ARTICLE III- BILL OF RIGHTS
cablegram to the Company: REITERATING REQUEST EXCUSE DAY SHIFT
Philippine Blooming Mills Employment Organization V. Philippine
Blooming Mills Co. (1973)
Lessons Applicable: Nature and Definition of Human Rights, Human Right
is superior to property rights, Social justice, jurisdiction over violation of
constitutional right
Laws Applicable: Bill of Rights on rights of free expression, rights of free
assembly and rights of petition
FACTS:
March 2, 1969: Philippine Blooming Mills discovered that Philippine
Blooming Mills Employees Organization (PBMEO) decided to stage a mass
demonstration as a valid exercise of their constitutional right of freedom
expression in general and of their right of assembly and petition for
redress of grievances in particular before appropriate governmental
agency, the Chief Executive, alleged abuses of the police officers of the
municipality of Pasig at Malacaang on March 4, 1969 to be participated in
by the workers in the first, second and third shifts (6am-2pm, 7am-4pm.
and 8am-5pm respectively)
March 3, 1969: Philippine Blooming Mills held 2 meetings in the
morning and afternoon where PBMEO confirmed the demonstration which
has nothing to do with the Company because the union has no quarrel or
dispute with Management. That Management, thru Atty. C.S. de Leon,
Company personnel manager, informed PBMEO that the demonstration is
an inalienable right of the union guaranteed by the Constitution but
emphasized, however, that any demonstration for that matter should not
unduly prejudice the normal operation thus whoever fails to report for
work the following morning shall be dismissed for violation of the existing
CBA Article XXIV: NO LOCKOUT NO STRIKE amounting to an illegal strike
March 3, 1969 9:50 am: Wilfredo Ariston, adviser of PBMEO sent a
EMPLOYEES JOINING DEMONSTRATION MARCH 4, 1969
The Company filed for violation of the CBA. PBMEO answered that
there is no violation since they gave prior notice. Moreover, it was not a
mass demonstration for strike against the company.
Judge Joaquin M. Salvador: PBMEO guilty of bargaining in bad faith and
PBMEO officers directly responsible for ULP losing their status as
employees
September 29, 1969: PBMEO motion for reconsideration dismissed
since 2 days late
ISSUE:
1. W/N to regard the demonstration against police officers, not against
the employer, as evidence of bad faith in collective bargaining and hence a
violation of the collective bargaining agreement and a cause for the
dismissal from employment of the demonstrating employees, stretches
unduly the compass of the collective bargaining agreement, is an inhibition
of the rights of free expression, free assembly and petition
HELD: YES. Set aside as null and void the orders of CFI and reinstate the
petitioners.
In a democracy, the preservation and enhancement of the dignity and
worth of the human personality is the central core as well as the cardinal
article of faith of our civilization. The inviolable character of man as an
individual must be "protected to the largest possible extent in his thoughts
and in his beliefs as the citadel of his person
The Bill of Rights is designed to preserve the ideals of liberty, equality
and security "against the assaults of opportunism, the expediency of the
passing hour, the erosion of small encroachments, and the scorn and
derision of those who have no patience with general principles.
The freedoms of expression and of assembly as well as the right to
petition are included among the immunities reserved by the sovereign
people
The rights of free expression, free assembly and petition, are not only
civil rights but also political rights essential to man's enjoyment of his life,
to his happiness and to his full and complete fulfillment. Thru these
freedoms the citizens can participate not merely in the periodic
establishment of the government through their suffrage but also in the
administration of public affairs as well as in the discipline of abusive public
officers. The citizen is accorded these rights so that he can appeal to the
appropriate governmental officers or agencies for redress and protection
as well as for the imposition of the lawful sanctions on erring public
officers and employees.
While the Bill of Rights also protects property rights, the primacy of
human rights over property rights is recognized.
o Property and property rights can be lost thru prescription; but human
rights are imprescriptible.
o a constitutional or valid infringement of human rights requires a more
stringent criterion, namely existence of a grave and immediate danger of a
substantive evil which the State has the right to prevent
o Rationale: Material loss can be repaired or adequately compensated.
The debasement of the human being broken in morale and brutalized in
spirit-can never be fully evaluated in monetary terms. The wounds fester
and the scars remain to humiliate him to his dying day, even as he cries in
anguish for retribution, denial of which is like rubbing salt on bruised
tissues.
o injunction would be trenching upon the freedom expression of the
workers, even if it legally appears to be illegal picketing or strike
The pretension of their employer that it would suffer loss or damage by
reason of the absence of its employees from 6 o'clock in the morning to 2
o'clock in the afternoon, is a plea for the preservation merely of their
property rights.
o There was a lack of human understanding or compassion on the part of
the firm in rejecting the request of the Union for excuse from work for the
day shifts in order to carry out its mass demonstration. And to regard as a
ground for dismissal the mass demonstration held against the Pasig police,
not against the company, is gross vindictiveness on the part of the
employer, which is as unchristian as it is unconstitutional.
o The most that could happen to them was to lose a day's wage by
reason of their absence from work on the day of the demonstration. One
day's pay means much to a laborer, more especially if he has a family to
support. Yet, they were willing to forego their one-day salary hoping that
their demonstration would bring about the desired relief from police
abuses. But management was adamant in refusing to recognize the
superior legitimacy of their right of free speech, free assembly and the
right to petition for redress.
o the dismissal for proceeding with the demonstration and consequently
being absent from work, constitutes a denial of social justice likewise
assured by the fundamental law to these lowly employees. Section 5 of
Article II of the Constitution imposes upon the State "the promotion of
social justice to insure the well-being and economic security of all of the
people," which guarantee is emphasized by the other directive in Section 6
of Article XIV of the Constitution that "the State shall afford protection to
labor ...". Under the Industrial Peace Act, the Court of Industrial Relations
is enjoined to effect the policy of the law "to eliminate the causes of
industrial unrest by encouraging and protecting the exercise by employees
of their right to self-organization for the purpose of collective bargaining
and for the promotion of their moral, social and economic well-being."
The respondent company is the one guilty of unfair labor practice
defined in Section 4(a-1) in relation to Section 3 of Republic Act No. 875,
otherwise known as the Industrial Peace Act. Section 3 of Republic Act No.
8 guarantees to the employees the right "to engage in concert activities for
... mutual aid or protection"; while Section 4(a-1) regards as an unfair labor
practice for an employer interfere with, restrain or coerce employees in
the exercise their rights guaranteed in Section Three."
violation of a constitutional right divests the court of jurisdiction. Relief
from a criminal conviction secured at the sacrifice of constitutional
liberties, may be obtained through habeas corpus proceedings even long
after the finality of the judgment. There is no time limit to the exercise of
the freedoms. The right to enjoy them is not exhausted by the delivery of
one speech, the printing of one article or the staging of one
demonstration. It is a continuing immunity to be invoked and exercised
when exigent and expedient whenever there are errors to be rectified,
abuses to be denounced, inhumanities to be condemned. Otherwise these
guarantees in the Bill of Rights would be vitiated by rule on procedure
prescribing the period for appeal. The battle then would be reduced to a
race for time. And in such a contest between an employer and its laborer,
the latter eventually loses because he cannot employ the best an
dedicated counsel who can defend his interest with the required diligence
and zeal, bereft as he is of the financial resources with which to pay for
competent legal services
enforcement of the basic human freedoms sheltered no less by the
organic law, is a most compelling reason to deny application of a Court of
Industrial Relations rule which impinges on such human rights. It is an
accepted principle that the Supreme Court has the inherent power to
"suspend its own rules or to except a particular case from its operation,
whenever the purposes of justice require."
DUE PROCESS
1. Ichong v. Hernandez
2. Philippine Phospate Fertilizer Co. v Torres 231 SCRA 335 (1994)
Facts: Philphos Movement for Progress, Inc. (PMPI for brevity), filed with
the Department of Labor and Employment a petition for certification
election among the supervisory employees of petitioner, alleging that as a
supervisory union duly registered with the Department of Labor and
Employment it was seeking to represent the supervisory employees of
Philippine Phosphate Fertilizer Corporation. Mediator-Arbiter Rodolfo S.
Milado issued an order directing the holding of a certification election
among the supervisory employees of petitioner, excluding therefrom the
superintendents and the professional and technical employees. However,
the PMPI filed an amended petition with the Mediator-Arbiter wherein it
sought to represent not only the supervisory employees of petitioner but
also its professional/technical and confidential employees. The parties
therein agreed to submit their respective position papers and to consider
the amended petition submitted for decision on the basis thereof and
related documents. Mediator-Arbiter Milado issued an order granting the
petition and directing the holding of a certification election among the
"supervisory, professional (engineers, analysts, mechanics, accountants,
nurses, midwives, etc.), technical, and confidential employees. PHILPHOS
appealed the order to the Secretary of Labor and Employment who
rendered a decision through Undersecretary Bienvenido Laguesma
dismissing the appeal. PHILPHOS moved for reconsideration but the same
was denied; hence, the instant petition alleging denial of due process on
the part of the DOLE to which the mediator-arbiter was under.
Issue: Whether or Not there was denial of due process.
Held: There was no denial of due process. The essence of due process is
simply an opportunity to be heard or, as applied to administrative
proceedings, an opportunity to explain one's side or an opportunity to seek
a reconsideration of the action or ruling complained of petitioner
PHILPHOS agreed to file its position paper with the Mediator-Arbiter and
to consider the case submitted for decision on the basis of the position
papers filed by the parties, there was sufficient compliance with the
requirement of due process, as petitioner was afforded reasonable
opportunity to present its side. Moreover, petitioner could have, if it so
desired, insisted on a hearing to confront and examine the witnesses of
the other party. But it did not; instead it opted to submit its position paper
with the Mediator-Arbiter. Besides, petitioner had all the opportunity to
ventilate its arguments in its appeal to the Secretary of Labor.
3. Ynot v. IAC
4. Mayor Bayani Alonte vs Judge Maximo Savellano, NBI & People of the
Philippines
Due Process in Criminal Proceedings Waiver of Right to Due Process
Alonte was accused of raping JuvieLyn Punongbayan with accomplice
Buenaventura Concepcion. It was alleged that Concepcion befriended Juvie
and had later lured her into Alonetes house who was then the mayor of
Bian, Laguna. The case was brought before RTC Bian. The counsel and
the prosecutor later moved for a change of venue due to alleged
intimidation. While the change of venue was pending, Juvie executed an
affidavit of desistance. The prosecutor continued on with the case and the
change of venue was done notwithstanding opposition from Alonte. The
case was raffled to the Manila RTC under J Savellano. Savellano later found
probable cause and had ordered the arrest of Alonte and Concepcion.
Thereafter, the prosecution presented Juvie and had attested the
voluntariness of her desistance the same being due to media pressure and
that they would rather establish new life elsewhere. Case was then
submitted for decision and Savellano sentenced both accused to reclusion
perpetua. Savellano commented that Alonte waived his right to due
process when he did not cross examine Juvie when clarificatory questions
were raised about the details of the rape and on the voluntariness of her
desistance.
ISSUE: Whether or not Alonte has been denied criminal due process.
HELD: The SC ruled that Savellano should inhibit himself from further
deciding on the case due to animosity between him and the parties. There
is no showing that Alonte waived his right. The standard of waiver requires
that it not only must be voluntary, but must be knowing, intelligent, and
done with sufficient awareness of the relevant circumstances and likely
consequences. Mere silence of the holder of the right should not be so
construed as a waiver of right, and the courts must indulge every
reasonable presumption against waiver. Savellano has not shown
impartiality by repeatedly not acting on numerous petitions filed by
Alonte. The case is remanded to the lower court for retrial and the decision
earlier promulgated is nullified.
5. Aniag Jr. v Comelec 237 SCRA 424 (1994)
Driver underwent illegal search and seizure on check pt. petitioner
charged in violation of Omnibus Election Code (gun ban) invokes
deprivation of Constitutional right on due process of law.
Facts: Upon the issuance of declaration of gun ban by the Comelec in
connection to the national & local election, the Sgt-at-Arms of the House
of Representatives requested petitioner to return the 2 firearms issued by
the House to him. In compliance, petitioner ordered his driver Arellano to
pick up the firearms in his house to return them to Congress. On his way
back to the Batasan Complex, Arellano was flagged down in a check point
and police search the car. Upon finding the guns, he was apprehended and
detained and his case was referred for inquest to the City prosecutor
office. Petitioner was not made a party to the charge but was invited to
shed light on the incident. Petitioner explained the purpose how Arellano
came to have the firearms boarded on the car and wrote the prosecutor to
exonerate Arellano from the charges. The prosecutor recommended
dismissing the case. The Comelec however issued a resolution filing
information in violation of the gun ban against petitioner. Petitioner moves
for reconsideration to the Comelec which was denied hence this petition
contending that the search on his car was illegal and that he was not
impleaded as respondent in the preliminary investigation and his
constitutional rights for due process was violated.
Issue: Whether or not petitioner was denied of due process of law.
Held: The court held that as a rule, a valid search must be authorized by a
search warrant duly issued by an appropriate authority. However, this is
not absolute. Aside from a search incident to a lawful arrest, a warrantless
search had been upheld in cases of (1) moving vehicles (2) the seizure of
evidence in plain view and (3) search conducted at police or military
checkpoints which are not illegal for as long as the vehicle is neither
searched nor its occupants subjected to a body search, and the inspection
of the vehicle is merely limited to a visual search, and (4) Stop-and-search
without warrant conducted by police officers on the basis of prior
confidential information which were reasonably corroborated by other
attendant matters is also recognized by the court to be legal. An extensive
search without warrant could only be resorted to if the officers conducting
the search had reasonable or probable cause to believe before the search
that either the motorist was a law offender or that they would find the
instrumentality or evidence pertaining to the commission of a crime in the
vehicle to be searched. Because there was no sufficient evidence that
would impel the policemen to suspect Arellano to justify the search they
have conducted, such action constitutes an unreasonable intrusion of the
petitioners privacy and security of his property in violation of Section 2,
Article III of the Constitution. Consequently, the firearms obtained in
violation of petitioner's right against warrantless search cannot be
admitted for any purpose in any proceeding. The manner by which
COMELEC proceeded against petitioner runs counter to the due process
clause of the Constitution. The facts show that petitioner was not among
those charged by the PNP with violation of the Omnibus Election Code. Nor
was he subjected by the City Prosecutor to a preliminary investigation for
such offense. Thus the court declared the warrantless search and seizure
of the firearms as illegal hence inadmissible to court as evidence in any
proceeding against the petitioner.
6. Philcomsat v Alcuaz 180 SCRA 218 (1989)
Facts: Herein petitioner is engaged in providing for services involving
telecommunications. Charging rates for certain specified lines that were
reduced by order of herein respondent Jose Alcuaz Commissioner of the
National Telecommunications Commission. The rates were ordered to be
reduced by fifteen percent (15%) due to Executive Order No. 546 which
granted the NTC the power to fix rates. Said order was issued without prior
notice and hearing.
Issue: Whether or Not E.O. 546 is unconstitutional.
Held: Yes. Respondents admitted that the application of a policy like the
fixing of rates as exercised by administrative bodies is quasi-judicial rather
than quasi-legislative. But respondents contention that notice and hearing
are not required since the assailed order is merely incidental to the entire
proceedings and temporary in nature is erroneous. Section 16(c) of the
Public Service Act, providing for the proceedings of the Commission, upon
notice and hearing, dictates that a Commission has power to fix rates,
upon proper notice and hearing, and, if not subject to the exceptions,
limitations or saving provisions.
It is thus clear that with regard to rate-fixing, respondent has no authority
to make such order without first giving petitioner a hearing, whether the
order be temporary or permanent, and it is immaterial whether the same
is made upon a complaint, a summary investigation, or upon the
commission's own motion as in the present case.
WHEREFORE, the writ prayed for is GRANTED and the order of respondents
is hereby SET ASIDE.
7. Ang Tibay v CIR 69 PHIL 635 (1940)
Facts: There was agreement between Ang Tibay and the National Labor
Union, Inc (NLU). The NLU alleged that the supposed lack of leather
material claimed by Toribio Teodoro was but a scheme adopted to
systematically discharge all the members of the NLU, from work. And this
averment is desired to be proved by the petitioner with the records of the
Bureau of Customs and Books of Accounts of native dealers in leather. That
National Worker's Brotherhood Union of Ang Tibay is a company or
employer union dominated by Toribio Teodoro, which was alleged by the
NLU as an illegal one. The CIR, decided the case and elevated it to the
Supreme Court, but a motion for new trial was raised by the NLU. But the
Ang Tibay filed a motion for opposing the said motion.
Issue: Whether or Not, the motion for new trial is meritorious to be
granted.
Held: To begin with the issue before us is to realize the functions of the
CIR. The CIR is a special court whose functions are specifically stated in the
law of its creation which is the Commonwealth Act No. 103). It is more an
administrative board than a part of the integrated judicial system of the
nation. It is not intended to be a mere receptive organ of the government.
Unlike a court of justice which is essentially passive, acting only when its
jurisdiction is invoked and deciding only cases that are presented to it by
the parties litigant, the function of the CIR, as will appear from perusal of
its organic law is more active, affirmative and dynamic. It not only
exercises judicial or quasi-judicial functions in the determination of
disputes between employers and employees but its functions are far more
comprehensive and extensive. It has jurisdiction over the entire
Philippines, to consider, investigate, decide, and settle any question,
matter controversy or disputes arising between, and/ or affecting
employers and employees or laborers, and landlords and tenants or farm-
laborers, and regulates the relations between them, subject to, and in
accordance with, the provisions of CA 103.
As laid down in the case of Goseco v. CIR, the SC had the occasion to point
out that the CIR is not narrowly constrained by technical rules of
procedure, and equity and substantial merits of the case, without regard to
technicalities or legal forms and shall not be bound by any technical rules
of legal evidence but may inform its mind in such manner as it may deem
just and equitable.
The fact, however, that the CIR may be said to be free from rigidity of
certain procedural requirements does not mean that it can in justiciable
cases coming before it, entirely ignore or disregard the fundamental and
essential requirements of due process in trials and investigations of an
administrative character. There cardinal primary rights which must be
respected even in proceedings of this character:
(1) the right to a hearing, which includes the right to present one's cause
and submit evidence in support thereof;
(2) The tribunal must consider the evidence presented;
(3) The decision must have something to support itself;
(4) The evidence must be substantial;
(5) The decision must be based on the evidence presented at the hearing;
or at least contained in the record and disclosed to the parties affected;
(6) The tribunal or body or any of its judges must act on its own
independent consideration of the law and facts of the controversy, and not
simply accept the views of a subordinate;
(7) The Board or body should, in all controversial questions, render its
decision in such manner that the parties to the proceeding can know the
various Issue involved, and the reason for the decision rendered.
The failure to grasp the fundamental issue involved is not entirely
attributable to the parties adversely affected by the result. Accordingly,
the motion for a new trial should be, and the same is hereby granted, and
the entire record of this case shall be remanded to the CIR, with instruction
that it reopen the case receive all such evidence as may be relevant, and
otherwise proceed in accordance with the requirements set forth. So
ordered.
8. Ateneo de Manila University v Capulong 222 SCRA 644 (1993)
Facts: Leonardo H. Villa, a first year law student of Petitioner University,
died of serious physical injuries at Chinese General Hospital after the
initiation rites of Aquila Legis. Bienvenido Marquez was also hospitalized at
the Capitol Medical Center for acute renal failure occasioned by the
serious physical injuries inflicted upon him on the same occasion.
Petitioner Dean Cynthia del Castillo created a Joint Administration-Faculty-
Student Investigating Committee which was tasked to investigate and
submit a report within 72 hours on the circumstances surrounding the
death of Lennie Villa. Said notice also required respondent students to
submit their written statements within twenty-four (24) hours from
receipt. Although respondent students received a copy of the written
notice, they failed to file a reply. In the meantime, they were placed on
preventive suspension. The Joint Administration-Faculty-Student
Investigating Committee, after receiving the written statements and
hearing the testimonies of several witness, found a prima facie case
against respondent students for violation of Rule 3 of the Law School
Catalogue entitled "Discipline." Respondent students were then required
to file their written answers to the formal charge. Petitioner Dean created
a Disciplinary Board to hear the charges against respondent students. The
Board found respondent students guilty of violating Rule No. 3 of the
Ateneo Law School Rules on Discipline which prohibits participation in
hazing activities. However, in view of the lack of unanimity among the
members of the Board on the penalty of dismissal, the Board left the
imposition of the penalty to the University Administration. Accordingly, Fr.
Bernas imposed the penalty of dismissal on all respondent students.
Respondent students filed with RTC Makati a TRO since they are currently
enrolled. This was granted. A TRO was also issued enjoining petitioners
from dismissing the respondents. A day after the expiration of the
temporary restraining order, Dean del Castillo created a Special Board to
investigate the charges of hazing against respondent students Abas and
Mendoza. This was requested to be stricken out by the respondents and
argued that the creation of the Special Board was totally unrelated to the
original petition which alleged lack of due process. This was granted and
reinstatement of the students was ordered.
Issue: Was there denial of due process against the respondent students.
Held: There was no denial of due process, more particularly procedural
due process. Dean of the Ateneo Law School, notified and required
respondent students to submit their written statement on the incident.
Instead of filing a reply, respondent students requested through their
counsel, copies of the charges. The nature and cause of the accusation
were adequately spelled out in petitioners' notices. Present is the twin
elements of notice and hearing.
Respondent students argue that petitioners are not in a position to file the
instant petition under Rule 65 considering that they failed to file a motion
for reconsideration first before the trial court, thereby by passing the latter
and the Court of Appeals. It is accepted legal doctrine that an exception to
the doctrine of exhaustion of remedies is when the case involves a
question of law, as in this case, where the issue is whether or not
respondent students have been afforded procedural due process prior to
their dismissal from Petitioner University.
Minimum standards to be satisfied in the imposition of disciplinary
sanctions in academic institutions, such as petitioner university herein,
thus:
(1) the students must be informed in writing of the nature and cause of
any accusation against them;
(2) that they shall have the right to answer the charges against them with
the assistance of counsel, if desired:
(3) they shall be informed of the evidence against them
(4) they shall have the right to adduce evidence in their own behalf; and
(5) the evidence must be duly considered by the investigating committee
or official designated by the school authorities to hear and decide the case.
9. Mortel v. Kerr- Di ko makita
10. Valentino v. City of Cebu- Waley din
11. Sanggunian Panlungson ng Baguio v. Jadewell Parking Systems Corp.
Facts
Baguio City and Jadewell Parking Systems Corporation agreed on June 26,
2000 that the latter (Jadewell) will be in charge for the on-street parking as
well as the installation of modern parking meters (DG4S Pay and Display
Parking Meter) in the City. Due to the failure to install the meters and to
remit the stipulated share of the City, the City Council through City
Resolution No. 037 s. 2002 expressed its intent to rescind. Baguio City
informed Jadewell through its President, Rogelio Tan, in a letter dated
September 22, 2006 of the rescission. In compliance with the
Memorandum of Agreement section 12, 60 days was given to Jadewell
prior to its effectivity. Jadewell then filed with the RTC of Baguio a petition
for Certiorari, Prohibition, and Mandamus, assailing the validity of the
resolution. The RTC found the rescission unlawful. The CA affirmed.
Issues
The second issue in this Petition is the correctness of the CAs ruling that
Jadewell was deprived of due process when the Sangguniang Panlungsod
rescinded the MOA.
Held/Ratio
We have looked closely at Resolution No. 003-2000 and the MOA and have
additionally reflected on the applicable provision under the Civil Code. We
have come to the conclusion that:
(a) There is only one provision that allows for unilateral revocation of the
MOA, which can be found in Section 9 thereof:
9. Minimum Guaranty The FIRST PARTY guaranties (sic) a minimum
period of five (5) years against rescission; provided that after such period,
the parties may agree to increase to a reasonable rate the parking fees and
the share of the city from the parking fees collected as provided for in the
guidelines, (Annex "B");
(b) This Section 9 requires that five years must have lapsed presumably
from the date of execution of the MOA before the unilateral right to
revoke the MOA can be exercised;
(c) Therefore, before the five year period has lapsed, the right to revoke
the MOA arises only under Article 1191 of the Civil Code, which reads:
Art. 1191. The power to rescind obligations is implied in reciprocal ones, in
case one of the obligors should not comply with what is incumbent upon
him.
The injured party may choose between the fulfillment and the rescission of
the obligation, with the payment of damages in either case. He may also
seek rescission, even after he has chosen fulfillment, if the latter should
become impossible.
The court shall decree the rescission claimed, unless there be just cause
authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons
who have acquired the thing, in accordance with Articles 1385 and 1388
and the Mortgage Law.
From the above, it appears that in order to effect a valid revocation of the
MOA prior to the lapse of the 5-year period provided for in Section 9, the
City of Baguio had to approach the problem from one or both of two
perspectives: one, negotiate the termination of the MOA with Jadewell, or
two, exercise its option under Article 1191 of the Civil Code.
The first option, a negotiated pretermination of the contract, is an inherent
right of every party in a contract. This can be inferred from the freedom of
the parties to contract and modify their previous covenants provided it
would not be contrary to law, morals, good customs, public order or public
policy. Despite the provision on the minimum warranty against rescission
stipulated in the MOA, the parties were not constrained to mutually
modify such restriction. The Sanggunian could have proposed to Jadewell
the possibility of lifting the warranty against rescission subject to the
condition that the latter will comply with its obligations under the MOA.
This scenario could have impressed upon Jadewell that its contractual
relations with the city government of Baguio were less than ideal. The
suggested approach for the Sanggunian could have been legally sound and
practical. Obviously, this was not done in this case; thus, Jadewells
Complaint before the RTC of Baguio City.
The second option is the exercise of the unilateral right to rescind a
bilateral contract on the part of a party who believes that it has been
injured by a breach substantial enough to warrant revocation. Where one
party allegedly failed to comply with his obligations under a contract, the
injured party may rescind the obligation if the other does not perform or is
not ready and willing to perform. We will examine the acts of Baguio City
in relation to what is allowed under Article 1191.
Rescission under Article 1191 takes place through either of two modes: (1)
through an extrajudicial declaration of rescission; or (2) upon the grant of a
judicial decree of rescission.
Extrajudicial declaration of rescission is recognized as a power which does
not require judicial intervention. If the rescission is not opposed,
extrajudicial declaration of rescission produces legal effect such that the
injured party is already relieved from performing the undertaking.
However, the power of declaring extrajudicial rescission conferred upon
the injured party is regulated by the Civil Code. If the extrajudicial
rescission is impugned by the other party, it shall be subject to a judicial
determination where court action must be taken, and the function of the
court is to declare the rescission as having been properly or improperly
made, or to give a period within which the debtor must perform the
obligation alleged to be breached. A unilateral cancellation of a contract
may be questioned in courts by the affected party to determine whether
or not cancellation is warranted. Thus, in an extrajudicial decree of
rescission, revocation cannot be completely exercised solely on a partys
own judgment that the other has committed a breach of the obligation but
always subject to the right of the other party to judicially impugn such
decision.
It is important to contextualize that the agreement entered into by the City
of Baguio with Jadewell is the embodiment of a grant of franchise imbued
with public interest and is not merely an agreement between two private
parties.
It is our view that the first act of rescission by the City of Baguio may be
valid even if there is a stipulation against it within the first five years of the
MOAs existence. Article 1191 of the New Civil Code provides a party the
right to rescind the agreement and clearly overrides any stipulation to the
contrary. However, the grounds that would serve as basis to the
application of the said article must be clearly established.
In the exercise of this option under Article 1191, was it necessary for the
City of Baguio to provide Jadewell an opportunity to air its side on the
matter before the former implemented the rescission of the MOA? In the
instant case, was Jadewell deprived of procedural due process?
We answer in the negative. We disagree with the rulings of the RTC and
the CA that Jadewell was deprived of due process. In Taxicab Operators of
Metro Manila v. The Board of Transportation, we confronted the issue of
whether the petitioners were denied procedural due process when the
respondent Board of Transportation issued a circular ordering the phasing
out of old vehicles to be used as taxicabs. In the said case, the phase-out
was embodied in a circular that was promulgated without holding a public
hearing or at least requiring those affected to submit their position papers
on the policy to be implemented. We held for the respondent Board, and
ruled in this wise:
Dispensing with a public hearing prior to the issuance of the Circulars is
neither violative of procedural due process. As held in Central Bank vs.
Hon. Cloribel and Banco Filipino, 44 SCRA 307 (1972):
Previous notice and hearing as elements of due process, are
constitutionally required for the protection of life or vested property
rights, as well as of liberty, when its limitation or loss takes place in
consequence of a judicial or quasi-judicial proceeding, generally dependent
upon a past act or event which has to be established or ascertained. It is
not essential to the validity of general rules or regulations promulgated to
govern future conduct of a class or persons or enterprises, unless the law
provides otherwise.
In the instant case, the assailed act by the Sanggunian Panlungsod in
rescinding the MOA be it first or second act of rescission was clearly in
the exercise of its legislative or administrative functions and was not an
exercise of a judicial or quasi-judicial function. The Sanggunian Panlungsod
does not possess any judicial or quasi-judicial functions. The preamble of
the MOA lends support to this view. Evidently, the foremost reason why
the agreement was entered into by the parties was to provide order, given
Baguio Citys parking problems in identified areas, as well as to generate
income.
The objectives of the Sanggunian Panlungsod, as well as its intention to
rescind the MOA; because it deems to no longer serve the interest of the
City of Baguio, are clearly an exercise of its legislative or administrative
function. However, it is another matter as to whether the City of Baguio
was able to clearly establish the grounds as basis for the exercise of its
right to rescind.
On the allegation of Jadewells substantial breach of the MOA.
The Baguio City government has repeatedly mentioned that Jadewell had
so far installed only 14 parking meters, with only 12 functioning. The COA-
CAR Report dated 13 July 2003 enumerated 12 findings, a majority of
which indicates that Jadewell was remiss in the fulfilment of its obligations
under the MOA. While Finding Nos. (1), (2), (3), (4), (5), (8) and (12) of the
COA-CAR Report state that Jadewell collected parking fees, Jadewell failed
to properly remit the same. Finding No. (11) of the COA-CAR Report states
that Jadewell failed to have its parking attendants deputized, a condition
under the MOA that is also important to the overall objective of the
endeavor.
The MOA does not specifically provide for the exact number of parking
meters to be installed by Jadewell pursuant to the parties objective in
regulating parking in the city. Nevertheless, 100 parking spaces were
allotted as mentioned in Annex A of the MOA. The agreement also
obligates Jadewell to have its parking attendants deputized by the DOTC-
LTO so that they shall have the authority to enforce traffic rules and
regulations in the regulated areas. To the Courts mind, these are two of
the most important obligations that Jadewell had to comply with,
considering the nature and objective of the agreement it had entered into.
the existence and extent of such breach. The facts and legal issues were
thus muddled.
We find fault in the lower and appellate courts lapse in examining the
issue on Jadewells alleged substantial breach. Evidence-taking had to be
undertaken by these courts before they could arrive at a judicial conclusion
on the presence of substantial breach.
12. Estrada v. Ombudsman

Despite the enumeration of the above-mentioned faults of Jadewell, we do

not make a categorical finding that there was substantial breach
committed by Jadewell to justify a unilateral rescission of the MOA. We
find, however, that the RTC had not properly received evidence that would
allow it to determine the extent of the claimed violations of the MOA. Had
these violations by Jadewell been proven in a proper hearing, the finding
of a substantial breach of the MOA would have been a distinct probability.

Unfortunately, neither the RTC nor the CA provided a clear basis for their
rulings on the extent of the breach of the MOA by Jadewell. Save from
reiterating the Sanggunians litany of violations said to be committed by
Jadewell, there was no testimony on record to prove such facts and no
indication as to whether the RTC or CA dismissed them or took them at
face value.

Whatever the extent of breach of contract that Jadewell may have

committed and the enumeration of Jadewells alleged faults in
Resolution 37 is quite extensive the City of Baguio was still duty-bound to
establish the alleged breach.

Matters became complicated when the RTC and the CA lumped the issues
on the due process violation of Baguio City with Jadewells alleged
substantial breaches under the MOA, instead of making a clear finding on