G.R. No. 134577.

November 18, 1998]

SEN. MIRIAM DEFENSOR SANTIAGO and SEN. FRANCISCO S.

TATAD, petitioners, vs. SEN. TEOFISTO T. GUINGONA, JR. and SEN.
MARCELO B. FERNAN, respondents.

DECISION
PANGANIBAN, J.:

The principle of separation of powers ordains that each of the three great branches of
government has exclusive cognizance of and is supreme in matters falling within its own
constitutionally allocated sphere.
Constitutional respect and a becoming regard for the sovereign acts of a coequal branch
prevents this Court from prying into the internal workings of the Senate. Where no provision of
the Constitution or the laws or even the Rules of the Senate is clearly shown to have been violated,
disregarded or overlooked, grave abuse of discretion cannot be imputed to Senate officials for acts
done within their competence and authority. This Court will be neither a tyrant nor a wimp; rather,
it will remain steadfast and judicious in upholding the rule and majesty of the law.

The Case

On July 31, 1998, Senators Miriam Defensor Santiago and Francisco S. Tatad instituted an
original petition for quo warranto under Rule 66, Section 5, Rules of Court, seeking the ouster of
Senator Teofisto T. Guingona Jr. as minority leader of the Senate and the declaration of Senator
Tatad as the rightful minority leader.
On August 4, 1998, the Court, upon receipt of the Petition, required the respondents and the
solicitor general to file COMMENT thereon within a non-extendible period of fifteen (15) days
from notice. On August 25, 1998, both respondents and the solicitor general submitted their
respective Comments. In compliance with a Resolution of the Court dated September 1, 1998,
petitioners filed their Consolidated Reply on September 23, 1998. Noting said pleading, this Court
gave due course to the petition and deemed the controversy submitted for decision, without need
of memoranda, on September 29, 1998.
In the regular course, the regional trial courts and this Court have concurrent jurisdiction[1] to
hear and decide petitions for quo warranto (as well as certiorari, prohibition and mandamus), and
a basic deference to the hierarchy of courts impels a filing of such petitions in the lower
tribunals.[2]However, for special and important reasons or for exceptional and compelling
circumstances, as in the present case, this Court has allowed exceptions to this doctrine.[3] In fact,
original petitions for certiorari, prohibition, mandamus and quo warranto assailing acts of
legislative officers like the Senate President[4] and the Speaker of the House[5] have been recognized
as exceptions to this rule.

The Facts

The Senate of the Philippines, with Sen. John Henry R. Osmea as presiding officer,
convened on July 27, 1998 for the first regular session of the eleventh Congress. At
the time, in terms of party affiliation, the composition of the Senate was as follows:[6]

10 members -Laban ng Masang Pilipino (LAMP)

7 members - Lakas-National Union of Christian Democrats-United Muslim

Democrats of the Philippines (Lakas-NUCD-UMDP)

1 member - Liberal Party (LP)

1 member - Aksyon Demokrasya

1 member - Peoples Reform Party (PRP)

1 member - Gabay Bayan

2 members - Independent

----------

23 - total number of senators[7] (The last six members are all classified by petitioners as
independent.)

On the agenda for the day was the election of officers. Nominated by Sen. Blas F. Ople to the
position of Senate President was Sen. Marcelo B. Fernan. Sen. Francisco S. Tatad was also
nominated to the same position by Sen. Miriam Defensor Santiago. By a vote of 20 to 2,[8] Senator
Fernan was declared the duly elected President of the Senate.
The following were likewise elected: Senator Ople as president pro tempore, and Sen.
Franklin M. Drilon as majority leader.
Senator Tatad thereafter manifested that, with the agreement of Senator Santiago, allegedly
the only other member of the minority, he was assuming the position of minority leader. He
explained that those who had voted for Senator Fernan comprised the majority, while only those
who had voted for him, the losing nominee, belonged to the minority.
During the discussion on who should constitute the Senate minority, Sen. Juan M. Flavier
manifested that the senators belonging to the Lakas-NUCD-UMDP Party -- numbering seven (7)
and, thus, also a minority -- had chosen Senator Guingona as the minority leader. No consensus
on the matter was arrived at. The following session day, the debate on the question continued, with
Senators Santiago and Tatad delivering privilege speeches. On the third session day, the Senate
met in caucus, but still failed to resolve the issue.
On July 30, 1998, the majority leader informed the body that he was in receipt of a letter
signed by the seven Lakas-NUCD-UMDP senators,[9] stating that they had elected Senator
Guingona as the minority leader. By virtue thereof, the Senate President formally recognized
Senator Guingona as the minority leader of the Senate.
The following day, Senators Santiago and Tatad filed before this Court the subject petition
for quo warranto, alleging in the main that Senator Guingona had been usurping, unlawfully
holding and exercising the position of Senate minority leader, a position that, according to them,
rightfully belonged to Senator Tatad.

Issues

From the parties pleadings, the Court formulated the following issues for resolution:

1. Does the Court have jurisdiction over the petition?

2. Was there an actual violation of the Constitution?

3. Was Respondent Guingona usurping, unlawfully holding and exercising the

position of Senate minority leader?

4. Did Respondent Fernan act with grave abuse of discretion in recognizing

Respondent Guingona as the minority leader?

The Courts Ruling

After a close perusal of the pleadings[10] and a careful deliberation on the

arguments, pro and con, the Court finds that no constitutional or legal infirmity or grave abuse of
discretion attended the recognition of and the assumption into office by Respondent Guingona as
the Senate minority leader.

First Issue: The Courts Jurisdiction

Petitioners principally invoke Avelino v. Cuenco[11] in arguing that this Court has jurisdiction
to settle the issue of who is the lawful Senate minority leader. They submit that the definitions of
majority and minority involve an interpretation of the Constitution, specifically Section 16 (1),
Article VI thereof, stating that [t]he Senate shall elect its President and the House of
Representatives its Speaker, by a majority vote of all its respective Members.
 Respondents and the solicitor general, in their separate Comments, contend in common that
the issue of who is the lawful Senate minority leader is an internal matter pertaining exclusively
to the domain of the legislature, over which the Court cannot exercise jurisdiction without
transgressing the principle of separation of powers. Allegedly, no constitutional issue is involved,
as the fundamental law does not provide for the office of a minority leader in the Senate. The
legislature alone has the full discretion to provide for such office and, in that event, to determine
the procedure of selecting its occupant.
Respondents also maintain that Avelino cannot apply, because there exists no question
involving an interpretation or application of the Constitution, the laws or even the Rules of the
Senate; neither are there peculiar circumstances impelling the Court to assume jurisdiction over
the petition. The solicitor general adds that there is not even any legislative practice to support the
petitioners theory that a senator who votes for the winning Senate President is precluded from
becoming the minority leader.
To resolve the issue of jurisdiction, this Court carefully reviewed and deliberated on the
various important cases involving this very important and basic question, which it has ruled upon
in the past.
The early case Avelino v. Cuenco cautiously tackled the scope of the Courts power of judicial
review; that is, questions involving an interpretation or application of a provision of the
Constitution or the law, including the rules of either house of Congress. Within this scope falls the
jurisdiction of the Court over questions on the validity of legislative or executive acts that are
political in nature, whenever the tribunal finds constitutionally imposed limits on powers or
functions conferred upon political bodies.[12]
In the aforementioned case, the Court initially declined to resolve the question of who was the
rightful Senate President, since it was deemed a political controversy falling exclusively within
the domain of the Senate. Upon a motion for reconsideration, however, the Court ultimately
assumed jurisdiction (1) in the light of subsequent events which justify its intervention; and (2)
because the resolution of the issue hinged on the interpretation of the constitutional provision on
the presence of a quorum to hold a session[13] and therein elect a Senate President.
Justice Feria elucidated in his Concurring Opinion: [I] concur with
the majority that this Court has jurisdiction over cases like the present x x x so as to establish in
this country the judicial supremacy, with the Supreme Court as the final arbiter, to see that no one
branch or agency of the government transcends the Constitution, not only in justiceable but
political questions as well.[14]
Justice Perfecto, also concurring, said in part:

Indeed there is no denying that the situation, as obtaining in the upper chamber of
Congress, is highly explosive. It had echoed in the House of Representatives. It has
already involved the President of the Philippines. The situation has created a veritable
national crisis, and it is apparent that solution cannot be expected from any quarter
other than this Supreme Court, upon which the hopes of the people for an effective
settlement are pinned.[15]
x x x This case raises vital constitutional questions which no one can settle or decide
if this Court should refuse to decide them.[16]

x x x The constitutional question of quorum should not be left unanswered.[17]

In Taada v. Cuenco,[18] this Court endeavored to define political question. And we said that it
refers to those questions which, under the Constitution, are to be decided by the people in their
sovereign capacity, or in regard to which full discretionary authority has been delegated to the
legislative or executive branch of the government. It is concerned with issues dependent upon
the wisdom, not [the] legality, of a particular measure.[19]
The Court ruled that the validity of the selection of members of the Senate Electoral Tribunal
by the senators was not a political question. The choice of these members did not depend on the
Senates full discretionary authority, but was subject to mandatory constitutional
limitations.[20] Thus, the Court held that not only was it clearly within its jurisdiction to pass upon
the validity of the selection proceedings, but it was also its duty to consider and determine the
issue.
In another landmark case, Lansang v. Garcia,[21] Chief Justice Roberto Concepcion wrote that
the Court had authority to and should inquire into the existence of the factual bases required by
the Constitution for the suspension of the privilege of the writ [of habeas corpus]. This ruling was
made in spite of the previous pronouncements in Barcelon v. Baker[22] and Montenegro v.
Castaeda[23] that the authority to decide whether the exigency has arisen requiring suspension (of
the privilege x x x) belongs to the President and his decision is final and conclusive upon the courts
and upon all other persons. But the Chief Justice cautioned: the function of the Court is merely to
check -- not to supplant --- the Executive, or to ascertain merely whether he has gone beyond the
constitutional limits of his jurisdiction, not to exercise the power vested in him or to determine the
wisdom of his act.
The eminent Chief Justice aptly explained later in Javellana v. Executive Secretary:[24]

The reason why the issue under consideration and other issues of similar character are
justiciable, not political, is plain and simple. One of the principal bases of the non-
justiciability of so-called political questions is the principle of separation of powers --
characteristic of the presidential system of government -- the functions of which are
classified or divided, by reason of their nature, into three (3) categories, namely, 1)
those involving the making of laws, which are allocated to the legislative department;
2) those concerning mainly with the enforcement of such laws and of judicial
decisions applying and/or interpreting the same, which belong to the executive
department; and 3) those dealing with the settlement of disputes, controversies or
conflicts involving rights, duties or prerogatives that are legally demandable and
enforceable, which are apportioned to courts of justice. Within its own sphere -- but
only within such sphere each department is 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 departments, 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 -- provided that such acts, measures or decision are within the
area allocated thereto by the Constitution."

Accordingly, when the grant of power is qualified, conditional or subject to

limitations, the issue of whether or not the prescribed qualifications or conditions have
been met, or the limitations respected is justiciable or non-political, the crux of the
problem being one of legality or validity of the contested act, not its
wisdom. Otherwise, said qualifications, conditions or limitations -- particularly those
prescribed by the Constitution -- would be set at naught. What is more, the judicial
inquiry into such issue and the settlement thereof are the main functions of the courts
of justice under the presidential form of government adopted in our 1935 Constitution,
and the system of checks and balances, one of its basic predicates. As a consequence,
we have neither the authority nor the discretion to decline passing upon said issue, but
are under the ineluctable obligation -- made particularly more exacting and
peremptory by our oath, as members of the highest Court of the land, to support and
defend the Constitution -- to settle it. This explains why, in Miller v. Johnson [92 Ky.
589, 18 SW 522, 523], it was held that courts have a duty, rather than a power, to
determine whether another branch of the government has kept within constitutional
limits.

Unlike our previous constitutions, the 1987 Constitution is explicit in defining the scope of
judicial power. The present Constitution now fortifies the authority of the courts to determine in
an appropriate action the validity of the acts of the political departments. It speaks of judicial
prerogative in terms of duty, viz.:

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. [25]

This express definition has resulted in clearer and more resolute pronouncements of the
Court.Daza v. Singson,[26] Coseteng v. Mitra Jr.[27] and Guingona Jr. v. Gonzales[28] similarly
resolved issues assailing the acts of the leaders of both houses of Congress in apportioning among
political parties the seats to which each chamber was entitled in the Commission on
Appointments. The Court held that the issue was justiciable, even if the question were political in
nature, since it involved the legality, not the wisdom, of the manner of filling the Commission on
Appointments as prescribed by [Section 18, Article VI of] the Constitution.
The same question of jurisdiction was raised in Taada v. Angara,[29] wherein the petitioners
sought to nullify the Senates concurrence in the ratification of the World Trade Organization
(WTO) Agreement. The Court ruled: Where an action of the legislative branch is seriously alleged
to have infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary
to settle the dispute. The Court en banc unanimously stressed that in taking jurisdiction over
petitions questioning an act of the political departments of government, it will not review the
wisdom, merits or propriety of such action, and will strike it down only on either of two
grounds: (1) unconstitutionality or illegality and (2) grave abuse of discretion.
Earlier in Co v. Electoral Tribunal of the House of Representatives[30] (HRET), the Court
refused to reverse a decision of the HRET, in the absence of a showing that said tribunal had
committed grave abuse of discretion amounting to lack of jurisdiction. The Court ruled that full
authority had been conferred upon the electoral tribunals of the House of Representatives and of
the Senate as sole judgesof all contests relating to
the election, the returns, and the qualifications of their respective members.Such jurisdiction is
original and exclusive.[31] The Court may inquire into a decision or resolution of said tribunals only
if such decision or resolution was rendered without or in excess of jurisdiction, or with grave abuse
of discretion.[32]
Recently, the Court, in Arroyo v. De Venecia,[33] was asked to reexamine the enrolled bill
doctrine and to look beyond the certification of the Speaker of the House of Representatives that
the bill, which was later enacted as Republic Act 8240, was properly approved by the legislative
body. Petitioners claimed that certain procedural rules of the House had been breached in the
passage of the bill. They averred further that a violation of the constitutionally mandated House
rules was a violation of the Constitution itself.
The Court, however, dismissed the petition, because the matter complained of concerned the
internal procedures of the House, with which the Court had no concern. It enucleated:[34]

It would be an unwarranted invasion of the prerogative of a coequal department for

this Court either to set aside a legislative action as void because the Court thinks the
House has disregarded its own rules of procedure, or to allow those defeated in the
political arena to seek a rematch in the judicial forum when petitioners can find their
remedy in that department itself. The Court has not been invested with a roving
commission to inquire into complaints, real or imagined, of legislative
skullduggery. It would be acting in excess of its power and would itself be guilty of
grave abuse of discretion were it to do so.x x x In the absence of anything to the
contrary, the Court must assume that Congress or any House thereof acted in the good
faith belief that its conduct was permitted by its rules, and deference rather than
disrespect is due the judgment of that body.

In the instant controversy, the petitioners -- one of whom is Senator Santiago, a well-known
constitutionalist -- try to hew closely to these jurisprudential parameters. They claim that Section
16 (1), Article VI of the Constitution, has not been observed in the selection of the Senate minority
leader. They also invoke the Courts expanded judicial power to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
respondents.
Dissenting in part, Mr. Justice Vicente V. Mendoza submits that the Court has no jurisdiction
over the petition. Well-settled is the doctrine, however, that jurisdiction over the subject matter of
a case is determined by the allegations of the complaint or petition, regardless of whether the
plaintiff or petitioner is entitled to the relief asserted.[35] In light of the aforesaid allegations of
petitioners, it is clear that this Court has jurisdiction over the petition. It is well within the power
and jurisdiction of the Court to inquire whether indeed the Senate or its officials committed a
violation of the Constitution or gravely abused their discretion in the exercise of their functions
and prerogatives.

Second Issue: Violation of the Constitution

Having assumed jurisdiction over the petition, we now go to the next crucial question: In
recognizing Respondent Guingona as the Senate minority leader, did the Senate or its officials,
particularly Senate President Fernan, violate the Constitution or the laws?
Petitioners answer the above question in the affirmative. They contend that the constitutional
provision requiring the election of the Senate President by majority vote of all its members carries
with it a judicial duty to determine the concepts of majority and minority, as well as who may elect
a minority leader. They argue that majority in the aforequoted constitutional provision refers to
that group of senators who (1) voted for the winning Senate President and (2) accepted committee
chairmanships. Accordingly, those who voted for the losing nominee and accepted no such
chairmanships comprise the minority, to whom the right to determine the minority leader
belongs. As a result, petitioners assert, Respondent Guingona cannot be the legitimate minority
leader, since he voted for Respondent Fernan as Senate President. Furthermore,
the members of the Lakas-NUCD-UMDP cannot choose the minority leader, because they did not
belong to the minority, having voted for Fernan and accepted committee chairmanships.
We believe, however, that the interpretation proposed by petitioners finds no clear support
from the Constitution, the laws, the Rules of the Senate or even from practices of the Upper House.
The term majority has been judicially defined a number of times. When referring to a certain
number out of a total or aggregate, it simply means the number greater than half or more than half
of any total.[36] The plain and unambiguous words of the subject constitutional clause simply mean
that the Senate President must obtain the votes of more than one half of all the senators. Not by
any construal does it thereby delineate who comprise the majority, much less the minority, in the
said body. And there is no showing that the framers of our Constitution had in mind other than the
usual meanings of these terms.
In effect, while the Constitution mandates that the President of the Senate must be elected by
a number constituting more than one half of all the members thereof, it does not provide that the
members who will not vote for him shall ipso facto constitute the minority, who could thereby
elect the minority leader. Verily, no law or regulation states that the defeated candidate shall
automatically become the minority leader.
The Comment[37] of Respondent Guingona furnishes some relevant precedents, which were
not contested in petitioners Reply. During the eighth Congress, which was the first to convene
after the ratification of the 1987 Constitution, the nomination of Sen. Jovito R. Salonga as Senate
President was seconded by a member of the minority, then Sen. Joseph E. Estrada.[38] During the
ninth regular session, when Sen. Edgardo J. Angara assumed the Senate presidency in 1993, a
consensus was reached to assign committee chairmanships to all senators, including those
belonging to the minority.[39] This practice continued during the tenth Congress, where even the
minority leader was allowed to chair a committee.[40] History would also show that the majority in
either house of Congress has referred to the political party to which the most number of lawmakers
belonged, while the minority normally referred to a party with a lesser number of members.
Let us go back to the definitions of the terms majority and minority. Majority may also refer
to the group, party, or faction with the larger number of votes,[41] not necessarily more than one
half. This is sometimes referred to as plurality. In contrast, minority is a group, party, or faction
with a smaller number of votes or adherents than the majority.[42] Between two unequal parts or
numbers comprising a whole or totality, the greater number would obviously be the majority, while
the lesser would be the minority. But where there are more than two unequal groupings, it is not
as easy to say which is theminority entitled to select the leader representing all the minorities. In a
government with a multi-party system such as in the Philippines (as pointed out by petitioners
themselves), there could be several minority parties, one of which has to be identified by the
Comelec as the dominant minority party for purposes of the general elections. In the prevailing
composition of the present Senate, members either belong to different political parties or are
independent. No constitutional or statutory provision prescribe which of the many minority groups
or the independents or a combination thereof has the right to select the minority leader.
While the Constitution is explicit on the manner of electing a Senate President and a House
Speaker, it is, however, dead silent on the manner of selecting the other officers in both chambers
of Congress. All that the Charter says is that [e]ach House shall choose such other officers as it
may deem necessary.[43] To our mind, the method of choosing who will be such other officers is
merely a derivative of the exercise of the prerogative conferred by the aforequoted
constitutional provision. Therefore, such method must be prescribed by the Senate itself, not
by this Court.
In this regard, the Constitution vests in each house of Congress the power to determine the
rules of its proceedings.[44] Pursuant thereto, the Senate formulated and adopted a set of rules to
govern its internal affairs.[45] Pertinent to the instant case are Rules I and II thereof, which provide:

Rule I

ELECTIVE OFFICERS

SECTION 1. The Senate shall elect, in the manner hereinafter provided, a President, a
President Pro Tempore, a Secretary, and a Sergeant-at-Arms.

These officers shall take their oath of office before entering into the discharge of their
duties.

Rule II

ELECTION OF OFFICERS

SEC. 2. The officers of the Senate shall be elected by the majority vote of all its
Members. Should there be more than one candidate for the same office, a nominal
vote shall be taken; otherwise, the elections shall be by viva voce or by resolution.
 Notably, the Rules of the Senate do not provide for the positions of majority and minority
leaders.Neither is there an open clause providing specifically for such offices and prescribing the
manner of creating them or of choosing the holders thereof. At any rate, such offices, by tradition
and long practice, are actually extant. But, in the absence of constitutional or statutory guidelines
or specific rules, this Court is devoid of any basis upon which to determine the legality of the acts
of the Senate relative thereto. On grounds of respect for the basic concept of separation of powers,
courts may not intervene in the internal affairs of the legislature; it is not within the province of
courts to direct Congress how to do its work.[46] Paraphrasing the words of Justice Florentino P.
Feliciano, this Court is of the opinion that where no specific, operable norms and standards are
shown to exist, then the legislature must be given a real and effective opportunity to fashion and
promulgate as well as to implement them, before the courts may intervene.[47]
Needless to state, legislative rules, unlike statutory laws, do not have the imprints of
permanence and obligatoriness during their effectivity. In fact, they are subject to revocation,
modification or waiver at the pleasure of the body adopting them.[48] Being merely matters of
procedure, their observance are of no concern to the courts, for said rules may be waived or
disregarded by the legislative body[49] at will, upon the concurrence of a majority.
In view of the foregoing, Congress verily has the power and prerogative to provide for such
officers as it may deem. And it is certainly within its own jurisdiction and discretion to prescribe
the parameters for the exercise of this prerogative. This Court has no authority to interfere and
unilaterally intrude into that exclusive realm, without running afoul of constitutional
principles that it is bound to protect and uphold -- the very duty that justifies the Courts
being.Constitutional respect and a becoming regard for the sovereign acts of a coequal
branch prevents this Court from prying into the internal workings of the Senate. To repeat,
this Court will be neither a tyrant nor a wimp; rather, it will remain steadfast and judicious
in upholding the rule and majesty of the law.
To accede, then, to the interpretation of petitioners would practically amount to judicial
legislation, a clear breach of the constitutional doctrine of separation of powers. If for this
argument alone, the petition would easily fail.
While no provision of the Constitution or the laws or the rules and even the practice of the
Senate was violated, and while the judiciary is without power to decide matters over which full
discretionary authority has been lodged in the legislative department, this Court may still inquire
whether an act of Congress or its officials has been made with grave abuse of discretion.[50] This is
the plain implication of Section 1, Article VIII of the Constitution, which expressly confers upon
the judiciary the power and the duty not only to settle actual controversies involving rights which
are legally demandable and enforceable, but likewise 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.
Explaining the above-quoted clause, former Chief Justice Concepcion, who was a member of
the 1986 Constitutional Commission, said in part:[51]

xxx the powers of government are generally considered divided into three
branches: the Legislative, the Executive and the Judiciary. Each one is supreme within
its own sphere and independent of the others. Because of that supremacy[, the] power
to determine whether a given law is valid or not is vested in courts of justice.

Briefly stated, courts of justice determine the limits of power of the agencies and
offices of the government as well as those of its officers. In other words, the judiciary
is the final arbiter on the question whether or not a branch of government or any of its
officials has acted without jurisdiction or in excess of jurisdiction, or so capriciously
as to constitute an abuse of discretion amounting to excess of jurisdiction or lack of
jurisdiction. This is not only a judicial power but a duty to pass judgment on matters
of this nature.

This is the background of paragraph 2 of Section 1, which means that the courts
cannot hereafter evade the duty to settle matters of this nature, by claiming that such
matters constitute a political question.

With this paradigm, we now examine the two other issues challenging the actions, first, of
Respondent Guingona and, second, of Respondent Fernan.

Third Issue: Usurpation of Office

Usurpation generally refers to unauthorized arbitrary assumption and exercise of power[52] by

one without color of title or who is not entitled by law thereto.[53] A quo warranto proceeding is
the proper legal remedy to determine the right or title to the contested public office and to oust the
holder from its enjoyment.[54] The action may be brought by the solicitor general or a public
prosecutor[55]or any person claiming to be entitled to the public office or position usurped or
unlawfully held or exercised by another.[56] The action shall be brought against the person who
allegedly usurped, intruded into or is unlawfully holding or exercising such office.[57]
In order for a quo warranto proceeding to be successful, the person suing must show that he
or she has a clear right to the contested office or to use or exercise the functions of the office
allegedly usurped or unlawfully held by the respondent.[58] In this case, petitioners present no
sufficient proof of a clear and indubitable franchise to the office of the Senate minority leader.
As discussed earlier, the specific norms or standards that may be used in determining who
may lawfully occupy the disputed position has not been laid down by the Constitution, the statutes,
or the Senate itself in which the power has been vested. Absent any clear-cut guideline, in no way
can it be said that illegality or irregularity tainted Respondent Guingonas assumption and exercise
of the powers of the office of Senate minority leader. Furthermore, no grave abuse of discretion
has been shown to characterize any of his specific acts as minority leader.

Fourth Issue: Fernans Recognition of Guingona

 The all-embracing and plenary power and duty of the Court 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 is restricted only by the definition and confines of
the term grave abuse of discretion.

By grave abuse of discretion is meant such capricious or whimsical exercise of

judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be
patent and gross as to amount to an evasion of positive duty or a virtual refusal to
perform a duty enjoined by law, or to act at all in contemplation of law as where
the power is exercised in an arbitrary and despotic manner by reason of passion
and hostility.[59]

By the above standard, we hold that Respondent Fernan did not gravely abuse his discretion
as Senate President in recognizing Respondent Guingona as the minority leader. Let us recall that
the latter belongs to one of the minority parties in the Senate, the Lakas-NUCD-UMDP. By
unanimous resolution of the members of this party that he be the minority leader, he was
recognized as such by the Senate President. Such formal recognition by Respondent Fernan came
only after at least two Senate sessions and a caucus, wherein both sides were liberally allowed to
articulate their standpoints.
Under these circumstances, we believe that the Senate President cannot be accused of
capricious or whimsical exercise of judgment or of an arbitrary and despotic manner by reason of
passion or hostility. Where no provision of the Constitution, the laws or even the rules of the
Senate has been clearly shown to have been violated, disregarded or overlooked, grave abuse
of discretion cannot be imputed to Senate officials for acts done within their competence and
authority.
WHEREFORE, for the above reasons, the petition is hereby DISMISSED.
SO ORDERED.

FERDINAND S. TOPACIO VS ASSOCIATE JUSTICE OF SANDIGANBAYAN GREGORY SANTOS ONG AND OSG

DECISION
CARPIO MORALES, J.:

Ferdinand Topacio (petitioner) via the present petition for certiorari and
prohibition seeks, in the main, to prevent Justice Gregory Ong (Ong) from further
exercising the powers, duties and responsibilities of a Sandiganbayan Associate
Justice.
It will be recalled that in Kilosbayan Foundation v. Ermita,[1] the Court, by Decision
of July 3, 2007, enjoined Ong from accepting an appointment to the position of
Associate Justice of the Supreme Court or assuming the position and discharging the
functions of that office, until he shall have successfully completed all necessary
steps, through the appropriate adversarial proceedings in court, to show that he is a
natural-born Filipino citizen and correct the records of his birth and citizenship.[2]

On July 9, 2007, Ong immediately filed with the Regional Trial Court (RTC) of
Pasig City a Petition for the amendment/ correction/ supplementation or annotation
of an entry in [his] Certificate of Birth, docketed as S.P. Proc No. 11767-SJ, Gregory
Santos Ong v. The Civil Registrar of San Juan, Metro Manila, et al.[3]

Meanwhile, petitioner, by verified Letter-Request/Complaint[4] of September 5,

2007, implored respondent Office of the Solicitor General (OSG) to initiate post-
haste a quo warranto proceeding against Ong in the latters capacity as an incumbent
Associate Justice of the Sandiganbayan. Invoking paragraph 1, Section 7, Article
VIII of the Constitution[5] in conjunction with the Courts Decision in Kilosbayan
Foundation
v. Ermita,[6] petitioner points out that natural-born citizenship is also a qualification
for appointment as member of the Sandiganbayan and that Ong has failed to meet
the citizenship requirement from the time of his appointment as such in October
1998.

The OSG, by letter of September 25, 2007, informed petitioner that it cannot
favorably act on [his] request for the filing of a quo warranto petition until the
[RTC] case shall have been terminated with finality.[7] Petitioner assails this position
of the OSG as being tainted with grave abuse of discretion, aside from Ongs
continuous discharge of judicial functions.

Hence, this petition, positing that:

IN OCTOBER OF 1998, RESPONDENT WAS NOT DULY-

QUALIFIED UNDER THE FIRST SENTENCE OF PARAGRAPH 1,
SECTION 7, OF THE 1987 CONSTITUTION, TO BE APPOINTED AN
ASSOCIATE JUSTICE OF THE SANDIGANBAYAN, MERELY ON
THE STRENGTH OF AN IDENTIFICATION CERTIFICATE ISSUED
 BY THE BUREAU OF IMMIGRATION AND A 1ST INDORSEMENT
DATED 22 MAY 1997 ISSUED BY THE SECRETARY OF JUSTICE,
BECAUSE, AS OF OCTOBER 1998, RESPONDETS BIRTH
CERTIFICATE INDICATED THAT RESPONDENT IS A CHINESE
CITIZEN AND BECAUSE, AS OF OCTOBER 1998, THE RECORDS
OF THIS HONORABLE COURT DECLARED THAT RESPONDENT
IS A NATURALIZED FILIPINO CITIZEN.[8] (Underscoring supplied)

Petitioner thus contends that Ong should immediately desist from holding the
position of Associate Justice of the Sandiganbayan since he is disqualified on the
basis of citizenship, whether gauged from his birth certificate which indicates him
to be a Chinese citizen or against his bar records bearing out his status as a
naturalized Filipino citizen, as declared in Kilosbayan Foundation v. Ermita.

Ong, on the other hand, states that Kilosbayan Foundation v. Ermita did not annul
or declare null his appointment as Justice of the Supreme Court, but merely enjoined
him from accepting his appointment, and that there is no definitive pronouncement
therein that he is not a natural-born Filipino. He informs that he, nonetheless,
voluntarily relinquished the appointment to the Supreme Court out of judicial
statesmanship.[9]

By Manifestation and Motion to Dismiss of January 3, 2008, Ong informs that the
RTC, by Decision of October 24, 2007, already granted his petition and recognized
him as a natural-born citizen. The Decision having, to him, become
final,[10]he caused the corresponding annotation thereof on his Certificate of Birth.[11]

Invoking the curative provisions of the 1987 Constitution, Ong explains that
his status as a natural-born citizen inheres from birth and the legal effect of such
recognition retroacts to the time of his birth.
Ong thus concludes that in view of the RTC decision, there is no more legal
or factual basis for the present petition, or at the very least this petition must await
the final disposition of the RTC case which to him involves a prejudicial issue.

The parties to the present petition have exchanged pleadings[12] that mirror the issues
in the pending petitions for certiorari in G.R. No. 180543, Kilosbayan Foundation,
et al. v. Leoncio M. Janolo, Jr., et al, filed with this Court and in CA-G.R. SP No.
102318, Ferdinand S. Topacio v. Leoncio M. Janolo, Jr., et al.,[13] filed with the
appellate court, both of which assail, inter alia, the RTC October 24, 2007 Decision.

First, on the objection concerning the verification of the petition.

The OSG alleges that the petition is defectively verified, being based on petitioners
personal knowledge and belief and/or authentic records, and having been
acknowledged before a notary public who happens to be petitioners father, contrary
to the Rules of Court[14] and the Rules on Notarial Practice of 2004,[15] respectively.

This technicality deserves scant consideration where the question at issue, as in this
case, is one purely of law and there is no need of delving into the veracity of the
allegations in the petition, which are not disputed at all by respondents.[16]

One factual allegation extant from the petition is the exchange of written
communications between petitioner and the OSG, the truthfulness of which the latter
does not challenge. Moreover, petitioner also verifies such correspondence on the
basis of the thereto attached letters, the authenticity of which he warranted in the
same verification-affidavit. Other allegations in the petition are verifiable in a
similar fashion, while the rest are posed as citations of law.

The purpose of verification is simply to secure an assurance that the allegations of

the petition or complaint have been made in good faith; or are true and correct, not
merely speculative. This requirement is simply a condition affecting the form of
pleadings, and non-compliance therewith does not necessarily render it fatally
defective. Indeed, verification is only a formal, not a jurisdictional requirement.[17]

In the same vein, the Court brushes aside the defect, insofar as the petition is
concerned, of a notarial act performed by one who is disqualified by reason of
consanguinity, without prejudice to any administrative complaint that may be filed
against the notary public.

Certiorari with respect to the OSG

On the issue of whether the OSG committed grave abuse of discretion in

deferring the filing of a petition for quo warranto, the Court rules in the negative.
Grave abuse of discretion implies such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction, or, in other words, where the power
is exercised in an arbitrary or despotic manner by reason of passion or personal
hostility, and it must be so patent and gross as to amount to an evasion of positive
duty or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law.[18]

The Court appreciates no abuse of discretion, much less, a grave one, on the part of
the OSG in deferring action on the filing of a quo warranto case until after the RTC
case has been terminated with finality. A decision is not deemed tainted with grave
abuse of discretion simply because the affected party disagrees with it.[19]

The Solicitor General is the counsel of the government, its agencies and
instrumentalities, and its officials or agents. In the discharge of its task, the Solicitor
General must see to it that the best interest of the government is upheld within the
limits set by law.[20]

The pertinent rules of Rule 66 on quo warranto provide:

SECTION 1. Action by Government against individuals. An

action for the usurpation of a public office, position or franchise may be
commenced by a verified petition brought in the name of the Republic of
the Philippines against:
(a) A person who usurps, intrudes into, or unlawfully holds or
exercises a public office, position or franchise;
(b) A public officer who does or suffers an act which, by the
provision of law, constitutes a ground for the forfeiture of his office; or
(c) An association which acts as a corporation within
the Philippines without being legally incorporated or without lawful
authority so to act.
SEC. 2. When Solicitor General or public prosecutor must
commence action. ─ The Solicitor General or a public prosecutor, when
directed by the President of the Philippines, or when upon complaint or
otherwise he has good reason to believe that any case specified in the
preceding section can be established by proof, must commence such
action.
 SEC. 3. When Solicitor General or public prosecutor may
commence action with permission of court. ─ The Solicitor General or a
public prosecutor may, with the permission of the court in which the
action is to be commenced, bring such an action at the request and upon
the relation of another person; but in such case the officer bringing it may
first require an indemnity for the expenses and costs of the action in an
amount approved by and to be deposited in the court by the person at
whose request and upon whose relation the same is brought. (Italics and
emphasis in the original)

In the exercise of sound discretion, the Solicitor General may suspend or turn down
the institution of an action for quo warranto where there are just and valid
reasons.[21]Thus, in Gonzales v. Chavez,[22] the Court ruled:

Like the Attorney-General of the United States who has absolute

discretion in choosing whether to prosecute or not to prosecute or to
abandon a prosecution already started, our own Solicitor General may
even dismiss, abandon, discontinue or compromise suits either with or
without stipulation with the other party.Abandonment of a case,
however, does not mean that the Solicitor General may just drop it
without any legal and valid reasons, for the discretion given him is not
unlimited. Its exercise must be, not only within the parameters get by
law but with the best interest of the State as the ultimate goal.[23]
Upon receipt of a case certified to him, the Solicitor General exercises his discretion
in the management of the case. He may start the prosecution of the case by filing the
appropriate action in court or he may opt not to file the case at all. He may do
everything within his legal authority but always conformably with the national
interest and the policy of the government on the matter at hand.[24]
It appears that after studying the case, the Solicitor General saw the folly of re-
litigating the same issue of Ongs citizenship in the quo warranto case
simultaneously with the RTC case, not to mention the consequent risk of forum-
shopping. In any event, the OSG did not totally write finis to the issue as it merely
advised petitioner to await the outcome of the RTC case.

Certiorari and Prohibition with respect to Ong

By petitioners admission, what is at issue is Ongs title to the office of Associate
Justice of Sandiganbayan.[25] He claims to have been constrained to file the present
petition after the OSG refused to heed his request to institute a suit for quo
warranto. Averring that Ong is disqualified to be a member of any lower collegiate
court, petitioner specifically prays that, after appropriate proceedings, the Court

. . . issue the writs of certiorari and prohibition against Respondent Ong,

ordering Respondent Ong to cease and desist from further exercising the
powers, duties, and responsibilities of a Justice of the Sandiganbayan due
to violation of the first sentence of paragraph 1, Section 7, of the 1987
Constitution; . . . issue the writs of certiorari and prohibition against
Respondent Ong and declare that he was disqualified from being appointed
to the post of Associate Justice of the Sandiganbayan in October of 1998,
considering that, as of October of 1998, the birth certificate of Respondent
Ong declared that he is a Chinese citizen, while even the records of this
Honorable Court, as of October of 1998, declared that Respondent Ong is
a naturalized Filipino; x x x[26]

While denominated as a petition for certiorari and prohibition, the petition

partakes of the nature of a quo warranto proceeding with respect to Ong, for it
effectively seeks to declare null and void his appointment as an Associate Justice of
the Sandiganbayan for being unconstitutional. While the petition professes to be one
for certiorari and prohibition, petitioner even adverts to a quo warranto aspect of the
petition.[27]

Being a collateral attack on a public officers title, the present petition for certiorari
and prohibition must be dismissed.

The title to a public office may not be contested except directly, by quo
warrantoproceedings; and it cannot be assailed collaterally,[28] even through
mandamus[29] or a motion to annul or set aside order.[30] In Nacionalista Party v. De
Vera,[31] the Court ruled that prohibition does not lie to inquire into the validity of
the appointment of a public officer.

x x x [T]he writ of prohibition, even when directed against persons acting

as judges or other judicial officers, cannot be treated as a substitute for quo
warranto or be rightfully called upon to perform any of the functions of
 the writ. If there is a court, judge or officer de facto, the title to the office
and the right to act cannot be questioned by prohibition. If an intruder takes
possession of a judicial office, the person dispossessed cannot obtain relief
through a writ of prohibition commanding the alleged intruder to cease
from performing judicial acts, since in its very nature prohibition is an
improper remedy by which to determine the title to an office.[32]

Even if the Court treats the case as one for quo warranto, the petition is, just the
same, dismissible.

A quo warranto proceeding is the proper legal remedy to determine the right or title
to the contested public office and to oust the holder from its enjoyment. [33] It is
brought against the person who is alleged to have usurped, intruded into, or
unlawfully held or exercised the public office,[34] and may be commenced by the
Solicitor General or a public prosecutor, as the case may be, or by any person
claiming to be entitled to the public office or position usurped or unlawfully held or
exercised by another.[35]

Nothing is more settled than the principle, which goes back to the 1905 case
of Acosta v. Flor,[36] reiterated in the recent 2008 case of Feliciano v.
Villasin,[37] that for a quo warranto petition to be successful, the private person
suing must show a clear right to the contested office. In fact, not even a mere
preferential right to be appointed thereto can lend a modicum of legal ground to
proceed with the action.[38]
In the present case, petitioner presented no sufficient proof of a clear and indubitable
franchise to the office of an Associate Justice of the Sandiganbayan. He in fact
concedes that he was never entitled to assume the office of an Associate Justice of
the Sandiganbayan.[39]

In the instance in which the Petition for Quo Warranto is filed by an

individual in his own name, he must be able to prove that he is entitled to
the controverted public office, position, or franchise; otherwise, the holder
of the same has a right to the undisturbed possession thereof. In actions
for Quo Warranto to determine title to a public office, the complaint, to be
sufficient in form, must show that the plaintiff is entitled to the
office.In Garcia v. Perez, this Court ruled that the person instituting Quo
Warrantoproceedings on his own behalf, under Section 5, Rule 66 of the
 Rules of Court, must aver and be able to show that he is entitled to the
office in dispute. Without such averment or evidence of such
right, the action may be dismissed at any stage.[40](Emphasis in the
original)

The rightful authority of a judge, in the full exercise of his public judicial functions,
cannot be questioned by any merely private suitor, or by any other, except in the
form especially provided by law.[41] To uphold such action would encourage every
disgruntled citizen to resort to the courts, thereby causing incalculable mischief and
hindrance to the efficient operation of the governmental machine.[42]

Clearly then, it becomes entirely unwarranted at this time to pass upon the
citizenship of Ong. The Court cannot, upon the authority of the present petition,
determine said question without encroaching on and preempting the proceedings
emanating from the RTC case. Even petitioner clarifies that he is not presently
seeking a resolution on Ongs citizenship, even while he acknowledges the
uncertainty of Ongs natural-born citizenship.[43]

The present case is different from Kilosbayan Foundation v. Ermita, given Ongs
actual physical possession and exercise of the functions of the office of an Associate
Justice of the Sandiganbayan, which is a factor that sets into motion the de
facto doctrine.

Suffice it to mention that a de facto officer is one who is in possession of the office
and is discharging its duties under color of authority, and by color of authority is
meant that derived from an election or appointment, however irregular or informal,
so that the incumbent is not a mere volunteer.[44] If a person appointed to an office
is subsequently declared ineligible therefor, his presumably valid appointment will
give him color of title that will confer on him the status of a de facto officer.[45]

x x x A judge de facto assumes the exercise of a part of the prerogative of

sovereignty, and the legality of that assumption is open to the attack of the
sovereign power alone.Accordingly, it is a well-established principle,
dating back from the earliest period and repeatedly confirmed by an
unbroken current of decisions, that the official acts of a de facto judge are
 just as valid for all purposes as those of a de jure judge, so far as the public
or third persons who are interested therein are concerned.[46]

If only to protect the sanctity of dealings by the public with persons whose ostensible
authority emanates from the State, and without ruling on the conditions for the
interplay of the de facto doctrine, the Court declares that Ong may turn out to be
either a de jureofficer who is deemed, in all respects, legally appointed and qualified
and whose term of office has not expired, or a de facto officer who enjoys certain
rights, among which is that his title to said office may not be contested except
directly by writ of quo warranto,[47] which contingencies all depend on the final
outcome of the RTC case.

With the foregoing disquisition, it becomes unnecessary to dwell on the ancillary

issues raised by the parties.

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

RULE 67

BERSAMIN, J.:
This appeal resolves the question of which between the parties - on one
hand, the petitioner, the rural bank that foreclosed the mortgage
constituted on the agricultural lands earlier expropriated under the land
reform program of the State, and acquired the lands under mortgage as the
highest bidder in the ensuing foreclosure sale; and, on the other, the
respondents, the registered owners and mortgagors of the lands in favor of
the petitioner - was entitled to the payment of the just compensation for the
lands.

In this suit initiated by the respondents to assert their right to the net value
of the just compensations, the petitioner prevailed in the Regional Trial
Court (RTC), Branch 57, in San Carlos City, Pangasinan by virtue of the
judgment rendered on July 15, 1995 (dismissing the respondents' complaint
for lack of cause of action),[1] but the Court of Appeals (CA), reversing the
judgment of the RTC on appeal through the assailed decision promulgated
on April 15, 2003,[2] ordered the petitioner instead to pay to the
respondents the sum of P119,912.00, plus legal interest reckoned from July
12, 1993, the date when the complaint was filed, representing the net value
of the just compensation .

The petitioner is now before the Court to seek the review and reversal of the
adverse decision of the CA.

Antecedents

The antecedents, as narrated by the CA, are the following:

Romeo M. Ceralde and Eduardo M. Ceralde, Jr., are the owners of the
parcels of land covered by Transfer Certificate of Title (TCT) Nos. 111647
and 111648 respectively, of the Registry of Deeds of Pangasinan. Under
varied dates in the years 1978, 1980, 1981 and 1982, they mortgaged these
properties in favor of appellee [R]ural [B]ank of Malasiqui, Inc., as security
for agricultural loans they obtained from the bank. At the time, however,
the land had already been placed under the coverage of Operation Land
Transfer and the corresponding Certificates of Land Transfer were already
issued to the tenants thereon. Nevertheless, appellee rural bank, through its
president, adviced (sic) mortgagors-appellants to submit an Affidavit of
Non-Tenancy, which appellants complied with. The mortgages were then
approved by appellee rural bank.[3]

After the respondents did not pay the loans at maturity, the petitioner
caused the extrajudicial foreclosure of the mortgages. In the ensuing
foreclosure sale, the petitioner acquired the mortgaged properties for being
the highest bidder.

The respondents commenced this action in the RTC to recover the net value
of the just compensation of the lands subject of the mortgages, averring
that their right to receive the payment for just compensation either directly
from the tenants or from the Land Bank of the Philippines could not be the
subject of the foreclosure proceedings; and that their equitable interest in
the right to receive the just compensation was protected under Section 80
of Republic Act No. 3844 (Agricultural Land Reform Code), as amended,
based on Opinion No. 92, Series of 1978, issued by the Secretary of Justice.
They prayed that the extrajudicial foreclosure of the mortgages constituted
over the two parcels of land covered by Transfer Certificate of Title No.
111647 and TCT No. 111648 of the Registry of Deeds of Pangasinan be
annulled; that TCT No. 151066 and TCT No. 151067 of the Registry of Deeds
of Pangasinan in the name of the petitioner be cancelled; and that the
petitioner be ordered to pay them PI 19,912.00, representing the net value
of the properties, plus legal interest.[4]

In its answer, the petitioner contended that it had foreclosed the mortgages
because of the failure of the respondents to pay their loans upon maturity
and despite repeated demands; that it had acquired the properties as the
highest bidder in the foreclosure sale; that the respondents had
misrepresented to it the untenanted status of the properties by submitting
affidavits of non-tenancy to support their loan application; that it had
found out later on that the lands were really tenanted; that the properties,
which were already registered in its name, were sold to the tenants in actual
possession and cultivation of the lands; that the claim of the respondents
was already barred by laches; that they were also guilty of forum shopping;
and that their complaint did not state any factual or legal basis for the
award of damages and attorney's fees.[5]

Ruling of the RTC

The RTC rendered its judgment dated July 15, 1995 dismissing the
complaint of the respondents.[6] It opined that the petitioner only enforced
the mortgage contract upon the default of the respondents; that nothing in
the records showed that the conduct of the foreclosure and the ensuing sale
had disregarded the law and the rules governing extrajudicial foreclosures;
that the respondents' claim of having informed the petitioner about the
existence of the tenants could not be believed; that the respondents were
guilty of misrepresentation from the very beginning in obtaining the loan;
and that the respondents were barred by estoppel on account of their
misrepresentation, as well as by laches in view of the fact that their
objection came too late and only after the properties had already been
transferred in the names of the tenant-beneficiaries.
 Decision of the CA

On appeal, the respondents argued that the rule on estoppel did not apply
because the petitioner had been aware from the beginning of the existence
of the tenants on their landholdings; that respondent Romeo M. Ceralde
had testified that Atty. Dolores Acuña, the president of the petitioner, had
directly informed him that their loan application would be granted if he
could secure the certificate of non-tenancy from the Municipal Agrarian
Reform Officer (MARO) whose office was just across from the petitioner's
premises; that Romeo had further testified that their tenants were
depositing their harvests in the warehouse owned by Atty. Acuña, thereby
indicating that the petitioner had been well aware of the tenanted condition
of the lands; and that because such testimonies were not controverted,
objections thereto were already waived.

As earlier mentioned, on April 15, 2003, the CA reversed the RTC,[7] ruling
thusly:

Appellants assert, in this appeal, that the court a quo committed error in
finding them guilty of, or barred by, estoppel. They argue that the rule on
estoppel does not apply to them because appellee rural bank was also aware
from the beginning that they have tenants on their landholdings used as
collateral for their loans. Thus, in granting the loans, appellee rural bank
was also in bad faith. Appellant Romeo Ceralde testified that he was told by
the president of appellee rural bank that their loan will be granted if he
could secure a certificate of non-tenancy from the Municipal Agrarian
Reform Leader whose office is just in front of the rural bank. He further
testified that their tenants were the ones depositing their harvests in the
warehouse owned by Atty. Dolores Acuna, the President of appellee rural
bank, apparently to bolster the contention that appellee rural bank was
aware that appellants' lands are tenanted.

The other appellant, Eduardo Ceralde, testified also along the same line.
These testimonies were not controverted by appellee rural bank which,
accordingly, is deemed to have waived its objection thereto. The argument
is well taken considering that the rule on estoppel has no application where
the knowledge or means of knowledge of both parties is equal, as in the
instant case. Appellee is therefore likewise in estoppel. And having
performed affirmative acts, advising them to submit certificates of non-
tenancy upon which appellants based their subsequent actions, cannot
thereafter refute its acts or renege on the effects of the same, to the
prejudice of the latter. To allow it to do so would be tantamount to
conferring upon it the liberty to limit its liability at its whim and caprice,
which is against the very principles of equity and natural justice.

Appellants further asserted that the Court a quo erred in not declaring that
the extrajudicial foreclosure by the appellee rural bank of the mortgages on
their landholdings is contrary to law and, therefore, void ab initio.

It is undisputed that when informed by appellee rural bank of the

impending foreclosure of their mortgages, appellant Romeo Ceralde went
to see the manager of appellee rural bank to inform her that the Land Bank
of the Philippines will be the one to pay their mortgage obligations.
Notwithstanding the information and apparent objection to the impending
foreclosure, appellee went ahead with the foreclosure proceedings and.
thereafter, sought the registration of the properties in its name. Eventually,
appellee sold the same to the tenants for a total sum of P140,000.00, in the
process depriving appellants of their right to receive the sum of P119,912.00
representing the net value of their landholdings after deducting the amount
of P28,088.00 for which the properties were sold to appellee rural bank at
the public auction sale.

Again, appellants' argument appears to be well taken. The pertinent

provision of the Agrarian Reform Code provides, as follows:

"In the event there is existing lien or encumbrance on the land in favor of
any Government lending institution at the time of acquisition by the Bank,
the landowner shall be paid the net value of the land (i.e., the value of the
land determined under Proclamation No. 27 minus the outstanding
balance/s of the obligation/s secured by the line/s or encumbrance/s), and
the outstanding balance/s of the obligations to the lending institution/s
shall be paid by the Land Bank in Land Bank bonds or other securities
existing charters of these institutions to the contrary notwithstanding. A
similar settlement may be negotiated by the Land Bank in the case of
obligations secured by liens or encumbrances in favor of private parties or
institutions." (Underscoring supplied)
As stated by the Secretary of Justice in his Opinion No. 92, series of 1978, in
a similar case or situation, "the Land Bank is thus charged with the
obligation to settle or negotiate the settlement of the obligations secured by
the mortgage, lien or encumbrance whether the lender is a government or a
private lending institution. This assumes that the right of the mortgagee
(appellee) to enforce its lien through foreclosure proceedings against
appellants' landholdings no longer subsists." Verily, therefore, appellee
violated the law, Section 80 of the Agrarian Reform Code, when it enforced
its lien against appellants properties through foreclosure proceedings.

In respect of the lower court's findings that appellants are guilty of laches,
the same cannot be allowed to prosper. "The question of laches is addressed
to the sound direction of the court and since laches is an equitable doctrine,
its application is controlled by equitable considerations. It cannot be
applied to defeat justice or to perpetuate fraud." Besides, it appears that the
properties were sold or the mortgages foreclosed on 12 July 1983 while the
complaint was filed on 12 July 1993. As provided for under Article 1142 of
the Civil Code, "A mortgage action prescribes after ten years." Obviously,
appellants' right of action has not yet prescribed.

Apparently, as the foregoing discussion indicates the trial court has indeed
committed errors which warrant the reversal of its decision in the present
aforementioned case.

WHEREFORE, premises considered, the appealed decision is

hereby REVERSED and SET ASIDE and a new one ENTEREDordering
appellee to pay the appellants the sum of P119,912.00, plus interest at the
legal rate computed from 12 July 1993, the time when their complaint was
filed.

SO ORDERED.[8]
Issues

Undaunted, the petitioner appeals, insisting that:

THAT IT WAS ERROR FOR THE COURT OF APPEALS TO RULE THAT

PRIVATE RESPONDENTS ARE NOT GUILTY OF LACHES AND
ESTOPPEL;

II

THAT IT WAS ERROR FOR THE COURT OF APPEALS IN RULING (sic)

THAT PETITIONER RURAL BANK VIOLATED THE AGRARIAN LAWS;

III

THAT IT WAS ERROR FOR THE COURT OF APPEALS TO DECLARE

THAT PRIVATE RESPONDENTS ARE STILL ENTITLED TO BE PAID THE
SUM OF P119,912.00 WITH INTEREST WHICH IS THE ALLEGED NET
VALUE OF THEIR LANDHOLDINGS.[9]

Ruling

The appeal lacks merit.

I
Action was not barred by
either prescription, laches or estoppel

The petitioner maintains that the CA wrongly relied on Article 1142 of

the Civil Code because it was Article 1149 of the Civil Code that applied; and
that the respondents were already barred by estoppel by virtue of their
misrepresentation about the lands not being tenanted.

The petitioner is correct about the erroneous reliance on Article 1142 of

the Civil Code, a legal provision on prescription that states: "A mortgage
action prescribes after ten years." The phrase mortgage action used in
Article 1142 refers to an action to foreclose a mortgage, and has nothing to
do with an action to annul the foreclosure of the mortgage,[10] like this one.

Nonetheless, we find to be untenable the petitioner's contention in its

motion for reconsideration that Article 1149 of the Civil Code ("All other
actions whose periods are not fixed in this Code or in other laws must be
brought within five years from the time the right of action accrues.") was
instead applicable.[11] This action to annul the foreclosure of the mortgage
was not yet barred by prescription because the applicable period of
prescription was 10 years from the time the right of action accrued by virtue
of the action being upon a written contract.[12] Indeed, the reckoning of the
period of prescription should start from July 12, 1983, when the foreclosure
of the mortgage was made, indicating that this action, being commenced on
July 12, 1993, was not barred by prescription.

Similarly, the petitioner's argument that the respondents were already

barred by laches had no substance. It would be wrong and unjust to bar the
respondents from recovering what was rightfully and legally theirs. In this
regard, we adopt with approval the CA's declaration to the effect that the
rule on laches, being an equitable doctrine whose application was
controlled by equitable considerations, could not be applied to defeat
justice or to perpetrate fraud. Indeed, the Court should implement the
better rule, which is that the courts, under the principle of equity, are not to
be guided strictly by the statute of limitations or the doctrine of laches
when a manifest wrong or injustice would result from doing so.[13]

The petitioner posits that the respondents' misrepresentation on the non-

tenancy of the lands subject of the mortgage estopped them from
recovering the just compensation from the petitioner.

The petitioner's position does not merit serious consideration. Estoppel is

applied when the following elements concur, namely:

xxx first, the actor who usually must have knowledge, notice or suspicion of
the true facts, communicates something to another in a misleading way,
either by words, conduct or silence; second, the other in fact relies, and relies
reasonably or justifiably, upon that communication; third, the other would
be harmed materially if the actor is later permitted to assert any claim
inconsistent with his earlier conduct; and fourth, the actor knows, expects or
foresees that the other would act upon the information given or that a
reasonable person in the actor's position would expect or foresee such
action.[14]

The petitioner's insistence on having been misled into approving the loan
application by the respondents' submission of the affidavit of non-tenancy
was entirely belied by the records. To begin with, the CA itself found that
the petitioner had been well aware of the conditions of the landholding,
including the existence of the tenants thereon. Secondly, the CA concluded
that the petitioner was also in bad faith, for, based on the testimony of
Romeo, it was the president herself of the petitioner who had told him that
the loan application would be granted if only he could secure a certificate of
non-tenancy from the MARO whose office had been located just in front of
the petitioner's premises.[15] And, thirdly, the tenants deposited the harvests
in the warehouse owned by the president of the petitioner, thereby
signifying that the petitioner had actual knowledge of the existence of the
tenants on the lands under mortgage.

The established circumstances of the case rendered the doctrine of estoppel

absolutely inapplicable. There was no question that the petitioner had not
been misled by any misrepresentation on the status of tenancy on the lands.
The submission of the affidavit of non-tenancy by the respondents had been
at the behest of its president who was then acting in its behalf. It is plain,
moreover, that because its business of rural banking involved the duty and
the responsibility to investigate the conditions of the lands being tendered
as collaterals, the petitioner should have discovered the presence of the
tenants in due time and quickly enough by its exercise of due diligence.

II

The petitioner argues that it did not violate Republic Act No. 3844, because
Operation Land Transfer (OLT) of the Department of Agrarian Reform
(DAR) had not yet been implemented at the time the title was consolidated
in its name.

The argument is absolutely devoid of factual foundation. The records of the

case indicate that the expropriation by the Government preceded the
consolidation of title in the name of the petitioner. The landholdings were
placed under the OLT in 1980 and 1981, and the certificates of land transfer
(CLTs) were then issued as a consequence.[16] Although the respondents
had obtained the loans from the petitioner in 1978, 1980, 1981 and 1982,
the petitioner had foreclosed the mortgages only on July 12, 1983, and the
title was consolidated in the name of the petitioner only on August 14, 1984.
It also appears that the respondents had informed the petitioner prior to
the actual foreclosure on July 12, 1983 that the mortgage obligation would
be paid by the Land Bank of the Philippines.

Still, the petitioner, insisting that it did not violate Section 80 of Republic
Act No. 3844, submits that it was Section 71 of Republic Act No. 6657 that
should govern. It contends that because Section 71 did not disallow it as a
banking or financial institution to hold any mortgage rights, it could then
validly acquire title to the mortgaged properties.

The contention of the petitioner cannot be upheld.

Section 80 of Republic Act No. 3844, as amended by Section 7 of

Presidential Decree No. 251, declares:

Section 80. Modes of Payment. The Bank shall finance the acquisition of
farm lots under any of the following modes of settlement:

1. Cash payment of 10% and balance in 25-year tax-free 6% Land Bank

bonds;

2. Payment of 30% in preferred shares of stock issued by the Bank and

balance in 25-year tax-free 6% Land Bank bonds;

3. Full guarantee on the payment of the fifteen (15) equal annual

amortizations to be made by the tenant/farmer;

4. Payment through the establishment of annuities or pensions with

insurance;

5. Exchange arrangement for government stocks in government-owned

controlled corporations or private corporations where the government has
holdings;

6. Such other modes of settlement as may be further adopted by the Board of

Directors and approved by the President of the Philippines.

In the event there is existing lien or encumbrance on the land in favor of any
Government lending institution at the time of acquisition by the Bank, the
landowner shall be paid the net value of the land (i.e., the value of the land
determined under Proclamation No. 27 minus the outstanding balance/s of
the obligation/s secured by the lien/s or encumbrance/s), and the
outstanding balance/s of the obligations to the lending institution/s shall be
paid by the Land Bank in Land Bank bonds or other securities; existing
charters of those institutions to the contrary notwithstanding. A similar
settlement may be negotiated by the Land Bank in the case of obligations
secured by liens or encumbrances in favor of private parties or institutions.

Whenever the Bank pays the whole or a portion of the total cost of farm lots,
the Bank shall be subrogated by reason thereof, to the right of the landowner
to collect and receive the yearly amortizations on farm lots or the amount
paid including interest thereon, from tenant/farmers in whose favour said
farm lots had been transferred pursuant to Presidential Decree No. 27, dated
October 21, 1972.

The profits accruing from payment shall be exempt from the tax on capital
gains.
Section 71 of Republic Act No. 6657 reads:

Section 71. Bank Mortgages. — Banks and other financial institutions

allowed by law to hold mortgage rights or security interests in agricultural
lands to secure loans and other obligations of borrowers, may acquire title to
these mortgaged properties, regardless of area, subject to existing laws on
compulsory transfer of foreclosed assets and acquisition as prescribed under
Section 13 of this Act.

The texts show that Section 80 of Republic Act No. 3844 and Section 71 of
Republic Act No. 6657 were not inconsistent with each other, but actually
complemented each other. Section 80, as amended by Presidential Decree
No. 251, only stated that the Land Bank of the Philippines would be the
institution to pay the private lending institutions. Equally relevant was that
Section 75[17] of Republic Act No. 6657 stipulated that the provisions of
Republic Act No. 3844 would have suppletory effect to Republic Act No.
6657. Absent the inconsistency between Section 80 of Republic Act No.
3844 and Section 71 of Republic Act No. 6657, the bases of the CA in
declaring the petitioner to have violated Republic Act No. 3844 remained.

The respondents, citing MOJ Opinion No. 092, Series of 1978, have
asserted that the petitioner still could not foreclose because of Section 80 of
Republic Act No. 3844.
MOJ Opinion No. 092 was issued on July 5, 1978 by then Minister of
Justice Vicente Abad Santos to respond to the request for a legal opinion
from the Minister of Agrarian Reform regarding landholdings covered by
Presidential Decree No. 27 that "have been previously mortgaged to
banking institutions," specifically on the following issues, to wit:

a) Whether or not lands covered by P.D. No. 27 may be the object of

foreclosure proceedings after October 21, 1972;

b) Whether or not the right of a landowner to receive payment from the Land
Bank may be the object of foreclosure proceedings.

The response of the Minister of Justice was as follows:

I find merit in the position taken by that Ministry that lands covered by P.D.
No. 27 may not be the object of foreclosure proceedings after the
promulgation of said decree on October 21, 1972. With the peremptory
declaration that the tenant farmer "shall be deemed owner" of the land he
tills, and the declaration that lands acquired thereunder or under the land
reform program of the government "shall not be transferable except by
hereditary succession or to the government in accordance with the
provisions of the Decree, the Code of Agrarian Reform, and other existing
laws and regulations", I believe that whatever right the mortgager has to the
property is superseded by the statutory declaration transferring ownership
from the mortgagor to the tenant by operation of law. Foreclosure of
mortgage is a remedy by which the property covered may be subjected to sale
to pay the debt for which the mortgage stands as security, and since the land
is by law no longer transferable except to the heirs of the tenant-farmer or to
the government, I do not see how the right to foreclose can subsist when the
mortgaged property has ceased to be alienable property of the mortgagor,
and the property cannot be transferred to the purchaser in the foreclosure
proceedings. The situation is analogous to one where the mortgaged property
is expropriated before foreclosure takes place, regarding which it has been
held that the mortgagee loses his lien upon the expropriated property as "the
land taken no longer belongs to the mortgagor, because it has been by virtue
of a sovereign power, free of the mortgage", (Chicago v. Salinger, et al. 52 NE
2d-184 [1943]; see also In Re Diliman, 267 NW-623 [1936]; In Re City of
Rochester, 32 NE 702 [1892])

This conclusion finds support in the provision of Section 80 of R.A. No. 3844
(Code of Agrarian Reform, as amended by P.D. No. 251), which provides
insofar as pertinent:

"SEC. 80. Modes of Payment. — The Bank shall finance the acquisition of
farm lots under any of the following modes of settlement:

x x x x

"In the event there is existing lien or encumbrance on the land in favor of any
Government lending institution at the time of acquisition by the Bank, the
landowner shall be paid the net value of the land (i.e., the value of the land
determined under Presidential Decree No. 27 minus the outstanding
balance/s of the obligation/s secured by the lien/s of encumbrance/s, and
the outstanding balance/s of the obligations to the lending institution/s shall
be paid by the Land Bank in Land Bank bonds or other securities; existing
charters of those institutions to the contrary notwithstanding. A similar
settlement may be negotiated by the Land Bank in the case of obligations
secured by liens or encumbrances in favor of private parties or institutions.

xxxx
The Land Bank is thus charged with the obligation to settle, or negotiate the
settlement of, the obligations secure by the mortgage, lien or encumbrance
whether the lender is a government or a private lending institution. This
assumes that the might of the mortgagor to enforce his lien through
foreclosure proceedings against the property no longer subsists. I may add
that with respect to cases where the mortgage might by now (but after
October 21, 1972) have already been foreclosed, the titles of the purchaser at
the auction sale having actually been perfected after the redemption period
had expired, the foreclosure might have to be set aside through judicial
proceedings.

I am aware that a ruling that lands covered by P.D. No. 27 may not be the
object of the foreclosure proceedings after the promulgation of said decree
on October 21, 1972, would concede that P.D. No. 27 had the effect of
impairing the obligation of the duly executed mortgage contracts affecting
said lands. There is no question, however, that the land reform program of
the government as accelerated under P.D. No. 27 and mandated by the
Constitution itself (Act XIV, Sec. 12), was undertaken in the exercise of the
police power of the state. It is settled in a long line of decisions of the
Supreme Court that the constitutional guaranty of non-impairment of
obligations of contract is limited by the exercise of the police power of the
state. [Pangasinan Transp. v. P.S.C. 70 Phil. 221 (1940); Phil. American Life
Ins. Co. v. The Auditor General 22 SCRA, 135 (1968); De Ramos v. Court of
Agrarian Relations, 1-19555, May 29, 1964; Stone v. Mississippi, 101 U.S.
814] One limitation on the contract clause arises from the police power, the
reason being that public welfare is superior to private rights. [Since, Phil. Pol.
Law, 11th ed. at p. 642] The situation here, is like that in eminent domain
proceedings, where the state expropriates private property for public use,
and the only condition to be complied with is the payment of just
compensation. Technically the condemnation proceedings do not impair the
contract on destroy its obligations, but merely appropriate of take it for
public use [Long Is. Water Sup. Co. v. Brooklyn, 166 U.S. 635]. As the Land
Bank is obliged to setter the obligations secured by the mortgage, the
mortgagee is not left without compensation.

The first query is therefore answered in the negative.

Regarding query No. 2, I do not see how foreclosure proceedings can be

instituted against the "right of the landowner to receive payment from the
Land Bank". As the mortgage had ceased to exist upon the transfer of title to
the tenant by virtue of the promulgation of P.D. No. 27 on October 21, 1972,
there can be no mortgage to foreclose and therefore no subject for the
foreclosure proceedings. Whatever equitable interest the mortgagee has in
the land owners' right to receive payment is protected under Section 80,
above-quoted, directing the Land Bank to settle existing liens and
encumbrances affecting the property.

Without passing judgment on the merits of MOJ Opinion No. 092, Series of
1978, the Court only needs to remind that the legal opinion remained good
only in so far as it was not inconsistent with the law it purported to
interpret. It remains beyond question that Section 80 of Republic Act No.
3844, supra, did not prohibit the foreclosure of the mortgage of agricultural
landholdings. It clearly only provided that the Land Bank of the Philippines
would pay the landowners the net value of the land minus the outstanding
balance of the obligations in favor of the lending institutions in the event of
an existing lien or encumbrance on the land in favor of private parties or
institutions. Hence, the opinion of the then Minister of Justice to the effect
that banks were not allowed to foreclose lands covered by Presidential
Decree No. 27, as amended, became legally untenable. Conformably with
the tenets of statutory construction, the law as written should be applied
absent any ambiguity.

The petitioner urges that the respondents violated Republic Act No. 3844
by mortgaging their lands to it despite such lands being already subject to
the OLT. The urging lacks substance, however, because the petitioner did
not cite any provision of law that prohibited agricultural lands subject of
the OLT from serving as collateral in order to secure loans and other
obligations of the landowners.

What is quite clear and uncontroverted is that both the petitioner and the
respondents were guilty of bad faith. Although the coverage of the lands in
question under the OLT was made known to the petitioner only after the
execution of the mortgages albeit prior to the foreclosure, the latter was
already put on notice of the coverage under the OLT, and should have
desisted from proceeding with the foreclosure in accordance with law.

Contrary to the petitioner's claim, Section 80 of Republic Act No. 3844

remained in effect after the effectivity of Republic Act No. 6657. The latter
law expressly repealed only the following provisions, namely: Section 35 of
Republic Act No. 3834;[18] Presidential Decree No. 316;[19] the last two
paragraphs of Section 12 of Presidential Decree No. 946;[20] and
Presidential Decree No. 1038.[21] Worthy to note, too, is that the repealed
laws did not concern the subject matter of Section 80 of Republic Act No.
3844; hence, the catch-all repeal or amendment of all other laws, decrees,
executive orders, rules and regulations, issuances or parts thereof
inconsistent with Republic Act No. 6657 did not affect Section 80 of
Republic Act No. 3844.

In view of the foregoing, Section 80 of Republic Act No. 3844 and Section
71 of Republic Act No. 6657 must be given equal application.

III

The foregoing elaborations also dispose of the final issue of whether or not
the respondents were entitled to the net value of their landholdings. The
petitioner contends that they were not because, firstly, the respondents had
acted in bad faith by misrepresenting that the lands were not tenanted;
and, secondly, title was already consolidated in its name when the lands
came to be covered by OLT. We hold that the respondents were entitled to
the net value of the lands not only by law but also by equity. As to equity,
we need only to point out that when the parties are both at fault, the
mistake of one is negated by the other's, and they are then returned to their
previous status where the law will look at the facts as if neither is at fault. In
such event, we can only apply the law, particularly Section 80 of Republic
Act No. 3844, as amended, and such application favors the respondents, as
we have already explained.

WHEREFORE, the Court AFFIRMS the decision promulgated on April

15, 2003; and ORDERS the petitioner to pay the costs of suit.

SO ORDERED.

RESOLUTION

BERSAMIN, J.:
This case originated from the Third Division, which rendered its decision
on February 6, 2007 in favor of petitioners Apo Fruits Corporation (AFC) and Hijo
Plantation, Inc. (HPI). On December 19, 2007, however, the Third Division
modified its decision upon the motion for reconsideration of respondent Land Bank
of the Philippines (Land Bank), deleting the award of interest and attorneys fees.
For consideration and resolution is the second motion for reconsideration (with
respect to the denial of the award of legal interest and attorney's fees) filed by AFC
and HPI.

Antecedents

On October 12, 1995, AFC and HPI voluntarily offered to sell the lands subject of
this case pursuant to Republic Act No. 6657 (Comprehensive Agrarian Reform
Law, or CARL). The Department of Agrarian Reform (DAR) referred their
voluntary-offer-to-sell (VOS) applications to Land Bank for initial valuation. Land
Bank fixed the just compensation at P165,484.47/hectare, that is, P86,900,925.88,
for AFC, and P164,478,178.14, for HPI. The valuation was rejected, however,
prompting Land Bank, upon the advice of DAR, to open deposit accounts in the
names of the petitioners, and to credit in said accounts the sums of P26,409,549.86
(AFC) and P45,481,706.76 (HPI).Both petitioners withdrew the amounts in cash
from the accounts, but afterwards, on February 14, 1997, they filed separate
complaints for determination of just compensation with the DAR Adjudication
Board (DARAB).

When DARAB did not act on their complaints for determination of just
compensation after more than three years, the petitioners filed complaints for
determination of just compensation with the Regional Trial Court (RTC)
in Tagum City, Branch 2, acting as a special agrarian court (SAC), docketed
as Agrarian Cases No. 54-2000 and No. 55-2000. Summonses were served on May
23, 2000 to Land Bank and DAR, which respectively filed their answers on July 26,
2000 and August 18, 2000. The RTC conducted a pre-trial, and appointed persons it
considered competent, qualified and disinterested as commissioners to determine the
proper valuation of the properties.

Ultimately, the RTC rendered its decision on September 25, 2001, disposing
thus:

WHEREFORE, consistent with all the foregoing premises, judgment

is hereby rendered by this Special Agrarian Court where it has determined
judiciously and now hereby fixed the just compensation for the
1,388.6027 hectares of lands and its improvements owned by the
plaintiffs: APO FRUITS CORPORATION and HIJO PLANTATION,
INC., as follows:

First Hereby ordering after having determined and fixed the fair,
reasonable and just compensation of the 1,338.6027 hectares of
land and standing crops owned by plaintiffs APO FRUITS
CORPORATION and HIJO PLANTATION, INC., based at
only P103.33 per sq. meter, ONE BILLION THREE
HUNDRED EIGHTY-THREE MILLION ONE HUNDRED
SEVENTY-NINE THOUSAND PESOS (P1,383,179,000.00),
Philippine Currency, under the current value of the Philippine
Peso, to be paid jointly and severally to the herein PLAINTIFFS
by the Defendants-Department of Agrarian Reform and its
 financial intermediary and co-defendant Land Bank of the
Philippines, thru its Land Valuation Office;

Second Hereby ordering Defendants DEPARTMENT OF

AGRARIAN REFORM and/or LAND BANK OF THE
PHILIPPINES, thru its Land Valuation Office, to pay plaintiffs-
APO FRUITS CORPORATION and HIJO PLANTATION,
INC., interests on the above-fixed amount of fair, reasonable
and just compensation equivalent to the market interest rates
aligned with 91-day Treasury Bills, from the date of the taking
in December 9, 1996, until fully paid, deducting the amount of
the previous payment which plaintiffs received as/and from the
initial valuation;

Third Hereby ordering Defendants DEPARTMENT OF

AGRARIAN REFORM and/or LAND BANK OF THE
PHILIPPINES, thru its Land Valuation Office, to pay jointly
and severally the Commissioners fees herein taxed as part of the
costs pursuant to Section 12, Rule 67 of the 1997 Rules of Civil
Procedure, equivalent to, and computed at Two and One-Half
(2 ) percent of the determined and fixed amount as the fair,
reasonable and just compensation of plaintiffs land and standing
crops plus interest equivalent to the interest of the 91-Day
Treasury Bills from date of taking until full payment;

Fourth - Hereby ordering Defendants DEPARTMENT OF

AGRARIAN REFORM and/or LAND BANK OF THE
PHILIPPINES, thru its Land Valuation Office, to pay jointly
and severally the attorneys fees to plaintiffs equivalent to, and
computed at ten (10%) Percent of the determined and fixed
amount as the fair, reasonable and just compensation of
plaintiffs land and standing crops, plus interest equivalent to the
91-Day Treasury Bills from date of taking until the full amount
is fully paid;

Fifth - Hereby ordering Defendants DEPARTMENT OF

AGRARIAN REFORM and/or LAND BANK OF THE
PHILIPPINES, thru its Land Valuation Office to deduct from
the total amount fixed as fair, reasonable and just compensation
of plaintiffs properties the initial payment paid to the plaintiffs;
 Sixth - Hereby ordering Defendants DEPARTMENT OF
AGRARIAN REFORM and/or LAND BANK OF THE
PHILIPPINES, thru its Land Valuation Office, to pay the costs
of the suit; and

Seventh - Hereby ordering Defendants DEPARTMENT OF

AGRARIAN REFORM and/or LAND BANK OF THE
PHILIPPINES, thru its Land Valuation Office, to pay all the
aforementioned amounts thru The Clerk of Court of this Court,
in order that said Court Officer could collect for payment any
docket fee deficiency, should there be any, from the plaintiffs.

Upon Land Banks motion for reconsideration, the RTC modified the decision
by promulgating its decision dated December 5, 2001, holding:

WHEREFORE, premises considered, IT IS HEREBY ORDERED that the

following modifications as they are hereby made on the dispositive
portion of this Courts consolidated decision be made and entered in the
following manner, to wit:

On the Second Paragraph of the Dispositive Portion which now reads as

follows, as modified:

Second - Hereby ordering Defendants DEPARTMENT OF

AGRARIAN REFORM and/or LAND BANK OF THE
PHILIPPINES, thru its Land Valuation Office, to pay
plaintiffs-APO FRUITS CORPORATION and HIJO
PLANTATION, INC., interest at the rate of Twelve (12%)
Percent per annum on the above-fixed amount of fair,
reasonable and just compensation computed from the time
the complaint was filed until the finality of this
decision. After this decision becomes final and executory,
the rate of TWELVE (12%) PERCENT per annum shall be
additionally imposed on the total obligation until payment
thereof is satisfied, deducting the amounts of the previous
payments by Defendant-LBP received as initial valuation;

On the Third Paragraph of the Dispositive Portion which Now Reads As

Follows, As Modified:
 Third - Hereby ordering Defendants DEPARTMENT OF
AGRARIAN REFORM and/or LAND BANK OF THE
PHILIPPINES, thru its Land Valuation Office, to pay
jointly and severally the Commissioners fees herein taxed
as part of the costs pursuant to Section 12, Rule 67 of the
1997 Rules of Civil Procedure, equivalent to, and
computed at Two and One-Half (2 ) percent of the
determined and fixed amount as the fair, reasonable and
just compensation of plaintiffs land and standing crops and
improvements;

On the Fourth Paragraph of the Dispositive Portion which Now Reads As

follows, As Modified:

Fourth - Hereby ordering Defendants DEPARTMENT OF

AGRARIAN REFORM and/or LAND BANK OF THE
PHILIPPINES, thru its Land Valuation Office, to pay
jointly and severally the attorneys fees to plaintiffs
equivalent to, and computed at ten (10%) Percent of the
determined and fixed amount as the fair, reasonable and
just compensation of plaintiffs land and standing crops and
improvements.

Except for the above-stated modifications, the consolidated decision

stands and shall remain in full force and effect in all other respects thereof.

Land Bank appealed by notice of appeal. The RTC denied due course to the
appeal, however, holding that such mode was not proper in view of the ruling
in Land Bank of the Philippines v. De Leon,[1] which held that the correct mode of
appeal from a decision of the RTC acting as SAC was by petition for review (Rule
43). The RTC denied Land Banks motion for reconsideration.

Land Bank was thus compelled to file in March 2003 a petition

for certiorari in the Court of Appeals (CA) to assail the RTCs order denying due
course to its appeal and denying its motion for reconsideration.

The CA granted the petition for certiorari on February 12, 2004, and nullified
the assailed orders of the RTC.
 Following the CAs denial of their joint motion for reconsideration on June
21, 2004, AFC and HPI appealed on certiorari, raising the following issues, to wit:

I.
WHETHER OR NOT THE QUESTIONED DECISION AND
RESOLUTION ARE IN ACCORD WITH LAW OR WITH THE
APPLICABLE DECISIONS OF THE SUPREME COURT?

II.
WHETHER OR NOT RESPONDENT LBP IS BOUND BY THE
DECISION OF COURT OF APPEALS IN CA-G.R. SP NO. 74879 AND
IS THEREFORE PRECLUDED FROM FILING CA-G.R. SP NO.
76222?

III.
WHETHER OR NOT THE FILING BY RESPONDENT LBP OF CA-
G.R. SP NO. 76222 IS ALREADY BARRED BY RES JUDICATA?

IV.
WHETHER OR NOT THE RULING OF THE SUPREME COURT IN
THE ARLENE DE LEON CASE, GIVING ONLY PROSPECTIVE
EFFECT TO ITS EARLIER RESOLUTION AS TO THE PROPER
MODE OF APPEAL FROM DECISIONS OF SPECIAL AGRARIAN
COURTS IS APPLICABLE IN THE INSTANT CASE?

V.
WHETHER OR NOT RESPONDENT LBP WAS DEPRIVED OF DUE
PROCESS AND/OR OF ITS RIGHT TO APPEAL?

VI.
WHETHER OR NOT THE SUBJECT PETITION (CA-G.R. SP NO.
76222) WAS MERELY INTERPOSED TO DELAY THE EXECUTION
OF SPECIAL AGRARIAN COURTS DECISION WHICH IS BASED
ON EVIDENCE DULY PRESENTED AND PROVED?

AFC and HPI prayed that the decision and resolution of the CA be reversed
and set aside, and that the RTCs decision dated September 25, 2001 rendered in
Agrarian Cases No. 54-2000 and No. 55-2000 be declared final and executory.
In its decision dated February 6, 2007, the Third Division decreed as follows:

WHEREFORE, premises considered, the instant Petition is

PARTIALLY GRANTED. While the Decision, dated 12 February 2004,
and Resolution, dated 21 June 2004, of the Court of Appeals in CA-G.R.
SP No. 76222, giving due course to LBPs appeal, are hereby AFFIRMED,
this Court, nonetheless, RESOLVES, in consideration of public interest,
the speedy administration of justice, and the peculiar circumstances of the
case, to give DUE COURSE to the present Petition and decide the same
on its merits. Thus, the Decision, dated 25 September 2001, as modified
by the Decision, dated 5 December 2001, of
the Regional Trial Court of Tagum City, Branch 2, in Agrarian Cases No.
54-2000 and No. 55-2000 is AFFIRMED. No costs.

SO ORDERED.

Land Bank sought reconsideration upon the following grounds, viz:

A. THE HONORABLE COURT RULED IN THE FAIRLY RECENT

CASE OF LAND BANK OF THE PHILIPPINES v. CELADA, G.R.
NO. 164876 THAT SPECIAL AGRARIAN COURTS ARE NOT
AT LIBERTY TO DISREGARD THE FORMULA DEVISED TO
IMPLEMENT SECTION 17 OF REPUBLIC ACT NO. 6657
OTHERWISE KNOWN AS THE COMPREHENSIVE AGRARIAN
REFORM LAW OF 1988.

B. RESPONDENT LBP SATISFIED OR COMPLIED WITH THE

CONSTITUTIONAL REQUIREMENT ON PROMPT AND FULL
PAYMENT OF JUST COMPENSATION.

C. RESPONDENT LBP ENSURED THAT THE INTERESTS

ALREADY EARNED ON THE BOND PORTION OF THE
REVALUED AMOUNTS WERE ALIGNED WITH 91-DAY
TRASURY BILL (T-BILL) RATES AND ON THE CASH PORTION
THE NORMAL BANKING INTEREST RATES.

D. PETITIONERS ARE NOT ENTITLED TO AN AWARD OF

ATTORNEYS FEES AND COMMISSIONERS FEES.
 E. RESPONDENT LBPS COUNSEL DID NOT UNNECESSARILY
DELAY THE PROCEEDINGS.

F. THE IMMINENT MODIFICATION, IF NOT THE REVERSAL, OF

THE SUPREME COURT RULINGS IN BANAL AND CELADA BY
THE QUESTIONED DECISION NECESSITATES A REFERRAL
OF THE INSTANT CASE TO THE HONORABLE COURT
SITTING EN BANC.

On December 19, 2007, the Third Division partially granted Land

Banks motion for reconsideration, ruling thus:
WHEREFORE, premises considered, the Motion for
Reconsideration is PARTIALLY GRANTED as follows:

(1) The award of 12% interest rate per annum in the total amount of
just compensation is DELETED.

(2) This case is ordered REMANDED to the RTC for further hearing
on the amount of Commissioners Fees.

(3) The award of attorneys fees is DELETED.

(4) The Motion for Referral of the case to the Supreme Court
sitting En Banc and the request or setting of the Omnibus Motion for Oral
Arguments are all DENIED for lack of merit. In all other respects, our
Decision dated 6 February 2007 is MAINTAINED.

SO ORDERED.

Dissatisfied, the parties filed their respective motions for reconsideration, but
the Third Division denied their motions on December 19, 2007. Upon finality of the
resolution, the entry of judgment was issued on May 16, 2008.

Notwithstanding the issuance of the entry of judgment, AFC and HPI still filed
on May 28, 2008 several motions, namely: (1) motion for leave to file and admit
second motion for reconsideration; (2) second motion for reconsideration (with
respect to the denial of the award of legal interest and attorney's fees); and
(3) motion to refer the second motion for reconsideration to the Honorable Court en
banc.

The case was thereafter referred by the Third Division to the Court en banc.
Hence, this resolution.

Ruling

The second motion for reconsideration (with respect to the denial of the
award of legal interest and attorney's fees) is denied, because, firstly, to grant it is
to jettison the immutability of a final decision a matter of public policy and public
interest, as well as a time-honored principle of procedural law; and secondly, to
award interest and attorneys fees despite the fact that Land Bank paid the just
compensation without undue delay is legally and factually unwarranted.

Immutability of Judgment

The main role of the courts of justice is to assist in the enforcement of the law and
in the maintenance of peace and order by putting an end to judiciable controversies
with finality.[2] Nothing better serves this role than the long established doctrine of
immutability of judgments.

It is never a small matter to maintain that litigation must end and terminate
sometime and somewhere, even at the risk of occasional errors.[3] A judgment that
has acquired finality becomes immutable and unalterable, and may no longer be
modified in any respect even if the modification is meant to correct erroneous
conclusions of fact or law and whether it will be made by the court that rendered it
or by the highest court of the land.[4] The reason for the rule is that if, on the
application of one party, the court could change its judgment to the prejudice of the
other, it could thereafter, on application of the latter, again change the judgment and
continue this practice indefinitely.[5] The equity of a particular case must yield to the
overmastering need of certainty and unalterability of judicial pronouncements.[6]
 The doctrine of immutability and inalterability of a final judgment has a two-
foldpurpose: (1) to avoid delay in the administration of justice and thus,
procedurally, to make orderly the discharge of judicial business and (2) to put an end
to judicial controversies, at the risk of occasional errors, which is precisely why
courts exist. Controversies cannot drag on indefinitely. The rights and obligations of
every litigant must not hang in suspense for an indefinite period of time. [7] The
doctrine is not a mere technicality to be easily brushed aside, but a matter of public
policy as well as a time-honored principle of procedural law.

The foregoing considerations show that granting the second motion for
reconsideration (with respect to the denial of the award of legal interest and
attorney's fees) absolutely risks the trivialization of the doctrine of immutability of
a final and executory judgment, and, therefore, the motion should be rejected.

Although the immutability doctrine admits several exceptions, like: (1) the
correction of clerical errors; (2) the so-called nunc pro tunc entries that cause no
prejudice to any party; (3) void judgments; and (4) whenever circumstances transpire
after the finality of the decision rendering its execution unjust and
inequitable,[8] none of the exceptions applies herein, simply because the matters
involved herein are plainly different from those involved in the exceptional cases.

A sampling of decided cases that illustrate what the Court has heretofore
recognized as exceptional circumstances warranting the reopening of final and
immutable judgments is proper to be made.

In Tan Tiac Chiong v. Cosico,[9] the Court, in dismissing the administrative

complaint filed against CA Justice Rodrigo Cosico, necessarily sustained the recall
of the entry of judgment made by Justice Cosico, as ponente, in a criminal case
appealed to the CA. The Court explained that the recall of entry of judgment might
have been an error of judgment, for which no judge should be administratively
charged, in the absence of showing of any bad faith, malice, or corrupt purpose. It
noted that Justice Cosico had recalled the entry of judgment to afford due process to
the accused, because the CA decision had been sent to the house of the counsel of
the accused but had been returned with the notation Moved Out. The CA was thus
prompted to resend the decision to the counsels new address, thereby allowing the
accused to file a motion for reconsideration.
 In De Guzman v. Sandiganbayan,[10] the Court had previously denied with
finality the petitioners motion for reconsideration of its decision affirming his
conviction by the Sandiganbayan of a violation of Section 3 (e) of Republic Act No.
3019. The petitioner nonetheless took a novel recourse by filing a so-called omnibus
motion for leave to vacate first motion for reconsideration in the light of the present
developments and to consider evidence presented herein and to set aside conviction.
Citing a transcendental reason, that the accused was then about to lose his liberty
simply because his former lawyers had pursued a carelessly contrived procedural
strategy of insisting on what has already become an imprudent remedy that had
forbade him from offering his evidence although all the while available for
presentation, the Court used its pervasive and encompassing power to alter even that
which it had already declared final, and directed the remand of the case to the
Sandiganbayan, to allow the evidence of the accused to be received and appreciated,
holding that:

xxx To cling to the general rule in this case is only to condone rather
than rectify a serious injustice to petitioner whose only fault was to repose
his faith and entrust his innocence to his previous lawyers. xxx

In Barnes v. Padilla,[11] the Court reinstated the petition despite the judgment
having become final and executory due to the counsels filing in the CA of a motion
for extension of time to file motion for reconsideration (which was not allowed under
the internal rules of the CA), instead of a timely motion for reconsideration. Aside
from observing that the petitioner, although bound by the mistakes or neglect of his
counsel, should not be allowed to suffer serious injustice from such mistakes or
neglect of counsel, the Court decided to rescind the assailed decision of the CA, and
to direct the Regional Trial Court to proceed with the hearing of the action for
specific performance that had been erroneously dismissed on the ground of forum-
shopping in view of a previously filed case for ejectment, considering that the
ejectment action did not bar the action for specific performance.

In Manotok IV v. Heirs of Homer L. Barque,[12] the Court set aside the entry
of judgment to reopen the case on the merits, because the militating concern for the
Court en banc in accepting these cases is not so much the particular fate of the
parties, but the stability of the Torrens system of registration by ensuring clarity of
jurisprudence on the field.

In contrast, the matter involved herein concerns only the petitioners mere
private claim for interest and attorneys fees, which cannot even be classified as
unprecedented. Even worse is that the petitioners private claim does not qualify
either as a substantial or transcendental matter, or as an issue of paramount public
interest, for no special or compelling circumstance has been present to warrant the
relaxation of the doctrine of immutability in favor of the petitioners. That the Third
Division might have erred in deleting the award of interest is neither a special nor a
compelling reason to have the Court en banc favor the petitioners with a
modification of the resolution dated December 19, 2007, after it became final and
immutable on May 16, 2008.

No Interest is Due Unless There is Delay

In Payment of Just Compensation

Even assuming, for the sake of argument, that the Court allows the reopening of a
final judgment, AFC and HPI are still not entitled to recover interest on the just
compensation and attorneys fees.
The taking of property under CARL is an exercise by the State of the power of
eminent domain. A basic limitation on the States power of eminent domain is the
constitutional directive that private property shall not be taken for public use without
just compensation.[13] Just compensation refers to the sum equivalent to the market
value of the property, broadly described to be the price fixed by the seller in open
market in the usual and ordinary course of legal action and competition, or the fair
value of the property as between one who receives and one who desires to sell. It is
fixed at the time of the actual taking by the State. Thus, if property is taken for public
use before compensation is deposited with the court having jurisdiction over the
case, the final compensation must include interests on its just value, to be computed
from the time the property is taken up to the time when compensation is actually
paid or deposited with the court.[14]
In Philippine Railway Company v. Solon,[15] decided in 1909, the Court treated
interest as part of just compensation when the payment to the owner was delayed.
There, the Court, relying heavily on American jurisprudence, declared:

Our attention has not been called to any Act of the Commission relating
to the matter of interest. But that the owner is entitled to interest from the
time when the company took possession of the property on the second day
of February, 1907, until the decision of the court on the 16th day of June,
1908, we think is clear. The statute requires just compensation to be made to
the owner for his property taken, and section 246 above cited requires the
court to make such final order and judgment as shall secure to the plaintiff
the property essential to the exercise of his rights under the law, and to the
defendant just compensation for the land so taken. The defendant, the owner,
was deprived of the use of his property from the 2d day of February, 1907,
until the 19th day of July, 1908. He lost the use of it for this time, and it
cannot be said that he has received just compensation for it if he is not
allowed interest upon the value of the property during that time. In the case
of The Pennsylvania Railroad Co. vs. Cooper (58 Penn. St., 408), the court
said at page 409:

It can hardly be made a question that the plaintiff below was

entitled to recover interest upon the value of his property taken by
the company defendants and appropriated for the purposes of their
road, from the time that it was taken. He is in the position of a
vendor of land, who has always been held to have a right to interest
on the purchase-money where possession has been delivered to the
vendee.

In the case of Warren vs. First Division of the St. Paul & Pacific
Railroad Co. (21 Minn., 424), the court said at page 427:

If, therefore, the allowance of interest upon the amount of the

assessment shall be necessary to make the compensation just, we
have no doubt of authority in the court to make it; and we think that,
generally, it is necessary to allow interest from the date of the award
to give to the owner just compensation. While the assessed value,
if paid at the date taken for the assessment, might be just
compensation, it certainly would not be, if payment be delayed,
as might happen in many cases, and as did happen in this case,
till several years after that time. The difference is the same as
between as between a sale for cash in hand and sale on time.

In the case of Philipps vs. The South Park Commissioners (119 Ill.626),
the court said at page 645:
 The court allowed interest on the amount decreed Mrs. Philipps,
from the 27th day of August, 1870, the time when the
commissioners took possession of the land, and this is relied upon
as error. Lands cannot be taken and appropriated to public use
without just compensation is made to the owner; and we think our
law of eminent domain requires the payment of the compensation,
or a tender, or deposit of the same with the county treasurer, before
possession of the land shall be taken. This seems manifest from
section 10 of the Eminent Domain Act, which, in substance,
provides that, when the report of the jury is brought in, the court or
judge shall make such order as to right and justice shall pertain,
ordering that petitioner enter upon such property, and the use of the
same, upon payment of full compensation, as ascertained as
aforesaid. The payment of the compensation, or the deposit of the
same, seems to be a condition precedent to the taking of possession.
When, therefore, the possession of the land is taken, the
compensation is due; and if due and payable, it, in justice, ought to
draw interest from that time.

But it is said that when the company took possession on the 2d day of
February, 1907, it deposited with the Insular Treasurer the value of the land
and therefore ought not to pay interest on that amount.

The order made on that date was at the request of the company and in
accordance with the provisions of section of Act No. 1592, which is as
follows:

When condemnation proceedings are brought by any railway

corporation, in any court of competent jurisdiction in the Philippine
Islands, for the purpose of the expropriation of land for the proper
corporate use of such railway corporation, said corporation shall
have the right to enter immediately upon the possession of the land
involved, after and upon the deposit by ascertained and fixed by the
court having jurisdiction of the proceedings, said sum to be held by
the Treasurer subject to the orders and final disposition of the
court: Provided, however, That the court may authorize the deposit
with the Insular Treasurer of a certificate of deposit of any
depository of the Government of the Philippine Islands in lieu of
cash, such certificate to be payable to the Insular Treasurer on
demand in the amount directed by the court to be deposited. The
certificate and the moneys represented thereby shall be subject to
the orders and final disposition of the court. And in case suit has
already been commenced on any land and the money deposited with
the Insular Treasurer at the date of the passage of this Act, the said
money may, upon proper order of the court, be withdrawn from the
Treasury by the railway corporation which deposited the same, and
 a certificate of deposit, as above described may be deposited in lieu
thereof. And the court is empowered and directed, by appropriate
order and writ if necessary, to place the railway corporation in
possession of the land, upon the making of the deposit.

The defendant having claimed that his damages would amount to

P19,398.42, the company deposited this sum, but it is very evident from
the terms of the Act that this deposit was in no sense a payment nor an
offer of payment by the company for the land. It simply guaranteed that
the plaintiff would pay whatever sum might eventually be awarded to
the defendant. The defendant had no right to withdraw this money on
the 3d day of February, 1907, nor did he acted upon the report of the
commissioners and entered its judgment, which it did on the 16th day of
June, 1908. We therefore hold that the defendant would not secure just
compensation for the property taken unless he received interest on its value
from the 2d day of February, 1907, until the 16th day of June, 1908.

Solon soon became the basis for the award of interest in expropriation cases, until
the payment of interest became an established part of every case in which the taking
and payment were not contemporaneously made.[16]

In Land Bank of the Philippines v. Wycoco,[17] however, the Court came to explicitly
rule that interest is to be imposed on the just compensation only in case of delay in
its payment, which fact must be sufficiently established. Significantly, Wycoco was
moored on Article 2209, Civil Code, which provides:

Article 2209. If the obligation consists in the payment of money

and the debtor incurs in delay, the indemnity for damages, there being
no stipulation to the contrary, shall be the payment of the interest agreed
upon, and in the absence of stipulation, the legal interest, which is six per
cent per annum. (1108)
`

The history of this case proves that Land Bank did not incur delay in the payment of
the just compensation. As earlier mentioned, after the petitioners voluntarily offered
to sell their lands on October 12, 1995, DAR referred their VOS applications to Land
Bank for initial valuation. Land Bank initially fixed the just compensation at
P165,484.47/hectare, that is, P86,900,925.88, for AFC, and P164,478,178.14, for
HPI. However, both petitioners rejected Land Banks initial valuation, prompting
Land Bank to open deposit accounts in the petitioners names, and to credit in said
accounts the amounts equivalent to their valuations. Although AFC withdrew the
amount of P26,409,549.86, while HPI withdrew P45,481,706.76, they still filed with
DARAB separate complaints for determination of just compensation. When
DARAB did not act upon their complaints for more than three years, AFC and HPI
commenced their respective actions for determination of just compensation in the
Tagum City RTC, which rendered its decision on September 25, 2001.

It is true that Land Bank sought to appeal the RTCs decision to the CA, by
filing a notice of appeal; and that Land Bank filed in March 2003 its petition
for certiorari in the CA only because the RTC did not give due course to its
appeal. Any intervening delay thereby entailed could not be attributed to Land Bank,
however, considering that assailing an erroneous order before a higher court is a
remedy afforded by law to every losing party, who cannot thus be considered to act
in bad faith or in an unreasonable manner as to make such party guilty of unjustified
delay. As stated in Land Bank of the Philippines v. Kumassie Plantation:[18]

The mere fact that LBP appealed the decisions of the RTC and the
Court of Appeals does not mean that it deliberately delayed the payment
of just compensation to KPCI. x x x It may disagree with DAR and the
landowner as to the amount of just compensation to be paid to the latter
and may also disagree with them and bring the matter to court for judicial
determination. This makes LBP an indispensable party in cases involving
just compensation for lands taken under the Agrarian Reform Program,
with a right to appeal decisions in such cases that are unfavorable to
it. Having only exercised its right to appeal in this case, LBP cannot be
penalized by making it pay for interest.

The Third Division justified its deletion of the award of interest thuswise:

AFC and HPI now blame LBP for allegedly incurring delay in
the determination and payment of just compensation. However, the
same is without basis as AFC and HPIs proper recourse after
rejecting the initial valuations of respondent LBP was to bring the
matter to the RTC acting as a SAC, and not to file two complaints for
determination of just compensation with the DAR, which was just
circuitous as it had already determined the just compensation of the
subject properties taken with the aid of LBP.
 In Land Bank of the Philippines v. Wycoco, citing Reyes v. National
Housing Authority and Republic v. Court of Appeals, this Court held that
the interest of 12% per annum on the just compensation is due the
landowner in case of delay in payment, which will in effect make the
obligation on the part of the government one of forbearance. On the other
hand, interest in the form of damages cannot be applied, where there
was prompt and valid payment of just compensation. Thus:

The constitutional limitation of just compensation is

considered to be the sum equivalent to the market value of the
property, broadly described to be the price fixed by the seller in
open market in the usual and ordinary course of legal action and
competition or the fair value of the property as between one who
receives, and one who desires to sell, it being fixed at the time of
the actual taking by the government. Thus, if property is taken
for public use before compensation is deposited with the court
having jurisdiction over the case, the final compensation must
include interests on its just value to be computed from the
time the property is taken to the time when compensation is
actually paid or deposited with the court. In fine, between the
taking of the property and the actual payment, legal interests
accrue in order to place the owner in a position as good as (but
not better than) the position he was in before the taking occurred.

xxx This allowance of interest on the amount found to be the

value of the property as of the time of the taking computed, being
an effective forbearance, at 12% per annum should help eliminate
the issue of the constant fluctuation and inflation of the value of
the currency over time. Article 1250 of the Civil Code, providing
that, in case of extraordinary inflation or deflation, the value of
the currency at the time of the establishment of the obligation
shall be the basis for the payment when no agreement to the
contrary is stipulated, has strict application only to contractual
obligations. In other words, a contractual agreement is needed for
the effects of extraordinary inflation to be taken into account to
alter the value of the currency.

It is explicit from LBP v. Wycoco that interest on the just

compensation is imposed only in case of delay in the payment thereof
which must be sufficiently established. Given the foregoing, we find
 that the imposition of interest on the award of just compensation is
not justified and should therefore be deleted.

It must be emphasized that pertinent amounts were deposited in favor

of AFC and HPI within fourteen months after the filing by the latter of the
Complaint for determination of just compensation before the RTC. It is
likewise true that AFC and HPI already collected P149.6 and P262
million, respectively, representing just compensation for the subject
properties. Clearly, there is no unreasonable delay in the payment of just
compensation which should warrant the award of 12% interest per annum
in AFC and HPIs favor.

The foregoing justification remains correct, and is reiterated herein.

Lastly, approving the second motion for reconsideration will surely produce
more harm than good. In addition to the costly sacrifice of the long-standing doctrine
of immutability, we will thereby be sending the wrong impression that a private
claim had primacy over public interest. There are many other landowners already
paid their just compensation by virtue of final judgments, but who may believe
themselves still entitled also to claim interest based on the supposed difference
between the desired valuations of their properties and the amounts of just
compensation already paid to them. To reopen their final judgments will definitely
open the floodgates to petitions for the resurrection of litigations long ago settled.
This Court cannot allow such scenario to happen.

WHEREFORE, the Court denies the petitioners second motion for

reconsideration (with respect to the denial of the award of legal interest and
attorney's fees), and reiterates the decision dated February 6, 2007 and the resolution
dated December 19, 2007 of the Third Division.

SO ORDERED.

REPUBLIC VS SERENO

REPUBLIC of the PHILIPPINES, represented by SOLICITOR GENERAL JOSE C. CALIDA

v. MARIA LOURDES P.A. SERENO,
 G.R. No. 237428, May 11, 2018 [J. Tijam, En Banc]

DOCTRINE OF THE CASE:

Quo warranto as a remedy to oust an ineligible public official may be availed of when the subject act
or omission was committed prior to or at the time of appointment or election relating to an official’s
qualifications to hold office as to render such appointment or election invalid. Acts or omissions,
even if it relates to the qualification of integrity being a continuing requirement but nonetheless
committed during the incumbency of a validly appointed and/or validly elected official cannot be the
subject of a quo warranto proceeding, but of impeachment if the public official concerned is
impeachable and the act or omission constitutes an impeachable offense, or to disciplinary,
administrative or criminal action, if otherwise.

FACTS:

From 1986 to 2006, Sereno served as a member of the faculty of the University of the Philippines-
College of Law. While being employed at the UP Law, or from October 2003 to 2006, Sereno was
concurrently employed as legal counsel of the Republic in two international arbitrations known as the
PIATCO cases, and a Deputy Commissioner of the Commissioner on Human Rights.

The Human Resources Development Office of UP (UP HRDO) certified that there was no record on
Sereno’s file of any permission to engage in limited practice of profession. Moreover, out of her 20
years of employment, only nine (9) Statement of Assets, Liabilities, and Net Worth (SALN) were on
the records of UP HRDO. In a manifestation, she attached a copy of a tenth SALN, which she
supposedly sourced from the “filing cabinets” or “drawers of UP”. The Ombudsman likewise had no
record of any SALN filed by Sereno. The JBC has certified to the existence of one SALN. In sum,
for 20 years of service, 11 SALNs were recovered.

On August 2010, Sereno was appointed as Associate Justice. On 2012, the position of Chief Justice
was declared vacant, and the JBC directed the applicants to submit documents, among which are “all
previous SALNs up to December 31, 2011” for those in the government and “SALN as of December
31, 2011” for those from the private sector. The JBC announcement further provided that “applicants
with incomplete or out-of-date documentary requirements will not be interviewed or considered for
nomination.” Sereno expressed in a letter to JBC that since she resigned from UP Law on 2006 and
became a private practitioner, she was treated as coming from the private sector and only submitted
three (3) SALNs or her SALNs from the time she became an Associate Justice. Sereno likewise
added that “considering that most of her government records in the academe are more than 15 years
old, it is reasonable to consider it infeasible to retrieve all of those files,” and that the clearance
issued by UP HRDO and CSC should be taken in her favor. There was no record that the letter was
deliberated upon. Despite this, on a report to the JBC, Sereno was said to have “complete
requirements.” On August 2012, Sereno was appointed Chief Justice.

On August 2017, an impeachment complaint was filed by Atty. Larry Gadon against Sereno, alleging
that Sereno failed to make truthful declarations in her SALNs. The House of Representatives
proceeded to hear the case for determination of probable cause, and it was said that Justice Peralta,
the chairman of the JBC then, was not made aware of the incomplete SALNs of Sereno. Other
findings were made: such as pieces of jewelry amounting to P15,000, that were not declared on her
1990 SALN, but was declared in prior years’ and subsequent years’ SALNs, failure of her husband to
sign one SALN, execution of the 1998 SALN only in 2003

On February 2018, Atty. Eligio Mallari wrote to the OSG, requesting that the latter, in representation
of the Republic, initiate a quo warranto proceeding against Sereno. The OSG, invoking the Court’s
original jurisdiction under Section 5(1), Article VIII of the Constitution in relation to the special civil
action under Rule 66, the Republic, through the OSG filed the petition for the issuance of the
extraordinary writ of quo warranto to declare as void Sereno’s appointment as CJ of the SC and to
oust and altogether exclude Sereno therefrom. [yourlawyersays]

Capistrano, Sen. De Lima, Sen. Trillianes, et. al., intervened. Sereno then filed a Motion for
Inhibition against AJ Bersamin, Peralta, Jardeleza, Tijam, and Leonardo-De Castro, imputing actual
bias for having testified against her on the impeachment hearing before the House of Representatives.

Contentions:

Office of the Solicitor General (petitioner):

OSG argues that the quo warranto is an available remedy because what is being sought is to question
the validity of her appointment, while the impeachment complaint accuses her of committing
culpable violation of the Constitution and betrayal of public trust while in office, citing Funa v.
Chairman Villar, Estrada v. Desierto and Nacionalista Party v. De Vera. OSG maintains that the
phrase “may be removed from office” in Section 2, Article XI of the Constitution means that
Members of the SC may be removed through modes other than impeachment.

OSG contends that it is seasonably filed within the one-year reglementary period under Section 11,
Rule 66 since Sereno’s transgressions only came to light during the impeachment proceedings.
Moreover, OSG claims that it has an imprescriptible right to bring a quo warranto petition under the
maxim nullum tempus occurit regi (“no time runs against the king”) or prescription does not operate
against the government. The State has a continuous interest in ensuring that those who partake of its
sovereign powers are qualified. Even assuming that the one-year period is applicable to the OSG,
considering that SALNs are not published, the OSG will have no other means by which to know the
disqualification.

Moreover, OSG maintains that the SC has jurisdiction, citing A.M. No. 10-4-20-SC which created a
permanent Committee on Ethics and Ethical Standards, tasked to investigate complaints involving
graft and corruption and ethical violations against members of the SC and contending that this is not
a political question because such issue may be resolved through the interpretation of the provisions of
the Constitution, laws, JBC rules, and Canons of Judicial Ethics.

OSG seeks to oust Sereno from her position as CJ on the ground that Sereno failed to show that she
is a person of proven integrity which is an indispensable qualification for membership in the
Judiciary under Section 7(3), Article VIII of the Constitution. According to the OSG, because OSG
failed to fulfill the JBC requirement of filing the complete SALNs, her integrity remains unproven.
The failure to submit her SALN, which is a legal obligation, should have disqualified Sereno from
being a candidate; therefore, she has no right to hold the office. Good faith cannot be considered as a
defense since the Anti-Graft and Corrupt Practices Act (RA No. 3019) and Code of Conduct and
Ethical Standards for Public Officials and Employees (RA No. 6713) are special laws and are thus
governed by the concept of malum prohibitum, wherein malice or criminal intent is completely
immaterial.

Sereno (respondent):

Sereno contends that an impeachable officer may only be ousted through impeachment, citing
Section 2 of Article XI of the Constitution, and Mayor Lecaroz v. Sandiganbayan, Cuenca v. Hon.
Fernan, In Re: First lndorsement from Hon. Gonzales, and Re: Complaint-Affidavit for Disbarment
Against SAJ Antonio T. Carpio. Sereno contends that the clear intention of the framers of the
Constitution was to create an exclusive category of public officers who can be removed only by
impeachment and not otherwise. Impeachment was chosen as the method of removing certain high-
ranking government officers to shield them from harassment suits that will prevent them from
performing their functions which are vital to the continued operations of government. Sereno further
argues that the word “may” on Section 2 of Article XI only qualifies the penalty imposable after the
impeachment trial, i.e., removal from office. Sereno contends that the since the mode is wrong, the
SC has no jurisdiction.

Sereno likewise argues that the cases cited by OSG is not in all fours with the present case because
the President and the Vice President may, in fact, be removed by means other than impeachment on
the basis of Section 4, Article VII of the 1987 Constitution vesting in the Court the power to be the
“sole judge” of all contests relating to the qualifications of the President and the Vice-President.
There is no such provision for other impeachable officers. Moreover, on the rest of the cases cited by
the OSG, there is no mention that quo warranto may be allowed.

Sereno also argues that since a petition for quo warranto may be filed before the RTC, such would
result to a conundrum because a judge of lower court would have effectively exercised disciplinary
power and administrative supervision over an official of the Judiciary much higher in rank and is
contrary to Sections 6 and 11, Article VIII of the Constitution which vests upon the SC disciplinary
and administrative power over all courts and the personnel thereof.

Sereno likewise posits that if a Member of the SC can be ousted through quo warranto initiated by
the OSG, the Congress’ “check” on the SC through impeachment would be rendered inutile.

Furthermore, Sereno argues that it is already time-barred. Section 11, Rule 66 provides that a petition
for quo warranto must be filed within one (1) year from the “cause of ouster” and not from the
“discovery” of the disqualification.

Moreover, Sereno contends that the Court cannot presume that she failed to file her SALNs because
as a public officer, she enjoys the presumption that her appointment to office was regular. OSG failed
to overcome the presumption created by the certifications from UP HRDO that she had been cleared
of all administrative responsibilities and charges. Her integrity is a political question which can only
be decided by the JBC and the President.
 Regarding her missing SALNs, Sereno contends that the fact that SALNs are missing cannot give
rise to the inference that they are not filed. The fact that 11 SALNs were filed should give an
inference to a pattern of filing, not of non-filing.

Intervenors’ arguments:

The intervenors argue that it is not incumbent upon Sereno to prove to the JBC that she possessed the
integrity required by the Constitution; rather, the onus of determining whether or not she qualified for
the post fell upon the JBC. Moreover, submission of SALNs is not a constitutional requirement; what
is only required is the imprimatur of the JBC. The intervenors likewise contend that “qualifications”
such as citizenship, age, and experience are enforceable while “characteristics” such as competence,
integrity, probity, and independence are mere subjective considerations.

ISSUES:

Preliminary issues:

1. Whether the Court should entertain the motion for intervention

2. Whether the Court should grant the motion for the inhibition of Sereno against five Justices

Main Issues:

3. Whether the Court can assume jurisdiction and give due course to the instant petition for quo
warranto.
4. Whether Sereno may be the respondent in a quo warranto proceeding notwithstanding the fact that an
impeachment complaint has already been filed with the House of Representatives.
5. Whether Sereno, who is an impeachable officer, can be the respondent in a quo warranto proceeding,
i.e., whether the only way to remove an impeachable officer is impeachment.
6. Whether to take cognizance of the quo warranto proceeding is violative of the principle of separation
of powers
7. Whether the petition is outrightly dismissible on the ground of prescription
8. Whether the determination of a candidate’s eligibility for nomination is the sole and exclusive
function of the JBC and whether such determination. partakes of the character of a political question
outside the Court’s supervisory and review powers;
9. Whether the filing of SALN is a constitutional and statutory requirement for the position of Chief
Justice.
10. If answer to ninth issue is in the affirmative, whether Sereno failed to file her SALNs as mandated by
the Constitution and required by the law and its implementing rules and regulations
11. If answer to ninth issue is in the affirmative, whether Sereno filed SALNs are not filed properly and
promptly.
12. Whether Sereno failed to comply with the submission of SALNs as required by the JBC
13. If answer to the twelfth issue is in the affirmative, whether the failure to submit SALNs to the JBC
voids the nomination and appointment of Sereno as Chief Justice;
14. In case of a finding that Sereno is ineligible to hold the position of Chief Justice, whether the
subsequent nomination by the JBC and the appointment by the President cured such ineligibility.
15. Whether Sereno is a de jure or a de facto officer.
[READ: Justice Leonen’s dissenting opinion: Q&A Format]

HELD:

Anent the first issue: The intervention is improper.

Intervention is a remedy by which a third party, not originally impleaded in the proceedings,
becomes a litigant therein for a certain purpose: to enable the third party to protect or preserve a right
or interest that may be affected by those proceedings. The remedy of intervention is not a matter of
right but rests on the sound discretion of the court upon compliance with the first requirement
on legal interest and the second requirement that no delay and prejudice should result. The
justification of one’s “sense of patriotism and their common desire to protect and uphold the
Philippine Constitution”, and that of the Senator De Lima’s and Trillanes’ intervention that their
would-be participation in the impeachment trial as Senators-judges if the articles of impeachment
will be filed before the Senate as the impeachment court will be taken away is not sufficient. The
interest contemplated by law must be actual, substantial, material, direct and immediate, and not
simply contingent or expectant. Moreover, the petition of quo warranto is brought in the name of the
Republic. It is vested in the people, and not in any private individual or group, because disputes over
title to public office are viewed as a public question of governmental legitimacy and not merely a
private quarrel among rival claimants.

Anent the second issue: There is no basis for the Associate Justices of the Supreme Court to inhibit
in the case.

It is true that a judge has both the duty of rendering a just decision and the duty of doing it in a
manner completely free from suspicion as to its fairness and as to his integrity. However, the right of
a party to seek the inhibition or disqualification of a judge who does not appear to be wholly free,
disinterested, impartial and independent in handling the case must be balanced with the latter’s
sacred duty to decide cases without fear of repression. Bias must be proven with clear and convincing
evidence. Those justices who were present at the impeachment proceedings were armed with the
requisite imprimatur of the Court En Banc, given that the Members are to testify only on matters
within their personal knowledge. The mere imputation of bias or partiality is not enough ground for
inhibition, especially when the charge is without basis. There must be acts or conduct clearly
indicative of arbitrariness or prejudice before it can brand them with the stigma of bias or partiality.
Sereno’s call for inhibition has been based on speculations, or on distortions of the language, context
and meaning of the answers the Justices may have given as sworn witnesses in the proceedings
before the House.

Moreover, insinuations that the Justices of the SC are towing the line of President Duterte in
entertaining the quo warranto petition must be struck for being unfounded and for sowing seeds of
mistrust and discordance between the Court and the public. The Members of the Court are beholden
to no one, except to the sovereign Filipino people who ordained and promulgated the Constitution. It
is thus inappropriate to misrepresent that the SolGen who has supposedly met consistent litigation
success before the SG shall likewise automatically and positively be received in the present quo
warranto action. As a collegial body, the Supreme Court adjudicates without fear or favor. The best
person to determine the propriety of sitting in a case rests with the magistrate sought to be
disqualified. [yourlawyersays]

Anent the third issue: A quo warranto petition is allowed against impeachable officials and SC has
jurisdiction.

The SC have concurrent jurisdiction with the CA and RTC to issue the extraordinary writs,
including quo warranto. A direct invocation of the SC’s original jurisdiction to issue such writs is
allowed when there are special and important reasons therefor, and in this case, direct resort to SC is
justified considering that the action is directed against the Chief Justice. Granting that the petition is
likewise of transcendental importance and has far-reaching implications, the Court is empowered to
exercise its power of judicial review. To exercise restraint in reviewing an impeachable officer’s
appointment is a clear renunciation of a judicial duty. an outright dismissal of the petition based on
speculation that Sereno will eventually be tried on impeachment is a clear abdication of the Court’s
duty to settle actual controversy squarely presented before it. Quo warranto proceedings are
essentially judicial in character – it calls for the exercise of the Supreme Court’s constitutional duty
and power to decide cases and settle actual controversies. This constitutional duty cannot be
abdicated or transferred in favor of, or in deference to, any other branch of the government including
the Congress, even as it acts as an impeachment court through the Senate.

To differentiate from impeachment, quo warranto involves a judicial determination of the eligibility
or validity of the election or appointment of a public official based on predetermined rules while
impeachment is a political process to vindicate the violation of the public’s trust. In quo
warrantoproceedings referring to offices filled by appointment, what is determined is the legality of
the appointment. The title to a public office may not be contested collaterally but only directly,
by quo warranto proceedings. usurpation of a public office is treated as a public wrong and carries
with it public interest, and as such, it shall be commenced by a verified petition brought in the name
of the Republic of the Philippines through the Solicitor General or a public prosecutor. The SolGen is
given permissible latitude within his legal authority in actions for quo warranto, circumscribed only
by the national interest and the government policy on the matter at hand.

Anent the fourth issue: Simultaneous quo warranto proceeding and impeachment proceeding is not
forum shopping and is allowed.

Quo warranto and impeachment may proceed independently of each other as these remedies are
distinct as to (1) jurisdiction (2) grounds, (3) applicable rules pertaining to initiation, filing and
dismissal, and (4) limitations. Forum shopping is the act of a litigant who repetitively availed 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, to increase his
chances of obtaining a favorable decision if not in one court, then in another. The test for determining
forum shopping is whether in the two (or more) cases pending, there is identity of parties, rights or
causes of action, and reliefs sought. The crux of the controversy in this quo warranto proceedings is
the determination of whether or not Sereno legally holds the Chief Justice position to be considered
as an impeachable officer in the first place. On the other hand, impeachment is for respondent’s
prosecution for certain impeachable offenses. Simply put, while Sereno’s title to hold a public office
is the issue in quo warranto proceedings, impeachment necessarily presupposes that Sereno legally
holds the public office and thus, is an impeachable officer, the only issue being whether or not she
committed impeachable offenses to warrant her removal from office.

Moreover, the reliefs sought are different. respondent in a quo warranto proceeding shall be
adjudged to cease from holding a public office, which he/she is ineligible to hold. Moreover,
impeachment, a conviction for the charges of impeachable offenses shall result to the removal of the
respondent from the public office that he/she is legally holding. It is not legally possible to impeach
or remove a person from an office that he/she, in the first place, does not and cannot legally hold or
occupy.

Lastly, there can be no forum shopping because the impeachment proceedings before the House is
not the impeachment case proper, since it is only a determination of probable cause. The
impeachment case is yet to be initiated by the filing of the Articles of Impeachment before the
Senate. Thus, at the moment, there is no pending impeachment case against Sereno. The process
before the House is merely inquisitorial and is merely a means of discovering if a person may be
reasonably charged with a crime.

Anent the fifth issue: Impeachment is not an exclusive remedy by which an invalidly appointed or
invalidly elected impeachable official may be removed from office.

The language of Section 2, Article XI of the Constitution does not foreclose a quo warranto action
against impeachable officers: “Section 2. The President, the Vice-President, the Members of the
Supreme Court, the Members of the Constitutional Commissions, and the Ombudsman may be
removed from office on impeachment for, and conviction of, culpable violation of the Constitution,
treason, bribery, graft and corruption, other high crimes, or betrayal of public trust.” The provision
uses the permissive term “may” which denote discretion and cannot be construed as having a
mandatory effect, indicative of a mere possibility, an opportunity, or an option. In American
jurisprudence, it has been held that “the express provision for removal by impeachment ought not to
be taken as a tacit prohibition of removal by other methods when there are other adequate reasons to
account for this express provision.”

The principle in case law is that during their incumbency, impeachable officers cannot be criminally
prosecuted for an offense that carries with it the penalty of removal, and if they are required to be
members of the Philippine Bar to qualify for their positions, they cannot be charged with disbarment.
The proscription does not extend to actions assailing the public officer’s title or right to the office he
or she occupies. Even the PET Rules expressly provide for the remedy of either an election protest or
a petition for quo warranto to question the eligibility of the President and the Vice-President, both of
whom are impeachable officers.

Further, that the enumeration of “impeachable offenses” is made absolute, that is, only those
enumerated offenses are treated as grounds for impeachment, is not equivalent to saying that the
enumeration likewise purport to be a complete statement of the causes of removal from office. If
other causes of removal are available, then other modes of ouster can likewise be availed. To
subscribe to the view that appointments or election of impeachable officers are outside judicial
review is to cleanse their appointments or election of any possible defect pertaining to the
Constitutionally-prescribed qualifications which cannot otherwise be raised in an impeachment
proceeding. To hold otherwise is to allow an absurd situation where the appointment of an
impeachable officer cannot be questioned even when, for instance, he or she has been determined to
be of foreign nationality or, in offices where Bar membership is a qualification, when he or she
fraudulently represented to be a member of the Bar.

Anent the sixth issue: The Supreme Court’s exercise of its jurisdiction over a quo warranto petition
is not violative of the doctrine of separation of powers.

The Court’s assumption of jurisdiction over an action for quo warranto involving a person who
would otherwise be an impeachable official had it not been for a disqualification, is not violative of
the core constitutional provision that impeachment cases shall be exclusively tried and decided by the
Senate. Again, the difference between quo warranto and impeachment must be emphasized. An
action for quo warranto does not try a person’s culpability of an impeachment offense, neither does a
writ of quo warranto conclusively pronounce such culpability. The Court’s exercise of its
jurisdiction over quo warranto proceedings does not preclude Congress from enforcing its own
prerogative of determining probable cause for impeachment, to craft and transmit the Articles of
Impeachment, nor will it preclude Senate from exercising its constitutionally committed power of
impeachment.

However, logic, common sense, reason, practicality and even principles of plain arithmetic bear out
the conclusion that an unqualified public official should be removed from the position immediately if
indeed Constitutional and legal requirements were not met or breached. To abdicate from resolving a
legal controversy simply because of perceived availability of another remedy, in this case
impeachment, would be to sanction the initiation of a process specifically intended to be long and
arduous and compel the entire membership of the Legislative branch to momentarily abandon their
legislative duties to focus on impeachment proceedings for the possible removal of a public official,
who at the outset, may clearly be unqualified under existing laws and case law.

For guidance, the Court demarcates that an act or omission committed prior to or at the time of
appointment or election relating to an official’s qualifications to hold office as to render such
appointment or election invalid is properly the subject of a quo warranto petition, provided that the
requisites for the commencement thereof are present. Contrariwise, acts or omissions, even if it
relates to the qualification of integrity, being a continuing requirement but nonetheless committed
during the incumbency of a validly appointed and/or validly elected official, cannot be the subject of
a quo warranto proceeding, but of something else, which may either be impeachment if the public
official concerned is impeachable and the act or omission constitutes an impeachable offense, or
disciplinary, administrative or criminal action, if otherwise.

Anent the seventh issue: Prescription does not lie against the State.

The rules on quo warranto provides that “nothing contained in this Rule shall be construed to
authorize an action against a public officer or employee for his ouster from office unless the same be
commenced within one (1) year after the cause of such ouster, or the right of the petitioner to hold
such office or position, arose”. Previously, the one-year prescriptive period has been applied in cases
where private individuals asserting their right of office, unlike the instant case where no private
individual claims title to the Office of the Chief Justice. Instead, it is the government itself which
commenced the present petition for quo warranto and puts in issue the qualification of the person
holding the highest position in the Judiciary.

Section 2 of Rule 66 provides that “the Solicitor General or a public prosecutor, when directed by the
President of the Philippines, or when upon complaint or otherwise he has good reason to believe that
any case specified in the preceding section can be established by proof must commence such action.”
It may be stated that ordinary statutes of limitation, civil or penal, have no application to quo
warranto proceeding brought to enforce a public right. There is no limitation or prescription of action
in an action for quo warranto, neither could there be, for the reason that it was an action by the
Government and prescription could not be plead as a defense to an action by the Government.

That prescription does not lie in this case can also be deduced from the very purpose of an action
for quo warranto. Because quo warranto serves to end a continuous usurpation, no statute of
limitations applies to the action. Needless to say, no prudent and just court would allow an
unqualified person to hold public office, much more the highest position in the Judiciary. Moreover,
the Republic cannot be faulted for questioning Sereno’s qualification· for office only upon discovery
of the cause of ouster because even up to the present, Sereno has not been candid on whether she
filed the required SALNs or not. The defect on Sereno’s appointment was therefore not discernible,
but was, on the contrary, deliberately rendered obscure.

Anent the eighth issue: The Court has supervisory authority over the JBC includes ensuring that the
JBC complies with its own rules.

Section 8(1), Article VIII of the Constitution provides that “A Judicial and Bar Council is hereby
created under the supervision of the Supreme Court.” The power of supervision means “overseeing
or the authority of an officer to see to it that the subordinate officers perform their duties.” JBC’s
absolute autonomy from the Court as to place its non-action or improper· actions beyond the latter’s
reach is therefore not what the Constitution contemplates. What is more, the JBC’s duty to
recommend or nominate, although calling for the exercise of discretion, is neither absolute nor
unlimited, and is not automatically equivalent to an exercise of policy decision as to place, in
wholesale, the JBC process beyond the scope of the Court’s supervisory and corrective powers.
While a certain leeway must be given to the JBC in screening aspiring magistrates, the same does not
give it an unbridled discretion to ignore Constitutional and legal requirements. Thus, the nomination
by the JBC is not accurately an exercise of policy or wisdom as to place the JBC’s actions in the
same category as political questions that the Court is barred from resolving. [yourlawyersays]

[READ: Justice Leonen’s dissenting opinion: Q&A Format]

With this, it must be emphasized that qualifications under the Constitution cannot be waived or
bargained by the JBC, and one of which is that “a Member of the Judiciary must be a person
of provencompetence, integrity, probity, and independence. “Integrity” is closely related to, or if not,
approximately equated to an applicant’s good reputation for honesty, incorruptibility, irreproachable
conduct, and fidelity to sound moral and ethical standards.” Integrity is likewise imposed by the New
Code of Judicial Conduct and the Code of Professional Responsibility. The Court has always viewed
integrity with a goal of preserving the confidence of the litigants in the Judiciary. Hence, the JBC
was created in order to ensure that a member of the Supreme Court must be a person
of provencompetence, integrity, probity, and independence.

Anent the ninth issue: The filing of SALN is a constitutional and statutory requirement.

Section 17, Article XI of the Constitution states that “A public officer or employee shall, upon
assumption of office and as often thereafter as may be required by law, submit a declaration under
oath of his assets, liabilities, and net worth.” This has likewise been required by RA 3019 and RA
6713. “Failure to comply” with the law is a violation of law, a “prima facie evidence of unexplained
wealth, which may result in the dismissal from service of the public officer.” It is a clear breach of
the ethical standards set for public officials and employees. The filing of the SALN is so important
for purposes of transparency and accountability that failure to comply with such requirement may
result not only in dismissal from the public service but also in criminal liability. Section 11 of R.A.
No. 6713 even provides that non-compliance with this requirement is not only punishable by
imprisonment and/or a fine, it may also result in disqualification to hold public office.

Because the Chief Justice is a public officer, she is constitutionally and statutorily mandated to
perform a positive duty to disclose all of his assets and liabilities. According to Sereno herself in her
dissenting opinion in one case, those who accept a public office do so cum onere, or with a burden,
and are considered as accepting its burdens and obligations, together with its benefits. They thereby
subject themselves to all constitutional and legislative provisions relating thereto, and undertake to
perform all the duties of their office. The public has the right to demand the performance of those
duties. More importantly, while every office in the government service is a public trust, no position
exacts a greater demand on moral righteousness and uprightness of an individual than a seat in the
Judiciary.

Noncompliance with the SALN requirement indubitably·reflects on a person’s integrity. It is not

merely a trivial or a formal requirement. The contention that the mere non-filing does not affect
Sereno’s integrity does not persuade considering that RA 6713 and RA 3019 are malum
prohibitum and not malum in se. Thus, it is the omission or commission of that act as defined by the
law, and not the character or effect thereof, that determines whether or not the provision has been
violated. Malice or criminal intent is completely immaterial.

Anent the tenth issue: Sereno chronically failed to file her SALNs and thus violated the Constitution,
the law, and the Code of Judicial Conduct.

In Sereno’s 20 years of government service in UP Law, only 11 SALNs have been filed. Sereno
could have easily dispelled doubts as to the filing or nonfiling of the unaccounted SALNs by
presenting them before the Court. Yet, Sereno opted to withhold such information or such evidence,
if at all, for no clear reason. The Doblada case, invoked by Sereno, cannot be applied, because in the
Doblada case, there was a letter of the head of the personnel of the branch of the court that the
missing SALN exists and was duly transmitted and received by the OCA as the repository agency. In
Sereno’s case, the missing SALNs are neither proven to be in the records of nor was proven to have
been sent to and duly received by the Ombudsman as the repository agency. The existence of these
SALNs and the fact of filing thereof were neither established by direct proof constituting substantial
evidence nor by mere inference. Moreover, the statement of the Ombudsman is categorical: “based
on records on file, there is no SALN filed by [Sereno] for calendar years 1999 to 2009 except SALN
ending December 1998.” This leads the Court to conclude that Sereno did not indeed file her SALN.

For this reason, the Republic was able to discharge its burden of proof with the certification from UP
HRDO and Ombudsman, and thus it becomes incumbent upon Sereno to discharge her burden of
evidence. Further, the burden of proof in a quo warranto proceeding is different when it is filed by
the State in that the burden rests upon the respondent.

In addition, contrary to what Sereno contends, being on leave does not exempt her from filing her
SALN because it is not tantamount to separation from government service. The fact that Sereno did
not receive any pay for the periods she was on leave does not make her a government worker
“serving in an honorary capacity” to be exempted from the SALN laws on RA
6713. [yourlawyersays]

Neither can the clearance and certification of UP HRDO be taken in favor of Sereno. During the
period when Sereno was a professor in UP, concerned authorized official/s of the Office of the
President or the Ombudsman had not yet established compliance procedures for the review of
SALNs filed by officials and employees of State Colleges and Universities, like U.P. The ministerial
duty of the head of office to issue compliance order came about only on 2006 from the CSC. As
such, the U.P. HRDO could not have been expected to perform its ministerial duty of issuing
compliance orders to Sereno when such rule was not yet in existence at that time. Moreover, the
clearance are not substitutes for SALNs. The import of said clearance is limited only to clearing
Sereno of her academic and administrative responsibilities, money and property accountabilities and
from administrative charges as of the date of her resignation.

Neither can Sereno’s inclusion in the matrix of candidates with complete requirements and in the
shortlist nominated by the JBC confirm or ratify her compliance with the SALN requirement. Her
inclusion in the shortlist of candidates for the position of Chief Justice does not negate, nor supply
her with the requisite proof of integrity. She should have been disqualified at the outset. Moreover,
the JBC En Banc cannot be deemed to have considered Sereno eligible because it does not appear
that Sereno’s failure to submit her SALNs was squarely addressed by the body. Her inclusion in the
shortlist of nominees and subsequent appointment to the position do not estop the Republic or this
Court from looking into her qualifications. Verily, no estoppel arises where the representation or
conduct of the party sought to be estopped is due to ignorance founded upon an innocent mistake

Anent the eleventh issue: Sereno failed to properly and promptly file her SALNs, again in violation
of the Constitutional and statutory requirements .

Failure to file a truthful, complete and accurate SALN would likewise amount to dishonesty if the
same is attended by malicious intent to conceal the truth or to make false statements. The suspicious
circumstances include: 1996 SALN being accomplished only in 1998; 1998 SALN only filed in
2003; 1997 SALN only notarized in 1993; 2004-2006 SALNs were not filed which were the years
when she received the bulk of her fees from PIATCO cases, 2006 SALN was later on intended to be
for 2010, gross amount from PIATCO cases were not reflected, suspicious increase of P2,700,000 in
personal properties were seen in her first five months as Associate Justice. It is therefore clear as day
that Sereno failed not only in complying with the physical act of filing, but also committed
dishonesty betraying her lack of integrity, honesty and probity. The Court does not hesitate to impose
the supreme penalty of dismissal against public officials whose SALNs were found to have contained
discrepancies, inconsistencies and non-disclosures.

Anent the twelfth issue: Sereno failed to submit the required SALNs as to qualify for nomination
pursuant to the JBC rules.

The JBC required the submission of at least ten SALNs from those applicants who are incumbent
Associate Justices, absent which, the applicant ought not to have been interviewed, much less been
considered for nomination. From the minutes of the meeting of the JBC, it appeared that Sereno was
singled out from the rest of the applicants for having failed to submit a single piece of SALN for her
years of service in UP Law. It is clear that JBC did not do away with the SALN requirement, but still
required substantial compliance. Subsequently, it appeared that it was only Sereno who was not able
to substantially comply with the SALN requirement, and instead of complying, Sereno wrote a letter
containing justifications why she should no longer be required to file the SALNs: that she resigned
from U.P. in 2006 and then resumed government service only in 2009, thus her government service is
not continuous; that her government records are more than 15 years old and thus infeasible to
retrieve; and that U.P. cleared her of all academic and administrative responsibilities and charges.

These justifications, however, did not obliterate the simple fact that Sereno submitted only 3 SALNs
to the JBC in her 20-year service in U.P., and that there was nary an attempt on Sereno’s part to
comply. Moreover, Sereno curiously failed to mention that she did not file several SALNs during the
course of her employment in U.P. Such failure to disclose a material fact and the concealment thereof
from the JBC betrays any claim of integrity especially from a Member of the Supreme
Court. [yourlawyersays]

Indubitably, Sereno not only failed to substantially comply with the submission of the SALNs but
there was no compliance at all. Dishonesty is classified as a grave offense the penalty of which is
dismissal from the service at the first infraction. A person aspiring to public office must observe
honesty, candor and faithful compliance with the law. Nothing less is expected. Dishonesty is a
malevolent act that puts serious doubt upon one’s ability to perform his duties with the integrity and
uprightness demanded of a public officer or employee. For these reasons, the JBC should no longer
have considered Sereno for interview.

Moreover, the fact that Sereno had no permit to engage in private practice while in UP, her false
representations that she was in private practice after resigning from UP when in fact she was counsel
for the government, her false claims that the clearance from UP HRDO is proof of her compliance
with SALNs requirement, her commission of tax fraud for failure to truthfully declare her income in
her ITRs for the years 2007-2009, procured a brand new Toyota Land Cruiser worth at least
P5,000,000, caused the hiring of Ms. Macasaet without requisite public bidding, misused P3,000,000
of government funds for hotel accommodation at Shangri-La Boracay as the venue of the 3rd ASEAN
Chief Justices meeting, issued a TRO in Coalition of Associations of Senior Citizens in the
Philippines v. COMELECcontrary to the Supreme Court’s internal rules, manipulated the disposition
of the DOJ request to transfer the venue of the Maute cases outside of Mindanao, ignored rulings of
the Supreme Court with respect to the grant of survivorship benefits which caused undue delay to the
release of survivorship benefits to spouses of deceased judges and Justices, manipulated the
processes of the JBC to exclude then SolGen, now AJ Francis Jardeleza, by using highly confidential
document involving national security against the latter among others, all belie the fact that Sereno
has integrity.

Anent the thirteenth issue: Sereno’s failure to submit to the JBC her SALNs for several years means
that her integrity was not established at the time of her application

The requirement to submit SALNs is made more emphatic when the applicant is eyeing the position
of Chief Justice. On the June 4, 2012, JBC En Banc meeting, Senator Escudero proposed the addition
of the requirement of SALN in order for the next Chief Justice to avoid what CJ Corona had gone
through. Further, the failure to submit the required SALNs means that the JBC and the public are
divested of the opportunity to consider the applicant’s fitness or propensity to commit corruption or
dishonesty. In Sereno’s case, for example, the waiver of the confidentiality of bank deposits would
be practically useless for the years that she failed to submit her SALN since the JBC cannot verify
whether the same matches the entries indicated in the SALN.

Anent the fourteenth issue: Sereno’s ineligibility for lack of proven integrity cannot be cured by her
nomination and subsequent appointment as Chief Justice.

Well-settled is the rule that qualifications for public office must be possessed at the time of
appointment and assumption of office and also during the officer’s entire tenure as a continuing
requirement. The voidance of the JBC nomination as a necessary consequence of the Court’s finding
that Sereno is ineligible, in the first place, to be a candidate for the position of Chief Justice and to be
nominated for said position follows as a matter of course. The Court has ample jurisdiction to do so
without the necessity of impleading the JBC as the Court can take judicial notice of the explanations
from the JBC members and the OEO. he Court, in a quo warranto proceeding, maintains the power to
issue such further judgment determining the respective rights in and to the public office, position or
franchise of all the parties to the action as justice requires.

Neither will the President’s act of appointment cause to qualify Sereno. Although the JBC is an
office constitutionally created, the participation of the President in the selection and nomination
process is evident from the composition of the JBC itself.

An appointment is essentially within the discretionary power of whomsoever it is vested, subject to

the only condition that the appointee should possess the qualifications required by law. While the
Court surrenders discretionary appointing power to the President, the exercise of such discretion is
subject to the non-negotiable requirements that the appointee is qualified and all other legal
requirements are satisfied, in the absence of which, the appointment is susceptible to attack.

Anent the fifteenth issue: Sereno is a de facto officer removable through quo warranto

The effect of a finding that a person appointed to an office is ineligible therefor is that his
presumably valid appointment will give him color of title that confers on him the status of a de facto
officer. For lack of a Constitutional qualification, Sereno is ineligible to hold the position of Chief
Justice and is merely holding a colorable right or title thereto. As such, Sereno has never attained the
status of an impeachable official and her removal from the office, other than by impeachment, is
justified. The remedy, therefore, of a quo warranto at the instance of the State is proper to oust
Sereno from the appointive position of Chief Justice. [yourlawyersays]

DISPOSITIVE PORTION:

WHEREFORE, the Petition for Quo Warranto is GRANTED.

Sereno is found DISQUALIFIED from and is hereby adjudged GUILTY of UNLAWFULLY

HOLDING and EXERCISING the OFFICE OF THE CHIEF JUSTICE. Accordingly, Sereno
is OUSTED and EXCLUDED therefrom.

The position of the Chief Justice of the Supreme Court is declared vacant and the Judicial and Bar
Council is directed to commence the application and nomination process.

This Decision is immediately executory without need of further action from the Court.

Sereno is ordered to SHOW CAUSE within ten (10) days from receipt hereof why she should not be
sanctioned for violating the Code of Professional Responsibility and the Code of Judicial Conduct for
transgressing the sub judice rule and for casting aspersions and ill motives to the Members of the
Supreme Court.