1. G.R. No.

1051 May 19, 1903

THE UNITED STATES, complainant-appellee,

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

F. G. Waite for appellants.

Solicitor-General Araneta for appellee.

LADD, J.:

The defendants have been convicted upon a complaint charging them with the offense of writing,
publishing, and circulating a scurrilous libel against the Government of the United States and the
Insular Government of the Philippine Islands. The complaint is based upon section 8 of Act No. 292
of the Commission, which is as follows:

Every person who shall utter seditious words or speeches, write, publish, or circulate
scurrilous libels against the Government of the United States or the Insular Government of
the Philippine Islands, or which tend to disturb or obstruct any lawful officer in executing his
office, or which tend to instigate others to cabal or meet together for unlawful purposes, or
which suggest or incite rebellious conspiracies or riots, or which tend to stir up the people
against the lawful authorities, or to disturb the peace of the community, the safety and order
of the Government, or who shall knowingly conceal such evil practices, shall be punished by
a fine not exceeding two thousand dollars or by imprisonment not exceeding two years, or
both, in the discretion of the court.

The alleged libel was published as an editorial in the issue of the "Manila Freedom" of April 6, 1902,
under the caption of "A few hard facts."

The Attorney-General in his brief indicates the following passages of the article as those upon which
he relies to sustain the conviction:

Sidney Adamson, in a late letter in "Leslie's Weekly," has the following to say of the action of
the Civil Commission in appointing rascally natives to important Government positions:

"It is a strong thing to say, but nevertheless true, that the Civil Commission, through
its ex-insurgent office holders, and by its continual disregard for the records of
natives obtained during the military rule of the Islands, has, in its distribution of
offices, constituted a protectorate over a set of men who should be in jail or deported.
. . . [Reference is then made to the appointment of one Tecson as justice of the
peace.] This is the kind of foolish work that the Commission is doing all over the
Islands, reinstating insurgents and rogues and turning down the men who have
during the struggle, at the risk of their lives, aided the Americans."

xxx xxx xxx

There is no doubt but that the Filipino office holders of the Islands are in a good many
instances rascals.

xxx xxx xxx

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

xxx xxx xxx

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

xxx xxx xxx

It is a notorious fact that many branches of the Government organized by the Civil
Commission are rotten and corrupt. The fiscal system, upon which life, liberty, and justice
depends, is admitted by the Attorney-General himself to be most unsatisfactory. It is a fact
that the Philippine judiciary is far from being what it should. Neither fiscals nor judges can be
persuaded to convict insurgents when they wish to protect them.

xxx xxx xxx

Now we hear all sorts of reports as to rottenness existing in the province [of Tayabas], and
especially the northern end of it; it is said that it is impossible to secure the conviction of
lawbreakers and outlaws by the native justices, or a prosecution by the native fiscals.

xxx xxx xxx

The long and short of it is that Americans will not stand for an arbitrary government,
especially when evidences of carpetbagging and rumors of graft are too thick to be pleasant.

We do not understand that it is claimed that the defendants succeeded in establishing at the trial the
truth of any of the foregoing statements. The only question which we have considered is whether
their publication constitutes an offense under section 8 of Act No. 292, above cited.

Several allied offenses or modes of committing the same offense are defined in that section, viz: (1)
The uttering of seditious words or speeches; (2) the writing, publishing, or circulating of scurrilous
libels against the Government of the United States or the Insular Government of the Philippine
Islands; (3) the writing, publishing, or circulating of libels which tend to disturb or obstruct any lawful
officer in executing his office; (4) or which tend to instigate others to cabal or meet together for
unlawful purposes; (5) or which suggest or incite rebellious conspiracies or riots; (6) or which tend to
stir up the people against the lawful authorities or to disturb the peace of the community, the safety
and order of the Government; (7) knowingly concealing such evil practices.

The complaint appears to be framed upon the theory that a writing, in order to be punishable as a
libel under this section, must be of a scurrilous nature and directed against the Government of the
United States or the Insular Government of the Philippine Islands, and must, in addition, tend to
some one of the results enumerated in the section. The article in question is described in the
complaint as "a scurrilous libel against the Government of the United States and the Insular
Government of the Philippine Islands, which tends to obstruct the lawful officers of the United States
and the Insular Government of the Philippine Islands in the execution of their offices, and which
tends to instigate others to cabal and meet together for unlawful purposes, and which suggests and
incites rebellious conspiracies, and which tends to stir up the people against the lawful authorities,
and which disturbs the safety and order of the Government of the United States and the Insular
Government of the Philippine Islands." But it is "a well-settled rule in considering indictments that
where an offense may be committed in any of several different modes, and the offense, in any
particular instance, is alleged to have been committed in two or more modes specified, it is sufficient
to prove the offense committed in any one of them, provided that it be such as to constitute the
substantive offense" (Com. vs. Kneeland, 20 Pick., Mass., 206, 215), and the defendants may,
therefore, be convicted if any one of the substantive charges into which the complaint may be
separated has been made out.

We are all, however, agreed upon the proposition that the article in question has no appreciable
tendency to "disturb or obstruct any lawful officer in executing his office," or to "instigate" any person
or class of persons "to cabal or meet together for unlawful purposes," or to "suggest or incite
rebellious conspiracies or riots," or to "stir up the people against the lawful authorities or to disturb
the peace of the community, the safety and order of the Government." All these various tendencies,
which are described in section 8 of Act No. 292, each one of which is made an element of a certain
form of libel, may be characterized in general terms as seditious tendencies. This is recognized in
the description of the offenses punished by this section, which is found in the title of the act, where
they are defined as the crimes of the "seditious utterances, whether written or spoken."

Excluding from consideration the offense of publishing "scurrilous libels against the Government of
the United States or the Insular Government of the Philippine Islands," which may conceivably stand
on a somewhat different footing, the offenses punished by this section all consist in inciting, orally or
in writing, to acts of disloyalty or disobedience to the lawfully constituted authorities in these Islands.
And while the article in question, which is, in the main, a virulent attack against the policy of the Civil
Commission in appointing natives to office, may have had the effect of exciting among certain
classes dissatisfaction with the Commission and its measures, we are unable to discover anything in
it which can be regarded as having a tendency to produce anything like what may be called
disaffection, or, in other words, a state of feeling incompatible with a disposition to remain loyal to
the Government and obedient to the laws. There can be no conviction, therefore, for any of the
offenses described in the section on which the complaint is based, unless it is for the offense of
publishing a scurrilous libel against the Government of the of the United States or the Insular
Government of the Philippine Islands.

Can the article be regarded as embraced within the description of "scurrilous libels against the
Government of the United States or the Insular Government of the Philippine Islands?" In the
determination of this question we have encountered great difficulty, by reason of the almost entire
lack of American precedents which might serve as a guide in the construction of the law. There are,
indeed, numerous English decisions, most of them of the eighteenth century, on the subject of
libelous attacks upon the "Government, the constitution, or the law generally," attacks upon the
Houses of Parliament, the Cabinet, the Established Church, and other governmental organisms, but
these decisions are not now accessible to us, and, if they were, they were made under such different
conditions from those which prevail at the present day, and are founded upon theories of
government so foreign to those which have inspired the legislation of which the enactment in
question forms a part, that they would probably afford but little light in the present inquiry. In
England, in the latter part of the eighteenth century, any "written censure upon public men for their
conduct as such," as well as any written censure "upon the laws or upon the institutions of the
country," would probably have been regarded as a libel upon the Government. (2 Stephen, History of
the Criminal Law of England, 348.) This has ceased to be the law in England, and it is doubtful
whether it was ever the common law of any American State. "It is true that there are ancient dicta to
the effect that any publication tending to "possess the people with an ill opinion of the Government"
is a seditious libel ( per Holt, C. J., in R. vs. Tuchin, 1704, 5 St. Tr., 532, and Ellenborough, C. J., in
R. vs. Cobbett, 1804, 29 How. St. Tr., 49), but no one would accept that doctrine now. Unless the
words used directly tend to foment riot or rebellion or otherwise to disturb the peace and tranquility of
the Kingdom, the utmost latitude is allowed in the discussion of all public affairs." (11 Enc. of the
Laws of England, 450.) Judge Cooley says (Const. Lim., 528): "The English common law rule which
made libels on the constitution or the government indictable, as it was administered by the courts,
seems to us unsuited to the condition and circumstances of the people of America, and therefore
never to have been adopted in the several States."

We find no decisions construing the Tennessee statute (Code, sec. 6663), which is apparently the
only existing American statute of a similar character to that in question, and from which much of the
phraseology of then latter appears to have been taken, though with some essential modifications.

The important question is to determine what is meant in section 8 of Act No. 292 by the expression
"the Insular Government of the Philippine Islands." Does it mean in a general and abstract sense the
existing laws and institutions of the Islands, or does it mean the aggregate of the individuals by
whom the government of the Islands is, for the time being, administered? Either sense would
doubtless be admissible.

We understand, in modern political science, . . . by the term government, that institution or aggregate
of institutions by which an independent society makes and carries out those rules of action which are
unnecessary to enable men to live in a social state, or which are imposed upon the people forming
that society by those who possess the power or authority of prescribing them. Government is the
aggregate of authorities which rule a society. By "dministration, again, we understand in modern
times, and especially in more or less free countries, the aggregate of those persons in whose hands
the reins of government are for the time being (the chief ministers or heads of departments)."
(Bouvier, Law Dictionary, 891.) But the writer adds that the terms "government" and "administration"
are not always used in their strictness, and that "government" is often used for "administration."

In the act of Congress of July 14, 1798, commonly known as the "Sedition Act," it is made an offense
to "write, print, utter, or published," or to "knowingly and willingly assist or aid in writing, printing,
uttering, or publishing any false, scandalous, and malicious writing or writings against the
Government of the United States, or either House of the Congress of the United States, or the
President of the United States, with intent to defame the said Government, or either House of the
said Congress, or the said President, or to bring them, or either of them, into contempt or disrepute,
or to excite against them or either or any of them the hatred of the good people of the United States,"
etc. The term "government" would appear to be used here in the abstract sense of the existing
political system, as distinguished from the concrete organisms of the Government — the Houses of
Congress and the Executive — which are also specially mentioned.

Upon the whole, we are of the opinion that this is the sense in which the term is used in the
enactment under consideration.

It may be said that there can be no such thing as a scurrilous libel, or any sort of a libel, upon an
abstraction like the Government in the sense of the laws and institutions of a country, but we think
an answer to this suggestion is that the expression "scurrilous libel" is not used in section 8 of Act
No. 292 in the sense in which it is used in the general libel law (Act No. 277) — that is, in the sense
of written defamation of individuals — but in the wider sense, in which it is applied in the common
law to blasphemous, obscene, or seditious publications in which there may be no element of
defamation whatever. "The word 'libel' as popularly used, seems to mean only defamatory words;
but words written, if obscene, blasphemous, or seditious, are technically called libels, and the
publication of them is, by the law of England, an indictable offense." (Bradlaugh vs. The Queen, 3 Q.
B. D., 607, 627, per Bramwell L. J. See Com. vs. Kneeland, 20 Pick., 206, 211.)

While libels upon forms of government, unconnected with defamation of individuals, must in the
nature of things be of uncommon occurrence, the offense is by no means an imaginary one. An
instance of a prosecution for an offense essentially of this nature is Republica vs. Dennie, 4 Yeates
(Pa.), 267, where the defendant was indicted "as a factious and seditious person of a wicked mind
and unquiet and turbulent disposition and conversation, seditiously, maliciously, and willfully
intending, as much as in him lay, to bring into contempt and hatred the independence of the United
States, the constitution of this Commonwealth and of the United States, to excite popular discontent
and dissatisfaction against the scheme of polity instituted, and upon trial in the said United States
and in the said Commonwealth, to molest, disturb, and destroy the peace and tranquility of the said
United States and of the said Commonwealth, to condemn the principles of the Revolution, and
revile, depreciate, and scandalize the characters of the Revolutionary patriots and statesmen, to
endanger, subvert, and totally destroy the republican constitutions and free governments of the said
United States and this Commonwealth, to involve the said United States and this Commonwealth in
civil war, desolation, and anarchy, and to procure by art and force a radical change and alteration in
the principles and forms of the said constitutions and governments, without the free will, wish, and
concurrence of the people of the said United States and this Commonwealth, respectively," the
charge being that "to fulfill, perfect, and bring to effect his wicked, seditious, and detestable
intentions aforesaid he . . . falsely, maliciously, factiously, and seditiously did make, compose, write,
and publish the following libel, to wit; 'A democracy is scarcely tolerable at any period of national
history. Its omens are always sinister and its powers are unpropitious. With all the lights or
experience blazing before our eyes, it is impossible not to discover the futility of this form of
government. It was weak and wicked at Athens, it was bad in Sparta, and worse in Rome. It has
been tried in France and terminated in despotism. it was tried in England and rejected with the
utmost loathing and abhorrence. It is on its trial here and its issue will be civil war, desolation, and
anarchy. No wise man but discerns its imperfections; no good man but shudders at its miseries; no
honest man but proclaims its fraud, and no brave man but draws his sword against its force. The
institution of a scheme of polity so radically contemptible and vicious is a memorable example of
what the villainy of some men can devise, the folly of others receive, and both establish, in despite of
reason, reflection, and sensation.'"

An attack upon the lawfully established system of civil government in the Philippine Islands, like that
which Dennie was accused of making upon the republican form of government lawfully established
in the United States and in the State of Pennsylvania would, we think, if couched in scandalous
language, constitute the precise offense described in section 8 of Act No. 292 as a scurrilous libel
against the Insular Government of the Philippine Islands.

Defamation of individuals, whether holding official positions or not, and whether directed to their
public conduct or to their private life, may always be adequately punished under the general libel
law. Defamation of the Civil Commission as an aggregation, it being "a body of persons definite and
small enough for its individual members to be recognized as such" (Stephen, Digest of the Criminal
Law, art. 277), as well as defamation of any of the individual members of the Commission or of the
Civil Governor, either in his public capacity or as a private individual, may be so punished. The
general libel law enacted by the Commission was in force when Act No. 292, was passed. There
was no occasion for any further legislation on the subject of libels against the individuals by whom
the Insular Government is administered — against the Insular Government in the sense of the
aggregate of such individuals. There was occasion for stringent legislation against seditious words or
libels, and that is the main if not the sole purpose of the section under consideration. It is not
unreasonable to suppose that the Commission, in enacting this section, may have conceived of
attacks of a malignant or scurrilous nature upon the existing political system of the United States, or
the political system established in these Islands by the authority of the United States, as necessarily
of a seditious tendency, but it is not so reasonable to suppose that they conceived of attacks upon
the personnel of the government as necessarily tending to sedition. Had this been their view it
seems probable that they would, like the framers of the Sedition Act of 1798, have expressly and
specifically mentioned the various public officials and collegiate governmental bodies defamation of
which they meant to punish as sedition.

The article in question contains no attack upon the governmental system of the United States, and it
is quite apparent that, though grossly abusive as respects both the Commission as a body and some
of its individual members, it contains no attack upon the governmental system by which the authority
of the United States is enforced in these Islands. The form of government by a Civil Commission and
a Civil Governor is not assailed. It is the character of the men who are intrusted with the
administration of the government that the writer is seeking to bring into disrepute by impugning the
purity of their motives, their public integrity, and their private morals, and the wisdom of their policy.
The publication of the article, therefore, no seditious tendency being apparent, constitutes no offense
under Act No. 292, section 8.

The judgment of conviction is reversed and the defendants are acquitted, with costs de oficio.

Arellano, C.J. Torres, Willard and Mapa, JJ., concur.

2. [G.R. No. 127685. July 23, 1998]

BLAS F. OPLE, petitioner, vs. RUBEN D. TORRES, ALEXANDER

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

DECISION
PUNO, J.:

The petition at bar is a commendable effort on the part of Senator Blas F. Ople to
prevent the shrinking of the right to privacy, which the revered Mr. Justice Brandeis
considered as "the most comprehensive of rights and the right most valued by civilized
men."[1] Petitioner Ople prays that we invalidate Administrative Order No. 308 entitled
"Adoption of a National Computerized Identification Reference System" on two important
constitutional grounds, viz: one, it is a usurpation of the power of Congress to legislate,
and two, it impermissibly intrudes on our citizenry's protected zone of privacy. We grant
the petition for the rights sought to be vindicated by the petitioner need stronger barriers
against further erosion.
A.O. No. 308 was issued by President Fidel V. Ramos on December 12, 1996 and
reads as follows:
 "ADOPTION OF A NATIONAL COMPUTERIZED IDENTIFICATION
REFERENCE SYSTEM

WHEREAS, there is a need to provide Filipino citizens and foreign residents

with the facility to conveniently transact business with basic service and social
security providers and other government instrumentalities;

WHEREAS, this will require a computerized system to properly and efficiently

identify persons seeking basic services on social security and reduce, if not
totally eradicate, fraudulent transactions and misrepresentations;

WHEREAS, a concerted and collaborative effort among the various basic

services and social security providing agencies and other government
instrumentalities is required to achieve such a system;

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the

Philippines, by virtue of the powers vested in me by law, do hereby direct the
following:

SECTION 1. Establishment of a National Computerized Identification

Reference System. A decentralized Identification Reference System among
the key basic services and social security providers is hereby established.

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

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

Head, Presidential Management Staff

Secretary, National Economic Development Authority

Secretary, Department of the Interior and
Local Government
Secretary, Department of Health
Administrator, Government Service Insurance
System,
Administrator, Social Security System, Administrator,
National Statistics Office Managing Director, National
Computer Center.
SEC. 3. Secretariat. The National Computer Center (NCC) is hereby
designated as secretariat to the IACC and as such shall provide administrative
and technical support to the IACC.

SEC. 4. Linkage Among Agencies. The Population Reference Number (PRN)

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

SEC. 5. Conduct of Information Dissemination Campaign. The Office of the

Press Secretary, in coordination with the National Statistics Office, the GSIS
and SSS as lead agencies and other concerned agencies shall undertake a
massive tri-media information dissemination campaign to educate and raise
public awareness on the importance and use of the PRN and the Social
Security Identification Reference.

SEC. 6. Funding. The funds necessary for the implementation of the system
shall be sourced from the respective budgets of the concerned agencies.

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

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

DONE in the City of Manila, this 12th day of December in the year of Our
Lord, Nineteen Hundred and Ninety-Six.

(SGD.) FIDEL V. RAMOS"

A.O. No. 308 was published in four newspapers of general circulation on January 22,
1997 and January 23, 1997. On January 24, 1997, petitioner filed the instant petition
against respondents, then Executive Secretary Ruben Torres and the heads of the
government agencies, who as members of the Inter-Agency Coordinating Committee, are
charged with the implementation of A.O. No. 308. On April 8, 1997, we issued a temporary
restraining order enjoining its implementation.
Petitioner contends:

"A. THE ESTABLISHMENT OF A NATIONAL COMPUTERIZED

IDENTIFICATION REFERENCE SYSTEM REQUIRES A LEGISLATIVE ACT.
THE ISSUANCE OF A.O. NO. 308 BY THE PRESIDENT OF THE REPUBLIC
OF THE PHILIPPINES IS, THEREFORE, AN UNCONSTITUTIONAL
USURPATION OF THE LEGISLATIVE POWERS OF THE CONGRESS OF
THE REPUBLIC OF THE PHILIPPINES.

B. THE APPROPRIATION OF PUBLIC FUNDS BY THE PRESIDENT FOR

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

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

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

Respondents counter-argue:

A. THE INSTANT PETITION IS NOT A JUSTICIABLE CASE AS WOULD

WARRANT A JUDICIAL REVIEW;

B. A.O. NO. 308 [1996] WAS ISSUED WITHIN THE EXECUTIVE AND
ADMINISTRATIVE POWERS OF THE PRESIDENT WITHOUT
ENCROACHING ON THE LEGISLATIVE POWERS OF CONGRESS;

C. THE FUNDS NECESSARY FOR THE IMPLEMENTATION OF THE

IDENTIFICATION REFERENCE SYSTEM MAY BE SOURCED FROM THE
BUDGETS OF THE CONCERNED AGENCIES;

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

We now resolve.
I

As is usual in constitutional litigation, respondents raise the threshold issues relating

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

We now come to the core issues. Petitioner claims that A.O. No. 308 is not a
mere administrative order but a law and hence, beyond the power of the President
to issue. He alleges that A.O. No. 308 establishes a system of identification that is all-
encompassing in scope, affects the life and liberty of every Filipino citizen and foreign
resident, and more particularly, violates their right to privacy.
Petitioner's sedulous concern for the Executive not to trespass on the lawmaking
domain of Congress is understandable. The blurring of the demarcation line between the
power of the Legislature to make laws and the power of the Executive to execute laws
will disturb their delicate balance of power and cannot be allowed. Hence, the exercise
by one branch of government of power belonging to another will be given a stricter
scrutiny by this Court.
The line that delineates Legislative and Executive power is not indistinct. Legislative
power is "the authority, under the Constitution, to make laws, and to alter and repeal
them."[8] The Constitution, as the will of the people in their original, sovereign and unlimited
capacity, has vested this power in the Congress of the Philippines. [9] The grant of
legislative power to Congress is broad, general and comprehensive. [10] The legislative
body possesses plenary power for all purposes of civil government.[11] Any power, deemed
to be legislative by usage and tradition, is necessarily possessed by Congress, unless
the Constitution has lodged it elsewhere.[12] In fine, except as limited by the Constitution,
either expressly or impliedly, legislative power embraces all subjects and extends to
matters of general concern or common interest.[13]
While Congress is vested with the power to enact laws, the President executes the
laws.[14] The executive power is vested in the President. [15] It is generally defined as the
power to enforce and administer the laws.[16] It is the power of carrying the laws into
practical operation and enforcing their due observance.[17]
As head of the Executive Department, the President is the Chief Executive. He
represents the government as a whole and sees to it that all laws are enforced by the
officials and employees of his department.[18] He has control over the executive
department, bureaus and offices. This means that he has the authority to assume directly
the functions of the executive department, bureau and office, or interfere with the
discretion of its officials.[19] Corollary to the power of control, the President also has the
duty of supervising the enforcement of laws for the maintenance of general peace and
public order. Thus, he is granted administrative power over bureaus and offices under
his control to enable him to discharge his duties effectively.[20]
Administrative power is concerned with the work of applying policies and
enforcing orders as determined by proper governmental organs.[21] It enables the
President to fix a uniform standard of administrative efficiency and check the
official conduct of his agents.[22] To this end, he can issue administrative orders,
rules and regulations.
Prescinding from these precepts, we hold that A.O. No. 308 involves a subject
that is not appropriate to be covered by an administrative order. An administrative
order is:

"Sec. 3. Administrative Orders.-- Acts of the President which relate to particular aspects
of governmental operation in pursuance of his duties as administrative head shall be
promulgated in administrative orders."[23]

An administrative order is an ordinance issued by the President which relates to specific

aspects in the administrative operation of government. It must be in harmony with the
law and should be for the sole purpose of implementing the law and carrying out
the legislative policy.[24] We reject the argument that A.O. No. 308 implements the
legislative policy of the Administrative Code of 1987. The Code is a general law and
"incorporates in a unified document the major structural, functional and procedural
principles of governance"[25] and "embodies changes in administrative structures and
procedures designed to serve the people."[26] The Code is divided into seven (7)
Books: Book I deals with Sovereignty and General Administration, Book II with the
Distribution of Powers of the three branches of Government, Book III on the Office of the
President, Book IV on the Executive Branch, Book V on the Constitutional Commissions,
Book VI on National Government Budgeting, and Book VII on Administrative Procedure.
These Books contain provisions on the organization, powers and general administration
of the executive, legislative and judicial branches of government, the organization and
administration of departments, bureaus and offices under the executive branch, the
organization and functions of the Constitutional Commissions and other constitutional
bodies, the rules on the national government budget, as well as guidelines for the exercise
by administrative agencies of quasi-legislative and quasi-judicial powers. The Code
covers both the internal administration of government, i.e, internal organization, personnel
and recruitment, supervision and discipline, and the effects of the functions performed by
administrative officials on private individuals or parties outside government.[27]
It cannot be simplistically argued that A.O. No. 308 merely implements the
Administrative Code of 1987. It establishes for the first time a National Computerized
Identification Reference System.Such a System requires a delicate adjustment of various
contending state policies-- the primacy of national security, the extent of privacy interest
against dossier-gathering by government, the choice of policies, etc. Indeed, the dissent
of Mr. Justice Mendoza states that the A.O. No. 308 involves the all-important freedom of
thought. As said administrative order redefines the parameters of some basic rights of
our citizenry vis-a-vis the State as well as the line that separates the administrative power
of the President to make rules and the legislative power of Congress, it ought to be evident
that it deals with a subject that should be covered by law.
Nor is it correct to argue as the dissenters do that A.O. No. 308 is not a law because
it confers no right, imposes no duty, affords no protection, and creates no office. Under
A.O. No. 308, a citizen cannot transact business with government agencies delivering
basic services to the people without the contemplated identification card. No citizen will
refuse to get this identification card for no one can avoid dealing with government. It is
thus clear as daylight that without the ID, a citizen will have difficulty exercising his rights
and enjoying his privileges. Given this reality, the contention that A.O. No. 308 gives no
right and imposes no duty cannot stand.
Again, with due respect, the dissenting opinions unduly expand the limits of
administrative legislation and consequently erodes the plenary power of Congress to
make laws. This is contrary to the established approach defining the traditional limits of
administrative legislation. As well stated by Fisher: "x x x Many regulations however,
bear directly on the public. It is here that administrative legislation must be
restricted in its scope and application. Regulations are not supposed to be a
substitute for the general policy-making that Congress enacts in the form of a
public law. Although administrative regulations are entitled to respect, the
authority to prescribe rules and regulations is not an independent source of power
to make laws."[28]
III

Assuming, arguendo, that A.O. No. 308 need not be the subject of a law, still it
cannot pass constitutional muster as an administrative legislation because
facially it violates the rightto privacy. The essence of privacy is the "right to be let
alone."[29] In the 1965 case of Griswold v. Connecticut,[30] the United States Supreme
Court gave more substance to the right of privacy when it ruled that the right has a
constitutional foundation. It held that there is a right of privacy which can be found within
the penumbras of the First, Third, Fourth, Fifth and Ninth Amendments, [31]viz:

"Specific guarantees in the Bill of Rights have penumbras formed by

emanations from these guarantees that help give them life and substance x x
x. Various guarantees create zones of privacy. The right of association
contained in the penumbra of the First Amendment is one, as we have seen.
The Third Amendment in its prohibition against the quartering of soldiers `in
any house' in time of peace without the consent of the owner is another facet
of that privacy. The Fourth Amendment explicitly affirms the `right of the
people to be secure in their persons, houses, papers, and effects, against
unreasonable searches and seizures.' The Fifth Amendment in its Self-
Incrimination Clause enables the citizen to create a zone of privacy which
government may not force him to surrender to his detriment. The Ninth
Amendment provides: `The enumeration in the Constitution, of certain rights,
shall not be construed to deny or disparage others retained by the people.'"

In the 1968 case of Morfe v. Mutuc,[32] we adopted the Griswold ruling that there is a
constitutional right to privacy. Speaking thru Mr. Justice, later Chief Justice, Enrique
Fernando, we held:
"xxx

The Griswold case invalidated a Connecticut statute which made the use of
contraceptives a criminal offense on the ground of its amounting to an
unconstitutional invasion of the right of privacy of married persons; rightfully it
stressed "a relationship lying within the zone of privacy created by several
fundamental constitutional guarantees." It has wider implications though. The
constitutional right to privacy has come into its own.

So it is likewise in our jurisdiction. The right to privacy as such is accorded

recognition independently of its identification with liberty; in itself, it is fully
deserving of constitutional protection. The language of Prof. Emerson is
particularly apt: 'The concept of limited government has always included the
idea that governmental powers stop short of certain intrusions into the
personal life of the citizen. This is indeed one of the basic distinctions between
absolute and limited government. Ultimate and pervasive control of the
individual, in all aspects of his life, is the hallmark of the absolute state. In
contrast, a system of limited government safeguards a private sector, which
belongs to the individual, firmly distinguishing it from the public sector, which
the state can control. Protection of this private sector-- protection, in other
words, of the dignity and integrity of the individual--has become increasingly
important as modern society has developed. All the forces of a technological
age --industrialization, urbanization, and organization-- operate to narrow the
area of privacy and facilitate intrusion into it. In modern terms, the capacity to
maintain and support this enclave of private life marks the difference between
a democratic and a totalitarian society.'"

Indeed, if we extend our judicial gaze we will find that the right of privacy is
recognized and enshrined in several provisions of our Constitution.[33] It is
expressly recognized in Section 3(1) of the Bill of Rights:

"Sec. 3. (1) The privacy of communication and correspondence shall be

inviolable except upon lawful order of the court, or when public safety or order
requires otherwise as prescribed by law."
Other facets of the right to privacy are protected in various provisions of the Bill of Rights,
viz:[34]

"Sec. 1. No person shall be deprived of life, liberty, or property without due

process of law, nor shall any person be denied the equal protection of the
laws.

Sec. 2. The right of the people to be secure in their persons, houses, papers,
and effects against unreasonable searches and seizures of whatever nature
and for any purpose shall be inviolable, and no search warrant or warrant of
arrest shall issue except upon probable cause to be determined personally by
the judge after examination under oath or affirmation of the complainant and
the witnesses he may produce, and particularly describing the place to be
searched and the persons or things to be seized.

x x x.

Sec. 6. The liberty of abode and of changing the same within the limits
prescribed by law shall not be impaired except upon lawful order of the court.
Neither shall the right to travel be impaired except in the interest of national
security, public safety, or public health, as may be provided by law.

x x x.

Sec. 8. The right of the people, including those employed in the public and
private sectors, to form unions, associations, or societies for purposes not
contrary to law shall not be abridged.

Sec. 17. No person shall be compelled to be a witness against himself."

Zones of privacy are likewise recognized and protected in our laws. The Civil
Code provides that "[e]very person shall respect the dignity, personality, privacy and
peace of mind of his neighbors and other persons" and punishes as actionable torts
several acts by a person of meddling and prying into the privacy of another.[35] It also holds
a public officer or employee or any private individual liable for damages for any violation
of the rights and liberties of another person,[36] and recognizes the privacy of letters and
other private communications.[37] The Revised Penal Code makes a crime the violation of
secrets by an officer,[38] the revelation of trade and industrial secrets,[39] and trespass to
dwelling.[40] Invasion of privacy is an offense in special laws like the Anti-Wiretapping
Law,[41] the Secrecy of Bank Deposit Act[42] and the Intellectual Property Code.[43] The Rules
of Court on privileged communication likewise recognize the privacy of certain
information.[44]
Unlike the dissenters, we prescind from the premise that the right to privacy is
a fundamental right guaranteed by the Constitution, hence, it is the burden of
government to show that A.O. No. 308 is justified by some compelling state interest
and that it is narrowly drawn. A.O. No. 308 is predicated on two considerations: (1) the
need to provide our citizens and foreigners with the facility to conveniently transact
business with basic service and social security providers and other government
instrumentalities and (2) the need to reduce, if not totally eradicate, fraudulent
transactions and misrepresentations by persons seeking basic services. It is debatable
whether these interests are compelling enough to warrant the issuance of A.O. No.
308. But what is not arguable is the broadness, the vagueness, the overbreadth of
A.O. No. 308 which if implemented will put our people's right to privacy in clear and
present danger.
The heart of A.O. No. 308 lies in its Section 4 which provides for a Population
Reference Number (PRN) as a "common reference number to establish a linkage among
concerned agencies" through the use of "Biometrics Technology" and "computer
application designs."
Biometry or biometrics is "the science of the application of statistical methods to
biological facts; a mathematical analysis of biological data."[45] The term "biometrics" has
now evolved into a broad category of technologies which provide precise
confirmation of an individual's identity through the use of the individual's own
physiological and behavioral characteristics.[46] A physiological characteristic is a
relatively stable physical characteristic such as a fingerprint, retinal scan, hand geometry
or facial features. A behavioral characteristic is influenced by the individual's
personality and includes voice print, signature and keystroke. [47] Most biometric
identification systems use a card or personal identification number (PIN) for initial
identification. The biometric measurement is used to verify that the individual holding the
card or entering the PIN is the legitimate owner of the card or PIN.[48]
A most common form of biological encoding is finger-scanning where technology
scans a fingertip and turns the unique pattern therein into an individual number which is
called a biocrypt. The biocrypt is stored in computer data banks[49] and becomes a means
of identifying an individual using a service. This technology requires one's fingertip to be
scanned every time service or access is provided.[50] Another method is the retinal scan.
Retinal scan technology employs optical technology to map the capillary pattern of the
retina of the eye. This technology produces a unique print similar to a finger
print.[51] Another biometric method is known as the "artificial nose." This device
chemically analyzes the unique combination of substances excreted from the skin of
people.[52] The latest on the list of biometric achievements is the thermogram. Scientists
have found that by taking pictures of a face using infra-red cameras, a unique heat
distribution pattern is seen. The different densities of bone, skin, fat and blood vessels all
contribute to the individual's personal "heat signature."[53]
In the last few decades, technology has progressed at a galloping rate. Some science
fictions are now science facts. Today, biometrics is no longer limited to the use of
fingerprint to identify an individual. It is a new science that uses various technologies
in encoding any and all biological characteristics of an individual for identification. It is
noteworthy that A.O. No. 308 does not state what specific biological characteristics
and what particular biometrics technology shall be used to identify people who will
seek its coverage. Considering the banquet of options available to the
implementors of A.O. No. 308, the fear that it threatens the right to privacy of our
people is not groundless.
A.O. No. 308 should also raise our antennas for a further look will show that it
does not state whether encoding of data is limited to biological information alone
for identification purposes. In fact, the Solicitor General claims that the adoption of the
Identification Reference System will contribute to the "generation of population data for
development planning."[54] This is an admission that the PRN will not be used solely for
identification but for the generation of other data with remote relation to the avowed
purposes of A.O. No. 308. Clearly, the indefiniteness of A.O. No. 308 can give the
government the roving authority to store and retrieve information for a purpose
other than the identification of the individual through his PRN.
The potential for misuse of the data to be gathered under A.O. No. 308 cannot
be underplayed as the dissenters do. Pursuant to said administrative order, an
individual must present his PRN everytime he deals with a government agency to avail of
basic services and security. His transactions with the government agency will necessarily
be recorded-- whether it be in the computer or in the documentary file of the agency. The
individual's file may include his transactions for loan availments, income tax returns,
statement of assets and liabilities, reimbursements for medication, hospitalization,
etc. The more frequent the use of the PRN, the better the chance of building a huge
and formidable information base through the electronic linkage of the files. [55] The
data may be gathered for gainful and useful government purposes; but the
existence of this vast reservoir of personal information constitutes a covert
invitation to misuse, a temptation that may be too great for some of our authorities
to resist.[56]
We can even grant, arguendo, that the computer data file will be limited to the name,
address and other basic personal information about the individual.[57] Even that hospitable
assumption will not save A.O. No. 308 from constitutional infirmity for again said order
does not tell us in clear and categorical terms how these information gathered shall
be handled. It does not provide who shall control and access the data, under what
circumstances and for what purpose. These factors are essential to safeguard the
privacy and guaranty the integrity of the information.[58] Well to note, the computer linkage
gives other government agencies access to the information. Yet, there are no controls
to guard against leakage of information. When the access code of the control
programs of the particular computer system is broken, an intruder, without fear of sanction
or penalty, can make use of the data for whatever purpose, or worse, manipulate the data
stored within the system.[59]
It is plain and we hold that A.O. No. 308 falls short of assuring that personal
information which will be gathered about our people will only be processed
for unequivocally specified purposes.[60]The lack of proper safeguards in this regard of
A.O. No. 308 may interfere with the individual's liberty of abode and travel by enabling
authorities to track down his movement; it may also enable unscrupulous persons to
access confidential information and circumvent the right against self-incrimination; it may
pave the way for "fishing expeditions" by government authorities and evade the right
against unreasonable searches and seizures.[61] The possibilities of abuse and misuse
of the PRN, biometrics and computer technology are accentuated when we
consider that the individual lacks control over what can be read or placed on his
ID, much less verify the correctness of the data encoded.[62] They threaten the very
abuses that the Bill of Rights seeks to prevent.[63]
The ability of a sophisticated data center to generate a comprehensive cradle-to-
grave dossier on an individual and transmit it over a national network is one of the most
graphic threats of the computer revolution.[64] The computer is capable of producing a
comprehensive dossier on individuals out of information given at different times and for
varied purposes.[65] It can continue adding to the stored data and keeping the information
up to date. Retrieval of stored data is simple. When information of a privileged character
finds its way into the computer, it can be extracted together with other data on the
subject.[66] Once extracted, the information is putty in the hands of any person. The end
of privacy begins.
Though A.O. No. 308 is undoubtedly not narrowly drawn, the dissenting opinions
would dismiss its danger to the right to privacy as speculative and hypothetical. Again,
we cannot countenance such a laidback posture. The Court will not be true to its role as
the ultimate guardian of the people's liberty if it would not immediately smother the sparks
that endanger their rights but would rather wait for the fire that could consume them.
We reject the argument of the Solicitor General that an individual has a
reasonable expectation of privacy with regard to the National ID and the use of
biometrics technology as it stands on quicksand. The reasonableness of a person's
expectation of privacy depends on a two-part test: (1) whether by his conduct, the
individual has exhibited an expectation of privacy; and (2) whether this expectation is one
that society recognizes as reasonable.[67] The factual circumstances of the case
determines the reasonableness of the expectation. [68] However, other factors, such as
customs, physical surroundings and practices of a particular activity, may serve to create
or diminish this expectation.[69] The use of biometrics and computer technology in A.O. No.
308 does not assure the individual of a reasonable expectation of privacy. [70] As technology
advances, the level of reasonably expected privacy decreases. [71] The measure of
protection granted by the reasonable expectation diminishes as relevant technology
becomes more widely accepted.[72] The security of the computer data file depends not only
on the physical inaccessibility of the file but also on the advances in hardware and
software computer technology. A.O. No. 308 is so widely drawn that a minimum
standard for a reasonable expectation of privacy, regardless of technology used,
cannot be inferred from its provisions.
The rules and regulations to be drawn by the IACC cannot remedy this fatal
defect. Rules and regulations merely implement the policy of the law or order. On its
face, A.O. No. 308 gives the IACC virtually unfettered discretion to determine the metes
and bounds of the ID System.
Nor do our present laws provide adequate safeguards for
a reasonable expectation of privacy. Commonwealth Act No. 591 penalizes the
disclosure by any person of data furnished by the individual to the NSO with imprisonment
and fine.[73] Republic Act No. 1161 prohibits public disclosure of SSS employment records
and reports.[74] These laws, however, apply to records and data with the NSO and the SSS.
It is not clear whether they may be applied to data with the other government agencies
forming part of the National ID System. The need to clarify the penal aspect of A.O. No.
308 is another reason why its enactment should be given to Congress.
Next, the Solicitor General urges us to validate A.O. No. 308's abridgment of the right
of privacy by using the rational relationship test.[75] He stressed that the purposes of
A.O. No. 308 are: (1)to streamline and speed
up the implementation of basic government services, (2) eradicate fraud by avoiding
duplication of services, and (3) generate population data for development planning. He
concludes that these purposes justify the incursions into the right to privacy for the means
are rationally related to the end.[76]
We are not impressed by the argument. In Morfe v. Mutuc,[77] we upheld the
constitutionality of R.A. 3019, the Anti-Graft and Corrupt Practices Act, as a valid police
power measure. We declared that the law, in compelling a public officer to make an
annual report disclosing his assets and liabilities, his sources of income and expenses,
did not infringe on the individual's right to privacy. The law was enacted to promote
morality in public administration by curtailing and minimizing the opportunities for official
corruption and maintaining a standard of honesty in the public service.[78]
The same circumstances do not obtain in the case at bar. For one, R.A. 3019 is a
statute, not an administrative order. Secondly, R.A. 3019 itself is sufficiently detailed. The
law is clear on what practices were prohibited and penalized, and it was narrowly drawn
to avoid abuses. In the case at bar, A.O. No. 308 may have been impelled by a worthy
purpose, but, it cannot pass constitutional scrutiny for it is not narrowly drawn. And we
now hold that when the integrity of a fundamental right is at stake, this court will
give the challenged law, administrative order, rule or regulation a stricter
scrutiny. It will not do for the authorities to invoke the presumption of regularity in
the performance of official duties. Nor is it enough for the authorities to prove that
their act is not irrational for a basic right can be diminished, if not defeated, even
when the government does not act irrationally. They must satisfactorily show the
presence of compelling state interests and that the law, rule, or regulation is
narrowly drawn to preclude abuses. This approach is demanded by the 1987
Constitution whose entire matrix is designed to protect human rights and to prevent
authoritarianism. In case of doubt, the least we can do is to lean towards the stance that
will not put in danger the rights protected by the Constitution.
The case of Whalen v. Roe[79] cited by the Solicitor General is also off-line. In Whalen,
the United States Supreme Court was presented with the question of whether the State
of New York could keep a centralized computer record of the names and addresses of all
persons who obtained certain drugs pursuant to a doctor's prescription. The New York
State Controlled Substances Act of 1972 required physicians to identify patients obtaining
prescription drugs enumerated in the statute, i.e., drugs with a recognized medical use
but with a potential for abuse, so that the names and addresses of the patients can be
recorded in a centralized computer file of the State Department of Health. The plaintiffs,
who were patients and doctors, claimed that some people might decline necessary
medication because of their fear that the computerized data may be readily available and
open to public disclosure; and that once disclosed, it may stigmatize them as drug
addicts.[80] The plaintiffs alleged that the statute invaded a constitutionally protected zone
of privacy, i.e, the individual interest in avoiding disclosure of personal matters, and the
interest in independence in making certain kinds of important decisions. The U.S.
Supreme Court held that while an individual's interest in avoiding disclosure of personal
matters is an aspect of the right to privacy, the statute did not pose a grievous threat to
establish a constitutional violation. The Court found that the statute was necessary to aid
in the enforcement of laws designed to minimize the misuse of dangerous drugs. The
patient-identification requirement was a product of an orderly and rational
legislative decision made upon recommendation by a specially appointed
commission which held extensive hearings on the matter. Moreover, the statute
was narrowly drawn and contained numerous safeguards against indiscriminate
disclosure. The statute laid down the procedure and requirements for the gathering,
storage and retrieval of the information. It enumerated who were authorized to access the
data. It also prohibited public disclosure of the data by imposing penalties for its violation.
In view of these safeguards, the infringement of the patients' right to privacy was justified
by a valid exercise of police power. As we discussed above, A.O. No. 308 lacks these
vital safeguards.
Even while we strike down A.O. No. 308, we spell out in neon that the Court is
not per se against the use of computers to accumulate, store, process, retrieve and
transmit data to improve our bureaucracy. Computers work wonders to achieve the
efficiency which both government and private industry seek. Many information systems
in different countries make use of the computer to facilitate important social objectives,
such as better law enforcement, faster delivery of public services, more efficient
management of credit and insurance programs, improvement of telecommunications and
streamlining of financial activities.[81] Used wisely, data stored in the computer could help
good administration by making accurate and comprehensive information for those who
have to frame policy and make key decisions.[82] The benefits of the computer
has revolutionized information technology. It developed the internet,[83] introduced the
concept of cyberspace[84] and the information superhighway where the individual, armed
only with his personal computer, may surf and search all kinds and classes of information
from libraries and databases connected to the net.
In no uncertain terms, we also underscore that the right to privacy does not bar
all incursions into individual privacy. The right is not intended to stifle scientific
and technological advancements that enhance public service and the common
good. It merely requires that the law be narrowly focused[85] and a compelling interest
justify such intrusions.[86] Intrusions into the right must be accompanied by proper
safeguards and well-defined standards to prevent unconstitutional invasions. We reiterate
that any law or order that invades individual privacy will be subjected by this Court to strict
scrutiny. The reason for this stance was laid down in Morfe v. Mutuc, to wit:

"The concept of limited government has always included the idea that governmental
powers stop short of certain intrusions into the personal life of the citizen. This is indeed
one of the basic distinctions between absolute and limited government. Ultimate and
pervasive control of the individual, in all aspects of his life, is the hallmark of the
absolute state. In contrast, a system of limited government safeguards a private sector,
which belongs to the individual, firmly distinguishing it from the public sector, which the
state can control. Protection of this private sector-- protection, in other words, of the
dignity and integrity of the individual-- has become increasingly important as modern
society has developed. All the forces of a technological age-- industrialization,
urbanization, and organization-- operate to narrow the area of privacy and facilitate
intrusion into it. In modern terms, the capacity to maintain and support this enclave of
private life marks the difference between a democratic and a totalitarian society." [87]

IV

The right to privacy is one of the most threatened rights of man living in a mass
society. The threats emanate from various sources-- governments, journalists,
employers, social scientists, etc.[88] In the case at bar, the threat comes from the executive
branch of government which by issuing A.O. No. 308 pressures the people to surrender
their privacy by giving information about themselves on the pretext that it will facilitate
delivery of basic services. Given the record-keeping power of the computer, only the
indifferent will fail to perceive the danger that A.O. No. 308 gives the government
the power to compile a devastating dossier against unsuspecting citizens. It is
timely to take note of the well-worded warning of Kalvin, Jr., "the disturbing result could
be that everyone will live burdened by an unerasable record of his past and his
limitations. In a way, the threat is that because of its record-keeping, the society will have
lost its benign capacity to forget."[89] Oblivious to this counsel, the dissents still say we
should not be too quick in labelling the right to privacy as a fundamental right. We close
with the statement that the right to privacy was not engraved in our Constitution for flattery.
IN VIEW WHEREOF, the petition is granted and Administrative Order No. 308 entitled
"Adoption of a National Computerized Identification Reference System" declared null and
void for being unconstitutional.
SO ORDERED.

1. G.R. No. 135945 March 7, 2001

THE UNITED RESIDENTS OF DOMINICAN HILL, INC., represented by its President RODRIGO
S. MACARIO, SR., petitioner,
vs.
COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS, represented by its
Commissioner, RUFINO V. MIJARES; MARIO PADILAN, PONCIANO BASILAN, HIPOLITO
ESLAVA, WILLIAM LUMPISA, PACITO MOISES, DIONISIO ANAS, NOLI DANGLA, NAPOLEON
BALESTEROS, ELSIE MOISES, SEBIO LACWASAN, BEN FLORES, DOMINGO CANUTAB,
MARCELINO GABRIANO, TINA TARNATE, ANDREW ABRAZADO, DANNY LEDDA,
FERNANDO DAYAO, JONATHAN DE LA PENA, JERRY PASSION, PETER AGUINSOD, and
LOLITA DURAN, respondents.

DE LEON, JR., J.:

Before us is a petition for prohibition and declaratory relief seeking the annulment of a status quo
order1 dated September 29, 1998 issued by the public respondent Commission on the Settlement of
Land Problems (COSLAP, for brevity) in COSLAP Case No. 98-253.

The facts are:

The property being fought over by the parties is a 10.36-hectare property in Baguio City called
Dominican Hills, formerly registered in the name of Diplomat Hills, Inc. It appeared that the property
was mortgaged to the United Coconut Planters Bank (UCPB) which eventually foreclosed the
mortgage thereon and acquired the same as highest bidder. On April 11, 1983, it was donated to the
Republic of the Philippines by UCPB through its President, Eduardo Cojuangco. The deed of
donation stipulated that Dominican Hills would be utilized for the "priority programs, projects,
activities in human settlements and economic development and governmental purposes" of the
Ministry of Human Settlements.

On December 12, 1986, the then President Corazon C. Aquino issued Executive Order No. 85
abolishing the Office of Media Affairs and the Ministry of Human Settlements. All agencies under the
latter's supervision as well as all its assets, programs and projects, were transferred to the
Presidential Management Staff (PMS).2

On October 18, 1988, the PMS received an application from petitioner UNITED RESIDENTS OF
DOMINICAN HILL, INC. (UNITED, for brevity), a community housing association composed of non-
real property owning residents of Baguio City, to acquire a portion of the Dominican Hills property.
On February 2, 1990, PMS Secretary Elfren Cruz referred the application to the HOME INSURANCE
GUARANTY CORPORATION (HIGC). HIGC consented to act as originator for
UNITED.3 Accordingly, on May 9, 1990, a Memorandum of Agreement was signed by and among
the PMS, the HIGC, and UNITED. The Memorandum of Agreement called for the PMS to sell the
Dominican Hills property to HIGC which would, in turn, sell the same to UNITED. The parties agreed
on a selling price of P75.00 per square meter.

Thus, on June 12, 1991, HIGC sold 2.48 hectares of the property to UNITED. The deed of
conditional sale provided that ten (10) per cent of the purchase price would be paid upon signing,
with the balance to be amortized within one year from its date of execution. After UNITED made its
final payment on January 31, 1992, HIGC executed a Deed of Absolute Sale dated July 1, 1992.

Petitioner alleges that sometime in 1993, private respondents entered the Dominican Hills property
allocated to UNITED and constructed houses thereon. Petitioner was able to secure a demolition
order from the city mayor.4

Unable to stop the razing of their houses, private respondents, under the name DOMINICAN HILL
BAGUIO RESIDENTS HOMELESS ASSOCIATION (ASSOCIATION, for brevity) filed an action 5 for
injunction docketed as Civil Case No. 3316-R, in the Regional Trial Court of Baguio City, Branch 4.
Private respondents were able to obtain a temporary restraining order but their prayer for a writ of
preliminary injunction was later denied in an Order dated March 18, 1996.6

While Civil Case No. 3316-R was pending, the ASSOCIATION, this time represented by the Land
Reform Beneficiaries Association, Inc. (BENEFICIARIES, for brevity), filed Civil Case No. 3382-R
before Branch 61 of the same court. The complaint7 prayed for damages, injunction and annulment
of the said Memorandum of Agreement between UNITED and HIGC. Upon motion of UNITED, the
trial court in an Order dated May 27, 1996 dismissed Civil Case No. 3382-R.8 The said Order of
dismissal is currently on appeal with the Court of Appeals.9
Demolition Order No. 1-96 was subsequently implemented by the Office of the City Mayor and the
City Engineer's Office of Baguio City. However, petitioner avers that private respondents returned
and reconstructed the demolished structures.

To forestall the re-implementation of the demolition order, private respondents filed on September
29, 1998 a petition10 for annulment of contracts with prayer for a temporary restraining order,
docketed as COSLAP Case No. 98-253, in the Commission on the Settlement of Land Problems
(COSLAP) against petitioner, HIGC, PMS, the City Engineer's Office, the City Mayor, as well as the
Register of Deeds of Baguio City. On the very same day, public respondent COSLAP issued the
contested order requiring the parties to maintain the status quo.

Without filing a motion for reconsideration from the aforesaid status quo order, petitioner filed the
instant petition questioning the jurisdiction of the COSLAP.

The issues we are called upon to resolve are:

IS THE COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS [COSLAP]

CREATED UNDER EXECUTIVE ORDER NO. 561 BY THE OFFICE OF THE PHILIPPINES
[sic] EMPOWERED TO HEAR AND TRY A PETITION FOR ANNULMENT OF CONTRACTS
WITH PRAYER FOR A TEMPORARY RESTRAINING ORDER AND THUS, ARROGATE
UNTO ITSELF THE POWER TO ISSUE STATUS QUO ORDER AND CONDUCT A
HEARING THEREOF [sic]?

ASSUMING THAT THE COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS

[COSLAP] HAS JURISDICTION ON THE MATTER, IS IT EXEMPTED FROM OBSERVING
A CLEAR CASE OF FORUM SHOPPING ON THE PART OF THE PRIVATE
RESPONDENTS?

To the extent that the instant case is denominated as one for declaratory relief, we initially clarify that
we do not possess original jurisdiction to entertain such petitions.11 Such is vested in the Regional
Trial Courts.12Accordingly, we shall limit our review to ascertaining if the proceedings before public
respondent COSLAP are without or in excess, of its jurisdiction. In this wise, a recounting of the
history of the COSLAP may provide useful insights into the extent of its powers and functions.

The COSLAP was created by virtue of Executive Order No. 561 dated September 21, 1979. Its
forerunner was the Presidential Action Committee on Land Problems (PACLAP) founded on July 31,
1970 by virtue of Executive Order No. 251. As originally conceived, the committee was tasked "to
expedite and coordinate the investigation and resolution of land disputes, streamline and shorten
administrative procedures, adopt bold and decisive measures to solve land problems, and/or
recommend other solutions." It was given the power to issue subpoenas duces tecum and ad
testificandum and to call upon any department, office, agency or instrumentality of the government,
including government owned or controlled corporations and local government units, for assistance in
the performance of its functions. At the time, the PACLAP did not exercise quasi-judicial functions.

On March 19, 1971, Executive Order No. 305 was issued reconstituting the PACLAP.13 The
committee was given exclusive jurisdiction over all cases involving public lands and other lands of
the public domain and accordingly was tasked:
 1. To investigate, coordinate, and resolve expeditiously land disputes, streamline
administrative procedures, and in general, to adopt bold and decisive measures to solve
problems involving public lands and lands of the public domain;

2. To coordinate and integrate the activities of all government agencies having to do with
public lands or lands of the public domain;

3. To study and review present policies as embodied in land laws and administrative rules
and regulations, in relation to the needs for land of the agro-industrial sector and small
farmers, with the end in view to evolving and recommending new laws and policies and
establishing priorities in the grant of public land, and the simplification of processing of land
applications in order to relieve the small man from the complexities of existing laws, rules
and regulations;

4. To evolve and implement a system for the speedy investigation and resolution of land
disputes;

5. To receive all complaints of settlers and small farmers, involving public lands or other
lands of the public domain;

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

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

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

xxx xxx xxx

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

xxx xxx xxx

Notably, the said Presidential Decree No. 832 did not contain any provision for judicial review of the
resolutions, orders or decisions of the PACLAP.

On September 21, 1979, the PACLAP was abolished and its functions transferred to the present
Commission on the Settlement of Land Problems by virtue of Executive Order No. 561. This
reorganization, effected in line with Presidential Decree No. 1416, brought the COSLAP directly
under the Office of the President.15 It was only at this time that a provision for judicial review was
made from resolutions, orders or decisions of the said agency, as embodied in section 3(2) thereof,
to wit:

Powers and functions. — The Commission shall have the following powers and functions:
 1. Coordinate the activities, particularly the investigation work, of the various
government offices and agencies involved in the settlement of land problems or
disputes, and streamline administrative procedures to relieve small settlers and
landholders and members of cultural minorities of the expense and time-consuming
delay attendant to the solution of such problems or disputes;

2. Refer and follow-up for immediate action by the agency having appropriate
jurisdiction any land problem or dispute referred to the Commission: Provided, that
the Commission may, in the following cases, assume jurisdiction and resolve land
problems or disputes which are critical and explosive in nature considering, for
instance, the large number of the parties involved, the presence or emergence of
social tension or unrest, or other similar critical situations requiring immediate action:

(a) Between occupants/squatters and pasture lease agreement holders or

timber concessionaires;

(b) Between occupants/squatters and government reservation grantees;

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

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

public domain; and

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

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

xxx xxx xxx

In the performance of its functions and discharge of its duties, the Commission is authorized,
through the Commission, to issue subpoena and subpoena duces tecum for the appearance
of witnesses and the production of records, books and documents before it. It may also call
upon any ministry, office, agency or instrumentality of the National Government, including
government-owned or controlled corporations, and local governments for assistance. This
authority is likewise, conferred upon the provincial offices as may be established pursuant to
Section 5 of this Executive Order.

In Bañaga v. Commission on the Settlement of Land Problems,16 we characterized the COSLAP's

jurisdiction as being general in nature, as follows:

Petitioners also contend in their petition that the COSLAP itself has no jurisdiction to resolve
the protest and counter-protest of the parties because its power to resolve land problems is
confined to those cases "which are critical and explosive in nature."
 This contention is devoid of merit. It is true that Executive Order No. 561 provides that the
COSLAP may take cognizance of cases which are "critical and explosive in nature
considering, for instance, the large number of parties involved, the presence or emergence
of social tension or unrest, or other similar critical situations requiring immediate action."
However, the use of the word "may" does not mean that the COSLAP's jurisdiction is merely
confined to the above mentioned cases. The provisions of the said Executive Order are clear
that the COSLAP was created as a means of providing a more effective mechanism for the
expeditious settlement of land problems in general, which are frequently the source of
conflicts among settlers, landowners and cultural minorities. Besides, the COSLAP merely
took over from the abolished PACLAP whose functions, including its jurisdiction, power and
authority to act on, decide and resolve land disputes (Sec. 2, P.D. No. 832) were all
assumed by it. The said Executive Order No. 561 containing said provision, being enacted
only on September 21, 1979, cannot affect the exercise of jurisdiction of the PACLAP
Provincial Committee of Koronadal on September 29, 1978. Neither can it affect the decision
of the COSLAP which merely affirmed said exercise of jurisdiction.

Given the facts of the case, it is our view that the COSLAP is not justified in assuming jurisdiction
over the controversy. As matters stand, it is not the judiciary's place to question the wisdom behind a
law;17 our task is to interpret the law. We feel compelled to observe, though, that by reason of the
ambiguous terminology employed in Executive Order No. 561, the power to assume jurisdiction
granted to the COSLAP provides an ideal breeding ground for forum shopping, as we shall explain
subsequently. Suffice it to state at this stage that the COSLAP may not assume jurisdiction over
cases which are already pending in the regular courts.

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

The COSLAP discharges quasi-judicial functions:

"Quasi-judicial function" is a term which applies to the actions, discretion, etc. of public
administrative officers or bodies, who are required to investigate facts, or ascertain the
 existence of facts, hold hearings, and draw conclusions from them, as a basis for their official
action and to exercise discretion of a judicial nature."24

However, it does not depart from its basic nature as an administrative agency, albeit one that
exercises quasi-judicial functions. Still, administrative agencies are not considered courts; they are
neither part of the judicial system nor are they deemed judicial tribunals.25 The doctrine of separation
of powers observed in our system of government reposes the three (3) great powers into its three (3)
branches — the legislative, the executive, and the judiciary — each department being co-equal and
coordinate, and supreme in its own sphere. Accordingly, the executive department may not, by its
own fiat, impose the judgment of one of its own agencies, upon the judiciary. Indeed, under the
expanded jurisdiction of the Supreme Court, it is empowered "to determine whether or not there has
been grave abuse of discretion amounting to lack of or excess of jurisdiction on the part of any
branch or instrumentality of the Government."26

There is an equally persuasive reason to grant the petition. As an additional ground for the
annulment of the assailed status quo order of COSLAP, UNITED accuses private respondents of
engaging in forum shopping. Forum shopping exists when a party "repetitively avail[s] of several
judicial remedies in different courts, simultaneously or successively, all substantially founded on the
same transactions and the same essential facts and circumstances, and all raising substantially the
same issues either pending in, or already resolved adversely by some other court."27 In this
connection, Supreme Court Administrative Circular No. 04-94 dated February 8, 1994 provides:

Revised Circular No. 28-91, dated February 8, 1994, applies to and governs the filing of
petitions in the Supreme Court and the Court of Appeals and is intended to prevent the
multiple filing of petitions or complaints involving the same issues in other tribunals or
agencies as a form of forum shopping.

Complementary thereto and for the same purpose, the following requirements, in addition to
those in pertinent provisions of the Rules of Court and existing circulars, shall be strictly
complied with in the filing of complaints, petitions, applications or other initiatory pleadings in
all courts and agencies other than the Supreme Court and the Court of Appeals and shall be
subject to the sanctions provided hereunder.

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

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

xxx xxx xxx

The said Administrative Circular's use of the auxiliary verb "shall" imports "an imperative obligation . .
. inconsistent with the idea of discretion."28 Hence, compliance therewith is mandatory.29

It bears stressing that there is a material distinction between the requirement of submission of the
certification against forum shopping from the undertakings stated therein. Accordingly,

x x x [f]ailure to comply with this requirement cannot be excused by the fact that plaintiff is
not guilty of forum shopping. The Court of Appeals, therefore, erred in concluding that
Administrative Circular No. 04-94 did not apply to private respondent's case merely because
her complaint was not based on petitioner's cause of action. The Circular applies to any
complaint, petition, application, or other initiatory pleading, regardless of whether the party
filing it has actually committed forum shopping. Every party filing a complaint or any other
initiatory pleading is required to swear under oath that he has not committed nor will he
commit forum shopping. Otherwise, we would have an absurd situation where the parties
themselves would be the judge of whether their actions constitute a violation of said Circular,
and compliance therewith would depend on their belief that they might or might not have
violated the requirement. Such interpretation of the requirement would defeat the very
purpose of Circular 04-94.

Indeed, compliance with the certification against forum shopping is separate from, and
independent of, the avoidance of forum shopping itself. Thus, there is a difference in the
treatment — in terms of imposable sanctions — between failure to comply with the
certification requirement and violation of the prohibition against forum shopping. The former
is merely a cause for the dismissal, without prejudice, of the complaint or initiatory pleading,
while the latter is a ground for summary dismissal thereof and constitutes direct contempt.30

A scrutiny of the pleadings filed before the trial courts and the COSLAP sufficiently establishes
private respondents' propensity for forum shopping. We lay the premise that the certification against
forum shopping must be executed by the plaintiff or principal party, and not by his counsel.31 Hence,
one can deduce that the certification is a peculiar personal representation on the part of the principal
party, an assurance given to the court or other tribunal that there are no other pending cases
involving basically the same parties, issues and causes of action. In the case at bar, private
respondents' litany of omissions range from failing to submit the required certification against forum
shopping to filing a false certification, and then to forum shopping itself. First, the petition filed before
the COSLAP conspicuously lacked a certification against forum shopping. Second, it does not
appear from the record that the ASSOCIATION informed Branch 4 of the Regional Trial Court of
Baguio City before which Civil Case No. 3316-R was pending, that another action, Civil Case No.
3382-R, was filed before Branch 61 of the same court. Another group of homeless residents of
Dominican Hill, the LAND REFORM BENEFICIARIES ASSOCIATION, INC. initiated the latter case.
The aforesaid plaintiff, however, does not hesitate to admit that it filed the second case in
representation of private respondent, as one of its affiliates. In the same manner, the certification
against forum shopping accompanying the complaint in Civil Case No. 3382-R does not mention the
pendency of Civil Case No. 3316-R. In fact, the opposite assurance was given, that there was no
action pending before any other tribunal. Another transgression is that both branches of the trial
court do not appear to have been notified of the filing of the subject COSLAP Case No. 98-253.

It is evident from the foregoing facts that private respondents, in filing multiple petitions, have
mocked our attempts to eradicate forum shopping and have thereby upset the orderly administration
of justice. They sought recourse from three (3) different tribunals in order to obtain the writ of
injunction they so desperately desired. "The willful attempt by private respondents to obtain a
preliminary injunction in another court after it failed to acquire the same from the original court
constitutes grave abuse of the judicial process."32

In this connection, we expounded on forum shopping in Viva Productions, Inc. v. Court of

Appeals33 that:

Private respondent's intention to engage in forum shopping becomes manifest with

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

xxx xxx xxx

Thus, while we might admit that the causes of action before the Makati court and
the Parañaque court are distinct, and that private respondent cannot seek civil indemnity in
the contempt proceedings, the same being in the nature of criminal contempt, we
nonetheless cannot ignore private respondent's intention of seeking exactly identical reliefs
when it sought the preliminary relief of injunction in the Makati court. As earlier indicated, had
private respondent been completely in good faith there would have been no hindrance in
filing the action for damages with the regional trial court of Parañaque and having it
consolidated with the contempt proceedings before Branch 274, so that the same issue on
the alleged violation of the sub judice rule will not have to be passed upon twice, and there
would be no possibility of having two courts of concurrent jurisdiction making two conflicting
resolutions.

Yet from another angle, it may be said that when the Parañaque court acquired jurisdiction
over the said issue, it excluded all other courts of concurrent jurisdiction from acquiring
jurisdiction over the same. To hold otherwise would be to risk instances where courts of
concurrent jurisdiction might have conflicting orders. This will create havoc and result in an
extremely disordered administration of justice. Therefore, even on the assumption that
the Makati court may acquire jurisdiction over the subject matter of the action for damages,
 without prejudice to the application of Administrative Circular No. 04-94, it cannot
nonetheless acquire jurisdiction over the issue of whether or not petitioner has violated the
sub judice rule. At best, the Makati court may hear the case only with respect to the alleged
injury suffered by private respondent after the Parañaque court shall have ruled favorably on
the said issue.

We also noted several indications of private respondents' bad faith. The complaint filed in Civil Case
No. 3316-R was prepared by the ASSOCIATION's counsel, Atty. Conrado Villamor Catral, Jr.
whereas the complaint filed in Civil Case No. 3382-R was signed by a different lawyer, Atty. Thomas
S. Tayengco. With regard to the petition filed with the COSLAP, the same was signed by private
respondents individually. As to the latter case, we noted that the petition itself could not have been
prepared by ordinary laymen, inasmuch as it exhibits familiarity with statutory provisions and legal
concepts, and is written in a lawyerly style.

In the same manner, the plaintiffs in the three (3) different cases were made to appear as dissimilar:
in Civil Case No. 3316-R, the plaintiff was ASSOCIATION of which private respondent Mario Padilan
was head, while the plaintiff in Civil Case No. 3382-R was the BENEFICIARIES. Before the
COSLAP, private respondents themselves were the petitioners, led again by Padilan.34 Private
respondents also attempted to vary their causes of action: in Civil Case No. 3382-R and COSLAP
Case No. 98-253, they seek the annulment of the Memorandum of Agreement executed by and
among UNITED, the PMS, and HIGC as well as the transfer certificates of title accordingly issued to
petitioner. All three (3) cases sought to enjoin the demolition of private respondents' houses.

It has been held that forum shopping is evident where the elements of litis pendentia or res
judicata are present. Private respondents' subterfuge comes to naught, for the effects of res
judicata or litis pendentia may not be avoided by varying the designation of the parties or changing
the form of the action or adopting a different mode of presenting one's case.35

In view of the foregoing, all that remains to be done is the imposition of the proper penalty. A party's
willful and deliberate act of forum shopping is punishable by summary dismissal of the actions
filed.36 The summary dismissal of both COSLAP Case No. 98-253 and Civil Case No. 3316-R is
therefore warranted under the premises. We shall refrain from making any pronouncement on Civil
Case No. 3382-R, the dismissal of which was elevated on appeal to the Court of Appeals where it is
still pending.

WHEREFORE, the petition is hereby GRANTED. The status quo order dated September 29, 1998
issued in COSLAP Case No. 98-253 by respondent Commission On The Settlement Of Land
Problems (COSLAP) is hereby SET ASIDE; and the petition filed in COSLAP Case No. 98-253 and
the complaint in Civil Case No. 3316-R are hereby DISMISSED for lack of jurisdiction and forum
shopping. Costs against private respondents.

SO ORDERED.

SECOND DIVISION
 PHILIPPINE FISHERIES G.R. No. 178030
DEVELOPMENT AUTHORITY
(PFDA),

Petitioner, Present:

CARPIO, J., Chairperson,

- versus - NACHURA,

PERALTA,

ABAD, and

MENDOZA, JJ.
CENTRAL BOARD OF
ASSESSMENT APPEALS, LOCAL
BOARD OF ASSESSMENT
APPEALS OF LUCENA CITY, CITY
OF LUCENA, LUCENA CITY
ASSESSOR AND LUCENA CITY
TREASURER,

Respondents.

Promulgated:

December 15, 2010

x--------------------------------------------------x

DECISION
CARPIO, J.:

The Case

This petition for review1 assails the 9 May 2007 Decision2 of the Court of Tax
Appeals in C.T.A. EB No. 193, affirming the 5 October 2005 Decision of the Central
Board of Assessment Appeals (CBAA) in CBAA Case No. L-33. The CBAA
dismissed the appeal of petitioner Philippine Fisheries Development Authority
(PFDA) from the Decision of the Local Board of Assessment Appeals (LBAA)
of Lucena City, ordering PFDA to pay the real property taxes imposed by the City
Government of Lucena on the Lucena Fishing Port Complex.

The Facts

The facts as found by the CBAA are as follows:

The records show that the Lucena Fishing Port Complex (LFPC) is one of the
fishery infrastructure projects undertaken by the National Government under
the Nationwide Fish Port-Package. Located
at BarangayDalahican, Lucena City, the fish port was constructed on a
reclaimed land with an area of 8.7 hectares more or less, at a total cost of PHP
296,764,618.77 financed through a loan (L/A PH-25 and 51) from the Overseas
Economic Cooperation Fund (OECF) of Japan, dated November 9, 1978 and
May 31, 1978, respectively.

The Philippine Fisheries Development Authority (PFDA) was created by virtue

of P.D. 977 as amended by E.O. 772, with functions and powers to (m)anage,
operate, and develop the Navotas Fishing Port Complex and such other fishing
port complexes that may be established by the Authority. Pursuant thereto,
Petitioner-Appellant PFDA took over the management and operation of LFPC
in February 1992.
 On October 26, 1999, in a letter addressed to PFDA, the City Government
of Lucena demanded payment of realty taxes on the LFPC property for the
period from 1993 to 1999 in the total amount of P39,397,880.00. This was
received by PFDA on November 24, 1999.

On October 17, 2000 another demand letter was sent by the Government
of Lucena City on the same LFPC property, this time in the amount of
P45,660,080.00 covering the period from 1993 to 2000.

On December 18, 2000 Petitioner-Appellant filed its Appeal before the Local
Board of Assessment Appeals of Lucena City, which was dismissed for lack of
merit. On November 6, 2001 Petitioner-Appellant filed its motion for
reconsideration; this was denied by the Appellee Local Board on December 10,
2001.3

PFDA appealed to the CBAA. In its Decision dated 5 October 2005, the CBAA
dismissed the appeal for lack of merit. The CBAA ruled:

Ownership of LFPC however has, before hand, been handed over to the PFDA,
as provided for under Sec. 11 of P.D. No. 977, as amended, and declared under
the MCIAA case [Mactan Cebu International Airport Authority v. Marcos,
G.R. No. 120082, 11 September 1996, 261 SCRA 667]. The allegations
therefore that PFDA is not the beneficial user of LFPC and not a taxable person
are rendered moot and academic by such ownership of PFDA over LFPC.

xxx

PFDAs Charter, P.D. 977, provided for exemption from income tax under Par.
2, Sec. 10 thereof: (t)he Authority shall be exempted from the payment of
income tax. Nothing was said however about PFDAs exemption from payment
 of real property tax: PFDA therefore was not to lay claim for realty tax
exemption on its Fishing Port Complexes. Reading Sec. 40 of P.D. 464 and
Sec. 234 of R.A. 7160 however, provided such ground: LFPC is owned by the
Republic of the Philippines, PFDA is only tasked to manage, operate, and
develop the same. Hence, LFPC is exempted from payment of realty tax.

xxx

The ownership of LFPC as passed on by the Republic of the Philippines to

PFDA is bourne by Direct evidence: P.D. 977, as amended (supra). Therefore,
Petitioner-Appellants claim for realty tax exemption on LFPC is untenable.

WHEREFORE, for all of the foregoing, the herein Appeal is hereby dismissed
for lack of merit.

SO ORDERED.4

PFDA moved for reconsideration, which the CBAA denied in its Resolution dated 7
June 2006.5 On appeal, the Court of Tax Appeals denied PFDAs petition for review
and affirmed the 5 October 2005 Decision of the CBAA.

Hence, this petition for review.

The Ruling of the Court of Tax Appeals

The Court of Tax Appeals held that PFDA is a government-owned or controlled
corporation, and is therefore subject to the real property tax imposed by local
government units pursuant to Section 232 in relation to Sections 193 and 234 of the
Local Government Code. Furthermore, the Court of Tax Appeals ruled that PFDA
failed to prove that it is exempt from real property tax pursuant to Section 234 of the
Local Government Code or any of its provisions.

The Issue

The sole issue raised in this petition is whether PFDA is liable for the real property tax
assessed on the Lucena Fishing Port Complex.

The Ruling of the Court

The petition is meritorious.

In ruling that PFDA is not exempt from paying real property tax, the Court of Tax
Appeals cited Sections 193, 232, and 234 of the Local Government Code which read:

Section 193. Withdrawal of Tax Exemption Privileges. ‒ Unless otherwise

provided in this Code, tax exemptions or incentives granted to, or presently
enjoyed by all persons, whether natural or juridical, including government-
owned or -controlled corporations, except local water districts, cooperatives
duly registered under R.A. No. 6938, non-stock and non-profit hospitals and
educational institutions, are hereby withdrawn upon the effectivity of this Code.

Section 232. Power to Levy Real Property Tax. ‒ A province or city or a

municipality within the Metropolitan Manila Area may levy an annual ad
valorem tax on real property such as land, building, machinery, and other
improvement not hereinafter specifically exempted.
 Section 234. Exemptions from Real Property Tax. ‒ The following are
exempted from payment of the real property tax:

(a) Real property owned by the Republic of the Philippines or any of its
political subdivision except when the beneficial use thereof has been granted,
for consideration or otherwise, to a taxable person;

(b) Charitable institutions, churches, parsonages or convents appurtenant

thereto, mosques, nonprofit or religious cemeteries and all lands, buildings and
improvements actually, directly, and exclusively used for religious, charitable
or educational purposes;

(c) All machineries and equipment that are actually, directly and exclusively
used by local water districts and government-owned or -controlled corporations
engaged in the supply and distribution of water and/or generation and
transmission of electric power;

(d) All real property owned by duly registered cooperatives as provided for
under R.A. No. 6938; and

(e) Machinery and equipment used for pollution control and environmental
protection.

Except as provided herein, any exemption from payment of real property tax
previously granted to, or presently enjoyed by, all persons, whether natural or
juridical, including all government-owned or -controlled corporations are
hereby withdrawn upon the effectivity of this Code.

The Court of Tax Appeals held that as a government-owned or controlled corporation,

PFDA is subject to real property tax imposed by local government units having
jurisdiction over its real properties pursuant to Section 232 of the Local Government
Code. According to the Court of Tax Appeals, Section 193 of the Local Government
Code withdrew all tax exemptions granted to government-owned or controlled
corporations. Furthermore, Section 234 of the Local Government Code explicitly
provides that any exemption from payment of real property tax granted to
government-owned or controlled corporations have already been withdrawn upon
the effectivity of the Local Government Code.

The ruling of the Court of Tax Appeals is anchored on the wrong premise that the
PFDA is a government-owned or controlled corporation. On the contrary, this Court
has already ruled that the PFDA is a government instrumentality and not a
government-owned or controlled corporation.

In the 2007 case of Philippine Fisheries Development Authority v. Court of

Appeals,6 the Court resolved the issue of whether the PFDA is a government-owned
or controlled corporation or an instrumentality of the national government. In that
case, the City of Iloilo assessed real property taxes on the Iloilo Fishing Port Complex
(IFPC), which was managed and operated by PFDA. The Court held that PFDA is an
instrumentality of the government and is thus exempt from the payment of real
property tax, thus:

The Court rules that the Authority [PFDA] is not a GOCC but an
instrumentality of the national government which is generally exempt
from payment of real property tax. However, said exemption does not
apply to the portions of the IFPC which the Authority leased to private
entities. With respect to these properties, the Authority is liable to pay property
tax. Nonetheless, the IFPC, being a property of public dominion cannot be sold
at public auction to satisfy the tax delinquency.

xxx

Indeed, the Authority is not a GOCC but an instrumentality of the government.

The Authority has a capital stock but it is not divided into shares of stocks.
Also, it has no stockholders or voting shares. Hence it is not a stock
corporation. Neither is it a non-stock corporation because it has no members.
 The Authority is actually a national government instrumentality which is
defined as an agency of the national government, not integrated within the
department framework, vested with special functions or jurisdiction by law,
endowed with some if not all corporate powers, administering special funds,
and enjoying operational autonomy, usually through a charter. When the law
vests in a government instrumentality corporate powers, the instrumentality
does not become a corporation. Unless the government instrumentality is
organized as a stock or non-stock corporation, it remains a government
instrumentality exercising not only governmental but also corporate
powers.7 (Emphasis supplied)

This ruling was affirmed by the Court in a subsequent PFDA case involving
the Navotas Fishing Port Complex, which is also managed and operated by the PFDA.
In consonance with the previous ruling, the Court held in the subsequent PFDA case
that the PFDA is a government instrumentality not subject to real property tax except
those portions of the Navotas Fishing Port Complex that were leased to taxable or
private persons and entities for their beneficial use.8

Similarly, we hold that as a government instrumentality, the PFDA is exempt from

real property tax imposed on the Lucena Fishing Port Complex, except those portions
which are leased to private persons or entities.

The exercise of the taxing power of local government units is subject to the limitations
enumerated in Section 133 of the Local Government Code.9 Under Section 133(o)10 of
the Local Government Code, local government units have no power to tax
instrumentalities of the national government like the PFDA. Thus, PFDA is not liable
to pay real property tax assessed by the Office of the City Treasurer of Lucena City on
the Lucena Fishing Port Complex, except those portions which are leased to private
persons or entities.

Besides, the Lucena Fishing Port Complex is a property of public dominion intended
for public use, and is therefore exempt from real property tax under Section
234(a)11 of the Local Government Code. Properties of public dominion are owned by
the State or the Republic of the Philippines.12 Thus, Article 420 of the Civil Code
provides:

Art. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks, shores,
roadsteads, and others of similar character;

(2) Those which belong to the State, without being for public use, and
are intended for some public service or for the development of the national
wealth. (Emphasis supplied)

The Lucena Fishing Port Complex, which is one of the major infrastructure projects
undertaken by the National Government under the Nationwide Fishing Ports Package,
is devoted for public use and falls within the term ports. The Lucena Fishing Port
Complex serves as PFDAs commitment to continuously provide post-harvest
infrastructure support to the fishing industry, especially in areas where productivity
among the various players in the fishing industry need to be enhanced.13 As property
of public dominion, the Lucena Fishing Port Complex is owned by the Republic of the
Philippines and thus exempt from real estate tax.

WHEREFORE, we GRANT the petition. We SET ASIDE the Decision dated 9

May 2007 of the Court of Tax Appeals in C.T.A. EB No. 193.
We DECLARE the Lucena Fishing Port Complex EXEMPT from real property tax
imposed by the City of Lucena. We declare VOID all the real property tax
assessments issued by the City of Lucena on the Lucena Fishing Port Complex
managed by Philippine Fisheries Development Authority, EXCEPT for the portions
that the Philippine Fisheries Development Authority has leased to private parties.

SO ORDERED.

FIRST DIVISION
CONSTANTINO T. GUMARU, G.R. No. 164196
Petitioner,
Present:
Puno, C.J.,
- versus - Chairperson,
Sandoval-Gutierrez,
Corona,
Azcuna, and
Garcia, JJ.
Promulgated:
QUIRINO STATE COLLEGE,
Respondent. June 22, 2007
x------------------------------------------------x
DECISION

PUNO, C.J.:

Assailed in this petition for review is the Decision[1] dated November 25, 2003 of
the Court of Appeals in CA-G.R. SP No. 72603, which reversed and set aside the
Order dated June 26, 2002 of the Regional Trial Court (RTC) of Quezon City,
Branch 88, denying the motion to quash the writ of execution issued in Civil Case
No. Q-97-32470, as well as its Resolution dated June 17, 2004, which denied
petitioners motion for reconsideration.

The facts are as follows:

On June 25, 1985, C.T. Gumaru Construction and Quirino State College, an
educational institution organized and existing under Batas
Pambansa (B.P.) Blg. 440,[2] through its president, Julian A. Alvarez, entered into
an Agreement[3] for the construction of the state colleges building
in Diffun, Quirino Province. Construction was done in stages and was covered by
supplemental agreements, because funding depended on the state colleges annual
budget allocation and fund releases from the government.
On October 17, 1997, Constantino T. Gumaru, owner and proprietor of
C.T. Gumaru Construction, filed a complaint for damages[4] before the RTC
of Quezon City against the state college and Julian A. Alvarez, asking for
(1) P368,493.35, the expected profits which he would have realized from the
construction of an unfinished portion of the project which was allegedly awarded by
the defendants to another contractor in violation of his preferential right to finish the
project; (2) P592,136.51, the escalation costs of construction materials and supplies;
(3) P50,000.00, the value of plaintiffs bodega allegedly demolished by the
defendants; and (4), P200,000.00 for moral and exemplary damages, attorneys fees
and costs of litigation.[5]

On May 8, 1998, Atty. Carlos T. Aggabao, purportedly acting as counsel for

the defendants, moved to dismiss the complaint on the ground of improper venue.
The motion was denied. Defendants were directed to file an answer. When they
failed to answer within the prescribed period, they were declared in default and
plaintiff was allowed to present evidence ex parte.

On February 22, 2001, the trial court decided the case in favor of the
plaintiff, viz:
WHEREFORE, x x x judgment is rendered in favor of the plaintiff Gumaru and
against the defendants College and Alvarez directing the latter to JOINTLY and
SEVERALLY pay the former as follows:

1. The sum P368,493.35 for the First Cause of action;

2. The amount of P592,136.51 for the Second Cause of action;
3. The amount of P50,000.00 for the Third Cause of action;
4. P100,000.00 for moral damages and P100,000 for attorneys fees,
plus costs.
5. The first three awards are with legal interests reckoned
from the filing of this case until the amounts are paid in
full.[6]

Defendants failed to appeal from the decision, a copy of which was duly
served on Atty. Aggabao on March 6, 2001.[7] The decision became final
and executory, and plaintiff moved for the issuance of a writ of execution.
On December 5, 2001, a Writ of Execution[8] was issued, directing the Ex-
Officio Provincial Sheriff of Quirino Province to seize the personal properties or, if
insufficient, the real properties of the defendants to satisfy the judgment awards. The
awards amounted to P1,739,725.30, inclusive of interests and sheriffs fees.

On January 11, 2002, the Office of the Solicitor General (OSG) entered its
appearance for the first time as counsel for the defendants. At the same time, it filed
a Motion to Quash Writ of Execution on the following grounds: (a) defendants were
not duly represented in court, since the OSG was not notified of the proceedings;
and (b) writs of execution may not be issued against government funds and
properties to satisfy court judgments.

Meanwhile, a Sheriffs Notice of Levy and Auction Sale [9] was issued against
two (2) parcels of land in the name of Quirino State College,[10] viz:
WHEREAS, by virtue of a Writ of Execution issued by the
Hon. Abednego O. Adre, Presiding Judge of the Regional Trial Court, x x x Branch
38, Quezon City x x x the undersigned provincial Sheriff of Quirino in order to
satisfy the amount of ONE MILLION SEVEN HUNDRED THIRTY NINE
THOUSAND SEVEN HUNDRED TWENTY FIVE AND 30/100 PESOS
(P1,739,725.30) with interest thereon from the date of execution until fully paid
aside from other incidental expenses incurred in connection with enforcement of
this Writ of Execution is HEREBY LEVIED upon all rights, interest and
participation of the defendant over the property described below, to wit:

LAND

A parcel of land under ARP. No. 00411-15003 in the name

of Quirino State College, Diffun, Quirino of which land is situated
at Bonifacio, Diffun, Quirino, Philippines, containing an area of
THIRTY THOUSAND (30,000) SQM. more or less.

LAND

A portion of land under ARP. No. 00415-16002 in the name

of Quirino State College, Diffun, Quirino of which land situated
at Bonifacio, Diffun, Quirino, Philippines, containing an area of
11.13110161 HA. more or less.
 In an Urgent Motion dated March 13, 2002,[11] the OSG reiterated its
plea for the quashal of the writ of execution and asked the court to take
judicial notice of Supreme Court Administrative Circular No. 10-2000,[12] as well as
Commission on Audit (COA) Resolution No. 2000-366[13] dated December 19,
2000, which finally adjudged plaintiff liable to the state college for P4,681,670.00
in overpayments, and liquidated damages for delay in the construction of the college
building.

The trial court denied the motion to quash the writ of execution. [14] Without
ruling on the issue of the defendants alleged lack of legal representation, the court
ruled that the properties of the state college may be seized under the writ of
execution, since it is an incorporated agency of the government given specific
powers to sue and be sued. A separate appropriation to satisfy the judgment awards
was not considered necessary, because the state colleges charter provides that funds
for the construction and repair of its buildings, machinery, equipment, and facilities
shall be taken from its annual appropriation.

The OSG filed a petition for certiorari before the Court of Appeals.
On November 25, 2003, the Court of Appeals granted the petition. [15] In quashing
the writ of execution, the Court of Appeals ruled that although the funds and
properties of government agencies with personalities separate and distinct from the
government are not exempt from execution or garnishment, the rule does not apply
where the incorporated government agency concerned is performing a vital
governmental function, like herein state college. In such cases, the money claim
should be filed first with the COA as provided in Presidential Decree No. 1445,
otherwise known as the Government Auditing Code of the Philippines.

Gumarus motion for reconsideration was denied. Hence, this petition raising
the following issues:

I. Whether or not, upon the facts and circumstances obtaining

herein, the consent given by the State to respondent to sue and be
 sued is plenary and not limited only to proceedings anterior to
the stage of execution;
II. Whether or not the money claim subject of the case below is
required to be filed first with the Commission on Audit (COA);

III. Whether or not the enforcement of the money judgment here

involved is subject to rules and procedures under Sections 49-50
of Presidential Decree No. 1445;
IV. Whether or not, being an incorporated agency of the
Government, respondents liability is controlled by the rulings on
incorporated or chartered government agencies;

V. Whether or not further appropriation is required for the

enforcement of the money judgment against respondent herein;
and
VI. Whether or not respondents representation below by counsel
of its own choice instead of by the OSG was proper.

Stated differently, the proper issues to be resolved are: (a) whether respondent state
college was properly represented before the trial court; (b) if in the negative, whether
the lack of proper legal representation was enough to nullify the proceedings; and
(c) whether the properties of respondent state college may be seized under the writ
of execution issued by the trial court.

On the issue of legal representation, Section 35, Chapter 12, Title III, Book
IV of Executive Order No. 292, otherwise known as the Administrative Code of
1987, provides:
The Office of the Solicitor General shall represent the Government of
the Philippines, its agencies and instrumentalities and its officials and agents in any
litigation, proceeding, investigation or matter requiring the services of lawyers.
When authorized by the President or head of the office concerned, it shall also
represent government owned or controlled corporations. The Office of the Solicitor
General shall constitute the law office of the Government and, as such, shall
discharge duties requiring the services of lawyers. x x x x
Under the foregoing, the OSG is mandated to act as the law office of the government,
its agencies, instrumentalities, officials and agents in any litigation or proceeding
requiring the services of a lawyer.[16] With respect to government-owned or
controlled corporations (GOCCs), the OSG shall act as counsel only when
authorized by the President or by the head of the office concerned. The principal law
office of GOCCs, as provided in Section 10, Chapter 3, Title III, Book IV, of
the Administrative Code of 1987,[17] is the Office of the Government Corporate
Counsel (OGCC).

In the case at bar, respondent state college is classified under the Code as a
chartered institution,[18] viz:
(12) Chartered institution refers to any agency organized or operating under
a special charter, and vested by law with functions relating to specific constitutional
policies or objectives. This term includes the state universities and colleges and
the monetary authority of the State. (emphasis ours)

as opposed to a GOCC defined in the following segment,[19] viz:

(13) A government-owned or controlled corporation refers to any agency
organized as a stock or non-stock corporation, vested with functions relating to
public needs whether governmental or proprietary in nature, and owned by the
Government directly or through its instrumentalities either wholly, or, where
applicable as in the case of stock corporations, to the extent of at least fifty-one (51)
percent of its capital stock: Provided, That government-owned or controlled
corporations may be further categorized by the Department of the Budget, the Civil
Service Commission, and the Commission on Audit for purposes of the exercise
and discharge of their respective powers, functions and responsibilities with respect
to such corporations.

Therefore, the proper statutory counsel of respondent state college is the OSG.
Legal representation by Atty. Carlos T. Aggabao, a private lawyer, was clearly
improper. In Gonzales v. Chavez,[20] we traced the statutory origins of the OSG and
ruled that its mandate to act as the principal law office of the government is
compulsory, viz:
 In x x x tracing the origins of the Office of the Solicitor General to gain a
clear understanding of the nature of the functions and extent of [its] powers x x x,
it is evident that a policy decision was made in the early beginnings to consolidate
in one official the discharge of legal functions and services of the government. x x x

xxxxxxxxx

x x x [T]he intent of the lawmaker was to give the designated official, the
Solicitor General, x x x the unequivocal mandate to appear for the government in
legal proceedings. Spread out in the laws creating the office is the discernible
intent which may be gathered from the term shall, which is invariably
employed, from Act No. 136 (1901) to the more recent Executive Order No.
292 (1987).

Under the principles of statutory construction, so familiar even to law

students, the term shall is nothing if not mandatory.[21] (emphases ours)

Thus, the Solicitor General cannot refuse to represent the government, its
agencies, instrumentalities, officials and agents without a just and valid reason. He
should not desist from appearing before the Court even in those cases where his
opinions may be inconsistent with the government or any of its agents he is expected
to represent.[22] As in the case of fiscals or prosecutors, bias or prejudice and
animosity or hostility do not constitute legal and valid excuses for
inhibition.[23] Unlike a practicing lawyer who has the right to decline employment, a
fiscal or prosecutor, or the Solicitor General in the case at bar, cannot refuse to
perform his functions without violating his oath of office.[24] Refusal to perform the
duty is compellable by a writ of mandamus.[25] On the other hand, government
agencies were admonished not to reject the services of the Solicitor General, or
otherwise fail or refuse to forward the papers of a case to the OSG for appropriate
action.[26] Actions filed in the name of the Republic that are not initiated by the OSG
will be summarily dismissed.[27] Moreover, the fee of the lawyer who rendered legal
service to the government in lieu of the OSG or the OGCC is the personal liability
of the government official who hired his services without the prior written
conformity of the OSG or the OGCC, as the case may be.[28] We explained the
rationale for the compulsory nature of the OSGs mandate, in this wise:
 The rationale x x x is not difficult to comprehend. Sound government
operations require consistency in legal policies and practices among the
instrumentalities of the State. x x x [A]n official learned in the law and skilled in
advocacy could best plan and coordinate the strategies and moves of the legal
battles of the different arms of the government. Surely, the economy factor, too,
must have weighed heavily in arriving at such a decision.

xxxxxxxxx

Sound management policies require that the governments approach to legal

problems and policies formulated on legal issues be harmonized and coordinated
by a specific agency. The government owes it to its officials and their respective
offices, the political units at different levels, the public and the various sectors, local
and international, that have dealings with it, to assure them of a degree of certitude
and predictability in matters of legal import.

From the historical and statutory perspectives x x x it is beyond cavil that it

is the Solicitor General who has been conferred the singular honor and privilege of
being the principal law officer and legal defender of the Government. One would
be hard put to name a single legal group or law firm that can match the expertise,
experience, resources, staff and prestige of the OSG which were painstakingly built
up for almost a century.

x x x [E]ndowed with a broad perspective that spans the legal interests of

virtually the entire government officialdom, the OSG may be expected to transcend
the parochial concerns of a particular client agency and instead, promote and protect
the public weal. Given such objectivity, it can discern, metaphorically speaking, the
panoply that is the forest and not just the individual trees. Not merely will it strive
for a legal victory circumscribed by the narrow interests of the client office or
official, but as well, the vast concerns of the sovereign which it is committed to
serve.[29]

The Solicitor General is thus expected to be the official who would best
uphold and protect the legal interests of the government.[30] His non-representation
of the government is dangerous and should not be allowed.

The magnitude of the non-representation by the OSG is nowhere more

apparent than in the case at bar. Instead of having been represented by an official
learned in the law who will promote and protect the public weal taking into
consideration the vast concerns of the sovereign which it is committed to serve,
respondent state college was instead represented by a private lawyer who made no
move to protect its interests except to file a motion to dismiss the complaint filed
against the state college, which was eventually denied by the trial court. No answer
to the complaint was filed notwithstanding due receipt of the order directing its
filing, as a consequence of which the state college was declared in default. The order
of default itself was not reconsidered, no move whatsoever having been made in that
direction. The plaintiff was allowed to present its evidence ex-parte. When the
decision was rendered adjudging the state college and its co-defendant, Julian A.
Alvarez, liable to the plaintiff, no effort was made to appeal the decision
notwithstanding due receipt of a copy thereof by Atty. Aggabao on March 6, 2001.
Thus, a writ of execution was issued against the properties of the state college, which
by this time remained as the sole defendant, Julian A. Alvarez having died during
the pendency of the case and no proper substitution of parties having been made at
the instance of Atty. Aggabao. Clear, therefore, was the utter failure of justice
insofar as respondent state college is concerned. It was as if it was not represented
by counsel at all. While it may be argued that the officials of respondent state college
should have informed the OSG of the suit filed against the state college, and that it
was their fault or negligence that the OSG was not informed in the first
place, it is settled, however, that the principle of estoppel does not operate against
the government for the act of its agents or their inaction.[31] The State has to protect
its interests and cannot be bound by, or estopped by the mistakes or negligent acts
of its officials or agents, much more, non-suited as a result thereof.[32] The legality
of legal representation can be raised and questioned at any stage of the
proceedings.[33]

The circumstances of this case, therefore, justify the nullification of the

proceedings before the trial court, and the writ of execution issued as a consequence
thereof. The state college should be given the opportunity to present its defenses
with the benefit of its statutory counsel, the OSG. A new trial would best serve the
interests of justice. With this disquisition, discussion of the other issues is not
necessary.
 IN VIEW WHEREOF, the petition is DENIED. This case
is REMANDED to the trial court for trial anew, with the Office of the Solicitor
General appearing as counsel for respondent Quirino State College. The Decision
dated February 22, 2001 of the Regional Trial Court of Quezon City, Branch 88, in
Civil Case No. Q-97-32470, and the assailed Decision dated November 25, 2003 and
Resolution dated June 17, 2004 of the Court of Appeals in CA-G.R. SP No. 72603
are, for this reason, VACATED and SET ASIDE.

SO ORDERED.

SECOND DIVISION

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

MANUEL M. LEYSON JR., petitioner, vs. OFFICE OF THE OMBUDSMAN,

TIRSO ANTIPORDA, Chairman, UCPB and CIIF Oil Mills, and OSCAR A.
TORRALBA, President, CIIF Oil Mills, respondents. ALEX

DECISION

BELLOSILLO, J.:

On 7 February 1996 International Towage and Transport Corporation (ITTC),

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

On 2 January 1998 petitioner charged respondent Tirso Antiporda, Chairman

of UCPB and CIIF Oil Mills, and respondent Oscar A. Torralba with violation
of The Anti-Graft and Corrupt Practices Actalso before the Ombudsman
anchored on the aforementioned alleged irregularities and corrupt
practices. spped

On 30 January 1998 public respondent dismissed the complaint based on its

finding that

The case is a simple case of breach of contract with damages

which should have been filed in the regular court. This Office has
no jurisdiction to determine the legality or validity of the
termination of the contract entered into by CIIF and ITTC. Besides
the entities involved are private corporations (over) which this
Office has no jurisdiction.
[2]

On 4 June 1998 reconsideration of the dismissal of the complaint was denied.

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

Petitioner now imputes grave abuse of discretion on public respondent in

dismissing his complaint. He submits that inasmuch as Philippine Coconut
Producers Federation, Inc. (COCOFED) v. PCGG and Republic v.
[4]
Sandiganbayan have declared that the coconut levy funds are public funds
[5]

then, conformably with Quimpo v. Tanodbayan, corporations formed and

[6]

organized from those funds or whose controlling stocks are from those funds
should be regarded as government owned and/or controlled corporations. As
in the present case, since the funding or controlling interest of the companies
being headed by private respondents was given or owned by the CIIF as
shown in the certification of their Corporate Secretary, it follows that they are
[7]

government owned and/or controlled corporations. Corollarily, petitioner

asserts that respondents Antiporda and Torralba are public officers subject to
the jurisdiction of the Ombudsman. Sdaadsc

Petitioner alleges next that public respondent's conclusion that his complaint
refers to a breach of contract is whimsical, capricious and irresponsible
amounting to a total disregard of its main point, i. e., whether private
respondents violated The Anti-Graft and Corrupt Practices Act when they
entered into a contract with Southwest Maritime Corporation which was
grossly disadvantageous to the government in general and to the CIIF in
particular. Petitioner admits that his motion for reconsideration was filed out of
time. Nonetheless, he advances that public respondent should have relaxed
its rules in the paramount interest of justice; after all, the delay was just a
matter of days and he, a layman not aware of technicalities, personally filed
the complaint. Rtcspped

Private respondents counter that the CIIF companies were duly organized and
are existing by virtue of the Corporation Code. Their stockholders are private
individuals and entities. In addition, private respondents contend that they are
not public officers as defined under The Anti-Graft and Corrupt Practices
Act but are private executives appointed by the Boards of Directors of the CIIF
companies. They asseverate that petitioner's motion for reconsideration was
filed through the expert assistance of a learned counsel. They then charge
petitioner with forum shopping since he had similarly filed a case for collection
of a sum of money plus damages before the trial court.

The Office of the Solicitor General maintains that the Ombudsman approved
the recommendation of the investigating officer to dismiss the complaint
because he sincerely believed there was no sufficient basis for the criminal
indictment of private respondents. spped

We find no grave abuse of discretion committed by the

Ombudsman. COCOFED v. PCGG referred to in Republic
v. Sandiganbayan reviewed the history of the coconut levy funds. I These
funds actually have four (4) general classes: (a) the Coconut Investment Fund
created under R. A. No. 6260; (b) the Coconut Consumers Stabilization Fund
[8]

created under P. D. No. 276; (c) the Coconut Industry Development Fund
[9]

created under P. D. No. 582; and, (d) the Coconut Industry Stabilization
[10]

Fund created under P. D. No. 1841. [11]

The various laws relating to the coconut industry were codified in 1976. On 21
October of that year, P. D. No. 961 was promulgated. On 11 June 1978 it
[12]

was amended by P. D. No. 1468 by inserting a new provision authorizing the

[13]

use of the balance of the Coconut Industry Development Fund for the
acquisition of "shares of stocks in corporations organized for the purpose of
engaging in the establishment and operation of industries x x x commercial
activities and other allied business undertakings relating to coconut and other
palm oil indust(ries)." From this fund thus created, or the CIIF, shares of
[14]

stock in what have come to be known as the "CIIF companies" were

purchased. miso

We then stated in COCOFED that the coconut levy funds were raised by the
State's police and taxing powers such that the utilization and proper
management thereof were certainly the concern of the Government. These
funds have a public character and are clearly affected with public interest.

Quimpo v. Tanodbayan involved the issue as to whether PETROPHIL was a

government owned or controlled corporation the employees of which fell
within the jurisdictional purview of the Tanodbayan for purposes of The Anti-
Graft and Corrupt Practices Act. We upheld the jurisdiction of the Tanodbayan
on the ratiocination that -

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

government-owned or controlled corporation, after it was acquired
by PNOC, which is a government-owned or controlled
corporation, PETROPHIL became a subsidiary of PNOC and thus
shed-off its private status. It is now funded and owned by the
government as, in fact, it was acquired to perform functions
related to government programs and policies on oil, a vital
commodity in the economic life of the nation. It was acquired not
temporarily but as a permanent adjunct to perform essential
government or government-related functions, as the marketing
arm of the PNOC to assist the latter in selling and distributing oil
and petroleum products to assure and maintain an adequate and
stable domestic supply. Korte
But these jurisprudential rules invoked by petitioner in support of his claim that
the CIIF companies are government owned and/or controlled corporations are
incomplete without resorting to the definition of "government owned or
controlled corporation" contained in par. (13), Sec. 2, Introductory Provisions
of the Administrative Code of 1987, i. e., any agency organized as a stock or
non-stock corporation vested with functions relating to public needs whether
governmental or proprietary in nature, and owned by the Government directly
or through its instrumentalities either wholly, or, where applicable as in the
case of stock corporations, to the extent of at least fifty-one (51) percent of its
capital stock. The definition mentions three (3) requisites, namely, first, any
agency organized as a stock or non-stock corporation; second, vested with
functions relating to public needs whether governmental or proprietary in
nature; and, third, owned by the Government directly or through its
instrumentalities either wholly, or, where applicable as in the case of stock
corporations, to the extent of at least fifty-one (51) percent of its capital
stock. Sclaw

In the present case, all three (3) corporations comprising the CIIF companies
were organized as stock corporations. The UCPB-CIIF owns 44.10% of the
shares of LEGASPI OIL, 91.24% of the shares of GRANEXPORT, and
92.85% of the shares of UNITED COCONUT. Obviously, the below 51%
[15]

shares of stock in LEGASPI OIL removes this firm from the definition of a
government owned or controlled corporation. Our concern has thus been
limited to GRANEXPORT and UNITED COCONUT as we go back to the
second requisite. Unfortunately, it is in this regard that petitioner failed to
substantiate his contentions. There is no showing that GRANEXPORT and/ or
UNITED COCONUT was vested with functions relating to public needs
whether governmental or proprietary in nature unlike PETROPHIL
in Quimpo. The Court thus concludes that the CIIF companies are, as found
by public respondent, private corporations not within the scope of its
jurisdiction. Sclex

With the foregoing conclusion, we find it unnecessary to resolve the other

issues raised by petitioner.

A brief note on private respondents' charge of forum shopping. Executive

Secretary v. Gordon is instructive that forum shopping consists of filing
[16]

multiple suits involving the same parties for the same cause of action, either
simultaneously or successively, for the purpose of obtaining a favorable
judgment. It is readily apparent that the present charge will not prosper
because the cause of action herein, i. e., violation of The Anti-Graft and
Corrupt Practices Act, is different from the cause of action in the case pending
before the trial court which is collection of a sum of money plus damages. miso

WHEREFORE, the petition is DISMISSED. The Resolution of public

respondent Office of the Ombudsman of 30 January 1998 which dismissed
the complaint of petitioner Manuel M. Leyson Jr., as well as its Order of 4
June 1998 denying his motion for reconsideration, is AFFIRMED. Costs
against petitioner.

SO ORDERED.apdc

SECOND DIVISION

MARCELINO B. AGOY, as the G.R. No. 162927

Administrator of the then
Don Santiago G. Manongdo, the Present:
Attorney-in-Fact of FRANCISCO M.
SARABIA AND GENEROSO T. QUISUMBING, J., Chairperson,
PEREZ, SPS. RODOLFO S. CARPIO,
FORONDA AND MILAGROS D. CARPIO MORALES,
FORONDA; JAIME PEREZ, all in TINGA, and
their own behalf, likewise, VELASCO, JR., JJ.
in behalf/representation of
OTHER BONA FIDE RESIDENTS/
SIMILARLY SITUATED,
TAXPAYERS, taken under class suit,
their names are so numerous and shall
be submitted in due time for judicial
cognizance,
Petitioners,

- versus -

COURT OF APPEALS AND

PHILIPPINE NATIONAL BANK, in
its own behalf and in behalf of PNB
Management and Development
Corporation, its supposed vendee, the
Mega Prime Realty & Holdings, Inc., Promulgated:
 in Joint Venture with Sakura Realty March 6, 2007
and Development Corporation,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J.:

Assailed in this petition for review are the Decision[1] dated September

12, 2003 and the Resolution[2] dated March 16, 2004 of the Court of Appeals in CA-
G.R. SP No. 63923.

This petition appears to be one of the numerous attempts by petitioners to title

several parcels of land in Quezon City by virtue of Titulo de Propriedad No. 4136,
which has been declared by this Court as null and void. The antecedent facts of the
case are as follows:

Sometime in 1911, the Tuason family filed a registration case covering 1,600
hectares of land in Sta. Mesa and Diliman, Quezon City. This was docketed as LRC
No. 7681. Petitioners opposed the registration, claiming ownership by virtue of an
alleged Composition Title in the name of the late Don Santiago G. Manongdo. They
averred that said title was registered on January 12, 1893 at the Property Registry in
Bulacan. On December 29, 1913, the Court of Land Registration ruled in favor of
the Tuasons.[3] On July 8, 1914, the Tuasons registered the land with the Register of
Deeds of Rizal and was issued Original Certificate of Title No. 735.[4]

In 1991, petitioners filed with the Court of Appeals an original action for annulment
of judgment in LRC No. 7681, docketed as CA-G.R. SP. Case No. 25853. The
appellate court dismissed the action for lack of merit and denied
reconsideration. Petitioners elevated the case to this Court. It was docketed as G.R.
No. 117177. However, this Court denied due course to the petition for late filing.

Through a series of legal transfers, Marcris Realty Corporation (MRC) acquired title
to five portions of the property and was issued Transfer Certificates of Title (TCT)
Nos. RT-81172 to 75 and 160470.[5] On February 12, 1980, MRC assigned to the
National Investment and Development Corporation (NIDC), a subsidiary of
Philippine National Bank (PNB), all of its shares of stock and a 1,793.10 square
meter parcel of land. By virtue of the assignment, NIDC acquired all the assets of
MRC.[6]

The five parcels of land were transferred from one subsidiary of PNB to another until
these were finally assigned to the Management and Development Corporation
(MADECOR). In view of the assignment, the Register of Deeds of Quezon City
cancelled TCT Nos. RT-81172 to 75 and issued TCT Nos. 87881 to 84 in the name
of MADECOR.[7]

On September 27, 1996, PNB sold all its stockholdings in MADECOR, including
the land covered by TCT Nos. 87881 to 84 and 160470, to Mega Prime Realty and
Holdings, Inc.[8]

On August 17, 1999, petitioners filed a complaint (for annulment of title) against
PNB, MADECOR, Mega Prime, and the Register of Deeds of Quezon City, with the
Regional Trial Court (RTC) of Quezon City, Branch 93. The case was docketed as
Civil Case No. Q-99-38491. Petitioners averred that the period within which PNB
can legally hold the five parcels of land ended on February 12, 1985, since it
foreclosed the properties of MRC on February 12, 1980. They alleged that the
transfer of the properties from PNB to MADECOR on May 18, 1988circumvented
the maximum holding period prescribed by Republic Act No. 337.[9]

The Land Registration Authority manifested that it did not issue the decree from
which the questioned certificates of title were derived, but it was the defunct General
Land Registration Office that did. It further stated that the basis of petitioners claim
was Titulo de Propriedad No. 4136 which was already declared by this Court as null
and void. For its part, PNB moved for the dismissal of the case for failure to state a
cause of action and/or on the ground that the cause of action was barred by prior
judgment.

On May 22, 2000, the RTC granted PNBs motion and dismissed the
case.[10] Subsequently, it denied petitioners separate motions for reconsideration and
to terminate the legal services of PNBs private counsel as it should be represented
by the Office of the Government Corporate Counsel (OGCC).[11] On December 1,
2000, the trial court denied petitioners second motion for
[12]
reconsideration. On January 9, 2001, the RTC clarified that its December 1,
2000 decision resolved the second motion for reconsideration and held that the
motion to resolve the second motion for reconsideration was already moot. [13]
Petitioners then filed a petition for certiorari with the Court of Appeals. However,
the appellate court denied the petition for failure to show grave abuse of discretion
on the part of the RTC. The Court of Appeals, likewise, denied reconsideration.

Petitioners now come before us raising the following issues:

1. WHETHER OR NOT THE RESPONDENT PHILIPPINE NATIONAL
BANK AS AN INSTRUMENTALITY OF THE GOVERNMENT HAS
ACTED [WITH] GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION IN DIVERTING PUBLIC FUND,
EQUIVALENT [TO] UTILIZING THE SUBJECT PARCEL OF LAND IN
QUESTION IN THE CASE AT BAR THAT WAS FORECLOSED ON
FEBRUARY 12, 1980 AS AN EQUITY IN THE REGISTRATION OF ITS
SO-CALLED SUBSIDIARY CORPORATION, THE PNB MANAGEMENT
AND DEVELOPMENT CORPORATION, UNDER THE CORPORATION
CODE (B.P. 68) ON FEBRUARY 6, 1989 WITHOUT NECESSARILY
VIOLATING THE PROVISIONS PRESCRIBED UNDER SEC. 25 (d) OF
THE GENERAL BANKING ACT (R.A. 337), AS AMENDED;

2. WHETHER OR NOT THE REGISTRATION ON FEBRUARY 6, 1989 OF

THE PNB MANAGEMENT AND DEVELOPMENT CORPORATION BY
THE PHILIPPINE NATIONAL BANK WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER S.E.C. REG. NO. 159753 AS ITS SO-
CALLED SUBSIDIARY CORPORATION COULD BE CONSIDERED
ILLEGAL PER SE, MARKED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION;

3. WHETHER OR NOT THE PHILIPPINE NATIONAL BANK HAS ACTED

WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
[EXCESS] OF JURISDICTION [IN] ITS PRIVATIZATION ON MAY 27,
1998 WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER
S.E.C. REG. NO. AS096-005555 BASED ON EXECUTIVE ORDER NO. 80,
ISSUED ON DECEMBER 3, 1986, AMOUNTING TO NULLITY, AND ON
THE OTHER HAND, COULD BE REPRESENTED BY THE OFFICE OF
THE GOVERNMENT COUNSEL (OGCC) AS ITS PRINCIPAL COUNSEL
IN THE CASE AT BAR.[14]

We note that these are not the same issues passed upon by the Court of
Appeals. Before the Court of Appeals, petitioners raised only the issues of (a) whether
the trial court properly disposed of the case, and (b) whether PNB could be legally
represented by its legal department instead of the OGCC. A party cannot raise new
issues or change his theory on appeal.[15] Thus, we shall address only two proper
issues: (1) Did the trial court properly dismiss the complaint? and (2) Does PNB have
to be represented by the OGCC?
 Petitioners reiterate their assertion that the registration by PNB, through its
subsidiary MADECOR, of the five parcels of land should be annulled because PNBs
right to hold the properties prescribed on February 12, 1985. They claim that, instead
of resolving the controversy, the trial court merely denied the complaint without
resolving their motion to strike out the entire copy of the motion to dismiss. They
maintain that the motion to dismiss was without any force and effect since it was
filed, not by the OGCC, but by PNBs own legal department.

PNB counters that petitioners failed to establish that the trial court gravely
abused its discretion when it dismissed the complaint. It maintains that an order of
dismissal is a final order, which is subject to appeal and not a proper subject of
certiorari. PNB adds that the present petition raises questions of fact which are not
proper in a petition for review.

On the first issue, we find that the trial courts dismissal of the complaint for
lack of cause of action was proper. The nature of an action is determined by the
material averments in the complaint and the character of the relief sought. The
complaint must contain a concise statement of the ultimate or essential facts
constituting the plaintiffs cause of action.[16] A cause of action is the act or omission
by which a party violates the right of another.[17] Its essential elements are as follows:
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. Act or omission on the part of such defendant in violation of the right of
the plaintiff or constituting a breach of the obligation of the defendant to the
plaintiff for which the latter may maintain an action for recovery of damages or
other appropriate relief.[18]

The first element is missing in the complaint. Petitioners have no right over
the subject parcels of land. Petitioners themselves stated in their complaint that this
Court, in G.R. No. 117177, denied their appeal of the Court of Appeals decision in
CA-G.R. SP. Case No. 25853, wherein their action to annul the title of private
respondents predecessors-in-interest was dismissed. This alone constitutes res
judicata on the issue of ownership between petitioners and PNB. Besides, this Court
has written finis to the issue of validity of Titulo de Propriedad No. 4136, from
which petitioners purportedly derive their claim, and declared it null and
void.[19] Not having any right over the land, petitioners cannot question its
subsequent transfers.
 In their attempt to cloud the issues, petitioners assail the incorporation of
MADECOR and the privatization of PNB, but these are improper subjects in a case
for annulment of title and are impertinent to the issues at hand.

Going to the second issue, Section 13[20] of the 1986 Revised Charter of

the Philippine National Bank[21] provides that PNB shall have its own legal
department. The section is captioned as Legal Matters and Cases which implies that
the legal department shall represent PNB in court. Besides, by virtue of the powers
and functions of the Department of Justice provided in Section 10, [22] Chapter 3,
Title III of the Administrative Code,[23] the OGCC is mandated to act as the principal
law office of all the government-owned and controlled corporations. This means that
the existing legal departments of the government-owned and controlled corporations
are maintained separately and continue to perform their functions, and the OGCC
shall exercise control and supervision over them. Hence, petitioners separate
motions to terminate the services of PNBs counsel and to expunge PNBs motion to
dismiss from the record are baseless.

WHEREFORE, the petition is DENIED for lack of merit. The Decision

dated September 12, 2003 and the Resolution dated March 16, 2004 of the Court of
Appeals in CA-G.R. SP No. 63923 are hereby AFFIRMED. Costs against the
petitioners.

SO ORDERED.
THIRD DIVISION

LAND BANK OF THE PHILIPPINES, G.R. No. 169008

Petitioner,
Present:

YNARES-SANTIAGO, J.,
Chairperson,
 - versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO, and
NACHURA, JJ.

Promulgated:
RAYMUNDA MARTINEZ,
Respondent. August 14, 2007

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of
Court assailing the September 28, 2004 Resolution[1] of the Court of Appeals (CA)
in CA-G.R. SP No. 83276 and the July 15, 2005 resolution[2] denying the motion for
reconsideration thereof.

Undisputed are the following antecedent facts:

After compulsory acquisition by the Department of Agrarian Reform (DAR), on

November 16, 1993, of respondent Martinezs 62.5369-hectare land
in Barangay Agpudlos, San Andres, Romblon, pursuant to Republic Act No. 6657,
or the Comprehensive Agrarian Reform Law of 1988 (CARL), petitioner Land Bank
of the Philippines (LBP) offered P1,955,485.60 as just compensation.[3] Convinced
that the proffered amount was unjust and confiscatory, respondent rejected
it. Thus, the Department of Agrarian Reform Adjudication Board (DARAB), through
its Provincial Agrarian Reform Adjudicator (PARAD) conducted summary
administrative proceedings for the preliminary determination of just compensation
in accordance with Section 16 (d) of the CARL.

On September 4, 2002, PARAD Virgilio M. Sorita, finding some marked

inconsistencies in the figures and factors made as bases by LBP in its computation,
rendered judgment as follows:

WHEREFORE, in view of the foregoing, judgment is hereby

rendered:

Ordering the Land Bank of the Philippines to pay landowner-

protestant RAYMUNDA MARTINEZ for her property covered and
embraced by TCT No. T-712 with an area of 62.5369 hectares, more or
less, which the Department of Agrarian Reform intends to acquire, the
total amount of TWELVE MILLION ONE HUNDRED SEVENTY NINE
THOUSAND FOUR HUNDRED NINETY TWO and 50/100 Pesos
(Php12,179,492.50), in the manner provided for by law.

SO ORDERED.[4]

A petition for the fixing of just compensation[5] docketed as Agrarian Case

No. 696 was then filed by LBPs counsel before the Special Agrarian Court (SAC), the
Regional Trial Court of Odiongan, Romblon, Branch 82. After filing her answer to
the said petition,[6] respondent, contending that the orders, rulings and decisions
of the DARAB become final after the lapse of 15 days from their receipt, moved for
the dismissal of the petition for being filed out of time.[7] Petitioner opposed the
motion.[8]

Meanwhile, respondent, still asserting the finality of PARAD Soritas decision,

filed before the Office of the PARAD a motion for the issuance of a writ of
execution, which was eventually granted on November 11, 2003.[9] Ascertaining
that the petition before the SAC was filed by LBP 26 days after it received a copy of
PARAD Soritas decision, the Office of the PARAD denied LBPs motion for
reconsideration and ordered the issuance of a writ of execution on February 23,
2004.[10] Aggrieved by these developments, LBP, on March 12, 2004, moved to
quash the said February 23, 2004 PARAD resolution.[11]

On April 6, 2004, even as the motion to quash was yet unresolved, LBP
instituted a petition for certiorari[12] before the CA, which was docketed as CA-G.R.
SP No. 83276, assailing both the November 11, 2003 and the February 23, 2004
PARAD resolutions. LBP primarily contended that the Office of the PARAD gravely
abused its discretion when it issued the writ of execution despite the pendency
with the SAC of a petition for the fixing of just compensation.

The CA, finding LBP guilty of forum-shopping for not disclosing the pendency
of the Motion to Quash dated March 12, 2004, dismissed the petition
on September 28, 2004,[13]thus:

ACCORDINGLY, the present petition for certiorari is DISMISSED

outright.

Consequently, in view of the dismissal of the above-entitled case,

we are no longer in a position to act on the private respondents motion
for execution pending appeal.
 Further, this Court, mindful that under Sec. 5, Rule 7, of the 1997
Rules of Civil Procedure, willful and deliberate forum-shopping
constitutes direct contempt of court and cause for administrative
sanctions, which may both be resolved and imposed in the same case
where the forum shopping is found, WARNS the counsel of record of the
petitioner that a repetition of a similar act of submitting a false
certification shall be dealt with most severely.

SO ORDERED.[14]

Not persuaded by LBPs motion for reconsideration, the appellate court

denied the same on July 15, 2005.[15] Thus, LBP, through its legal department,
elevated the case to this Court on September 9, 2005 via a petition for review
on certiorari[16] under Rule 45, contending, among others, that it did not commit
deliberate forum shopping for what it filed with the Office of the PARAD was a
motion to quash, which is not an initiatory pleading, and that the decision of the
PARAD cannot be executed due to the pending petition for fixing of just
compensation with the SAC.

On September 14, 2005, we issued a temporary restraining order (TRO)

restraining the appellate court and the DAR adjudicators from implementing
the November 11, 2003 and the February 23, 2004 resolutions. [17]

For her part, respondent contends that petitioner committed forum-

shopping when it filed a certiorari petition without first awaiting the resolution by
the Office of the PARAD of the motion to quash;[18] and that petitioner has lost its
standing to sue considering that it is being represented by its lawyers and not the
Office of the Government Corporate Counsel (OGCC).[19]
 On the basis of these antecedents, the Court shall now resolve seriatim the
following issues: (1) whether or not petitioner may file the instant appeal solely
through its legal department; (2) whether or not petitioner has committed forum
shopping; and (3) whether or not the PARAD, in this case, gravely abused its
discretion when it issued a writ of execution despite the pendency of LBPs petition
for fixing of just compensation with the SAC.

After meticulously reviewing the records and considering the arguments of

the parties, the Court finds the appeal devoid of merit.

In Land Bank of the Philippines v. Teresita Panlilio-Luciano,[20] the Court

explained in one of its resolutions that nothing in the LBP charter expressly
authorizes the LBP Legal Department to appear in behalf of LBP in any court or
quasi-judicial proceeding and that the Administrative Code of 1987 mandates the
OGCC, not the LBP Legal Department, to act as the principal law office of the LBP,
thus:

There is nothing in the LBP charter that expressly authorizes the

said Legal Department to appear in behalf of LBP in any court or quasi-
judicial proceeding. Attys. Beramo and Berbao insist that the creation of
the LBP Legal Department necessarily entails conferment of the power
to represent [LBP] in any and all cases and consequently confers the
power to exercise such incidental powers or perform such acts as are
necessary to make the conferred power effective. At first blush, this is
not an unreasonable position; yet, we are precluded from adopting the
same, owing to the explicit proviso in Section 10, Book IV, Title III, Chapter
3 of the Administrative Code of 1987, which reads:

Section 10. Office of the Government Corporate

Counsel. The Office of the Government Corporate Counsel
(OGCC) shall act as the principal law office of all
government-owned or controlled corporations, their
 subsidiaries, other corporate offsprings and government
acquired asset corporations and shall exercise control and
supervision over all legal departments or
divisions maintained separately and such powers and
functions as are now or may hereafter be provided by law.
In the exercise of such control and supervision, the
Government Corporate Counsel shall promulgate rules and
regulations to effectively implement the objectives of the
Office.
The OGCC is authorized to receive the attorney's fees
adjudged in favor of their client government-owned or
controlled corporations, their subsidiaries/other corporate
offsprings and government acquired asset corporations.
These attorney's fees shall accrue to a Special fund of the
OGCC, and shall be deposited in an authorized government
depository as trust liability and shall be made available for
expenditure without the need for a Cash Disbursement
Ceiling, for purposes of upgrading facilities and equipment,
granting of employee's incentive pay and other benefits,
and defraying such other incentive expenses not provided
for in the General Appropriations Act as may be determined
by the Government Corporate Counsel. (Emphasis
supplied.)

The above provision mandates the OGCC, and not the LBP Legal
Department, as the principal law office of the LBP. Moreover, it
establishes the proper hierarchical order in that the LBP Legal
Department remains under the control and supervision of the
OGCC. Indeed, if we were to accede to the position of Attys. Beramo and
Berbao that the mere constitution of an LBP Legal Department ipso
facto confers upon it the capacity to litigate cases in behalf of LBP in any
legal proceeding, then the role of the OGCC as the principal law office of
all GOCCs would be rendered nugatory in all GOCCs with Legal
Departments.
 At the same time, the existence of the OGCC does not render the
LBP Legal Department a superfluity. We do not doubt that the LBP Legal
Department carries out vital legal services to LBP. However, the
performance of such functions cannot deprive the OGCCs role as
overseer of the LBP Legal Department and its mandate of exercising
control and supervision over all GOCC legal departments. For the purpose
of filing petitions and making submissions before this Court, such control
and supervision imply express participation by the OGCC as principal legal
counsel of LBP. Our succeeding disposition of the OGCCs
pending Manifestation would delve in detail the extent of the OGCCs
required participation. But suffice for now, Attys. Beramo and Berbao are
in error when they assert that the OGCCs participation in the present
petition is not required at all.

It should also be noted that the aforementioned Section 10, Book

IV, Title III, Chapter 3 of the Administrative Code of 1987 authorizes the
OGCC to receive the attorney's fees adjudged in favor of their client
GOCCs, such fees accruing to a special fund of the OGCC. Evidently, the
non-participation of the OGCC in litigations pursued by GOCCs would
deprive the former of its due funding as authorized by law. Hence, this is
another reason why we cannot sustain Attys. Beramo and Berbao's
position that the OGCC need not participate in litigations pursued by LBP.

It may strike as disruptive to the flow of a GOCCs daily grind to

require the participation of the OGCC as its principal law office, or the
exercise of control and supervision by the OGCC over the acts of the
GOCCs legal departments. For reasons such as proximity and comfort,
the GOCC may find it convenient to rely instead on its in-house legal
departments, or more irregularly, on private practitioners. Yet the
statutory role of the OGCC as principal law office of GOCCs is one of long-
standing, and we have to recognize such function as part of public policy.
Since the jurisdiction of the OGCC includes all GOCCs, its perspective is
less myopic than that maintained by a particular legal department of a
GOCC. It is not inconceivable that left to its own devices, the legal
department of a given GOCC may adopt a legal position inconsistent with
or detrimental to other GOCCs. Since GOCCs fall within the same
governmental framework, it would be detrimental to have GOCCs foisted
into adversarial positions by their respective legal departments. Hence,
there is indubitable wisdom in having one overseer over all these legal
departments which would ensure that the legal positions adopted by the
GOCCs would not conflict with each other or the government.

Attys. Beramo and Berbao claim that the LBP Legal Department
had handled some cases which had been decided by the Court and that
the OGCC has never been involved in the litigation and handling of LBPs
appellate cases involving specialized fields such as banking and agrarian
reform. These points should not be dismissed lightly, but then
again, years of wrong practice do not make a statutory right. The
Administrative Code of 1987, adopting a decades-old legal precept,
expressly provides that it is the OGCC that acts as the principal law office
of GOCCs and exercises control and supervision over the legal
departments of GOCCs. If the LBP Legal Department has long operated as
an independent fiefdom absent any control, supervision, or even concern
from the OGCC, then this practice must end now. As to the pending
litigations of LBP which are [handled] exclusively by the LBP Legal
Department, it shall be the individual courts with jurisdiction over those
cases that shall decide how to proceed next. We shall not, by reason of
this Resolution, interfere with the dispensation of those cases. Certainly,
Section 10, Book IV, Title III, Chapter 3 of the Administrative Code of 1987
can be invoked by adverse parties or by the courts in citing as deficient
the exclusive representation of LBP by its Legal Department. Then again,
if neither the adverse parties nor the courts of jurisdiction choose to
contest this point, there would be no impediment to the litigation to
maintain.

Of course, if the principle that the OGCC is the principal law office
of GOCCs proves persistently inconvenient in practice, it would be up to
 Congress to amend the Administrative Code, or for the OGCC itself to
promulgate rules and regulations that would alleviate the problems in
practice without abdicating its legal mandate. The succeeding discussion
on the OGCC's pending Manifestationinvolves a review of the OGCC's
current practices, including the present rules and regulations.[21]

In the present controversy, we find nothing in the record which shows that
the OGCC has entered its appearance as the principal legal counsel of petitioner
LBP or that it has expressly given its conformity to the LBP Legal Departments filing
of the instant petition. On this ground alone, the appeal must be denied. Petitioner
should have been more circumspect, considering that the instant petition was filed
on September 9, 2005, or several months after we issued the said resolution in LBP
v. Panlilio-Luciano. Further, respondent precisely raised in her pleadings this issue
of lack of authority to sue of petitioners Law Department. Prudence, therefore,
should have impelled LBP to request its principal counsel, the OGCC, to participate
in the case. Up to this date, however, petitioner remains insensitive to the import
of its charter and the Administrative Code as elucidated in our ruling. Certainly, we
cannot simply close our eyes to LBPs intransigence to and disrespect for the rule of
law.

Even if we allow the LBPs filing of the instant petition without any authority
from the OGCC, we must still deny the same for we find no reversible error in the
CAs ruling that LBP forum shopped. In Repol v. Commission on Elections,[22] we
found forum shopping in the filing of a petition for certiorari during the pendency
of an omnibus motion to reconsider, set aside and quash a writ of execution with
the trial court. Likewise, in Go v. Judge Abrogar,[23] we deemed as a violation of the
rules against forum shopping the institution of a separate action for annulment of
auction sale with injunction, simultaneous with a third-party adverse claim and
motion to quash writ of execution, and a petition for certiorari, mandamus and
prohibition. Further, in La Campana Development Corporation v. See,[24] we
explained that the simultaneous filing of a motion to quash writ of execution and
an action for the annulment of a judgment run afoul of the prohibition on forum
shopping, thus:

In essence, forum shopping is the practice of litigants resorting to

two different fora for the purpose of obtaining the same relief, to
increase their chances of obtaining a favorable judgment. In determining
whether forum shopping exists, it is important to consider the vexation
caused to the courts and the parties-litigants by a person who asks
appellate courts and/or administrative entities to rule on the same
related causes and/or to grant the same or substantially the same relief,
in the process creating the possibility of conflicting decisions by the
different courts or fora on the same issues. We have ruled that forum
shopping is present when, in two or more cases pending, there is identity
of (1) parties (2) rights or causes of action and reliefs prayed for and (3)
the identity of the two preceding particulars is such that any judgment
rendered in the other action, will, regardless of which party is successful,
amount to res judicata in the action under consideration.

The parties in the two cases are indisputably identical. The

allegations of facts giving rise to respondents rights, such as extrinsic
fraud and lack of jurisdiction, are also essentially the same, as are the
reliefs prayed for. Finally, in the light of these close similarities, res
judicata may arise. Acting on the documents filed with them, the RTC and
the MeTC may well come up with completely opposite rulings on the
question of whether or not the latter courts decision should be
implemented. This is the very evil that the proscription on forum
shopping seeks to avert. If they wanted to avoid this kind of problem,
respondents should not have filed what were essentially the same
documents with two different courts.[25]

Similarly, in this case, petitioner moved to quash the PARAD resolutions and
at the same time petitioned for their annulment via certiorari under Rule 65. In
both proceedings, the parties are identical and the reliefs prayed for are the
same. In the two actions, petitioner also has a singular stance: the PARAD
resolutions should not be executed in view of the pendency of the petition for fixing
of just compensation with the SAC. Thus a situation is created where the
two fora could come up with conflicting decisions. This is precisely the evil sought
to be avoided by the rule against forum-shopping.

Finally and most importantly, we find petitioner not entitled to the grant of
a writ of certiorari by the appellate court because the Office of the PARAD did not
gravely abuse its discretion when it undertook to execute the September 4,
2002 decision. Rule XIII, Section 11 of the DARAB Rules of Procedure,[26] which was
then applicable, provides that:

Section 11. Land Valuation and Preliminary Determination and

Payment of Just Compensation. - The decision of the Adjudicator
on land valuation and preliminary determination and payment of just
compensation shall not be appealable to the Board but shall be brought
directly to the Regional Trial Courts designated as Special Agrarian
Courts within fifteen (15) days from receipt of the notice thereof. Any
party shall be entitled to only one motion for reconsideration.

In Philippine Veterans Bank v. Court of Appeals[27] and in Department of

Agrarian Reform Adjudication Board v. Lubrica,[28] we explained the consequence
of the said rule to the effect that the adjudicators decision on land valuation attains
finality after the lapse of the 15-day period. Considering therefore that, in this case,
LBPs petition with the SAC for the fixing of just compensation was filed 26 days
after its receipt of the PARADs decision, or eleven days beyond the reglementary
period, the latter had already attained finality. The PARAD could very well issue the
writ of execution.
WHEREFORE, premises considered, the appeal is DENIED. The decision of the Court
of Appeals in CA-G.R. SP No. 83276 is AFFIRMED.

SO ORDERED.
RODOLFO M. CUENCA, G.R. No. 146214
Petitioner,
- versus -

HON. ALBERTO P. ATAS, Present:

JULITO F. FABRERO, and HON.
NATHANIEL A. LOBIGAS, in CARPIO MORALES, J.,
their capacity as Hearing Officers Acting Chairperson,
of the SECURITIES AND TINGA,
EXCHANGE COMMISSION; VELASCO, JR.,
PHILIPPINE NATIONAL NACHURA,* and
CONSTRUCTION CORPORATION, REYES,* JJ.
ASSET PRIVATIZATION TRUST,
PHILIPPINE NATIONAL BANK,
DEVELOPMENT BANK OF
THE PHILIPPINES, NATIONAL
DEVELOPMENT COMPANY,
PHILIPPINE EXPORT AND
FOREIGN LOAN GUARANTEE
CORPORATION, and
GOVERNMENT SERVICE Promulgated:
INSURANCE SYSTEM,
Respondents. October 5, 2007
x-----------------------------------------------------------------------------------------x

DECISION
VELASCO, JR., J.:

The Case

In this Petition for Review on Certiorari[1] of the adverse November 29, 2000
Decision[2] of the Court of Appeals (CA) in CA-G.R. SP No. 60366, petitioner
Rodolfo M. Cuenca, in effect, questions the July 10, 2000 Decision [3] of the
Securities and Exchange Commission (SEC) Securities Investigation and Clearing
Department (SICD) in SICD SEC Case No. 05-96-5357 entitled Rodolfo M. Cuenca
v. Philippine National Construction Corporation (PNCC), et al., which declared
defendants-government financial institutions (GFIs) as majority stockholders of the
PNCC. The SICD Decision was affirmed by the SEC in SEC Case No. AC 807,
which, in turn, was upheld by the CA in its assailed November 29, 2000 Decision.

The Facts

Petitioner was an incorporator, President, and Chief Executive Officer of the then
Construction Development Corporation of the Philippines (CDCP), now PNCC,
from its incorporation in 1966 until 1983. Sometime in 1977, CDCP was granted a
franchise under Presidential Decree No. 1113 to construct, operate, and maintain toll
facilities of the North and South Luzon Expressway. In the course of its operations,
it incurred substantial credit obligations from both private and government sources.

However, its unpaid obligations ballooned so much that by 1983, it became

impossible for it to settle its maturing and overdue accounts with various GFIs,
namely, the Philippine National Bank (PNB), Development Bank of the Philippines
(DBP), National Development Company (NDC), Government Service Insurance
System (GSIS), Land Bank of the Philippines (LBP), and Philippine Export and
Foreign Loan Guarantee Corporation (PEFLGC), now known as the Trade and
Investment Development Corporation of the Philippines.
On February 23, 1983, then President Ferdinand E. Marcos issued Letter of
Instruction No. (LOI) 1295,[4] directing the creditor GFIs to convert into CDCPs
shares of stock the following: (1) all of the direct obligations of CDCP and those of
its wholly-owned subsidiaries, including, but not limited to loans, credits, accrued
interests, fees and advances in any currency outstanding as of December 31, 1982;
(2) the direct obligations of CDCP maturing in 1983; and (3) obligations maturing
in 1983 which were guaranteed by the GFIs.

On April 25, 1983, a special stockholders meeting, presided by petitioner, was

held whereby stockholders representing more than two-thirds (2/3) of the
outstanding capital stock of CDCP approved the increase of its authorized capital
stock from PhP 1.6 to 2.7 billion in accordance with LOI 1295. Thus, the CDCP,
pursuant to said letter, converted some of its obligations to GFIs into equity.
 Consequently, CDCP issued common shares to DBP, NDC, GSIS, LBP,
PEFLGC, and preferred D shares to PNB in consideration for the extinguishment of
some of CDCPs outstanding loan obligations to said GFIs, all of which were duly
recorded in its corporate books. Subsequently, in December 1983, the SEC approved
the increase of CDCPs authorized capital stock, and the corresponding CDCP
Certificates of Stock were issued in the names of DBP, GSIS, LBP, PEFLGC, and
PNB, to wit:

Certificates of stock issued Name No. of shares issued to GFIs

Cert. of Stock No. 40269[5] DBP 26,987,477 common shares
Cert. of Stock No. 40270[6] PEFLGC 37,584,577 common shares
Cert. of Stock No. 40271[7] GSIS 47,490,000 common shares
Cert. of Stock No. 40272 LBP 657,836 common shares
Cert. of Stock No. N[8] PNB 25,500,000 Preferred Class D

The total subscription of the above issuance of shares of stock pursuant to LOI
1295 amounted to PhP 1,405,202,000 or 1.4 billion.

Thus, with the implementation of LOI 1295, respondents-GFIs became the

majority stockholders of CDCP to the extent of 70% of the authorized capital stocks.
The change in the corporations ownership was made public through various
announcements.[9] CDCP was later renamed to PNCC to reflect the Philippine
Government stockholding, and became a government-acquired asset corporation.
Consequently, the various GFIs were given seats in the Board of Directors of PNCC
and participated in the management of the company.

On August 19, 1987, PNCC issued Certificate of Stock No. 43032 in the name
of NDC for 14,699,000 shares of common stock.

Meanwhile, sometime in 1988, pursuant to Administrative Order Nos. 14 and

64, DBP, PNB, PEFLGC, and NDC transferred their interests in PNCC to the
Republic of the Philippines which in turn conveyed them to the Asset Privatization
Trust (APT), now the Privatization and Management Office, for disposition to the
private sector pursuant to the governments privatization program.

On May 31, 1996, more than a decade after LOI 1295 was implemented,
petitioner filed a complaint before the SEC SICD docketed as SEC Case No. 05-96-
5357 entitled Rodolfo M. Cuenca v. PNCC, et al., for the SEC to determine and
declare whether the GFIs were registered stockholders of PNCC and the number of
shares held by each of them and to compel PNCC to call and hold regular
stockholders meetings and election of directors every year.

Petitioner averred that while PNCC issued the above specified certificates of
stock to the GFIs pursuant to LOI 1295, the GFIs however refused to cancel and
never did cancel the loans in their books as payment for the shares issued in their
names by PNCC as they considered it to be a diminution of the value of their
investments. Thus, petitioner claimed that some of the GFIs refused to accept
delivery of the stock certificates from PNCC while others were not even aware of
the issuance of the certificates of stock in their names. Consequently, respondents-
GFIs continued to charge and receive payments for their loan and interest charges
from PNCC though these loans were supposed to have been converted into common
stock in 1983 pursuant to LOI 1295.

In March 1998, with the idea of spinning-off its toll-way operations, PNCC
scheduled a special stockholders meeting on April 14, 1998. On March 31, 1998,
petitioner filed before the SEC SICD an Urgent Application for Temporary
Restraining Order (TRO) and Writ of Preliminary Injunction seeking to enjoin
PNCC from allowing the GFIs to vote their shares of stock in PNCC, either issued
or subscribed, pursuant to LOI 1295, and from exercising any right arising from the
shares.

On April 14, 1998, the date of the special stockholders meeting of PNCC, the
SEC SICD, through its hearing officer, granted petitioners urgent application and
issued a TRO enjoining the GFIs from voting their shares of stock in
PNCC.[10] Thereafter, the parties presented their respective preliminary evidence
during the hearings for the issuance of a preliminary injunction.
 Meanwhile, despite the pendency of SICD SEC Case No. 05-96-5357,
petitioner filed a Third Amended Complaint[11] before the Makati City Regional
Trial Court (RTC), Branch 142, docketed as Civil Case No. 95-1356 and
entitled Rodolfo M. Cuenca, for and in behalf of PNCC v. APT, et al. for
(1) enforcement and strict compliance with LOI 1295; (2) cancellation of all
penalties, interest, and surcharges accrued after December 31, 1982; (3) enjoinment
of the GFIs from receiving any real or personal properties from PNCC; and (4)
cancellation of the transfer of Lot 3, Block 1, RL-04-000001 covered by Transfer
Certificate of Title (TCT) No. 34996 to APT.

On September 8, 1998, the SEC SICD issued an Order[12] granting the

preliminary injunction. PNCCs Motion for Reconsideration was then denied in
the December 21, 1998 SEC SICD Omnibus Order.[13] Thus, on January 8, 1999,
PNCC filed a Petition for Certiorari[14] before the SEC en banc to review and set
aside the September 8, 1998 and December 21, 1998 SEC SICD Orders, docketed
as SEC-EB Case No. 640. On March 14, 2000, the SEC en banc issued an order
dismissing PNCCs petition. Consequently, PNCC brought before the CA the SEC en
banc March 14, 2000 Order through a Petition for Review,[15] docketed as CA-G.R.
SP No. 58117.

In the meantime, on May 20, 1999, petitioner filed a Motion to Admit

Amended Complaint in SEC SICD Case No. 05-96-5357, which was granted despite
oppositions from PNCC and the GFIs. Respondents PNCC and GFIs then filed their
respective answers to the amended complaint.

On March 23, 2000, PNCC filed a Motion to Designate Hearing Panel[16] on

the ground that the instant case would be better heard and resolved by a hearing
panel of three than by a sole hearing officer, considering the interests the Philippine
Government holds in PNCC through the GFIs. This was opposed by
petitioner. Nonetheless, while not finding any valid reason for said motion,
respondent SEC SICD Hearing Officer Alberto P. Atas granted PNCCs motion
through the April 6, 2000 Order[17] to allay respondent PNCCs fear that it may not
be able to obtain a sense of fairness and justness in the determination of the merits
of its claims. No Motion for Reconsideration of the April 6, 2000 Order was filed by
petitioner.
 Consequently, SEC SICD Director Daisy Besa-De Asis designated
respondents Hearing Officers Alberto P. Atas, Julito F. Fabrero, and Nathaniel A.
Lobigas as the three (3)-person Hearing Panel.

During the hearings of the instant case, through a May 4, 2000 Order, the
Hearing Panel admitted almost all of petitioners exhibits. On May 8, 2000, PNCC
filed an Amended Answer[18] raising a new matter of the April 14, 2000 Deed of
Confirmation and June 7, 2000 Supplement to Deed of Confirmation. On June 1,
2000, the Hearing Panel admitted PNCCs Amended Answer through an Order.[19]

On June 2, 2000, the Hearing Panel scheduled a new preliminary conference

on June 13, 2000. At the hearing on June 5, 2000, due to conflicts with the schedules
of some of the parties counsels, the preliminary conference was moved to June 29,
2000. However, on June 6, 2000, PNCC filed an Urgent Motion[20] praying that the
preliminary conference be reset back to the original schedule of June 13, 2000 so as
to follow the proviso in the SEC Rules of Procedure. PNCCs Urgent Motion was
granted through a June 8, 2000 Order,[21] and the preliminary conference was reset
back to June 13, 2000.

In the preliminary conference on June 13, 2000, petitioner adopted his

previous preliminary conference brief dated November 15, 1999. PNCC and APT
filed their preliminary conference briefs dated June 8, 2000 and June 13, 2000,
respectively; while DBP, GSIS, PNB, and PEFLGC adopted their respective
preliminary conference briefs previously filed. On the same date, petitioner was
barred from presenting additional evidence due to his failure to file a reply to PNCCs
Amended Answer and to file an amended preliminary conference brief together with
the affidavits of witnesses as required by the new SEC Rules.

On June 13 and 14, 2000, PNCC adopted the testimonial and documentary
evidence it presented during the hearing on the preliminary injunction as part of its
evidence-in-chief and adduced further additional witnesses and documentary
evidence to substantiate the new matter presented in its amended answer. The GFIs
adopted PNCCs evidence which was orally offered by PNCC over petitioners
objection.
 The Hearing Panel scheduled the reception of petitioners rebuttal evidence on
June 19 and 20, 2000. However, on June 19, 2000, instead of presenting rebuttal
evidence, petitioner filed a Motion to Admit Second Amended Complaint, but an
opposition was filed to it by respondents for being dilatory.

On June 21, 2000, PNCC filed a Motion to Terminate Plaintiffs Rebuttal

Evidence and to Submit the Case for Decision on the Merits[22] which was
opposed[23] by petitioner. On July 3, 2000, the Hearing Panel issued an Omnibus
Order[24] denying petitioners motion to admit second amended complaint, granted
PNCCs motion to terminate petitioners rebuttal evidence, and submitted the case for
resolution on the merits. Thus, the instant case was submitted for decision on the
merits based on the pleadings, evidence, and other submissions of the parties.

The Ruling of the SEC SICD

On July 10, 2000, the Hearing Panel rendered its Decision dismissing
petitioners complaint for lack of merit and revoking the writ of preliminary
injunction issued on September 8, 1998. The fallo reads:

WHEREFORE, plaintiffs Complaint is hereby dismissed for lack of

merit and the Orders dated April 14, 1998 and September 8,
1998 are hereby revoked and set aside.[25]

The Hearing Panel found that the evidence presented by PNCC and GFIs
constituted substantial proof of the implementation of LOI 1295. It reasoned that not
only did PNCC issue the shares of stock as shown in its stock ledger cards but such
fact was corroborated by Caval Securities Registry, Inc., PNCCs stock transfer
agent, which prepared PNCCs September 15, 1987 Schedule of
Subscription.[26] Moreover, prior to the filing of the instant case, the GFIs have been
nominating their representatives to PNCCs Board of Directors which is an attribute
of ownership of shares of stock in PNCC.

The Hearing Panel also took cognizance of the April 14, 2000 Deed of
Confirmation[27] and the June 7, 2000 Supplement to Deed of
Confirmation[28] executed by the GFIs, which erased all doubts on the
implementation of LOI 1295 by the conversion of the GFIs loan receivables from
PNCC into the latters equity. Thus, with the clear consideration of loan receivables
for the shares of stock, the shares issued to the GFIs cannot in any way be considered
watered stocks. It cited Section 62 of the Corporation Code which expressly allows
the issuance of shares of stock in consideration for previously incurred indebtedness.

Moreover, the Notes to the Financial Statements[29] on the Report on

Examinations of Financial Statements[30] for comparative periods of December 31,
1982 and December 31, 1983 prepared by independent auditors from Carlos J.
Valdes & Co., Certified Public Accountants, clearly show the reduction of PNCC
loan obligations. Specifically, Note No. 11[31]stated that as of December 31, 1983,
total obligations already converted into equity amounted to PhP 1,382,202 or
roughly 1.4 billion representing the increase of authorized capital stock of PNCC.

On the other hand, the Hearing Panel found the pieces of evidence presented
by petitioner, most of which were the same ones presented by respondents, to be
inconsequential and insufficient to overthrow the weight of the evidence presented
by respondents that a conversion of PNCCs debt into equity was implemented. It
ratiocinated that the badges of fraud pointed out by petitioner are inconsequential as
no clear and convincing evidence was presented by petitioner, and that allegations
cannot take the place of proof. Likewise, the lack of a subscription agreement was
not fatal to the shares of stock issued to the GFIs as LOI 1295 in no uncertain terms
mandated such conversion of debt-to-equity which was duly approved by the
stockholders of PNCC in increasing its authorized capital stock precisely pursuant
to LOI 1295.

Anent the August 15, 1995 Memorandum of Agreement [32] executed by the
Department of Finance (DOF), APT, and PNCC, whereby PNCC assigned to APT
and the DOF Lot 3, Block 1, RL-04-000001 covered by TCT No. 34996, such did
not by far prove that PNCC paid its obligations to PNB and DBP, which transferred
their assets to the National Government, and the shares PNCC issued to these GFIs
were without consideration. Evidence shows that PNCC owed PNB PhP 1.79 billion
and DBP PhP 629 million, but what were converted into equity were only PhP 255
million for PNB and PhP 269.874 million for DBP, thus leaving outstanding
balances of PhP 1.535 billion for PNB and PhP 359 million for DBP. These
outstanding and unconverted loan credits were the subject of the assignment of
receivables to APT.

In fine, the Hearing Panel cited the resolution of the 1992 case of Childrens
Garden of the Philippines v. APT,[33] where this Court ruled that the implementation
of LOI 1295 was already a fait accompli; thus, there was clear recognition by the
Court of the factual conversion of GFIs loan credits to PNCC shares.

As regards NDC, the Hearing Panel dismissed the complaint against it for
failure of petitioner to state a cause of action as the issuance of 14,699,000 shares of
common stock of PNCC in favor of NDC in 1987 was pursuant to LOI 1136 and not
LOI 1295, and the shares were issued for valuable consideration.

The Ruling of the SEC En Banc

With the adverse ruling against him, petitioner timely filed his Notice of
Appeal[34] and Petition for Review on Certiorari and/or Memorandum on
Appeal.[35] Aside from assailing the July 10, 2000 SEC SICD Decision, petitioner
also assailed the July 3, 2000 Omnibus Order terminating the presentation of his
rebuttal evidence and submitting the case for decision on the merits, and the June
27, 2000 Preliminary Conference Order[36] barring him from presenting additional
witnesses as part of his evidence-in-chief. Petitioner raised before the SEC en
banc the allegations that the Hearing Panel conspired with PNCC in railroading the
trial and issuing the questioned Orders and Decision.

Among other things, petitioner assails the speed, taking only seven (7) days
from the date the case was submitted for decision, with which the Hearing Panel
came out with a grammar-perfect decision. It concluded that it was PNCC which
prepared the decision, pointing out numerous instances where the text of the assailed
decision is identical to or very similar to some portions of PNCCs petitions in
another case.

Subsequently, the SEC en banc issued its August 8, 2000 Order denying
petitioners appeal and affirming in toto the July 10, 2000 Decision of the SEC SICD.
The decretal portion states:
 FINDING NO REVERSIBLE ERROR, therefore, the herein Appeal
should be, as it is hereby DISMISSED.

The 10th July 2000 Decision in SICD Case No. 05-96-5357 is

herewith AFFIRMED in toto.

Costs adjudged against the appellant.[37]

The SEC en banc found that petitioner banked on sweeping speculations and
assumptions except the significant and substantial proof to corroborate the serious
charges leveled against the Hearing Panel. It reasoned that petitioner had not shown
malice, bad faith, or corrupt purpose on the part of the Hearing Panel to warrant the
reversal of the assailed Decision.
Moreover, it pointed out that petitioner failed to procedurally appreciate the
import of the mandatory requirements set forth in the SEC Rules of Procedure in
effect at that time, as the Hearing Panel merely adhered to Rule V, Sec. 4 of said
Rules of Procedure, which provides that hearings shall be commenced not later than
15 days from the date of the termination of the preliminary conference and
completed within 20 days from the date of the first hearing. Besides, according to
the SEC en banc, the proceedings in the SEC SICD were summary in nature; thus,
speed seemed to ensue when the case was heard and decided.

On the issue of violation or infringement of petitioners right to due process,

the SEC en banc found no basis for it, as the summary nature of the proceedings
below has to be followed by the Hearing Panel. Moreover, the SEC en banc found a
dearth of evidence to lend support to petitioners contention.

Finally, the SEC en banc likewise relied on the GFIs ratification of their
subscription to the shares issued by PNCC pursuant to LOI 1295 to erase any doubt
about its implementation and the extinguishment of PNCCs unpaid loan credits to
the extent of such issuance of shares of stock.

The Ruling of the Court of Appeals

Aggrieved, on August 24, 2000, petitioner raised through a Petition for

Review[38] before the CA the August 8, 2000 SEC en banc Order dismissing his
appeal, docketed as CA-G.R. SP No. 60366. Petitioner likewise assailed in its CA
petition the SEC SICD June 27, 2000 Preliminary Conference Order, July 3, 2000
Omnibus Order, and July 10, 2000 Decision.

Thereafter, through its assailed November 29, 2000 Decision,[39] the CA

denied and dismissed the petition for review for lack of merit; thus, it upheld the
SEC en banc order affirming the SEC SICD decision which dismissed petitioners
complaint. The CA found that neither the SEC en banc nor the SEC Hearing Panel
committed grave abuse of discretion amounting to lack or excess of jurisdiction in
rendering their respective orders and decision.

The appellate court failed to see any rhyme or reason in finding fault in or to
disturb the findings of the SEC en banc on its ruling regarding the alleged suspicious
and compelling badges of fraud pointing to a conspiracy between the Hearing Panel
and PNCC. It quoted with approbation the quasi-judicial agencys disquisition on this
matter. Moreover, it reasoned that there was nothing startling or irregular in the fact
that the text of the same decision was similar in language with the text of the
pleadings filed by PNCC as the Hearing Panel is allowed by the Rules to adopt any
part of the position papers or draft decisions the parties had filed in their resolution
or decision. As regards the constitution of the three-person Hearing Panel, the CA
held that by not filing a motion for reconsideration of the order granting the
constitution of the panel, petitioner could not now evoke suspicion on it.

The CA further upheld the summary proceedings before the Hearing Panel for
being in accord with the SECs New Rules of Procedure, and, thus, such could not be
prejudicial to petitioner. As regards the admission of PNCCs amended answer, the
CA held that such could not be considered as a conspiratorial act as petitioner did
not oppose such admission.

On the issue of the preliminary conference brief being merely permissive, the
CA noted that during the June 5, 2000 hearing, it was specifically ordered by the
Hearing Panel for the parties to file their respective briefs with attached affidavits of
their witnesses before the actual preliminary conference. Thus, petitioner could have
prepared and filed his brief before the June 13, 2000 preliminary
conference. However, petitioner chose to remain silent and simply adopted his
previous preliminary conference brief. Petitioner never made known to the Hearing
Panel his assertion that the filing of his brief was merely permissive. Besides, it was
the Hearing Panel who had the say on whether preliminary conference briefs should
be filed or not.

On the issue of the limitation on the presentation of petitioners rebuttal

evidence, the CA likewise found it untenable as he could have filed a reply to
traverse the new one-paragraph allegation in the amended answer or, in the
alternative, referred to supporting documents and affidavits negating such new
matter in his preliminary conference brief. Petitioner did neither.The CA then opined
that [petitioner] could not now cry foul over his lapses as due process is not violated
where a person is given the opportunity to be heard but chooses not to give his side.

Likewise, the CA reasoned that petitioner could not assail the findings of facts
and conclusions of law by the Hearing Panel as such are based on the aggregate
evidence presented by the parties. It pointed out that the evidence presented during
the hearings for the issuance of a preliminary injunction was preliminary or only a
sample to support the issuance of the injunctive writ. Verily, the CA ruled that the
findings of the Hearing Officer in the issuance of the TRO and injunctive writ could
not pre-empt the conclusive findings of the tribunal after due trial and presentation
of all the evidence adduced by the parties. Thus, the CA was convinced that
petitioner was indeed accorded due process and given ample opportunity to ventilate
his case.

In fine, the appellate court likewise held the applicability of Childrens Garden
of the Philippines[40] and the fact that the assailed issuance of shares of stock to the
GFIs was for valuable consideration, that is, the existing loan credit obligations. The
CA then ruled that petitioner was guilty of forum shopping for having raised
substantially the same issues before the SEC and RTC.

Hence, the instant petition is now before the Court.

Parenthetically, on June 19, 2000, petitioner filed a Notice of Dismissal and

Motion to Dismiss Third Amended Complaint[41] in Civil Case No. 95-1356 before
the Makati City RTC, Branch 142. Petitioner reasoned that based on the position
taken and the admissions made by PNCC and the GFIs in other cases, with respect
to the validity of LOI 1295, he was no longer certain if it was proper for him to
maintain suit for the enforcement and implementation of said law. The trial court
promptly dismissed Civil Case No. 95-1356 through its June 23, 2000 Order.[42]

Similarly, sometime in September 2000, PNCC filed a motion to dismiss CA-

G.R. SP No. 58117 before the CA Ninth Division, as said case had been rendered
moot and academic by the July 10, 2000 Decision of the SEC SICD Hearing Panel,
which lifted and revoked the preliminary injunction granted through the assailed
SEC SICD September 8, 1998 Order.Consequently, CA-G.R. SP No. 58117 was
dismissed through the September 19, 2000 CA Resolution.[43]

The Issues

Petitioner raises the following grounds for our consideration:

THE COURT OF APPEALS HAS COMMITTED REVERSIBLE

ERROR IN NOT FINDING THAT THE SEC EN BANC GROSSLY
ERRED IN NOT HOLDING THAT THE PROCEEDINGS BELOW
WERE PROCEDURALLY FLAWED BECAUSE THE HEARING
PANEL HAD RAILROADED THE TRIAL IN FAVOR OF
RESPONDENT PNCC.

A. The Court of Appeals has committed reversible error in not finding that
the SEC en banc grossly erred in not holding that the Hearing Panel,
in issuing the Omnibus Order dated 3 July 2000 terminating the
presentation of petitioners rebuttal evidence and submitting the case
for decision on the merits, committed reversible error and grave abuse
of discretion.

i. Respondent PNCCs Motion to Terminate Plaintiffs Rebuttal

Evidence was a mere scrap of paper and should not have been given
due course by the Hearing Panel.
ii. The premature termination of petitioners rebuttal evidence was a
denial of his right to due process.
 iii. The cancellation of the 19 and 20 June 2000 trial sessions where
petitioner was scheduled to present rebuttal evidence, [sic] was due
to the lack of quorum in the Hearing Panel, which was not the fault
of petitioner and for which he should not have been penalized.
iv. The Hearing Panel grossly erred in finding that petitioner could not
have presented new or significant evidence on rebuttal, and that
petitioner had already presented sufficient rebuttal evidence,
considering that said findings contradict each other and are
presumptuous and bereft of any factual basis.

B. The Court of Appeals has committed reversible error in not finding that
the SEC en banc grossly erred in not holding that the Hearing Panel,
in issuing the Preliminary Conference Order dated 27 June
2000 (released on 3 July 2000) barring petitioner from presenting
additional witnesses as part of his evidence-in-chief, committed
reversible error and grave abuse of discretion.

II

THE COURT OF APPEALS HAS COMMITTED REVERSIBLE

ERROR IN UPHOLDING THE SEC EN BANC ORDER DATED 8
AUGUST 2000 AFFIRMING THE HEARING PANELS DECISION
DATED 10 JULY 2000.

A. Badges of fraud abound in the pages of the Decision dated 10 July

2000, indubitably showing the Hearing Panels utter disregard of due
process.
B. The SEC en bancs and the Hearing Panels findings of fact are
inexplicably the opposite of the findings of fact previously made by
Hearing Officer Gallegos and the SEC en banc, even though both sets
of findings of fact are based on the very same evidence.
C. The Court of Appeals has committed reversible error in finding that
petitioner is guilty of forum shopping.
D. The Court of Appeals has committed reversible error in not ruling that
the SEC en banc grossly erred in not holding that the Hearing Panel
committed reversible error and grave abuse of discretion in
considering evidence not formally offered and admitted.
E. The Court of Appeals has committed reversible error in not ruling that
the SEC en banc grossly erred in not holding that the Hearing Panel
committed reversible error and grave abuse of discretion in making
 findings of fact not supported by the evidence on record and in
disregarding overwhelming evidence.[44]

Petitioner challenges the CA decision on the ground that he was denied due
process. He also claims that the CA erred in ruling that the factual findings of the
SEC SICD Hearing Panel, as affirmed by the SEC en banc, were conclusive on
it. Finally, he faults the CA for its failure to appreciate circumstances that would not
only show denial of due process but of fraud and conspiracy in railroading the instant
case against him.

The Courts Ruling

The petition is bereft of merit.

Procedural Due Process

Procedural due process, in gist, is the necessity for notice and an opportunity
to be heard before judgment is rendered. Its essence is encapsulated in the immortal
cry of Themistocles to Alcibiades: Strikebut hear me first.[45] Thus, as long as a party
is given the opportunity to defend his/her interests in due course, the party would
have no reason to complain, for it is this opportunity to be heard that makes up the
essence of due process.[46]

In administrative and quasi-judicial proceedings where the magistrates or

tribunals hearing the case are not bound by the niceties and finer points of judicial
due process, the cardinal primary requirements of procedural due process, as gleaned
by Justice Laurel from an array of American decisions, were enumerated in Tibay v.
Court of Industrial Relations, as follows:

(1) The first of these rights is the right to a hearing, which includes
the right of the party interested or affected to present his own case
and submit evidence in support thereof. x x x

(2) Not only must the party be given an opportunity to present his case
and to adduce evidence tending to establish the rights which he asserts but
the tribunal must consider the evidence presented. x x x
 (3) While the duty to deliberate does not impose the obligation to
decide right, it does imply a necessity which cannot be disregarded,
namely, that of having something to support its decision. x x x

(4) Not only must there be some evidence to support a finding or

conclusion (City of Manila vs. Agustin, G. R. No. 45844, promulgated
November 29, 1937, XXXVI O.G. 1335), but the evidence must be
substantial. x x x

(5) The decision must be rendered on the evidence presented at

the hearing, or at least contained in the record and disclosed to the
parties affected. x x x

(6) The [c]ourt x x x or any of its judges, therefore, must act on its or
his own independent consideration of the law and facts of the
controversy, and not simply accept the views of a subordinate in
arriving at a decision. x x x

(7) [The court] should, in all controversial questions, render its

decision in such a manner that the parties to the proceeding can know
the various issues involved, and the reasons for the decisions
rendered. The performance of this duty is inseparable from the authority
conferred upon it.[47] (Emphasis supplied.)

Prescinding from the above requirements, it is thus clear that the proceedings
before the SEC SICD Hearing Panel are bound by these requirements. To determine
whether petitioner was denied due process as alleged, we will scrutinize the
proceedings below.

Proceedings before the Hearing Panel

For clarity, we reiterate the significant and relevant events that transpired
which are mainly being assailed by petitioner.

It is undisputed that the instant case was pending for over four (4) years before
the SEC SICD, that is, from May 31, 1996 until the rendition of the SEC SICD
Decision on July 10, 2000. In the intervening time, petitioner was granted a 20-day
TRO on April 13, 1998 and a writ of preliminary injunction was likewise issued in
his favor on September 8, 1998.

Meanwhile, on May 20, 1999, petitioner filed a motion to admit amended

complaint which was granted by the Hearing Officer. Consequently, PNCC and the
GFIs filed their respective answers to the amended complaint. On May 8, 2000,
PNCC in turn filed a motion for leave to admit amended answer, which was not
opposed by petitioner, and duly granted by the Hearing Panel on June 1, 2000.

Likewise, PNCCs March 21, 2000 motion to designate hearing panel, while
opposed by petitioner, was granted on April 6, 2000 and the Hearing Panel was
constituted; however, petitioner did not assail this grant as he failed to file a Motion
for Reconsideration of the April 6, 2000 Order.

Consequently, a new preliminary conference was scheduled for June 13, 2000
but was moved to June 29, 2000 due to conflict of schedules of the counsels, but was
reset to the original date of June 13, 2000 upon PNCCs urgent motion to conform
with the then SEC New Rules of Procedure.

During the preliminary conference of June 13, 2000, petitioner was barred
from presenting additional evidence. The preliminary conference order was
subsequently issued on June 27, 2000. Petitioners presentation of rebuttal witnesses
was terminated through the July 3, 2000 Omnibus Order which also denied
admission of petitioners second amended complaint and submitted the case for
decision on the merits.

On July 10, 2000, the Hearing Panel rendered its Decision dismissing
petitioners case for lack of merit.

Were the foregoing proceedings procedurally flawed as alleged by

petitioner? Were the proceedings of the instant case before the SEC SICD Hearing
Panel railroaded? Was there a conspiracy between the Hearing Panel and respondent
PNCC and the GFIs? Was petitioners right to due process violated? A review of the
then SEC New Rules of Procedure will shed light on the issue of due process.

SEC Rules prescribe a summary procedure

 A cursory reading of the then prevailing SEC New Rules of Procedure shows
that the proceedings before the Hearing Officers or Hearing Panel are summary in
nature and to be conducted expeditiously in the interest of just, speedy and
inexpensive determination of disputes and claims.[48]

Notably, said rules provided:

RULE I

SEC. 4. Nature of Proceedings.Subject to the requirements of due

process, proceedings before the Commission shall be summary in
nature not necessarily adhering to or following the technical rules of
evidence obtaining in the regular courts. Provided, however, that the
Rules of Court may apply in a suppletory manner whenever practicable.

xxxx

RULE V
PROCEEDINGS BEFORE THE
DESIGNATED HEARING OFFICER

SECTION 1. Preliminary Conference.In any action, the Hearing

Officer shall set the case for preliminary conference within ten (10)
days after the last pleading is filed, and the parties and their attorneys
shall be directed to appear before the Hearing Officer on the dates set on
the notice, to consider based on the affidavits, documents and other
evidence submitted by the parties:

a. The possibility of an amicable settlement;

b. The simplification of the issues;
c. Schedule hearing which must be undertaken continuously as
scheduled until completed and terminated; and
d. Such other matters as may aid in the just and speedy disposition of
the case.

The Hearing Officer shall terminate the preliminary conference ten

(10) days after its commencement, whether or not the parties have
agreed to settle their differences.
 xxxx

SEC. 4. Preliminary Conference Order.After the preliminary

conference, the Hearing Officer shall issue an Order reciting the action
taken at the conference; the stipulations made by the parties as to any of
the matters considered; a recital of such other evidence as the parties may
have agreed upon; the witnesses, if any, to be presented by all the parties;
and the scheduled dates of hearing for presentation of all such
witnesses. Provided, however, that the hearings shall be commenced not
later than fifteen (15) days from the date of the termination of the
preliminary conference and completed within twenty (20) days from
the date of the first hearing. Provided, further, that the failure of a party
to present a witness or witnesses on a scheduled hearing date shall be
deemed a waiver of such hearing date. Provided, finally, that a party may
present such witness or witnesses within the remaining hearing dates.

SEC. 5. Submission of Position Papers and Draft Decisions. Within

fifteen (15) days after the submission of case for resolution, the parties
shall submit their position papers setting forth the law and the facts relied
upon by them. They shall also be required to submit a draft of the decision
or resolution they seek, stating clearly and distinctly the facts and the law
upon which it is based. The Hearing Officer may adopt, in whole or in
part, either of the parties draft decision or resolution, or reject both.

RULE VI
DECISION

SECTION 1. Decision.The Hearing Officer shall render a decision

within twenty (20) days from submission of the case for
resolution. (Emphasis supplied.)

No denial of due process

From the foregoing provisions, it becomes clear that petitioner was indeed
accorded due process. The requirements spelled out in Ang Tibay have been
complied with. Verily, a close examination of the proceedings in the SEC SICD in
the backdrop of the above rules shows that petitioners right to due process was not
violated. He was indeed accorded ample opportunity to ventilate his position.
 First, there is no cause shown for arbitrariness or ill-motive in the constitution
of the Hearing Panel. While petitioner opposed PNCCs motion for its constitution,
the April 6, 2000 Order granting it was not questioned nor assailed by petitioner in
a motion for reconsideration. Verily, the rules allow the constitution of a hearing
panel, as Sec. 2 of Rule I, SEC New Rules of Procedure on Definitions provides that
a Hearing Officer is any Commissioner, officer, body or panel duly designated or
created by the Commission to hear and decide a particular case (emphasis supplied).

Thus, by failing to question the Hearing Panels constitution, and by

participating in the proceedings before the panel, petitioner had indeed acquiesced
to and waived any question on its constitution.

Second, the resetting of the preliminary conference back to the original

schedule of June 13, 2000 is well within the authority of the Hearing Panel and
pursuant to Rule V, Sec. 1 of the SEC Rules which provides that the preliminary
conference be set within 10 days after the last pleading was filed.

Indeed, the last pleading filed was the amended answer to which petitioner
opted not to file a reply despite the opportunity to do so. More so, when the amended
answer only raised a new one-paragraph matter on the deed of confirmation and its
supplement executed by the GFIs. In this setting, we find nothing out of line.

Third, petitioner contends that the SEC Hearing Panel required the submission
of preliminary conference briefs for the June 13, 2000 preliminary conference when,
under the SECs Rules of Procedure, the filing of such briefs was not mandatory. In
this regard, we do not fault but rather commend the SEC Hearing Panel for taking
the necessary steps to ensure that the proceedings are conducted in an orderly
fashion. The SEC Hearing Panel, in directing the submission of briefs, was simply
mindful of the importance of pre-trial as means of facilitating the disposal of cases
by simplifying or limiting the issues and avoiding unnecessary proof of facts at the
trial, or exploring the possibility of an amicable settlement or of submission to
arbitration, and generally to do whatever may reasonably be necessary to facilitate
and shorten the formal trial.[49] Recently, we issued Resolution No. 03-1-09-SC on
the Guidelines on Pre-trial and on the Use of the Different Modes of Discovery and
Deposition, stressing that pre-trial, if used properly, is a very effective case
management tool to obliterate case delay and expedite case processing and
adjudication.

In any event, no prejudice could have been suffered by petitioner arising from
his inability to file brief for the June 13, 2000 preliminary conference as he had
already finished presentation of his evidence. The conference was conducted only
with respect to additional matters raised in PNCCs Amended Answer which did not
however alter its theory. Moreover, petitioner cannot now say that he failed to file
his preliminary conference brief due to short notice as he only received the order
granting the resetting on June 9, 2000, a Friday. It is undisputed that the parties were
granted enough time through the June 2, 2000 Order setting the original schedule on
June 13, 2000 and for the parties to file their respective briefs. Indeed, petitioner had
sufficient time to prepare and file his brief.

Fourth, on the issue of not being accorded the opportunity to file an opposition
to PNCCs urgent motion to reset the preliminary conference back to June 13, 2000,
suffice it to say that the urgent motion was non-litigious, then it may be granted ex-
parte as the matter raised pertains only to the schedule of the preliminary conference
in accordance with the rules.Otherwise, the opposition will further delay the
preliminary conference proceeding which the rules precisely obviate.

Fifth, the ruling of the Hearing Panel during the June 13, 2000 preliminary
conference barring petitioner from presenting additional witnesses is within its
authority and competence.Indeed, the reasons given for such curtailment were that
petitioner failed to file his reply to address the sole new matter raised in the amended
answer, to file an amended preliminary conference brief required by the panel, and
to submit the affidavits of his witnesses required to be appended to his brief.

While the SEC New Rules of Procedure allows the testimony of adverse
witnesses sans their affidavits, the records do not show that petitioner informed the
Hearing Panel of the names of his additional witnesses, the description of their
testimony, and the documentary evidence they would identify except the general
description that they are adverse witnesses.Indeed, petitioner did not dispute these
except to cry foul that the curtailment of presenting additional witnesses and
evidence violated his right to due process. Given the fact that petitioner was hedging
and was, so to say, fishing for evidence, it is but proper that he was barred from
further presenting additional witnesses in order not to needlessly prolong the
proceedings.

Sixth, in the same vein, the ruling of the Hearing Panel to terminate petitioners
presentation of rebuttal evidence in the July 3, 2000 Omnibus Order is likewise well-
taken. Indeed, the Hearing Panel granted petitioners oral motion for presentation of
rebuttal evidence but limited it to the testimony of petitioner himself and Mr. Froilan
V. Bacugan. However, on the scheduled date for their testimony, petitioner
presented other witnesses and again went on a fishing expedition. Given that no
persuasive additional evidence was forthcoming, the termination of rebuttal
evidence is proper. Besides, as correctly ruled by the Hearing Panel, additional
evidence of the same class may be dispensed with if such would not add anything
substantial or material to what has already been presented.

Petitioner however argues that by the termination of his rebuttal evidence, he

was deprived of the right to prove that (1) the signatories to the Deed of Confirmation
and Supplement were not authorized by their respective Boards of Directors; (2) the
GFIs have not actually cancelled PNCCs loan in their books; and (3) the GFIs have
likewise not cancelled the interest, penalties, adjustments for peso devaluation, and
other surcharges that accrued PNCCs loan from 1982 to 2000.[50]

The records reveal that petitioner could very well have introduced evidence
on the alleged non-cancellation of the loans and other charges in the books of the
GFIs during the presentation of his evidence-in-chief. Having failed to do so,
petitioner can no longer belatedly interject such evidence into the record through the
right to introduce rebuttal evidence. Such evidence, if any, can be considered as
forgotten evidence which is evidence already existing at the time of the trial but was
not presented at that stage of the proceedings.

Anent the authority of the signatories to the Deed of Confirmation and

Supplement, petitioner could also have confronted PNCCs witnesses, especially
Atty. Raul Villanueva who was presented to prove this fact, when they testified
before the SEC Hearing Panel. Petitioner again failed to do this. Lastly, the SEC
Hearing Panel had determined that there was sufficient evidence on record to render
an informed judgment on the issues of fact before it. Thus, there is nothing irregular
in the discontinuation of the presentation of rebuttal evidence.
 Seventh, the disallowance of petitioners second amended complaint is also
proper as the proceedings were already at the late stage, and it was not expeditious
to go back again to the stage for respondents to file their answers and set anew a
fourth preliminary conference. Besides, the amendment which petitioner wanted to
be incorporated refers to the sole new issue in PNCCs amended answer, which he
could have addressed with a reply to the amended answer or through an amended
preliminary conference brief. Petitioner did neither. He had thus waived his right to
address the sole new matter raised in the amended answer; and if otherwise, the
summary and expeditious nature of the proceedings below would be duly
compromised.Indeed, when a party is given ample opportunity to present his case,
his failure to do so is not a denial of due process.

In no uncertain terms, the CA explicated that the assailed acts of the SEC
Hearing Panel considered as badges of fraud by petitioner find legal mooring either
in the SECs Rules of Procedure or are within its quasi-judicial powers. Petitioners
participation in the proceedings and actions taken by the panel or his failure to
vigorously pursue his objections to them can only be construed to be an acquiescence
to such actions or waiver of his rights. Petitioner cannot now be heard to complain.

No evidence of fraud and conspiracy

We now move on to the issues of fraud and conspiracy which petitioner

foisted to show that the instant case was railroaded and fast-tracked against him.

Petitioner would like us to believe that the CA and the SEC en banc erred in
not considering the badges of fraud he presented to show that the case was
railroaded. First, petitioner points out that the SEC SICD only took seven (7) days
to come out with a grammar-perfect decision. Second, petitioner strongly asserts that
the proceedings were fast-tracked due to the governments action to privatize some
of the assets of the GFIs which include the subject shares of stock. Third, petitioner
presents numerous instances in the July 10, 2000 SEC SICD Decision which, he
proffers, indubitably showed that it was not the Hearing Panel which penned the
decision but respondent PNCC.

We are not persuaded.

 Petitioner has not shown any proof or substantial evidence of fraud and
conspiracy. Indeed, he who alleges fraud must prove it for basic is the rule that actori
incumbit onus probandi.[51] Differently stated, upon the plaintiff in a civil case, the
burden of proof never parts.[52] In the case at bar, the petitioner must therefore
establish his allegation of fraud by a preponderance of evidence.[53] Once again,
petitioner utterly failed to do this. In addition, it is an aged-old rule in civil cases that
he who alleges a fact has the burden of proving it and a mere allegation is not
evidence.[54] Fraud is never presumed, but must be established by clear and
convincing evidence.[55]

Indeed, a cursory reading of the comparative statements presented by

petitioner proves nothing beyond the fact that they are similarly worded. Even
granting arguendo that these statements in the decision were taken from the
pleadings of PNCC, no ill-motive or adverse conclusion may be derived from said
decision as the SEC New Rules of Procedure, specifically Sec. 5 of Rule V, allows
the Hearing Officer to adopt in whole or in part a draft decision, position paper, or
other pleadings for that matter filed by the parties. While it is true that the parties did
not file any draft decision or position paper, yet the Hearing Panel is not barred to
adopt a part or portion of any pleadings filed by the parties. If the Hearing Panel is
allowed to adopt a draft decision or position paper, more so is it allowed to adopt
any portion from the pleadings filed by the parties.

Moreover, Sec. 1 of Rule VI particularly provides that the decision must be

rendered within 20 days from the submission of the case for resolution. Thus, by
complying with the directive provided by said Rules, the Hearing Panel cannot be
faulted in rendering the July 10, 2000 Decision after only seven (7) days from the
submission of the instant case for resolution on the merits. In fact, the Hearing Panel
must be commended for doing its job expeditiously.

Anent the issue of the governments privatization as the cause of the alleged
rapid processing of the case, such is utterly specious and bereft of any factual
basis. Petitioner wants us to believe that the government, through the GFIs, exerted
pressure on the Hearing Panel and the SEC en banc for a favorable judgment. This
is utterly an unfounded innuendo as petitioner has not presented even an iota of proof
to substantiate his accusation. Allegations are easily leveled but proving them is
another matter. In the absence of proof, petitioner only has bare allegations and
nothing more.

Findings of facts of administrative bodies accorded finality when

supported by substantial evidence

On the merits of the case, suffice it to say that the findings of facts and
conclusions of law of the SEC are controlling on the reviewing authority. Indeed,
the rule is that the findings of fact of administrative bodies, if based on substantial
evidence, are controlling on the reviewing authority.[56]

We disagree with petitioner that there was a change in the findings by the
Hearing Panel vis--vis the findings of the Hearing Officer in the grant of the
preliminary injunction upon the same set of evidence. It must be borne in mind that
the pieces of evidence presented during the hearings for the issuance of the injunctive
writ were only preliminary ones, that is, a sampling of the evidence intended to give
the tribunal an idea of the justification for the issuance of the injunctive writ pending
the decision of the case on the merits. As often repeated, the issuance of an injunctive
writ cannot preempt the resolution of the case on the merits. Indeed, the records
show that PNCC and respondent GFIs presented additional evidence aside from
what were presented during the hearings for the issuance of the injunctive writ. Thus,
petitioner has no basis to say that the decision was based on the same evidence
presented during the hearings for the issuance of the preliminary injunction, which
were held in 1998.
It has been held that it is not for the appellate court to substitute its own
judgment for that of the administrative agency on the sufficiency of the evidence and
the credibility of the witnesses.[57] The Hearing Panel had the optimum opportunity
to review the pieces of evidence presented before it and to observe the demeanor of
the witnesses. Administrative decisions on matters within their jurisdiction are
entitled to respect and can only be set aside on proof of grave abuse of discretion,
fraud, or error of law,[58] which have not been shown by petitioner in this case.

It is well-settled that factual findings of administrative agencies are generally

held to be binding and final so long as they are supported by substantial evidence in
the record of the case. It is not the function of this Court to analyze or weigh all over
again the evidence and credibility of witnesses presented before the lower court,
tribunal, or office, as we are not a trier of facts. Our jurisdiction is limited to
reviewing and revising errors of law imputed to the lower court, the latters findings
of fact being conclusive and not reviewable by this Court.[59]

The CA found neither reversible error nor grave abuse of discretion on the
part of the SEC en banc in affirming the decision of the SEC SICD Hearing Panel,
which was supported by substantial evidence. Thus, we find no reason to rule
otherwise.

LOI 1295 has been implemented

Even without considering our factual determination in Childrens Garden of

the Philippines v. APT,[60] still we arrive at the same conclusion that LOI 1295 was
indeed implemented.
First, it is undisputed that shares of stock were issued to the GFIs converting
part of their outstanding loan credit to equity with PNCC. The certificates of stock
issued attest to this fact. Moreover, the administrative body below had duly
debunked any irregularity in the face of these certificates of stock. Second, the
records and accounts of PNCC duly reflected such debt-to-equity conversion as
attested to by the independent auditors from Carlos J. Valdes & Co., Certified Public
Accountants, in the comparative Financial Statements covering the years 1982 and
1983. Third, the due issuance of the shares of stock in the names of the GFIs was
corroborated by PNCCs stock transfer agent, Caval Securities Registry, Inc. Fourth,
the Deed of Confirmation and its Supplement erased any doubt as to the
implementation of LOI 1295. Thus, based on these reasons, there can be no doubt as
to the implementation of LOI 1295.Corollarily, the shares of stock subject of the
instant case issued to the GFIs were for value and thus cannot be considered as void
or watered stocks.

Petitioner guilty of forum shopping

On the issue of forum shopping, we agree with both the SEC en banc and the
CA that petitioner is guilty of forum shopping. A close perusal of both the Amended
Complaint in SICD SEC Case No. 05-96-5357 and the Third Amended Complaint
in Civil Case No. 95-1356 shows that both cases are derived from the same factual
issues involving substantially the same parties. Although the actions seem to be
different, yet it can be seen that there is a splitting of a cause of action.

While, on the one hand, the instant case was for the determination whether the
GFIs are indeed stockholders of PNCC and their respective number of shares, and
on the other, Civil Case No. 95-1356 was for the enforcement and compliance of
LOI 1295, yet both actions involved substantially the same parties, stemming from
the same factual antecedent of the debt-to-equity conversion mandated by LOI 1295
and involved the same cause of action that petitioner anchors both complaints, that
is, that LOI 1295 was not fully implemented.

In this connection, we reject petitioners pretense that no identity exists

between Civil Case No. 95-1356 and the instant case, both of which substantially
involve the same parties, having the same cause of action and which stem from the
same factual antecedents. The fact remains that in Civil Case No. 95-1356, petitioner
prayed for the enforcement and compliance of LOI 1295, the same relief he could
have asked for in the instant case before the SEC proceedings below. The fact that
he made PNCC as complainant in the civil case does not alter the essence of said
case in which the GFIs are made to answer substantially the same issues raised in
the instant case. It is indeed revealing that petitioner withdrew his third amended
complaint before the trial court on June 19, 2000 when the instant case was at its last
stages before the Hearing Panel. Moreover, while petitioner informed the trial court
of the pendency of the instant case, yet petitioner fatally failed to state in his
verification and certification[61] the status of the instant case as required by Sec. 5,
1(b)[62] of Rule 7, 1997 Rules of Civil Procedure. Clearly, petitioner is guilty of
forum shopping.

SEC has jurisdiction to compel PNCC to hold annual stockholders

meetings and election of board of directors

Finally, it has been settled in Philippine National Construction Corporation

v. Pabion[63] that PNCC is an acquired asset corporation and not a government-
owned and/or controlled corporation (GOCC). In said case, we held that PNCC did
not lose its status as a private corporation upon acquisition by the government
through GFIs of the majority of its shares of stock.Our determination that PNCC is
an acquired asset corporation removed it from the category of a GOCC. Thus, while
the SEC has no jurisdiction over GOCCs with original charter or created by special
law primarily because they are governed by their charters, it retains jurisdiction over
government-acquired asset corporations. Therefore, the SEC may compel PNCC to
hold a stockholders meeting for the purpose of electing members of the latters board
of directors.

WHEREFORE, the instant petition is DISMISSED for lack of merit and

the November 29, 2000 Decision of the CA in CA-G.R. SP No. 60366 is
hereby AFFIRMED IN TOTO.Costs against petitioner.

SO ORDERED.

THE HERITAGE HOTEL MANILA, acting G.R. No. 178296

through its owner, GRAND PLAZA
HOTEL CORPORATION,
Present:
Petitioner,

CARPIO, J.,
- versus - Chairperson,
NACHURA,
NATIONAL UNION OF WORKERS IN LEONARDO-DE CASTRO,*
THE HOTEL, RESTAURANT AND ALLIED
INDUSTRIES-HERITAGE HOTEL MANILA ABAD, and
SUPERVISORS CHAPTER (NUWHRAIN- MENDOZA, JJ.
HHMSC),
Respondent.

Promulgated:

January 12, 2011

x----------------------------------------------------------------------------------x
 DECISION

NACHURA, J.:
Before the Court is a petition for review on certiorari of the Decision[1] of the Court
of Appeals (CA) dated May 30, 2005 and Resolution dated June 4, 2007. The
assailed Decision affirmed the dismissal of a petition for cancellation of union
registration filed by petitioner, Grand Plaza Hotel Corporation, owner of Heritage
Hotel Manila, against respondent, National Union of Workers in the Hotel,
Restaurant and Allied Industries-Heritage Hotel Manila Supervisors
Chapter (NUWHRAIN-HHMSC), a labor organization of the supervisory employees
of Heritage Hotel Manila.
The case stemmed from the following antecedents:

On October 11, 1995, respondent filed with the Department of Labor and
Employment-National Capital Region (DOLE-NCR) a petition for certification
election.[2] The Med-Arbiter granted the petition on February 14, 1996 and ordered
the holding of a certification election.[3] On appeal, the DOLE Secretary, in a
Resolution dated August 15, 1996, affirmed the Med-Arbiters order and remanded
the case to the Med-Arbiter for the holding of a preelection conference on February
26, 1997. Petitioner filed a motion for reconsideration, but it was denied on
September 23, 1996.

The preelection conference was not held as initially scheduled; it was held a year
later, or on February 20, 1998. Petitioner moved to archive or to dismiss the
petition due to alleged repeated non-appearance of respondent. The latter agreed
to suspend proceedings until further notice. The preelection conference resumed
on January 29, 2000.

Subsequently, petitioner discovered that respondent had failed to submit to the

Bureau of Labor Relations (BLR) its annual financial report for several years and the
list of its members since it filed its registration papers in 1995. Consequently, on
May 19, 2000, petitioner filed a Petition for Cancellation of Registration of
respondent, on the ground of the non-submission of the said documents. Petitioner
prayed that respondents Certificate of Creation of Local/Chapter be cancelled and
its name be deleted from the list of legitimate labor organizations. It further
requested the suspension of the certification election proceedings.[4]
On June 1, 2000, petitioner reiterated its request by filing a Motion to Dismiss or
Suspend the [Certification Election] Proceedings,[5] arguing that the dismissal or
suspension of the proceedings is warranted, considering that the legitimacy of
respondent is seriously being challenged in the petition for cancellation of
registration. Petitioner maintained that the resolution of the issue of whether
respondent is a legitimate labor organization is crucial to the issue of whether it
may exercise rights of a legitimate labor organization, which include the right to be
certified as the bargaining agent of the covered employees.

Nevertheless, the certification election pushed through on June 23, 2000.

Respondent emerged as the winner.[6]

On June 28, 2000, petitioner filed a Protest with Motion to Defer Certification
of Election Results and Winner,[7] stating that the certification election held on June
23, 2000 was an exercise in futility because, once respondents registration is
cancelled, it would no longer be entitled to be certified as the exclusive bargaining
agent of the supervisory employees. Petitioner also claimed that some of
respondents members were not qualified to join the union because they were
either confidential employees or managerial employees. It then prayed that the
certification of the election results and winner be deferred until the petition for
cancellation shall have been resolved, and that respondents members who held
confidential or managerial positions be excluded from the supervisors bargaining
unit.
Meanwhile, respondent filed its Answer[8] to the petition for the cancellation of its
registration. It averred that the petition was filed primarily to delay the conduct of
the certification election, the respondents certification as the exclusive bargaining
representative of the supervisory employees, and the commencement of
bargaining negotiations. Respondent prayed for the dismissal of the petition for the
following reasons: (a) petitioner is estopped from questioning respondents status
as a legitimate labor organization as it had already recognized respondent as such
during the preelection conferences; (b) petitioner is not the party-in-interest, as
the union members are the ones who would be disadvantaged by the non-
submission of financial reports; (c) it has already complied with the reportorial
requirements, having submitted its financial statements for 1996, 1997, 1998, and
1999, its updated list of officers, and its list of members for the years 1995, 1996,
1997, 1998, and 1999; (d) the petition is already moot and academic, considering
that the certification election had already been held, and the members had
manifested their will to be represented by respondent.

Citing National Union of Bank Employees v. Minister of Labor, et al.[9] and Samahan
ng Manggagawa sa Pacific Plastic v. Hon. Laguesma,[10] the Med-Arbiter held that
the pendency of a petition for cancellation of registration is not a bar to the holding
of a certification election. Thus, in an Order[11] dated January 26, 2001, the Med-
Arbiter dismissed petitioners protest, and certified respondent as the sole and
exclusive bargaining agent of all supervisory employees.

Petitioner subsequently appealed the said Order to the DOLE Secretary.[12] The
appeal was later dismissed by DOLE Secretary Patricia A. Sto. Tomas (DOLE
Secretary Sto. Tomas) in the Resolution of August 21, 2002.[13] Petitioner moved for
reconsideration, but the motion was also denied.[14]

In the meantime, Regional Director Alex E. Maraan (Regional Director Maraan) of

DOLE-NCR finally resolved the petition for cancellation of registration. While
finding that respondent had indeed failed to file financial reports and the list of its
members for several years, he, nonetheless, denied the petition, ratiocinating that
freedom of association and the employees right to self-organization are more
substantive considerations. He took into account the fact that respondent won the
certification election and that it had already been certified as the exclusive
bargaining agent of the supervisory employees. In view of the foregoing, Regional
Director Maraanwhile emphasizing that the non-compliance with the law is not
viewed with favorconsidered the belated submission of the annual financial reports
and the list of members as sufficient compliance thereof and considered them as
having been submitted on time. The dispositive portion of the decision[15] dated
December 29, 2001 reads:

WHEREFORE, premises considered, the instant petition to delist

the National Union of Workers in the Hotel, Restaurant and Allied
Industries-Heritage Hotel Manila Supervisors Chapter from the roll of
legitimate labor organizations is hereby DENIED.

SO ORDERED.[16]

Aggrieved, petitioner appealed the decision to the BLR.[17] BLR Director Hans Leo
Cacdac inhibited himself from the case because he had been a former counsel of
respondent.

In view of Director Cacdacs inhibition, DOLE Secretary Sto. Tomas took cognizance
of the appeal. In a resolution[18] dated February 21, 2003, she dismissed the appeal,
holding that the constitutionally guaranteed freedom of association and right of
workers to self-organization outweighed respondents noncompliance with the
statutory requirements to maintain its status as a legitimate labor organization.
Petitioner filed a motion for reconsideration,[19] but the motion was likewise
denied in a resolution[20] dated May 30, 2003. DOLE Secretary Sto. Tomas admitted
that it was the BLR which had jurisdiction over the appeal, but she pointed out that
the BLR Director had voluntarily inhibited himself from the case because he used
to appear as counsel for respondent. In order to maintain the integrity of the
decision and of the BLR, she therefore accepted the motion to inhibit and took
cognizance of the appeal.
Petitioner filed a petition for certiorari with the CA, raising the issue of whether the
DOLE Secretary acted with grave abuse of discretion in taking cognizance of the
appeal and affirming the dismissal of its petition for cancellation of respondents
registration.

In a Decision dated May 30, 2005, the CA denied the petition. The CA opined that
the DOLE Secretary may legally assume jurisdiction over an appeal from the
decision of the Regional Director in the event that the Director of the BLR inhibits
himself from the case. According to the CA, in the absence of the BLR Director,
there is no person more competent to resolve the appeal than the DOLE Secretary.
The CA brushed aside the allegation of bias and partiality on the part of the DOLE
Secretary, considering that such allegation was not supported by any evidence.
The CA also found that the DOLE Secretary did not commit grave abuse of discretion
when she affirmed the dismissal of the petition for cancellation of respondents
registration as a labor organization. Echoing the DOLE Secretary, the CA held that
the requirements of registration of labor organizations are an exercise of the
overriding police power of the State, designed for the protection of workers against
potential abuse by the union that recruits them. These requirements, the CA
opined, should not be exploited to work against the workers constitutionally
protected right to self-organization.
Petitioner filed a motion for reconsideration, invoking this Courts ruling in Abbott
Labs. Phils., Inc. v. Abbott Labs. Employees Union,[21] which categorically declared
that the DOLE Secretary has no authority to review the decision of the Regional
Director in a petition for cancellation of union registration, and Section 4,[22] Rule
VIII, Book V of the Omnibus Rules Implementing the Labor Code.

In its Resolution[23] dated June 4, 2007, the CA denied petitioners motion, stating
that the BLR Directors inhibition from the case was a peculiarity not present in
the Abbott case, and that such inhibition justified the assumption of jurisdiction by
the DOLE Secretary.
In this petition, petitioner argues that:
 I.

The Court of Appeals seriously erred in ruling that the Labor Secretary
properly assumed jurisdiction over Petitioners appeal of the Regional
Directors Decision in the Cancellation Petition x x x.

A. Jurisdiction is conferred only by law. The Labor Secretary had

no jurisdiction to review the decision of the Regional Director
in a petition for cancellation. Such jurisdiction is conferred by
law to the BLR.

B. The unilateral inhibition by the BLR Director cannot justify the

Labor Secretarys exercise of jurisdiction over the Appeal.

C. The Labor Secretarys assumption of jurisdiction over the

Appeal without notice violated Petitioners right to due process.

II.

The Court of Appeals gravely erred in affirming the dismissal of the

Cancellation Petition despite the mandatory and unequivocal provisions
of the Labor Code and its Implementing Rules.[24]

The petition has no merit.

Jurisdiction to review the decision of the Regional Director lies with the BLR. This is
clearly provided in the Implementing Rules of the Labor Code and enunciated by
the Court in Abbott. But as pointed out by the CA, the present case involves a
peculiar circumstance that was not present or covered by the ruling in Abbott. In
this case, the BLR Director inhibited himself from the case because he was a former
counsel of respondent. Who, then, shall resolve the case in his place?

In Abbott, the appeal from the Regional Directors decision was directly filed
with the Office of the DOLE Secretary, and we ruled that the latter has no appellate
jurisdiction. In the instant case, the appeal was filed by petitioner with the BLR,
which, undisputedly, acquired jurisdiction over the case. Once jurisdiction is
acquired by the court, it remains with it until the full termination of the case.[25]

Thus, jurisdiction remained with the BLR despite the BLR Directors inhibition.
When the DOLE Secretary resolved the appeal, she merely stepped into the shoes
of the BLR Director and performed a function that the latter could not himself
perform. She did so pursuant to her power of supervision and control over the
BLR.[26]

Expounding on the extent of the power of control, the Court, in Araneta, et al. v.
Hon. M. Gatmaitan, et al.,[27] pronounced that, if a certain power or authority is
vested by law upon the Department Secretary, then such power or authority may
be exercised directly by the President, who exercises supervision and control over
the departments. This principle was incorporated in the Administrative Code of
1987, which defines supervision and control as including the authority to act
directly whenever a specific function is entrusted by law or regulation to a
subordinate.[28] Applying the foregoing to the present case, it is clear that the DOLE
Secretary, as the person exercising the power of supervision and control over the
BLR, has the authority to directly exercise the quasi-judicial function entrusted by
law to the BLR Director.
It is true that the power of control and supervision does not give the Department
Secretary unbridled authority to take over the functions of his or her
subordinate. Such authority is subject to certain guidelines which are stated in Book
IV, Chapter 8, Section 39(1)(a) of the Administrative Code of 1987.[29] However, in
the present case, the DOLE Secretarys act of taking over the function of the BLR
Director was warranted and necessitated by the latters inhibition from the case and
the objective to maintain the integrity of the decision, as well as the Bureau
itself.[30]
Petitioner insists that the BLR Directors subordinates should have resolved the
appeal, citing the provision under the Administrative Code of 1987 which states, in
case of the absence or disability of the head of a bureau or office, his duties shall
be performed by the assistant head.[31] The provision clearly does not apply
considering that the BLR Director was neither absent nor suffering from any
disability; he remained as head of the BLR. Thus, to dispel any suspicion of bias, the
DOLE Secretary opted to resolve the appeal herself.

Petitioner was not denied the right to due process when it was not notified in
advance of the BLR Directors inhibition and the DOLE Secretarys assumption of the
case. Well-settled is the rule that the essence of due process is simply
an opportunity to be heard, or, as applied to administrative proceedings,
an opportunity to explain ones side or an opportunity to seek a reconsideration of
the action or ruling complained of.[32] Petitioner had the opportunity to question
the BLR Directors inhibition and the DOLE Secretarys taking cognizance of the case
when it filed a motion for reconsideration of the latters decision. It would be well
to state that a critical component of due process is a hearing before an impartial
and disinterested tribunal, for all the elements of due process, like notice and
hearing, would be meaningless if the ultimate decision would come from a partial
and biased judge.[33] It was precisely to ensure a fair trial that moved the BLR
Director to inhibit himself from the case and the DOLE Secretary to take over his
function.
Petitioner also insists that respondents registration as a legitimate labor union
should be cancelled. Petitioner posits that once it is determined that a ground
enumerated in Article 239 of the Labor Code is present, cancellation of registration
should follow; it becomes the ministerial duty of the Regional Director to cancel
the registration of the labor organization, hence, the use of the word
shall. Petitioner points out that the Regional Director has admitted in its decision
that respondent failed to submit the required documents for a number of years;
therefore, cancellation of its registration should have followed as a matter of
course.
We are not persuaded.

Articles 238 and 239 of the Labor Code read:

ART. 238. CANCELLATION OF REGISTRATION; APPEAL
The certificate of registration of any legitimate labor organization,
whether national or local, shall be canceled by the Bureau if it has reason
to believe, after due hearing, that the said labor organization no longer
meets one or more of the requirements herein prescribed.[34]

ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION.

The following shall constitute grounds for cancellation of union
registration:

xxxx
(d) Failure to submit the annual financial report to the Bureau within
thirty (30) days after the closing of every fiscal year and
misrepresentation, false entries or fraud in the preparation of the
financial report itself;

xxxx
(i) Failure to submit list of individual members to the Bureau once a year
or whenever required by the Bureau.[35]

These provisions give the Regional Director ample discretion in dealing with a
petition for cancellation of a unions registration, particularly, determining whether
the union still meets the requirements prescribed by law. It is sufficient to give the
Regional Director license to treat the late filing of required documents as sufficient
compliance with the requirements of the law. After all, the law requires the labor
organization to submit the annual financial report and list of members in order to
verify if it is still viable and financially sustainable as an organization so as to protect
the employer and employees from fraudulent or fly-by-night unions. With the
submission of the required documents by respondent, the purpose of the law has
been achieved, though belatedly.

We cannot ascribe abuse of discretion to the Regional Director and the DOLE
Secretary in denying the petition for cancellation of respondents registration. The
union members and, in fact, all the employees belonging to the appropriate
bargaining unit should not be deprived of a bargaining agent, merely because of
the negligence of the union officers who were responsible for the submission of
the documents to the BLR.

Labor authorities should, indeed, act with circumspection in treating petitions for
cancellation of union registration, lest they be accused of interfering with union
activities. In resolving the petition, consideration must be taken of the fundamental
rights guaranteed by Article XIII, Section 3 of the Constitution, i.e., the rights of all
workers to self-organization, collective bargaining and negotiations, and peaceful
concerted activities. Labor authorities should bear in mind that registration confers
upon a union the status of legitimacy and the concomitant right and privileges
granted by law to a legitimate labor organization, particularly the right to
participate in or ask for certification election in a bargaining unit.[36] Thus, the
cancellation of a certificate of registration is the equivalent of snuffing out
the life of a labor organization. For without such registration, it loses - as a rule - its
rights under the Labor Code.[37]

It is worth mentioning that the Labor Codes provisions on cancellation of union

registration and on reportorial requirements have been recently amended by
Republic Act (R.A.) No. 9481, An Act Strengthening the Workers Constitutional Right
to Self-Organization, Amending for the Purpose Presidential Decree No. 442, As
Amended, Otherwise Known as the Labor Code of the Philippines, which lapsed into
law on May 25, 2007 and became effective on June 14, 2007. The amendment
sought to strengthen the workers right to self-organization and enhance
the Philippines compliance with its international obligations as embodied in the
International Labour Organization (ILO) Convention No. 87,[38] pertaining to the
non-dissolution of workers organizations by administrative authority.[39] Thus, R.A.
No. 9481 amended Article 239 to read:
ART. 239. Grounds for Cancellation of Union Registration.The following
may constitute grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the
adoption or ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification, and the list of members who took
part in the ratification;

(b) Misrepresentation, false statements or fraud in connection with the

election of officers, minutes of the election of officers, and the list of
voters;

(c) Voluntary dissolution by the members.

R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides:

ART. 242-A. Reportorial Requirements.The following are documents

required to be submitted to the Bureau by the legitimate labor
organization concerned:

(a) Its constitution and by-laws, or amendments thereto, the minutes of

ratification, and the list of members who took part in the ratification of
the constitution and by-laws within thirty (30) days from adoption or
ratification of the constitution and by-laws or amendments thereto;
 (b) Its list of officers, minutes of the election of officers, and list of voters
within thirty (30) days from election;

(c) Its annual financial report within thirty (30) days after the close
of every fiscal year; and

(d) Its list of members at least once a year or whenever required by the
Bureau.

Failure to comply with the above requirements shall not be a ground

for cancellation of union registration but shall subject the erring officers
or members to suspension, expulsion from membership, or any
appropriate penalty.

ILO Convention No. 87, which we have ratified in 1953, provides that workers and
employers organizations shall not be liable to be dissolved or suspended by
administrative authority. The ILO has expressed the opinion that the cancellation
of union registration by the registrar of labor unions, which in our case is the BLR,
is tantamount to dissolution of the organization by administrative authority when
such measure would give rise to the loss of legal personality of the union or loss of
advantages necessary for it to carry out its activities, which is true in our
jurisdiction. Although the ILO has allowed such measure to be taken, provided that
judicial safeguards are in place, i.e., the right to appeal to a judicial body, it has
nonetheless reminded its members that dissolution of a union, and cancellation of
registration for that matter, involve serious consequences for occupational
representation. It has, therefore, deemed it preferable if such actions were to be
taken only as a last resort and after exhausting other possibilities with less serious
effects on the organization.[40]
The aforesaid amendments and the ILOs opinion on this matter serve to fortify our
ruling in this case. We therefore quote with approval the DOLE Secretarys rationale
for denying the petition, thus:
 It is undisputed that appellee failed to submit its annual financial
reports and list of individual members in accordance with Article 239 of
the Labor Code. However, the existence of this ground should not
necessarily lead to the cancellation of union registration. Article 239
recognizes the regulatory authority of the State to exact compliance with
reporting requirements. Yet there is more at stake in this case than
merely monitoring union activities and requiring periodic documentation
thereof.

The more substantive considerations involve the constitutionally

guaranteed freedom of association and right of workers to self-
organization. Also involved is the public policy to promote free trade
unionism and collective bargaining as instruments of industrial peace and
democracy. An overly stringent interpretation of the statute governing
cancellation of union registration without regard to surrounding
circumstances cannot be allowed. Otherwise, it would lead to an
unconstitutional application of the statute and emasculation of public
policy objectives. Worse, it can render nugatory the protection to labor
and social justice clauses that pervades the Constitution and the Labor
Code.

Moreover, submission of the required documents is the duty of the

officers of the union. It would be unreasonable for this Office to order
the cancellation of the union and penalize the entire union membership
on the basis of the negligence of its officers. In National Union of Bank
Employees vs. Minister of Labor, L-53406, 14 December 1981, 110 SCRA
296, the Supreme Court ruled:
As aptly ruled by respondent Bureau of Labor Relations
Director Noriel: The rights of workers to self-organization
finds general and specific constitutional guarantees. x x x
 Such constitutional guarantees should not be lightly taken
much less nullified. A healthy respect for the freedom of
association demands that acts imputable to officers or
members be not easily visited with capital punishments
against the association itself.

At any rate, we note that on 19 May 2000, appellee had submitted its
financial statement for the years 1996-1999. With this submission,
appellee has substantially complied with its duty to submit its financial
report for the said period. To rule differently would be to preclude the
union, after having failed to meet its periodic obligations promptly, from
taking appropriate measures to correct its omissions. For the record, we
do not view with favor appellees late submission. Punctuality on the part
of the union and its officers could have prevented this petition.[41]

WHEREFORE, premises considered, the Court of Appeals Decision dated May 30,
2005 and Resolution dated June 4, 2007 are AFFIRMED.

SO ORDERED.
EN BANC

[G.R. No. 96754. June 22, 1995.]

CONGRESSMAN JAMES L. CHIONGBIAN (Third District, South Cotabato),

ADELBERT W. ANTONINO (First District, South Cotabato), WILFREDO G. CAINGLET
(Third District, Zamboanga del Norte), HILARION RAMIRO, JR. (Second Division,
Misamis Occidental), ERNESTO S. AMATONG (Second District, Zamboanga del
Norte), ALVIN G. DANS (Lone District, Basilan), ABDULLAH M. DIMAPORO (Second
District, Lanao del Norte), and CONGRESSWOMAN MARIA CLARA A. LOBREGAT
(Lone District, Zamboanga City), Petitioners, v. HON. OSCAR M. ORBOS, Executive
Secretary; COMMITTEE CHAIRMAN SEC. FIDEL V. RAMOS, CABINET OFFICERS
FOR REGIONAL DEVELOPMENT FOR REGIONS X and XII, CHAIRMAN OF THE
REGIONAL DEVELOPMENT COUNCIL FOR REGION X, CHAIRMAN JESUS V.
AYALA, CABINET OFFICERS FOR REGIONAL DEVELOPMENT FOR REGIONS XI
 and XII, DEPARTMENT OF LOCAL GOVERNMENT, NATIONAL ECONOMIC AND
DEVELOPMENT AUTHORITY SECRETARIAT, PRESIDENTIAL MANAGEMENT
STAFF, HON. GUILLERMO CARAGUE, Secretary of the Department of Budget and
Management; and HON. ROSALINA S. CAJUCUM, OIC National
Treasurer, Respondents.

[G.R. No. 96673. June 22, 1995.]

IMMANUEL JALDON, Petitioner, v. HON. EXECUTIVE SECRETARY OSCAR M.

ORBOS, HON. FIDEL V. RAMOS, HON. SECRETARY LUIS SANTOS, and HON.
NATIONAL TREASURER ROSALINA CAJUCOM, Respondents.

DECISION

MENDOZA, J.:

These suits challenge the validity of a provision of the Organic Act for the Autonomous
Region in Muslim Mindanao (R.A. No. 6734), authorizing the President of the
Philippines to "merge" by administrative determination the regions remaining after the
establishment of the Autonomous Region, and the Executive Order issued by the
President pursuant to such authority, "Providing for the Reorganization of Administrative
Regions in Mindanao." A temporary restraining order prayed for by the petitioners was
issued by this Court on January 29, 1991, enjoining the respondents from enforcing the
Executive Order and statute in question.

The facts are as follows:

Pursuant to Art. X, Sec. 18 of the 1987 Constitution, Congress passed R.A. No. 6734,
the Organic Act for the Autonomous Region in Muslim Mindanao, calling for a plebiscite
to be held in the provinces of Basilan, Cotabato, Davao del Sur, Lanao del Sur,
Maguindanao, Palawan, South Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi, Zamboanga
del Norte, Zamboanga del Sur and the cities Cotabato, Dapitan, Dipolog, General
Santos, Iligan, Marawi, Pagadian, Puerto Princesa and Zamboanga. In the ensuing
plebiscite held on November 16, 1989, four provinces voted in favor of creating an
autonomous region. These are the provinces of Lanao del Sur, Maguindanao, Sulu and
Tawi-Tawi. In accordance with the constitutional provision, these provinces became the
Autonomous Region in Muslim Mindanao.
On the other hand, with respect to provinces and cities not voting in favor of the
Autonomous Region, Art. XIX, Sec. 13 of R.A. No. 6734 provides,

That only the provinces and cities voting favorably in such plebiscites shall be included
in the Autonomous Region in Muslim Mindanao. The provinces and cities which in the
plebiscite do not vote for inclusion in the Autonomous Region shall remain in the
existing administrative regions: Provided, however, that the President may, by
administrative determination, merge the existing regions.

Pursuant to the authority granted by this provision, then President Corazon C. Aquino
issued on October 12, 1990 Executive Order No. 429, "Providing for the Reorganization
of the Administrative Regions in Mindanao." Under this Order, as amended by E.O. No.
439 —

(1) Misamis Occidental, at present part of Region X, will become part of Region IX.

(2) Oroquieta City, Tangub City and Ozamiz City, at present parts of Region X will
become parts of Region IX.

(3) South Cotabato, at present a part of Region XI, will become part of Region XII.

(4) General Santos City, at present part of Region XI, will become part of Region XII.

(5) Lanao del Norte, at present part of Region XII, will become part of Region IX.

(6) Iligan City and Marawi City, at present part of Region XII, will become part of Region
IX.

Petitioners in G.R. No. 96754 are, or at least at the time of the filing of their petition,
members of Congress representing various legislative districts in South Cotabato,
Zamboanga del Norte, Basilan, Lanao del Norte and Zamboanga City. On November
12, 1990, they wrote then President Aquino protesting E.O. No. 429. They contended
that

There is no law which authorizes the President to pick certain provinces and cities
within the existing regions - some of which did not even take part in the plebiscite as in
the case of the province of Misamis Occidental and the cities of Oroquieta, Tangub and
Ozamiz - and restructure them to new administrative regions. On the other hand, the
law (Sec. 13, Art. XIX, R.A. 6734) is specific to the point, that is, that "provinces and
cities which in the plebiscite do not vote for inclusion in the Autonomous Region shall
remain in the existing administrative regions".

The transfer of the provinces of Misamis Occidental from Region X to Region IX; Lanao
del Norte from Region XII to Region IX, and South Cotabato from Region XI to Region
XII are alterations of the existing structures of governmental units, in other words,
reorganization. This can be gleaned from Executive Order No. 429, thus
Whereas, there is an urgent need to reorganize the administrative regions in Mindanao
to guarantee the effective delivery of field services of government agencies taking into
consideration the formation of the Autonomous Region in Muslim Mindanao.

With due respect to Her Excellency, we submit that while the authority necessarily
includes the authority to merge, the authority to merge does not include the authority to
reorganize. Therefore, the President's authority under RA No. 6734 to "merge existing
regions" cannot be construed to include the authority to reorganize them. To do so will
violate the rules of statutory construction.

The transfer of regional centers under Executive Order 429 is actually a restructuring
(reorganization) of administrative regions. While this reorganization, as in Executive
Order 429, does not affect the apportionment of congressional representatives, the
same is not valid under the penultimate paragraph of Sec. 13, Art. XIX of R.A. 6734 and
Ordinance appended to the 1986 Constitution apportioning the seats of the House of
Representatives of Congress of the Philippines to the different legislative districts in
provinces and cities. 1

As their protest went unheeded, while Inauguration Ceremonies of the New

Administrative Region IX were scheduled on January 26, 1991, petitioners brought this
suit for Certiorari and prohibition.

On the other hand, the petitioner in G.R. No. 96673, Immanuel Jaldon, is a resident of
Zamboanga City, who is suing in the capacity of taxpayer and citizen of the Republic of
the Philippines.

Petitioners in both cases contend that Art. XIX, §13 of R.A. No. 6734 is unconstitutional
because (1) it unduly delegates legislative power to the President by authorizing him to
"merge [by administrative determination] the existing regions" or at any rate provides no
standard for the exercise of the power delegated and (2) the power granted is not
expressed in the title of the law.

In addition, petitioner in G.R. No. 96673 challenges the validity of E.O. No. 429 on the
ground that the power granted by Art. XIX, §13 to the President is only "merge regions
IX and XII" but not to reorganize the entire administrative regions in Mindanao and
certainly not to transfer the regional center of Region IX from Zamboanga City to
Pagadian.

The Solicitor General defends the reorganization of regions in Mindanao by E.O. No.
429 as merely the exercise of a power "traditionally lodged in the President," as held in
Abbas v. COMELEC, 2 and as a mere incident of his power of general supervision over
local governments and control of executive departments, bureaus and offices under Art.
X, §16 and Art. VII, §17, respectively, of the Constitution.

He contends that there is no undue delegation of legislative power but only a grant of
the power to "fill up" or provide the details of legislation because Congress did not have
the facility to provide for them. He cites by analogy the case of Municipality of Cardona
v. Municipality of Binangonan, 3 in which power of the Governor-General to fix
municipal boundaries was sustained on the ground that

[such power] is simply a transference of certain details with respect to provinces,

municipalities, and townships, many of them newly created, and all of them subject to a
more or less rapid change both in development and centers of population, the proper
regulation of which might require not only prompt action but action of such a detailed
character as not to permit the legislative body, as such, to take it efficiently.

The Solicitor General justifies the grant to the President of the power "to merge the
existing regions" as something fairly embraced in the title of R.A. No. 6734, to wit, "An
Act Providing for an Organic Act for the Autonomous Region in Muslim Mindanao,"
because it is germane to it.

He argues that the power is not limited to the merger of those regions in which the
provinces and cities which took part in the plebiscite are located but that it extends to all
regions in Mindanao as necessitated by the establishment of the autonomous region.

Finally, he invokes P.D. No. 1416, as amended by P.D. No. 1772 which
provides:nadchanroblesvirtualawlibrary

1. The President of the Philippines shall have the continuing authority to reorganize the
National Government. In exercising this authority, the President shall be guided by
generally acceptable principles of good government and responsive national
government, including but not limited to the following guidelines for a more efficient,
effective, economical and development-oriented governmental
framework:nadchanroblesvirtualawlibrary

(a) More effective planning implementation, and review functions;

(b) Greater decentralization and responsiveness in decision-making process;

(c) Further minimization, if not, elimination, of duplication or overlapping of purposes,

functions, activities, and programs;

(d) Further development of as standardized as possible ministerial, sub-ministerial and

corporate organizational structures;

(e) Further development of the regionalization process; and

(f) Further rationalization of the functions of and administrative relationships among

government entities.

For purposes of this Decree, the coverage of the continuing authority of the President to
reorganize shall be interpreted to encompass all agencies, entities, instrumentalities,
and units of the National Government, including all government-owned or -controlled
corporations as well as the entire range of the powers, functions, authorities,
administrative relationships, and related aspects pertaining to these agencies, entities,
instrumentalities, and units.

2. [T]he President may, at his discretion, take the following

actions:nadchanroblesvirtualawlibrary

xxx xxx xxx

f. Create, abolish, group, consolidate, merge, or integrate entities, agencies,

instrumentalities, and units of the National Government, as well as expand, amend,
change, or otherwise modify their powers, functions and authorities, including, with
respect to government-owned or controlled corporations, their corporate life,
capitalization, and other relevant aspects of their charters.

g. Take such other related actions as may be necessary to carry out the purposes and
objectives of this Decree.

Considering the arguments of the parties, the issues are:nadchanroblesvirtualawlibrary

(1) whether the power to "merge" administrative regions is legislative in character, as

petitioners contend, or whether it is executive in character, as respondents claim it is,
and, in any event, whether Art. XIX, §13 is invalid because it contains no standard to
guide the President's discretion;

(2) whether the power given is fairly expressed in the title of the statute; and

(3) whether the power granted authorizes the reorganization even of regions the
provinces and cities in which either did not take part in the plebiscite on the creation of
the Autonomous Region or did not vote in favor of it; and

(4) whether the power granted to the President includes the power to transfer the
regional center of Region IX from Zamboanga City to Pagadian City.

It will be useful to recall first the nature of administrative regions and the basis and
purpose for their creation. On September 9, 1968, R.A. No. 5435 was passed
"authorizing the President of the Philippines, with the help of a Commission on
Reorganization, to reorganize the different executive departments, bureaus, offices,
agencies and instrumentalities of the government, including banking or financial
institutions and corporations owned or controlled by it." The purpose was to promote
"simplicity, economy and efficiency in the government." 4 The Commission on
Reorganization created under the law was required to submit an integrated
reorganization plan not later than December 31, 1969 to the President who was in turn
required to submit the plan to Congress within forty days after the opening of its next
regular session. The law provided that any reorganization plan submitted would become
effective only upon the approval of Congress. 5

Accordingly, the Reorganization Commission prepared an Integrated Reorganization

Plan which divided the country into eleven administrative regions. 6 By P.D. No. 1, the
Plan was approved and made part of the law of the land on September 24, 1972. P.D.
No. 1 was twice amended in 1975, first by P.D. No. 742 which "restructur[ed] the
regional organization of Mindanao, Basilan, Sulu and Tawi-Tawi" and later by P.D. No.
773 which further "restructur[ed] the regional organization of Mindanao and divid[ed]
Region IX into two sub-regions." In 1978, P.D. No. 1555 transferred the regional center
of Region IX from Jolo to Zamboanga City.

Thus the creation and subsequent reorganization of administrative regions have been
by the President pursuant to authority granted to him by law. In conferring on the
President the power "to merge [by administrative determination] the existing regions"
following the establishment of the Autonomous Region in Muslim Mindanao, Congress
merely followed the pattern set in previous legislation dating back to the initial
organization of administrative regions in 1972. The choice of the President as delegate
is logical because the division of the country into regions is intended to facilitate not only
the administration of local governments but also the direction of executive departments
which the law requires should have regional offices. As this Court observed in Abbas,
"while the power to merge administrative regions is not expressly provided for in the
Constitution, it is a power which has traditionally been lodged with the President to
facilitate the exercise of the power of general supervision over local governments [see
Art. X, §4 of the Constitution]." The regions themselves are not territorial and political
divisions like provinces, cities, municipalities and barangays but are "mere groupings of
contiguous provinces for administrative purposes." 7 The power conferred on the
President is similar to the power to adjust municipal boundaries 8 which has been
described in Pelaez v. Auditor General 9 as "administrative in nature."

There is, therefore, no abdication by Congress of its legislative power in conferring on

the President the power to merge administrative regions. The question whether
Congress has provided a sufficient standard by which the President is to be guided in
the exercise of the power granted and whether in any event the grant of power to him is
included in the subject expressed in the title of the law.

First, the question of standard. A legislative standard need not be expressed. It may
simply be gathered or implied. 10 Nor need it be found in the law challenged because it
may be embodied in other statutes on the same subjects as that of the challenged
legislation. 11

With respect to the power to merge existing administrative regions, the standard is to be
found in the same policy underlying the grant to the President in R.A. No. 5435 of the
power to reorganize the Executive Department, to wit: "to promote simplicity, economy
and efficiency in the government to enable it to pursue programs consistent with
national goals for accelerated social and economic development and to improve the
service in the transaction of the public business." 12 Indeed, as the original eleven
administrative regions were established in accordance with this policy, it is logical to
suppose that in authorizing the President to "merge [by administrative determination]
the existing regions" in view of the withdrawal from some of those regions of the
provinces now constituting the Autonomous Region, the purpose of Congress was to
reconstitute the original basis for the organization of administrative regions.

Nor is Art. XIX, §13 susceptible to charge that its subject is not embraced in the title of
R.A. No. 6734. The constitutional requirement that "every bill passed by the Congress
shall embrace only one subject which shall be expressed in the title thereof" 13 has
always been given a practical rather than a technical construction. The title is not
required to be an index of the content of the bill. It is sufficient compliance with the
constitutional requirement if the title expresses the general subject and all provisions
are germane to that subject. 14 Certainly the reorganization of the remaining
administrative regions is germane to the general subject of R.A. No. 6734, which is the
establishment of the Autonomous Region in Muslim Mindanao.

Finally, it is contended that the power granted to the President is limited to the
reorganization of administrative regions in which some of the provinces and cities which
voted in favor of regional autonomy are found, because Art. XIX, §13 provides that
those which did not vote for autonomy "shall remain in the existing administrative
regions." More specifically, petitioner in G.R. No. 96673
Claims:nadchanroblesvirtualawlibrary

The questioned Executive Order No. 429 . . . distorted and, in fact, contravened the
clear intent of this provision by moving out or transferring certain political subdivisions
(provinces/cities) out of their legally designated regions. Aggravating this unacceptable
or untenable situation is EO. No. 429's effecting certain movements on areas which did
not even participate in the November 19, 1989 plebiscite. The unauthorized action of
the President, as effected by and under the questioned EO. No. 429, is shown by the
following dispositions: (1) Misamis Occidental, formerly of Region X and which did not
even participate in the plebiscite, was moved from said Region X to Region IX; (2) the
cities of Ozamiz, Oroquieta, and Tangub, all formerly belonging to Region X, which
likewise did not participate in the said plebiscite, were transferred to Region IX; (3)
South Cotabato, from Region XI to Region XII; (5) Lanao del Norte, from Region XII to
Region IX; and (6) the cities of Marawi and Iligan from Region XII to Region IX. All of
the said provinces and cities voted "NO", and thereby rejected their entry into the
Autonomous Region in Muslim Mindanao, as provided under RA. No. 6734. 15

The contention has no merit. While Art. XIX, §13 provides that "The provinces and cities
which do not vote for inclusion in the Autonomous Region shall remain in the existing
administrative regions," this provision is subject to the qualification that "the President
may by administrative determination merge the existing regions." This means that while
non-assenting provinces and cities are to remain in the regions as designated upon the
creation of the Autonomous Region, they may nevertheless be regrouped with
contiguous provinces forming other regions as the exigency of administration may
require.

The regrouping is done only on paper. It involves no more than a redefinition of the lines
separating administrative regions for the purpose of facilitating the administrative
supervision of local government units by the President and insuring the efficient delivery
of essential services. There will be no "transfer" of local governments from one region to
another except as they may thus be regrouped so that a province like Lanao del Norte,
which is at present part of Region XII, will become part of Region IX.

The regrouping of contiguous provinces is not even analogous to a redistricting or to the

division or merger of local governments, which all have political consequences on the
right of people residing in those political units to vote and to be voted for. It cannot be
overemphasized that administrative regions are mere groupings of contiguous
provinces for administrative purposes, not for political representation.

Petitioners nonetheless insist that only those regions, in which the provinces and cities
which voted for inclusion in the Autonomous Region are located, can be "merged" by
the President.

To be sure Art. XIX, §13 is not so limited. But the more fundamental reason is that the
President's power cannot be so limited without neglecting the necessities of
administration. It is noteworthy that the petitioners do not claim that the reorganization
of the regions in E.O. No. 429 is irrational. The fact is that, as they themselves admit,
the reorganization of administrative regions in E.O. No. 429 is based on relevant
criteria, to wit: (1) contiguity and geographical features; (a) transportation and
communication facilities; (3) cultural and language groupings; (4) land area and
population; (5) existing regional centers adopted by several agencies; (6) socio-
economic development programs in the regions and (7) number of provinces and cities.

What has been said above applies to the change of the regional center from
Zamboanga City to Pagadian City. Petitioners contend that the determination of
provincial capitals has always been by act of Congress. But as, this Court said in
Abbas, 16 administrative regions are mere "groupings of contiguous provinces for
administrative purposes. . . [They] are not territorial and political subdivisions like
provinces, cities, municipalities and barangays." There is, therefore, no basis for
contending that only Congress can change or determine regional centers. To the
contrary, the examples of P.D. Nos. 1, 742, 773 and 1555 suggest that the power to
reorganize administrative regions carries with it the power to determine the regional
center.

It may be that the transfer of the regional center in Region IX from Zamboanga City to
Pagadian City may entail the expenditure of large sums of money for the construction of
buildings and other infrastructures to house regional offices. That contention is
addressed to the wisdom of the transfer rather than to its legality and it is settled that
courts are not the arbiters of the wisdom or expediency of legislation. In any event this
is a question that we will consider only if fully briefed and upon a more adequate record
than that presented by petitioners.

WHEREFORE, the petitions for Certiorari and prohibition are DISMISSED for lack of
merit.

SO ORDERED.

[G.R. No. 149724. August 19, 2003]

DEPARTMENT OF ENVIRONMENT AND NATURAL

RESOURCES, represented herein by its Secretary, HEHERSON T.
ALVAREZ, petitioner, vs. DENR REGION 12
EMPLOYEES, represented by BAGUIDALI KARIM, Acting
President of COURAGE (DENR Region 12 Chapter), respondents.

DECISION
YNARES-SANTIAGO, J.:

This is a petition for review assailing the Resolutions dated May 31, 2000 of [1]

the Court of Appeals which dismissed the petition for certiorari in CA-G.R. SP
No. 58896, and its Resolution dated August 20, 2001 , which denied the motion
[2]

for reconsideration.
The facts are as follows:
On November 15, 1999, Regional Executive Director of the Department of
Environment and Natural Resources for Region XII, Israel C. Gaddi, issued a
Memorandum directing the immediate transfer of the DENR XII Regional
[3]

Offices from Cotabato City to Koronadal (formerly Marbel), South

Cotabato. The Memorandum was issued pursuant to DENR Administrative
Order No. 99-14, issued by then DENR Secretary Antonio H. Cerilles, which
reads in part:

Subject: Providing for the Redefinition of Functions and Realignment

of Administrative Units in the Regional and Field Offices:

Pursuant to Executive Order No. 192, dated June 10, 1987 and as an interim
administrative arrangement to improve the efficiency and effectiveness of the
Department of Environment and Natural Resources (DENR) in delivering its services
pending approval of the government-wide reorganization by Congress, the following
redefinition of functions and realignment of administrative units in the regional and
field offices are hereby promulgated:

Section 1. Realignment of Administrative Units:

The DENR hereby adopts a policy to establish at least one Community Environment
and Natural Resources Office (CENRO) or Administrative Unit per Congressional
District except in the Autonomous Region of Muslim Mindanao (ARMM) and the
National Capital Region (NCR). The Regional Executive Directors (REDs) are hereby
authorized to realign/relocate existing CENROs and implement this policy in
accordance with the attached distribution list per region which forms part of this
Order. Likewise, the following realignment and administrative arrangements are
hereby adopted:

xxxxxxxxx

1.6. The supervision of the Provinces of South Cotabato and Sarangani shall be
transferred from Region XI to XII. [4]

Respondents, employees of the DENR Region XII who are members of the
employees association, COURAGE, represented by their Acting President,
Baguindanai A. Karim, filed with the Regional Trial Court of Cotabato, a petition
for nullity of orders with prayer for preliminary injunction.
On December 8, 1999, the trial court issued a temporary restraining order
enjoining petitioner from implementing the assailed Memorandum. The
dispositive portion of the Order reads:

WHEREFORE, defendants DENR Secretary Antonio H. Cerilles and Regional

Executive Director Israel C. Gaddi are hereby ordered to cease and desist from doing
the act complained of, namely, to stop the transfer of DENR [Region] 12 offices from
Cotabato City to Korandal (Marbel), South Cotabato.

xxx xxx xxx.

SO ORDERED. [5]

Petitioner filed a Motion for Reconsideration with Motion to Dismiss, raising

the following grounds:
I.
The power to transfer the Regional Office of the Department of Environment and
Natural Resources (DENR) is executive in nature.

II.

The decision to transfer the Regional Office is based on Executive Order No. 429,
which reorganized Region XII.

III.

The validity of EO 429 has been affirmed by the Honorable Supreme Court in the Case
of Chiongbian vs. Orbos (1995) 245 SCRA 255.

IV.

Since the power to reorganize the Administrative Regions is Executive in Nature citing
Chiongbian, the Honorable Court has no jurisdiction to entertain this petition.
[6]

On January 14, 2000, the trial court rendered judgment, the dispositive
portion of which reads:

CONSEQUENTLY, order is hereby issued ordering the respondents herein to cease

and desist from enforcing their Memorandum Order dated November 15, 1999
relative to the transfer of the DENR Regional Offices from Region 12 to Region 11 at
Koronadal, South Cotabato for being bereft of legal basis and issued with grave abuse
of discretion amounting to lack or excess of jurisdiction on their part, and they are
further ordered to return back the seat of the DENR Regional Offices 12 to Cotabato
City.

SO ORDERED. [7]

Petitioners motion for reconsideration was denied in an Order dated April

10, 2000. A petition for certiorari under Rule 65 was filed before the Court of
Appeals, docketed as CA-G.R. SP No. 58896. The petition was dismissed
outright for: (1) failure to submit a written explanation why personal service was
not done on the adverse party; (2) failure to attach affidavit of service; (3) failure
to indicate the material dates when copies of the orders of the lower court were
received; (4) failure to attach certified true copy of the order denying petitioners
motion for reconsideration; (5) for improper verification, the same being based
on petitioners knowledge and belief, and (6) wrong remedy of certiorari under
Rule 65 to substitute a lost appeal. [8]
 The motion for reconsideration was denied in a resolution dated August 20,
2001. Hence, this petition based on the following assignment of errors:
[9]

RULES OF PROCEDURE CAN NOT BE USED TO DEFEAT THE ENDS OF

SUBSTANTIAL JUSTICE

II

THE DECISION OF THE LOWER COURT DATED 14 JANUARY 2000 WHICH

WAS AFFIRMED IN THE QUESTIONED RESOLUTIONS OF THE COURT OF
APPEALS DATED 31 MAY 2000 AND 20 AUGUST 2001 IS PATENTLY
ILLEGAL AND SHOULD BE NULLIFIED, CONSIDERING THAT:

A. RESPONDENTS HAVE NO CAUSE OF ACTION AGAINST

PETITIONER AS THEY HAVE NO RIGHT TO CAUSE THE
DENR REGION 12 OFFICE TO REMAIN IN COTABATO
CITY.

B. THE STATE DID NOT GIVE ITS CONSENT TO BE SUED.

C. THE DECISION OF THE LOWER COURT DATED 14 JANUARY

2000 IS CONTRARY TO THE RULE OF PRESUMPTION OF
REGULARITY IN THE PERFORMANCE OF OFFICIAL
FUNCTIONS.

D. IN ANY EVENT, THE DECISION OF THE LOWER COURT

DATED 14 JANUARY 2000 IS CONTRARY TO THE LETTER
AND INTENT OF EXECUTIVE ORDER NO. 429 AND
REPUBLIC ACT NO. 6734.

E. THE DETERMINATION OF THE PROPRIETY AND

PRACTICALITY OF THE TRANSFER OF REGIONAL
OFFICES IS INHERENTLY EXECUTIVE, AND THEREFORE,
NON-JUSTICIABLE. [10]

In essence, petitioner argues that the trial court erred in enjoining it from
causing the transfer of the DENR XII Regional Offices, considering that it was
done pursuant to DENR Administrative Order 99-14.
The issues to be resolved in this petition are: (1) Whether DAO-99-14 and
the Memorandum implementing the same were valid; and (2) Whether the
DENR Secretary has the authority to reorganize the DENR.
 Prefatorily, petitioner prays for a liberal application of procedural rules
considering the greater interest of justice.
This Court is fully aware that procedural rules are not to be simply
disregarded for these prescribed procedures ensure an orderly and speedy
administration of justice. However, it is equally true that litigation is not merely
a game of technicalities. Time and again, courts have been guided by the
principle that the rules of procedure are not to be applied in a very rigid and
technical manner, as rules of procedure are used only to help secure and not
to override substantial justice. Thus, if the application of the Rules would tend
[11]

to frustrate rather than promote justice, it is always within the power of this Court
to suspend the rules, or except a particular case from its operation. [12]

Despite the presence of procedural flaws, we find it necessary to address

the issues because of the demands of public interest, including the need for
stability in the public service and the serious implications this case may cause
on the effective administration of the executive department. Although no appeal
was made within the reglementary period to appeal, nevertheless, the departure
from the general rule that the extraordinary writ of certiorari cannot be a
substitute for the lost remedy of appeal is justified because the execution of the
assailed decision would amount to an oppressive exercise of judicial authority. [13]

Petitioner maintains that the assailed DAO-99-14 and the implementing

memorandum were valid and that the trial court should have taken judicial
notice of Republic Act No. 6734, otherwise known as An Organic Act for the
Autonomous Region in Muslim Mindanao, and its implementing Executive
Order 429, as the legal bases for the issuance of the assailed DAO-99-
[14]

14. Moreover, the validity of R.A. No. 6734 and E.O. 429 were upheld in the
case of Chiongbian v. Orbos. Thus, the respondents cannot, by means of an
[15]

injunction, force the DENR XII Regional Offices to remain in Cotabato City, as
the exercise of the authority to transfer the same is executive in nature.
It is apropos to reiterate the elementary doctrine of qualified political
agency, thus:

Under this doctrine, which recognizes the establishment of a single executive, 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 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.[16]

This doctrine is corollary to the control power of the President as provided

for under Article VII, Section 17 of the 1987 Constitution, which reads:

Sec. 17. The President shall have control of all the executive departments, bureaus,
and offices. He shall ensure that the laws be faithfully executed.

However, as head of the Executive Department, the President cannot be

expected to exercise his control (and supervisory) powers personally all the
time. He may delegate some of his powers to the Cabinet members except
when he is required by the Constitution to act in person or the exigencies of the
situation demand that he acts personally. [17]

In Buklod ng Kawaning EIIB v. Zamora, this Court upheld the continuing

[18]

authority of the President to carry out the reorganization in any branch or

agency of the executive department. Such authority includes the creation,
alteration or abolition of public offices. The Chief Executives authority to
[19]

reorganize the National Government finds basis in Book III, Section 20 of E.O.
No. 292, otherwise known as the Administrative Code of 1987, viz:

Section 20. Residual Powers. Unless Congress provides otherwise, the President shall
exercise such other powers and functions vested in the President which are provided
for under the laws and which are not specifically enumerated above or which are not
delegated by the President in accordance with law.

Further, in Larin v. Executive Secretary, this Court had occasion to rule:

[20]

This provision speaks of such other powers vested in the President under the law.
What law then gives him the power to reorganize? It is Presidential Decree No. 1772
which amended Presidential Decree No. 1416. These decrees expressly grant the
President of the Philippines the continuing authority to reorganize the national
government, which includes the power to group, consolidate bureaus and agencies, to
abolish offices, to transfer functions, to create and classify functions, services and
activities and to standardize salaries and materials. The validity of these two decrees is
unquestionable. The 1987 Constitution clearly provides that all laws, decrees,
executive orders, proclamations, letters of instructions and other executive issuances
not inconsistent with this Constitution shall remain operative until amended, repealed
or revoked. So far, there is yet no law amending or repealing said decrees.
 Applying the doctrine of qualified political agency, the power of the President
to reorganize the National Government may validly be delegated to his cabinet
members exercising control over a particular executive department. Thus,
in DOTC Secretary v. Mabalot, we held that the President through his duly
[21]

constituted political agent and alter ego, the DOTC Secretary may legally and
validly decree the reorganization of the Department, particularly the
establishment of DOTC-CAR as the LTFRB Regional Office at the Cordillera
Administrative Region, with the concomitant transfer and performance of public
functions and responsibilities appurtenant to a regional office of the LTFRB.
Similarly, in the case at bar, the DENR Secretary can validly reorganize the
DENR by ordering the transfer of the DENR XII Regional Offices from Cotabato
City to Koronadal, South Cotabato.The exercise of this authority by the DENR
Secretary, as an alter ego, is presumed to be the acts of the President for the
latter had not expressly repudiated the same.
The trial court should have taken judicial notice of R.A. No. 6734, as
implemented by E.O. No. 429, as legal basis of the Presidents power to
reorganize the executive department, specifically those administrative regions
which did not vote for their inclusion in the ARMM. It is axiomatic that a court
has the mandate to apply relevant statutes and jurisprudence in determining
whether the allegations in a complaint establish a cause of action. While it
focuses on the complaint, a court clearly cannot disregard decisions material to
the proper appreciation of the questions before it. In resolving the motion to
[22]

dismiss, the trial court should have taken cognizance of the official acts of the
legislative, executive, and judicial departments because they are proper
subjects of mandatory judicial notice as provided by Section 1 of Rule 129 of
the Rules of Court, to wit:

A court shall take judicial notice, without the introduction of evidence, of the
existence and territorial extent of states, their political history, forms of government
and symbols of nationality, the law of nations, the admiralty and maritime courts of
the world and their seals, the political constitution and history of the Philippines, the
official acts of the legislative, executive and judicial departments of the Philippines,
the laws of nature, the measure of time, and the geographical divisions. (Emphasis
supplied)

Article XIX, Section 13 of R.A. No. 6734 provides:

SECTION 13. The creation of the Autonomous Region in Muslim Mindanao shall
take effect when approved by a majority of the votes cast by the constituent units
provided in paragraph (2) of Sec. 1 of Article II of this Act in a plebiscite which shall
be held not earlier than ninety (90) days or later than one hundred twenty (120) days
after the approval of this Act: Provided, That only the provinces and cities voting
favorably in such plebiscite shall be included in the Autonomous Region in Muslim
Mindanao. The provinces and cities which in the plebiscite do not vote for inclusion
in the Autonomous Region shall remain in the existing administrative
regions: Provided, however, That the President may, by administrative determination,
merge the existing regions.

Pursuant to the authority granted by the aforequoted provision, then

President Corazon C. Aquino issued on October 12, 1990 E.O. 429, Providing
for the Reorganization of the Administrative Regions in Mindanao. Section 4
thereof provides:

SECTION 4. REGION XII, to be known as CENTRAL MINDANAO, shall include

the following provinces and cities:

Provinces
Sultan Kudarat
Cotabato
South Cotabato

Cities
Cotabato
General Santos

The Municipality of Koronadal (Marinduque) in South Cotabato shall serve as the

regional center.

In Chiongbian v. Orbos, this Court stressed the rule that the power of the
President to reorganize the administrative regions carries with it the power to
determine the regional centers. In identifying the regional centers, the President
purposely intended the effective delivery of the field services of government
agencies. The same intention can be gleaned from the preamble of the
[23]

assailed DAO-99-14 which the DENR sought to achieve, that is, to improve the
efficiency and effectiveness of the DENR in delivering its services.
It may be true that the transfer of the offices may not be timely considering
that: (1) there are no buildings yet to house the regional offices in Koronadal,
(2) the transfer falls on the month of Ramadan, (3) the children of the affected
employees are already enrolled in schools in Cotabato City, (4) the Regional
Development Council was not consulted, and (5) the Sangguniang
Panglungsond, through a resolution, requested the DENR Secretary to
reconsider the orders. However, these concern issues addressed to the
wisdom of the transfer rather than to its legality. It is basic in our form of
government that the judiciary cannot inquire into the wisdom or expediency of
the acts of the executive or the legislative department, for each department is
[24]

supreme and independent of the others, and each is devoid of authority not only
to encroach upon the powers or field of action assigned to any of the other
department, but also to inquire into or pass upon the advisability or wisdom of
the acts performed, measures taken or decisions made by the other
departments. [25]

The Supreme Court should not be thought of as having been tasked with
the awesome responsibility of overseeing the entire bureaucracy. Unless there
is a clear showing of constitutional infirmity or grave abuse of discretion
amounting to lack or excess of jurisdiction, the Courts exercise of the judicial
power, pervasive and limitless it may seem to be, still must succumb to the
paramount doctrine of separation of powers. After a careful review of the
[26]

records of the case, we find that this jurisprudential element of abuse of

discretion has not been shown to exist.
WHEREFORE, in view of the foregoing, the petition for review is
GRANTED. The resolutions of the Court of Appeals in CA-G.R. SP No. 58896
dated May 31, 2000 and August 20, 2001, as well as the decision dated January
14, 2000 of the Regional Trial Court of Cotabato City, Branch 15, in Civil Case
No 389, are REVERSED and SET ASIDE. The permanent injunction, which
enjoined the petitioner from enforcing the Memorandum Order of the DENR XII
Regional Executive Director, is LIFTED.
SO ORDERED.
EN BANC

LOUIS BAROK C. BIRAOGO, G.R. No. 192935

Petitioner,

- versus -

THE PHILIPPINE TRUTH

COMMISSION OF 2010,
Respondent.
x-----------------------x
REP. EDCEL C. LAGMAN, G.R. No. 193036
REP. RODOLFO B. ALBANO, JR.,
REP. SIMEON A. Present:
 DATUMANONG, and REP.
ORLANDO B. FUA, SR., CORONA, C.J.,
Petitioners, CARPIO,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,
- versus - LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA, and
EXECUTIVE SECRETARY SERENO, JJ.
PAQUITO N. OCHOA, JR. and
DEPARTMENT OF BUDGET AND Promulgated:
MANAGEMENT SECRETARY
FLORENCIO B. ABAD, December 7, 2010
Respondents.

x -------------------------------------------------------------------------------------- x

DECISION
MENDOZA, J.:
When the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority over the other
departments; it does not in reality nullify or invalidate an act of the
legislature, but only asserts the solemn and sacred obligation assigned
to it by the Constitution to determine conflicting claims of authority
under the Constitution and to establish for the parties in an actual
controversy the rights which that instrument secures and guarantees to
them.

--- Justice Jose P. Laurel[1]

The role of the Constitution cannot be overlooked. It is through the Constitution that
the fundamental powers of government are established, limited and defined, and by
which these powers are distributed among the several departments. [2] The
Constitution is the basic and paramount law to which all other laws must conform
and to which all persons, including the highest officials of the land, must
defer.[3] Constitutional doctrines must remain steadfast no matter what may be the
tides of time. It cannot be simply made to sway and accommodate the call of
situations and much more tailor itself to the whims and caprices of government and
the people who run it.[4]

For consideration before the Court are two consolidated cases[5] both of which
essentially assail the validity and constitutionality of Executive Order No. 1, dated
July 30, 2010, entitled Creating the Philippine Truth Commission of 2010.

The first case is G.R. No. 192935, a special civil action for prohibition
instituted by petitioner Louis Biraogo (Biraogo) in his capacity as a citizen and
taxpayer. Biraogo assails Executive Order No. 1 for being violative of the legislative
power of Congress under Section 1, Article VI of the Constitution[6] as it usurps the
constitutional authority of the legislature to create a public office and to appropriate
funds therefor.[7]

The second case, G.R. No. 193036, is a special civil action for certiorari and
prohibition filed by petitioners Edcel C. Lagman, Rodolfo B. Albano Jr., Simeon A.
Datumanong, and Orlando B. Fua, Sr. (petitioners-legislators) as incumbent
members of the House of Representatives.

The genesis of the foregoing cases can be traced to the events prior to the historic
May 2010 elections, when then Senator Benigno Simeon Aquino III declared his
staunch condemnation of graft and corruption with his slogan, Kung walang corrupt,
walang mahirap. The Filipino people, convinced of his sincerity and of his ability
to carry out this noble objective, catapulted the good senator to the presidency.

To transform his campaign slogan into reality, President Aquino found a need
for a special body to investigate reported cases of graft and corruption allegedly
committed during the previous administration.
 Thus, at the dawn of his administration, the President on July 30, 2010, signed
Executive Order No. 1 establishing the Philippine Truth Commission of 2010 (Truth
Commission).Pertinent provisions of said executive order read:
EXECUTIVE ORDER NO. 1

CREATING THE PHILIPPINE TRUTH COMMISSION OF 2010

WHEREAS, Article XI, Section 1 of the 1987 Constitution of the Philippines

solemnly enshrines the principle that a public office is a public trust and mandates
that public officers and employees, who are servants of the people, must at all times
be accountable to the latter, serve them with utmost responsibility, integrity,
loyalty and efficiency, act with patriotism and justice, and lead modest lives;

WHEREAS, corruption is among the most despicable acts of defiance of this

principle and notorious violation of this mandate;

WHEREAS, corruption is an evil and scourge which seriously affects the political,
economic, and social life of a nation; in a very special way it inflicts untold
misfortune and misery on the poor, the marginalized and underprivileged sector of
society;

WHEREAS, corruption in the Philippines has reached very alarming levels, and
undermined the peoples trust and confidence in the Government and its
institutions;

WHEREAS, there is an urgent call for the determination of the truth regarding
certain reports of large scale graft and corruption in the government and to put a
closure to them by the filing of the appropriate cases against those involved, if
warranted, and to deter others from committing the evil, restore the peoples faith
and confidence in the Government and in their public servants;

WHEREAS, the Presidents battlecry during his campaign for the Presidency in the
last elections kung walang corrupt, walang mahirap expresses a solemn pledge
that if elected, he would end corruption and the evil it breeds;

WHEREAS, there is a need for a separate body dedicated solely to investigating

and finding out the truth concerning the reported cases of graft and corruption
during the previous administration, and which will recommend the prosecution of
the offenders and secure justice for all;
WHEREAS, Book III, Chapter 10, Section 31 of Executive Order No. 292, otherwise
known as the Revised Administrative Code of the Philippines, gives the President
the continuing authority to reorganize the Office of the President.

NOW, THEREFORE, I, BENIGNO SIMEON AQUINO III, President of the

Republic of the Philippines, by virtue of the powers vested in me by law, do hereby
order:
SECTION 1. Creation of a Commission. There is hereby created
the PHILIPPINE TRUTH COMMISSION, hereinafter referred to as
the COMMISSION, which shall primarily seek and find the truth on, and toward
this end, investigate reports of graft and corruption of such scale and magnitude
that shock and offend the moral and ethical sensibilities of the people, committed
by public officers and employees, their co-principals, accomplices and accessories
from the private sector, if any, during the previous administration; and thereafter
recommend the appropriate action or measure to be taken thereon to ensure that
the full measure of justice shall be served without fear or favor.
The Commission shall be composed of a Chairman and four (4) members who will
act as an independent collegial body.

SECTION 2. Powers and Functions. The Commission, which shall have all the
powers of an investigative body under Section 37, Chapter 9, Book I of the
Administrative Code of 1987, is primarily tasked to conduct a thorough fact-finding
investigation of reported cases of graft and corruption referred to in Section 1,
involving third level public officers and higher, their co-principals, accomplices
and accessories from the private sector, if any, during the previous administration
and thereafter submit its finding and recommendations to the President, Congress
and the Ombudsman.
In particular, it shall:

a) Identify and determine the reported cases of such graft and corruption which
it will investigate;

b) Collect, receive, review and evaluate evidence related to or regarding the cases
of large scale corruption which it has chosen to investigate, and to this end require
any agency, official or employee of the Executive Branch, including government-
owned or controlled corporations, to produce documents, books, records and other
papers;

c) Upon proper request or representation, obtain information and documents

from the Senate and the House of Representatives records of investigations
conducted by committees thereof relating to matters or subjects being investigated
by the Commission;

d) Upon proper request and representation, obtain information from the courts,
including the Sandiganbayan and the Office of the Court Administrator,
information or documents in respect to corruption cases filed with the
Sandiganbayan or the regular courts, as the case may be;

e) Invite or subpoena witnesses and take their testimonies and for that purpose,
administer oaths or affirmations as the case may be;

f) Recommend, in cases where there is a need to utilize any person as a state

witness to ensure that the ends of justice be fully served, that such person who
qualifies as a state witness under the Revised Rules of Court of the Philippines be
admitted for that purpose;

g) Turn over from time to time, for expeditious prosecution, to the appropriate
prosecutorial authorities, by means of a special or interim report and
recommendation, all evidence on corruption of public officers and employees and
their private sector co-principals, accomplices or accessories, if any, when in the
course of its investigation the Commission finds that there is reasonable ground to
believe that they are liable for graft and corruption under pertinent applicable laws;

h) Call upon any government investigative or prosecutorial agency such as the

Department of Justice or any of the agencies under it, and the Presidential Anti-
Graft Commission, for such assistance and cooperation as it may require in the
discharge of its functions and duties;

i) Engage or contract the services of resource persons, professionals and other

personnel determined by it as necessary to carry out its mandate;

j) Promulgate its rules and regulations or rules of procedure it deems necessary

to effectively and efficiently carry out the objectives of this Executive Order and to
ensure the orderly conduct of its investigations, proceedings and hearings,
including the presentation of evidence;

k) Exercise such other acts incident to or are appropriate and necessary in

connection with the objectives and purposes of this Order.
SECTION 3. Staffing Requirements. x x x.

SECTION 4. Detail of Employees. x x x.

SECTION 5. Engagement of Experts. x x x

SECTION 6. Conduct of Proceedings. x x x.

SECTION 7. Right to Counsel of Witnesses/Resource Persons. x x x.
SECTION 8. Protection of Witnesses/Resource Persons. x x x.
SECTION 9. Refusal to Obey Subpoena, Take Oath or Give Testimony. Any
government official or personnel who, without lawful excuse, fails to appear upon
subpoena issued by the Commission or who, appearing before the Commission
refuses to take oath or affirmation, give testimony or produce documents for
inspection, when required, shall be subject to administrative disciplinary action.
Any private person who does the same may be dealt with in accordance with law.
SECTION 10. Duty to Extend Assistance to the Commission. x x x.
SECTION 11. Budget for the Commission. The Office of the President shall provide
the necessary funds for the Commission to ensure that it can exercise its powers,
execute its functions, and perform its duties and responsibilities as effectively,
efficiently, and expeditiously as possible.
SECTION 12. Office. x x x.

SECTION 13. Furniture/Equipment. x x x.

SECTION 14. Term of the Commission. The Commission shall accomplish its
mission on or before December 31, 2012.

SECTION 15. Publication of Final Report. x x x.

SECTION 16. Transfer of Records and Facilities of the Commission. x x x.

 SECTION 17. Special Provision Concerning Mandate. If and when in the judgment
of the President there is a need to expand the mandate of the Commission as
defined in Section 1 hereof to include the investigation of cases and instances of
graft and corruption during the prior administrations, such mandate may be so
extended accordingly by way of a supplemental Executive Order.

SECTION 18. Separability Clause. If any provision of this Order is declared

unconstitutional, the same shall not affect the validity and effectivity of the other
provisions hereof.

SECTION 19. Effectivity. This Executive Order shall take effect immediately.

DONE in the City of Manila, Philippines, this 30th day of July 2010.

(SGD.) BENIGNO S. AQUINO III

By the President:

(SGD.) PAQUITO N. OCHOA, JR.

Executive Secretary

Nature of the Truth Commission

As can be gleaned from the above-quoted provisions, the Philippine Truth

Commission (PTC) is a mere ad hoc body formed under the Office of the President
with the primary task to investigate reports of graft and corruption committed by
third-level public officers and employees, their co-principals, accomplices and
accessories during the previous administration, and thereafter to submit its finding
and recommendations to the President, Congress and the Ombudsman. Though it
has been described as an independent collegial body, it is essentially an entity within
the Office of the President Proper and subject to his control. Doubtless, it constitutes
a public office, as an ad hoc body is one.[8]

To accomplish its task, the PTC shall have all the powers of an investigative
body under Section 37, Chapter 9, Book I of the Administrative Code of 1987. It is
not, however, a quasi-judicial body as it cannot adjudicate, arbitrate, resolve, settle,
or render awards in disputes between contending parties. All it can do is gather,
collect and assess evidence of graft and corruption and make recommendations. It
may have subpoena powers but it has no power to cite people in contempt, much
less order their arrest. Although it is a fact-finding body, it cannot determine from
such facts if probable cause exists as to warrant the filing of an information in our
courts of law. Needless to state, it cannot impose criminal, civil or administrative
penalties or sanctions.
The PTC is different from the truth commissions in other countries which have
been created as official, transitory and non-judicial fact-finding bodies to establish
the facts and context of serious violations of human rights or of international
humanitarian law in a countrys past.[9] They are usually established by states
emerging from periods of internal unrest, civil strife or authoritarianism to serve as
mechanisms for transitional justice.

Truth commissions have been described as bodies that share the following
characteristics: (1) they examine only past events; (2) they investigate patterns of
abuse committed over a period of time, as opposed to a particular event; (3) they are
temporary bodies that finish their work with the submission of a report containing
conclusions and recommendations; and (4) they are officially sanctioned, authorized
or empowered by the State.[10] Commissions members are usually empowered to
conduct research, support victims, and propose policy recommendations to prevent
recurrence of crimes. Through their investigations, the commissions may aim to
discover and learn more about past abuses, or formally acknowledge them. They
may aim to prepare the way for prosecutions and recommend institutional
reforms.[11]

Thus, their main goals range from retribution to reconciliation. The

Nuremburg and Tokyo war crime tribunals are examples of a retributory or
vindicatory body set up to try and punish those responsible for crimes against
humanity. A form of a reconciliatory tribunal is the Truth and Reconciliation
Commission of South Africa, the principal function of which was to heal the wounds
of past violence and to prevent future conflict by providing a cathartic experience
for victims.

The PTC is a far cry from South Africas model. The latter placed more
emphasis on reconciliation than on judicial retribution, while the marching order of
the PTC is the identification and punishment of perpetrators. As one writer [12] puts
it:
 The order ruled out reconciliation. It translated the
Draconian code spelled out by Aquino in his inaugural speech: To
those who talk about reconciliation, if they mean that they would
like us to simply forget about the wrongs that they have committed
in the past, we have this to say: There can be no reconciliation
without justice. When we allow crimes to go unpunished, we give
consent to their occurring over and over again.

The Thrusts of the Petitions

Barely a month after the issuance of Executive Order No. 1, the petitioners
asked the Court to declare it unconstitutional and to enjoin the PTC from performing
its functions. A perusal of the arguments of the petitioners in both cases shows that
they are essentially the same. The petitioners-legislators summarized them in the
following manner:

(a) E.O. No. 1 violates the separation of powers as it arrogates

the power of the Congress to create a public office and appropriate
funds for its operation.

(b) The provision of Book III, Chapter 10, Section 31 of the

Administrative Code of 1987 cannot legitimize E.O. No. 1 because the
delegated authority of the President to structurally reorganize the Office
of the President to achieve economy, simplicity and efficiency does not
include the power to create an entirely new public office which was
hitherto inexistent like the Truth Commission.

(c) E.O. No. 1 illegally amended the Constitution and pertinent

statutes when it vested the Truth Commission with quasi-judicial
powers duplicating, if not superseding, those of the Office of the
Ombudsman created under the 1987 Constitution and the Department
of Justice created under the Administrative Code of 1987.

(d) E.O. No. 1 violates the equal protection clause as it selectively

targets for investigation and prosecution officials and personnel of the
previous administration as if corruption is their peculiar species even as
it excludes those of the other administrations, past and present, who
may be indictable.
 (e) The creation of the Philippine Truth Commission of 2010
violates the consistent and general international practice of four decades
wherein States constitute truth commissions to exclusively investigate
human rights violations, which customary practice forms part of the
generally accepted principles of international law which the Philippines
is mandated to adhere to pursuant to the Declaration of Principles
enshrined in the Constitution.

(f) The creation of the Truth Commission is an exercise in

futility, an adventure in partisan hostility, a launching pad for
trial/conviction by publicity and a mere populist propaganda to
mistakenly impress the people that widespread poverty will altogether
vanish if corruption is eliminated without even addressing the other
major causes of poverty.

(g) The mere fact that previous commissions were not

constitutionally challenged is of no moment because neither laches nor
estoppel can bar an eventual question on the constitutionality and
validity of an executive issuance or even a statute.[13]

In their Consolidated Comment,[14] the respondents, through the Office of the

Solicitor General (OSG), essentially questioned the legal standing of petitioners and
defended the assailed executive order with the following arguments:

1] E.O. No. 1 does not arrogate the powers of Congress to create

a public office because the Presidents executive power and power of
control necessarily include the inherent power to conduct investigations
to ensure that laws are faithfully executed and that, in any event, the
Constitution, Revised Administrative Code of 1987 (E.O. No.
292), [15] Presidential Decree (P.D.) No. 1416[16] (as amended by P.D.
No. 1772), R.A. No. 9970,[17] and settled jurisprudence that authorize
the President to create or form such bodies.

2] E.O. No. 1 does not usurp the power of Congress to appropriate

funds because there is no appropriation but a mere allocation of funds
already appropriated by Congress.
 3] The Truth Commission does not duplicate or supersede the
functions of the Office of the Ombudsman (Ombudsman) and the
Department of Justice (DOJ), because it is a fact-finding body and not
a quasi-judicial body and its functions do not duplicate, supplant or
erode the latters jurisdiction.

4] The Truth Commission does not violate the equal protection

clause because it was validly created for laudable purposes.

The OSG then points to the continued existence and validity of other executive
orders and presidential issuances creating similar bodies to justify the creation of the
PTC such as Presidential Complaint and Action Commission (PCAC) by President
Ramon B. Magsaysay, Presidential Committee on Administrative Performance
Efficiency (PCAPE) by President Carlos P. Garcia and Presidential Agency on
Reform and Government Operations (PARGO) by President Ferdinand E.
Marcos.[18]
From the petitions, pleadings, transcripts, and memoranda, the following are
the principal issues to be resolved:

1. Whether or not the petitioners have the legal standing

to file their respective petitions and question Executive Order No. 1;

2. Whether or not Executive Order No. 1 violates the

principle of separation of powers by usurping the powers of Congress
to create and to appropriate funds for public offices, agencies and
commissions;
3. Whether or not Executive Order No. 1 supplants the powers of
the Ombudsman and the DOJ;

4. Whether or not Executive Order No. 1 violates the equal

protection clause; and

5. Whether or not petitioners are entitled to injunctive relief.

Essential requisites for judicial review

Before proceeding to resolve the issue of the constitutionality of Executive
Order No. 1, the Court needs to ascertain whether the requisites for a valid exercise
of its power of judicial review are present.

Like almost all powers conferred by the Constitution, the power of judicial review
is subject to limitations, to wit: (1) there must be an actual case or controversy calling
for the exercise of judicial power; (2) the person challenging the act must have the
standing to question the validity of the subject act or issuance; otherwise stated, he
must have a personal and substantial interest in the case such that he has sustained,
or will sustain, direct injury as a result of its enforcement; (3) the question of
constitutionality must be raised at the earliest opportunity; and (4) the issue of
constitutionality must be the very lis mota of the case.[19]

Among all these limitations, only the legal standing of the petitioners has been put
at issue.

Legal Standing of the Petitioners

The OSG attacks the legal personality of the petitioners-legislators to file their
petition for failure to demonstrate their personal stake in the outcome of the case. It
argues that the petitioners have not shown that they have sustained or are in danger
of sustaining any personal injury attributable to the creation of the PTC. Not
claiming to be the subject of the commissions investigations, petitioners will not
sustain injury in its creation or as a result of its proceedings.[20]

The Court disagrees with the OSG in questioning the legal standing of the
petitioners-legislators to assail Executive Order No. 1. Evidently, their petition
primarily invokes usurpation of the power of the Congress as a body to which they
belong as members. This certainly justifies their resolve to take the cudgels for
Congress as an institution and present the complaints on the usurpation of their
power and rights as members of the legislature before the Court. As held
in Philippine Constitution Association v. Enriquez,[21]

To the extent the powers of Congress are impaired, so is the

power of each member thereof, since his office confers a right to
participate in the exercise of the powers of that institution.
 An act of the Executive which injures the institution of
Congress causes a derivative but nonetheless substantial injury,
which can be questioned by a member of Congress. In such a case,
any member of Congress can have a resort to the courts.

Indeed, legislators have a legal standing to see to it that the prerogative,

powers and privileges vested by the Constitution in their office remain
inviolate. Thus, they are allowed to question the validity of any official action which,
to their mind, infringes on their prerogatives as legislators.[22]

With regard to Biraogo, the OSG argues that, as a taxpayer, he has no standing
to question the creation of the PTC and the budget for its operations. [23] It
emphasizes that the funds to be used for the creation and operation of the
commission are to be taken from those funds already appropriated by Congress.
Thus, the allocation and disbursement of funds for the commission will not entail
congressional action but will simply be an exercise of the Presidents power over
contingent funds.

As correctly pointed out by the OSG, Biraogo has not shown that he sustained,
or is in danger of sustaining, any personal and direct injury attributable to the
implementation of Executive Order No. 1. Nowhere in his petition is an assertion of
a clear right that may justify his clamor for the Court to exercise judicial power and
to wield the axe over presidential issuances in defense of the Constitution. The case
of David v. Arroyo[24] explained the deep-seated rules on locus standi. Thus:

Locus standi is defined as a right of appearance in a court of

justice on a given question. In private suits, standing is governed by
the real-parties-in interest rule as contained in Section 2, Rule 3 of
the 1997 Rules of Civil Procedure, as amended. It provides
that every action must be prosecuted or defended in the name of the
real party in interest. Accordingly, the real-party-in interest is the
party who stands to be benefited or injured by the judgment in the
suit or the party entitled to the avails of the suit. Succinctly put, the
plaintiffs standing is based on his own right to the relief sought.

The difficulty of determining locus standi arises in public

suits. Here, the plaintiff who asserts a public right in assailing an
allegedly illegal official action, does so as a representative of the
general public. He may be a person who is affected no differently
from any other person. He could be suing as a stranger, or in the
category of a citizen, or taxpayer.In either case, he has to adequately
show that he is entitled to seek judicial protection. In other words,
he has to make out a sufficient interest in the vindication of the
public order and the securing of relief as a citizen or taxpayer.

Case law in most jurisdictions now allows both citizen and

taxpayer standing in public actions. The distinction was first laid
down in Beauchamp v. Silk, where it was held that the plaintiff in a
taxpayers suit is in a different category from the plaintiff in a
citizens suit. In the former, the plaintiff is affected by the
expenditure of public funds, while in the latter, he is but the mere
instrument of the public concern. As held by the New York Supreme
Court in People ex rel Case v. Collins: In matter of mere public
right, howeverthe people are the real partiesIt is at least the right,
if not the duty, of every citizen to interfere and see that a public
offence be properly pursued and punished, and that a public
grievance be remedied. With respect to taxpayers suits, Terr v.
Jordan held that the right of a citizen and a taxpayer to maintain
an action in courts to restrain the unlawful use of public funds to
his injury cannot be denied.

However, to prevent just about any person from seeking

judicial interference in any official policy or act with which he
disagreed with, and thus hinders the activities of governmental
agencies engaged in public service, the United State Supreme Court
laid down the more stringent direct injury test in Ex Parte Levitt,
later reaffirmed in Tileston v. Ullman.The same Court ruled that for
a private individual to invoke the judicial power to determine the
validity of an executive or legislative action, he must show that he
has sustained a direct injury as a result of that action, and it is not
sufficient that he has a general interest common to all members of the
public.

This Court adopted the direct injury test in our

jurisdiction. In People v. Vera, it held that the person who impugns
the validity of a statute must have a personal and substantial interest
in the case such that he has sustained, or will sustain direct injury as
a result. The Vera doctrine was upheld in a litany of cases, such
as, Custodio v. President of the Senate, Manila Race Horse
 Trainers Association v. De la Fuente, Pascual v. Secretary of
Public Works and Anti-Chinese League of the Philippines v.
Felix. [Emphases included. Citations omitted]

Notwithstanding, the Court leans on the doctrine that the rule on standing is a
matter of procedure, hence, can be relaxed for nontraditional plaintiffs like ordinary
citizens, taxpayers, and legislators when the public interest so requires, such as when
the matter is of transcendental importance, of overreaching significance to society,
or of paramount public interest.[25]

Thus, in Coconut Oil Refiners Association, Inc. v. Torres,[26] the Court held
that in cases of paramount importance where serious constitutional questions are
involved, the standing requirements may be relaxed and a suit may be allowed to
prosper even where there is no direct injury to the party claiming the right of judicial
review. In the first Emergency Powers Cases,[27] ordinary citizens and taxpayers
were allowed to question the constitutionality of several executive orders although
they had only an indirect and general interest shared in common with the public.

The OSG claims that the determinants of transcendental importance[28] laid

down in CREBA v. ERC and Meralco[29] are non-existent in this case. The Court,
however, finds reason in Biraogos assertion that the petition covers matters of
transcendental importance to justify the exercise of jurisdiction by the Court. There
are constitutional issues in the petition which deserve the attention of this Court in
view of their seriousness, novelty and weight as precedents. Where the issues are of
transcendental and paramount importance not only to the public but also to the Bench
and the Bar, they should be resolved for the guidance of all.[30] Undoubtedly, the
Filipino people are more than interested to know the status of the Presidents first
effort to bring about a promised change to the country. The Court takes cognizance
of the petition not due to overwhelming political undertones that clothe the issue in
the eyes of the public, but because the Court stands firm in its oath to perform its
constitutional duty to settle legal controversies with overreaching significance to
society.

Power of the President to Create the Truth Commission

 In his memorandum in G.R. No. 192935, Biraogo asserts that the Truth
Commission is a public office and not merely an adjunct body of the Office of the
President.[31] Thus, in order that the President may create a public office he must be
empowered by the Constitution, a statute or an authorization vested in him by law.
According to petitioner, such power cannot be presumed[32] since there is no
provision in the Constitution or any specific law that authorizes the President to
create a truth commission.[33] He adds that Section 31 of the Administrative Code of
1987, granting the President the continuing authority to reorganize his office, cannot
serve as basis for the creation of a truth commission considering the aforesaid
provision merely uses verbs such as reorganize, transfer, consolidate, merge, and
abolish.[34] Insofar as it vests in the President the plenary power to reorganize the
Office of the President to the extent of creating a public office, Section 31 is
inconsistent with the principle of separation of powers enshrined in the Constitution
and must be deemed repealed upon the effectivity thereof.[35]

Similarly, in G.R. No. 193036, petitioners-legislators argue that the creation

of a public office lies within the province of Congress and not with the executive
branch of government.They maintain that the delegated authority of the President to
reorganize under Section 31 of the Revised Administrative Code: 1) does not permit
the President to create a public office, much less a truth commission; 2) is limited to
the reorganization of the administrative structure of the Office of the President; 3) is
limited to the restructuring of the internal organs of the Office of the President
Proper, transfer of functions and transfer of agencies; and 4) only to achieve
simplicity, economy and efficiency.[36] Such continuing authority of the President to
reorganize his office is limited, and by issuing Executive Order No. 1, the President
overstepped the limits of this delegated authority.

The OSG counters that there is nothing exclusively legislative about the
creation by the President of a fact-finding body such as a truth commission. Pointing
to numerous offices created by past presidents, it argues that the authority of the
President to create public offices within the Office of the President Proper has long
been recognized.[37] According to the OSG, the Executive, just like the other two
branches of government, possesses the inherent authority to create fact-finding
committees to assist it in the performance of its constitutionally mandated functions
and in the exercise of its administrative functions.[38] This power, as the OSG
explains it, is but an adjunct of the plenary powers wielded by the President under
Section 1 and his power of control under Section 17, both of Article VII of the
Constitution.[39]

It contends that the President is necessarily vested with the power to conduct
fact-finding investigations, pursuant to his duty to ensure that all laws are enforced
by public officials and employees of his department and in the exercise of his
authority to assume directly the functions of the executive department, bureau and
office, or interfere with the discretion of his officials.[40] The power of the President
to investigate is not limited to the exercise of his power of control over his
subordinates in the executive branch, but extends further in the exercise of his other
powers, such as his power to discipline subordinates,[41] his power for rule making,
adjudication and licensing purposes[42] and in order to be informed on matters which
he is entitled to know.[43]

The OSG also cites the recent case of Banda v. Ermita,[44] where it was held
that the President has the power to reorganize the offices and agencies in the
executive department in line with his constitutionally granted power of control and
by virtue of a valid delegation of the legislative power to reorganize executive offices
under existing statutes.

Thus, the OSG concludes that the power of control necessarily includes the
power to create offices. For the OSG, the President may create the PTC in order to,
among others, put a closure to the reported large scale graft and corruption in the
government.[45]

The question, therefore, before the Court is this: Does the creation of the PTC
fall within the ambit of the power to reorganize as expressed in Section 31 of the
Revised Administrative Code? Section 31 contemplates reorganization as limited by
the following functional and structural lines: (1) restructuring the internal
organization of the Office of the President Proper by abolishing, consolidating or
merging units thereof or transferring functions from one unit to another; (2)
transferring any function under the Office of the President to any other
Department/Agency or vice versa; or (3) transferring any agency under the Office
of the President to any other Department/Agency or vice versa. Clearly, the
provision refers to reduction of personnel, consolidation of offices, or abolition
thereof by reason of economy or redundancy of functions. These point to situations
where a body or an office is already existent but a modification or alteration thereof
has to be effected. The creation of an office is nowhere mentioned, much less
envisioned in said provision. Accordingly, the answer to the question is in the
negative.

To say that the PTC is borne out of a restructuring of the Office of the
President under Section 31 is a misplaced supposition, even in the plainest meaning
attributable to the term restructure an alteration of an existing structure. Evidently,
the PTC was not part of the structure of the Office of the President prior to the
enactment of Executive Order No. 1. As held in Buklod ng Kawaning EIIB v. Hon.
Executive Secretary,[46]

But of course, the list of legal basis authorizing the President

to reorganize any department or agency in the executive branch
does not have to end here. We must not lose sight of the very source
of the power that which constitutes an express grant of power.
Under Section 31, Book III of Executive Order No. 292 (otherwise
known as the Administrative Code of 1987), "the President, subject
to the policy in the Executive Office and in order to achieve
simplicity, economy and efficiency, shall have the continuing
authority to reorganize the administrative structure of the Office of
the President." For this purpose, he may transfer the functions of
other Departments or Agencies to the Office of the President. In
Canonizado v. Aguirre [323 SCRA 312 (2000)], we ruled that
reorganization "involves the reduction of personnel, consolidation
of offices, or abolition thereof by reason of economy or redundancy
of functions." It takes place when there is an alteration of the existing
structure of government offices or units therein, including the lines of
control, authority and responsibility between them.The EIIB is a
bureau attached to the Department of Finance. It falls under the
Office of the President. Hence, it is subject to the Presidents
continuing authority to reorganize. [Emphasis Supplied]

In the same vein, the creation of the PTC is not justified by the Presidents
power of control. Control is essentially the power 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 with that of the latter.[47] Clearly, the power of
control is entirely different from the power to create public offices. The former is
inherent in the Executive, while the latter finds basis from either a valid delegation
from Congress, or his inherent duty to faithfully execute the laws.

The question is this, is there a valid delegation of power from Congress,

empowering the President to create a public office?

According to the OSG, the power to create a truth commission pursuant to the
above provision finds statutory basis under P.D. 1416, as amended by P.D. No.
1772.[48] The said law granted the President the continuing authority to reorganize
the national government, including the power to group, consolidate bureaus and
agencies, to abolish offices, to transfer functions, to create and classify functions,
services and activities, transfer appropriations, and to standardize salaries and
materials. This decree, in relation to Section 20, Title I, Book III of E.O. 292 has
been invoked in several cases such as Larin v. Executive Secretary.[49]

The Court, however, declines to recognize P.D. No. 1416 as a justification for
the President to create a public office. Said decree is already stale, anachronistic and
inoperable. P.D. No. 1416 was a delegation to then President Marcos of the authority
to reorganize the administrative structure of the national government including the
power to create offices and transfer appropriations pursuant to one of the purposes
of the decree, embodied in its last Whereas clause:

WHEREAS, the transition towards the parliamentary form

of government will necessitate flexibility in the organization of the
national government.

Clearly, as it was only for the purpose of providing manageability and

resiliency during the interim, P.D. No. 1416, as amended by P.D. No.
1772, became functus oficio upon the convening of the First Congress, as expressly
provided in Section 6, Article XVIII of the 1987 Constitution. In fact, even the
Solicitor General agrees with this view. Thus:
 ASSOCIATE JUSTICE CARPIO: Because P.D. 1416 was enacted
was the last whereas clause of P.D.
1416 says it was enacted to prepare
the transition from presidential to
parliamentary. Now, in a
parliamentary form of
government, the legislative and
executive powers are fused,
correct?

SOLICITOR GENERAL CADIZ: Yes, Your Honor.

ASSOCIATE JUSTICE CARPIO: That is why, that P.D. 1416 was

issued. Now would you agree with
me that P.D. 1416 should not be
considered effective anymore upon
the promulgation, adoption,
ratification of the 1987
Constitution.

SOLICITOR GENERAL CADIZ: Not the whole of P.D. [No.] 1416,

Your Honor.

ASSOCIATE JUSTICE CARPIO: The power of the President to

reorganize the entire National
Government is deemed repealed, at
least, upon the adoption of the
1987 Constitution, correct.

SOLICITOR GENERAL CADIZ: Yes, Your Honor.[50]

While the power to create a truth commission cannot pass muster on the basis of
P.D. No. 1416 as amended by P.D. No. 1772, the creation of the PTC finds
justification under Section 17, Article VII of the Constitution, imposing upon the
President the duty to ensure that the laws are faithfully executed. Section 17 reads:

Section 17. The President shall have control of all the executive
departments, bureaus, and offices. He shall ensure that the laws be faithfully
executed. (Emphasis supplied).
 As correctly pointed out by the respondents, the allocation of power in the
three principal branches of government is a grant of all powers inherent in them. The
Presidents power to conduct investigations to aid him in ensuring the faithful
execution of laws in this case, fundamental laws on public accountability and
transparency is inherent in the Presidents powers as the Chief Executive. That the
authority of the President to conduct investigations and to create bodies to execute
this power is not explicitly mentioned in the Constitution or in statutes does not mean
that he is bereft of such authority.[51] As explained in the landmark case of Marcos
v. Manglapus:[52]

x x x. The 1987 Constitution, however, brought back the

presidential system of government and restored the separation of
legislative, executive and judicial powers by their actual
distribution among three distinct branches of government with
provision for checks and balances.

It would not be accurate, however, to state that "executive

power" is the power to enforce the laws, for the President is head of
state as well as head of government and whatever powers inhere in
such positions pertain to the office unless the Constitution itself
withholds it. Furthermore, the Constitution itself provides that the
execution of the laws is only one of the powers of the President. It
also grants the President other powers that do not involve the
execution of any provision of law, e.g., his power over the country's
foreign relations.

On these premises, we hold the view that although the 1987

Constitution imposes limitations on the exercise of specific powers
of the President, it maintains intact what is traditionally considered
as within the scope of "executive power." Corollarily, the powers of
the President cannot be said to be limited only to the specific
powers enumerated in the Constitution. In other words, executive
power is more than the sum of specific powers so enumerated.

It has been advanced that whatever power inherent in the

government that is neither legislative nor judicial has to be
executive. x x x.
Indeed, the Executive is given much leeway in ensuring that our laws are faithfully
executed. As stated above, the powers of the President are not limited to those
specific powers under the Constitution.[53] One of the recognized powers of the
President granted pursuant to this constitutionally-mandated duty is the power to
create ad hoc committees. This flows from the obvious need to ascertain facts and
determine if laws have been faithfully executed. Thus, in Department of Health v.
Camposano,[54] the authority of the President to issue Administrative Order No. 298,
creating an investigative committee to look into the administrative charges filed
against the employees of the Department of Health for the anomalous purchase of
medicines was upheld. In said case, it was ruled:

The Chief Executives power to create the Ad hoc Investigating

Committee cannot be doubted. Having been constitutionally
granted full control of the Executive Department, to which
respondents belong, the President has the obligation to ensure that
all executive officials and employees faithfully comply with the
law. With AO 298 as mandate, the legality of the investigation is
sustained. Such validity is not affected by the fact that the
investigating team and the PCAGC had the same composition, or
that the former used the offices and facilities of the latter in
conducting the inquiry. [Emphasis supplied]

It should be stressed that the purpose of allowing ad hoc investigating bodies

to exist is to allow an inquiry into matters which the President is entitled to know so
that he can be properly advised and guided in the performance of his duties relative
to the execution and enforcement of the laws of the land. And if history is to be
revisited, this was also the objective of the investigative bodies created in the past
like the PCAC, PCAPE, PARGO, the Feliciano Commission, the Melo Commission
and the Zenarosa Commission. There being no changes in the government structure,
the Court is not inclined to declare such executive power as non-existent just because
the direction of the political winds have changed.

On the charge that Executive Order No. 1 transgresses the power of Congress
to appropriate funds for the operation of a public office, suffice it to say that there
will be no appropriation but only an allotment or allocations of existing funds
already appropriated. Accordingly, there is no usurpation on the part of the
Executive of the power of Congress to appropriate funds. Further, there is no need
to specify the amount to be earmarked for the operation of the commission because,
in the words of the Solicitor General, whatever funds the Congress has provided for
the Office of the President will be the very source of the funds for the
commission.[55] Moreover, since the amount that would be allocated to the PTC shall
be subject to existing auditing rules and regulations, there is no impropriety in the
funding.

Power of the Truth Commission to Investigate

The Presidents power to conduct investigations to ensure that laws are faithfully
executed is well recognized. It flows from the faithful-execution clause of the
Constitution under Article VII, Section 17 thereof.[56] As the Chief Executive, the
president represents the government as a whole and sees to it that all laws are
enforced by the officials and employees of his department. He has the authority to
directly assume the functions of the executive department.[57]

Invoking this authority, the President constituted the PTC to primarily investigate
reports of graft and corruption and to recommend the appropriate action. As
previously stated, no quasi-judicial powers have been vested in the said body as it
cannot adjudicate rights of persons who come before it. It has been said that Quasi-
judicial powers involve the power to hear and determine questions of fact to which
the legislative policy is to apply and to decide in accordance with the standards laid
down by law itself in enforcing and administering the same law.[58] In simpler terms,
judicial discretion is involved in the exercise of these quasi-judicial power, such that
it is exclusively vested in the judiciary and must be clearly authorized by the
legislature in the case of administrative agencies.

The distinction between the power to investigate and the power to adjudicate
was delineated by the Court in Cario v. Commission on Human Rights.[59] Thus:

"Investigate," commonly understood, means to examine,

explore, inquire or delve or probe into, research on, study. The
dictionary definition of "investigate" is "to observe or study closely:
inquire into systematically: "to search or inquire into: x x to subject
to an official probe x x: to conduct an official inquiry." The purpose
of investigation, of course, is to discover, to find out, to learn, obtain
 information. Nowhere included or intimated is the notion of
settling, deciding or resolving a controversy involved in the facts
inquired into by application of the law to the facts established by
the inquiry.
The legal meaning of "investigate" is essentially the same:
"(t)o follow up step by step by patient inquiry or observation. To
trace or track; to search into; to examine and inquire into with care
and accuracy; to find out by careful inquisition; examination; the
taking of evidence; a legal inquiry;" "to inquire; to make an
investigation," "investigation" being in turn described as "(a)n
administrative function, the exercise of which ordinarily does not
require a hearing. 2 Am J2d Adm L Sec. 257; x x an inquiry, judicial
or otherwise, for the discovery and collection of facts concerning a
certain matter or matters."
"Adjudicate," commonly or popularly understood, means to
adjudge, arbitrate, judge, decide, determine, resolve, rule on, settle.
The dictionary defines the term as "to settle finally (the rights and
duties of the parties to a court case) on the merits of issues raised:
x x to pass judgment on: settle judicially: x x act as judge." And
"adjudge" means "to decide or rule upon as a judge or with judicial
or quasi-judicial powers: x x to award or grant judicially in a case of
controversy x x."
In the legal sense, "adjudicate" means: "To settle in the
exercise of judicial authority. To determine finally. Synonymous
with adjudge in its strictest sense;" and "adjudge" means: "To pass
on judicially, to decide, settle or decree, or to sentence or condemn.
x x. Implies a judicial determination of a fact, and the entry of a
judgment." [Italics included. Citations Omitted]

Fact-finding is not adjudication and it cannot be likened to the judicial

function of a court of justice, or even a quasi-judicial agency or office. The function
of receiving evidence and ascertaining therefrom the facts of a controversy is not a
judicial function. To be considered as such, the act of receiving evidence and arriving
at factual conclusions in a controversy must be accompanied by the authority
of applying the law to the factual conclusions to the end that the controversy may be
decided or resolved authoritatively, finally and definitively, subject to appeals or
modes of review as may be provided by law.[60] Even respondents themselves admit
that the commission is bereft of any quasi-judicial power.[61]
Contrary to petitioners apprehension, the PTC will not supplant the Ombudsman or
the DOJ or erode their respective powers. If at all, the investigative function of the
commission will complement those of the two offices. As pointed out by the
Solicitor General, the recommendation to prosecute is but a consequence of the
overall task of the commission to conduct a fact-finding investigation.[62] The actual
prosecution of suspected offenders, much less adjudication on the merits of the
charges against them,[63] is certainly not a function given to the commission. The
phrase, when in the course of its investigation, under Section 2(g), highlights this
fact and gives credence to a contrary interpretation from that of the petitioners. The
function of determining probable cause for the filing of the appropriate complaints
before the courts remains to be with the DOJ and the Ombudsman.[64]

At any rate, the Ombudsmans power to investigate under R.A. No. 6770 is not
exclusive but is shared with other similarly authorized government agencies. Thus,
in the case of Ombudsman v. Galicia,[65] it was written:

This power of investigation granted to the Ombudsman by the 1987

Constitution and The Ombudsman Act is not exclusive but is shared
with other similarly authorized government agencies such as the
PCGG and judges of municipal trial courts and municipal circuit
trial courts. The power to conduct preliminary investigation on
charges against public employees and officials is likewise
concurrently shared with the Department of Justice. Despite the
passage of the Local Government Code in 1991, the Ombudsman
retains concurrent jurisdiction with the Office of the President and
the local Sanggunians to investigate complaints against local
elective officials. [Emphasis supplied].

Also, Executive Order No. 1 cannot contravene the power of the Ombudsman to
investigate criminal cases under Section 15 (1) of R.A. No. 6770, which states:

(1) 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 government, the investigation of such
cases. [Emphases supplied]

The act of investigation by the Ombudsman as enunciated above contemplates

the conduct of a preliminary investigation or the determination of the existence of
probable cause.This is categorically out of the PTCs sphere of functions. Its power
to investigate is limited to obtaining facts so that it can advise and guide the President
in the performance of his duties relative to the execution and enforcement of the laws
of the land. In this regard, the PTC commits no act of usurpation of the Ombudsmans
primordial duties.

The same holds true with respect to the DOJ. Its authority under Section 3 (2),
Chapter 1, Title III, Book IV in the Revised Administrative Code is by no means
exclusive and, thus, can be shared with a body likewise tasked to investigate the
commission of crimes.

Finally, nowhere in Executive Order No. 1 can it be inferred that the findings of the
PTC are to be accorded conclusiveness. Much like its predecessors, the Davide
Commission, the Feliciano Commission and the Zenarosa Commission, its findings
would, at best, be recommendatory in nature. And being so, the Ombudsman and the
DOJ have a wider degree of latitude to decide whether or not to reject the
recommendation. These offices, therefore, are not deprived of their mandated duties
but will instead be aided by the reports of the PTC for possible indictments for
violations of graft laws.

Violation of the Equal Protection Clause

Although the purpose of the Truth Commission falls within the investigative
power of the President, the Court finds difficulty in upholding the constitutionality
of Executive Order No. 1 in view of its apparent transgression of the equal protection
clause enshrined in Section 1, Article III (Bill of Rights) of the 1987
Constitution. Section 1 reads:
 Section 1. No person shall be deprived of life, liberty, or
property without due process of law, nor shall any person be denied
the equal protection of the laws.

The petitioners assail Executive Order No. 1 because it is violative of this

constitutional safeguard. They contend that it does not apply equally to all members
of the same class such that the intent of singling out the previous administration as
its sole object makes the PTC an adventure in partisan hostility.[66] Thus, in order to
be accorded with validity, the commission must also cover reports of graft and
corruption in virtually all administrations previous to that of former President
Arroyo.[67]

The petitioners argue that the search for truth behind the reported cases of
graft and corruption must encompass acts committed not only during the
administration of former President Arroyo but also during prior administrations
where the same magnitude of controversies and anomalies[68] were reported to have
been committed against the Filipino people.They assail the classification formulated
by the respondents as it does not fall under the recognized exceptions because first,
there is no substantial distinction between the group of officials targeted for
investigation by Executive Order No. 1 and other groups or persons who abused their
public office for personal gain; and second, the selective classification is not
germane to the purpose of Executive Order No. 1 to end corruption.[69] In order to
attain constitutional permission, the petitioners advocate that the commission should
deal with graft and grafters prior and subsequent to the Arroyo administration with
the strong arm of the law with equal force.[70]

Position of respondents

According to respondents, while Executive Order No. 1 identifies the previous

administration as the initial subject of the investigation, following Section 17
thereof, the PTC will not confine itself to cases of large scale graft and corruption
solely during the said administration.[71] Assuming arguendo that the commission
would confine its proceedings to officials of the previous administration, the
petitioners argue that no offense is committed against the equal protection clause for
the segregation of the transactions of public officers during the previous
administration as possible subjects of investigation is a valid classification based on
substantial distinctions and is germane to the evils which the Executive Order seeks
to correct.[72] To distinguish the Arroyo administration from past administrations, it
recited the following:

First. E.O. No. 1 was issued in view of widespread reports of

large scale graft and corruption in the previous administration which
have eroded public confidence in public institutions. There is,
therefore, an urgent call for the determination of the truth regarding
certain reports of large scale graft and corruption in the government and
to put a closure to them by the filing of the appropriate cases against
those involved, if warranted, and to deter others from committing the
evil, restore the peoples faith and confidence in the Government and in
their public servants.

Second. The segregation of the preceding administration as the

object of fact-finding is warranted by the reality that unlike with
administrations long gone, the current administration will most likely
bear the immediate consequence of the policies of the previous
administration.

Third. The classification of the previous administration as a

separate class for investigation lies in the reality that the evidence of
possible criminal activity, the evidence that could lead to recovery of
public monies illegally dissipated, the policy lessons to be learned to
ensure that anti-corruption laws are faithfully executed, are more easily
established in the regime that immediately precede the current
administration.

Fourth. Many administrations subject the transactions of their

predecessors to investigations to provide closure to issues that are
pivotal to national life or even as a routine measure of due diligence
and good housekeeping by a nascent administration like the
Presidential Commission on Good Government (PCGG), created by the
late President Corazon C. Aquino under Executive Order No. 1 to
pursue the recovery of ill-gotten wealth of her predecessor former
President Ferdinand Marcos and his cronies, and
the Saguisag Commission created by former President Joseph Estrada
under Administrative Order No, 53, to form an ad-hoc and independent
citizens committee to investigate all the facts and circumstances
 surrounding Philippine Centennial projects of his predecessor, former
President Fidel V. Ramos.[73] [Emphases supplied]

Concept of the Equal Protection Clause

One of the basic principles on which this government was founded is that of the
equality of right which is embodied in Section 1, Article III of the 1987
Constitution. The equal protection of the laws is embraced in the concept of due
process, as every unfair discrimination offends the requirements of justice and fair
play. It has been embodied in a separate clause, however, to provide for a more
specific guaranty against any form of undue favoritism or hostility from the
government. Arbitrariness in general may be challenged on the basis of the due
process clause. But if the particular act assailed partakes of an unwarranted partiality
or prejudice, the sharper weapon to cut it down is the equal protection clause.[74]

According to a long line of decisions, equal protection simply requires that all
persons or things similarly situated should be treated alike, both as to rights
conferred and responsibilities imposed.[75] It requires public bodies and institutions
to treat similarly situated individuals in a similar manner.[76] The purpose of the equal
protection clause is to secure every person within a states jurisdiction against
intentional and arbitrary discrimination, whether occasioned by the express terms of
a statue or by its improper execution through the states duly constituted
authorities.[77] In other words, the concept of equal justice under the law requires the
state to govern impartially, and it may not draw distinctions between individuals
solely on differences that are irrelevant to a legitimate governmental objective.[78]

The equal protection clause is aimed at all official state actions, not just those
of the legislature.[79] Its inhibitions cover all the departments of the government
including the political and executive departments, and extend to all actions of a state
denying equal protection of the laws, through whatever agency or whatever guise is
taken. [80]

It, however, does not require the universal application of the laws to all
persons or things without distinction. What it simply requires is equality among
equals as determined according to a valid classification. Indeed, the equal protection
clause permits classification. Such classification, however, to be valid must pass the
test of reasonableness. The test has four requisites: (1) The classification rests on
substantial distinctions; (2) It is germane to the purpose of the law; (3) It is not
limited to existing conditions only; and
[81]
(4) It applies equally to all members of the same class. Superficial differences do
not make for a valid classification.[82]

For a classification to meet the requirements of constitutionality, it must

include or embrace all persons who naturally belong to the class. [83] The
classification will be regarded as invalid if all the members of the class are not
similarly treated, both as to rights conferred and obligations imposed. It is not
necessary that the classification be made with absolute symmetry, in the sense that
the members of the class should possess the same characteristics in equal
degree. Substantial similarity will suffice; and as long as this is achieved, all those
covered by the classification are to be treated equally. The mere fact that an
individual belonging to a class differs from the other members, as long as that class
is substantially distinguishable from all others, does not justify the non-application
of the law to him.[84]

The classification must not be based on existing circumstances only, or so

constituted as to preclude addition to the number included in the class. It must be of
such a nature as to embrace all those who may thereafter be in similar circumstances
and conditions. It must not leave out or underinclude those that should otherwise fall
into a certain classification. As elucidated in Victoriano v. Elizalde Rope Workers'
Union[85] and reiterated in a long line of cases,[86]
The guaranty of equal protection of the laws is not a guaranty
of equality in the application of the laws upon all citizens of the
state. It is not, therefore, a requirement, in order to avoid the
constitutional prohibition against inequality, that every man,
woman and child should be affected alike by a statute. Equality of
operation of statutes does not mean indiscriminate operation on
persons merely as such, but on persons according to the
circumstances surrounding them. It guarantees equality, not
identity of rights. The Constitution does not require that things
which are different in fact be treated in law as though they were the
same. The equal protection clause does not forbid discrimination as
to things that are different. It does not prohibit legislation which is
limited either in the object to which it is directed or by the territory
within which it is to operate.
 The equal protection of the laws clause of the Constitution allows
classification. Classification in law, as in the other departments of
knowledge or practice, is the grouping of things in speculation or
practice because they agree with one another in certain particulars.
A law is not invalid because of simple inequality. The very idea of
classification is that of inequality, so that it goes without saying that
the mere fact of inequality in no manner determines the matter of
constitutionality. All that is required of a valid classification is that
it be reasonable, which means that the classification should be
based on substantial distinctions which make for real differences,
that it must be germane to the purpose of the law; that it must not
be limited to existing conditions only; and that it must apply equally
to each member of the class. This Court has held that the standard
is satisfied if the classification or distinction is based on a
reasonable foundation or rational basis and is not palpably
arbitrary. [Citations omitted]

Applying these precepts to this case, Executive Order No. 1 should be struck
down as violative of the equal protection clause. The clear mandate of the envisioned
truth commission is to investigate and find out the truth concerning the reported
cases of graft and corruption during the previous administration[87] only. The intent
to single out the previous administration is plain, patent and manifest. Mention of it
has been made in at least three portions of the questioned executive order.
Specifically, these are:

WHEREAS, there is a need for a separate body dedicated solely to

investigating and finding out the truth concerning the reported
cases of graft and corruption during the previous administration,
and which will recommend the prosecution of the offenders and
secure justice for all;

SECTION 1. Creation of a Commission. There is hereby created

the PHILIPPINE TRUTH COMMISSION, hereinafter referred to as
the COMMISSION, which shall primarily seek and find the truth
on, and toward this end, investigate reports of graft and corruption
of such scale and magnitude that shock and offend the moral and
ethical sensibilities of the people, committed by public officers and
employees, their co-principals, accomplices and accessories from
the private sector, if any, during the previous administration; and
 thereafter recommend the appropriate action or measure to be
taken thereon to ensure that the full measure of justice shall be
served without fear or favor.

SECTION 2. Powers and Functions. The Commission, which shall

have all the powers of an investigative body under Section 37,
Chapter 9, Book I of the Administrative Code of 1987, is primarily
tasked to conduct a thorough fact-finding investigation of reported
cases of graft and corruption referred to in Section 1, involving third
level public officers and higher, their co-principals, accomplices
and accessories from the private sector, if any, during the previous
administration and thereafter submit its finding and
recommendations to the President, Congress and the Ombudsman.
[Emphases supplied]

In this regard, it must be borne in mind that the Arroyo administration is but
just a member of a class, that is, a class of past administrations. It is not a class of its
own. Not to include past administrations similarly situated constitutes arbitrariness
which the equal protection clause cannot sanction. Such discriminating
differentiation clearly reverberates to label the commission as a vehicle for
vindictiveness and selective retribution.

Though the OSG enumerates several differences between the Arroyo

administration and other past administrations, these distinctions are not substantial
enough to merit the restriction of the investigation to the previous administration
only. The reports of widespread corruption in the Arroyo administration cannot be
taken as basis for distinguishing said administration from earlier administrations
which were also blemished by similar widespread reports of impropriety. They are
not inherent in, and do not inure solely to, the Arroyo administration. As Justice
Isagani Cruz put it, Superficial differences do not make for a valid classification.[88]

The public needs to be enlightened why Executive Order No. 1 chooses to

limit the scope of the intended investigation to the previous administration only. The
OSG ventures to opine that to include other past administrations, at this point, may
unnecessarily overburden the commission and lead it to lose its effectiveness.[89] The
reason given is specious. It is without doubt irrelevant to the legitimate and noble
objective of the PTC to stamp out or end corruption and the evil it breeds.[90]
 The probability that there would be difficulty in unearthing evidence or that
the earlier reports involving the earlier administrations were already inquired into is
beside the point. Obviously, deceased presidents and cases which have already
prescribed can no longer be the subjects of inquiry by the PTC. Neither is the PTC
expected to conduct simultaneous investigations of previous administrations, given
the bodys limited time and resources. The law does not require the impossible (Lex
non cogit ad impossibilia).[91]

Given the foregoing physical and legal impossibility, the Court logically
recognizes the unfeasibility of investigating almost a centurys worth of graft
cases. However, the fact remains that Executive Order No. 1 suffers from arbitrary
classification. The PTC, to be true to its mandate of searching for the truth, must not
exclude the other past administrations. The PTC must, at least, have the authority to
investigate all past administrations. While reasonable prioritization is permitted, it
should not be arbitrary lest it be struck down for being unconstitutional. In the often
quoted language of Yick Wo v. Hopkins,[92]

Though the law itself be fair on its face and impartial in

appearance, yet, if applied and administered by public authority with
an evil eye and an unequal hand, so as practically to make unjust and
illegal discriminations between persons in similar circumstances,
material to their rights, the denial of equal justice is still within the
prohibition of the constitution. [Emphasis supplied]

It could be argued that considering that the PTC is an ad hoc body, its scope
is limited. The Court, however, is of the considered view that although its focus is
restricted, the constitutional guarantee of equal protection under the laws should not
in any way be circumvented. The Constitution is the fundamental and paramount
law of the nation to which all other laws must conform and in accordance with which
all private rights determined and all public authority administered.[93] Laws that do
not conform to the Constitution should be stricken down for being
unconstitutional.[94] While the thrust of the PTC is specific, that is, for investigation
of acts of graft and corruption, Executive Order No. 1, to survive, must be read
together with the provisions of the Constitution. To exclude the earlier
administrations in the guise of substantial distinctions would only confirm the
petitioners lament that the subject executive order is only an adventure in partisan
hostility. In the case of US v. Cyprian,[95] it was written: A rather limited number of
such classifications have routinely been held or assumed to be arbitrary; those
include: race, national origin, gender, political activity or membership in a political
party, union activity or membership in a labor union, or more generally the exercise
of first amendment rights.

To reiterate, in order for a classification to meet the requirements of

constitutionality, it must include or embrace all persons who naturally belong to the
class.[96] Such a classification must not be based on existing circumstances only, or
so constituted as to preclude additions to the number included within a class, but
must be of such a nature as to embrace all those who may thereafter be in similar
circumstances and conditions. Furthermore, all who are in situations and
circumstances which are relative to the discriminatory legislation and which are
indistinguishable from those of the members of the class must be brought under the
influence of the law and treated by it in the same way as are the members of the
class.[97]

The Court is not unaware that mere underinclusiveness is not fatal to the
validity of a law under the equal protection clause.[98] Legislation is not
unconstitutional merely because it is not all-embracing and does not include all the
evils within its reach.[99] It has been written that a regulation challenged under the
equal protection clause is not devoid of a rational predicate simply because it
happens to be incomplete.[100] In several instances, the underinclusiveness was not
considered a valid reason to strike down a law or regulation where the purpose can
be attained in future legislations or regulations. These cases refer to the step by step
process.[101] With regard to equal protection claims, a legislature does not run the
risk of losing the entire remedial scheme simply because it fails, through
inadvertence or otherwise, to cover every evil that might conceivably have been
attacked.[102]

In Executive Order No. 1, however, there is no inadvertence. That the

previous administration was picked out was deliberate and intentional as can be
gleaned from the fact that it was underscored at least three times in the assailed
executive order. It must be noted that Executive Order No. 1 does not even mention
any particular act, event or report to be focused on unlike the investigative
commissions created in the past. The equal protection clause is violated by
purposeful and intentional discrimination.[103]

To disprove petitioners contention that there is deliberate discrimination, the

OSG clarifies that the commission does not only confine itself to cases of large scale
graft and corruption committed during the previous administration.[104] The OSG
points to Section 17 of Executive Order No. 1, which provides:

SECTION 17. Special Provision Concerning Mandate. If and when in the

judgment of the President there is a need to expand the mandate of the
Commission as defined in Section 1 hereof to include the investigation of
cases and instances of graft and corruption during the prior
administrations, such mandate may be so extended accordingly by way of
a supplemental Executive Order.

The Court is not convinced. Although Section 17 allows the President the
discretion to expand the scope of investigations of the PTC so as to include the acts
of graft and corruption committed in other past administrations, it does not guarantee
that they would be covered in the future. Such expanded mandate of the commission
will still depend on the whim and caprice of the President. If he would decide not to
include them, the section would then be meaningless. This will only fortify the fears
of the petitioners that the Executive Order No. 1 was crafted to tailor-fit the
prosecution of officials and personalities of the Arroyo administration.[105]

The Court tried to seek guidance from the pronouncement in the case of Virata
v. Sandiganbayan,[106] that the PCGG Charter (composed of Executive Orders Nos.
1, 2 and 14) does not violate the equal protection clause. The decision, however, was
devoid of any discussion on how such conclusory statement was arrived at, the
principal issue in said case being only the sufficiency of a cause of action.

A final word
 The issue that seems to take center stage at present is - whether or not the
Supreme Court, in the exercise of its constitutionally mandated power of Judicial
Review with respect to recent initiatives of the legislature and the executive
department, is exercising undue interference. Is the Highest Tribunal, which is
expected to be the protector of the Constitution, itself guilty of violating fundamental
tenets like the doctrine of separation of powers? Time and again, this issue has been
addressed by the Court, but it seems that the present political situation calls for it to
once again explain the legal basis of its action lest it continually be accused of being
a hindrance to the nations thrust to progress.

The Philippine Supreme Court, according to Article VIII, Section 1 of the

1987 Constitution, is vested with Judicial Power that includes 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
of abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the government.

Furthermore, in Section 4(2) thereof, it is vested with the power of judicial

review which is the power to declare a treaty, international or executive agreement,
law, presidential decree, proclamation, order, instruction, ordinance, or regulation
unconstitutional. This power also includes the duty to rule on the constitutionality of
the application, or operation of presidential decrees, proclamations, orders,
instructions, ordinances, and other regulations. These provisions, however, have
been fertile grounds of conflict between the Supreme Court, on one hand, and the
two co-equal bodies of government, on the other. Many times the Court has been
accused of asserting superiority over the other departments.

To answer this accusation, the words of Justice Laurel would be a good source
of enlightenment, to wit: And when the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority over the other departments; it does not
in reality nullify or invalidate an act of the legislature, but only asserts the solemn
and sacred obligation assigned to it by the Constitution to determine conflicting
claims of authority under the Constitution and to establish for the parties in an actual
controversy the rights which that instrument secures and guarantees to them. [107]
 Thus, the Court, in exercising its power of judicial review, is not imposing its
own will upon a co-equal body but rather simply making sure that any act of
government is done in consonance with the authorities and rights allocated to it by
the Constitution. And, if after said review, the Court finds no constitutional
violations of any sort, then, it has no more authority of proscribing the actions under
review. Otherwise, the Court will not be deterred to pronounce said act as void and
unconstitutional.

It cannot be denied that most government actions are inspired with noble
intentions, all geared towards the betterment of the nation and its people. But then
again, it is important to remember this ethical principle: The end does not justify the
means. No matter how noble and worthy of admiration the purpose of an act, but if
the means to be employed in accomplishing it is simply irreconcilable with
constitutional parameters, then it cannot still be allowed.[108] The Court cannot just
turn a blind eye and simply let it pass. It will continue to uphold the Constitution and
its enshrined principles.

The Constitution must ever remain supreme. All must bow to the
mandate of this law. Expediency must not be allowed to sap its strength
nor greed for power debase its rectitude.[109]

Lest it be misunderstood, this is not the death knell for a truth commission as
nobly envisioned by the present administration. Perhaps a revision of the executive
issuance so as to include the earlier past administrations would allow it to pass
the test of reasonableness and not be an affront to the Constitution. Of all the
branches of the government, it is the judiciary which is the most interested in
knowing the truth and so it will not allow itself to be a hindrance or obstacle to its
attainment. It must, however, be emphasized that the search for the truth must be
within constitutional bounds for ours is still a government of laws and not of men. [110]

WHEREFORE, the petitions are GRANTED. Executive Order No. 1 is

hereby declared UNCONSTITUTIONAL insofar as it is violative of the equal
protection clause of the Constitution.

As also prayed for, the respondents are hereby ordered to cease and desist
from carrying out the provisions of Executive Order No. 1.
SO ORDERED.

G.R. Nos. 120865-71 December 7, 1995

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE HERCULANO TECH, PRESIDING JUDGE, BRANCH 70,
REGIONAL TRIAL COURT OF BINANGONAN RIZAL; FLEET DEVELOPMENT, INC. and
CARLITO ARROYO; THE MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B.
PACIS, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE AURELIO C. TRAMPE, PRESIDING JUDGE, BRANCH 163,
REGIONAL TRIAL COURT OF PASIG; MANILA MARINE LIFE BUSINESS RESOURCES, INC.
represented by, MR. TOBIAS REYNALD M. TIANGCO; MUNICIPALITY OF TAGUIG, METRO
MANILA and/or MAYOR RICARDO D. PAPA, JR., respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE ALEJANDRO A. MARQUEZ, PRESIDING JUDGE,
BRANCH 79, REGIONAL TRIAL COURT OF MORONG, RIZAL; GREENFIELD VENTURES
INDUSTRIAL DEVELOPMENT CORPORATION and R. J. ORION DEVELOPMENT
CORPORATION; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA
VEGA, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE MANUEL S. PADOLINA, PRESIDING JUDGE, BRANCH
162, REGIONAL TRIAL COURT OF PASIG, METRO MANILA; IRMA FISHING & TRADING
CORP.; ARTM FISHING CORP.; BDR CORPORATION, MIRT CORPORATION and TRIM
CORPORATION; MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B.
PACIS, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78,
REGIONAL TRIAL COURT OF MORONG, RIZAL; BLUE LAGOON FISHING CORP. and ALCRIS
CHICKEN GROWERS, INC.; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE
LA VEGA, respondents.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78,
REGIONAL TRIAL COURT OF MORONG, RIZAL; AGP FISH VENTURES, INC., represented by
its PRESIDENT ALFONSO PUYAT; MUNICIPALITY OF JALA-JALA and/or MAYOR
WALFREDO M. DE LA VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE EUGENIO S. LABITORIA, PRESIDING JUDGE, BRANCH
161, REGIONAL TRIAL COURT OF PASIG, METRO MANILA; SEA MAR TRADING CO. INC.;
EASTERN LAGOON FISHING CORP.; MINAMAR FISHING CORP.; MUNICIPALITY OF
BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents.

HERMOSISIMA, JR., J.:

It is difficult for a man, scavenging on the garbage dump created by affluence and profligate
consumption and extravagance of the rich or fishing in the murky waters of the Pasig River and the
Laguna Lake or making a clearing in the forest so that he can produce food for his family, to
understand why protecting birds, fish, and trees is more important than protecting him and keeping
his family alive.

How do we strike a balance between environmental protection, on the one hand, and the individual
personal interests of people, on the other?

Towards environmental protection and ecology, navigational safety, and sustainable development,
Republic Act No. 4850 created the "Laguna Lake Development Authority." This Government Agency
is supposed to carry out and effectuate the aforesaid declared policy, so as to accelerate the
development and balanced growth of the Laguna Lake area and the surrounding provinces, cities
and towns, in the act clearly named, within the context of the national and regional plans and policies
for social and economic development.

Presidential Decree No. 813 of former President Ferdinand E. Marcos amended certain sections of
Republic Act No. 4850 because of the concern for the rapid expansion of Metropolitan Manila, the
suburbs and the lakeshore towns of Laguna de Bay, combined with current and prospective uses of
the lake for municipal-industrial water supply, irrigation, fisheries, and the like. Concern on the part of
the Government and the general public over: — the environment impact of development on the
water quality and ecology of the lake and its related river systems; the inflow of polluted water from
the Pasig River, industrial, domestic and agricultural wastes from developed areas around the lake;
the increasing urbanization which induced the deterioration of the lake, since water quality studies
have shown that the lake will deteriorate further if steps are not taken to check the same; and the
floods in Metropolitan Manila area and the lakeshore towns which will influence the hydraulic system
of Laguna de Bay, since any scheme of controlling the floods will necessarily involve the lake and its
river systems, — likewise gave impetus to the creation of the Authority.

Section 1 of Republic Act No. 4850 was amended to read as follows:

Sec. 1. Declaration of Policy. It is hereby declared to be the national policy to

promote, and accelerate the development and balanced growth of the Laguna Lake
area and the surrounding provinces, cities and towns hereinafter referred to as the
region, within the context of the national and regional plans and policies for social
and economic development and to carry out the development of the Laguna Lake
region with due regard and adequate provisions for environmental management and
control, preservation of the quality of human life and ecological systems, and the
prevention of undue ecological disturbances, deterioration and pollution. 1

Special powers of the Authority, pertinent to the issues in this case, include:
Sec. 3. Section 4 of the same Act is hereby further amended by adding thereto seven
new paragraphs to be known as paragraphs (j), (k), (l), (m), (n), (o), and (p) which
shall read as follows:

xxx xxx xxx

(j) The provisions of existing laws to the contrary notwithstanding, to

engage in fish production and other aqua-culture projects in Laguna
de Bay and other bodies of water within its jurisdiction and in
pursuance thereof to conduct studies and make experiments,
whenever necessary, with the collaboration and assistance of the
Bureau of Fisheries and Aquatic Resources, with the end in view of
improving present techniques and practices. Provided, that until
modified, altered or amended by the procedure provided in the
following sub-paragraph, the present laws, rules and permits or
authorizations remain in force;

(k) For the purpose of effectively regulating and monitoring activities

in Laguna de Bay, the Authority shall have exclusive jurisdiction to
issue new permit for the use of the lake waters for any projects or
activities in or affecting the said lake including navigation,
construction, and operation of fishpens, fish enclosures, fish corrals
and the like, and to impose necessary safeguards for lake quality
control and management and to collect necessary fees for said
activities and projects: Provided, That the fees collected for fisheries
may be shared between the Authority and other government
agencies and political sub-divisions in such proportion as may be
determined by the President of the Philippines upon recommendation
of the Authority's Board: Provided, further, That the Authority's Board
may determine new areas of fishery development or activities which it
may place under the supervision of the Bureau of Fisheries and
Aquatic Resources taking into account the overall development plans
and programs for Laguna de Bay and related bodies of
water: Provided, finally, That the Authority shall subject to the
approval of the President of the Philippines promulgate such rules
and regulations which shall govern fisheries development activities in
Laguna de Bay which shall take into consideration among others the
following: socio-economic amelioration of bonafide resident fishermen
whether individually or collectively in the form of cooperatives,
lakeshore town development, a master plan for fishpen construction
and operation, communal fishing ground for lake shore town
residents, and preference to lake shore town residents in hiring
laborer for fishery projects;

(l) To require the cities and municipalities embraced within the region
to pass appropriate zoning ordinances and other regulatory measures
necessary to carry out the objectives of the Authority and enforce the
same with the assistance of the Authority;

(m) The provisions of existing laws to the contrary notwithstanding, to

exercise water rights over public waters within the Laguna de Bay
region whenever necessary to carry out the Authority's projects;
 (n) To act in coordination with existing governmental agencies in
establishing water quality standards for industrial, agricultural and
municipal waste discharges into the lake and to cooperate with said
existing agencies of the government of the Philippines in enforcing
such standards, or to separately pursue enforcement and penalty
actions as provided for in Section 4 (d) and Section 39-A of this
Act: Provided, That in case of conflict on the appropriate water quality
standard to be enforced such conflict shall be resolved thru the NEDA
Board. 2

To more effectively perform the role of the Authority under Republic Act No. 4850, as though
Presidential Decree No. 813 were not thought to be completely effective, the Chief Executive, feeling
that the land and waters of the Laguna Lake Region are limited natural resources requiring judicious
management to their optimal utilization to insure renewability and to preserve the ecological balance,
the competing options for the use of such resources and conflicting jurisdictions over such uses
having created undue constraints on the institutional capabilities of the Authority in the light of the
limited powers vested in it by its charter, Executive Order No. 927 further defined and enlarged the
functions and powers of the Authority and named and enumerated the towns, cities and provinces
encompassed by the term "Laguna de Bay Region".

Also, pertinent to the issues in this case are the following provisions of Executive Order No. 927
which include in particular the sharing of fees:

Sec 2. Water Rights Over Laguna de Bay and Other Bodies of Water within the Lake
Region: To effectively regulate and monitor activities in the Laguna de Bay region,
the Authority shall have exclusive jurisdiction to issue permit for the use of all surface
water for any projects or activities in or affecting the said region including navigation,
construction, and operation of fishpens, fish enclosures, fish corrals and the like.

For the purpose of this Executive Order, the term "Laguna de Bay Region" shall refer
to the Provinces of Rizal and Laguna; the Cities of San Pablo, Pasay, Caloocan,
Quezon, Manila and Tagaytay; the towns of Tanauan, Sto. Tomas and Malvar in
Batangas Province; the towns of Silang and Carmona in Cavite Province; the town of
Lucban in Quezon Province; and the towns of Marikina, Pasig, Taguig, Muntinlupa,
and Pateros in Metro Manila.

Sec 3. Collection of Fees. The Authority is hereby empowered to collect fees for the
use of the lake water and its tributaries for all beneficial purposes including but not
limited to fisheries, recreation, municipal, industrial, agricultural, navigation, irrigation,
and waste disposal purpose; Provided, that the rates of the fees to be collected, and
the sharing with other government agencies and political subdivisions, if necessary,
shall be subject to the approval of the President of the Philippines upon
recommendation of the Authority's Board, except fishpen fee, which will be shared in
the following manner; 20 percent of the fee shall go to the lakeshore local
governments, 5 percent shall go to the Project Development Fund which shall be
administered by a Council and the remaining 75 percent shall constitute the share of
LLDA. However, after the implementation within the three-year period of the Laguna
Lake Fishery Zoning and Management Plan, the sharing will be modified as
follows: 35 percent of the fishpen fee goes to the lakeshore local governments, 5
percent goes to the Project Development Fund and the remaining 60 percent shall be
retained by LLDA; Provided, however, that the share of LLDA shall form part of its
 corporate funds and shall not be remitted to the National Treasury as an exception to
the provisions of Presidential Decree No. 1234. (Emphasis supplied)

It is important to note that Section 29 of Presidential Decree No. 813 defined the term "Laguna Lake"
in this manner:

Sec 41. Definition of Terms.

(11) Laguna Lake or Lake. Whenever Laguna Lake or lake is used in this Act, the
same shall refer to Laguna de Bay which is that area covered by the lake water when
it is at the average annual maximum lake level of elevation 12.50 meters, as referred
to a datum 10.00 meters below mean lower low water (M.L.L.W). Lands located at
and below such elevation are public lands which form part of the bed of said lake.

Then came Republic Act No. 7160, the Local Government Code of 1991. The municipalities in the
Laguna Lake Region interpreted the provisions of this law to mean that the newly passed law gave
municipal governments the exclusive jurisdiction to issue fishing privileges within their municipal
waters because R.A. 7160 provides:

Sec. 149. Fishery Rentals, Fees and Charges.

(a) Municipalities shall have the exclusive authority to grant fishery privileges in the
municipal waters and impose rental fees or charges therefor in accordance with the
provisions of this Section.

(b) The Sangguniang Bayan may:

(1) Grant fishing privileges to erect fish corrals, oyster, mussel or

other aquatic beds or bangus fry areas, within a definite zone of the
municipal waters, as determined by it; . . . .

(2) Grant privilege to gather, take or catch bangus fry, prawn fry
or kawag-kawag or fry of other species and fish from the municipal
waters by nets, traps or other fishing gears to marginal fishermen free
from any rental fee, charges or any other imposition whatsoever.

xxx xxx xxx

Sec. 447. Power, Duties, Functions and Compensation. . . . .

xxx xxx xxx

(XI) Subject to the provisions of Book II of this Code, grant exclusive

privileges of constructing fish corrals or fishpens, or the taking or
catching of bangus fry, prawn fry or kawag-kawag or fry of any
species or fish within the municipal waters.

xxx xxx xxx

Municipal governments thereupon assumed the authority to issue fishing privileges and fishpen
permits. Big fishpen operators took advantage of the occasion to establish fishpens and fishcages to
the consternation of the Authority. Unregulated fishpens and fishcages, as of July, 1995, occupied
almost one-third of the entire lake water surface area, increasing the occupation drastically from
7,000 hectares in 1990 to almost 21,000 hectares in 1995. The Mayor's permit to construct fishpens
and fishcages were all undertaken in violation of the policies adopted by the Authority on fishpen
zoning and the Laguna Lake carrying capacity.

To be sure, the implementation by the lakeshore municipalities of separate independent policies in

the operation of fishpens and fishcages within their claimed territorial municipal waters in the lake
and their indiscriminate grant of fishpen permits have already saturated the lake area with fishpens,
thereby aggravating the current environmental problems and ecological stress of Laguna Lake.

In view of the foregoing circumstances, the Authority served notice to the general public that:

In compliance with the instructions of His Excellency PRESIDENT FIDEL V. RAMOS

given on June 23, 1993 at Pila, Laguna pursuant to Republic Act 4850 as amended
by Presidential Decree 813 and Executive Order 927 series of 1983 and in line with
the policies and programs of the Presidential Task Force on Illegal Fishpens and
Illegal Fishing, the general public is hereby notified that:

1. All fishpens, fishcages and other aqua-culture structures in the Laguna de Bay
Region, which were not registered or to which no application for registration and/or
permit has been filed with Laguna Lake Development Authority as of March 31, 1993
are hereby declared outrightly as illegal.

2. All fishpens, fishcages and other aqua-culture structures so declared as illegal

shall be subject to demolition which shall be undertaken by the Presidential Task
Force for Illegal Fishpen and Illegal Fishing.

3. Owners of fishpens, fishcages and other aqua-culture structures declared as

illegal shall, without prejudice to demolition of their structures be criminally charged in
accordance with Section 39-A of Republic Act 4850 as amended by P.D. 813 for
violation of the same laws. Violations of these laws carries a penalty of imprisonment
of not exceeding 3 years or a fine not exceeding Five Thousand Pesos or both at the
discretion of the court.

All operators of fishpens, fishcages and other aqua-culture structures declared as

illegal in accordance with the foregoing Notice shall have one (1) month on or before
27 October 1993 to show cause before the LLDA why their said fishpens, fishcages
and other aqua-culture structures should not be demolished/dismantled.

One month, thereafter, the Authority sent notices to the concerned owners of the illegally
constructed fishpens, fishcages and other aqua-culture structures advising them to dismantle their
respective structures within 10 days from receipt thereof, otherwise, demolition shall be effected.

Reacting thereto, the affected fishpen owners filed injunction cases against the Authority before
various regional trial courts, to wit: (a) Civil Case No. 759-B, for Prohibition, Injunction and Damages,
Regional Trial Court, Branch 70, Binangonan, Rizal, filed by Fleet Development, Inc. and Carlito
Arroyo; (b) Civil Case No. 64049, for Injunction, Regional Trial Court, Branch 162, Pasig, filed by
IRMA Fishing and Trading Corp., ARTM Fishing Corp., BDR Corp., MIRT Corp. and TRIM Corp.; (c)
Civil Case No. 566, for Declaratory Relief and Injunction, Regional Trial Court, Branch 163, Pasig,
filed by Manila Marine Life Business Resources, Inc. and Tobias Reynaldo M. Tianco; (d) Civil Case
No. 556-M, for Prohibition, Injunction and Damages, Regional Trial Court, Branch 78, Morong, Rizal,
filed by AGP Fishing Ventures, Inc.; (e) Civil Case No. 522-M, for Prohibition, Injunction and
Damages, Regional Trial Court, Branch 78, Morong, Rizal, filed by Blue Lagoon and Alcris Chicken
Growers, Inc.; (f) Civil Case No. 554-, for Certiorari and Prohibition, Regional Trial Court, Branch 79,
Morong, Rizal, filed by Greenfields Ventures Industrial Corp. and R.J. Orion Development Corp.; and
(g) Civil Case No. 64124, for Injunction, Regional Trial Court, Branch 15, Pasig, filed by SEA-MAR
Trading Co., Inc. and Eastern Lagoon Fishing Corp. and Minamar Fishing Corporation.

The Authority filed motions to dismiss the cases against it on jurisdictional grounds. The motions to
dismiss were invariably denied. Meanwhile, temporary restraining order/writs of preliminary
mandatory injunction were issued in Civil Cases Nos. 64124, 759 and 566 enjoining the Authority
from demolishing the fishpens and similar structures in question.

Hence, the herein petition for certiorari, prohibition and injunction, G.R. Nos. 120865-71, were filed
by the Authority with this court. Impleaded as parties-respondents are concerned regional trial courts
and respective private parties, and the municipalities and/or respective Mayors of Binangonan,
Taguig and Jala-jala, who issued permits for the construction and operation of fishpens in Laguna de
Bay. The Authority sought the following reliefs, viz.:

(A) Nullification of the temporary restraining order/writs of preliminary injunction

issued in Civil Cases Nos. 64125, 759 and 566;

(B) Permanent prohibition against the regional trial courts from exercising jurisdiction
over cases involving the Authority which is a co-equal body;

(C) Judicial pronouncement that R.A. 7610 (Local Government Code of 1991) did not
repeal, alter or modify the provisions of R.A. 4850, as amended, empowering the
Authority to issue permits for fishpens, fishcages and other aqua-culture structures in
Laguna de Bay and that, the Authority the government agency vested with exclusive
authority to issue said permits.

By this Court's resolution of May 2, 1994, the Authority's consolidated petitions were referred to the
Court of Appeals.

In a Decision, dated June 29, 1995, the Court of Appeals dismissed the Authority's consolidated
petitions, the Court of Appeals holding that: (A) LLDA is not among those quasi-judicial agencies of
government whose decision or order are appealable only to the Court of Appeals; (B) the LLDA
charter does vest LLDA with quasi-judicial functions insofar as fishpens are concerned; (C) the
provisions of the LLDA charter insofar as fishing privileges in Laguna de Bay are concerned had
been repealed by the Local Government Code of 1991; (D) in view of the aforesaid repeal, the
power to grant permits devolved to and is now vested with their respective local government units
concerned.

Not satisfied with the Court of Appeals decision, the Authority has returned to this Court charging the
following errors:

1. THE HONORABLE COURT OF APPEALS PROBABLY COMMITTED AN ERROR

WHEN IT RULED THAT THE LAGUNA LAKE DEVELOPMENT AUTHORITY IS
NOT A QUASI-JUDICIAL AGENCY.

2. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR

WHEN IT RULED THAT R.A. 4850 AS AMENDED BY P.D. 813 AND E.O. 927
SERIES OF 1983 HAS BEEN REPEALED BY REPUBLIC ACT 7160. THE SAID
 RULING IS CONTRARY TO ESTABLISHED PRINCIPLES AND JURISPRUDENCE
OF STATUTORY CONSTRUCTION.

3. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR

WHEN IT RULED THAT THE POWER TO ISSUE FISHPEN PERMITS IN LAGUNA
DE BAY HAS BEEN DEVOLVED TO CONCERNED (LAKESHORE) LOCAL
GOVERNMENT UNITS.

We take a simplistic view of the controversy. Actually, the main and only issue posed is: Which
agency of the Government — the Laguna Lake Development Authority or the towns and
municipalities comprising the region — should exercise jurisdiction over the Laguna Lake and its
environs insofar as the issuance of permits for fishery privileges is concerned?

Section 4 (k) of the charter of the Laguna Lake Development Authority, Republic Act No. 4850, the
provisions of Presidential Decree No. 813, and Section 2 of Executive Order No. 927, cited above,
specifically provide that the Laguna Lake Development Authority shall have exclusive jurisdiction to
issue permits for the use of all surface water for any projects or activities in or affecting the said
region, including navigation, construction, and operation of fishpens, fish enclosures, fish corrals and
the like. On the other hand, Republic Act No. 7160, the Local Government Code of 1991, has
granted to the municipalities the exclusive authority to grant fishery privileges in municipal waters.
The Sangguniang Bayan may grant fishery privileges to erect fish corrals, oyster, mussels or other
aquatic beds or bangus fry area within a definite zone of the municipal waters.

We hold that the provisions of Republic Act No. 7160 do not necessarily repeal the aforementioned
laws creating the Laguna Lake Development Authority and granting the latter water rights authority
over Laguna de Bay and the lake region.

The Local Government Code of 1991 does not contain any express provision which categorically
expressly repeal the charter of the Authority. It has to be conceded that there was no intent on the
part of the legislature to repeal Republic Act No. 4850 and its amendments. The repeal of laws
should be made clear and expressed.

It has to be conceded that the charter of the Laguna Lake Development Authority constitutes a
special law. Republic Act No. 7160, the Local Government Code of 1991, is a general law. It is basic
in statutory construction that the enactment of a later legislation which is a general law cannot be
construed to have repealed a special law. It is a well-settled rule in this jurisdiction that "a special
statute, provided for a particular case or class of cases, is not repealed by a subsequent statute,
general in its terms, provisions and application, unless the intent to repeal or alter is manifest,
although the terms of the general law are broad enough to include the cases embraced in the
special law." 3

Where there is a conflict between a general law and a special statute, the special statute should
prevail since it evinces the legislative intent more clearly than the general statute. The special law is
to be taken as an exception to the general law in the absence of special circumstances forcing a
contrary conclusion. This is because implied repeals are not favored and as much as possible, effect
must be given to all enactments of the legislature. A special law cannot be repealed, amended or
altered by a subsequent general law by mere implication. 4

Thus, it has to be concluded that the charter of the Authority should prevail over the Local
Government Code of 1991.
Considering the reasons behind the establishment of the Authority, which are environmental
protection, navigational safety, and sustainable development, there is every indication that the
legislative intent is for the Authority to proceed with its mission.

We are on all fours with the manifestation of petitioner Laguna Lake Development Authority that
"Laguna de Bay, like any other single body of water has its own unique natural ecosystem. The 900
km² lake surface water, the eight (8) major river tributaries and several other smaller rivers that drain
into the lake, the 2,920 km² basin or watershed transcending the boundaries of Laguna and Rizal
provinces, greater portion of Metro Manila, parts of Cavite, Batangas, and Quezon provinces,
constitute one integrated delicate natural ecosystem that needs to be protected with uniform set of
policies; if we are to be serious in our aims of attaining sustainable development. This is an
exhaustible natural resource — a very limited one — which requires judicious management and
optimal utilization to ensure renewability and preserve its ecological integrity and balance."

"Managing the lake resources would mean the implementation of a national policy geared towards
the protection, conservation, balanced growth and sustainable development of the region with due
regard to the inter-generational use of its resources by the inhabitants in this part of the earth. The
authors of Republic Act 4850 have foreseen this need when they passed this LLDA law — the
special law designed to govern the management of our Laguna de Bay lake resources."

"Laguna de Bay therefore cannot be subjected to fragmented concepts of management policies

where lakeshore local government units exercise exclusive dominion over specific portions of the
lake water. The garbage thrown or sewage discharged into the lake, abstraction of water therefrom
or construction of fishpens by enclosing its certain area, affect not only that specific portion but the
entire 900 km² of lake water. The implementation of a cohesive and integrated lake water resource
management policy, therefore, is necessary to conserve, protect and sustainably develop Laguna de
Bay." 5

The power of the local government units to issue fishing privileges was clearly granted for revenue
purposes. This is evident from the fact that Section 149 of the New Local Government Code
empowering local governments to issue fishing permits is embodied in Chapter 2, Book II, of
Republic Act No. 7160 under the heading, "Specific Provisions On The Taxing And Other Revenue
Raising Power Of Local Government Units."

On the other hand, the power of the Authority to grant permits for fishpens, fishcages and other
aqua-culture structures is for the purpose of effectively regulating and monitoring activities in the
Laguna de Bay region (Section 2, Executive Order No. 927) and for lake quality control and
management. 6 It does partake of the nature of police power which is the most pervasive, the least
limitable and the most demanding of all State powers including the power of taxation. Accordingly, the
charter of the Authority which embodies a valid exercise of police power should prevail over the Local
Government Code of 1991 on matters affecting Laguna de Bay.

There should be no quarrel over permit fees for fishpens, fishcages and other aqua-culture
structures in the Laguna de Bay area. Section 3 of Executive Order No. 927 provides for the proper
sharing of fees collected.

In respect to the question as to whether the Authority is a quasi-judicial agency or not, it is our
holding that, considering the provisions of Section 4 of Republic Act No. 4850 and Section 4 of
Executive Order No. 927, series of 1983, and the ruling of this Court in Laguna Lake Development
Authority vs. Court of Appeals, 231 SCRA 304, 306, which we quote:

xxx xxx xxx

 As a general rule, the adjudication of pollution cases generally pertains to the
Pollution Adjudication Board (PAB), except in cases where the special law provides
for another forum. It must be recognized in this regard that the LLDA, as a
specialized administrative agency, is specifically mandated under Republic Act No.
4850 and its amendatory laws to carry out and make effective the declared national
policy of promoting and accelerating the development and balanced growth of the
Laguna Lake area and the surrounding provinces of Rizal and Laguna and the cities
of San Pablo, Manila, Pasay, Quezon and Caloocan with due regard and adequate
provisions for environmental management and control, preservation of the quality of
human life and ecological systems, and the prevention of undue ecological
disturbances, deterioration and pollution. Under such a broad grant of power and
authority, the LLDA, by virtue of its special charter, obviously has the responsibility to
protect the inhabitants of the Laguna Lake region from the deleterious effects of
pollutants emanating from the discharge of wastes from the surrounding areas. In
carrying out the aforementioned declared policy, the LLDA is mandated, among
others, to pass upon and approve or disapprove all plans, programs, and projects
proposed by local government offices/agencies within the region, public corporations,
and private persons or enterprises where such plans, programs and/or projects are
related to those of the LLDA for the development of the region.

xxx xxx xxx

. . . . While it is a fundamental rule that an administrative agency has only such

powers as are expressly granted to it by law, it is likewise a settled rule that an
administrative agency has also such powers as are necessarily implied in the
exercise of its express powers. In the exercise, therefore, of its express powers
under its charter, as a regulatory and quasi-judicial body with respect to pollution
cases in the Laguna Lake region, the authority of the LLDA to issue a "cease and
desist order" is, perforce, implied. Otherwise, it may well be reduced to a "toothless"
paper agency.

there is no question that the Authority has express powers as a regulatory and quasi-judicial
body in respect to pollution cases with authority to issue a "cease and desist order" and on
matters affecting the construction of illegal fishpens, fishcages and other aqua-culture
structures in Laguna de Bay. The Authority's pretense, however, that it is co-equal to the
Regional Trial Courts such that all actions against it may only be instituted before the Court
of Appeals cannot be sustained. On actions necessitating the resolution of legal questions
affecting the powers of the Authority as provided for in its charter, the Regional Trial Courts
have jurisdiction.

In view of the foregoing, this Court holds that Section 149 of Republic Act No. 7160, otherwise
known as the Local Government Code of 1991, has not repealed the provisions of the charter of the
Laguna Lake Development Authority, Republic Act No. 4850, as amended. Thus, the Authority has
the exclusive jurisdiction to issue permits for the enjoyment of fishery privileges in Laguna de Bay to
the exclusion of municipalities situated therein and the authority to exercise such powers as are by
its charter vested on it.

Removal from the Authority of the aforesaid licensing authority will render nugatory its avowed
purpose of protecting and developing the Laguna Lake Region. Otherwise stated, the abrogation of
this power would render useless its reason for being and will in effect denigrate, if not abolish, the
Laguna Lake Development Authority. This, the Local Government Code of 1991 had never intended
to do.
WHEREFORE, the petitions for prohibition, certiorari and injunction are hereby granted, insofar as
they relate to the authority of the Laguna Lake Development Authority to grant fishing privileges
within the Laguna Lake Region.

The restraining orders and/or writs of injunction issued by Judge Arturo Marave, RTC, Branch 78,
Morong, Rizal; Judge Herculano Tech, RTC, Branch 70, Binangonan, Rizal; and Judge Aurelio
Trampe, RTC, Branch 163, Pasig, Metro Manila, are hereby declared null and void and ordered set
aside for having been issued with grave abuse of discretion.

The Municipal Mayors of the Laguna Lake Region are hereby prohibited from issuing permits to
construct and operate fishpens, fishcages and other aqua-culture structures within the Laguna Lake
Region, their previous issuances being declared null and void. Thus, the fishing permits issued by
Mayors Isidro B. Pacis, Municipality of Binangonan; Ricardo D. Papa, Municipality of Taguig; and
Walfredo M. de la Vega, Municipality of Jala-jala, specifically, are likewise declared null and void and
ordered cancelled.

The fishpens, fishcages and other aqua-culture structures put up by operators by virtue of permits
issued by Municipal Mayors within the Laguna Lake Region, specifically, permits issued to Fleet
Development, Inc. and Carlito Arroyo; Manila Marine Life Business Resources, Inc., represented by,
Mr. Tobias Reynald M. Tiangco; Greenfield Ventures Industrial Development Corporation and R.J.
Orion Development Corporation; IRMA Fishing And Trading Corporation, ARTM Fishing
Corporation, BDR Corporation, Mirt Corporation and Trim Corporation; Blue Lagoon Fishing
Corporation and ALCRIS Chicken Growers, Inc.; AGP Fish Ventures, Inc., represented by its
President Alfonso Puyat; SEA MAR Trading Co., Inc., Eastern Lagoon Fishing Corporation, and
MINAMAR Fishing Corporation, are hereby declared illegal structures subject to demolition by the
Laguna Lake Development Authority.

SO ORDERED.

Davide, Jr., Bellosillo and Kapunan, JJ., concur.

Separate Opinions

PADILLA, J., concurring:

I fully concur with the decision written by Mr. Justice R. Hermosisima, Jr.. I would only like to stress
what the decision already states, i.e., that the local government units in the Laguna Lake area are
not precluded from imposing permits on fishery operations for revenue raising purposes of such local
government units. In other words, while the exclusive jurisdiction to determine whether or not
projects or activities in the lake area should be allowed, as well as their regulation, is with the
Laguna Lake Development Authority, once the Authority grants a permit, the permittee may still be
subjected to an additional local permit or license for revenue purposes of the local government units
concerned. This approach would clearly harmonize the special law, Rep. Act No. 4850, as amended,
with Rep. Act No. 7160, the Local Government Code. It will also enable small towns and
municipalities in the lake area, like Jala-Jala, to rise to some level of economic viability.

FIRST DIVISION

G.R. No. 151908 August 12, 2003

SMART COMMUNICATIONS, INC. (SMART) and PILIPINO TELEPHONE CORPORATION

(PILTEL), petitioners,
vs.
NATIONAL TELECOMMUNICATIONS COMMISSION (NTC), respondent.

x---------------------------------------------------------x

G.R. No. 152063 August 12, 2003

GLOBE TELECOM, INC. (GLOBE) and ISLA COMMUNICATIONS CO., INC.

(ISLACOM), petitioners,
vs.
COURT OF APPEALS (The Former 6th Division) and the NATIONAL TELECOMMUNICATIONS
COMMISSION, respondents.

YNARES-SANTIAGO, J.:

Pursuant to its rule-making and regulatory powers, the National Telecommunications Commission
(NTC) issued on June 16, 2000 Memorandum Circular No. 13-6-2000, promulgating rules and
regulations on the billing of telecommunications services. Among its pertinent provisions are the
following:

(1) The billing statements shall be received by the subscriber of the telephone service not
later than 30 days from the end of each billing cycle. In case the statement is received
beyond this period, the subscriber shall have a specified grace period within which to pay the
bill and the public telecommunications entity (PTEs) shall not be allowed to disconnect the
service within the grace period.

(2) There shall be no charge for calls that are diverted to a voice mailbox, voice prompt,
recorded message or similar facility excluding the customer's own equipment.

(3) PTEs shall verify the identification and address of each purchaser of prepaid SIM cards.
Prepaid call cards and SIM cards shall be valid for at least 2 years from the date of first use.
Holders of prepaid SIM cards shall be given 45 days from the date the prepaid SIM card is
fully consumed but not beyond 2 years and 45 days from date of first use to replenish the
SIM card, otherwise the SIM card shall be rendered invalid. The validity of an invalid SIM
card, however, shall be installed upon request of the customer at no additional charge except
the presentation of a valid prepaid call card.

(4) Subscribers shall be updated of the remaining value of their cards before the start of
every call using the cards.
 (5) The unit of billing for the cellular mobile telephone service whether postpaid or prepaid
shall be reduced from 1 minute per pulse to 6 seconds per pulse. The authorized rates per
minute shall thus be divided by 10.1

The Memorandum Circular provided that it shall take effect 15 days after its publication in a
newspaper of general circulation and three certified true copies thereof furnished the UP Law
Center. It was published in the newspaper, The Philippine Star, on June 22, 2000.2 Meanwhile, the
provisions of the Memorandum Circular pertaining to the sale and use of prepaid cards and the unit
of billing for cellular mobile telephone service took effect 90 days from the effectivity of the
Memorandum Circular.

On August 30, 2000, the NTC issued a Memorandum to all cellular mobile telephone service
(CMTS) operators which contained measures to minimize if not totally eliminate the incidence of
stealing of cellular phone units. The Memorandum directed CMTS operators to:

a. strictly comply with Section B(1) of MC 13-6-2000 requiring the presentation and
verification of the identity and addresses of prepaid SIM card customers;

b. require all your respective prepaid SIM cards dealers to comply with Section B(1) of MC
13-6-2000;

c. deny acceptance to your respective networks prepaid and/or postpaid customers using
stolen cellphone units or cellphone units registered to somebody other than the applicant
when properly informed of all information relative to the stolen cellphone units;

d. share all necessary information of stolen cellphone units to all other CMTS operators in
order to prevent the use of stolen cellphone units; and

e. require all your existing prepaid SIM card customers to register and present valid
identification cards.3

This was followed by another Memorandum dated October 6, 2000 addressed to all public
telecommunications entities, which reads:

This is to remind you that the validity of all prepaid cards sold on 07 October 2000 and
beyond shall be valid for at least two (2) years from date of first use pursuant to MC 13-6-
2000.

In addition, all CMTS operators are reminded that all SIM packs used by subscribers of
prepaid cards sold on 07 October 2000 and beyond shall be valid for at least two (2) years
from date of first use. Also, the billing unit shall be on a six (6) seconds pulse effective 07
October 2000.

For strict compliance.4

On October 20, 2000, petitioners Isla Communications Co., Inc. and Pilipino Telephone Corporation
filed against the National Telecommunications Commission, Commissioner Joseph A. Santiago,
Deputy Commissioner Aurelio M. Umali and Deputy Commissioner Nestor C. Dacanay, an action for
declaration of nullity of NTC Memorandum Circular No. 13-6-2000 (the Billing Circular) and the NTC
Memorandum dated October 6, 2000, with prayer for the issuance of a writ of preliminary injunction
and temporary restraining order. The complaint was docketed as Civil Case No. Q-00-42221 at the
Regional Trial Court of Quezon City, Branch 77.5

Petitioners Islacom and Piltel alleged, inter alia, that the NTC has no jurisdiction to regulate the sale
of consumer goods such as the prepaid call cards since such jurisdiction belongs to the Department
of Trade and Industry under the Consumer Act of the Philippines; that the Billing Circular is
oppressive, confiscatory and violative of the constitutional prohibition against deprivation of property
without due process of law; that the Circular will result in the impairment of the viability of the prepaid
cellular service by unduly prolonging the validity and expiration of the prepaid SIM and call cards;
and that the requirements of identification of prepaid card buyers and call balance announcement
are unreasonable. Hence, they prayed that the Billing Circular be declared null and void ab initio.

Soon thereafter, petitioners Globe Telecom, Inc and Smart Communications, Inc. filed a joint Motion
for Leave to Intervene and to Admit Complaint-in-Intervention.6 This was granted by the trial court.

On October 27, 2000, the trial court issued a temporary restraining order enjoining the NTC from
implementing Memorandum Circular No. 13-6-2000 and the Memorandum dated October 6, 2000.7

In the meantime, respondent NTC and its co-defendants filed a motion to dismiss the case on the
ground of petitioners' failure to exhaust administrative remedies.

Subsequently, after hearing petitioners' application for preliminary injunction as well as respondent's
motion to dismiss, the trial court issued on November 20, 2000 an Order, the dispositive portion of
which reads:

WHEREFORE, premises considered, the defendants' motion to dismiss is hereby denied for
lack of merit. The plaintiffs' application for the issuance of a writ of preliminary injunction is
hereby granted. Accordingly, the defendants are hereby enjoined from implementing NTC
Memorandum Circular 13-6-2000 and the NTC Memorandum, dated October 6, 2000,
pending the issuance and finality of the decision in this case. The plaintiffs and intervenors
are, however, required to file a bond in the sum of FIVE HUNDRED THOUSAND PESOS
(P500,000.00), Philippine currency.

SO ORDERED.8

Defendants filed a motion for reconsideration, which was denied in an Order dated February 1,
2001.9

Respondent NTC thus filed a special civil action for certiorari and prohibition with the Court of
Appeals, which was docketed as CA-G.R. SP. No. 64274. On October 9, 2001, a decision was
rendered, the decretal portion of which reads:

WHEREFORE, premises considered, the instant petition for certiorari and prohibition is
GRANTED, in that, the order of the court a quo denying the petitioner's motion to dismiss as
well as the order of the court a quo granting the private respondents' prayer for a writ of
preliminary injunction, and the writ of preliminary injunction issued thereby, are hereby
ANNULLED and SET ASIDE. The private respondents' complaint and complaint-in-
intervention below are hereby DISMISSED, without prejudice to the referral of the private
respondents' grievances and disputes on the assailed issuances of the NTC with the said
agency.
 SO ORDERED.10

Petitioners' motions for reconsideration were denied in a Resolution dated January 10, 2002 for lack
of merit.11

Hence, the instant petition for review filed by Smart and Piltel, which was docketed as G.R. No.
151908, anchored on the following grounds:

A.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE

NATIONAL TELECOMMUNICATIONS COMMISSION (NTC) AND NOT THE REGULAR
COURTS HAS JURISDICTION OVER THE CASE.

B.

THE HONORABLE COURT OF APPEALS ALSO GRAVELY ERRED IN HOLDING THAT

THE PRIVATE RESPONDENTS FAILED TO EXHAUST AN AVAILABLE ADMINISTRATIVE
REMEDY.

C.

THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE BILLING
CIRCULAR ISSUED BY THE RESPONDENT NTC IS UNCONSTITUTIONAL AND
CONTRARY TO LAW AND PUBLIC POLICY.

D.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE PRIVATE

RESPONDENTS FAILED TO SHOW THEIR CLEAR POSITIVE RIGHT TO WARRANT THE
ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION.12

Likewise, Globe and Islacom filed a petition for review, docketed as G.R. No. 152063, assigning the
following errors:

1. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE

DOCTRINES OF PRIMARY JURISDICTION AND EXHAUSTION OF ADMINISTRATIVE
REMEDIES DO NOT APPLY SINCE THE INSTANT CASE IS FOR LEGAL NULLIFICATION
(BECAUSE OF LEGAL INFIRMITIES AND VIOLATIONS OF LAW) OF A PURELY
ADMINISTRATIVE REGULATION PROMULGATED BY AN AGENCY IN THE EXERCISE
OF ITS RULE MAKING POWERS AND INVOLVES ONLY QUESTIONS OF LAW.

2. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE

DOCTRINE ON EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT APPLY
WHEN THE QUESTIONS RAISED ARE PURELY LEGAL QUESTIONS.

3. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE THE

DOCTRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDIES DOES NOT APPLY
WHERE THE ADMINISTRATIVE ACTION IS COMPLETE AND EFFECTIVE, WHEN
THERE IS NO OTHER REMEDY, AND THE PETITIONER STANDS TO SUFFER GRAVE
AND IRREPARABLE INJURY.
 4. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED BECAUSE
PETITIONERS IN FACT EXHAUSTED ALL ADMINISTRATIVE REMEDIES AVAILABLE TO
THEM.

5. THE HONORABLE COURT OF APPEALS SO GRAVELY ERRED IN ISSUING ITS

QUESTIONED RULINGS IN THIS CASE BECAUSE GLOBE AND ISLA HAVE A CLEAR
RIGHT TO AN INJUNCTION.13

The two petitions were consolidated in a Resolution dated February 17, 2003.14

On March 24, 2003, the petitions were given due course and the parties were required to submit
their respective memoranda.15

We find merit in the petitions.

Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or

administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make
rules and regulations which results in delegated legislation that is within the confines of the granting
statute and the doctrine of non-delegability and separability of powers.16

The rules and regulations that administrative agencies promulgate, which are the product of a
delegated legislative power to create new and additional legal provisions that have the effect of law,
should be within the scope of the statutory authority granted by the legislature to the administrative
agency. It is required that the regulation be germane to the objects and purposes of the law, and be
not in contradiction to, but in conformity with, the standards prescribed by law.17 They must conform
to and be consistent with the provisions of the enabling statute in order for such rule or regulation to
be valid. Constitutional and statutory provisions control with respect to what rules and regulations
may be promulgated by an administrative body, as well as with respect to what fields are subject to
regulation by it. It may not make rules and regulations which are inconsistent with the provisions of
the Constitution or a statute, particularly the statute it is administering or which created it, or which
are in derogation of, or defeat, the purpose of a statute. In case of conflict between a statute and an
administrative order, the former must prevail.18

Not to be confused with the quasi-legislative or rule-making power of an administrative agency is its
quasi-judicial or administrative adjudicatory power. This is the power to hear and determine
questions of fact to which the legislative policy is to apply and to decide in accordance with the
standards laid down by the law itself in enforcing and administering the same law. The administrative
body exercises its quasi-judicial power when it performs in a judicial manner an act which is
essentially of an executive or administrative nature, where the power to act in such manner is
incidental to or reasonably necessary for the performance of the executive or administrative duty
entrusted to it. In carrying out their quasi-judicial functions, the administrative officers or bodies are
required to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and
draw conclusions from them as basis for their official action and exercise of discretion in a judicial
nature.19

In questioning the validity or constitutionality of a rule or regulation issued by an administrative

agency, a party need not exhaust administrative remedies before going to court. This principle
applies only where the act of the administrative agency concerned was performed pursuant to its
quasi-judicial function, and not when the assailed act pertained to its rule-making or quasi-legislative
power. In Association of Philippine Coconut Dessicators v. Philippine Coconut Authority,20 it was
held:
The rule of requiring exhaustion of administrative remedies before a party may seek judicial review,
so strenuously urged by the Solicitor General on behalf of respondent, has obviously no application
here. The resolution in question was issued by the PCA in the exercise of its rule- making or
legislative power. However, only judicial review of decisions of administrative agencies made in the
exercise of their quasi-judicial function is subject to the exhaustion doctrine.

Even assuming arguendo that the principle of exhaustion of administrative remedies apply in this
case, the records reveal that petitioners sufficiently complied with this requirement. Even during the
drafting and deliberation stages leading to the issuance of Memorandum Circular No. 13-6-2000,
petitioners were able to register their protests to the proposed billing guidelines. They submitted their
respective position papers setting forth their objections and submitting proposed schemes for the
billing circular.21 After the same was issued, petitioners wrote successive letters dated July 3,
200022 and July 5, 2000,23 asking for the suspension and reconsideration of the so-called Billing
Circular. These letters were not acted upon until October 6, 2000, when respondent NTC issued the
second assailed Memorandum implementing certain provisions of the Billing Circular. This was
taken by petitioners as a clear denial of the requests contained in their previous letters, thus
prompting them to seek judicial relief.

In like manner, the doctrine of primary jurisdiction applies only where the administrative agency
exercises its quasi-judicial or adjudicatory function. Thus, in cases involving specialized disputes, the
practice has been to refer the same to an administrative agency of special competence pursuant to
the doctrine of primary jurisdiction. The courts will not determine a controversy involving a question
which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by
the administrative tribunal, where the question demands the exercise of sound administrative
discretion requiring the special knowledge, experience and services of the administrative tribunal to
determine technical and intricate matters of fact, and a uniformity of ruling is essential to comply with
the premises of the regulatory statute administered. The objective of the doctrine of primary
jurisdiction is to guide a court in determining whether it should refrain from exercising its jurisdiction
until after an administrative agency has determined some question or some aspect of some question
arising in the proceeding before the court. It applies where the claim is originally cognizable in the
courts and comes into play whenever enforcement of the claim requires the resolution of issues
which, under a regulatory scheme, has been placed within the special competence of an
administrative body; in such case, the judicial process is suspended pending referral of such issues
to the administrative body for its view.24

However, where what is assailed is the validity or constitutionality of a rule or regulation issued by
the administrative agency in the performance of its quasi-legislative function, the regular courts have
jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules
issued by an administrative agency contravenes the law or the constitution is within the jurisdiction of
the regular courts. Indeed, the Constitution vests the power of judicial review or the power to declare
a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance,
or regulation in the courts, including the regional trial courts.25 This is within the scope of judicial
power, which includes the authority of the courts to determine in an appropriate action the validity of
the acts of the political departments.26 Judicial power includes 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.27

In the case at bar, the issuance by the NTC of Memorandum Circular No. 13-6-2000 and its
Memorandum dated October 6, 2000 was pursuant to its quasi-legislative or rule-making power. As
such, petitioners were justified in invoking the judicial power of the Regional Trial Court to assail the
constitutionality and validity of the said issuances. In Drilon v. Lim,28 it was held:
 We stress at the outset that the lower court had jurisdiction to consider the constitutionality of
Section 187, this authority being embraced in the general definition of the judicial power to
determine what are the valid and binding laws by the criterion of their conformity to the
fundamental law. Specifically, B.P. 129 vests in the regional trial courts jurisdiction over all
civil cases in which the subject of the litigation is incapable of pecuniary estimation, even as
the accused in a criminal action has the right to question in his defense the constitutionality
of a law he is charged with violating and of the proceedings taken against him, particularly as
they contravene the Bill of Rights. Moreover, Article X, Section 5(2), of the Constitution vests
in the Supreme Court appellate jurisdiction over final judgments and orders of lower courts in
all cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or
regulation is in question.29

In their complaint before the Regional Trial Court, petitioners averred that the Circular contravened
Civil Code provisions on sales and violated the constitutional prohibition against the deprivation of
property without due process of law. These are within the competence of the trial judge. Contrary to
the finding of the Court of Appeals, the issues raised in the complaint do not entail highly technical
matters. Rather, what is required of the judge who will resolve this issue is a basic familiarity with the
workings of the cellular telephone service, including prepaid SIM and call cards – and this is
judicially known to be within the knowledge of a good percentage of our population – and expertise
in fundamental principles of civil law and the Constitution.

Hence, the Regional Trial Court has jurisdiction to hear and decide Civil Case No. Q-00-42221. The
Court of Appeals erred in setting aside the orders of the trial court and in dismissing the case.

WHEREFORE, in view of the foregoing, the consolidated petitions are GRANTED. The decision of
the Court of Appeals in CA-G.R. SP No. 64274 dated October 9, 2001 and its Resolution dated
January 10, 2002 are REVERSED and SET ASIDE. The Order dated November 20, 2000 of the
Regional Trial Court of Quezon City, Branch 77, in Civil Case No. Q-00-42221 is REINSTATED. This
case is REMANDED to the court a quo for continuation of the proceedings.

SO ORDERED.

G.R. No. 96681 December 2, 1991

HON. ISIDRO CARIÑO, in his capacity as Secretary of the Department of Education, Culture &
Sports, DR. ERLINDA LOLARGA, in her capacity as Superintendent of City Schools of
Manila, petitioners,
vs.
THE COMMISSION ON HUMAN RIGHTS, GRACIANO BUDOY, JULIETA BABARAN, ELSA
IBABAO, HELEN LUPO, AMPARO GONZALES, LUZ DEL CASTILLO, ELSA REYES and
APOLINARIO ESBER, respondents.

NARVASA, J.:p

The issue raised in the special civil action of certiorari and prohibition at bar, instituted by the
Solicitor General, may be formulated as follows: where the relief sought from the Commission on
Human Rights by a party in a case consists of the review and reversal or modification of a decision
or order issued by a court of justice or government agency or official exercising quasi-judicial
functions, may the Commission take cognizance of the case and grant that relief? Stated otherwise,
where a particular subject-matter is placed by law within the jurisdiction of a court or other
government agency or official for purposes of trial and adjudgment, may the Commission on Human
Rights take cognizance of the same subject-matter for the same purposes of hearing and
adjudication?

The facts narrated in the petition are not denied by the respondents and are hence taken as
substantially correct for purposes of ruling on the legal questions posed in the present action. These
facts, 1 together with others involved in related cases recently resolved by this Court 2 or otherwise undisputed on the record, are
hereunder set forth.

1. On September 17, 1990, a Monday and a class day, some 800 public school teachers, among
them members of the Manila Public School Teachers Association (MPSTA) and Alliance of
Concerned Teachers (ACT) undertook what they described as "mass concerted actions" to
"dramatize and highlight" their plight resulting from the alleged failure of the public authorities to act
upon grievances that had time and again been brought to the latter's attention. According to them
they had decided to undertake said "mass concerted actions" after the protest rally staged at the
DECS premises on September 14, 1990 without disrupting classes as a last call for the government
to negotiate the granting of demands had elicited no response from the Secretary of Education. The
"mass actions" consisted in staying away from their classes, converging at the Liwasang Bonifacio,
gathering in peaceable assemblies, etc. Through their representatives, the teachers participating in
the mass actions were served with an order of the Secretary of Education to return to work in 24
hours or face dismissal, and a memorandum directing the DECS officials concerned to initiate
dismissal proceedings against those who did not comply and to hire their replacements. Those
directives notwithstanding, the mass actions continued into the week, with more teachers joining in
the days that followed. 3

Among those who took part in the "concerted mass actions" were the eight (8) private respondents
herein, teachers at the Ramon Magsaysay High School, Manila, who had agreed to support the non-
political demands of the MPSTA. 4

2. For failure to heed the return-to-work order, the CHR complainants (private respondents) were
administratively charged on the basis of the principal's report and given five (5) days to answer the
charges. They were also preventively suspended for ninety (90) days "pursuant to Section 41 of P.D.
807" and temporarily replaced (unmarked CHR Exhibits, Annexes F, G, H). An investigation
committee was consequently formed to hear the charges in accordance with P.D. 807. 5

3. In the administrative case docketed as Case No. DECS 90-082 in which CHR complainants
Graciano Budoy, Jr., Julieta Babaran, Luz del Castillo, Apolinario Esber were, among others, named
respondents, 6 the latter filed separate answers, opted for a formal investigation, and also moved "for suspension of the administrative
proceedings pending resolution by . . (the Supreme) Court of their application for issuance of an injunctive writ/temporary restraining order."
But when their motion for suspension was denied by Order dated November 8, 1990 of the Investigating Committee, which later also denied
their motion for reconsideration orally made at the hearing of November 14, 1990, "the respondents led by their counsel staged a walkout
signifying their intent to boycott the entire proceedings." 7 The case eventually resulted in a Decision of Secretary Cariño dated December
17, 1990, rendered after evaluation of the evidence as well as the answers, affidavits and documents submitted by the respondents,
decreeing dismissal from the service of Apolinario Esber and the suspension for nine (9) months of Babaran, Budoy and del Castillo. 8

4. In the meantime, the "MPSTA filed a petition for certiorari before the Regional Trial Court of
Manila against petitioner (Cariño), which was dismissed (unmarked CHR Exhibit, Annex I). Later, the
MPSTA went to the Supreme Court (on certiorari, in an attempt to nullify said dismissal, grounded on
the) alleged violation of the striking teachers" right to due process and peaceable assembly
docketed as G.R. No. 95445, supra. The ACT also filed a similar petition before the Supreme Court .
. . docketed as G.R. No. 95590." 9 Both petitions in this Court were filed in behalf of the teacher associations, a few named
individuals, and "other teacher-members so numerous similarly situated" or "other similarly situated public school teachers too numerous to
be impleaded."
5. In the meantime, too, the respondent teachers submitted sworn statements dated September 27,
1990 to the Commission on Human Rights to complain that while they were participating in peaceful
mass actions, they suddenly learned of their replacements as teachers, allegedly without notice and
consequently for reasons completely unknown to them. 10

6. Their complaints — and those of other teachers also "ordered suspended by the . . . (DECS)," all
numbering forty-two (42) — were docketed as "Striking Teachers CHR Case No. 90775." In
connection therewith the Commission scheduled a "dialogue" on October 11, 1990, and sent a
subpoena to Secretary Cariño requiring his attendance therein. 11

On the day of the "dialogue," although it said that it was "not certain whether he (Sec. Cariño)
received the subpoena which was served at his office, . . . (the) Commission, with the Chairman
presiding, and Commissioners Hesiquio R. Mallilin and Narciso C. Monteiro, proceeded to hear the
case;" it heard the complainants' counsel (a) explain that his clients had been "denied due process
and suspended without formal notice, and unjustly, since they did not join the mass leave," and (b)
expatiate on the grievances which were "the cause of the mass leave of MPSTA teachers, (and) with
which causes they (CHR complainants) sympathize." 12 The Commission thereafter issued an Order 13 reciting these
facts and making the following disposition:

To be properly apprised of the real facts of the case and be accordingly guided in its
investigation and resolution of the matter, considering that these forty two teachers
are now suspended and deprived of their wages, which they need very badly,
Secretary Isidro Cariño, of the Department of Education, Culture and Sports, Dr.
Erlinda Lolarga, school superintendent of Manila and the Principal of Ramon
Magsaysay High School, Manila, are hereby enjoined to appear and enlighten the
Commission en banc on October 19, 1990 at 11:00 A.M. and to bring with them any
and all documents relevant to the allegations aforestated herein to assist the
Commission in this matter. Otherwise, the Commission will resolve the complaint on
the basis of complainants' evidence.

xxx xxx xxx

7. Through the Office of the Solicitor General, Secretary Cariño sought and was granted leave to file
a motion to dismiss the case. His motion to dismiss was submitted on November 14, 1990 alleging
as grounds therefor, "that the complaint states no cause of action and that the CHR has no
jurisdiction over the case." 14

8. Pending determination by the Commission of the motion to dismiss, judgments affecting the
"striking teachers" were promulgated in two (2) cases, as aforestated, viz.:

a) The Decision dated December l7, 1990 of Education Secretary Cariño in Case No.
DECS 90-082, decreeing dismissal from the service of Apolinario Esber and the
suspension for nine (9) months of Babaran, Budoy and del Castillo; 15 and

b) The joint Resolution of this Court dated August 6, 1991 in G.R. Nos. 95445 and
95590 dismissing the petitions "without prejudice to any appeals, if still timely, that
the individual petitioners may take to the Civil Service Commission on the matters
complained of," 16 and inter alia "ruling that it was prima facie lawful for petitioner Cariño to issue return-to-work
orders, file administrative charges against recalcitrants, preventively suspend them, and issue decision on those
charges." 17

9. In an Order dated December 28, 1990, respondent Commission denied Sec. Cariño's motion to
dismiss and required him and Superintendent Lolarga "to submit their counter-affidavits within ten
(10) days . . . (after which) the Commission shall proceed to hear and resolve the case on the merits
with or without respondents counter affidavit." 18 It held that the "striking teachers" "were denied due process of law; . . .
they should not have been replaced without a chance to reply to the administrative charges;" there had been a violation of their civil and
political rights which the Commission was empowered to investigate; and while expressing its "utmost respect to the Supreme Court . . . the
facts before . . . (it) are different from those in the case decided by the Supreme Court" (the reference being unmistakably to this Court's joint
Resolution of August 6, 1991 in G.R. Nos. 95445 and 95590, supra).

It is to invalidate and set aside this Order of December 28, 1990 that the Solicitor General, in behalf
of petitioner Cariño, has commenced the present action of certiorari and prohibition.

The Commission on Human Rights has made clear its position that it does not feel bound by this
Court's joint Resolution in G.R. Nos. 95445 and 95590, supra. It has also made plain its intention "to
hear and resolve the case (i.e., Striking Teachers HRC Case No. 90-775) on the merits." It intends,
in other words, to try and decide or hear and determine, i.e., exercise jurisdiction over the following
general issues:

1) whether or not the striking teachers were denied due process, and just cause exists for the
imposition of administrative disciplinary sanctions on them by their superiors; and

2) whether or not the grievances which were "the cause of the mass leave of MPSTA teachers, (and)
with which causes they (CHR complainants) sympathize," justify their mass action or strike.

The Commission evidently intends to itself adjudicate, that is to say, determine with character of
finality and definiteness, the same issues which have been passed upon and decided by the
Secretary of Education, Culture & Sports, subject to appeal to the Civil Service Commission, this
Court having in fact, as aforementioned, declared that the teachers affected may take appeals to the
Civil Service Commission on said matters, if still timely.

The threshold question is whether or not the Commission on Human Rights has the power under the
Constitution to do so; whether or not, like a court of justice, 19 or even a quasi-judicial agency, 20 it has jurisdiction or
adjudicatory powers over, or the power to try and decide, or hear and determine, certain specific type of cases, like alleged human rights
violations involving civil or political rights.

The Court declares the Commission on Human Rights to have no such power; and that it was not
meant by the fundamental law to be another court or quasi-judicial agency in this country, or
duplicate much less take over the functions of the latter.

The most that may be conceded to the Commission in the way of adjudicative power is that it
may investigate, i.e., receive evidence and make findings of fact as regards claimed human rights
violations involving civil and political rights. But fact finding is not adjudication, and cannot be likened
to the judicial function of a court of justice, or even a quasi-judicial agency or official. The function of
receiving evidence and ascertaining therefrom the facts of a controversy is not a judicial function,
properly speaking. To be considered such, the faculty of receiving evidence and making factual
conclusions in a controversy must be accompanied by the authority of applying the law to those
factual conclusions to the end that the controversy may be decided or determined authoritatively,
finally and definitively, subject to such appeals or modes of review as may be provided by law. 21 This
function, to repeat, the Commission does not have. 22

The proposition is made clear by the constitutional provisions specifying the powers of the
Commission on Human Rights.

The Commission was created by the 1987 Constitution as an independent office. 23 Upon its constitution, it
succeeded and superseded the Presidential Committee on Human Rights existing at the time of the effectivity of the Constitution. 24 Its
powers and functions are the following 25
 (1) Investigate, on its own or on complaint by any party, all forms of human rights
violations involving civil and political rights;

(2) Adopt its operational guidelines and rules of procedure, and cite for contempt for
violations thereof in accordance with the Rules of Court;

(3) Provide appropriate legal measures for the protection of human rights of all
persons within the Philippines, as well as Filipinos residing abroad, and provide for
preventive measures and legal aid services to the underprivileged whose human
rights have been violated or need protection;

(4) Exercise visitorial powers over jails, prisons, or detention facilities;

(5) Establish a continuing program of research, education, and information to

enhance respect for the primacy of human rights;

(6) Recommend to the Congress effective measures to promote human rights and to
provide for compensation to victims of violations of human rights, or their families;

(7) Monitor the Philippine Government's compliance with international treaty

obligations on human rights;

(8) Grant immunity from prosecution to any person whose testimony or whose
possession of documents or other evidence is necessary or convenient to determine
the truth in any investigation conducted by it or under its authority;

(9) Request the assistance of any department, bureau, office, or agency in the
performance of its functions;

(10) Appoint its officers and employees in accordance with law; and

(11) Perform such other duties and functions as may be provided by law.

As should at once be observed, only the first of the enumerated powers and functions bears any
resemblance to adjudication or adjudgment. The Constitution clearly and categorically grants to the
Commission the power to investigate all forms of human rights violations involving civil and political
rights. It can exercise that power on its own initiative or on complaint of any person. It may exercise
that power pursuant to such rules of procedure as it may adopt and, in cases of violations of said
rules, cite for contempt in accordance with the Rules of Court. In the course of any investigation
conducted by it or under its authority, it may grant immunity from prosecution to any person whose
testimony or whose possession of documents or other evidence is necessary or convenient to
determine the truth. It may also request the assistance of any department, bureau, office, or agency
in the performance of its functions, in the conduct of its investigation or in extending such remedy as
may be required by its findings. 26

But it cannot try and decide cases (or hear and determine causes) as courts of justice, or even
quasi-judicial bodies do. To investigate is not to adjudicate or adjudge. Whether in the popular or the
technical sense, these terms have well understood and quite distinct meanings.

"Investigate," commonly understood, means to examine, explore, inquire or delve or probe into,
research on, study. The dictionary definition of "investigate" is "to observe or study closely: inquire
into systematically. "to search or inquire into: . . . to subject to an official probe . . .: to conduct an
official inquiry." 27 The purpose of investigation, of course, is to discover, to find out, to learn, obtain information. Nowhere included or
intimated is the notion of settling, deciding or resolving a controversy involved in the facts inquired into by application of the law to the facts
established by the inquiry.

The legal meaning of "investigate" is essentially the same: "(t)o follow up step by step by patient
inquiry or observation. To trace or track; to search into; to examine and inquire into with care and
accuracy; to find out by careful inquisition; examination; the taking of evidence; a legal inquiry;" 28 "to
inquire; to make an investigation," "investigation" being in turn describe as "(a)n administrative function, the exercise of which ordinarily does
not require a hearing. 2 Am J2d Adm L Sec. 257; . . . an inquiry, judicial or otherwise, for the discovery and collection of facts concerning a
certain matter or matters." 29

"Adjudicate," commonly or popularly understood, means to adjudge, arbitrate, judge, decide,

determine, resolve, rule on, settle. The dictionary defines the term as "to settle finally (the rights and
duties of the parties to a court case) on the merits of issues raised: . . . to pass judgment on: settle
judicially: . . . act as judge." 30 And "adjudge" means "to decide or rule upon as a judge or with judicial or quasi-judicial powers: . .
. to award or grant judicially in a case of controversy . . . ." 31

In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority. To determine
finally. Synonymous with adjudge in its strictest sense;" and "adjudge" means: "To pass on judicially,
to decide, settle or decree, or to sentence or condemn. . . . Implies a judicial determination of a fact,
and the entry of a judgment." 32

Hence it is that the Commission on Human Rights, having merely the power "to investigate," cannot
and should not "try and resolve on the merits" (adjudicate) the matters involved in Striking Teachers
HRC Case No. 90-775, as it has announced it means to do; and it cannot do so even if there be a
claim that in the administrative disciplinary proceedings against the teachers in question, initiated
and conducted by the DECS, their human rights, or civil or political rights had been transgressed.
More particularly, the Commission has no power to "resolve on the merits" the question of (a)
whether or not the mass concerted actions engaged in by the teachers constitute and are prohibited
or otherwise restricted by law; (b) whether or not the act of carrying on and taking part in those
actions, and the failure of the teachers to discontinue those actions, and return to their classes
despite the order to this effect by the Secretary of Education, constitute infractions of relevant rules
and regulations warranting administrative disciplinary sanctions, or are justified by the grievances
complained of by them; and (c) what where the particular acts done by each individual teacher and
what sanctions, if any, may properly be imposed for said acts or omissions.

These are matters undoubtedly and clearly within the original jurisdiction of the Secretary of
Education, being within the scope of the disciplinary powers granted to him under the Civil Service
Law, and also, within the appellate jurisdiction of the Civil Service Commission.

Indeed, the Secretary of Education has, as above narrated, already taken cognizance of the issues
and resolved them, 33 and it appears that appeals have been seasonably taken by the aggrieved parties to the Civil Service
Commission; and even this Court itself has had occasion to pass upon said issues. 34

Now, it is quite obvious that whether or not the conclusions reached by the Secretary of Education in
disciplinary cases are correct and are adequately based on substantial evidence; whether or not the
proceedings themselves are void or defective in not having accorded the respondents due process;
and whether or not the Secretary of Education had in truth committed "human rights violations
involving civil and political rights," are matters which may be passed upon and determined through a
motion for reconsideration addressed to the Secretary Education himself, and in the event of an
adverse verdict, may be reviewed by the Civil Service Commission and eventually the Supreme
Court.
The Commission on Human Rights simply has no place in this scheme of things. It has no business
intruding into the jurisdiction and functions of the Education Secretary or the Civil Service
Commission. It has no business going over the same ground traversed by the latter and making its
own judgment on the questions involved. This would accord success to what may well have been
the complaining teachers' strategy to abort, frustrate or negate the judgment of the Education
Secretary in the administrative cases against them which they anticipated would be adverse to them.

This cannot be done. It will not be permitted to be done.

In any event, the investigation by the Commission on Human Rights would serve no useful purpose.
If its investigation should result in conclusions contrary to those reached by Secretary Cariño, it
would have no power anyway to reverse the Secretary's conclusions. Reversal thereof can only by
done by the Civil Service Commission and lastly by this Court. The only thing the Commission can
do, if it concludes that Secretary Cariño was in error, is to refer the matter to the appropriate
Government agency or tribunal for assistance; that would be the Civil Service Commission. 35 It cannot
arrogate unto itself the appellate jurisdiction of the Civil Service Commission.

WHEREFORE, the petition is granted; the Order of December 29, 1990 is ANNULLED and SET
ASIDE, and the respondent Commission on Human Rights and the Chairman and Members thereof
are prohibited "to hear and resolve the case (i.e., Striking Teachers HRC Case No. 90-775) on the
merits."

SO ORDERED.

Melencio-Herrera, Cruz, Feliciano, Bidin, Griño-Aquino, Medialdea, Regalado, Davide, Jr. and
Romero, JJ, concur.

Separate Opinions

GUTIERREZ, JR., J., concurring:

I concur in the result. The teachers are not to be blamed for exhausting all means to overcome the
Secretary's arbitrary act of not reinstating them.

PARAS, J., concurring:

I concur with the brilliant and enlightening decision of Chief Justice Andres R. Narvasa

I wish to add however that the Commission on Human Rights should concern itself in this case and
in many other similar cases:

(1) not only with the human rights of striking teachers but also the human rights of
students and their parents;
 (2) not only with the human rights of the accused but also the human rights of the
victims and the latter's families;

(3) not only with the human rights of those who rise against the government but also
those who defend the same;

(4) not only the human rights of striking laborers but also those who as a
consequence of strikes may be laid off because of financial repercussions.

The defense of human rights is not a monopoly of a government agency (such as the
Commission on Human Rights) nor the monopoly of a group of lawyers defending so-called
"human rights' but the responsibility of ALL AGENCIES (governmental or private) and of ALL
LAWYERS, JUDGES, and JUSTICES.

Finally, the Commission should realize that while there are "human rights", there are also
corresponding "human obligations."

PADILLA, J., dissenting:

I vote to dismiss the petition for the same reasons stated in my earlier separate opinion filed in this
case.

EN BANC

LINTANG BEDOL, G.R. No. 179830

Petitioner,

Present:

PUNO, C.J.,
CARPIO,
CORONA,*
CARPIO MORALES,

- versus - CHICO-NAZARIO,
VELASCO, JR.,*
NACHURA,
 LEONARDO-DE CASTRO,
BRION,
PERALTA,*
BERSAMIN,
COMMISSION ON DEL CASTILLO,
ELECTIONS,
Respondent. ABAD, and
VILLARAMA, JR., JJ.

Promulgated:

December 3, 2009
x-----------------------------------------------------------------------------------------x

DECISION

LEONARDO-DE CASTRO, J.:

Challenged in this petition for certiorari are the twin Resolutions issued by
the respondent Commission on Elections (COMELEC) En Banc in the case entitled In
the Matter of the Charge of Contempt of the Commission Against Election
Supervisor Lintang Bedol. The first Resolution[1] dated August 7, 2007, held
petitioner guilty of contempt of the COMELEC and meted out to him the penalty of
six (6) months imprisonment and a fine of P1,000.00. The second
Resolution[2] dated August 31, 2007, denied petitioners motion for reconsideration.

The facts as stated by the COMELEC follow:

 On May 14, 2007, the National and Local elections were held
under the auspices of this Commission.

As Chair of the Provincial Board of Canvassers (PBOC) for the province of

Maguindanao, the respondent [petitioner] discharged his official
functions and was able to ensure the PBOCs performance of its
ministerial duty to canvass the Certificates of Canvass coming from the
twenty two (22) city and municipalities in the province.

At that time, respondent [petitioner] also was charged with the

burdensome and gargantuan duty of being the concurrent Provincial
Elections Supervisor for the Province of Shariff Kabunsuan a
neighboring province of Maguindanao.

Respondent [petitioner] Bedol failed to attend the scheduled canvassing

of the Provincial Certificates of Canvass (PCOC) of Maguindanao of which
he is the Provincial Election Supervisor which was slated on May 22,
2007.

On May 25, 2007, respondent appeared before the Commission, en banc

sitting as the National Board of Canvassers (NBOC) for the election of
senators to submit the provincial certificate of canvass for Maguindanao,
pursuant to his functions as Provincial Elections Supervisor and chair of
the PBOC for Maguindanao. Due to certain observations on the
provincial certificates of canvass by certain parties, canvassing of the
certificate was held in abeyance and respondent was queried on the
alleged fraud which attended the conduct of elections in his area.

He was already informed of the resetting of the canvassing for May 30,
2007, but failed to appear despite prior knowledge.
On June 4, 2007, Celia B. Romero, Director II, ERSD & Concurrent Chief of
the Records and Statistics Division of the COMELEC issued a certification
that as of even date, the canvassing documents for all municipalities of
the province of Maguindanao in connection with the May 14, 2007
elections were not transmitted by the Provincial Election Supervisor of
said province nor the respective Board of Canvassers.

The Commission and not just the NBOC, in the exercise of its
investigatory powers to determine existing controversies created the
Task Force Maguindanao, headed by Commissioner Nicodemo Ferrer,
which was tasked to conduct a fact-finding investigation on the conduct
of elections and certificates of canvass from the city and municipalities
in Maguindanao.

Respondent [petitioner] appeared before the Task Force during its June
11, 2007 fact finding activity and responded to the queries from the
chair. It was during this hearing that respondent [petitioner] Bedol
explained that, while in his custody and possession, the election
paraphernalia were stolen sometime on May 29, 2007, or some fifteen
(15) days after the elections. This was the first time such an excuse was
given by the respondent [petitioner] and no written report was ever filed
with the Commission regarding the alleged loss.

Respondent [petitioner] Bedol was duly informed to be present in the

next scheduled investigative proceedings set for June 14, 2007 as the
Task Force wanted to delve deeper into the alleged loss by propounding
additional questions to Atty. Bedol during the next scheduled
proceedings, such as why he still had in his possession said documents
which should have already been turned over to the Commission, why he
did not report to the COMELEC or to the police authorities the purported
theft, and other pertinent questions. However, despite actual notice in
open session, Atty. Bedol failed to appear, giving the impression that
respondent [petitioner] Bedol does not give importance to this whole
 exercise and ignores the negative impact his attitude has on this
Commission.

Also respondent [petitioner] failed and refused to submit a written

explanation of his absences which he undertook to submit on June 13,
2007, but was only received by this Commission belatedly on July 03,
2007.

On June 26, 2007, [petitioner] came out on national newspapers, in an

exclusive interview with the Inquirer and GMA-7, with a gleaming 45
caliber pistol strapped to his side, and in clear defiance of the
Commission posted the challenge by saying that those that are saying
that there was cheating in Maguindanao, file a case against me
tomorrow, the next day. They should file a case now and I will answer
their accusations.(Words in brackets ours)

On June 27, 2007, the COMELEC through Task Force Maguindanao head,
Commissioner Nicodemo T. Ferrer, issued a Contempt Charge and Show Cause
Order[3] against petitioner citing various violations of the COMELEC Rules of
Procedure, viz:

You are hereby formally charged of contempt of this Commission

for having committed during the period between May 14, 2007, and June
26, 2007, acts in violation of specific paragraphs of Section 2, Rule 29 of
the COMELEC Rules of Procedure, as follows:

1. (a) Your (PES Bedols) failure to attend the scheduled canvassing of the
Provincial Certificates of Canvass (PCOC) of Maguindanao of which he
(sic) is (sic) the Provincial Election Supervisor on May 22, 2007; (b) your
failure to attend the reset schedule of the canvassing on May 30, 2007,
despite knowledge thereof when you attended the previously scheduled
but again reset canvassing of said PCOCs on May 25, 2007; (c) your failure
to attend the continuation of hearing of the Task Force Maguindanao on
June 14, 2007, despite notice to him in open session in the hearing held
on June 11, 2007, and personal service to you of a subpoena which you
duly signed on the same date; and your failure/refusal to submit your
written explanation of your said absences which you undertook to
submit on June 13, 2007 all of these failures on your part are violations
of paragraphs (b) and (f) of Section 2, Rule 29 of COMELEC Rules of
Procedure.

2. Your unlawful assumption of custody in your office in Maguinadanao

of the municipal certificates of canvass (MCOC) and other accountable
election documents of all the municipalities of Maguinadanao used in the
last elections of 2007, but which should have been delivered to the
Commission on Elections in its main office in Intramuros, Manila, and
your admission that said accountable documents were lost from your
said custody these constitute violations of paragraphs (a), (c) and (d),
section 2, Rule 29 of said Rules.

3. Your pronouncements in the media flaunting [disrespect to] the

authority of the COMELEC over you, challenging the institution to file a
case against you in court as it is only in court that you are ready to face
your accuser are violations of paragraphs (a) and (d), Section 2, Rule 29
of said Rules.

4. Your regaling the media (interviews in national television channels,

newspapers and radios) with your boast of possession of an armory of
long firearms and side arms, displaying in public for all to see in your
front-page colored portrait in a national broadsheet and during a
television interview a shiny pistol tucked in a holster at your waist in a
combative mode (sic) these are clear violations of paragraphs (a) and (d),
Section 2, Rule 29 of said Rules. (Words in brackets ours)
 Through the foregoing June 27, 2007 Order, petitioner was directed to
appear before the COMELEC En Banc on July 3, 2007 at 10:00 oclock in the morning
to personally explain why he should not be held in contempt for the above-
mentioned offenses.

On July 2, 2007, petitioner was arrested by members of the Philippine

National Police on the basis of an Order of Arrest[4] issued on June 29, 2007 by the
COMELEC after petitioner repeatedly failed to appear during the fact-finding
proceedings before Task Force Maguindanao.

During the July 3, 2007 hearing, petitioner questioned the COMELECs legal
basis for issuing the warrant of arrest and its assumption of jurisdiction over the
contempt charges.Upon petitioners motion, he was granted a period of ten (10)
days within which to file the necessary pleading adducing his arguments and
supporting authorities. The continuation of the hearing was set on July 17, 2007.

On July 17, 2007, which was beyond the ten-day period he requested,
petitioner submitted an Explanation Ad Cautelam with Urgent Manifestation,
containing the following averments:

1. Respondent [petitioner] urgently manifests that he is making a

special appearance as he assails the jurisdiction of the Honorable
Commission and its capacity to prosecute the present case in an impartial
and fair manner.

2. Respondent [petitioner] questions the issuance of a warrant of

arrest against him. He can not be validly arrested or re-arrested as a
witness who is being compelled to testify in a hearing before the
Honorable Commission.
 3. Respondent [petitioner] has not committed any contemptuous
acts against the Commission. He has not committed those acts charged
against him by the Commission motu proprio. (Words in brackets ours.)

During the hearing on July 17, 2007, petitioner reiterated his objection to
the jurisdiction of the COMELEC over the contempt charges due to the absence of
a complaint lodged with the COMELEC by any private party. Petitioners objection
was treated as a motion to dismiss for lack of jurisdiction, which was denied
forthwith by the COMELEC. Petitioner was then required to present evidence which
he refused to do. Various exhibits were then marked and presented to the
COMELEC. However, the latter allowed petitioner to file a Memorandum within a
period of ten (10) days and gave him the opportunity to attach thereto his
documentary and other evidence.
On July 31, 2007, petitioner again belatedly filed his
Memorandum[5] maintaining his objection to the jurisdiction of the COMELEC to
initiate the contempt proceedings on ground that the COMELEC, sitting en banc as
the National Board of Canvassers for the election of senators, was performing its
administrative and not its quasi-judicial functions. Petitioner argued that the
COMELEC, in that capacity, could not punish him for contempt.

On August 7, 2007, the COMELEC En Banc rendered the first assailed

Resolution, the dispositive part of which reads:

WHEREFORE, considering all the foregoing, respondent Atty.

Lintang Bedol is hereby found guilty of Contempt of the Commission for
the following acts and omissions:

1. (a) The failure to attend the scheduled canvassing of the

Provincial Certificates of Canvass (PCOC) of Maguindanao of which he is
the Provincial Election Supervisor on May 22, 2007 (b) failure to attend
the reset schedule of the canvassing on May 30, 2007, despite knowledge
thereof when Respondent Bedol attended the previously scheduled but
again reset canvassing on May 25, 2007 (c) failure to attend the
continuation of hearing of the Task Force Maguindanao on June 14, 2007,
despite notice to Respondent in open session in the hearing held on June
11, 2007, and personal service to him of the subpoena which he duly
signed on the same date; the failure/refusal to submit written
explanation of respondents absences which he undertook to submit
on June 13, 2007 --- all of these failures are violations of paragraphs (b)
and (f) of Section 2, Rule 29 of COMELEC Rules of Procedure.

2. The unlawful assumption of custody in the Respondents office

in Maguindanao of the Municipal Certificates of Canvass (MCOC) and
other accountable election documents of all the municipalities of
Maguindanao used in the last elections of 2007, but which should have
been delivered to the Commission on Elections in its main office in
Intramuros, Manila, and Respondents plain admission that said
accountable documents were lost from his said custody --- these
constitute violations of paragraphs (a), (c) and (d), Section 2, Rule 29 of
said Rules.

3. The respondents pronouncements in media flaunting

disrespect to the authority of the COMELEC over him, challenging the
institution to file a case against him in court as it is supposedly only in
court that Respondent Bedol was ready to face his accuser are violations
of paragraphs (a) and (d), Section 2, Rule 29 of said Rules.

4. Regaling the public through the media (interviews in national

television channels, newspapers and radios) with boast of possession of
an armory of long firearms and side arms, displaying in public, for all to
see in his front-page colored portrait in a national broadsheet and during
a television interview, a shiny pistol tucked in a holster at your waist in a
combative mode (sic) --- these are clear violations of paragraphs (a) and
(d), Section 2, Rule 29 of said Rules.
 All the foregoing constitute an exhibition of contumacious acts
showing disrespect for the institution, of which respondent is even a
ranking official, which is clearly contemptuous of this Commission, for
which Respondent Lintang Bedol is hereby sentenced to suffer the
penalty of imprisonment of six (6) months and to pay a fine of One
Thousand Pesos (P1,000.00).

The Legal Department of the Comelec is hereby directed to

investigate and determine whether or not any election offense or crime
under the Revised Penal Code has been committed by respondent
Lintang Bedol and to initiate the filing of the necessary charge/s therefor.

SO ORDERED.

Aggrieved, petitioner filed a motion for reconsideration which was denied

by the COMELEC in the other assailed Resolution dated August 31, 2007.

Hence, petitioner filed before the Court the instant petition for certiorari
raising the following issues:

I
WHETHER OR NOT THE COMMISSION ON ELECTIONS HAS
JURISDICTION TO INITIATE OR PROSECUTE THE CONTEMPT
PROCEEDINGS AGAINST THE PETITIONER.

II
WHETHER OR NOT THE COMMISSSION HAS ALREADY PREJUDGED
THE CASE AGAINST THE PETITIONER IN VIOLATION OF HIS DUE PROCESS
RIGHTS
 III
WHETHER OR NOT THE FINDINGS OF THE COMMISSION ON
ELECTIONS, ASSUMING IT HAS JURISDICTION TO PUNISH FOR
CONTEMPT, ARE SUPPORTED BY SUBSTANTIAL, CREDIBLE AND
COMPETENT EVIDENCE.

We dismiss the petition.

The main thrust of petitioners argument is that the COMELEC exceeded its
jurisdiction in initiating the contempt proceedings when it was performing its
administrative and not its quasi-judicial functions as the National Board of
Canvassers for the election of senators. According to petitioner, the COMELEC may
only punish contemptuous acts while exercising its quasi-judicial functions.

The COMELEC possesses the power to conduct investigations as an adjunct

to its constitutional duty to enforce and administer all election laws, by virtue of
the explicit provisions of paragraph 6, Section 2, Article IX of the 1987 Constitution,
which reads:

Article IX-C, Section 2. xxx

(6) xxx; investigate and, where appropriate, prosecute cases of

violations of election laws, including acts or omissions constituting
election frauds, offenses, and malpractices.

The above-quoted provision should be construed broadly to give effect to

the COMELECs constitutional mandate as enunciated in Loong v. Commission on
Elections,[6] which held:
 xxx. Section 2(1) of Article IX(C) of the Constitution gives the
COMELEC the broad power "to enforce and administer all laws and
regulations relative to the conduct of an election, plebiscite, initiative,
referendum and recall." Undoubtedly, the text and intent of this
provision is to give COMELEC all the necessary and incidental powers for
it to achieve the objective of holding free, orderly, honest, peaceful, and
credible elections. Congruent to this intent, this Court has not been
niggardly in defining the parameters of powers of COMELEC in the
conduct of our elections.

The powers and functions of the COMELEC, conferred upon it by the 1987
Constitution and the Omnibus Election Code, may be classified into administrative,
quasi-legislative, and quasi-judicial. The quasi-judicial power of the COMELEC
embraces the power to resolve controversies arising from the enforcement of
election laws, and to be the sole judge of all pre-proclamation controversies; and
of all contests relating to the elections, returns, and qualifications. Its quasi-
legislative power refers to the issuance of rules and regulations to implement the
election laws and to exercise such legislative functions as may expressly be
delegated to it by Congress. Its administrative function refers to the enforcement
and administration of election laws. In the exercise of such power, the Constitution
(Section 6, Article IX-A) and the Omnibus Election Code (Section 52 [c]) authorize
the COMELEC to issue rules and regulations to implement the provisions of the
1987 Constitution and the Omnibus Election Code.[7]

The quasi-judicial or administrative adjudicatory power is the power to hear

and determine questions of fact to which the legislative policy is to apply, and to
decide in accordance with the standards laid down by the law itself in enforcing
and administering the same law. The Court, in Dole Philippines Inc. v.
Esteva,[8] described quasi-judicial power in the following manner, viz:
 Quasi-judicial or administrative adjudicatory power on the other
hand is the power of the administrative agency to adjudicate the rights
of persons before it. It is the power to hear and determine questions of
fact to which the legislative policy is to apply and to decide in accordance
with the standards laid down by the law itself in enforcing and
administering the same law. The administrative body exercises its quasi-
judicial power when it performs in a judicial manner an act which is
essentially of an executive or administrative nature, where the power to
act in such manner is incidental to or reasonably necessary for the
performance of the executive or administrative duty entrusted to it. In
carrying out their quasi-judicial functions the administrative officers or
bodies are required to investigate facts or ascertain the existence of
facts, hold hearings, weigh evidence, and draw conclusions from them
as basis for their official action and exercise of discretion in a judicial
nature.Since rights of specific persons are affected, it is elementary that
in the proper exercise of quasi-judicial power due process must be
observed in the conduct of the proceedings. [Emphasis ours.]

The Creation of Task Force Maguindanao was impelled by the allegations of

fraud and irregularities attending the conduct of elections in
the province of Maguindanao and the non-transmittal of the canvassing
documents for all municipalities of said province.

Task Force Maguindanaos fact-finding investigation to probe into the

veracity of the alleged fraud that marred the elections in said province; and
consequently, to determine whether the certificates of canvass were genuine or
spurious, and whether an election offense had possibly been committed could by
no means be classified as a purely ministerial or administrative function.

The COMELEC, through the Task Force Maguindanao, was exercising its
quasi-judicial power in pursuit of the truth behind the allegations of massive fraud
during the elections in Maguindanao. To achieve its objective, the Task Force
conducted hearings and required the attendance of the parties concerned and their
counsels to give them the opportunity to argue and support their respective
positions.

The effectiveness of the quasijudicial power vested by law on a government

institution hinges on its authority to compel attendance of the parties and/or their
witnesses at the hearings or proceedings. As enunciated in Arnault v. Nazareno[9]

Experience has shown that mere requests for such information

are often unavailing, and also that information which is volunteered is
not always accurate or complete; so some means of compulsion is
essential to obtain what is needed.

In the same vein, to withhold from the COMELEC the power to punish
individuals who refuse to appear during a fact-finding investigation, despite a
previous notice and order to attend, would render nugatory the COMELECs
investigative power, which is an essential incident to its constitutional mandate to
secure the conduct of honest and credible elections. In this case, the purpose of
the investigation was however derailed when petitioner obstinately refused to
appear during said hearings and to answer questions regarding the various election
documents which, he claimed, were stolen while they were in his possession and
custody. Undoubtedly, the COMELEC could punish petitioner for such
contumacious refusal to attend the Task Force hearings.

Even assuming arguendo that the COMELEC was acting as a board of

canvassers at that time it required petitioner to appear before it, the Court had the
occasion to rule that the powers of the board of canvassers are not purely
ministerial. The board exercises quasi-judicial functions, such as the function and
duty to determine whether the papers transmitted to them are genuine election
returns signed by the proper officers.[10] When the results of the elections in
the province of Maguindanao were being canvassed, counsels for various
candidates posited numerous questions on the certificates of canvass brought
before the COMELEC. The COMELEC asked petitioner to appear before it in order
to shed light on the issue of whether the election documents coming from
Maguindanao were spurious or not. When petitioner unjustifiably refused to
appear, COMELEC undeniably acted within the bounds of its jurisdiction when it
issued the assailed resolutions.

In Santiago, Jr. v. Bautista,[11] the Court held:

xxx. The exercise of judicial functions may involve the

performance of legislative or administrative duties, and the performance
of and administrative or ministerial duties, may, in a measure, involve
the exercise of judicial functions. It may be said generally that the
exercise of judicial functions is to determine what the law is, and what
the legal rights of parties are, with respect to a matter in controversy;
and whenever an officer is clothed with that authority, and undertakes
to determine those questions, he acts judicially.

On the procedure adopted by the COMELEC in proceeding with the indirect

contempt charges against petitioner, Section 52 (e), Article VII of the Omnibus
Election Code pertinently provides:

Section 52. Powers and functions of the Commission on Elections.

xxx

(e) Punish contempts provided for in the Rules of Court in the

same procedure and with the same penalties provided therin. Any
violation of any final and executory decision, order or ruling of the
Commission shall constitute contempt thereof. [Emphasis ours.]
 The aforecited provision of law is implemented by Rule 29 of COMELECs
Rules of Procedure, Section 2 of which states:

Rule 29 Contempt

Sec. 1. xxx

Sec. 2. Indirect Contempt. After charge in writing has been filed

with the Commission or Division, as the case may be, and an opportunity
given to the respondent to be heard by himself or counsel, a person guilty
of the following acts may be punished for indirect contempt:

(a) Misbehavior of the responsible officer of the

Commission in the performance of his official duties or in
his official transactions;

(b) Disobedience of or resistance to a lawful writ,

process, order, judgment or command of the Commission
or any of its Divisions, or injunction or restraining order
granted by it;

(c) Any abuse of or any inlawful interference with the

process or proceedings of the Commission or any of its
Divisions not constituting direct contempt under Section 1
of this Rules;

(d) Any improper conduct tending, directly or

indirectly, to impede, obstruct, or degrade the
administration of justice by the Commission or any of its
Divisions;
 (e) Assuming to be an attorney and acting as such
without authority; and

(f) Failure to obey a subpoena duly served.

SEC. 3 Penalty for Indirect Contempt. If adjudged guilty, the

accused may be punished by a fine not exceeding one thousand
(P1,000.00) pesos or imprisonment for not more than six (6) months, or
both, at the discretion of the Commission or Division.

The language of the Omnibus Election Code and the COMELEC Rules of
Procedure is broad enough to allow the initiation of indirect contempt proceedings
by the COMELEC motu proprio. Furthermore, the above-quoted provision of
Section 52(e), Article VII of the Omnibus Election Code explicitly adopts the
procedure and penalties provided by the Rules of Court. Under Section 4, Rule 71,
said proceedings may be initiated motu proprio by the COMELEC, viz:

SEC. 4. How proceedings commenced. Proceedings for indirect

contempt may be initiated motu proprio by the court against which the
contempt was committed by an order or any other formal charge
requiring the respondent to show cause why he should not be punished
for contempt.

In all other cases, charges for indirect contempt shall be

commenced by a verified petition with supporting particulars and
certified true copies of documents or papers involved therein, and upon
full compliance with the requirements for filing initiatory pleadings for
civil actions in the court concerned. If the contempt charges arose out of
or are related to a principal action pending in the court, the petition for
contempt shall allege that fact but said petition shall be docketed, heard
and decided separately, unless the court in its discretion orders the
 consolidation of the contempt charge and the principal action for joint
hearing and decision.

Hence, the COMELEC properly assumed jurisdiction over the indirect

contempt proceedings which were initiated by its Task Force Maguindanao,
through a Contempt Charge and Show Cause Order, notwithstanding the absence
of any complaint filed by a private party.

We turn now to petitioners claim that the COMELEC pre-judged the case
against him, and that its findings were not supported by evidence. His claim
deserves scant consideration.

The fact that the indirect contempt charges against petitioner were
initiated motu proprio by the COMELEC did not by itself prove that it had already
prejudged the case against him. As borne out by the records, the COMELEC gave
petitioner several opportunities to explain his side and to present evidence to
defend himself. All of petitioners belatedly filed pleadings were admitted and taken
into consideration before the COMELEC issued the assailed Resolution finding
petitioner guilty of indirect contempt.

The COMELEC complied with the aforementioned Section 4, Rule 71 of the

Rules of Court and with the requirements set by Rule 29 of the COMELEC Rules of
Procedure, when it issued the Contempt Charge and Show Cause Order against
petitioner directing him to appear before it and explain why he should not be held
in contempt.

Petitioner claims that the challenged Resolution finding him guilty of indirect
contempt was based merely on hearsay, surmises, speculations and conjectures,
and not on competent and substantial evidence. He contends that there is no
convincing evidence that he deliberately refused to heed the summonses of the
COMELEC or that he was sufficiently notified of the investigative hearings. He
further argues that the loss of the election documents should not even be
automatically ascribed to him.

We are not persuaded.

Petitioner was found guilty of contempt on four (4) grounds. First, he

repeatedly failed to attend, despite notice of the scheduled[12] canvassing of the
Provincial Certificates of Canvass, the hearing of the Task Force Maguindanao; and
refused to submit his explanation for such absences, which he had undertaken to
submit, in violation of paragraphs (b) and (f) of Section 2, Rule 29 of the COMELEC
Rules of Procedure.

Petitioner was duly notified of the scheduled hearings. It was his official
responsibility to be present during the scheduled hearing to shed light on the
allegedly stolen election documents but he failed to do so without offering any valid
justification for his non-appearance.

Second, he unlawfully assumed custody of accountable election documents,

which were lost while in his possession, and consequently failed to deliver the
same, in violation of paragraphs (a), (c) and (d) Section 2, Rule 29 of same Rules.

Petitioner admitted that the subject certificate of canvass and other election
documents were lost while in his custody. Petitioner himself admitted during the
hearing held on June 11, 2007 that the documents were stolen sometime on May
29, 2007. Apart from the said loss of the vital election documents, his liability
stemmed from the fact that he illegally retained custody and possession of said
documents more than two weeks after the elections. The COMELEC viewed such
act as a contemptuous interference with its normal functions.
 Third and fourth, he publicly displayed disrespect for the authority of the
COMELEC through the media (interviews on national television channels, and in
newspapers and radios) by flaunting an armory of long firearms and side arms in
public, and posing for the front page of a national broadsheet, with a shiny pistol
tucked in a holster, in violation of paragraphs (a) and (d), Section 2, Rule 29 of same
Rules.
Petitioner questions the probative value of the newspaper clippings
published in the Philippine Daily Inquirer on June 26, 2007 which showed a photo
of him with a firearm tucked to his side and his supposed exclusive interview. He
claims that said newspaper clippings are mere hearsay, which are of no evidentiary
value.

True, there were instances when the Court rejected newspaper articles as
hearsay, when such articles are offered to prove their contents without any other
competent and credible evidence to corroborate them. However, in Estrada v.
Desierto, et al.,[13] the Court held that not all hearsay evidence is inadmissible and
how over time, exceptions to the hearsay rule have emerged. Hearsay evidence
may be admitted by the courts on grounds of relevance, trustworthiness and
necessity.[14] When certain facts are within judicial notice of the Court, newspaper
accounts only buttressed these facts as facts.[15]

Another exception to the hearsay rule is the doctrine of independently relevant

statements, where only the fact that such statements were made is relevant, and
the truth or falsity thereof is immaterial. The hearsay rule does not apply; hence,
the statements are admissible as evidence. Evidence as to the making of such
statement is not secondary but primary, for the statement itself may constitute a
fact in issue or be circumstantially relevant as to the existence of such a fact.[16]

Here, the newspaper clippings were introduced to prove that petitioner

deliberately defied or challenged the authority of the COMELEC. As ratiocinated by
the COMELEC in the challenged Resolution of August 7, 2007, it was not the mere
content of the articles that was in issue, but petitioners conduct when he allowed
himself to be interviewed in the manner and circumstances, adverted to in the
COMELEC Resolution, on a pending controversy which was still brewing in the
COMELEC. While petitioner claimed that he was misquoted, he denied neither the
said interview nor his picture splashed on the newspaper with a firearm holstered
at his side but simply relied on his objection to the hearsay nature of the newspaper
clippings.It should be stressed that petitioner was no ordinary witness or
respondent. He was under the administrative supervision of the COMELEC[17] and
it was incumbent upon him to demonstrate to the COMELEC that he had faithfully
discharged his duties as dictated by law. His evasiveness and refusal to present his
evidence as well as his reliance on technicalities to justify such refusal in the face
of the allegations of fraud or anomalies and newspaper publication mentioned to
the Contempt Charge and Show Cause Order amounted to an implied admission of
the charges leveled against him.

All told, petitioner brought this predicament upon himself when he opted to
dispense with the presentation of his evidence during the scheduled hearings and
to explain his non-appearance at the hearings of Task Force Maguindanao and the
loss of the certificates of canvass and other election documents.

WHEREFORE, the petition is hereby DISMISSED and the prayer for a

Temporary Restraining Order and/or a Writ of Preliminary Injunction is
hereby DENIED. No costs.

SO ORDERED.

GOVERNMENT SERVICE G.R. No. 180062

INSURANCE SYSTEM,
Petitioner, Present:

PUNO, C.J., Chairperson,

- versus - CARPIO MORALES,
LEONARDO-DE CASTRO,
 BOARD OF COMMISSIONERS BERSAMIN, and
ND
(2 DIVISION), BOARD OF VILLARAMA, JR., JJ.
COMMISSIONERS OF THE
HOUSING AND LAND USE
REGULATORY BOARD (HLURB)
HLURB NATIONAL CAPITAL
REGION FIELD OFFICE, SPOUSES
MARCELINO H. DE LOS REYES and Promulgated:
ALMA T. DE LOS REYES, and NEW May 5, 2010
SAN JOSE BUILDERS, INC.,
Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CARPIO MORALES, J.

New San Jose Builders, Inc. (NSJBI) mortgaged on December 10, 1997 three parcels
of land together with the existing improvements, 366 lots with existing low cost
houses, and 102 condominium units located on Scout Rallos Street, Quezon City to
the Government Service Insurance System (GSIS) to secure the payment of a loan
amounting to Six Hundred Million (P600,000,000) Pesos. The mortgaged properties
included Condominium Unit 312 (the condominium unit) which was later sold by
NSJBI to respondent spouses Marcelino and Alma De los Reyes (spouses De los
Reyes) by Deed of Absolute Sale dated May 28, 2001.

NSJBI defaulted in its loan obligation, hence, the GSIS foreclosed the mortgage and
purchased the properties covered thereby on June 17, 2003. The Certificate of Sale,
dated June 20, 2003, issued to GSIS was registered with the Registry of Deeds of
Quezon City on September 19, 2003.

The spouses De los Reyes later discovered the mortgage and eventual sale of the
condominium unit to GSIS, hence, they filed on June 15, 2004, a complaint against
herein respondents NSJBI, et al. with the Housing and Land Use Regulatory Board
(HLURB), docketed as REM 061504-12726,[1] praying as follows:
 1. Ordering the revocation of the Certificate of Registration and License to
Sell of the respondent corporation, New San Jose Builders, Inc. (NSJBI);

2. Ordering the respondent corporation New San Jose Builders, Inc.

(NSJBI) and the individual respondents Rey L. Vergara and Carol B. Ros
to immediately cause the release and delivery to herein complainants of
the Condominium Certificate of Title No. N-18117 covering Unit 312 of
Saint John Condominium, free from all liens and encumbrances;

3. Ordering the respondent Government Service Insurance System to release

the mortgage on Condominium Certificate of Title No. N-18117 covering
Unit 312 of Saint John Condominium;

4. Ordering the respondent corporation New San Jose Builders, Inc. (NSJBI)
and individual respondents President Rey L. Vergara and AVP for
Marketing Carol B. Ros to indemnify the complainants, jointly and
severally, the following amounts . . .

x x x x[2]

In its Answer, GSIS claimed that the spouses De los Reyes had no cause of action
against it as the mortgage was executed prior to the sale of the condominium
unit[3] to which sale it (GSIS) was not a party.
Before the expiration of the redemption period or on September 20, 2004, the
spouses De los Reyes filed an Urgent Motion for Issuance of a Writ of Preliminary
Injunction with Prayer for a Temporary Restraining Order to restrain GSIS from
consolidating its title to the condominium unit.

GSIS opposed the motion, alleging that Presidential Decree (PD) No. 385,[4] in
relation to Letter of Instruction No. 411, prohibits the issuance of a restraining order
against any government financial institution in any action taken by it in compliance
with the mandatory foreclosure under said PD.[5]

By Order of November 16, 2004,[6] House and Land Use Arbiter Rowena C.
Balasolla granted the spouses De los Reyess motion and issued a Cease and Desist
Order (CDO) restraining GSIS from consolidating ownership of the condominium
unit.

On the appeal of GSIS, the HLURB Second Division, by Decision of June 23, 2005,
affirmed the Arbiters ruling, it holding that PD No. 385 applies only to on-going
foreclosure proceedings. Besides, it noted that

. . . an examination of the projects technical docket shows that no

mortgage clearance was secured beforehand. Thus, said
respondents violated Section 18 of P.D. No. 957 which provides that no
mortgage on any unit or lot shall be made by the owner or developer
without prior written approval of this Board. This being so, the said
mortgage and the incidents which transpired subsequent thereto are
void.[7] (emphasis and underscoring supplied)

GSISs motion for reconsideration, filed before the Board En Banc, was denied by
the Second Division by Resolution of October 21, 2005, prompting it to file a
petition for certioraribefore the Court of Appeals.

In addition to its arguments proffered before the HLURB, GSIS alleged that the
HLURB acted without jurisdiction, for only three members, instead of the nine-man
Board of Commissioners, entertained the appeal, contrary to the mandate of Sections
5 and 6(a) of Executive Order (E.O.) No. 648 (1981), as amended.[8]

The Court of Appeals, by Decision of June 28, 2007,[9] dismissed GSISs petition and
accordingly ordered the Arbiter to proceed with dispatch in the disposition of the
spouses De los Reyess complaint.

In dismissing GSISs petition, the appellate court held that the HLURB Second
Division did not abuse its discretion in taking jurisdiction over GSISs motion for
reconsideration-appeal, for 2004, the HLURB Revised Rules of Procedure provides
that appeals shall be decided by the Board of Commissioners sitting en banc or by
division in accordance with the internal rules of the Board.[10]

On the merits, the Court of Appeals ratiocinated that the requisites for the issuance
of a writ of preliminary injunction were present; and since the act sought to be
enjoined pertains to the consolidation process, it is outside the intended ambit of PD
No. 385.

GSISs motion for reconsideration having been denied by the appellate court
by Resolution of October 10, 2007, the present petition for review was filed.

GSIS argues in the main that the HLURB Revised Rules of Procedure did not vest
authority in the Boards Second Division to entertain appeals.

The Court is not persuaded.

Section 5 of E.O. No. 648 specifically mandates the HLURB Board of

Commissioners to adopt rules of procedure for the conduct of its business and
perform such functions necessary for the effective discharge thereof. Such grant of
power necessary to carry out its functions has been held to be an adequate source of
authority to delegate a particular function, unless, by express provision of the Act or
by implication, it has been withheld.[11]

The present composition of the Board of Commissioners,[12] wherein five out of its
nine members sit in ex-officio capacity while the remaining four serve as full time
commissioners, practicality necessitates the establishment of a procedure whereby a
case on appeal may be decided by members of a division.

Since the 2004 HLURB Rules of Procedure provides that a motion for
reconsideration shall be assigned to the Division from which the decision, order or
ruling originated,[13] the questioned cognizance by the HLURB Second Division of
GSISs motion for reconsideration is in order.
Respecting GSISs argument that PD No. 385 prohibits the issuance of a CDO, the
pertinent provisions of the decree read:

Section 1. It shall be mandatory for government financial institutions,

after the lapse of sixty (60) days from the issuance of this Decree, to
foreclose the collaterals and/or securities for any loan, credit,
accommodation, and/or guarantees granted by them whenever the
arrearages on such account, including accrued interest and other charges,
amount to at least twenty percent (20%) of the total outstanding
obligations, including interest and other charges, as appearing in the books
of account and/or related records of the financial institution concerned.
This shall be without prejudice to the exercise by the government financial
institutions of such rights and/or remedies available to them under their
respective contracts with their debtors, including the right to foreclose on
loans, credits, accommodations and/or guarantees on which the arrearages
are less than twenty percent (20%).

Section 2. No restraining order, temporary or permanent injunction shall

be issued by the court against any government financial institution in any
action taken by such institution in compliance with the mandatory
foreclosure provided in Section 1 hereof, whether such restraining
order, temporary or permanent injunction is sought by the borrower(s) or
any third party or parties, except after due hearing in which it is
established by the borrower and admitted by the government financial
institution concerned that twenty percent (20%) of the outstanding
arrearages has been paid after the filing of foreclosure proceedings.

In case a restraining order or injunction is issued, the borrower shall

nevertheless be legally obligated to liquidate the remaining balance of the
arrearages outstanding as of the time of foreclosure, plus interest and other
charges, on every succeeding thirtieth (30th) day after the issuance of such
restraining order or injunction until the entire arrearages have been
liquidated. These shall be in addition to the payment of amortization
currently maturing. The restraining order or injunction shall automatically
be dissolved should the borrower fail to make any of the above-mentioned
payments on due dates, and no restraining order or injunction shall be
issued thereafter. This shall be without prejudice to the exercise by the
government financial institutions of such rights and/or remedies available
to them under their respective charters and their respective contracts with
their debtors, nor should this provision be construed as restricting the
government financial institutions concerned from approving, solely at its
own discretion, any restructuring, recapitalization, or any other
arrangement that would place the entire account on a current basis,
provided, however, that at least twenty percent (20%) of the arrearages
outstanding at the time of the foreclosure is paid.

All restraining orders and injunctions existing as of the date of this Decree
on foreclosure proceedings filed by said government financial institutions
shall be considered lifted unless finally resolved by the court within sixty
(60) days from date hereof. (underscoring supplied)
The act subject of the CDO was the intended consolidation by the GSIS of ownership
of the condominium unit, not the mandatory foreclosure of the mortgage. At any
rate, the second paragraph of the above-quoted Section 2 of PD No. 385 in fact
recognizes the eventuality that an injunction may be issued against a government
financial institution, hence, it obliges the borrower to liquidate the arrearages due in
order to safeguard the interests of the government financial institution-lender.

Undoubtedly, the jurisdiction of the HLURB to regulate the real estate business is
broad enough to include jurisdiction over a complaint for annulment of foreclosure
sale and mortgage and the grant of incidental reliefs such as a CDO. [14] Even
Presidential Decree No. 957, The Subdivision and Condominium Buyers Protective
Decree, authorizes the HLURB as successor of the National Housing Authority to
issue CDOs in relevant cases, viz:

SECTION 16. Cease and Desist Order. Whenever it shall appear to the
Authority that any person is engaged or about to engage in any act or
practice which constitutes or will constitute a violation of the provisions
of this Decree, or of any rule or regulation thereunder, it may, upon due
notice and hearing as provided in Section 13 hereof, issue a cease and
desist order to enjoin such act or practices.

WHEREFORE, the challenged Court of Appeals Decision of June 28, 2007

is AFFIRMED. The Housing and Land Use Arbiter is ORDERED to proceed with
dispatch with private respondent spouses De los Reyess complaint.

SO ORDERED.

G.R. No. L-24576 July 29, 1968

MARTINIANO P. VIVO, as Acting Commissioner of Immigration,

BOARD OF COMMISSIONERS, Bureau of Immigration and DEPORTATION OFFICER, Bureau
of Immigration, petitioners,
vs.
HON. AGUSTIN P. MONTESA, as Judge of the Court of First Instance of Manila, Branch XIX,
JOSE CALACDAY, ET AL., respondents.
Office of the Solicitor General for petitioners.
Edgardo R. Hojilla for respondents.

REYES, J.B.L., J.:

Petition for certiorari and prohibition with preliminary injunction to annul the order of 27 May 1965 of
the respondent Court of First Instance of Manila, in its Civil Case No. 60906, which enjoined the
above-named immigration officers from arresting and detaining, with a view to deporting the herein
private respondents.

The private respondents Juan, Pedro, Julio, Marcelo, Jose, Manuel and Benito, all surnamed
"Calacday" arrived in the Philippines from Hongkong, the first four on 18 November 1959, and the
last three on 6 December 1959. Upon their arrival they sought admission as Filipino citizens. After
investigation, a board of special inquiry, in its decisions of 7 and 11 December 1959, found them to
be the legitimate sons of a Filipino citizen, one Isaac Calacday, and thus admitted them into this
country. The Bureau of Immigration then issued to each of them an identification certificate as a
Filipino citizen, with the notation that their admission as such was by a decision of the board of
special inquiry, duly affirmed by the Board of Commissioners.

Sometime in February, 1963, however, Isaac Calacday confessed before an immigration official that
the seven respondents were not his sons (Petition, page 4, paragraph 4; Annex "C" to Petition, page
2; Annex "I" to Answer; Respondent's Manifestation, 29 November 1965, page 4). He retracted his
confession in March, 1963, in an investigation in the Department of Justice, with the explanation
that, in a fit of anger, he disclaimed, under oath, paternity of the respondents because they refused
to give him money (Annex "I" to Answer).

On 9 May 1963, Commissioner of Immigration Martiniano Vivo issued warrants of arrest against the
herein private respondents, stating in said warrants their deportability under Section 37 (a) (1) and
Section 37 (a) (2) in relation to Section 29(a) (17) of the Philippine Immigration Act of 1940, as
amended, for having entered the Philippines "by means of false and misleading statements and that
they were not lawfully admissible at the time of entry, not being properly documented for admission."
The warrants directed any immigration office or officer of the law to bring the respondents before the
Commissioner, for them to show cause, if any there be, why they should not be deported (Annexes
"B-1" and "B-2" to Petition).

Manuel Calacday was subsequently arrested. The others remained at large.

On 26 April 1965, the respondents filed before the respondent court a petition, docketed as Civil
Case No. 60906, praying for three principal reliefs, namely: to restrain the arrest of those petitioners
who have not been arrested; to release Manuel Calacday who had been arrested; and to prohibit the
deportation of all the petitioners, all upon the claim that they are Filipino citizens.

Respondent Commissioner of Immigration questioned the propriety of the remedy of prohibition, and
insisted that habeas corpus is the proper one, but the respondent court invoked its general
jurisdiction, which includes certiorari and prohibition, on the ground that habeas corpus would be
proper only to the one already arrested but not to those not yet arrested.

On 27 May 1965, the respondent court, resolving the issue only of "whether the respondent Acting
Commissioner of Immigration (therein petitioner) can summarily order the arrest and deportation of
the petitioners (therein respondents) ..., without giving them a chance to be heard as Filipino
citizens", and relying on the case of Commissioner of Immigration vs. Fernandez, et al., L-22696, 29
May 1964, issued the order, now being questioned before this Court, the dispositive part of which
states: .

IN VIEW THEREOF, the Court finds, the motion to be well-founded, and so hereby orders
that the writ of preliminary injunction issued (sic) during the pendency of this action, enjoining
the respondents from arresting and detaining the petitioners herein, with a view to their
deportation, upon the filing by the petitioners of a bond in the amount of P10,000 each, to
answer for whatever damages may be sustained by the respondents as a result of the
issuance of the said writ. In the meantime, the respondents are hereby ordered to release
Manuel Calacday and any other of them who may now be detained by virtue of the order of
arrest issued by the respondents, within 48 hours after the filing of the said bond to
guarantee their appearance here and at the investigation of their case by the Board of
Immigration.

We agree with petitioning Commissioner that the court below is without jurisdiction to restrain the
deportation proceedings of respondents Calacdays.These proceedings are within the jurisdiction of
the Immigration authorities under Sections 28 and 37 of the Philippine Immigration Act (C.A. No.
613). That jurisdiction is not tolled by a claim of Filipino citizenship, where the Commissioner or
Commissioners have reliable evidence to the contrary; and said officers should be given opportunity
to determine the issue of citizenship before the courts interfere in the exercise of the power of
judicial review of administrative decisions. We have so ruled in Porta Perez, et al. vs. Board of
Special Inquiry, L-9236, 29 May 1956, wherein we said: .

The respondents impugn petitioners' claim to Philippine citizenship on the strength of a

sworn Statement of Tecla Socella, supposed mother of the petitioner Melanio Porta Perez as
given in the birth certificate presented by him to the immigration authorities to the effect that
the said birth certificate refers not to the said petitioner but to one Melanio Perez now living
in Pagbilao, Quezon Province. And there being thus substantial evidence that petitioners are
not Filipino citizens but are Chinese nationals who have gained entry into this country
through false representations, the respondents by way of special defense, contend that the
present action is premature, and urge that they be allowed to proceed with their investigation
until they shall have finally determined whether petitioners are or are not Filipino citizens, or
are or are not subject to deportation.

We find merit in this contention. The present case is not one where the Philippine citizenship
of the persons threatened with deportation is admitted or conclusively appears, there being
reliable evidence that herein petitioners are aliens who have succeeded in gaining entry into
this country through false representations. In line with the views expressed by this Court in
the case of Federico M. Chua Hiong v. The Deportation Board, G.R. No. L- 6038, March 19,
1955, we think it would be in the sound judicial discretion to allow the respondents to
continue the proceedings already begun by them until they have determined whether or not
the petitioners are aliens. Their decision on the question is, of course, not final but subject to
review by the courts.".

And in Miranda vs. Deportation Board, 94 Phil. 531, 533, this Court said: . 1äw phï1.ñët

While the jurisdiction of the Deportation Board as an instrument of the Chief Executive to
deport undesirable aliens exists only when the person arrested is an alien, however, the
mere plea of citizenship does not divest the Board of its jurisdiction over the case. Petitioners
should make "a showing that his claim is frivolous" (Ng Fung Ho vs. White, 259 U.S., 275),
and must prove by sufficient evidence that they are Filipino citizens. [Kessler vs. Strecker
(1939) 307 U.S., 21, 35-36.] If such is the primary duty of petitioners, it follows that the
 Deportation Board has the necessary power to pass upon the evidence that may be
presented and determine in the first instance if petitioners are Filipino citizens or not. This is
inherent-in, or essential to the efficient exercise of, the power of the Deportation Board
(Laurencio vs.Collector of Customs, 35 Phil., 37). It is not therefore correct to state that the
question of citizenship should be determined exclusively by the court, As this Court ruled in a
recent case: .

Resuelto por la Junta que tiene jurisdiccion, es obvio que debe proseguir con el caso
hasta su terminacion. Si la Junta halla infundados los cargos de indeseabilidad del
recurrente, el caso habra terminado totalmente, pero si la halla indeseable, puede
apelar contra el fallo, y si la apelacion fracasa, entonces sera el tiempo de
considerar si demonstrando causa razonable debe haber un juicio ulterior sobre la
ciudadania Filipina que alega mediante habeas corpus." (Llanco vs. The Deportation
Board, G.R. No. L-6272, prom. February 22, 1954.)

It is well to note here that when the petition for certiorari and prohibition (the respondent judge
considered it as such) was filed, deportation proceedings had been started against the respondents
(petitioners below) but had not been completed. In view of the non-completion of the proceedings,
the Board of Commissioners has not rendered as yet any decision. The respondents Calacdays,
therefore, are not being deported. Before the Board reaches a decision, it has to conduct a hearing
where the main issue will be the citizenship or alienage of the respondents. Therefore, there is
nothing so far for the courts to review.

It is clear from the order complained of that the court below misapprehended the import of the
warrants issued by the Commissioner herein. Said warrants required the respondents to be brought
to the immigration authorities, not to be deported, but "to show cause, if any there be, why he should
not be deported from the Philippines", as expressly recited therein. There was no case of "summarily
arresting and deporting" the respondents Calacdays, as unwarrantedly assumed by the court below.

The Calacdays have alluded in this Court to certain documents in support of their claim to Philippine
citizenship. The proper procedure is for said respondents to appear before the Immigration officials
and there submit these documents as evidence on their part to show cause why they should not be
deported.

Nevertheless, we are of the opinion that, the issuance of warrants of arrest by the Commissioners of
Immigration, solely for purposes of investigation and before a final order of deportation is issued,
conflicts with paragraph 3, Section 1, of Article III (Bill of Rights) of our Constitution, providing: .

3. The right of the people to be secure in their persons, houses, papers and effects against
unreasonable, searches and seizures shall not be violated, and no warrants shall issue but
upon probable cause, to be determined by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and particularly describing
the place to be searched, and the persons or things to be seized.

It will be noted that the power to determine probable cause for warrants of arrest is limited by the
Philippine Constitution to judge exclusively, unlike in previous organic laws and the Federal
Constitution of the United States that left undetermined which public officials could determine the
existence of probable cause. And in Qua Chee Gan, et al. vs. Deportation Board, L-20280,
promulgated on September 30 1963, this Court pointed out that Executive Order No. 69, of July 29,
1947, issued by President Roxas, in prescribing the procedure for deportation of aliens, only
required the filing of a bond by an alien under investigation, but did not authorize his arrest.
Discussing the implications of the provision of our Bill of Rights on the issuance of administrative
warrants of arrest, this Court said in the same case: .

xxx xxx xxx 1äw phï1.ñët

Under the express terms of our Constitution it is, therefore, even doubtful whether the arrest
of an individual may be ordered by any authority other than the judge if the purpose is merely
to determine the existence of a probable cause, leading to an administrative investigation.
The Constitution does not distinguish between warrants in a criminal case and administrative
warrants in administrative proceedings. And if one suspected of having committed a crime is
entitled to a determination of the probable cause against him, by a judge, why should one
suspected of a violation of an administrative nature deserve less guarantee? Of course it is
different if the order of arrest is issued to carry out a final finding of a violation, either by an
executive or legislative officer or agency duly authorized for the purpose, as then the warrant
is not that mentioned in the Constitution which is issuable only probable cause. Such, for
example, would be a warrant of arrest to carry out a final order of deportation, or to effect
compliance of an order of contempt.

The contention of the Solicitor General that the arrest of a foreigner is necessary to carry into
effect the power of deportation is valid only when, as already stated, there is already an
order of deportation. To carry out the order of deportation, the President obviously has the
power to order the arrest of the deportee. But, certainly during the investigation, it is not
indispensable that the alien be arrested. It s enough, as was true before the executive order
of President Quirino, that a bond be required to insure the appearance of the alien during the
investigation, as was authorized in the executive order of President Roxas.

Following the same trend of thought, this Court, in Morano vs. Vivo (L-22196, 30 June 1967, 20
SCRA, 562; Phil. 1967-B, page 741), distinguished between administrative arrest, in the execution of
a final deportation order and arrest as preliminary to further administrative proceedings. The Court
remarked in said case:

Section 1 (3), Article III of the Constitution, we perceive, does not require judicial intervention
in the execution of a final order of deportation issued in accordance with law. The
constitutional limitation contemplates an order of arrest in the exercise of judicial power 1 as
a step preliminary or incidental to prosecution or proceedings for a given offense or
administrative action, not as a measure indispensable to carry out a valid decision by a
competent official, such as a legal order of deportation, issued by the Commissioner of
Immigration, in pursuance of a valid legislation.

We see no reason why the cautionary bond requirement of the 1947 Executive Order No. 69 of
President Roxas should not apply to deportation proceedings initiated by the Immigration
Commissioners, considering the identity of ends sought to be served. Such notice and bonds should
suffice to ensure the subject's appearance at the hearings without prejudice to more drastic
measures in case of recalcitrant respondents. But as long as the illegal entry or offense of the
respondents Calacdays has not yet been established and their expulsion finally decided upon, their
arrest upon administrative warrant violates the provisions of our Bill of Rights. The constitutional
guarantees of individual liberty must be liberally construed and applied if we are to enjoy the
blessings of a regime of justice, liberty and democracy that the Philippine Constitution sought to
secure and consolidate.

IN VIEW OF THE FOREGOING, the writ prayed for is hereby granted, the order issued in Civil Case
No. 60906 of the Court of First Instance of Manila is set aside, and the proceedings ordered
discontinued. But the warrants of arrest heretofore issued by the petitioner, Immigration
Commissioner, against herein respondents Calacdays are declared null and void, without prejudice
to said respondents being required to furnish bonds in such reasonable sums as the Immigration
Commissioners may fix, in order to guarantee their appearance at the hearings and other
proceedings in their case, until final determination of their right to stay in the Philippines. No costs.
So ordered.

EN BANC

G.R. No. L-10280 September 30, 1963

QUA CHEE GAN, JAMES UY, DANIEL DY alias DEE PAC, CHAN TIONG YU, CUA CHU TIAN,
CHUA LIM PAO alias JOSE CHUA and BASILIO KING, petitioners-appellants,
vs.
THE DEPORTATION BOARD, respondent-appellee.

Sabido and Sabido Law Offices and Ramon T. Oben for petitioners-appellants.
Solicitor General for respondent-appellee.

BARRERA, J.:

This is an appeal from the decision of the Court of First Instance of Manila (in Sp. Proc. No. 20037)
denying the petition for writs of habeas corpus and/or prohibition, certiorari, and mandamus filed by
Qua Chee Gan, James Uy, Daniel Dy alias Dee Pac, Chan Tiong Yu, Chua Chu Tian, Chua Lim
Pao alias Jose Chua, and Basilio King. The facts of the case, briefly stated, are as follows:.

On May 12, 1952, Special Prosecutor Emilio L. Galang charged the above-named petitioners before
the Deportation Board, with having purchased U.S. dollars in the total sum of $130,000.00, without
the necessary license from the Central Bank of the Philippines, and of having clandestinely remitted
the same to Hongkong and petitioners, Qua Chee Gan, Chua Lim Pao alias Jose Chua, and Basilio
King, with having attempted to bribe officers of the Philippine and United States Governments
(Antonio Laforteza, Chief of the Intelligence Division of the Central Bank, and Capt. A. P. Charak of
the OSI, U.S. Air Force) in order to evade prosecution for said unauthorized purchase of U.S.
dollars.1

Following the filing of said deportation charges, a warrant for the arrest of said aliens was issued by
the presiding member of the Deportation Board. Upon their filing surety bond for P10,000.00 and
cash bond for P10,000.00, herein petitioners-appellants were provisionally set at liberty.

On September 22, 1952, petitioners-appellants filed a joint motion to dismiss the charges presented
against them in the Deportation Board for the reason, among others, that the same do not constitute
legal ground for deportation of aliens from this country, and that said Board has no jurisdiction to
entertain such charges. This motion to dismiss having been denied by order of the Board of
February 9, 1953, petitioners-appellants filed in this Court a petition for habeas corpus and/or
prohibition, which petition was given due course in our resolution of July 7, 1953, but made
returnable to the Court of First Instance of Manila (G.R. No. L-6783). The case was docketed in the
lower court as Special Proceeding No. 20037.
At the instance of petitioners and upon their filing a bond for P5,000.00 each, a writ of preliminary
injunction was issued by the lower court, restraining the respondent Deportation Board from hearing
Deportation charges No. R-425 against petitioners, pending final termination of the habeas
corpus and/or prohibition proceedings.

On July 29, 1953, the respondent Board filed its answer to the original petition, maintaining among
others, that the Deportation Board, as an agent of the President, has jurisdiction over the charges
filed against petitioners and the authority to order their arrest; and that, while petitioner Qua Chee
Gan was acquitted of the offense of attempted bribery of a public official, he was found in the same
decision of the trial court that he did actually offer money to an officer of the United States Air Force
in order that the latter may abstain from assisting the Central Bank official in the investigation of the
purchase of $130,000.00 from the Clark Air Force Base, wherein said petitioner was involved.

After due trial, the court rendered a decision on January 18, 1956, upholding the validity of the
delegation by the president to the Deportation Board of his power to conduct investigations for the
purpose of determining whether the stay of an alien in this country would be injurious to the security,
welfare and interest of the State. The court, likewise, sustained the power of the deportation Board
to issue warrant of arrest and fix bonds for the alien's temporary release pending investigation of
charges against him, on the theory that the power to arrest and fix the amount of the bond of the
arrested alien is essential to and complement the power to deport aliens pursuant to Section 69 of
the Revised Administrative Code. Consequently, the petitioners instituted the present appeal. .

It may be pointed out at the outset that after they were provisionally released on bail, but before the
charges filed against them were actually investigated, petitioners-appellant raised the question of
jurisdiction of the Deportation Board, first before said body, then in the Court of First Instance, and
now before us. Petitioners-appellants contest the power of the President to deport aliens and,
consequently, the delegation to the Deportation Board of the ancillary power to investigate, on the
ground that such power is vested in the Legislature. In other words, it is claimed, for the power to
deport to be exercised, there must be a legislation authorizing the same.

Under Commonwealth Act No. 613 (Immigration Act of 1940), the Commissioner of Immigration was
empowered to effect the arrest and expulsion of an alien, after previous determination by the Board
of Commissioners of the existence of ground or grounds therefor (Sec- 37). With the enactment of
this law, however, the legislature did not intend to delimit or concentrate the exercise of the power to
deport on the Immigration Commissioner alone, because in its Section 52, it provides:.

SEC. 52. This Act is in substitution for and supersedes all previous laws relating to the entry
of aliens into the Philippines, and their exclusion, deportation, and repatriation therefrom,
with the exception of section sixty-nine of Act Numbered Twenty-seven hundred and eleven
which shall continue in force and effect: ..." (Comm. Act No. 613).

Section 69 of Act No. 2711 (Revised Administrative Code) referred to above reads:.

SEC. 69 Deportation of subject to foreign power. — A subject of a foreign power residing in

the Philippines shall not be deported, expelled, or excluded from said Islands or repatriated
to his own country by the President of the Philippines except upon prior investigation,
conducted by said Executive or his authorized agent, of the ground upon which Such action
is contemplated. In such case the person concerned shall be informed of the charge or
charges against him and he shall be allowed not less than these days for the preparation of
his defense. He shall also have the right to be heard by himself or counsel, to produce
witnesses in his own behalf, and to cross-examine the opposing witnesses."
While it may really be contended that the aforequoted provision did not expressly confer on the
President the authority to deport undesirable aliens, unlike the express grant to the Commissioner of
Immigration under Commonwealth Act No. 613, but merely lays down the procedure to be observed
should there be deportation proceedings, the fact that such a procedure was provided for before the
President can deport an alien-which provision was expressly declared exempted from the repealing
effect of the Immigration Act of 1940-is a clear indication of the recognition, and inferentially a
ratification, by the legislature of the existence of such power in the Executive. And the, exercise of
this power by the chief Executive has been sanctioned by this Court in several decisions.2

Under the present and existing laws, therefore, deportation of an undesirable alien may be effected
in two ways: by order of the President, after due investigation, pursuant to Section 69 of the Revised
Administrative Code, and by the Commissioner of Immigration, upon recommendation by the Board
of Commissioners, under Section 37 of Commonwealth Act No. 613.

Petitioners contend, however, that even granting that the President is invested with power to deport,
still he may do so only upon the grounds enumerated in Commonwealth Act No. 613, as amended,
and on no other, as it would be unreasonable and undemocratic to hold that an alien may be
deported upon an unstated or undefined ground depending merely on the unlimited discretion of the
Chief Executive. This contention is not without merit, considering that whenever the legislature
believes a certain act or conduct to be a just cause for deportation, it invariably enacts a law to that
effect. Thus, in a number of amendatory acts, grounds have been added to those originally
contained in Section 37 of Commonwealth Act No. 613, as justifying deportation of an alien, as well
as other laws which provide deportation as part of the penalty imposed on aliens committing
violation thereof.

Be this as it may, the charges against the herein petitioners constitute in effect an act of profiteering,
hoarding or blackmarketing of U.S. dollars, in violation of the Central Bank regulations — an
economic sabotage — which is a ground for deportation under the provisions of Republic Act 503
amending Section 37 of the Philippine Immigration Act of 1940. The President may therefore order
the deportation of these petitioners if after investigation they are shown to have committed the act
charged.

There seems to be no doubt that the President's power of investigation may be delegated. This is
clear from a reading of Section 69 of the Revised Administrative Code which provides for a "prior
investigation, conducted by said Executive (the President) or his authorized agent." The first
executive order on the subject was that of Governor General Frank Murphy (No. 494, July 26, 1934),
constituting a board to take action on complaints against foreigners, to conduct investigations and
thereafter make recommendations. By virtue of Executive Order No. 33 dated May 29, 1936,
President Quezon created the Deportation Board primarily to receive complaints against aliens
charged to be undesirable, to conduct investigation pursuant to Section 69 of the Revised
Administrative Code and the rules and regulations therein provided, and make the corresponding
recommendation. 3 Since then, the Deportation Board has been conducting the investigation as the
authorized agent of the President.

This gives rise to the question regarding the extent of the power of the President to conduct
investigation, i.e., whether such authority carries with it the power to order the arrest of the alien
complained of, since the Administrative Code is silent on the matter, and if it does, whether the same
may be delegated to the respondent Deportation Board. 1aw phîl.nèt

Let it be noted that Section 69 of the Revised Administrative Code, unlike Commonwealth Act No.
613 wherein the Commissioner of Immigration was specifically granted authority, among others, to
make arrests, fails to provide the President with like specific power to be exercised in connection
with such investigation. It must be for this reason that President Roxas for the first time, saw it
necessary to issue his Executive Order No. 69, dated July 29, 1947, providing —

For the purpose of insuring the appearance of aliens charged before the Deportation Board
created under Executive Order No. 37, dated January 4, 1947, and facilitating the execution
of the order of deportation whenever the President decides the case against the respondent.
I, Manuel Roxas, President of the Philippines, by virtue of the powers vested in me by law,
do hereby order that all respondents in deportation proceedings shall file a bond with the
Commissioner of Immigration in such amount and containing such conditions as he may
prescribe. .

xxx xxx xxx

Note that the executive order only required the filing of a bond to secure appearance of the alien
under investigation. It did not authorize the arrest of the respondent.

It was only on January 5, 1951, when President Quirino reorganized the Deportation Board by virtue
of his Executive Order No. 398, that the Board was authorized motu proprio or upon the filing of
formal charges by the Special Prosecutor of the Board, to issue the warrant for the arrest of the alien
complained of and to hold him under detention during the investigation unless he files a bond for his
provisional release in such amount and under such conditions as may be prescribed by the
Chairman of the Board.

As has been pointed out elsewhere, Section 69 of the Revised Administrative Code, upon whose
authority the President's power to deport is predicated, does not provide for the exercise of the
power to arrest. But the Solicitor General argues that the law could not have denied to the Chief
Executive acts which are absolutely necessary to carry into effect the power of deportation granted
him, such as the authority to order the arrest of the foreigner charged as undesirable.

In this connection, it must be remembered that the right of an individual to be secure in his person is
guaranteed by the Constitution in the following language:.

3. The right of the People to be secure in their persons, houses, papers and effects against
unreasonable searches and seizures shall not be violated, and no warrants shall issue but
upon probable cause, to be determined by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and particularly describing
the place to be searched, and the persons or things to be seized." (Sec 1, Art. III, Bill of
Rights, Philippine Constitution).

As observed by the late Justice Laurel in his concurring opinion in the case of Rodriguez, et al. v.
Villamiel, et al. (65 Phil. 230, 239), this provision is not the same as that contained in the Jones Law
wherein this guarantee is placed among the rights of the accused. Under our Constitution, the same
is declared a popular right of the people and, of course, indisputably it equally applies to both
citizens and foreigners in this country. Furthermore, a notable innovation in this guarantee is found in
our Constitution in that it specifically provides that the probable cause upon which a warrant of arrest
may be issued, must be determined by the judge after examination under oath, etc., of the
complainant and the witnesses he may produce. This requirement — "to be determined by the
judge" — is not found in the Fourth Amendment of the U.S. Constitution, in the Philippine Bill or in
the Jones Act, all of which do not specify who will determine the existence of a probable cause.
Hence, under their provisions, any public officer may be authorized by the Legislature to make such
determination, and thereafter issue the warrant of arrest. Under the express terms of our
Constitution, it is, therefore, even doubtful whether the arrest of an individual may be ordered by any
authority other than the judge if the purpose is merely to determine the existence of a probable
cause, leading to an administrative investigation. The Constitution does not distinguish between
warrants in a criminal case and administrative warrants in administrative proceedings. And, if one
suspected of having committed a crime is entitled to a determination of the probable cause against
him, by a judge, why should one suspected of a violation of an administrative nature deserve less
guarantee? Of course it is different if the order of arrest is issued to carry out a final finding of a
violation, either by an executive or legislative officer or agency duly authorized for the purpose, as
then the warrant is not that mentioned in the Constitution which is issuable only on probable cause.
Such, for example, would be a warrant of arrest to carry out a final order of deportation, or to effect
compliance of an order of contempt.

The contention of the Solicitor General that the arrest of a foreigner is necessary to carry into effect
the power of deportation is valid only when, as already stated, there is already an order of
deportation. To carry out the order of deportation, the President obviously has the power to order the
arrest of the deportee. But, certainly, during the investigation, it is not indispensable that the alien be
arrested. It is enough, as was true before the executive order of President Quirino, that a bond be
required to insure the appearance of the alien during the investigation, as was authorized in the
executive order of President Roxas. Be that as it may, it is not imperative for us to rule, in this
proceeding - and nothing herein said is intended to so decide — on whether or not the President
himself can order the arrest of a foreigner for purposes of investigation only, and before a definitive
order of deportation has been issued. We are merely called upon to resolve herein whether,
conceding without deciding that the President can personally order the arrest of the alien complained
of, such power can be delegated by him to the Deportation Board.

Unquestionably, the exercise of the power to order the arrest of an individual demands the exercise
of discretion by the one issuing the same, to determine whether under specific circumstances, the
curtailment of the liberty of such person is warranted. The fact that the Constitution itself, as well as
the statute relied upon, prescribe the manner by which the warrant may be issued, conveys the
intent to make the issuance of such warrant dependent upon conditions the determination of the
existence of which requires the use of discretion by the person issuing the same. In other words, the
discretion of whether a warrant of arrest shall issue or not is personal to the one upon whom the
authority devolves. And authorities are to the effect that while ministerial duties may be delegated,
official functions requiring the exercise of discretion and judgment, may not be so delegated. Indeed,
an implied grant of power, considering that no express authority was granted by the law on the
matter under discussion, that would serve the curtailment or limitation on the fundamental right of a
person, such as his security to life and liberty, must be viewed with caution, if we are to give
meaning to the guarantee contained in the Constitution. If this is so, then guarantee a delegation of
that implied power, nebulous as it is, must be rejected as inimical to the liberty of the people. The
guarantees of human rights and freedom can not be made to rest precariously on such a shaky
foundation.

We are not unaware of the statements made by this Court in the case of Tan Sin v. Deportation
Board (G.R. No. L-11511, Nov. 28,1958). It may be stated, however, that the power of arrest was not
squarely raised in that proceeding, but only as a consequence of therein petitioner's proposition that
the President had no inherent power to deport and that the charges filed against him did not
constitute ground for deportation. .

IN VIEW OF THE FOREGOING, Executive Order No. 398, series of 1951, insofar as it empowers
the Deportation Board to issue warrant of arrest upon the filing of formal charges against an alien or
aliens and to fix bond and prescribe the conditions for the temporary release of said aliens, is
declared illegal. As a consequence, the order of arrest issued by the respondent Deportation Board
is declared null and void and the bonds filed pursuant to such order of arrest, decreed cancelled.
With the foregoing modification, the decision appealed from is hereby affirmed. No costs. So
ordered.

SUBIC BAY METROPOLITAN G.R. No. 160270

AUTHORITY,
Petitioner, Present:

CARPIO, J.,
Chairperson,VELASCO, JR.,*
- versus - BRION,
ABAD, and
PEREZ, JJ.
MERLINO E. RODRIGUEZ and
WIRA INTERNATIONAL
TRADING CORP., both
represented herein by HILDA M. Promulgated:
BACANI, as their authorized
representative, April 23, 2010
Respondents.
x-----------------------------------------------------------------------------------------x

DECISION

CARPIO, J.:

The Case

This is a petition for review[1] of the Court of Appeals (CA) Decision[2] dated
20 June 2003 and Resolution dated 8 October 2003 in CA-G.R. SP No. 74989. The
CA dismissed the petition for certiorari and
prohibition[3] with prayer for temporary restraining order, preliminary or permanent
injunction filed by Subic Bay Metropolitan Authority (SBMA) against Judge Ramon
S. Caguioa of the Regional Trial Court (RTC) of Olongapo City, Branch 74, and
Merlino E. Rodriguez and Wira International Trading Corporation (WIRA), both
represented by Hilda Bacani. The CA also affirmed the Orders dated 21 November
2002 and 27 November 2002 issued by the RTC.
 The Antecedent Facts

The factual and procedural antecedents of this case, as culled from the records,
are as follows:

On 29 September 2001, a cargo shipment described as agricultural product and

valued at US$6,000 arrived at the Port of Subic, Subic Bay Freeport Zone.[4] On the
basis of its declared value, the shipment was assessed customs duties and taxes
totaling P57,101 which were paid by respondent WIRA, the shipments consignee.[5]

On 23 October 2001, Raval Manalas, Acting COO III of the Bureau of Customs,
Port of Subic (BOC Subic Port), issued a Memorandum addressed to the BOC Subic
Port District Collector, stating that upon examination, the subject shipment was
found to contain rice. The Memorandum further stated as follows: that the importer
claimed there was a misshipment since it also had a pending order for rice; that the
warehousing entry was amended to reflect the change in description from
agricultural product to rice; that the shipment, as a warehoused cargo inside the
freeport zone, was duty and tax free, and was not recommended for any imposition
of penalty and surcharge; that the consumption entry was changed to reflect a
shipment of rice; and that the consumption entry, together with supporting
documents belatedly received by the importer, was submitted to the bank although
not yet filed with the BOC.[6]

On 24 October 2001, Hilda Bacani (respondents authorized representative) wrote

BOC Subic Port District Collector Billy Bibit, claiming that she was the
representative of Metro Star Rice Mill (Metro Star), the importer of the subject
cargo. She stated that there was a misshipment of cargo which actually contained
rice, and that Metro Star is an authorized importer of rice as provided in the permits
issued by the National Food Authority (NFA). Bacani requested that the
misshipment be upgraded from agricultural product to a shipment of rice, and at the
same time manifested willingness to pay the appropriate duties and taxes.[7] The
following day, or on 25 October 2001, the BOC issued Hold Order No. 14/C1/2001
1025-101, directing BOC Subic Port officers to (1) hold the delivery of the shipment,
and (2) to cause its transfer to the security warehouse.[8]
On 26 October 2001, respondent WIRA, as the consignee of the shipment, paid the
amount of P259,874 to the BOC representing additional duties and taxes for the
upgraded shipment.[9]

On 30 October 2001, BOC Commissioner Titus Villanueva issued a directive stating

as follows:[10]

2nd Indorsement
30 October 2001

Returned to the District Collector of Customs, Port of Subic, the within

(sic) Import Entry No. C 2550-01 covering the shipment of 2,000 bags
Thai Rice 25% broken consigned to WIRA INTL TRADING
CORPORATION (METRO STAR RICE MILL) ex MV Resolution
V0139 with NFA Import Permit IP SN 000032 and IP SN 000033 both
dated on 13 September 2001 duly issued by the Administrator, National
Food Authority.

Accordingly, the same may be released subject to payment of duties

and taxes based on an upgraded value as provided for by the National
Food Authority at $153.00/MT and compliance with all existing rules
and regulations.

Further, ensure cancellation of NFA Import Permit IP SN 000032 and IP

SN 000033, to prevent the same from being recycled.

Report to this office your compliance of herein directives.

Be guided accordingly.

(Sgd.) Titus Villanueva, CESO 1

Commissioner

In accordance with the shipment upgrade, respondent WIRA paid on 28 November

2001 a further amount of P206,212 as customs duties and taxes.[11] On 4 December
2001, Fertony G. Marcelo, Officer-in-Charge of the Cash Division of BOC Subic
Port issued a certification/letter addressed to Mr. Augusto Canlas, General Manager
of the Seaport Department, stating thus:[12]
 This is to certify that the undersigned Collecting Officer validate[d] a
revenue of Php 523,187.00 from above-mentioned
[13]
importation covered by O.R. Numbers 8083840 dated October 23,
2001, 8084068 dated October 26, 2001 and 8165208 dated November 28,
2001, respectively. And a Gate Pass was issued on December 3, 2001
with signature of Mr. Percito V. Lozada, Chief Assessment in behalf
of the District Collector Billy C. Bibit.

(Sgd.) Fertoni G. Marcelo

Officer-in-charge, Cash Division
(Collecting Officer)

Noted:
(Sgd. For) Coll. Billy C. Bibit

Despite the above certification/letter, petitioner SBMA, through Seaport Department

General Manager Augusto Canlas, refused to allow the release of the rice
shipment. Hence, on 11 June 2002, respondents filed with the RTC of Olongapo
City, a complaint for Injunction and Damages with prayer for issuance of Writ of
Preliminary Prohibitory and Mandatory Injunction and/or Temporary Restraining
Order against petitioner SBMA and Augusto L. Canlas, and the case was docketed
as Civil Case No. 261-0-2002.

The succeeding events were summarized by the trial court and reproduced by the
Court of Appeals, as follows:[14]

1. On June 11, 2002, a complaint for Injunction and Damages with prayer
for issuance of Writ of Preliminary Prohibitory and Mandatory Injunction
and/or Temporary Restraining Order was filed by the plaintiff/petitioners
Mernilo E. Rodriguez, doing business under the name and style Metro
Star Rice Mill, represented by Attorney-in-fact Hilda M. Bacani, and
WIRA International Trading, Inc. likewise represented by Hilda M.
Bacani as authorized representative, against Subic Bay Metropolitan
Authority (SBMA) and Augusto L. Canlas, in his personal and official
capacity as General Manager of the Seaport Department of said
SBMA. The complaint was docketed as Civil Case No. 261-0-[2002].

2. On June 13, 2002, an Order was issued by the Executive Judge of the
Regional Trial Court of Olongapo City, Branch 72, where
plaintiffs/petitioners application for injunctive relief was granted. Said
order restrained the defendants/respondents for seventy-two (72) hours,
from interfering with plaintiffs/petitioners right to enter the premises of
the CCA compound located within the Bureau of Customs territory and
authority within the Subic Bay Freeport Zone (SBFZ), Olongapo City,
and to withdraw and release from said CCA warehouse the rice
importation of plaintiffs and to take and possess the said imported rice
consisting of 2,000 bags; and from interfering in any manner whatsoever
with plaintiffs/petitioners rights and possession over the aforesaid
imported rice. On the same day also, June 13, 2002, the raffle of the case
was set on June 18, 2002 at 8:30 in the morning.

3. Copy of the complaint with summons together with aforesaid

Temporary Restraining Order (TRO) was served by Sheriff Leopoldo
Rabanes and Leandro Madarang of the Office of the Clerk of Court of the
Regional Trial Court, Olongapo City, upon the defendants/respondents on
the same day, June 13, 2002, at around 3:40 in the afternoon as shown by
the Sheriff's return of service (Exh. A-3 and Exh. B-1) typed and found in
the same pleadings.

4. The following day, on June 14, 2002, the same Sheriffs went back to
defendants/respondents' office to determine whether or not the TRO
issued by Branch 72 and served by them was followed. They were
however, met by defendants/respondents Attys. Abella and Katalbas, in
the office of defendant/respondent Canlas, who after much discussion,
refused to honor the TRO issued by Branch 72 alleging among other[s],
that said Order was illegal and therefore, will not be followed by the
defendants/respondents.

5. Unsuccessful in their efforts, the Sheriffs of this Court prepared and

filed their report dated June 17, 2002 outlining therein what transpired on
June 14, 2002 and the circumstances surrounding the refusal by
defendants/respondents to honor the TRO issued by Branch 72-RTC,
Olongapo City (Exh. C). On the same day also, June 17, 2002,
plaintiffs/petitioners-movants filed in the instant case a verified indirect
contempt charge alleging therein that because of the defiance exhibited by
the defendants/respondents[,] specifically Augusto L. Canlas, Attys.
Francisco A. Abella, Jr. and Rizal V. Katalbas. Jr.[,] in not honoring the
court's TRO, they prayed that said defendants/respondents, after due
notice and hearing, be declared and adjudged guilty of indirect contempt
committed against the court for having directly failed and refused to
comply with the TRO dated June 13, 2002, and that they be punished with
imprisonment and/or fine in accordance with Rule 71 of the 1997 Rules
of Civil Procedure.

6. On June 18, 2002, the case was raffled to Branch 74 of herein court.[15]

7. On June 24, 2002, a comment and/or opposition to the verified indirect

contempt charge was filed by the defendants/respondents alleging therein
that they cannot be cited for contempt of court because they had legal
basis to refuse to honor the TRO.

8. Trial was conducted by the court in the indirect contempt charge on

July 12, 2002 as per the courts Order of even date. Plaintiffs/petitioners
presented Sheriff Leopoldo Rabanes who testified on direct
examination. During the August 20, 2002 hearing, Sheriff Rabanes was
cross-examined. Thereafter, the testimony of his co-Sheriff Leandro
Madarang was stipulated upon the parties considering that his testimony
would only corroborate in all principal points the testimony of Sheriff
Rabanes.

9. On that same hearing also[,] plaintiffs/petitioners formally offered their

evidence and rested. Defendants/respondents[,] however, in the meantime
had earlier filed a motion on August 1, 2002[,] asking leave of court to
file a motion to dismiss with attached Motion to Dismiss and in the said
August 20, 2002 hearing, defendants/respondents further manifested that
they were adopting their legal arguments marshalled in the said motion to
dismiss insofar as the indirect contempt charge was concerned.

10. Thereafter, on August 29, 2002, defendants/respondents filed a

manifestation with formal offer of evidence in the indirect contempt case
essentially alleging that it is the Bureau of Customs that has jurisdiction
over this case in view of a Warrant of Seizure and Detention case filed
against the plaintiff/petitioners and denominated as Seizure Identification
No. 200[2]-10. Therefore, since it is the Bureau of Customs that has
jurisdiction, the indirect contempt case has no legal leg to stand on and as
such, defendants/respondents had the right to refuse to comply with the
subject TRO in this case.

11. With the said formal offer of exhibits filed by the

defendants/respondents, the indirect contempt case was considered
submitted for decision by this court.
In addition to the foregoing, on 19 July 2002, petitioner SBMA and Augusto Canlas
filed their Answer to the Complaint for Injunction and Damages with
Counterclaim.[16] On 1 August 2002, petitioner SBMA, Augusto Canlas, Francisco
A. Abella, Jr. and Rizal V. Katalbas, Jr. filed a Consolidated Motion to Dismiss
which sought the dismissal of (1) Civil Case No. 261-0-2002 (Complaint for
Injunction and Damages) and (2) Civil Case No. 262-0-2002 (Petition for Indirect
Contempt), alleging the existence of a Warrant of Seizure and Detention, dated 22
May 2002, issued against the subject rice shipment.[17]

On 21 November 2002, the RTC issued an Order on the indirect contempt case,
stating thus:

WHEREFORE, foregoing considered, judgment is hereby rendered

finding all of the defendants/respondents guilty of indirect contempt of
court. Atty. Francisco A. Abella, Jr. is sentenced to suffer the penalty of
imprisonment of ten (10) days and fined the amount of P10,000.00 Atty.
Rizal V. Katalbas, Jr. is sentenced to pay a fine of P10,000.00. Augusto
L. Canlas is sentenced to pay a fine of P5,000.00. Subsidiary
imprisonment in case of insolvency for all.

Let a warrant of arrest issue against Atty. Francisco A. Abella, Jr. The
Clerk of Court, Atty. John V. Aquino, of the Regional Trial Court,
Olongapo City is directed to collect the corresponding fine from each of
the respondents immediately upon receipt of this order and to report the
same to the court.

SO ORDERED.[18]

On 27 November 2002, the RTC issued another Order considering the pending
incidents in the injunction case. The RTC held that there should be prior
determination by the BOC on whether the 2,000 bags of imported rice were
smuggled, and thus issued the following order:

WHEREFORE, the Bureau of Customs, Customs District XIII, Port of

Subic, Olongapo City through Atty. Titus A. Sangil, Chief, Law Division
and Deputy Collector for Administration is hereby directed to resolve
 Seizure Identification Case No. 2002-10 and submit to the court its
resolution therewith, within fifteen (15) days from receipt of this
order. Meantime, the proceedings in this case are suspended until the court
is in receipt of the resolution of the Bureau of Customs.

Furnish a copy of this order to Atty. Titus A. Sangil at his abovecited

office address.

SO ORDERED.[19]

The Court of Appeals Ruling

Petitioner filed with the CA a Petition for Certiorari and Prohibition with prayer for
Temporary Restraining Order and Preliminary or Permanent Injunction seeking to
nullify and set aside the RTC Orders dated 21 November 2002 and 27 November
2002. On 20 June 2003, the CA rendered a Decision dismissing the petition for lack
of merit and affirming the Orders issued by the RTC. We quote the dispositive
portion of the CA decision below.

WHEREFORE, premises considered, the assailed Orders dated

November 21, 2002 and November 27, 2002 are hereby AFFIRMED in
toto and the present petition is hereby DENIED DUE COURSE and
accordingly DISMISSED for lack of merit.

SO ORDERED.[20]

Petitioners Motion for Reconsideration was denied by the CA in its Resolution of 8

October 2003.[21]

Hence, this appeal.

The Issue

The issue for resolution in this case is whether the CA erred in affirming the RTC
Orders dated 21 November 2002 and 27 November 2002.
 The Courts Ruling

We find the appeal meritorious.

As a rule, actions for injunction and damages lie within the jurisdiction of the RTC
pursuant to Section 19 of Batas Pambansa Blg. 129 (BP 129), otherwise known as
the Judiciary Reorganization Act of 1980, as amended by Republic Act (RA) No.
7691.[22]
An action for injunction is a suit which has for its purpose the enjoinment of the
defendant, perpetually or for a particular time, from the commission or continuance
of a specific act, or his compulsion to continue performance of a particular act.[23] It
has an independent existence, and is distinct from the ancillary remedy of
preliminary injunction which cannot exist except only as a part or an incident of an
independent action or proceeding.[24] In an action for injunction, the auxiliary
remedy of preliminary injunction, prohibitory or mandatory, may issue.[25]
Until the propriety of granting an injunction, temporary or perpetual, is determined,
the court (i.e., the RTC in this case) may issue a temporary restraining order. [26]A
TRO is an interlocutory order or writ issued by the court as a restraint on the
defendant until the propriety of granting an injunction can be determined, thus going
no further in its operation than to preserve the status quo until that
determination.[27] A TRO is not intended to operate as an injunction pendente lite,
and should not in effect determine the issues involved before the parties can have
their day in court.[28]

Petitioner alleges that the RTC of Olongapo City has no jurisdiction over the action
for injunction and damages filed by respondents on 11 June 2002 as said action is
within the exclusive original jurisdiction of the BOC pursuant to Section 602 of
Republic Act No. 1937, otherwise known as the Tariff and Customs Code of the
Philippines, as amended. Section 602 provides, thus:

Sec. 602. Functions of the Bureau.- The general duties, powers and
jurisdiction of the bureau shall include:
xxx
 g. Exercise exclusive original jurisdiction over seizure and
forfeiture cases under the tariff and customs laws.

Petitioner contends that the imported 2,000 bags of rice were in the actual physical
control and possession of the BOC as early as 25 October 2001, by virtue of the BOC
Subic Port Hold Order of even date, and of the BOC Warrant of Seizure and
Detention dated 22 May 2002. As such, the BOC had acquired exclusive original
jurisdiction over the subject shipment, to the exclusion of the RTC.

We agree with petitioner.

It is well settled that the Collector of Customs has exclusive jurisdiction over seizure
and forfeiture proceedings, and regular courts cannot interfere with his exercise
thereof or stifle or put it at naught.[29] The Collector of Customs sitting in seizure and
forfeiture proceedings has exclusive jurisdiction to hear and determine all questions
touching on the seizure and forfeiture of dutiable goods.[30] Regional trial courts are
devoid of any competence to pass upon the validity or regularity of seizure and
forfeiture proceedings conducted by the BOC and to enjoin or otherwise interfere
with these proceedings.[31] Regional trial courts are precluded from assuming
cognizance over such matters even through petitions for certiorari, prohibition or
mandamus.[32]

Verily, the rule is that from the moment imported goods are actually in the
possession or control of the Customs authorities, even if no warrant for seizure or
detention had previously been issued by the Collector of Customs in connection with
the seizure and forfeiture proceedings, the BOC acquires exclusive jurisdiction over
such imported goods for the purpose of enforcing the customs laws, subject to appeal
to the Court of Tax Appeals whose decisions are appealable to this Court. [33] As we
have clarified in Commissioner of Customs v. Makasiar,[34] the rule that RTCs have
no review powers over such proceedings is anchored upon the policy of placing no
unnecessary hindrance on the government's drive, not only to prevent smuggling and
other frauds upon Customs, but more importantly, to render effective and efficient
the collection of import and export duties due the State, which enables the
government to carry out the functions it has been instituted to perform.
Based on the records of this case, the BOC Subic Port issued a Hold Order against
the subject rice shipment on 25 October 2001. However, on 30 October 2001, BOC
Commissioner Titus Villanueva issued a directive to the BOC District Collector
stating that the shipment may be released subject to payment of duties and taxes
based on an upgraded value x x x and compliance with all existing rules and
regulations. Accordingly, respondents made additional payments of customs duties
and taxes for the upgraded shipment. Consequently, on 4 December 2001, the
Officer-in-Charge of the BOC Subic Port Cash Division issued a certification/letter
addressed to Augusto Canlas, the General Manager of the Subic Seaport
Department, stating that respondents have already paid the customs taxes and duties
due on the shipment, and a Gate Pass was issued on December 3, 2001 with
signature of Mr. Percito V. Lozada, Chief Assessment (sic) in behalf of the District
Collector Billy C. Bibit.[35] Thus, the Hold Order previously issued by the
BOC[36] had been superseded, and made ineffective, by the succeeding BOC
issuances.

However, BOC Subic Port District Collector Felipe A. Bartolome subsequently

issued a Warrant of Seizure and Detention dated 22 May 2002 against the subject
rice shipment. The warrant was issued upon recommendation made by Atty.
Baltazar Morales of the Customs Intelligence and Investigation Service (CIIS) on
29 April 2002.[37] With the issuance of the warrant of seizure and detention,
exclusive jurisdiction over the subject shipment was regained by the BOC.

We note that the appellate court found suspicious the existence of the warrant of
seizure and detention at the time of filing of the injunction and damages case with
the RTC by respondents. The CA pointed out that petitioner did not mention the
existence of the warrant in its Answer to the Complaint for Injunction and Damages,
filed on 19 July 2002, and only mentioned the warrant in its Consolidated Motion to
Dismiss [the Complaint for Injunction and Damages, and the Petition for Indirect
Contempt], filed on 1 August 2002.[38] We do not agree with the appellate court.
Petitioner's apparent neglect to mention the warrant of seizure and detention in its
Answer is insufficient to cast doubt on the existence of said warrant.

Respondents filed a case for indirect contempt against Augusto L. Canlas, Atty.
Francisco A. Abella, Jr., and Atty. Rizal V. Katalbas, Jr. for allegedly defying the
TRO issued by the RTC in connection with the complaint for injunction and damages
previously filed by respondents.

Contempt constitutes disobedience to the court by setting up an opposition to its

authority, justice and dignity.[39] It signifies not only a willful disregard or
disobedience of the court's orders but such conduct as tends to bring the authority of
the court and the administration of law into disrepute or in some manner to impede
the due administration of justice.[40] There are two kinds of contempt punishable by
law: direct contempt and indirect contempt. Direct contempt is committed when a
person is guilty of misbehavior in the presence of or so near a court as to obstruct or
interrupt the proceedings before the same, including disrespect toward the court,
offensive personalities toward others, or refusal to be sworn or to answer as a
witness, or to subscribe an affidavit or deposition when lawfully required to do
so.[41] Indirect contempt or constructive contempt is that which is committed out of
the presence of the court.[42]
Section 3 of Rule 71 of the Revised Rules of Civil Procedure includes, among the
grounds for filing a case for indirect contempt, the following:

Section 3. Indirect contempt to be punished after charge and hearing.

After charge in writing has been filed, and an opportunity given to
the accused to be heard by himself or counsel, a person guilty of any of
the following acts may be punished for contempt:
xxx
(b) Disobedience of or resistance to a lawful writ, process, order,
judgment or command of a court, or injunction granted by a court or judge,
xxx
(c) Any abuse of or any unlawful interference with the process or
proceedings of a court not constituting direct contempt under Section 1 of
this rule;
(d) Any improper conduct tending, directly or indirectly, to impede,
obstruct or degrade the administration of justice;
xxx

When the TRO issued by the RTC was served upon the SBMA officers on 13 June
2002, there was already an existing warrant of seizure and detention (dated 22 May
2002) issued by the BOC against the subject rice shipment. Thus, as far as the SBMA
officers were concerned, exclusive jurisdiction over the subject shipment remained
with the BOC, and the RTC had no jurisdiction over cases involving said shipment.
Consequently, the SBMA officers refused to comply with the TRO issued by the
RTC.

Considering the foregoing circumstances, we believe that the SBMA officers may
be considered to have acted in good faith when they refused to follow the TRO issued
by the RTC. The SBMA officers' refusal to follow the court order was not
contumacious but due to the honest belief that jurisdiction over the subject shipment
remained with the BOC because of the existing warrant of seizure and detention
against said shipment. Accordingly, these SBMA officers should not be held
accountable for their acts which were done in good faith and not without legal
basis. Thus, we hold that the RTC Order dated 21 November 2002 which found the
SBMA officers guilty of indirect contempt for not complying with the RTC's TRO
should be invalidated.

Finally, the RTC stated in its Order dated 27 November 2002 that based on the
records, there is a pending case with the Bureau of Customs District XIII, Port of
Subic, Olongapo City, identified and docketed as Seizure Identification No. 2002-
10 and involving the same 2,000 bags of imported rice that is also the subject matter
of the case herein. The existence and pendency of said case before the Bureau of
Customs have in fact been admitted by the parties.[43]

The RTC then proceeded to order the suspension of court proceedings, and directed
the BOC Subic Port Chief of the Law Division and Deputy Collector for
Administration, Atty. Titus Sangil, to resolve the seizure case and submit to the RTC
its resolution within fifteen (15) days from receipt of the court order. We quote the
dispositive portion of the RTC Order dated 27 November 2002, to wit:

WHEREFORE, the Bureau of Customs, Customs District XIII, Port of

Subic, Olongapo City through Atty. Titus A. Sangil, Chief, Law Division
and Deputy Collector for Administration is hereby directed to resolve
Seizure Identification Case No. 2002-10 and submit to the court its
resolution therewith, within fifteen (15) days from receipt of this
order. Meantime, the proceedings in this case are suspended until the court
is in receipt of the resolution of the Bureau of Customs.
 Furnish a copy of this order to Atty. Titus A. Sangil at his abovecited
office address.[44]

We find the issuance of the RTC Order dated 27 November 2002 improper. The
pendency of the BOC seizure proceedings which was made known to the RTC
through petitioner's consolidated motion to dismiss should have prompted said court
to dismiss the case before it. As previously discussed, the BOC has exclusive
original jurisdiction over seizure cases under Section 602 of the Tariff and Customs
Code. The rule that the RTC must defer to the exclusive original jurisdiction of the
BOC in cases involving seizure and forfeiture of goods is absolute. Thus, the RTC
had no jurisdiction to issue its Order dated 27 November 2002.

WHEREFORE, we GRANT the petition. We REVERSE the Court of Appeals

Decision dated 20 June 2003 and Resolution dated 8 October 2003 in CA-G.R. SP
No. 74989. We declare VOID the Regional Trial Court Orders dated 21 November
2002 and 27 November 2002.
SO ORDERED.
SPS. LEONARDO AND MILAGROS G.R. No. 156164
CHUA,
Petitioners,
Present:

- versus - QUISUMBING, J., Chairperson,

CARPIO MORALES,
BRION,
DEL CASTILLO, and
HON. JACINTO G. ANG, DENNIS R. ABAD, JJ.
PASTRANA, IN THEIR CAPACITIES AS
CITY AND ASSISTANT PROSECUTOR
OF PASIG, RESPECTIVELY,
FERDINAND T. SANTOS, ROBERT
JOHN L. SOBREPEA, NOEL M. CARIO,
ROBERTO S. ROCO, ALICE ODCHIQUE-
BONDOC, ROMULO T. SANTOS AND
ENRIQUE A. SOBREPEA, JR.,
Respondents.

Promulgated:

September 4, 2009
x-------------------------------------------------------------------------------------- x
DECISION
 BRION, J.:

Before us is the petition for certiorari[1] filed by the spouses Leonardo and Milagros
Chua (petitioners) to assail the Resolution dated November 4, 2002 of the City
Prosecutor of Pasig in I.S. No. PSG 02-02-09150. The City Prosecutors Resolution
dismissed the complaint filed by the petitioners against Ferdinand T. Santos, Robert
John L. Sobrepea, Noel M. Cario, Roberto S. Roco, Alice Odchique-Bondoc, Romulo
T. Santos and Enrique A. Sobrepea, Jr. (private respondents) for violation of
Presidential Decree (P.D.) No. 957, otherwise known as The Subdivision and
Condominium Buyers Protective Decree.

FACTUAL BACKGROUND

The antecedent facts, drawn from the records, are briefly summarized below.

On February 11, 1999, the petitioners (as buyers) and Fil-Estate Properties, Inc.
(FEPI, as developers) executed a Contract To Sell[2] a condominium unit. Despite the
lapse of three (3) years, FEPI failed to construct and deliver the contracted
condominium unit to the petitioners.

As a result, the petitioners filed on September 3, 2002 a Complaint-

Affidavit[3] before the Office of the City Prosecutor of Pasig City accusing the private
respondents, as officers and directors of FEPI, of violating P.D. No. 957, specifically
its Sections 17 and 20, in relation with Section 39.[4] These provisions state:
Sec. 17. Registration. - All contracts to sell, deeds of sale and other similar
instruments relative to the sale or conveyance of the subdivision lots and
condominium units, whether or not the purchase price is paid in full, shall
be registered by the seller in the Office of the Register of Deeds of the
province or city where the property is situated.

xxx
 Sec. 20. Time of Completion. - Every owner or developer shall construct
and provide the facilities, improvements, infrastructures and other forms
of development, including water supply and lighting facilities, which are
offered and indicated in the approved subdivision or condominium plans,
brochures, prospectus, printed matters, letters or in any form of
advertisement, within one year from the date of the issuance of the license
for the subdivision or condominium project or such other period of time
as may be fixed by the Authority.

xxx

Sec. 39. Penalties. - Any person who shall violate any of the provisions
of this Decree and/or any rule or regulation that may be issued pursuant to
this Decree shall, upon conviction, be punished by a fine of not more than
twenty thousand (P20,000.00) pesos and/or imprisonment of not more
than ten years: Provided, That in the case of corporations, partnership,
cooperatives, or associations, the President, Manager or Administrator or
the person who has charge of the administration of the business shall be
criminally responsible for any violation of this Decree and/or the rules and
regulations promulgated pursuant thereto. [Emphasis supplied]

The petitioners alleged that the private respondents did not construct and failed to
deliver the contracted condominium unit to them and did not register the Contract
to Sell with the Register of Deeds.

Of the seven (7) private respondents, only private respondent Alice Odchique-
Bondoc filed a Counter-Affidavit.[5] She countered that the City Prosecutor has no
jurisdiction over the case since it falls under the exclusive jurisdiction of
the Housing and Land Use Regulatory Board (HLURB).

On November 4, 2002, Assistant City Prosecutor Dennis R. Pastrana and Pasig

City Prosecutor Jacinto G. Ang (public respondents), respectively issued and
approved the Resolution[6] dismissing the complaint for being premature. The
Resolution held that it is the HLURB that has exclusive jurisdiction over cases
involving real estate business and practices.
 THE PETITION and THE PARTIES POSITIONS

On December 12, 2002, the petitioners filed the present petition[7] anchored on the
following ground:

PUBLIC RESPONDENTS COMMITTED MANIFEST ERROR AND GRAVE

ABUSE OF DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF
JURISDICTION, WHEN IT DISMISSED PETITIONER'S COMPLAINANT (sic)
ON THE GROUND THAT THE HLURB, NOT THEIR OFFICE HAS
JURISDICTION TO CONDUCT PRELIMINARY INVESTIGATION AND FILE THE
CORRESPONDING INFORMATION IN COURT FOR CRIMINAL VIOLATIONS
OF P.D. No. 957.[8]

The petitioners argue that jurisdiction to entertain criminal complaints is lodged

with the city prosecutor and that the jurisdiction of the HLURB under P.D. No. 957
is limited to the enforcement of contractual rights, not the investigation of criminal
complaints.

In their Comment,[9] the private respondents submit that the petition should be
dismissed outright because the petitioners failed to avail of other remedies
provided by law, such as (a) the filing of a motion for reconsideration with the City
Prosecutor of Pasig City, (b) the filing of a petition for review with the Secretary of
the Department of Justice (DOJ), (c) the filing of a motion for reconsideration of any
judgment rendered by the DOJ, or (d) the filing of an appeal or a petition
for certiorari with the Court of Appeals (CA); that even if certiorari is a proper
remedy, the petition was filed in violation of the hierarchy of courts; and that even
on the merits, the petition must fail since the public respondents correctly
dismissed the complaint as a reasonable interpretation of P.D. No. 957 which
requires a prior determination by the HLURB that a corporation violated P.D. No.
957 before criminal charges may be filed against its corporate officers.
In their Reply, the petitioners reiterate that the public respondents abdicated their
authority to conduct a preliminary investigation and to indict the private
respondents for criminal violations of P.D. No. 957 when they dismissed the
criminal complaint for being premature.[10]

OUR RULING

We find the petition meritorious.

At the outset, we note that the petitioners indeed filed the present petition
for certiorari without prior recourse to other available remedies provided by law
and the observance of the judicial hierarchy of courts. Nonetheless, the rules on
prior recourse to these available remedies are not without exceptions, nor is the
observance of the judicial hierarchy of courts an inflexible rule; the peculiarity,
uniqueness and unusual character of the factual and circumstantial settings of a
case may allow the flexible application of these established legal principles to
achieve fair and speedy dispensation of justice.

A prior motion for reconsideration is unnecessary: (a) where the order is a patent
nullity, as where the court a quo has no jurisdiction; (b) where the questions raised
in the certiorariproceedings have been duly raised and passed upon by the lower
court, or are the same as those raised and passed upon in the lower court;
(c) where there is an urgent necessity for the resolution of the question and any
further delay would prejudice the interests of the Government or of the
petitioner; (d) where, under the circumstances, a motion for
reconsideration would be useless; (e) where petitioner was deprived of due
process and there is an extreme urgency for relief; (f) where, in a criminal case,
relief from an order of arrest is urgent and the grant of such relief by the trial court
is improbable; (g) where the proceedings in the lower court are a nullity for lack of
due process; (h) where the proceedings were ex parte or in which the petitioner
had no opportunity to object; or (i) where the issue raised is one purely of law or
where public interest is involved.[11]

On the other hand, prior exhaustion of administrative remedies may be dispensed

with and judicial action may be validly resorted to immediately: (a) when there is a
violation of due process; (b) when the issue involved is purely a legal question; (c)
when the administrative action is patently illegal amounting to lack or excess of
jurisdiction; (d) when there is estoppel on the part of the administrative agency
concerned; (e) when there is irreparable injury; (f) when the respondent is a
department secretary whose acts as an alter ego of the President bear the implied
and assumed approval of the latter; (g) when to require exhaustion of
administrative remedies would be unreasonable; (h) when it would amount to a
nullification of a claim; (i) when the subject matter is a private land in land case
proceedings; (j) when the rule does not provide a plain, speedy and adequate
remedy; or (k) when there are circumstances indicating the urgency of judicial
intervention.[12]

On the non-observance of the principle of hierarchy of courts, it must be

remembered that this rule generally applies to cases involving conflicting factual
allegations. Cases which depend on disputed facts for decision cannot be brought
immediately before us as we are not triers of facts.[13] A strict application of this
rule may be excused when the reason behind the rule is not present in a case, as in
the present case, where the issues are not factual but purely legal. In these types
of questions, this Court has the ultimate say so that we merely abbreviate the
review process if we, because of the unique circumstances of a case, choose to hear
and decide the legal issues outright.[14]

In the present petition for certiorari, we find that there are four (4) compelling
reasons to allow the petitioners' invocation of our jurisdiction in the first instance,
even without prior recourse to a motion for reconsideration or to the exhaustion
of administrative remedies, and even in disregard of the principle of hierarchy of
courts.
 First, the petitioners raise a pure question of law involving jurisdiction over
criminal complaints for violation of P.D. No. 957. A question of law exists when the
doubt or controversy concerns the correct application of law or jurisprudence to a
certain set of facts; or when the issue does not call for an examination of the
probative value of the evidence presented, the truth or falsehood of facts being
admitted.[15] As noted earlier, this Court is the undisputed final arbiter of all
questions of law.

Second, the present case requires prompt action because public interest and
welfare are involved in subdivision and condominium development, as the terms
of P.D. Nos. 957 and 1344 expressly reflect.[16] Questions of conflicting processes,
essentially based on jurisdiction, will consistently recur as peoples need for housing
(and hence, subdivisions and condominiums) escalate. Shelter is a basic human
need whose fulfillment cannot afford any kind of delay.[17]

Third, considering that this case has been pending for nearly seven (7) years
(since the filing of the Complaint-Affidavit on September 3, 2002) to the prejudice
not only of the parties involved, but also of the subdivision and condominium
regulatory system and its need for the prompt determination of controversies, the
interests of justice now demand the direct resolution of the jurisdictional issue this
proceeding poses. As mentioned, at stake in this case is shelter a basic human need
and to remand the case to the DOJ for a determination of the merits of the parties
jurisdictional tug-of-war would not serve any purpose other than to further delay
its resolution.[18] Thus, the practicality of the situation and the need for the speedy
administration of justice justify a departure from the strict application of
procedural rules. Besides, the issue before us presents no special difficulty, and we
feel it should be decided now, without going through the procedural formalities
that shall anyway end up with this Court.
Fourth, the petition is meritorious. The public respondents committed grave abuse
of discretion in dismissing the criminal complaints for violation of P.D. No. 957 on
the ground that jurisdiction lies with the HLURB.

Generally, the extent to which an administrative agency may exercise its powers
depends largely, if not wholly, on the provisions of the statute creating and defining
the terms of the agencys mandate. P.D. No. 1344 clarifies and spells out the quasi-
judicial dimensions of the grant of jurisdiction to the HLURB in the following
specific terms:[19]

SEC. 1. In the exercise of its functions to regulate the real estate

trade and business and in addition to its powers provided for in
Presidential Decree No. 957, the National Housing Authority shall have
exclusive jurisdiction to hear and decide cases of the following nature:

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by

subdivision lot or condominium unit buyer against the project owner,
developer, dealer, broker or salesman; and

C. Cases involving specific performance of contractual and

statutory obligations filed by buyers of subdivision lots or condominium
units against the owner, developer, dealer, broker or salesman.

The extent of its quasi-judicial authority, on the other hand, is defined by the terms
of P.D. No. 957 whose Section 3 provides:
x x x National Housing Authority [now HLURB]. - The National
Housing Authority shall have exclusive jurisdiction to regulate the real
estate trade and business in accordance with the provisions of this Decree.

The provisions of P.D No. 957 were intended to encompass all questions
regarding subdivisions and condominiums. The intention was to provide for an
appropriate government agency, the HLURB, to which all parties buyers and sellers
of subdivision and condominium units - may seek remedial recourse. The law
recognized, too, that subdivision and condominium development involves public
interest and welfare and should be brought to a body, like the HLURB, that has
technical expertise.[20] In the exercise of its powers, the HLURB, on the other hand,
is empowered to interpret and apply contracts, and determine the rights of private
parties under these contracts. This ancillary power, generally judicial, is now no
longer with the regular courts to the extent that the pertinent HLURB laws
provide.[21]

Viewed from this perspective, the HLURBs jurisdiction over contractual rights and
obligations of parties under subdivision and condominium contracts comes out very
clearly. But hand in hand with this definition and grant of authority is the provision
on criminal penalties for violations of the Decree, provided under the Decrees
Section 39, heretofore quoted. Significantly, nothing in P.D. No. 957 vests the
HLURB with jurisdiction to impose the Section 39 criminal penalties. What the
Decree provides is the authority of the HLURB to impose administrative fines under
Section 38, as implemented by the Rules Implementing the Subdivision and
Condominium Buyers Protective Decree. This Section of the Decree provides:

Sec. 38. Administrative Fines. The Authority may prescribe and impose
fines not exceeding ten thousand pesos for violations of the provisions of
this Decree or of any rule or regulation thereunder. Fines shall be payable
to the Authority and enforceable through writs of execution in accordance
with the provisions of the Rules of Court.

The Implementing Rules, for their part, clarify that The implementation and payment
of administrative fines shall not preclude criminal prosecution of the offender under
Section 39 of the Decree. Thus, the implementing rules themselves expressly
acknowledge that two separate remedies with differing consequences may be sought
under the Decree, specifically, the administrative remedy and criminal prosecution.

Unless the contrary appears under other provisions of law (and in this case no
such provision applies), the determination of the criminal liability lies within the
realm of criminal procedure as embodied in the Rules of Court. Section 2, Rule 112
of these Rules provide that the prerogative to determine the existence or non-
existence of probable cause lies with the persons duly authorized by law; as provided
in this Rule, they are (a) Provincial or City Prosecutors and their assistants; (b)
Judges of the Municipal Trial Courts and Municipal Circuit Trial Courts; (c)
National and Regional State Prosecutors; and (d) other officers as may be authorized
by law.

In the present case, the petitioners have expressly chosen to pursue the
criminal prosecution as their remedy but the prosecutor dismissed their complaint.
The prosecutors dismissal for prematurity was apparently on the view that an
administrative finding of violation must first be obtained before recourse can be
made to criminal prosecution. This view is not without its model in other laws; one
such law is in the prosecution of unfair labor practice under the Labor Code where
no criminal prosecution for unfair labor practice can be instituted without a final
judgment in a previous administrative proceeding.[22] The need for a final
administrative determination in unfair labor practice cases, however, is a
matter expressly required by law.Where the law is silent on this matter, as in this
case, the fundamental principle that administrative cases are independent from
criminal actions[23] fully applies, subject only to the rules on forum shopping under
Section 5, Rule 7 of the Rules of Court.[24] In the present case, forum shopping is not
even a matter for consideration since the petitioners have chosen to pursue only one
remedy criminal prosecution. Thus, we see no bar to their immediate recourse to
criminal prosecution by filing the appropriate complaint before the prosecutors
office.

In light of these legal realities, we hold that the public respondent prosecutors should
have made a determination of probable cause in the complaint before them, instead
of simply dismissing it for prematurity. Their failure to do so and the dismissal they
ordered effectively constituted an evasion of a positive duty and a virtual refusal to
perform a duty enjoined by law; they acted on the case in a manner outside the
contemplation of law. This is grave abuse of discretion amounting to a lack of or in
excess of jurisdiction warranting a reversal of the assailed resolution.[25] In the
concrete context of this case, the public prosecutors effectively shied away from
their duty to prosecute, a criminal violation of P.D. No. 957 as mandated by Section
5, Rule 110 of the Rules of Court and Republic Act No. 5180,[26] as
amended,[27] otherwise known as the Law on Uniform Procedure of Preliminary
Investigation.

As a final word, we stress that the immediate recourse to this Court that this
Decision allows should not serve as a precedent in other cases where the prosecutor
dismisses a criminal complaint, whether under P.D. No. 957 or any other law.
Recourse to (a) the filing a motion for reconsideration with the City or Provincial
Prosecutor, (b) the filing a petition for review with the Secretary of the DOJ, (c) the
filing a motion for reconsideration of any judgment rendered by the DOJ, and (d)
intermediate recourse to the CA, are remedies that the dictates of orderly procedure
and the hierarchy of authorities cannot dispense with. Only the extremely peculiar
circumstances of the present case compelled us to rule as we did; thus our ruling in
this regard is a rare one that should be considered pro hac vice.

WHEREFORE, we hereby GRANT the petition and

accordingly REVERSE and SET ASIDE the Resolution dated November 4, 2002
of the City Prosecutor of Pasig in I.S. No. PSG 02-02-09150. The complaint is
hereby ordered returned to the Office of the City Prosecutor of Pasig City for the
determination of probable cause and the filing of the necessary information, if
warranted. No costs.

SO ORDERED.

EN BANC

[G.R. No. 101476. April 14, 1992.]

EXPORT PROCESSING ZONE AUTHORITY, Petitioner, v. THE COMMISSION ON

HUMAN RIGHTS, TERESITA VALLES, LORETO ALEDIA and PEDRO
ORDOÑEZ, Respondents.

The Government Corporate Counsel for Petitioner.

Marvic M.V.F. Leonen for respondents Valles, Aledia and Ordoñez.

SYLLABUS

1. CONSTITUTIONAL LAW; COMMISSION ON HUMAN RIGHTS; LIMITATION ON

THE POWER THEREOF TO PROVIDE PREVENTIVE MEASURES AND LEGAL AID
SERVICES TO THE UNDERPRIVILEGED WHOSE HUMAN RIGHTS HAVE BEEN
VIOLATED. — The constitutional provision directing the CHR to "provide for preventive
measures and legal aid services to the underprivileged whose human rights have been
violated or need protection" may not be construed to confer jurisdiction on the
Commission to issue a restraining order or writ of injunction for, if that were the
intention, the Constitution would have expressly said so. "Jurisdiction is conferred only
by the Constitution or by law (Oroso, Jr. v. Court of Appeals, G.R. Nos. 76828-32, 28
January 1991; Bacalso v. Ramolete, G.R. No. L-22488, 26 October 1967, 21 SCRA
519). It is never derived by implication. (Garcia, Et. Al. v. De Jesus, Et Al., G.R. No.
88158; Tobon Uy v. Commission on Election, Et Al., G.R. Nos. 97108-09, March 4,
1992.)

2. ID.; ID.; NO JURISDICTION TO ISSUE WRIT OF PRELIMINARY INJUNCTION;

REASON THEREFOR. — Evidently, the "preventive measures and legal aid services"
mentioned in the Constitution refer to extrajudicial and judicial remedies (including a
preliminary writ of injunction) which the CHR may seek from the proper courts on behalf
of the victims of human rights violations. Not being a court of justice, the CHR itself has
no jurisdiction to issue the writ, for a writ of preliminary injunction may only be issued
"by the judge of any court in which the action is pending [within his district]. or by a
Justice of the Court of Appeals, or of the Supreme Court. It may also be granted by the
judge of the Court of First Instance [now Regional Trial Court] in any action pending in
an inferior court within his district." (Sec. 2, Rule 58, Rules of Court). A writ of
preliminary injunction is an ancillary remedy. It is available only in a pending principal
action, for the preservation or protection of the rights and interests of a party thereto,
and for no other purpose.

PADILLA, J., dissenting:chanrob1es virtual 1aw library

1. CONSTITUTIONAL LAW; COMMISSION ON HUMAN RIGHTS; HAS THE

AUTHORITY IN APPROPRIATE CASES TO PROVIDE FOR PREVENTIVE
MEASURES AND LEGAL AID SERVICES TO THE UNDERPRIVILEGED WHOSE
HUMAN RIGHTS HAVE BEEN VIOLATED OR NEED PROTECTION. — Justice Padilla
dissents for the reasons stated in his separate opinion in "Hon. Isidro Cariño, Et. Al. v.
Commission on Human Rights, Et Al.," G.R. No. 96681, 2 December 1991. In addition,
it is his considered view that the CHR has the unquestioned authority in appropriate
cases to "provide for preventive measures and legal aid services to the under privileged
whose human rights have been violated or need protection." (Section 18(c), Article XIII,
1987 Constitution). If the CHR can not, by itself, issue any cease and desist order in
order to maintain the status quo pending its investigation of cases involving alleged
human rights violations, then it is, in effect, an ineffective instrument for the protection of
human rights. He submits that the CHR, consistent with the intent of the framers of the
1987 Constitution, may issue cease and desist orders particularly in situations involving
a threatened violation of human rights, which it intends to investigate, and such cease
and desist orders may be judicially challenged like the orders of the other constitutional
commissions, — which are not courts of law — under Rule 65 of the Rules of Court, on
grounds of lack or excess of jurisdiction or grave abuse of discretion.

DECISION
 GRIÑO-AQUINO, J.:

On May 30, 1980, P.D. 1980 was issued reserving and designating certain parcels of
land in Rosario and General Trias, Cavite, as the "Cavite Export Processing Zone"
(CEPZ). For purposes of development, the area was divided into Phases I to IV. A
parcel in Phase IV was bought by the Filoil Refinery Corporation. The same parcel was
later sold by Filoil to the Export Processing Zone Authority (EPZA).

Before EPZA could take possession of the area, several individuals had entered the
premises and planted agricultural products therein without permission from EPZA or its
predecessor, Filoil. To convince the intruders to depart peacefully, EPZA, in 1981, paid
a P10,000-financial-assistance to those who accepted the same and signed quitclaims.
Among them were Teresita Valles and Alfredo Aledia, father of respondent Loreto
Aledia.

Ten years later, on May 10, 1991, respondent Teresita Valles, Loreto Aledia and Pedro
Ordoñez filed in the respondent Commission on Human Rights (CHR) a joint complaint
(Pinagsamang Salaysay) praying for "justice and other reliefs and remedies"
("Katarungan at iba pang tulong"). The CHR conducted an investigation of the
complaint.

According to the CHR, the private respondents, who are farmers, filed in the
Commission on May 10, 1991, a verified complaint for violation of their human rights.
They alleged that on March 20, 1991, at 10:00 o’clock in the morning, Engineer Neron
Damondamon, EPZA Project Engineer, accompanied by his subordinates and members
of the 215th PNP Company, brought a bulldozer and a crane to level the area occupied
by the private respondents who tried to stop them by showing a copy of a letter from the
Office of the President of the Philippines ordering postponement of the bulldozing.
However, the letter was crumpled and thrown to the ground by a member of
Damondamon’s group who proclaimed that: "The President in Cavite is Governor
Remulla!" chanrobles.com.ph : virtual law library

On April 3, 1991, mediamen who had been invited by the private respondents to cover
the happenings in the area were beaten up and their cameras were snatched from them
by members of the Philippine National Police and some government officials and their
civilian followers.

On May 17, 1991, the CHR issued an Order of injunction commanding EPZA, the 125th
PNP Company and Governor Remulla and their subordinates to desist from committing
further acts of demolition, terrorism, and harassment until further orders from the
Commission and to appear before the Commission on May 27, 1991 at 9:00 a.m. for a
dialogue (Annex A).

On May 25, 1991, two weeks later, the same group accompanied by men of Governor
Remulla, again bulldozed the area. They allegedly handcuffed private respondent
Teresita Valles, pointed their firearms at the other respondents, and fired a shot in the
air.

On May 28, 1991, CHR Chairman Mary Concepcion Bautista issued another injunction
Order reiterating her order of May 17, 1991 and expanded it to include the Secretary of
Public Works and Highways, the contractors, and their subordinates. The order reads
as follows:chanrobles.com.ph : virtual law library

"Considering the sworn statements of the farmers whose farmlands are being bulldozed
and the wanton destruction of their irrigation canals which prevent cultivation of the
farmlands as well as the claim of ownership of the lands by some farmers-complainants,
and their possession and cultivation thereof spanning decades, including the failure of
the officials concerned to comply with the Constitutional provision on the eviction of rural
‘squatters’, the Commission reiterates its Order of May 17, 1991, and further orders the
Secretary of Public Works and Highways, their Contractors and representatives to
refrain and desist from bulldozing the farmlands of the complainants-farmers who have
come to the Commission for relief, during the pendency of this investigation and to
refrain from further destruction of the irrigation canals in the area until further orders of
the Commission.

"This dialogue is reset to June 10, 1991 at 9:00 a.m. and the Secretary of the
Department of Public Works and Highways or his representative is requested to
appear." (p. 20, Rollo; Emphasis ours.)

On July 1, 1991, EPZA filed in the CHR a motion to lift the Order of Injunction for lack of
authority to issue injunctive writs and temporary restraining orders.

On August 16, 1991, the Commission denied the motion.

On September 11, 1991, the petitioner, through the Government Corporate Counsel,
filed in this Court a Special civil action of certiorari and prohibition with a prayer for the
issuance of a restraining order and/or preliminary injunction, alleging that the CHR
acted in excess of its jurisdiction and with grave abuse of discretion in issuing the
restraining order and injunctive writ; that the private respondents have no clear, positive
right to be protected by an injunction; that the CHR abused its discretion in entertaining
the private respondent’s complaint because the issues raised therein had been decided
by this Court, hence, it is barred by prior judgment.

On September 19, 1991, this Court issued a temporary restraining order, ordering the
CHR to cease and desist from enforcing and/or implementing the questioned injunction
orders.

In its comment on the petition, the CHR asked for the immediate lifting of this Court’s
restraining order, and for an order restraining petitioner EPZA from doing further acts of
destruction and harassment. The CHR contends that its principal function under Section
18, Art. 13 of the 1987 Constitution, "is not limited to mere investigation" because it is
mandated, among others, to:jgc:chanrobles.com.ph

"a. Investigate, on its own or on complaint by any party, all forms of human rights
violations involving civil and political rights;

"b. Adopt its operational guidelines and rules of procedure, and cite for contempt for
violations thereof in accordance with the Rules of Court;

"c. Provide appropriate legal measures for the protection of human rights of all persons
within the Philippines, as well as Filipinos residing abroad, and provide for preventive
measures and legal aid services to the under privileged whose human rights have been
violated or need protection;

"d. Monitor the Philippine Government’s compliance with international treaty obligations
on human rights. (Emphasis ours.)" (p. 45, Rollo.)

On November 14, 1991, the Solicitor General filed a Manifestation and Motion praying
that he be excused from filing a Comment for the CHR on the ground that the Comment
filed by the latter "fully traversed and squarely met all the issues raised and discussed in
the main Petition for Certiorari and Prohibition" (p. 83, Rollo.)cralawnad

Does the CHR have jurisdiction to issue a writ of injunction or restraining order against
supposed violators of human rights, to compel them to cease and desist from continuing
the acts complained of?

In "Hon. Isidro Cariño, Et. Al. v. Commission on Human Rights, Et Al.," G.R. No. 96681,
December 2, 1991, we held that the CHR is not a court of justice nor even a quasi-
judicial body.

"The most that may be conceded to the Commission in the way of adjudicative power is
that it may investigate, i.e., receive evidence and make findings of fact as regards
claimed human rights violations involving civil and political rights. But fact-finding is not
adjudication, and cannot be likened to the judicial function of a court of justice, or even a
quasi-judicial agency or official. The function of receiving evidence and ascertaining
therefrom the facts of a controversy is not a judicial function, properly speaking. To be
considered such, the faculty of receiving evidence and making factual conclusions in a
controversy must be accompanied by the authority of applying the law to those factual
conclusions to the end that the controversy may be decided or determined
authoritatively, finally and definitely, subject to such appeals or modes of review as may
be provided by law. This function, to repeat, the Commission does not have.

"x x x.

"Hence it is that the Commission on Human Rights, having merely the power ‘to
investigate,’ cannot and should not ‘try and resolve on the merits’ (adjudicate) the
matters involved in Striking Teachers HRC Case No. 90-775, as it has announced it
means to do; and it cannot do so even if there be a claim that in the administrative
disciplinary proceedings against the teachers in question, initiated and conducted by the
DECS, their human rights, or civil or political rights had been transgressed. More
particularly, the Commission has no power to ‘resolve on the merits’ the question of (a)
whether or not the mass concerted actions engaged in by the teachers constitute a
strike and are prohibited or otherwise restricted by law; (b) whether or not the act of
carrying on and taking part in those actions, and the failure of the teachers to
discontinue those actions and return to their classes despite the order to this effect by
the Secretary of Education, constitute infractions of relevant rules and regulations
warranting administrative disciplinary sanctions, or are justified by the grievances
complained of by them; and (c) what were the particular acts done by each individual
teacher and what sanctions, if any, may properly be imposed for said acts or
omissions." (pp. 5 & 8.)

The constitutional provision directing the CHR to "provide for preventive measures and
legal aid services to the underprivileged whose human rights have been violated or
need protection" may not be construed to confer jurisdiction on the Commission to issue
a restraining order or writ of injunction for, if that were the intention, the Constitution
would have expressly said so. "Jurisdiction is conferred only by the Constitution or by
law (Oroso, Jr. v. Court of Appeals, G.R. Nos. 76828-32, 28 January 1991; Bacalso v.
Ramolete, G.R. No. L-22488, 26 October 1967, 21 SCRA 519). It is never derived by
implication. (Garcia, Et. Al. v. De Jesus, Et Al., G.R. No. 88158; Tobon Uy v.
Commission on Election, Et Al., G.R. Nos. 97108-09. March 4, 1992.).

Evidently, the "preventive measures and legal aid services" mentioned in the
Constitution refer to extrajudicial and judicial remedies (including a preliminary writ of
injunction) which the CHR may seek from the proper courts on behalf of the victims of
human rights violations. Not being a court of justice, the CHR itself has no jurisdiction to
issue the writ, for a writ of preliminary injunction may only be issued "by the judge of any
court in which the action is pending [within his district], or by a Justice of the Court of
Appeals, or of the Supreme Court. It may also be granted by the judge of a Court of
First Instance [now Regional Trial court] in any action pending in an inferior court within
his district." (Sec. 2, Rule 58, Rules of Court). A writ of preliminary injunction is an
ancillary remedy. It is available only in a pending principal action, for the preservation or
protection of the rights and interests of a party thereto, and for no other
purpose.chanrobles.com : virtual law library

WHEREFORE, the petition for certiorari and prohibition is GRANTED. The orders of
injunction dated May 17 and 28, 1991 issued by the respondent Commission on Human
Rights, are hereby ANNULLED and SET ASIDE and the temporary restraining order
which this Court issued on September 19, 1991, is hereby made PERMANENT.

SO ORDERED.

Narvasa, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Bidin, Medialdea,

Regalado, Davide, Jr., Romero and Nocon, JJ., concur.
Feliciano and Bellosillo, JJ., are on leave.

Separate Opinions

PADILLA, J., dissenting:chanrob1es virtual 1aw library

I dissent for the reasons stated in my separate opinion in "Hon. Isidro Cariño, Et. Al. v.
Commission on Human Rights, Et Al.," G.R. No. 96681, 2 December 1991. In addition,
it is my considered view that the CHR has the unquestioned authority in appropriate
cases to "provide for preventive measures and legal aid services to the under privileged
whose human rights have been violated or need protection." (Section 18(c), Article XIII,
1987 Constitution).

If the CHR can not, by itself, issue any cease and desist order in order to maintain the
status quo pending its investigation of case involving alleged human rights violations,
then it is, in effect, an ineffective instrument for the protection of human rights. I submit
that the CHR, consistent with the intent of the framers of the 1987 Constitution, may
issue cease and desist orders particularly in situations involving a threatened violation
of human rights, which it intends to investigate, and such cease and desist orders may
be judicially challenged like the orders of the other constitutional commissions, — which
are not courts of law — under Rule 65 of the Rules of Court, on grounds of lack or
excess of jurisdiction or grave abuse of discretion.

ACCORDINGLY, I vote to DISMISS the petition and to remand the case to the CHR for
further proceedings (investigation).