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G.R. No.

1051

May 19, 1903

The commission has exalted to the highest positions in the Islands Filipinos who are alleged to be
notoriously corrupt and rascally, and men of no personal character.

THE UNITED STATES, complainant-appellee,


vs.
FRED L. DORR, ET AL., defendants-appellants.

xxx xxx xxx


Editor Valdez, of "Miau," made serious charges against two of the native Commissioners charges against
Trinidad H. Pardo de Tavera, which, if true, would brand the man as a coward and a rascal, and with what
result? . . . [Reference is then made to the prosecution and conviction of Valdez for libel "under a law which
specifies that the greater the truth the greater the libel."] Is it the desire of the people of the United States that
the natives against whom these charges have been made (which, if true, absolutely vilify their personal
characters) be permitted to retain their seats on the Civil Commission, the executive body of the Philippine
Government, without an investigation?

F. G. Waite for appellants.


Solicitor-General Araneta for appellee.
LADD, J.:
The defendants have been convicted upon a complaint charging them with the offense of writing, publishing,
and circulating a scurrilous libel against the Government of the United States and the Insular Government of
the Philippine Islands. The complaint is based upon section 8 of Act No. 292 of the Commission, which is as
follows:
Every person who shall utter seditious words or speeches, write, publish, or circulate scurrilous
libels against the Government of the United States or the Insular Government of the Philippine
Islands, or which tend to disturb or obstruct any lawful officer in executing his office, or which tend
to instigate others to cabal or meet together for unlawful purposes, or which suggest or incite
rebellious conspiracies or riots, or which tend to stir up the people against the lawful authorities, or
to disturb the peace of the community, the safety and order of the Government, or who shall
knowingly conceal such evil practices, shall be punished by a fine not exceeding two thousand
dollars or by imprisonment not exceeding two years, or both, in the discretion of the court.
The alleged libel was published as an editorial in the issue of the "Manila Freedom" of April 6, 1902, under the
caption of "A few hard facts."

xxx xxx xxx


It is a notorious fact that many branches of the Government organized by the Civil Commission are
rotten and corrupt. The fiscal system, upon which life, liberty, and justice depends, is admitted by
the Attorney-General himself to be most unsatisfactory. It is a fact that the Philippine judiciary is far
from being what it should. Neither fiscals nor judges can be persuaded to convict insurgents when
they wish to protect them.
xxx xxx xxx
Now we hear all sorts of reports as to rottenness existing in the province [of Tayabas], and
especially the northern end of it; it is said that it is impossible to secure the conviction of
lawbreakers and outlaws by the native justices, or a prosecution by the native fiscals.
xxx xxx xxx

The Attorney-General in his brief indicates the following passages of the article as those upon which he relies
to sustain the conviction:
Sidney Adamson, in a late letter in "Leslie's Weekly," has the following to say of the action of the
Civil Commission in appointing rascally natives to important Government positions:
"It is a strong thing to say, but nevertheless true, that the Civil Commission, through its
ex-insurgent office holders, and by its continual disregard for the records of natives
obtained during the military rule of the Islands, has, in its distribution of offices,
constituted a protectorate over a set of men who should be in jail or deported. . . .
[Reference is then made to the appointment of one Tecson as justice of the peace.]
This is the kind of foolish work that the Commission is doing all over the Islands,
reinstating insurgents and rogues and turning down the men who have during the
struggle, at the risk of their lives, aided the Americans."
xxx xxx xxx
There is no doubt but that the Filipino office holders of the Islands are in a good many instances
rascals.
xxx xxx xxx

The long and short of it is that Americans will not stand for an arbitrary government, especially
when evidences of carpetbagging and rumors of graft are too thick to be pleasant.
We do not understand that it is claimed that the defendants succeeded in establishing at the trial the truth of
any of the foregoing statements. The only question which we have considered is whether their publication
constitutes an offense under section 8 of Act No. 292, above cited.
Several allied offenses or modes of committing the same offense are defined in that section, viz: (1) The
uttering of seditious words or speeches; (2) the writing, publishing, or circulating of scurrilous libels against the
Government of the United States or the Insular Government of the Philippine Islands; (3) the writing,
publishing, or circulating of libels which tend to disturb or obstruct any lawful officer in executing his office; (4)
or which tend to instigate others to cabal or meet together for unlawful purposes; (5) or which suggest or incite
rebellious conspiracies or riots; (6) or which tend to stir up the people against the lawful authorities or to
disturb the peace of the community, the safety and order of the Government; (7) knowingly concealing such
evil practices.
The complaint appears to be framed upon the theory that a writing, in order to be punishable as a libel under
this section, must be of a scurrilous nature and directed against the Government of the United States or the
Insular Government of the Philippine Islands, and must, in addition, tend to some one of the results
enumerated in the section. The article in question is described in the complaint as "a scurrilous libel against
the Government of the United States and the Insular Government of the Philippine Islands, which tends to
obstruct the lawful officers of the United States and the Insular Government of the Philippine Islands in the
execution of their offices, and which tends to instigate others to cabal and meet together for unlawful

purposes, and which suggests and incites rebellious conspiracies, and which tends to stir up the people
against the lawful authorities, and which disturbs the safety and order of the Government of the United States
and the Insular Government of the Philippine Islands." But it is "a well-settled rule in considering indictments
that where an offense may be committed in any of several different modes, and the offense, in any particular
instance, is alleged to have been committed in two or more modes specified, it is sufficient to prove the
offense committed in any one of them, provided that it be such as to constitute the substantive offense"
(Com. vs. Kneeland, 20 Pick., Mass., 206, 215), and the defendants may, therefore, be convicted if any one of
the substantive charges into which the complaint may be separated has been made out.
We are all, however, agreed upon the proposition that the article in question has no appreciable tendency to
"disturb or obstruct any lawful officer in executing his office," or to "instigate" any person or class of persons "to
cabal or meet together for unlawful purposes," or to "suggest or incite rebellious conspiracies or riots," or to
"stir up the people against the lawful authorities or to disturb the peace of the community, the safety and order
of the Government." All these various tendencies, which are described in section 8 of Act No. 292, each one of
which is made an element of a certain form of libel, may be characterized in general terms as seditious
tendencies. This is recognized in the description of the offenses punished by this section, which is found in the
title of the act, where they are defined as the crimes of the "seditious utterances, whether written or spoken."
Excluding from consideration the offense of publishing "scurrilous libels against the Government of the United
States or the Insular Government of the Philippine Islands," which may conceivably stand on a somewhat
different footing, the offenses punished by this section all consist in inciting, orally or in writing, to acts of
disloyalty or disobedience to the lawfully constituted authorities in these Islands. And while the article in
question, which is, in the main, a virulent attack against the policy of the Civil Commission in appointing
natives to office, may have had the effect of exciting among certain classes dissatisfaction with the
Commission and its measures, we are unable to discover anything in it which can be regarded as having a
tendency to produce anything like what may be called disaffection, or, in other words, a state of feeling
incompatible with a disposition to remain loyal to the Government and obedient to the laws. There can be no
conviction, therefore, for any of the offenses described in the section on which the complaint is based, unless it
is for the offense of publishing a scurrilous libel against the Government of the of the United States or the
Insular Government of the Philippine Islands.
Can the article be regarded as embraced within the description of "scurrilous libels against the Government of
the United States or the Insular Government of the Philippine Islands?" In the determination of this question
we have encountered great difficulty, by reason of the almost entire lack of American precedents which might
serve as a guide in the construction of the law. There are, indeed, numerous English decisions, most of them
of the eighteenth century, on the subject of libelous attacks upon the "Government, the constitution, or the law
generally," attacks upon the Houses of Parliament, the Cabinet, the Established Church, and other
governmental organisms, but these decisions are not now accessible to us, and, if they were, they were made
under such different conditions from those which prevail at the present day, and are founded upon theories of
government so foreign to those which have inspired the legislation of which the enactment in question forms a
part, that they would probably afford but little light in the present inquiry. In England, in the latter part of the
eighteenth century, any "written censure upon public men for their conduct as such," as well as any written
censure "upon the laws or upon the institutions of the country," would probably have been regarded as a libel
upon the Government. (2 Stephen, History of the Criminal Law of England, 348.) This has ceased to be the
law in England, and it is doubtful whether it was ever the common law of any American State. "It is true that
there are ancient dicta to the effect that any publication tending to "possess the people with an ill opinion of the
Government" is a seditious libel ( per Holt, C. J., in R. vs. Tuchin, 1704, 5 St. Tr., 532, and Ellenborough, C. J.,
in R. vs. Cobbett, 1804, 29 How. St. Tr., 49), but no one would accept that doctrine now. Unless the words
used directly tend to foment riot or rebellion or otherwise to disturb the peace and tranquility of the Kingdom,
the utmost latitude is allowed in the discussion of all public affairs." (11 Enc. of the Laws of England, 450.)
Judge Cooley says (Const. Lim., 528): "The English common law rule which made libels on the constitution or
the government indictable, as it was administered by the courts, seems to us unsuited to the condition and
circumstances of the people of America, and therefore never to have been adopted in the several States."

We find no decisions construing the Tennessee statute (Code, sec. 6663), which is apparently the only existing
American statute of a similar character to that in question, and from which much of the phraseology of then
latter appears to have been taken, though with some essential modifications.
The important question is to determine what is meant in section 8 of Act No. 292 by the expression "the Insular
Government of the Philippine Islands." Does it mean in a general and abstract sense the existing laws and
institutions of the Islands, or does it mean the aggregate of the individuals by whom the government of the
Islands is, for the time being, administered? Either sense would doubtless be admissible.
We understand, in modern political science, . . . by the term government, that institution or aggregate of
institutions by which an independent society makes and carries out those rules of action which are
unnecessary to enable men to live in a social state, or which are imposed upon the people forming that society
by those who possess the power or authority of prescribing them. Government is the aggregate of authorities
which rule a society. By "dministration, again, we understand in modern times, and especially in more or less
free countries, the aggregate of those persons in whose hands the reins of government are for the time being
(the chief ministers or heads of departments)." (Bouvier, Law Dictionary, 891.) But the writer adds that the
terms "government" and "administration" are not always used in their strictness, and that "government" is often
used for "administration."
In the act of Congress of July 14, 1798, commonly known as the "Sedition Act," it is made an offense to "write,
print, utter, or published," or to "knowingly and willingly assist or aid in writing, printing, uttering, or publishing
any false, scandalous, and malicious writing or writings against the Government of the United States, or either
House of the Congress of the United States, or the President of the United States, with intent to defame the
said Government, or either House of the said Congress, or the said President, or to bring them, or either of
them, into contempt or disrepute, or to excite against them or either or any of them the hatred of the good
people of the United States," etc. The term "government" would appear to be used here in the abstract sense
of the existing political system, as distinguished from the concrete organisms of the Government the
Houses of Congress and the Executive which are also specially mentioned.
Upon the whole, we are of the opinion that this is the sense in which the term is used in the enactment under
consideration.
It may be said that there can be no such thing as a scurrilous libel, or any sort of a libel, upon an abstraction
like the Government in the sense of the laws and institutions of a country, but we think an answer to this
suggestion is that the expression "scurrilous libel" is not used in section 8 of Act No. 292 in the sense in which
it is used in the general libel law (Act No. 277) that is, in the sense of written defamation of individuals
but in the wider sense, in which it is applied in the common law to blasphemous, obscene, or seditious
publications in which there may be no element of defamation whatever. "The word 'libel' as popularly used,
seems to mean only defamatory words; but words written, if obscene, blasphemous, or seditious, are
technically called libels, and the publication of them is, by the law of England, an indictable offense."
(Bradlaugh vs. The Queen, 3 Q. B. D., 607, 627, per Bramwell L. J. See Com. vs. Kneeland, 20 Pick., 206,
211.)
While libels upon forms of government, unconnected with defamation of individuals, must in the nature of
things be of uncommon occurrence, the offense is by no means an imaginary one. An instance of a
prosecution for an offense essentially of this nature is Republica vs. Dennie, 4 Yeates (Pa.), 267, where the
defendant was indicted "as a factious and seditious person of a wicked mind and unquiet and turbulent
disposition and conversation, seditiously, maliciously, and willfully intending, as much as in him lay, to bring
into contempt and hatred the independence of the United States, the constitution of this Commonwealth and of
the United States, to excite popular discontent and dissatisfaction against the scheme of polity instituted, and
upon trial in the said United States and in the said Commonwealth, to molest, disturb, and destroy the peace
and tranquility of the said United States and of the said Commonwealth, to condemn the principles of the
Revolution, and revile, depreciate, and scandalize the characters of the Revolutionary patriots and statesmen,
to endanger, subvert, and totally destroy the republican constitutions and free governments of the said United
States and this Commonwealth, to involve the said United States and this Commonwealth in civil war,

desolation, and anarchy, and to procure by art and force a radical change and alteration in the principles and
forms of the said constitutions and governments, without the free will, wish, and concurrence of the people of
the said United States and this Commonwealth, respectively," the charge being that "to fulfill, perfect, and
bring to effect his wicked, seditious, and detestable intentions aforesaid he . . . falsely, maliciously, factiously,
and seditiously did make, compose, write, and publish the following libel, to wit; 'A democracy is scarcely
tolerable at any period of national history. Its omens are always sinister and its powers are unpropitious. With
all the lights or experience blazing before our eyes, it is impossible not to discover the futility of this form of
government. It was weak and wicked at Athens, it was bad in Sparta, and worse in Rome. It has been tried in
France and terminated in despotism. it was tried in England and rejected with the utmost loathing and
abhorrence. It is on its trial here and its issue will be civil war, desolation, and anarchy. No wise man but
discerns its imperfections; no good man but shudders at its miseries; no honest man but proclaims its fraud,
and no brave man but draws his sword against its force. The institution of a scheme of polity so radically
contemptible and vicious is a memorable example of what the villainy of some men can devise, the folly of
others receive, and both establish, in despite of reason, reflection, and sensation.'"
An attack upon the lawfully established system of civil government in the Philippine Islands, like that which
Dennie was accused of making upon the republican form of government lawfully established in the United
States and in the State of Pennsylvania would, we think, if couched in scandalous language, constitute the
precise offense described in section 8 of Act No. 292 as a scurrilous libel against the Insular Government of
the Philippine Islands.
Defamation of individuals, whether holding official positions or not, and whether directed to their public conduct
or to their private life, may always be adequately punished under the general libel law. Defamation of the Civil
Commission as an aggregation, it being "a body of persons definite and small enough for its individual
members to be recognized as such" (Stephen, Digest of the Criminal Law, art. 277), as well as defamation of
any of the individual members of the Commission or of the Civil Governor, either in his public capacity or as a
private individual, may be so punished. The general libel law enacted by the Commission was in force when
Act No. 292, was passed. There was no occasion for any further legislation on the subject of libels against the
individuals by whom the Insular Government is administered against the Insular Government in the sense
of the aggregate of such individuals. There was occasion for stringent legislation against seditious words or
libels, and that is the main if not the sole purpose of the section under consideration. It is not unreasonable to
suppose that the Commission, in enacting this section, may have conceived of attacks of a malignant or
scurrilous nature upon the existing political system of the United States, or the political system established in
these Islands by the authority of the United States, as necessarily of a seditious tendency, but it is not so
reasonable to suppose that they conceived of attacks upon the personnel of the government as necessarily
tending to sedition. Had this been their view it seems probable that they would, like the framers of the Sedition
Act of 1798, have expressly and specifically mentioned the various public officials and collegiate governmental
bodies defamation of which they meant to punish as sedition.
The article in question contains no attack upon the governmental system of the United States, and it is quite
apparent that, though grossly abusive as respects both the Commission as a body and some of its individual
members, it contains no attack upon the governmental system by which the authority of the United States is
enforced in these Islands. The form of government by a Civil Commission and a Civil Governor is not assailed.
It is the character of the men who are intrusted with the administration of the government that the writer is
seeking to bring into disrepute by impugning the purity of their motives, their public integrity, and their private
morals, and the wisdom of their policy. The publication of the article, therefore, no seditious tendency being
apparent, constitutes no offense under Act No. 292, section 8.
The judgment of conviction is reversed and the defendants are acquitted, with costs de oficio.
SCRA
1.CRIMINAL LAW; SEDITION; GOVERNMENT DEFINED.The term "government" as employed in Act No.
292 of the United States Philippine Commission is used in the abstract sense of the existing political system as
distinguished from the concrete organism of the Government. [United States vs. Dorr, 2 Phil. 332(1903)]

The publication of an article abusive of the United States Philippine Commission and its members is not a libel
upon the Government and does not fall within said Act No. 292 of the United States Philippine Commission.
[United States vs. Dorr, 2 Phil. 332(1903)]
G.R. No. 103982 December 11, 1992
ANTONIO A. MECANO, petitioner,
vs.
COMMISSION ON AUDIT, respondent.

CAMPOS, JR., J.:


Antonio A. Mecano, through a petition for certiorari, seeks to nullify the decision of the Commission on Audit
(COA, for brevity) embodied in its 7th Indorsement, dated January 16, 1992, denying his claim for
reimbursement under Section 699 of the Revised Administrative Code (RAC), as amended, in the total amount
of P40,831.00.
Petitioner is a Director II of the National Bureau of Investigation (NBI). He was hospitalized for cholecystitis
from March 26, 1990 to April 7, 1990, on account of which he incurred medical and hospitalization expenses,
the total amount of which he is claiming from the COA.
On May 11, 1990, in a memorandum to the NBI Director, Alfredo S. Lim (Director Lim, for brevity), he
requested reimbursement for his expenses on the ground that he is entitled to the benefits under Section
699 1 of the RAC, the pertinent provisions of which read:
Sec. 699. Allowances in case of injury, death, or sickness incurred in performance of
duty. When a person in the service of the national government of a province, city,
municipality or municipal district is so injured in the performance of duty as thereby to
receive some actual physical hurt or wound, the proper Head of Department may direct
that absence during any period of disability thereby occasioned shall be on full pay,
though not more than six months, and in such case he may in his discretion also
authorize the payment of the medical attendance, necessary transportation,
subsistence and hospital fees of the injured person. Absence in the case contemplated
shall be charged first against vacation leave, if any there be.
xxx xxx xxx
In case of sickness caused by or connected directly with the performance of some act
in the line of duty, the Department head may in his discretion authorize the payment of
the necessary hospital fees.
Director Lim then forwarded petitioner's claim, in a 1st Indorsement dated June 22, 1990, to the Secretary of
Justice, along with the comment, bearing the same date, of Gerarda Galang, Chief, LED of the NBI,
"recommending favorable action thereof". Finding petitioner's illness to be service-connected, the Committee
on Physical Examination of the Department of Justice favorably recommended the payment of petitioner's
claim.
However, then Undersecretary of Justice Silvestre H. Bello III, in a 4th Indorsement dated November 21, 1990,
returned petitioner's claim to Director Lim, having considered the statements of the Chairman of the COA in its

5th Indorsement dated 19 September 1990, to the effect that the RAC being relied upon was repealed by the
Administrative Code of 1987.
Petitioner then re-submitted his claim to Director Lim, with a copy of Opinion No. 73, S. 1991 2 dated April 26,
1991 of then Secretary of Justice Franklin M. Drilon (Secretary Drilon, for brevity) stating that "the issuance of
the Administrative Code did not operate to repeal or abregate in its entirety the Revised Administrative Code,
including the particular Section 699 of the latter".
On May 10, 1991, Director Lim, under a 5th Indorsement transmitted anew Mecano's claim to then
Undersecretary Bello for favorable consideration. Under a 6th Indorsement, dated July 2, 1991, Secretary
Drilon forwarded petitioner's claim to the COA Chairman, recommending payment of the same. COA Chairman
Eufemio C. Domingo, in his 7th Indorsement of January 16, 1992, however, denied petitioner's claim on the
ground that Section 699 of the RAC had been repealed by the Administrative Code of 1987, solely for the
reason that the same section was not restated nor re-enacted in the Administrative Code of 1987. He
commented, however, that the claim may be filed with the Employees' Compensation Commission,
considering that the illness of Director Mecano occurred after the effectivity of the Administrative Code of 1987.
Eventually, petitioner's claim was returned by Undersecretary of Justice Eduardo Montenegro to Director Lim
under a 9th Indorsement dated February 7, 1992, with the advice that petitioner "elevate the matter to the
Supreme Court if he so desires".
On the sole issue of whether or not the Administrative Code of 1987 repealed or abrogated Section 699 of the
RAC, this petition was brought for the consideration of this Court.
Petitioner anchors his claim on Section 699 of the RAC, as amended, and on the aforementioned Opinion No.
73, S. 1991 of Secretary Drilon. He further maintains that in the event that a claim is filed with the Employees'
Compensation Commission, as suggested by respondent, he would still not be barred from filing a claim under
the subject section. Thus, the resolution of whether or not there was a repeal of the Revised Administrative
Code of 1917 would decide the fate of petitioner's claim for reimbursement.
The COA, on the other hand, strongly maintains that the enactment of the Administrative Code of 1987 (Exec.
Order No. 292) operated to revoke or supplant in its entirety the Revised Administrative Code of 1917. The
COA claims that from the "whereas" clauses of the new Administrative Code, it can be gleaned that it was the
intent of the legislature to repeal the old Code. Moreover, the COA questions the applicability of the aforesaid
opinion of the Secretary of Justice in deciding the matter. Lastly, the COA contends that employment-related
sickness, injury or death is adequately covered by the Employees' Compensation Program under P.D. 626,
such that to allow simultaneous recovery of benefits under both laws on account of the same contingency
would be unfair and unjust to the Government.
The question of whether a particular law has been repealed or not by a subsequent law is a matter of
legislative intent. The lawmakers may expressly repeal a law by incorporating therein a repealing provision
which expressly and specifically cites the particular law or laws, and portions thereof, that are intended to be
repealed. 3 A declaration in a statute, usually in its repealing clause, that a particular and specific law, identified
by its number or title, is repealed is an express repeal; all others are implied repeals. 4
In the case of the two Administrative Codes in question, the ascertainment of whether or not it was the intent
of the legislature to supplant the old Code with the new Code partly depends on the scrutiny of the repealing
clause of the new Code. This provision is found in Section 27, Book VII (Final Provisions) of the Administrative
Code of 1987 which reads:
Sec. 27. Repealing Clause. All laws, decrees, orders, rules and regulations, or
portions thereof, inconsistent with this Code are hereby repealed or modified
accordingly.

The question that should be asked is: What is the nature of this repealing clause? It is certainly not an express
repealing clause because it fails to identify or designate the act or acts that are intended to be
repealed. 5 Rather, it is an example of a general repealing provision, as stated in Opinion No. 73, S. 1991. It is
a clause which predicates the intended repeal under the condition that substantial conflict must be found in
existing and prior acts. The failure to add a specific repealing clause indicates that the intent was not to repeal
any existing law, unless an irreconcilable inconcistency and repugnancy exist in the terms of the new and old
laws. 6 This latter situation falls under the category of an implied repeal.
Repeal by implication proceeds on the premise that where a statute of later date clearly reveals an intention
on the part of the legislature to abrogate a prior act on the subject, that intention must be given effect. 7 Hence,
before there can be a repeal, there must be a clear showing on the part of the lawmaker that the intent in
enacting the new law was to abrogate the old one. The intention to repeal must be clear and
manifest; 8 otherwise, at least, as a general rule, the later act is to be construed as a continuation of, and not a
substitute for, the first act and will continue so far as the two acts are the same from the time of the first
enactment. 9
There are two categories of repeal by implication. The first is where provisions in the two acts on the same
subject matter are in an irreconcilable conflict, the later act to the extent of the conflict constitutes an implied
repeal of the earlier one. The second is if the later act covers the whole subject of the earlier one and is clearly
intended as a substitute, it will operate to repeal the earlier law. 10
Implied repeal by irreconcilable inconsistency takes place when the two statutes cover the same subject
matter; they are so clearly inconsistent and incompatible with each other that they cannot be reconciled or
harmonized; and both cannot be given effect, that is, that one law cannot be enforced without nullifying the
other. 11
Comparing the two Codes, it is apparent that the new Code does not cover nor attempt to cover the entire
subject matter of the old Code. There are several matters treated in the old Code which are not found in the
new Code, such as the provisions on notaries public, the leave law, the public bonding law, military
reservations, claims for sickness benefits under Section 699, and still others.
Moreover, the COA failed to demonstrate that the provisions of the two Codes on the matter of the subject
claim are in an irreconcilable conflict. In fact, there can be no such conflict because the provision on sickness
benefits of the nature being claimed by petitioner has not been restated in the Administrative Code of 1987.
However, the COA would have Us consider that the fact that Section 699 was not restated in the
Administrative Code of 1987 meant that the same section had been repealed. It further maintained that to
allow the particular provisions not restated in the new Code to continue in force argues against the Code itself.
The COA anchored this argument on the whereas clause of the 1987 Code, which states:
WHEREAS, the effectiveness of the Government will be enhanced by a new
Administrative Code which incorporate in a unified document the major structural,
functional and procedural principles and rules of governance; and
xxx xxx xxx
It argues, in effect, that what is contemplated is only one Code the Administrative Code of 1987. This
contention is untenable.
The fact that a later enactment may relate to the same subject matter as that of an earlier statute is not of itself
sufficient to cause an implied repeal of the prior act, since the new statute may merely be cumulative or a
continuation of the old one. 12 What is necessary is a manifest indication of legislative purpose to repeal. 13

We come now to the second category of repeal the enactment of a statute revising or codifying the former
laws on the whole subject matter. This is only possible if the revised statute or code was intended to cover the
whole subject to be a complete and perfect system in itself. It is the rule that a subsequent statute is deemed
to repeal a prior law if the former revises the whole subject matter of the former statute. 14 When both intent
and scope clearly evidence the idea of a repeal, then all parts and provisions of the prior act that are omitted
from the revised act are deemed repealed. 15 Furthermore, before there can be an implied repeal under this
category, it must be the clear intent of the legislature that the later act be the substitute to the prior act. 16

FACTS:
Mecano, an NBI Director, was hospitalized for cholecystitis, for which he incurred medical and hospitalization
expenses, the total amount of which he is claiming from the COA, based on sec. 699 of the RAC. COA
contended that the RAC has been repealed by the Administrative Code of 1987, specifically sec. 699 was not
restated nor re-enacted in the Code.
ISSUE:

According to Opinion No. 73, S. 1991 of the Secretary of Justice, what appears clear is the intent to cover only
those aspects of government that pertain to administration, organization and procedure, understandably
because of the many changes that transpired in the government structure since the enactment of the RAC
decades of years ago. The COA challenges the weight that this opinion carries in the determination of this
controversy inasmuch as the body which had been entrusted with the implementation of this particular
provision has already rendered its decision. The COA relied on the rule in administrative law enunciated in the
case of Sison vs.Pangramuyen 17 that in the absence of palpable error or grave abuse of discretion, the Court
would be loathe to substitute its own judgment for that of the administrative agency entrusted with the
enforcement and implementation of the law. This will not hold water. This principle is subject to limitations.
Administrative decisions may be reviewed by the courts upon a showing that the decision is vitiated by fraud,
imposition or mistake. 18 It has been held that Opinions of the Secretary and Undersecretary of Justice are
material in the construction of statutes in pari materia. 19
Lastly, it is a well-settled rule of statutory construction that repeals of statutes by implication are not
favored. 20The presumption is against inconsistency and repugnancy for the legislature is presumed to know
the existing laws on the subject and not to have enacted inconsistent or conflicting statutes. 21
This Court, in a case, explains the principle in detail as follows: "Repeals by implication are not favored, and
will not be decreed unless it is manifest that the legislature so intended. As laws are presumed to be passed
with deliberation with full knowledge of all existing ones on the subject, it is but reasonable to conclude that in
passing a statute it was not intended to interfere with or abrogate any former law relating to some matter,
unless the repugnancy between the two is not only irreconcilable, but also clear and convincing, and flowing
necessarily from the language used, unless the later act fully embraces the subject matter of the earlier, or
unless the reason for the earlier act is beyond peradventure renewed. Hence, every effort must be used to
make all acts stand and if, by any reasonable construction, they can be reconciled, the later act will not
operate as a repeal of the earlier. 22
Regarding respondent's contention that recovery under this subject section shall bar the recovery of benefits
under the Employees' Compensation Program, the same cannot be upheld. The second sentence of Article
173, Chapter II, Title II (dealing on Employees' Compensation and State Insurance Fund), Book IV of the
Labor Code, as amended by P.D. 1921, expressly provides that "the payment of compensation under this Title
shall not bar the recovery of benefits as provided for in Section 699 of the Revised Administrative Code . . .
whose benefits are administered by the system (meaning SSS or GSIS) or by other agencies of the
government."
WHEREFORE, premises considered, the Court resolves to GRANT the petition; respondent is hereby ordered
to give due course to petitioner's claim for benefits. No costs.

W/N the Administrative Code of 1987 repealed or abrogated sec. 699 of the RAC
HELD:
The question of whether or not a particular law has been repealed or not by a subsequent law is a matter of
legislative intent. The lawmakers may expressly repeal a law by incorporating therein a repealing provision
which expressly and specifically cites the particular law or laws, and portions thereof, that are intended to be
repealed. A declaration in a statute, usually in its repealing clause, that a particular and specific law, identified
by its number or title, is repealed is an express repeal; all others are implied repeals.
Under sec. 27, Bk. VII (Final Provisions) of the Administrative Code of 1987, the repealing clause states that
all laws, decrees, orders, rules and regulations, or portions thereof, inconsistent with this Code are hereby
repealed or modified accordingly.
The question that should be asked is: What is the nature of this repealing clause? It is certainly not an express
repealing clause because it fails to identify or designate the act or acts that are intended to be repealed.
Rather, it is an example of a general repealing provision. It is a clause which predicates the intended repeal
under the condition that a substantial conflict must be found in existing and prior acts. The failure to add a
specific repealing clause indicates the intent was not to repeal any existing law, unless an irreconcilable
inconsistency and repugnancy exist in the terms of the new and old laws. The latter situation falls under the
category of an implied repeal.
(NOTA BENE: This means that the RAC, despite the passage of the Administrative Code of 1987, may still be
a source of administrative law)
SCRA
Statutes; Administrative Code of 1987; Implied repeal.In the case of the two Administrative Codes in
question, the ascertainment of whether or not it was the intent of the legislature to supplant the old Code with
the new Code partly depends on the scrutiny of the repealing clause of the new Code. This provision is found
in Section 27, Book VII (Final Provisions) of the Administrative Code of 1987 which reads: Sec. 27. Repealing
Clause.All laws, decrees, orders, rules and regulations, or portions thereof, inconsistent with this Code are
hereby repealed or modified accordingly. The question that should be asked is: What is the nature of this
repealing clause? It is certainly not an express repealing clause because it fails to identify or designate the act
or acts that are intended to be repealed. Rather, it is an example of a general repealing provision, as stated in
Opinion No. 73, S. 1991. It is a clause which predicates the intended repeal under the condition that a
substantial conflict must be found in existing and prior acts. The failure to add a specific repealing clause
indicates that the intent was not to repeal any existing law, unless an irreconcilable inconsistency and
repugnancy exist in the terms of the new and old laws. This latter situation falls under the category of an
implied repeal.

SO ORDERED.
Digest

Mecano vs. COA, 216 SCRA 500 (1992)

Same; Same; Same.There are two categories of repeal by implication. The first is where provisions in the
two acts on the same subject matter are in an irreconcilable conflict, the later act to the extent of the conflict
constitutes an implied repeal of the earlier one. The second is if the later act covers the whole subject of the
earlier one and is clearly intended as a substitute, it will operate to repeal the earlier law. Implied repeal by
irreconcilable inconsistency takes place when the two statutes cover the same subject matter; they are so
clearly inconsistent and incompatible with each other that they cannot be reconciled or harmonized; and both
cannot be given effect, that is, that one law cannot be enforced without nullifying the other. Comparing the two
Codes, it is apparent that the new Code does not cover nor attempt to cover the entire subject matter of the

old Code. There are several matters treated in the old Code which are not found [Mecano vs. Commission on
Audit, 216 SCRA 500(1992)]
in the new Code, such as the provisions on notaries public, the leave law, the public bonding law, military
reservations, claims for sickness benefits under Section 699, and still others.
Same; Same; Same.Lastly, it is a well-settled rule of statutory construction that repeals of statutes by
implication are not favored. The presumption is against inconsistency and repugnancy for the legislature is
presumed to know the existing laws on the subject and not to have enacted inconsistent or conflicting statutes.
This Court, in a case, explains the principle in detail as follows: Repeals by implication are not favored, and
will not be decreed unless it is manifest that the legislature so intended. As laws are presumed to be passed
with deliberation with full knowledge of all existing ones on the subject, it is but reasonable to conclude that in
passing a statute it was not intended to interfere with or abrogate any former law relating to some matter,
unless the repugnancy between the two is not only irreconcilable, but also clear and convincing, and flowing
necessarily from the language used, unless the later act fully embraces the subject matter of the earlier, or
unless the reason for the earlier act is beyond peradventure renewed. Hence, every effort must be used to
make all acts stand and if, by any reasonable construction, they can be reconciled, the later act will not
operate as a repeal of the earlier. [Mecano vs. Commission on Audit, 216 SCRA 500(1992)]
G.R. No. L-66614 January 25, 1988
PRIMITIVO LEVERIZA, FE LEVERIZA, PARUNGAO & ANTONIO C. VASCO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, MOBIL OIL PHILIPPINES & CIVIL AERONAUTICS
ADMINISTRATION,respondents.

land subject of Contract A above mentioned, at a monthly rental of P1,500.00, for a


period of 25 years (Exhibit 'B', Exhibit 4-Leverizas' ).
Third Contract. For purposes of easy reference and brevity, this contract shall be
referred to hereinafter as Contract C. This is a "LEASE AGREEMENT", executed
between Defendant CIVIL AERONAUTICS ADMINISTRATION, as lessor, and plaintiff
MOBIL OIL PHILIPPINES, INC., as lessee, on June 1, 1968 over that SAME parcel of
land (Lot A, on plan being a portion of Parcel, Psu 2031), containing an area of 3,000
square meters more or less, at a monthly rental of P.25 per square meter for the
second 200 square meters, and P.20 per square meter for the rest, for a period of 29
(sic) years. (Exhibit "C").
There is no dispute among the parties that the subject matter of the three contracts of
lease above mentioned, Contract A, Contract B, and Contract C, is the same parcel of
land, with the noted difference that while in Contract A, the area leased is 4,502 square
meters, in Contract B and Contract C, the area has been reduced to 3,000 square
meters. To summarize:
Contract A a lease contract of April 2, 1965 between the
Republic of the Philippines, represented by Defendant Civil
Aeronautics Administration and Rosario C. Leveriza over a
parcel of land containing an area of 4,502 square meters, for 25
years.
Contract B a lease contract (in effect a sublease) of May 21,
1965 between defendant Rosario C. Leveriza and plaintiff Mobil
Oil Philippines, Inc. over the same parcel of land, but reduced
to 3,000 square meters for 25 years; and

BIDIN, J.:
This is a Petition for Review on certiorari seeking the reversal of the decision of the Intermediate Appellate
Court, Third Division * dated February 29, 1984 in AC-G.R. No. CV No. 61705 entitled Mobil Oil Philippines,
Inc., plaintiff-appellee vs. Primitivo Leveriza Parungao, Antonio C. Vasco and Civil Aeronautics Administration,
defendants-appellants; Primitive Leveriza, Fe Leveriza Parungao and Antonio C. Leveriza, cross-defendant,
affirming in toto the decision of the trial court dated April 6, 1976.
As found by the trial court and adopted by the Intermediate Appellate Court, the facts of this case are as
follows:
Around three contracts of lease resolve the basic issues in the instant case. These
three contracts are as follows:
First Contract. For purposes of easy reference and brevity, this contract shall be
referred to hereinafter as Contract A. This is a "CONTRACT OF LEASE", executed
between the REPUBLIC OF THE PHILIPPINES, represented by Defendant CIVIL
AERONAUTICS ADMINISTRATION, as lessor, and ROSARIO C. LEVERIZA, as
lessee, on April 2, 1965, over a certain parcel of land at the MIA area, consisting of
approximately 4,502 square meters, at a monthly rental of P450.20, for a period of 25
years, (Exhibit "A", Exhibit "I-Leverizas", Exhibit "I-CAA").
Second Contracts. For purposes of easy references and brevity, this contract shall
be referred to hereinafter as Contract B. This is a "LEASE AGREEMENT", executed
between ROSARIO C. LEVERIZA, as lessor, and Plaintiff MOBIL OIL PHILIPPINES,
INC., as lessee on May 21, 1965, over 3,000 square meters of that SAME Parcel of

Contract C a lease contract of June 1, 1968 between


defendant Civil Aeronautics Administration and plaintiff Mobil Oil
Philippines, Inc., over the same parcel of land, but reduced to
3,000 square meters, for 25 years.
It is important to note, for a clear understanding of the issues involved, that it appears
that defendant Civil Aeronautics Administration as LESSOR, leased the same parcel of
land, for durations of time that overlapped to two lessees, to wit: (1) Defendant Rosario
C. Leveriza, and that plaintiff Mobil Oil Philippines, Inc., as LESSEE, leased the same
parcel of land from two lessors, to wit: (1) defendant Rosario C. Leveriza and (2)
defendant Civil Aeronautics Administration, Inc., for durations of time that also
overlapped.
For purposes of brevity defendant Civil Aeronautics Administration shall be referred to
hereinafter as defendant CAA.
Rosario C. Leveriza, the lessee in Contract A and the lessor in Contract B, is now
deceased. This is the reason why her successor-in-interest, her heirs, are sued,
namely: Defendants Primitive Leveriza, her second husband, (now also deceased), Fe
Leveriza Parungao, her daughter by her second husband, and Antonio C. Vasco, her
son by her first husband. For purposes of brevity, these defendants shall be referred to
hereinafter as Defendants Leveriza.

Plaintiff Mobil Oil Philippines, Inc., shall be referred to hereinafter simply as the Plaintiff.
(pp. 95-99, Record on Appeal).
Plaintiff in this case seeks the rescission or cancellation of Contract A and Contract B
on the ground that Contract A from which Contract B is derived and depends has
already been cancelled by the defendant Civil Aeronautics Administration and
maintains that Contract C with the defendant CAA is the only valid and subsisting
contract insofar as the parcel of land, subject to the present litigation is concerned. On
the other hand, defendants Leverizas' claim that Contract A which is their contract with
CAA has never been legally cancelled and still valid and subsisting; that it is Contract C
between plaintiff and defendant CAA which should be declared void.
Defendant CAA asserts that Exhibit "A" is still valid and subsisting because its
cancellation by Guillermo Jurado was ineffective and asks the court to annul Contract A
because of the violation committed by defendant Leveriza in leasing the parcel of land
to plaintiff by virtue of Contract B without the consent of defendant CAA. Defendant
CAA further asserts that Contract C not having been approved by the Director of Public
Works and Communications is not valid. ...

8. Dismissing defendant CAA's counterclaim against plaintiff;


9. Dismissing defendant CAA's counterclaim against defendant
Leverizas.
No pronouncements as to costs.
On June 2, 1976, defendant Leveriza filed a motion for new trial on the ground of newly discovered evidence,
lack of jurisdiction of the court over the case and lack of evidentiary support of the decision which was denied
in the order of November 12,1976 (Rollo, p. 17).
On July 27, 1976, the CAA filed a Motion for Reconsideration, averring that because the lot lease was properly
registered in the name of the Republic of the Philippines, it was only the President of the Philippines or an
officer duly designated by him who could execute the lease contract pursuant to Sec. 567 of the Revised
Administrative Code; that the Airport General Manager has no authority to cancel Contract A, the contract
entered into between the CAA and Leveriza, and that Contract C between the CAA and Mobil was void for not
having been approved by the Secretary of Public Works and Communications. Said motion was however
denied on November 12, 1976 (Rollo, p. 18).

xxx xxx xxx


After trial, the lower court render judgment on April 6, 1976 the dispositive part of which reads:

On appeal, the Intermediate Appellate Court, being in full accord with the trial court, rendered a decision on
February 29, 1984, the dispositive part of which reads:
WHEREFORE, finding no reversible error in the decision of the lower court dated April
6, 1976, the same is hereby affirmed in toto.

WHEREFORE, after having thus considered the evidence of all the parties, testimonial
and documentary, and their memoranda and reply-memoranda, this Court hereby
renders judgment:
Hence, this petition.
1. Declaring Contract A as having been validly cancelled on
June 28, 1966, and has therefore ceased to have any effect as
of that date;

The petitioners raised the following assignment of errors:


I

2. Declaring that Contract B has likewise ceased to have any


effect as of June 28, 1966 because of the cancellation of
Contract A;
3. Declaring that Contract C was validly entered into on June 1,
1968, and that it is still valid and subsisting;
4. Ordering defendant CAA to refund to defendants Leverizas
the amount of P32,189.30 with 6% per annum until fully paid;
5. Ordering defendants Leverizas to refund to plaintiff the
amount of P48,000.00 with 6% interest per annum until fully
paid;
6. Dismissing defendants Leverizas' four counterclaims against
plaintiff;
7. Dismissing defendants Leverizas' cross-claim against
defendant CAA;

THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE


ADMINISTRATOR OF THE CIVIL AERONAUTICS ADMINISTRATION (CAA) HAD
THE STATUTORY AUTHORITY TO LEASE, EVEN WITHOUT APPROVAL OF THE
THEN SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, REAL
PROPERTY BELONGING TO THE REPUBLIC OF THE PHILIPPINES.
II
THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE
ADMINISTRATOR OF THE CIVIL AERONAUTICS ADMINISTRATION HAD
STATUTORY AUTHORITY, WITHOUT THE APPROVAL OF THE THEN SECRETARY
OF PUBLIC WORKS AND COMMUNICATIONS, TO CANCEL A LEASE CONTRACT
OVER REAL PROPERTY OWNED BY THE REPUBLIC OF THE PHILIPPINES,
WHICH CONTRACT WAS APPROVED, AS REQUIRED BY LAW, BY THE
SECRETARY.
III
THE INTERMEDIATE APPELLATE COURT ERRED WHEN IT RULED THAT THE
CONTRACT OF SUBLEASE (CONTRACT B) ENTERED INTO BETWEEN

PETITIONERS' PREDECESSOR-IN-INTEREST AND RESPONDENT MOBIL OIL


PHILIPPINES, INC. WAS WITHOUT THE CONSENT OF THE ADMINISTRATOR OF
THE CIVIL AERONAUTICS ADMINISTRATION.
The petition is devoid of merit.
There is no dispute that Contract "A" at the time of its execution was a valid contract. The issue therefore is
whether or not said contract is still subsisting after its cancellation by CAA on the ground of a sublease
executed by petitioners with Mobil Oil Philippines without the consent of CAA and the execution of another
contract of lease between CAA and Mobil Oil Philippines (Contract "C").
Petitioners contend that Contract "A" is still subsisting because Contract "B" is a valid sublease and does not
constitute a ground for the cancellation of Contract "A", while Contract "C", a subsequent lease agreement
between CAA and Mobil Oil Philippines is null and void, for lack of approval by the Department Secretary.
Petitioners anchor their position on Sections 567 and 568 of the Revised Administrative Code which require
among others, that subject contracts should be executed by the President of the Philippines or by an officer
duly designated by him, unless authority to execute the same is by law vested in some other officer (Petition,
Rollo, pp. 15-16).
At the other extreme, respondent Mobil Oil Philippines asserts that Contract "A" was validly cancelled on June
28, 1966 and so was Contract "B" which was derived therefrom. Accordingly, it maintains that Contract "C" is
the only valid contract insofar as the parcel of land in question is concerned and that approval of the
Department Head is not necessary under Section 32 (par. 24) of the Republic Act 776 which expressly vested
authority to enter into such contracts in the Administrator of CAA (Comment; Rollo, p. 83).

8. Failure on the part of the Party of the Second Part to comply with the terms and
conditions herein agreed upon shall be sufficient for revocation of this contract by the
Party of the First Part without need of judicial demand.
It is not disputed that the Leverizas (lessees) entered into a contract of sublease (Contract "B") with Mobil Oil
Philippines without the consent of CAA (lessor). The cancellation of the contract was made in a letter dated
June 28, 1966 of Guillermo P. Jurado, Airport General Manager of CAA addressed to Rosario Leveriza, as
follows:
(Letterhead)
June 28, 1966
Mrs. Rosario Leveriza
Manila International Airport
Madam:
It has been found out by the undersigned that you have sublet
the property of the CAA leased to you and by virtue of this, your
lease contract is hereby cancelled because of the violation of
the stipulations of the contract. I would like to inform you that
even without having sublet the said property the said contract
would have been cancelled as per attached communication.

On its part, respondent Civil Aeronautics Administration took the middle ground with its view that Contract "A"
is still subsisting as its cancellation is ineffective without the approval of the Department Head but said contract
is not enforceable because of petitioners' violation of its terms and conditions by entering into Contract "B" of
sublease without the consent of CAA. The CAA further asserts that Contract "C" not having been approved by
the Secretary of Public Works and Communications, is not valid (Rollo, p. 43). However, in its comment filed
with the Supreme Court, the CAA made a complete turnabout adopting the interpretation and ruling made by
the trial court which was affirmed by the Intermediate Appellate Court (Court of Appeals), that the CAA
Administrator has the power to execute the deed or contract of lease involving real properties under its
administration belonging to the Republic of the Philippines without the approval of the Department Head as
clearly provided in Section 32, paragraph (24) of Republic Act 776.

Very truly yo

For the Direc

(Sgd.) Illegib
(Typed)
GUIL
LERM
O P.
JURA
DO
Airpor
t
Gener
al
Mana
ger

The issue narrows down to whether or not there is a valid ground for the cancellation of Contract "A."
Contract "A" was entered into by CAA as the lessor and the Leverizas as the lessee specifically "for the
purpose of operating and managing a gasoline station by the latter, to serve vehicles going in and out of the
airport."
As regards prior consent of the lessor to the transfer of rights to the leased premises, the provision of
paragraph 7 of said Contract reads in full:
7. The Party of the Second part may transfer her rights to the leased premises but in
such eventuality, the consent of the Party of the First Part shall first be secured. In any
event, such transfer of rights shall have to respect the terms and conditions of this
agreement.
Paragraph 8 provides the sanction for the violation of the above-mentioned terms and conditions of the
contract. Said paragraph reads:

Respondent Leverizas and the CAA assailed the validity of such cancellation, claiming that the Airport General
Manager had no legal authority to make the cancellation. They maintain that it is only the Secretary of Public
Works and Communications, acting for the President, or by delegation of power, the Director of Civil
Aeronautics Administration who could validly cancel the contract. They do admit, however, and it is evident
from the records that the Airport General Manager signed "For the Director." Under the circumstances, there is
no question that such act enjoys the presumption of regularity, not to mention the unassailable fact that such
act was subsequently affirmed or ratified by the Director of the CAA himself (Record on Appeal, pp. 108-110).

Petitioners argue that cancelling or setting aside a contract approved by the Secretary is, in effect, repealing
an act of the Secretary which is beyond the authority of the Administrator.
Such argument is untenable. The terms and conditions under which such revocation or cancellation may be
made, have already been specifically provided for in Contract "A" which has already been approved by the
Department Head, It is evident that in the implementation of aforesaid contract, the approval of said
Department Head is no longer necessary if not redundant.
It is further contended that even granting that such cancellation was effective, a subsequent billing by the
Accounting Department of the CAA has in effect waived or nullified the rescission of Contract "A."
It will be recalled that the questioned cancellation of Contract "A" was among others, mainly based on the
violation of its terms and conditions, specifically, the sublease of the property by the lessee without the consent
of the lessor.
The billing of the petitioners by the Accounting Department of the CAA if indeed it transpired, after the
cancellation of Contract "A" is obviously an error. However, this Court has already ruled that the mistakes of
government personnel should not affect public interest. In San Mauricio Mining Company v. Ancheta (105
SCRA 391, 422), it has been held that as a matter of law rooted in the protection of public interest, and also as
a general policy to protect the government and the people, errors of government personnel in the performance
of their duties should never deprive the people of the right to rectify such error and recover what might be lost
or be bartered away in any actuation, deal or transaction concerned. In the case at bar, the lower court in its
decision which has been affirmed by the Court of Appeals, ordered the CAA to refund to the petitioners the
amount of rentals which was not due from them with 6% interest per annum until fully paid.

SEC. 567. Authority of the President of the Philippines to execute contracts relative to
real property. When the Republic of the Philippines is party to a deed conveying the
title to real property or is party to any lease or other contract relating to real property
belonging to said government, said deed or contract shall be executed on behalf of
said government by the President of the Philippines or by an officer duly designated by
him, unless authority to execute the same is by law expressly vested in some other
officer. (Emphasis supplied)
SEC. 568. Authority of national officials to make contract. Written contracts not
within the purview of the preceding section shall, in the absence of special provision,
be executed, with the approval of the proper Department Head, by the Chief of the
Bureau or Office having control of the appropriation against which the contract would
create a charge; or if there is no such chief, by the proper Department Head himself or
the President of the Philippines as the case may require.
On the other hand, respondent CAA avers that the CAA Administrator has the authority to lease real property
belonging to the Republic of the Philippines under its administration even without the approval of the Secretary
of Public Works and Communications, which authority is expressly vested in it by law, more particularly
Section 32 (24) of Republic Act 776, which reads:
Sec. 32. Powers and Duties of the Administrator. Subject to the general control and
supervision of the Department Head, the Administrator shall have, among others, the
following powers and duties:
xxx xxx xxx

Petitioners further assail the interpretation of Contract "A", claiming that Contract "B" was a mere sublease to
respondent Mobil Oil Philippines, Inc. and requires no prior consent of CAA to perfect the same. Citing Article
1650 of the Civil Code, they assert that the prohibition to sublease must be expressed and cannot be merely
implied or inferred (Rollo, p. 151).
As correctly found by the Court of Appeals, petitioners in asserting the non- necessity for a prior consent
interprets the first sentence of paragraph 7 of Contract "A" to refer to an assignment of lease under Article
1649 of the Civil Code and not to a mere sublease. A careful scrutiny of said paragraph of Contract "A" clearly
shows that it speaks of transfer of rights of Rosario Leveriza to the leased premises and not to assignment of
the lease (Rollo, pp. 48-49).
Petitioners likewise argued that it was contemplated by the parties to Contract "A" that Mobil Oil Philippines
would be the owner of the gasoline station it would construct on the leased premises during the period of the
lease, hence, it is understood that it must be given a right to use and occupy the lot in question in the form of a
sub-lease (Rollo, p. 152).
In Contract "A", it was categorically stated that it is the lessee (petitioner) who will manage and operate the
gasoline station. The fact that Mobil Oil was mentioned in that contract was clearly not intended to give
approval to a sublease between petitioners and said company but rather to insure that in the arrangements to
be made between them, it must be understood that after the expiration of the lease contract, whatever
improvements have been constructed in the leased premises shall be relinquished to CAA. Thus, this Court
held that "the primary and elementary rule of construction of documents is that when the words or language
thereof is clear and plain or readily understandable by any ordinary reader thereof, there is absolutely no room
for interpretation or construction anymore." (San Mauricio Mining Company v. Ancheta, supra).
Finally, petitioners contend that the administrator of CAA cannot execute without approval of the Department
Secretary, a valid contract of lease over real property owned by the Republic of the Philippines, citing Sections
567 and 568 of the Revised Administrative Code, which provide as follows:

(24) To administer, operate, manage, control, maintain and develop the Manila
International Airport and all government aerodromes except those controlled or
operated by the Armed Forces of the Philippines including such power and duties as: ...
(b) to enter into, make and execute contracts of any kind with any person, firm, or
public or private corporation or entity; (c) to acquire, hold, purchase, or lease any
personal or real property; right of ways, and easements which may be proper or
necessary: Provided, that no real property thus acquired and any other real property of
the Civil Aeronautics Administration shall be sold without the approval of the President
of the Philippines. ...
There is no dispute that the Revised Administrative Code is a general law while
Republic Act 776 is a special law nor in the fact that the real property subject of the
lease in Contract "C" is real property belonging to the Republic of the Philippines.
Under 567 of the Revised Administrative Code, such contract of lease must be executed: (1) by the President
of the Philippines, or (2) by an officer duly designated by him or (3) by an officer expressly vested by law. It is
readily apparent that in the case at bar, the Civil Aeronautics Administration has the authority to enter into
Contracts of Lease for the government under the third category. Thus, as correctly ruled by the Court of
Appeals, the Civil Aeronautics Administration has the power to execute the deed or contract involving leases of
real properties belonging to the Republic of the Philippines, not because it is an entity duly designated by the
President but because the said authority to execute the same is, by law expressly vested in it.
Under the above-cited Section 32 (par. 24) of Republic Act 776, the Administrator (Director) of the Civil
Aeronautics Administration by reason of its creation and existence, administers properties belonging to the
Republic of the Philippines and it is on these properties that the Administrator must exercise his vast power
and discharge his duty to enter into, make and execute contract of any kind with any person, firm, or public or
private corporation or entity and to acquire, hold, purchase, or lease any personal or real property, right of
ways and easements which may be proper or necessary. The exception, however, is the sale of properties

acquired by CAA or any other real properties of the same which must have the approval of the President of the
Philippines. The Court of appeals took cognizance of the striking absence of such proviso in the other
transactions contemplated in paragraph (24) and is convinced as we are, that the Director of the Civil
Aeronautics Administration does not need the prior approval of the President or the Secretary of Public Works
and Communications in the execution of Contract "C."
In this regard, this Court, ruled that another basic principle of statutory construction mandates that general
legislation must give way to special legislation on the same subject, and generally be so interpreted as to
embrace only cases in which the special provisions are not applicable (Sto. Domingo v. De los Angeles, 96
SCRA 139),. that specific statute prevails over a general statute (De Jesus v. People, 120 SCRA 760) and that
where two statutes are of equal theoretical application to a particular case, the one designed therefor specially
should prevail (Wil Wilhensen, Inc. v. Baluyot, 83 SCRA 38)
WHEREFORE, the petition is DISMISSED for lack of merit and the decision of the Court of Appeals appealed
from is AFFIRMED in toto.

Code, such contract of lease must be executed: (1) by the President of the Philippines, or (2) by an officer duly
designated by him or (3) by an officer expressly vested by law. It is readily apparent that in the case at bar, the
Civil Aeronautics Administration has the authority to enter into Contracts of Lease for the government under
the third category. Thus, as correctly ruled by the Court of Appeals, the Civil Aeronautics Administration has
the power to execute the deed or contract involving leases of real properties belonging to the Republic of the
Philippines, not because it is an entity duly designated by the President but because the said authority to
execute the same is, by law expressly vested in it. [Leveriza vs. Intermediate Appellate Court, 157 SCRA
282(1988)]
G.R. No. 120319 October 6, 1995
LUZON DEVELOPMENT BANK, petitioner,
vs.
ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER S. GARCIA in her
capacity as VOLUNTARY ARBITRATOR, respondents.

SO ORDERED.
ROMERO, J.:

Digest

Leveriza vs. IAC, 157 SCRA 282 (1988)

FACTS:

From a submission agreement of the Luzon Development Bank (LDB) and the Association of Luzon
Development Bank Employees (ALDBE) arose an arbitration case to resolve the following issue:
Whether or not the company has violated the Collective Bargaining Agreement
provision and the Memorandum of Agreement dated April 1994, on promotion.

This case involves three contracts of lease:


1) Contract A: executed between Civil Aeronautics Administration (lessor) and Rosario Leveriza (lessee)
2) Contract B: executed between Leveriza (lessor) and Mobil Oil (lessee)
3) Contract C: executed between CAA (lessor) and Mobil Oil (lessee)
When Leveriza subleased the property to Mobil Oil (Contract B) without permission from the lessor, CAA
cancelled Contract A and executed Contract C with Mobil Oil. Leveriza contended that Contract C was invalid
not only because it was entered into by CAA without approval by the Department Secretary but also because it
was not executed by the President of the Philippines or officer duly designated. According to Leveriza, the
officer duly designated to cancel the contract is not the Airport General Manager but the Secretary of Public
Works and Communication or the Director of the CAA.
ISSUE:
W/N Contract C was validly entered into
HELD:
SC held that the Airport General Manager had authority to enter into contracts of lease. In executing Contract
C, the Airport General Manager signed for the Director of the CAA, who subsequently ratified the same.
Under sec. 567 of the RAC, a contract of lease may be executed by: (1) President; (2) officer duly designated
by him; and (3) officer expressly vested by law. Under sec. 32 (24) of RA 776, the Director of the CAA is one
such officer vested by law.
SCRA
Administrative Law; Under 567 of the Revised Administrative Code, the Civil Aeronautics Administration has
the authority to enter into Contracts of Lease for the government.Under 567 of the Revised Administrative

At a conference, the parties agreed on the submission of their respective Position Papers on December 1-15,
1994. Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received ALDBE's Position Paper on
January 18, 1995. LDB, on the other hand, failed to submit its Position Paper despite a letter from the
Voluntary Arbitrator reminding them to do so. As of May 23, 1995 no Position Paper had been filed by LDB.
On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered a decision disposing as
follows:
WHEREFORE, finding is hereby made that the Bank has not adhered to the Collective
Bargaining Agreement provision nor the Memorandum of Agreement on promotion.
Hence, this petition for certiorari and prohibition seeking to set aside the decision of the Voluntary Arbitrator
and to prohibit her from enforcing the same.
In labor law context, arbitration is the reference of a labor dispute to an impartial third person for determination
on the basis of evidence and arguments presented by such parties who have bound themselves to accept the
decision of the arbitrator as final and binding.
Arbitration may be classified, on the basis of the obligation on which it is based, as either compulsory or
voluntary.
Compulsory arbitration is a system whereby the parties to a dispute are compelled by the government to
forego their right to strike and are compelled to accept the resolution of their dispute through arbitration by a
third party. 1The essence of arbitration remains since a resolution of a dispute is arrived at by resort to a
disinterested third party whose decision is final and binding on the parties, but in compulsory arbitration, such
a third party is normally appointed by the government.

Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made, pursuant to a
voluntary arbitration clause in their collective agreement, to an impartial third person for a final and binding
resolution. 2Ideally, arbitration awards are supposed to be complied with by both parties without delay, such
that once an award has been rendered by an arbitrator, nothing is left to be done by both parties but to comply
with the same. After all, they are presumed to have freely chosen arbitration as the mode of settlement for that
particular dispute. Pursuant thereto, they have chosen a mutually acceptable arbitrator who shall hear and
decide their case. Above all, they have mutually agreed to de bound by said arbitrator's decision.
In the Philippine context, the parties to a Collective Bargaining Agreement (CBA) are required to include
therein provisions for a machinery for the resolution of grievances arising from the interpretation or
implementation of the CBA or company personnel policies. 3 For this purpose, parties to a CBA shall name and
designate therein a voluntary arbitrator or a panel of arbitrators, or include a procedure for their selection,
preferably from those accredited by the National Conciliation and Mediation Board (NCMB). Article 261 of the
Labor Code accordingly provides for exclusive original jurisdiction of such voluntary arbitrator or panel of
arbitrators over (1) the interpretation or implementation of the CBA and (2) the interpretation or enforcement of
company personnel policies. Article 262 authorizes them, but only upon agreement of the parties, to exercise
jurisdiction over other labor disputes.
On the other hand, a labor arbiter under Article 217 of the Labor Code has jurisdiction over the following
enumerated cases:
. . . (a) Except as otherwise provided under this Code the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days
after the submission of the case by the parties for decision without extension, even in
the absence of stenographic notes, the following cases involving all workers, whether
agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;

voluntary arbitration provides that "(t)he award or decision of the Voluntary Arbitrator . . . shall be final and
executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties," 5 while
the "(d)ecision, awards, or orders of the Labor Arbiter are final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or
orders." 6 Hence, while there is an express mode of appeal from the decision of a labor arbiter, Republic Act
No. 6715 is silent with respect to an appeal from the decision of a voluntary arbitrator.
Yet, past practice shows that a decision or award of a voluntary arbitrator is, more often than not, elevated to
the Supreme Court itself on a petition for certiorari, 7 in effect equating the voluntary arbitrator with the NLRC
or the Court of Appeals. In the view of the Court, this is illogical and imposes an unnecessary burden upon it.
In Volkschel Labor Union, et al. v. NLRC, et al., 8 on the settled premise that the judgments of courts and
awards of quasi-judicial agencies must become final at some definite time, this Court ruled that the awards of
voluntary arbitrators determine the rights of parties; hence, their decisions have the same legal effect as
judgments of a court. In Oceanic Bic Division (FFW), et al. v. Romero, et al., 9 this Court ruled that "a voluntary
arbitrator by the nature of her functions acts in a quasi-judicial capacity." Under these rulings, it follows that the
voluntary arbitrator, whether acting solely or in a panel, enjoys in law the status of a quasi-judicial agency but
independent of, and apart from, the NLRC since his decisions are not appealable to the latter. 10
Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of Appeals shall
exercise:
xxx xxx xxx
(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities,
boards or commissions, including the Securities and Exchange Commission, the
Employees Compensation Commission and the Civil Service Commission, except
those falling within the appellate jurisdiction of the Supreme Court in accordance with
the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442,
as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph
and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of
1948.
xxx xxx xxx

4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts;
6. Except claims for Employees Compensation, Social Security, Medicare and
maternity benefits, all other claims, arising from employer-employee relations, including
those of persons in domestic or household service, involving an amount exceeding five
thousand pesos (P5,000.00) regardless of whether accompanied with a claim for
reinstatement.
xxx xxx xxx
It will thus be noted that the jurisdiction conferred by law on a voluntary arbitrator or a panel of such arbitrators
is quite limited compared to the original jurisdiction of the labor arbiter and the appellate jurisdiction of the
National Labor Relations Commission (NLRC) for that matter. 4 The state of our present law relating to

Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may not strictly be
considered as a quasi-judicial agency, board or commission, still both he and the panel are comprehended
within the concept of a "quasi-judicial instrumentality." It may even be stated that it was to meet the very
situation presented by the quasi-judicial functions of the voluntary arbitrators here, as well as the subsequent
arbitrator/arbitral tribunal operating under the Construction Industry Arbitration Commission, 11 that the broader
term "instrumentalities" was purposely included in the above-quoted provision.
An "instrumentality" is anything used as a means or agency. 12 Thus, the terms governmental "agency" or
"instrumentality" are synonymous in the sense that either of them is a means by which a government acts, or
by which a certain government act or function is performed. 13 The word "instrumentality," with respect to a
state, contemplates an authority to which the state delegates governmental power for the performance of a
state function. 14 An individual person, like an administrator or executor, is a judicial instrumentality in the
settling of an estate, 15 in the same manner that a sub-agent appointed by a bankruptcy court is an
instrumentality of the court, 16 and a trustee in bankruptcy of a defunct corporation is an instrumentality of the
state. 17

The voluntary arbitrator no less performs a state function pursuant to a governmental power delegated to him
under the provisions therefor in the Labor Code and he falls, therefore, within the contemplation of the term
"instrumentality" in the aforequoted Sec. 9 of B.P. 129. The fact that his functions and powers are provided for
in the Labor Code does not place him within the exceptions to said Sec. 9 since he is a quasi-judicial
instrumentality as contemplated therein. It will be noted that, although the Employees Compensation
Commission is also provided for in the Labor Code, Circular No. 1-91, which is the forerunner of the present
Revised Administrative Circular No. 1-95, laid down the procedure for the appealability of its decisions to the
Court of Appeals under the foregoing rationalization, and this was later adopted by Republic Act No. 7902 in
amending Sec. 9 of B.P. 129.

by which a certain government act or function is performed. The word instrumentality, with respect to a state
contemplates an authority to which the state delegates governmental power for the performance of a state
function. [Luzon Development Bank vs. Association of Luzon Development Bank Employees, 249 SCRA
162(1995)]
G.R. No. 102976 October 25, 1995
IRON AND STEEL AUTHORITY, petitioner,
vs.
THE COURT OF APPEALS and MARIA CRISTINA FERTILIZER CORPORATION, respondents.

A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable
to the Court of Appeals, in line with the procedure outlined in Revised Administrative Circular No. 1-95, just like
those of the quasi-judicial agencies, boards and commissions enumerated therein.
This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to provide a
uniform procedure for the appellate review of adjudications of all quasi-judicial entities 18 not expressly
excepted from the coverage of Sec. 9 of B.P. 129 by either the Constitution or another statute. Nor will it run
counter to the legislative intendment that decisions of the NLRC be reviewable directly by the Supreme Court
since, precisely, the cases within the adjudicative competence of the voluntary arbitrator are excluded from the
jurisdiction of the NLRC or the labor arbiter.

FELICIANO, J.:
Petitioner Iron and Steel Authority ("ISA") was created by Presidential Decree (P.D.) No. 272 dated 9 August
1973 in order, generally, to develop and promote the iron and steel industry in the Philippines. The objectives
of the ISA are spelled out in the following terms:
Sec. 2. Objectives The Authority shall have the following objectives:

In the same vein, it is worth mentioning that under Section 22 of Republic Act No. 876, also known as the
Arbitration Law, arbitration is deemed a special proceeding of which the court specified in the contract or
submission, or if none be specified, the Regional Trial Court for the province or city in which one of the parties
resides or is doing business, or in which the arbitration is held, shall have jurisdiction. A party to the
controversy may, at any time within one (1) month after an award is made, apply to the court having
jurisdiction for an order confirming the award and the court must grant such order unless the award is vacated,
modified or corrected. 19
In effect, this equates the award or decision of the voluntary arbitrator with that of the regional trial court.
Consequently, in a petition for certiorari from that award or decision, the Court of Appeals must be deemed to
have concurrent jurisdiction with the Supreme Court. As a matter of policy, this Court shall henceforth remand
to the Court of Appeals petitions of this nature for proper disposition.

(a) to strengthen the iron and steel industry of the Philippines and to expand the
domestic and export markets for the products of the industry;
(b) to promote the consolidation, integration and rationalization of the industry in order
to increase industry capability and viability to service the domestic market and to
compete in international markets;
(c) to rationalize the marketing and distribution of steel products in order to achieve a
balance between demand and supply of iron and steel products for the country and to
ensure that industry prices and profits are at levels that provide a fair balance between
the interests of investors, consumers suppliers, and the public at large;

ACCORDINGLY, the Court resolved to REFER this case to the Court of Appeals.
SO ORDERED.
SCRA
Same; Same; Administrative Law; The voluntary arbitrator, whether acting solely or in a panel, enjoys in law
the status of a quasijudicial agency but independent of, and apart from, the NLRC since his decisions are not
appealable to the latter.In Volkschel Labor Union, et al. v. NLRC, et al., on the settled premise that the
judgments of courts and awards of quasi-judicial agencies must become final at some definite time, this Court
ruled that the awards of voluntary arbitrators determine the rights of parties; hence, their decisions have the
same legal effect as judgments of a court. In Oceanic Bic Division (FFW), et al. v. Romero, et al., this Court
ruled that a voluntary arbitrator by the nature of her functions acts in a quasi-judicial capacity. Under these
rulings, it follows that the voluntary arbitrator, whether acting solely or in a panel, enjoys in law the status of a
quasi-judicial agency but independent of, and apart from, the NLRC since his decisions are not appealable to
the latter.
Same; Same; Same; Words and Phrases; Governmental Agency or Instrumentality, Explained.An
instrumentality is anything used as a means or agency. Thus, the terms governmental agency or
instrumentality are synonymous in the sense that either of them is a means by which a government acts, or

(d) to promote full utilization of the existing capacity of the industry, to discourage
investment in excess capacity, and in coordination, with appropriate government
agencies to encourage capital investment in priority areas of the industry;
(e) to assist the industry in securing adequate and low-cost supplies of raw materials
and to reduce the excessive dependence of the country on imports of iron and steel.
The list of powers and functions of the ISA included the following:
Sec. 4. Powers and Functions. The authority shall have the following powers and
functions:
xxx xxx xxx
(j) to initiate expropriation of land required for basic iron and steel facilities for
subsequent resale and/or lease to the companies involved if it is shown that such use
of the State's power is necessary to implement the construction of capacity which is
needed for the attainment of the objectives of the Authority;

xxx xxx xxx


(Emphasis supplied)
P.D. No. 272 initially created petitioner ISA for a term of five (5) years counting from 9 August 1973. 1 When
ISA's original term expired on 10 October 1978, its term was extended for another ten (10) years by Executive
Order No. 555 dated 31 August 1979.
The National Steel Corporation ("NSC") then a wholly owned subsidiary of the National Development
Corporation which is itself an entity wholly owned by the National Government, embarked on an expansion
program embracing, among other things, the construction of an integrated steel mill in Iligan City. The
construction of such a steel mill was considered a priority and major industrial project of the Government.
Pursuant to the expansion program of the NSC, Proclamation No. 2239 was issued by the President of the
Philippines on 16 November 1982 withdrawing from sale or settlement a large tract of public land (totalling
about 30.25 hectares in area) located in Iligan City, and reserving that land for the use and immediate
occupancy of NSC.
Since certain portions of the public land subject matter Proclamation No. 2239 were occupied by a nonoperational chemical fertilizer plant and related facilities owned by private respondent Maria Cristina Fertilizer
Corporation ("MCFC"), Letter of Instruction (LOI), No. 1277, also dated 16 November 1982, was issued
directing the NSC to "negotiate with the owners of MCFC, for and on behalf of the Government, for the
compensation of MCFC's present occupancy rights on the subject land." LOI No. 1277 also directed that
should NSC and private respondent MCFC fail to reach an agreement within a period of sixty (60) days from
the date of LOI No. 1277, petitioner ISA was to exercise its power of eminent domain under P.D. No. 272 and
to initiate expropriation proceedings in respect of occupancy rights of private respondent MCFC relating to the
subject public land as well as the plant itself and related facilities and to cede the same to the NSC. 2
Negotiations between NSC and private respondent MCFC did fail. Accordingly, on 18 August 1983, petitioner
ISA commenced eminent domain proceedings against private respondent MCFC in the Regional Trial Court,
Branch 1, of Iligan City, praying that it (ISA) be places in possession of the property involved upon depositing
in court the amount of P1,760,789.69 representing ten percent (10%) of the declared market values of that
property. The Philippine National Bank, as mortgagee of the plant facilities and improvements involved in the
expropriation proceedings, was also impleaded as party-defendant.
On 17 September 1983, a writ of possession was issued by the trial court in favor of ISA. ISA in turn placed
NSC in possession and control of the land occupied by MCFC's fertilizer plant installation.
The case proceeded to trial. While the trial was ongoing, however, the statutory existence of petitioner ISA
expired on 11 August 1988. MCFC then filed a motion to dismiss, contending that no valid judgment could be
rendered against ISA which had ceased to be a juridical person. Petitioner ISA filed its opposition to this
motion.
In an Order dated 9 November 1988, the trial court granted MCFC's motion to dismiss and did dismiss the
case. The dismissal was anchored on the provision of the Rules of Court stating that "only natural or juridical
persons or entities authorized by law may be parties in a civil case." 3 The trial court also referred to noncompliance by petitioner ISA with the requirements of Section 16, Rule 3 of the Rules of Court. 4
Petitioner ISA moved for reconsideration of the trial court's Order, contending that despite the expiration of its
term, its juridical existence continued until the winding up of its affairs could be completed. In the alternative,
petitioner ISA urged that the Republic of the Philippines, being the real party-in-interest, should be allowed to
be substituted for petitioner ISA. In this connection, ISA referred to a letter from the Office of the President
dated 28 September 1988 which especially directed the Solicitor General to continue the expropriation case.

The trial court denied the motion for reconsideration, stating, among other things that:
The property to be expropriated is not for public use or benefit [__] but for the use and
benefit [__] of NSC, a government controlled private corporation engaged in private
business and for profit, specially now that the government, according to newspaper
reports, is offering for sale to the public its [shares of stock] in the National Steel
Corporation in line with the pronounced policy of the present administration to
disengage the government from its private business ventures. 5 (Brackets supplied)
Petitioner went on appeal to the Court of Appeals. In a Decision dated 8 October 1991, the Court of Appeals
affirmed the order of dismissal of the trial court. The Court of Appeals held that petitioner ISA, "a government
regulatory agency exercising sovereign functions," did not have the same rights as an ordinary corporation
and that the ISA, unlike corporations organized under the Corporation Code, was not entitled to a period for
winding up its affairs after expiration of its legally mandated term, with the result that upon expiration of its term
on 11 August 1987, ISA was "abolished and [had] no more legal authority to perform governmental functions."
The Court of Appeals went on to say that the action for expropriation could not prosper because the basis for
the proceedings, the ISA's exercise of its delegated authority to expropriate, had become ineffective as a result
of the delegate's dissolution, and could not be continued in the name of Republic of the Philippines,
represented by the Solicitor General:
It is our considered opinion that under the law, the complaint cannot prosper, and
therefore, has to be dismissed without prejudice to the refiling of a new complaint for
expropriation if the Congress sees it fit." (Emphases supplied)
At the same time, however, the Court of Appeals held that it was premature for the trial court to
have ruled that the expropriation suit was not for a public purpose, considering that the parties had
not yet rested their respective cases.
In this Petition for Review, the Solicitor General argues that since ISA initiated and prosecuted the action for
expropriation in its capacity as agent of the Republic of the Philippines, the Republic, as principal of ISA, is
entitled to be substituted and to be made a party-plaintiff after the agent ISA's term had expired.
Private respondent MCFC, upon the other hand, argues that the failure of Congress to enact a law further
extending the term of ISA after 11 August 1988 evinced a "clear legislative intent to terminate the juridical
existence of ISA," and that the authorization issued by the Office of the President to the Solicitor General for
continued prosecution of the expropriation suit could not prevail over such negative intent. It is also contended
that the exercise of the eminent domain by ISA or the Republic is improper, since that power would be
exercised "not on behalf of the National Government but for the benefit of NSC."
The principal issue which we must address in this case is whether or not the Republic of the Philippines is
entitled to be substituted for ISA in view of the expiration of ISA's term. As will be made clear below, this is
really the only issue which we must resolve at this time.
Rule 3, Section 1 of the Rules of Court specifies who may be parties to a civil action:
Sec. 1. Who May Be Parties. Only natural or juridical persons or entities authorized
by law may be parties in a civil action.
Under the above quoted provision, it will be seen that those who can be parties to a civil action
may be broadly categorized into two (2) groups:

(a) those who are recognized as persons under the law whether natural, i.e., biological
persons, on the one hand, or juridical person such as corporations, on the other hand;
and
(b) entities authorized by law to institute actions.
Examination of the statute which created petitioner ISA shows that ISA falls under category (b) above. P.D. No.
272, as already noted, contains express authorization to ISA to commence expropriation proceedings like
those here involved:
Sec. 4. Powers and Functions. The Authority shall have the following powers and
functions:
xxx xxx xxx
(j) to initiate expropriation of land required for basic iron and steel facilities for
subsequent resale and/or lease to the companies involved if it is shown that such use
of the State's power is necessary to implement the construction of capacity which is
needed for the attainment of the objectives of the Authority;
xxx xxx xxx

"Authority" has been used to designate both incorporated and non-incorporated agencies or instrumentalities
of the Government.
We consider that the ISA is properly regarded as an agent or delegate of the Republic of the Philippines. The
Republic itself is a body corporate and juridical person vested with the full panoply of powers and attributes
which are compendiously described as "legal personality." The relevant definitions are found in the
Administrative Code of 1987:
Sec. 2. General Terms Defined. Unless the specific words of the text, or the context
as a whole, or a particular statute, require a different meaning:
(1) Government of the Republic of the Philippines refers to the corporate governmental
entity through which the functions of government are exercised throughout the
Philippines, including, save as the contrary appears from the context, the various arms
through which political authority is made effective in the Philippines, whether pertaining
to the autonomous regions, the provincial, city, municipal or barangay subdivisions or
other forms of local government.
xxx xxx xxx
(4) Agency of the Government refers to any of the various units of the Government,
including a department, bureau, office, instrumentality, or government-owned or
controlled corporation, or a local government or a distinct unit therein.

(Emphasis supplied)
xxx xxx xxx
It should also be noted that the enabling statute of ISA expressly authorized it to enter into certain
kinds of contracts "for and in behalf of the Government" in the following terms:
xxx xxx xxx
(i) to negotiate, and when necessary, to enter into contracts for and in behalf of the
government, for the bulk purchase of materials, supplies or services for any sectors in
the industry, and to maintain inventories of such materials in order to insure a
continuous and adequate supply thereof and thereby reduce operating costs of such
sector;
xxx xxx xxx
(Emphasis supplied)
Clearly, ISA was vested with some of the powers or attributes normally associated with juridical personality.
There is, however, no provision in P.D. No. 272 recognizing ISA as possessing general or comprehensive
juridical personality separate and distinct from that of the Government. The ISA in fact appears to the Court to
be a non-incorporated agency or instrumentality of the Republic of the Philippines, or more precisely of the
Government of the Republic of the Philippines. It is common knowledge that other agencies or
instrumentalities of the Government of the Republic are cast in corporate form, that is to say, are incorporated
agencies orinstrumentalities, sometimes with and at other times without capital stock, and accordingly vested
with a juridical personality distinct from the personality of the Republic. Among such incorporated agencies or
instrumentalities are: National Power Corporation; 6 Philippine Ports Authority; 7 National Housing
Authority; 8 Philippine National Oil Company; 9 Philippine National Railways; 10 Public Estates
Authority; 11 Philippine Virginia Tobacco Administration, 12 and so forth. It is worth noting that the term

(10) Instrumentality refers to any agency of the National Government, not integrated
within the department framework, vested with special functions or jurisdiction by
law, endowed with some if not all corporate powers, administering special funds, and
enjoying operational autonomy, usually through a charter. This term includes regulatory
agencies, chartered institutions and government-owned or controlled corporations.
xxx xxx xxx
(Emphases supplied)
When the statutory term of a non-incorporated agency expires, the powers, duties and functions as well as the
assets and liabilities of that agency revert back to, and are re-assumed by, the Republic of the Philippines, in
the absence of special provisions of law specifying some other disposition thereof such as, e.g., devolution or
transmission of such powers, duties, functions, etc. to some other identified successor agency or
instrumentality of the Republic of the Philippines. When the expiring agency is an incorporated one, the
consequences of such expiry must be looked for, in the first instance, in the charter of that agency and, by way
of supplementation, in the provisions of the Corporation Code. Since, in the instant case, ISA is a nonincorporated agency or instrumentality of the Republic, its powers, duties, functions, assets and liabilities are
properly regarded as folded back into the Government of the Republic of the Philippines and hence assumed
once again by the Republic, no special statutory provision having been shown to have mandated succession
thereto by some other entity or agency of the Republic.
The procedural implications of the relationship between an agent or delegate of the Republic of the Philippines
and the Republic itself are, at least in part, spelled out in the Rules of Court. The general rule is, of course, that
an action must be prosecuted and defended in the name of the real party in interest. (Rule 3, Section 2)
Petitioner ISA was, at the commencement of the expropriation proceedings, a real party in interest, having

been explicitly authorized by its enabling statute to institute expropriation proceedings. The Rules of Court at
the same time expressly recognize the role of representative parties:
Sec. 3. Representative Parties. A trustee of an expressed trust, a guardian, an
executor or administrator, or a party authorized by statute may sue or be sued without
joining the party for whose benefit the action is presented or defended; but the court
may, at any stage of the proceedings, order such beneficiary to be made a party. . . . .
(Emphasis supplied)
In the instant case, ISA instituted the expropriation proceedings in its capacity as an agent or delegate or
representative of the Republic of the Philippines pursuant to its authority under P.D. No. 272. The present
expropriation suit was brought on behalf of and for the benefit of the Republic as the principal of ISA.
Paragraph 7 of the complaint stated:
7. The Government, thru the plaintiff ISA, urgently needs the subject parcels of land for
the construction and installation of iron and steel manufacturing facilities that are
indispensable to the integration of the iron and steel making industry which is vital to
the promotion of public interest and welfare. (Emphasis supplied)
The principal or the real party in interest is thus the Republic of the Philippines and not the National
Steel Corporation, even though the latter may be an ultimate user of the properties involved should
the condemnation suit be eventually successful.
From the foregoing premises, it follows that the Republic of the Philippines is entitled to be substituted in the
expropriation proceedings as party-plaintiff in lieu of ISA, the statutory term of ISA having expired. Put a little
differently, the expiration of ISA's statutory term did not by itself require or justify the dismissal of the eminent
domain proceedings.

complaint already proved by the Republic of the Philippines and bring back as it were
to square one. 16 (Emphasis supplied)
As noted earlier, the Court of Appeals declined to permit the substitution of the Republic of the Philippines for
the ISA upon the ground that the action for expropriation could not prosper because the basis for the
proceedings, the ISA's exercise of its delegated authority to expropriate, had become legally ineffective by
reason of the expiration of the statutory term of the agent or delegated i.e., ISA. Since, as we have held above,
the powers and functions of ISA have reverted to the Republic of the Philippines upon the termination of the
statutory term of ISA, the question should be addressed whether fresh legislative authority is necessary before
the Republic of the Philippines may continue the expropriation proceedings initiated by its own delegate or
agent.
While the power of eminent domain is, in principle, vested primarily in the legislative department of the
government, we believe and so hold that no new legislative act is necessary should the Republic decide, upon
being substituted for ISA, in fact to continue to prosecute the expropriation proceedings. For the legislative
authority, a long time ago, enacted a continuing or standing delegation of authority to the President of the
Philippines to exercise, or cause the exercise of, the power of eminent domain on behalf of the Government of
the Republic of the Philippines. The 1917 Revised Administrative Code, which was in effect at the time of the
commencement of the present expropriation proceedings before the Iligan Regional Trial Court, provided that:
Sec. 64. Particular powers and duties of the President of the Philippines. In addition
to his general supervisory authority, the President of the Philippines shall have such
other specific powers and duties as are expressly conferred or imposed on him by law,
and also, in particular, the powers and duties set forth in this Chapter.
Among such special powers and duties shall be:
xxx xxx xxx

It is also relevant to note that the non-joinder of the Republic which occurred upon the expiration of ISA's
statutory term, was not a ground for dismissal of such proceedings since a party may be dropped or added by
order of the court, on motion of any party or on the court's own initiative at any stage of the action and on such
terms as are just. 13 In the instant case, the Republic has precisely moved to take over the proceedings as
party-plaintiff.
In E.B. Marcha Transport Company, Inc. v. Intermediate Appellate Court, 14 the Court recognized that the
Republic may initiate or participate in actions involving its agents. There the Republic of the Philippines was
held to be a proper party to sue for recovery of possession of property although the "real" or registered owner
of the property was the Philippine Ports Authority, a government agency vested with a separate juridical
personality. The Court said:
It can be said that in suing for the recovery of the rentals, the Republic of the
Philippines acted as principal of the Philippine Ports Authority, directly exercising the
commission it had earlier conferred on the latter as its agent. . . . 15 (Emphasis supplied)
In E.B. Marcha, the Court also stressed that to require the Republic to commence all over again
another proceeding, as the trial court and Court of Appeals had required, was to generate
unwarranted delay and create needless repetition of proceedings:
More importantly, as we see it, dismissing the complaint on the ground that the
Republic of the Philippines is not the proper party would result in needless delay in the
settlement of this matter and also in derogation of the policy against multiplicity of suits.
Such a decision would require the Philippine Ports Authority to refile the very same

(h) To determine when it is necessary or advantageous to exercise the right of eminent


domain in behalf of the Government of the Philippines; and to direct the Secretary of
Justice, where such act is deemed advisable, to cause the condemnation proceedings
to be begun in the court having proper jurisdiction. (Emphasis supplied)
The Revised Administrative Code of 1987 currently in force has substantially reproduced the
foregoing provision in the following terms:
Sec. 12. Power of eminent domain. The President shall determine when it is
necessary or advantageous to exercise the power of eminent domain in behalf of the
National Government, anddirect the Solicitor General, whenever he deems the action
advisable, to institute expopriation proceedings in the proper court. (Emphasis
supplied)
In the present case, the President, exercising the power duly delegated under both the 1917 and
1987 Revised Administrative Codes in effect made a determination that it was necessary and
advantageous to exercise the power of eminent domain in behalf of the Government of the
Republic and accordingly directed the Solicitor General to proceed with the suit. 17
It is argued by private respondent MCFC that, because Congress after becoming once more the depository of
primary legislative power, had not enacted a statute extending the term of ISA, such non-enactment must be
deemed a manifestation of a legislative design to discontinue or abort the present expropriation suit. We find
this argument much too speculative; it rests too much upon simple silence on the part of Congress and
casually disregards the existence of Section 12 of the 1987 Administrative Code already quoted above.

Other contentions are made by private respondent MCFC, such as, that the constitutional requirement of
"public use" or "public purpose" is not present in the instant case, and that the indispensable element of just
compensation is also absent. We agree with the Court of Appeals in this connection that these contentions,
which were adopted and set out by the Regional Trial Court in its order of dismissal, are premature and are
appropriately addressed in the proceedings before the trial court. Those proceedings have yet to produce a
decision on the merits, since trial was still on going at the time the Regional Trial Court precipitously dismissed
the expropriation proceedings. Moreover, as a pragmatic matter, the Republic is, by such substitution as partyplaintiff, accorded an opportunity to determine whether or not, or to what extent, the proceedings should be
continued in view of all the subsequent developments in the iron and steel sector of the country including,
though not limited to, the partial privatization of the NSC.
WHEREFORE, for all the foregoing, the Decision of the Court of Appeals dated 8 October 1991 to the extent
that it affirmed the trial court's order dismissing the expropriation proceedings, is hereby REVERSED and SET
ASIDE and the case is REMANDED to the court a quo which shall allow the substitution of the Republic of the
Philippines for petitioner Iron and Steel Authority and for further proceedings consistent with this Decision. No
pronouncement as to costs.
SO ORDERED.

Since certain portions of the public land subject matter Proclamation No. 2239 were occupied by a nonoperational chemical fertilizer plant and related facilities owned by Maria Cristina Fertilizer Corporation
(MCFC), Letter of Instruction (LOI), No. 1277, was issued directing the NSC to negotiate with the owners of
MCFC, for and on behalf of the Government, for the compensation of MCFCs present occupancy rights on the
subject land. LOI No. 1277 also directed that should NSC and private respondent MCFC fail to reach an
agreement within a period of sixty (60) days from the date of LOI No. 1277, petitioner ISA was to exercise its
power of eminent domain under P.D. No. 272 and to initiate expropriation proceedings in respect of occupancy
rights of private respondent MCFC relating to the subject public land as well as the plant itself and related
facilities and to cede the same to the NSC.

Negotiations between NSC and private respondent MCFC did fail. Accordingly ISA commenced eminent
domain proceedings against MCFC in the RTC of Iligan City, praying that it be placed in possession of the
property involved upon depositing in court representing ten percent (10%) of the declared market values of
that property.

Digest
IRON AND STEEL AUTHORITY vs. CA and MARIA CRISTINA FERTILIZER CORPORATION

G.R. No. 102976

A writ of possession was issued by the trial court in favor of ISA. ISA in turn placed NSC in possession and
control of the land occupied by MCFCs fertilizer plant installation.

The case proceeded to trial. While the trial was ongoing, however, the statutory existence of petitioner ISA
expired. MCFC then filed a motion to dismiss, contending that no valid judgment could be rendered against
ISA which had ceased to be a juridical person. Petitioner ISA filed its opposition to this motion.

October 25, 1995

FACTS: Iron and Steel Authority (ISA) was created by P.D. No. 272 in order, generally, to develop and
promote the iron and steel industry in the Philippines. The list of powers and functions of the ISA included the
following: xx

The trial court granted MCFCs motion to dismiss and did dismiss the case. The dismissal was anchored on
the provision of the Rules of Court stating that only natural or juridical persons or entities authorized by law
may be parties in a civil case.

Petitioner ISA moved for reconsideration which the trial court denied.
Sec. 4. Powers and Functions. The authority shall have the following powers and functions: xx

(j) to initiate expropriation of land required for basic iron and steel facilities for subsequent resale and/or lease
to the companies involved if it is shown that such use of the States power is necessary to implement the
construction of capacity which is needed for the attainment of the objectives of the Authority; xx

ISA went on appeal to the CA, which affirmed the order of dismissal of the trial court. At the same time,
however, the Court of Appeals held that it was premature for the trial court to have ruled that the expropriation
suit was not for a public purpose, considering that the parties had not yet rested their respective cases.

Hence this Petition for Review.


The National Steel Corporation (NSC) then a wholly owned subsidiary of the National Development
Corporation which is itself an entity wholly owned by the National Government, embarked on an expansion
program embracing, among other things, the construction of an integrated steel mill in Iligan City. Pursuant to
the expansion program of the NSC, Proc. No. 2239 was issued by the President of the Philippines withdrawing
from sale or settlement a large tract of public located in Iligan City, and reserving that land for the use and
immediate occupancy of NSC.

ISSUE: WON the RP is entitled to be substituted for ISA in view of the expiration of ISAs term.

HELD: The Decision of the CA to the extent that it affirmed the trial courts order dismissing the expropriation
proceedings, is hereby REVERSED and SET ASIDE and the case is REMANDED to the court a quo which
shall allow the substitution of the RPfor petitioner ISA

YES

xxx xxx xxx

(4) Agency of the Government refers to any of the various units of the Government, including a department,
bureau, office, instrumentality, or government-owned or controlled corporation, or a local government or a
distinct unit therein.

Rule 3, Section 1 of the Rules of Court specifies who may be parties to a civil action:
xxx xxx xxx
Sec. 1. Who May Be Parties. Only natural or juridical persons or entities authorized by law may be parties in
a civil action.

Examination of the statute which created petitioner ISA shows that ISA falls under category (b) above. P.D. No.
272, as already noted, contains express authorization to ISA to commence expropriation proceedings like
those here involved. It should also be noted that the enabling statute of ISA expressly authorized it to enter
into certain kinds of contracts for and in behalf of the Government in the following terms: xx

(10) Instrumentality refers to any agency of the National Government, not integrated within the department
framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational autonomy, usually through a charter. This term includes
regulatory agencies, chartered institutions and government-owned or controlled corporations.

xxx xxx xxx

(i) to negotiate, and when necessary, to enter into contracts for and in behalf of the government, for the bulk
purchase of materials, supplies or services for any sectors in the industry, and to maintain inventories of such
materials in order to insure a continuous and adequate supply thereof and thereby reduce operating costs of
such sector; xxx

Clearly, ISA was vested with some of the powers or attributes normally associated with juridical personality.
There is, however, no provision in P.D. No. 272 recognizing ISA as possessing general or comprehensive
juridical personality separate and distinct from that of the Government.

We consider that the ISA is properly regarded as an agent or delegate of the RP. The Republic itself is a body
corporate and juridical person vested with the full panoply of powers and attributes which are compendiously
described as legal personality. The relevant definitions are found in the Administrative Code of 1987:

When the statutory term of a non-incorporated agency expires, the powers, duties and functions as well as the
assets and liabilities of that agency revert back to, and are re-assumed by, the RP, in the absence of special
provisions of law specifying some other disposition thereof such as, e.g., devolution or transmission of such
powers, duties, functions, etc. to some other identified successor agency or instrumentality of the RP.

When the expiring agency is an incorporated one, the consequences of such expiry must be looked for, in the
first instance, in the charter of that agency and, by way of supplementation, in the provisions of the
Corporation Code.

Since, in the instant case, ISA is a non-incorporated agency or instrumentality of the Republic, its powers,
duties, functions, assets and liabilities are properly regarded as folded back into GRP and hence assumed
once again by the Republic, no special statutory provision having been shown to have mandated succession
thereto by some other entity or agency of the Republic.

Sec. 2. General Terms Defined. Unless the specific words of the text, or the context as a whole, or a
particular statute, require a different meaning:
The principal or the real party in interest is thus the RP and not the NSC, even though the latter may be an
ultimate user of the properties involved should the condemnation suit be eventually successful.
(1) Government of the RPrefers to the corporate governmental entity through which the functions of
government are exercised throughout the Philippines, including, save as the contrary appears from the
context, the various arms through which political authority is made effective in the Philippines, whether
pertaining to the autonomous regions, the provincial, city, municipal or barangay subdivisions or other forms of
local government.

From the foregoing premises, it follows that the RP is entitled to be substituted in the expropriation
proceedings as party-plaintiff in lieu of ISA, the statutory term of ISA having expired. Put a little differently, the
expiration of ISAs statutory term did not by itself require or justify the dismissal of the eminent domain
proceedings.

In E.B. Marcha, the Court also stressed that to require the Republic to commence all over again another
proceeding, as the trial court and CA had required, was to generate unwarranted delay and create needless
repetition of proceedings:

NOTES:

In the present case, the President, exercising the power duly delegated under both the 1917 and 1987
Revised Administrative Codes in effect made a determination that it was necessary and advantageous to
exercise the power of eminent domain in behalf of the Government of the Republic and accordingly directed
the SG to proceed with the suit. 17

2. It is argued by private respondent MCFC that, because Congress after becoming once more the depository
of primary legislative power, had not enacted a statute extending the term of ISA, such non-enactment must
be deemed a manifestation of a legislative design to discontinue or abort the present expropriation suit. We
find this argument much too speculative; it rests too much upon simple silence on the part of Congress and
casually disregards the existence of Section 12 of the 1987 Administrative Code already quoted above.

1. Since, as we have held above, the powers and functions of ISA have reverted to the RP upon the
termination of the statutory term of ISA, the question should be addressed whether fresh legislative authority is
necessary before the RP may continue the expropriation proceedings initiated by its own delegate or agent.

While the power of eminent domain is, in principle, vested primarily in the legislative department of the
government, we believe and so hold that no new legislative act is necessary should the Republic decide, upon
being substituted for ISA, in fact to continue to prosecute the expropriation proceedings. For the legislative
authority, a long time ago, enacted a continuing or standing delegation of authority to the President of the
Philippines to exercise, or cause the exercise of, the power of eminent domain on behalf of the Government of
the Republic of the Philippines. The 1917 Revised Administrative Code, which was in effect at the time of the
commencement of the present expropriation proceedings before the Iligan RTC , provided that:

3. Other contentions are made by private respondent MCFC, such as, that the constitutional requirement of
public use or public purpose is not present in the instant case, and that the indispensable element of just
compensation is also absent. We agree with the Court of Appeals in this connection that these contentions,
which were adopted and set out by the RTC in its order of dismissal, are premature and are appropriately
addressed in the proceedings before the trial court. Those proceedings have yet to produce a decision on the
merits, since trial was still on going at the time the RTC precipitously dismissed the expropriation proceedings.
Moreover, as a pragmatic matter, the Republic is, by such substitution as party-plaintiff, accorded an
opportunity to determine whether or not, or to what extent, the proceedings should be continued in view of all
the subsequent developments in the iron and steel sector of the country including, though not limited to, the
partial privatization of the NSC
SCRA

Sec. 64. Particular powers and duties of the President of the Philippines. In addition to his general
supervisory authority, the President of the Philippines shall have such other specific powers and duties as are
expressly conferred or imposed on him by law, and also, in particular, the powers and duties set forth in this
Chapter.

Among such special powers and duties shall be: xx

(h) To determine when it is necessary or advantageous to exercise the right of eminent domain in behalf of the
Government of the Philippines; and to direct the Secretary of Justice, where such act is deemed advisable, to
cause the condemnation proceedings to be begun in the court having proper jurisdiction. xx

The Revised Administrative Code of 1987 currently in force has substantially reproduced the foregoing
provision in the following terms:

Sec. 12. Power of eminent domain. The President shall determine when it is necessary or advantageous to
exercise the power of eminent domain in behalf of the National Government, and direct the Solicitor General,
whenever he deems the action advisable, to institute expopriation proceedings in the proper court. (Emphasis
supplied)

Administrative Law; Government Owned and Controlled Corporations; Government Agencies and
Instrumentalities; The Iron and Steel Authority (ISA) appears to be a non-incorporated agency or
instrumentality of the Republic of the Philippines, or more precisely of the Government of the Republic of the
Philippines.Clearly, ISA was vested with some of the powers or attributes normally associated with juridical
personality. There is, however, no provision in P.D. No. 272 recognizing ISA as possessing general or
comprehensive juridical personality separate and distinct from that of the Government. The ISA in fact appears
to the Court to be a non-incorporated agency or instrumentality of the Republic of the Philippines, or more
precisely of the Government of the Republic of the Philippines. It is common knowledge that other agencies or
instrumentalities of the Government of the Republic are cast in corporate form, that is to say, are incorporated
agencies or instrumentalities, sometimes with and at other times without capital stock, and accordingly vested
with a juridical personality distinct from the personality of the Republic. [Iron and Steel Authority vs. Court of
Appeals, 249 SCRA 538(1995)]
[G.R. No. 145972. March 23, 2004]
IGNACIA BALICAS, petitioner, vs. FACT-FINDING & INTELLIGENCE BUREAU (FFIB), OFFICE OF THE
OMBUDSMAN, respondent.
DECISION
QUISUMBING, J.:
This petition for review on certiorari assails the Court of Appeals decision [1] dated August 25, 2000 and
resolution[2] of November 13, 2000 in CA-G.R. SP No. 56386, which affirmed the Ombudsmans
decision[3] dismissing petitioner from government service for gross neglect of duty in connection with the
tragedy at the Cherry Hills Subdivision in Antipolo City on August 3, 1999.

The antecedent facts as summarized in the Ombudsmans decision are as follows:


Based on the evidence adduced by the complainant, the following is the chronological series of events which
led to the development of the CHS (Cherry Hills Subdivision):
August 28, 1990 Philjas Corporation, whose primary purposes, among others are: to own, develop, subdivide,
market and provide low-cost housing for the poor, was registered with the Securities and Exchange
Commission (SEC).
February 19, 1991 then City Mayor Daniel S. Garcia, endorsed to the Housing and Land Use Regulatory
Board (HLURB) the proposed CHS.
Thereafter, or on 07 March 1991, based on the favorable recommendations of Mayor Garcia, respondent TAN,
issued the Preliminary Approval and Locational Clearance (PALC) for the development of CHS.
On July 5, 1991, then HLURB Commissioner respondent TUNGPALAN issued Development Permit No. 910216 for land development only for the entire land area of 12.1034 hectares covered by TCT No. 35083 (now
TCT 208837) and with 1,003 saleable lots/units with project classification B.P. 220 Model A-Socialized Housing
(p. 96, Records), with several conditions for its development.
Three (3) days thereafter or on July 8, 1991, respondent JASARENO, allowed/granted the leveling/earthmoving operations of the development project of the area subject to certain conditions.
On November 18, 1991, then HLURB Commissioner AMADO B. DELORIA issued Certificate of Registration
No. 91-11-0576 in favor of CHS, with License to Sell No. 91-11-0592 for the 1,007 lots/units in the subdivision.
Eventually, on December 10, 1991, respondent POLLISCO issued Small Scale Mining Permit (SSMP) No. IV316 to Philjas to extract and remove 10,000 cu. meters of filling materials from the area where the CHS is
located.
Thereafter, or on January 12, 1994, Philjas applied for a Small Scale Mining Permit (SSMP) under P.D. 1899
with the Rizal Provincial Government to extract and remove 50,000 metric tons of filling materials per annum
on CHS 2.8 hectares.

Records further disclosed that on August 10, 1994, respondent BALICAS monitored the implementation of the
CHS Project Development to check compliance with the terms and conditions in the ECC.Again, on August 23,
1995, she conducted another monitoring on the project for the same purpose. In both instances, she noted
that the project was still in the construction stage hence, compliance with the stipulated conditions could not
be fully assessed, and therefore, a follow-up monitoring is proper. It appeared from the records that this
August 23, 1995 monitoring inspection was the last one conducted by the DENR.
On September 24, 1994, GOV. CASIMIRO I. YNARES, JR., approved the SSMP applied for by Philjas under
SSMP No. RZL-012, allowing Philjas to extract and remove 50,000 metric tons of filling materials from the area
for a period of two (2) years from date of its issue until September 6, 1996. [4]
Immediately after the tragic incident on August 3, 1999, a fact-finding investigation was conducted by
the Office of the Ombudsman through its Fact-Finding and Intelligence Bureau (FFIB), which duly filed an
administrative complaint with the Office of the Ombudsman against several officials of the Housing and Land
Use Regulatory Board (HLURB), Department of Environment and Natural Resources (DENR), and the local
government of Antipolo.
The charge against petitioner involved a supposed failure on her part to monitor and inspect the
development of Cherry Hills Subdivision, which was assumed to be her duty as DENR senior environmental
management specialist assigned in the province of Rizal.
For her part, petitioner belied allegations that monitoring was not conducted, claiming that she
monitored the development of Cherry Hills Subdivision as evidenced by three (3) monitoring reports dated
March 12, 1994, August 10, 1994 and August 23, 1995. She averred that she also conducted subsequent
compliance monitoring of the terms and conditions of Philjas Environmental Compliance Certificate (ECC) on
May 19, 1997 and noted no violation thereon. She further claimed good faith and exercise of due diligence,
insisting that the tragedy was a fortuitous event. She reasoned that the collapse did not occur in Cherry Hills,
but in the adjacent mountain eastern side of the subdivision.
On November 15, 1999, the Office of the Ombudsman rendered a decision imposing upon petitioner
the supreme penalty of dismissal from office for gross neglect of duty finding:
RESPONDENT BALICAS
Records show that she monitored and inspected the CHS [Cherry Hills Subdivision] only thrice (3), to wit:

Thus, on January 17, 1994, respondent MAGNO, informed ELIEZER I. RODRIGUEZ of Philjas that CHS is
within the EIS System and as such must secure ECC from the DENR. Philjas was accordingly informed of the
matter such that it applied for the issuance of ECC from the DENR-Region IV, on February 3, 1994.

1. Inspection Report dated 12 March 1994


2. Monitoring Report dated 10 August 1994

On March 12, 1994, an Inspection Report allegedly prepared by respondent BALICAS, attested by respondent
RUTAQUIO and approved by respondent TOLENTINO re: field evaluation to the issuance of ECC, was
submitted.
Consequently, on April 28, 1994, upon recommendations of respondent TOLENTINO, Philjas application for
ECC was approved by respondent PRINCIPE, then Regional Executive Director, DENR under ECC-137-R1212-94.
A Mining Field Report for SSMP dated May 10, 1994 was submitted pursuant to the inspection report prepared
by respondents CAYETANO, FELICIANO, HILADO and BURGOS, based on their inspection conducted on
April 25 to 29, 1994. The report recommended, among others, that the proposed extraction of materials would
pose no adverse effect to the environment.

3. Monitoring Report dated 23 August 1995


Verily, with this scant frequency, how can respondent Balicas sweepingly claim that there was no violation of
ECC compliance and that she had done what is necessary in accordance with the regular performance of her
duties. She herself recognized the fact that the collapsed area is not the subdivision in question but the
adjacent mountain eastern side of the CHS. It is incumbent upon her to establish the same in her monitoring
and inspection reports and make objective recommendations re: its possible adverse effect to the environment
and to the residents of the CHS and nearby areas. Her defense that the position of the CHS shows the
impossibility of checking the would-be adverse effect clearly established her incompetence. No expert mind is
needed to know that mountains cause landslide and erosion.Cherry Hills Subdivision is a living witness to this.
[5]

Petitioner seasonably filed a petition for review of the Ombudsmans decision with the Court of
Appeals. In its decision dated August 25, 2000, the Court of Appeals dismissed the petition for lack of merit
and affirmed the appealed decision. It found that the landslide was a preventable occurrence and that
petitioner was guilty of gross negligence in failing to closely monitor Philjas compliance with the conditions of
the ECC given the known inherent instability of the ground where the subdivision was developed. The
appellate court likewise denied petitioners motion for reconsideration in its resolution dated November 13,
2000.
Petitioner now comes to this Court for review on certiorari, under Rule 45 of the Rules of Civil
Procedure, of the appellate courts decision. She alleges that the Court of Appeals committed serious errors of
law in affirming the Ombudsmans conclusion that:
1 There was gross negligence on the part of petitioner Balicas in the performance of her official
duties as Senior Environmental Management Specialist (SEMS) of the Provincial
Environment and Natural Resources Office (PENRO) Province of Rizal, DENR Region IV;
and the alleged gross neglect of duty of petitioner warranted the imposition of the extreme
penalty of dismissal from the service.

1. conduct surveillance and inspection of pollution sources and control facilities and
undertake/initiate measures relative to pollution-related complaints of the general public for
appropriate referral to the regional office;
2. comment on the project description, determine if the project fall within the Environmental
Impact Statement (EIS) System[8] and submit the same to the regional office; and
3. implement programs and projects related to environmental management within the PENRO. [9]
In addition, the PENRO is likewise tasked to monitor the project proponents compliance with the
conditions stipulated in the ECC, with support from the DENR regional office and the Environmental
Management Bureau.[10] The primary purpose of compliance monitoring is to ensure the judicious
implementation of sound and standard environmental quality during the development stage of a particular
project. Specifically, it aims to:
1. monitor project compliance with the conditions set in the ECC;

2. The landslide which caused the death of several residents of the subdivision and the
destruction of property is not a fortuitous event and therefore preventible. [6]

2. monitor compliance with the Environmental Management Plan (EMP) and applicable laws,
rules and regulations; and

The main issues are whether or not the Court of Appeals committed serious errors of law in: (1) holding
petitioner guilty of gross neglect of duty and (2) imposing upon her the extreme penalty of dismissal from
office.

3. provide a basis for timely decision-making and effective planning and management of
environmental measures through the monitoring of actual project impacts vis--vis predicted
impacts in the EIS.[11]

In order to ascertain if there had been gross neglect of duty, we have to look at the lawfully prescribed
duties of petitioner. Unfortunately, DENR regulations are silent on the specific duties of a senior environmental
management specialist. Internal regulations merely speak of the functions of the Provincial Environment and
Natural Resources Office (PENRO) to which petitioner directly reports.

Based on the foregoing, the monitoring duties of the PENRO mainly deal with broad environmental
concerns, particularly pollution abatement. This general monitoring duty is applicable to all types of physical
developments that may adversely impact on the environment, whether housing projects, industrial sites,
recreational facilities, or scientific undertakings.

Nonetheless, petitioner relies on a letter [7] dated December 13, 1999 from the chief of personnel, DENR
Region IV, which defines the duties of a senior environmental management specialist as follows:

However, a more specific monitoring duty is imposed on the HLURB as the sole regulatory body for
housing and land development. It is mandated to encourage greater private sector participation in low-cost
housing through (1) liberalization of development standards, (2) simplification of regulations and (3)
decentralization of approvals for permits and licenses.[12]

1. Conducts investigation of pollution sources or complaints;


2. Review[s] plans and specifications of proposes (sic) or existing treatment plants and pollution
abatement structures and devices to determine their efficiency and suitability for the kind of
pollutants to be removed and to recommend issuance or denial of permits;
3. Conducts follow-up inspection of construction of pollution abatement/work and structures to
oversee compliance with approved plans and specifications;
4. Recommends remedial measures for the prevention, abatement and control of pollution;
5. Prepares technical reports on pollution investigation and related activities; and
6. Performs related work as assigned.
It is readily apparent that no monitoring duty whatsoever is mentioned in the said letter. The PENRO,
on the other hand, is mandated to:

P.D. No. 1586[13] prescribes the following duties on the HLURB (then Ministry of Human Settlements) in
connection with environmentally critical projects requiring an ECC:
SECTION 4. Presidential Proclamation of Environmentally Critical Areas and Projects. The President of the
Philippines may, on his own initiative or upon recommendation of the National Environment Protection Council,
by proclamation declare certain projects, undertakings or areas in the country as environmentally critical. No
person, partnership or corporation shall undertake or operate any such declared environmentally critical
project or area without first securing an Environmental Compliance Certificate issued by the President or his
duly authorized representative. For the proper management of said critical project or area, the President may
by his proclamation reorganize such government offices, agencies, institutions, corporations or
instrumentalities including the re-alignment of government personnel, and their specific functions and
responsibilities.
For the same purpose as above, the Ministry of Human Settlements [now HLURB] shall: (a) prepare the
proper land or water use pattern for said critical project(s) or area(s); (b) establish ambient
environmental quality standards; (c) develop a program of environmental enhancement or protective
measures against calamitous factors such as earthquake, floods, water erosion and others;and (d)
perform such other functions as may be directed by the President from time to time. (Emphasis ours.)

The legal duty to monitor housing projects, like the Cherry Hills Subdivision, against calamities such as
landslides due to continuous rain, is clearly placed on the HLURB, not on the petitioner as PENRO senior
environmental management specialist. In fact, the law imposes no clear and direct duty on petitioner to
perform such narrowly defined monitoring function.
In the related case of Principe v. Fact-Finding and Intelligence Bureau,[14] this Court found Antonio
Principe, regional executive director for DENR Region IV who approved Philjas application for ECC, not liable
for gross neglect of duty. The Court reversed the decision of the Court of Appeals and thereby annulled the
decision of the Ombudsman in OMB-ADM-09-661, dated December 1, 1999, dismissing Principe from the
government service. We ordered his reinstatement with back pay and without loss of seniority.[15]
The rationale for our decision in Principe bears reiteration: the responsibility of monitoring housing and
land development projects is not lodged with the DENR, but with the HLURB as the sole regulatory body for
housing and land development. Thus, we must stress that we find no legal basis to hold petitioner, who is an
officer of DENR, liable for gross neglect of the duty pertaining to another agency, the HLURB. It was grave
error for the appellate court to sustain the Ombudsmans ruling that she should be dismissed from the
service. The reinstatement of petitioner is clearly called for.
WHEREFORE, the petition is hereby GRANTED. The Court of Appeals decision affirming the
Ombudsmans dismissal of petitioner IGNACIA BALICAS from office is REVERSED and SET ASIDE, and
petitioners REINSTATEMENT to her position with back pay and without loss of seniority rights is hereby
ordered.
SO ORDERED.
Digest
BALICAS vs. FFIB, OFFICE OF THE OMBUDSMAN
G. R. No. 145972
March 23, 2004
FACTS: In the development of the Cherry Hills Subdivision (CHS), Philjas applied for the issuance of ECC
from the DENR-Region IV
Respondent BALICAS, PENRO senior environmental management specialist, monitored the implementation
of the CHS Project Development to check compliance with the terms and conditions in the ECC. She
conducted another monitoring on the project for the same purpose. In both instances, she noted that the
project was still in the construction stage hence, compliance with the stipulated conditions could not be fully
assessed, and therefore, a follow-up monitoring is proper. It appeared from the records that this August 23,
1995 monitoring inspection was the last one conducted by the DENR.
Immediately after the tragic incident on August 3, 1999, a fact-finding investigation was conducted by the
Office of the Ombudsman through its Fact-Finding and Intelligence Bureau (FFIB), which duly filed an
administrative complaint with the Office of the Ombudsman against several officials of the Housing and Land
Use Regulatory Board (HLURB), Department of Environment and Natural Resources (DENR), and the local
government of Antipolo.
The charge against petitioner involved a supposed failure on her part to monitor and inspect the development
of CHS, which was assumed to be her duty as DENR senior environmental management specialist assigned
in the province of Rizal.
For her part, petitioner belied allegations that monitoring was not conducted, claiming that she monitored the
development of CHS as evidenced by 3 monitoring reports .She further claimed good faith and exercise of due
diligence, insisting that the tragedy was a fortuitous event. She reasoned that the collapse did not occur in
Cherry Hills, but in the adjacent mountain eastern side of the subdivision.
The Office of the Ombudsman rendered a decision imposing upon petitioner the supreme penalty of dismissal
from office for gross neglect of duty.

Petitioner seasonably filed a petition for review of the Ombudsmans decision with the CA. The Court of
Appeals dismissed the petition for lack of merit and affirmed the appealed decision. It found that the landslide
was a preventable occurrence and that petitioner was guilty of gross negligence in failing to closely monitor
Philjas compliance with the conditions of the ECC given the known inherent instability of the ground where the
subdivision was developed. The appellate court likewise denied petitioners motion for reconsideration.
This petition for review on certiorari
ISSUE: WON Balicas is guilty of gross neglect of duty
HELD: the petition is hereby GRANTED, The CA decision affirming the Ombudsmans dismissal of petitioner
IGNACIA BALICAS from office is REVERSED and SET ASIDE, and petitioners REINSTATEMENT to her
position with back pay and without loss of seniority rights is hereby ordered.
NO
In order to ascertain if there had been gross neglect of duty, we have to look at the lawfully prescribed duties
of petitioner. Unfortunately, DENR regulations are silent on the specific duties of a senior environmental
management specialist. Internal regulations merely speak of the functions of the Provincial Environment and
Natural Resources Office (PENRO) to which petitioner directly reports.
Tthe monitoring duties of the PENRO mainly deal with broad environmental concerns, particularly pollution
abatement. This general monitoring duty is applicable to all types of physical developments that may adversely
impact on the environment, whether housing projects, industrial sites, recreational facilities, or scientific
undertakings.
However, a more specific monitoring duty is imposed on the HLURB as the sole regulatory body for housing
and land development.
P.D. No. 1586 prescribes the following duties on the HLURB (then Ministry of Human Settlements) in
connection with environmentally critical projects requiring an ECC:
SECTION 4. Presidential Proclamation of Environmentally Critical Areas and Projects. The President of the
Philippines may, on his own initiative or upon recommendation of the National Environment Protection Council,
by proclamation declare certain projects, undertakings or areas in the country as environmentally critical. No
person, partnership or corporation shall undertake or operate any such declared environmentally critical
project or area without first securing an Environmental Compliance Certificate issued by the President or his
duly authorized representative. For the proper management of said critical project or area, the President may
by his proclamation reorganize such government offices, agencies, institutions, corporations or
instrumentalities including the re-alignment of government personnel, and their specific functions and
responsibilities.
For the same purpose as above, the Ministry of Human Settlements [now HLURB] shall:
(a) prepare the proper land or water use pattern for said critical project(s) or area(s);
(b) establish ambient environmental quality standards;
(c) develop a program of environmental enhancement or protective measures against calamitous factors such
as earthquake, floods, water erosion and others; and
(d) perform such other functions as may be directed by the President from time to time.
The legal duty to monitor housing projects, like the CHP, against calamities such as landslides due to
continuous rain, is clearly placed on the HLURB, not on the petitioner as PENRO senior environmental
management specialist. In fact, the law imposes no clear and direct duty on petitioner to perform such
narrowly defined monitoring function.

SCRA
Administrative Law; Dismissals; Certiorari; The responsibility of monitoring housing and land development
projects is not lodged with the DENR but with the HLURB as the sole regulatory body for housing and land
development; It was grave error for the appellate court to sustain the Ombudsmans ruling that petitioner

should be dismissed from the service.The rationale for our decision in Principe bears reiteration: the
responsibility of monitoring housing and land development projects is not lodged with the DENR, but with the
HLURB as the sole regulatory body for housing and land development. Thus, we must stress that we find no
legal basis to hold petitioner, who is an officer of DENR, liable for gross neglect of the duty pertaining to
another agency, the HLURB. It was grave error for the appellate court to sustain the Ombudsmans ruling that
she should be dismissed from the service. The reinstatement of petitioner is clearly called for. [Balicas vs.
Fact-Finding & Intelligence Bureau (FFIB), Office of the Ombudsman, 426 SCRA 194(2004)]
[G.R. No. 86695. September 3, 1992.]
MARIA ELENA MALAGA, doing business under the name B.E. CONSTRUCTION; JOSIELEEN
NAJARRO, doing business under the name BEST BUILT CONSTRUCTION; JOSE N. OCCEA, doing
business under the name THE FIRM OF JOSE N. OCCEA; and the ILOILO BUILDERS
CORPORATION, Petitioners, v. MANUEL R. PENACHOS, JR., ALFREDO MATANGGA, ENRICO TICAR
AND TERESITA VILLANUEVA, in their respective capacities as Chairman and Members of the Prequalification Bids and Awards Committee (PBAC)-BENIGNO PANISTANTE, in his capacity as President
of Iloilo State College of Fisheries, as well as in their respective personal capacities; and HON.
LODRIGIO L. LEBAQUIN, Respondents.
Salas, Villareal & Velasco, for Petitioners.
Virgilio A. Sindico for Respondents.

SYLLABUS

1. ADMINISTRATIVE LAW; GOVERNMENT INSTRUMENTALITY, DEFINED. The 1987 Administrative


Code defines a government instrumentality as follows: Instrumentality refers to any agency of the National
Government, not integrated within the department framework, vested with special functions or jurisdiction by
law, endowed with some if not all corporate powers, administering special funds, and enjoying operational
autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions, and
government-owned or controlled corporations. (Sec. 2 (5) Introductory Provisions).
2. ID.; CHARTERED INSTITUTION; DEFINED; APPLICATION IN CASE AT BAR. The 1987 Administrative
Code describes a chartered institution thus: Chartered institution refers to any agency organized or
operating under a special charter, and vested by law with functions relating to specific constitutional policies or
objectives. This term includes the state universities and colleges, and the monetary authority of the state.
(Sec. 2 (12) Introductory Provisions). It is clear from the above definitions that ISCOF is a chartered institution
and is therefore covered by P.D. 1818. There are also indications in its charter that ISCOF is a government
instrumentality. First, it was created in pursuance of the integrated fisheries development policy of the State, a
priority program of the government to effect the socio-economic life of the nation. Second, the Treasurer of the
Republic of the Philippines shall also be the ex-officio Treasurer of the state college with its accounts and
expenses to be audited by the Commission on Audit or its duly authorized representative. Third, heads of
bureaus and offices of the National Government are authorized to loan or transfer to it, upon request of the
president of the state college, such apparatus, equipment, or supplies and even the services of such
employees as can be spared without serious detriment to public service. Lastly, an additional amount of P1.5M
had been appropriated out of the funds of the National Treasury and it was also decreed in its charter that the
funds and maintenance of the state college would henceforth be included in the General Appropriations Law.
(Presidential Decree No. 1523)
3. ID.; PROHIBITION OF ANY COURT FROM ISSUING INJUNCTION IN CASES INVOLVING
INFRASTRUCTURE PROJECTS OF GOVERNMENT (P.D. 1818); POWER OF THE COURTS TO RESTRAIN
APPLICATION. In the case of Datiles and Co. v. Sucaldito, (186 SCRA 704) this Court interpreted a similar
prohibition contained in P.D. 605, the law after which P.D. 1818 was patterned. It was there declared that the
prohibition pertained to the issuance of injunctions or restraining orders by courts against administrative acts in
controversies involving facts or the exercise of discretion in technical cases. The Court observed that to allow
the courts to judge these matters would disturb the smooth functioning of the administrative machinery. Justice
Teodoro Padilla made it clear, however, that on issues definitely outside of this dimension and involving
questions of law, courts could not be prevented by P.D. No. 605 from exercising their power to restrain or
prohibit administrative acts. We see no reason why the above ruling should not apply to P.D. 1818. There are
at least two irregularities committed by PBAC that justified injunction of the bidding and the award of the
project.

4. ID.; POLICIES AND GUIDELINES PRESCRIBED FOR GOVERNMENT INFRASTRUCTURE (PD 1594);
RULES IMPLEMENTING THEREOF, NOT SUFFICIENTLY COMPLIED WITH IN CASE AT BAR. Under the
Rules Implementing P.D. 1594, prescribing policies and guidelines for government infrastructure contracts,
PBAC shall provide prospective bidders with the Notice to Pre-qualification and other relevant information
regarding the proposed work. Prospective contractors shall be required to file their ARC-Contractors
Confidential Application for Registration & Classifications & the PRE-C2 Confidential Pre-qualification
Statement for the Project (prior to the amendment of the rules, this was referred to as Pre-C1) not later than
the deadline set in the published Invitation to Bid, after which date no PRE-C2 shall be submitted and
received. Invitations to Bid shall be advertised for at least three times within a reasonable period but in no
case less than two weeks in at least two newspapers of general circulations. (IB 13 1.2-19, Implementing
Rules and Regulations of P.D. 1594 as amended) PBAC advertised the pre-qualification deadline as
December 2, 1988, without stating the hour thereof, and announced that the opening of bids would be at 3
oclock in the afternoon of December 12, 1988. This scheduled was changed and a notice of such change was
merely posted at the ISCOF bulletin board. The notice advanced the cut-off time for the submission of prequalification documents to 10 oclock in the morning of December 2, 1988, and the opening of bids to 1 oclock
in the afternoon of December 12, 1988. The new schedule caused the pre-disqualification of the petitioners as
recorded in the minutes of the PBAC meeting held on December 6, 1988. While it may be true that there were
fourteen contractors who were pre-qualified despite the change in schedule, this fact did not cure the defect of
the irregular notice. Notably, the petitioners were disqualified because they failed to meet the new deadline
and not because of their expired licenses. (B.E. & Best Builts licenses were valid until June 30, 1989. [Ex. P &
O respectively: both were marked on December 28, 1988]) We have held that where the law requires a
previous advertisement before government contracts can be awarded, non-compliance with the requirement
will, as a general rule, render the same void and of no effect. (Caltex Phil. v. Delgado Bros., 96 Phil. 368) The
fact that an invitation for bids has been communicated to a number of possible bidders is not necessarily
sufficient to establish compliance with the requirements of the law if it is shown that other possible bidders
have not been similarly notified.
5. ID.; ID.; ID.; PURPOSE THEREOF; CASE AT BAR. The purpose of the rules implementing P.D. 1594 is
to secure competitive bidding and to prevent favoritism, collusion and fraud in the award of these contracts to
the detriment of the public. This purpose was defeated by the irregularities committed by PBAC. It has been
held that the three principles in public bidding are the offer to the public, an opportunity for competition and a
basis for exact comparison of bids. A regulation of the matter which excludes any of these factors destroys the
distinctive character of the system and thwarts the purpose of its adoption. (Hannan v. Board of Education, 25
Okla. 372) In the case at bar, it was the lack of proper notice regarding the pre-qualification requirement and
the bidding that caused the elimination of petitioners B.E. and Best Built. It was not because of their expired
licenses, as private respondents now claim. Moreover, the plans and specifications which are the contractors
guide to an intelligent bid, were not issued on time, thus defeating the guaranty that contractors be placed on
equal footing when they submit their bids. The purpose of competitive bidding is negated if some contractors
are informed ahead of their rivals of the plans and specifications that are to be the subject of their bids.
6. ID.; ID.; ID.; EFFECT OF NON-COMPLIANCE THEREOF. It has been held in a long line of cases that a
contract granted without the competitive bidding required by law is void, and the party to whom it is awarded
cannot benefit from it. It has not been shown that the irregularities committed by PBAC were induced by or
participated in by any of the contractors. Hence, liability shall attach only to the private respondents for the
prejudice sustained by the petitioners as a result of the anomalies described above.
7. CIVIL LAW; NOMINAL DAMAGES; AWARD THEREOF, WHEN AVAILABLE. As there is no evidence of
the actual loss suffered by the petitioners, compensatory damage may not be awarded to them. Moral
damages do not appear to be due either. Even so, the Court cannot close its eyes to the evident bad faith that
characterized the conduct of the private respondents, including the irregularities in the announcement of the
bidding and their efforts to persuade the ISCOF president to award the project after two days from receipt of
the restraining order and before they moved to lift such order. For such questionable acts, they are liable in
nominal damages at least in accordance with Article 2221 of the Civil Code, which states: Art. 2221. Nominal
damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the
defendant may be vindicated or, recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered by him. These damages are to be assessed against the private respondents in the amount of
P10,000.00 each, to be paid separately for each of petitioners B.E. Construction and Best Built Construction.

DECISION

CRUZ, J.:

This controversy involves the extent and applicability of P.D. 1818, which prohibits any court from issuing
injunctions in cases involving infrastructure projects of the government.chanrobles.com.ph : virtual law library

the restraining order after the bidding sought to be restrained had already been held. Furthermore, the
members of the PBAC could not be restrained from awarding the project because the authority to do so was
lodged in the President of the ISCOF, who was not a party to the case. 4

The facts are not disputed.


The Iloilo State College of Fisheries (henceforth ISCOF) through its Pre-qualification, Bids and Awards
Committee (henceforth PBAC) caused the publication in the November 25, 26, 28, 1988 issues of the Western
Visayas Daily an Invitation to Bid for the construction of the Micro Laboratory Building at ISCOF. The notice
announced that the last day for the submission of pre-qualification requirements (PRE C-1) ** was December
2, 1988, and that the bids would be received and opened on December 12, 1988, 3 oclock in the afternoon. 1
Petitioners Maria Elena Malaga and Josieleen Najarro, respectively doing business under the name of the
B.E. Construction and Best Built Construction, submitted their pre-qualification documents at two oclock in the
afternoon of December 2, 1988. Petitioner Jose Occea submitted his own PRE-C1 on December 5, 1988. All
three of them were not allowed to participate in the bidding because their documents were considered late,
having been submitted after the cut-off time of ten oclock in the morning of December 2, 1988.
On December 12, 1988, the petitioners filed a complaint with the Regional Trial Court of Iloilo against the
chairman and members of PBAC in their official and personal capacities. The plaintiffs claimed that although
they had submitted their PRE-C1 on time, the PBAC refused without just cause to accept them. As a result,
they were not included in the list of pre-qualified bidders, could not secure the needed plans and other
documents, and were unable to participate in the scheduled bidding.

In the petition now before us, it is reiterated that P.D. 1818 does not cover the ISCOF because of its separate
and distinct corporate personality. It is also stressed again that the prohibition under P.D. 1818 could not apply
to the present controversy because the project was vitiated with irregularities, to wit:chanrobles.com : virtual
law library
1. The invitation to bid as published fixed the deadline of submission of pre-qualification document on
December 2, 1988 without indicating any time, yet after 10:00 oclock of the given late, the PBAC already
refused to accept petitioners documents.
2. The time and date of bidding was published as December 12, 1988 at 3:00 p.m. yet it was held at 10:00
oclock in the morning.
3. Private respondents, for the purpose of inviting bidders to participate, issued a mimeographed "Invitation to
Bid" form, which by law (P.D. 1594 and Implementing Rules, Exh. B-1) is to contain the particulars of the
project subject of bidding for the purpose of.
(i) enabling bidders to make an intelligent and accurate bids;
(ii) for PBAC to have a uniform basis for evaluating the bids;

In their prayer, they sought the resetting of the December 12, 1988 bidding and the acceptance of their PREC1 documents. They also asked that if the bidding had already been conducted, the defendants be directed
not to award the project pending resolution of their complaint.
On the same date, Judge Lodrigio L. Lebaquin issued a restraining order prohibiting PBAC from conducting
the bidding and awarding the project. 2
On December 16, 1988, the defendants filed a motion to lift the restraining order on the ground that the Court
was prohibited from issued restraining orders, preliminary injunctions and preliminary mandatory injunctions by
P.D. 1818.chanroblesvirtualawlibrary
The decree reads pertinently as follows:chanrob1es virtual 1aw library
Section 1. No Court in the Philippines shall have jurisdiction to issue any restraining order, preliminary
injunction, or preliminary infrastructure project, or a mining, fishery, forest or other natural resource
development project of the government, or any public utility operated by the government, including among
others public utilities for the transport of the goods and commodities, stevedoring and arrastre contracts, to
prohibit any person or persons, entity or government official from proceeding with, or continuing the execution
or implementation of any such project, or the operation of such public utility, or pursuing any lawful activity
necessary for such execution, implementation or operation.
The movants also contended that the question of the propriety of a preliminary injunction had become moot
and academic because the restraining order was received late, at 2 oclock in the afternoon of December 12,
1988, after the bidding had been conducted and closed at eleven thirty in the morning of that date.
In their opposition of the motion, the plaintiffs argued against the applicability of P.D. 1818, pointing out that
while ISCOF was a state college, it had its own charter and separate existence and was not part of the
national government or of any local political subdivision. Even if P.D. 1818 were applicable, the prohibition
presumed a valid and legal government project, not one tainted with anomalies like the project at bar.
They also cited Filipinas Marble Corp. v. IAC, 3 where the Court allowed the issuance of a writ of preliminary
injunction despite a similar prohibition found in P.D. 385. The Court therein stated that:chanrob1es virtual 1aw
library
The government, however, is bound by basic principles of fairness and decency under the due process
clauses of the Bill of Rights. P.D. 385 was never meant to protect officials of government-lending institutions
who take over the management of a borrower corporation, lead that corporation to bankruptcy through
mismanagement or misappropriation of its funds, and who, after ruining it, use the mandatory provisions of the
decree to avoid the consequences of their misleads (p. 188, Emphasis supplied).
On January 2, 1989, the trial court lifted the restraining order and denied the petition for preliminary injunction.
It declared that the building sought to be construed at the ISCOF was an infrastructure project of the
government falling within the coverage of P.D. 1818. Even if it were not, the petition for the issuance of a writ
of preliminary injunction would still fail because the sheriffs return showed that PBAC was served a copy of

(iii) to prevent collusion between a bidder and the PBAC, by opening to all the particulars of a project.
Additionally, the Invitation to Bid prepared by the respondents and the Itemized Bill of Quantities therein were
left blank. 5 And although the project in question was a "Construction," the private respondents used an
Invitation to Bid form for "Materials." 6
The petitioners also point out that the validity of the writ of preliminary injunction had not yet become moot and
academic because even if the bids had been opened before the restraining order was issued, the project itself
had not yet been awarded. The ISCOF president was not an indispensable party because the signing of the
award was merely a ministerial function which he could perform only upon the recommendation of the Award
Committee. At any rate, the complaint had already been duly amended to include him as a party defendant.
In their Comment, the private respondents maintain that since the members of the board of trustees of the
ISCOF are all government officials under Section 7 of P.D. 1523 and since the operations and maintenance of
the ISCOF are provided for in the General Appropriations Law, it is should be considered a government
institution whose infrastructure project is covered by P.D. 1818.
Regarding the schedule for pre-qualification, the private respondents insist that PBAC posted on the ISCOF
bulletin board an announcement that the deadline for the submission of pre-qualifications documents was at
10 oclock of December 2, 1988, and the opening of bids would be held at 1 oclock in the afternoon of
December 12, 1988. As of ten oclock in the morning of December 2, 1988, B.E. construction and Best Built
construction had filed only their letters of intent. At two oclock in the afternoon, B.E., and Best Built filed
through their common representative, Nenette Garuello, their pre-qualification documents which were admitted
but stamped "submitted late." The petitioners were informed of their disqualification on the same date, and the
disqualification became final on December 6, 1988. Having failed to take immediate action to compel PBAC to
pre-qualify them despite their notice of disqualification, they cannot now come to this Court to question the
binding proper in which they had not participated.
In the petitioners Reply, they raise as an additional irregularity the violation of the rule that where the estimate
project cost is from P1M to P5M, the issuance of plans, specifications and proposal book forms should made
thirty days before the date of bidding. 7 They point out that these forms were issued only on December 2,
1988, and not at the latest on November 12, 1988, the beginning of the 30-day period prior to the scheduled
bidding.
In their Rejoinder, the private respondents aver that the documents of B.E. and Best Built were received
although filed late and were reviewed by the Award Committee, which discovered that the contractors had
expired licenses. B.E.s temporary certificate of Renewal of Contractors License was valid only until
September 30, 1988, while Best Builts license was valid only up to June 30, 1988.chanrobles lawlibrary :
rednad
The Court has considered the arguments of the parties in light of their testimonial and documentary evidence
and the applicable laws and jurisprudence. It finds for the petitioners.

The 1987 Administrative Code defines a government instrumentality as follows:chanrob1es virtual 1aw library
Instrumentality refers to any agency of the National Government, not integrated within the department
framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational autonomy, usually through a charter. This term includes
regulatory agencies, chartered institutions, and government-owned or controlled corporations. (Sec. 2 (5)
Introductory Provisions).
The same Code describes a chartered institution thus:chanrob1es virtual 1aw library
Chartered institution refers to any agency organized or operating under a special charter, and vested by law
with functions relating to specific constitutional policies or objectives. This term includes the state universities
and colleges, and the monetary authority of the state. (Sec. 2 (12) Introductory Provisions).
It is clear from the above definitions that ISCOF is a chartered institution and is therefore covered by P.D.
1818.
There are also indications in its charter that ISCOF is a government instrumentality. First, it was created in
pursuance of the integrated fisheries development policy of the State, a priority program of the government of
effect the socio-economic life of the nation. Second, the Treasurer of the Republic of the Philippines also be
the ex-officio Treasurer of the state college with its accounts and expenses to be audited by the Commission
on Audit or its duly authorized representative. Third, heads of bureaus and offices of the National Government
are authorized to loan or transfer to it, upon request of the president of the state college, such apparatus,
equipment, or supplies and even the services of such employees as can be spared without serious detriment
to public service. Lastly, an additional amount of P1.5M had been appropriated out of the funds of the National
Treasury and it was also decreed in its charter that the funds and maintenance of the state college would
henceforth be included in the General Appropriations Law. 8
Nevertheless, it does not automatically follow that ISCOF is covered by the prohibition in the said decree.
In the case of Datiles and Co. v. Sucaldito, 9 this Court interpreted a similar prohibition contained in P.D. 605,
the law after which P.D. 1818 was patterned. It was there declared that the prohibition pertained to the
issuance of injunctions or restraining orders by courts against administrative acts in controversies involving
facts or the exercise of discretion in technical cases. The Court observed that to allow the courts to judge
these matters would disturb the smooth functioning of the administrative machinery. Justice Teodoro Padilla
made it clear, however, that on issues definitely outside of this dimension and involving questions of law,
courts could not be prevented by P.D. No. 605 from exercising their power to restrain or prohibit administrative
acts.

We have held that where the law requires a previous advertisement before government contracts can be
awarded, non-compliance with the requirement will, as a general rule, render the same void and of no effect 11
The facts that an invitation for bids has been communicated to a number of possible bidders is not necessarily
sufficient to establish compliance with the requirements of the law if it is shown that other public bidders have
not been similarly notified. 12
Second, PBAC was required to issue to pre-qualified applicants the plans, specifications and proposal book
forms for the project to be bid thirty days before the date of bidding if the estimate project cost was between
P1M and P5M. PBAC has not denied that these forms were issued only on December 2, 1988, or only ten
days before the bidding scheduled for December 12, 1988. At the very latest, PBAC should have issued them
on November 12, 1988, or 30 days before the scheduled bidding.
It is apparent that the present controversy did not arise from the discretionary acts of the administrative body
nor does it involve merely technical matters. What is involved here is non-compliance with the procedural rules
on bidding which required strict observance. The purpose of the rules implementing P.D. 1594 is to secure
competitive bidding and to prevent favoritism, collusion and fraud in the award of these contracts to the
detriment of the public. This purpose was defeated by the irregularities committed by PBAC.chanrobles law
library : red
It has been held that the three principles in public bidding are the offer to the public, an opportunity for
competition and a basis for exact comparison of bids. A regulation of the matter which excludes any of these
factors destroys the distinctive character of the system and thwarts and purpose of its adoption. 13
In the case at bar, it was the lack of proper notice regarding the pre-qualification requirement and the bidding
that caused the elimination of petitioners B.E. and Best Built. It was not because of their expired licenses, as
private respondents now claim. Moreover, the plans and specifications which are the contractors guide to an
intelligent bid, were not issued on time, thus defeating the guaranty that contractors be placed on equal footing
when they submit their bids. The purpose of competitive bidding is negated if some contractors are informed
ahead of their rivals of the plans and specifications that are to be the subject of their bids.
P.D. 1818 was not intended to shield from judicial scrutiny irregularities committed by administrative agencies
such as the anomalies above described. Hence, the challenged restraining order was not improperly issued by
the respondent judge and the writ of preliminary injunction should not have been denied. We note from Annex
Q of the private respondents memorandum, however, that the subject project has already been "100%
completed as to the Engineering Standard." This fait accompli has made the petition for a writ of preliminary
injunction moot and academic.
We come now to the liabilities of the private respondents.

We see no reason why the above ruling should not apply to P.D. 1818.
There are at least two irregularities committed by PBAC that justified injunction of the bidding and the award of
the project.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
First, PBAC set deadlines for the filing of the PRE-C1 and the opening of bids and then changed these
deadlines without prior notice to prospective participants.
Under the Rules Implementing P.D. 1594, prescribing policies and guidelines for government infrastructure
contracts, PBAC shall provide prospective bidders with the Notice of Pre-qualification and other relevant
information regarding the proposed work. Prospective contractors shall be required to file their ARCContractors Confidential Application for Registration & Classifications & the PRE-C2 Confidential Prequalification Statement for the Project (prior to the amendment of the rules, this was referred to as PRE-C1)
not later than the deadline set in the published Invitation to Bid, after which date no PRE-C2 shall be submitted
and received. Invitations to Bid shall be advertised for at least three times within a reasonable period but in no
case less than two weeks in at least two newspapers of general circulations. 10
PBAC advertised the pre-qualification deadline as December 2, 1988, without stating the hour thereof, and
announced that the opening of bids would be at 3 oclock in the afternoon of December 12, 1988. This
schedule was changed and a notice of such change was merely posted at the ISCOF bulletin board. The
notice advanced the cut-off time for the submission of pre-qualification documents to 10 oclock in the morning
of December 2, 1988, and the opening of bids to 1 oclock in the afternoon of December 12, 1988.
The new schedule caused the pre-disqualification of the petitioners as recorded in the minutes of the PBAC
meeting held on December 6, 1988. While it may be true that there were fourteen contractors who were prequalified despite the change in schedule, this fact did not cure the defect of the irregular notice. Notably, the
petitioners were disqualified because they failed to meet the new deadline and not because of their expired
licenses. ***

It has been held in a long line of cases that a contract granted without the competitive bidding required by law
is void, and the party to whom it is awarded cannot benefit from it. 14 It has not been shown that the
irregularities committed by PBAC were induced by or participated in by any of the contractors. Hence, liability
shall attach only to the private respondents for the prejudice sustained by the petitioners as a result of the
anomalies described above.
As there is no evidence of the actual loss suffered by the petitioners, compensatory damage may not be
awarded to them. Moral damages do not appear to be due either. Even so, the Court cannot close its eyes to
the evident bad faith that characterized the conduct of the private respondents, including the irregularities in
the announcement of the bidding and their efforts to persuade the ISCOF president to award the project after
two days from receipt of the restraining order and before they moved to lift such order. For such questionable
acts, they are liable in nominal damages at least in accordance with Article 2221 of the Civil Code, which
states:jgc:chanrobles.com.ph
"Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or
invaded by the defendant may be vindicated or, recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.
These damages are to assessed against the private respondents in the amount of P10,000.00 each, to be
paid separately for each of petitioners B.E. Construction and Best Built Construction. The other petitioner,
Occea Builders, is not entitled to relief because it admittedly submitted its pre-qualification documents on
December 5, 1988, or three days after the deadline.chanrobles virtual lawlibrary
WHEREFORE, judgment is hereby rendered: a) upholding the restraining order dated December 12, 1988, as
not covered by the prohibition in P.D. 1818; b) ordering the chairman and the members of the PBAC board of
trustees, namely Manuel R. Penachos, Jr., Alfredo Matangga, Enrico Ticar, and Teresita Villanueva, to each
pay separately to petitioners Maria Elena Malaga and Josieleen Najarro nominal damages P10,000.00 each;

and c) removing the said chairman and members from the PBAC board of trustees, or whoever among them is
still incumbent therein, for their malfeasance in office. Costs against PBAC.

On 30 June 1993, after trial on the merits, the Second Division of the Sandiganbayan rendered judgment
finding petitioner guilty beyond reasonable doubt. The dispositive portion reads as follows:

Let a copy of this decision be sent to the Office of the Ombudsman.


SO ORDERED.
SCRA
Administrative Law; Government instrumentality, defined; Iloilo State College of Fisheries is a government
instrumentality; Applicability of P.D. 188.The 1987 Administrative Code defines a government instrumentality
as follows: Instrumentality refers to any agency of the National Government, not integrated within the
department framework, vested with special functions or jurisdiction by law, endowed with some if not all
corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter.
This term includes regulatory agencies, chartered institutions, and government-owned or controlled
corporations. (Sec. 2 (5) Introductory Provisions). The same Code describes a chartered institution thus:
Chartered institutionrefers to any agency organized or operating under a special charter, and vested by law
with functions relating to specific constitutional policies or objectives. This term includes the state universities
and colleges, and the monetary authority of the state. (Sec. 2 (12) Introductory Provisions). It is clear from the
above definitions that ISCOF is a chartered institution and is therefore covered by P.D. 1818. [Malagas vs.
Penachos, Jr., 213 SCRA 516(1992)]

WHEREFORE, judgment is hereby rendered finding accused Claro Preclaro y Jambalos GUILTY
beyond reasonable doubt of the violation of Section 3, paragraph (b) of Republic Act No. 3019, as
amended, otherwise known as the Anti-Graft and Corrupt Practices Act, and he is hereby
sentenced to suffer an indeterminate penalty ranging from SIX (6) YEARS and ONE (1) MONTH,
as the minimum, to TEN (10) YEARS and ONE (1) DAY, as the maximum, perpetual
disqualification from public office and to pay the costs of this action.
SO ORDERED. 2
The antecedent facts are largely undisputed.
On 1 October 1989, the Chemical Mineral Division of the Industrial Technology Development Institute (ITDI), a
component of the Department of Science and Technology (DOST) employed Petitioner under a written
contract of services as Project Manager to supervise the construction of the ITDI-CMD (JICA) Building at the
DOST Compound in Bicutan, Taguig, Metro Manila. 3

G.R. No. 111091 August 21, 1995


ENGINEER CLARO J. PRECLARO, petitioner,
vs.
SANDIGANBAYAN and PEOPLE OF THE PHILIPPINES, respondents.

The contract was to remain in effect from October 1, 1989 up to the end of the construction period unless
sooner terminated. 4 Petitioner was to be paid a monthly salary drawn from counter-part funds duly financed by
foreign-assisted projects and government funds duly released by the Department of Budget and
Management. 5
In November 1989, to build the aforementioned CMD Structure, DOST contracted the services of the Jaime
Sta. Maria Construction Company with Engr. Alexander Resoso, as the company's project engineer. 6

KAPUNAN, J.:
On 14 June 1990, petitioner was charged before the Sandiganbayan with a violation of Sec. 3(b) of R.A. No.
3019 as amended, otherwise known as the Anti-Graft and Corrupt Practices Act. The information against him
read as follows:

How petitioner committed a violation of the Anti-Graft & Corrupt Practices Act is narrated in the Comment of
the Solicitor General and amply supported by the records. The material portions are hereunder reproduced:
xxx xxx xxx

That on or about June 8, 1990, or sometime prior thereto, in Quezon City, Philippines, and within
the jurisdiction of this Honorable Court, the above-named accused, a public officer, being then the
Project Manager/ Consultant of the Chemical Mineral Division, Industrial Technology Development
Institute, Department of Science and Technology, a component of the Industrial Development
Institute (ITDI for brevity) which is an agency of the Department of Science and Technology (DOST
for brevity), wherein the Jaime Sta. Maria Construction undertook the construction of the building in
Bicutan, Taguig, Metro Manila, with a total cost of SEVENTEEN MILLION SIX HUNDRED NINETY
FIVE THOUSAND PESOS (P17,695,000.00) jointly funded by the Philippine and Japanese
Governments, and while the said construction has not yet been finally completed, accused either
directly requested and/or demanded for himself or for another, the sum of TWO HUNDRED
THOUSAND PESOS (P200,000.00), claimed as part of the expected profit of FOUR HUNDRED
SIXTY THOUSAND PESOS (P460,000.00) in connection with the construction of that government
building wherein the accused had to intervene under the law in his capacity as Project
Manager/Consultant of said construction said offense having been committed in relation to the
performance of his official duties.

3. In the month of May, 1990, Alexander Resoso, Project Engineer of the Sta. Maria Construction
Company, was in the process of evaluating a Change Order for some electricals in the building
construction when petitioner approached him at the project site (p. 11, 25, Ibid.).

CONTRARY TO LAW. 1

6. However, Sta. Maria, Sr. asked for two (2) more days or until the 8th of June, perceiving
financial constraints (Ibid.).

On 20 July 1990, during arraignment, petitioner pleaded "not guilty" to the charges against him.

4. Unexpectedly, petitioner made some overtures that expenses in the Change Order will be
deductive (meaning, charged to the contractor by deducting from the contract price), instead of
additive (meaning, charged to the owner). Petitioner intimated that he can forget about the
deductive provided he gets P200,000.00, a chunk of the contractor's profit which he roughly
estimated to be around P460,000.00 (pp. 12-13, 22, Ibid.).
5. Having conveyed the proposal to Jaime Sta. Maria, Sr., the owner of Sta. Maria Construction
Company, Resoso thereafter asked petitioner if he wanted a rendezvous for him to receive the
money. Petitioner chose Wendy's Restaurant, corner E. Delos Santos Avenue and Camias Street,
on June 6, 1990 at around 8:00 o'clock in the evening (p. 14, Ibid.).

7. Petitioner relented, saying "O.K. lang with me because we are not in a hurry." (p. 15, Ibid.)
Petitioner was thereafter asked to bring along the result of the punch list (meaning, the list of
defective or correctible works to be done by the contractor) (p. 15, Ibid.; p. 10, TSN, 18 Oct. 1991).
8. On 7 June 1990, Sta. Maria, Sr. and Resoso proceeded to the National Bureau of Investigation
(NBI) to report the incident (p. 15, 35, Ibid.).
9. The NBI suggested an entrapment plan to which Sta. Maria, Sr. signified his conformity (p. 16,
TSN, 12 Oct. 1990). Accordingly, Sta. Maria, Sr. was requested to produce the amount of
P50,000.00 in P500.00 denomination to represent the grease money (p. 37, TSN, 6 Sept. 1990).
10. The next day, or on 8 June 1990, Resoso delivered the money to the NBI. Thereafter, the
money was dusted with flourescent powder and placed inside an attache case (pp. 16-17, Ibid.).
Resoso got the attache case and was instructed not to open it. Similarly, he was advised to
proceed at the Wendy's Restaurant earlier than the designated time where a group of NBI men
awaited him and his companion, Sta. Maria, Jr. (pp. 17-18, Ibid.).

PROS. CAOILI:
q. When you talk[ed] about his punch list, did you
talk about anything else?
a. Engineer Sta. Maria, Jr., they were conversing
with Dave Preclaro and he told [him], "O, paano na."
JUSTICE ESCAREAL:
q. Who said "Paano na?"
a. Engineer Sta. Maria, [Jr.]. And then Preclaro told
[him], "Paano, How will the money be arranged and
can I bring it?" he said.

11. Hence, from the NBI, Resoso passed by the Jade Valley Restaurant in Timog, Quezon City, to
fetch Sta. Maria, Jr. (Ibid.).

And then Jimmy Sta. Maria, Jr. told him it was


arranged on two bundles on two envelopes.

12. At around 7:35 p.m., Resoso and Sta. Maria, Jr. arrived at the Wendy's Restaurant. They were
led by the NBI men to a table previously reserved by them which was similarly adjacent to a table
occupied by them (pp. 18-19, Ibid.).

And then Dave Preclaro told, "Puede" and he asked


Jimmy Sta. Maria, Jr. if there is express teller and
could he deposit during night time but Engineer Sta.
Maria, Jr. told him, "I do not have any knowledge or
I do not have any express teller you can deposit. I
only know credit card."

13. Twenty minutes later, petitioner arrived. Supposedly, the following conversation took place, to
wit:
JUSTICE BALAJADIA:
q. When Dave Preclaro arrived, what did he do?
a. We asked him his order and we talked about the
punch list.

PROS. CAOILI:
q. When Engr. Sta. Maria intervened and
interviewed him that way, was there anything that
happened?
a. Jimmy Sta. Maria, Jr. handed two envelopes to
Preclaro.

q. What was his comment about the punch list?


a. He told us that it is harder to produce small items
than big ones.
q. How long did you converse with Engr. Claro
Preclaro?
a. I think thirty minutes or so.
q. Was Preclaro alone when he came?

q. Did Claro Preclaro receive these two envelopes


from Engineer Sta. Maria?
a. Yes, sir. (pp. 19-21, Ibid., See also pp. 13-14,
TSN, 29 Oct. 1990.)
14. From the moment petitioner received the two envelopes with his right hand, thereafter placing
them under his left armpit, he was accosted by the NBI men (p. 22, TSN, 12 Oct. 1990).
15. A camera flashed to record the event. Petitioner instinctively docked to avoid the taking of
pictures. In such manner, the two envelopes fell (p. 23, Ibid.).

a. Yes, Your Honor.


xxx xxx xxx

16. The NBI men directed petitioner to pick up the two envelopes. Petitioner refused. Hence, one
of the NBI men picked up the envelopes and placed them inside a big brown envelope (p. 27, Ibid.)

17. Petitioner was thenceforth brought to the NBI for examination (p. 28; Ibid.).

(1) Elective officials and their personal or confidential staff;

18. At the NBI Forensic Chemistry Section, petitioner's right palmar hand was tested positive of
flourescent powder. The same flourescent powder, however, cannot be detected in petitioner's Tshirt and pants (p. 5, TSN, 29 Oct. 1990). 7

(2) Secretaries and other officials of Cabinet rank who hold their positions at the pleasure of the
President and their personal or confidential staff(s);

xxx xxx xxx


Thus, as brought out at the outset, an information was filed against petitioner which, after due hearing,
resulted in his conviction by the Sandiganbayan. Not satisfied with the decision, petitioner instituted the
present petition for review, ascribing to the Sandiganbayan the following errors:
1. THE SANDIGANBAYAN ERRED IN TAKING COGNIZANCE OF THE CASE, INSTEAD OF
DISMISSING IT FOR LACK OF JURISDICTION, THE [PETITIONER] NOT BEING A PUBLIC
OFFICER; and
2. THE SANDIGANBAYAN ERRED IN NOT RULING THAT NOT ALL THE ELEMENTS OF THE
OFFENSE CHARGED HAVE BEEN ESTABLISHED BEYOND REASONABLE DOUBT AND/OR
THAT THE GUILT OF THE [PETITIONER] HAS NOT BEEN ESTABLISHED BEYOND
REASONABLE DOUBT.
We find the petition unmeritorious.
On the first issue, petitioner asserts that he is not a public officer as defined by Sec. 2(b) of the Anti-Graft &
Corrupt Practices Act (R.A. No. 3019 as amended), because he was neither elected nor appointed to a public
office. Rather, petitioner maintains that he is merely a private individual hired by the ITDI on contractual basis
for a particular project and for a specified period 8 as evidenced by the contract of services 9 he entered into
with the ITDI. Petitioner, to further support his "theory," alleged that he was not issued any appointment paper
separate from the abovementioned contract. He was not required to use the bundy clock to record his hours of
work and neither did he take an oath of office. 10
We are not convinced by petitioner's arguments.
Petitioner miscontrues the definition of "public officer" in R.A. No. 3019 which, according to Sec. 2(b) thereof
"includes elective and appointive officials and employees, permanent or temporary, whether in the classified or
unclassified or exemption service receiving compensation, even nominal, from the government. . . ."
The word "includes" used in defining a public officer in Sec. 2(b) indicates that the definition is not restrictive.
The terms "classified, unclassified or exemption service" were the old categories of positions in the civil
service which have been reclassified into Career Service and Non-Career Service 11 by PD 807 providing for
the organization of the Civil Service Commission 12 and by the Administrative Code of 1987. 13
Non-career service in particular is characterized by
(1) entrance on bases other than those of the usual test of merit and fitness utilized for the career
service;and (2) tenure which is limited to a period specified by law, or which is coterminous with
that of the appointing authority or subject to his pleasure, or which is limited to the duration of a
particular project for which purpose employment was made.
The Non-Career Service shall include:

(3) Chairman and members of commissions and boards with fixed terms of office and their
personal or confidential staff;
(4) Contractual personnel or those whose employment in the government is in accordance with a
special contract to undertake a specific work or job, requiring special or technical skills not
available in the employing agency, to be accomplished within a specific period, which in no case
shall exceed one year, and performs or accomplishes the specific work or job, under his own
responsibility with a minimum of direction and supervision from the hiring agency; and
(5) Emergency and seasonal personnel. (Emphasis ours.)

14

From the foregoing classification, it is quite evident that petitioner falls under the non-career service category
(formerly termed the unclassified or exemption service) of the Civil Service and thus is a public officer as
defined by Sec. 2(b) of the Anti-Graft & Corrupt Practices Act (R.A. No. 3019).
The fact that petitioner is not required to record his working hours by means of a bundy clock or did not take
an oath of office became unessential considerations in view of the above-mentioned provision of law clearly
including petitioner within the definition of a public officer.
Similarly, petitioner's averment that he could not be prosecuted under the Anti-Graft & Corrupt Practices Act
because his intervention "was not required by law but in the performance of a contract of services entered into
by him as a private individual contractor," 15 is erroneous. As discussed above, petitioner falls within the
definition of a public officer and as such, his duties delineated in Annex "B" of the contract of services 16 are
subsumed under the phrase "wherein the public officer in his official capacity has to intervene under the
law." 17 Petitioner's allegation, to borrow a cliche, is nothing but a mere splitting of hairs.
Among petitioner's duties as project manager is to evaluate the contractor's accomplishment
reports/billings 18hence, as correctly ruled by the Sandiganbayan he has the "privilege and authority to make a
favorable recommendation and act favorably in behalf of the government," signing acceptance papers and
approving deductives and additives are some examples. 19 All of the elements of Sec. 3(b) of the Anti-Graft &
Corrupt Practices Act are, therefore, present.
Anent the second issue, we likewise find Petitioner's allegations completely bereft of merit.
Petitioner insists that the prosecution has failed to establish his guilt beyond reasonable doubt and that the
charges against him should be rejected for being improbable, unbelievable and contrary to human nature.
We disagree.
Proof beyond reasonable doubt does not mean that which produces absolute certainty. Only moral certainty is
required or "that degree of proof which produces conviction in an unprejudiced mind." 20 We have extensively
reviewed the records of this case and we find no reason to overturn the findings of the Sandiganbayan.
Petitioner enumerates the alleged improbabilities and inconsistencies in the testimonies of the prosecution
witnesses. We shall examine the testimonies referred to with meticulousness.

Petitioner asserts that it was improbable for him to have demanded P200,000.00 from Engr. Resoso, when he
could have just talked directly to the contractor himself. It is quite irrelevant from whom petitioner demanded
his percentage share of P200,000.00 whether from the contractor's project engineer, Engr. Alexander Resoso
or directly from the contractor himself Engr. Jaime Sta. Maria Sr. That petitioner made such a demand is all
that is required by Sec. 3(b) of R.A. No. 3019 and this element has been sufficiently established by the
testimony of Engr. Resoso, thus:

Q What does he mean by that if you know?


A I do not know sir.
He just said, I will get the P200,000.00 and tell it to your boss. (Emphasis
ours.)

xxx xxx xxx


JUSTICE BALAJADIA:
Q You said when you were computing your Change Order Mr. Preclaro or
Dave Preclaro whom you identified approached you, what did you talk
about?

Q What is P200,000.00?
A It is Two Hundred Thousand Pesos.

A He mentioned to me that we are deductive in our Change Order three


and four so after our conversation I told this conversation to my boss that
we are deductible in the Change Order three and four and then my boss
told me to ask why it is deductive.

PROS. CAOILI:
Q What did you answer him when he told you that?

Q Did you ask the accused here, Dave Preclaro why it is considered
deductive?

A He told me to forget the deductive and electrical and after that I told my
boss what he told me.

A Yes, sir.
Q Who is your boss?
Q What was his answer if any?
A Santa Maria Sr.
A I asked him that my boss is asking me to ask you how come it became
deductive when my computation is additive and he told me that I have done
so much for your company already and then he picked up cement bag
paper bag and computed our alleged profit amounting to One Hundred
Sixty Thousand Pesos and then he told me that he used to use some
percentage in projects maximum and minimum and in our case he would
use a minimum percentage and multiply to 60 and . . .
JUSTICE ESCAREAL:
Q What is 460?
A P460,000.00 and he said take of the butal and get two Hundred
Thousand Pesos.
JUSTICE BALAJADIA:
What is the translation now?
WITNESS:
A And he said disregard the excess and I will just get the P200,000.00.
(Emphasis ours.)
PROS. CAOILI:

Q What was the reaction of your boss when you relayed the message to
Mr. Preclaro?
A The next day he told me to ask Dave where and when to pick up the
money so the next day I asked Dave "Where do you intend to get the
money, the Boss wanted to know."
Q What was the answer of Dave?
A And he told me, Wendy's Restaurant at 3:00 o'clock.
Q When?
A June 6 Wednesday.
Q When he told you that did you comply with June 6 appointment?
A I told my boss what he told me again that the meeting will take place at
Wendy's Restaurant corner Edsa and Camias Street at around 8:00 o'clock
p.m. June 6, Wednesday.
Q What did your boss tell you?
A The next day he told me to ask Dave.

Q What did your boss tell you?

paper bag and computed our alleged profit amounting to One Hundred
Sixty Thousand Pesos and then he told me that he used to use some
percentage in projects maximum and minimum and in our case he would
use a minimum percentage and multiply to 460 and . . . (Emphasis ours.)

A My boss told me to ask Dave to postpone the meeting on June 6 to be


postponed on June 8 at the same place and same time because my boss is
having financial problem.

JUSTICE ESCAREAL:
Q Did you relay the postponement to Dave Preclaro?
Q What is 460?
A Yes sir. I told what my boss told me.
A P460,000.00 and it ended to P215 thousand or P20,000.00 and he said
take of the butal and get the Two Hundred Thousand Pesos. (Emphasis
ours.)

Q What was his reaction?


A Dave told me "O.K. lang with me" because we are not in a hurry. Any way
we are the ones to sign the acceptance papers and my boss instructed me
that on Friday to ask Dave to bring along the result of the punch list and if
possible also to bring along the acceptance papers to be signed by Dave,
Lydia Mejia and Dr. Lirag the director.

JUSTICE BALAJADIA:
What is the translation now?
WITNESS:

Q What happened next after meeting with Preclaro to relay the


postponement if any?

A And he said disregard the excess and I will just get the P200,000.00.

A Nothing happened. The next day, Thursday the boss instructed me to go


with him to the NBI to give a statement.

PROS. CAOILI:
Q What does he mean by that if you know?

Q Did you go to the NBI and report to the incident to the NBI?

A I do not know sir.

A Yes sir.

He just said, I will get the P200,000.00 and tell it to your boss.

Q Did you give a statement before any of the agents of the of the NBI?

24

xxx xxx xxx

A Yes sir. 21
xxx xxx xxx
Likewise, petitioner's alleged refusal to see Mr. Jaime Sta. Maria Sr. when the latter tried to arrange meetings
with him regarding his demand 22 does not weaken the cause against petitioner. It does not at all prove that
petitioner did not ask for money. Conceivably petitioner did not muster enough courage to ask money directly
from the contractor himself. Getting the amount through the project engineer would be safer because if Mr.
Sta. Maria, Sr. had refused to give money, petitioner could always deny having made the demand.

The records, however, do not show the true and actual amount that the Sta. Maria Construction will earn as
profit. There is, therefore, no basis for petitioner's contention as the actual profit may be lower or higher than
his estimation.
Besides, as related by Engr. Resoso, petitioner considers the P200,000.00 percentage proper compensation
since he has allegedly done so much for the Sta. Maria construction company. 25
Petitioner also argues that:

Petitioner contends that the percentage demanded in the amount of P200,000.00 is too high considering that
the estimated profit of the contractor from the CMD project is only P460,000.00. In petitioner's words, this
would "scare the goose that lays the golden egg." 23 We reject this argument. The aforementioned contractor's
profit is petitioner's own computation as testified to by Engr. Resoso:

According to STA. MARIA, SR., they were deductive by P280,000.00 (Id., pp. 34-35).
If STA. MARIA CONSTRUCTION was deductive in the amount of P280,000.00, why would the
petitioner still demand P200,000.00 which would increase the contractor's loss to P480,000.00!

xxx xxx xxx


A I asked him that my boss is asking me to ask you how come it became
deductive when my computation is additive and he told me that I have done
so much for your company alreadyand then he picked up cement bag

It might have been different if the changes were additive where STA. MARIA CONSTRUCTION
would have earned more, thereby providing motive for the petitioner to ask for a percentage! 26

But this is precisely what petitioner was bargaining for P200,000.00 in exchange for forgetting about the
deductive 27 and thus prevent the Sta. Maria Construction from incurring losses.
Petitioner's contention that it was impossible for him to make any demands because the final decision
regarding accomplishments and billing lies with the DOST technical committee is unacceptable. Petitioner is
part of the abovementioned technical committee as the ITDI representative consultant. This is part of his
duties under the contract of services in connection with which he was employed by the ITDI. Even,
assuming arguendo that petitioner does not make the final decision, as supervisor/consultant, his
recommendations will necessarily carry much weight. Engr. Resoso testified thus:
PROS. CAOILI:
Q As a Project Engineer to whom do you present your billing papers
accomplishment report or purchase order?

Q How about with the other consultants representing the ITDI and DOST?
A In the construction site we have meeting every Monday to discuss any
problem.
Q With whom do you discuss this problem?
A The Infra-structure Committee of DOST and the Infra-structure
Committee of ITDI, the architect and the contractor. We had weekly
meetings.
Q What matters if any do you consult with Mr. Claro Preclaro?
ATTY. JIMENEZ:

A The billing paper was being taken cared of by the, of our office. I
personally do my job as supervision in the construction.
Q Do you have any counterpart to supervise the project from the
government side?

No basis.
JUSTICE ESCAREAL:
They met on problems on Mondays.

A Yes, we have.
ATTY. JIMENEZ:
Yes, the DOST have a technical Committee Infra-Structure Committee and
also the ITDI as its own representative.
Q Who composed the Technical Committee of the DOST?
A A certain Engineer Velasco, Engineer Sande Banez and Engineer Mejia.
Q How about the ITDI?
A The ITDI representative composed of Dave Preclaro.

But there is no mention of Preclaro specifically.


JUSTICE ESCAREAL:
With the representative of DOST and Preclaro
ATTY. JIMENEZ:
Does that also mean that Preclaro is also among the representatives he is
going to consult with?

Q Who is this Dave Preclaro?


Well any way. . .
A He is the consultant of ITDI. (Emphasis ours.)
JUSTICE ESCAREAL:
xxx xxx xxx
Witness may answer the question.
ATTY. CAOILI:
Read back the question.
Q As Project Engineer do you consult to any body regarding your job?
COURT STENOGRAPHER:
A First if there is any problem in the site I consult my boss.
Reading back the question as ordered by the Court.
PROS. CAOILI:
WITNESS:

A Every Monday meeting we tackle with accomplishment report the billing


papers. 28 (Emphasis ours.)

Q Now, of course, this entrapment operation, you made certain preparation


to make sure that you would be able to gather evidence in support of the
entrapment?

xxx xxx xxx


A Yes sir.
Petitioner also claims that the testimonies of the prosecution witnesses regarding the entrapment itself are
conflicting, doubtful or improbable:
(aaa) according to RESOSO, only FOUR (4) P500 bills were dusted with flourescent powder and
used in the alleged entrapment.
Contradicting RESOSO, STA. MARIA, SR. said that he gave fifty thousand (P50,000.00) pesos in
P500 denomination to the NBI. 29

Q As a matter of fact you even brought photographer for the purpose?


A That is right sir.
Q And that photographer was precisely brought along to record the
entrapment?
A Yes sir.

There is no such inconsistency. Said witnesses were testifying on two different subjects. Engr. Sta. Maria, Sr.'s
testimony touched on the amount he gave the NBI for use in the entrapment while Engr. Resoso's declaration
referred only to the number of bills dusted with flourescent powder.
Petitioner, likewise, misappreciated the following testimony of Resoso:

Q From the beginning to the end, that was the purpose?


A At the time of the arrest sir.
ATTY. JIMENEZ:

PROS. CAOILI:
Q What did he do with the two envelopes upon receiving the same?
A Then he asked Jaime Sta. Maria, Jr. if there is bank teller express, if he
could deposit the money but Mr. Sta. Maria said, "I do not have, I only have
credit cards." 30
Petitioner intended to deposit the money in his own account not that of Mr. Sta. Maria, Jr. He was merely
inquiring from the latter if there was an express teller nearby where he could make the deposit. Mr. Sta. Maria
Jr. himself testified as follows:
A He asked me if there was express teller. I told him I do not know then he
asked me whether it is possible to deposit at the Express Teller at that time.
I told him I don't know because I have no express teller card and he asked
me how am I going to arrange, how was it arranged if I will bring it, can I
bring it. Then I told him that it was placed in two envelopes consisting of
500 Peso bills and then he said "Okay na yan." 31
The failure of the NBI to take photographs of the actual turn-over of the money to petitioner is not fatal to the
People's cause. The transaction was witnessed by several people, among whom were Engr. Resoso, Mr. Sta.
Maria Jr. and the NBI agents whose testimonies on the circumstances before, during and after the turn-over
are consistent, logical and credible.

From the time of the handing over of the envelopes until the entrapment
would have been terminated?
A No sir we plan to take the photograph only during the arrest because if
we take photographs he would be alerted during the handing of the
envelopes. (Emphasis ours.)
Q So you did not intend to take photographs of the act of handing of the
envelopes to the suspect?
A We intended but during that time we cannot take photographs at the time
of the handling because the flash will alert the suspect. (Emphasis ours.)
JUSTICE ESCAREAL:
Why did you not position the photographer to a far distance place with
camera with telescopic lens?
A We did not Your Honor.
ATTY. JIMENEZ:

According to NBI Agent Francisco Balanban Sr., they purposely took no photographs of the actual turn-over so
as not to alert and scare off the petitioner. During cross-examination Agent Balanban Jr. stated:

So was it your intention to take photographs only at the time that he is


already being arrested?

xxx xxx xxx


A Yes sir. 32

xxx xxx xxx


Petitioner insists that when his hands were placed under ultra-violet light, both were found negative for
flourescent powder. This is petitioner's own conclusion which is not supported by evidence. Such self-serving
statement will not prevail over the clear and competent testimony and the report 33 submitted by the forensic
expert of the NBI Ms. Demelen R. dela Cruz, who was the one who conducted the test and found petitioner's
right palmar hand positive for flourescent powder, the same hand he used, according to witnesses Resoso and
Sta. Maria Jr., to get the money from the latter.
xxx xxx xxx
Q Mrs. dela Cruz since when have you been a Forensic Chemist at NBI?
A Since 1981 sir.

Showing to you Physic Examination No. 90-961 which for purposes of


identification has already been marked as Exh. H what relation has this
have with the report that you mentioned a while ago?
A This is the same report that I prepared sir.
Q How did you conduct such flourescent examination?
A The left and right hands of the accused were placed under the ultra violet
lamp sir.
Q What was the result?
A It gave a . . . under the ultra violent lamp the palmer hands of the suspect
gave positive result for the presence of flourescent powder.

Q JUSTICE ESCAREAL:
Q What palmar hands?
Q By the way, is the defense willing to admit that the witness is a
competent as . . . .
ATTY. JIMENEZ:
Admitted Your Honor.
PROS. CAOILI:
Madam Witness did you conduct a forensic examination in the person of
one Dave Preclaro y Jambalos?
A Yes sir.
Q If that person whom you examined is here in court would you be able to
recognize him?
ATTY. JIMENEZ:
We admit that the accused is the one examined by the witness.

A Right hand sir.


Q What other examination did you conduct?
A And also the clothing, consisting of the t-shirts and the pants were
examined. Under the ultra violet lamp the presence of the flourescent
powder of the t-shirts and pants cannot be seen or distinguished because
the fibers or the material of the cloth under the ultra violet lamp was
flouresce.
Q Please tell the Court why the t-shirts and pants under the ultra violent
lamp was flouresce?
A The materials or the fibers of the clothings it could have been dyed with
flourescent dyes sir.34
xxx xxx xxx
What we find improbable and contrary to human experience is petitioner's claim that he was set up by Engr.
Sta. Maria Sr. and Engr. Resoso for no other purpose but revenge on account, for petitioner's failure to
recommend the Sta. Maria Construction to perform the extra electrical works. 35

ATTY. CAOILI:
The Sandiganbayan has aptly ruled on this matter, thus:
Did you prepare the result of the examination in writing?
A Yes sir.
PROS. CAOILI:

For another, the claim of accused that there was ill-will on the part of the construction company is
hardly plausible. It is highly improbable for the company to embark on a malicious prosecution of
an innocent person for the simple reason that such person had recommended the services of
another construction firm. And it is extremely impossible for such company to enlist the cooperation
and employ the services of the government's chief investigative agency for such an anomalous
undertaking. It is more in accord with reason and logic to presuppose that there was some sort of a
mischievous demand made by the accused in exchange for certain favorable considerations, such
as, favorable recommendation on the completeness of the project, hassle-free release of funds,

erasure of deductives, etc. Indeed, the rationale for the occurrence of the meeting and the demand
for money is infinite and boundless. 36
As correctly pointed out by the Solicitor General, Engr. Sta. Maria Sr., who was then engaged in the
construction of another DOST building, would not risk his business or livelihood just to exact revenge which is
neither profitable nor logical. As we aptly stated in Maleg v. Sandiganbayan: 37

grounds, viz: one, it is a usurpation of the power of Congress to legislate, and two, it impermissibly intrudes on
our citizenry's protected zone of privacy. We grant the petition for the rights sought to be vindicated by the
petitioner need stronger barriers against further erosion.
A.O. No. 308 was issued by President Fidel V. Ramos On December 12, 1996 and reads as follows:
ADOPTION OF A NATIONAL COMPUTERIZED

It is hard to believe that the complainant who is a contractor would jeopardize and prejudice his
business interests and risk being blacklisted in government infrastructure projects, knowing that
with the institution of the case, he may find it no longer advisable nor profitable to continue in his
construction ventures. It is hardly probable that the complainant would weave out of the blue a
serious accusation just to retaliate and take revenge on the accused.
From the foregoing, the conclusion is inescapable that on the basis of the testimonial and documentary
evidence presented during the trial, the guilt of petitioner has been established beyond reasonable doubt.
WHEREFORE, the appealed decision of the Sandiganbayan is hereby AFFIRMED.
SO ORDERED.
SCRA
Anti-Graft and Corrupt Practices Act; Civil Service; Administrative Law; Public Officers; Words and Phrases;
Public Officer, Defined; Public officer under Sec. 2(b) of R.A. 3019 includes elective and appointive officials
and employees, permanent or temporary, whether in the Career Service and Non-Career Service.Petitioner
miscontrues the definition of public officer in R.A. No. 3019 which, according to Sec. 2(b) thereof includes
elective and appointive officials and employees, permanent or temporary, whether in the classified or
unclassified or exemption service receiving compensation, even nominal, from the government. . . . The word
includes used in defining a public officer in Sec. 2(b) indicates that the definition is not restrictive. The terms
classified, unclassified or exemption service were the old categories of positions in the civil service which
have been reclassified into Career Service and Non-Career Service by PD 807 providing for the organization
of the Civil Service Commission and by the Administrative Code of 1987.

IDENTIFICATION REFERENCE SYSTEM


WHEREAS, there is a need to provide Filipino citizens and foreign residents with the
facility to conveniently transact business with basic service and social security
providers and other government instrumentalities;
WHEREAS, this will require a computerized system to properly and efficiently identify
persons seeking basic services on social security and reduce, if not totally eradicate
fraudulent transactions and misrepresentations;
WHEREAS, a concerted and collaborative effort among the various basic services and
social security providing agencies and other government intrumentalities is required to
achieve such a system;
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines,
by virtue of the powers vested in me by law, do hereby direct the following:
Sec. 1. Establishment of a National Compoterized Identification Reference System. A
decentralized Identification Reference System among the key basic services and social
security providers is hereby established.

G.R. No. 127685 July 23, 1998

Sec. 2. Inter-Agency Coordinating Committee. An Inter-Agency Coordinating


Committee (IACC) to draw-up the implementing guidelines and oversee the
implementation of the System is hereby created, chaired by the Executive Secretary,
with the following as members:

BLAS F. OPLE, petitioner,

Head, Presidential Management Staff

vs.

Secretary, National Economic Development Authority

RUBEN D. TORRES, ALEXANDER AGUIRRE, HECTOR VILLANUEVA, CIELITO HABITO, ROBERT


BARBERS, CARMENCITA REODICA, CESAR SARINO, RENATO VALENCIA, TOMAS P. AFRICA, HEAD
OF THE NATIONAL COMPUTER CENTER and CHAIRMAN OF THE COMMISSION ON
AUDIT, respondents.

Secretary, Department of the Interior and Local Government


Secretary, Department of Health
Administrator, Government Service Insurance System,

PUNO, J.:

Administrator, Social Security System,

The petition at bar is a commendable effort on the part of Senator Blas F. Ople to prevent the shrinking of the
right to privacy, which the revered Mr. Justice Brandeis considered as "the most comprehensive of rights and
the right most valued by civilized men." 1 Petitioner Ople prays that we invalidate Administrative Order No. 308
entitled "Adoption of a National Computerized Identification Reference System" on two important constitutional

Administrator, National Statistics Office


Managing Director, National Computer Center.

Sec. 3. Secretariat. The National Computer Center (NCC) is hereby designated as


secretariat to the IACC and as such shall provide administrative and technical support
to the IACC.

Respondents counter-argue:
A. THE INSTANT PETITION IS NOT A JUSTICIABLE CASE AS WOULD WARRANT A
JUDICIAL REVIEW;

Sec. 4. Linkage Among Agencies. The Population Reference Number (PRN) generated
by the NSO shall serve as the common reference number to establish a linkage among
concerned agencies. The IACC Secretariat shall coordinate with the different Social
Security and Services Agencies to establish the standards in the use of Biometrics
Technology and in computer application designs of their respective systems.

B. A.O. NO. 308 [1996] WAS ISSUED WITHIN THE EXECUTIVE AND
ADMINISTRATIVE POWERS OF THE PRESIDENT WITHOUT ENCROACHING ON
THE LEGISLATIVE POWERS OF CONGRESS;
C. THE FUNDS NECESSARY FOR THE IMPLEMENTATION OF THE
IDENTIFICATION REFERENCE SYSTEM MAY BE SOURCED FROM THE BUDGETS
OF THE CONCERNED AGENCIES;

Sec. 5. Conduct of Information Dissemination Campaign. The Office of the Press


Secretary, in coordination with the National Statistics Office, the GSIS and SSS as lead
agencies and other concerned agencies shall undertake a massive tri-media
information dissemination campaign to educate and raise public awareness on the
importance and use of the PRN and the Social Security Identification Reference.
Sec. 6. Funding. The funds necessary for the implementation of the system shall be
sourced from the respective budgets of the concerned agencies.

D. A.O. NO. 308 [1996] PROTECTS AN INDIVIDUAL'S INTEREST IN PRIVACY. 3


We now resolve.
I

Sec. 7. Submission of Regular Reports. The NSO, GSIS and SSS shall submit regular
reports to the Office of the President through the IACC, on the status of implementation
of this undertaking.

As is usual in constitutional litigation, respondents raise the threshold issues relating to the standing to sue of
the petitioner and the justiciability of the case at bar. More specifically, respondents aver that petitioner has no
legal interest to uphold and that the implementing rules of A.O. No. 308 have yet to be promulgated.

Sec. 8. Effectivity. This Administrative Order shall take effect immediately.


DONE in the City of Manila, this 12th day of December in the year of Our Lord,
Nineteen Hundred and Ninety-Six.
(SGD.) FIDEL V. RAMOS
A.O. No. 308 was published in four newspapers of general circulation on January 22, 1997 and January 23,
1997. On January 24, 1997, petitioner filed the instant petition against respondents, then Executive Secretary
Ruben Torres and the heads of the government agencies, who as members of the Inter-Agency Coordinating
Committee, are charged with the implementation of A.O. No. 308. On April 8, 1997, we issued a temporary
restraining order enjoining its implementation.
Petitioner contends:
A. THE ESTABLISNMENT OF A NATIONAL COMPUTERIZED IDENTIFICATION
REFERENCE SYSTEM REQUIRES A LEGISLATIVE ACT. THE ISSUANCE OF A.O.
NO. 308 BY THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES IS,
THEREFORE, AN UNCONSTITUTIONAL USURPATION OF THE LEGISLATIVE
POWERS OF THE CONGRESS OF THE REPUBLIC OF THE PHILIPPINES.

These submissions do not deserve our sympathetic ear. Petitioner Ople is a distinguished member of our
Senate. As a Senator, petitioner is possessed of the requisite standing to bring suit raising the issue that the
issuance of A.O. No. 308 is a usurpation of legislative power. 4 As taxpayer and member of the Government
Service Insurance System (GSIS), petitioner can also impugn the legality of the misalignment of public funds
and the misuse of GSIS funds to implement A.O. No. 308. 5
The ripeness for adjudication of the Petition at bar is not affected by the fact that the implementing rules of
A.O. No. 308 have yet to be promulgated. Petitioner Ople assails A.O. No. 308 as invalid per se and as
infirmed on its face. His action is not premature for the rules yet to be promulgated cannot cure its fatal
defects. Moreover, the respondents themselves have started the implementation of A.O. No. 308 without
waiting for the rules. As early as January 19, 1997, respondent Social Security System (SSS) caused the
publication of a notice to bid for the manufacture of the National Identification (ID) card. 6 Respondent
Executive Secretary Torres has publicly announced that representatives from the GSIS and the SSS have
completed the guidelines for the national identification system. 7 All signals from the respondents show their
unswerving will to implement A.O. No. 308 and we need not wait for the formality of the rules to pass judgment
on its constitutionality. In this light, the dissenters insistence that we tighten the rule on standing is not a
commendable stance as its result would be to throttle an important constitutional principle and a fundamental
right.
II

B. THE APPROPRIATION OF PUBLIC FUNDS BY THE PRESIDENT FOR THE


IMPLEMENTATION OF A.O. NO. 308 IS AN UNCONSTITUTIONAL USURPATION OF
THE EXCLUSIVE RIGHT OF CONGRESS TO APPROPRIATE PUBLIC FUNDS FOR
EXPENDITURE.

We now come to the core issues. Petitioner claims that A.O. No. 308 is not a mere administrative order but a
law and hence, beyond the power of the President to issue. He alleges that A.O. No. 308 establishes a system
of identification that is all-encompassing in scope, affects the life and liberty of every Filipino citizen and
foreign resident, and more particularly, violates their right to privacy.

C. THE IMPLEMENTATION OF A.O. NO. 308 INSIDIOUSLY LAYS THE


GROUNDWORK FOR A SYSTEM WHICH WILL VIOLATE THE BILL OF RIGHTS
ENSHRINED IN THE CONSTITUTION. 2

Petitioner's sedulous concern for the Executive not to trespass on the lawmaking domain of Congress is
understandable. The blurring of the demarcation line between the power of the Legislature to make laws and
the power of the Executive to execute laws will disturb their delicate balance of power and cannot be allowed.

Hence, the exercise by one branch of government of power belonging to another will be given a stricter
scrutiny by this Court.

and discipline, and the effects of the functions performed by administrative officials on private
individuals or parties outside government. 27

The line that delineates Legislative and Executive power is not indistinct. Legislative power is "the authority,
under the Constitution, to make laws, and to alter and repeal them." 8 The Constitution, as the will of the
people in their original, sovereign and unlimited capacity, has vested this power in the Congress of the
Philippines. 9 The grant of legislative power to Congress is broad, general and comprehensive. 10 The
legislative body possesses plenary power for all purposes of civil government. 11 Any power, deemed to be
legislative by usage and tradition, is necessarily possessed by Congress, unless the Constitution has lodged it
elsewhere. 12 In fine, except as limited by the Constitution, either expressly or impliedly, legislative power
embraces all subjects and extends to matters of general concern or common interest. 13

It cannot be simplistically argued that A.O. No. 308 merely implements the Administrative Code of 1987. It
establishes for the first time a National Computerized Identification Reference System. Such a System
requires a delicate adjustment of various contending state policies the primacy of national security, the
extent of privacy interest against dossier-gathering by government, the choice of policies, etc. Indeed, the
dissent of Mr. Justice Mendoza states that the A.O. No. 308 involves the all-important freedom of thought. As
said administrative order redefines the parameters of some basic rights of our citizenry vis-a-vis the State as
well as the line that separates the administrative power of the President to make rules and the legislative
power of Congress, it ought to be evident that it deals with a subject that should be covered by law.

While Congress is vested with the power to enact laws, the President executes the laws. 14 The executive
power is vested in the Presidents. 15 It is generally defined as the power to enforce and administer the
laws. 16 It is the power of carrying the laws into practical operation and enforcing their due observance. 17

Nor is it correct to argue as the dissenters do that A.D. No. 308 is not a law because it confers no right,
imposes no duty, affords no proctection, and creates no office. Under A.O. No. 308, a citizen cannot transact
business with government agencies delivering basic services to the people without the contemplated
identification card. No citizen will refuse to get this identification card for no one can avoid dealing with
government. It is thus clear as daylight that without the ID, a citizen will have difficulty exercising his rights and
enjoying his privileges. Given this reality, the contention that A.O. No. 308 gives no right and imposes no duty
cannot stand.

As head of the Executive Department, the President is the Chief Executive. He represents the government as
a whole and sees to it that all laws are enforced by the officials and employees of his department. 18 He has
control over the executive department, bureaus and offices. This means that he has the authority to assume
directly the functions of the executive department, bureau and office or interfere with the discretion of its
officials. 19 Corollary to the power of control, the President also has the duty of supervising the enforcement of
laws for the maintenance of general peace and public order. Thus, he is granted administrative power over
bureaus and offices under his control to enable him to discharge his duties effectively. 20
Administrative power is concerned with the work of applying policies and enforcing orders as determined by
proper governmental organs. 21 It enables the President to fix a uniform standard of administrative efficiency
and check the official conduct of his agents. 22 To this end, he can issue administrative orders, rules and
regulations.

Again, with due respect, the dissenting opinions unduly expand the limits of administrative legislation and
consequently erodes the plenary power of Congress to make laws. This is contrary to the established
approach defining the traditional limits of administrative legislation. As well stated by Fisher: ". . . Many
regulations however, bear directly on the public. It is here that administrative legislation must he restricted in
its scope and application. Regulations are not supposed to be a substitute for the general policy-making that
Congress enacts in the form of a public law. Although administrative regulations are entitled to respect, the
authority to prescribe rules and regulations is not an independent source of power to make laws." 28
III

Prescinding from these precepts, we hold that A.O. No. 308 involves a subject that is not appropriate to be
covered by an administrative order. An administrative order is:
Sec. 3. Administrative Orders. Acts of the President which relate to particular
aspects of governmental operation in pursuance of his duties as administrative head
shall be promulgated in administrative orders. 23
An administrative order is an ordinance issued by the President which relates to specific aspects in
the administrative operation of government. It must be in harmony with the law and should be for
the sole purpose of implementing the law and carrying out the legislative policy. 24 We reject the
argument that A.O. No. 308 implements the legislative policy of the Administrative Code of 1987.
The Code is a general law and "incorporates in a unified document the major structural, functional
and procedural principles of governance." 25 and "embodies changes in administrative structure
and procedures designed to serve the
people." 26 The Code is divided into seven (7) Books: Book I deals with Sovereignty and General
Administration, Book II with the Distribution of Powers of the three branches of Government, Book
III on the Office of the President, Book IV on the Executive Branch, Book V on Constitutional
Commissions, Book VI on National Government Budgeting, and Book VII on Administrative
Procedure. These Books contain provisions on the organization, powers and general
administration of the executive, legislative and judicial branches of government, the organization
and administration of departments, bureaus and offices under the executive branch, the
organization and functions of the Constitutional Commissions and other constitutional bodies, the
rules on the national government budget, as well as guideline for the exercise by administrative
agencies of quasi-legislative and quasi-judicial powers. The Code covers both the internal
administration of government, i.e, internal organization, personnel and recruitment, supervision

Assuming, arguendo, that A.O. No. 308 need not be the subject of a law, still it cannot pass constitutional
muster as an administrative legislation because facially it violates the right to privacy. The essence of privacy
is the "right to be let alone." 29 In the 1965 case of Griswold v. Connecticut, 30 the United States Supreme Court
gave more substance to the right of privacy when it ruled that the right has a constitutional foundation. It held
that there is a right of privacy which can be found within the penumbras of the First, Third, Fourth, Fifth and
Ninth Amendments, 31 viz:
Specific guarantees in the Bill of Rights have penumbras formed by emanations from
these guarantees that help give them life and substance . . . various guarantees create
zones of privacy. The right of association contained in the penumbra of the First
Amendment is one, as we have seen. The Third Amendment in its prohibition against
the quartering of soldiers "in any house" in time of peace without the consent of the
owner is another facet of that privacy. The Fourth Amendment explicitly affirms the
''right of the people to be secure in their persons, houses and effects, against
unreasonable searches and seizures." The Fifth Amendment in its Self-Incrimination
Clause enables the citizen to create a zone of privacy which government may not force
him to surrender to his detriment. The Ninth Amendment provides: "The enumeration in
the Constitution, of certain rights, shall not be construed to deny or disparage others
retained by the people."
In the 1968 case of Morfe v. Mutuc, 32 we adopted the Griswold ruling that there is a constitutional
right to privacy. Speaking thru Mr. Justice, later Chief Justice, Enrique Fernando, we held:
xxx xxx xxx

The Griswold case invalidated a Connecticut statute which made the use of
contraceptives a criminal offence on the ground of its amounting to an unconstitutional
invasion of the right of privacy of married persons; rightfully it stressed "a relationship
lying within the zone of privacy created by several fundamental constitutional
guarantees." It has wider implications though. The constitutional right to privacy has
come into its own.
So it is likewise in our jurisdiction. The right to privacy as such is accorded recognition
independently of its identification with liberty; in itself, it is fully deserving of
constitutional protection. The language of Prof. Emerson is particularly apt: "The
concept of limited government has always included the idea that governmental powers
stop short of certain intrusions into the personal life of the citizen. This is indeed one of
the basic distinctions between absolute and limited government. Ultimate and
pervasive control of the individual, in all aspects of his life, is the hallmark of the
absolute state. In contrast, a system of limited government safeguards a private sector,
which belongs to the individual, firmly distinguishing it from the public sector, which the
state can control. Protection of this private sector protection, in other words, of the
dignity and integrity of the individual has become increasingly important as modern
society has developed. All the forces of a technological age industrialization,
urbanization, and organization operate to narrow the area of privacy and facilitate
intrusion into it. In modern terms, the capacity to maintain and support this enclave of
private life marks the difference between a democratic and a totalitarian society."
Indeed, if we extend our judicial gaze we will find that the right of privacy is recognized and enshrined in
several provisions of our Constitution. 33 It is expressly recognized in section 3 (1) of the Bill of Rights:
Sec. 3. (1) The privacy of communication and correspondence shall be inviolable
except upon lawful order of the court, or when public safety or order requires otherwise
as prescribed by law.

Sec. 8. The right of the people, including those employed in the public and private
sectors, to form unions, associations, or societies for purposes not contrary to law shall
not be abridged.
Sec. 17. No person shall be compelled to be a witness against himself.
Zones of privacy are likewise recognized and protected in our laws. The Civil Code provides that "[e]very
person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons"
and punishes as actionable torts several acts by a person of meddling and prying into the privacy of
another. 35 It also holds a public officer or employee or any private individual liable for damages for any
violation of the rights and liberties of another person, 36 and recognizes the privacy of letters and other private
communications. 37 The Revised Penal Code makes a crime the violation of secrets by an officer, 38 the
revelation of trade and industrial secrets, 39 and trespass to dwelling. 40Invasion of privacy is an offense in
special laws like the Anti-Wiretapping Law, 41 the Secrecy of Bank Deposits Act 42 and the Intellectual Property
Code. 43 The Rules of Court on privileged communication likewise recognize the privacy of certain
information. 44
Unlike the dissenters, we prescind from the premise that the right to privacy is a fundamental right guaranteed
by the Constitution, hence, it is the burden of government to show that A.O. No. 308 is justified by some
compelling state interest and that it is narrowly drawn. A.O. No. 308 is predicated on two considerations: (1)
the need to provides our citizens and foreigners with the facility to conveniently transact business with basic
service and social security providers and other government instrumentalities and (2) the need to reduce, if not
totally eradicate, fraudulent transactions and misrepresentations by persons seeking basic services. It is
debatable whether these interests are compelling enough to warrant the issuance of A.O. No. 308. But what is
not arguable is the broadness, the vagueness, the overbreadth of A.O. No. 308 which if implemented will put
our people's right to privacy in clear and present danger.
The heart of A.O. No. 308 lies in its Section 4 which provides for a Population Reference Number (PRN) as a
"common reference number to establish a linkage among concerned agencies" through the use of "Biometrics
Technology" and "computer application designs."

Other facets of the right to privacy are protectad in various provisions of the Bill of Rights, viz: 34
Sec. 1. No person shall be deprived of life, liberty, or property without due process of
law, nor shall any person be denied the equal protection of the laws.
Sec. 2. The right of the people to be secure in their persons, houses papers, and
effects against unreasonable searches and seizures of whatever nature and for any
purpose shall be inviolable, and no search warrant or warrant of arrest shall issue
except upon probable cause to be determined personally by the judge after
examination under oath or affirmation of the complainant and the witnesses he may
produce, and particularly describing the place to be searched and the persons or things
to be seized.
xxx xxx xxx
Sec. 6. The liberty of abode and of changing the same within the limits prescribed by
law shall not be impaired except upon lawful order of the court. Neither shall the right to
travel be impaired except in the interest of national security, public safety, or public
health as may be provided by law.
xxx xxx xxx

Biometry or biometrics is "the science of the applicatin of statistical methods to biological facts; a mathematical
analysis of biological data." 45 The term "biometrics" has evolved into a broad category of technologies which
provide precise confirmation of an individual's identity through the use of the individual's own physiological and
behavioral characteristics. 46 A physiological characteristic is a relatively stable physical characteristic such as
a fingerprint, retinal scan, hand geometry or facial features. A behavioral characteristic is influenced by the
individual's personality and includes voice print, signature and keystroke. 47 Most biometric idenfication
systems use a card or personal identificatin number (PIN) for initial identification. The biometric measurement
is used to verify that the individual holding the card or entering the PIN is the legitimate owner of the card or
PIN. 48
A most common form of biological encoding is finger-scanning where technology scans a fingertip and turns
the unique pattern therein into an individual number which is called a biocrypt. The biocrypt is stored in
computer data banks 49 and becomes a means of identifying an individual using a service. This technology
requires one's fingertip to be scanned every time service or access is provided. 50 Another method is the
retinal scan. Retinal scan technology employs optical technology to map the capillary pattern of the retina of
the eye. This technology produces a unique print similar to a finger print. 51 Another biometric method is known
as the "artificial nose." This device chemically analyzes the unique combination of substances excreted from
the skin of people. 52 The latest on the list of biometric achievements is the thermogram. Scientists have found
that by taking pictures of a face using infra-red cameras, a unique heat distribution pattern is seen. The
different densities of bone, skin, fat and blood vessels all contribute to the individual's personal "heat
signature." 53

In the last few decades, technology has progressed at a galloping rate. Some science fictions are now science
facts. Today, biometrics is no longer limited to the use of fingerprint to identify an individual. It is a new science
that uses various technologies in encoding any and all biological characteristics of an individual for
identification. It is noteworthy that A.O. No. 308 does not state what specific biological characteristics and what
particular biometrics technology shall be used to identify people who will seek its coverage. Considering the
banquest of options available to the implementors of A.O. No. 308, the fear that it threatens the right to privacy
of our people is not groundless.
A.O. No. 308 should also raise our antennas for a further look will show that it does not state whether
encoding of data is limited to biological information alone for identification purposes. In fact, the Solicitor
General claims that the adoption of the Identification Reference System will contribute to the "generation of
population data for development planning." 54 This is an admission that the PRN will not be used solely for
identification but the generation of other data with remote relation to the avowed purposes of A.O. No. 308.
Clearly, the indefiniteness of A.O. No. 308 can give the government the roving authority to store and retrieve
information for a purpose other than the identification of the individual through his PRN.
The potential for misuse of the data to be gathered under A.O. No. 308 cannot be undarplayed as the
dissenters do. Pursuant to said administrative order, an individual must present his PRN everytime he deals
with a government agency to avail of basic services and security. His transactions with the government agency
will necessarily be recorded whether it be in the computer or in the documentary file of the agency. The
individual's file may include his transactions for loan availments, income tax returns, statement of assets and
liabilities, reimbursements for medication, hospitalization, etc. The more frequent the use of the PRN, the
better the chance of building a huge formidable informatin base through the electronic linkage of the
files. 55 The data may be gathered for gainful and useful government purposes; but the existence of this vast
reservoir of personal information constitutes a covert invitation to misuse, a temptation that may be too great
for some of our authorities to resist. 56
We can even grant, arguendo, that the computer data file will be limited to the name, address and other basic
personal infomation about the individual. 57 Even that hospitable assumption will not save A.O. No. 308 from
constitutional infirmity for again said order does not tell us in clear and categorical terms how these information
gathered shall he handled. It does not provide who shall control and access the data, under what
circumstances and for what purpose. These factors are essential to safeguard the privacy and guaranty the
integrity of the information. 58 Well to note, the computer linkage gives other government agencies access to
the information. Yet, there are no controls to guard against leakage of information. When the access code of
the control programs of the particular computer system is broken, an intruder, without fear of sanction or
penalty, can make use of the data for whatever purpose, or worse, manipulate the data stored within the
system. 59
It is plain and we hold that A.O. No. 308 falls short of assuring that personal information which will be gathered
about our people will only be processed for unequivocally specified purposes. 60 The lack of proper safeguards
in this regard of A.O. No. 308 may interfere with the individual's liberty of abode and travel by enabling
authorities to track down his movement; it may also enable unscrupulous persons to access confidential
information and circumvent the right against self-incrimination; it may pave the way for "fishing expeditions" by
government authorities and evade the right against unreasonable searches and seizures. 61 The possibilities of
abuse and misuse of the PRN, biometrics and computer technology are accentuated when we consider that
the individual lacks control over what can be read or placed on his ID, much less verify the correctness of the
data encoded. 62 They threaten the very abuses that the Bill of Rights seeks to prevent. 63
The ability of sophisticated data center to generate a comprehensive cradle-to-grave dossier on an individual
and transmit it over a national network is one of the most graphic threats of the computer revolution. 64 The
computer is capable of producing a comprehensive dossier on individuals out of information given at different
times and for varied purposes. 65 It can continue adding to the stored data and keeping the information up to
date. Retrieval of stored date is simple. When information of a privileged character finds its way into the
computer, it can be extracted together with other data on the subject. 66 Once extracted, the information is
putty in the hands of any person. The end of privacy begins.

Though A.O. No. 308 is undoubtedly not narrowly drawn, the dissenting opinions would dismiss its danger to
the right to privacy as speculative and hypothetical. Again, we cannot countenance such a laidback posture.
The Court will not be true to its role as the ultimate guardian of the people's liberty if it would not immediately
smother the sparks that endanger their rights but would rather wait for the fire that could consume them.
We reject the argument of the Solicitor General that an individual has a reasonable expectation of privacy with
regard to the Natioal ID and the use of biometrics technology as it stands on quicksand. The reasonableness
of a person's expectation of privacy depends on a two-part test: (1) whether by his conduct, the individual has
exhibited an expectation of privacy; and (2) whether this expectation is one that society recognizes as
reasonable.67 The factual circumstances of the case determines the reasonableness of the
expectation. 68 However, other factors, such as customs, physical surroundings and practices of a particular
activity, may serve to create or diminish this expectation. 69 The use of biometrics and computer technology in
A.O. No. 308 does not assure the individual of a reasonable expectation of privacy. 70 As technology
advances, the level of reasonably expected privacy decreases. 71 The measure of protection granted by the
reasonable expectation diminishes as relevant technology becomes more widely accepted. 72 The security of
the computer data file depends not only on the physical inaccessibility of the file but also on the advances in
hardware and software computer technology. A.O. No. 308 is so widely drawn that a minimum standard for a
reasonable expectation of privacy, regardless of technology used, cannot be inferred from its provisions.
The rules and regulations to be by the IACC cannot remedy this fatal defect. Rules and regulations merely
implement the policy of the law or order. On its face, A.O. No. gives the IACC virtually infettered discretion to
determine the metes and bounds of the ID System.
Nor do your present laws prvide adequate safeguards for a reasonable expectation of privacy. Commonwealth
Act. No. 591 penalizes the disclosure by any person of data furnished by the individual to the NSO with
imprisonment and fine. 73 Republic Act. No. 1161 prohibits public disclosure of SSS employment records and
reports. 74These laws, however, apply to records and data with the NSO and the SSS. It is not clear whether
they may be applied to data with the other government agencies forming part of the National ID System. The
need to clarify the penal aspect of A.O. No. 308 is another reason why its enactment should be given to
Congress.
Next, the Solicitor General urges us to validate A.O. No. 308's abridgment of the right of privacy by using the
rational relationship test. 75 He stressed that the purposes of A.O. No. 308 are: (1) to streamline and speed up
the implementation of basic government services, (2) eradicate fraud by avoiding duplication of services, and
(3) generate population data for development planning. He cocludes that these purposes justify the incursions
into the right to privacy for the means are rationally related to the end. 76
We are not impressed by the argument. In Morfe v. Mutuc, 77 we upheld the constitutionality of R.A. 3019, the
Anti-Graft and Corrupt Practices Act, as a valid police power measure. We declared that the law, in compelling
a public officer to make an annual report disclosing his assets and liabilities, his sources of income and
expenses, did not infringe on the individual's right to privacy. The law was enacted to promote morality in
public administration by curtailing and minimizing the opportunities for official corruption and maintaining a
standard of honesty in the public service. 78

The same circumstances do not obtain in the case at bar. For one, R.A. 3019 is a statute, not an
administrative order. Secondly, R.A. 3019 itself is sufficiently detailed. The law is clear on what practices were
prohibited and penalized, and it was narrowly drawn to avoid abuses. IN the case at bar, A.O. No. 308 may
have been impelled by a worthy purpose, but, it cannot pass constitutional scrutiny for it is not narrowly drawn.
And we now hod that when the integrity of a fundamental right is at stake, this court will give the challenged
law, administrative order, rule or regulation a stricter scrutiny. It will not do for the authorities to invoke the
presumption of regularity in the performance of official duties. Nor is it enough for the authorities to prove that
their act is not irrational for a basic right can be diminished, if not defeated, even when the government does
not act irrationally. They must satisfactorily show the presence of compelling state interests and that the law,
rule or regulation is narrowly drawn to preclude abuses. This approach is demanded by the 1987 Constitution
whose entire matrix is designed to protect human rights and to prevent authoritarianism. In case of doubt, the
least we can do is to lean towards the stance that will not put in danger the rights protected by the
Constitutions.
The case of Whalen v. Roe 79 cited by the Solicitor General is also off-line. In Whalen, the United States
Supreme Court was presented with the question of whether the State of New York could keep a centralized
computer record of the names and addresses of all persons who obtained certain drugs pursuant to a doctor's
prescription. The New York State Controlled Substance Act of 1972 required physicians to identify parties
obtaining prescription drugs enumerated in the statute, i.e., drugs with a recognized medical use but with a
potential for abuse, so that the names and addresses of the patients can be recorded in a centralized
computer file of the State Department of Health. The plaintiffs, who were patients and doctors, claimed that
some people might decline necessary medication because of their fear that the computerized data may be
readily available and open to public disclosure; and that once disclosed, it may stigmatize them as drug
addicts. 80 The plaintiffs alleged that the statute invaded a constitutionally protected zone of privacy, i.e., the
individual interest in avoiding disclosure of personal matters, and the interest in independence in making
certain kinds of important decisions. The U.S. Supreme Court held that while an individual's interest in
avoiding disclosuer of personal matter is an aspect of the right to privacy, the statute did not pose a grievous
threat to establish a constitutional violation. The Court found that the statute was necessary to aid in the
enforcement of laws designed to minimize the misuse of dangerous drugs. The patient-identification
requirement was a product of an orderly and rational legislative decision made upon recommmendation by a
specially appointed commission which held extensive hearings on the matter. Moreover, the statute was
narrowly drawn and contained numerous safeguards against indiscriminate disclosure. The statute laid down
the procedure and requirements for the gathering, storage and retrieval of the informatin. It ebumerated who
were authorized to access the data. It also prohibited public disclosure of the data by imposing penalties for its
violation. In view of these safeguards, the infringement of the patients' right to privacy was justified by a valid
exercise of police power. As we discussed above, A.O. No. 308 lacks these vital safeguards.

The concept of limited government has always included the idea that governmental
powers stop short of certain intrusions into the personal life of the citizen. This is
indeed one of the basic disctinctions between absolute and limited government.
Ultimate and pervasive control of the individual, in all aspects of his life, is the hallmark
of the absolute state. In contrast, a system of limited government safeguards a private
sector, which belongs to the individual, firmly distinguishing it from the public sector,
which the state can control. Protection of this private sector protection, in other
words, of the dignity and integrity of the individual has become increasingly
important as modern society has developed. All the forces of a technological age
industrialization, urbanization, and organization operate to narrow the area of
privacy and facilitate intrusion into it. In modern terms, the capacity to maintain and
support this enclave of private life marks the difference between a democratic and a
totalitarian society. 87
IV
The right to privacy is one of the most threatened rights of man living in a mass society. The threats emanate
from various sources governments, journalists, employers, social scientists, etc. 88 In th case at bar, the
threat comes from the executive branch of government which by issuing A.O. No. 308 pressures the people to
surrender their privacy by giving information about themselves on the pretext that it will facilitate delivery of
basic services. Given the record-keeping power of the computer, only the indifferent fail to perceive the danger
that A.O. No. 308 gives the government the power to compile a devastating dossier against unsuspecting
citizens. It is timely to take note of the well-worded warning of Kalvin, Jr., "the disturbing result could be that
everyone will live burdened by an unerasable record of his past and his limitations. In a way, the threat is that
because of its record-keeping, the society will have lost its benign capacity to forget." 89 Oblivious to this
counsel, the dissents still say we should not be too quick in labelling the right to privacy as a fundamental
right. We close with the statement that the right to privacy was not engraved in our Constitution for flattery.
IN VIEW WHEREOF, the petition is granted and Adminisrative Order No. 308 entitled "Adoption of a National
Computerized Identification Reference System" declared null and void for being unconstitutional.
SO ORDERED.
[G.R. Nos. 95203-05 : December 18, 1990.]
192 SCRA 363

Even while we strike down A.O. No. 308, we spell out in neon that the Court is not per se agains the use of
computers to accumulate, store, process, retvieve and transmit data to improve our bureaucracy. Computers
work wonders to achieve the efficiency which both government and private industry seek. Many information
system in different countries make use of the computer to facilitate important social objective, such as better
law enforcement, faster delivery of public services, more efficient management of credit and insurance
programs, improvement of telecommunications and streamlining of financial activities. 81 Used wisely, data
stored in the computer could help good administration by making accurate and comprehensive information for
those who have to frame policy and make key decisions. 82 The benefits of the computer has revolutionized
information technology. It developed the internet, 83 introduced the concept of cyberspace 84 and the
information superhighway where the individual, armed only with his personal computer, may surf and search
all kinds and classes of information from libraries and databases connected to the net.
In no uncertain terms, we also underscore that the right to privacy does not bar all incursions into individual
privacy. The right is not intended to stifle scientific and technological advancements that enhance public
service and the common good. It merely requires that the law be narrowly focused 85 and a compelling interest
justify such intrusions. 86 Intrusions into the right must be accompanied by proper safeguards and well-defined
standards to prevent unconstitutional invasions. We reiterate that any law or order that invades individual
privacy will be subjected by this Court to strict scrutiny. The reason for this stance was laid down in Morfe v.
Mutuc, to wit:

SENATOR ERNESTO MACEDA, Petitioner, vs. ENERGY REGULATORY BOARD (ERB); MARCELO N.
FERNANDO, ALEJANDRO B. AFURONG; REX V. TANTIONGCO; and OSCAR E. ALA, in their collective
official capacities as Chairman and Members of the Board (ERB), respectively; CATALINO MACARAIG,
in his quadruple official capacities as Executive Secretary, Chairman of Philippine National Oil
Company; Office of the Energy Affairs, and with MANUEL ESTRELLA, in their respective official
capacities as Chairman and President of the Petron Corporation; PILIPINAS SHELL PETROLEUM
CORPORATION; with CESAR BUENAVENTURA and REY GAMBOA as chairman and President,
respectively; CALTEX PHILIPPINES with FRANCIS ABLAN, President and Chief Executive Officer; and
the Presidents of Philippine Petroleum Dealer's Association, Caltex Dealer's Co., Petron Dealer's
Asso., Shell Dealer's Asso. of the Phil., Liquefied Petroleum Gas Institute of the Phils., any and all
concerned gasoline and petrol dealers or stations; and such other persons, officials, and parties,
acting for and on their behalf; or in representation of and/or under their authority, Respondents.
[G.R. Nos. 95119-21 : December 18, 1990.]
192 SCRA 363
OLIVER O. LOZANO, Petitioner, vs. ENERGY REGULATORY BOARD (ERB), PILIPINAS SHELL
PETROLEUM CORPORATION, CALTEX (PHIL.), INC., and PETRON CORPORATION, Respondents.

DECISION

SARMIENTO, J.:

The petitioners pray for injunctive relief, to stop the Energy Regulatory Board (Board hereinafter) from
implementing its Order, dated September 21, 1990, mandating a provisional increase in the prices of
petroleum and petroleum products, as follows:

The Court set the cases (in G.R. Nos. 95203-05) for hearing on October 25, 1990, in which Senator Maceda
and his counsel, Atty. Alexander Padilla, argued. The Solicitor General, on behalf of the Board, also presented
his arguments, together with Board Commissioner Rex Tantiangco. Attys. Federico Alikpala, Jr. and Joselia
Poblador represented the oil firms (Petron and Caltex, respectively).
The parties were thereafter required to submit their memorandums after which, the Court considered the
cases submitted for resolution.
On November 20, 1990, the Court ordered these cases consolidated.

PRODUCTS IN PESOS PER LITER

On November 27, 1990, we gave due course to both petitions.

OPSF

The Court finds no merit in these petitions.

Premium Gasoline 1.7700

Senator Maceda and Atty. Lozano, in questioning the lack of a hearing, have overlooked the provisions of
Section 8 of Executive Order No. 172, which we quote:

Regular Gasoline 1.7700

Fuel Oil 1.4900

"SECTION 8. Authority to Grant Provisional Relief . The Board may, upon the filing of an application,
petition or complaint or at any stage thereafter and without prior hearing, on the basis of supporting papers
duly verified or authenticated, grant provisional relief on motion of a party in the case or on its own initiative,
without prejudice to a final decision after hearing, should the Board find that the pleadings, together with such
affidavits, documents and other evidence which may be submitted in support of the motion, substantially
support the provisional order: Provided, That the Board shall immediately schedule and conduct a hearing
thereon within thirty (30) days thereafter, upon publication and notice to all affected parties.: nad

Feedstock 1.4900

As the Order itself indicates, the authority for provisional increase falls within the above provision.

LPG 0.8487

There is no merit in the Senator's contention that the "applicable" provision is Section 3, paragraph (e) of the
Executive Order, which we quote:

Avturbo 1.8664
Kerosene 1.2400
Diesel Oil 1.2400

Asphalts 2.7160
Thinners 1.7121 1
It appears that on September 10, 1990, Caltex (Philippines), Inc., Pilipinas Shell Petroleum Corporation, and
Petron Corporation proferred separate applications with the Board for permission to increase the wholesale
posted prices of petroleum products, as follows:
Caltex P3.2697 per liter
Shell 2.0338 per liter
Petron 2.00 per liter 2
and meanwhile, for provisional authority to increase temporarily such wholesale posted prices pending further
proceedings.:-cralaw
On September 21, 1990, the Board, in a joint (on three applications) Order granted provisional relief as
follows:
WHEREFORE, considering the foregoing, and pursuant to Section 8 of Executive Order No. 172, this Board
hereby grants herein applicants' prayer for provisional relief and, accordingly, authorizes said applicants a
weighted average provisional increase of ONE PESO AND FORTY-TWO CENTAVOS (P1.42) per liter in the
wholesale posted prices of their various petroleum products enumerated below, refined and/or marketed by
them locally. 3

(e) Whenever the Board has determined that there is a shortage of any petroleum product, or when public
interest so requires, it may take such steps as it may consider necessary, including the temporary adjustment
of the levels of prices of petroleum products and the payment to the Oil Price Stabilization Fund created under
Presidential Decree No. 1956 by persons or entities engaged in the petroleum industry of such amounts as
may be determined by the Board, which will enable the importer to recover its cost of importation.
What must be stressed is that while under Executive Order No. 172, a hearing is indispensable, it does not
preclude the Board from ordering, ex parte, a provisional increase, as it did here, subject to its final disposition
of whether or not: (1) to make it permanent; (2) to reduce or increase it further; or (3) to deny the application.
Section 37 paragraph (e) is akin to a temporary restraining order or a writ of preliminary attachment issued by
the courts, which are given ex parte, and which are subject to the resolution of the main case.
Section 3, paragraph (e) and Section 8 do not negate each other, or otherwise, operate exclusively of the
other, in that the Board may resort to one but not to both at the same time. Section 3(e) outlines the jurisdiction
of the Board and the grounds for which it may decree a price adjustment, subject to the requirements of notice
and hearing. Pending that, however, it may order, under Section 8, an authority to increase provisionally,
without need of a hearing, subject to the final outcome of the proceeding. The Board, of course, is not
prevented from conducting a hearing on the grant of provisional authority which is of course, the better
procedure however, it cannot be stigmatized later if it failed to conduct one. As we held in Citizens' Alliance
for Consumer Protection v. Energy Regulatory Board. 7

The petitioner, Senator Ernesto Maceda, 4 also submits that the same was issued without proper notice and
hearing in violation of Section 3, paragraph (e), of Executive Order No. 172; that the Board, in decreeing an
increase, had created a new source for the Oil Price Stabilization Fund (OPSF), or otherwise that it had levied
a tax, a power vested in the legislature, and/or that it had "re-collected", by an act of taxation, ad valorem
taxes on oil which Republic Act No. 6965 had abolished.

In the light of Section 8 quoted above, public respondent Board need not even have conducted formal
hearings in these cases prior to issuance of its Order of 14 August 1987 granting a provisional increase of
prices. The Board, upon its own discretion and on the basis of documents and evidence submitted by private
respondents, could have issued an order granting provisional relief immediately upon filing by private
respondents of their respective applications. In this respect, the Court considers the evidence presented by
private respondents in support of their applications i.e., evidence showing that importation costs of
petroleum products had gone up; that the peso had depreciated in value; and that the Oil Price Stabilization
Fund (OPSF) had by then been depleted as substantial and hence constitutive of at least prima facie basis
for issuance by the Board of a provisional relief order granting an increase in the prices of petroleum products.
8

The petitioner, Atty. Oliver Lozano, 5 likewise argues that the Board's Order was issued without notice and
hearing, and hence, without due process of law.

We do not therefore find the challenged action of the Board to have been done in violation of the due process
clause. The petitioners may contest however, the applications at the hearings proper.

The petitioners submit that the above Order had been issued with grave abuse of discretion, tantamount to
lack of jurisdiction, and correctible by Certiorari.

The intervenor, the Trade Union of the Philippines and Allied Services (TUPAS/FSM)-W.F.T.U., 6 argues on the
other hand, that the increase cannot be allowed since the respondents oil companies had not exhausted their
existing oil stock which they had bought at old prices and that they cannot be allowed to charge new rates for
stock purchased at such lower rates.

Senator Maceda's attack on the Order in question on premises that it constitutes an act of taxation or that it
negates the effects of Republic Act No. 6965, cannot prosper. Republic Act No. 6965 operated to lower taxes
on petroleum and petroleum products by imposing specific taxes rather than ad valorem taxes thereon; it is,
not, however, an insurance against an "oil hike", whenever warranted, or is it a price control mechanism on
petroleum and petroleum products. The statute had possibly forestalled a larger hike, but it operated no more.:
nad

WHEREFORE, these petitions are DISMISSED. No costs.

The Board Order authorizing the proceeds generated by the increase to be deposited to the OPSF is not an
act of taxation. It is authorized by Presidential Decree No. 1956, as amended by Executive Order No. 137, as
follows:

Feliciano, J., is on leave.

SECTION 8. There is hereby created a Trust Account in the books of accounts of the Ministry of Energy to be
designated as Oil Price Stabilization Fund (OPSF) for the purpose of minimizing frequent price changes
brought about by exchange rate adjustments and/or changes in world market prices of crude oil and imported
petroleum products. The Oil Price Stabilization Fund (OPSF) may be sourced from any of the following:
a) Any increase in the tax collection from ad valorem tax or customs duty imposed on petroleum products
subject to tax under this Decree arising from exchange rate adjustment, as may be determined by the Minister
of Finance in consultation with the Board of Energy;

SO ORDERED.
Narvasa, Gutierrez, Jr ., Cruz, Gancayco, Bidin, Grio Aquino, Medialdea and Regalado, JJ., concur.
Fernan, C.J., Melencio-Herrera and Padilla, JJ., no part.

Separate Opinions
PARAS, J., dissenting:
I dissent.
In fixing the oil prices complained of, the Energy Regulatory Board (ERB) gravely abused its discretion
(1) in approving the prices without due process of law, and

b) Any increase in the tax collection as a result of the lifting of tax exemptions of government corporations, as
may be determined by the Minister of Finance in consultation with the Board of Energy;

(2) in exercising the taxing power in gross violation of the 1987 Constitution which vests such power only in
Congress.: nad

c) Any additional amount to be imposed on petroleum products to augment the resources of the Fund through
an appropriate Order that may be issued by the Board of Energy requiring payment by persons or companies
engaged in the business of importing, manufacturing and/or marketing petroleum products;

With respect to due process, it will be noted that it is Sec. 3(e) (and not Sec. 8) of Ex. Order No. 172 which
should apply to the instant case (and therefore a hearing is essential) 1 for it is Sec. 3(e) that refers to "the
temporary adjustment of the levels of prices of petroleum products" or instances "when public interest so
requires." Sec. 8, which is relied upon by the majority opinion, does NOT speak of price increases. Additionally
it is clear that in the instant case, "public interest" [also mentioned in Sec. 3 (e)] necessitated a prior hearing.

d) Any resulting peso cost differentials in case the actual peso costs paid by oil companies in the importation of
crude oil and petroleum products is less than the peso costs computed using the reference foreign exchange
rates as fixed by the Board of Energy.
Anent claims that oil companies cannot charge new prices for oil purchased at old rates, suffice it to say that
the increase in question was not prompted alone by the increase in world oil prices arising from tension in the
Persian Gulf. What the Court gathers from the pleadings as well as events of which it takes judicial notice, is
that: (1) as of June 30, 1990, the OPSF has incurred a deficit of P6.1 Billion; (2) the exchange rate has fallen
to P28.00 to $1.00; (3) the country's balance of payments is expected to reach $1 Billion; (4) our trade deficit is
at $2.855 Billion as of the first nine months of the year.
Evidently, authorities have been unable to collect enough taxes necessary to replenish the OPSF as provided
by Presidential Decree No. 1956, and hence, there was no available alternative but to hike existing prices.
The OPSF, as the Court held in the aforecited CACP cases, must not be understood to be a funding designed
to guarantee oil firms' profits although as a subsidy, or a trust account, the Court has no doubt that oil firms
make money from it. As we held there, however, the OPSF was established precisely to protect the consuming
public from the erratic movement of oil prices and to preclude oil companies from taking advantage of
fluctuations occurring every so often. As a buffer mechanism, it stabilizes domestic prices by bringing about a
uniform rate rather than leaving pricing to the caprices of the market.
In all likelihood, therefore, an oil hike would have probably been imminent, with or without trouble in the Gulf,
although trouble would have probably aggravated it.: nad
The Court is not to be understood as having prejudged the justness of an oil price increase amid the above
premises. What the Court is saying is that it thinks that based thereon, the Government has made out a prima
facie case to justify the provisional increase in question. Let the Court therefore make clear that these findings
are not final; the burden, however, is on the petitioners' shoulders to demonstrate the fact that the present
economic picture does not warrant a permanent increase.
There is no doubt that the increase in oil prices in question (not to mention another one impending, which the
Court understands has been under consideration by policy-makers) spells hard(er) times for the Filipino
people. The Court can not, however, debate the wisdom of policy or the logic behind it (unless it is otherwise
arbitrary), not because the Court agrees with policy, but because the Court is not the suitable forum for debate.
It is a question best judged by the political leadership which after all, determines policy, and ultimately, by the
electorate, that stands to be better for it or worse off, either in the short or long run.
At this point, the Court shares the indignation of the people over the conspiracy of events and regrets its own
powerlessness, if by this Decision it has been powerless. The constitutional scheme of things has simply left it
with no choice.
In fine, we find no grave abuse of discretion committed by the respondent Board in issuing its questioned
Order.

Anent the unconstitutional use of the taxing power, the decision of the majority says that "the Board Order
authorizing the proceeds generated by the increases" is "authorized by Presidential Decree No. 1456, as
amended by Executive Order No. 137" (See Decision, pp. 7-8). Assuming that such is authorized by law, still a
law, no matter how imperative, cannot prevail over the Constitution which grants only to Congress the power
to tax. And indeed, there can be no denying the fact that when revenue is earned by the government from the
consuming public (except when only licenses are concerned) there is an exercise of the taxing power.
I am of course aware of the dangerous economic quagmire to which our country has been plunged by the
sadism precipitating the Middle East crisis, but certainly one error cannot be corrected by another error.
Besides there are more significant and clear-cut reasons for our economic crisis: namely, the intentional
depreciation (actually, a devaluation) of our already demeaned currency, our unfortunate liberalization of
imports, and our slavish subservience to the dictates of the IMF.:-cralaw

G.R. No. L-49705-09 February 8, 1979


TOMATIC ARATUC, SERGIO TOCAO, CISCOLARIO DIAZ, FRED TAMULA, MANGONTAWAR GURO and
BONIFACIO LEGASPI, petitioners,
vs.
The COMMISSION ON ELECTIONS, REGIONAL BOARD OF CANVASSERS for Region XII (Central
Mindanao), ABDULLAH DIMAPORO, JESUS AMPARO, ANACLETO BADOY, et al., respondents.
Nos. L-49717-21 February 8,1979.
LINANG MANDANGAN, petitioner,
vs.
THE COMMISSION ON ELECTIONS, THE REGIONAL BOARD OF CANVASSERS for Region XII, and
ERNESTO ROLDAN, respondents.
L-49705-09 Lino M. Patajo for petitioners.
Estanislao A. Fernandez for private respondents.

L-49717-21 Estanislao A. Fernandez for petitioner.


Lino M. Patajo for private respondent.

5. Badoy, Anacleto (KBL)

198,966

6. Amparo, Jesus (KBL)

184,764

7. Pangandaman,
Sambolayan (KBL)

183,646

8. Sinsuat, Datu Blah


(KBL)

182,457

9. Baga, Tomas (KBL)

171,656

10. Aratuc, Tomatic (KB)

165,795

11. Mandangan,
Linang(KB)

165,032

12. Diaz, Ciscolario (KB)

159,977

13. Tamalu, Fred (KB)

153,734

14. Legaspi Bonifacio


(KB)

148,200

Office of the Solicitor General, for Public respondents.

BARREDO, J.:
Petition in G. R. Nos. L-49705-09 for certiorari with restraining order and preliminary injunction filed by six (6)
independent candidates for representatives to tile Interim Batasang Pambansa who had joined together under
the banner of the Kunsensiya ng Bayan which, however, was not registered as a political party or group under
the 1976 Election Code, P.D. No. 1296, namely Tomatic Aratuc, Sorgio Tocao, Ciscolario Diaz, Fred Tamula,
Mangontawar Guro and Bonifacio Legaspi her referred to as petitioners, to review the decision of the
respondent Commission on Election (Comelec) resolving their appeal from the Of the respondent Regional
Board of Canvasses for Region XII regarding the canvass of the results of the election in said region for
representatives to the I.B.P. held on April 7, 1978. Similar petition in G.R. Nos. L49717-21, for certiorari with
restraining order and preliminary injunction filed by Linang Mandangan, abo a candidate for representative in
the same election in that region, to review the decision of the Comelec declaring respondent Ernesto Roldan
as entitled to be proclaimed as one of the eight winners in said election.
The instant proceedings are sequels of Our decision in G.R. No. L- 48097, wherein Tomatic Aratuc et al.
sought the suspension of the canvass then being undertaken by respondent dent Board in Cotabato city and
in which canvass, the returns in 1966 out of a total of 4,107 voting centers in the whole region had already
been canvassed showing partial results as follows:

NAMES OF
CANDIDATES

NO. OF
VOTES

1. Roldan, Ernesto (KB)

225,674

2. Valdez, Estanislao
(KBL)

217,789

3. Dimporo, Abdullah
(KBL)

4. Tocao, Sergio (KB)

199,244

199,062

15. Guro, Mangontawar


(KB)

139,386

16. Loma, Nemesio (KB)

107,455

17. Macapeges,
Malamama
(Independent)

101,350

(Votes Of the independent candidates who actually were not in contention omitted)" (Page 6, Record, L49705-09.)
A supervening panel headed by Commissioner of Elections, Hon- Venancio S. Duque, had conducted of the
complaints of the petitioners therein of alleged irregularities in the election records in all the voting centers in
the whole province of Lanao del Sur, the whole City of Marawi, eight (8) towns of Lanao del Norte, namely,
Baloi, Karomatan, Matungao, Munai, Nunungan, Pantao Ragat, Tagoloan and Tangcal, seven (7) towns in
Maguindanao, namely, Barrira, Datu Piang, Dinaig, Matanog Parang, South Upi and Upi, ten (10) towns in
North Cotabato, namely, Carmen, Kabacan, Kidapwan, Magpet, Matalam Midsayap, Pigcawayan, Pikit, Pres.
Roxas and Tulonan, and eleven (11) towns in Sultan Kudarat, namely, Bagumbayan, Columbia Don Mariano
Marcos, Esperanza, Isulan, Kalamansig, Lebak, Lutayan, Palimbang, President Quirino and Tacurong, by
reason for which, petitioners had asked that the returns from said voting centers be excluded from the
canvass. Before the start of the hearings, the canvass was suspended but after the supervisory panel
presented its report, on May 15, 1978, the Comelec lifted its order of suspension and directed the resumption
of the canvass to be done in Manila. This order was the one assailed in this Court. We issued a restraining
order.

4. That none of the election returns reffered to in the petition herein shall be canvassed
without first giving the herein petitioners ample opportunity to make their specific
objections thereto, if they have any, and to show sufficient basis for the rejection of any
of the returns, and, in this connection, the respondent Regional Board of Canvassers
should give due consideration to the points raised in the memorandum filed by said
petitioners with the Commission on Election in the above cases dated April 26, 1978;
5. That should it appear to the board upon summary scrutiny of the records to be
offered by petitioners indication that in the voting center actually held and/or that
election returns were prepared either before the day of the election returns or at any
other time, without regard thereto or that there has been massive substitution of voters,
or that ballots and/or returns were prepared by the same groups of persons or
individuals or outside of the voting centers, the Board should exclude the
corresponding returns from the canvass;
6. That appeals to the commission on Election of the Board may be made only after all
the returns in question in all the above, the above five cases shall have been passed
upon by the Board and, accordingly, no proclamation made until after the Commission
shall have finally resolved the appeal without prejudice to recourse to this court, if
warranted as provided by the Code and the Constitution, giving the parties reasonable
time therefor;
7. That the copies of the election returns found in the corresponding ballot boxes shall
be the one used in the canvass;
8. That the canvass shall be conducted with utmost dispatch, to the end that a
proclamation, if feasible, may be made not later than June 10, 1978; thus, the canvass
may be terminated as soon as it is evident that the possible number of votes in the still
uncanvassed returns with no longer affect the general results of the elections here in
controversy;
9. That respondent Commission shall promulgate such other directive not inconsistent
with this resolution y necessary to expedite the proceedings herein contemplated and
to accomplish the purposes herein intended. (Pp. 8-9, Record.
On June 1, 1978, upon proper motion, said guidelines were modified:

After hearing the parties, the Court allowed the resumption of the canvass but issued the following guidelines
to be observed thereat:
1. That the resumption of said canvass shall be held in the Comelec main office in
Manila starting not later than June 1, 1978;
2. That in preparation therefor, respondent Commission on Elections shall see to it that
all the material election paragraph corresponding to all the voting center involved in
Election Nos. 78-8, 78-9, 78-10, 78-11 and 78-12 are taken to its main office in Manila,
more particularly, the ballot boxes, with the contents, used during the said elections,
the books of voters or records of voting and the lists or records of registered voters, on
or before May 31, 1978;
3. That as soon as the corresponding records are available, petitioners and their
counsel shall be allowed to examine the same under such security measures as the
respondent Board may determine, except the contents of the ballot boxes which shall
be opened only upon orders of either the respondent Board or respondent
Commission, after the need therefor has become evident, the purpose of such
examination being to enable petitioners, and their counsel to expeditiously determine
which of them they would wish to be scrutinized and passed upon by the Board as
supporting their charges of election frauds and anomalies, petitioners and their counsel
being admonished in this connection, that no dilatory tactics should be in by them and
that only such records substantial objections should be offered by them for the scrutiny
by the Board;

... in the sense that the ballot boxes for the voting centers just referred to need not be
taken to Manila, EXCEPT those of the particular voting centers as to which the
petitioners have the right to demand that the corresponding ballot boxes be opened in
order that the votes therein may be counted because said ballots unlike the election
returns, have not been tampered with or substituted, which instances the results of the
counting shall be specified and made known by petitioners to the Regional Board of
Canvassers not later than June 3, 1978; it being understood, that for the purposes of
the canvass, the petitioners shall not be allowed to invoke any objection not already
alleged in or comprehend within the allegations in their complaint in the election cases
above- mentioned. (Page 8, Id.)
Thus respondent Board proceeded with the canvass, with the herein petitioners presenting objections, most of
them supported by the report of handwriting and finger print experts who had examined the voting records and
lists of voters in 878 voting centers, out of 2,700 which they specified in their complaints or petitions in Election
Cases 78-8, 78-9, 78-10, 78-11 and 7812 in the Comelec. In regard to 501 voting centers, the records cf.
which, consisting of the voters lists and voting records were not available- and could not be brought to Manila,
petitions asked that the results therein be completely excluded from the canvass. On July 11, 1978,
respondent Board terminated its canvass and declared the result of the voting to be as follows:

NAME OF

VOTES

CANDIDATE

OBTAIN

VALDEZ,
Estanislao

436,069

DIMAPORO,
Abdullah

ARATUC, Tomatic

205,829

429,351

GURO,
Mangontawar

190,489

PANGANDAMAN,
Sambolayan

406,106

DIAZ, Ciscolario

190,077

TAMULA, Fred

180,280

SINSUAT, Blah

403,445

399,997

LEGASPI,
Bonifacio

174,396

AMPARO, Jesus

MANDANGAN,
Linang

387,025

MACAPEGES,
Malamana

160,271

BAGA, Tomas

386,393

(Pp. 11-12,
Record.)

BADOY,Anacleto

374,933

ROLDAN, Ernesto

275,141

Without loss of time, the petitioners brought the resolution of respondent Board to the Comelec. Hearing was
held on April 25, 1978, after which , the case was declared submitted for decision. However, on August
30,1978, the Comelec issued a resolution stating inter alia that :
In order to enable the Commission to decide the appeal properly :
a. It will have to go deeper into the examination of the voting records and registration
records and in the case of voting centers whose voting and registration records which
have not yet been submitted for the Commission to decide to open the ballot boxes;
and

TOCAO, Sergio

239,914

b. To interview and get statements under oath of impartial and disinterested persons
from the area to determine whether actual voting took place on April 7, 1978, as well as
those of the military authorities in the areas affects (Page 12). Record, L-49705-09 .)
On December 11, 1978, the Comelec required the parties "to file their respective written comments on the
reports they shall periodically receive from the NBI-Comelec team of finger-print and signature experts within
the inextendible period of seven (7) days from their receipt thereof". According to counsel for Aratuc, et al.,
"Petitioners submitted their various comments on the report 4, the principal gist of which was that it would
appear uniformly in all the reports submitted by the Comelec-NBI experts that the registered voters were not
the ones who voted as shown by the fact that the thumbprints appearing in Form 1 were different from the
thumbprints of the voters in Form 5. " But the Comelec denied a motion of petitioners asking that the ballot
boxes corresponding to the voting centers the record of which are not available be opened and that a date be
set when the statements of witnesses referred to in the August 30, 1978 resolution would be taken, on the
ground that in its opinion, it was no longer necessary to proceed with such opening of ballot boxes and taking
of statements.
For his part, counsel for petitioner M in G.R. No. L-49717-21 filed with Comelec on December 19,1978 a
Memorandum. To quote from the petition:
On December 19, 1978, the KBL, through counsel, filed a Memorandum for the
Kilusang Bagong Lipunan (KBL) Candidates on the Comelec's Resolution of December
11, 1978, a xerox copy of which is attached hereto and made a part hereof as Annex 2,
wherein they discussed the following topics: (I) Brief History of the President Case; (II)
Summary of Our Position and Submission Before the Honorable commission; and (III)
KBL's Appeal Ad Cautelam. And the fourth topic, because of its relevance to the case
now before this Honorable Court, we hereby quote for ready reference:
IV

Court of May 23, 1978 (in G.R. No. L-48097), we, the KBL, did not comment any more
on said reports. (Pp. 5-6, Record, L-49717-21.)
On January 13, 1979, the Comelec rendered its resolution being assailed in these cases, declaring the final
result of the canvass to be as follows:

CANDIDATES

VOT
ES

VALDEZ,
Estanislao

319,
514

DIMAPORO,
Abdullah

289.
751

AMPARO,
Jesus

286,
180

BADOY,
Anacleto

285,
985

BAGA, Tomas

271,
473

PANGANDAM
AN,
Sambolayan

271,
393

SINSUAT,
Blah

269,
905

ROLDAN,

268,

OUR POSITION WITH RESPECT TO THE


ESOLUTION OF THE HONORABLE
COMMISSION OF DECEMBER 11, 1978
We respectfully submit that the Resolution of this case by this Honorable Commission
should be limited to the precincts and municipalities involved in the KB'S Petitions in
Cases Nos. 78-8 to 78-12, on which evidence had been submitted by the parties, and
on which the KB submitted the reports of their handwriting-print. Furthermore, it should
be limited by the appeal of the KB. For under the Supreme Court Resolution of May 23,
1978, original jurisdiction was given to the Board, with appeal to this Honorable
Commission-Considerations of other matters beyond these would be, in our humble
opinion, without jurisdiction.
For the present, we beg to inform this Honorable Commission that we stand by the
reports and findings of the COMELEC/NBI experts as submitted by them to the
Regional Board of Canvassers and as confirmed by the said Regional Board of
Canvassers in its Resolution of July 11, 1978, giving the 8 KBL candidates the
majorities we have already above mentioned. The Board did more than make a
summary scrutiny of the records' required by the Supreme Court Resolution, Guideline
No. 5, of May 23, 1978. Hence, if for lack of material time we cannot file any
Memorandum within the non-extendible period of seven (7) days, we would just stand
by said COMELEC/NBI experts' reports to the Regional Board, as confirmed by the
Board (subject to our appeal ad cautelam).
The COMELEC sent to the parties copies of the reports of the NBI-COMELEC experts.
For lack of material time due to the voluminous reports and number of voting centers
involved, the Christmas holidays, and our impression that the COMELEC will
exercise only its appellate jurisdiction, specially as per resolution of this Honorable

Ernesto

287

MANDANGAN
, Linang

251,
226

(Page 14,
Record, L49705-09.)

It is alleged in the Aratuc petition that:


The Comelec committee grave abuse of dicretion, amounting to lack of jurisdiction:

TACAO,
Sergio

229,
124

DIAZ,
Ciscolario

187,
986

1. In not pursuing further the examination of the registration records and voting records
from the other voting centers questioned by petitioners after it found proof of massive
substitute voting in all of the voting records and registration records examined by
Comelec and NBI experts;
2. In including in the canvass returns from the voting centers whose book of voters and
voting records could not be recovered by the Commission in spite of its repeated efforts
to retrieve said records;
3. In not excluding from the canvass returns from voting centers showing a very high
percentage of voting and in not considering that high percentage of voting, coupled
with massive substitution of voters is proof of manufacturing of election returns;

ARATUC,
Tomatic

183,
316

LEGASPI,
Bonifacio

178,
564

TAMULA,
Fred

177,
270

4. In denying petitioners' petition for the opening of the ballot boxes from voting centers
whose records are not available for examination to determine whether or not there had
been voting in said voting centers;
5. In not Identifying the ballot boxes that had no padlocks and especially those that
were found to be empty while they were shipped to Manila pursuant to the directive of
the Commission in compliance with the guidelines of this Honorable Court;
6. In not excluding from the canvass returns where the results of examination of the
voting records and registration records show that the thumbprints of the voters in CE
Form 5 did not correspond to those of the registered voters as shown in CE Form 1;
7. In giving more credence to the affidavits of chairmen and members of the voting
centers, municipal treasurers and other election officials in the voting centers where
irregularities had been committed and not giving credence to the affidavits of watchers
of petitioners;

GURO,
Mangontawar

163,
449

LOMA,
Nemesio

129,
450

8. In not including among those questioned before the Board by petitioners those
included among the returns questioned by them in their Memorandum filed with the
Commission on April 26, 1978, which Memorandum was attached as Annex 'I' to their
petition filed with this Honorable Court G.R. No. L-48097 and which the Supreme Court
said in its Guidelines should be considered by the Board in the course of the canvass
(Guidelines No. 4). (Pp. 15-16, Record, Id.)
On the other hand, the Mandangan petition submits that the Comelec comitted the following errors:

1. In erroneously applying the earlier case of Diaz vs. Commission on Elections


(November 29, 1971; 42 SCRA 426), and particularly the highly restrictive criterion that
when the votes obtained by the candidates with the highest number of votes exceed
the total number of highest possible valid votes, the COMELEC ruled to exclude from
the canvass the election return reflecting such rests, under which the COMELEC
excluded 1,004 election returns, involving around 100,000 votes, 95 % of which are for
KBL candidates, particularly the petitioner Linang Mandangan, and which rule is so
patently unfair, unjust and oppressive.
2. In not holding that the real doctrine in the Diaz Case is not the total exclusion of
election returns simply because the total number of votes exceed the total number of
highest possible valid votes, but 'even if all the votes cast by persons Identified as
registered voters were added to the votes cast by persons who can not be definitely
ascertained as registered or not, and granting, ad arguendo, that all of them voted for
respondent Daoas, still the resulting total is much below the number of votes credited
to the latter in returns for Sagada, 'and that 'of the 2,188 ballots cast in Sagada, nearly
one-half (1,012) were cast by persons definitely Identified as not registered therein or
still more than 40 % of substitute voting which was the rule followed in the later case of
Bashier/Basman (Diaz Case, November 19,1971,42 SCRA 426,432).
3. In not applying the rule and formula in the later case of Bashier and Basman vs.
Commission on Election(February 24, 1972, 43 SCRA 238) which was the one
followed by the Regional Board of Canvassers, to wit:
In Basman vs Comelec (L-33728, Feb. 24, 1972) the Supreme
Court upheld the Supreme Court upheld the ruling of the
Commission setting the standard of 40 % excess votes to justify
the exclusion of election returns. In line with the above ruling,
the Board of Canvassers may likewise set aside election
returns with 40 % substitute votes. Likewise, where excess
voting occured and the excess was such as to destroy the
presumption of innocent mistake, the returns was excluded.
(COMELEC'S Resolution, Annex I hereof, p. 22), which this Honorable Court must
have meant when its Resolution of May 23, 1978 (G.R. No. 7), it referred to "massive
substitution of voters.
4. In examining, through the NBI/COMELEC experts, the records in more than 878
voting centers examined by the KB experts and passed upon by the Regional Board of
Canvassers which was all that was within its appellate jurisdiction is examination of
more election records to make a total of 1,085 voting centers (COMELEC'S Resolution,
Annex 1 hereof, p. 100), being beyond its jurisdiction and a denial of due process as
far as the KBL, particularly the petitioner Mandangan, were concerned because they
were informed of it only on December, 1978, long after the case has been submitted for
decision in September, 1978; and the statement that the KBL acquiesced to the same
is absolutely without foundation.
5. In excluding election returns from areas where the conditions of peace and order
were allegedly unsettled or where there was a military operation going on immediately
before and during election and where the voter turn out was high (90 % to 100 %), and
where the people had been asked to evacuate, as a ruling without jurisdiction and in
violation of due process because no evidence was at all submitted by the parties
before the Regional Board of Canvasssers. (Pp. 23-25, Record, L-47917-21.)
Now before discussing the merits of the foregoing contentions, it is necessary to clarify first the nature and
extent of the Supreme Court's power of review in the premises. The Aratuc petition is expressly predicated on
the ground that respondent Comelec "committed grave abuse of discretion, amounting to lack of jurisdiction" in
eight specifications. On the other hand, the Mandangan petition raises pure questions of law and jurisdiction.
In other words, both petitions invoked the Court's certiorari jurisdiction, not its appellate authority of review.

This is as it should be. While under the Constitution of 1935, "the decisions, orders and rulings of the
Commission shall be subject to review by the Supreme Court" (Sec. 2, first paragraph, Article X) and pursuant
to the Rules of Court, the petition for "certiorari or review" shall be on the ground that the Commission "has
decided a question of substance not theretofore determined by the Supreme Court, or has decided it in a way
not in accord with law or the applicable decisions of the Supreme Court" (Sec. 3. Rule 43), and such
provisions refer not only to election contests but even to pre-proclamation proceedings, the 1973 Constitution
provides somewhat differently thus: "Any decision, order or ruling of the Commissionmay be brought to the
Supreme Court on certiorari by the aggrieved party within thirty days from his receipt of a copy thereof"
(Section 11, Article XII c), even as it ordains that the Commission shall "be the sole judge of all contests
relating to the elections, returns and qualifications of all members of the National Assembly and elective
provincial and city official" (Section 2(2).)
Correspondingly, the ElectionCode of 1978, which is the first legislative constructionof the pertinent
constitutional provisions, makes the Commission also the "sole judge of all pre-proclamation controversies"
and further provides that "any of its decisions, orders or rulings (in such contoversies) shall be final and
executory", just as in election contests, "the decision of the Commission shall be final, and executory and
inappealable." (Section 193)
It is at once evident from these constitutional and statutory modifications that there is a definite tendency to
enhance and invigorate the role of the Commission on Elections as the independent constitutinal body
charged with the safeguarding of free, peaceful and honest elections. The framers of the new Constitution
must be presumed ot have definite knowledge of what it means to make the decisions, orders and rulings of
the Commission "subject to review by the Supreme Court". And since instead of maintaining that provision
intact, it ordained that the Commission's actuations be instead "brought to the Supreme Court on certiorari",
We cannot insist that there was no intent to change the nature of the remedy, considering that the limited
scope of certiorari, compared to a review, is well known in remedial law.
Withal, as already stated, the legislative construction of the modified peritinent constitutional provision is to the
effect that the actuations of the Commission are final, executory and even inappealable. While such
construction does not exclude the general certiorari jurisdiction of the Supreme Court which inheres in it as the
final guardian of the Constitution, particularly, of its imperious due process mandate, it correspondingly
narrows down the scope and extent of the inquiry the Court is supposed to undertake to what is strictly the
office of certiorari as distinguished from review. We are of the considered opinion that the statutory
modifications are consistent with the apparent new constitional intent. Indeed, it is obvious that to say that
actuations of the Commission may be brought to the Supreme Court on certiorari technically connotes
something less than saying that the same "shall be subject to review by the Supreme Court", when it comes to
the measure of the Court's reviewing authority or prerogative in the premises.
A review includes digging into the merits and unearthing errors of judgment, while certiorari deals exclusively
with grave abuse of discretion, which may not exist even when the decision is otherwise erroneous. certiorari
implies an indifferent disregard of the law, arbitrariness and caprice, an omission to weight pertinent
considerations, a decision arrived at without rational deliberation. While the effecdts of an error of judgment
may not differ from that of an indiscretion, as a matter of policy, there are matters taht by their nature ought to
be left for final determination to the sound discretion of certain officers or entities, reserving it to the Supreme
Court to insure the faithful observance of due process only in cases of patent arbitrariness.
Such, to Our mind, is the constitutional scheme relative to the Commission on Elections. Conceived by the
charter as the effective instrument to preserve the sanctity of popular suffrage, endowed with independence
and all the needed concommittant powers, it is but proper that the Court should accord the greatest measure
of presumption of regularity to its course of action and choice of means in performing its duties, to the end that
it may achieve its designed place in the democratic fabric of our government. Ideally, its members should be
free from all suspicions of partisan inclinations, but the fact that actually some of them have had stints in the
arena of politics should not, unless the contrary is shown, serve as basis for denying to its actuations the
respect and consideration that the Constitution contemplates should be accorded to it, in the same manner
that the Supreme Court itself which from time to time may have members drawn from the political ranks or
even from military is at all times deemed insulated from every degree or form of external pressure and
influence as well as improper internal motivations that could arise from such background or orientation.
We hold, therefore that under the existing constitution and statutory provisions, the certiorari jurisdiction of the
Court over orders, and decisions of the Comelec is not as broad as it used to be and should be confined to
instances of grave abuse of discretion amounting to patent and substantial denial of due process. Accordingly,
it is in this light that We the opposing contentions of the parties in this cases.

THE MANDANGAN CASE


Being more simple in Our view, We shall deal with the petition in G.R. No. L-49717-21 first.
The errors assigned in this petition boil down to two main propositions, namely, (1) that it was an error of law
on the part of respondent Comelec to have applied to the extant circumstances hereof the ruling of this Court
in Diaz vs. Comelec 42 SCRA 426 instead of that of Bashier vs. Comelec 43 SCRA 238; and (2) that
respondent Comelec exceeded its jurisdiction and denied due process to petitioner Mandangan in extending
its inquiry beyond the election records of "the 878 voting centers examined by the KB experts and passed
upon by the Regional Board of Canvassers" and in excluding from the canvass the returns showing 90 to 100
% voting, from voting centers where military operations were by the Army to be going on, to the extent that
said voting centers had to be transferred to the poblaciones the same being by evidence.
Anent the first proposition, it must be made clear that the Diaz and Bashier rulings are not mutually exclusive
of each other, each being an outgrowth of the basic rationale of statistical improbability laid down in Lagumbay
vs. Comelec and , 16 SCRA 175. Whether they be apply together or separately or which of them be applied
depends on the situation on hand. In the factual milieu of the instant case as found by the Comelec, We see
no cogent reason, and petitioner has not shown any, why returns in voting centers showing that the votes of
the candidate obtaining highest number of votes of the candidate obtaining the highest number of votes
exceeds the highest possible number of valid votes cast therein should not be deemed as spurious and
manufactured just because the total number of excess votes in said voting centers were not more than 40 %.
Surely, this is not the occasion, consider the historical antecedents relative to the highly questionable manner
in which elections have been bad in the past in the provinces herein involved, of which the Court has judicial
notice as attested by its numerous decisions in cases involving practically every such election, of the Court to
move a whit back from the standards it has enunciated in those decisions.
In regard to the jurisdictional and due process points raised by herein petitioner, it is of decisive importance to
bear in mind that under Section 168 of the Revised Election Code of 1978, "the Commission (on Elections)
shall have direct control and supervision on over the board of canvassers" and that relatedly, Section 175 of
the same Code provides that it "shall be the sole judge of all pre-proclamation controversies." While nominally,
the procedure of bringing to the Commission objections to the actuations of boards of canvassers has been
quite loosely referred to in certain quarters, even by the Commission and by this Court, such as in the
guidelines of May 23,1978 quoted earlier in this opinion, as an appeal, the fact of the matter is that the
authority of the Commission in reviewing such actuations does not spring from any appellate jurisdiction
conferred by any specific provision of law, for there is none such provision anywhere in the Election Code, but
from the plenary prerogative of direct control and supervision endowed to it by the above-quoted provisions of
Section 168. And in administrative law, it is a too well settled postulate to need any supporting citation here,
that a superior body or office having supervision and control over another may do directly what the latter is
supposed to do or ought to have done.
Consequently, anything said in Lucman vs. Dimaporo, 33 SCRA 387, cited by petitioner, to the contrary
notwithstanding, We cannot fault respondent Comelec for its having extended its inquiry beyond that
undertaken by the Board of Canvass On the contrary, it must be stated that Comelec correctly and
commendably asserted its statutory authority born of its envisaged constitutional duties vis-a-vis the
preservation of the purity of elections and electoral processes and p in doing what petitioner it should not have
done. Incidentally, it cannot be said that Comelec went further than even what Aratuc et al. have asked, since
said complaints had impugned from the outset not only the returns from the 878 voting centers examined by
their experts but all those mentioned in their complaints in the election cases filed originally with the Comelec
enumerated in the opening statements hereof, hence respondent Comelec had that much field to work on.
The same principle should apply in respect to the ruling of the Commission regarding the voting centers
affected by military operations. It took cognizance of the fact, not considered by the board of canvass, that said
voting centers had been transferred to the poblaciones. And, if only for purposes of pre-proclamation
proceedings, We are persuaded it did not constitute a denial of due process for the Commission to have taken
into account, without the need or presentation of evidence by the parties, a matter so publicly notorious as the
unsettled situation of peace and order in localities in the provinces herein involved that their may perhaps be
taken judicial notice of, the same being capable of unquestionable demonstration. (See 1, Rule 129)
In this connection, We may as well perhaps, say here as later that regrettably We cannot, however, go along
with the view, expressed in the dissent of our respected Chief Justice, that from the fact that some of the
voting centers had been transferred to the poblaciones there is already sufficient basis for Us to rule that the

Commission should have also subjected all the returns from the other voting centers of the some
municipalities, if not provinces, to the same degree of scrutiny as in the former. The majority of the Court feels
that had the Commission done so, it would have fallen into the error by petitioner Mandangan about denial of
due process, for it is relatively unsafe to draw adverse conclusions as to the exact conditions of peace and
order in those other voting centers without at list some prima facie evidence to rely on considering that there is
no allegation, much less any showing at all that the voting centers in question are so close to those excluded
by the Comelec on as to warrant the inescapable conclusion that the relevant circumstances by the Comelec
as obtaining in the latter were Identical to those in the former.
Premises considered the petition in G.R. Nos. L-49717-21 is hereby dismiss for lack of merit.
THE ARATUC ET AL. PETITION
Of the eight errors assigned by herein petitioners earlier adverted to, the seventh and the sight do not require
any extended disquisition. As to the issue of whether the elections in the voting centers concerned were held
on April 7, 1978, the date designated by law, or earlier, to which the seventh alleged error is addressed, We
note that apparently petitioners are not seriously pressing on it anymore, as evidenced by the complete
absence of any reference thereto during the oral argument of their counsel and the practically cavalier
discussion thereof in the petition. In any event, We are satisfied from a careful review of the analysis by the
Comelec in its resolution now before Us that it took pains to consider as meticulously as the nature of the
evidence presented by both parties would permit all the contentions of petitioners relative to the weight that
should be given to such evidence. The detailed discussion of said evidence is contained in not less than
nineteen pages (pp. 70-89) of the resolution. In these premises, We are not prepared to hold that Comelec
acted wantonly and arbitrarily in drawing its conclusions adverse to petitioners' position. If errors there are in
any of those conclusions, they are errors of judgment which are not reviewable in certiorari, so long as they
are founded on substantial evidence.
As to eighth assigned error. the thrust of respondents, comment is that the results in the voting centers
mentioned in this assignment of error had already been canvassed at the regional canvass center in Cotabato
City. Again, We cannot say that in sustaining the board of canvassers in this regard, Comelec gravely abused
its discretion, if only because in the guidelines set by this Court, what appears to have been referred to is,
rightly or wrongly, the resumption only of the canvass, which does not necessarily include the setting aside
and repetition of the canvass already made in Cotabato City.
The second and fourth assignments of error concern the voting centers the corresponding voters' record (C.E.
Form 1) and record of voting, (C.E. Form 5) of which have never been brought to Manila because they, were
not available The is not clear as to how many are these voting centers. According to petitioners they are 501,
but in the Comelec resolution in question, the number mentioned is only 408, and this number is directly
challenged in the petition. Under the second assignment, it is contended that the Comelec gravely abused its
discretion in including in the canvass the election returns from these voting centers and, somewhat
alternatively, it is alleged as fourth assignment that the petitioners motion for the opening of the ballot boxes
pertaining to said voting centers was arbitraly denied by respondent Comelec.
The resolution under scrutiny explains the situation that confronted the Commission in regard to the 408 voting
centers reffered to as follows :
The Commission had the option of excluding from the canvass the election returns
under category. By deciding to exclude, the Commission would be summarily
disenfranchising the voters registered in the voting centers affected without any basis.
The Commission could also order the inclusion in the canvass of these elections
returns under the injunction of the Supreme Court that extremes caution must be
exercised in rejecting returns unless these are palpably irregular. The Commission
chose to give prima facie validity to the election returns mentioned and uphold the
votes cast by the voters in those areas. The Commission held the view that the failure
of some election officials to comply with Commission orders(to submit the records)
should not parties to such official disobedience. In the case of Lino Luna vs. Rodriguez,
39 Phil. 208, the Supreme Court ruled that when voters have honestly cast their
ballots, the same should not be nullified because the officers appointed under the law
to direct the election and guard the purity of the ballot have not complied with their duty.
(cited in Laurel on Elections, p. 24)

On page 14 of the comment of the Solicitor General, however, it is stated that:

... The commission had it seen fit to so order, could have directed the opening of the
ballot boxes. But the Commission did not see the necessity of going to such length in a
that was in nature and decided that there was sufficient bases for the revolution of the
appeal. That the Commission has discretion to determine when the ballot boxes should
be opened is implicit in the guidelines set by the Supreme Court which states that '. . .
the ballot bones [which] shall be opened only upon orders of either the respondent
Board or respondent Commission, after the need therefor has become evident ... '
(guideline No. 3; emphasissupplied). Furthermore, the Court on June 1, 1978,
amended the guidelines that the "ballot boxes for the voting centers ... need not be
taken to Manila EXCEPT those of the centers as to which the petitioners have the right
to demand that the corresponding ballot boxes be opened ... provided that the voting
centers concerned shall be specified and made known by petitioners to the Regional
Board of Canvassers not later than June 3,1978 ... ' (Emphasis supplied). The KB,
candidates did not take advantage of the option granted them under these guidelines.
( Pp 106-107, Record.)

At all events, the returns corresponding to these voting centers were examined by the
Comelec and 141 of such returns were excluded, as follows:
SUMMARY

PROVINCE

TOTAL

EXCLUDED

INCLUDED

Lanao del Norte

30

30

Lanao del Sur

342

137

205

Maguindanao

21

20

North Cotabato

Sultan Kudarat

12

10

totals -----

412

141

271

(Page 301, Record.)


This assertion has not been denied by petitioners.
Thus, it appears that precisely use of the absence or unavailability of the CE Forms 1 and 5 corresponding to
the more than 400 voting centers concerned in our present discussion the Comelec examined the returns from
said voting centers to determine their trustworthiness by scrutinizing the purported relevant data appearing on
their faces, believing that such was the next best thing that could be done to avoid total disenfranchisement of
the voters in all of them On the Other hand, Petitioners' insist that the right thing to do was to order the
opening of the ballot boxes involved.
In connection with such opposing contentions, Comelec's explanation in its resolution is:

Considering that Comelec, if it had wished to do so, had the facilities to Identify on its own the voting centers
without CE Forms I and 5, thereby precluding the need for the petitioners having to specify them, and under
the circumstances the need for opening the ballot boxes in question should have appeared to it to be quite
apparent, it may be contended that Comelec would have done greater service to the public interest had it
proceeded to order such opening, as it had announced it had thoughts of doing in its resolution of August 30,
1978. On the other hand, We cannot really blame the Commission too much, since the exacting tenor of the
guidelines issued by Us left it with very little elbow room, so to speak, to use its own discretion independently
of what We had ordered. What could have saved matters altogether would have been a timely move on the
part of petitioners on or before June 3, 1978, as contemplated in Our resolution. After all come to think of it,
that the possible outcome of the opening of the ballot boxes would favor the petitioners was not a certainty
the contents them could conceivably boomerang against them, such as, for example, if the ballots therein had
been found to be regular and preponderantly for their opponents. Having in mind that significantly, petitioners
filed their motion for only on January 9, 1979, practically on the eve of the promulgation of the resolution, We
hold that by having adhered to Our guidelines of June 1, 1978, Comelec certainly cannot be held to be guilty
of having gravely abused its discretion, in examining and passing on the returns from the voting centers
reffered to in the second and fourth assignments of error in the canvass or in denying petitioners' motion for
the of the ballot boxes concerned.
The first, third and sixth assignment of involve related matters and maybe discussed together. They all deal
with the inclusion in or exclusion from the canvass of returns on the basis of the percentage of voting in
specified voting centers and the corresponding findings of the Comelec on the extent of substitute voting
therein as indicated by the result of either the technical examination by experts of the signatures and thumbprints of the voters threat.
To begin with, petitioners' complaint that the Comelec did not examine and study 1,694 of the records in an the
2,775 voting centers questioned by them is hardly accurate. To be more exact, the Commission excluded a
total of 1,267 returns coming under four categories namely: 1,001 under the Diaz, supra, ruling, 79 because of
90-100 % turnout of voters despite military operations, 105 palpably manufactured owe and 82 returns
excluded by the board of canvass on other grounds. Thus, 45.45 % of the of the petitioners were sustained by
the Comelec. In contrast, in the board of canvassers, only 453 returns were excluded. The board was reversed
as to 6 of these, and 821 returns were excluded by Comelec over and above those excluded by the board. In
other words, the Comelec almost doubled the exclusions by the board.
Petitioners would give the impression by their third assignment of error that Comelec refused to consider high
percentage of voting, coupled with mass substitute voting, as proof that the pertinent returns had been
manufactured. That such was not the case is already shown in the above specifications. To add more, it can
be gleaned from the resolution that in t to the 1,065 voting centers in Lanao del Sur and Marawi City where a
high percentage of voting appeared, the returns from the 867 voting centers were excluded by the Comelec
and only 198 were included a ratio of roughly 78 % to 22 %. The following tabulation drawn from the figures in
the resolution shows how the Comelec went over those returns center by center and acted on them
individually:
90% 100% VOTING
MARAWI CITY AND LANAO DEL SUR

We are convinced, apart from presuming regularity in the performance of its duties, that there is enough
showing in the record that it did examine and study the returns and pertinent records corresponding to all the
2775 voting centers subject of petitioners' complaints below. In one part of its resolution the Comelec states:

the spuriousness of the return, the basis rule of their being accorded prima facie status
as bona fide reports of the results of the count of the votes for canvassing and
proclamation purposes must be applied, without prejudice to the question being tried
on the merits with the presentation of evidence, testimonial and real in the
corresponding electoral protest. (Bashier vs. Comelec L-33692, 33699, 33728, 43
SCRA 238, February 24, 1972). The decisive factor is that where it has been duly de
ed after investigation and examination of the voting and registration records
hat actual voting and election by the registered voters had taken place in the
questioned voting centers, the election returns cannot be disregarded and excluded
with the resting disenfranchisement of the voters, but must be accorded prima facie
status as bona fide reports of the results of the voting for canvassing and registration
purposes. Where the grievances relied upon is the commission of irregularities and
violation of the Election Law the proper remedy is election protest. (Anni vs. Isquierdo
et al. Supra). (P. 69, Record, L-49705-09).

The Commission as earlier stated examined on its own the Books of Voters (Comelec
Form No. 1) and the Voters Rewards Comelec Form No. 5) to determine for itself which
of these elections form needed further examination by the COMELEC-NBI experts. The
Commission, aware of the nature of this pre-proclamation controversy, believes that it
can decide, using common sense and perception, whether the election forms in
controversy needed further examination by the experts based on the presence or
absence of patent signs of irregularity. (Pp. 137-138, Record.)
In the face of this categorical assertion of fact of the Commission, the bare charge of petitioners that the
records pertaining to the 1,694 voting centers assailed by them should not create any ripple of serious doubt.
As We view this point under discussion, what is more factually accurate is that those records complained of
were not examined with the aid of experts and that Comelec passed upon the returns concerned "using
common sense and perception only." And there is nothing basically objectionable in this. The defunct
Presidential Senate and House Electoral Tribunals examine passed upon and voided millions of votes in
several national elections without the assistance of experts and "using" only common sense and perception".
No one ever raised any eyebrows about such procedure. Withal, what we discern from the resolution is that
Comelec preliminary screened the records and whatever it could not properly pass upon by "using common
sense and perception" it left to the experts to work on. We might disagree with he Comelec as to which voting
center should be excluded or included, were We to go over the same records Ourselves, but still a case of
grave abuse of discretion would not come out, considering that Comelec cannot be said to have acted
whimsically or capriciously or without any rational basis, particularly if it is considered that in many respects
and from the very nature of our respective functions, becoming candor would dictate to Us to concede that the
Commission is in a better position to appreciate and assess the vital circumstances closely and accurately. By
and large, therefore, the first, third and sixth assignments of error of the petitioners are not well taken.
The fifth assignment of error is in Our view moot and academic. The Identification of the ballot boxes in
defective condition, in some instances open and allegedly empty, is at best of secondary import because, as
already discussed, the records related thereto were after all examined, studied and passed upon. If at all,
deeper inquiry into this point would be of real value in an electoral protest.
CONCLUSION
Before closing, it may not be amiss to state here that the Court had initially agreed to dispose of the cases in a
minute resolution, without prejudice to an extended or reasoned out opinion later, so that the Court's decision
may be known earlier. Considering, however, that no less than the Honorable Chief Justice has expressed
misgivings as to the propriety of yielding to the conclusions of respondent Commission because in his view
there are strong considerations warranting farther meticulous inquiry of what he deems to be earmarks of
seemingly traditional faults in the manner elections are held in the municipalities and provinces herein
involved, and he is joined in this pose by two other distinguished colleagues of Ours, the majority opted to ask
for more time to put down at least some of the important considerations that impelled Us to see the matters in
dispute the other way, just as the minority bidded for the opportunity to record their points of view. In this
manner, all concerned will perhaps have ample basis to place their respective reactions in proper perspective.
In this connection, the majority feels it is but meet to advert to the following portion of the ratiocination of
respondent Board of Canvassers adopted by respondent Commission with approval in its resolution under
question:
First of all this Board was guided by the legal doctrine that canvassing boards must
exercise "extreme caution" in rejecting returns and they may do so only when the
returns are palpably irregular. A conclusion that an election return is obviously
manufactured or false and consequently should be disregarded in the canvass must be
approached with extreme caution, and only upon the most convincing proof. Any
plausible explanation one which is acceptable to a reasonable man in the light of
experience and of the probabilities of the situation, should suffice to avoid outright
nullification, with the resulting t of those who exercised their right of suffrage. (Anni vs.
Isquierdo et at L-35918, Jude 28,1974; Villavon v. Comelec L-32008, August 31,1970;
Tagoranao v. Comelec 22 SCRA 978). In the absence of strong evidence establishing

The writer of this opinion has taken care to personally check on the citations to be doubly sure they were not
taken out of context, considering that most, if not all of them arose from similar situations in the very venues of
the actual milieu of the instant cases, and We are satisfied they do fit our chosen posture. More importantly,
they actually came from the pens of different members of the Court, already retired or still with Us,
distinguished by their perspicacity and their perceptive prowess. In the context of the constitutional and
legislative intent expounded at the outset of this opinion and evident in the modifications of the duties and
responsibilities of the Commission on Elections vis-a-vis the matters that have concerned Us herein,
particularly the elevation of the Commission as the "sole judge of pre-proclamation controversies" as well as of
all electoral contests, We find the afore-quoted doctrines compelling as they reveal through the clouds of
existing jurisprudence the pole star by which the future should be guided in delineating and circumscribing
separate spheres of action of the Commission as it functions in its equally important dual role just indicated
bearing as they do on the purity and sanctity of elections in this country.
In conclusion, the Court finds insufficient merit in the petition to warrant its being given due course. Petition
dismissed, without pronouncement as to costs. Justices Fernando, Antonio and Guerrero who are presently on
official missions abroad voted for such dismissal.
G.R. No. 135945

March 7, 2001

THE UNITED RESIDENTS OF DOMINICAN HILL, INC., represented by its President RODRIGO S.
MACARIO, SR., petitioner,
vs.
COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS, represented by its Commissioner,
RUFINO V. MIJARES; MARIO PADILAN, PONCIANO BASILAN, HIPOLITO ESLAVA, WILLIAM LUMPISA,
PACITO MOISES, DIONISIO ANAS, NOLI DANGLA, NAPOLEON BALESTEROS, ELSIE MOISES, SEBIO
LACWASAN, BEN FLORES, DOMINGO CANUTAB, MARCELINO GABRIANO, TINA TARNATE, ANDREW
ABRAZADO, DANNY LEDDA, FERNANDO DAYAO, JONATHAN DE LA PENA, JERRY PASSION, PETER
AGUINSOD, and LOLITA DURAN, respondents.
DE LEON, JR., J.:
Before us is a petition for prohibition and declaratory relief seeking the annulment of a status quo order 1 dated
September 29, 1998 issued by the public respondent Commission on the Settlement of Land Problems
(COSLAP, for brevity) in COSLAP Case No. 98-253.
The facts are:
The property being fought over by the parties is a 10.36-hectare property in Baguio City called Dominican
Hills, formerly registered in the name of Diplomat Hills, Inc. It appeared that the property was mortgaged to the
United Coconut Planters Bank (UCPB) which eventually foreclosed the mortgage thereon and acquired the
same as highest bidder. On April 11, 1983, it was donated to the Republic of the Philippines by UCPB through
its President, Eduardo Cojuangco. The deed of donation stipulated that Dominican Hills would be utilized for

the "priority programs, projects, activities in human settlements and economic development and governmental
purposes" of the Ministry of Human Settlements.
On December 12, 1986, the then President Corazon C. Aquino issued Executive Order No. 85 abolishing the
Office of Media Affairs and the Ministry of Human Settlements. All agencies under the latter's supervision as
well as all its assets, programs and projects, were transferred to the Presidential Management Staff (PMS). 2
On October 18, 1988, the PMS received an application from petitioner UNITED RESIDENTS OF DOMINICAN
HILL, INC. (UNITED, for brevity), a community housing association composed of non-real property owning
residents of Baguio City, to acquire a portion of the Dominican Hills property. On February 2, 1990, PMS
Secretary Elfren Cruz referred the application to the HOME INSURANCE GUARANTY CORPORATION
(HIGC). HIGC consented to act as originator for UNITED. 3 Accordingly, on May 9, 1990, a Memorandum of
Agreement was signed by and among the PMS, the HIGC, and UNITED. The Memorandum of Agreement
called for the PMS to sell the Dominican Hills property to HIGC which would, in turn, sell the same to UNITED.
The parties agreed on a selling price of P75.00 per square meter.
Thus, on June 12, 1991, HIGC sold 2.48 hectares of the property to UNITED. The deed of conditional sale
provided that ten (10) per cent of the purchase price would be paid upon signing, with the balance to be
amortized within one year from its date of execution. After UNITED made its final payment on January 31,
1992, HIGC executed a Deed of Absolute Sale dated July 1, 1992.
Petitioner alleges that sometime in 1993, private respondents entered the Dominican Hills property allocated
to UNITED and constructed houses thereon. Petitioner was able to secure a demolition order from the city
mayor.4
Unable to stop the razing of their houses, private respondents, under the name DOMINICAN HILL BAGUIO
RESIDENTS HOMELESS ASSOCIATION (ASSOCIATION, for brevity) filed an action 5 for injunction docketed
as Civil Case No. 3316-R, in the Regional Trial Court of Baguio City, Branch 4. Private respondents were able
to obtain a temporary restraining order but their prayer for a writ of preliminary injunction was later denied in
an Order dated March 18, 1996.6
While Civil Case No. 3316-R was pending, the ASSOCIATION, this time represented by the Land Reform
Beneficiaries Association, Inc. (BENEFICIARIES, for brevity), filed Civil Case No. 3382-R before Branch 61 of
the same court. The complaint7 prayed for damages, injunction and annulment of the said Memorandum of
Agreement between UNITED and HIGC. Upon motion of UNITED, the trial court in an Order dated May 27,
1996 dismissed Civil Case No. 3382-R.8 The said Order of dismissal is currently on appeal with the Court of
Appeals.9
Demolition Order No. 1-96 was subsequently implemented by the Office of the City Mayor and the City
Engineer's Office of Baguio City. However, petitioner avers that private respondents returned and
reconstructed the demolished structures.
To forestall the re-implementation of the demolition order, private respondents filed on September 29, 1998 a
petition10 for annulment of contracts with prayer for a temporary restraining order, docketed as COSLAP Case
No. 98-253, in the Commission on the Settlement of Land Problems (COSLAP) against petitioner, HIGC, PMS,
the City Engineer's Office, the City Mayor, as well as the Register of Deeds of Baguio City. On the very same
day, public respondent COSLAP issued the contested order requiring the parties to maintain the status quo.
Without filing a motion for reconsideration from the aforesaid status quo order, petitioner filed the instant
petition questioning the jurisdiction of the COSLAP.
The issues we are called upon to resolve are:

1
IS THE COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS [COSLAP] CREATED
UNDER EXECUTIVE ORDER NO. 561 BY THE OFFICE OF THE PHILIPPINES [sic]
EMPOWERED TO HEAR AND TRY A PETITION FOR ANNULMENT OF CONTRACTS WITH
PRAYER FOR A TEMPORARY RESTRAINING ORDER AND THUS, ARROGATE UNTO ITSELF
THE POWER TO ISSUE STATUS QUO ORDER AND CONDUCT A HEARING THEREOF [sic]?
2
ASSUMING THAT THE COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS [COSLAP]
HAS JURISDICTION ON THE MATTER, IS IT EXEMPTED FROM OBSERVING A CLEAR CASE
OF FORUM SHOPPING ON THE PART OF THE PRIVATE RESPONDENTS?
To the extent that the instant case is denominated as one for declaratory relief, we initially clarify that we do
not possess original jurisdiction to entertain such petitions. 11 Such is vested in the Regional Trial
Courts.12Accordingly, we shall limit our review to ascertaining if the proceedings before public respondent
COSLAP are without or in excess, of its jurisdiction. In this wise, a recounting of the history of the COSLAP
may provide useful insights into the extent of its powers and functions.
The COSLAP was created by virtue of Executive Order No. 561 dated September 21, 1979. Its forerunner was
the Presidential Action Committee on Land Problems (PACLAP) founded on July 31, 1970 by virtue of
Executive Order No. 251. As originally conceived, the committee was tasked "to expedite and coordinate the
investigation and resolution of land disputes, streamline and shorten administrative procedures, adopt bold
and decisive measures to solve land problems, and/or recommend other solutions." It was given the power to
issue subpoenasduces tecum and ad testificandum and to call upon any department, office, agency or
instrumentality of the government, including government owned or controlled corporations and local
government units, for assistance in the performance of its functions. At the time, the PACLAP did not exercise
quasi-judicial functions.
On March 19, 1971, Executive Order No. 305 was issued reconstituting the PACLAP.13 The committee was
given exclusive jurisdiction over all cases involving public lands and other lands of the public domain and
accordingly was tasked:
1. To investigate, coordinate, and resolve expeditiously land disputes, streamline administrative
procedures, and in general, to adopt bold and decisive measures to solve problems involving
public lands and lands of the public domain;
2. To coordinate and integrate the activities of all government agencies having to do with public
lands or lands of the public domain;
3. To study and review present policies as embodied in land laws and administrative rules and
regulations, in relation to the needs for land of the agro-industrial sector and small farmers, with
the end in view to evolving and recommending new laws and policies and establishing priorities in
the grant of public land, and the simplification of processing of land applications in order to relieve
the small man from the complexities of existing laws, rules and regulations;
4. To evolve and implement a system for the speedy investigation and resolution of land disputes;
5. To receive all complaints of settlers and small farmers, involving public lands or other lands of
the public domain;

6. To look into the conflicts between Christians and non-Christians, between corporations and
small settlers and farmers; cause the speedy settlement of such conflicts in accordance with
priorities or policies established by the Committee; and

(d) Petitions for classification, release and/or subdivision of lands of the


public domain; and
(e) Other similar land problems of grave urgency and magnitude.

7. To perform such other functions as may be assigned to it by the President.


Thereafter, the PACLAP was reorganized pursuant to Presidential Decree No. 832 dated November 27,
1975.14Its jurisdiction was revised thus:
xxx

xxx

xxx

2. Refer for immediate action any land problem or dispute brought to the attention of the PACLAP,
to any member agency having jurisdiction thereof: Provided, that when the Executive Committee
decides to act on a case, its resolution, order or decision thereon, shall have the force and effect of
a regular administrative resolution, order or decision, and shall be binding upon the parties therein
involved and upon the member agency having jurisdiction thereof;
xxx

xxx

xxx

Notably, the said Presidential Decree No. 832 did not contain any provision for judicial review of the
resolutions, orders or decisions of the PACLAP.
On September 21, 1979, the PACLAP was abolished and its functions transferred to the present Commission
on the Settlement of Land Problems by virtue of Executive Order No. 561. This reorganization, effected in line
with Presidential Decree No. 1416, brought the COSLAP directly under the Office of the President. 15 It was
only at this time that a provision for judicial review was made from resolutions, orders or decisions of the said
agency, as embodied in section 3(2) thereof, to wit:
Powers and functions. The Commission shall have the following powers and functions:
1. Coordinate the activities, particularly the investigation work, of the various
government offices and agencies involved in the settlement of land problems or
disputes, and streamline administrative procedures to relieve small settlers and
landholders and members of cultural minorities of the expense and time-consuming
delay attendant to the solution of such problems or disputes;
2. Refer and follow-up for immediate action by the agency having appropriate
jurisdiction any land problem or dispute referred to the Commission: Provided, that the
Commission may, in the following cases, assume jurisdiction and resolve land
problems or disputes which are critical and explosive in nature considering, for
instance, the large number of the parties involved, the presence or emergence of social
tension or unrest, or other similar critical situations requiring immediate action:
(a) Between occupants/squatters and pasture lease agreement holders or
timber concessionaires;
(b) Between occupants/squatters and government reservation grantees;

The Commission shall promulgate such rules of procedure as will insure expeditious resolution and
action on the above cases. The resolution, order or decision of the Commission on any of the
foregoing cases shall have the force and effect of a regular administrative resolution, order or
decision and shall be binding upon the parties therein and upon the agency having jurisdiction over
the same. Said resolution, order or decision shall become final and executory within thirty (30)
days from its promulgation and shall be appealable by certiorari only to the Supreme Court.
xxx

xxx

xxx

In the performance of its functions and discharge of its duties, the Commission is authorized,
through the Commission, to issue subpoena and subpoena duces tecum for the appearance of
witnesses and the production of records, books and documents before it. It may also call upon any
ministry, office, agency or instrumentality of the National Government, including governmentowned or controlled corporations, and local governments for assistance. This authority is likewise,
conferred upon the provincial offices as may be established pursuant to Section 5 of this Executive
Order.
In Baaga v. Commission on the Settlement of Land Problems,16 we characterized the COSLAP's jurisdiction
as being general in nature, as follows:
Petitioners also contend in their petition that the COSLAP itself has no jurisdiction to resolve the
protest and counter-protest of the parties because its power to resolve land problems is confined to
those cases "which are critical and explosive in nature."
This contention is devoid of merit. It is true that Executive Order No. 561 provides that the
COSLAP may take cognizance of cases which are "critical and explosive in nature considering, for
instance, the large number of parties involved, the presence or emergence of social tension or
unrest, or other similar critical situations requiring immediate action." However, the use of the word
"may" does not mean that the COSLAP's jurisdiction is merely confined to the above mentioned
cases. The provisions of the said Executive Order are clear that the COSLAP was created as a
means of providing a more effective mechanism for the expeditious settlement of land problems in
general, which are frequently the source of conflicts among settlers, landowners and cultural
minorities. Besides, the COSLAP merely took over from the abolished PACLAP whose functions,
including its jurisdiction, power and authority to act on, decide and resolve land disputes (Sec. 2,
P.D. No. 832) were all assumed by it. The said Executive Order No. 561 containing said provision,
being enacted only on September 21, 1979, cannot affect the exercise of jurisdiction of the
PACLAP Provincial Committee of Koronadal on September 29, 1978. Neither can it affect the
decision of the COSLAP which merely affirmed said exercise of jurisdiction.
Given the facts of the case, it is our view that the COSLAP is not justified in assuming jurisdiction over the
controversy. As matters stand, it is not the judiciary's place to question the wisdom behind a law; 17 our task is
to interpret the law. We feel compelled to observe, though, that by reason of the ambiguous terminology
employed in Executive Order No. 561, the power to assume jurisdiction granted to the COSLAP provides an
ideal breeding ground for forum shopping, as we shall explain subsequently. Suffice it to state at this stage that
the COSLAP may not assume jurisdiction over cases which are already pending in the regular courts.

(c) Between occupants/squatters and public land claimants or applicants;


The reason is simple. Section 3(2) of Executive Order 561 speaks of any resolution, order or decision of the
COSLAP as having the "force and effect of a regular administrative resolution, order or decision." The

qualification places an unmistakable emphasis on the administrative character of the COSLAP's


determination, amplified by the statement that such resolutions, orders or decisions "shall be binding upon the
parties therein and upon the agency having jurisdiction over the same." An agency is defined by statute as
"any of the various units of the Government, including a department, bureau, office, instrumentality, or
government-owned or controlled corporation, or a local government or a distinct unit therein." 18 A department,
on the other hand, "refers to anexecutive department created by law." 19 Whereas, a bureau is understood to
refer "to any principal subdivision of any department." 20 In turn, an office "refers, within the framework of
governmental organization, to any major functional unit of a department or bureau including regional offices. It
may also refer to any position held or occupied by individual persons, whose functions are defined by law or
regulation."21 An instrumentality is deemed to refer "to any agency of the National Government, not integrated
within the department framework, vested with special functions or jurisdiction by law, endowed with some if not
all corporate powers, administering special funds and enjoying operational autonomy, usually through a
charter. This term includes regulatory agencies, chartered institutions and government-owned or controlled
corporations."22 Applying the principle in statutory construction of ejusdem generis, i.e., "where general words
follow an enumeration or persons or things, by words of a particular and specific meaning, such general words
are not to be construed in their widest extent, but are to be held as applying only to persons or things of the
same kind or class as those specifically mentioned," 23 section 3(2) of Executive Order 561 patently indicates
that the COSLAP's dispositions are binding on administrative orexecutive agencies. The history of the
COSLAP itself bolsters this view. Prior enactments enumerated its member agencies among which it was to
exercise a coordinating function.

agencies other than the Supreme Court and the Court of Appeals and shall be subject to the
sanctions provided hereunder.
1. The plaintiff, petitioner, applicant or principal part seeking relief in the complaint,
petition, application or other initiatory pleading shall certify under oath in such original
pleading, or in a sworn certification annexed thereto and simultaneously filed therewith,
to the truth of the following facts and undertakings: (a) he has not theretofore
commenced any other action or proceeding involving the same issues in the Supreme
Court, the Court of Appeals, or any other tribunal or agency; (b) to the best of his
knowledge, no such action or proceedings is pending in the Supreme Court, the Court
of Appeals, or any other tribunal or agency; (c) if there is any such action or proceeding
which is either pending or may have been terminated, he must state the status thereof;
and (d) if he should thereafter learn that a similar action or proceeding has been filed or
is pending before the Supreme Court, the Court of Appeals or any other tribunal or
agency, he undertakes to report that fact within five (5) days therefrom to the court or
agency wherein the original pleading and sworn certification contemplated herein have
been filed.
The complaint and other initiatory pleadings referred to and subject of this Circular are
the original civil complaint, counterclaim, cross-claim, third (fourth, etc.) party
complaint, or complaint-in-intervention, petition, or application wherein a party asserts
his claim for relief.

The COSLAP discharges quasi-judicial functions:


"Quasi-judicial function" is a term which applies to the actions, discretion, etc. of public
administrative officers or bodies, who are required to investigate facts, or ascertain the existence of
facts, hold hearings, and draw conclusions from them, as a basis for their official action and to
exercise discretion of a judicial nature."24
However, it does not depart from its basic nature as an administrative agency, albeit one that exercises quasijudicial functions. Still, administrative agencies are not considered courts; they are neither part of the judicial
system nor are they deemed judicial tribunals.25 The doctrine of separation of powers observed in our system
of government reposes the three (3) great powers into its three (3) branches the legislative, the executive,
and the judiciary each department being co-equal and coordinate, and supreme in its own sphere.
Accordingly, the executive department may not, by its own fiat, impose the judgment of one of its own
agencies, upon the judiciary. Indeed, under the expanded jurisdiction of the Supreme Court, it is empowered
"to determine whether or not there has been grave abuse of discretion amounting to lack of or excess of
jurisdiction on the part of any branch or instrumentality of the Government." 26
There is an equally persuasive reason to grant the petition. As an additional ground for the annulment of the
assailed status quo order of COSLAP, UNITED accuses private respondents of engaging in forum shopping.
Forum shopping exists when a party "repetitively avail[s] of several judicial remedies in different courts,
simultaneously or successively, all substantially founded on the same transactions and the same essential
facts and circumstances, and all raising substantially the same issues either pending in, or already resolved
adversely by some other court."27 In this connection, Supreme Court Administrative Circular No. 04-94 dated
February 8, 1994 provides:
Revised Circular No. 28-91, dated February 8, 1994, applies to and governs the filing of petitions in
the Supreme Court and the Court of Appeals and is intended to prevent the multiple filing of
petitions or complaints involving the same issues in other tribunals or agencies as a form of forum
shopping.
Complementary thereto and for the same purpose, the following requirements, in addition to those
in pertinent provisions of the Rules of Court and existing circulars, shall be strictly complied with in
the filing of complaints, petitions, applications or other initiatory pleadings in all courts and

2. Any violation of this Circular shall be a cause for the dismissal of the complaint,
petition, application or other initiatory pleading, upon motion and after hearing.
However, any clearly willful and deliberate forum shopping by any other party and his
counsel through the filing of multiple complaints or other initiatory pleadings to obtain
favorable action shall be a ground for the summary dismissal thereof and shall
constitute contempt of court. Furthermore, the submission of a false certification or
non-compliance with the undertakings therein, as provided in Paragraph 1 hereof, shall
constitute indirect contempt of court, without prejudice to disciplinary proceedings
against the counsel and the filing of a criminal action against the part. [emphasis
supplied]
xxx

xxx

xxx

The said Administrative Circular's use of the auxiliary verb "shall" imports "an imperative obligation . . .
inconsistent with the idea of discretion."28 Hence, compliance therewith is mandatory.29
It bears stressing that there is a material distinction between the requirement of submission of the certification
against forum shopping from the undertakings stated therein. Accordingly,
x x x [f]ailure to comply with this requirement cannot be excused by the fact that plaintiff is not
guilty of forum shopping. The Court of Appeals, therefore, erred in concluding that Administrative
Circular No. 04-94 did not apply to private respondent's case merely because her complaint was
not based on petitioner's cause of action. The Circular applies to any complaint, petition,
application, or other initiatory pleading, regardless of whether the party filing it has actually
committed forum shopping. Every party filing a complaint or any other initiatory pleading is required
to swear under oath that he has not committed nor will he commit forum shopping. Otherwise, we
would have an absurd situation where the parties themselves would be the judge of whether their
actions constitute a violation of said Circular, and compliance therewith would depend on their
belief that they might or might not have violated the requirement. Such interpretation of the
requirement would defeat the very purpose of Circular 04-94.

Indeed, compliance with the certification against forum shopping is separate from, and
independent of, the avoidance of forum shopping itself. Thus, there is a difference in the treatment
in terms of imposable sanctions between failure to comply with the certification requirement
and violation of the prohibition against forum shopping. The former is merely a cause for the
dismissal, without prejudice, of the complaint or initiatory pleading, while the latter is a ground for
summary dismissal thereof and constitutes direct contempt.30
A scrutiny of the pleadings filed before the trial courts and the COSLAP sufficiently establishes private
respondents' propensity for forum shopping. We lay the premise that the certification against forum shopping
must be executed by the plaintiff or principal party, and not by his counsel. 31 Hence, one can deduce that the
certification is a peculiar personal representation on the part of the principal party, an assurance given to the
court or other tribunal that there are no other pending cases involving basically the same parties, issues and
causes of action. In the case at bar, private respondents' litany of omissions range from failing to submit the
required certification against forum shopping to filing a false certification, and then to forum shopping itself.
First, the petition filed before the COSLAP conspicuously lacked a certification against forum shopping.
Second, it does not appear from the record that the ASSOCIATION informed Branch 4 of the Regional Trial
Court of Baguio City before which Civil Case No. 3316-R was pending, that another action, Civil Case No.
3382-R, was filed before Branch 61 of the same court. Another group of homeless residents of Dominican Hill,
the LAND REFORM BENEFICIARIES ASSOCIATION, INC. initiated the latter case. The aforesaid plaintiff,
however, does not hesitate to admit that it filed the second case in representation of private respondent, as
one of its affiliates. In the same manner, the certification against forum shopping accompanying the complaint
in Civil Case No. 3382-R does not mention the pendency of Civil Case No. 3316-R. In fact, the opposite
assurance was given, that there was no action pending before any other tribunal. Another transgression is that
both branches of the trial court do not appear to have been notified of the filing of the subject COSLAP Case
No. 98-253.
It is evident from the foregoing facts that private respondents, in filing multiple petitions, have mocked our
attempts to eradicate forum shopping and have thereby upset the orderly administration of justice. They
sought recourse from three (3) different tribunals in order to obtain the writ of injunction they so desperately
desired. "The willful attempt by private respondents to obtain a preliminary injunction in another court after it
failed to acquire the same from the original court constitutes grave abuse of the judicial process." 32

in good faith there would have been no hindrance in filing the action for damages with the regional
trial court of Paraaque and having it consolidated with the contempt proceedings before Branch
274, so that the same issue on the alleged violation of the sub judice rule will not have to be
passed upon twice, and there would be no possibility of having two courts of concurrent jurisdiction
making two conflicting resolutions.
Yet from another angle, it may be said that when the Paraaque court acquired jurisdiction over
the said issue, it excluded all other courts of concurrent jurisdiction from acquiring jurisdiction over
the same. To hold otherwise would be to risk instances where courts of concurrent jurisdiction
might have conflicting orders. This will create havoc and result in an extremely disordered
administration of justice. Therefore, even on the assumption that the Makati court may acquire
jurisdiction over the subject matter of the action for damages, without prejudice to the application of
Administrative Circular No. 04-94, it cannot nonetheless acquire jurisdiction over the issue of
whether or not petitioner has violated the sub judice rule. At best, theMakati court may hear the
case only with respect to the alleged injury suffered by private respondent afterthe Paraaque
court shall have ruled favorably on the said issue.
We also noted several indications of private respondents' bad faith. The complaint filed in Civil Case No. 3316R was prepared by the ASSOCIATION's counsel, Atty. Conrado Villamor Catral, Jr. whereas the complaint filed
in Civil Case No. 3382-R was signed by a different lawyer, Atty. Thomas S. Tayengco. With regard to the
petition filed with the COSLAP, the same was signed by private respondents individually. As to the latter case,
we noted that the petition itself could not have been prepared by ordinary laymen, inasmuch as it exhibits
familiarity with statutory provisions and legal concepts, and is written in a lawyerly style.
In the same manner, the plaintiffs in the three (3) different cases were made to appear as dissimilar: in Civil
Case No. 3316-R, the plaintiff was ASSOCIATION of which private respondent Mario Padilan was head, while
the plaintiff in Civil Case No. 3382-R was the BENEFICIARIES. Before the COSLAP, private respondents
themselves were the petitioners, led again by Padilan. 34 Private respondents also attempted to vary their
causes of action: in Civil Case No. 3382-R and COSLAP Case No. 98-253, they seek the annulment of the
Memorandum of Agreement executed by and among UNITED, the PMS, and HIGC as well as the transfer
certificates of title accordingly issued to petitioner. All three (3) cases sought to enjoin the demolition of private
respondents' houses.

In this connection, we expounded on forum shopping in Viva Productions, Inc. v. Court of Appeals33 that:
Private respondent's intention to engage in forum shopping becomes manifest with undoubted
clarity upon the following considerations. Notably, if not only to ensure the issuance of an injunctive
relief, the significance of the action for damages before the Makati court would be nil. What
damages against private respondent would there be to speak about if the Paraaque court already
enjoins the performance of the very same act complained of in the Makati court? Evidently, the
action for damages is premature if not for the preliminary injunctive relief sought. Thus, we find
grave abuse of discretion on the part of the Makati court, being a mere co-equal of the Paraaque
court, in not giving due deference to the latter before which the issue of the alleged violation of
the sub-judice rule had already been raised and submitted. In such instance, the Makati court, if it
was wary of dismissing the action outrightly under Administrative Circular No. 04-94, should have,
at least, ordered the consolidation of its case with that of the Paraaque court, which had first
acquired jurisdiction over the related case x x x, or it should have suspended the proceedings until
the Paraaque court may have ruled on the issue x x x.
xxx

xxx

xxx

Thus, while we might admit that the causes of action before the Makati court and the Paraaque
court are distinct, and that private respondent cannot seek civil indemnity in the contempt
proceedings, the same being in the nature of criminal contempt, we nonetheless cannot ignore
private respondent's intention of seeking exactly identical reliefs when it sought the preliminary
relief of injunction in the Makati court. As earlier indicated, had private respondent been completely

It has been held that forum shopping is evident where the elements of litis pendentia or res judicata are
present. Private respondents' subterfuge comes to naught, for the effects of res judicata or litis pendentia may
not be avoided by varying the designation of the parties or changing the form of the action or adopting a
different mode of presenting one's case. 35
In view of the foregoing, all that remains to be done is the imposition of the proper penalty. A party's willful and
deliberate act of forum shopping is punishable by summary dismissal of the actions filed. 36 The summary
dismissal of both COSLAP Case No. 98-253 and Civil Case No. 3316-R is therefore warranted under the
premises. We shall refrain from making any pronouncement on Civil Case No. 3382-R, the dismissal of which
was elevated on appeal to the Court of Appeals where it is still pending.
WHEREFORE, the petition is hereby GRANTED. The status quo order dated September 29, 1998 issued in
COSLAP Case No. 98-253 by respondent Commission On The Settlement Of Land Problems (COSLAP) is
hereby SET ASIDE; and the petition filed in COSLAP Case No. 98-253 and the complaint in Civil Case No.
3316-R are hereby DISMISSED for lack of jurisdiction and forum shopping. Costs against private respondents.
SO ORDERED.
G.R. No. 97149 March 31, 1992

FIDENCIO Y. BEJA, SR., petitioner,


vs.
COURT OF APPEALS, HONORABLE REINERIO O. REYES, in his capacity as Secretary of the
Department of Transportation and Communications; COMMODORE ROGELIO A. DAYAN, in his
capacity as General Manager of the Philippine Ports Authority; DEPARTMENT OF TRANSPORTATION
AND COMMUNICATIONS, ADMINISTRATIVE ACTION BOARD; and JUSTICE ONOFRE A. VILLALUZ, in
his capacity as Chairman of the Administrative Action Board, DOTC, respondents.

WHEREFORE, judgment is hereby rendered, adjudging the following, namely:


a) That respondents Geronimo Beja, Jr. and Hernando Villaluz are exonerated from the
charge against them;
b) That respondent Fidencio Y. Beja be dismissed from the service;
c) That his leave credits and retirement benefits are declared forfeited;

ROMERO, J.:

d) That he be disqualified from re-employment in the government service;

The instant petition for certiorari questions the jurisdiction of the Secretary of the Department of Transportation
and Communications (DOTC) and/or its Administrative Action Board (AAB) over administrative cases involving
personnel below the rank of Assistant General Manager of the Philippine Ports Authority (PPA), an agency
attached to the said Department.

e) That his eligibility is recommended to be cancelled.

Petitioner Fidencio Y. Beja, Sr. 1 was first employed by the PPA as arrastre supervisor in 1975. He became
Assistant Port Operations Officer in 1976 and Port Operations Officer in 1977. In February 1988, as a result of
the reorganization of the PPA, he was appointed Terminal Supervisor.
On October 21, 1988, the PPA General Manager, Rogelio A. Dayan, filed Administrative Case No. 11-04-88
against petitioner Beja and Hernando G. Villaluz for grave dishonesty, grave misconduct, willful violation of
reasonable office rules and regulations and conduct prejudicial to the best interest of the service. Beja and
Villaluz allegedly erroneously assessed storage fees resulting in the loss of P38,150.77 on the part of the PPA.
Consequently, they were preventively suspended for the charges. After a preliminary investigation conducted
by the district attorney for Region X, Administrative Case No. 11-04-88 was "considered closed for lack of
merit."
On December 13, 1988, another charge sheet, docketed as Administrative Case No. 12-01-88, was filed
against Beja by the PPA General Manager also for dishonesty, grave misconduct, violation of reasonable office
rules and regulations, conduct prejudicial to the best interest of the service and for being notoriously
undesirable. The charge consisted of six (6) different specifications of administrative offenses including fraud
against the PPA in the total amount of P218,000.00. Beja was also placed under preventive suspension
pursuant to Sec. 41 of P.D. No. 807.
The case was redocketed as Administrative Case No. PPA-AAB-1-049-89 and thereafter, the PPA general
manager indorsed it to the AAB for "appropriate action." At the scheduled hearing, Beja asked for continuance
on the ground that he needed time to study the charges against him. The AAB proceeded to hear the case and
gave Beja an opportunity to present evidence. However, on February 20, 1989, Beja filed a petition
for certiorari with preliminary injunction before the Regional Trial Court of Misamis Oriental. 2 Two days later,
he filed with the AAB a manifestation and motion to suspend the hearing of Administrative Case No. PPA-AAB1-049-89 on account of the pendency of the certiorari proceeding before the court. AAB denied the motion and
continued with the hearing of the administrative case.
Thereafter, Beja moved for the dismissal of the certiorari case below and proceeded to file before this Court a
petition for certiorari with preliminary injunction and/or temporary restraining order. The case was docketed as
G.R. No. 87352 captioned "Fidencio Y. Beja v. Hon. Reinerio 0. Reyes, etc., et al." In the en banc resolution of
March 30, 1989, this Court referred the case to the Court of Appeals for "appropriate action." 3 G.R. No. 87352
was docketed in the Court of Appeals as CA-G.R. SP No. 17270.
Meanwhile, a decision was rendered by the AAB in Administrative Case No. PPA-AAB-049-89. Its dispositive
portion reads:

Pasig, Metro Manila, February 28, 1989.


On December 10, 1990, after appropriate proceedings, the Court of Appeals also rendered a decision 4 in CAG.R. SP No. 17270 dismissing the petition for certiorari for lack of merit. Hence, Beja elevated the case back
to this Court through an "appeal by certiorari with preliminary injunction and/or temporary restraining order."
We find the pleadings filed in this case to be sufficient bases for arriving at a decision and hence, the filing of
memoranda has been dispensed with.
In his petition, Beja assails the Court of Appeals for having "decided questions of substance in a way probably
not in accord with law or with the applicable decisions" of this Court. 5 Specifically, Beja contends that the
Court of Appeals failed to declare that: (a) he was denied due process; (b) the PPA general manager has no
power to issue a preventive suspension order without the necessary approval of the PPA board of directors; (c)
the PPA general manager has no power to refer the administrative case filed against him to the DOTC-AAB,
and (d) the DOTC Secretary, the Chairman of the DOTC-AAB and DOTC-AAB itself as an adjudicatory body,
have no jurisdiction to try the administrative case against him. Simply put, Beja challenges the legality of the
preventive suspension and the jurisdiction of the DOTC Secretary and/or the AAB to initiate and hear
administrative cases against PPA personnel below the rank of Assistant General Manager.
Petitioner anchors his contention that the PPA general manager cannot subject him to a preventive suspension
on the following provision of Sec. 8, Art. V of Presidential Decree No. 857 reorganizing the PPA:
(d) the General Manager shall, subject to the approval of the Board, appoint and
remove personnel below the rank of Assistant General Manager. (Emphasis supplied.)
Petitioner contends that under this provision, the PPA Board of Directors and not the PPA General Manager is
the "proper disciplining authority. 6
As correctly observed by the Solicitor General, the petitioner erroneously equates "preventive suspension" as
a remedial measure with "suspension" as a penalty for administrative dereliction. The imposition of preventive
suspension on a government employee charged with an administrative offense is subject to the following
provision of the Civil Service Law, P.D. No. 807:
Sec. 41. Preventive Suspension. The proper disciplining authority may preventively
suspend any subordinate officer or employee under his authority pending an
investigation, if the charge against such officer or employee involves dishonesty,
oppression or grave misconduct, or neglect in the performance of duty, or if there are

reasons to believe that the respondent is guilty of charges which would warrant his
removal from the service.
Imposed during the pendency of an administrative investigation, preventive suspension is not a penalty in
itself. It is merely a measure of precaution so that the employee who is charged may be separated, for obvious
reasons, from the scene of his alleged misfeasance while the same is being investigated. 7 Thus, preventive
suspension is distinct from the administrative penalty of removal from office such as the one mentioned in Sec.
8(d) of P.D. No 857. While the former may be imposed on a respondent during the investigation of the charges
against him, the latter is the penalty which may only be meted upon him at the termination of the investigation
or the final disposition of the case.
The PPA general manager is the disciplining authority who may, by himself and without the approval of the
PPA Board of Directors, subject a respondent in an administrative case to preventive suspension. His
disciplinary powers are sanctioned, not only by Sec. 8 of P.D. No. 857 aforequoted, but also by Sec. 37 of P.D.
No. 807 granting heads of agencies the "jurisdiction to investigate and decide matters involving disciplinary
actions against officers and employees" in the PPA.
Parenthetically, the period of preventive suspension is limited. It may be lifted even if the disciplining authority
has not finally decided the administrative case provided the ninety-day period from the effectivity of the
preventive suspension has been exhausted. The employee concerned may then be reinstated. 8 However, the
said ninety-day period may be interrupted. Section 42 of P.D. No. 807 also mandates that any fault, negligence
or petition of a suspended employee may not be considered in the computation of the said period. Thus, when
a suspended employee obtains from a court of justice a restraining order or a preliminary injunction inhibiting
proceedings in an administrative case, the lifespan of such court order should be excluded in the reckoning of
the permissible period of the preventive suspension. 9
With respect to the issue of whether or not the DOTC Secretary and/or the AAB may initiate and hear
administrative cases against PPA Personnel below the rank of Assistant General Manager, the
Court qualifiedlyrules in favor of petitioner.
The PPA was created through P.D. No. 505 dated July 11, 1974. Under that Law, the corporate powers of the
PPA were vested in a governing Board of Directors known as the Philippine Port Authority Council. Sec. 5(i) of
the same decree gave the Council the power "to appoint, discipline and remove, and determine the
composition of the technical staff of the Authority and other personnel."
On December 23, 1975, P.D. No. 505 was substituted by P.D. No. 857, See. 4(a) thereof created the Philippine
Ports Authority which would be "attached" to the then Department of Public Works, Transportation and
Communication. When Executive Order No. 125 dated January 30, 1987 reorganizing the Ministry of
Transportation and Communications was issued, the PPA retained its "attached" status. 10 Even Executive
Order No. 292 or the Administrative Code of 1987 classified the PPA as an agency "attached" to the
Department of Transportation and Communications (DOTC). Sec. 24 of Book IV, Title XV, Chapter 6 of the
same Code provides that the agencies attached to the DOTC "shall continue to operate and function in
accordance with the respective charters or laws creating them, except when they conflict with this Code."
Attachment of an agency to a Department is one of the three administrative relationships mentioned in Book
IV, Chapter 7 of the Administrative Code of 1987, the other two being supervision and control and
administrative supervision. "Attachment" is defined in Sec. 38 thereof as follows:
(3) Attachment. (a) This refers to the lateral relationship between the Department or
its equivalent and the attached agency or corporation for purposes of policy and
program coordination. The coordination shall be accomplished by having the
department represented in the governing board of the attached agency or corporation,
either as chairman or as a member, with or without voting rights, if this is permitted by
the charter; having the attached corporation or agency comply with a system of

periodic reporting which shall reflect the progress of programs and projects; and having
the department or its equivalent provide general policies through its representative in
the board, which shall serve as the framework for the internal policies of the attached
corporation or agency;
(b) Matters of day-to-day administration or all those pertaining to internal operations
shall he left to the discretion or judgment of the executive officer of the agency or
corporation. In the event that the Secretary and the head of the board or the attached
agency or corporation strongly disagree on the interpretation and application of
policies, and the Secretary is unable to resolve the disagreement, he shall bring the
matter to the President for resolution and direction;
(c) Government-owned or controlled corporations attached to a department shall
submit to the Secretary concerned their audited financial statements within sixty (60)
days after the close of the fiscal year; and
(d) Pending submission of the required financial statements, the corporation shall
continue to operate on the basis of the preceding year's budget until the financial
statements shall have been submitted. Should any government-owned or controlled
corporation incur an operation deficit at the close of its fiscal year, it shall be subject to
administrative supervision of the department; and the corporation's operating and
capital budget shall be subject to the department's examination, review, modification
and approval. (emphasis supplied.)
An attached agency has a larger measure of independence from the Department to which it is attached than
one which is under departmental supervision and control or administrative supervision. This is borne out by the
"lateral relationship" between the Department and the attached agency. The attachment is merely for "policy
and program coordination." With respect to administrative matters, the independence of an attached agency
from Departmental control and supervision is further reinforced by the fact that even an agency under a
Department's administrative supervision is free from Departmental interference with respect to appointments
and other personnel actions "in accordance with the decentralization of personnel functions" under the
Administrative Code of 1987. 11 Moreover, the Administrative Code explicitly provides that Chapter 8 of Book
IV on supervision and control shall not apply to chartered institutions attached to a Department. 12
Hence, the inescapable conclusion is that with respect to the management of personnel, an attached agency
is, to a certain extent, free from Departmental interference and control. This is more explicitly shown by P.D.
No. 857 which provides:
Sec. 8. Management and Staff. a) The President shall, upon the recommendation of
the Board, appoint the General Manager and the Assistant General Managers.
(b) All other officials and employees of the Authority shall be selected and appointed on
the basis of merit and fitness based on a comprehensive and progressive merit system
to be established by the Authority immediately upon its organization and consistent
with Civil Service rules and regulations.The recruitment, transfer, promotion, and
dismissal of all personnel of the Authority, including temporary workers, shall be
governed by such merit system.
(c) The General Manager shall, subject to the approval of the Board, determine the
staffing pattern and the number of personnel of the Authority, define their duties and
responsibilities, and fix their salaries and emoluments. For professional and technical
positions, the General Manager shall recommend salaries and emoluments that are
comparable to those of similar positions in other government-owned corporations, the

provisions of existing rules and regulations on wage and position classification


notwithstanding.
(d) The General Manager shall, subject to the approval by the Board, appoint and
remove personnel below the rank of Assistant General Manager.
xxx xxx xxx
(emphasis supplied.)
Although the foregoing section does not expressly provide for a mechanism for an administrative investigation
of personnel, by vesting the power to remove erring employees on the General Manager, with the approval of
the PPA Board of Directors, the law impliedly grants said officials the power to investigate its personnel below
the rank of Assistant Manager who may be charged with an administrative offense. During such investigation,
the PPA General Manager, as earlier stated, may subject the employee concerned to preventive suspension.
The investigation should be conducted in accordance with the procedure set out in Sec. 38 of P.D. No.
807. 13 Only after gathering sufficient facts may the PPA General Manager impose the proper penalty in
accordance with law. It is the latter action which requires the approval of the PPA Board of Directors. 14
From an adverse decision of the PPA General Manager and the Board of Directors, the employee
concerned mayelevate the matter to the Department Head or Secretary. Otherwise, he may appeal directly to
the Civil Service Commission. The permissive recourse to the Department Secretary is sanctioned by the Civil
Service Law (P.D. No. 807) under the following provisions:

The AAB, which was created during the tenure of Secretary Reyes under Office Order No. 88-318 dated July
1, 1988, was designed to act, decide and recommend to him "all cases of administrative malfeasance,
irregularities, grafts and acts of corruption in the Department." Composed of a Chairman and two (2)
members, the AAB came into being pursuant to Administrative Order No. 25 issued by the President on May
25, 1987. 15 Its special nature as a quasi-judicial administrative body notwithstanding, the AAB is not exempt
from the observance of due process in its proceedings. 16 We are not satisfied that it did so in this case the
respondents protestation that petitioner waived his right to be heard notwithstanding. It should be observed
that petitioner was precisely questioning the AAB's jurisdiction when it sought judicial recourse.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED insofar as it upholds the power of the PPA
General Manager to subject petitioner to preventive suspension and REVERSED insofar as it validates the
jurisdiction of the DOTC and/or the AAB to act on Administrative Case No. PPA-AAB-1-049-89 and rules that
due process has been accorded the petitioner.
The AAB decision in said case is hereby declared NULL and VOID and the case in REMANDED to the PPA
whose General Manager shall conduct with dispatch its reinvestigation.
The preventive suspension of petitioner shall continue unless after a determination of its duration, it is found
that he had served the total of ninety (90) days in which case he shall be reinstated immediately.
SO ORDERED.
G.R. No. 115863 March 31, 1995

Sec. 37. Disciplinary Jurisdiction. (a) The Commission shall decide upon appeal all
administrative disciplinary cases involving the imposition of a penalty of suspension for
more than thirty days, or fine in an amount exceeding thirty days salary, demotion in
rank or salary or transfer, removal or dismissal from office. A complaint may be filed
directly with the Commission by a private citizen against a government official or
employee in which case it may hear and decide the case or it may deputize any
department or agency or official or group of officials to conduct the investigation. The
results of the investigation shall be submitted to the Commission with recommendation
as to the penalty to be imposed or other action to be taken.

AIDA D. EUGENIO, petitioner,


vs.
CIVIL SERVICE COMMISSION, HON. TEOFISTO T. GUINGONA, JR. & HON. SALVADOR ENRIQUEZ,
JR.,respondents.

(b) The heads of departments, agencies and instrumentalities, provinces, cities and
municipalities shall have jurisdiction to investigate and decide matters involving
disciplinary action against officers and employees under their jurisdiction. The
decisions shall be final in case the penalty imposed is suspension for not more than
thirty days or fine in an amount not exceeding thirty days' salary. In case the decision
rendered by a bureau or office head is appealable to the Commission, the same may
be initially appealed to the department and finally to the Commission and pending
appeal, the same shall be executory except when the penalty is removal, in which case
the same shall be executory only after confirmation by the department head.

The power of the Civil Service Commission to abolish the Career Executive Service Board is challenged in this
petition for certiorari and prohibition.

xxx xxx xxx


(Emphasis supplied.)
It is, therefore, clear that the transmittal of the complaint by the PPA General Manager to the AAB was
premature. The PPA General Manager should have first conducted an investigation, made the proper
recommendation for the imposable penalty and sought its approval by the PPA Board of Directors. It was
discretionary on the part of the herein petitioner to elevate the case to the then DOTC Secretary Reyes. Only
then could the AAB take jurisdiction of the case.

PUNO, J.:

First the facts. Petitioner is the Deputy Director of the Philippine Nuclear Research Institute. She applied for a
Career Executive Service (CES) Eligibility and a CESO rank on August 2, 1993, she was given a CES
eligibility. On September 15, 1993, she was recommended to the President for a CESO rank by the Career
Executive Service Board. 1
All was not to turn well for petitioner. On October 1, 1993, respondent Civil Service Commission 2 passed
Resolution No. 93-4359, viz:
RESOLUTION NO. 93-4359
WHEREAS, Section 1(1) of Article IX-B provides that Civil Service shall be
administered by the Civil Service Commission, . . .;
WHEREAS, Section 3, Article IX-B of the 1987 Philippine Constitution provides that
"The Civil Service Commission, as the central personnel agency of the government, is

mandated to establish a career service and adopt measures to promote morale,


efficiency, integrity, responsiveness, progresiveness and courtesy in the civil service, . .
.";

You may, however, bring a case before the appropriate court to settle the legal issues
arising from issuance by the Civil Service Commission of CSC Resolution No. 93-4359,
for guidance of all concerned.

WHEREAS, Section 12 (1), Title I, Subtitle A, Book V of the Administrative Code of


1987 grants the Commission the power, among others, to administer and enforce the
constitutional and statutory provisions on the merit system for all levels and ranks in
the Civil Service;

Thank You.

WHEREAS, Section 7, Title I, Subtitle A, Book V of the Administrative Code of 1987


Provides, among others, that The Career Service shall be characterized by (1)
entrance based on merit and fitness to be determined as far as practicable by
competitive examination, or based highly technical qualifications; (2) opportunity for
advancement to higher career positions; and (3) security of tenure;
WHEREAS, Section 8 (c), Title I, Subtitle A, Book V of the administrative Code of 1987
provides that "The third level shall cover Positions in the Career Executive Service";
WHEREAS, the Commission recognizes the imperative need to consolidate, integrate
and unify the administration of all levels of positions in the career service.
WHEREAS, the provisions of Section 17, Title I, Subtitle A. Book V of the
Administrative Code of 1987 confers on the Commission the power and authority to
effect changes in its organization as the need arises.
WHEREAS, Section 5, Article IX-A of the Constitution provides that the Civil Service
Commission shall enjoy fiscal autonomy and the necessary implications thereof;
NOW THEREFORE, foregoing premises considered, the Civil Service Commission
hereby resolves to streamline reorganize and effect changes in its organizational
structure. Pursuant thereto, the Career Executive Service Board, shall now be known
as the Office for Career Executive Service of the Civil Service Commission.
Accordingly, the existing personnel, budget, properties and equipment of the Career
Executive Service Board shall now form part of the Office for Career Executive Service.
The above resolution became an impediment. to the appointment of petitioner as Civil Service Officer, Rank
IV. In a letter to petitioner, dated June 7, 1994, the Honorable Antonio T. Carpio, Chief Presidential legal
Counsel, stated:
xxx xxx xxx
On 1 October 1993 the Civil Service Commission issued CSC Resolution No. 93-4359
which abolished the Career Executive Service Board.
Several legal issues have arisen as a result of the issuance of CSC Resolution No. 934359, including whether the Civil Service Commission has authority to abolish the
Career Executive Service Board. Because these issues remain unresolved, the Office
of the President has refrained from considering appointments of career service
eligibles to career executive ranks.
xxx xxx xxx

Finding herself bereft of further administrative relief as the Career Executive Service Board which
recommended her CESO Rank IV has been abolished, petitioner filed the petition at bench to annul, among
others, resolution No. 93-4359. The petition is anchored on the following arguments:
A.
IN VIOLATION OF THE CONSTITUTION, RESPONDENT COMMISSION USURPED
THE LEGISLATIVE FUNCTIONS OF CONGRESS WHEN IT ABOLISHED THE CESB,
AN OFFICE CREATED BY LAW, THROUGH THE ISSUANCE OF CSC: RESOLUTION
NO. 93-4359;
B.
ALSO IN VIOLATION OF THE CONSTITUTION, RESPONDENT CSC USURPED THE
LEGISLATIVE FUNCTIONS OF CONGRESS WHEN IT ILLEGALLY AUTHORIZED
THE TRANSFER OF PUBLIC MONEY, THROUGH THE ISSUANCE OF CSC
RESOLUTION NO. 93-4359.
Required to file its Comment, the Solicitor General agreed with the contentions of petitioner. Respondent
Commission, however, chose to defend its ground. It posited the following position:
ARGUMENTS FOR PUBLIC RESPONDENT-CSC
I. THE INSTANT PETITION STATES NO CAUSE OF ACTION AGAINST THE PUBLIC
RESPONDENT-CSC.
II. THE RECOMMENDATION SUBMITTED TO THE PRESIDENT FOR
APPOINTMENT TO A CESO RANK OF PETITIONER EUGENIO WAS A VALID ACT
OF THE CAREER EXECUTIVE SERVICE BOARD OF THE CIVIL SERVICE
COMMISSION AND IT DOES NOT HAVE ANY DEFECT.
III. THE OFFICE OF THE PRESIDENT IS ESTOPPED FROM QUESTIONING THE
VALIDITY OF THE RECOMMENDATION OF THE CESB IN FAVOR OF PETITIONER
EUGENIO SINCE THE PRESIDENT HAS PREVIOUSLY APPOINTED TO CESO
RANK FOUR (4) OFFICIALS SIMILARLY SITUATED AS SAID PETITIONER.
FURTHERMORE, LACK OF MEMBERS TO CONSTITUTE A QUORUM. ASSUMING
THERE WAS NO QUORUM, IS NOT THE FAULT OF PUBLIC RESPONDENT CIVIL
SERVICE COMMISSION BUT OF THE PRESIDENT WHO HAS THE POWER TO
APPOINT THE OTHER MEMBERS OF THE CESB.
IV. THE INTEGRATION OF THE CESB INTO THE COMMISSION IS AUTHORIZED
BY LAW (Sec. 12 (1), Title I, Subtitle A, Book V of the Administrative Code of the 1987).
THIS PARTICULAR ISSUE HAD ALREADY BEEN SETTLED WHEN THE
HONORABLE COURT DISMISSED THE PETITION FILED BY THE HONORABLE
MEMBERS OF THE HOUSE OF REPRESENTATIVES, NAMELY: SIMEON A.
DATUMANONG, FELICIANO R. BELMONTE, JR., RENATO V. DIAZ, AND MANUEL

M. GARCIA IN G.R. NO. 114380. THE AFOREMENTIONED PETITIONERS ALSO


QUESTIONED THE INTEGRATION OF THE CESB WITH THE COMMISSION.
We find merit in the petition. 3

necessary independent constitutional body, the Commission may effect changes in the
organization as the need arises.
But as well pointed out by petitioner and the Solicitor General, Section 17 must be read together with Section
16 of the said Code which enumerates the offices under the respondent Commission, viz:

The controlling fact is that the Career Executive Service Board (CESB) was created in the Presidential Decree
(P.D.) No. 1 on September 1, 1974 4 which adopted the Integrated Plan. Article IV, Chapter I, Part of the III of
the said Plan provides:
Article IV Career Executive Service
1. A Career Executive Service is created to form a continuing pool of well-selected and
development oriented career administrators who shall provide competent and faithful
service.
2. A Career Executive Service hereinafter referred to in this Chapter as the Board, is
created to serve as the governing body of the Career Executive Service. The Board
shall consist of the Chairman of the Civil Service Commission as presiding officer, the
Executive Secretary and the Commissioner of the Budget as ex-officio members and
two other members from the private sector and/or the academic community who are
familiar with the principles and methods of personnel administration.
xxx xxx xxx
5. The Board shall promulgate rules, standards and procedures on the selection,
classification, compensation and career development of members of the Career
Executive Service. The Board shall set up the organization and operation of the
service. (Emphasis supplied)
It cannot be disputed, therefore, that as the CESB was created by law, it can only be abolished by the
legislature. This follows an unbroken stream of rulings that the creation and abolition of public offices is
primarily a legislative function. As aptly summed up in AM JUR 2d on Public Officers and
Employees, 5 viz:
Except for such offices as are created by the Constitution, the creation of public offices
is primarily a legislative function. In so far as the legislative power in this respect is not
restricted by constitutional provisions, it supreme, and the legislature may decide for
itself what offices are suitable, necessary, or convenient. When in the exigencies of
government it is necessary to create and define duties, the legislative department has
the discretion to determine whether additional offices shall be created, or whether
these duties shall be attached to and become ex-officio duties of existing offices. An
office created by the legislature is wholly within the power of that body, and it may
prescribe the mode of filling the office and the powers and duties of the incumbent, and
if it sees fit, abolish the office.
In the petition at bench, the legislature has not enacted any law authorizing the abolition of the CESB. On the
contrary, in all the General Appropriations Acts from 1975 to 1993, the legislature has set aside funds for the
operation of CESB. Respondent Commission, however, invokes Section 17, Chapter 3, Subtitle A. Title I, Book
V of the Administrative Code of 1987 as the source of its power to abolish the CESB. Section 17 provides:
Sec. 17. Organizational Structure. Each office of the Commission shall be headed
by a Director with at least one Assistant Director, and may have such divisions as are

Sec. 16. Offices in the Commission. The Commission shall have the following
offices:
(1) The Office of the Executive Director headed by an Executive Director, with a Deputy
Executive Director shall implement policies, standards, rules and regulations
promulgated by the Commission; coordinate the programs of the offices of the
Commission and render periodic reports on their operations, and perform such other
functions as may be assigned by the Commission.
(2) The Merit System Protection Board composed of a Chairman and two (2) members
shall have the following functions:
xxx xxx xxx
(3) The Office of Legal Affairs shall provide the Chairman with legal advice and
assistance; render counselling services; undertake legal studies and researches;
prepare opinions and ruling in the interpretation and application of the Civil Service law,
rules and regulations; prosecute violations of such law, rules and regulations; and
represent the Commission before any court or tribunal.
(4) The Office of Planning and Management shall formulate development plans,
programs and projects; undertake research and studies on the different aspects of
public personnel management; administer management improvement programs; and
provide fiscal and budgetary services.
(5) The Central Administrative Office shall provide the Commission with personnel,
financial, logistics and other basic support services.
(6) The Office of Central Personnel Records shall formulate and implement policies,
standards, rules and regulations pertaining to personnel records maintenance, security,
control and disposal; provide storage and extension services; and provide and maintain
library services.
(7) The Office of Position Classification and Compensation shall formulate and
implement policies, standards, rules and regulations relative to the administration of
position classification and compensation.
(8) The Office of Recruitment, Examination and Placement shall provide leadership
and assistance in developing and implementing the overall Commission programs
relating to recruitment, execution and placement, and formulate policies, standards,
rules and regulations for the proper implementation of the Commission's examination
and placement programs.
(9) The Office of Career Systems and Standards shall provide leadership and
assistance in the formulation and evaluation of personnel systems and standards

relative to performance appraisal, merit promotion, and employee incentive benefit and
awards.
(10) The Office of Human Resource Development shall provide leadership and
assistance in the development and retention of qualified and efficient work force in the
Civil Service; formulate standards for training and staff development; administer
service-wide scholarship programs; develop training literature and materials;
coordinate and integrate all training activities and evaluate training programs.
(11) The Office of Personnel Inspection and Audit shall develop policies, standards,
rules and regulations for the effective conduct or inspection and audit personnel and
personnel management programs and the exercise of delegated authority; provide
technical and advisory services to Civil Service Regional Offices and government
agencies in the implementation of their personnel programs and evaluation systems.

charter; having the attached corporation or agency comply with a system of periodic
reporting which shall reflect the progress of programs and projects; and having the
department or its equivalent provide general policies through its representative in the
board, which shall serve as the framework for the internal policies of the attached
corporation or agency.
Respondent Commission also relies on the case of Datumanong, et al., vs. Civil Service Commission, G. R.
No. 114380 where the petition assailing the abolition of the CESB was dismissed for lack of cause of action.
Suffice to state that the reliance is misplaced considering that the cited case was dismissed for lack of
standing of the petitioner, hence, the lack of cause of action.
IN VIEW WHEREOF, the petition is granted and Resolution No. 93-4359 of the respondent Commission is
hereby annulled and set aside. No costs.
SO ORDERED.

(12) The Office of Personnel Relations shall provide leadership and assistance in the
development and implementation of policies, standards, rules and regulations in the
accreditation of employee associations or organizations and in the adjustment and
settlement of employee grievances and management of employee disputes.

DIGEST
EUGENIO vs. CSC et al
G.R. No. 115863

(13) The Office of Corporate Affairs shall formulate and implement policies, standards,
rules and regulations governing corporate officials and employees in the areas of
recruitment, examination, placement, career development, merit and awards systems,
position classification and compensation, performing appraisal, employee welfare and
benefit, discipline and other aspects of personnel management on the basis of
comparable industry practices.
(14) The Office of Retirement Administration shall be responsible for the enforcement
of the constitutional and statutory provisions, relative to retirement and the regulation
for the effective implementation of the retirement of government officials and
employees.
(15) The Regional and Field Offices. The Commission shall have not less than
thirteen (13) Regional offices each to be headed by a Director, and such field offices as
may be needed, each to be headed by an official with at least the rank of an Assistant
Director.
As read together, the inescapable conclusion is that respondent Commission's power to reorganize
is limited to offices under its control as enumerated in Section 16, supra. From its inception, the
CESB was intended to be an autonomous entity, albeit administratively attached to respondent
Commission. As conceptualized by the Reorganization Committee "the CESB shall be
autonomous. It is expected to view the problem of building up executive manpower in the
government with a broad and positive outlook." 6 The essential autonomous character of the CESB
is not negated by its attachment to respondent Commission. By said attachment, CESB was not
made to fall within the control of respondent Commission. Under the Administrative Code of 1987,
the purpose of attaching one functionally inter-related government agency to another is to attain
"policy and program coordination." This is clearly etched out in Section 38(3), Chapter 7, Book IV
of the aforecited Code, to wit:
(3) Attachment. (a) This refers to the lateral relationship between the department or
its equivalent and attached agency or corporation for purposes of policy and program
coordination. The coordination may be accomplished by having the department
represented in the governing board of the attached agency or corporation, either as
chairman or as a member, with or without voting rights, if this is permitted by the

March 31, 1995


FACTS: . Eugenio is the Deputy Director of the Philippine Nuclear Research Institute. She applied for a Career
Executive Service (CES) Eligibility and a CESO rank,. She was given a CES eligibility and was recommended
to the President for a CESO rank by the Career Executive Service Board.
Then respondent Civil Service Commission passed a Resolution which abolished the CESB, relying on the
provisions of Section 17, Title I, Subtitle A. Book V of the Administrative Code of 1987 allegedly conferring on
the Commission the power and authority to effect changes in its organization as the need arises. Said
resolution states:
Pursuant thereto, the Career Executive Service Board, shall now be known as the Office for Career Executive
Service of the Civil Service Commission. Accordingly, the existing personnel, budget, properties and
equipment of the Career Executive Service Board shall now form part of the Office for Career Executive
Service.
Finding herself bereft of further administrative relief as the Career Executive Service Board which
recommended her CESO Rank IV has been abolished, petitioner filed the petition at bench to annul, among
others, said resolution.
ISSUE: WON CSC given the authority to abolish the office of the CESB
HELD: the petition is granted and Resolution of the respondent Commission is hereby annulled and set aside
NO
1. The controlling fact is that the CESB was created in PD No. 1 on September 1, 1974. It cannot be disputed,
therefore, that as the CESB was created by law, it can only be abolished by the legislature. This follows an
unbroken stream of rulings that the creation and abolition of public offices is primarily a legislative function
In the petition at bench, the legislature has not enacted any law authorizing the abolition of the CESB. On the
contrary, in all the General Appropriations Acts from 1975 to 1993, the legislature has set aside funds for the
operation of CESB.
Respondent Commission, however, invokes Section 17, Chapter 3, Subtitle A. Title I, Book V of the
Administrative Code of 1987 as the source of its power to abolish the CESB.

But as well pointed out by petitioner and the Solicitor General, Section 17 must be read together with Section
16 of the said Code which enumerates the offices under the respondent Commission.
As read together, the inescapable conclusion is that respondent Commissions power to reorganize is limited
to offices under its control as enumerated in Section 16..
2. . From its inception, the CESB was intended to be an autonomous entity, albeit administratively attached to
respondent Commission. As conceptualized by the Reorganization Committee the CESB shall be
autonomous. It is expected to view the problem of building up executive manpower in the government with a
broad and positive outlook.
The essential autonomous character of the CESB is not negated by its attachment to respondent Commission.
By said attachment, CESB was not made to fall within the control of respondent Commission. Under the
Administrative Code of 1987, the purpose of attaching one functionally inter-related government agency to
another is to attain policy and program coordination. This is clearly etched out in Section 38(3), Chapter 7,
Book IV of the aforecited Code, to wit:
(3) Attachment. (a) This refers to the lateral relationship between the department or its equivalent and
attached agency or corporation for purposes of policy and program coordination. The coordination may be
accomplished by having the department represented in the governing board of the attached agency or
corporation, either as chairman or as a member, with or without voting rights, if this is permitted by the charter;
having the attached corporation or agency comply with a system of periodic reporting which shall reflect the
progress of programs and projects; and having the department or its equivalent provide general policies
through its representative in the board, which shall serve as the framework for the internal policies of the
attached corporation or agency.
NOTES:
Section 17, Chapter 3, Subtitle A. Title I, Book V of the Administrative Code of 1987 as the source of its power
to abolish the CESB. Section 17 provides:
Sec. 17. Organizational Structure. Each office of the Commission shall be headed by a Director with at least
one Assistant Director, and may have such divisions as are necessary independent constitutional body, the
Commission may effect changes in the organization as the need arises.
Sec. 16. Offices in the Commission. The Commission shall have the following offices:
(1) The Office of the Executive
(2) The Merit System Protection Board composed of a Chairman and two (2) members
(3) The Office of Legal Affairs
(4) The Office of Planning and Management

[G.R. No. 134990. April 27, 2000]


MANUEL M. LEYSON JR., petitioner, vs. OFFICE OF THE OMBUDSMAN, TIRSO ANTIPORDA,
Chairman, UCPB and CIIF Oil Mills, and OSCAR A. TORRALBA, President, CIIF Oil Mills,
respondents. ALEX
DECISION
BELLOSILLO, J.:
On 7 February 1996 International Towage and Transport Corporation (ITTC), a domestic corporation engaged
in the lighterage or shipping business, entered into a one (1)-year contract with Legaspi Oil Company, Inc.
(LEGASPI OIL), Granexport Manufacturing Corporation (GRANEXPORT) and United Coconut Chemicals, Inc.
(UNITED COCONUT), comprising the Coconut Industry Investment Fund (CIIF) companies, for the transport
of coconut oil in bulk through MT Transasia. The majority shareholdings of these CIIF companies are owned
by the United Coconut Planters Bank (UCPB) as administrator of the CIIF. Under the terms of the contract,
either party could terminate the agreement provided a three (3)-month advance notice was given to the other
party. However, in August 1996, or prior to the expiration of the contract, the CIIF companies with their new
President, respondent Oscar A. Torralba, terminated the contract without the requisite advance notice. The
CIIF companies engaged the services of another vessel, MT Marilag, operated by Southwest Maritime
Corporation. miso
On 11 March 1997 petitioner Manuel M. Leyson Jr., Executive Vice President of ITTC, filed with public
respondent Office of the Ombudsman a grievance case against respondent Oscar A. Torralba. The following is
a summary of the irregularities and corrupt practices allegedly committed by respondent Torralba: (a) breach of
contract - unilateral cancellation of valid and existing contract; (b) bad faith - falsification of documents and
reports to stop the operation of MT Transasia; (c) manipulation - influenced their insurance to disqualify MT
Transasia; (d) unreasonable denial of requirement imposed; (e) double standards and inconsistent in favor
of MT Marilag; (f) engaged and entered into a contract with Southwest Maritime Corp. which is not the owner
of MT Marilag, where liabilities were waived and whose paid-up capital is only P250,000.00; and, (g)
overpricing in the freight rate causing losses of millions of pesos to Cocochem. [1]
On 2 January 1998 petitioner charged respondent Tirso Antiporda, Chairman of UCPB and CIIF Oil Mills, and
respondent Oscar A. Torralba with violation of The Anti-Graft and Corrupt Practices Act also before the
Ombudsman anchored on the aforementioned alleged irregularities and corrupt practices. spped

(5) The Central Administrative Office.


(6) The Office of Central Personnel Records
(7) The Office of Position Classification and Compensation
(8) The Office of Recruitment, Examination and Placement
(9) The Office of Career Systems and Standards

On 30 January 1998 public respondent dismissed the complaint based on its finding that
The case is a simple case of breach of contract with damages which should have been
filed in the regular court. This Office has no jurisdiction to determine the legality or
validity of the termination of the contract entered into by CIIF and ITTC. Besides the
entities involved are private corporations (over) which this Office has no jurisdiction. [2]

(10) The Office of Human Resource Development


(11) The Office of Personnel Inspection and Audit.
(12) The Office of Personnel Relations
(13) The Office of Corporate Affairs
(14) The Office of Retirement
(15) The Regional and Field Offices.

On 4 June 1998 reconsideration of the dismissal of the complaint was denied. The Ombudsman was
unswayed in his finding that the present controversy involved breach of contract as he also took into account
the circumstance that petitioner had already filed a collection case before the Regional Trial Court of ManilaBr. 15, docketed as Civil Case No. 97-83354. Moreover, the Ombudsman found that the filing of the motion for
reconsideration on 31 March 1998 was beyond the inextendible period of five (5) days from notice of the
assailed resolution on 19 March 1998.[3] miso

Petitioner now imputes grave abuse of discretion on public respondent in dismissing his complaint. He submits
that inasmuch as Philippine Coconut Producers Federation, Inc. (COCOFED) v. PCGG [4] and Republic v.
Sandiganbayan[5] have declared that the coconut levy funds are public funds then, conformably with Quimpo v.
Tanodbayan,[6] corporations formed and organized from those funds or whose controlling stocks are from
those funds should be regarded as government owned and/or controlled corporations. As in the present case,
since the funding or controlling interest of the companies being headed by private respondents was given or
owned by the CIIF as shown in the certification of their Corporate Secretary, [7] it follows that they are
government owned and/or controlled corporations. Corollarily, petitioner asserts that respondents Antiporda
and Torralba are public officers subject to the jurisdiction of the Ombudsman. Sdaadsc
Petitioner alleges next that public respondent's conclusion that his complaint refers to a breach of contract is
whimsical, capricious and irresponsible amounting to a total disregard of its main point, i. e., whether private
respondents violated The Anti-Graft and Corrupt Practices Act when they entered into a contract with
Southwest Maritime Corporation which was grossly disadvantageous to the government in general and to the
CIIF in particular. Petitioner admits that his motion for reconsideration was filed out of time. Nonetheless, he
advances that public respondent should have relaxed its rules in the paramount interest of justice; after all, the
delay was just a matter of days and he, a layman not aware of technicalities, personally filed the
complaint. Rtcspped
Private respondents counter that the CIIF companies were duly organized and are existing by virtue of the
Corporation Code. Their stockholders are private individuals and entities. In addition, private respondents
contend that they are not public officers as defined under The Anti-Graft and Corrupt Practices Act but are
private executives appointed by the Boards of Directors of the CIIF companies. They asseverate that
petitioner's motion for reconsideration was filed through the expert assistance of a learned counsel. They then
charge petitioner with forum shopping since he had similarly filed a case for collection of a sum of money plus
damages before the trial court.
The Office of the Solicitor General maintains that the Ombudsman approved the recommendation of the
investigating officer to dismiss the complaint because he sincerely believed there was no sufficient basis for
the criminal indictment of private respondents. spped
We find no grave abuse of discretion committed by the Ombudsman. COCOFED v. PCGG referred to
in Republic v. Sandiganbayan reviewed the history of the coconut levy funds. I These funds actually have four
(4) general classes: (a) the Coconut Investment Fund created under R. A. No. 6260; [8] (b) the Coconut
Consumers Stabilization Fund created under P. D. No. 276; [9] (c) the Coconut Industry Development Fund
created under P. D. No. 582;[10] and, (d) the Coconut Industry Stabilization Fund created under P. D. No. 1841.
[11]

The various laws relating to the coconut industry were codified in 1976. On 21 October of that year, P. D. No.
961[12] was promulgated. On 11 June 1978 it was amended by P. D. No. 1468 [13] by inserting a new provision
authorizing the use of the balance of the Coconut Industry Development Fund for the acquisition of "shares of
stocks in corporations organized for the purpose of engaging in the establishment and operation of industries x
x x commercial activities and other allied business undertakings relating to coconut and other palm oil
indust(ries)."[14]From this fund thus created, or the CIIF, shares of stock in what have come to be known as the
"CIIF companies" were purchased. miso
We then stated in COCOFED that the coconut levy funds were raised by the State's police and taxing powers
such that the utilization and proper management thereof were certainly the concern of the Government. These
funds have a public character and are clearly affected with public interest.

While it may be that PETROPHIL was not originally "created" as a government-owned


or controlled corporation, after it was acquired by PNOC, which is a government-owned
or controlled corporation, PETROPHIL became a subsidiary of PNOC and thus shedoff its private status. It is now funded and owned by the government as, in fact, it was
acquired to perform functions related to government programs and policies on oil, a
vital commodity in the economic life of the nation. It was acquired not temporarily but
as a permanent adjunct to perform essential government or government-related
functions, as the marketing arm of the PNOC to assist the latter in selling and
distributing oil and petroleum products to assure and maintain an adequate and stable
domestic supply. Korte
But these jurisprudential rules invoked by petitioner in support of his claim that the CIIF companies are
government owned and/or controlled corporations are incomplete without resorting to the definition of
"government owned or controlled corporation" contained in par. (13), Sec. 2, Introductory Provisions of the
Administrative Code of 1987, i. e., any agency organized as a stock or non-stock corporation vested with
functions relating to public needs whether governmental or proprietary in nature, and owned by the
Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock
corporations, to the extent of at least fifty-one (51) percent of its capital stock. The definition mentions three (3)
requisites, namely, first, any agency organized as a stock or non-stock corporation; second, vested with
functions relating to public needs whether governmental or proprietary in nature; and, third, owned by the
Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock
corporations, to the extent of at least fifty-one (51) percent of its capital stock. Sclaw
In the present case, all three (3) corporations comprising the CIIF companies were organized as stock
corporations. The UCPB-CIIF owns 44.10% of the shares of LEGASPI OIL, 91.24% of the shares of
GRANEXPORT, and 92.85% of the shares of UNITED COCONUT.[15] Obviously, the below 51% shares of
stock in LEGASPI OIL removes this firm from the definition of a government owned or controlled corporation.
Our concern has thus been limited to GRANEXPORT and UNITED COCONUT as we go back to the second
requisite. Unfortunately, it is in this regard that petitioner failed to substantiate his contentions. There is no
showing that GRANEXPORT and/ or UNITED COCONUT was vested with functions relating to public needs
whether governmental or proprietary in nature unlike PETROPHIL in Quimpo. The Court thus concludes that
the CIIF companies are, as found by public respondent, private corporations not within the scope of its
jurisdiction. Sclex
With the foregoing conclusion, we find it unnecessary to resolve the other issues raised by petitioner.
A brief note on private respondents' charge of forum shopping. Executive Secretary v. Gordon [16] is instructive
that forum shopping consists of filing multiple suits involving the same parties for the same cause of action,
either simultaneously or successively, for the purpose of obtaining a favorable judgment. It is readily apparent
that the present charge will not prosper because the cause of action herein, i. e., violation of The Anti-Graft
and Corrupt Practices Act, is different from the cause of action in the case pending before the trial court which
is collection of a sum of money plus damages. miso
WHEREFORE, the petition is DISMISSED. The Resolution of public respondent Office of the Ombudsman of
30 January 1998 which dismissed the complaint of petitioner Manuel M. Leyson Jr., as well as its Order of 4
June 1998 denying his motion for reconsideration, is AFFIRMED. Costs against petitioner.
SO ORDERED.apdc
[G.R. Nos. 147706-07. February 16, 2005]

Quimpo v. Tanodbayan involved the issue as to whether PETROPHIL was a government owned or controlled
corporation the employees of which fell within the jurisdictional purview of the Tanodbayan for purposes of The
Anti-Graft and Corrupt Practices Act. We upheld the jurisdiction of the Tanodbayan on the ratiocination that -

PEOPLE OF THE PHILIPPINES, petitioner, vs. THE HONORABLE SANDIGANBAYAN (Fifth Division) and
EFREN L. ALAS, respondents.

DECISION
CORONA, J.:
Does the Sandiganbayan have jurisdiction over presidents, directors or trustees, or managers of
government-owned or controlled corporations organized and incorporated under the Corporation Code for
purposes of the provisions of RA 3019, otherwise known as the Anti-Graft and Corrupt Practices Act? The
petitioner, represented by the Office of the Special Prosecutor (OSP), takes the affirmative position in this
petition for certiorari under Rule 65 of the Rules of Court. Respondent Efren L. Alas contends otherwise,
together with the respondent court.
Pursuant to a resolution dated September 30, 1999 of the Office of the Ombudsman, two separate
informations[1] for violation of Section 3(e) of RA 3019, otherwise known as the Anti-Graft and Corrupt
Practices Act, were filed with the Sandiganbayan on November 17, 1999 against Efren L. Alas. The charges
emanated from the alleged anomalous advertising contracts entered into by Alas, in his capacity as President
and Chief Operating Officer of the Philippine Postal Savings Bank (PPSB), with Bagong Buhay Publishing
Company which purportedly caused damage and prejudice to the government.
On October 30, 2002, Alas filed a motion to quash the informations for lack of jurisdiction, which motion
was vehemently opposed by the prosecution. After considering the arguments of both parties, the respondent
court ruled that PPSB was a private corporation and that its officers, particularly herein respondent Alas, did
not fall under Sandiganbayan jurisdiction. According to the Sandiganbayan:
After a careful consideration of the arguments of the accused-movant as well as of that of the prosecution, we
are of the considered opinion that the instant motion of the accused is well taken. Indeed, it is the basic thrust
of Republic Act as well as (sic) Presidential Decree No. 1606 as amended by President Decree No. 1486 and
Republic Act No. 7975 and Republic Act No. 8249 that the Sandiganbayan has jurisdiction only over public
officers unless private persons are charged with them in the commission of the offenses.

The test in determining whether a government-owned or controlled corporation is subject to the Civil Service
Law is the manner of its creation such that government corporation created by special charter are subject to its
provision while those incorporated under the general corporation law are not within its coverage.
Likewise in Davao City Water District vs. Civil Service Commission, 201 SCRA 601 it was held that by
government-owned or controlled corporation with original charter we mean government-owned or controlled
corporation created by a special law and not under the Corporation Code of the Philippines while in Llenes vs.
Dicdican, et al., 260 SCRA 207, a public officer has been ruled, as a person whose duties involve the exercise
of discretion in the performance of the function of government.
Clearly, on the basis of the foregoing pronouncements of the Supreme Court, the accused herein cannot be
considered a public officer. Thus, this Court may not exercise jurisdiction over his act. [2]
Dissatisfied, the People, through the Office of the Special Prosecutor (OSP), filed this petition [3] arguing,
in essence, that the PPSB was a government-owned or controlled corporation as the term was defined under
Section 2(13) of the Administrative Code of 1987. [4] Likewise, in further defining the jurisdiction of the
Sandiganbayan, RA 8249 did not make a distinction as to the manner of creation of the government-owned or
controlled corporations for their officers to fall under its jurisdiction. Hence, being President and Chief
Operating Officer of the PPSB at the time of commission of the crimes charged, respondent Alas came under
the jurisdiction of the Sandiganbayan.
Quoting at length from the assailed resolution dated February 15, 2001, respondent Alas, on the other
hand, practically reiterated the pronouncements made by the respondent court in support of his conclusion
that the PPSB was not created by special law, hence, its officers did not fall within the jurisdiction of the
Sandiganbayan.[5]
We find merit in the petition.
Section 2(13) of EO 292[6] defines government-owned or controlled corporations as follows:

The records disclosed that while Philippine Postal Savings Bank is a subsidiary of the Philippine Postal
Corporation which is a government owned corporation, the same is not created by a special law. It was
organized and incorporated under the Corporation Code which is Batas Pambansa Blg. 68. It was registered
with the Securities and Exchange Commission under SEC No. AS094-005593 on June 22, 1994 with a lifetime
of fifty (50) years. Under its Articles of Incorporation the purpose for which said entity is formed was primarily
for business, xxx
Likewise, a scrutiny of the seven (7) secondary purposes of the corporation points to the conclusion that it
exists for business. Obviously, it is not involved in the performance of a particular function in the exercise of
government power. Thus, its officers and employees are not covered by the GSIS and are under the SSS law,
and actions for reinstatement and backwages are not within the jurisdiction of the Civil Service Commission
but by the National Labor Relations Commission (NLRC).
The Supreme Court, in the case of Trade Unions of the Philippines and Allied Services vs. National Housing
Corp., 173 SCRA 33, held that the Civil Service now covers only government owned or controlled corporations
with original or legislative charters, those created by an act of Congress or by special law, and not those
incorporated under and pursuant to a general legislation. The Highest Court categorically ruled that the Civil
Service does not include government-owned or controlled corporation which are organized as subsidiaries of
government-owned or controlled corporation under the general corporation law.
In Philippine National Oil Company Energy Development Corporation vs. Leogardo, 175 SCRA 26, the
Supreme Court emphasized that:

Sec. 2. General Terms Defined Unless the specific words of the text or the context as a whole or a particular
statute, shall require a different meaning:
xxx xxx xxx
(13) government owned or controlled corporations refer to any agency organized as a stock or non-stock
corporation vested with functions relating to public needs whether governmental or proprietary in nature, and
owned by the government directly or indirectly or through its instrumentalities either wholly, or where
applicable as in the case of stock corporations to the extent of at least 51% of its capital stock: provided, that
government owned or controlled corporations maybe further categorized by the department of the budget, the
civil service commission and the commission on audit for the purpose of the exercise and discharge of their
respective powers, functions and responsibilities with respect to such corporations.
From the foregoing, PPSB fits the bill as a government-owned or controlled corporation, and organized
and incorporated under the Corporation Code as a subsidiary of the Philippine Postal Corporation
(PHILPOST). More than 99% of the authorized capital stock of PPSB belongs to the government while the rest
is nominally held by its incorporators who are/were themselves officers of PHILPOST. The creation of PPSB
was expressly sanctioned by Section 32 of RA 7354, otherwise known as the Postal Service Act of 1992, for
purposes of, among others, to encourage and promote the virtue of thrift and the habit of savings among the
general public, especially the youth and the marginalized sector in the countryside xxx and to facilitate postal
service by receiving collections and making payments, including postal money orders. [7]

It is not disputed that the Sandiganbayan has jurisdiction over presidents, directors or trustees, or
managers of government-owned or controlled corporations with original charters whenever charges of graft
and corruption are involved. However, a question arises whether the Sandiganbayan has jurisdiction over the
same officers in government-owned or controlled corporations organized and incorporated under the
Corporation Code in view of the delimitation provided for in Article IX-B Section 2(1) of the 1987 Constitution
which states that:
SEC. 2. (1) The Civil Service embraces all branches, subdivisions, instrumentalities, and agencies of the
government, including government-owned or controlled corporations with original charters.
It should be pointed out however, that the jurisdiction of the Sandiganbayan is separate and distinct
from the Civil Service Commission. The same is governed by Article XI, Section 4 of the 1987 Constitution
which provides that the present anti-graft court known as the Sandiganbayan shall continue to function and
exercise its jurisdiction as now or hereafter may be provided by law. This provision, in effect, retained the
jurisdiction of the anti-graft court as defined under Article XIII, Section 5 of the 1973 Constitution which
mandated its creation, thus:
Sec. 5. The Batasang Pambansa shall create a special court, to be known as Sandiganbayan, which shall
have jurisdiction over criminal and civil cases involving graft and corrupt practices and such other offense
committed by public officers and employees, including those in government-owned or controlled corporations,
in relation to their office as may be determined by law. (Italics ours)
On March 30, 1995, Congress, pursuant to its authority vested under the 1987 Constitution, enacted
RA 7975[8] maintaining the jurisdiction of the Sandiganbayan over presidents, directors or trustees, or
managers of government-owned or controlled corporations without any distinction whatsoever. Thereafter, on
February 5, 1997, Congress enacted RA 8249 [9] which preserved the subject provision:
Section 4, Jurisdiction. The Sandiganbayan shall exercise exclusive original jurisdiction in all cases involving:
a. Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and
Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section, Title VII, Book II
of the Revised Penal Code, where one or more of the accused are officials occupying
the following positions in the government, whether in a permanent, acting or interim
capacity, at the time of the commission of the offense,
(1) Officials of the executive branch occupying the positions of regional director,
and higher, otherwise classified as grade 27 and higher, of the Compensation and
Position Classification Act of 1989 (Republic Act No. 6758) specifically including:
xxx xxx xxx

(g) Presidents, directors or trustees, or managers of


government-owned or controlled corporations, state universities or
educational institutions or foundations. (Italics ours)
The legislature, in mandating the inclusion of presidents, directors or trustees, or managers of
government-owned or controlled corporations within the jurisdiction of the Sandiganbayan, has consistently
refrained from making any distinction with respect to the manner of their creation.
The deliberate omission, in our view, clearly reveals the intention of the legislature to include the
presidents, directors or trustees, or managers of both types of corporations within the jurisdiction of the
Sandiganbayan whenever they are involved in graft and corruption. Had it been otherwise, it could have
simply made the necessary distinction. But it did not.
It is a basic principle of statutory construction that when the law does not distinguish, we should not
distinguish. Ubi lex non distinguit nec nos distinguere debemos. Corollarily, Article XI Section 12 of the 1987
Constitution, on the jurisdiction of the Ombudsman (the governments prosecutory arm against persons
charged with graft and corruption), includes officers and employees of government-owned or controlled
corporations, likewise without any distinction.
In Quimpo v. Tanodbayan,[10] this Court, already mindful of the pertinent provisions of the 1987
Constitution, ruled that the concerned officers of government-owned or controlled corporations, whether
created by special law or formed under the Corporation Code, come under the jurisdiction of the
Sandiganbayan for purposes of the provisions of the Anti-Graft and Corrupt Practices Act. Otherwise, as we
emphasized therein, a major policy of Government, which is to eradicate, or at the very least minimize, the
graft and corruption that has permeated the fabric of the public service like a malignant social cancer, would
be seriously undermined. In fact, Section 1 of the Anti-Graft and Corrupt Practices Act embodies this policy of
the government, that is, to repress certain acts not only of public officers but also of private persons
constituting graft or corrupt practices or which may lead thereto.
The foregoing pronouncement has not outlived its usefulness. On the contrary, it has become even
more relevant today due to the rampant cases of graft and corruption that erode the peoples faith in
government. For indeed, a government-owned or controlled corporation can conceivably create as many
subsidiary corporations under the Corporation Code as it might wish, use public funds, disclaim public
accountability and escape the liabilities and responsibilities provided by law. By including the concerned
officers of government-owned or controlled corporations organized and incorporated under the Corporation
Code within the jurisdiction of the Sandiganbayan, the legislature evidently seeks to avoid just that.
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED and the assailed resolution
dated February 15, 2001 of the respondent court is hereby REVERSED and SET ASIDE.
SO ORDERED.