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G.R. No. 166062. September 26, 2006.

SALVADOR M. PEREZ and JUANITA A. APOSTOL, petitioners, vs. HON. SANDIGANBAYAN (2nd Division) and PEOPLE OF
THE PHILIPPINES represented by the Special Prosecutor of the Office of the Ombudsman, respondents.

DECI SION

CHICO-NAZARIO, J p:

This is a Petition for Certiorari under Rule 65 of the Rules of Court, questioning the twin Resolutions 1 of the Sandiganbayan dated 7 May
2004 (promulgated 18 May 2004), 2 and 27 September 2004 (promulgated 1 October 2004). 3

The following facts were culled from the records of the case:

In a resolution dated 24 April 2001, the Office of the Deputy Ombudsman for Luzon resolved to file charges of violation of Section
3(e) 4 of Republic Act No. 3019 5against petitioners, San Manuel, Pangasinan Mayor Salvador M. Perez, and Municipal Treasurer Juanita
Apostol. The Information alleges a crime committed as follows:

That on or about September of 1998, or sometime prior or subsequent thereto, in the Municipality of San Manuel, Pangasinan,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, SALVADOR PEREZ, being then the
Municipal Mayor and JUANITA APOSTOL, ZAPANTA, Municipal Treasurer of said municipality, conspiring and confederating
with one another, committing the crime herein charged in relation to and taking advantage of their official functions, and
through manifest partiality, evident bad faith or gross inexcusable negligence, did then and there, wilfully, unlawfully and
criminally cause the purchase of one (1) computer unit costing P120,000.00 acquisition by personal canvass which is in
violation of Secs. 362 and 367 of R.A. 7160, thereby causing undue injury to the Municipality of San Manuel, Pangasinan. 6

On 16 January 2002, prior to the scheduled arraignment, petitioners filed with the Sandiganbayan a Motion for Leave of Court to File Motion
for Reconsideration/Reinvestigation alleging the discovery of new evidence which will change the outcome of the case if presented and
appreciated. The alleged newly discovered evidence consists in the reassessment by the auditors of the Commission on Audit (COA) that,
though the prices between the subject computer and that canvassed by the COA are different, such difference is "not really that material." 7

The Sandiganbayan denied the Motion for Leave of Court to File Motion for Reconsideration/Reinvestigation in an Order dated 4 April 2002.
On a subsequent Motion for Reconsideration, however, the Sandiganbayan reconsidered the 4 April 2002 Order, and granted petitioners
ten days from receipt of the current 6 September 2002 Resolution within which to formalize their Motion for Reconsideration in the Office
of the Ombudsman. DIESHT

Complying with the 6 September 2002 Resolution, petitioners formalized their Motion for Reconsideration in the Office of the Ombudsman.

Accordingly, the Office of the Special Prosecutor conducted a reinvestigation. Assistant Special Prosecutor Warlito F. Galisanao prepared a
Memorandum dated 23 October 2003, recommending the withdrawal of the Information. 8 However, in the portion of the Memorandum
earmarked for the Special Prosecutor's action, Special Prosecutor Dennis M. Villa-Ignacio chose the action "DO NOT CONCUR" by drawing
two lines on the action "I CONCUR," and wrote the following marginal note:

I am, instead adopting the enclosed memorandum of Pros. Chua dated Jan. 22, 2004 recommending that in the meantime,
further fact-finding be conducted, and an administrative case be filed against accused Apostol, after withdrawing the
Information for viol. of Sec. 3(e) R.A. 3019. 9

On the other hand, new Ombudsman Simeon V. Marcelo crossed out both actions (APPROVED/DISAPPROVED), and wrote the following
marginal note dated 16 February 2004:

The resolution of this case is deferred. There are two modes of violating Section 3(e) of RA 3019, to wit: a) causing undue injury
or b) giving unwarranted benefits, advantage or preference. OSP should study whether the accused, assuming arguendo that
there was no overprice, gave unwarranted benefits, advantage or preference to the seller of the subject computer. Kindly
submit your recommendation soonest. 10

In an 8 March 2004 Supplemental Memorandum, Assistant Special Prosecutor III Warlito F. Galisanao recommended an amendment of the
Information, instead of a withdrawal thereof, to wit: ISDCaT
This is a Supplemental Memorandum to an earlier Memorandum dated October 23, 2003 to the Honorable Tanodbayan,
Simeon V. Marcelo who directed the deferment of action on undersigned's recommendation for the withdrawal of the
Information.

As earlier found, the acquisition of the unbranded computer set was questionable on the following grounds:

1. There was no public bidding and the mode of procurement was by canvass.

2. Under Sec. 367 of the Local Government Code, procurement through Personal Canvass requires approval of the
Committee on Awards. There was no committee approval to speak of in this case because none has been
constituted. This committee is supposed to be composed of:

a. Local General Services Officer or the Municipal Treasurer;

b. Local Accountant;

c. The head of office of department for whose use the supplies are being procured. CDHSac

3. Purchases under this section allows municipalities outside Metro Manila with the following limits:

Second and Third Class — Forty Thousand Pesos

(P40,000.00)

Fourth Class and Below — Twenty Thousand Pesos

(P20,000.00)

These limits are applicable for all items procured by any one (1) month period only. The local government of San Manuel,
Pangasinan, incidentally, is a fourth class municipality.

It must be noted that the canvass made on all the stores/suppliers were done by accused Treasurer Juanita Apostol and
attested by Mayor, Salvador Perez. To attest means to affirm to be correct, true or genuine (Blacks Law Dictionary, Fifth
Edition)[.]
In the earlier memorandum, there is no unanimity of conclusion as far as the reasonableness of the purchase price of the
computer set is concern[ed]. However, the circumstances of its acquisition clearly indicate that the public officials involved gave
the supplier, Mobil Link Enterprises/Starlet Sales Center, a private party, unwarranted benefits, advantage or preference
through manifest partiality, evident bad faith or gross inexcusable negligence by paying much more than the prevailing price
for a comparable computer set in the market. HcSaTI

This conclusion is derived from accused's deliberate disregard of the rules on procurement discussed above. The Information
must, therefore, be amended to reflect the manner of the commission of the offense. In regard to Prosecutor Elvira Chua's
recommendation which is endorsed by the Special Prosecutor, the issue of overpricing must be referred to the appropriate
office for further fact-finding and probable administrative investigation for violation of COA rules and RA 7160otherwise,
known as the Local Government Code of 1991.

In light of the foregoing, it is recommended that the Information be amended instead of withdrawing the same. Further, the
case of overpricing be referred for fact-finding and possible administrative investigation for violation of Secs. 362 and 367
of RA 7160, otherwise known as the Local Government Code of 1991. 11

This time around, Special Prosecutor Villa-Ignacio approved the Supplemental Memorandum and, pursuant thereto, Assistant Special
Prosecutor Galisanao filed a Motion for Leave to File Amended Information dated 12 March 2004. The Amended Information, which again
charges petitioners Perez and Apostol for violation of Sec. 3(e) of Republic Act No. 3019, provides:

That on or about January 21, 1998, or sometime prior or subsequent thereto, in the Municipality of San Manuel, Pangasinan,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, SALVADOR PEREZ, being then the
Municipal Mayor and JUANITA A. APOSTOL, Municipal Treasurer of said municipality, conspiring and confederating with one
another, committing the crime herein charged in relation to and taking advantage of their official functions, through manifest
partiality, evident bad faith or gross inexcusable negligence, did then and there, willfully, unlawfully and criminally, give
unwarranted benefits, advantage or preference in the discharge of official functions to Mobil Link Enterprises/Starlet Sales
Center causing the purchase of one (1) computer unit costing P120,000.00, an acquisition by personal canvass which is in
violation of Sections 362 and 367 of RA 7160, thereby causing damage and prejudice to the Municipality of San Manuel,
Pangasinan. 12
The Sandiganbayan granted the motion in the first assailed resolution, thus:

There having been no arraignment yet and the pre-maturity of the amendment is of the prosecution's risk, the motion to
Amend the Information is GRANTED.

Accordingly, the Amended Information submitted by the prosecution is admitted. 13

Petitioners filed a motion for reconsideration, but the same was denied in the second assailed resolution:

The Court resolves to deny the Motion for Reconsideration filed by the accused. Indeed, the power of a prosecuting prosecutor
to amend or cause the amendment of the information does not need the approving authority of the Ombudsman. The
Information was maintained only with some amendments made which the Court feels do not violate any law since there was
no arraignment yet.

Accordingly, accused Motion for Reconsideration dated June 4, 2004 is denied for lack of merit. 14

Petitioners assail the foregoing Resolutions before this Court, presenting the following issues for resolution:

1. Whether or not there is a denial of procedural due process on the part of the petitioners when the Special Prosecutor filed
the Amended Information without authority from or the approval of the Honorable Ombudsman, and against the latter's
specific instruction;

2. Whether or not the Amended Information is valid in the absence of such authority or approval of the Ombudsman under
the circumstances; and cCaIET

3. Whether or not respondent Sandiganbayan acted with grave abuse of discretion amounting to lack or excess of jurisdiction,
when it admitted the Amended Information which bears no approval of the Honorable Ombudsman, and against the latter's
written instruction to submit to him for approval the result of the re-study before the filing of said Amended Information. 15

This is not the first time the respective powers of the Ombudsman and the Special Prosecutor were pitted at loggerheads against each other
since these positions were reinvented in the 1987 Constitution. The Offices of the Ombudsman (now also called the Tanodbayan) and the
Special Prosecutor (then called the Tanodbayan) were reintroduced, with modified powers and designation, in the following provisions of
Article XI of the Constitution:

Sec. 5. There is hereby created the independent Office of the Ombudsman, composed of the Ombudsman to be known as
Tanodbayan, one overall Deputy, and at least one Deputy each for Luzon, Visayas and Mindanao. A separate Deputy for the
military establishment may likewise be appointed.

xxx xxx xxx

Sec. 7. The existing Tanodbayan shall hereafter be known as the Office of the Special Prosecutor. It shall continue to function
and exercise its powers as now or hereafter may be provided by law, except those conferred on the Office of the Ombudsman
created under this Constitution.

A judicial examination of the prosecutorial powers of these two Constitutional positions came barely a year after the effectivity of the 1987
Constitution, when then Special Prosecutor Raul Gonzalez filed criminal cases against Antique Governor Enrique Zaldivar. Zaldivar claimed
that said cases were filed without legal and constitutional authority since, under the 1987 Constitution, it is only the Ombudsman (not the
incumbent Tanodbayan who should now be called the Special Prosecutor) who has the authority to file the cases with the Sandiganbayan.
In granting the petitions and nullifying the criminal informations filed against Zaldivar, this Court held:

Under the 1987 Constitution, the Ombudsman (as distinguished from the incumbent Tanodbayan) is charged with the duty
to:

"Investigate on its own, or on complaint by any person, any act or omission of any public official, employee, office or
agency, when such act or omission appears to be illegal, unjust, improper or inefficient." (Sec. 13, par. 1)

The Constitution likewise provides that:

"The existing Tanodbayan shall hereafter be known as the Office of the Special Prosecutor. It shall continue to function
and exercise its powers as now or hereafter may be provided by law, except those conferred on the Office of the
Ombudsman created under this Constitution." (Art. XI, Section 7) (Italics ours). IcHDCS
Now then, inasmuch as the aforementioned duty is given to the Ombudsman, the incumbent Tanodbayan (called Special
Prosecutor under the 1987 constitution and who is supposed to retain powers and duties NOT GIVEN to the Ombudsman)
is clearly without authority to conduct preliminary investigations and to direct the filing of criminal cases with the
Sandiganbayan, except upon orders of the Ombudsman. This right to do so was lost effective February 2, 1987. From that
time, he has been divested of such authority.

Under the present constitution, the Special Prosecutor (Raul Gonzalez) is a mere subordinate of the Tanodbayan (Ombudsman)
and can investigate and prosecute cases only upon the latter's authority or orders. The Special Prosecutor cannot initiate the
prosecution of cases but can only conduct the same if instructed to do so by the Ombudsman. Even his original power to issue
subpoena, which he still claims under Section 10(d) of PD 1630, is now deemed transferred to the Ombudsman, who may,
however, retain it in the Special Prosecutor in connection with the cases he is ordered to investigate. 16 (Emphasis supplied.)

The following year, Republic Act No. 6770, 17 otherwise known as The Ombudsman Act of 1989, was passed into law. Among other things,
said law:

1) expressly included the Special Prosecutor under the Office of the Ombudsman; 18

2) gave the Special Prosecutor the power, under the supervision and control and upon the authority of the Ombudsman, to conduct
preliminary investigation and prosecute criminal cases within the jurisdiction of the Sandiganbayan, and to perform such other duties
assigned to it by the Ombudsman; 19 and, most importantly,

3) granted the Ombudsman the powers to: CHIScD

Investigate and prosecute on its own or on complaint by any person, any act or omission of any public officer or employee, office
or agency, when such act or omission appears to be illegal, unjust, improper or inefficient. It has primary jurisdiction over cases
cognizable by the Sandiganbayan and, in the exercise of its primary jurisdiction, it may take over, at any stage, from any
investigatory agency of the Government, the investigation of such cases. 20

A few years later, several persons charged in a complaint filed with the Office of the Ombudsman (in connection with the alleged summary
execution of Kuratong Baleleng gang members) instituted petitions for certiorari with this Court, claiming that it is the Special Prosecutor
which has jurisdiction to conduct the preliminary investigation and file the proper information against them. In the oral arguments, the
parties agreed to limit the issues, with petitioners praying for the re-examination of the Zaldivar ruling on the argument that the
Constitution did not give the Ombudsman prosecutorial functions, and contending that the inclusion of the Office of the Special Prosecutor
as among the offices under the Office of the Ombudsman in Section 3 of Republic Act No. 6770 is unconstitutional. DSacAE

In upholding Zaldivar, we held that while there was indeed an intention to withhold prosecutorial functions from the Ombudsman, the
legislature nevertheless recommended that the Legislature could, through statute, prescribe such other powers, functions and duties to the
Ombudsman. 21 Thus, paragraph 8, Section 13, Article XI of the Constitution, provides that the Ombudsman may exercise other functions
and duties as may be provided by law. 22 Pursuant to this authority, the Legislature enacted Republic Act No. 6770, which granted
prosecutorial powers to the Ombudsman.

On the claim that the inclusion of the Office of the Special Prosecutor as among the offices under the Office of the Ombudsman in Section
3 of Republic Act No. 6770 is unconstitutional, we ratiocinated that:

The contention is not impressed with merit. Firstly, the petitioners misconstrue Commissioner Romulo's statement as authority
to advocate that the intent of the framers of the 1987 Constitution was to place the Office of the Special Prosecutor under
the Office of the President. The said statement obviously referred to the Tanodbayan under P.D. No. 1630 — note how specific
the erstwhile Commissioner was in stating; ". . . as the decree now reads . . ." Further, in complete contrast to the petitioner's
stand, one of the principal reasons for the proposal to withhold prosecutorial powers from the Ombudsman was precisely to
remove the office from presidential control. . . .

xxx xxx xxx

In the second place, Section 7 of Article XI expressly provides that the then existing Tanodbayan, to be henceforth known as
the Office of the Special Prosecutor, "shall continue to function and exercise its powers as now or hereafter may be provided
by law, except those conferred on the Office of the Ombudsman created under this Constitution." The underscored phrase
evidently refers to the Tanodbayan's powers under P.D. No. 1630 or subsequent amendatory legislation. It follows then that
Congress may remove any of the Tanodbayan's/Special Prosecutor's powers under P.D. No. 1630 or grant it other powers,
except those powers conferred by the Constitution on the Office of the Ombudsman.
Pursuing the present line of reasoning, when one considers that by express mandate of paragraph 8, Section 13, Article XI
of the Constitution, the Ombudsman may "exercise such other powers or perform functions or duties as may be provided by
law," it is indubitable then that Congress has the power to place the Office of the Special Prosecutor under the Office of the
Ombudsman. In the same vein, Congress may remove some of the powers granted to the Tanodbayan by P.D. No. 1630 and
transfer them to the Ombudsman; or grant the Office of the Special Prosecutor such other powers and functions and duties
as Congress may deem fit and wise. This Congress did through the passage of R.A No. 6770. 23

While it is clear that Acop v. Office of the Ombudsman upheld Zaldivar v. Sandiganbayan insofar as the power of the Ombudsman to
prosecute cases is concerned, there has been a shift in its ratio decidendi. Hence, it was pronounced that the authority of the Ombudsman
to prosecute was based on Republic Act No. 6770, as authorized by paragraph 8, Section 13, Article XI of the Constitution. This being the
case, and considering that Republic Act No. 6770 also gives the Special Prosecutor the power to prosecute criminal cases (albeit under the
supervision and control and under the authority of the Ombudsman), was there likewise a modification of our ruling in Zaldivar prohibiting
the then Special Prosecutor to initiate criminal cases unless authorized by the Ombudsman? Or should there now be a presumed authority,
pursuant to Republic Act No. 6770, to prosecute cases unless prohibited by the Ombudsman? SDIaHE

The determination of this question is necessary in the case at bar, where it is the petitioners' central contention that the Sandiganbayan
committed grave abuse of discretion amounting to lack or excess in jurisdiction when it admitted the Amended Information which, according
to petitioners, bears no approval of the Ombudsman, thus, constituting denial of procedural due process. 24

Particularly, petitioners allege that the amendment of the Information and the admission of the Amended Information is premature, since
the Ombudsman has not yet acted with finality on the 23 October 2003 Memorandum. 25 The Ombudsman, by stating in the marginal
notes of the 23 October 2003 Memorandum that "(t)he resolution of this case is deferred," and "(k)indly submit your recommendation
soonest," allegedly decreed that the reinvestigation stage would not be completed until his final determination. 26

Respondent People's defense is that compliance with the specific instructions of the Ombudsman is merely an internal matter and the alleged
failure to heed the specific instructions of the Ombudsman is speculative. 27
The marginal notes of Ombudsmen to the recommendations of investigating prosecutors are hardly internal matters. In Cruz, Jr. v.
People, 28 Olivarez v. Sandiganbayan,29 and Gallardo v. People, 30 the marginal notes, even one-liners as in the case of Gallardo, were
judicially considered sufficient dispositions by the Ombudsmen and Special Prosecutors concerned. We held in Olivarez that: AICDSa

The mere fact that the order to file the information against petitioner was contained in a marginal note is not sufficient to
impute arbitrariness or caprice on the part of respondent special prosecutors, absent a clear showing that they gravely abused
their discretion in disapproving the recommendation of the investigating prosecutors to dismiss or withdraw the case against
petitioner. . . . 31

Was there, as petitioners assert, a violation of the orders of the Ombudsman as stated in his marginal note?

For reference, we reiterate the marginal note of Ombudsman Marcelo dated 16 February 2004:

The resolution of this case is deferred. There are two modes of violating Section 3(e) of RA 3019, to wit: a) causing undue injury
or b) giving unwarranted benefits, advantage or preference. OSP should study whether the accused, assuming arguendo that
there was no overprice, gave unwarranted benefits, advantage or preference to the seller of the subject computer. Kindly
submit your recommendation soonest. 32

Assistant Special Prosecutor Galisanao's Special Memorandum, quoted in full in the narration of facts, show complete compliance with
Ombudsman Marcelo's order to "study whether the accused, assuming arguendo that there was no overprice, gave unwarranted benefits,
advantage or preference to the seller of the subject computer." Assistant Special Prosecutor Galisanao answered the query in the affirmative,
stating that unwarranted benefits, advantage or preference were given to Mobil Link Enterprises/Starlet Sales Center through the "deliberate
disregard of the rules on procurement discussed above."

Ombudsman Marcelo's order, however, to "(k)indly submit your recommendation soonest," is another matter. The marginal note did not
indicate to whom the recommendation should be submitted. As the recommendation was prepared by a subordinate in the Office of the
Special Prosecutor, would a submission to the Special Prosecutor be sufficient compliance with the order of the Ombudsman? What is
imperative is that the recommendation be submitted to someone who has the authority to implement such recommendation, by authorizing
the filing of the proper information.
Republic Act No. 6770, by conferring upon the Ombudsman the power to prosecute, likewise grants to the Ombudsman the power to
authorize the filing of informations. As to the Special Prosecutor, respondent People invokes the aforesaid authority of the Ombudsman in
Section 15(10) to delegate his powers, and claim that there was a general delegation of the authority to approve the filing of informations
in Office Order No. 03-97, series of 2003 (dated 15 September 2003), and Office Order No. 40-05, series of 2005 (dated 4 April
2005). AaHTIE

Office Order No. 40-05 is a consolidation of several office orders, including the aforementioned Office Order No. 03-97, which is thus
superceded by the former. 33Office Order No. 40-05 provides:

In the exigency of the service, except when otherwise ordered by the Ombudsman, the disposition of administrative and
criminal cases involving any of the following,viz:

1) City and Municipal mayors;

xxx xxx xxx

as the highest ranking respondent, where the offense charged involves injury or damage amounting to, or valued at Two Million
Pesos (P2,000,000.00) or less, or where the maximum imposable penalty for any of the offense charged does not exceed
twenty (20) years imprisonment, shall be subject to the final approval of the Deputy Ombudsman concerned; provided, that,
where the offense charged involves injury or damage amounting to, or valued at, more than Two Million Pesos
(P2,000,000.00), or where the maximum imposable penalty for any of the offense charged is more than twenty (20) years
imprisonment, the disposition shall be subject to the final approval of the Ombudsman.

In the foregoing dispositions that are subject to the final approval of the Deputy Ombudsman concerned, the undersigned
hereby delegates to the latter further authority to approve and sign any corresponding criminal information, whether to be
filed with the regular courts or the Sandiganbayan; provided, however, that, preparatory to the filing of the information with
the Sandiganbayan, the Office of the Special Prosecutor may review and modify the same, subject to the approval of the Special
Prosecutor, without departing from, or varying in any way, the contents of the basic Resolution, Order or Decision. 34

Contrary to the contention of respondent People, the delegation of the power to authorize the filing of informations under Office Order No.
40-05 was only made to Deputy Ombudsmen, and not to the Special Prosecutor. All that was delegated to the Special Prosecutor was the
discretional 35 authority to review and modify the Deputy Ombudsmen-authorized information, but even this is subject to the condition that
such modification must be "without departing from, or varying in any way, the contents of the basic Resolution, Order or Decision." Even
the title of Office Order No. 40-05 betray the contention of delegation to the Special Prosecutor: "DELEGATION OF FINAL APPROVING
AUTHORITY TO THE DEPUTY OMBUDSMAN FOR LUZON, DEPUTY OMBUDSMAN FOR VISAYAS AND DEPUTY OMBUDSMAN FOR
MINDANAO." IDTHcA

Neither does it help that, under Section 11(4) of Republic Act No. 6770, the Special Prosecutor was given the rank and salary of Deputy
Ombudsman. In Office of the Ombudsman v. Valera, 36 this Court held:

The petitioner's contention that since the Special Prosecutor is of the same rank as that of a Deputy Ombudsman, then the
former can rightfully perform all the functions of the latter, including the power to preventively suspend, is not persuasive.
Under civil service laws, rank classification determines the salary and status of government officials and employees. Although
there is substantial equality in the level of their respective functions, those occupying the same rank do not necessarily have
the same powers nor perform the same functions. 37

There being no express delegation of the power to prosecute, we are constrained to go back to our main query: Is there an implied delegation
of the power to prosecute under Republic Act No. 6770, such that Special Prosecutors are presumed to have been delegated such power, in
the absence of a prohibition from the Ombudsman?

Republic Act No. 6770 provides:

(4) The Office of the Special Prosecutor shall, under the supervision and control and upon the authority of the Ombudsman,
have the following powers:

(a) To conduct preliminary investigation and prosecute criminal cases within the jurisdiction of the Sandiganbayan;

(b) To enter into plea-bargaining agreements; and

(c) To perform such other duties assigned to it by the Ombudsman. 38

This Court has defined the power of control as "the power of an officer to alter or modify or nullify or set aside what a subordinate officer
had done in the performance of his duties and to substitute the judgment of the former for that of the latter." 39 The power of supervision,
on the other hand, means "overseeing, or the power or authority of an officer to see that subordinate officers perform their duties." 40 Under
the Administrative Code of 1987 41 :

Supervision and control shall include authority to act directly whenever a specific function is entrusted by law or regulation
to a subordinate; direct the performance of duty; restrain the commission of acts; review, approve, reverse or modify acts and
decisions of subordinate officials or units; determine priorities in the execution of plans and programs; and prescribe standards,
guidelines, plans and programs. . . .

Springing from the power of control is the doctrine of qualified political agency, wherein the acts of a subordinate bears the implied approval
of his superior, unless actually disapproved by the latter. 42 Thus, taken with the powers of control and supervision, the acts of Department
Secretaries in the performance of their duties are presumed to be the act of the President, unless and until the President alters, modifies,
or nullifies the same. By arguing that "[w]hat is important is that the amended Information has not been withdrawn, and or recalled by the
Honorable Ombudsman, [a] clear showing that the latter acknowledged/upheld the act of the Special Prosecutor in signing the Amended
Information," 43 respondent People claims that the doctrine of qualified political agency should be applied as well to the relationship between
the Ombudsman and the Special Prosecutor. acEHSI

Petitioners counter that the doctrine of qualified political agency does not apply to the Office of the Ombudsman, since the latter is an
apolitical agency, and is far different from the bureaucracy to which said doctrine applies. 44

Petitioners are correct.

The doctrine of qualified political agency was adopted in our system of government on the following pronouncement of this Court in Villena
v. The Secretary of the Interior 45 :

After serious reflection, we have decided to sustain the contention of the government in this case on the broad proposition,
albeit not suggested, that under the presidential type of government which we have adopted and considering the departmental
organization established and continued in force by paragraph 1, section 12, Article VII, of our Constitution,all executive and
administrative organizations are adjuncts of the Executive Department, the heads of the various executive departments are
assistants and agents of the Chief Executive, and, except in cases where the Chief Executive is required by the Constitution or
the law to act in person or the exigencies of the situation demand that he act personally, the multifarious executive and
administrative functions of the Chief Executive are performed by and through the executive departments, and the acts of the
secretaries of such departments, performed and promulgated in the regular course of business, are, unless disapproved or
reprobated by the Chief Executive, presumptively the acts of the Chief Executive. (Runkle vs. United States [1887]. 122 U.S.,
543; 30 Law. ed., 1167; 7 Sup. Ct. Rep., 1141; see also U. S. vs. Eliason [1839], 16 Pet., 291; 10 Law. ed., 968; Jones vs.
U. S. [1890], 137 U.S., 202; 34 Law. ed., 691; 11 Sup. Ct., Rep., 80; Wolsey v. Chapman[1880], 101 U.S., 755; 25 Law.
ed., 915; Wilcox vs. Jackson [1836], 13 Pet., 498; 10 Law. ed., 264.) 46

While we do not underestimate the quantity of work in the hands of the Office of the Ombudsman, the same simply does not measure up
to the workload of the Office of the President as to necessitate having the Special Prosecutor as an alter ego of the Ombudsman. In any case,
the Office of the Ombudsman could very well make a general delegation of powers to the Special Prosecutor, if it is so desired. An examination
of the office orders issued by the Ombudsman, however, reveal that there had been no such intention to make a general delegation.

Indeed, a statute granting powers to an agency created by the Constitution should be liberally construed for the advancement of the purposes
and objectives for which it was created. 47 Yet, the Ombudsman would be severely hampered from exercising his power of control if we are
to allow the Special Prosecutor to authorize the filing of informations in the first instance. This is because while the Ombudsman has full
discretion to determine whether or not a criminal case should be filed in the Sandiganbayan, once the case has been filed with said court,
it is the Sandiganbayan, and no longer the Ombudsman, which has full control of the case so much so that the informations may not be
dismissed, without the approval of the said court. 48

We, therefore, resolve to grant the Petition. We realize that, once transmitted to the new Ombudsman, she can so easily approve the 8 March
2004 Supplemental Memorandum of Assistant Special Prosecutor Galisanao, and the same Amended Information can be filed in no time.
However, when the law entails a specific procedure to be followed, unwarranted shortcuts lead to the violation of the sacred right to due
process, which we cannot countenance. CASTDI

Finally, as regards other informations authorized by the Special Prosecutor to be filed without the approval of the Ombudsman, we also
recognize that the former prevailing interpretation of the law may shield these informations from illegality. Such reliance upon the operative
fact, however, would cease upon the finality of this Decision.
WHEREFORE, the instant Petition for Certiorari is GRANTED. The assailed Resolutions of the Sandiganbayan admitting the Amended
Information is SET ASIDE. Let the 8 March 2004 Supplemental Memorandum of Assistant Special Prosecutor III Warlito F. Galisanao be
TRANSMITTED to the Office of the Ombudsman for approval or disapproval.

SO ORDERED.

||| (Perez v. Sandiganbayan, G.R. No. 166062, [September 26, 2006], 534 PHIL 357-381)

[G.R. No. L-31152. March 27, 1974.]

UNIVERSITY OF NUEVA CACERES, JAIME HERNANDEZ, SR., and JAIME HERNANDEZ, JR., petitioners, vs. HON. ARSENIO
I. MARTINEZ, as Presiding Judge of the Court of Industrial Relations, and the UNIVERSITY OF NUEVA CACERES GUARDIANS
UNION, respondents.

Sycip, Salazar, Luna, Manalo & Feliciano for petitioners.

Mariano B. Tuason and Francisco M. de los Reyes for respondent Judge, CIR.

Augusto A. Pardalis and Mariano M. Abes for respondent Union.

DECI SION

BARREDO, J p:

Petition for certiorari, prohibition and mandamus, with preliminary injunction, relative to the orders of respondent Presiding Judge of the
Court of Industrial Relations dated July 30, 1969 and October 6, 1969, which in effect held that the determination of whether or not a
charge of unfair labor practice, investigated by the Prosecution Division of said court, should be dismissed outright because of any fatal defect
of form or substance is the exclusive prerogative of said Presiding Judge, to the exclusion of the court en banc, on the theory that the function
involved in such determination is not judicial but purely administrative and hence entrusted to his exclusive administrative authority as head
of said court.

On June 17, 1969, respondent University of Nueva Caceres Guardians Union filed with the Bicol branch of respondent Court of Industrial
Relations (CIR) an unfair labor practice charge against petitioners, accompanied by the joint affidavit of Benito de la Paz and George
Offemaria. At the hearing of said charge before the prosecutor of the CIR, petitioners moved to dismiss the same on the grounds: (1) it is not
verified; (2) it does not specify the particular provisions of Section 4 (a) of the Industrial Peace Act, RA 875, as amended, supposed to have
been violated, and (3) the supporting joint affidavit contains "falsities, misstatements and improbabilities on points otherwise material to the
charge." Instead of dismissing the charge, the prosecutor, although finding the grounds of the dismissal motion to be more or less plausible,
granted respondent Union five (5) days "to file an amended charge and amended affidavit," which said Union did on July 8, 1969. On July
14, 1969, petitioners moved to reconsider the ruling of the prosecutor, but on July 30, 1969, respondent Presiding Judge denied the same,
admitted the amended charge and directed the Court Prosecutor to set the said amended charge for preliminary investigation. On August
16, 1969, petitioners moved again for reconsideration of the order of July 30, 1969. Apparently, petitioners assumed their motion for
reconsideration would be acted upon by the court en banc, for when on October 6, 1969, respondent Judge issued an order, signed by him
alone, denying it, the present petition was filed charging said respondent with having acted in excess of jurisdiction in acting on a matter
addressed to and within the jurisdiction of the CIR en banc and of grave abuse of discretion in not ordering the dismissal of the charge upon
the grounds invoked by them.

The assertion by respondent Judge, implicit in his order of October 6, 1969, of jurisdiction, to the exclusion of the court en banc, over the
matter herein involved cannot be sustained. It is Our considered view that unlike the preliminary investigation of criminal cases by fiscals
which are under the supervision and control of the Secretary of Justice, 1 the peculiar procedure prescribed by law in unfair labor practices
partakes of the nature of judicial investigations, since they are conducted, to quote the language of the law, by "the Court or any agency or
agent designated by the Court", (Section 5 (b), Rep. Act 875) similarly to the preliminary investigations undertaken by courts of first instance
in election cases 2 and charges of violation of the Anti-Subversion Act. 3 Surely, no one can pretend that in such preliminary investigations,
the courts of first instance are performing administrative or non-judicial functions. In such cases, the courts act in the same judicial capacity
as they do in trying the cases on the merits and cannot, in any respect or measure, be controlled by the Secretary of Justice. The fact that
the law authorizes the CIR to delegate the investigation to "any agency or agent designated by the Court" does not alter the nature of the
court's function in the premises, just as the appointment of commissioners by the courts under Rule 34 does not make the procedure
administrative or less judicial. Indeed, under the provision aforementioned, the investigation could very well be assigned to one of the judges
of the CIR, and in that event, how can it be maintained that the function is administrative? Withal, it is implicit in this procedure that the
work of the "agency or agent designated by Court" is as much the responsibility of the court as if it were the court itself that were acting
directly.

The contention of respondent Judge that the function of overseering the Prosecution Division of the CIR in its work of filing and dismissing
charges of unfair labor practice is purely administrative in nature and falls within his exclusive competence is without merit. It is true that
reference to the court in the law must be construed to mean the Presiding Judge and not the court en banc when the action contemplated
is purely administrative in character, but, precisely, the point missed is that, as already explained, the Industrial Peace Act does not consider
the investigation by the CIR, either by itself or thru an agent, as an administrative matter but a judicial one like the preliminary investigations
in election and anti-subversion cases.

Maybe the development in the United States recounted by respondent Judge whereby the Taft-Hartley Law transferred from the National
Labor Relations Board to its General Counsel the exclusive function and power to determine with finality whether or not an unfair labor
practice charge should be filed with the Board is good, in the sense of avoiding that the Board be the accuser, investigator and judge all rolled
into one, but there is nothing in either Commonwealth Act 103 or the Industrial Peace Act indicating that the American experience has
influenced the enactment and phraseology of the pertinent provisions of our laws. Quite on the contrary, as already pointed out, Section 5(b)
of RA 875 very explicitly confers the function of investigating unfair labor charges upon the CIR itself, albeit it allows the court to designate
any other agency or agent for the purpose.

As regards the other impugned order of July 30, 1969, the result of the foregoing discussion and ruling is that the same should first be
submitted to the CIR en banc for appropriate action. Much as the writer of this opinion feels that the objections thereto raised by petitioners
are rather strained and are not very consistent with the interests of justice, which would not permit the throwing out of an unfair labor
practice charge merely because of non-jurisdictional defects which can anyway be corrected, the Court would not pre-empt the power of
the CIR en banc to make the corresponding ruling relative thereto in the first instance.

Before closing, it might be stated that, to be sure, the creation of the National Labor Relations Commission, may have altered the procedure
in cases involving alleged unfair labor practices, but that point is not and cannot be raised anymore in this proceeding and We do not consider
it necessary to pass on it now.
WHEREFORE, the petition for certiorari and prohibition insofar as the assailed order of July 30, 1969 is concerned is denied, without
prejudice to the appropriate action on petitioners' motion for reconsideration thereof by the CIR en banc, but the petition for certiorari and
mandamus relative to the impugned order of respondent Presiding Judge of October 6, 1969 is granted, the said order is hereby declared
null and void and set aside, as in excess of jurisdiction, and respondent Presiding Judge or whoever is acting in his stead is ordered to refer
the motion for reconsideration of petitioners dated August 16, 1969 to the CIR en banc for appropriate action. The writ of preliminary
injunction issued by the Court on November 24, 1969 is made permanent, without prejudice to the resolution by the CIR of petitioners'
motion for reconsideration just referred to. The manifestation of Acting Presiding Judge Ansberto Paredes to the effect that he has desisted
and continues to desist from following the practice of former Presiding Judge Martinez declared illegal in this decision is noted. Costs against
private respondents.

Zaldivar, Fernandez and Aquino, JJ ., concur.

Separate Opinions

ANTONIO, J ., concurring:

I concur in the main opinion, with the following additional observations:

In the United States, the provisions of the National Labor Relations Act, as amended by the Taft-Hartley Act of 1947, separate the
prosecuting authority from the judicial authority in unfair labor practice proceedings.

According to Werne, "the General Counsel, who has supervision of the regional directors in the board's various regional offices and their staffs,
constitutes the ultimate prosecuting arm of the agency, while the board's functions in unfair labor practice cases are restricted exclusively
to decisional powers." Thus, the General Counsel is granted by said Act, "final authority to act in the name of, but independently of any
direction, control, or review by the Board in respect of the prosecution of such complaints before the Board." 1 In other words, the aforesaid
Act grants the General Counsel "final authority in the investigation of charges and the issuance of complaints." 2
After showing the basic and fundamental difference between the "charge" and the "complaint," Rothenberg observes that "the proceedings
(as the equivalent of litigation) commences only with the issuance by the Board of a complaint, from which time forward the Board's judicial
functions come into play. Its prior acceptance of the charge and the resultant investigation are purely of an administrative character." 3

Such is not the case in this jurisdiction, however, because section 5(b) of the Industrial Peace Act expressly confers upon the Court of Industrial
Relations investigatory as well as decisional powers in unfair labor practice cases. It is important, therefore, to comprehend the unique and
dual nature of the functional character of the court. In the exercise of its investigatory powers, in unfair labor practice cases, the court may
conduct the investigation itself or authorize any of its members or designate any agent, such as its prosecutor, to conduct the investigation
of the charges filed by the aggrieved party. In the latter case, the designated agent acts on behalf of the court which retains the final authority
in the disposition of the charges and in the issuance of the complaint.

It is, therefore, a matter which is not embraced within the "administrative" authority of respondent Presiding Judge of the Court of Industrial
Relations. The term "administrative" connotes, or pertains, to "administration, especially management, as by managing or conducting,
directing or superintending, the execution, application, or conduct of persons or things." 4 It does not entail an opportunity to be heard, the
production and weighing of evidence, and a decision or resolution thereon.

Fernando, J ., concurs.

||| (University of Nueva Caceres v. Martinez, G.R. No. L-31152, [March 27, 1974], 155 PHIL 126-133)

[G.R. No. 141309. June 19, 2007.]

LIWAYWAY VINZONS-CHATO, petitioner, vs. FORTUNE TOBACCO CORPORATION, respondent.

DECI SION
YNARES-SANTIAGO, J p:

Petitioner assails the May 7, 1999 Decision 1 of the Court of Appeals in CA-G.R. SP No. 47167, which affirmed the September 29, 1997
Order 2 of the Regional Trial Court (RTC) of Marikina, Branch 272, in Civil Case No. 97-341-MK, denying petitioner's motion to dismiss.
The complaint filed by respondent sought to recover damages for the alleged violation of its constitutional rights arising from petitioner's
issuance of Revenue Memorandum Circular No. 37-93 (RMC 37-93), which the Court declared invalid in Commissioner of Internal Revenue
v. Court of Appeals. 3

Petitioner Liwayway Vinzons-Chato was then the Commissioner of Internal Revenue while respondent Fortune Tobacco Corporation is an
entity engaged in the manufacture of different brands of cigarettes, among which are "Champion," "Hope," and "More" cigarettes.

On June 10, 1993, the legislature enacted Republic Act No. 7654 (RA 7654), which took effect on July 3, 1993. Prior to its effectivity,
cigarette brands "Champion," "Hope," and "More" were considered local brands subjected to an ad valorem tax at the rate of 20-45%.
However, on July 1, 1993, or two days before RA 7654 took effect, petitioner issued RMC 37-93 reclassifying "Champion," "Hope," and
"More" as locally manufactured cigarettes bearing a foreign brand subject to the 55% ad valoremtax. 4 RMC 37-93 in effect subjected
"Hope," "More," and "Champion" cigarettes to the provisions of RA 7654, specifically, to Sec. 142, 5 (c) (1) on locally manufactured cigarettes
which are currently classified and taxed at 55%, and which imposes an ad valorem tax of "55% provided that the minimum tax shall not be
less than Five Pesos (P5.00) per pack." 6

On July 2, 1993, at about 5:50 p.m., BIR Deputy Commissioner Victor A. Deoferio, Jr. sent via telefax a copy of RMC 37-93 to Fortune
Tobacco but it was addressed to no one in particular. On July 15, 1993, Fortune Tobacco received, by ordinary mail, a certified xerox copy
of RMC 37-93. On July 20, 1993, respondent filed a motion for reconsideration requesting the recall of RMC 37-93, but was denied in
a letter dated July 30, 1993. 7 The same letter assessed respondent for ad valorem tax deficiency amounting to P9,598,334.00 (computed
on the basis of RMC 37-93) and demanded payment within 10 days from receipt thereof. 8 On August 3, 1993, respondent filed a petition
for review with the Court of Tax Appeals (CTA), which on September 30, 1993, issued an injunction enjoining the implementation of RMC
37-93. 9 In its decision dated August 10, 1994, the CTA ruled that RMC 37-93 is defective, invalid, and unenforceable and further enjoined
petitioner from collecting the deficiency tax assessment issued pursuant to RMC No. 37-93. This ruling was affirmed by the Court of Appeals,
and finally by this Court in Commissioner of Internal Revenue v. Court of Appeals. 10 It was held, among others, that RMC 37-93, has fallen
short of the requirements for a valid administrative issuance. DHaEAS
On April 10, 1997, respondent filed before the RTC a complaint 11 for damages against petitioner in her private capacity. Respondent
contended that the latter should be held liable for damages under Article 32 of the Civil Code considering that the issuance of RMC 37-93
violated its constitutional right against deprivation of property without due process of law and the right to equal protection of the laws.

Petitioner filed a motion to dismiss 12 contending that: (1) respondent has no cause of action against her because she issued RMC 37-93
in the performance of her official function and within the scope of her authority. She claimed that she acted merely as an agent of the Republic
and therefore the latter is the one responsible for her acts; (2) the complaint states no cause of action for lack of allegation of malice or bad
faith; and (3) the certification against forum shopping was signed by respondent's counsel in violation of the rule that it is the plaintiff or
the principal party who should sign the same.

On September 29, 1997, the RTC denied petitioner's motion to dismiss holding that to rule on the allegations of petitioner would be to
prematurely decide the merits of the case without allowing the parties to present evidence. It further held that the defect in the certification
against forum shopping was cured by respondent's submission of the corporate secretary's certificate authorizing its counsel to execute the
certification against forum shopping. The dispositive portion thereof, states:

WHEREFORE, foregoing premises considered, the motion to dismiss filed by the defendant Liwayway Vinzons-Chato and the
motion to strike out and expunge from the record the said motion to dismiss filed by plaintiff Fortune Tobacco Corporation
are both denied on the grounds aforecited. The defendant is ordered to file her answer to the complaint within ten (10) days
from receipt of this Order.

SO ORDERED. 13

The case was elevated to the Court of Appeals via a petition for certiorari under Rule 65. However, same was dismissed on the ground that
under Article 32 of the Civil Code, liability may arise even if the defendant did not act with malice or bad faith. The appellate court
ratiocinated that Section 38, Book I of the Administrative Code is the general law on the civil liability of public officers while Article 32 of
the Civil Code is the special law that governs the instant case. Consequently, malice or bad faith need not be alleged in the complaint for
damages. It also sustained the ruling of the RTC that the defect of the certification against forum shopping was cured by the submission of
the corporate secretary's certificate giving authority to its counsel to execute the same.
Undaunted, petitioner filed the instant recourse contending that the suit is grounded on her acts done in the performance of her functions
as a public officer, hence, it is Section 38, Book I of the Administrative Code which should be applied. Under this provision, liability will attach
only when there is a clear showing of bad faith, malice, or gross negligence. She further averred that the Civil Code, specifically, Article 32
which allows recovery of damages for violation of constitutional rights, is a general law on the liability of public officers; while Section 38,
Book I of the Administrative Code is a special law on the superior public officers' liability, such that, if the complaint, as in the instant case,
does not allege bad faith, malice, or gross negligence, the same is dismissible for failure to state a cause of action. As to the defect of the
certification against forum shopping, she urged the Court to strictly construe the rules and to dismiss the complaint.

Conversely, respondent argued that Section 38 which treats in general the public officers' "acts" from which civil liability may arise, is a
general law; while Article 32 which deals specifically with the public officers' violation of constitutional rights, is a special provision which
should determine whether the complaint states a cause of action or not. Citing the case of Lim v. Ponce de Leon, 14 respondent alleged that
under Article 32 of the Civil Code, it is enough that there was a violation of the constitutional rights of the plaintiff and it is not required
that said public officer should have acted with malice or in bad faith. Hence, it concluded that even granting that the complaint failed to allege
bad faith or malice, the motion to dismiss for failure to state a cause of action should be denied inasmuch as bad faith or malice are not
necessary to hold petitioner liable.

The issues for resolution are as follows:

(1) May a public officer be validly sued in his/her private capacity for acts done in connection with the discharge of the
functions of his/her office?

(2) Which as between Article 32 of the Civil Code and Section 38, Book I of the Administrative Code should govern in
determining whether the instant complaint states a cause of action? IEAacS

(3) Should the complaint be dismissed for failure to comply with the rule on certification against forum shopping?

(4) May petitioner be held liable for damages?

On the first issue, the general rule is that a public officer is not liable for damages which a person may suffer arising from the just performance
of his official duties and within the scope of his assigned tasks. 15 An officer who acts within his authority to administer the affairs of the
office which he/she heads is not liable for damages that may have been caused to another, as it would virtually be a charge against the Republic,
which is not amenable to judgment for monetary claims without its consent. 16However, a public officer is by law not immune from damages
in his/her personal capacity for acts done in bad faith which, being outside the scope of his authority, are no longer protected by the mantle
of immunity for official actions. 17

Specifically, under Section 38, Book I of the Administrative Code, civil liability may arise where there is bad faith, malice, or gross negligence
on the part of a superior public officer. And, under Section 39 of the same Book, civil liability may arise where the subordinate public officer's
act is characterized by willfulness or negligence. Thus —

Sec. 38. Liability of Superior Officers. — (1) A public officer shall not be civilly liable for acts done in the performance of his
official duties, unless there is a clear showing of bad faith, malice or gross negligence.

xxx xxx xxx

Section 39. Liability of Subordinate Officers. — No subordinate officer or employee shall be civilly liable for acts done by him
in good faith in the performance of his duties. However, he shall be liable for willful or negligent acts done by him which are
contrary to law, morals, public policy and good customs even if he acts under orders or instructions of his superior.

In addition, the Court held in Cojuangco, Jr. v. Court of Appeals, 18 that a public officer who directly or indirectly violates the constitutional
rights of another, may be validly sued for damages under Article 32 of the Civil Code even if his acts were not so tainted with malice or bad
faith.

Thus, the rule in this jurisdiction is that a public officer may be validly sued in his/her private capacity for acts done in the course of the
performance of the functions of the office, where said public officer: (1) acted with malice, bad faith, or negligence; or (2) where the public
officer violated a constitutional right of the plaintiff.

Anent the second issue, we hold that the complaint filed by respondent stated a cause of action and that the decisive provision thereon is
Article 32 of the Civil Code.
A general statute is one which embraces a class of subjects or places and does not omit any subject or place naturally belonging to such class.
A special statute, as the term is generally understood, is one which relates to particular persons or things of a class or to a particular portion
or section of the state only. 19

A general law and a special law on the same subject are statutes in pari materia and should, accordingly, be read together and harmonized,
if possible, with a view to giving effect to both. The rule is that where there are two acts, one of which is special and particular and the other
general which, if standing alone, would include the same matter and thus conflict with the special act, the special law must prevail since it
evinces the legislative intent more clearly than that of a general statute and must not be taken as intended to affect the more particular and
specific provisions of the earlier act, unless it is absolutely necessary so to construe it in order to give its words any meaning at all. 20

The circumstance that the special law is passed before or after the general act does not change the principle. Where the special law is later,
it will be regarded as an exception to, or a qualification of, the prior general act; and where the general act is later, the special statute will
be construed as remaining an exception to its terms, unless repealed expressly or by necessary implication. 21

Thus, in City of Manila v. Teotico, 22 the Court held that Article 2189 of the Civil Code which holds provinces, cities, and municipalities civilly
liable for death or injuries by reason of defective conditions of roads and other public works, is a special provision and should prevail over
Section 4 of Republic Act No. 409, the Charter of Manila, in determining the liability for defective street conditions. Under said Charter, the
city shall not be held for damages or injuries arising from the failure of the local officials to enforce the provision of the charter, law, or
ordinance, or from negligence while enforcing or attempting to enforce the same. As explained by the Court: ADHaTC

Manila maintains that the former provision should prevail over the latter, because Republic Act 409 is a special law, intended
exclusively for the City of Manila, whereas the Civil Code is a general law, applicable to the entire Philippines.

The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is true that, insofar as its territorial
application is concerned, Republic Act No. 409 is a special law and the Civil Code a general legislation; but, as regards the
subject matter of the provisions above quoted, Section 4 of Republic Act 409 establishes a general rule regulating the liability
of the City of Manila for "damages or injury to persons or property arising from the failure of" city officers "to enforce the
provisions of" said Act "or any other law or ordinance, or from negligence" of the city "Mayor, Municipal Board, or other officers
while enforcing or attempting to enforce said provisions." Upon the other hand, Article 2189 of the Civil Code constitutes a
particular prescription making "provinces, cities and municipalities . . . liable for damages for the death of, or injury suffered
by, any person by reason" — specifically — "of the defective condition of roads, streets, bridges, public buildings, and other
public works under their control or supervision." In other words, said section 4 refers to liability arising from negligence, in
general, regardless of the object thereof, whereas Article 2189 governs liability due to "defective streets," in particular. Since
the present action is based upon the alleged defective condition of a road, said Article 2189 is decisive thereon. 23

In the case of Bagatsing v. Ramirez, 24 the issue was which law should govern the publication of a tax ordinance, the City Charter of Manila,
a special act which treats ordinances in general and which requires their publication before enactment and after approval, or the Tax Code,
a general law, which deals in particular with "ordinances levying or imposing taxes, fees or other charges," and which demands publication
only after approval. In holding that it is the Tax Code which should prevail, the Court elucidated that:

There is no question that the Revised Charter of the City of Manila is a special act since it relates only to the City of Manila,
whereas the Local Tax Code is a general law because it applies universally to all local governments. Blackstone defines general
law as a universal rule affecting the entire community and special law as one relating to particular persons or things of a class.
And the rule commonly said is that a prior special law is not ordinarily repealed by a subsequent general law. The fact that
one is special and the other general creates a presumption that the special is to be considered as remaining an exception of
the general, one as a general law of the land, the other as the law of a particular case. However, the rule readily yields to a
situation where the special statute refers to a subject in general, which the general statute treats in particular. Th[is] exactly
is the circumstance obtaining in the case at bar. Section 17 of the Revised Charter of the City of Manila speaks of "ordinance"
in general, i.e., irrespective of the nature and scope thereof, whereas, Section 43 of the Local Tax Code relates to "ordinances
levying or imposing taxes, fees or other charges" in particular. In regard, therefore, to ordinances in general, the Revised Charter
of the City of Manila is doubtless dominant, but, that dominant force loses its continuity when it approaches the realm of
"ordinances levying or imposing taxes, fees or other charges" in particular. There, the Local Tax Code controls. Here, as always,
a general provision must give way to a particular provision. Special provision governs.

Let us examine the provisions involved in the case at bar. Article 32 of the Civil Code provides:

ART. 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates, or
in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for
damages:
xxx xxx xxx

(6) The right against deprivation of property without due process of law; DECSIT

xxx xxx xxx

(8) The right to the equal protection of the laws;

xxx xxx xxx

The rationale for its enactment was explained by Dean Bocobo of the Code Commission, as follows:

"DEAN BOCOBO. Article 32, regarding individual rights, Attorney Cirilo Paredes proposes that Article 32 be so amended as
to make a public official liable for violation of another person's constitutional rights only if the public official acted maliciously
or in bad faith. The Code Commission opposes this suggestion for these reasons:

"The very nature of Article 32 is that the wrong may be civil or criminal. It is not necessary therefore that there should be
malice or bad faith. To make such a requisite would defeat the main purpose of Article 32 which is the effective protection of
individual rights. Public officials in the past have abused their powers on the pretext of justifiable motives or good faith in the
performance of their duties. Precisely, the object of the Article is to put an end to official abuse by the plea of good faith. In
the United States this remedy is in the nature of a tort.

"Mr. Chairman, this article is firmly one of the fundamental articles introduced in the New Civil Code to implement democracy.
There is no real democracy if a public official is abusing and we made the article so strong and so comprehensive that it
concludes an abuse of individual rights even if done in good faith, that official is liable. As a matter of fact, we know that there
are very few public officials who openly and definitely abuse the individual rights of the citizens. In most cases, the abuse is
justified on a plea of desire to enforce the law to comply with one's duty. And so, if we should limit the scope of this article,
that would practically nullify the object of the article. Precisely, the opening object of the article is to put an end to abuses which
are justified by a plea of good faith, which is in most cases the plea of officials abusing individual rights." 25

The Code Commission deemed it necessary to hold not only public officers but also private individuals civilly liable for violation of the rights
enumerated in Article 32 of the Civil Code. It is not necessary that the defendant under this Article should have acted with malice or bad
faith, otherwise, it would defeat its main purpose, which is the effective protection of individual rights. It suffices that there is a violation of
the constitutional right of the plaintiff. 26

Article 32 was patterned after the "tort" in American law. 27 A tort is a wrong, a tortious act which has been defined as the commission
or omission of an act by one, without right, whereby another receives some injury, directly or indirectly, in person, property, or
reputation. 28 There are cases in which it has been stated that civil liability in tort is determined by the conduct and not by the mental state
of the tortfeasor, and there are circumstances under which the motive of the defendant has been rendered immaterial. The reason sometimes
given for the rule is that otherwise, the mental attitude of the alleged wrongdoer, and not the act itself, would determine whether the act
was wrongful. 29 Presence of good motive, or rather, the absence of an evil motive, does not render lawful an act which is otherwise an
invasion of another's legal right; that is, liability in tort is not precluded by the fact that defendant acted without evil intent. 30

The clear intention therefore of the legislature was to create a distinct cause of action in the nature of tort for violation of constitutional rights,
irrespective of the motive or intent of the defendant. 31 This is a fundamental innovation in the Civil Code, and in enacting the
Administrative Code pursuant to the exercise of legislative powers, then President Corazon C. Aquino, could not have intended to obliterate
this constitutional protection on civil liberties.

In Aberca v. Ver, 32 it was held that with the enactment of Article 32, the principle of accountability of public officials under the Constitution
acquires added meaning and assumes a larger dimension. No longer may a superior official relax his vigilance or abdicate his duty to supervise
his subordinates, secure in the thought that he does not have to answer for the transgressions committed by the latter against the
constitutionally protected rights and liberties of the citizen. Part of the factors that propelled people power in February 1986 was the widely
held perception that the government was callous or indifferent to, if not actually responsible for, the rampant violations of human rights.
While it would certainly be too naive to expect that violators of human rights would easily be deterred by the prospect of facing damage suits,
it should nonetheless be made clear in no uncertain terms that Article 32 of the Civil Code makes the persons who are directly, as well as
indirectly, responsible for the transgression, joint tortfeasors.

On the other hand, Sections 38 and 39, Book I of the Administrative Code, laid down the rule on the civil liability of superior and subordinate
public officers for acts done in the performance of their duties. For both superior and subordinate public officers, the presence of bad faith,
malice, and negligence are vital elements that will make them liable for damages. Note that while said provisions deal in particular with the
liability of government officials, the subject thereof is general, i.e., "acts" done in the performance of official duties, without specifying the
action or omission that may give rise to a civil suit against the official concerned. SDHacT

Contrarily, Article 32 of the Civil Code specifies in clear and unequivocal terms a particular specie of an "act" that may give rise to an action
for damages against a public officer, and that is, a tort for impairment of rights and liberties. Indeed, Article 32 is the special provision that
deals specifically with violation of constitutional rights by public officers. All other actionable acts of public officers are governed by Sections
38 and 39 of the Administrative Code. While the Civil Code, specifically, the Chapter on Human Relations is a general law, Article 32 of the
same Chapter is a special and specific provision that holds a public officer liable for and allows redress from a particular class of wrongful acts
that may be committed by public officers. Compared thus with Section 38 of the Administrative Code, which broadly deals with civil liability
arising from errors in the performance of duties, Article 32 of the Civil Code is the specific provision which must be applied in the instant
case precisely filed to seek damages for violation of constitutional rights.

The complaint in the instant case was brought under Article 32 of the Civil Code. Considering that bad faith and malice are not necessary
in an action based on Article 32 of the Civil Code, the failure to specifically allege the same will not amount to failure to state a cause of action.
The courts below therefore correctly denied the motion to dismiss on the ground of failure to state a cause of action, since it is enough that
the complaint avers a violation of a constitutional right of the plaintiff.

Anent the issue on non-compliance with the rule against forum shopping, the subsequent submission of the secretary's certificate authorizing
the counsel to sign and execute the certification against forum shopping cured the defect of respondent's complaint. Besides, the merits of
the instant case justify the liberal application of the rules. 33

WHEREFORE, in view of the foregoing, the petition is DENIED. The Decision of the Court of Appeals dated May 7, 1999 which affirmed the
Order of the Regional Trial Court of Marikina, Branch 272, denying petitioner's motion to dismiss, is AFFIRMED. The Presiding Judge,
Regional Trial Court of Marikina, Branch 272, is hereby DIRECTED to continue with the proceedings in Civil Case No. 97-341-MK with
dispatch.

With costs.

SO ORDERED.

||| (Vinzons-Chato v. Fortune Tobacco Corp., G.R. No. 141309, [June 19, 2007], 552 PHIL 101-118)
[G.R. No. 141309. December 23, 2008.]

LIWAYWAY VINZONS-CHATO, petitioner, vs. FORTUNE TOBACCO CORPORATION, respondent.

RESOLU TI ON

NACHURA, J p:

It is a fundamental principle in the law of public officers that a duty owing to the public in general cannot give rise to a liability
in favor of particular individuals.1 The failure to perform a public duty can constitute an individual wrong only when a person can show
that, in the public duty, a duty to himself as an individual is also involved, and that he has suffered a special and peculiar injury by reason
of its improper performance or non-performance. 2 DaACIH

By this token, the Court reconsiders its June 19, 2007 Decision 3 in this case.

As culled from the said decision, the facts, in brief, are as follows:

On June 10, 1993, the legislature enacted Republic Act No. 7654 (RA 7654), which took effect on July 3, 1993.
Prior to its effectivity, cigarette brands "Champion", "Hope", and "More" were considered local brands subjected to an ad
valorem tax at the rate of 20-45%. However, on July 1, 1993, or two days before RA 7654 took effect, petitioner issued
RMC 37-93 reclassifying "Champion", "Hope", and "More" as locally manufactured cigarettes bearing a foreign brand subject
to the 55% ad valorem tax. RMC 37-93 in effect subjected "Hope", "More", and "Champion" cigarettes to the provisions of RA
7654, specifically, to Sec. 142, (c)(1) on locally manufactured cigarettes which are currently classified and taxed at 55%,
and which imposes an ad valorem tax of "55% provided that the minimum tax shall not be less than Five Pesos (P5.00) per
pack."

On July 2, 1993, at about 5:50 p.m., BIR Deputy Commissioner Victor A. Deoferio, Jr. sent via telefax a copy of RMC
37-93 to Fortune Tobacco but it was addressed to no one in particular. On July 15, 1993, Fortune Tobacco received, by
ordinary mail, a certified xerox copy of RMC 37-93. On July 20, 1993, respondent filed a motion for reconsideration
requesting the recall of RMC 37-93, but was denied in a letter dated July 30, 1993. The same letter assessed respondent
for ad valorem tax deficiency amounting to P9,598,334.00 (computed on the basis of RMC 37-93) and demanded
payment within 10 days from receipt thereof. On August 3, 1993, respondent filed a petition for review with the Court of
Tax Appeals (CTA), which on September 30, 1993, issued an injunction enjoining the implementation of RMC 37-93. In
its decision dated August 10, 1994, the CTA ruled that RMC 37-93 is defective, invalid, and unenforceable and further
enjoined petitioner from collecting the deficiency tax assessment issued pursuant to RMC No. 37-93. This ruling was affirmed
by the Court of Appeals, and finally by this Court in Commissioner of Internal Revenue v. Court of Appeals. It was held, among
others, that RMC 37-93, has fallen short of the requirements for a valid administrative issuance.

On April 10, 1997, respondent filed before the RTC a complaint for damages against petitioner in her private capacity.
Respondent contended that the latter should be held liable for damages under Article 32 of the Civil Code considering that
the issuance of RMC 37-93 violated its constitutional right against deprivation of property without due process of law and
the right to equal protection of the laws.

Petitioner filed a motion to dismiss contending that: (1) respondent has no cause of action against her because she
issued RMC 37-93 in the performance of her official function and within the scope of her authority. She claimed that she
acted merely as an agent of the Republic and therefore the latter is the one responsible for her acts; (2) the complaint states
no cause of action for lack of allegation of malice or bad faith; and (3) the certification against forum shopping was signed
by respondent's counsel in violation of the rule that it is the plaintiff or the principal party who should sign the same.

On September 29, 1997, the RTC denied petitioner's motion to dismiss holding that to rule on the allegations of
petitioner would be to prematurely decide the merits of the case without allowing the parties to present evidence. It further
held that the defect in the certification against forum shopping was cured by respondent's submission of the corporate
secretary's certificate authorizing its counsel to execute the certification against forum shopping. . . . TESICD

xxx xxx xxx

The case was elevated to the Court of Appeals via a petition for certiorari under Rule 65. However, same was
dismissed on the ground that under Article 32 of the Civil Code, liability may arise even if the defendant did not act with
malice or bad faith. The appellate court ratiocinated that Section 38, Book I of the Administrative Code is the general law
on the civil liability of public officers while Article 32 of the Civil Code is the special law that governs the instant case.
Consequently, malice or bad faith need not be alleged in the complaint for damages. It also sustained the ruling of the RTC
that the defect of the certification against forum shopping was cured by the submission of the corporate secretary's certificate
giving authority to its counsel to execute the same. 4 [Citations and underscoring omitted.]

In the aforesaid June 19, 2007 Decision, we affirmed the disposition of the Court of Appeals (CA) and directed the trial court to
continue with the proceedings in Civil Case No. 97-341-MK. 5

Petitioner, on July 20, 2007, subsequently moved for the reconsideration of the said decision. 6 After respondent filed its comment,
the Court, in its April 14, 2008 Resolution, 7 denied with finality petitioner's motion for reconsideration.

Undaunted, petitioner filed, on April 29, 2008 her Motion to Refer [the case] to the Honorable Court En Banc. 8 She contends
that the petition raises a legal question that is novel and is of paramount importance. The earlier decision rendered by the Court will send
a chilling effect to public officers, and will adversely affect the performance of duties of superior public officers in departments or agencies
with rule-making and quasi-judicial powers. With the said decision, the Commissioner of Internal Revenue will have reason to hesitate or
refrain from performing his/her official duties despite the due process safeguards in Section 228 of the National Internal Revenue
Code. 9 Petitioner hence moves for the reconsideration of the June 19, 2007 Decision. 10

In its June 25, 2008 Resolution, 11 the Court referred the case to the En Banc. Respondent consequently moved for the
reconsideration of this resolution.

We now resolve both motions.

There are two kinds of duties exercised by public officers: the "duty owing to the public collectively" (the body politic), and the "duty
owing to particular individuals," thus:

1. Of Duties to the Public. — The first of these classes embraces those officers whose duty is owing primarily to the
public collectively — to the body politic — and not to any particular individual; who act for the public at large, and who are
ordinarily paid out of the public treasury.
The officers whose duties fall wholly or partially within this class are numerous and the distinction will be readily
recognized. Thus, the governor owes a duty to the public to see that the laws are properly executed, that fit and competent
officials are appointed by him, that unworthy and ill-considered acts of the legislature do not receive his approval, but these,
and many others of a like nature, are duties which he owes to the public at large and no one individual could single himself
out and assert that they were duties owing to him alone. So, members of the legislature owe a duty to the public to pass only
wise and proper laws, but no one person could pretend that the duty was owing to himself rather than to another. Highway
commissioners owe a duty that they will be governed only by considerations of the public good in deciding upon the opening
or closing of highways, but it is not a duty to any particular individual of the community. IDSaTE

These illustrations might be greatly extended, but it is believed that they are sufficient to define the general doctrine.

2. Of Duties to Individuals. — The second class above referred to includes those who, while they owe to the public the
general duty of a proper administration of their respective offices, yet become, by reason of their employment by a particular
individual to do some act for him in an official capacity, under a special and particular obligation to him as an individual.
They serve individuals chiefly and usually receive their compensation from fees paid by each individual who employs them.

A sheriff or constable in serving civil process for a private suitor, a recorder of deeds in recording the deed or mortgage
of an individual, a clerk of court in entering up a private judgment, a notary public in protesting negotiable paper, an
inspector of elections in passing upon the qualifications of an elector, each owes a general duty of official good conduct to the
public, but he is also under a special duty to the particular individual concerned which gives the latter a peculiar interest in
his due performance. 12

In determining whether a public officer is liable for an improper performance or non-performance of a duty, it must first be
determined which of the two classes of duties is involved. For, indeed, as the eminent Floyd R. Mechem instructs, "[t]he liability of a public
officer to an individual or the public is based upon and is co-extensive with his duty to the individual or the public. If to the one or the
other he owes no duty, to that one he can incur no liability." 13

Stated differently, when what is involved is a "duty owing to the public in general", an individual cannot have a cause of action for
damages against the public officer, even though he may have been injured by the action or inaction of the officer. In such a case, there
is damage to the individual but no wrong to him. In performing or failing to perform a public duty, the officer has touched his interest
to his prejudice; but the officer owes no duty to him as an individual. 14 The remedy in this case is not judicial but political. 15 ACIDTE

The exception to this rule occurs when the complaining individual suffers a particular or special injury on account of the public
officer's improper performance or non-performance of his public duty. An individual can never be suffered to sue for an injury which,
technically, is one to the public only; he must show a wrong which he specially suffers, and damage alone does not constitute a wrong. 16 A
contrary precept (that an individual, in the absence of a special and peculiar injury, can still institute an action against a public officer
on account of an improper performance or non-performance of a duty owing to the public generally) will lead to a deluge of suits, for
if one man might have an action, all men might have the like — the complaining individual has no better right than anybody else. 17 If
such were the case, no one will serve a public office. Thus, the rule restated is that an individual cannot have a particular action against
a public officer without a particular injury, or a particular right, which are the grounds upon which all actions are founded. 18

Juxtaposed with Article 32 19 of the Civil Code, the principle may now translate into the rule that an individual can hold a public
officer personally liable for damages on account of an act or omission that violates a constitutional right only if it results in a particular
wrong or injury to the former. This is consistent with this Court's pronouncement in its June 19, 2007 Decision (subject of petitioner's
motion for reconsideration) that Article 32, in fact, allows a damage suit for "tort for impairment of rights and liberties." 20

It may be recalled that in tort law, for a plaintiff to maintain an action for damages for the injuries of which he complains, he must
establish that such injuries resulted from a breach of duty which the defendant owed the plaintiff, meaning a concurrence of injury to the
plaintiff and legal responsibility by the person causing it. Indeed, central to an award of tort damages is the premise that an individual
was injured in contemplation of law. 21 Thus, in Lim v. Ponce de Leon, 22 we granted the petitioner's claim for damages because he, in
fact, suffered the loss of his motor launch due to the illegal seizure thereof. In Cojuangco, Jr. v. Court of Appeals, 23we upheld the right
of petitioner to the recovery of damages as there was an injury sustained by him on account of the illegal withholding of his horserace prize
winnings. IcDCaS

In the instant case, what is involved is a public officer's duty owing to the public in general. The petitioner, as the then Commissioner
of the Bureau of Internal Revenue, is being taken to task for Revenue Memorandum Circular (RMC) No. 37-93 which she issued without
the requisite notice, hearing and publication, and which, in Commissioner of Internal Revenue v. Court of Appeals, 24 we declared as
having "fallen short of a valid and effective administrative issuance." 25 A public officer, such as the petitioner, vested with quasi-legislative
or rule-making power, owes a duty to the public to promulgate rules which are compliant with the requirements of valid administrative
regulations. But it is a duty owed not to the respondent alone, but to the entire body politic who would be affected, directly or indirectly,
by the administrative rule.

Furthermore, as discussed above, to have a cause of action for damages against the petitioner, respondent must allege that it
suffered a particular or special injury on account of the non-performance by petitioner of the public duty. A careful reading of the
complaint filed with the trial court reveals that no particular injuryis alleged to have been sustained by the respondent. The phrase
"financial and business difficulties" 26 mentioned in the complaint is a vague notion, ambiguous in concept, and cannot translate into a
"particular injury". In contrast, the facts of the case eloquently demonstrate that the petitioner took nothing from the respondent, as the
latter did not pay a single centavo on the tax assessment levied by the former by virtue of RMC 37-93.

With no "particular injury" alleged in the complaint, there is, therefore, no delict or wrongful act or omission attributable to the
petitioner that would violate the primary rights of the respondent. Without such delict or tortious act or omission, the complaint then
fails to state a cause of action, because a cause of action is the act or omission by which a party violates a right of another. 27

A cause of action exists if the following elements are present: (1) a right in favor of the plaintiff by whatever means and under
whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3)
an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of defendant
to plaintiff for which the latter may maintain an action for recovery of damages. 28

The remedy of a party whenever the complaint does not allege a cause of action is to set up this defense in a motion to dismiss,
or in the answer. A motion to dismiss based on the failure to state a cause of action in the complaint hypothetically admits the truth of
the facts alleged therein. However, the hypothetical admission is limited to the "relevant and material facts well-pleaded in the complaint
and inferences deducible therefrom. The admission does not extend to conclusions or interpretations of law; nor does it cover allegations
of fact the falsity of which is subject to judicial notice." 29 cCSDTI

The complaint may also be dismissed for lack of cause of action if it is obvious from the complaint and its annexes that the plaintiff
is not entitled to any relief.30
The June 19, 2007 Decision and the dissent herein reiterates that under Article 32 of the Civil Code, the liability of the public officer
may accrue even if he/she acted in good faith, as long as there is a violation of constitutional rights, citing Cojuangco, Jr. v. Court of
Appeals, 31 where we said:

Under the aforecited article, it is not necessary that the public officer acted with malice or bad faith. To be liable, it
is enough that there was a violation of the constitutional rights of petitioners, even on the pretext of justifiable motives or
good faith in the performance of duties. 32

The complaint in this case does not impute bad faith on the petitioner. Without any allegation of bad faith, the cause of action in
the respondent's complaint (specifically, paragraph 2.02 thereof) for damages under Article 32 of the Civil Code would be premised on
the findings of this Court in Commissioner of Internal Revenue v. Court of Appeals (CIR v. CA), 33 where we ruled that RMC No. 37-93,
issued by petitioner in her capacity as Commissioner of Internal Revenue, had "fallen short of a valid and effective administrative
issuance". This is a logical inference. Without the decision in CIR v. CA, the bare allegations in the complaint that respondent's rights to
due process of law and to equal protection of the laws were violated by the petitioner's administrative issuance would be conclusions of
law, hence not hypothetically admitted by petitioner in her motion to dismiss. acSECT

But in CIR v. CA, this Court did not declare RMC 37-93 unconstitutional; certainly not from either the due process of law or equal
protection of the laws perspective. On due process, the majority, after determining that RMC 37-93 was a legislative rule, cited an earlier
Revenue Memorandum Circular (RMC No. 10-86) requiring prior notice before RMC's could become "operative". However, this Court did
not make an express finding of violation of the right to due process of law. On the aspect of equal protection, CIR v. CA said: "Not
insignificantly, RMC 37-93 might have likewise infringed on uniformity of taxation"; a statement that does not amount to a positive
indictment of petitioner for violation of respondent's constitutional right. Even if one were to ascribe a constitutional infringement by RMC
37-93 on the non-uniformity of tax provisions, the nature of the constitutional transgression falls under Section 28, Article VI — not
Section 1, Article III — of the Constitution.

This Court's own summation in CIR v. CA: "All taken, the Court is convinced that the hastily promulgated RMC 37-93 has fallen
short of a valid and effective administrative issuance", does not lend itself to an interpretation that the RMC is unconstitutional. Thus, the
complaint's reliance on CIR v. CA — which is cited in, and a copy of which is annexed to, the complaint — as suggestive of a violation of
due process and equal protection, must fail.
Accordingly, from the foregoing discussion, it is obvious that paragraph 2.02 of respondent's complaint loses the needed crutch to
sustain a valid cause of action against the petitioner, for what is left of the paragraph is merely the allegation that only respondent's
"Champion", "Hope" and "More" cigarettes were reclassified.

If we divest the complaint of its reliance on CIR v. CA, what remains of respondent's cause of action for violation of constitutional
rights would be paragraph 2.01, which reads:

2.01. On or about July 1, 1993, defendant issued Revenue Memorandum Circular No. 37-93 (hereinafter referred
to as RMC No. 37-93) reclassifying specifically "Champion", "Hope" and "More" as locally manufactured cigarettes bearing
a foreign brand. A copy of the aforesaid circular is attached hereto and made an integral part hereof as ANNEX "A". The
issuance of a circular and its implementation resulted in the "deprivation of property" of plaintiff. They were done without
due process of law and in violation of the right of plaintiff to the equal protection of the laws. (Italics supplied.)

But, as intimated above, the bare allegations, "done without due process of law" and "in violation of the right of plaintiff to the equal
protection of the laws" are conclusions of law. They are not hypothetically admitted in petitioner's motion to dismiss and, for purposes
of the motion to dismiss, are not deemed as facts. DcITHE

In Fluor Daniel, Inc. Philippines v. EB. Villarosa & Partners Co., Ltd., 34 this Court declared that the test of sufficiency of facts
alleged in the complaint as constituting a cause of action is whether or not, admitting the facts alleged, the court could render a valid
verdict in accordance with the prayer of the complaint. In the instant case, since what remains of the complaint which is hypothetically
admitted, is only the allegation on the reclassification of respondent's cigarettes, there will not be enough facts for the court to render
a valid judgment according to the prayer in the complaint.

Furthermore, in an action for damages under Article 32 of the Civil Code premised on violation of due process, it may be necessary
to harmonize the Civil Code provision with subsequent legislative enactments, particularly those related to taxation and tax collection.
Judicial notice may be taken of the provisions of theNational Internal Revenue Code, as amended, and of the law creating the Court of
Tax Appeals. Both statutes provide ample remedies to aggrieved taxpayers; remedies which, in fact, were availed of by the respondent
— without even having to pay the assessment under protest — as recounted by this Court in CIR v. CA, viz.:
In a letter, dated 19 July 1993, addressed to the appellate division of the BIR, Fortune Tobacco requested for a review,
reconsideration and recall of RMC 37-93. The request was denied on 29 July 1993. The following day, or on 30 July 1993,
the CIR assessed Fortune Tobacco for ad valorem tax deficiency amounting to P9,598,334.00.

On 03 August 1993, Fortune Tobacco filed a petition for review with the CTA. 35

The availability of the remedies against the assailed administrative action, the opportunity to avail of the same, and actual recourse to
these remedies, contradict the respondent's claim of due process infringement.

At this point, a brief examination of relevant American jurisprudence may be instructive. CITSAc

42 U.S. Code 1983, a provision incorporated into the Civil Rights Act of 1871, presents a parallel to our own Article 32 of the
Civil Code, as it states:

Every person who, under color of any statute, ordinance, regulation, custom, usage, or any State or Territory, subjects,
or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation
of any rights, privileges or immunities secured by the Constitution and laws, shall be liable to the party injured in an action
at law, suit in equity or other proper proceeding for redress.

This provision has been employed as the basis of tort suits by many petitioners intending to win liability cases against government officials
when they violate the constitutional rights of citizens.

Webster Bivens v. Six Unknown Named Agents of Federal Bureau of Investigation, 36 has emerged as the leading case on the victim's
entitlement to recover money damages for any injuries suffered as a result of flagrant and unconstitutional abuses of administrative power.
In this case, federal narcotics officers broke into Bivens' home at 6:30 a.m. without a search warrant and in the absence of probable cause.
The agents handcuffed Bivens, searched his premises, employed excessive force, threatened to arrest his family, subjected him to a visual
strip search in the federal court house, fingerprinted, photographed, interrogated and booked him. When Bivens was brought before a
United States Commissioner, however, charges against him were dismissed. On the issue of whether violation of the Fourth Amendment
"by a federal agent acting under color of authority gives rise to a cause of action for damages consequent upon his constitutional conduct",
the U.S. Supreme Court held that Bivens is entitled to recover damages for injuries he suffered as a result of the agents' violation of the
Fourth Amendment.
A number of subsequent decisions have upheld Bivens. For instance, in Scheuer v. Rhodes, 37 a liability suit for money damages was
allowed against Ohio Governor James Rhodes by petitioners who represented three students who had been killed by Ohio National Guard
troops at Kent State University as they protested against U.S. involvement in Vietnam. In Wood v. Strickland, 38 local school board
members were sued by high school students who argued that they had been deprived of constitutional due process rights when they were
expelled from school for having spiked a punch bowl at a school function without the benefit of a full hearing. In Butz v.
Economou, 39 Economou, whose registration privilege as a commodities futures trader was suspended, without prior warning, by
Secretary of Agriculture Earl Butz, sued on a Bivens action, alleging that the suspension was aimed at "chilling" his freedom of expression
right under the First Amendment. A number of other cases 40 with virtually the same conclusion followed. ICHcTD

However, it is extremely dubious whether a Bivens action against government tax officials and employees may prosper, if we
consider the pronouncement of the U.S. Supreme Court in Schweiker v. Chilicky, 41 that a Bivens remedy will not be allowed when other
"meaningful safeguards or remedies for the rights of persons situated as (is the plaintiff)" are available. It has also been held that
a Bivens action is not appropriate in the civil service system 42 or in the military justice system. 43

In Frank Vennes v. An Unknown Number of Unidentified Agents of the United States of America, 44 petitioner Vennes instituted
a Bivens action against agents of the Internal Revenue Service (IRS) who alleged that he (Vennes) owed $250,000 in tax liability, instituted
a jeopardy assessment, confiscated Vennes' business, forced a total asset sale, and put Vennes out of business, when in fact he owed not
a dime. The U.S. Court of Appeals, Eighth Circuit, ruled:

The district court dismissed these claims on the ground that a taxpayer's remedies under the Internal Revenue Code
preclude such a Bivens action. Vennes cites to us no contrary authority, and we have found none. Though the Supreme Court
has not addressed this precise question, it has strongly suggested that the district court correctly applied Bivens:

When the design of a Government program suggests that Congress has provided what it considers adequate remedial
mechanisms for constitutional violations that may occur in the course of its administration, we have not created
additional Bivens remedies.

xxx xxx xxx


Congress has provided specific and meaningful remedies for taxpayers who challenge overzealous tax assessment and
collection activities. A taxpayer may challenge a jeopardy assessment both administratively and judicially, and may sue the
government for a tax refund, and have authorized taxpayer actions against the United States to recover limited damages
resulting from specific types of misconduct by IRS employees. These carefully crafted legislative remedies confirm that, in the
politically sensitive realm of taxation, Congress's refusal to permit unrestricted damage action by taxpayers has not been
inadvertent. Thus, the district court correctly dismissed Vennes's Bivens claims against IRS agents for their tax assessment
and collection activities. SHCaDA

In still another Bivens action, instituted by a taxpayer against IRS employees for alleged violation of due process rights concerning a tax
dispute, the U.S. District Court of Minnesota said:

In addition, the (Tax) Code provides taxpayers with remedies, judicial and otherwise, for correcting and redressing
wrongful acts taken by IRS employees in connection with any collection activities. Although these provisions do not provide
taxpayers with an all-encompassing remedy for wrongful acts of IRS personnel, the rights established under the Code
illustrate that it provides all sorts of rights against the overzealous officialdom, including, most fundamentally, the right to
sue the government for a refund if forced to overpay taxes, and it would make the collection of taxes chaotic if a taxpayer
could bypass the remedies provided by Congress simply by bringing a damage suit against IRS employees. 45

American jurisprudence obviously validates the contention of the petitioner.

Finally, we invite attention to Section 227, Republic Act No. 8424 (Tax Reform Act of 1997), which provides:

Section 227. Satisfaction of Judgment Recovered Against any Internal Revenue Officer. — When an action is brought
against any Internal Revenue officer to recover damages by reason of any act done in the performance of official duty, and
the Commissioner is notified of such action in time to make defense against the same, through the Solicitor General, any
judgment, damages or costs recovered in such action shall be satisfied by the Commissioner, upon approval of the Secretary
of Finance, or if the same be paid by the person sued shall be repaid or reimbursed to him.

No such judgment, damages or costs shall be paid or reimbursed in behalf of a person who has acted negligently or
in bad faith, or with willful oppression. CASTDI
Because the respondent's complaint does not impute negligence or bad faith to the petitioner, any money judgment by the trial court
against her will have to be assumed by the Republic of the Philippines. As such, the complaint is in the nature of a suit against the State. 46

WHEREFORE, premises considered, we GRANT petitioner's motion for reconsideration of the June 19, 2007 Decision and DENY
respondent's motion for reconsideration of the June 25, 2008 Resolution. Civil Case No. CV-97-341-MK, pending with the Regional Trial
Court of Marikina City, is DISMISSED.

SO ORDERED.

Puno, C.J., Quisumbing, Carpio, Austria-Martinez, Carpio-Morales, Azcuna, Tinga, Chico-Nazario, Velasco, Jr., Reyes, Leonardo-de
Castro and Brion, JJ., concur.

Ynares-Santiago, J., see dissenting opinion.

Corona, J., is on leave.

Separate Opinions

YNARES-SANTIAGO, J., dissenting:

Jurisprudence is settled that to be liable under Article 32 1 of the Civil Code, a public officer or a private individual must have
committed an act in violation of the plaintiff's constitutional rights regardless of whether he/she acted in good faith or whether the act
was done within or beyond the bounds of authority of said public officer. The act may have been committed in any manner; what is pivotal
is that the act resulted in a violation of another person's constitutional rights. CHcTIA

No distinction was made whether the public officer acted within or beyond the scope of authority in order to hold him/her liable.
As long as there was a violation of constitutional rights, a public officer may be held liable for damages, and it is not even required that
he/she acted with malice or bad faith. That the Legislature did not intend to hold the public officer liable for damages under Article 32
of the Civil Code for violation of constitutional rights only if he/she acted beyond the scope of authority, is further made clear by the fact
that under Article 32, a private individual is similarly held accountable.
The clear intention of the legislature in inserting Article 32 of the Civil Code was to create a distinct cause of action in the nature
of tort for violation of constitutional rights, irrespective of the motive or intent of the defendant or whether it was done within or without
the bounds of the public officer's authority. In enacting the Administrative Code, then President Aquino could not have intended to
obliterate this fundamental innovation in the Civil Code for the constitutional protection of civil liberties.

As pertinently discussed in the June 19, 2007 Decision of the Third Division:

On the other hand, Sections 38 and 39, Book I of the Administrative Code, laid down the rule on the civil liability of
superior and subordinate public officers for acts done in the performance of their duties. For both superior and subordinate
public officers, the presence of bad faith, malice, and negligence are vital elements that will make them liable for
damages. Note that while said provisions deal in particular with the liability of government officials, the subject thereof is
general, i.e., "acts" done in the performance of official duties, without specifying the action or omission that may give rise to
a civil suit against the official concerned.

Contrarily, Article 32 of the Civil Code specifies in clear and unequivocal terms a particular specie of an "act" that may
give rise to an action for damages against a public officer, and that is, a tort for impairment of rights and liberties. Indeed,
Article 32 is a special provision that deals specifically with violation of constitutional rights by public officers. All other
actionable acts of public officers are governed by Sections 38 and 39 of the Administrative Code. While the Civil Code,
specifically, the Chapter on Human Relations is a general law, Article 32 of the same Chapter is a special and specific provision
that holds a public officer liable for and allows redress from a particular class of wrongful acts that may be committed by
public officers. Compared thus with Section 38 of the Administrative Code, which broadly deals with civil liability arising from
errors in the performance of duties, Article 32 of the Civil Code is the specific provision which must be applied in the instant
case precisely filed to seek damages for violation of constitutional rights. DCcIaE

The complaint for damages filed against petitioner was brought under Article 32 of the Civil Code for the latter's alleged violation
of respondent's constitutional rights against deprivation of property without due process of law and for equal protection of law. 2

In Lim v. Ponce de Leon, 3 the Court held that "[t]o be liable under Article 32 of the New Civil Code, it is enough that there was
a violation of the constitutional rights of the plaintiffs and it is not required that defendants should have acted with malice or bad
faith." 4 In said case, Fiscal Ponce de Leon was found liable for damages because he committed a violation of the plaintiffs' constitutional
right against unreasonable search and seizure. There is no merit to petitioner's contention that Fiscal Ponce de Leon was found liable for
damages on the basis of his lack of authority to order the seizure. The discussion on his lack of authority to order the search and seizure
was only necessary to establish the violation of plaintiffs' constitutional right.

The reasons for Article 32 as expressed by Dr. Jorge Bocobo, Chairman of the Code Commission, are:

"DEAN BOCOBO. Article 32, regarding individual rights, Attorney Cirilo Paredes proposes that Article 32 be so
amended as to make a public official liable for violation of another person's constitutional rights only if the public official acted
maliciously or in bad faith. The Code Commission opposes this suggestion for these reasons:

"The very nature of Article 32 is that the wrong may be civil or criminal. It is not necessary therefore that there should
be malice or bad faith. To make such a requisite would defeat the main purpose of Article 32 which is the effective protection
of individual rights. Public officials in the past have abused their powers on the pretext of justifiable motives or good faith in
the performance of their duties. Precisely, the object of the Article is to put an end to official abuse by the plea of good faith.
In the United States this remedy is in the nature of a tort. CIAcSa

"Mr. Chairman, this article is firmly one of the fundamental articles introduced in the New Civil Code to implement
democracy. There is no real democracy if a public official is abusing, and we made the article so strong and so comprehensive
that it concludes an abuse of individual rights even if done in good faith, that official is liable. As a matter of fact, we know
that there are very few public officials who openly and definitely abuse the individual rights of citizens. In most cases, the abuse
is justified on a plea of desire to enforce the law to comply with one's duty. And so, if we should limit the scope of this article,
that would practically nullify the object of the article. Precisely, the opening object of the article is to put an end to abuses
which are justified by a plea of good faith, which is in most cases the plea of officials abusing individual rights." 5

Petitioner argues that unlike in Cojuangco, Jr. v. Court of Appeals, 6 respondent could not validly claim that it was deprived of its
property without due process of law. However, this is a matter of defense which should be threshed out during trial proper. What is at
issue in the instant case is the propriety of the denial by the trial court of petitioner's motion to dismiss. In fact, an answer has yet to be
filed before the trial court. It is therefore premature for petitioner to conclude that she is not liable for damages because respondent was
not deprived of its property without due process of law.
The ruling in Cojuangco, Jr. v. Court of Appeals supports the decision of the Court's Third Division that a public officer may be held
liable for damages even if he/she acted in good faith as long as there is a violation of constitutional rights, thus:

Under the aforecited article, it is not necessary that the public officer acted with malice or bad faith. To be liable, it
is enough that there was a violation of the constitutional rights of petitioners, even on the pretext of justifiable motives or
good faith in the performance of one's duties. 7 ACETID

Petitioner's reliance on Philippine Match Co., Ltd. v. City of Cebu, 8 is misplaced. In said case, petitioner's claim for damages is
predicated on Articles 19, 9 20, 1021, 11 27 12 and 2229 of the Civil Code, arguing that the public officer (city treasurer) refused and
neglected without just cause to perform his duty and to act with justice and good faith. In the instant case, the complaint specifically
charged petitioner with violation of constitutional rights under Article 32 of the Civil Code.

Orocio v. Commission on Audit 13 cited by petitioner is likewise not in point. The case involved a petition seeking to annul
the Indorsement of the Regional Auditor ordering the booking of the disallowed disbursement in petitioner's name on the ground that the
fund was disbursed based on the erroneous opinion rendered by petitioner as Officer-in-charge of the Office of the General Counsel of the
National Power Corporation. Unlike in the instant case, said case does not involve alleged violation of constitutional right.

Neither could petitioner rely on Drilon v. Court of Appeals. 14 In said case, Homobono Adaza filed a complaint for damages against
Franklin Drilon and several others charging them "with engaging in a deliberate, willful and malicious experimentation by filing against
him a charge of rebellion complexed with murder and frustrated murder" 15 despite being fully aware of the non-existence of such crime
in the statute books. On petition for review on certiorari, the Court granted petitioners' motion to dismiss on the ground that the
complaint states no cause of action. The Court ruled that the complaint is a suit for damages for malicious prosecution, the elements of
which are: (1) the fact of the prosecution and the further fact that the defendant was himself the prosecutor and that the action finally
terminated with an acquittal; (2) that in bringing the action, the prosecutor acted without probable cause; and (3) that the prosecutor
was actuated or impelled by legal malice, that is by improper or sinister motive. All these requisites were lacking.

Petitioner however insists that the suit for damages filed against Drilon and several others was ordered dismissed because it involves
a doubtful or difficult question of law. The argument lacks basis. A reading of the Drilon case reveals that the dismissal was grounded on
failure to state cause of action because all the elements of a complaint for damages for malicious prosecution were lacking. Concededly,
the Court ruled that a "doubtful or difficult question of law may become the basis of good faith;" 16 however, it was not pivotal to the
dismissal of the complaint since it relates only to one of the three elements of a complaint for malicious prosecution. At any rate, good
faith is irrelevant in the instant complaint for damages which is predicated on petitioner's alleged violation of respondent's constitutional
rights against deprivation of property without due process of law and equal protection of law. DCASIT

Similarly, the Court in Cojuangco, Jr. v. Court of Appeals, noted the uncertainties faced by respondent Carrascoso, Jr., as then
Chairman of the Philippine Charity Sweepstakes Office (PCSO) in withholding the winnings of petitioner from horse races. The Court noted
that at the time, the scope of the sequestration order was not well-defined; the Presidential Commission on Good Government (PCGG)
was a newly born legal creation; and sequestration was a novel remedy. The Court deemed the above considerations only as badges of good
faith on the part of respondent; however the latter was still held liable under Article 32 of the Civil Code. The Court ruled that it is not
necessary that the public officer acted with malice or bad faith; to be liable under Article 32 of the Civil Code, it is enough that there was
a violation of the constitutional rights of petitioner, even on the pretext of justifiable motives or good faith in the performance of one's
duties. 17

ACCORDINGLY, I Vote that, as held in the June 19, 2007 Decision of the Third Division, the Decision of the Court of Appeals
affirming the Order of the Regional Trial Court of Marikina, Branch 272 denying petitioner's motion to dismiss be AFFIRMED and the
Presiding Judge, Regional Trial Court of Marikina, Branch 272, be DIRECTED to continue with the proceedings in Civil Case No.
97-341-MK with dispatch.

||| (Vinzons-Chato v. Fortune Tobacco Corp. , G.R. No. 141309 (Resolution), [December 23, 2008], 595 PHIL 629-664)

EN BANC

[G.R. No. 159139. January 13, 2004.]

INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES, MA. CORAZON M. AKOL, MIGUEL UY, EDUARDO H.
LOPEZ, AUGUSTO C. LAGMAN, REX C. DRILON, MIGUEL HILADO, LEY SALCEDO, and MANUEL ALCUAZ JR., petitioners, vs.
COMMISSION ON ELECTIONS; COMELEC CHAIRMAN BENJAMIN ABALOS SR.; COMELEC BIDDING and AWARD
COMMITTEE CHAIRMAN EDUARDO D. MEJOS and MEMBERS GIDEON DE GUZMAN, JOSE F. BALBUENA, LAMBERTO P.
LLAMAS, and BARTOLOME SINOCRUZ JR.; MEGA PACIFIC eSOLUTIONS, INC.; and MEGA PACIFIC
CONSORTIUM,respondents.

DECI SION

PANGANIBAN, J p:

There is grave abuse of discretion (1) when an act is done contrary to the Constitution, the law or jurisprudence; 1 or (2) when it is executed
whimsically, capriciously or arbitrarily out of malice, ill will or personal bias. 2 In the present case, the Commission on Elections approved
the assailed Resolution and awarded the subject Contract not only in clear violation of law and jurisprudence, but also in reckless disregard
of its own bidding rules and procedure. For the automation of the counting and canvassing of the ballots in the 2004 elections, Comelec
awarded the Contract to "Mega Pacific Consortium" an entity that had not participated in the bidding. Despite this grant, the poll body signed
the actual automation Contract with "Mega Pacific eSolutions, Inc.," a company that joined the bidding but had not met the eligibility
requirements.

Comelec awarded this billion-peso undertaking with inexplicable haste, without adequately checking and observing mandatory financial,
technical and legal requirements. It also accepted the proferred computer hardware and software even if, at the time of the award, they had
undeniably failed to pass eight critical requirements designed to safeguard the integrity of elections, especially the following three items:

• They failed to achieve the accuracy rating criteria of 99.9995 percent set-up by the Comelec itself

• They were not able to detect previously downloaded results at various canvassing or consolidation levels and to prevent these
from being inputted again

• They were unable to print the statutorily required audit trails of the count/canvass at different levels without any loss of data
Because of the foregoing violations of law and the glaring grave abuse of discretion committed by Comelec, the Court has no choice but to
exercise its solemn "constitutional duty" 3 to void the assailed Resolution and the subject Contract. The illegal, imprudent and hasty actions
of the Commission have not only desecrated legal and jurisprudential norms, but have also cast serious doubts upon the poll body's ability and
capacity to conduct automated elections. Truly, the pith and soul of democracy — credible, orderly, and peaceful elections — has been put
in jeopardy by the illegal and gravely abusive acts of Comelec.

The Case

Before us is a Petition 4 under Rule 65 of the Rules of Court, seeking (1) to declare null and void Resolution No. 6074 of the Commission
on Elections (Comelec), which awarded "Phase II of the Modernization Project of the Commission to Mega Pacific Consortium (MPC);" (2) to
enjoin the implementation of any further contract that may have been entered into by Comelec "either with Mega Pacific Consortium and/or
Mega Pacific eSolutions, Inc. (MPEI);" and (3) to compel Comelec to conduct a re-bidding of the project.

The Facts

The following facts are not disputed. They were culled from official documents, the parties' pleadings, as well as from admissions during the
Oral Argument on October 7, 2003.

On June 7, 1995, Congress passed Republic Act 8046, 5 which authorized Comelec to conduct a nationwide demonstration of a
computerized election system and allowed the poll body to pilot-test the system in the March 1996 elections in the Autonomous Region in
Muslim Mindanao (ARMM).

On December 22, 1997, Congress enacted Republic Act 8436 6 authorizing Comelec to use an automated election system (AES) for the
process of voting, counting votes and canvassing/consolidating the results of the national and local elections. It also mandated the poll body
to acquire automated counting machines (ACMs), computer equipment, devices and materials; and to adopt new electoral forms and printing
materials.

Initially intending to implement the automation during the May 11, 1998 presidential elections, Comelec — in its Resolution No. 2985 dated
February 9, 1998 7 — eventually decided against full national implementation and limited the automation to the Autonomous Region in
Muslim Mindanao (ARMM). However, due to the failure of the machines to read correctly some automated ballots in one town, the poll body
later ordered their manual count for the entire Province of Sulu. 8
In the May 2001 elections, the counting and canvassing of votes for both national and local positions were also done manually, as no additional
ACMs had been acquired for that electoral exercise allegedly because of time constraints.

On October 29, 2002, Comelec adopted in its Resolution 02-0170 a modernization program for the 2004 elections. It resolved to conduct
biddings for the three (3) phases of its Automated Election System; namely, Phase I — Voter Registration and Validation System; Phase II
— Automated Counting and Canvassing System; and Phase III — Electronic Transmission.

On January 24, 2003, President Gloria Macapagal-Arroyo issued Executive Order No. 172, which allocated the sum of P2.5 billion to fund
the AES for the May 10, 2004 elections. Upon the request of Comelec, she authorized the release of an additional P500 million.

On January 28, 2003, the Commission issued an "Invitation to Apply for Eligibility and to Bid," which we quote as follows:

"INVITATION TO APPLY FOR ELIGIBILITY AND TO BID

The Commission on Elections (COMELEC), pursuant to the mandate of Republic Act Nos. 8189 and 8436, invites interested
offerors, vendors, suppliers or lessors to apply for eligibility and to bid for the procurement by purchase, lease, lease with option
to purchase, or otherwise, supplies, equipment, materials and services needed for a comprehensive Automated Election System,
consisting of three (3) phases: (a) registration/verification of voters, (b) automated counting and consolidation of votes, and
(c) electronic transmission of election results, with an approved budget of TWO BILLION FIVE HUNDRED MILLION
(Php2,500,000,000) Pesos. EICDSA

Only bids from the following entities shall be entertained:

a. Duly licensed Filipino citizens/proprietorships;

b. Partnerships duly organized under the laws of the Philippines and of which at least sixty percent (60%) of the interest
belongs to citizens of the Philippines;

c. Corporations duly organized under the laws of the Philippines, and of which at least sixty percent (60%) of the
outstanding capital stock belongs to citizens of the Philippines;
d. Manufacturers, suppliers and/or distributors forming themselves into a joint venture, i.e., a group of two (2) or more
manufacturers, suppliers and/or distributors that intend to be jointly and severally responsible or liable for a
particular contract, provided that Filipino ownership thereof shall be at least sixty percent (60%); and

e. Cooperatives duly registered with the Cooperatives Development Authority.

Bid documents for the three (3) phases may be obtained starting 10 February 2003, during office hours from the Bids and
Awards Committee (BAC) Secretariat/Office of Commissioner Resurreccion Z. Borra, 7th Floor, Palacio del Governador,
Intramuros, Manila, upon payment at the Cash Division, Commission on Elections, in cash or cashier's check, payable to the
Commission on Elections, of a non-refundable amount of FIFTEEN THOUSAND PESOS (Php15,000.00) for each phase. For
this purpose, interested offerors, vendors, suppliers or lessors have the option to participate in any or all of the three (3) phases
of the comprehensive Automated Election System.

A Pre-Bid Conference is scheduled on 13 February 2003, at 9:00 a.m. at the Session Hall, Commission on Elections, Postigo
Street, Intramuros, Manila. Should there be questions on the bid documents, bidders are required to submit their queries in
writing to the BAC Secretariat prior to the scheduled Pre-Bid Conference.

Deadline for submission to the BAC of applications for eligibility and bid envelopes for the supply of the comprehensive
Automated Election System shall be at the Session Hall, Commission on Elections, Postigo Street, Intramuros, Manila on 28
February 2003 at 9:00 a.m.

The COMELEC reserves the right to review the qualifications of the bidders after the bidding and before the contract is executed.
Should such review uncover any misrepresentation made in the eligibility statements, or any changes in the situation of the
bidder to materially downgrade the substance of such statements, the COMELEC shall disqualify the bidder upon due notice
without any obligation whatsoever for any expenses or losses that may be incurred by it in the preparation of its bid." 9

On February 11, 2003, Comelec issued Resolution No. 5929 clarifying certain eligibility criteria for bidders and the schedule of activities for
the project bidding, as follows:
"1.) Open to Filipino and foreign corporation duly registered and licensed to do business and is actually doing business in the
Philippines, subject to Sec. 43 of RA 9184 (An Act providing in the Modernization Standardization and Regulation of
the Procurement Activities of the Government and for other purposes etc.)

2.) Track Record:

a) For counting machines — should have been used in at least one (1) political exercise with no less than Twenty Million
Voters;

b) For verification of voters — the reference site of an existing data base installation using Automated Fingerprint
Identification System (AFIS) with at least Twenty Million.

3.) Ten percent (10%) equity requirement shall be based on the total project cost; and

4.) Performance bond shall be twenty percent (20%) of the bid offer.

RESOLVED moreover, that:

1) A. Due to the decision that the eligibility requirements and the rest of the Bid documents shall be released at the same time,
and the memorandum of Comm. Resurreccion Z. Borra dated February 7, 2003, the documents to be released on
Friday, February 14, 2003 at 2:00 o'clock p.m. shall be the eligibility criteria, Terms of Reference (TOR) and other
pertinent documents;

B. Pre-Bid conference shall be on February 18, 2003; and

C. Deadline for the submission and receipt of the Bids shall be on March 5, 2003.

2) The aforementioned documents will be available at the following offices:

a) Voters Validation: Office of Comm. Javier

b) Automated Counting Machines: Office of Comm. Borra


c) Electronic Transmission: Office of Comm. Tancangco" 10

On February 17, 2003, the poll body released the Request for Proposal (RFP) to procure the election automation machines. The Bids and
Awards Committee (BAC) of Comelec convened a pre-bid conference on February 18, 2003 and gave prospective bidders until March 10,
2003 to submit their respective bids.

Among others, the RFP provided that bids from manufacturers, suppliers and/or distributors forming themselves into a joint venture may
be entertained, provided that the Philippine ownership thereof shall be at least 60 percent. Joint venture is defined in the RFP as "a group
of two or more manufacturers, suppliers and/or distributors that intend to be jointly and severally responsible or liable for a particular
contract." 11

Basically, the public bidding was to be conducted under a two-envelope/two stage system. The bidder's first envelope or the Eligibility
Envelope should establish the bidder's eligibility to bid and its qualifications to perform the acts if accepted. On the other hand, the second
envelope would be the Bid Envelope itself. The RFP outlines the bidding procedures as follows:

"25. Determination of Eligibility of Prospective Bidders

"25.1 The eligibility envelopes of prospective Bidders shall be opened first to determine their eligibility. In case any of the
requirements specified in Clause 20 is missing from the first bid envelope, the BAC shall declare said prospective Bidder as
ineligible to bid. Bid envelopes of ineligible Bidders shall be immediately returned unopened.

"25.2 The eligibility of prospective Bidders shall be determined using simple 'pass/fail' criteria and shall be determined as
either eligible or ineligible. If the prospective Bidder is rated 'passed' for all the legal, technical and financial requirements, he
shall be considered eligible. If the prospective Bidder is rated 'failed' in any of the requirements, he shall be considered ineligible.

"26. Bid Examination/Evaluation

"26.1 The BAC will examine the Bids to determine whether they are complete, whether any computational errors have been
made, whether required securities have been furnished, whether the documents have been properly signed, and whether the
Bids are generally in order.
"26.2 The BAC shall check the submitted documents of each Bidder against the required documents enumerated under Clause
20, to ascertain if they are all present in the Second bid envelope (Technical Envelope). In case one (1) or more of the required
documents is missing, the BAC shall rate the Bid concerned as 'failed' and immediately return to the Bidder its Third bid
envelope (Financial Envelope) unopened. Otherwise, the BAC shall rate the first bid envelope as 'passed'.

"26.3 The BAC shall immediately open the Financial Envelopes of the Bidders whose Technical Envelopes were passed or rated
on or above the passing score. Only Bids that are determined to contain all the bid requirements for both components shall
be rated 'passed' and shall immediately be considered for evaluation and comparison.

"26.4 In the opening and examination of the Financial Envelope, the BAC shall announce and tabulate the Total Bid Price as
calculated. Arithmetical errors will be rectified on the following basis: If there is a discrepancy between words and figures, the
amount in words will prevail. If there is a discrepancy between the unit price and the total price that is obtained by multiplying
the unit price and the quantity, the unit price shall prevail and the total price shall be corrected accordingly. If there is a
discrepancy between the Total Bid Price and the sum of the total prices, the sum of the total prices prevail and the Total Bid
Price shall be corrected accordingly. HcSaAD

"26.5 Financial Proposals which do not clearly state the Total Bid Price shall be rejected. Also, Total Bid Price as calculated
that exceeds the approved budget for the contract shall also be rejected.

27. Comparison of Bids

"27.1 The bid price shall be deemed to embrace all costs, charges and fees associated with carrying out all the elements of
the proposed Contract, including but not limited to, license fees, freight charges and taxes.

"27.2 The BAC shall establish the calculated prices of all Bids rated 'passed' and rank the same in ascending order.

xxx xxx xxx

"29. Postqualification

"29.1 The BAC will determine to its satisfaction whether the Bidder selected as having submitted the lowest calculated bid
is qualified to satisfactorily perform the Contract.
"29.2 The determination will take into account the Bidder's financial, technical and production capabilities/resources. It will
be based upon an examination of the documentary evidence of the Bidder's qualification submitted by the Bidder as well as
such other information as the BAC deems necessary and appropriate.

"29.3 A bid determined as not substantially responsive will be rejected by the BAC and may not subsequently be made
responsive by the Bidder by correction of the non-conformity.

"29.4 The BAC may waive any informality or non-conformity or irregularity in a bid which does not constitute a material
deviation, provided such waiver does not prejudice or affect the relative ranking of any Bidder.

"29.5 Should the BAC find that the Bidder complies with the legal, financial and technical requirements, it shall make an
affirmative determination which shall be a prerequisite for award of the Contract to the Bidder. Otherwise, it will make a
negative determination which will result in rejection of the Bidder's bid, in which event the BAC will proceed to the next lowest
calculated bid to make a similar determination of that Bidder's capabilities to perform satisfactorily." 12

Out of the 57 bidders, 13 the BAC found MPC and the Total Information Management Corporation (TIMC) eligible. For technical evaluation,
they were referred to the BAC's Technical Working Group (TWG) and the Department of Science and Technology (DOST).

In its Report on the Evaluation of the Technical Proposals on Phase II, DOST said that both MPC and TIMC had obtained a number of failed
marks in the technical evaluation. Notwithstanding these failures, Comelec en banc, on April 15, 2003, promulgated Resolution No. 6074
awarding the project to MPC. The Commission publicized this Resolution and the award of the project to MPC on May 16, 2003.

On May 29, 2003, five individuals and entities (including the herein Petitioners Information Technology Foundation of the Philippines,
represented by its president, Alfredo M. Torres; and Ma. Corazon Akol) wrote a letter 14 to Comelec Chairman Benjamin Abalos Sr. They
protested the award of the Contract to Respondent MPC "due to glaring irregularities in the manner in which the bidding process had been
conducted." Citing therein the noncompliance with eligibility as well as technical and procedural requirements (many of which have been
discussed at length in the Petition), they sought a re-bidding.

In a letter-reply dated June 6, 2003, 15 the Comelec chairman — speaking through Atty. Jaime Paz, his head executive assistant — rejected
the protest and declared that the award "would stand up to the strictest scrutiny."
Hence, the present Petition. 16

The Issues

In their Memorandum, petitioners raise the following issues for our consideration:

"1. The COMELEC awarded and contracted with a non-eligible entity; . . .

"2. Private respondents failed to pass the Technical Test as required in the RFP. Notwithstanding, such failure was ignored. In
effect, the COMELEC changed the rules after the bidding in effect changing the nature of the contract bidded upon.

"3. Petitioners have locus standi.

"4. Instant Petition is not premature. Direct resort to the Supreme Court is justified." 17

In the main, the substantive issue is whether the Commission on Elections, the agency vested with the exclusive constitutional mandate to
oversee elections, gravely abused its discretion when, in the exercise of its administrative functions, it awarded to MPC the contract for the
second phase of the comprehensive Automated Election System.

Before discussing the validity of the award to MPC, however, we deem it proper to first pass upon the procedural issues: the legal standing
of petitioners and the alleged prematurity of the Petition.

This Court's Ruling

The Petition is meritorious.

First Procedural Issue:

Locus Standi of Petitioners

Respondents chorus that petitioners do not possess locus standi, inasmuch as they are not challenging the validity or constitutionality of RA
8436. Moreover, petitioners supposedly admitted during the Oral Argument that no law had been violated by the award of the Contract.
Furthermore, they allegedly have no actual and material interest in the Contract and, hence, do not stand to be injured or prejudiced on
account of the award.
On the other hand, petitioners — suing in their capacities as taxpayers, registered voters and concerned citizens — respond that the issues
central to this case are "of transcendental importance and of national interest." Allegedly, Comelec's flawed bidding and questionable award
of the Contract to an unqualified entity would impact directly on the success or the failure of the electoral process. Thus, any taint on the
sanctity of the ballot as the expression of the will of the people would inevitably affect their faith in the democratic system of government.
Petitioners further argue that the award of any contract for automation involves disbursement of public funds in gargantuan amounts;
therefore, public interest requires that the laws governing the transaction must be followed strictly.

We agree with petitioners. Our nation's political and economic future virtually hangs in the balance, pending the outcome of the 2004
elections. Hence, there can be no serious doubt that the subject matter of this case is "a matter of public concern and imbued with public
interest"; 18 in other words, it is of "paramount public interest" 19and "transcendental importance." 20 This fact alone would justify
relaxing the rule on legal standing, following the liberal policy of this Court whenever a case involves "an issue of overarching significance to
our society." 21 Petitioners' legal standing should therefore be recognized and upheld.

Moreover, this Court has held that taxpayers are allowed to sue when there is a claim of "illegal disbursement of public funds," 22 or if public
money is being "deflected to any improper purpose"; 23 or when petitioners seek to restrain respondent from "wasting public funds through
the enforcement of an invalid or unconstitutional law." 24 In the instant case, individual petitioners, suing as taxpayers, assert a material
interest in seeing to it that public funds are properly and lawfully used. In the Petition, they claim that the bidding was defective, the winning
bidder not a qualified entity, and the award of the Contract contrary to law and regulation. Accordingly, they seek to restrain respondents
from implementing the Contract and, necessarily, from making any unwarranted expenditure of public funds pursuant thereto. Thus, we
hold that petitioners possess locus standi.

Second Procedural Issue:

Alleged Prematurity Due to Non-Exhaustion


of Administrative Remedies

Respondents claim that petitioners acted prematurely, since they had not first utilized the protest mechanism available to them under RA
9184, the Government Procurement Reform Act, for the settlement of disputes pertaining to procurement contracts.
Section 55 of RA 9184 states that protests against decisions of the Bidding and Awards Committee in all stages of procurement may be
lodged with the head of the procuring entity by filing a verified position paper and paying a protest fee. Section 57 of the same law mandates
that in no case shall any such protest stay or delay the bidding process, but it must first be resolved before any award is made.

On the other hand, Section 58 provides that court action may be resorted to only after the protests contemplated by the statute shall have
been completed. Cases filed in violation of this process are to be dismissed for lack of jurisdiction. Regional trial courts shall have jurisdiction
over final decisions of the head of the procuring entity, and court actions shall be instituted pursuant to Rule 65 of the 1997 Rules of Civil
Procedure. cECTaD

Respondents assert that throughout the bidding process, petitioners never questioned the BAC Report finding MPC eligible to bid and
recommending the award of the Contract to it (MPC). According to respondents, the Report should have been appealed to the Comelec en
banc, pursuant to the aforementioned sections of RA 9184. In the absence of such appeal, the determination and recommendation of the
BAC had become final.

The Court is not persuaded.

Respondent Comelec came out with its en banc Resolution No. 6074 dated April 15, 2003, awarding the project to Respondent MPC even
before the BAC managed to issue its written report and recommendation on April 21, 2003. Thus, how could petitioners have appealed the
BAC's recommendation or report to the head of the procuring entity (the chairman of Comelec), when the Comelec en banc had already
approved the award of the contract to MPC even before petitioners learned of the BAC recommendation?

It is claimed 25 by Comelec that during its April 15, 2003 session, it received and approved the verbal report and recommendation of the
BAC for the award of the Contract to MPC, and that the BAC subsequently re-affirmed its verbal report and recommendation by submitting
it in writing on April 21, 2003. Respondents insist that the law does not require that the BAC Report be in writing before Comelec can act
thereon; therefore, there is allegedly nothing irregular about the Report as well as theen banc Resolution.

However, it is obvious that petitioners could have appealed the BAC's report and recommendation to the head of the procuring entity (the
Comelec chair) only upon their discovery thereof, which at the very earliest would have been on April 21, 2003, when the BAC actually put
its report in writing and finally released it. Even then, what would have been the use of protesting/appealing the report to the Comelec chair,
when by that time the Commission en banc (including the chairman himself) had already approved the BAC Report and awarded the
Contract to MPC?

And even assuming arguendo that petitioners had somehow gotten wind of the verbal BAC report on April 15, 2003 (immediately after
the en banc session), at that point the Commission en banc had already given its approval to the BAC Report along with the award to
MPC. To put it bluntly, the Comelec en banc itself made it legally impossible for petitioners to avail themselves of the administrative remedy
that the Commission is so impiously harping on. There is no doubt that they had not been accorded the opportunity to avail themselves of
the process provided under Section 55 of RA 9184, according to which a protest against a decision of the BAC may be filed with the head
of the procuring entity. Nemo tenetur ad impossible, 26 to borrow private respondents' favorite Latin excuse. 27

Some Observations on the BAC Report to the Comelec

We shall return to this issue of alleged prematurity shortly, but at this interstice, we would just want to put forward a few observations
regarding the BAC Report and the Comelec en banc's approval thereof.

First, Comelec contends that there was nothing unusual about the fact that the Report submitted by the BAC came only after the former
had already awarded the Contract, because the latter had been asked to render its report and recommendation orally during the
Commission's en banc session on April 15, 2003. Accordingly, Comelec supposedly acted upon such oral recommendation and approved the
award to MPC on the same day, following which the recommendation was subsequently reduced into writing on April 21, 2003. While not
entirely outside the realm of the possible, this interesting and unique spiel does not speak well of the process that Comelec supposedly went
through in making a critical decision with respect to a multi-billion-peso contract.

We can imagine that anyone else standing in the shoes of the Honorable Commissioners would have been extremely conscious of the
overarching need for utter transparency. They would have scrupulously avoided the slightest hint of impropriety, preferring to maintain an
exacting regularity in the performance of their duties, instead of trying to break a speed record in the award of multi-billion-peso contracts.
After all, between April 15 and April 21 were a mere six (6) days. Could Comelec not have waited out six more days for the written report
of the BAC, instead of rushing pell-mell into the arms of MPC? Certainly, respondents never cared to explain the nature of the Commission's
dire need to act immediately without awaiting the formal, written BAC Report.
In short, the Court finds it difficult to reconcile the uncommon dispatch with which Comelec acted to approve the multi-billion-peso deal,
with its claim of having been impelled by only the purest and most noble of motives.

At any rate, as will be discussed later on, several other factors combine to lend negative credence to Comelec's tale.

Second, without necessarily ascribing any premature malice or premeditation on the part of the Comelec officials involved, it should
nevertheless be conceded that this cart-before-the-horse maneuver (awarding of the Contract ahead of the BAC's written report) would
definitely serve as a clever and effective way of averting and frustrating any impending protest under Section 55.

Having made the foregoing observations, we now go back to the question of exhausting administrative remedies. Respondents may not have
realized it, but the letter addressed to Chairman Benjamin Abalos Sr. dated May 29, 2003 28 serves to eliminate the prematurity issue as
it was an actual written protest against the decision of the poll body to award the Contract. The letter was signed by/for, inter alia, two
of herein petitioners: the Information Technology Foundation of the Philippines, represented by its president, Alfredo M. Torres; and Ma.
Corazon Akol.

Such letter-protest is sufficient compliance with the requirement to exhaust administrative remedies particularly because it hews closely to
the procedure outlined in Section 55 of RA 9184.

And even without that May 29, 2003 letter-protest, the Court still holds that petitioners need not exhaust administrative remedies in the
light of Paat v. Court of Appeals.29 Paat enumerates the instances when the rule on exhaustion of administrative remedies may be
disregarded, as follows:

"(1) when there is a violation of due process,

(2) when the issue involved is purely a legal question,

(3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction,

(4) when there is estoppel on the part of the administrative agency concerned,

(5) when there is irreparable injury,


(6) when the respondent is a department secretary whose acts as an alter ego of the President bears the implied and assumed
approval of the latter,

(7) when to require exhaustion of administrative remedies would be unreasonable,

(8) when it would amount to a nullification of a claim,

(9) when the subject matter is a private land in land case proceedings,

(10) when the rule does not provide a plain, speedy and adequate remedy, and

(11) when there are circumstances indicating the urgency of judicial intervention." 30

The present controversy precisely falls within the exceptions listed as Nos. 7, 10 and 11: "(7) when to require exhaustion of administrative
remedies would be unreasonable; (10) when the rule does not provide a plain, speedy and adequate remedy, and (11) when there are
circumstances indicating the urgency of judicial intervention." As already stated, Comelec itself made the exhaustion of administrative
remedies legally impossible or, at the very least, "unreasonable."

In any event, the peculiar circumstances surrounding the unconventional rendition of the BAC Report and the precipitate awarding of the
Contract by the Comelec en banc — plus the fact that it was racing to have its Contract with MPC implemented in time for the elections
in May 2004 (barely four months away) — have combined to bring about the urgent need for judicial intervention, thus prompting this Court
to dispense with the procedural exhaustion of administrative remedies in this case.

Main Substantive Issue:

Validity of the Award to MPC

We come now to the meat of the controversy. Petitioners contend that the award is invalid, since Comelec gravely abused its discretion when
it did the following:

1. Awarded the Contract to MPC though it did not even participate in the bidding

2. Allowed MPEI to participate in the bidding despite its failure to meet the mandatory eligibility requirements
3. Issued its Resolution of April 15, 2003 awarding the Contract to MPC despite the issuance by the BAC of its Report, which
formed the basis of the assailed Resolution, only on April 21, 2003 31

4. Awarded the Contract, notwithstanding the fact that during the bidding process, there were violations of the mandatory
requirements of RA 8436 as well as those set forth in Comelec's own Request for Proposal on the automated election
system IHaECA

5. Refused to declare a failed bidding and to conduct a re-bidding despite the failure of the bidders to pass the technical tests
conducted by the Department of Science and Technology

6. Failed to follow strictly the provisions of RA 8436 in the conduct of the bidding for the automated counting machines

After reviewing the slew of pleadings as well as the matters raised during the Oral Argument, the Court deems it sufficient to focus discussion
on the following major areas of concern that impinge on the issue of grave abuse of discretion:

A. Matters pertaining to the identity, existence and eligibility of MPC as a bidder

B. Failure of the automated counting machines (ACMs) to pass the DOST technical tests

C. Remedial measures and re-testings undertaken by Comelec and DOST after the award, and their effect on the present
controversy

A.

Failure to Establish the Identity, Existence and Eligibility


of the Alleged Consortium as a Bidder

On the question of the identity and the existence of the real bidder, respondents insist that, contrary to petitioners' allegations, the bidder
was not Mega Pacific eSolutions, Inc. (MPEI), which was incorporated only on February 27, 2003, or 11 days prior to the bidding itself.
Rather, the bidder was Mega Pacific Consortium (MPC), of which MPEI was but a part. As proof thereof, they point to the March 7, 2003
letter of intent to bid, signed by the president of MPEI allegedly for and on behalf of MPC. They also call attention to the official receipt issued
to MPC, acknowledging payment for the bidding documents, as proof that it was the "consortium" that participated in the bidding process.
We do not agree. The March 7, 2003 letter, signed by only one signatory — "Willy U. Yu, President, Mega Pacific eSolutions, Inc., (Lead
Company/Proponent) For: Mega Pacific Consortium" — and without any further proof, does not by itself prove the existence of the consortium.
It does not show that MPEI or its president have been duly pre-authorized by the other members of the putative consortium to represent
them, to bid on their collective behalf and, more important, to commit them jointly and severally to the bid undertakings. The letter is purely
self-serving and uncorroborated.

Neither does an official receipt issued to MPC, acknowledging payment for the bidding documents, constitute proof that it was the purported
consortium that participated in the bidding. Such receipts are issued by cashiers without any legally sufficient inquiry as to the real identity
or existence of the supposed payor.

To assure itself properly of the due existence (as well as eligibility and qualification) of the putative consortium, Comelec's BAC should have
examined the bidding documents submitted on behalf of MPC. They would have easily discovered the following fatal flaws.

Two-Envelope, Two-Stage System

As stated earlier in our factual presentation, the public bidding system designed by Comelec under its RFP (Request for Proposal for the
Automation of the 2004 Election) mandated the use of a two-envelope, two-stage system. A bidder's first envelope (Eligibility Envelope) was
meant to establish its eligibility to bid and its qualifications and capacity to perform the contract if its bid was accepted, while the second
envelope would be the Bid Envelope itself.

The Eligibility Envelope was to contain legal documents such as articles of incorporation, business registrations, licenses and permits, mayor's
permit, VAT certification, and so forth; technical documents containing documentary evidence to establish the track record of the bidder and
its technical and production capabilities to perform the contract; and financial documents, including audited financial statements for the last
three years, to establish the bidder's financial capacity.

In the case of a consortium or joint venture desirous of participating in the bidding, it goes without saying that the Eligibility Envelope would
necessarily have to include a copy of the joint venture agreement, the consortium agreement or memorandum of agreement — or a business
plan or some other instrument of similar import — establishing the due existence, composition and scope of such aggrupation. Otherwise,
how would Comelec know who it was dealing with, and whether these parties are qualified and capable of delivering the products and services
being offered for bidding? 32
In the instant case, no such instrument was submitted to Comelec during the bidding process. This fact can be conclusively ascertained by
scrutinizing the two-inch thick "Eligibility Requirements" file submitted by Comelec last October 9, 2003, in partial compliance with this
Court's instructions given during the Oral Argument. This file purports to replicate the eligibility documents originally submitted to Comelec
by MPEI allegedly on behalf of MPC, in connection with the bidding conducted in March 2003. Included in the file are the incorporation papers
and financial statements of the members of the supposed consortium and certain certificates, licenses and permits issued to them.

However, there is no sign whatsoever of any joint venture agreement, consortium agreement, memorandum of agreement, or business plan
executed among the members of the purported consortium.

The only logical conclusion is that no such agreement was ever submitted to the Comelec for its consideration, as part of the bidding process.

It thus follows that, prior the award of the Contract, there was no documentary or other basis for Comelec to conclude that a consortium
had actually been formed amongst MPEI, SK C&C and WeSolv, along with Election.com and ePLDT. 33 Neither was there anything to
indicate the exact relationships between and among these firms; their diverse roles, undertakings and prestations, if any, relative to the
prosecution of the project, the extent of their respective investments (if any) in the supposed consortium or in the project; and the precise
nature and extent of their respective liabilities with respect to the contract being offered for bidding. And apart from the self-serving letter
of March 7, 2003, there was not even any indication that MPEI was the lead company duly authorized to act on behalf of the others.

So, it necessarily follows that, during the bidding process, Comelec had no basis at all for determining that the alleged consortium really existed
and was eligible and qualified; and that the arrangements among the members were satisfactory and sufficient to ensure delivery on the
Contract and to protect the government's interest.

Notwithstanding such deficiencies, Comelec still deemed the "consortium" eligible to participate in the bidding, proceeded to open its Second
Envelope, and eventually awarded the bid to it, even though — per the Comelec's own RFP — the BAC should have declared the MPC ineligible
to bid and returned the Second (Bid) Envelope unopened.

Inasmuch as Comelec should not have considered MPEI et al. as comprising a consortium or joint venture, it should not have allowed them
to avail themselves of the provision in Section 5.4 (b) (i) of the IRR for RA 6957 (the Build-Operate-Transfer Law), as amended by RA 7718.
This provision states in part that a joint venture/consortium proponent shall be evaluated based on the individual or collective experience of
the member-firms of the joint venture or consortium and of the contractor(s) that it has engaged for the project. Parenthetically,
respondents have uniformly argued that the said IRR of RA 6957, as amended, have suppletory application to the instant case.

Hence, had the proponent MPEI been evaluated based solely on its own experience, financial and operational track record or lack thereof,
it would surely not have qualified and would have been immediately considered ineligible to bid, as respondents readily admit.

At any rate, it is clear that Comelec gravely abused its discretion in arbitrarily failing to observe its own rules, policies and guidelines with
respect to the bidding process, thereby negating a fair, honest and competitive bidding.

Commissioners Not Aware of Consortium

In this regard, the Court is beguiled by the statements of Commissioner Florentino Tuason Jr., given in open court during the Oral Argument
last October 7, 2003. The good commissioner affirmed that he was aware, of his own personal knowledge, that there had indeed been a
written agreement among the "consortium" members, 34although it was an internal matter among them, 35 and of the fact that it would
be presented by counsel for private respondent. 36

However, under questioning by Chief Justice Hilario G. Davide Jr. and Justice Jose C. Vitug, Commissioner Tuason in effect admitted that,
while he was the commissioner-in-charge of Comelec's Legal Department, he had never seen, even up to that late date, the agreement he
spoke of. 37 Under further questioning, he was likewise unable to provide any information regarding the amounts invested into the project
by several members of the claimed consortium. 38 A short while later, he admitted that the Commission had not taken a look at the
agreement (if any). 39

He tried to justify his position by claiming that he was not a member of the BAC. Neither was he the commissioner-in-charge of the Phase
II Modernization project (the automated election system); but that, in any case, the BAC and the Phase II Modernization Project Team did
look into the aspect of the composition of the consortium.

It seems to the Court, though, that even if the BAC or the Phase II Team had taken charge of evaluating the eligibility, qualifications and
credentials of the consortium-bidder, still, in all probability, the former would have referred the task to Commissioner Tuason, head of
Comelec's Legal Department. That task was the appreciation and evaluation of the legal effects and consequences of the terms, conditions,
stipulations and covenants contained in any joint venture agreement, consortium agreement or a similar document — assuming of course
that any of these was available at the time. The fact that Commissioner Tuason was barely aware of the situation bespeaks the complete
absence of such document, or the utter failure or neglect of the Comelec to examine it — assuming it was available at all — at the time the
award was made on April 15, 2003. TIaDHE

In any event, the Court notes for the record that Commissioner Tuason basically contradicted his statements in open court about there being
one written agreement among all the consortium members, when he subsequently referred 40 to the four (4) Memoranda of Agreement
(MOAs) executed by them. 41

At this juncture, one might ask: What, then, if there are four MOAs instead of one or none at all? Isn't it enough that there are these
corporations coming together to carry out the automation project? Isn't it true, as respondent aver, that nowhere in the RFP issued by
Comelec is it required that the members of the joint venture execute a single written agreement to prove the existence of a joint venture.
Indeed, the intention to be jointly and severally liable may be evidenced not only by a single joint venture agreement, but also by
supplementary documents executed by the parties signifying such intention. What then is the big deal?

The problem is not that there are four agreements instead of only one. The problem is that Comelec never bothered to check. It never based
its decision on documents or other proof that would concretely establish the existence of the claimed consortium or joint venture or
agglomeration. It relied merely on the self-serving representation in an uncorroborated letter signed by only one individual, claiming that
his company represented a "consortium" of several different corporations. It concluded forthwith that a consortium indeed existed, composed
of such and such members, and thereafter declared that the entity was eligible to bid.

True, copies of financial statements and incorporation papers of the alleged "consortium" members were submitted. But these papers did not
establish the existence of a consortium, as they could have been provided by the companies concerned for purposes other than to prove that
they were part of a consortium or joint venture. For instance, the papers may have been intended to show that those companies were each
qualified to be a sub-contractor (and nothing more) in a major project. Those documents did not by themselves support the assumption that
a consortium or joint venture existed among the companies.

In brief, despite the absence of competent proof as to the existence and eligibility of the alleged consortium (MPC), its capacity to deliver on
the Contract, and the members' joint and several liability therefor, Comelec nevertheless assumed that such consortium existed and was
eligible. It then went ahead and considered the bid of MPC, to which the Contract was eventually awarded, in gross violation of the former's
own bidding rules and procedures contained in its RFP. Therein lies Comelec's grave abuse of discretion.

Sufficiency of the Four Agreements

Instead of one multilateral agreement executed by, and effective and binding on, all the five "consortium members" — as earlier claimed by
Commissioner Tuason in open court — it turns out that what was actually executed were four (4) separate and distinct bilateral
Agreements. 42 Obviously, Comelec was furnished copies of these Agreements only after the bidding process had been terminated, as these
were not included in the Eligibility Documents. These Agreements are as follows:

• A Memorandum of Agreement between MPEI and SK C&C

• A Memorandum of Agreement between MPEI and WeSolv

• A "Teaming Agreement" between MPEI and Election.com Ltd.

• A "Teaming Agreement" between MPEI and ePLDT

In sum, each of the four different and separate bilateral Agreements is valid and binding only between MPEI and the other contracting party,
leaving the other "consortium" members total strangers thereto. Under this setup, MPEI dealt separately with each of the "members," and
the latter (WeSolv, SK C&C, Election.com, and ePLDT) in turn had nothing to do with one another, each dealing only with MPEI.

Respondents assert that these four Agreements were sufficient for the purpose of enabling the corporations to still qualify (even at that late
stage) as a consortium or joint venture, since the first two Agreements had allegedly set forth the joint and several undertakings among the
parties, whereas the latter two clarified the parties' respective roles with regard to the Project, with MPEI being the independent contractor
and Election.com and ePLDT the subcontractors.

Additionally, the use of the phrase "particular contract" in the Comelec's Request for Proposal (RFP), in connection with the joint and several
liabilities of companies in a joint venture, is taken by them to mean that all the members of the joint venture need not be solidarily liable
for the entire project or joint venture, because it is sufficient that the lead company and the member in charge of a particular contract or
aspect of the joint venture agree to be solidarily liable.
At this point, it must be stressed most vigorously that the submission of the four bilateral Agreements to Comelec after the end of the bidding
process did nothing to eliminate the grave abuse of discretion it had already committed on April 15, 2003.

Deficiencies Have Not Been "Cured"

In any event, it is also claimed that the automation Contract awarded by Comelec incorporates all documents executed by the "consortium"
members, even if these documents are not referred to therein. The basis of this assertion appears to be the passages from Section 1.4 of the
Contract, which is reproduced as follows:

"All Contract Documents shall form part of the Contract even if they or any one of them is not referred to or mentioned in
the Contract as forming a part thereof. Each of the Contract Documents shall be mutually complementary and explanatory
of each other such that what is noted in one although not shown in the other shall be considered contained in all, and what
is required by any one shall be as binding as if required by all, unless one item is a correction of the other.

"The intent of the Contract Documents is the proper, satisfactory and timely execution and completion of the Project, in
accordance with the Contract Documents. Consequently, all items necessary for the proper and timely execution and
completion of the Project shall be deemed included in the Contract."

Thus, it is argued that whatever perceived deficiencies there were in the supplementary contracts — those entered into by MPEI and the other
members of the "consortium" as regards their joint and several undertakings — have been cured. Better still, such deficiencies have supposedly
been prevented from arising as a result of the above-quoted provisions, from which it can be immediately established that each of the members
of MPC assumes the same joint and several liability as the other members.

The foregoing argument is unpersuasive. First, the contract being referred to, entitled "The Automated Counting and Canvassing Project
Contract," is between Comelec and MPEI, not the alleged consortium, MPC. To repeat, it is MPEI — not MPC — that is a party to the
Contract. Nowhere in that Contract is there any mention of a consortium or joint venture, of members thereof, much less of joint and several
liability. Supposedly executed sometime in May 2003, 43 the Contract bears a notarization date of June 30, 2003, and contains the
signature of Willy U. Yu signing as president of MPEI (not for and on behalf of MPC), along with that of the Comelec chair. It provides in Section
3.2 that MPEI (not MPC) is to supply the Equipment and perform the Services under the Contract, in accordance with the appendices thereof;
nothing whatsoever is said about any consortium or joint venture or partnership.
Second, the portions of Section 1.4 of the Contract reproduced above do not have the effect of curing (much less preventing) deficiencies in
the bilateral agreements entered into by MPEI with the other members of the "consortium," with respect to their joint and several liabilities.
The term "Contract Documents," as used in the quoted passages of Section 1.4, has a well-defined meaning and actually refers only to the
following documents:

• The Contract itself along with its appendices

• The Request for Proposal (also known as "Terms of Reference") issued by the Comelec, including the Tender Inquiries and Bid
Bulletins

• The Tender Proposal submitted by MPEI

In other words, the term "Contract Documents" cannot be understood as referring to or including the MOAs and the Teaming Agreements
entered into by MPEI with SK C&C, WeSolv, Election.com and ePLDT. This much is very clear and admits of no debate. The attempt to use
the provisions of Section 1.4 to shore up the MOAs and the Teaming Agreements is simply unwarranted.

Third and last, we fail to see how respondents can arrive at the conclusion that, from the above-quoted provisions, it can be immediately
established that each of the members of MPC assumes the same joint and several liability as the other members. Earlier, respondents claimed
exactly the opposite — that the two MOAs (between MPEI and SK C&C, and between MPEI and WeSolv) had set forth the joint and several
undertakings among the parties; whereas the two Teaming Agreements clarified the parties' respective roles with regard to the Project, with
MPEI being the independent contractor and Election.com and ePLDT the subcontractors.

Obviously, given the differences in their relationships, their respective liabilities cannot be the same. Precisely, the very clear terms and
stipulations contained in the MOAs and the Teaming Agreements — entered into by MPEI with SK C&C, WeSolv, Election.com and ePLDT
— negate the idea that these "members" are on a par with one another and are, as such, assuming the same joint and several liability. IHTASa

Moreover, respondents have earlier seized upon the use of the term "particular contract" in the Comelec's Request for Proposal (RFP), in order
to argue that all the members of the joint venture did not need to be solidarily liable for the entire project or joint venture. It was sufficient
that the lead company and the member in charge of a particular contract or aspect of the joint venture would agree to be solidarily liable.
The glaring lack of consistency leaves us at a loss. Are respondents trying to establish the same joint and solidary liability among all the
"members" or not?

Enforcement of Liabilities Problematic

Next, it is also maintained that the automation Contract between Comelec and the MPEI confirms the solidary undertaking of the lead
company and the consortium member concerned for each particular Contract, inasmuch as the position of MPEI and anyone else performing
the services contemplated under the Contract is described therein as that of an independent contractor.

The Court does not see, however, how this conclusion was arrived at. In the first place, the contractual provision being relied upon by
respondents is Article 14, "Independent Contractors," which states: "Nothing contained herein shall be construed as establishing or creating
between the COMELEC and MEGA the relationship of employee and employer or principal and agent, it being understood that the position
of MEGA and of anyone performing the Services contemplated under this Contract, is that of an independent contractor."

Obviously, the intent behind the provision was simply to avoid the creation of an employer-employee or a principal-agent relationship and
the complications that it would produce. Hence, the Article states that the role or position of MPEI, or anyone else performing on its behalf,
is that of an independent contractor. It is obvious to the Court that respondents are stretching matters too far when they claim that, because
of this provision, the Contract in effect confirms the solidary undertaking of the lead company and the consortium member concerned for
the particular phase of the project. This assertion is an absolute non sequitur.

Enforcement of Liabilities Under the Civil Code Not Possible

In any event, it is claimed that Comelec may still enforce the liability of the "consortium" members under the Civil Code provisions
on partnership, reasoning that MPEI et al. represented themselves as partners and members of MPC for purposes of bidding for the Project.
They are, therefore, liable to the Comelec to the extent that the latter relied upon such representation. Their liability as partners is solidary
with respect to everything chargeable to the partnership under certain conditions.

The Court has two points to make with respect to this argument. First, it must be recalled that SK C&C, WeSolv, Election.com and
ePLDT never represented themselves as partners and members of MPC, whether for purposes of bidding or for something else. It was
MPEI alone that represented them to be members of a "consortium" it supposedly headed. Thus, its acts may not necessarily be held against
the other "members."
Second, this argument of the OSG in its Memorandum 44 might possibly apply in the absence of a joint venture agreement or some other
writing that discloses the relationship of the "members" with one another. But precisely, this case does not deal with a situation in which there
is nothing in writing to serve as reference, leaving Comelec to rely on mere representations and therefore justifying a falling back on the rules
on partnership. For, again, the terms and stipulations of the MOAs entered into by MPEI with SK C&C and WeSolv, as well as the Teaming
Agreements of MPEI with Election.com and ePLDT (copies of which have been furnished the Comelec) are very clear with respect to the extent
and the limitations of the firms' respective liabilities.

In the case of WeSolv and SK C&C, their MOAs state that their liabilities, while joint and several with MPEI, are limited only to the particular
areas of work wherein their services are engaged or their products utilized. As for Election.com and ePLDT, their separate "Teaming
Agreements" specifically ascribe to them the role of subcontractor vis-a-vis MPEI as contractor and, based on the terms of their particular
agreements, neither Election.com nor ePLDT is, with MPEI, jointly and severally liable to Comelec. 45 It follows then that in the instant case,
there is no justification for anyone, much less Comelec, to resort to the rules on partnership and partners' liabilities.

Eligibility of a Consortium Based on the Collective Qualifications of Its Members

Respondents declare that, for purposes of assessing the eligibility of the bidder, the members of MPC should be evaluated on a collective basis.
Therefore, they contend, the failure of MPEI to submit financial statements (on account of its recent incorporation) should not by itself
disqualify MPC, since the other members of the "consortium" could meet the criteria set out in the RFP.

Thus, according to respondents, the collective nature of the undertaking of the members of MPC, their contribution of assets and sharing of
risks, and the community of their interest in the performance of the Contract lead to these reasonable conclusions: (1) that their collective
qualifications should be the basis for evaluating their eligibility; (2) that the sheer enormity of the project renders it improbable to expect any
single entity to be able to comply with all the eligibility requirements and undertake the project by itself; and (3) that, as argued by the OSG,
the RFP allows bids from manufacturers, suppliers and/or distributors that have formed themselves into a joint venture, in recognition of
the virtual impossibility of a single entity's ability to respond to the Invitation to Bid.

Additionally, argues the Comelec, the Implementing Rules and Regulations of RA 6957 (the Build-Operate-Transfer Law) as amended by RA
7718 would be applicable, as proponents of BOT projects usually form joint ventures or consortiums. Under the IRR, a joint
venture/consortium proponent shall be evaluated based on the individual or the collective experience of the member-firms of the joint
venture/consortium and of the contractors the proponent has engaged for the project.
Unfortunately, this argument seems to assume that the "collective" nature of the undertaking of the members of MPC, their contribution of
assets and sharing of risks, and the "community" of their interest in the performance of the Contract entitle MPC to be treated as a joint
venture or consortium; and to be evaluated accordingly on the basis of the members' collective qualifications when, in fact, the evidence before
the Court suggest otherwise.

This Court in Kilosbayan v. Guingona 46 defined joint venture as "an association of persons or companies jointly undertaking some
commercial enterprise; generally, all contribute assets and share risks. It requires a community of interest in the performance of the subject
matter, a right to direct and govern the policy in connection therewith, and [a] duty, which may be altered by agreement to share both in
profit and losses."

Going back to the instant case, it should be recalled that the automation Contract with Comelec was not executed by the "consortium" MPC
— or by MPEI for and on behalf of MPC — but by MPEI, period. The said Contract contains no mention whatsoever of any consortium or
members thereof. This fact alone seems to contradict all the suppositions about a joint undertaking that would normally apply to a joint
venture or consortium: that it is a commercial enterprise involving a community of interest, a sharing of risks, profits and losses, and so on.

Now let us consider the four bilateral Agreements, starting with the Memorandum of Agreement between MPEI and WeSolv Open Computing,
Inc., dated March 5, 2003. The body of the MOA consists of just seven (7) short paragraphs that would easily fit in one page! It reads as follows:

"1. The parties agree to cooperate in successfully implementing the Project in the substance and form as may be most beneficial
to both parties and other subcontractors involved in the Project.

"2. Mega Pacific shall be responsible for any contract negotiations and signing with the COMELEC and, subject to the latter's
approval, agrees to give WeSolv an opportunity to be present at meetings with the COMELEC concerning WeSolv's portion of
the Project.

"3. WeSolv shall be jointly and severally liable with Mega Pacific only for the particular products and/or services supplied by
the former for the Project.

"4. Each party shall bear its own costs and expenses relative to this agreement unless otherwise agreed upon by the parties.
"5. The parties undertake to do all acts and such other things incidental to, necessary or desirable or the attainment of the
objectives and purposes of this Agreement.

"6. In the event that the parties fail to agree on the terms and conditions of the supply of the products and services including
but not limited to the scope of the products and services to be supplied and payment terms, WeSolv shall cease to be bound
by its obligations stated in the aforementioned paragraphs.

"7. Any dispute arising from this Agreement shall be settled amicably by the parties whenever possible. Should the parties be
unable to do so, the parties hereby agree to settle their dispute through arbitration in accordance with the existing laws of the
Republic of the Philippines." (Emphasis supplied.)

Even shorter is the Memorandum of Agreement between MPEI and SK C&C Co. Ltd., dated March 9, 2003, the body of which consists of
only six (6) paragraphs, which we quote: IDCHTE

"1. All parties agree to cooperate in achieving the Consortium's objective of successfully implementing the Project in the
substance and form as may be most beneficial to the Consortium members and in accordance with the demand of the RFP.

"2. Mega Pacific shall have full powers and authority to represent the Consortium with the Comelec, and to enter and sign,
for and in behalf of its members any and all agreement/s which may be required in the implementation of the Project.

"3. Each of the individual members of the Consortium shall be jointly and severally liable with the Lead Firm for the particular
products and/or services supplied by such individual member for the project, in accordance with their respective undertaking
or sphere of responsibility.

"4. Each party shall bear its own costs and expenses relative to this agreement unless otherwise agreed upon by the parties.

"5. The parties undertake to do all acts and such other things incidental to, necessary or desirable for the attainment of the
objectives and purposes of this Agreement.

"6. Any dispute arising from this Agreement shall be settled amicably by the parties whenever possible. Should the parties be
unable to do so, the parties hereby agree to settle their dispute through arbitration in accordance with the existing laws of the
Republic of the Philippines." (Emphasis supplied.)
It will be noted that the two Agreements quoted above are very similar in wording. Neither of them contains any specifics or details as to
the exact nature and scope of the parties' respective undertakings, performances and deliverables under the Agreement with respect to the
automation project. Likewise, the two Agreements are quite bereft of pesos-and-centavos data as to the amount of investments each party
contributes, its respective share in the revenues and/or profit from the Contract with Comelec, and so forth — all of which are normal for
agreements of this nature. Yet, according to public and private respondents, the participation of MPEI, WeSolv and SK C&C comprises fully
90 percent of the entire undertaking with respect to the election automation project, which is worth about P1.3 billion.

As for Election.com and ePLDT, the separate "Teaming Agreements" they entered into with MPEI for the remaining 10 percent of the entire
project undertaking are ironically much longer and more detailed than the MOAs discussed earlier. Although specifically ascribing to them
the role of subcontractor vis-a-vis MPEI as contractor, these Agreements are, however, completely devoid of any pricing data or payment
terms. Even the appended Schedules supposedly containing prices of goods and services are shorn of any price data. Again, as mentioned
earlier, based on the terms of their particular Agreements, neither Election.com nor ePLDT — with MPEI — is jointly and severally liable
to Comelec.

It is difficult to imagine how these bare Agreements — especially the first two — could be implemented in practice; and how a dispute between
the parties or a claim by Comelec against them, for instance, could be resolved without lengthy and debilitating litigations. Absent any
clear-cut statement as to the exact nature and scope of the parties' respective undertakings, commitments, deliverables and covenants, one
party or another can easily dodge its obligation and deny or contest its liability under the Agreement; or claim that it is the other party that
should have delivered but failed to.

Likewise, in the absence of definite indicators as to the amount of investments to be contributed by each party, disbursements for expenses,
the parties' respective shares in the profits and the like, it seems to the Court that this situation could readily give rise to all kinds of
misunderstandings and disagreements over money matters.

Under such a scenario, it will be extremely difficult for Comelec to enforce the supposed joint and several liabilities of the members of the
"consortium." The Court is not even mentioning the possibility of a situation arising from a failure of WeSolv and MPEI to agree on the scope,
the terms and the conditions for the supply of the products and services under the Agreement. In that situation, by virtue of paragraph 6
of its MOA, WeSolv would perforce cease to be bound by its obligations — including its joint and solidary liability with MPEI under the MOA
— and could forthwith disengage from the project. Effectively, WeSolv could at any time unilaterally exit from its MOA with MPEI by simply
failing to agree. Where would that outcome leave MPEI and Comelec?

To the Court, this strange and beguiling arrangement of MPEI with the other companies does not qualify them to be treated as a consortium
or joint venture, at least of the type that government agencies like the Comelec should be dealing with. With more reason is it unable to agree
to the proposal to evaluate the members of MPC on a collective basis.

In any event, the MPC members claim to be a joint venture/consortium; and respondents have consistently been arguing that the IRR for RA
6957, as amended, should be applied to the instant case in order to allow a collective evaluation of consortium members. Surprisingly,
considering these facts, respondents have not deemed it necessary for MPC members to comply with Section 5.4 (a) (iii) of the IRR for RA
6957 as amended.

According to the aforementioned provision, if the project proponent is a joint venture or consortium, the members or participants thereof
are required to submit a sworn statement that, if awarded the contract, they shall bind themselves to be jointly, severally and solidarily liable
for the project proponent's obligations thereunder. This provision was supposed to mirror Section 5 of RA 6957, as amended, which states:
"In all cases, a consortium that participates in a bid must present proof that the members of the consortium have bound themselves jointly
and severally to assume responsibility for any project. The withdrawal of any member of the consortium prior to the implementation of the
project could be a ground for the cancellation of the contract."

The Court has certainly not seen any joint and several undertaking by the MPC members that even approximates the tenor of that which
is described above. We fail to see why respondents should invoke the IRR if it is for their benefit, but refuse to comply with it otherwise.

B.

DOST Technical Tests Flunked by the Automated Counting Machines

Let us now move to the second subtopic, which deals with the substantive issue: the ACM's failure to pass the tests of the Department of Science
and Technology (DOST).

After respondent "consortium" and the other bidder, TIM, had submitted their respective bids on March 10, 2003, the Comelec's BAC —
through its Technical Working Group (TWG) and the DOST — evaluated their technical proposals. Requirements that were highly technical
in nature and that required the use of certain equipment in the evaluation process were referred to the DOST for testing. The Department
reported thus:

TEST RESULTS MATRIX 47

[Technical Evaluation of Automated Counting Machine]

KEY REQUIREMENTS MEGA-PACIFIC TOTAL INFORMATION

[QUESTIONS] CONSORTIUM MANAGEMENT

YES NO YES NO

1. Does the machine have


an accuracy rating of at
least 99.995 percent?

At COLD  
environmental
conditions

At NORMAL  
environmental
conditions

At HARSH  
environmental
conditions

2. Accurately records and  


reports the date and time
of the start and end of
counting of ballots per
precinct?

3. Prints election returns  


without any loss of date
during generation of
such reports?

4. Uninterruptible back-up  
power system, that will
engage immediately to
allow operation of at
least 10 minutes after
outage, power surge or
abnormal electrical
occurrences?

5. Machine reads two-  


sided ballots in one Note: This
pass? particular
requirement
needs further
verification

6. Machine can detect  


previously counted
ballots and prevent
previously counted
ballots from being
counted more than
once?

7. Stores results of counted  


votes by precinct in Note: This
external (removable) particular
storage device? requirement
needs further
verification

8. Data stored in external  


media is encrypted? Note: This
particular
requirement
needs further
verification

9. Physical key or similar  


device allows, limits, or
restricts operation of the
machine?

10. CPU speed is at least  


400mHz? Note: This
particular
requirement
needs further
verification
11. Port to allow use of  
dot-matrix printers?

12. Generates printouts of


the election returns in a
format specified by the
COMELEC?

Generates printouts  

In format specified by  
COMELEC

13. Prints election returns  


without any loss of data
during generation of
such report?

14. Generates an audit trail


of the counting
machine, both hard copy
and soft copy?

Hard copy  

Soft copy  
Note: This
particular
requirement
needs further
verification

15. Does the  


City/Municipal Note: This
Canvassing System particular
consolidate results from requirement
all precincts within it needs further
using the encrypted soft verification
copy of the data
generated by the
counting machine and
stored on the removable
data storage device?

16. Does the  


City/Municipal Note: This Note: This
Canvassing System particular particular
consolidate results from requirement requirement
all precincts within it needs further needs further
using the encrypted soft verification verification
copy of the data
generated by the
counting machine and
transmitted through an
electronic transmission
media?
17. Does the system output  
a Zero City/Municipal Note: This
Canvass Report, which particular
is printed on election requirement
day prior to the conduct needs further
of the actual canvass verification
operation, that shows
that all totals for all the
votes for all the
candidates and other
information, are indeed
zero or null?

18. Does the system  


consolidate results from Note: This
all precincts in the particular
city/municipality using requirement
the data storage device needs further
coming from the verification
counting machine?

19. Is the machine 100%  


accurate? Note: This
particular
requirement
needs further
verification
20. Is the Program able to  
detect previously Note: This
downloaded precinct particular
results and prevent these requirement
from being inputted needs further
again into the System? verification

21. The System is able to


print the specified
reports and the audit
trail without any loss of
data during generation
of the above-mentioned
reports?

Prints specified reports  

Audit Trail  
Note: This
particular
requirement
needs further
verification

22. Can the result of the  


city/municipal Note: This
consolidation be stored particular
in a data storage device? requirement
needs further
verification

23. Does the system  


consolidate results from Note: This
all precincts in the particular
provincial/district/ requirement
national using the data needs further
storage device from verification
different levels of
consolidation?

24. Is the system 100%  


accurate? Note: This
particular
requirement
needs further
verification

25. Is the Program able to  


detect previously Note: This
downloaded precinct particular
results and prevent these requirement
from being inputted needs further
again into the System? verification

26. The System is able to


print the specified
reports and the audit
trail without any loss of
data during generation
of the abovementioned
reports?

Prints specified reports  

Audit Trail  
Note: This
particular
requirement
needs further
verification

27. Can the results of the  


provincial/district/ Note: This
national consolidation particular
be stored in a data requirement
storage device? needs further
verification

According to respondents, it was only after the TWG and the DOST had conducted their separate tests and submitted their respective reports
that the BAC, on the basis of these reports formulated its comments/recommendations on the bids of the consortium and TIM. HaTSDA

The BAC, in its Report dated April 21, 2003, recommended that the Phase II project involving the acquisition of automated counting
machines be awarded to MPEI. It said:

"After incisive analysis of the technical reports of the DOST and the Technical Working Group for Phase II — Automated
Counting Machine, the BAC considers adaptability to advances in modern technology to ensure an effective and efficient
method, as well as the security and integrity of the system.
"The results of the evaluation conducted by the TWG and that of the DOST (14 April 2003 report), would show the apparent
advantage of Mega-Pacific over the other competitor, TIM.

"The BAC further noted that both Mega-Pacific and TIM obtained some 'failed marks' in the technical evaluation. In general,
the 'failed marks' of Total Information Management as enumerated above affect the counting machine itself which are material
in nature, constituting non-compliance to the RFP. On the other hand, the 'failed marks' of Mega-Pacific are mere formalities
on certain documentary requirements which the BAC may waive as clearly indicated in the Invitation to Bid.

"In the DOST test, TIM obtained 12 failed marks and mostly attributed to the counting machine itself as stated earlier. These
are requirements of the RFP and therefore the BAC cannot disregard the same.

"Mega-Pacific failed in 8 items however these are mostly on the software which can be corrected by reprogramming the
software and therefore can be readily corrected.

"The BAC verbally inquired from DOST on the status of the retest of the counting machines of the TIM and was informed that
the report will be forthcoming after the holy week. The BAC was informed that the retest is on a different parameters they're
being two different machines being tested. One purposely to test if previously read ballots will be read again and the other for
the other features such as two sided ballots.

"The said machine and the software therefore may not be considered the same machine and program as submitted in the
Technical proposal and therefore may be considered an enhancement of the original proposal.

"Advance information relayed to the BAC as of 1:40 PM of 15 April 2003 by Executive Director Ronaldo T. Viloria of DOST
is that the result of the test in the two counting machines of TIM contains substantial errors that may lead to the failure of
these machines based on the specific items of the RFP that DOST has to certify.

OPENING OF FINANCIAL BIDS

"The BAC on 15 April 2003, after notifying the concerned bidders opened the financial bids in their presence and the results
were as follows:

Mega-Pacific:
Option 1 — Outright purchase: Bid Price if Php1,248,949,088.00

Option 2 — Lease option:

70% Down payment of cost of hardware or Php642,755,757.07

Remainder payable over 50 months or a total of Php642,755,757.07

Discount rate of 15% p.a. or 1.2532% per month.

Total Number of Automated Counting Machine — 1,769 ACMs (Nationwide)

TIM:

Total Bid Price – Php1,297,860,560.00

Total Number of Automated Counting Machine — 2,272 ACMs (Mindanao and NCR only)

"Premises considered, it appears that the bid of Mega Pacific is the lowest calculated responsive bid, and therefore, the Bids
and Awards Committee (BAC) recommends that the Phase II project re Automated Counting Machine be awarded to Mega
Pacific eSolutions, Inc." 48

The BAC, however, also stated on page 4 of its Report: "Based on the 14 April 2003 report (Table 6) of the DOST, it appears that both
Mega-Pacific and TIM (Total Information Management Corporation) failed to meet some of the requirements. Below is a comparative
presentation of the requirements wherein Mega-Pacific or TIM or both of them failed: . . .." What followed was a list of "key requirements,"
referring to technical requirements, and an indication of which of the two bidders had failed to meet them.

Failure to Meet the Required Accuracy Rating

The first of the key requirements was that the counting machines were to have an accuracy rating of at least 99.9995 percent. The BAC
Report indicates that both Mega Pacific and TIM failed to meet this standard.

The key requirement of accuracy rating happens to be part and parcel of the Comelec's Request for Proposal (RFP). The RFP, on page 26,
even states that the ballot counting machines and ballot counting software "must have an accuracy rating of 99.9995% (not merely
99.995%) or better as certified by a reliable independent testing agency."
When questioned on this matter during the Oral Argument, Commissioner Borra tried to wash his hands by claiming that the required
accuracy rating of 99.9995 percent had been set by a private sector group in tandem with Comelec. He added that the Commission had
merely adopted the accuracy rating as part of the group's recommended bid requirements, which it had not bothered to amend even after
being advised by DOST that such standard was unachievable. This excuse, however, does not in any way lessen Comelec's responsibility to
adhere to its own published bidding rules, as well as to see to it that the consortium indeed meets the accuracy standard. Whichever accuracy
rating is the right standard — whether 99.995 or 99.9995 percent — the fact remains that the machines of the so-called "consortium"
failed to even reach the lesser of the two. On this basis alone, it ought to have been disqualified and its bid rejected outright.

At this point, the Court stresses that the essence of public bidding is violated by the practice of requiring very high standards or unrealistic
specifications that cannot be met — like the 99.9995 percent accuracy rating in this case — only to water them down after the bid has been
award. Such scheme, which discourages the entry of prospective bona fide bidders, is in fact a sure indication of fraud in the bidding, designed
to eliminate fair competition. Certainly, if no bidder meets the mandatory requirements, standards or specifications, then no award should
be made and a failed bidding declared.

Failure of Software to Detect Previously Downloaded Data

Furthermore, on page 6 of the BAC Report, it appears that the "consortium" as well as TIM failed to meet another key requirement — for
the counting machine's software program to be able to detect previously downloaded precinct results and to prevent these from being entered
again into the counting machine. This same deficiency on the part of both bidders reappears on page 7 of the BAC Report, as a result of the
recurrence of their failure to meet the said key requirement.

That the ability to detect previously downloaded data at different canvassing or consolidation levels is deemed of utmost importance can be
seen from the fact that it is repeated three times in the RFP. On page 30 thereof, we find the requirement that the city/municipal canvassing
system software must be able to detect previously downloaded precinct results and prevent these from being "inputted" again into the system.
Again, on page 32 of the RFP, we read that the provincial/district canvassing system software must be able to detect previously downloaded
city/municipal results and prevent these from being "inputted" again into the system. And once more, on page 35 of the RFP, we find the
requirement that the national canvassing system software must be able to detect previously downloaded provincial/district results and
prevent these from being "inputted" again into the system.
Once again, though, Comelec chose to ignore this crucial deficiency, which should have been a cause for the gravest concern. Come May 2004,
unscrupulous persons may take advantage of and exploit such deficiency by repeatedly downloading and feeding into the computers results
favorable to a particular candidate or candidates.We are thus confronted with the grim prospect of election fraud on a massive scale by means
of just a few key strokes. The marvels and woes of the electronic age!

Inability to Print the Audit Trail

But that grim prospect is not all. The BAC Report, on pages 6 and 7, indicate that the ACMs of both bidders were unable to print the audit
trail without any loss of data. In the case of MPC, the audit trail system was "not yet incorporated" into its ACMs.

This particular deficiency is significant, not only to this bidding but to the cause of free and credible elections. The purpose of requiring audit
trails is to enable Comelec to trace and verify the identities of the ACM operators responsible for data entry and downloading, as well as the
times when the various data were downloaded into the canvassing system, in order to forestall fraud and to identify the perpetrators. CTIDcA

Thus, the RFP on page 27 states that the ballot counting machines and ballot counting software must print an audit trail of all machine
operations for documentation and verification purposes. Furthermore, the audit trail must be stored on the internal storage device and be
available on demand for future printing and verifying. On pages 30–31, the RFP also requires that the city/municipal canvassing
system software be able to print an audit trail of the canvassing operations, including therein such data as the date and time the canvassing
program was started, the log-in of the authorized users (the identity of the machine operators), the date and time the canvass data were
downloaded into the canvassing system, and so on and so forth. On page 33 of the RFP, we find the same audit trail requirement with respect
to theprovincial/district canvassing system software; and again on pages 35–36 thereof, the same audit trail requirement with respect to
the national canvassing systemsoftware.

That this requirement for printing audit trails is not to be lightly brushed aside by the BAC or Comelec itself as a mere formality or technicality
can be readily gleaned from the provisions of Section 7 of RA 8436, which authorizes the Commission to use an automated system for
elections.

The said provision which respondents have quoted several times, provides that ACMs are to possess certain features divided into two classes:
those that the statute itself considers mandatory and other features or capabilities that the law deems optional. Among those considered
mandatory are "provisions for audit trails"! Section 7 reads as follows: "The System shall contain the following features: (a) use of appropriate
ballots; (b) stand-alone machine which can count votes and an automated system which can consolidate the results immediately; (c) with
provisions for audit trails; (d) minimum human intervention; and (e) adequate safeguard/security measures." (Italics and emphases supplied.)

In brief, respondents cannot deny that the provision requiring audit trails is indeed mandatory, considering the wording of Section 7 of RA
8436. Neither can Respondent Comelec deny that it has relied on the BAC Report, which indicates that the machines or the software was
deficient in that respect. And yet, the Commission simply disregarded this shortcoming and awarded the Contract to private respondent,
thereby violating the very law it was supposed to implement.

C.

Inadequacy of Post Facto Remedial Measures

Respondents argue that the deficiencies relating to the detection of previously downloaded data, as well as provisions for audit trails, are mere
shortcomings or minor deficiencies in software or programming, which can be rectified. Perhaps Comelec simply relied upon the BAC Report,
which states on page 8 thereof that "Mega Pacific failed in 8 items[;] however these are mostly on the software which can be corrected by
re-programming . . . and therefore can be readily corrected."

The undersigned ponente's questions, some of which were addressed to Commissioner Borra during the Oral Argument, remain unanswered
to this day. First of all, who made the determination that the eight "fail" marks of Mega Pacific were on account of the software — was it
DOST or TWG? How can we be sure these failures were not the results of machine defects? How was it determined that the software could
actually be re-programmed and thereby rectified? Did a qualified technical expert read and analyze the source code 49 for the programs
and conclude that these could be saved and remedied? (Such determination cannot be done by any other means save by the examination and
analysis of the source code.)

Who was this qualified technical expert? When did he carry out the study? Did he prepare a written report on his findings? Or did the Comelec
just make a wild guess? It does not follow that all defects in software programs can be rectified, and the programs saved. In the information
technology sector, it is common knowledge that there are many badly written programs, with significant programming errors written into
them; hence it does not make economic sense to try to correct the programs; instead, programmers simply abandon them and just start
from scratch. There's no telling if any of these programs is unrectifiable, unless a qualified programmer reads the source code.
And if indeed a qualified expert reviewed the source code, did he also determine how much work would be needed to rectify the programs?
And how much time and money would be spent for that effort? Who would carry out the work? After the rectification process, who would
ascertain and how would it be ascertained that the programs have indeed been properly rectified, and that they would work properly
thereafter? And of course, the most important question to ask: could the rectification be done in time for the elections in 2004?

Clearly, none of the respondents bothered to think the matter through. Comelec simply took the word of the BAC as gospel truth, without
even bothering to inquire from DOST whether it was true that the deficiencies noted could possibly be remedied by re-programming the
software. Apparently, Comelec did not care about the software, but focused only on purchasing the machines.

What really adds to the Court's dismay is the admission made by Commissioner Borra during the Oral Argument that the software currently
being used by Comelec was merely the "demo" version, inasmuch as the final version that would actually be used in the elections was still being
developed and had not yet been finalized.

It is not clear when the final version of the software would be ready for testing and deployment. It seems to the Court that Comelec is just
keeping its fingers crossed and hoping the final product would work. Is there a "Plan B" in case it does not? Who knows? But all these software
programs are part and parcel of the bidding and the Contract awarded to the Consortium. Why is it that the machines are already being
brought in and paid for, when there is as yet no way of knowing if the final version of the software would be able to run them properly, as
well as canvass and consolidate the results in the manner required?

The counting machines, as well as the canvassing system, will never work properly without the correct software programs. There is an old
adage that is still valid to this day: "Garbage in, garbage out." No matter how powerful, advanced and sophisticated the computers and the
servers are, if the software being utilized is defective or has been compromised, the results will be no better than garbage. And to think that
what is at stake here is the 2004 national elections — the very basis of our democratic life.

Correction of Defects?

To their Memorandum, public respondents proudly appended 19 Certifications issued by DOST declaring that some 285 counting machines
had been tested and had passed the acceptance testing conducted by the Department on October 8–18, 2003. Among those tested were
some machines that had failed previous tests, but had undergone adjustments and thus passed re-testing.
Unfortunately, the Certifications from DOST fail to divulge in what manner and by what standards or criteria the condition, performance
and/or readiness of the machines were re-evaluated and re-appraised and thereafter given the passing mark. Apart from that fact, the
remedial efforts of respondents were, not surprisingly, apparently focused again on the machines — the hardware. Nothing was said or done
about the software — the deficiencies as to detection and prevention of downloading and entering previously downloaded data, as well as
the capability to print an audit trail. No matter how many times the machines were tested and re-tested, if nothing was done about the
programming defects and deficiencies, the same danger of massive electoral fraud remains. As anyone who has a modicum of knowledge of
computers would say, "That's elementary!"

And only last December 5, 2003, an Inq7.net news report quoted the Comelec chair as saying that the new automated poll system would
be used nationwide in May 2004, even as the software for the system remained unfinished. It also reported that a certain Titus Manuel of
the Philippine Computer Society, which was helping Comelec test the hardware and software, said that the software for the counting still
had to be submitted on December 15, while the software for the canvassing was due in early January.

Even as Comelec continues making payments for the ACMs, we keep asking ourselves: who is going to ensure that the software would be tested
and would work properly?

At any rate, the re-testing of the machines and/or the 100 percent testing of all machines (testing of every single unit) would not serve to
eradicate the grave abuse of discretion already committed by Comelec when it awarded the Contract on April 15, 2003, despite the obvious
and admitted flaws in the bidding process, the failure of the "winning bidder" to qualify, and the inability of the ACMs and the intended
software to meet the bid requirements and rules.

Comelec's Latest "Assurances" Are Unpersuasive

Even the latest pleadings filed by Comelec do not serve to allay our apprehensions. They merely affirm and compound the serious violations
of law and gravely abusive acts it has committed. Let us examine them.

The Resolution issued by this Court on December 9, 2003 required respondents to inform it as to the number of ACMs delivered and paid
for, as well as the total payment made to date for the purchase thereof. They were likewise instructed to submit a certification from the DOST
attesting to the number of ACMs tested, the number found to be defective; and "whether the reprogrammed software has been tested and
found to have complied with the requirements under Republic Act No. 8436." 50

In its "Partial Compliance and Manifestation" dated December 29, 2003, Comelec informed the Court that 1,991 ACMs had already been
delivered to the Commission as of that date. It further certified that it had already paid the supplier the sum of P849,167,697.41, which
corresponded to 1,973 ACM units that had passed the acceptance testing procedures conducted by the MIRDC-DOST 51 and which had
therefore been accepted by the poll body. ICTcDA

In the same submission, for the very first time, Comelec also disclosed to the Court the following:

"The Automated Counting and Canvassing Project involves not only the manufacturing of the ACM hardware but also the
development of three (3) types of software, which are intended for use in the following:

1. Evaluation of Technical Bids

2. Testing and Acceptance Procedures

3. Election Day Use."

Purchase of the First Type of Software Without Evaluation

In other words, the first type of software was to be developed solely for the purpose of enabling the evaluation of the bidder's technical bid.
Comelec explained thus: "In addition to the presentation of the ACM hardware, the bidders were required to develop a 'base' software program
that will enable the ACM to function properly. Since the software program utilized during the evaluation of bids is not the actual software
program to be employed on election day, there being two (2) other types of software program that will still have to be developed and
thoroughly tested prior to actual election day use, defects in the 'base' software that can be readily corrected by reprogramming are
considered minor in nature, and may therefore be waived."

In short, Comelec claims that it evaluated the bids and made the decision to award the Contract to the "winning" bidder partly on the basis
of the operation of the ACMs running a "base" software. That software was therefore nothing but a sample or "demo" software, which would
not be the actual one that would be used on election day. Keeping in mind that the Contract involves the acquisition of not just the ACMs
or the hardware, but also the software that would run them, it is now even clearer that the Contract was awarded without Comelec having
seen, much less evaluated, the final product — the software that would finally be utilized come election day. (Not even the "near-final"
product, for that matter).

What then was the point of conducting the bidding, when the software that was the subject of the Contract was still to be created and could
conceivably undergo innumerable changes before being considered as being in final form? And that is not all!

No Explanation for Lapses in the Second Type of Software

The second phase, allegedly involving the second type of software, is simply denominated "Testing and Acceptance Procedures." As best as
we can construe, Comelec is claiming that this second type of software is also to be developed and delivered by the supplier in connection with
the "testing and acceptance" phase of the acquisition process. The previous pleadings, though — including the DOST reports submitted to this
Court — have not heretofore mentioned any statement, allegation or representation to the effect that a particular set of software was to
be developed and/or delivered by the supplier in connection with the testing and acceptance of delivered ACMs.

What the records do show is that the imported ACMs were subjected to the testing and acceptance process conducted by the DOST. Since
the initial batch delivered included a high percentage of machines that had failed the tests, Comelec asked the DOST to conduct a 100 percent
testing; that is, to test every single one of the ACMs delivered. Among the machines tested on October 8 to 18, 2003, were some units that
had failed previous tests but had subsequently been re-tested and had passed. To repeat, however, until now, there has never been any
mention of a second set or type of software pertaining to the testing and acceptance process.

In any event, apart from making that misplaced and uncorroborated claim, Comelec in the same submission also professes (in response to
the concerns expressed by this Court) that the reprogrammed software has been tested and found to have complied with the requirements
of RA 8436. It reasoned thus: "Since the software program is an inherent element in the automated counting system, the certification issued
by the MIRDC-DOST that one thousand nine hundred seventy-three (1,973) units passed the acceptance test procedures is an official
recognition by the MIRDC-DOST that the software component of the automated election system, which has been reprogrammed to comply
with the provisions of Republic Act No. 8436 as prescribed in the Ad Hoc Technical Evaluation Committee's ACM Testing and Acceptance
Manual, has passed the MIRDC-DOST tests."

The facts do not support this sweeping statement of Comelec. A scrutiny of the MIRDC-DOST letter dated December 15, 2003, 52 which
it relied upon, does not justify its grand conclusion. For clarity's sake, we quote in full the letter-certification, as follows:
"15 December 2003

"HON. RESURRECCION Z. BORRA

Commissioner-in-Charge

Phase II, Modernization Project

Commission on Elections

Intramuros, Manila

Attention: Atty. Jose M. Tolentino, Jr.

Project Director

"Dear Commissioner Borra:

"We are pleased to submit 11 DOST Test Certifications representing 11 lots and covering 158 units of automated counting
machines (ACMs) that we have tested from 02–12 December 2003.

"To date, we have tested all the 1,991 units of ACMs, broken down as follow: (sic)

1st batch — 30 units 4th batch — 438 units

2nd batch — 288 units 5th batch — 438 units

3rd batch — 414 units 6th batch — 383 units

"It should be noted that a total of 18 units have failed the test. Out of these 18 units, only one (1) unit has failed the retest.

"Thank you and we hope you will find everything in order.

"Very truly yours,

"ROLANDO T. VILORIA, CESO III


Executive Director cum

Chairman, DOST-Technical Evaluation Committee"

Even a cursory glance at the foregoing letter shows that it is completely bereft of anything that would remotely support Comelec's contention
that the "software component of the automated election system . . . has been reprogrammed to comply with" RA 8436, and "has passed the
MIRDC-DOST tests." There is no mention at all of any software reprogramming. If the MIRDC-DOST had indeed undertaken the supposed
reprogramming and the process turned out to be successful, that agency would have proudly trumpeted its singular achievement.

How Comelec came to believe that such reprogramming had been undertaken is unclear. In any event, the Commission is not forthright and
candid with the factual details. If reprogramming has been done, who performed it and when? What exactly did the process involve? How
can we be assured that it was properly performed? Since the facts attendant to the alleged reprogramming are still shrouded in mystery,
the Court cannot give any weight to Comelec's bare allegations.

The fact that a total of 1,973 of the machines has ultimately passed the MIRDC-DOST tests does not by itself serve as an endorsement of
the soundness of the software program, much less as a proof that it has been reprogrammed. In the first place, nothing on record shows that
the tests and re-tests conducted on the machines were intended to address the serious deficiencies noted earlier. As a matter of fact, the
MIRDC-DOST letter does not even indicate what kinds of tests or re-tests were conducted, their exact nature and scope, and the specific
objectives thereof. 53 The absence of relevant supporting documents, combined with the utter vagueness of the letter, certainly fails to inspire
belief or to justify the expansive confidence displayed by Comelec. In any event, it goes without saying that remedial measures such as the
alleged reprogramming cannot in any way mitigate the grave abuse of discretion already committed as early as April 15, 2003.

Rationale of Public Bidding Negated by the Third Type of Software

Respondent Comelec tries to assuage this Court's anxiety in these words: "The reprogrammed software that has already passed the
requirements of Republic Act No. 8436 during the MIRDC-DOST testing and acceptance procedures will require further customization since
the following additional elements, among other things, will have to be considered before the final software can be used on election day: 1.
Final Certified List of Candidates . . . 2. Project of Precincts . . . 3. Official Ballot Design and Security Features . . . 4. Encryption, digital
certificates and digital signatures . . . The certified list of candidates for national elective positions will be finalized on or before 23 January
2004 while the final list of projects of precincts will be prepared also on the same date. Once all the above elements are incorporated in the
software program, the Test Certification Group created by the Ad Hoc Technical Evaluation Committee will conduct meticulous testing of
the final software before the same can be used on election day. In addition to the testing to be conducted by said Test Certification Group,
the Comelec will conduct mock elections in selected areas nationwide not only for purposes of public information but also to further test the
final election day program. Public respondent Comelec, therefore, requests that it be given up to 16 February 2004 to comply with this
requirement."

The foregoing passage shows the imprudent approach adopted by Comelec in the bidding and acquisition process. The Commission says that
before the software can be utilized on election day, it will require "customization" through addition of data — like the list of candidates, project
of precincts, and so on. And inasmuch as such data will become available only in January 2004 anyway, there is therefore no perceived need
on Comelec's part to rush the supplier into producing the final (or near-final) version of the software before that time. In any case, Comelec
argues that the software needed for the electoral exercise can be continuously developed, tested, adjusted and perfected, practically all the
way up to election day, at the same time that the Commission is undertaking all the other distinct and diverse activities pertinent to the
elections.

Given such a frame of mind, it is no wonder that Comelec paid little attention to the counting and canvassing software during the entire
bidding process, which took place in February–March 2003. Granted that the software was defective, could not detect and prevent the re-use
of previously downloaded data or produce the audit trail — aside from its other shortcomings — nevertheless, all those deficiencies could still
be corrected down the road. At any rate, the software used for bidding purposes would not be the same one that will be used on election
day, so why pay any attention to its defects? Or to the Comelec's own bidding rules for that matter?HcTIDC

Clearly, such jumbled ratiocinations completely negate the rationale underlying the bidding process mandated by law.

At the very outset, the Court has explained that Comelec flagrantly violated the public policy on public biddings (1) by allowing MPC/MPEI
to participate in the bidding even though it was not qualified to do so; and (2) by eventually awarding the Contract to MPC/MPEI. Now, with
the latest explanation given by Comelec, it is clear that the Commission further desecrated the law on public bidding by permitting the
winning bidder to change and alter the subject of the Contract (the software), in effect allowing a substantive amendment without public
bidding.
This stance is contrary to settled jurisprudence requiring the strict application of pertinent rules, regulations and guidelines for public bidding
for the purpose of placing each bidder, actual or potential, on the same footing. The essence of public bidding is, after all, an opportunity for
fair competition, and a fair basis for the precise comparison of bids. In common parlance, public bidding aims to "level the playing field." That
means each bidder must bid under the same conditions; and be subject to the same guidelines, requirements and limitations, so that the best
offer or lowest bid may be determined, all other things being equal.

Thus, it is contrary to the very concept of public bidding to permit a variance between the conditions under which bids are invited and those
under which proposals are submitted and approved; or, as in this case, the conditions under which the bid is won and those under which the
awarded Contract will be complied with. The substantive amendment of the contract bidded out, without any public bidding — after the
bidding process had been concluded — is violative of the public policy on public biddings, as well as the spirit and intent of RA 8436. The
whole point in going through the public bidding exercise was completely lost. The very rationale of public bidding was totally subverted by
the Commission.

From another perspective, the Comelec approach also fails to make sense. Granted that, before election day, the software would still have
to be customized to each precinct, municipality, city, district, and so on, there still was nothing at all to prevent Comelec from requiring
prospective suppliers/bidders to produce, at the very start of the bidding process, the "next-to-final" versions of the software (the best
software the suppliers had) — pre-tested and ready to be customized to the final list of candidates and project of precincts, among others,
and ready to be deployed thereafter. The satisfaction of such requirement would probably have provided far better bases for evaluation and
selection, as between suppliers, than the so-called demo software.

Respondents contend that the bidding suppliers' counting machines were previously used in at least one political exercise with no less than
20 million voters. If so, it stands to reason that the software used in that past electoral exercise would probably still be available and, in all
likelihood, could have been adopted for use in this instance. Paying for machines and software of that category (already tried and proven in
actual elections and ready to be adopted for use) would definitely make more sense than paying the same hundreds of millions of pesos for
demo software and empty promises of usable programs in the future.

But there is still another gut-level reason why the approach taken by Comelec is reprehensible. It rides on the perilous assumption that nothing
would go wrong; and that, come election day, the Commission and the supplier would have developed, adjusted and "re-programmed" the
software to the point where the automated system could function as envisioned. But what if such optimistic projection does not materialize?
What if, despite all their herculean efforts, the software now being hurriedly developed and tested for the automated system performs
dismally and inaccurately or, worse, is hacked and/or manipulated? 54 What then will we do with all the machines and defective
software already paid for in the amount of P849 million of our tax money? Even more important, what will happen to our country in case
of failure of the automation?

The Court cannot grant the plea of Comelec that it be given until February 16, 2004 to be able to submit a "certification relative to the
additional elements of the software that will be customized," because for us to do so would unnecessarily delay the resolution of this case and
would just give the poll body an unwarranted excuse to postpone the 2004 elections. On the other hand, because such certification will not
cure the gravely abusive actions complained of by petitioners, it will be utterly useless.

Is this Court being overly pessimistic and perhaps even engaging in speculation? Hardly. Rather, the Court holds that Comelec should not have
gambled on the unrealistic optimism that the supplier's software development efforts would turn out well. The Commission should have
adopted a much more prudent and judicious approach to ensure the delivery of tried and tested software, and readied alternative courses
of action in case of failure. Considering that the nation's future is at stake here, it should have done no less.

Epilogue

Once again, the Court finds itself at the crossroads of our nation's history. At stake in this controversy is not just the business of a computer
supplier, or a questionable proclamation by Comelec of one or more public officials. Neither is it about whether this country should switch from
the manual to the automated system of counting and canvassing votes. At its core is the ability and capacity of the Commission on Elections
to perform properly, legally and prudently its legal mandate to implement the transition from manual to automated elections.

Unfortunately, Comelec has failed to measure up to this historic task. As stated at the start of this Decision, Comelec has not merely gravely
abused its discretion in awarding the Contract for the automation of the counting and canvassing of the ballots. It has also put at grave risk
the holding of credible and peaceful elections by shoddily accepting electronic hardware and software that admittedly failed to pass legally
mandated technical requirements. Inadequate as they are, the remedies it proffers post facto do not cure the grave abuse of discretion it
already committed (1) on April 15, 2003, when it illegally made the award; and (2) "sometime" in May 2003 when it executed the Contract
for the purchase of defective machines and non-existent software from a non-eligible bidder.
For these reasons, the Court finds it totally unacceptable and unconscionable to place its imprimatur on this void and illegal transaction that
seriously endangers the breakdown of our electoral system. For this Court to cop-out and to close its eyes to these illegal transactions, while
convenient, would be to abandon its constitutional duty of safeguarding public interest.

As a necessary consequence of such nullity and illegality, the purchase of the machines and all appurtenances thereto including the
still-to-be-produced (or in Comelec's words, to be "reprogrammed") software, as well as all the payments made therefor, have no basis
whatsoever in law. The public funds expended pursuant to the void Resolution and Contract must therefore be recovered from the payees
and/or from the persons who made possible the illegal disbursements, without prejudice to possible criminal prosecutions against them.

Furthermore, Comelec and its officials concerned must bear full responsibility for the failed bidding and award, and held accountable for the
electoral mess wrought by their grave abuse of discretion in the performance of their functions. The State, of course, is not bound by the
mistakes and illegalities of its agents and servants.

True, our country needs to transcend our slow, manual and archaic electoral process. But before it can do so, it must first have a diligent
and competent electoral agency that can properly and prudently implement a well-conceived automated election system.

At bottom, before the country can hope to have a speedy and fraud-free automated election, it must first be able to procure the proper
computerized hardware and software legally, based on a transparent and valid system of public bidding. As in any democratic system, the
ultimate goal of automating elections must be achieved by a legal, valid and above-board process of acquiring the necessary tools and skills
therefor. Though the Philippines needs an automated electoral process, it cannot accept just any system shoved into its bosom through
improper and illegal methods. As the saying goes, the end never justifies the means. Penumbral contracting will not produce enlightened
results.

WHEREFORE, the Petition is GRANTED. The Court hereby declares NULL and VOID Comelec Resolution No. 6074 awarding the contract for
Phase II of the CAES to Mega Pacific Consortium (MPC). Also declared null and void is the subject Contract executed between Comelec and
Mega Pacific eSolutions (MPEI). 55 Comelec is further ORDERED to refrain from implementing any other contract or agreement entered into
with regard to this project.
Let a copy of this Decision be furnished the Office of the Ombudsman which shall determine the criminal liability, if any, of the public officials
(and conspiring private individuals, if any) involved in the subject Resolution and Contract. Let the Office of the Solicitor General also take
measures to protect the government and vindicate public interest from the ill effects of the illegal disbursements of public funds made by
reason of the void Resolution and Contract.

SO ORDERED.

||| (Information Technology Foundation of the Philippines v. Commission on Elections, G.R. No. 159139, [January 13, 2004], 464 PHIL
173-324)
[G.R. No. 159139. June 15, 2005.]

INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES, MA. CORAZON M. AKOL, MIGUEL UY, EDUARDO H.
LOPEZ, AUGUSTO C. LAGMAN, REX C. DRILON, MIGUEL HILADO, LEY SALCEDO, and MANUEL ALCUAZ JR., petitioners, vs.
COMMISSION ON ELECTIONS; COMELEC CHAIRMAN BENJAMIN ABALOS SR.; COMELEC BIDDING and AWARD
COMMITTEE CHAIRMAN EDUARDO D. MEJOS and MEMBERS GIDEON DE GUZMAN, JOSE F BALBUENA, LAMBERTO P.
LLAMAS, and BARTOLOME SINOCRUZ JR.; MEGA PACIFIC eSOLUTIONS, INC.; and MEGA PACIFIC
CONSORTIUM,respondents.

RESOLU TI ON

PANGANIBAN, J p:

Our Decision 1 in the present case voided the Contract entered into by the Commission on Elections (Comelec) for the supply of automated
counting machines (ACMs) because of "clear violation of law and jurisprudence" and "reckless disregard of [Comelec's] own bidding rules and
procedure." Moreover, "Comelec awarded this billion-dollar undertaking with inexplicable haste, without adequately checking and observing
mandatory financial, technical and legal requirements. . . . The illegal, imprudent and hasty actions of the Commission have not only
desecrated legal and jurisprudential norms, but have also cast serious doubts upon the poll body's ability and capacity to conduct automated
elections." As a result, the ACMs illegally procured and improvidently paid for by Comelec were not used during the 2004 national elections.

In its present Motion, the poll body expressly admits that the Decision "has become final and executory," and that "COMELEC and MPC-MPEI
are under obligation to make mutual restitution. Otherwise stated, this admission implies that the ACMs are to be returned to MPC-MPEI,
and that the sum of over one billion pesos illegally paid for them be refunded to the public purse. 2 In short, ownership of the ACMs never
left MPC-MPEI and the money paid for them still belongs, and must be returned, to the government. jurcd2005

Consequently, the ACMs, which "admittedly failed to pass legally mandated technical requirements" cannot be used during the forthcoming
elections in the Autonomous Region for Muslim Mindanao (ARMM). Apart from formidable legal, jurisprudential, technical and financial
obstacles, the use of the machines would expose the ARMM elections to the same electoral pitfalls and frauds pointed out in our Decision. If
the ACMs were not good enough for the 2004 national elections, why should they be good enough now for the 2005 ARMM elections,
considering that nothing has been done by Comelec to correct the legal, jurisprudential and technical flaws underscored in our final and
executory Decision?

The Motion

Before us is the Commission on Election's "Most Respectful Motion for Leave to Use the Automated Counting Machines in [the] Custody of the
Commission on Elections for use (sic) in the August 8, 2005 Elections in the Autonomous Region for Muslim Mindanao (ARMM)," dated
December 9, 2004. In its January 18, 2005 Resolution, the Court required the parties to comment. After careful deliberation on all pleadings
at hand, we now resolve the Motion. AEIHCS

Background Information

At the outset, we stress that the Decision in the present case, promulgated on January 13, 2004, has long attained finality. 3 In our February
17, 2004 Resolution, we denied with finality Comelec's Motion for Reconsideration dated January 28, 2004, as well as private respondents'
Omnibus Motion dated January 26, 2004. The Decision was recorded in the Book of Entries of Judgments on March 30, 2004.

Recall that our Decision declared Comelec to have acted with grave abuse of discretion when, by way of its Resolution No. 6074, it awarded
the Contract for the supply of automated counting machines (ACMs) to private respondents. It did so, not only in clear violation of law and
jurisprudence, but also with inexplicable haste and reckless disregard of its own bidding rules and procedures; particularly the mandatory
financial, technical and legal requirements. It further manifested such grave abuse of discretion when it accepted the subject computer
hardware and software even though, at the time of the award, these had patently failed to pass eight critical requirements designed to
safeguard the integrity of the elections. Consequently, this Court was constrained to exercise its constitutional duty by voiding the assailed
Resolution No. 6074 awarding the Contract to Mega Pacific Consortium, as well as the subject Contract itself executed between Comelec and
Mega Pacific eSolutions, Inc.

Comelec was further ordered to refrain from implementing any other contract or agreement it had entered into with regard to the said
project. We also declared that, as a necessary consequence of such nullity and illegality, the purchase of the ACMs and the software, along
with all payments made for them, had no basis in law. Hence, the public funds spent must be recovered from the payees and/or the persons
who made the illegal disbursements possible, without prejudice to possible criminal prosecutions against them. 4

Likewise, our February 17, 2004 Resolution denying reconsideration found movants to have raised the same procedural and substantive issues
already exhaustively discussed and definitively passed upon in our Decision. In that Resolution, we emphasized (and we reiterate here) that
the Decision did not prohibit automation of the elections. Neither did the Court say that it was opposed to such project (or the use of ACMs)
as a general proposition. We repeated our explanation that the reason for voiding the assailed Resolution and the subject Contract was the
grave abuse of discretion on the part of Comelec; as well as its violations of law — specifically RA 9184,RA 8436, and RA 6955 as
amended by RA 7718 — prevailing jurisprudence (the latest of which was Agan v. Philippine International Air Terminals Co., Inc. 5 ), and
the bidding rules and policies of the Commission itself.

Comelec's Claims

Notwithstanding our Decision and Resolution, the present Motion claims, inter alia, that the ARMM elections are slated to be held on August
8, 2005, and are mandated by RA 9333 to be automated; that the government has no available funds to finance the automation of those
elections; that considering its present fiscal difficulties, obtaining a special appropriation for the purpose is unlikely; that, on the other hand,
there are in Comelec's custody at present 1,991 ACMs, which were previously delivered by private respondents; that these machines would
deteriorate and become obsolete if they remain idle and unused; that they are now being stored in the Comelec Maxilite Warehouse along
UN Avenue, at storage expenses of P329,355.26 a month, or P3,979,460.24 annually."

The Motion further alleges that "information technology experts," who purportedly supervised all stages of the software development for the
creation of the final version to be used in the ACMs, have unanimously confirmed that this undertaking is in line with the internationally
accepted standards (ISO/IEC 12207) for software life cycle processes, "with its quality assurance that it would be fit for use in the
elections . . .."

Comelec also points out that the process of "enhancement" of the counting and canvassing software has to be commenced at least six (6)
months prior to the August 8, 2005 ARMM elections, in order to be ready by then. It asserts that its Motion is (a) without prejudice to the
ongoing Civil Case No. 04-346 pending before the Regional Trial Court of Makati City, Branch 59, entitled "Mega Pacific eSolutions, Inc. v.
Republic of the Philippines (represented by the Commission on Elections)," for the collection of a purported P200 million balance due from
Comelec under the voided Contract; and (b) with a continuing respectful recognition of the finality and legal effects of our aforesaid Decision.
At bottom, Comelec prays that it be granted leave to use the ACMs in its custody during the said ARMM elections.

Private Respondents' Contentions

Commenting on the present Motion, private respondents take the position that, since the subject ACMs have already been delivered to, paid
for and used by Comelec, the Republic of the Philippines is now their owner, without prejudice to Mega Pacific eSolutions, Inc.'s claim for
damages in the case pending before the RTC of Makati; and that, consequently, as far as private respondents are concerned, the question of
using the subject ACMs for the ARMM elections is dependent solely on the discretion of the owner, the Republic of the Philippines.

Petitioners' Comment

On the other hand, petitioners contend that Comelec is asking this Court to render an advisory opinion, in contravention of the constitutional
provision 6 that explicitly states that the exercise of judicial power is confined to (1) settling actual controversies involving rights that are
legally demandable and enforceable; and (2) determining whether there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of government.

Petitioners assert that there is no longer any live case or controversy to speak of — an existing case or controversy that is appropriate or
ripe for determination, not merely conjectural or anticipatory; and that Comelec's allegations in its Motion do not amount to an actual case
or controversy that would require this Court to render a decision or resolution in the legitimate exercise of its judicial power. This lack of actual
controversy is clearly seen in the relief prayed for in the Motion: the grant of a leave to use the ACMs during the ARMM elections. Obviously,
Comelec merely seeks an advisory opinion from this Court on whether its proposal to use the ACMs during the said elections might be in
violation of this Court's Decision dated January 13, 2004, and Resolution dated February 17, 2004. HIaTCc
Assuming arguendo that the present Motion might somehow be justified by the government's fiscal difficulties, petitioners further argue that
permitting Comelec to use the ACMs would nevertheless allow it to do indirectly what it was not permitted by this Court to do directly. They
argue that the instant Motion is merely a subterfuge on the poll body's part to resurrect a lost case via a request for an advisory opinion.

The OSG's Comment

The Office of the Solicitor General (OSG) declares in its Comment that, in compliance with this Court's directive for it to "take measures to
protect the government and vindicate public interest from the ill effects of the illegal disbursements of public funds made by reason of the
void [Comelec] Resolution and Contract," it filed on behalf of the Republic on July 7, 2004, an Answer with Counterclaim in Civil Case No.
04-346. The OSG prayed for the return of all payments made by Comelec to Mega Pacific under the void Contract, amounting to
P1,048,828,407.

The OSG also manifests that it received a copy of the Complaint-Affidavit dated September 15, 2004, filed with the Office of the
Ombudsman by the Bantay Katarungan Foundation and the Kilosbayan Foundation against the Comelec commissioners who had awarded
the Contract for the ACMs; and the private individuals involved, including the incorporators and officers of Mega Pacific eSolutions, Inc. This
Complaint-Affidavit was for violation of the Anti-Plunder Law (RA 7030), the Anti-Graft and Corrupt Practices Act (RA 3019 as
amended), and the Code of Conduct and Ethical Standards for Public Officials and Employees (RA 6713).

The complainants alleged immense kickbacks and horrendous overpricing involved in the purchase of the 1,991 ACMs. Based on the OSG's
available records, it appears that Comelec withdrew from Land Bank P1.03 billion, but actually paid Mega Pacific only P550.81 million.
Furthermore, commercial invoices and bank applications for documentary credits reveal that each ACM cost only P276,650.00, but that
Comelec agreed to pay Mega Pacific P430,394.17 per unit — or a differential of P153,744.17 per unit or an aggregate differential of
P306.10 million. Moreover, Mega Pacific charged P83.924 million for value-added taxes (VAT) and P81.024 million more for customs duties
and brokerage fees, when in fact — under the nullified Contract — it was supposed to be exempt from VAT, customs duties and brokerage
fees. Lastly, Comelec agreed to peg the ACM price at the exchange rate of P58 to $1, when the exchange rate was P55 to $1 at the time
of the bidding, resulting in additional losses for the government amounting to about P30 million. HEDSIc
The OSG hews to the view that the automation of elections, if properly carried out, is a desirable objective, but is mindful of the need for
mutual restitution by the parties as a result of the final Decision nullifying the Contract for the ACMs. Nevertheless, in apparent response to
Comelec's clamor to use the ACMs in the ARMM elections, the OSG manifests that it has no objection to the proposal to use the
machines, provided however that (1) Comelec should show with reasonable certainty that the hardware and software of, the ACMs can be
effectively used for the intended purpose; (2) Mega Pacific should be made to return to the Republic at least a substantial portion of the
overprice they charged for the purchase of the ACMs; and (3) the use of these machines, if authorized by this Court, should be without
prejudice to the prosecution of the related criminal cases pending before the Office of the Ombudsman (OMB).

The OMB's Manifestation

For its part, the Office of the Ombudsman manifested that as a result of the nullification of the Contract, various fact-finding investigations
had been conducted, and criminal and administrative charges filed before it against the persons who appeared to be responsible for the
anomalous Contract; and that the various cases had been consolidated, and preliminary investigation conducted in respect of the
non-impeachable Comelec officials and co-conspirators/private individuals. Furthermore, the OMB is in the process of determining whether
a verified impeachment complaint may be filed against the poll body's impeachable officials concerned. EAcHCI

A Supplemental Complaint prepared and filed by the Field Investigation Office of the Ombudsman reveals that the ACMs were overpriced
by about P162,000.00 per unit; that, additionally, Mega Pacific unduly benefited by including VAT and import duties amounting to P194.60
million in its bid price for the ACMs, despite Section 8 ofRA 8436 exempting such equipment from taxes and duties; that Comelec nonetheless
awarded the Contract to Mega Pacific at the same bid price of P1.249 billion, inclusive of VAT, import duties and so on; and that the
Commission allowed Mega Pacific to peg the ACM price using an exchange rate of P58 to $1 instead of P53 to $1, which further inflated
Mega Pacific's windfall.

The foregoing notwithstanding, the OMB had allegedly prepared a comment on the present Motion, stating its position on the issue of utilizing
the ACMs, but upon further reflection decided not to file that comment. It came to the conclusion that ventilating its position on the matter
might engender certain impressions that it had already resolved factual and/or legal issues closely intertwined with the elements of the
offenses charged in the criminal and administrative cases pending before it. "For one, utilizing illegally procured goods or the intentional
non-return thereof to the supplier may have a bearing on the determination of evident bad faith or manifest partiality, an essential element
in any prosecution under the anti-graft law, and may, at the same time, be constitutive of misconduct penalized under relevant disciplinary
laws."

Consequently, out of prudential considerations, the OMB prayed to be excused from commenting on the merits of the present Motion, to avoid
any perception of prejudgment, bias or partiality on its part, in connection with the criminal and administrative cases pending before it.

The Court's Ruling

Decision Subverted
by the Motion

There are several reasons why the present Motion must be denied. First, although it professes utmost respect for the finality of our Decision
of January 13, 2004 — an inescapable and immutable fact from which spring equally ineludible consequences — granting it would have the
effect of illegally reversing and subverting our final Decision. Plainly stated, our final Decision bars the grant of the present Motion.

To stress, as a direct result of our January 13, 2004 Decision, the Contract for the supply of the subject ACMs was voided, and the machines
were not used in the 2004 national elections. Furthermore, the OSG was directed "to take measures to protect the government and vindicate
public interest from the ill-effects of the illegal disbursements of public funds made by reason of the void Resolution." Accordingly, in Civil
Case No. 04-346, the government counsel has prayed for mutual restitution; and for the "return of all payments, amounting to
P1,048,828,407.00 made by Comelec to Mega Pacific under the void Contract."

In the meantime, Comelec has done nothing — at least, nothing has been reported in the present Motion — to abide by and enforce our
Decision. Apparently, it has not done anything to rectify its violations of laws, jurisprudence and its own bidding rules referred to in our
judgment. Neither has it reported any attempt to correct and observe the "mandatory financial, technical and legal requirements" needed
to computerize the elections.

Apparently, it has simply filed the present Motion asking permission to do what it has precisely been prohibited from doing under our final
and executory Decision. If law and jurisprudence bar it from using the subject ACMs during the last elections, why should it even propose to
use these machines in the forthcoming ARMM elections? True, these elections are important. But they cannot be more important than the
2004 national elections. Note that the factual premises and the laws involved in the procurement and use of the ACMs have not changed.
Indeed, Comelec has not even alleged, much less proven, any supervening factual or legal circumstances to justify its Motion.
Basic and primordial is the rule that when a final judgment becomes executory, it thereby becomes immutable and unalterable. In other words,
such a judgment may no longer undergo any modification, much less any reversal, even if it is meant to correct what is perceived to be an
erroneous conclusion of fact or law; and even if it is attempted by the court rendering it or by this Court. 7 Equally well-entrenched is the
doctrine that what is not permitted to be done directly may not be done indirectlyeither. In the instant case, it is unarguable that the
inexorable result of granting the present Motion will precisely be a subversion of the Decision, or at least a modification that would render
the latter totally ineffective and nugatory. AaITCH

To support its present Motion, Comelec appended as Annex 1 a letter dated January 22, 2004. Addressed to its chairman, the Annex was
signed by four 8 self-proclaimed "information technology experts," 9 who had gratuitously contended that this Court's Decision was "one of
the most inopportune rulings ever to come out of the hallowed halls of that High Tribunal"; blame the Decision for supposedly forcing our
people "to entrust their votes to a manual system of counting and canvassing that have been proven to be prone to massive fraud in the past";
and mouth legal/technical arguments that have already been repeatedly debunked in the Decision and Resolution here. The letter also included
a long-winded, tortuous discussion of the software development life cycle.

A quick check of the case records confirmed our suspicion. The very same letter dated January 22, 2004 had previously been appended as
Annex 2 to private respondents' "Omnibus Motion A) for reconsideration of the Decision dated 13 January 2004; b) to admit exhibits in
refutation of the findings of fact of the Court; c) to have the case set for hearing and/or reception of evidence if deemed necessary by the
Court." The only difference, is that this time around, Comelec overlooked or failed to photocopy the last page (page 17) of the letter, bearing
the signatures of the four other purported "information technology experts." 10 In other words, to support its present Motion, it
merely recycled an earlier exhibit that had already been used in seeking reconsideration of our aforesaid Decision.

While expressing utmost reverence for the finality of the Decision, Comelec implicitly seeks, nevertheless, to have this Court take up
anew matters that have already been passed upon and disposed of with finality.

It is a hornbook doctrine that courts are presumed to have passed upon all points that were raised by the parties in their various pleadings,
and that form part of the records of the case. Our Resolution, disposing of respondents' arguments on reconsideration, did not explicitly and
specifically address all of the matters raised in the said letter of January 22, 2004. It is presumed however, that all matters within an issue
raised in a case were passed upon by the Court, 11 as indeed they were in the instant case. And as we have held elsewhere, 12 courts will
refuse to reopen what has been decided; they will not allow the same parties or their privies to litigate anew a question that has been
considered and decided with finality.

Besides, the letter of January 22, 2004, laden as it is with technical jargon and impressive concepts, does not serve to alter by even the
minutest degree our finding of grave abuse of discretion by Comelec, on account of its clear violations of law and jurisprudence and its
unjustifiable and reckless disregard of its own bidding rules and procedures.

Furthermore, the letter would obviously not contain anything that might serve to persuade us that the situation obtaining in January 2004
has so changed in the interim as to justify the use of the ACMs in August 2005. IDEHCa

The Commission seems to think that it can resurrect the dead case by waving at this Court a letter replete with technical jargon, much like
a witch doctor muttering unintelligible incantations to revive a corpse.

In its main text, the Motion concedes that our Decision "has become final and executory," and that all that remains to be done is "to make
mutual restitution." 13 So, what is the relevance of all these useless argumentations and pontifications in Annex 1 by the Commission's
self-proclaimed "experts"? For its own illegal acts, imprudence and grave abuse of discretion, why blame this Court? For Comelec to know
immediately which culprit should bear full responsibility for its miserable failure to automate our elections, it should simply face the mirror.

Recovery of Government Funds


Barred by the Motion

Second, the grant of the Motion will bar or jeopardize the recovery of government funds improvidently paid to private respondents, funds
that to date the OSG estimates to be over one billion pesos. At the very least, granting the Motion will be antagonistic to the directive in our
Decision for the OSG to recover the "illegal disbursements of public funds made by reason of the void Resolution and Contract."

Indeed, if the government is conned into not returning the ACMs but instead keeping and utilizing them, there would be no need for Mega
Pacific to refund the payments made by Comelec. In fact, such recovery will no longer be possible. Consequently, all those who stood to benefit
(or have already benefited) financially from the deal would no longer be liable for the refund. They can argue that there was nothing wrong
with the voided Resolution and Contract, nothing wrong with the public bidding, nothing wrong with the machines and software, since the
government has decided to keep and utilize them. This argument can be stretched to abate the criminal prosecutions pending before the OMB
and the impeachment proceedings it is considering. After all, "reasonable doubt" is all that is needed to secure acquittal in a criminal
prosecution.

In brief, the poll body's Motion not only asks for what is legally impossible to do (to reverse and subvert a final and executory Decision of the
highest court of the land), but also prevents the Filipino people from recovering illegally disbursed public funds running into billions of pesos.
Verily, by subverting the Decision of this Court, the Motion would be unduly favoring and granting virtual immunity from criminal prosecution
to the parties responsible for the illegal disbursement of scarce public funds.

Use of the ACMs and Software


Detrimental to ARMM Elections

Third, the use of the unreliable ACMs and the nonexistent software that is supposed to run them will expose the ARMM elections to the same
electoral ills pointed out in our final and executory Decision. Be it remembered that this Court expressly ruled that the proffered hardware
and software had undeniably failed to pass eight critical requirements designed to safeguard the integrity of elections, especially the following
three items:

"• They failed to achieve the accuracy rating criterion of 99.9995 percent set up by the Comelec itself. SaIHDA

"• They were not able to detect previously downloaded results at various canvassing or consolidation levels and to prevent these
from being inputted again.

"• They were unable to print the statutorily required audit trails of the count/canvass at different levels without any loss of
data." 14

The Motion has not at all demonstrated that these technical requirements have been addressed from the time our Decision was issued up to
now. In fact, Comelec is merely asking for leave to use the machines, without mentioning any specific manner in which the foregoing
requirements have been satisfactorily met.

Equally important, we stressed in our Decision that "[n]othing was said or done about the software — the deficiencies as to detection and
prevention of downloading and entering previously downloaded data, as well as the capability to print an audit trail. No matter how many
times the machines were tested and retested, if nothing was done about the programming defects and deficiencies, the same danger of
massive electoral fraud remains." 15

Other than vaguely claiming that its four so-called "experts" have "unanimously confirmed that the software development which the Comelec
undertook, [was] in line with the internationally accepted standards (ISO/IEC 12207) [for] software life cycle processes," the present Motion
has not shown that the alleged "software development" was indeed extant and capable of addressing the "programming defects and
deficiencies" pointed out by this Court.

At bottom, the proposed use of the ACMs would subject the ARMM elections to the same dangers of massive electoral fraud that would have
been inflicted by the projected automation of the 2004 national elections.

Motion Inadequate
and Vague

Fourth, assuming arguendo that the foregoing formidable legal, financial and technical obstacles could be overcome or set aside, still, the
Motion cannot be granted because it is vague; it does not contain enough details to enable this Court to act appropriately.

The sham nature of the Motion is evident from the following considerations. While Comelec asserts a pressing need for the ACMs to be used
in the ARMM elections, strangely enough, it has not bothered to determine the number of units that will be required for the purpose, much
less tried to justify such quantification. It contracted for a total of 1,991 ACMs, intended for use throughout the entire country during the
2004 elections. Are we to believe that all 1,991 units would be utilized to count and canvass the votes cast in the ARMM elections? Such
a scenario is highly unlikely, even ridiculous. TAcSCH

A genuine, bona fide proposal for the utilization of the ACMs would naturally have included a well-thought-out plan of action, indicating the
number of units to be deployed, places of utilization, number of operators and other personnel required, methods/periods of deployment and
recovery or retrieval, assessments of costs and risks involved in implementing the proposal, and concomitant justifications, among other
things. Now, either "The Plan" is being kept absolutely top secret, or it is completely nonexistent.

Furthermore, once the ACMs are deployed and utilized, they will no longer be in the same condition as when they were first delivered to
Comelec. In fact, it is quite probable that by the time election day comes around, some of the machines would have been mishandled and
damaged, maybe even beyond repair. What steps has the poll body taken to make certain that such eventualities, if not altogether preventable,
can at least be minimized so as to ensure the eventual return of the ACMs and the full recovery of the payments made for them? A scrutiny
of the 4-page Motion 16 ends in futility. It is all too clear that a failure or inability of Comelec to return the machines sans damage would
most assuredly be cited as a ground to refuse the refund of the moneys paid. Yet, if Comelec has given any thought at all to this or any other
contingency, such fact has certainly not been made evident to us. ITSacC

ARMM Elections Not Jeopardized


by Non use of ACMs

Fifth, there is no basis for the claim that unless the subject ACMs are used, the ARMM elections would not be held.

At the outset, if such elections are not held, the blame must be laid squarely at the doorstep of Comelec. To stress, had it not gravely abused
its discretion, the automation of the vote counting and canvassing processes would have already become a reality over a year ago, and the
ACMs that would have been used in the 2004 national elections would now be available for the ARMM elections.

In any event, the Commission in its Motion argues that the government, given its present fiscal difficulties, has no available funds to finance
the automation of the ARMM elections. Without even asking under what authority it has assumed the role of Treasury spokesman, we
emphasize that there would not now be any lack of funds for election automation had it not improvidently turned over P1 billion of taxpayers'
moneys to Mega Pacific's bank accounts.

Nevertheless, had the poll body been honestly and genuinely intent on implementing automated counting and canvassing for the ARMM
elections, it ought to have informed Congress of the non-availability of the subject ACMs due to our Decisions and of the need for special
appropriations, instead of wasting this Court's time on its unmeritorious Motion. In fact, if only it had taken proper heed of our Decision of
January 13, 2004, it could have conducted an above-board public bidding for the supply of acceptable ACMs.

Certainly, this option or course of action was not foreclosed by our Decision. Moreover, there was sufficient time within which to conduct the
public bidding process. RA 9333, which set the second Monday of August 2005 (August 8, 2005) as the date of the ARMM elections, was
enacted on September 21, 2004. Undoubtedly, Comelec was made aware of the proposed date of the ARMM elections way before the passage
of RA 9333. Thus, the poll body had about ten (10) months at the very least(between the end of September 2004, when RA 9333 came
into force and effect, and August 8, 2005) to lobby Congress, properly conduct a public bidding, award the appropriate contracts, deliver
and test the new machines, and make final preparations for the election.

Even assuming that a new public bidding for ACMs was not a viable option, still, Comelec has had more than sufficient lead time — about
ten months counted from the end of September 2004 until August 8, 2005 — to prepare for manual counting and canvassing in the ARMM
elections. It publicly declared, sometime in late January 2004, that notwithstanding our Decision nullifying the Mega Pacific Contract, it
would still be able to implement such manualization for the May 10, 2004 national elections. It made this declaration even though it had
a mere three months or so to set up the mechanics. In this present instance involving elections on a much smaller scale, it will definitely be
able to implement manual processes if it wants to. TcIAHS

There is therefore absolutely no basis for any apprehension that the ARMM elections would not push through simply because the present
Motion cannot pass muster. More to the point, it would be ridiculous to regard the grant of permission to use the subject ACMs as the conditio
sine qua non for the holding of the ARMM elections.

What is most odious is the resort to the present Motion seeking the use of the subject ACMs despite the availability of viable alternative courses
of action 17 that will not tend to disturb or render this Court's final Decision ineffectual. Thus, the present Motion is wholly unnecessary and
unwarranted. Upon it, however has Comelec pinned all its hopes, instead of focusing on what the poll body can and ought to do under the
circumstances. The consequences of granting its lamentable Motion, we repeat, will indubitably subvert and thwart the Decision of this Court
in the instant case.

Equally reprehensible is the attempt of the Commission to pass the onus of its mismanagement problems on to this Court. For instance, the
Motion quotes the cost of storage of the ACMs in its Maxilite Warehouse at P329,355.26 per month or P3,979,460.24 per annum. Assuming
for the nonce that the machines have to be held in storage pending the decision in the civil case (as it would simply not do to throw the
machines out into the streets), why must it assume the cost of storage? Per our Decision, the machines are to be returned to Mega Pacific.
If it refuses to accept them back, it does not follow that Comelec must pick up the tab. Instead of further wasting the taxpayers money, it
can simply send the bill to Mega Pacific for collection.

It would be entirely improper, bordering on unmitigated contempt of court, for the Commission to try to pass on the problem to this Court
through its Motion.
No Actual Case or
Controversy

Finally, the Motion presents no actual justiciable case or controversy over which this Court can exercise its judicial authority. It is
well-established in this jurisdiction that ". . . for a court to exercise its power of adjudication, there must be an actual case or controversy
— one which involves a conflict of legal rights, an assertion of opposite legal claims susceptible of judicial resolution; the case must not be moot
or academic or based on extra-legal or other similar considerations not cognizable by a court of justice. . . . [C]ourts do not sit to adjudicate
mere academic questions to satisfy scholarly interest, however intellectually challenging." 18 The controversy must be justiciable — definite
and concrete, touching on the legal relations of parties having adverse legal interests. 19 In other words, the pleadings must show an active
antagonistic assertion of a legal right, on the one hand, and a denial thereof on the other; that is, it must concern a real and not a merely
theoretical question or issue.20 There ought to be an actual and substantial controversy admitting of specific relief through a decree conclusive
in nature, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts. 21

A perusal of the present Motion will readily reveal the utter absence of a live case before us, involving a clash of legal rights or opposing legal
claims. At best, it is merely a request for an advisory opinion, which this Court has no jurisdiction to grant. 22

EPILOGUE

We close this Resolution by repeating the last two paragraphs of our final and executory Decision:

"True, our country needs to transcend our slow, manual and archaic electoral process. But before it can do so, it must first
have a diligent and competent electoral agency that can properly and prudently implement a well-conceived automated
election system. ISDCHA

"At bottom, before the country can hope to have a speedy and fraud-free automated election, it must first be able to procure
the proper computerized hardware and software legally, based on a transparent and valid system of public bidding. As in any
democratic system, the ultimate goal of automating elections must be achieved by a legal, valid and above-board process of
acquiring the necessary tools and skills therefor. Though the Philippines needs an automated electoral process, it cannot accept
just any system shoved into its bosom through improper and illegal methods. As the saying goes, the end never justifies the
means. Penumbral contracting will not produce enlightened results." 23
Comelec must follow and not skirt our Decision. Neither may it short-circuit our laws and jurisprudence. It should return the ACMs to
MPC-MPEI and recover the improvidently disbursed funds. Instead of blaming this Court for its illegal actions and grave abuse of discretion,
the Commission should, for a change, devise a legally and technically sound plan to computerize our elections and show our people that it
is capable of managing the transition from an archaic to a modern electoral system.

WHEREFORE, the Motion is hereby DENIED for utter lack of merit.

||| (Information Technology Foundation of the Philippines v. Commission on Elections, G.R. No. 159139, [June 15, 2005], 499 PHIL
281-306)

[G.R. No. 159139. June 6, 2017.]

INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES, MA. CORAZON M. AKOL, MIGUEL UY, EDUARDO H.
LOPEZ, AUGUSTO C. LAGMAN, REX C. DRILON, MIGUEL HILADO, LEY SALCEDO, and MANUEL ALCUAZ,
JR.,petitioners, vs. COMMISSION ON ELECTIONS, COMELEC CHAIRMAN BENJAMIN ABALOS, SR.,COMELEC BIDDING AND
AWARDS COMMITTEE CHAIRMAN EDUARDO D. MEJOS AND MEMBERS GIDEON DE GUZMAN, JOSE F. BALBUENA,
LAMBERTO P. LLAMAS, and BARTOLOME SINOCRUZ, JR.,respondents.

[G.R. No. 174777. June 6, 2017.]

AQUILINO Q. PIMENTEL, JR.,SERGIO R. OSMEÑA III, PANFILO M. LACSON, ALFREDO S. LIM, JAMBY A.S. MADRIGAL, LUISA
P. EJERCITO-ESTRADA, JINGGOY E. ESTRADA, RODOLFO G. BIAZON, and RICHARD J. GORDON,petitioners, vs. MA.
MERCEDITAS NAVARRO-GUTIERREZ, in her capacity as Ombudsman,respondent.

DECISION
JARDELEZA, J p:

In Information Technology Foundation of the Philippines (Infotech) v. Commission on Elections (COMELEC),1 we nullified the
COMELEC's award to Mega Pacific Consortium of the procurement contract involving the automated counting machines (ACMs) for the
2004 national elections. We found that the COMELEC gravely abused its discretion when it awarded the contract to an entity which failed
to establish itself as a proper consortium, and despite the ACMs' failure to meet certain technical requirements. This case presents the
question of whether our conclusion in Infotech that the COMELEC committed grave abuse of discretion is tantamount to a finding of
probable cause that the COMELEC officials violated penal laws, thereby making it the ministerial duty of the respondent Ombudsman to
file the appropriate criminal complaints. HTcADC

On January 13, 2004, we promulgated the Decision in Infotech declaring as null and void: (a) COMELEC Resolution No. 6074
which awarded the contract for Phase II of the Comprehensive Automated Electoral System to Mega Pacific Consortium (MPC);and (b)
the procurement contract for ACMs executed between the COMELEC and Mega Pacific eSolutions, Inc. (MPEI).2 We found that the
COMELEC's failure to follow its own rules, policies, and guidelines in respect of the bidding process, and to adequately check and observe
financial, technical and legal requirements constituted grave abuse of discretion. In particular, we found that the winning bidder, MPC,
failed to include in its bid documents any joint venture or consortium agreement between MPEI, Election.com, Ltd.,WeSolv Open
Computing, Inc.,SK C&C, ePLDT and Oracle System (Philippines),Inc. that would prove that MPC is a proper consortium. Thus, we
concluded that there was no documentary basis for the COMELEC to determine that the alleged consortium really existed and was eligible
and qualified to bid. 3 Furthermore, we found that the ACMs from MPC failed to meet the 99.9995% accuracy rating required in the
COMELEC's own Request for Proposal (RFP).Based on a 27-point test conducted by the Department of Science and Technology
(DOST),MPC failed in eight mostly software-related items — which result should have warranted the rejection of MPC's bid. 4 Finally,
we also found that it was grave abuse for the COMELEC to evaluate the demo version of the software instead of the final version which
would be run during the national elections. And because the final version was still to be developed when the ACM contract was awarded,
the COMELEC practically permitted the winning bidder to change and alter the subject of the contract, particularly the software, thus
effectively allowing a substantive amendment without public bidding. 5 As a result of the foregoing lapses of the COMELEC, we also
directed the Ombudsman to determine the criminal liability, if any, of the public officials and private individuals involved in the nullified
resolution and contract. 6

As mandated by the Infotech Decision, the Ombudsman initiated a fact-finding investigation docketed as CPL-C-04-0060. On
January 21, 2004, Senator Aquilino Pimentel, Jr. also filed criminal and administrative complaints against COMELEC Chairman
Benjamin S. Abalos, Sr. and other COMELEC officials with the Ombudsman, docketed as OMB-C-C-04-0011-A and
OMB-C-A-04-0015-A. 7 Kilosbayan Foundation and Bantay Katarungan Foundation later filed a related complaint with the
Ombudsman against COMELEC officials and stockholders of MPEI on September 19, 2004, docketed as OMB-L-C-02-0922-J. 8 The
Field Investigation Office (FIO) of the Ombudsman filed a supplemental complaint on October 6, 2004. These cases were later on
consolidated by the Ombudsman. 9

In the meantime, the petitioners in the Infotech case (docketed as G.R. No. 159139) filed a Manifestation and Motion 10 dated
December 22, 2005, as well as a Supplemental Motion 11 dated January 20, 2006, alleging that the Ombudsman has yet to comply
with our directive in the Infotech Decision. Thus, on February 14, 2006, we issued a Resolution 12 directing the Ombudsman to show
cause why it should not be held in contempt for its failure to comply with the Court's directive. In compliance with the foregoing Resolution,
the Ombudsman filed its Comment 13 contending that it should not be held in contempt of court because it has "long acted on the referral,
or complied with this x x x Court's 'directive' in this case, to its full extent." 14 In a Resolution 15 dated March 28, 2006, we directed
the Ombudsman, under pain of contempt, to submit quarterly reports to the Court starting June 30, 2006. 16

Consequently, the Ombudsman issued a Resolution 17 dated June 28, 2006 recommending: (a) the filing of an information with
the Sandiganbayan against Eduardo Mejos, Gideon G. De Guzman, Jose P. Balbuena, Lamberto P. Llamas, Bartolome J. Sinocruz, Jr.,Willy
U. Yu, Bonnie Yu, Enrique Tansipek, Rosita Y. Tansipek, Pedro O. Tan, Johnson W. Fong, Bernardo L. Fong, and Lauriano Barrios; (b) the
dismissal of the complaint against Jose Tolentino, Jaime Paz, Zita Buena-Castillon, and Rolando Viloria; (c) the referral of the findings
against COMELEC Commissioner Resureccion Z. Borra to the House of Representatives; (d) the dismissal of Eduardo Mejos, Gideon G. De
Guzman, Jose P. Balbuena, Lamberto P. Llamas, and Bartolome J. Sinocruz, Jr. from service; and (e) the conduct of further fact-finding
investigation by the Ombudsman. 18 The respondents in the Ombudsman cases filed a Motion for Reconsideration of the aforementioned
Resolution on July 10, 2006. 19
On July 13, 2006, the investigating panel of the Office of the Ombudsman reconvened to carry out further investigation and
clarificatory hearings. They invited resource persons and witnesses to testify and present relevant documents and papers in order to
determine criminal liability of the public and private respondents in the Ombudsman cases. In all, the investigating panel conducted a total
of 12 public hearings between July 13, 2006 and August 23, 2006, interviewed 10 witnesses, and received no less than 198
documents. 20 aScITE

Following these public hearings, the Ombudsman issued a Supplemental Resolution 21 dated September 27, 2006 which reversed
and set aside the June 28, 2006 Resolution, and dismissed the administrative and criminal complaints against both public and private
respondents for lack of probable cause. The Supplemental Resolution stated that the Investigating Panel "cannot find an iota of evidence
to show that the acts of [the Bids and Awards Committee (BAC)] in allowing MPC to bid and its subsequent recommendation to award
[the] Phase II Contract to MPC constitute manifest [] partiality, evident bad faith or gross inexcusable negligence" and that it cannot
establish that any "unwarranted benefit, advantage or preference was extended to MPC or MP[E]I by [the] BAC in the exercise of its
administrative function in the determination [of] MPC's eligibility and subsequent recommendation made to [the] COMELEC." 22 In sum,
the Ombudsman opined that a finding of grave abuse of discretion in the Infotech case cannot be considered criminal in nature in the
absence of evidence showing bad faith, malice or bribery in the bidding process. 23

Aggrieved by the Ombudsman's reversal, the petitioners filed the present special civil action for certiorari docketed as G.R. No.
174777 seeking to nullify the Ombudsman's Supplemental Resolution and to cite the Ombudsman in contempt. On the other hand,
petitioners in G.R. No. 159139 filed a Motion 24 dated October 17, 2006 praying for the Court to: (1) reject the Ombudsman's
Supplemental Resolution as compliance with the Court's directive in the Infotech decision; and (2) order the Ombudsman to file an
information with the Sandiganbayan against the COMELEC officials and other private individuals. On the same date, we resolved to
consolidate the two cases. 25

II

As a preliminary procedural matter, we observe that while the petition asks this Court to set aside the Supplemental Resolution,
which dismissed both administrative and criminal complaints, it is clear from the allegations therein that what petitioners are questioning
is the criminal aspect of the assailed resolution,i.e.,the Ombudsman's finding that there is no probable cause to indict the respondents in
the Ombudsman cases. 26 Movants in G.R. No. 159139 similarly question this conclusion by the Ombudsman and accordingly pray that
the Ombudsman be directed to file an information with the Sandiganbayan against the responsible COMELEC officials and conspiring
private individuals. 27

In Kuizon v. Desierto 28 and Mendoza-Arce v. Office of the Ombudsman,29 we held that this Court has jurisdiction over petitions
for certiorari questioning resolutions or orders of the Ombudsman in criminal cases. For administrative cases, however, we declared in the
case of Dagan v. Office of the Ombudsman(Visayas) 30 that the petition should be filed with the Court of Appeals in observance of the
doctrine of hierarchy of courts. The Dagan ruling homogenized the procedural rule with respect to administrative cases falling within the
jurisdiction of the Ombudsman — first enunciated in Fabian v. Desierto 31 — that is, all remedies involving the orders, directives, or
decisions of the Ombudsman in administrative cases, whether by an appeal under Rule 43 or a petition for certiorariunder Rule 65, must
be filed with the Court of Appeals.

Accordingly, we shall limit our resolution to the criminal aspect of the Ombudsman's Supplemental Resolution dated September
27, 2006.

III

The dispositive portion of the Infotech decision reads:

WHEREFORE, the Petition is GRANTED.The Court hereby declares NULL and VOID Comelec Resolution No. 6074
awarding the contract for Phase II of the AES to Mega Pacific Consortium (MPC).Also declared null and void is the subject
Contract executed between Comelec and Mega Pacific eSolutions (MPEI).Comelec is further ORDERED to refrain from
implementing any other contract or agreement entered into with regard to this project.

Let a copy of this Decision be furnished the Office of the Ombudsman which shall determine the criminal liability, if
any,of the public officials (and conspiring private individuals, if any) involved in the subject Resolution and Contract. Let the
Office of the Solicitor General also take measures to protect the government and vindicate public interest from the ill effects
of the illegal disbursements of public funds made by reason of the void Resolution and Contract. 32(Citation omitted,
emphasis supplied.) HEITAD

The Ombudsman maintains that it has the discretion to determine whether a criminal case, given the facts of the case and the
applicable laws and jurisprudence, should be filed. 33 The respondents in G.R. No. 159139, the COMELEC and MPEI, support the
Ombudsman's position. They point to the plain text of the dispositive portion, i.e.,the use of the phrase "if any," which clearly demonstrates
the Court's intent for the Ombudsman to conduct its own investigation and render an independent assessment based on whatever evidence
the Ombudsman gathers. 34

Against this straightforward interpretation, the petitioners in G.R. No. 174777 and movants in G.R. No. 159139 insist that "[t]he
Supreme Court in the Infotechcase has already established that a crime has been committed and endorsed the case to the Ombudsman
to determine the specific personalities who are 'probably guilty' thereof." 35 They allege that, by issuing the Supplemental Resolution, the
Ombudsman reversed the findings of the Supreme Court. 36 Consequently, they argue that the Ombudsman should also be held in indirect
contempt because she failed to comply with our directive in Infotech.We take their arguments in turn.

The Court is mindful that the directive in the Infotech Decision may have been susceptible to misinterpretation, particularly when
taken in conjunction with the oftentimes strong language used in the body of the ponencia.However, such statements were made only to
emphasize the critical role of the COMELEC in the electoral process and to sternly remind the COMELEC that it cannot afford to be
lackadaisical in the implementation of the bidding laws and rules, particularly when what is involved is no less than the national elections.
Thus, to allay any fear that we are arrogating unto ourselves the powers of the Ombudsman, we deemed it proper to clarify the nature
of our directive in a Resolution 37 dated June 13, 2006, the relevant portion of which provides:

The Court emphatically stresses that its directive to the OMB to render a report on a regular basis, pursuant to this
Court's Decision promulgated on January 13, 2004, does not in any way impinge upon, much less rob it of, its independence
as provided under the Constitution. Nowhere in the questioned Resolutions did the Court demand the OM to decide or make
a specific determination — one way or the other — of the culpability of any of the parties. Our directive was for the OMB
to report on its "final determination of whether a probable cause exists against any of the public officials (and conspiring
private individuals, if any) x x x." Surely, these emphasized words indicate that the Court in no way intends to intrude upon
the discretionary powers of the OMB. x x x 38 (Emphasis in the original.)

Our pronouncements in the June 13, 2006 Resolution are consistent with the Court's policy of non-interference with the
Ombudsman's conduct of preliminary investigations, and to leave the Ombudsman sufficient latitude of discretion in the determination
of what constitutes sufficient evidence to establish probable cause.39 As a general rule, the Court does not intervene with the Ombudsman's
exercise of its investigative and prosecutorial powers, and respects the initiative and independence inherent in the Office of the
Ombudsman which, beholden to no one, acts as the champion of the people and the preserver of the integrity of the public service. 40 This
policy rests on the fundamental doctrine of separation of powers, which is one of the foundations of our republican government.

The 1987 Constitution clothed the Ombudsman with authority to investigate offenses committed by public officers and
employees. 41 In Casing v. Ombudsman,42 we stated that:

The Constitution and R.A. No. 6770 endowed the Office of the Ombudsman with wide latitude, in the exercise of its
investigatory and prosecutory powers, to pass upon criminal complaints involving public officials and employees. Specifically,
the determination of whether probable cause exists is a function that belongs to the Office of the Ombudsman. Whether a
criminal case, given its attendant facts and circumstances, should be filed or not is basically its call. 43

The determination of probable cause — that is, one made for the purpose of filing an information in court — is essentially an
executive function and not a judicial one. The State's self-preserving power to prosecute violators of its penal laws is a necessary component
of the Executive's power and responsibility to faithfully execute the laws of the land. 44

On the other hand, the Constitution vests the Supreme Court with judicial power, defined under Section 1, Article VIII as "the duty
of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the government." Conspicuously absent in the provision is the power of the judiciary to prosecute crimes — much less
the broader power to execute laws from which it can be inferred. As early as 1932, we held that: "It is judicial power and judicial power
only which is exercised by the Supreme Court. Just as the Supreme Court, as the guardian of constitutional rights, should not sanction
usurpations by any other department of the government, so should it as strictly confine its own sphere of influence to the powers expressly
or by implication conferred on it by the Organic Act." 45 ATICcS

In view of the constitutional delineation of powers, we reject the petitioners' contention that we already made a determination in
the Infotech case that a crime has been committed. We could not have made such determination without going beyond the limits of our
judicial power and thereby unlawfully impinging the prerogative of the constitutionally created Office of the Ombudsman. In Infotech,we
only exercised our mandate to determine whether or not there was grave abuse of discretion amounting to lack or excess of jurisdiction
on the part of the COMELEC. Ultimately, we found that the COMELEC committed grave abuse of discretion when it: (a) awarded the
project to MPC, an entity that did not participate in the bidding; (b) accepted and paid for MPEI's ACMs that failed the 99.9995%
accuracy requirement stated in the COMELEC's own bidding rule, including the software's failure to detect previously downloaded precinct
results and the ACMs' inability to print audit trails without loss of data; and (c) accepted and awarded the contract based on a mere demo
version of the software. However, a finding of grave abuse of discretion is not necessarily indicative of probable cause. To determine the
latter, the constitutive elements of the crime must first be considered. 46 In the exercise of our certiorari jurisdiction in Infotech,we only
resolved whether the COMELEC acted in a capricious, whimsical, arbitrary or despotic manner. 47 We never decided whether the facts
were sufficient to engender a well-founded belief that a crime has been committed and that the respondents were probably guilty
thereof. 48

Under our constitutional structure, courts of law have no right to directly decide matters over which full discretionary authority
has been delegated to another office or branch of government. 49 We confine ourselves to the exercise of judicial power and are careful
not to encroach upon the functions of the other branches of the government. Lest it be forgotten, separation of powers is not merely a
hollow doctrine in constitutional law; rather, it serves a very important purpose in our democratic republic government, that is, to prevent
tyranny by prohibiting the concentration of the sovereign powers of state in one body. The power to prosecute and the power to adjudicate
must remain separate; otherwise, as James Madison warned, "[the judge] might behave with all the violence of [an oppressor]." 50

Apart from constitutionally founded limitations, there are also practical reasons why the Court does not interfere with the
Ombudsman's determination of the existence or absence of probable cause. These reasons are briefly, but concisely, stated in Galario v.
Office of the Ombudsman (Mindanao):51

It is not sound practice to depart from the policy of noninterference in the Ombudsman's exercise of discretion to
determine whether or not to file information against an accused. As cited in a long line of cases, this Court has pronounced
that it cannot pass upon the sufficiency or insufficiency of evidence to determine the existence of probable cause. The rule is
based not only upon respect for the investigatory and prosecutory powers granted by the Constitution to the Office of the
Ombudsman but upon practicality as well. If it were otherwise, this Court will be clogged with an innumerable list of cases
assailing investigatory proceedings conducted by the Office of the Ombudsman with regard to complaints filed before it,to
determine if there is probable cause.
[T]he Court does not interfere with the Ombudsman's discretion in the finding of probable cause resulting in its
investigations. The Ombudsman's findings are essentially factual in nature, and the Supreme Court is NOT a trier
of facts.52 (Citation omitted, emphasis supplied.)

In his separate opinion in Roberts, Jr. v. Court of Appeals,53 Chief Justice Narvasa succinctly stated his objection to the idea of the
Court making a determination of probable cause:

In this special civil action, this Court is being asked to assume the function of a public prosecutor. It is being asked to
determine whether probable cause exists as regards petitioners. More concretely, the Court is being asked to examine and
assess such evidence as has thus far been submitted by the parties and, on the basis thereof, make a conclusion as to whether
or not it suffices "to engender a well[-]founded belief that a crime has been committed and that the respondent is probably
guilty thereof and should be held for trial."

It is a function that this Court should not be called upon to perform. It is a function that properly pertains to the public
prosecutor, one that, as far as crimes cognizable by a Regional Trial Court are concerned, and notwithstanding that it involves
an adjudicative process of a sort, exclusively pertains, by law, to said executive officer, the public prosecutor. It is moreover
a function that in the established scheme of things, is supposed to be performed at the very genesis of, indeed, prefatorily to,
the formal commencement of a criminal action. The proceedings before a public prosecutor, it may well be stressed, are
essentially preliminary, prefatory, and cannot lead to a final, definite and authoritative adjudgment of the guilt or innocence
of the persons charged with a felony or crime. 54 (Citations omitted, emphasis supplied.) TIADCc

For cases cognizable by the Sandiganbayan, the function of determining probable cause primarily lies with the Office of the
Ombudsman, which has the presumed expertise in the laws it is entrusted to enforce.

The Ombudsman's determination of probable cause may only be assailed through certiorari proceedings before this Court on the
ground that such determination is tainted with grave abuse of discretion. Not every error in the proceedings or every erroneous conclusion
of law or fact, however, constitutes grave abuse of discretion. It has been stated that the Ombudsman may err or even abuse the discretion
lodged in her by law, but such error or abuse alone does not render her act amenable to correction and annulment by the extraordinary
remedy of certiorari.To justify judicial intrusion into what is fundamentally the domain of another constitutional body, the petitioner must
clearly show that the Ombudsman committed grave abuse of discretion amounting to lack or excess of jurisdiction in making her
determination and in arriving at the conclusion she reached. 55 For there to be a finding of grave abuse of discretion, it must be shown
that the discretionary power was exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and the abuse
of discretion must be so patent and gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined
or to act in contemplation of law. 56

In a special civil action for certiorari,the burden of proving that the public officer acted with grave abuse of discretion, in accordance
with the definition and standards stated above, lies with the person filing the petition. 57 Here, the petitioners solely rely on
the Infotech Decision to support their contention that the Ombudsman gravely abused her discretion when she issued the assailed
Supplemental Resolution. They argue that the Ombudsman's decision to dismiss the criminal complaints is tantamount to a reversal of
a final decision by the Supreme Court.

However, a close scrutiny of the Supplemental Resolution reveals that the Ombudsman did not reverse the Court's findings in
the Infotech case. Preliminarily, we reiterate the rule that the Supreme Court is not a trier of facts. Hence, the findings made
in Infotech were not exhaustive insofar as they only represent undisputed facts. 58 To recapitulate, these facts were: (a) MPC did not
present any joint venture or consortium agreement between MPEI, Election.com, Ltd.,WeSolv Open Computing, Inc.,SK C&C, ePLDT, and
Oracle System (Philippines),Inc. in any of its bid documents; (b) the ACMs provided by MPC failed in eight mostly software-related items
out of the 27-point test conducted by the DOST; (c) the COMELEC only evaluated a demo version of the software instead of the final
version to be run in the national elections; and (d) notwithstanding the foregoing deficiencies, the COMELEC still awarded the contract
and made partial payments to MPC. From these facts, we concluded that the COMELEC disregarded its own bidding rules and procedure
by entertaining the bid of an entity with no legal personality and by tolerating deviations from financial, technical and legal requirements
— all of which amounted to grave abuse of discretion. Nonetheless, we did not make any determination, preliminary or otherwise, that
the COMELEC acted with evident bad faith, manifest partiality or gross inexcusable negligence, or that MPC received any unwarranted
benefit or undue advantage. Instead, we directed the Ombudsman to conduct its own investigation. To reiterate, we could not have made
such determination because the power to do so falls squarely within the constitutional authority of the Ombudsman.

In the Supplemental Resolution, the Ombudsman found that when the COMELEC-BAC allowed MPC to bid, the public officials
considered the numerous documents 59 submitted by MPC to arrive at the conclusion, albeit erroneous, that MPC was eligible. The
Ombudsman also found that the COMELEC had intended to test the final version of the software, 60 but this plan was overtaken by the
filing and subsequent resolution of the Infotech case. With respect to the bid itself, the Ombudsman found that MPC's bid was the lowest
and most responsive. 61 The Ombudsman based these findings on the 12 public hearings conducted between July 13, 2006 and August
23, 2006. In the course of those hearings, the investigating panel heard 10 witnesses, received counter-affidavits, and gathered
voluminous documents. Based on its independent investigation, the Ombudsman did not find that all the essential elements of the crimes
punished under Sections 3 (e) and (g) of Republic Act No. 3019 62 are present. In particular, the Ombudsman was of the opinion that
there was nothing to show "that the acts of BAC in allowing MPC to bid and its subsequent recommendation to award [the] Phase II
Contract to MPC constitute manifest [] partiality, evident bad faith or gross inexcusable negligence" 63and "[n]either was it established
that an unwarranted benefit, advantage or preference was extended to MPC or MP[E]I by BAC in the exercise of its administrative
function in the determination [of] MPC's eligibility and subsequent recommendation x x x to [the] COMELEC." 64 In the end, the
Ombudsman concluded that the COMELEC made errors of judgment but did not necessarily violate the anti-graft law.

Based on the foregoing, we find that the action taken by the Ombudsman cannot be characterized as arbitrary, capricious,
whimsical or despotic. The Ombudsman found no evidence to prove probable cause. Probable cause refers to facts and circumstances
sufficient to engender a well-founded belief that a crime has been committed and that the respondents probably committed it. 65 It
signifies a reasonable ground of suspicion supported by circumstances sufficiently strong in themselves to warrant a cautious man's belief
that the person accused is guilty of the offense with which he is charged. 66 To engender a well-founded belief that a crime has been
committed, and to determine if the suspect is probably guilty of the same, the elements of the crime charged should, in all reasonable
likelihood, be present. 67 Here, the Ombudsman determined the non-existence of probable cause only after conducting numerous hearings,
reviewing copious documents, and evaluating these against the constitutive elements of the crimes punished under the anti-graft law —
it was not as if the decision to dismiss the complaints was pulled out of thin air. The issuance of the Supplemental Resolution is clearly
a valid exercise of the Ombudsman's discretion. AIDSTE

The problem for the petitioners is that they relied solely on the Infotech Decision and did not actively participate in the investigation
conducted by the Ombudsman. They did not submit any evidence to substantiate any claim of malice, bad faith, or bribery. In this regard,
it bears emphasis that the petitioners do not ascribe grave abuse with regard to the conduct of the hearings. And they could not have;
after all, they were duly notified by the Ombudsman and had every opportunity to participate in the preliminary investigation. Their
misplaced reliance on Infotech now leaves them with nothing to anchor their petition on.

IV
We are not unaware of our Decision dated June 27, 2016 in Republic v. Mega Pacific eSolutions, Inc.,68 where the Court's First
Division relied on the sameInfotech case to establish that MPEI committed fraud against the Republic which entitled the latter to a writ
of preliminary attachment. To dispel any misconception, we deem it proper to clarify that our holding in Republic,much like
in Infotech,was never intended to intrude into the Ombudsman's constitutional authority to determine probable cause.

To give a brief background, Republic involved an action for damages filed by MPEI with the Regional Trial Court of Makati City. MPEI
claimed that notwithstanding the nullification of the contract, the COMELEC was still obligated to pay the amount of P200,165,681.89
representing the unpaid value of the ACMs and the support services delivered. COMELEC filed a counterclaim for the return of the
payments made pursuant to the automation contract with a prayer for the issuance of a writ of preliminary attachment. The application
for preliminary attachment was grounded upon the alleged fraudulent misrepresentation of MPEI and its incorporators as to the former's
eligibility to participate in the bidding for the COMELEC automation project and the failure of the ACMs to comply with mandatory
technical requirements. The Court's First Division ruled in favor of the Republic and held that a writ of preliminary attachment should
issue against the properties of therein respondents MPEI, Willy U. Yu, Bonnie S. Yu, Enrique T. Tansipek, Rosita Y. Tansipek, Pedro O. Tan,
Johnson W. Fong, Bernard I. Fong, and Lauriano A. Barrios. Relying on portions of the Infotech case, the Court ruled that: (1) "MPEI
committed fraud by securing the election automation contract[] and x x x by misrepresenting that the actual bidder was MPC and not
MPEI, which was only acting on behalf of MPC;" 69 (2) "MPEI has defrauded petitioner, since the former still executed the automation
contract despite knowing that it was not qualified to bid for the same;" 70 and (3) "[d]espite its failure to meet the mandatory
requirements set forth in the bidding procedure, [MPEI] still acceded to being awarded the contract." 71

At the outset, it must be clarified that fraud has no technical legal meaning in our laws. 72 In its general sense, fraud is deemed
to comprise anything calculated to deceive, including all acts, omissions, and concealment involving a breach of legal or equitable duty,
trust, or confidence justly reposed, resulting in damage to another, or by which an undue and unconscientious advantage is taken of
another. It is a generic term embracing all multifarious means which human ingenuity can devise, and which are resorted to by one
individual to secure an advantage over another by false suggestions or by suppression of truth and includes all surprise, trick, cunning,
dissembling and any unfair way by which another is cheated. 73 While the generic concept of fraud is similar for both civil and criminal
cases, the term is descriptive rather than substantive. In its specific and substantive sense, a right of action occasioned by fraud is dependent
on the law upon which the action is based. Based on its nature, actionable fraud may be civil or criminal.
There are two broad classes of actionable civil fraud in this jurisdiction. First is fraud that gives rise to an action for damages,
generally in case of contravention of the normal fulfillment of obligations 74 or as a tort under the human relations provisions of the Civil
Code, 75 as well as in specific instances mentioned by law. 76 To be actionable, the fraudulent act must cause loss or injury to another.
Second is fraud that creates a vice in the intent of one or more parties in juridical transactions, such as wills, 77 marriages, 78 and
contracts, among others. With respect to the latter, fraud may render the contract defective in varying degrees: voidable, when consent
is obtained through fraud; 79 rescissible, when the contract is undertaken in fraud of creditors; 80 and "reformable," when by reason of
fraud, the parties' true intention is not expressed in the instrument. 81

Criminal fraud, on the other hand, may pertain to the means of committing a crime or the classes of crimes under Chapter Three,
Title Four, Book Two and Chapter Three, Title Seven, Book Two of the Revised Penal Code. As a means, fraud may be an essential element
of the crime (e.g.,estafa by means of false pretenses or fraudulent acts or through fraudulent means) 82 or a generic aggravating
circumstance. 83 Meanwhile, the crimes classified as frauds under the penal code punish specific types of fraud: machinations in public
auctions; 84 monopolies and combinations in restraint of trade; 85 importation and disposition of falsely marked articles or merchandise
made of gold, silver, or other precious metals or their alloys; 86 subsisting and altering trade-mark, trade-names, or service
marks; 87 unfair competition, fraudulent registration of trade-mark, trade-name or service mark, fraudulent designation of origin, and
false description; 88 frauds against the public treasury and similar offenses; 89 and frauds committed by public officers. 90 As with other
criminal offenses, liability for these punishable frauds depends on the concurrence of the essential elements of each type of crime. AaCTcI

It is immediately apparent that Republic involved a civil case, whereas the present case, although in the nature of a special civil
action, originated from the preliminary investigation of a criminal case. We recognized this distinction in Republic itself:

The main issue in the instant case is whether respondents are guilty of fraud in obtaining and executing the automation
contract, to justify the issuance of a writ of preliminary attachment in petitioner's favor. Meanwhile, the issue relating to
the proceedings before the Ombudsman (and this Court in G.R. No. 174777) pertains to the finding of lack of probable cause
for the possible criminal liability of respondents under the Anti-Graft and Corrupt Practices Act.

The matter before Us involves petitioner's application for a writ of preliminary attachment in relation to its recovery
of the expended amount under the voided contract, and not the determination of whether there is probable cause to hold
respondents liable for possible criminal liability due to the nullification of the automation contract. Whether or not the
Ombudsman has found probable cause for possible criminal liability on the part of respondents is not controlling in the instant
case. 91

The distinction is a significant one in view of the legal nuances between civil fraud and criminal fraud. To recall, Republic originated
from the government's application for a writ of preliminary attachment in a civil case pending before the trial court. Under Rule 57 of
the Rules of Civil Procedure, one of the grounds for the issuance of a writ of preliminary attachment is when the party against whom
attachment is sought is guilty of fraud in "contracting the debt or incurring the obligation upon which the action is brought." 92 The type
of fraud referred to by this rule is civil in nature; in the law of contracts, it is commonly referred to as dolo causante or causal fraud, or
those deceptions or misrepresentations of a serious character employed by one party and without which the other party would not have
entered into the contract. 93 The finding of fraud in Republic,inasmuch as it involved fraud committed by MPEI in the execution of the
procurement contract with COMELEC, pertains to causal fraud, which falls under the broad classification of civil fraud rather than
criminal fraud. The issue of criminal fraud was not considered in Republic and no determination about the commission of any particular
crime was made.

While we are not saying that the same act which constitutes civil fraud cannot serve as basis for criminal fraud and vice versa,the
essential elements that create civil liability and those that give rise to criminal liability are neither identical nor legally interchangeable.
We therefore find no conflict between our ruling in Republicand the Ombudsman's findings below. 94 We reiterate that it is not our
function to determine at the first instance whether criminal fraud has been committed. That task properly lies with the prosecutorial arm
of government, either with the Department of Justice or, as in this case, the Ombudsman.

Having ruled that the Ombudsman did not commit grave abuse of discretion, it is no longer necessary to belabor the issue on
contempt. Suffice it to say that our directive to the Ombudsman was simply to determine if there was any criminal liability on the part
of the public and private respondents in G.R. No. 159139. The Ombudsman sufficiently complied with this directive when she found that,
based on the hearings conducted and documents gathered, probable cause did not exist.

xxx xxx xxx

The Court respects the relative autonomy of the Ombudsman to investigate and prosecute, and refrains from interfering when the
latter exercises such powers, except when there is grave abuse of discretion. The Ombudsman's determination of probable cause may only
be assailed before this Court through the extraordinary remedy of certiorari.The requirement for judicial intrusion, however, is still for
the petitioners to demonstrate clearly that the Ombudsman acted arbitrarily or despotically. Absent such clear demonstration, the
intervention must be disallowed in deference to the doctrine of non-interference.

WHEREFORE,the petition docketed as G.R. No. 174777 is DISMISSED.The Motion dated October 17, 2006 filed by the petitioners
in G.R. No. 159139 is DENIED.

SO ORDERED.

||| (Information Technology Foundation of the Philippines v. Commission on Election, G.R. Nos. 159139 & 174777, [June 6, 2017])