April 18, 2016
a free patent or any other public land patent. 18 Petitioners also alleged that
G.R. No. 202051
REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF
PUBLIC WORKS & HIGHWAYS; ENGINEER SIMPLICIO D. GONZALES,
District Engineer, Second Engineering District of Camarines Sur; and
ENGINEER VICTORINO M. DEL SOCORRO, JR., Project Engineer, DPWH,
Baras, Canaman, Camarines Sur, Petitioners,
vs.
SPOUSES ILDEFONSO B. REGULTO and FRANCIA R. REGULTO,
Respondents.
DECISION
PERALTA, J.:
For resolution of this Court is the petition for review on certiorari dated July
10, 2012 filed by petitioners, the Republic of the Philippines as represented
by the Department of Public Works and Highways (DPWH); Engineer
Simplicio D. Gonzales, District Engineer, Second Engineering District of
Camarines Sur; and Engineer Victorino M. Del Socorro, Jr., Project
Engineer, DPWH, Baras, Canaman, Camarines Sur assailing the Order1
dated May 24, 2012 of the Regional Trial Court (RTC) ofNaga City, Branch
62, which ordered herein petitioners to pay respondents spouses Ildefonso
B. Regulto and Francia R. Regulto (Spouses Regulto) the amount of Two
Hundred Forty-Three Thousand Pesos (P243,000.00) as just
compensation for the part of their property traversed by the Naga
CityMilaor Bypass Project of the DPWH.
The factual antecedents are as follows:
Respondents spouses Ildefonso B. Regulto and Francia R. Regulto are the
registered owners of the property in controversy located at Mabel, Naga
City, Camarines Sur consisting of 300 square meters covered by Transfer
Certificate of Title (TCT) No. 086-2010000231.2 The Spouses Regulto
acquired the said property by virtue of a deed of absolute sale executed by
Julian R. Cortes, attorney-in-fact of the spouses Bienvenido and Beatriz
Santos, in February 1994.3 The subject property originated from a Free
Patent property consisting of 7,759 square meters registered and covered
by Original Certificate of Title (OCT) No. 235 dated April 14, 1956.4
Sometime in April 2011, the DPWH Second Engineering District of
Camarines Sur apprised the Spouses Regulto of the construction of its road
project, the Naga City-Milaor Bypass Road, which will traverse their
property and other adjoining properties. 5 The DPWH initially offered the
spouses the sum of P243,000.00 or Pl ,500.00 per square meter for the
162 square-meter affected area as just compensation.6
However, in a letter dated May 11, 2006, the DPWH, through District Engr.
Rolando P. Valdez, withdrew the offer, and informed the Spouses Regulto
that they were not entitled to just compensation since the title of their land
originated from a Free Patent title acquired under Commonwealth Act (CA.)
No. 141, known as the Public Land Act, which contained a reservation in
favor of the government of an easement of right-of-way of twenty (20)
meters, which was subsequently increased to sixty (60) meters by
Presidential Decree (P.D.) No. 635, for public highways and similar works
that the government or any public or quasi-public service enterprise may
reasonably require for carrying on their business, with payment of
damages for the improvements only. 7
The Spouses Regulto, in their letter dated May 30, 2011, protested the
findings of the DPWH and ordered them to cease from proceeding with the
construction. 8 They alleged that since their property is already covered by
TCT No. 086-2010000231, it ceased to be a public land.9 They
communicated that the market value of the property is P450,000.00 plus
the Zonal Value of the Bureau of Internal Revenue (BIR), which is more or
less the acceptable just compensation of their property. 10 Furthermore,
they requested that they be furnished, within five (5) days from the receipt
of their letter, with a Program of Works and Sketch Plan showing the cost
of the project and the extent or area covered by the road that will traverse
their property. 11
The DPWH furnished the Spouses Regulto with the sketch plan showing the
extent of the road right-of-way that will cut across their property. 12 It
also reiterated its earlier position that the title to the land was acquired
under C.A. No. 141. 13
On October 8, 2011, the Spouses Regulto filed a complaint for payment of
just compensation, damages with prayer for issuance of temporary
restraining order and/or writ of preliminary injunction before the RTC of
Naga City, Branch 62, against herein petitioners Republic of the Philippines,
represented by the DPWH; District Engr. Valdez of the Second Engineering
District of Camarines Sur; and Project Engr. Del Socorro, Jr. of the DPWH,
Baras, Canaman, Camarines Sur. 14
The Spouses Regulto averred that the DPWH acted with deceit,
misrepresentation and evident bad faith in convincing them to sign on a
paper after relying on the assurance that they would be paid with just
compensation. 15 They also alleged that their property is outside the
coverage of Section 112, C.A. No. 141 because their land is a private
property, and that the same is situated beyond the 60-meter radius or
width from the public highways, railroads, irrigation ditches, aqueducts,
telegraph and telephone lines, airport runways, an d oth er government
structures. 16
On August 5, 2011, the petitioners, through the Office of the Solicitor
General (OSG), filed a Motion to Dismiss on the ground that the Spouses
Regulto do not have a cause of action, and that their complaint failed to
state the same. 17 Petitioners asseverated that Section 112 of C.A. No.
141 is explicit on the encumbrance imposed upon lands originally covered by
the respondents failed to exhaust administrative remedies for not appealing
the findings of the Regional Infrastructure Right-of-Way (IROW) Committee
with the DPWH Regional Director or to the Secretary of Public Works and
Highways. 19
In an Order dated October 17, 2011, the RTC denied the motion filed by the
petitioners citing that the insufficiency of the cause of action must appear on
the face of the complaint to sustain a dismissal based on lack of cause of
action. 20 In this case, the complaint stated allegations of nonpayment of
just compensation.[[ 21]] Furthermore, the court mentioned that one of the
exceptions of the doctrine of exhaustion of administrative remedies is when
the issue is one of law and when circumstances warrant urgency of judicial
intervention, as in the case of the Spouses Regulto whose portion of their
property has already been occupied by the petitioners without just
compensation. 22
In the Answer23 dated November 16, 2011, the petitioners reiterated their
defense that no legal right has been violated since C.A. No. 141, as amended
by P.D. No. 1361,24 imposes a 60-meter wide lien on the property originally
covered by a Free Patent.25 Petitioners also avowed that Section 5 of the
Implementing Rules and Regulation (IRR) of the Republic Act (R.A.) No.
897426 provides that if the private property or land is acquired
under the provisions of C.A. No. 141, the government officials charged with
the prosecution of the projects or their representative is authorized to take
immediate possession of the property subject to the lien as soon as the need
arises, and the government may obtain a quitclaim from the owners
concerned without the need for payment for the land acquired under the said
quit claim mode except for the damages to improvements only. 27 Hence,
petitioners maintained that the Spouses Regulto are not entitled to a just
compensation for the portion of their property affected by the construction of
the Naga City-Milaor Bypass Road.28
The petitioners, in a Motion dated December 19, 2011, prayed for the
issuance of the writ of possession of the subject property in their favor for
the construction of the project to finally proceed and be completed without
further delay.29
On January 2, 2012, the RTC ordered the respondents spouses to remove
the obstructions that they erected on the subject property within three days,
or the petitioners may dismantle the same to proceed with the construction
of the bypass road project.30 Likewise, the petitioners were ordered to
deliver the check already prepared in the amount of Three Thousand Pesos
(P3,000.00) for payment of the trees/improvements on the property. 31 The
petitioners were also ordered to deposit with any authorized government
depository bank the amount of Thirty-Six Thousand Four Hundred Fifty
Pesos (P36,450.00) equivalent to the assessed value of the 162 square
meters of the subject property, which was assessed at P67,500.00 by the
2010 tax declaration, that the road project will traverse.32
In an Order dated January 27, 2012, the RTC dismissed the motion for
reconsideration filed by the Spouses Regulto, and sustained its earlier order
that the petitioners deposit the amount of P36,450.00.33 The RTC also
acknowledged the receipt of the Spouses Regulto of the check for the
payment of the improvements on the property affected by the project.34
Consequently, the RTC, in its Order dated May 24, 2012, ordered the
petitioners to pay the Spouses Regulto the amount of P243,000.00 as just
compensation for the affected portion of their property.[[ 35]] The
dispositive portion of the Order reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering
the defendants Engr. Rolando F. Valdez and Engr. Victorino M. del Socorro,
Jr., Republic of the Philippines and the Dept. of Public Works and Highways to
pay plaintiffs-spouses Ildefonso and Francia Regulto the amount of
P243,000.00 as just compensation for their property traversed by the
Naga-Milaor Bypass Project.
SO ORDERED.36
The RTC concluded that the government waived the encumbrance provided
for in C.A. No. 141 when it did not oppose the further subdivision of the
original property covered by the free patent or made an express intent on
making its encumbrance before the residential lots, which are part of the
said subdivision, were sold to other innocent purchasers for value, especially
after the 25-year period has lapsed since the free patent. 37
Hence, the petitioners, through the OSG, filed the instant petition raising the
following issues:
THE RTC ERRED IN HOLDING THAT RESPONDENTS ARE ENTITLED TO AND
IN ORDERING PETITIONERS TO PAY JUST COMPENSATION DESPITE THE
UNDISPUTED FACT THAT THE LAND WAS ORIGINALLY PUBLIC LAND AW
ARD ED TO RESPONDENTS' PREDECESSORS-IN-INTEREST BY FREE PATENT,
AND THUS A LEGAL EASEMENT OF RIGHT-OF-WAY EXISTS IN FAVOR OF
THE GOVERNMENT.
THE TRIAL COURT'S RATIOCINATION - THAT THE SUBJECT PROPERTY HAS
IPSO FACTO CEASED TO BE "PUBLIC LAND" AND THUS NO LONGER
SUBJECT TO THE LIEN IMPOSED BY SAID PROVISION OF C.A. NO. 141, BY
VIRTUE OF THE SUBJECT PROPERTY BEING ALREADY COVERED BY A
TRANSFER CERTIFICATE OF TITLE IN THEIR NAME – CONTRAVENES
SECTION 44 OF P.D. NO. 1529 AND NATIONAL IRRIGATION
ADMINISTRATION VS. COURT OF APPEALS.
THE RTC ERRED IN HOLDING THAT SECTION 8 ("EXPROPRIATION"), NOT
SECTION 5 ("QUIT CLAIM"), OF THE IMPLEMENTING RULES AND
REGULATIONS OF R.A. N6. 8974 IS THE APPLICABLE PROVISION
REGARDING THE MODE OF ACQUISITION OF RESPONDENTS'
PROPERTY.38
This Court finds the instant petition partially meritorious.
At the outset, it is noted that petitioners filed the instant petition before
this Court without appealing the said case before the Court of Appeals (CA).
A strict application of the policy of strict observance of the judicial
hierarchy of courts is unnecessary when cases brought before the
appellate courts do not involve factual but purely legal questions.39
Section 2 (c), 40 Rule 41, of the Revised Rules of Court provides that a
decision or order of the RTC may, as done in the instant petition, be
appealed to the Supreme Court by petition for review on certiorari under
Rule 45, provided that such petition raises only questions of law.41
The distinction between questions of law and questions of fact are
explained in the case of Navy Officers' Village Association, Inc. (NOVA!) v.
Republic of the Philippines 42 as follows:
A question of law exists when the doubt or controversy concerns the
correct application of law or jurisprudence on a certain state of facts. The
issue does not call for an examination of the probative value of the
evidence presented, the truth or falsehood of the facts being admitted. In
contrast, a question of fact exists when a doubt or difference arises as to
the truth or falsehood of facts or when the query invites the calibration of
the whole evidence considering mainly the credibility of the witnesses; the
existence and relevancy of specific surrounding circumstances, as well as
their relation to each other and to the whole; and the probability of the
situation.
In the case at bar, the petitioners raise questions of law in disputing the
denial by the RTC in the application of C.A. No. 141 to impose the legal
easement of right-of-way to the subject property, and the application of
Section 8 (Expropriation) of the IRR of R.A. No. 8974 instead of Section 5
(Quit Claim) in the acquisition of the said property.
Essentially, the issue for resolution of this Court is whether the petitioners
are liable for just compensation iri enforcing the Government's legal
easement of right-of-way on the subject property which originated from
the 7,759 square-meter of public land awarded by free patent to the
predecessor-in-interest of the Spouses Regulto.
Petitioners allege that a legal easement of right-of-way exists in favor of
the Government since the land in controversy was originally public land
awarded by free patent to the Spouses Regulto's predecessors-in-interest.
The RTC, however, ruled that the provision of C.A. No. 141 regarding the
easement of right-of-way in favor of the government is not applicable to
the subject property since the law is clearly meant for lands granted
gratuitously by the government in favor of individuals tasked to make it
agriculturally productive.43 It ruled that the subject property is already a
private property since the Spouses Regulto acquired the same through a
deed of absolute sale from the spouses Bienvenido and Beatriz Santos in
February 1994, and that the same originated from the property covered by
TCT No. 24027.44
This Court finds that the RTC erroneously ruled that the provisions of C.A.
No. 141 are not applicable to the case at bar. On the contrary, this Court
held that "a legal easement of right-of-way exists in favor of the
Government over land that was originally a public land awarded by free
patent even if the land is subsequently sold to another."45 This Court has
expounded that the "ruling would be otherwise if the land was originally a
private property, to which just compensation must be paid for the taking of
a part thereof for public use as an easement of right-of-way."46
It is undisputed that the subject property originated from and was a part of
a 7,759-square-meter property covered by free patent registered under
OCT No. 235.47 ..Furthermore, the Spouses Regulto's transfer certificate
of title, which the RTC relied, contained the reservation: "subject to the
provisions of the Property Registration Decree and the Public Land Act, as
well as to those of the Mining Law, if the land is mineral, and subject,
further, to such conditions contained in the original title as may be
subsisting."48
Jurisprudence settles that one of the reservations and conditions under the
Original Certificate of Title of land granted by free patent is that the said
land is subject "to all conditions and public easements and servitudes
recognized and prescribed by law especially those mentioned in Sections
109, 110, 111, 112, 113 and 114, Commonwealth Act No. 141, as
amended. "49
Section 112 of C.A. No. 141, as amended, provides that lands granted by
patent shall be subjected to a right-of-way in favor of the Government, to
wit:
Sec. 112. Said land shall further be subject to a right-of-way not exceeding
sixty (60) meters on width for public highways, railroads, irrigation ditches,
aqueducts, telegraph and telephone lines, airport runways, including sites
necessary for terminal buildings and other government structures needed
for full operation of the airport, as well as
areas and sites for government buildings for Resident and/or Project
Engineers needed in the prosecution of government-infrastructure
projects, and similar works as the Government or any public or
quasi-public service or enterprise, including mining or forest
concessionaires, may reasonably require for carrying on their business,
with damages for the improvements only.
Government officials charged with the prosecution of these projects or their
representatives are authorized to take immediate possession of the portion
of the property subject to the lien as soon as the need arises and after due
notice to the owners. It is however, understood that ownership over said
properties shall immediately revert to the title holders should the airport be
abandoned or when the infrastructure projects are completed and buildings
used by project engineers are abandoned or dismantled, but subject to the
same lien for future improvements.’’50
In other words, lands granted by patent shall be subject to a right-of-way not
exceeding 60 meters in width for public highways, irrigation ditches,
aqueducts, and other similar works of the government or any public
enterprise, free of charge, except only for the value of the improvements
existing thereon that may be affected.51
We are not persuaded with the ruling of the RTC that the government waived
the encumbrance imposed by C.A. No. 141 (Public Land Act) when it did not
oppose the subdivision of the original property covered by the free patent.
The reservation and condition contained in the OCT of lands granted by free
patent, like the origins of the subject property, is not limited by any time
period, "thus, the same is subsisting. 52 . This subsisting reservation
contained in the transfer certificate of title of the Spouses Regulto belies
such supposition that the Government waived the enforcement of its legal
easement of right-of-way on the subject property when it did not oppose to
the subdivision of the property in 1995.
Petitioners allege that since the property in controversy was originally
acquired under the provisions of special laws, particularly C.A. No. 141, then
Section 5 of the IRR of R.A. No. 8974 should be applied in the present case.
Petitioners insist that the acquisition of the portion of the subject property is
through execution of quitclaims.
Section 5 of the IRR of R.A. No. 8974 provides:
SECTION 5. Quit Claim - If the private property or land is acquired under the
provisions of Special Laws, particularly Commonwealth Act No. 141, known
as the Public Land Act, which provides a 20-meter strip of land easement by
the government for public use with damages to improvements only, P.D. No.
635 which increased the reserved area to a 60-meter strip, and P.D. No.
1361 which authorizes government officials charged with the prosecution of
projects or their representative to take immediate possession of portion of
the property subject to the lien as soon as the need arises and after due
notice to the owners, then a quit claim from the owners concerned shall be
obtained by the Implementing Agency. No payment by the government shall
be made for land acquired under the quit claim mode. 53
With the existence of the said easement of right-of-way in favor of the
Government, the petitioners may appropriate the portion of the land
necessary for the construction of the bypass road without paying for it,
except for damages to the improvements. Consequently, the petitioners are
ordered to obtain the necessary quitclaim deed from the Spouses Regulto for
the 162-square-meter strip of land to be utilized in the bypass road project.
It is noted that the 162 square meters of the subject property traversed by
the bypass road project is well within the limit provided by the law While this
Court concurs that the petitioners are not obliged to pay just compensation
in the enforcement of its easement of right-of-way to lands which originated
from public lands granted by free patent, we, however, rule that petitioners
are not free from any liability as to the consequence of enforcing the said
right-of-way granted over the original 7,759-square-meter property to the
300-square-meter property belonging to the Spouses Regulto.
There is "taking," in the context of the State's inherent power of eminent
domain, when the owner is actually deprived or dispossessed of his property;
when there is a practical destruction or material impairment of the
value of his property or when he is deprived of the ordinary use thereof.54
Using one of these standards, it is apparent that there is taking of the
remaining area of the property of the Spouses Regulto. It is true that no
burden was imposed thereon, and that the spouses still retained title and
possession of the property. The fact that more than half of the property shall
be devoted to the bypass road will undoubtedly result in material impairment
of the value of the property. It reduced the subject property to an area of
138 square meters.1âwphi1
Thus, the petitioners are liable to pay just compensation over the remaining
area of the subject property, with interest thereon at the rate of six percent
(6%) per annum from the date of writ of possession or the actual taking until
full payment is made.
The case of Republic v. Hon. Jesus M Mupas55 elucidated just compensation
in this language:
Just compensation is defined as "the full and fair equivalent of the property
taken from its owner by the expropriator." The word "just" is used to qualify
the meaning of the word "compensation" and to convey the idea that the
amount to be tendered for the property to be taken shall be real, substantial,
full and ample. On the other hand, the word "compensation" means "a full
indemnity or remuneration for the loss or damage sustained by the owner of
property taken or injured for public use."
Simply stated, just compensation means that the former owner must be
returned to the monetary equivalent of the position that the owner had when
the taking occurred. To achieve this monetary equivalent, we use the
standard value of "fair market value" of the property at the time of the filing
of the complaint for expropriation or at the time of the taking of property,
whichever is earlier.56
Consequently, the case is remanded to the court of origin for the purpose of
determining the final just compensation for the remaining area of the subject
property. The RTC is thereby ordered to make the determination of just
compensation payable to the respondents Spouses Regulto with deliberate
dispatch. The R TC is cautioned to make a determination based on the
parameters set forth by law and jurisprudence regarding just
compensation.
WHEREFORE, the petition for review on certiorari dated July 10, 2012 filed
by the Republic of the Philippines as represented by the Department of
Public Works and Highways; Engineer Simplicio D. Gonzales, District
Engineer, Second Engineering District of Camarines Sur; and Engineer
Victorino M. Del Socorro, Jr., Project Engineer, DPWH, Baras, Canaman,
Camarines Sur, is hereby PARTIALLY GRANTED.
The case is hereby REMANDED to the Regional Trial Court of Naga City,
Branch 62 for the determination of the final just compensation of the
compensable area consisting of 13 8 square meters, with interest thereon
at the rate of six percent (6%) per annum from the date of writ of
possession or the actual taking until full payment is made.
SO ORDERED.
[ GR No. 207132, Dec 06, 2016 ]
ASSOCIATION OF MEDICAL CLINICS FOR OVERSEAS WORKERS v. GCC
APPROVED MEDICAL CENTERS ASSOCIATION +
DECISION
BRION, J.:
In these consolidated petitions for review on certiorari[1] filed under Rule
45 of the Rules of Court, by the Association of Medical Clinics for Overseas
Workers, Inc. (AMCOW) in GR No. 207132, and by Secretary Enrique T.
Ona (Secretary Ona) of the Department of Health (DOH) in GR No. 207205,
we resolve the challenge to the August 10, 2012 decision[2] and the April
12, 2013 order[3] of the Regional Trial Court (RTC) of Pasay City, Branch
108, in Sp. Civil Action No. R-PSY-10-04391-CV.[4]
The August 10, 2012 decision and April 12, 2013 order declared null and
void ab initio the August 23, 2010 and November 2, 2010 orders issued by
the DOH directing respondent GCC Approved Medical Centers Association,
Inc. (GAMCA) to cease and desist from implementing the referral decking
system (these orders shall be alternately referred to as DOH CDO letters).
I. The Antecedents
On March 8, 2001, the DOH issued Administrative Order No. 5, Series of
2001[5] (AO 5-01) which directed the decking or equal distribution of
migrant workers among the several clinics who are members of GAMCA.
AO 5-01 was issued to comply with the Gulf Cooperative Countries (GCC)
States' requirement that only GCC-accredited medical clinics/hospitals'
examination results will be honored by the GCC States' respective
embassies. It required an OFW applicant to first go to a GAMCA Center
which, in turn, will refer the applicant to a GAMCA clinic or hospital.
Subsequently, the DOH issued AO No. 106, Series of 2002[6] holding in
abeyance the implementation of the referral decking system. The DOH
reiterated its directive suspending the referral decking system in AO No.
159, Series of 2004.[7]
In 2004, the DOH issued AO No. 167, Series of 2004[8] repealing AO 5-01,
reasoning that the referral decking system did not guarantee the migrant
workers' right to safe and quality health service. AO 167-04 pertinently
reads:
WHEREAS, after a meticulous and deliberate study, examination, and
consultation about the GAMCA referral decking system, the DOH believes
that its mandate is to protect and promote the health of the Filipino people
by ensuring the rights to safe and quality health service and reliable
medical examination results through the stricter regulation of medical
clinics and other health facilities, which the referral decking system neither
assures nor guarantees.
NOW, THEREFORE, for and in consideration of the foregoing, the DOH
hereby withdraws, repeals and/or revokes Administrative Order No. 5,
series of 2001, concerning the referral decking system. Hence, all other
administrative issuances, bureau circulars and memoranda related to A.O.
No. 5, series of 2001, are hereby withdrawn, repealed and/revoked
accordingly.
In Department Memorandum No. 2008-0210,[9] dated September 26,
2008, then DOH Secretary Francisco T. Duque III expressed his concern
about the continued implementation of the referral decking system despite
the DOH's prior suspension directives. The DOH directed the "OFW clinics,
duly accredited/licensed by the DOH and/or by the Philippine Health
Insurance Corporation (PHILHEALTH) belonging to and identified with
GAMCA x x x to forthwith stop, terminate, withdraw or otherwise end the x
x x 'referral decking system.'"[10]
GAMCA questioned the DOH's Memorandum No. 2008-0210 before the
Office of the President (OP). In a decision[11] dated January 14, 2010, the
OP nullified Memorandum No. 2008-0210.
On March 8, 2010, Republic Act (RA) No. 10022[12] lapsed into law
without the President's signature. Section 16 of RA No. 10022 amended
Section 23 of RA No. 8042, adding two new paragraphs - paragraphs (c)
and (d). The pertinent portions of the amendatory provisions read:
Section 16. Under Section 23 of Republic Act No. 8042, as amended, add
new paragraphs (c) and (d) with their corresponding subparagraphs to
read as follows:
(c) Department of Health. - The Department of Health (DOH) shall regulate
the activities and operations of all clinics which conduct medical, physical,
optical, dental, psychological and other similar examinations, hereinafter
referred to as health examinations, on Filipino migrant workers as
requirement for their overseas employment. Pursuant to this, the DOH shall
ensure that:
(c.1) The fees for the health examinations are regulated, regularly
monitored and duly published to ensure that the said fees are reasonable
and not exorbitant;
(c.2) The Filipino migrant worker shall only be required to undergo health
examinations when there is reasonable certainty that he or she will be hired
and deployed to the jobsite and only those health examinations which are
absolutely necessary for the type of job applied for or those specifically
required by the foreign employer shall be conducted;
(c.3) No group or groups of medical clinics shall have a monopoly of
exclusively conducting health examinations on migrant workers for certain
receiving countries;
(c.4) Every Filipino migrant worker shall have the freedom to choose any of
the DOH-accredited or DOH-operated clinics that will conduct his/her health
examinations and that his or her rights as a patient are respected. The
decking practice, which requires an overseas Filipino worker to go first to an
office for registration and then farmed out to a medical clinic located
elsewhere, shall not be allowed;
(c.5) Within a period of three (3) years from the effectivity of this Act, all
DOH regional and/or provincial hospitals shall establish and operate clinics
that can serve the health examination requirements of Filipino migrant
workers to provide them easy access to such clinics all over the country and
lessen their transportation and lodging expenses; and
(c.6) All DOH-accredited medical clinics, including the DOH- operated clinics,
conducting health examinations for Filipino migrant workers shall observe
the same standard operating procedures and shall comply with
internationally accepted standards in their operations to conform with the
requirements of receiving countries or of foreign employers/principals.
Any Foreign employer who does not honor the results of valid health
examinations conducted by a DOH-accredited or DOH-operated clinic shall
be temporarily disqualified from participating in the overseas employment
program, pursuant to POEA rules and regulations.
In case an overseas Filipino worker is found to be not medically fit upon
his/her immediate arrival in the country of destination, the medical clinic
that conducted the health examinations of such overseas Filipino worker
shall pay for his or her repatriation back to the Philippines and the cost of
deployment of such worker.
Any government official or employee who violates any provision of this
subsection shall be removed or dismissed from service with disqualification
to hold any appointive public office for five (5) years. Such penalty is without
prejudice to any other liability which he or she may have incurred under
existing laws, rules or regulations. [emphases and underscoring supplied]
On August 13, 2010, the Implementing Rules and Regulations[13] (IRR) of
RA No. 8042, as amended by RA No. 10022, took effect.
Pursuant to Section 16 of RA No. 10022, the DOH, through its August 23,
2010 letter-order,[14] directed GAMCA to cease and desist from
implementing the referral decking system and to wrap up their operations
within three (3) days from receipt thereof. GAMCA received its copy of the
August 23, 2010 letter-order on August 25, 2010.
On August 26, 2010, GAMCA filed with the RTC of Pasig City a petition for
certiorari and prohibition with prayer for a writ of preliminary injunction
and/or temporary restraining order (GAMCA's petition).[15] It assailed: (1)
the DOH's August 23, 2010 letter-order on the ground of grave abuse of
discretion; and (2) paragraphs c.3 and c.4, Section 16 of RA No. 10022, as
well as Section 1 (c) and (d), Rule XI of the IRR, as unconstitutional.
Meanwhile, the DOH reiterated - through its November 2, 2010 order - its
directive that GAMCA cease and desist from implementing the referral
decking system.[16]
On November 23, 2010, AMCOW filed an urgent motion for leave to
intervene and to file an opposition-in-intervention, attaching its
opposition--in-intervention to its motion.[17] In the hearing conducted the
following day, November 24, 2010, the RTC granted AMCOW's intervention;
DOH and GAMCA did not oppose AMCOW's motion.[18] AMCOW
subsequently paid the docket fees and submitted its memorandum.[19]
In an order[20] dated August 1, 2011, the RTC issued a writ of preliminary
injunction[21] directing the DOH to cease and desist from implementing its
August 23, 2010 and November 2, 2010 orders. The RTC likewise issued an
order denying the motion for inhibition/disqualification filed by AMCOW.
On August 18, 2011, the DOH sought reconsideration of the RTC's August 1,
2011 order.
The assailed RTC rulings
In its August 10, 2012 decision,[22] the RTC granted GAMCA's certiorari
petition and declared null and void ab initio the DOH CDO letters. It also
issued a writ of prohibition directing "the DOH Secretary and all persons
acting on his behalf to cease and desist from implementing the assailed
Orders against the [GAMCA]."
The RTC upheld the constitutionality of Section 16 of RA No. 10022,
amending Section 23 of RA No. 8042, but ruled that Section 16 of RA No.
10022 does not apply to GAMCA.
The RTC reasoned out that the prohibition against the referral decking
system under Section 16 of RA No. 10022 must be interpreted as applying
only to clinics that conduct health examination on migrant workers bound
for countries that do not require the referral decking system for the
issuance of visas to job applicants.
It noted that the referral decking system is part of the application
procedure in obtaining visas to enter the GCC States, a procedure made in
the exercise of the sovereign power of the GCC States to protect their
nationals from health hazards, and of their diplomatic power to regulate
and screen entrants to their territories. Under the principle of sovereign
equality and independence of States, the Philippines cannot interfere with
this system and, in fact, must respect the visa-granting procedures of
foreign states in the same way that they respect our immigration
procedures.
Moreover, to restrain GAMCA which is a mere adjunct of HMC, the agent of
GCC States, is to restrain the GCC States themselves. To the RTC, the
Congress was aware of this limitation, pursuant to the generally accepted
principles of international law under Article II, Section 2 of the 1987
Constitution, when it enacted Section 16 of RA No. 10022.
The DOH and AMCOW separately sought reconsideration of the RTC's
August 10, 2012 decision, which motions the RTC denied.[23] The DOH
and AMCOW separately filed the present Rule 45 petitions.
On August 24, 2013, AMCOW filed a motion for consolidation[24] of the
two petitions; the Court granted this motion and ordered the consolidation
of the two petitions in a resolution dated September 17, 2013.[25]
In the resolution[26] of April 14, 2015, the Court denied: (1) GAMCA's
most urgent motion for issuance of temporary restraining order/writ of
preliminary injunction/status quo ante order (with request for immediate
inclusion in the Honorable Court's agenda of March 3, 2015, its motion
dated March 2, 2015);[27] and (2) the most urgent reiterating motion for
issuance of temporary restraining order/writ of preliminary
injunction/status quo ante order dated March 11, 2015.[28]
The Court also suspended the implementation of the permanent injunction
issued by the RTC of Pasay City, Branch 108 in its August 10, 2012
decision.
II. The Issues
The consolidated cases before us present the following issues:
First, whether the Regional Trial Court legally erred in giving due course to
the petition for certiorari and prohibition against the DOH CDO letters;
Second, whether the DOH CDO letters prohibiting GAMCA from
implementing the referral decking system embodied under Section 16 of
Republic Act No. 10022 violates Section 3, Article II of the 1987
Constitution for being an undue taking of property;
Third, whether the application of Section 16 of Republic Act No.10022 to
the GAMCA violates the international customary principles of sovereign
independence and equality.
III. Our Ruling
A. The RTC legally erred when it gave due course to GAMCA's petition for
certiorari and prohibition.
The present case reached us through an appeal by certiorari (pursuant to
Rule 45) of an RTC ruling, assailing the decision based solely on questions
of law. The RTC decision, on the other hand, involves the grant of the
petitions for certiorari and prohibition (pursuant to Rule 65) assailing the
DOH CDO letters for grave abuse of discretion.
The question before us asks whether the RTC made a reversible error of
law when it issued writs of certiorari and prohibition against the DOH CDO
letters.
AMCOW questions the means by which GAMCA raised the issue of the
legality of RA No. 10022 before the RTC. AMCOW posits that GAMCA
availed of an improper remedy, as certiorari and prohibition lie only
against quasi-judicial acts, and quasi-judicial and ministerial acts,
respectively. Since the disputed cease and desist order is neither, the RTC
should have dismissed the petition outright for being an improper remedy.
We agree with the petitioners' assertion that the RTC erred when it gave
due course to GAMCA's petition for certiorari and prohibition, but we do so
for different reasons.
1. Certiorari under Rules of Court and under the courts' expanded
jurisdiction under Art VIII, Section 1 of the Constitution, as recognized by
jurisprudence.
A.1.a. The Current Certiorari Situation
The use of petitions for certiorari and prohibition under Rule 65 is a remedy
that judiciaries have used long before our Rules of Court existed.[29] As
footnoted below, these writs - now recognized and regulated as remedies
under Rule 65 of our Rules of Court - have been characterized a
"supervisory writs" used by superior courts to keep lower courts within the
confines of their granted jurisdictions, thereby ensuring orderliness in
lower courts' rulings.
We confirmed this characterization in Madrigal Transport v. Lapanday
Holdings Corporation,[30] when we held that a writ is founded on the
supervisory jurisdiction of appellate courts over inferior courts, and is
issued to keep the latter within the bounds of their jurisdiction. Thus, the writ
corrects only errors of jurisdiction of judicial and quasi-judicial bodies, and
cannot be used to correct errors of law or fact. For these mistakes of
judgment, the appropriate remedy is an appeal.[31]
This situation changed after 1987 when the new Constitution "expanded" the
scope of judicial power by providing that -
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. (italics supplied)[32]
In Francisco v. The House of Representatives,[33] we recognized that this
expanded jurisdiction was meant "to ensure the potency of the power of
judicial review to curb grave abuse of discretion by 'any branch or
instrumentalities of government.'" Thus, the second paragraph of Article VIII,
Section 1 engraves, for the first time in its history, into black letter law the
"expanded certiorari jurisdiction" of this Court, whose nature and purpose
had been provided in the sponsorship speech of its proponent, former Chief
Justice Constitutional Commissioner Roberto Concepcion:
xxxx
The first section starts with a sentence copied from former
Constitutions. It says:
The judicial power shall be vested in one Supreme Court and in such lower
courts as may be established by law.
I suppose nobody can question it.
The next provision is new in our constitutional law. I will read it first and
explain.
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.
Fellow Members of this Commission, this is actually a product of our
experience during martial law. As a matter of fact, it has some antecedents
in the past, but the role of the judiciary during the deposed regime was
marred considerably by the circumstance that in a number of cases against
the government, which then had no legal defense at all, the solicitor general
set up the defense of political question and got away with it. As a
consequence, certain principles concerning particularly the writ of habeas
corpus, that is, the authority of courts to order the release of political
detainees, and other matters related to the operation and effect of martial
law failed because the government set up the defense of political question.
And the Supreme Court said: "Well, since it is political, we have no authority
to pass upon it." The Committee on the Judiciary feels that this was not a
proper solution of the questions involved. It did not merely request an
encroachment upon the rights of the people, but it, in effect, encouraged
further violations thereof during the martial law regime. x x x
xxxx
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.[34] (italics in the
original; emphasis and underscoring supplied)
Meanwhile that no specific procedural rule has been promulgated to enforce
this "expanded" constitutional definition of judicial power and because of the
commonality of "grave abuse of discretion" as a ground for review under
Rule 65 and the courts expanded jurisdiction, the Supreme Court based on
its power to relax its rules[35] allowed Rule 65 to be used as the medium for
petitions invoking the courts' expanded jurisdiction based on its power to
relax its Rules.[36] This is however an ad hoc approach that does not fully
consider the accompanying implications, among them, that Rule 65 is an
essentially distinct remedy that cannot simply be bodily lifted for application
under the judicial power's expanded mode. The terms of Rule 65, too, are
not fully aligned with what the Court's expanded jurisdiction signifies and
requires.[37]
On the basis of almost thirty years' experience with the courts' expanded
jurisdiction, the Court should now fully recognize the attendant distinctions
and should be aware that the continued use of Rule 65 on an ad hoc basis as
the operational remedy in implementing its expanded jurisdiction may, in
the longer term, result in problems of uneven, misguided, or even incorrect
application of the courts' expanded mandate.
The present case is a prime example of the misguided reading that may take
place in constitutional litigation: the procedural issues raised apparently
spring from the lack of proper understanding of what a petition for certiorari
assails under the traditional and expanded modes, and the impact of these
distinctions in complying with the procedural requirements for a valid
petition.
2. The Basic Distinctions
A.2.a. Actual Case or Controversy
Basic in the exercise of judicial power whether under the traditional or in
the expanded setting - is the presence of an actual case or controversy. For
a dispute to be justiciable, a legally demandable and enforceable right
must exist as basis, and must be shown to have been violated.[38]
Whether a case actually exists depends on the pleaded allegations, as
affected by the elements of standing (translated in civil actions as the
status of being a "real-party-in-interest," in criminal actions as "offended
party" and in special proceedings as "interested party"),[39] ripeness,[40]
prematurity, and the moot and academic principle that likewise interact
with one another. These elements and their interactions are discussed m
greater detail below.
The Court's expanded jurisdiction - itself an exercise of judicial power -
does not do away with the actual case or controversy requirement in
presenting a constitutional issue, but effectively simplifies this
requirement by merely requiring a prima facie showing of grave abuse of
discretion in the assailed governmental act.
A.2.b. Actions Correctable by Certiorari
A basic feature of the expanded jurisdiction under the constitutional
definition of judicial power, is the authority and command for the courts to
act on petitions involving the commission by any branch or instrumentality
of government of grave abuse of discretion amounting to lack or excess of
jurisdiction.
This command distinctly contrasts with the terms of Rule 65 which confines
court certiorari action solely to the review of judicial and quasi--judicial
acts.[41] These differing features create very basic distinctions that must
necessarily result in differences in the application of remedies.
While actions by lower courts do not pose a significant problem because
they are necessarily acting judicially when they adjudicate, a critical
question comes up for the court acting on certiorari petitions when
governmental agencies are involved - under what capacity does the
agency act?
This is a critical question as the circumstances of the present case show.
When the government entity acts quasi-judicially, the petition for certiorari
challenging the action falls under Rule 65; in other instances, the petition
must be filed based on the courts' expanded jurisdiction.
A.2.c. Grave Abuse of Discretion
Another distinction, a seeming one as explained below, relates to the cited
ground of a certiorari petition under Rule 65 which speaks of lack or excess
of jurisdiction or grave abuse of discretion amounting to lack or excess of
jurisdiction, as against the remedy under the courts' expanded jurisdiction
which expressly only mentions grave abuse of discretion amounting to lack
or excess of jurisdiction.
This distinction is apparently not legally significant when it is considered
that action outside of or in excess of the granted authority necessarily
involves action with grave abuse of discretion: no discretion is allowed in
areas outside of an agency's granted authority so that any such action
would be a gravely abusive exercise of power. The constitutional grant of
power, too, pointedly addresses grave abuse of discretion when it amounts
to lack or excess of jurisdiction,[42] thus establishing that the presence of
jurisdiction is the critical element; failure to comply with this requirement
necessarily leads to the certiorari petition's immediate dismissal.[43]
As an added observation on a point that our jurisprudence has not fully
explored, the result of the action by a governmental entity (e.g., a law or
an executive order) can be distinguished from the perspective of its
legality as tested against the terms of the Constitution or of another law
(where subordinate action like an executive order is involved), vis-a-vis
the legality of the resulting action where grave abuse of discretion
attended the governmental action or the exercise of the governmental
function.
In the former, the conclusion may be plain illegality or legal error that
characterized the law or exec order (as tested, for example, under the
established rules of interpretation); no consideration is made of how the
governmental entity exercised its function. In the latter case, on the other
hand, it is the governmental entity's exercise of its function that is
examined and adjudged independently of the result, with impact on the
legality of the result of the gravely abusive action.
Where the dispute in a case relates to plain legal error, ordinary court
action and traditional mode are called for and this must be filed in the
lower courts based on rules of jurisdiction while observing the hierarchy of
courts.
Where grave abuse of discretion is alleged to be involved, the expanded
jurisdiction is brought into play based on the express wording of the
Constitution and constitutional implications may be involved (such as
grave abuse of discretion because of plain oppression or discrimination),
but this must likewise be filed with the lowest court of concurrent
jurisdiction, unless the court highest in the hierarchy grants exemption.
Note that in the absence of express rules, it is only the highest court, the
Supreme Court, that can only grant exemptions.
From these perspectives, the use of grave abuse of discretion can spell the
difference in deciding whether a case filed directly with the Supreme Court
has been properly filed.
A.2.d. Exhaustion of Available Remedies
A basic requirement under Rule 65 is that there be "no other plain, speedy
and adequate remedy found in law,"[44] which requirement the expanded
jurisdiction provision does not expressly carry. Nevertheless, this
requirement is not a significant distinction in using the remedy of certiorari
under the traditional and the expanded modes. The doctrine of exhaustion of
administrative remedies applies to a petition for certiorari, regardless of the
act of the administrative agency concerned, i.e., whether the act concerns a
quasi-judicial, or quasi-legislative function, or is purely regulatory.[45]
Consider in this regard that once an administrative agency has been
empowered by Congress to undertake a sovereign function, the agency
should be allowed to perform its function to the full extent that the law grants.
This full extent covers the authority of superior officers in the administrative
agencies to correct the actions of subordinates, or for collegial bodies to
reconsider their own decisions on a motion for reconsideration. Premature
judicial intervention would interfere with this administrative mandate,
leaving administrative action incomplete; if allowed, such premature judicial
action through a writ of certiorari, would be a usurpation that violates the
separation of powers principle that underlies our Constitution.[46]
In every case, remedies within the agency's administrative process must be
exhausted before external remedies can be applied. Thus, even if a
governmental entity may have committed a grave abuse of discretion,
litigants should, as a rule, first ask reconsideration from the body itself, or a
review thereof before the agency concerned. This step ensures that by the
time the grave abuse of discretion issue reaches the court, the
administrative agency concerned would have fully exercised its jurisdiction
and the court can focus its attention on the questions of law presented before
it.
Additionally, the failure to exhaust administrative remedies affects the
ripeness to adjudicate the constitutionality of a governmental act, which in
turn affects the existence of the need for an actual case or controversy for
the courts to exercise their power of judicial review.[47] The need for
ripeness - an aspect of the timing of a case or controversy does not change
regardless of whether the issue of constitutionality reaches the Court
through the traditional means, or through the Court's expanded jurisdiction.
In fact, separately from ripeness, one other concept pertaining to judicial
review is intrinsically connected to it; the concept of a case being moot and
academic.[48]
Both these concepts relate to the timing of the presentation of a controversy
before the Court ripeness relates to its prematurity, while mootness relates
to a belated or unnecessary judgment on the issues. The Court cannot
preempt the actions of the parties, and neither should it (as a rule) render
judgment after the issue has already been resolved by or through external
developments.
The importance of timing in the exercise of judicial review highlights and
reinforces the need for an actual case or controversy an act that may violate
a party's right. Without any completed action or a concrete threat of injury to
the petitioning party, the act is not yet ripe for adjudication. It is merely a
hypothetical problem. The challenged act must have been accomplished or
performed by either branch or instrumentality of government before a court
may come into the picture, and the petitioner must allege the existence of an
immediate or threatened injury to itself as a result of the challenged action.
In these lights, a constitutional challenge, whether presented through the
traditional route or through the Court's expanded jurisdiction, requires
compliance with the ripeness requirement. In the case of administrative acts,
ripeness manifests itself through compliance with the doctrine of exhaustion
of administrative remedies.
In like manner, an issue that was once ripe for resolution but whose
resolution, since then, has been rendered unnecessary, needs no resolution
from the Court, as it presents no actual case or controversy and likewise
merely presents a hypothetical problem. In simpler terms, a case is moot
and academic when an event supervenes to render a judgment over the
issues unnecessary and superfluous.
Without the element of ripeness or a showing that the presented issue is
moot and academic, petitions challenging the constitutionality of a law or
governmental act are vulnerable to dismissal.
Not to be forgotten is that jurisprudence also prohibits litigants from
immediately seeking judicial relief without first exhausting the available
administrative remedies for practical reasons.[49]
From the perspective of practicality, immediate resort to the courts on issues
that are within the competence of administrative agencies to resolve, would
unnecessarily clog the courts' dockets. These issues, too, usually involve
technical considerations that are within the agency's specific competence
and which, for the courts, would require additional time and resources to
study and consider.[50] Of course, the Supreme Court cannot really avoid
the issues that a petition for certiorari, filed with the lower courts may
present; the case may be bound ultimately to reach the Court, albeit as an
appeal from the rulings of the lower courts.
3. Situations Where a Petition for Certiorari May Be Used
There are two distinct situations where a writ of certiorari or prohibition may
be sought. Each situation carries requirements, peculiar to the nature of
each situation, that lead to distinctions that should be recognized in the use
of certiorari under Rule 65 and under the courts' expanded jurisdiction.
The two situations differ in the type of questions raised. The first is the
constitutional situation where the constitutionality of acts are questioned.
The second is the non-constitutional situation where acts amounting to
grave abuse of discretion are challenged without raising constitutional
questions or violations.
The process of questioning the constitutionality of a governmental action
provides a notable area of comparison between the use of certiorari in the
traditional and the expanded modes.
Under the traditional mode, plaintiffs question the constitutionality of a
governmental action through the cases they file before the lower courts;
the defendants may likewise do so when they interpose the defense of
unconstitutionality of the law under which they are being sued. A petition
for declaratory relief may also be used to question the constitutionality or
application of a legislative (or quasi-legislative) act before the court.[51]
For quasi-judicial actions, on the other hand, certiorari is an available
remedy, as acts or exercise of functions that violate the Constitution are
necessarily committed with grave abuse of discretion for being acts
undertaken outside the contemplation of the Constitution. Under both
remedies, the petitioners should comply with the traditional requirements
of judicial review, discussed below.[52] In both cases, the decisions of
these courts reach the Court through an appeal by certiorari under Rule
45.
In contrast, existing Court rulings in the exercise of its expanded
jurisdiction have allowed the direct filing of petitions for certiorari and
prohibition with the Court to question, for grave abuse of discretion,
actions or the exercise of a function that violate the Constitution.[53] The
governmental action may be questioned regardless of whether it is
quasi--judicial, quasi-legislative, or administrative in nature. The Court's
expanded jurisdiction does not do away with the actual case or controversy
requirement for presenting a constitutional issue, but effectively simplifies
this requirement by merely requiring a prima facie showing of grave abuse
of discretion in the exercise of the governmental act.[54]
To return to judicial review heretofore mentioned, in constitutional cases
where the question of constitutionality of a governmental action is raised,
the judicial power the courts exercise is likewise identified as the power of
judicial review - the power to review the constitutionality of the actions of
other branches of government.[55] As a rule, as required by the hierarchy
of courts principle, these cases are filed with the lowest court with
jurisdiction over the matter. The judicial review that the courts undertake
requires:
1)
there be an actual case or controversy calling for the exercise of judicial
power;
(2)
the person challenging the act must have "Standing" to challenge; he must
have a personal and substantial interest in the case such that he has
sustained, or will sustain, direct injury as a result of its enforcement;
(3)
the question of constitutionality must be raised at the earliest possible
opportunity; and
(4)
the issue of constitutionality must be the very lis mota of the case.[56]
The lower court's decision under the constitutional situation reaches the
Supreme Court through the appeal process, interestingly, through a
petition for review on certiorari under Rule 45 of the Rules of Court.
In the non-constitutional situation, the same requirements essentially
apply, less the requirements specific to the constitutional issues. In
particular, there must be an actual case or controversy and the compliance
with requirements of standing, as affected by the hierarchy of courts,
exhaustion of remedies, ripeness, prematurity, and the moot and
academic principles.
A.3.a. The "Standing" Requirement
Under both situations, the party bringing suit must have the necessary
"standing." This means that this party has, in its favor, the demandable
and enforceable right or interest giving rise to a justiciable controversy
after the right is violated by the offending party.
The necessity of a person's standing to sue derives from the very definition
of judicial power. Judicial power includes the duty of the courts to settle
actual controversies involving rights which are legally demandable and
enforceable. Necessarily, the person availing of a judicial remedy must
show that he possesses a legal interest or right to it, otherwise, the issue
presented would be purely hypothetical and academic. This concept has
been translated into the requirement to have "standing" in judicial
review,[57] or to be considered as a "real-party-in-interest" in civil
actions,[58] as the "offended party" in criminal actions[59] and the
"interested party" in special proceedings.[60]
While the Court follows these terms closely in both non-constitutional
cases and constitutional cases under the traditional mode, it has relaxed
the rule in constitutional cases harrdled under the expanded jurisdiction
mode. in the latter case, a prima facie showing that the questioned
governmental act violated the Constitution, effectively disputably shows
an injury to the sovereign Filipino nation who approved the Constitution
and endowed it with authority, such that the challenged act may be
questioned by any Philippine citizen before the Supreme Court.[61] In this
manner, the "standing" requirement is relaxed compared with the
standard of personal stake or injury that the traditional petition requires.
The relaxation of the standing requirement has likewise been achieved
through the application of the "transcendental importance doctrine" under
the traditional mode for constitutional cases.[62] (Under the traditional
mode, "transcendental importance" not only relaxes the standing
requirement, but also allows immediate access to this Court, thus
exempting the petitioner from complying with the hierarchy of courts
requirement.)[63]
More importantly perhaps, the prima facie showing of grave abuse of
discretion in constitutional cases also implies that the injury alleged is actual
or imminent, and not merely hypothetical.
Through this approach, the Court's attention is directed towards the
existence of an actual case or controversy - that is, whether the government
indeed violated the Constitution to the detriment of the Filipino people
without the distractions of determining the existence of transcendental
importance indicators unrelated to the dispute and which do not at all
determine whether the Court properly exercises its power of judicial review.
Parenthetically, in the traditional mode, the determination of the
transcendental importance of the issue presented,[64] aside from simply
relaxing the standing requirement, may result in the dilution of the actual
case or controversy element because of the inextricable link between
standing and the existence of an actual case or controversy.
Consider, in this regard, that an actual case or controversy that calls for the
exercise of judicial power necessarily requires that the party presenting it
possesses the standing to mount a challenge to a governmental act. A case
or controversy exists when there is an actual dispute between parties over
their legal rights, which remains in conflict at the time the dispute is
presented before the court.[65] Standing, on the other hand, involves a
personal and substantial interest in the case because the petitioner has
sustained, or will sustain, direct injury as a result of the violation of its
right.[66]
With the element of "standing" (or the petitioner's personal or substantial
stake or interest in the case) relaxed, the practical effect is to dilute the need
to show that an immediate actual dispute over legal rights did indeed take
place and is now the subject of the action before the court.[67]
In both the traditional and the expanded modes, this relaxation carries a
ripple effect under established jurisprudential rulings,[68] affecting not only
the actual case or controversy requirement, but compliance with the
doctrine of hierarchy of courts, discussed in greater detail below.
A.3.b. The Hierarchy of Courts Principle
Another requirement that a certiorari petition carries, springs from the
principle of "hierarchy of courts" which recognizes the various levels of
courts in the country as they are established under the Constitution and by
law, their ranking and effect of their rulings in relation with one another, and
how these different levels of court interact with one another.[69] Since
courts are established and given their defined jurisdictions by law, the
hierarchy of the different levels of courts should leave very little opening for
flexibility (and potential legal questions), but for the fact that the law creates
courts at different and defined levels but with concurrent jurisdictions.
The Constitution itself has partially determined the judicial hierarchy in the
Philippine legal system by designating the Supreme Court as the highest
court with irreducible powers; its rulings serve as precedents that other
courts must follow[70] because they form part of the law of the land.[71] As
a rule, the Supreme Court is not a trial court and rules only on questions of
law, in contrast with the Court of Appeals and other intermediate courts[72]
which rule on both questions of law and of fact. At the lowest level of courts
are the municipal and the regional trial courts which handle questions of fact
and law at the first instance according to the jurisdiction granted to them by
law.
Petitions for certiorari and prohibition fall under the concurrent jurisdiction of
the regional trial courts and the higher courts, all the way up to the Supreme
Court. As a general rule, under the hierarchy of courts principle, the petition
must be brought to the lowest court with jurisdiction;[73] the petition
brought to the higher courts may be dismissed based on the hierarchy
principle. Cases, of course, may ultimately reach the Supreme Court through
the medium of an appeal.
The recognition of exceptions to the general rule is provided by the Supreme
Court through jurisprudence, i.e., through the cases that recognized the
propriety of filing cases directly with the Supreme Court. This is possible as
the Supreme Court has the authority to relax the application of its own
rules.[74]
As observed above, this relaxation waters down other principles affecting the
remedy of certiorari. While the relaxation may result in greater and closer
supervision by the Court over the lower courts and quasi-judicial bodies
under Rule 65, the effect may not always be salutary in the long term when
it is considered that this may affect the constitutional standards for the
exercise of judicial power, particularly the existence of an actual case or
controversy.
The "transcendental importance" standard, in particular, is vague,
open-ended and value-laden, and should be limited in its use to exemptions
from the application of the hierarchy of courts principle. It should not carry
any ripple effect on the constitutional requirement for the presence of an
actual case or controversy.
4. The petition for certiorari and prohibition against the DOH Letter was filed
before the wrong court.
In the present case, the act alleged to be unconstitutional refers to the cease
and desist order that the DOH issued against GAMCA's referral decking
system. Its constitutionality was questioned through a petition for certiorari
and prohibition before the RTC. The case reached this Court through a Rule
45 appeal by certiorari under the traditional route.
In using a petition for certiorari and prohibition to assail the DOH-CDO letters,
GAMCA committed several procedural lapses that rendered its petition
readily dismissible by the RTC. Not only did the petitioner present a
premature challenge against an administrative act; it also committed the
grave jurisdictional error of filing the petition before the wrong court.
A.4.a. The DOH CDO letters were issued in the exercise of the DOH's
quasi--judicial functions, and could be assailed through Rule 65 on
certiorari and prohibition.
A cease and desist order is quasi-judicial in nature, as it applies a
legislative policy to an individual or group within the coverage of the law
containing the policy.
The Court, in Municipal Council of Lemery, Batangas v. Provincial Board of
Batangas,[75] recognized the difficulty of d fining the precise demarcation
line between what are judicial and what are administrative or ministerial
functions, as the exercise of judicial functions may involve the
performance of legislative or administrative duties, and the performance
of administrative or ministerial duties may, to some extent, involve the
exercise of functions judicial in character. Thus, the Court held that the
nature of the act to be performed, rather than of the office, board, or body
which performs it, should determine whether or not an action is in the
discharge of a judicial or a quasi-judicial function.[76]
Generally, the exercise of judicial functions involves the determination of
what the law is, and what the legal rights of parties are under this law with
respect to a matter in controversy. Whenever an officer is clothed with this
authority and undertakes to determine those questions, he acts
judicially.[77]
In the administrative realm, a government officer or body exercises a
quasi-judicial function when it hears and determines questions of fact to
which the legislative policy is to apply, and decide, based on the law's
standards, matters relating to the enforcement and administration of the
law.[78]
The DOH CDO letter directed GAMCA to cease and desist from engaging in
the referral decking system practice within three days from receipt of the
letter. By issuing this CDO letter implementing Section 16 of RA No. 10022,
the DOH (1) made the finding of fact that GAMCA implements the referral
decking system, and (2) applied Section 16 of RA No. 10022, to conclude
that GAMCA's practice is prohibited by law and should be stopped.
From this perspective, the DOH acted in a quasi-judicial capacity: its CDO
letter determined a question of fact, and applied the legislative policy
prohibiting the referral decking system practice.
Notably, cease and desist orders have been described and treated as
quasi-judicial acts in past cases, and had even been described as similar to
the remedy of injunction granted by the courts.[79]
A.4.b. The petitions for certiorari and prohibition against the DOH CDO
letters fall within the jurisdiction of the Court of Appeals.
Since the CDO Letter was a quasi-judicial act, the manner by which GAMCA
assailed it before the courts of law had been erroneous; the RTC should not
have entertained GAMCA's petition.
First, acts or omissions by quasi-judicial agencies, regardless of whether
the remedy involves a Rule 43 appeal or a Rule 65 petition for certiorari, is
cognizable by the Court of Appeals. In particular, Section 4, Rule 65 of the
Rules of Court provides:
Section 4. When and where petition filed. The petition shall be filed not
later than sixty (60) days from notice of the judgment, order or resolution.
In case a motion for reconsideration or new trial is timely filed, whether
such motion is required or not, the sixty (60) day period shall be counted
from notice of the denial of said motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts
or omissions of a lower court or of a corporation, board, officer or person,
in the Regional Trial Court exercising jurisdiction over the territorial area
as defined by the Supreme Court. It may also be filed in the Court of
Appeals whether or not the same is in aid of its appellate jurisdiction, or in
the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves
the acts or omissions of a quasi-judicial agency, unless otherwise provided
by law or these Rules, the petition shall be filed in and cognizable only by
the Court of Appeals. (emphasis, italics, and underscoring supplied)
Since the DOH is part of the Executive Department and has acted in its
quasi-judicial capacity, the petition challenging its CDO letter should have
been filed before the Court of Appeals. The RTC thus did not have
jurisdiction over the subject matter of the petitions and erred in giving due
course to the petition for certiorari and prohibition against the DOH CDO
letters. In procedural terms, petitions for certiorari and prohibition against
a government agency are remedies avaiJable to assail its quasi-judicial
acts, and should thus have been filed before the CA.
The provision in Section 4, Rule 65 requiring that certiorari petitions
challenging quasi-judicial acts to be filed with the CA is in full accord with
Section 9 of Batas Pambansa Blg. 129[80] on the same point. Section 9
provides:
Section 9. Jurisdiction.- The Court of Appeals shall exercise:
1. Original jurisdiction to issue writs of mandamus, prohibition, certiorari,
habeas corpus, and quo warranto, and auxiliary writs or processes,
whether or not in aid of its appellate jurisdiction;
xxxx
3. Exclusive appellate jurisdiction over all final judgments, resolutions,
orders or awards of Regional Trial Courts and quasi--judicial agencies,
instrumentalities, boards or commission, including the Securities and
Exchange Commission, the Social Security Commission, the Employees
Compensation Commission and the Civil Service Commission, except
those falling within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, the provisions of this Act, and of
subparagraph (1) of the third paragraph and subparagraph 4 of the fourth
paragraph of Section 17 of the Judiciary Act of 1948.
xxxx
(emphases, italics, and underscoring supplied)
Thus, by law and by Supreme Court Rules, the CA is the court with the
exclusive original jurisdiction to entertain petitions for certiorari and
prohibition against quasi-judicial agencies. In short, GAMCA filed its remedy
with the wrong court.
A.4.c The petitions for certiorari and prohibition against the DOH CDO letters
were premature challenges - they failed to comply with the requirement that
there be "no other plain, speedy and adequate remedy" and with the
doctrine of exhaustion of administrative remedies.
Second, the Regional Trial Court of Pasay City unduly disregarded the
requirements that there be "no other plain, speedy and adequate remedy at
law" and the doctrine of exhaustion of administrative remedies, when it gave
due course to the certiorari and prohibition petition against the DOH's CDO.
Under Chapter 8, Book IV of Executive Order (EO) No. 292,[81] series of
1987, the DOH Secretary "shall have supervision and control over the
bureaus, offices, and agencies under him"[82] and "shall have authority
over and responsibility for x x x operation" of the Department.
Section 1, Chapter 1, Title I, Book III of EO No. 292 in relation with Article VII,
Sections 1 and 17 of the Constitution,[83] on the other hand, provides that
the "President shall have control of all the executive departments, bureaus,
and offices."
These provisions both signify that remedies internal to the Executive Branch
exist before resorting to judicial remedies: GAMCA could ask the DOH
Secretary to reconsider or clarify its letter-order, after which it could appeal,
should the ruling be unfavorable, to the Office of the President.
Significantly, this was what GAMCA did in the past when the DOH issued
Memorandum Order No. 2008-0210 that prohibited the referral decking
system. GAMCA then asked for the DOH Secretary's reconsideration, and
subsequently appealed the DOH's unfavorable decision with the Office of the
President. The OP then reversed Memorandum Order No. 2008-0210 and
allowed the referral decking system to continue.
That GAMCA had earlier taken this course indicates that it was not unaware
of the administrative remedies available to it; it simply opted to disregard
the doctrine of exhaustion of administrative remedies and the requirement
that there be no other plain, speedy, and adequate remedy in law when it
immediately filed its petition for certiorari with the RTC.
This blatant disregard of the Rule 65 requirements clearly places GAMCA's
petition outside the exceptions that we recognized in the past in relaxing
strict compliance with the exhaustion of administrative remedies
requirement.
Jurisprudence[84] shows that this Court never hesitated in the past in
relaxing the application of the rules of procedure to accommodate
exceptional circumstances when their strict application would result in
injustice. These instances, founded as they are on equitable considerations,
do not include the undue disreiard of administrative remedies, particularly
when they are readily available.[85]
A.4.d. The petitions for certiorari and prohibition against the DOH CDO
letters should have been dismissed outright, as Rule 65 Petitions for
Certiorari and Prohibition are extraordinary remedies given due course only
upon compliance with the formal and substantive requirements.
Note, at this point, that Rule 65 petitions for certiorari and prohibition are
discretionary writs, and that the handling court possesses the authority to
dismiss them outright for failure to comply with the form and substance
requirements. Section 6, Rule 65 of the Rules of Court in this regard
provides:
Section 6. Order to comment. - If the petition is sufficient in form and
substance to justify suclr process, the court shall issue an order requiring the
respondent or respondents to comment on the petition within ten (10) days
from receipt of a copy thereof. Such order shall be served on the
respondents in such manner as the court may direct together with a copy of
the petition and any annexes thereto. (emphasis, italics, and underscoring
supplied)
Thus, even before requiring the DOH to comment, the RTC could have
assessed the petition for certiorari and prohibition for its compliance with the
Rule 65 requirements. At that point, the petition for certiorari and prohibition
should have been dismissed outright, for failing to comply with Section 1 and
Section 4 of Rule 65. When the court instead took cognizance of the petition,
it acted on a matter outside its jurisdiction.
Consequently, the RTC's resulting judgment is void and carries no legal
effect. The decision exempting GAMCA from the application of the referral
decking system should equally have no legal effect.
Noncompliance with the Section 1, Rule 65 requirement that there be no
other plain, speedy, and adequate remedy in law, on the other hand, is more
than just a pro-forma requirement in the present case. Since the petitions for
certiorari and prohibition challenge a governmental act - i.e. action under
the DOH CDO letters, as well as the validity of the instruments under which
these letters were issued - compliance with Section 1, Rule 65 and the
doctrine of exhaustion of administrative remedies that judicial review
requires is also mandatory. To recall a previous discussion, the exhaustion of
administrative remedies is also an aspect of ripeness in deciding a
constitutional issue.
Thus, GAMCA's disregard of the Rules of Court not only renders the petition
dismissible for failure to first exhaust administrative remedies; the
constitutional issues GAMCA posed before the RTC were not also ripe for
adjudication.
5. The Regional Trial Court erred in finding grave abuse of discretion on the
part of the DOH's issuance of the DOH CDO letters.
On the merits, we find that the RTC of Pasay reversibly erred in law when
it held that the DOH acted with grave abuse of discretion m prohibiting
GAMCA from implementing the referral decking system.
In exempting GAMCA from the referral decking system that RA No. 10022
prohibits, the RTC of Pasay City noted that the regulation per se was not
unconstitutional, but its application to GAMCA would violate the principle
of sovereign equality and independence.
While we agree with the RTC's ultimate conclusion upholding the
constitutionality of the prohibition against the referral decking system
under RA No. 10022, our agreement proceeds from another reason; we
disagree that the prohibition does not apply to GAMCA and with the
consequent ruling nullifying the DOH's CDO Letter.
A.5.a. The prohibition against the referral decking system under Section
16, RA No. 10022, is a valid exercise of police power.
In its comment, GAMCA asserts that implementing the prohibition against
the referral decking system would amount to an undue taking of property
that violates Article II, Section 2 of the 1987 Constitution.
It submits that the Securities and Exchange Commission had in fact
approved its Articles of Incorporation and Bylaws that embody the referral
decking system; thus, the DOH cannot validly prohibit the implementation
of this system.
GAMCA further claims that its members made substantial investments to
upgrade their facilities and equipment. From this perspective, the August
23, 2010 order constitutes taking of property without due process of law as
its implementation would deprive GAMCA members of their property.
AMCOW responded to these claims with the argument that the DOH CDO
letters implementing RA No. 10022 are consistent with the State's exercise
of the police power to prescribe regulations to promote the health, safety,
and general welfare of the people. Public interest justifies the State's
interference in health matters, since the welfare of migrant workers is a
legitimate public concern. The DOH thus merely performed its duty of
upholding the migrant workers' freedom to consult their chosen clinics for
the conduct of health examinations.
We agree with AMCOW.
The State's police power[86] is vast and plenary[87] and the operation of
a business,[88] especially one that is imbued with public interest (such as
healthcare services),[89] falls within the scope of governmental exercise
of police power through regulation.
As defined, police power includes (1) the imposition of restraint on liberty
or property, (2) in order to foster the common good.[90] The exercise of
police power involves the "state authority to enact legislation that may
interfere with personal liberty or property in order to promote the general
welfare."[91]
By its very nature, the exercise of the State's police power limits individual
rights and liberties, and subjects them to the "far more overriding
demands and requirements of the greater number."[92] Though vast and
plenary, this State power also carries limitations, specifically, it may not be
exercised arbitrarily or unreasonably. Otherwise, it defeats the purpose for
which it is exercised, that is, the advancement of the public good.[93]
To be considered reasonable, the government's exercise of police power
must satisfy the "valid object and valid means" method of analysis: first,
the interest of the public generally, as distinguished from those of a
particular class, requires interference; and second, the means employed
are reasonably necessary to attain the objective sought and not unduly
oppressive upon individuals.[94]
These two elements of reasonableness are undeniably present in Section
16 of RA No. 10022. The prohibition against the referral decking system is
consistent with the State's exercise of the police power to prescribe
regulations to promote the health, safety, and general welfare of the
people. Public interest demands State interference on health matters,
since the welfare of migrant workers is a legitimate public concern.
We note that RA No. 10022 expressly reflects the declared State policies to
"uphold the dignity of its citizens whether in the country or overseas, in
general, and Filipino migrant workers," and to "afford full protection to
labor, local and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all. Towards
this end, the State shall provide adequate and timely social, economic and
legal services to Filipino migrant workers." The prohibition against the
referral decking system in Section 16 of RA No. 10022 is an expression and
implementation of these state policies.
The guarantee under Section 16 for OFWs to be given the option to choose
a quality healthcare service provider as expressed in Section 16 (c)[95] of
RA No. 10022 is guaranteed by the prohibition against the decking practice
and against monopoly practices in OFW health examinations.[96]
Section 16 likewise requires employers to accept health examinations from
any DOH-accredited health facility; a refusal could lead to their temporary
disqualification under pertinent rules to be formulated by the Philippine
Overseas Employment Authority (POEA).[97]
These rules are part of the larger legal framework to ensure the Overseas
Filipino Workers' (OFW) access to quality healthcare services, and to curb
existing practices that limit their choices to specific clinics and facilities.
Separately from the Section 16 prohibition against the referral decking
system, RA No. 10022 also prohibits and penalizes the imposition of a
compulsory exclusive arrangement requiring OFWs to undergo health
examinations only from specifically designated medical clinics, institutions,
entities or persons. Section 5, in relation to Section 6 of RA No. 10022,
penalizes compulsory, exclusive arrangements[98] by imprisonment and
fine and by the automatic revocation of the participating medical clinic's
license.
The DOH's role under this framework is to regulate the activities and
operations of all clinics conducting health examinations on Filipino migrant
workers as a requirement for their overseas employment. The DOH is tasked
to ensure that:
(c.3) No group or groups of medical clinics shall have a monopoly of
exclusively conducting health examinations on migrant workers for certain
receiving countries;
(c.4) Every Filipino migrant worker shall have the freedom to choose any of
the DOH-accredited or DOH-operated clinics that will conduct his/her health
examinations and that his or her rights as a patient are respected. The
decking practice, which requires an overseas Filipino worker to go first to an
office for registration and then farmed out to a medical clinic located
elsewhere, shall not be allowed;[99]
While Section 16 of RA No. 10022 does not specifically define the
consequences of violating the prohibition against the referral decking system,
Republic Act No. 4226 (Hospital Licensure Act), which governs the licensure
and regulation of hospitals and health facilities, authorizes the DOH to
suspend, revoke, or refuse to renew the license of hospitals and clinics
violating the law.[100]
These consequences cannot but apply to the violation of the prohibition
against the referral decking system under RA No. 10022. If, under the law,
the DOH can suspend, revoke, or refuse to renew the license of these
hospitals upon the finding that they violated any provision of law (whether
those found in RA No. 4226 or in RA No. 10022), it follows- as a necessarily
included lesser power - that the DOH can likewise order these clinics and
their association to cease and desist from practices that the law deems to be
undesirable.
A.5.b. The DOH did not gravely abuse its discretion in issuing the assailed
DOH CDO letters.
As discussed above, the letter-order implementing the prohibition against
the referral decking system is quasi-judicial in nature. This characteristic
requires that procedural due process be observed - that is, that the clinics
concerned be given the opportunity to be heard before the standard found in
the law can be applied to them.
Thus, prior to the issuance of the disputed CDO letter, the DOH should have
given GAMCA the opportunity to be heard on whether the prohibition applies
to it. Lest this opportunity to be heard be misunderstood, this DOH obligation
raises an issue different from the question of whether Congress can, under
the exercise of police power, prohibit the referral decking system; this latter
issue lies outside the scope of the DOH to pass upon. The required hearing
before the DOH relates solely to whether it properly implemented, based on
the given standards under the law, the prohibition that Congress decreed
under RA No. 10022.
Under normal circumstances, the issuance of a CDO without a prior hearing
would violate GAMCA's procedural due process rights, and would amount to
more than a legal error, i.e., an error equivalent to action without jurisdiction.
Rendering a decision quasi-judicial in nature without providing the
opportunity to be heard amounts to a grave abuse of discretion that divests
a quasi-judicial agency of its jurisdiction.
Factual circumstances unique to the present case, however, lead us to
conclude that while it was an error of law for the DOH to issue a CDO without
complying with the requirements of procedural due process, its action did
not amount to a grave abuse of discretion.
Grave abuse of discretion amounts to more than an error of law; it refers to
an act that is so capricious, arbitrary, and whimsical that it amounts to a
clear evasion of a positive duty or a virtual refusal to perform a duty enjoined
by law, as where the power is exercised in an arbitrary and despotic manner
because of passion or hostility.[101]
Prior to the issuance of its CDO Letter, the DOH had more than sufficient
basis to determine that GAMCA practices the prohibited referral decking
system under RA No. 10022. Notably, the DOH had earlier allowed and
recognized the referral decking system that GAMCA practiced through AO
5-01. This recognition was made with GAMCA's practice in mind. The
subsequent administrative orders and department memorandum
suspending and terminating the referral decking system, respectively, all
pertain to the practice that the DOH had authorized under AO 5-01. Even the
subject matter of these issuances do not just pertain to any other referral
decking system, but to the "GAMCA referral decking system."
GAMCA likewise had more than several opportunities to contest the
suspension and eventual revocation of the referral decking system initially
pe1mitted under AO 5-01. Its appeal even reached the Office of the
President, which overturned the DOH Memorandum Order terminating the
referral decking system.
That the referral decking system had been subsequently prohibited by law
shows the intent of Congress to prevent and prohibit the practice that
GAMCA initiated and which the President had allowed. The President's duty
under our political system is to implement the law; hence, when Congress
subsequently prohibited the practice that GAMCA initiated, the Executive -
including the President -has no choice but to implement it.
Based on these circumstances, while the DOH erred when it issued its CDO
letters without first giving GAMCA the opportunity to prove whether the
practice conducted by GAMCA is the same practice prohibited under RA No.
10022, the DOH conclusion to so act, in our view, did not constitute grave
abuse of discretion that would have divested it of jurisdiction.
We note that the DOH had sufficient basis when it determined that the
referral decking system prohibited under RA No. 10022 was the same
decking system practiced by GAMCA. To reiterate, the referral decking
system was not something new; it was an old system that GAMCA
practiced and was known to all in its scope and operating details. That
GAMCA had previously questioned the DOH prohibition and had been given
ample opportunity to be heard when it filed an appeal before the OP,
negate the conclusion that GAMCA had been aggrieved by precipitate and
unfair DOH action.
To be sure, these factual circumstances do not make the CDO letter
compliant with procedural due process. They mitigate, however, the error
committed and render it less than the capricious, arbitrary, and patent
refusal to comply with a positive legal duty that characterizes an act
committed with grave abuse of discretion.
The Court furthermore, in several instances,[102] has recognized that an
administrative agency may issue an ex parte cease and desist order,
where vital public interests outweigh the need for procedural due process."
In these instances, the Court noted that the affected establishment may
contest the ex parte order, upon which the administrative agency
concerned must conduct a hearing and allow the establishment to be heard.
While jurisprudence has so far used the "vital public interests" standard to
pollution cases, it had not been a grave abuse of discretion on the part of
the DOH to consider that GAMCA's referral decking practice falls within this
category. The DOH has long made the factual finding that the referral
decking system hinders our Filipino seafarers' access to quality and
affordable healthcare in its A.O. No. 106, series of 2002.
These circumstances further mitigate whatever legal error the DOH has
committed and render the conclusion that grave abuse of discretion had
taken place misplaced.
Since the writs of certiorari and prohibition do not issue against legal errors,
but to acts of grave abuse of discretion, the RTC erred in issuing these
writs against the DOH CDO letters.
6. The prohibition against the referral decking system against GAMCA does
not violate the principle of sovereign equality and independence.
The RTC based its decision to grant the writs of certiorari and prohibition
against the DOH letter-order on the principle of sovereign equality and
independence; applying the referral decking system prohibition against
GAMCA violates this principle.
The RTC reasoned out that the prohibition against the referral decking
system under Section 16 of RA No. 10022 must be interpreted to apply
only to clinics conducting health examinations on migrant workers bound
for countries that do not require the referral decking system for the
issuance of visas to job applicants.
The RTC observed, too, that the refer al decking system is part of the
application procedure in obtaining visas to enter the GCC States, a
procedure made in the exercise of the sovereign power of the GCC States
to protect their nationals from health hazards, and of their diplomatic
power to regulate and screen entrants to their territories.
It also reasoned out that under the principle of sovereign equality and
independence of States, the Philippines cannot interfere with this system
and in fact must respect the visa-granting procedures of foreign states in
the same way that they respect our immigration procedures. Moreover, to
restrain GAMCA which is a mere adjunct of HMC (an agent of GCC States)
is to restrain the GCC States themselves.
AMCOW contests the RTC's conclusion, arguing that the principles of
sovereign equality and independence of States do not apply to the present
case. According to AMCOW, the subject matter of this case pertains to a
domestic concern as the law and the regulations that GAMCA assails relate
to the operation of medical clinics in the Philippines.
It points out that the Philippines gave GAMCA and its members the
privilege of conducting their businesses domestically; hence, their
operations are governed by Philippine laws, specifically by RA No. 10022
which serves as one of the limitations on the privilege granted to them.
GAMCA's right to engage in business should yield to the State's exercise of
police power. In legal contemplation, therefore, the DOH CDO letters did
not prejudice GAMCA's right to engage in business; nor did they hamper
the GAMCA members' business operations.
AMCOW further insists that the August 23, 2010 and November 2, 2010
orders are consistent with the State's exercise of the police power to
prescribe regulations to promote the health, safety, and general welfare of
the people. Public interest demands State interference on health matters,
since the welfare of migrant workers is a legitimate public concern. The
DOH thus merely performed its duty of upholding the migrant workers'
freedom to choose any of its accredited or operated clinics that will conduct
health examinations.
The DOH, for its part, adds that the implementation of RA No. 10022 cannot
be defeated by agreements entered into by GAMCA with the GCC States. The
GCC States, the DOH points out, are not empowered to determine the
Philippines' courses of action with respect to the operation, within Philippine
territory, of medical clinics; the conduct of health examinations; and the
freedom of choice of Filipino migrant workers.
GAMCA responds to these arguments by asserting that the referral decking
system is a part of the application procedure for obtaining visas to enter the
GCC States. Hence, it is an exercise of the sovereign power of the GCC
States to protect their nationals from health hazards, and their diplomatic
power to regulate and screen entrants to their territories. To restrain an
agent of the GCC States under the control and acting in accordance with the
direction of these GCC States, restrains the GCC States.
GAMCA also points out that the OFWs would suffer grave and irreparable
damage and injury if the DOH CDO letters would be implemented as the GCC
States would not issue working visas without the GAMCA seal attesting that
the OFWs had been medically examined by GAMCA member clinics.
After considering all these arguments, we find that the RTC's decision
misapplied the principle of sovereign independence and equality to the
present case. While the principles of sovereign independence and equality
have been recognized in Philippine jurisprudence, our recogmtmn of this
principle does not extend to the exemption of States and their affiliates from
compliance with Philippine regulatory laws.
A.6. The principle of sovereign equality and independence of states does not
exempt GAMCAfrom the referral decking system prohibition under RA No.
10022.
In Republic of Indonesia v. Vinzon,[103] we recognized the principle of
sovereign independence and equality as part of the law of the land. We used
this principle to justify the recognition of the principle of sovereign immunity
which exempts the State - both our Government and foreign governments -
from suit. We held:
International law is founded largely upon the principles of reciprocity, comity,
independence, and equality of States which were adopted as part of the law
of our land under Article II, Section 2 of the 1987 Constitution. The rule that
a State may not be sued without its consent is a necessary consequence of
the principles of independence and equality of States. As enunciated in
Sanders v. Veridiano II, the practical justification for the doctrine of
sovereign immunity is that there can be no legal right against the authority
that makes the law on which the right depends. In the case of foreign States,
the rule is derived from the principle of the sovereign equality of States, as
expressed in the maxim par in parem non habet imperium. All states are
sovereign equals and cannot assert jurisdiction over one another. A contrary
attitude would "unduly vex the peace of nations."
Our recognition of sovereign immunity, however, has never been unqualified.
While we recognized the principles of independence and equality of States to
justify a State's sovereign immunity from suit, we also restricted state
immunity to acts jus imperii, or public acts. We said that once a State enters
into commercial transactions (jus gestionis), then it descends to the level of
a private individual, and is thus not immune from the resulting liability and
consequences of its actions.[104]
By this recognition, we acknowledge that a foreign government acting in its
jus imperii function cannot be held liable in a Philippine court. Philippine
courts, as part of the Philippine government, cannot and should not take
jurisdiction over cases involving the public acts of a foreign government.
Taking jurisdiction would amount to authority over a foreign government,
and would thus violate the principle of sovereign independence and
equality.[105]
This recognition is altogether different from exempting governments whose
agents are in the Philippines from complying with our domestic laws.[106]
We have yet to declare in a case that the principle of sovereign independence
and equality exempts agents of foreign governments from compliance with
the application of Philippine domestic law.
In the present case, GAMCA has not adduced any evidence in the court below,
nor has it presented any argument before us showing that the principle of
sovereign equality and independence has developed into an international
custom shielding state agents from compliance with another state's
domestic laws. Under this situation, the Court is in no position to determine
whether the practice that GAMCA alleges has indeed crystallized into an
international custom.
GAMCA has never proven in this case, too, that the GCC has extended its
sovereign immunity to GAMCA. Sovereign immunity belongs to the State,
and it must first be extended to its agents before the latter may be
considered to possess sovereign immunity.
Significantly, the Court has even adopted a restrictive approach in
recognizing state immunity, by distinguishing between a State's jus imperii
and jus gestionis. It is only when a State acts in its jus imperii function that
we recognize state immunity.[107]
We point out furthermore that the prohibition against the referral decking
system applies to hospitals and clinics, as well as to OFW employers, and
does not seek to interfere with the GCC's visa requirement processes. RA
10022 prohibits hospitals and clinics in the Philippines from practicing the
referral decking system, and employers from requiring OFWs to procure
their medical examinations from hospitals and clinics practicing the referral
decking system.
The regulation applies to Philippine hospitals and clinics, as well as to
employers of OFWs. It does not apply to the GCCs and their visa processes.
That the regulation could affect the OFWs' compliance with the visa
requirements imposed by GCCs does not place it outside the regulatory
powers of the Philippine government.
In the same manner, GCC states continue to possess the prerogative to
apply their visa requirements to any foreign national, including our OFWs,
who seeks to enter their territory; they may refuse to grant them entry for
failure to comply with the referral decking system, or they may adjust to
the prohibition against the referral decking system that we have imposed.
These prerogatives lie with the GCC member-states and do not affect at all
the legality of the prohibition against the referral decking system.
Lastly, the effect of the prohibition against the referral decking system is
beyond the authority of this Court to consider. The wisdom of this
prohibition has been decided by Congress, through the enactment of RA
No. 10022. Our role in this case is merely to determine whether our
government has the authority to enact the law's prohibition against the
referral decking system, and whether this prohibition is being
implemented legally. Beyond these lies the realm of policy that, under our
Constitution's separation of powers, this Court cannot cross.
WHEREFORE, in the light of these considerations, we hereby GRANT the
petitions. Accordingly, we REVERSE and SET ASIDE the orders dated
August 10, 2012 and April 12, 2013 of the Regional Trial Court of Pasay
City, Branch 108, in Sp. Civil Action No. R-PSY-10-04391-CV.
Costs against respondent GAMCA.
FIRST DIVISION
June 7, 2017
G.R. No. 195003
CITY OF BATANGAS, represented by Hon. Severina Vilma Abaya, 1 in her
capacity as City Mayor of Batangas, Petitioner
vs.
PHILIPPINE SHELL PETROLEUM CORPORATION and SHELL PHILIPPINES
EXPLORATION B.V., Respondents
DECISION
CAGUIOA, J.:
The policy of ensuring the autonomy of local governments was not
intended to create an imperium in imperio and install intra-sovereign
political subdivisions independent of the sovereign state.2 As agents of the
state, local governments should· bear in mind that the police power
devolved to them by law must be, at all times, exercised in a manner
consistent with the will of their principal.
The Case
This is a petition for review on certiorari3 (Petition) filed under Rule 45 of
the Rules of Court against the Decision4 dated May 25, 2010 (Assailed
Decision) and Resolution5 dated December 30, 2010 (Assailed Resolution)
in CA-G.R. CV No. 90373 rendered by the Tenth Division of the Court of
Appeals (CA). The Assailed Decision and Resolution stem from an appeal
from the Decision6 dated June 29, 2007 rendered by the Regional Trial
Court of Batangas City (RTC), Branch 84 in SP. Civil Case Nos. 7924-7925,
declaring as invalid Ordinance No. 3, series of 2001,7 (Assailed Ordinance),
enacted by the Sangguniang Panlungsod (Sangguniang Panlungsod) of the
City of Batangas (Batangas City).8
The Facts
Batangas City is a local government unit created by virtue of its charter,
Republic Act No. 5495 (RA 5495). Under RA 5495, Batangas City
constitutes a political body corporate, and is endowed with powers which
pertain to a municipal corporation.9 The Sangguniang Panlungsod is the
legislative body of Batangas City.
Philippine Shell Petroleum Corporation (PSPC) is a duly organized
Philippine corporation engaged in the business of manufacturing, refining
and distribution of petroleum products. 10 PSPC owns and operates a
refinery situated in Tabangao, Batangas City (Tabangao Refinery). 11
Shell Philippines Exploration, B.V. (SPEX) is a foreign corporation licensed
to do business in the Philippines. 12 In furtherance of the mandate of
Presidential Decree No. 87 (PD 87) to promote the discovery and
production of indigenous petroleum, the Department of Energy (DOE)
executed Service Contract No. 38 (SC 38) with SPEX under which SPEX
was tasked to explore and develop possible petroleum sources in North
Western Palawan. 13 SPEX's exploration led to the discovery of an
abundant source of natural gas in the Malampaya field off the shores of
Palawan, which thereafter gave rise to the Malampaya Project. The
Malampaya Project required the construction of a 504-kilometer offshore
pipeline for the transport of natural gas from Malampaya field to Batangas,
for treatment in PSPC's Tabangao Refinery. 14
On May 28, 2001, the Sangguniang Panlungsod enacted the Assailed
Ordinance which requires heavy industries operating along the portions of
Batangas Bay within the territorial jurisdiction of Batangas City to
construct desalination plants to facilitate the use of seawater as coolant for
their industrial facilities. 15 The pertinent portions of the Assailed
Ordinance state:
SECTION 3. - MANDATORY REQUIREMENT FOR THE APPROVAL OF HEAVY
INDUSTRIES ALONG THE BATANGAS CITY PORTION OF BATANGAS BAY
AND OTHER AREAS. - In addition to the requirements provided by laws and
ordinances, the City Government shall not grant permit or clearance or its
approval for any project or program involving the construction or
establishment of heavy industries along the Batangas City portion of the
Batangas Bay and other areas delineated as Heavy Industrial Zone without
the required DESALINATION PLANT for use of sea water instead of
underground fresh water for cooling system and industrial purposes.
SECTION 4. - GRACE PERIOD PROVIDED FOR HEAVY INDUSTRIES. - All
heavy industries already established or approved by the City Government
prior to the enactment of this Ordinance, including those to be established,
are granted a period of five (5) years, counted from the date of approval of
this Ordinance, to install [a] desalination plant.
SECTION 5. - AUTHORITY TO GRANT EXEMPTION FROM THE
CONSTRUCTION OF DESALINATION PLANT. - The City Mayor with the
concurrence of the Sangguniang Panlungsod may grant exemption for a
given period to an industry from installation or construction of
DESALINATION PLANT on the basis of the following conditions:
5.1. The exemption will not adversely affect the environment, public health,
public safety and the welfare of the people, more particularly, the local
aquifers, as shown by a comprehensive ground water assessment or
comprehensive hydrological study conducted by the industry and presented
by the industry applying for exemption.
5.2. The industry or proposed project will support economic-based activities
and provide livelihood, employment, vital community services and facilities
while at the same time posing no adverse effect on the community.
5.3. A public hearing is conducted.
5.4. Such other reasonable conditions which the City Mayor may require with
the concurrence of the Sangguniang Panlungsod.
x x xx
SECTION 7. PENAL CLAUSE. -Any person who shall authorize the start of the
construction, development or operation of any project considered as heavy
industry without the approval of the government authorities herein
mentioned shall suffer an imprisonment of not less than six (6) months nor
more than one (1) year and a fine of ₱5,000.00.
If the violator is a juridical person or association, the penalty shall be
imposed upon the owner, President, project manager and/or persons
directly in charge of the construction, development and operation of the
project.
SECTION 8. POWER OF THE CITY MAYOR TO ISSUE A CEASE AND DESIST
ORDER. - The City Mayor, upon knowledge of the violation of this ordinance
shall issue a cease and desist order for the stoppage of the construction,
development or operation of the project or industry and shall exercise all
powers necessary to give effect to the said order.
SECTION 9. ADMINISTRATIVE FINE. - An administrative fine/penalty of
₱5,000.00 per day of violation of this ordinance shall be imposed upon the
owner, President, project manager, and/or persons directly in charge of the
construction, development and operation of the project or industry. 16
The Assailed Ordinance was approved by the city mayor on June 7, 2001.
Heavy industries subject of the Assailed Ordinance had until May 28, 2006 to
comply with its provisions. 17 Among the facilities affected by the Assailed
Ordinance is PSPC's Tabangao Refinery.
Proceedings before the RTC
On May 23, 2006, PSPC filed against Batangas City and the Sangguniang
Panlungsod a Petition for Declaration of Nullity (PSPC Petition) before the
RTC praying that the Assailed Ordinance be declared null and void. The PSPC
Petition was raffled to Branch 84, and docketed as SP Civil Case No. 7924.18
Thereafter, SPEX filed a petition-in-intervention (Intervention) praying for
the same relief. 19
JG Summit Petrochemical Corporation (JG Summit) and First Gas Power
Corporation (First Gas) filed similar petitions docketed as SP Civil Case Nos.
7925 (JG Summit Petition) and 7926 (First Gas Petition), respectively.20
These petitions were likewise raffled to Branch 84, and consolidated with the
PSPC Petition for joint trial.21
For its part, PSPC averred that the Assailed Ordinance constitutes an invalid
exercise of police power as it failed to meet the substantive requirements for
validity.22 Particularly, PSPC argued that the Assailed Ordinance
contravenes the Water Code of the Philippines (Water Code), and
encroaches upon the power of the National Water Resources Board (NWRB)
to regulate and control the Philippines' water resources. 23 In addition,
Batangas City and the Sangguniang Panlungsod failed to sufficiently show
the factual or technical basis for its enactment. 24 In this connection, PSPC
alleged that the Assailed Ordinance unduly singles out heavy industries, and
holds them solely accountable for the loss of water and destruction of
aquifers without basis, resulting in the deprivation of their property rights
without due process of law.25
On the procedural aspect, PSPC contended that the Assailed Ordinance was
not posted or published in a newspaper of general circulation in the province,
nor were public hearings or consultations involving concerned parties
conducted thereon.26 Further, there are no records showing that the
Assailed Ordinance, as approved by the Sangguniang Panlungsod, was
forwarded to the Sangguniang Panlalawigan of the Province of Batangas
after it was approved by the city mayor, as required by Section 56 of the
Local Government Code (LGC).27
SPEX essentially adopted the allegations of PSPC and prayed for the same
relief, asserting that it possesses material and direct interest in the subject
matter of the PSPC Petition.28
In response, Batangas City and the Sangguniang Panlungsod maintained
that they have the power to enact the Assailed Ordinance pursuant to the
general welfare clause under the LGC.29 According to them, the rationale
of the Assailed Ordinance is to stop PSPC and other industries similarly
situated from relying "too much" on ground water as coolants for their
machineries, and alternatively promote the use of seawater for such
purpose, considering that fresh ground water is a "perishable
commodity."30 Further, Batangas City and the Sangguniang Panlungsod
countered that the "regulation or prohibition" on the use of ground water is
merely incidental to the main purpose of the Assailed Ordinance, which is
to compel heavy industries such as PSPC to construct desalination plants.
Hence, provisions having regulatory and prohibitive effect may be taken
out of the Assailed Ordinance without entirely impairing its validity.31
Further, Batangas City and the Sangguniang Panlungsod took exception to
PSPC's allegations and asserted that the Assailed Ordinance had been
published in Dyaryo Veritas, a newspaper of general circulation in the area.
Moreover, Batangas City and the Sangguniang Panlungsod claimed that a
joint public hearing on the Assailed Ordinance had in fact been conducted
by the Sangguniang Panlungsod and Sangguniang Panlalawigan, where
PSPC was duly represented. 32 In addition, Batangas City and the
Sangguniang Panlungsod argued that the requirement of referral of
ordinances to the Sangguniang Panlalawigan applies only to tax and other
revenue measures. 33
Finally, Batangas City and the Sangguniang Panlungsod averred that since
PSPC and SPEX, along with other concerned heavy industries, essentially
question the former' s authority to regulate and prohibit the use of fresh
ground water, they should have first referred their grievances to NWRB by
filing a complaint for adjudication on the threatened revocation of their
existing water permits. 34
On June 21, 2007, the RTC resolved the First Gas Petition by issuing a
Decision declaring the Assailed Ordinance null and void. 35
Subsequently, on June 29, 2007 the RTC rendered a Decision,36 this time
resolving the PSPC and JG Summit petitions. The dispositive portion of said
Decision reads:
It is evident that from foregoing factual milieu and parameters, the
questioned ordinance is INVALID, as it is hereby declared INVALID, in its
entirety for want of necessity and for not conducting prior public hearing,
and for violating the due process clause of the Constitution with respect to
its (sic) Sec. 8, City Ordinance No. 3, [s]. 2001. No pronouncement as to
costs.
SO ORDERED.37
The RTC gave credence to the testimony of PSPC's witness Engineer
Joeffrey Caranto (Engineer Caranto) who conducted a hydrogeology study
on the Tabangao-Malitam watershed from which PSPC sources fresh
ground water.38 The RTC summarized the findings of said study in this
wise:
1. A water balance x x x calculation of the Tabangao-Malitam groundwater
system shows that the natural recharge (replenishment) rate far exceeds
the current demand for water in the area. Hence, there is no threat of
depletion of the groundwater resource[s] in the Tabangao-Malitam
[w]atershed that purportedly may result from PSPC's deep well pumping.
2. Water levels in the PSPC wells have not lowered significantly over the
last three (3) decades, indicating that there is no substantial diminution of
the supply of groundwater.
3. Among the four PSPC wells, only one [1] well shows very slightly
elevated levels of chloride at 300 milligrams per liter which however is very
low compared to seawater (which measures 20,000 milligrams of chloride
per liter). The chloride levels in the other nearby PSPC wells are all within
drinking water standards and have not increased in the last four (4)
decades of usage. This indicates that salt water intrusion is not occurring in
the PSPC wells.39 (Emphasis supplied)
The RTC also noted that the Sangguniang Panlungsod failed to consult the
NWRB before enacting the Assailed Ordinance, thereby encroaching upon
its authority.40
Anent Section 8, the RTC concluded that the power granted to the city
mayor to cause the issuance of cease and desist orders against the use of
ground water without prior notice and hearing constitutes a violation of the
due process clause.41
Proceedings before the CA
Batangas City and the Sangguniang Panlungsod filed separate notices of
appeal from the decisions resolving the PSPC, JG Summit and First Gas
petitions.42
The appeals against JG Summit and First Gas were raffled to the Fourth
Division (CA Fourth Division) and were docketed as CA-G.R. CV Nos.
90324 (JG Summit Appeal) and 90365 (First Gas Appeal), respectively.
Meanwhile, the appeal filed against PSPC and SPEX was raffled to the
Tenth Division (CA Tenth Division), and docketed as CA-G.R. CV No. 90373
(PSPC Appeal).
In the PSPC Appeal, Batangas City and the Sangguniang Panlungsod, as
appellants, averred that the R TC failed to consider the testimonies of
barangay captains Joel Caaway and Calixto Villena of Barangays Tabangao
Aplaya and Pinamucan, respectively, who testified that some wells in their
areas had dried up, while others had begun to produce salt water.43 These
testimonies, according to Batangas City and the Sangguniang Panlungsod,
serve as sufficient factual bases for the enactment of the Assailed Ordinance,
as "there could be no higher degree of evidence than the actual experience
of the inhabitants in the area."44
On May 28, 2009, the CA Fourth Division issued a Joint Decision45 resolving
the JG Summit and First Gas appeals. The Joint Decision affirmed the RTC's
decisions in SP Civil Case Nos. 7924-7925 (involving JG Summit and PSPC)
and 7926 (involving First Gas).46
On October 15, 2009, the CA Tenth Division directed Batangas City and the
Sangguniang Panlungsod on one hand, and PSPC and SPEX on the other, to
file their respective memoranda on the filing of separate appeals, and the
implications of the Joint Decision of the CA Fourth Division on the resolution
of the PSPC Appeal.47
In their Joint Memorandum, 48 PSPC and SPEX averred that the Joint
Decision in the JG Summit and First Gas appeals bars a contrary decision in
the PSPC Appeal, pursuant to the principle of judicial stability.49 PSPC and
SPEX further contended that the filing of multiple appeals involving the same
issues and parties was tantamount to forum shopping. 50
In their defense, Batangas City and the Sangguniang Panlungsod claimed
that the filing of separate appeals was made necessary by the fact that the
separate decisions of the RTC in SP Civil Case Nos. 7924-7925 and 7926
were issued more than fifteen (15) days apart.51
On the basis of the submissions of the parties, the CA Tenth Division issued
the Assailed Decision dismissing the appeal filed against PSPC and SPEX for
lack of merit. The relevant portions of the Assailed Decision read:
City Ordinance No. 3, S.2001 contravenes Presidential Decree No. 1067,
better known as "The Water Code of the Philippines" as it is an encroachment
into the authority of the [NWRB]. The use of water resources is under the
regulatory power of the national government. This is explicit from the
provisions of the Water Code which states that -
"The utilization, explo[i]tation, development, conservation and protection of
water resources shall be subject to the control and regulation of the
government through the [NWRB]".
Although respondents-appellants insist that the city ordinance is not an
absolute prohibition but merely a regulation on the use of fresh groundwater
for cooling systems and industrial purposes the argument cannot justify the
attempt to usurp the NWRB' s power to regulate and control water resources.
Moreover, not only does the city ordinance prohibit or regulate the use of
fresh groundwater in disregard of previously granted water permits from the
NWRB but also directs the installation of desalination plants for purposes of
utilizing sea water, without the requisite water permit from the NWRB.
x x x The police power of the Sangguniang Panglungsod is subordinate to the
constitutional limitations that its exercise must be reasonable and for the
public good. Without the concurrence of these two requisites, the ordinance
will not muster the test of a valid police measure and should be struck down.
The trial court aptly examined the city ordinance against the requirement of
reasonable necessity and correctly concluded that the subject ordinance
failed to prove that it was reasonably necessary to prohibit heavy industries
from using ground water and requiring them instead to construct
desalination plants. There must be a reasonable relation between the
purposes of the police measure and the means employed for its
accomplishment. Arbitrary invasion of personal rights and those pertaining
to private property will not be allowed even under the guise of protecting
public interest. It has not been sufficiently demonstrated that there exists no
other means less intrusive of private rights that would equally be effective
for the accomplishment of the same purpose.
With the foregoing premises considered, there is no more necessity to
address the other errors raised in the instant appeal.
WHEREFORE, the appeal is DISMISSED. The Decision dated 29 June 2007
rendered by the Regional Trial Court of Batangas City, Branch 84, in SP Civil
Case No. 7924, declaring invalid City Ordinance No. 3, S.2001 is hereby
AFFIRMED.
SO ORDERED. 52 (Emphasis supplied)
Batangas City and the Sangguniang Panlungsod filed a Motion for
Reconsideration53 (MR) dated June 21, 2010, which the CA Tenth Division
subsequently denied through the Assailed Resolution. The CA Tenth Division
found that the MR merely reiterated the arguments relied upon in the appeal,
which were already passed upon in the Assailed Decision. 54
Batangas City and the Sangguniang Panlungsod received a copy of the
Assailed Resolution on January 13, 2011.
On January 25, 2011, Batangas City filed the present Petition. 55 Notably,
the Petition does not name the Sangguniang Panlungsod as party,56 and
only the signature of then city mayor Severina Vilma Abaya appears on the
Verification and Certification of Non-Forum Shopping attached thereto.57
PSPC and SPEX filed a Motion for Additional Time58 dated April 1, 2011,
praying for a period of ten (10) days therefrom to file their comment.
Thereafter, PSPC and SPEX filed a Second Motion for Additional Time59
dated April 11, 2011, praying for an additional period of seven (7) days to file
said comment. Finally, PSPC and SPEX filed their Joint Comment on and/or
Opposition to the Petition for Review on Certiorarz- 60 (Joint
Comment/Opposition) dated April 25, 2011 on even date.
Batangas City failed to timely file its reply to the Joint
Comment/Opposition, prompting them to file a Manifestation and Motion
for Extension of Time to File a Reply (Manifestation and Motion) dated
December 12, 2011.61 The Manifestation and Motion prayed that it be
granted twenty (20) days therefrom to file its reply.62 Accordingly,
Batangas City filed its Reply dated December 21, 2011 on even date. 63
The Issue
The sole issue for this Court's determination is whether the CA erred in
affirming the RTC Decision which declared the Assailed Ordinance invalid.
The Court's Ruling
Batangas City contends that it has the legal authority to enact ordinances
in the exercise of its police power for the purpose of promoting the general
welfare of its inhabitants. 64 Thus, it asserts that it has the power to
regulate PSPC's and SPEX's right to use ground water, as continued use
would be injurious to public interest. 65
Further, Batangas City insists that there is factual basis to justify the
enactment of the Assailed Ordinance. 66 As testified to by barangay
captains Joel Caaway and Calixto Villena, a gradual change in the quality
and quantity of ground water had taken place due to the increase in the
number of industrial plants along Batangas Bay.67 According to Batangas
City, these testimonies should be given more weight, since they are based
on "actual facts and experience."68
These assertions lack merit.
The amendment of the Petition should be allowed in the interest of justice.
At the outset, the Court notes that Batangas City erroneously referred to
the 'Joint Decision issued by the CA Fourth Division in the JG Summit and
First Gas appeals as the subject of this Petition, instead of the Decision
issued by the CA Tenth Division resolving the PSPC Appeal. Batangas City
sought to correct this error in its Reply, thus:
1. After diligent and careful review [of] the Petition for Review submitted
by the undersigned, it was found out that there was an error which was
inadvertently committed in the first paragraph of the fifth (5th) page of the
Petition;
2. The first paragraph on page 5 of the Petition for Review on Certiorari x
x x;
xxxx
Should be amended to appear as:
"On June 13, 2007, herein Petitioner City Government of Batangas
received the decision of the Regional Trial Court (RTC), Branch 84 of
Batangas City ruling in favor of Respondents, [PSPC] and Intervenor
[SPEX] x x x. Petitioner filed its Notice of Appeal x x x on 26 July 2007. The
case was elevated to the Court of Appeals and the Tenth Division rendered
the 25 May 2010 favoring [PSPC] and SPEx x x x. The City Government of
Batangas filed a Motion for Reconsideration x x x. The motion was denied
by the Tenth Division of the Court of Appeals in its resolution dated 30
December 2010 x x x. Hence, now this Petition."69 (Emphasis omitted)
Considering the nature of the issues involved in the present Petition, and
the lack of any evidence showing that Batangas City's error resulted from
anything more than inadvertence, the Court resolves to permit the
amendment of the Petition in the interest of substantial justice.
The Assailed Ordinance is void for being ultra vires, for being contrary to
existing law, and for lack of evidence showing the existence of factual basis
for its enactment.
The requisites for a valid ordinance are well established. Time and again,
the Court has ruled that in order for an ordinance to be valid, it must not
only be within the corporate powers of the concerned LGU to enact, but
must also be passed in accordance with the procedure prescribed by law.
Moreover, substantively, the ordinance (i) must not contravene the
Constitution or any statute; (ii) must not be unfair or oppressive; (iii) must
not be partial or discriminatory; (iv) must not prohibit, but may regulate
trade; (v) must be general and consistent with public policy; and (vi) must
not be unreasonable.70
Batangas City claims that the enactment of the Assailed Ordinance
constitutes a valid exercise of its police power. This claim is erroneous.
Police power is the power to prescribe regulations to promote the health,
morals, peace, education, good order, safety, and general welfare of the
people.71 As an inherent attribute of sovereignty, police power primarily
rests with the State. In furtherance of the State's policy to foster genuine
and meaningful local autonomy, the national legislature delegated the
exercise of police power to local government units (LGUs) as agents of the
State.72 Such delegation can be found in Section 1673 of the LGC, which
embodies the general welfare clause. 74
Since LGUs exercise delegated police power as agents of the State, it is
incumbent upon them to act in conformity to the will of their principal, the
State.75 Necessarily, therefore, ordinances enacted pursuant to the
general welfare clause may not subvert the State's will by contradicting
national statutes. Thus, in Batangas CATV, Inc. v. Court of Appeals, 76 the
Court struck down an ordinance enacted by Batangas City which granted
the Sangguniang Panlungsod the power to fix subscriber rates charged by
CATV providers operating within the former's territory, as this directly
violated a general law which grants such power exclusively to the National
Telecommunications Commission. In so ruling, the Court stressed that
municipalities are precluded from regulating conduct already covered by a
statute involving the same subject matter, hence:
In De la Cruz vs. Paraz, we laid the general rule "that ordinances passed by
virtue of the implied power found in the general welfare clause must be
reasonable, consonant with the general powers and purposes of the
corporation, and not inconsistent with the laws or policy of the State."
xxxx
In this regard, it is appropriate to stress that where the state legislature has
made provision for the regulation of conduct, it has manifested its intention
that the subject matter shall be fully covered by the statute, and that a
municipality, under its general powers, cannot regulate the same
conduct.1avvphi1 In Keller vs. State, it was held that: "Where there is no
express power in the charter of a municipality authorizing it to adopt
ordinances regulating certain matters which are specifically covered by a
general statute, a municipal ordinance, insofar as it attempts to regulate the
subject which is completely covered by a general statute of the legislature,
may be rendered invalid. x x x Where the subject is of statewide concern,
and the legislature has appropriated the field and declared the rule, its
declaration is binding throughout the State." A reason advanced for this view
is that such ordinances are in excess of the powers granted to the municipal
corporation.
Since E.O. No. 205, a general law, mandates that the regulation of CATV
operations shall be exercised by the NTC, an LGU cannot enact an ordinance
or approve a resolution in violation of the said law.
It is a fundamental principle that municipal ordinances are inferior in status
and subordinate to the laws of the state. An ordinance in conflict with a state
law of general character and statewide application is universally held to be
invalid. The principle is frequently expressed in the declaration that
municipal authorities, under a general grant of power, cannot adopt
ordinances which infringe the spirit of a state law or repugnant to the general
policy of the state. In every power to pass ordinances given to a municipality,
there is an implied restriction that the ordinances shall be consistent with the
general law.x x x77 (Emphasis and underscoring supplied)
In this Petition, the Court is called upon to determine whether the control
and regulation of the use of water may be made subject of a city ordinance
under the regime of the Water Code - a national statute governing the same
subject matter.
The Water Code governs the ownership, appropriation, utilization,
exploitation, development, conservation and protection of water resources.
78 Under Article 3 thereof, water resources are placed under the control and
regulation of the government through the National Water Resources Council,
now the NWRB. 79 In turn, the privilege to appropriate and use water is one
which is exclusively granted and regulated by the State through water
permits issued by the NWRB.80 Once granted, these water permits continue
to be valid save only for reasons spelled out under the Water Code itself.81
Conversely, the power to modify, suspend, cancel or revoke water permits
already issued also rests with NWRB.82
On the other hand, the avowed purpose of the Assailed Ordinance, as stated
in its whereas clauses, is the protection of local aquifers for the benefit of the
inhabitants of Batangas City.83 Accordingly, the Assailed Ordinance
mandates all heavy industries operating along Batangas Bay to use seawater
in the operation of their respective facilities, and install desalination plants
for this purpose. Failure to comply with this mandatory requirement would
have the effect of precluding continuous operation, and exposing
noncompliant parties to penal and administrative sanctions. 84
There is no doubt, therefore, that the Assailed Ordinance effectively
contravenes the provisions of the Water Code as it arrogates unto Batangas
City the power to control and regulate the use of ground water which, by
virtue of the provisions of the Water Code, pertains solely to the NWRB. By
enacting the Assailed Ordinance, Batangas City acted in excess of the
powers granted to it as an LGU, rendering the Assailed Ordinance ultra vzres.
Being ultra vires, the Assailed Ordinance, in its entirety, is null and void.
Thus, it becomes unnecessary to still determine if it complies with the other
substantive requirements for a valid ordinance - i.e., that the ordinance is
fair and reasonable.
In any case, it bears emphasizing that the measure of the substantive
validity of an ordinance is the underlying factual basis for which it was
enacted. Hence, without factual basis, an ordinance will necessarily fail the
substantive test for validity.
Batangas City's failure to prove the existence of factual basis to justify the
enactment of the Assailed Ordinance had already been passed upon by the
lower courts.1âwphi1 The Court quotes, with approval, the Joint Decision of
the CA Fourth Division:
To prohibit an act or to compel something to be done, there must be a shown
reason for the same. The purpose must also be cogent to the means adopted
by the law to attain it. In this case, as seen in the "whereas clause," the
purpose of the ordinance is to protect the environment and prevent
ecological imbalance, especially the drying up of the aquifers of Batangas
City. In effect, the drying up of aquifers is being blamed on the
establishments and industries such as petitioners-appellees here. It would
have been acceptable had there been a specific study or findings that the
local government conducted (sic) and not just its reliance on the complaints
of some constituents who merely made its conclusion that the drying up of
wells or its salination was due to the "heavy industries"' use of groundwater.

In addition, if appellants were convinced that those industries adversely
affect the environment and specifically the water resource in Batangas City,
there would be no exemptions, as provided in Section 5 of the Ordinance,
as it would negate the purpose of the Jaw.
It thus becomes apparent that the ordinance was come up with in an
arbitrary manner, if not based purely on emotive or flawed premises.
There was no scientific standard or any acceptable standard at all that the
ordinance was based on. x x x85
While the Joint Decision resolves the JG Summit and First Gas appeals,
these cases, pertain to the same appeal filed by Batangas City and the
Sangguniang Panlungsod from the Decision of the RTC nullifying the
Assailed Ordinance. As aptly put by the CA in the present case:
The factual antecedents and legal issues in the present CA-G.R. CV No.
90373 are identical to those of CA-G.R. CV Nos. 90324 and 90365. The
assignment of errors in the present appeal are but a restatement of the
errors raised in the two consolidated appeals cases, which errors have
already been exhaustively passed upon by the Court's Fourth Division in its
Joint Decision dated May 28, 2009, weighing pieces of evidence that are
now the very same pieces of evidence presented for consideration in this
appeal. x x x86 (Emphasis supplied)
This Court, not being a trier of facts, accords the highest degree of respect
to the findings of fact of the trial court, especially where, as here, they
have been affirmed by the CA; accordingly, these findings will not be
disturbed. To be sure, such findings are binding and conclusive upon this
Court, 87 and it is not the Court's function in a petition for review on
certiorari to examine, evaluate or weigh anew the probative value of the
evidence presented before the trial court. 88 While there are recognized
exceptions to this rule, the Court finds that none is present in this case.
Consequently, since it has been established that Batangas City did not
have factual basis to justify the purpose of the Assailed Ordinance,
Batangas City cannot invoke the presumption of validity. As held in
Ermita-Ma/ate Hotel and Motel Operators Association, Inc. v. City Mayor of
Manila, 89 which Batangas City itself cites in its Petition, the presumption
of validity ascribed to an ordinance prevails only in the absence of some
factual foundation of record sufficient to overthrow the assailed
issuance.90 In this case, the presumption of validity ascribed to the
Assailed Ordinance had been overturned by documentary and testimonial
evidence showing that no substantial diminution in the supply of ground
water in the TabangaoMalitam watershed had occurred in the last three (3)
decades, and that no threat of depletion of ground water resources in said
watershed existed.91
Final Note
While the Assailed Ordinance has been struck down as invalid, the
pronouncements hereunder should not be misconstrued by heavy
industries to be carte blanche to abuse their respective water rights at the
expense of the health and safety of the inhabitants of Batangas City, the
environment within which these inhabitants live, and the resources upon
which these inhabitants rely. The Court recognizes fresh ground water as
an invaluable natural resource, and deems it necessary to emphasize that
Batangas City is not precluded from exercising its right to protect its
inhabitants from injurious effects which may result from the misuse of
natural water resources within its territorial jurisdiction, should these
effects later arise, provided that such exercise is done within the
framework of applicable national law, particularly, the Water Code.
WHEREFORE, premises considered, the petition for review on certiorari is
DENIED. The Decision dated May 25, 2010 and Resolution dated
December 30, 2010 of the Court of Appeals in CA-G.R. CV No. 90373 are
AFFIRMED.
Philippine Supreme Court Jurisprudence > Year 2017 > August 2017
Decisions > G.R. No. 225442, August 08, 2017 - SAMAHAN NG MGA
PROGRESIBONG KABATAAN (SPARK), JOANNE ROSE SACE LIM, JOHN
ARVIN NAVARRO BUENAAGUA, RONEL BACCUTAN, MARK LEO DELOS
REYES, AND CLARISSA JOYCE VILLEGAS, MINOR, FOR HERSELF AND AS
REPRESENTED BY HER FATHER, JULIAN VILLEGAS, JR., Petitioners, v.
QUEZON CITY, AS REPRESENTED BY MAYOR HERBERT BAUTISTA, CITY OF
MANILA, AS REPRESENTED BY MAYOR JOSEPH ESTRADA, AND NAVOTAS
CITY, AS REPRESENTED BY MAYOR JOHN REY TIANGCO, Respondents.:
G.R. No. 225442, August 08, 2017 - SAMAHAN NG MGA PROGRESIBONG
KABATAAN (SPARK), JOANNE ROSE SACE LIM, JOHN ARVIN NAVARRO
BUENAAGUA, RONEL BACCUTAN, MARK LEO DELOS REYES, AND
CLARISSA JOYCE VILLEGAS, MINOR, FOR HERSELF AND AS
REPRESENTED BY HER FATHER, JULIAN VILLEGAS, JR., Petitioners, v.
QUEZON CITY, AS REPRESENTED BY MAYOR HERBERT BAUTISTA, CITY OF
MANILA, AS REPRESENTED BY MAYOR JOSEPH ESTRADA, AND NAVOTAS
CITY, AS REPRESENTED BY MAYOR JOHN REY TIANGCO, Respondents.
G.R. No. 225442, August 08, 2017 - SAMAHAN NG MGA
PROGRESIBONG KABATAAN (SPARK), JOANNE ROSE SACE LIM, JOHN
ARVIN NAVARRO BUENAAGUA, RONEL BACCUTAN, MARK LEO DELOS
REYES, AND CLARISSA JOYCE VILLEGAS, MINOR, FOR HERSELF AND AS
REPRESENTED BY HER FATHER, JULIAN VILLEGAS, JR., Petitioners, v.
QUEZON CITY, AS REPRESENTED BY MAYOR HERBERT BAUTISTA, CITY OF
MANILA, AS REPRESENTED BY MAYOR JOSEPH ESTRADA, AND NAVOTAS
CITY, AS REPRESENTED BY MAYOR JOHN REY TIANGCO, Respondents.
PHILIPPINE SUPREME COURT DECISIONS
EN BANC
G.R. No. 225442, August 08, 2017
SAMAHAN NG MGA PROGRESIBONG KABATAAN (SPARK),* JOANNE ROSE
SACE LIM, JOHN ARVIN NAVARRO BUENAAGUA, RONEL BACCUTAN, MARK
LEO DELOS REYES, AND CLARISSA JOYCE VILLEGAS, MINOR, FOR HERSELF
AND AS REPRESENTED BY HER FATHER, JULIAN VILLEGAS, JR., Petitioners,
v. QUEZON CITY, AS REPRESENTED BY MAYOR HERBERT BAUTISTA, CITY
OF MANILA, AS REPRESENTED BY MAYOR JOSEPH ESTRADA, AND NAVOTAS
CITY, AS REPRESENTED BY MAYOR JOHN REY TIANGCO, Respondents.
DECISION
PERLAS-BERNABE, J.:
This petition for certiorari and prohibition1 assails the constitutionality of the
curfew ordinances issued by the local governments of Quezon City, Manila,
and Navotas. The petition prays that a temporary restraining order (TRO) be
issued ordering respondents Herbert Bautista, Joseph Estrada, and John Rey
Tiangco, as Mayors of their respective local governments, to prohibit, refrain,
and desist from implementing and enforcing these issuances, pending
resolution of this case, and eventually, declare the City of Manila's ordinance
as ultra vires for being contrary to Republic Act No. (RA) 9344,2 or the
"Juvenile Justice and Welfare Act," as amended, and all curfew ordinances as
unconstitutional for violating the constitutional right of minors to travel, as
well as the right of parents to rear their children.
The Facts
Following the campaign of President Rodrigo Roa Duterte to implement a
nationwide curfew for minors, several local governments in Metro Manila
started to strictly implement their curfew ordinances on minors through
police operations which were publicly known as part of "Oplan Rody."3
Among those local governments that implemented curfew ordinances were
respondents: (a) Navotas City, through Pambayang Ordinansa Blg. 99-02,4
dated August 26, 1999, entitled "Nagtatakda ng 'Curfew' ng mga Kabataan
na Wala Pang Labing Walong (18) Taong Gulang sa Bayan ng Navotas,
Kalakhang Maynila," as amended by Pambayang Ordinansa Blg. 2002-13,5
dated June 6, 2002 (Navotas Ordinance); (b) City of Manila, through
Ordinance No. 80466 entitled "An Ordinance Declaring the Hours from 10:00
P.M. to 4:00A.M. of the Following Day as 'Barangay Curfew Hours' for
Children and Youths Below Eighteen (18) Years of Age; Prescribing Penalties
Therefor; and for Other Purposes" dated October 14, 2002 (Manila
Ordinance); and (c) Quezon City, through Ordinance No. SP-2301,7 Series
of 2014, entitled "An Ordinance Setting for a [sic] Disciplinary Hours in
Quezon City for Minors from 10:00 P.M. to 5:00A.M., Providing Penalties for
Parent/Guardian, for Violation Thereof and for Other Purposes" dated July 31,
2014 (Quezon City Ordinance; collectively, Curfew Ordinances).8
Petitioners,9 spearheaded by the Samahan ng mga Progresibong Kabataan
(SPARK)- an association of young adults and minors that aims to forward a
free and just society, in particular the protection of the rights and welfare of
the youth and minors10 - filed this present petition, arguing that the Curfew
Ordinances are unconstitutional because they: (a) result in arbitrary and
discriminatory enforcement, and thus, fall under the void for vagueness
doctrine; (b) suffer from overbreadth by proscribing or impairing legitimate
activities of minors during curfew hours; (c) deprive minors of the right to
liberty and the right to travel without substantive due process; and (d)
deprive parents of their natural and primary right in rearing the youth
without substantive due process.11 In addition, petitioners assert that the
Manila Ordinance contravenes RA 9344, as amended by RA 10630.12
More specifically, petitioners posit that the Curfew Ordinances encourage
arbitrary and discriminatory enforcement as there are no clear provisions or
detailed standards on how law enforcers should apprehend and properly
determine the age of the alleged curfew violators.13 They further argue that
the law enforcer's apprehension depends only on his physical assessment,
and, thus, subjective and based only on the law enforcer's visual assessment
of the alleged curfew violator.14
While petitioners recognize that the Curfew Ordinances contain provisions
indicating the activities exempted from the operation of the imposed curfews,
i.e., exemption of working students or students with evening class, they
contend that the lists of exemptions do not cover the range and breadth of
legitimate activities or reasons as to why minors would be out at night, and,
hence, proscribe or impair the legitimate activities of minors during curfew
hours.15
Petitioners likewise proffer that the Curfew Ordinances: (a) are
unconstitutional as they deprive minors of the right to liberty and the right to
travel without substantive due process;16 and (b) fail to pass the strict
scrutiny test, for not being narrowly tailored and for employing means that
bear no reasonable relation to their purpose.17 They argue that the
prohibition of minors on streets during curfew hours will not per se protect
and promote the social and moral welfare of children of the community.18
Furthermore, petitioners claim that the Manila Ordinance, particularly
Section 419 thereof, contravenes Section 57-A20 of RA 9344, as amended,
given that the cited curfew provision imposes on minors the penalties of
imprisonment, reprimand, and admonition. They contend that the imposition
of penalties contravenes RA 9344's express command that no penalty shall
be imposed on minors for curfew violations.21
Lastly, petitioners submit that there is no compelling State interest to
impose curfews contrary to the parents' prerogative to impose them in the
exercise of their natural and primary right in the rearing of the youth, and
that even if a compelling interest exists, less restrictive means are available
to achieve the same. In this regard, they suggest massive street lighting
programs, installation of CCTVs (closed-circuit televisions) in public streets,
and regular visible patrols by law enforcers as other viable means of
protecting children and preventing crimes at night. They further opine that
the government can impose more reasonable sanctions, i.e., mandatory
parental counseling and education seminars informing the parents of the
reasons behind the curfew, and that imprisonment is too harsh a penalty
for parents who allowed their children to be out during curfew hours.22
The Issue Before the Court
The primordial issue for the Court's resolution in this case is whether or not
the Curfew Ordinances are unconstitutional.
The Court's Ruling
The petition is partly granted.
I.
At the onset, the Court addresses the procedural issues raised in this case.
Respondents seek the dismissal of the petition, questioning: (a) the
propriety of certiorari and prohibition under Rule 65 of the Rules of Court to
assail the constitutionality of the Curfew Ordinances; (b) petitioners' direct
resort to the Court, contrary to the hierarchy of courts doctrine; and (c)
the lack of actual controversy and standing to warrant judicial review.23
A. Propriety of the Petition for Certiorari and Prohibition.
Under the 1987 Constitution, judicial power includes the duty of the courts
of justice not only "to settle actual controversies involving rights which are
legally demandable and enforceable," but also "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."24 Section 1, Article VIII of the 1987 Constitution reads:
ARTICLE VIII
JUDICIAL DEPARTMENT
Section 1. The judicial power shall be vested in one Supreme Court and in
such lower courts as may be established by law.
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 instrumentalitv of the Government. (Emphasis and
underscoring supplied)
Case law explains that the present Constitution has "expanded the concept
of judicial power, which up to then was confined to its traditional ambit of
settling actual controversies involving rights that were legally demandable
and enforceable."25
In Araullo v. Aquino III,26 it was held that petitions for certiorari and
prohibition filed before the Court "are the remedies by which the grave
abuse of discretion amounting to lack or excess of jurisdiction on the part
of any branch or instrumentality of the Government may be determined
under the Constitution."27 It was explained that "[w]ith respect to the
Court, x x x the remedies of certiorari and prohibition are necessarily
broader in scope and reach, and the writ of certiorari or prohibition may be
issued to correct errors of jurisdiction committed not only by a tribunal,
corporation, board or officer exercising judicial, quasi-judicial or
ministerial functions, but also to set right, undo[,] and restrain any act of
grave abuse of discretion amounting to lack or excess of jurisdiction by any
branch or instrumentality of the Government, even if the latter does not
exercise judicial, quasi-judicial or ministerial functions. This application is
expressly authorized by the text of the second paragraph of Section 1,
[Article VIII of the 1987 Constitution cited above]."28
In Association of Medical Clinics for Overseas Workers, Inc. v. GCC
Approved Medical Centers Association, Inc.,29 it was expounded that
"[m]eanwhile that no specific procedural rule has been promulgated to
enforce [the] 'expanded' constitutional definition of judicial power and
because of the commonality of 'grave abuse of discretion' as a ground for
review under Rule 65 and the courts' expanded jurisdiction, the Supreme
Court - based on its power to relax its rules - allowed Rule 65 to be used as
the medium for petitions invoking the courts' expanded jurisdiction[.]"30
In this case, petitioners question the issuance of the Curfew Ordinances by
the legislative councils of Quezon City, Manila, and Navotas in the exercise
of their delegated legislative powers on the ground that these ordinances
violate the Constitution, specifically, the provisions pertaining to the right
to travel of minors, and the right of parents to rear their children. They also
claim that the Manila Ordinance, by imposing penalties against minors,
conflicts with RA 9344, as amended, which prohibits the imposition of
penalties on minors for status offenses. It has been held that "[t]here is
grave abuse of discretion when an act is (1) done contrary to the
Constitution, the law or jurisprudence or (2) executed whimsically,
capriciously or arbitrarily, out of malice, ill will or personal bias."31 In light
of the foregoing, petitioners correctly availed of the remedies of certiorari
and prohibition, although these governmental actions were not made
pursuant to any judicial or quasi-judicial function.
B. Direct Resort to the Court.
Since petitions for certiorari and prohibition are allowed as remedies to
assail the constitutionality of legislative and executive enactments, the
next question to be resolved is whether or not petitioners' direct resort to
this Court is justified.
The doctrine of hierarchy of courts "[r]equires that recourse must first be
made to the lower-ranked court exercising concurrent jurisdiction with a
higher court. The Supreme Court has original jurisdiction over petitions for
certiorari, prohibition, mandamus, quo warranto, and habeas corpus.
While this jurisdiction is shared with the Court of Appeals [(CA)] and the
[Regional Trial Courts], a direct invocation of this Court's jurisdiction is
allowed when there are special and important reasons therefor, clearly and
especially set out in the petition[.]"32 This Court is tasked to resolve "the
issue of constitutionality of a law or regulation at the first instance [if it] is of
paramount importance and immediately affects the social, economic, and
moral well-being of the people,"33 as in this case. Hence, petitioners' direct
resort to the Court is justified.
C. Requisites of Judicial Review.
"The prevailing rule in constitutional litigation is that no question involving
the constitutionality or validity of a law or governmental act may be heard
and decided by the Court unless there is compliance with the legal requisites
for judicial inquiry, namely: (a) there must be anactual case or controversy
calling for the exercise of judicial power; (b) the person challenging the act
must have the standing to question the validity of the subject act or issuance;
(c) the question of constitutionality must be raised at the earliest
opportunity; and (d) the issue of constitutionality must be the very lis mota
of the case."34 In this case, respondents assail the existence of the first two
(2) requisites.
1. Actual Case or Controversy.
"Basic in the exercise of judicial power — whether under the traditional or in
the expanded setting — is the presence of an actual case or controversy."35
"[A]n actual case or controversy is one which 'involves a conflict of legal
rights, an assertion of opposite legal claims, susceptible of judicial resolution
as distinguished from a hypothetical or abstract difference or dispute.' In
other words, 'there must be a contrariety of legal rights that can be
interpreted and enforced on the basis of existing law and jurisprudence."'36
According to recent jurisprudence, in the Court's exercise of its expanded
jurisdiction under the 1987 Constitution, this requirement is simplified "by
merely requiring a prima facie showing of grave abuse of discretion in the
assailed governmental act."37
"Corollary to the requirement of an actual case or controversy is the
requirement of ripeness. A question is ripe for adjudication when the act
being challenged has had a direct adverse effect on the individual
challenging it. For a case to be considered ripe for adjudication, it is a
prerequisite that something has then been accomplished or performed by
either branch before a court may come into the picture, and the petitioner
must allege the existence of an immediate or threatened injury to himself as
a result of the challenged action. He must show that he has sustained or is
immediately in danger of sustaining some direct injury as a result of the act
complained of."38
Applying these precepts, this Court finds that there exists an actual
justiciable controversy in this case given the evident clash of the parties'
legal claims, particularly on whether the Curfew Ordinances impair the
minors' and parents' constitutional rights, and whether the Manila Ordinance
goes against the provisions of RA 9344. Based on their asseverations,
petitioners have - as will be gleaned from the substantive discussions below
- conveyed a prima facie case of grave abuse of discretion, which perforce
impels this Court to exercise its expanded jurisdiction. The case is likewise
ripe for adjudication, considering that the Curfew Ordinances were being
implemented until the Court issued the TRO39 enjoining their enforcement.
The purported threat or incidence of injury is, therefore, not merely
speculative or hypothetical but rather, real and apparent.
2. Legal Standing.
"The question of locus standi or legal standing focuses on the determination
of whether those assailing the governmental act have the right of
appearance to bring the matter to the court for adjudication. [Petitioners]
must show that they have a personal and substantial interest in the case,
such that they have sustained or are in immediate danger of sustaining,
some direct injury as a consequence of the enforcement of the challenged
governmental act."40 "'[I]nterest' in the question involved must be material
— an interest that is in issue and will be affected by the official act — as
distinguished from being merely incidental or general."41
"The gist of the question of [legal] standing is whether a party alleges such
personal stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the court
depends for illumination of difficult constitutional questions. Unless a person
is injuriously affected in any of his constitutional rights by the operation of
statute or ordinance, he has no standing."42
As abovementioned, the petition is anchored on the alleged breach of two (2)
constitutional rights, namely: (1) the right of minors to freely travel within
their respective localities; and (2) the primary right of parents to rear their
children. Related to the first is the purported conflict between RA 9344, as
amended, and the penal provisions of the Manila Ordinance.
Among the five (5) individual petitioners, only Clarissa Joyce Villegas
(Clarissa) has legal standing to raise the issue affecting the minor's right to
travel,43 because: (a) she was still a minor at the time the petition was filed
before this Court,44 and, hence, a proper subject of the Curfew Ordinances;
and (b) as alleged, she travels from Manila to Quezon City at night after
school and is, thus, in imminent danger of apprehension by virtue of the
Curfew Ordinances. On the other hand, petitioners Joanne Rose Sace Lim,
John Arvin Navarro Buenaagua, Ronel Baccutan (Ronel), and Mark Leo Delos
Reyes (Mark Leo) admitted in the petition that they are all of legal age, and
therefore, beyond the ordinances' coverage. Thus, they are not proper
subjects of the Curfew Ordinances, for which they could base any direct
injury as a consequence thereof.
None of them, however, has standing to raise the issue of whether the
Curfew Ordinances violate the parents' right to rear their children as they
have not shown that they stand before this Court as parent/s and/or
guardian/s whose constitutional parental right has been infringed. It
should be noted that Clarissa is represented by her father, Julian Villegas,
Jr. (Mr. Villegas), who could have properly filed the petition for himself for
the alleged violation of his parental right. But Mr. Villegas did not question
the Curfew Ordinances based on his primary right as a parent as he only
stands as the representative of his minor child, Clarissa, whose right to
travel was supposedly infringed.
As for SPARK, it is an unincorporated association and, consequently, has
no legal personality to bring an action in court.45 Even assuming that it
has the capacity to sue, SPARK still has no standing as it failed to allege
that it was authorized by its members who were affected by the Curfew
Ordinances, i.e., the minors, to file this case on their behalf.
Hence, save for Clarissa, petitioners do not have the required personal
interest in the controversy. More particularly, Clarissa has standing only on
the issue of the alleged violation of the minors' right to travel, but not on
the alleged violation of the parents' right.
These notwithstanding, this Court finds it proper to relax the standing
requirement insofar as all the petitioners are concerned, in view of the
transcendental importance of the issues involved in this case. "In a
number of cases, this Court has taken a liberal stance towards the
requirement of legal standing, especially when paramount interest is
involved. Indeed, when those who challenge the official act are able to
craft an issue of transcendental significance to the people, the Court may
exercise its sound discretion and take cognizance of the suit. It may do so
in spite of the inability of the petitioners to show that they have been
personally injured by the operation of a law or any other government
act."46
This is a case of first impression in which the constitutionality of juvenile
curfew ordinances is placed under judicial review. Not only is this Court
asked to determine the impact of these issuances on the right of parents to
rear their children and the right of minors to travel, it is also requested to
determine the extent of the State's authority to regulate these rights in the
interest of general welfare. Accordingly, this case is of overarching
significance to the public, which, therefore, impels a relaxation of
procedural rules, including, among others, the standing requirement.
That being said, this Court now proceeds to the substantive aspect of this
case.
II.
A. Void for Vagueness.
Before resolving the issues pertaining to the rights of minors to travel and
of parents to rear their children, this Court must first tackle petitioners'
contention that the Curfew Ordinances are void for vagueness.
In particular, petitioners submit that the Curfew Ordinances are void for
not containing sufficient enforcement parameters, which leaves the
enforcing authorities with unbridled discretion to carry out their provisions.
They claim that the lack of procedural guidelines in these issuances led to
the questioning of petitioners Ronel and Mark Leo, even though they were
already of legal age. They maintain that the enforcing authorities
apprehended the suspected curfew offenders based only on their physical
appearances and, thus, acted arbitrarily. Meanwhile, although they
conceded that the Quezon City Ordinance requires enforcers to determine
the age of the child, they submit that nowhere does the said ordinance
require the law enforcers to ask for proof or identification of the child to
show his age.47
The arguments are untenable.
"A statute or act suffers from the defect of vagueness when it lacks
comprehensible standards that men of common intelligence must
necessarily guess at its meaning and differ as to its application. It is
repugnant to the Constitution in two (2) respects: (1) it violates due
process for failure to accord persons, especially the parties targeted by it,
fair notice of the conduct to avoid; and (2) it leaves law enforcers unbridled
discretion in carrying out its provisions and becomes an arbitrary flexing of
the Government muscle."48
In this case, petitioners' invocation of the void for vagueness doctrine is
improper, considering that they do not properly identify any provision in
any of the Curfew Ordinances, which, because of its vague terminology,
fails to provide fair warning and notice to the public of what is prohibited or
required so that one may act accordingly.49The void for vagueness
doctrine is premised on due process considerations, which are absent from
this particular claim. In one case, it was opined that:
[T]he vagueness doctrine is a specie of "unconstitutional uncertainty,"
which may involve "procedural due process uncertainty cases" and
"substantive due process uncertainty cases." "Procedural due process
uncertainty" involves cases where the statutory language was so obscure
that it failed to give adequate warning to those subject to its prohibitions
as well as to provide proper standards for adjudication. Such a definition
encompasses the vagueness doctrine. This perspective rightly integrates
the vagueness doctrine with the due process clause, a necessary
interrelation since there is no constitutional provision that explicitly bars
statutes that are "void-for-vagueness."50
Essentially, petitioners only bewail the lack of enforcement parameters to
guide the local authorities in the proper apprehension of suspected curfew
offenders. They do not assert any confusion as to what conduct the subject
ordinances prohibit or not prohibit but only point to the ordinances' lack of
enforcement guidelines. The mechanisms related to the implementation of
the Curfew Ordinances are, however, matters of policy that are best left for
the political branches of government to resolve. Verily, the objective of
curbing unbridled enforcement is not the sole consideration in a void for
vagueness analysis; rather, petitioners must show that this perceived
danger of unbridled enforcement stems from an ambiguous provision in the
law that allows enforcement authorities to second-guess if a particular
conduct is prohibited or not prohibited. In this regard, that ambiguous
provision of law contravenes due process because agents of the government
cannot reasonably decipher what conduct the law permits and/or forbids. In
Bykofsky v. Borough of Middletown,51 it was ratiocinated that:
A vague law impermissibly delegates basic policy matters to policemen,
judges, and juries for resolution on ad hoc and subjective basis, and vague
standards result in erratic and arbitrary application based on individual
impressions and personal predilections.52
As above-mentioned, petitioners fail to point out any ambiguous standard in
any of the provisions of the Curfew Ordinances, but rather, lament the lack
of detail on how the age of a suspected minor would be determined. Thus,
without any correlation to any vague legal provision, the Curfew Ordinances
cannot be stricken down under the void for vagueness doctrine.
Besides, petitioners are mistaken in claiming that there are no sufficient
standards to identify suspected curfew violators. While it is true that the
Curfew Ordinances do not explicitly state these parameters, law
enforcement agents are still bound to follow the prescribed measures found
in statutory law when implementing ordinances. Specifically, RA 9344, as
amended, provides:
Section 7. Determination of Age. - x x x The age of a child may be
determinedfrom the child's birth certificate, baptismal certificate or any
other pertinent documents. In the absence of these documents, age may be
based on information from the child himself/herself, testimonies of other
persons, the physical appearance of the child and other relevant evidence.
(Emphases supplied)
This provision should be read in conjunction with the Curfew Ordinances
because RA 10630 (the law that amended RA 9344) repeals all ordinances
inconsistent with statutory law.53 Pursuant to Section 57-A of RA 9344, as
amended by RA 10630,54minors caught in violation of curfew ordinances are
children at risk and, therefore, covered by its provisions.55 It is a
long-standing principle that "[c]onformity with law is one of the essential
requisites for the validity of a municipal ordinance."56 Hence, by necessary
implication, ordinances should be read and implemented in conjunction with
related statutory law.
Applying the foregoing, any person, such as petitioners Ronel and Mark Leo,
who was perceived to be a minor violating the curfew, may therefore prove
that he is beyond the application of the Curfew Ordinances by simply
presenting any competent proof of identification establishing their majority
age. In the absence of such proof, the law authorizes enforcement
authorities to conduct a visual assessment of the suspect, which - needless
to state - should be done ethically and judiciously under the circumstances.
Should law enforcers disregard these rules, the remedy is to pursue the
appropriate action against the erring enforcing authority, and not to have the
ordinances invalidated.
All told, petitioners' prayer to declare the Curfew Ordinances as void for
vagueness is denied.
B. Right of Parents to Rear their Children.
Petitioners submit that the Curfew Ordinances are unconstitutional because
they deprive parents of their natural and primary right in the rearing of the
youth without substantive due process. In this regard, they assert that this
right includes the right to determine whether minors will be required to go
home at a certain time or will be allowed to stay late outdoors. Given that the
right to impose curfews is primarily with parents and not with the State, the
latter's interest in imposing curfews cannot logically be compelling.57
Petitioners' stance cannot be sustained.
Section 12, Article II of the 1987 Constitution articulates the State's policy
relative to the rights of parents in the rearing of their children:
Section 12. The State recognizes the sanctity of family life and shall protect
and strengthen the family as a basic autonomous social institution. It shall
equally protect the life of the mother and the life of the unborn from
conception. The natural and primary right and duty of parents in the rearing
of the youth for civic efficiency and the development of moral character shall
receive the support of the Government. (Emphasis and underscoring
supplied.)
As may be gleaned from this provision, the rearing of children (i.e., referred
to as the "youth") for civic efficiency and the development of their moral
character are characterized not only as parental rights, but also as parental
duties. This means that parents are not only given the privilege of exercising
their authority over their children; they are equally obliged to exercise this
authority conscientiously. The duty aspect of this provision is a reflection of
the State's independent interest to ensure that the youth would eventually
grow into free, independent, and well-developed citizens of this nation. For
indeed, it is during childhood that minors are prepared for additional
obligations to society. "[T]he duty to prepare the child for these [obligations]
must be read to include the inculcation of moral standards, religious beliefs,
and elements of good citizenship."58 "This affirmative process of teaching,
guiding, and inspiring by precept and example is essential to the growth of
young people into mature, socially responsible citizens."59
By history and tradition, "the parental role implies a substantial measure of
authority over one's children."60 In Ginsberg v. New York,61 the Supreme
Court of the United States (US) remarked that "constitutional interpretation
has consistently recognized that the parents' claim to authority in their own
household to direct the rearing of their children is basic in the structure of
our society."62 As in our Constitution, the right and duty of parents to rear
their children is not only described as "natural," but also as "primary." The
qualifier "primary" connotes the parents' superior right over the State in
the upbringing of their children.63 The rationale for the State's deference
to parental control over their children was explained by the US Supreme
Court in Bellotti v. Baird (Bellotti),64 as follows:
[T]he guiding role of parents in their upbringing of their children justifies
limitations on the freedoms of minors. The State commonly protects its
youth from adverse governmental action and from their own immaturity
by requiring parental consent to or involvement in important decisions by
minors. But an additional and more important justification for state
deference to parental control over children is that "the child is not [a] mere
creature of the State; those who nurture him and direct his destiny have
the right, coupled with the high duty, to recognize and prepare him for
additional obligations."65 (Emphasis and underscoring supplied)
While parents have the primary role in child-rearing, it should be stressed
that "when actions concerning the child have a relation to the public
welfare or the well-being of the child, the [S]tate may act to promote these
legitimate interests."66 Thus, "[i]n cases in which harm to the physical or
mental health of the child or to public safety, peace, order, or welfare is
demonstrated, these legitimate state interests may override the parents'
qualified right to control the upbringing of their children."67
As our Constitution itself provides, the State is mandated to support
parents in the exercise of these rights and duties. State authority is
therefore, not exclusive of, but rather, complementary to parental
supervision. In Nery v. Lorenzo,68 this Court acknowledged the State's
role as parens patriae in protecting minors, viz.:
[W]here minors are involved, the State acts as parens patriae. To it is cast
the duty of protecting the rights of persons or individual who because of
age or incapacity are in an unfavorable position, vis-a- vis other parties.
Unable as they are to take due care of what concerns them, they have the
political community to look after their welfare. This obligation the state
must live up to. It cannot be recreant to such a trust. As was set forth in an
opinion of the United States Supreme Court: "This prerogative of parens
patriae is inherent in the supreme power of every State, x x x."69
(Emphases and underscoring supplied)
As parens patriae, the State has the inherent right and duty to aid parents
in the moral development of their children,70 and, thus, assumes a
supporting role for parents to fulfill their parental obligations. In Bellotti, it
was held that "[l]egal restriction on minors, especially those supportive of
the parental role, may be important to the child's chances for the full
growth and maturity that make eventual participation in a free society
meaningful and rewarding. Under the Constitution, the State can properly
conclude that parents and others, teachers for example, who have the
primary responsibility for children's well-being are entitled to the support
of the laws designed to aid discharge of that responsibility."71
The Curfew Ordinances are but examples of legal restrictions designed to
aid parents in their role of promoting their children's well-being. As will be
later discussed at greater length, these ordinances further compelling
State interests (particularly, the promotion of juvenile safety and the
prevention of juvenile crime), which necessarily entail limitations on the
primary right of parents to rear their children. Minors, because of their
peculiar vulnerability and lack of experience, are not only more exposed to
potential physical harm by criminal elements that operate during the night;
their moral well-being is likewise imperiled as minor children are prone to
making detrimental decisions during this time.72
At this juncture, it should be emphasized that the Curfew Ordinances apply
only when the minors are not - whether actually or constructively (as will
be later discussed) - accompanied by their parents. This serves as an
explicit recognition of the State's deference to the primary nature of
parental authority and the importance of parents' role in child-rearing.
Parents are effectively given unfettered authority over their children's
conduct during curfew hours when they are able to supervise them. Thus,
in all actuality, the only aspect of parenting that the Curfew Ordinances
affects is the parents' prerogative to allow minors to remain in public
places without parental accompaniment during the curfew hours.73 In this
respect, the ordinances neither dictate an over-all plan of discipline for the
parents to apply to their minors nor force parents to abdicate their
authority to influence or control their minors' activities.74 As such, the
Curfew Ordinances only amount to a minimal - albeit reasonable -
infringement upon a parent's right to bring up his or her child.
Finally, it may be well to point out that the Curfew Ordinances positively
influence children to spend more time at home. Consequently, this
situation provides parents with better opportunities to take a more active
role in their children's upbringing. In Schleifer v. City of Charlottesvillle
(Schleifer),75 the US court observed that the city government "was
entitled to believe x x x that a nocturnal curfew would promote parental
involvement in a child's upbringing. A curfew aids the efforts of parents
who desire to protect their children from the perils of the street but are
unable to control the nocturnal behavior of those children."76 Curfews
may also aid the "efforts of parents who prefer their children to spend time
on their studies than on the streets."77 Reason dictates that these realities
observed in Schleifer are no less applicable to our local context. Hence,
these are additional reasons which justify the impact of the nocturnal
curfews on parental rights.
In fine, the Curfew Ordinances should not be declared unconstitutional for
violating the parents' right to rear their children.
C. Right to Travel.
Petitioners further assail the constitutionality of the Curfew Ordinances
based on the minors' right to travel. They claim that the liberty to travel is
a fundamental right, which, therefore, necessitates the application of the
strict scrutiny test. Further, they submit that even if there exists a
compelling State interest, such as the prevention of juvenile crime and the
protection of minors from crime, there are other less restrictive means for
achieving the government's interest.78 In addition, they posit that the
Curfew Ordinances suffer from overbreadth by proscribing or impairing
legitimate activities of minors during curfew hours.79
Petitioner's submissions are partly meritorious.
At the outset, the Court rejects petitioners' invocation of the overbreadth
doctrine, considering that petitioners have not claimed any transgression of
their rights to free speech or any inhibition of speech-related conduct. In
Southern Hemisphere Engagement Network, Inc. v. Anti-Terrorism Council
(Southern Hemisphere),80 this Court explained that "the application of the
overbreadth doctrine is limited to a facial kind of challenge and, owing to the
given rationale of a facial challenge, applicable only to free speech
cases,"81viz.:
By its nature, the overbreadth doctrine has to necessarily apply a facial type
of invalidation in order to plot areas of protected speech, inevitably almost
always under situations not before the court, that are impermissibly swept
by the substantially overbroad regulation. Otherwise stated, a statute
cannot be properly analyzed for being substantially overbroad if the court
confines itself only to facts as applied to the litigants.
The most distinctive feature of the overbreadth technique is that it marks an
exception to some of the usual rules of constitutional litigation. Ordinarily, a
particular litigant claims that a statute is unconstitutional as applied to him
or her; if the litigant prevails, the courts carve away the unconstitutional
aspects of the law by invalidating its improper applications on a case to case
basis. Moreover, challengers to a law are not permitted to raise the rights of
third parties and can only assert their own interests. In overbreadth analysis,
those rules give way; challenges are permitted to raise the rights of third
parties; and the court invalidates the entire statute "on its face," not merely
"as applied for" so that the overbroad law becomes unenforceable until a
properly authorized court construes it more narrowly. The factor that
motivates courts to depart from the normal adjudicatory rules is the concern
with the "chilling;" deterrent effect of the overbroad statute on third parties
not courageous enough to bring suit. The Court assumes that an overbroad
law's "very existence may cause others not before the court to refrain from
constitutionally protected speech or expression." An overbreadth ruling is
designed to remove that deterrent effect on the speech of those third
parties.82 (Emphases and underscoring supplied)
In the same case, it was further pointed out that "[i]n restricting the
overbreadth doctrine to free speech claims, the Court, in at least two [(2)]
cases, observed that the US Supreme Court has not recognized an
overbreadth doctrine outside the limited context of the First Amendment,83
and that claims of facial overbreadth have been entertained in cases
involving statutes which, by their terms, seek to regulate only spoken words.
In Virginia v. Hicks,84 it was held that rarely, if ever, will an overbreadth
challenge succeed against a law or regulation that is not specifically
addressed to speech or speech-related conduct. Attacks on overly broad
statutes are justified by the 'transcendent value to all society of
constitutionally protected expression."'85
In the more recent case of Spouses Imbong v. Ochoa, Jr.,86 it was opined
that "[f]acial challenges can only be raised on the basis of overbreadth and
not on vagueness. Southern Hemisphere demonstrated how vagueness
relates to violations of due process rights, whereas facial challenges are
raised on the basis of overbreadth and limited to the realm of freedom of
expression."87
That being said, this Court finds it improper to undertake an overbreadth
analysis in this case, there being no claimed curtailment of free speech. On
the contrary, however, this Court finds proper to examine the assailed
regulations under the strict scrutiny test.
The right to travel is recognized and guaranteed as a fundamental right88
under Section 6, Article III of the 1987 Constitution, to wit:
Section 6. The liberty of abode and of changing the same within the limits
prescribed by law shall not be impaired except upon lawful order of the court.
Neither shall the right to travel be impaired except in the interest of national
security, public safety, or public health, as may be provided by law.
(Emphases and underscoring supplied)
Jurisprudence provides that this right refers to the right to move freely from
the Philippines to other countries or within the Philippines.89 It is a right
embraced within the general concept of liberty.90 Liberty - a birthright of
every person - includes the power of locomotion91 and the right of citizens to
be free to use their faculties in lawful ways and to live and work where they
desire or where they can best pursue the ends of life.92
The right to travel is essential as it enables individuals to access and exercise
their other rights, such as the rights to education, free expression, assembly,
association, and religion.93 The inter-relation of the right to travel with other
fundamental rights was briefly rationalized in City of Maquoketa v.
Russell,94 as follows:
Whenever the First Amendment rights of freedom of religion, speech,
assembly, and association require one to move about, such movement must
necessarily be protected under the First Amendment. Restricting movement
in those circumstances to the extent that First Amendment Rights cannot be
exercised without violating the law is equivalent to a denial of those rights.
One court has eloquently pointed this out:
We would not deny the relatedness of the rights guaranteed by the First
Amendment to freedom of travel and movement. If, for any reason, people
cannot walk or drive to their church, their freedom to worship is impaired. If,
for any reason, people cannot walk or drive to the meeting hall, freedom of
assembly is effectively blocked. If, for any reason, people cannot safely
walk the sidewalks or drive the streets of a community, opportunities for
freedom of speech are sharply limited. Freedom of movement is
inextricably involved with freedoms set forth in the First Amendment.
(Emphases supplied)
Nevertheless, grave and overriding considerations of public interest justify
restrictions even if made against fundamental rights. Specifically on the
freedom to move from one place to another, jurisprudence provides that
this right is not absolute.95 As the 1987 Constitution itself reads, the
State96 may impose limitations on the exercise of this right, provided that
they: (1) serve the interest of national security, public safety, or public
health; and (2) are provided by law.97
The stated purposes of the Curfew Ordinances, specifically the promotion
of juvenile safety and prevention of juvenile crime, inarguably serve the
interest of public safety. The restriction on the minor's movement and
activities within the confines of their residences and their immediate
vicinity during the curfew period is perceived to reduce the probability of
the minor becoming victims of or getting involved in crimes and criminal
activities. As to the second requirement, i.e., that the limitation "be
provided by law," our legal system is replete with laws emphasizing the
State's duty to afford special protection to children, i.e., RA 7610,98 as
amended, RA 9775,99 RA 9262,100 RA 9851, 101 RA 9344,102 RA
10364,103 RA 9211,104 RA 8980,105 RA 9288,106 and Presidential
Decree (PD) 603,107 as amended.
Particularly relevant to this case is Article 139 of PD 603, which explicitly
authorizes local government units, through their city or municipal councils,
to set curfew hours for children. It reads:
Article 139. Curfew Hours for Children. - City or municipal councils may
prescribe such curfew hours for children as may be warranted by local
conditions. The duty to enforce curfew ordinances shall devolve upon the
parents or guardians and the local authorities.
x x x x (Emphasis and underscoring supplied)
As explicitly worded, city councils are authorized to enact curfew
ordinances (as what respondents have done in this case) and enforce the
same through their local officials. In other words, PD 603 provides
sufficient statutory basis - as required by the Constitution - to restrict the
minors' exercise of the right to travel.
The restrictions set by the Curfew Ordinances that apply solely to minors
are likewise constitutionally permissible. In this relation, this Court
recognizes that minors do possess and enjoy constitutional rights,108but
the exercise of these rights is not co-extensive as those of adults.109 They
are always subject to the authority or custody of another, such as their
parent/s and/or guardian/s, and the State.110 As parens patriae, the
State regulates and, to a certain extent, restricts the minors' exercise of
their rights, such as in their affairs concerning the right to vote,111 the
right to execute contracts,112 and the right to engage in gainful
employment.113 With respect to the right to travel, minors are required by
law to obtain a clearance from the Department of Social Welfare and
Development before they can travel to a foreign country by themselves or
with a person other than their parents.114 These limitations demonstrate
that the State has broader authority over the minors' activities than over
similar actions of adults,115 and overall, reflect the State's general
interest in the well-being of minors.116 Thus, the State may impose
limitations on the minors' exercise of rights even though these limitations
do not generally apply to adults.
In Bellotti,117 the US Supreme Court identified three (3) justifications for
the differential treatment of the minors' constitutional rights. These
are:first, the peculiar vulnerability of children; second, their inability to
make critical decisions in an informed and mature manner; and third, the
importance of the parental role in child rearing:118
[On the first reason,] our cases show that although children generally are
protected by the same constitutional guarantees against governmental
deprivations as are adults, the State is entitled to adjust its legal system to
account for children's vulnerability and their needs for
'concern, ...sympathy, and ... paternal attention. x x x.
[On the second reason, this Court's rulings are] grounded [on] the
recognition that, during the formative years of childhood and adolescence,
minors often lack the experience, perspective, and judgment to recognize
and avoid choices that could be detrimental to them. x x x.
xxxx
[On the third reason,] the guiding role of parents in the upbringing of their
children justifies limitations on the freedoms of minors. The State
commonly protects its youth from adverse governmental action and from
their own immaturity by requiring parental consent to or involvement in
important decisions by minors. x x x.
xxxx
x x x Legal restrictions on minors, especially those supportive of the
parental role, may be important to the child's chances for the full growth
and maturity that make eventual participation in a free society meaningful
and rewarding.119 (Emphases and underscoring supplied)
Moreover, in Prince v. Massachusetts,120 the US Supreme Court
acknowledged the heightened dangers on the streets to minors, as
compared to adults:
A democratic society rests, for its continuance, upon the healthy,
well-rounded growth of young people into full maturity as citizens, with all
that implies. It may secure this against impeding restraints and dangers
within a broad range of selection. Among evils most appropriate for such
action are the crippling effects of child employment, more especially in public
places, and the possible harms arising from other activities subject to all the
diverse influences of the [streets]. It is too late now to doubt that legislation
appropriately designed to reach such evils is within the state's police power,
whether against the parent's claim to control of the child or one that religious
scruples dictate contrary action.
It is true children have rights, in common with older people, in the primary
use of highways. But even in such use streets afford dangers for them not
affecting adults. And in other uses, whether in work or in other things, this
difference may be magnified.121 (Emphases and underscoring supplied)
For these reasons, the State is justified in setting restrictions on the minors'
exercise of their travel rights, provided, they are singled out on reasonable
grounds.
Philippine jurisprudence has developed three (3) tests of judicial scrutiny to
determine the reasonableness of classifications.122 The strict scrutiny test
applies when a classification either (i) interferes with the exercise of
fundamental rights, including the basic liberties guaranteed under the
Constitution, or (ii) burdens suspect classes.123 The intermediate scrutiny
test applies when a classification does not involve suspect classes or
fundamental rights, but requires heightened scrutiny, such as in
classifications based on gender and legitimacy.124 Lastly, the rational basis
test applies to all other subjects not covered by the first two tests.125
Considering that the right to travel is a fundamental right in our legal system
guaranteed no less by our Constitution, the strict scrutiny test126 is the
applicable test.127 At this juncture, it should be emphasized that minors
enjoy the same constitutional rights as adults; the fact that the State has
broader authority over minors than over adults does not trigger the
application of a lower level of scrutiny.128 In Nunez v. City of San Diego
(Nunez),129 the US court illumined that:
Although many federal courts have recognized that juvenile curfews
implicate the fundamental rights of minors, the parties dispute whether strict
scrutiny review is necessary. The Supreme Court teaches that rights are no
less "fundamental" for minors than adults, but that the analysis of those
rights may differ:
Constitutional rights do not mature and come into being magically only when
one attains the state-defined age of majority. Minors, as well as adults, are
protected by the Constitution and possess constitutional rights. The Court[,]
indeed, however, [has long] recognized that the State has somewhat
broader authority to regulate the activities of children than of adults. x x x.
Thus, minors' rights are not coextensive with the rights of adults because the
state has a greater range of interests that justify the infringement of minors'
rights.
The Supreme Court has articulated three specific factors that, when
applicable, warrant differential analysis of the constitutional rights of minors
and adults: x x x. The Bellotti test [however] does not establish a lower level
of scrutiny for the constitutional rights of minors in the context of a juvenile
curfew. Rather, the Bellotti framework enables courts to determine whether
the state has a compelling state interest justifying greater restrictions on
minors than on adults. x x x.
x x x Although the state may have a compelling interest in regulating minors
differently than adults, we do not believe that [a] lesser degree of scrutiny is
appropriate to review burdens on minors' fundamental rights. x x x.
Accordingly, we apply strict scrutiny to our review of the ordinance. x x x.130
(Emphases supplied)
The strict scrutiny test as applied to minors entails a consideration of the
peculiar circumstances of minors as enumerated in Bellotti vis-a-vis the
State's duty as parens patriae to protect and preserve their well-being with
the compelling State interests justifying the assailed government act. Under
the strict scrutiny test, a legislative classification that interferes with the
exercise of a fundamental right or operates to the disadvantage of a suspect
class is presumed unconstitutional.131 Thus, the government has the
burden of proving that the classification (i) is necessary to achieve a
compelling State interest, and (ii) is the least restrictive means to protect
such interest or the means chosen is narrowly tailored to accomplish the
interest.132
a. Compelling State Interest.
Jurisprudence holds that compelling State interests include constitutionally
declared policies.133This Court has ruled that children's welfare and the
State's mandate to protect and care for them as parens patriae constitute
compelling interests to justify regulations by the State.134 It is akin to the
paramount interest of the state for which some individual liberties must give
way.135 As explained in Nunez, the Bellotti framework shows that the State
has a compelling interest in imposing greater restrictions on minors than on
adults. The limitations on minors under Philippine laws also highlight this
compelling interest of the State to protect and care for their welfare.
In this case, respondents have sufficiently established that the ultimate
objective of the Curfew Ordinances is to keep unsupervised minors during
the late hours of night time off of public areas, so as to reduce - if not totally
eliminate - their exposure to potential harm, and to insulate them against
criminal pressure and influences which may even include themselves. As
denoted in the "whereas clauses" of the Quezon City Ordinance, the State, in
imposing nocturnal curfews on minors, recognizes that:
[b] x x x children, particularly the minors, appear to be neglected of their
proper care and guidance, education, and moral development, which [lead]
them into exploitation, drug addiction, and become vulnerable to and at
the risk of committing criminal offenses;
xxxx
[d] as a consequence, most of minor children become out-of-school youth,
unproductive by-standers, street children, and member of notorious gangs
who stay, roam around or meander in public or private roads, streets or
other public places, whether singly or in groups without lawful purpose or
justification;
xxxx
[f] reports of barangay officials and law enforcement agencies reveal that
minor children roaming around, loitering or wandering in the evening are
the frequent personalities involved in various infractions of city ordinances
and national laws;
[g] it is necessary in the interest of public order and safety to regulate the
movement of minor children during night time by setting disciplinary hours,
protect them from neglect, abuse or cruelty and exploitation, and other
conditions prejudicial or detrimental to their development;
[h] to strengthen and support parental control on these minor children,
there is a need to put a restraint on the tendency of growing number of
youth spending their nocturnal activities wastefully, especially in the face
of the unabated rise of criminality and to ensure that the dissident
elements of society are not provided with potent avenues for furthering
their nefarious activities[.]136
The US court's judicial demeanor in Schleifer,137 as regards the
information gathered by the City Council to support its passage of the
curfew ordinance subject of that case, may serve as a guidepost to our
own treatment of the present case. Significantly, in Schleifer, the US court
recognized the entitlement of elected bodies to implement policies for a
safer community, in relation to the proclivity of children to make
dangerous and potentially life-shaping decisions when left unsupervised
during the late hours of night:
Charlottesville was constitutionally justified in believing that its curfew
would materially assist its first stated interest—that of reducing juvenile
violence and crime. The City Council acted on the basis of information from
many sources, including records from Charlottesville's police department,
a survey of public opinion, news reports, data from the United States
Department of Justice, national crime reports, and police reports from
other localities. On the basis of such evidence, elected bodies are entitled
to conclude that keeping unsupervised juveniles off the streets late at
night will make for a safer community. The same streets may have a more
volatile and less wholesome character at night than during the day. Alone
on the streets at night children face a series of dangerous and potentially
life-shaping decisions. Drug dealers may lure them to use narcotics or aid
in their sale. Gangs may pressure them into membership or participation in
violence. "[D]uring the formative years of childhood and adolescence,
minors often lack the experience, perspective, and judgment to recognize
and avoid choices that could be detrimental to them." Those who succumb
to these criminal influences at an early age may persist in their criminal
conduct as adults. Whether we as judges subscribe to these theories is
beside the point. Those elected officials with their finger on the pulse of
their home community clearly did. In attempting to reduce through its
curfew the opportunities for children to come into contact with criminal
influences,the City was directly advancing its first objective of reducing
juvenile violence and crime.138 (Emphases and underscoring supplied;
citations omitted)
Similar to the City of Charlottesville in Schleifer, the local governments of
Quezon City and Manila presented statistical data in their respective
pleadings showing the alarming prevalence of crimes involving juveniles,
either as victims or perpetrators, in their respective localities.139
Based on these findings, their city councils found it necessary to enact
curfew ordinances pursuant to their police power under the general
welfare clause.140 In this light, the Court thus finds that the local
governments have not only conveyed but, in fact, attempted to
substantiate legitimate concerns on public welfare, especially with respect
to minors. As such, a compelling State interest exists for the enactment
and enforcement of the Curfew Ordinances.
With the first requirement of the strict scrutiny test satisfied, the Court
now proceeds to determine if the restrictions set forth in the Curfew
Ordinances are narrowly tailored or provide the least restrictive means to
address the cited compelling State interest - the second requirement of the
strict scrutiny test.
b. Least Restrictive Means/ Narrowly Drawn.
The second requirement of the strict scrutiny test stems from the
fundamental premise that citizens should not be hampered from pursuing
legitimate activities in the exercise of their constitutional rights. While
rights may be restricted, the restrictions must be minimal or only to the
extent necessary to achieve the purpose or to address the State's
compelling interest. When it is possible for governmental regulations to be
more narrowly drawn to avoid conflicts with constitutional rights, then
they must be so narrowly drawn.141
Although treated differently from adults, the foregoing standard applies to
regulations on minors as they are still accorded the freedom to participate
in any legitimate activity, whether it be social, religious, or civic.142 Thus,
in the present case, each of the ordinances must be narrowly tailored as to
ensure minimal constraint not only on the minors' right to travel but also
on their other constitutional rights.143
In In Re Mosier,144 a US court declared a curfew ordinance unconstitutional
impliedly for not being narrowly drawn, resulting in unnecessary curtailment
of minors' rights to freely exercise their religion and to free speech.145 It
observed that:
The ordinance prohibits the older minor from attending alone Christmas Eve
Midnight Mass at the local Roman Catholic Church or Christmas Eve services
at the various local Protestant Churches. It would likewise prohibit them
from attending the New [Year's] Eve watch services at the various churches.
Likewise it would prohibit grandparents, uncles, aunts or adult brothers and
sisters from taking their minor relatives of any age to the above mentioned
services. x x x.
xxxx
Under the ordinance, during nine months of the year a minor could not even
attend the city council meetings if they ran past 10:30 (which they
frequently do) to express his views on the necessity to repeal the curfew
ordinance, clearly a deprivation of his First Amendment right to freedom of
speech.
xxxx
[In contrast, the ordinance in Bykofsky v. Borough of Middletown (supra
note 52)] was [a] very narrowly drawn ordinance of many pages with eleven
exceptions and was very carefully drafted in an attempt to pass
constitutional muster. It specifically excepted [the] exercise of First
Amendment rights, travel in a motor vehicle and returning home by a direct
route from religious, school, or voluntary association activities. (Emphases
supplied)
After a thorough evaluation of the ordinances' respective provisions, this
Court finds that only the Quezon City Ordinance meets the above-discussed
requirement, while the Manila and Navotas Ordinances do not.
The Manila Ordinance cites only four (4) exemptions from the coverage of
the curfew, namely: (a) minors accompanied by their parents, family
members of legal age, or guardian; (b) those running lawful errands such as
buying of medicines, using of telecommunication facilities for emergency
purposes and the like; (c) night school students and those who, by virtue of
their employment, are required in the streets or outside their residence after
10:00 p.m.; and (d) those working at night.146
For its part, the Navotas Ordinance provides more exceptions, to wit: (a)
minors with night classes; (b) those working at night; (c) those who
attended a school or church activity, in coordination with a specific barangay
office; (d) those traveling towards home during the curfew hours; (e) those
running errands under the supervision of their parents, guardians, or
persons of legal age having authority over them; (f) those involved in
accidents, calamities, and the like. It also exempts minors from the curfew
during these specific occasions: Christmas eve, Christmas day, New Year's
eve, New Year's day, the night before the barangay fiesta, the day of the
fiesta, All Saints' and All Souls' Day, Holy Thursday, Good Friday, Black
Saturday, and Easter Sunday.147
This Court observes that these two ordinances are not narrowly drawn in
that their exceptions are inadequate and therefore, run the risk of overly
restricting the minors' fundamental freedoms. To be fair, both ordinances
protect the rights to education, to gainful employment, and to travel at night
from school or work.148 However, even with those safeguards, the Navotas
Ordinance and, to a greater extent, the Manila Ordinance still do not account
for the reasonable exercise of the minors' rights of association, free exercise
of religion, rights to peaceably assemble, and of free expression, among
others.
The exceptions under the Manila Ordinance are too limited, and thus, unduly
trample upon protected liberties. The Navotas Ordinance is apparently more
protective of constitutional rights than the Manila Ordinance; nonetheless, it
still provides insufficient safeguards as discussed in detail below:
First, although it allows minors to engage in school or church activities, it
hinders them from engaging in legitimate non-school or non-church
activities in the streets or going to and from such activities; thus, their
freedom of association is effectively curtailed. It bears stressing that
participation in legitimate activities of organizations, other than school or
church, also contributes to the minors' social, emotional, and intellectual
development, yet, such participation is not exempted under the Navotas
Ordinance.
Second, although the Navotas Ordinance does not impose the curfew during
Christmas Eve and Christmas day, it effectively prohibits minors from
attending traditional religious activities (such as simbang gabi) at night
without accompanying adults, similar to the scenario depicted in Mosier.149
This legitimate activity done pursuant to the minors' right to freely exercise
their religion is therefore effectively curtailed.
Third, the Navotas Ordinance does not accommodate avenues for minors to
engage in political rallies or attend city council meetings to voice out their
concerns in line with their right to peaceably assemble and to free
expression.
Certainly, minors are allowed under the Navotas Ordinance to engage in
these activities outside curfew hours, but the Court finds no reason to
prohibit them from participating in these legitimate activities during curfew
hours. Such proscription does not advance the State's compelling interest to
protect minors from the dangers of the streets at night, such as becoming
prey or instruments of criminal activity. These legitimate activities are
merely hindered without any reasonable relation to the State's interest;
hence, the Navotas Ordinance is not narrowly drawn. More so, the Manila
Ordinance, with its limited exceptions, is also not narrowly drawn.
In sum, the Manila and Navotas Ordinances should be completely stricken
down since their exceptions, which are essentially determinative of the
scope and breadth of the curfew regulations, are inadequate to ensure
protection of the above-mentioned fundamental rights. While some
provisions may be valid, the same are merely ancillary thereto; as such,
they cannot subsist independently despite the presence150 of any
separability clause.151
The Quezon City Ordinance stands in stark contrast to the first two (2)
ordinances as it sufficiently safeguards the minors' constitutional rights. It
provides the following exceptions:
Section 4. EXEMPTIONS - Minor children under the following
circumstances shall not be covered by the provisions of this ordinance;
(a)
Those accompanied by their parents or guardian;
(b)
Those on their way to or from a party, graduation ceremony, religious
mass, and/or other extra-curricular activities of their school or
organization wherein their attendance are required or otherwise
indispensable, or when such minors are out and unable to go home early
due to circumstances beyond their control as verified by the proper
authorities concerned; and
(c)
Those attending to, or in experience of, an emergency situation such as
conflagration, earthquake, hospitalization, road accident, law enforcers
encounter, and similar incidents[;]
(d)
When the minor is engaged in an authorized employment activity, or going
to or returning home from the same place of employment activity without
any detour or stop;
(e)
When the minor is in [a] motor vehicle or other travel accompanied by an
adult in no violation of this Ordinance;
(f)
When the minor is involved in an emergency;
(g)
When the minor is out of his/her residence attending an official school,
religious, recreational, educational, social, communitv or other similar
private activity sponsored by the city, barangay, school, or other similar
private civic/religious organization/group (recognized by the community)
that supervises the activity or when the minor is going to or returning
home from such activity, without any detour or stop; and
(h)
When the minor can present papers certifying that he/she is a student and
was dismissed from his/her class/es in the evening or that he/she is a
working student.152 (Emphases and underscoring supplied)
As compared to the first two (2) ordinances, the list of exceptions under
the Quezon City Ordinance is more narrowly drawn to sufficiently protect
the minors' rights of association, free exercise of religion, travel, to
peaceably assemble, and of free expression.
Specifically, the inclusion of items (b) and (g) in the list of exceptions
guarantees the protection of these aforementioned rights. These items
uphold the right of association by enabling minors to attend both official
and extra-curricular activities not only of their school or church but also of
other legitimate organizations. The rights to peaceably assemble and of
free expression are also covered by these items given that the minors'
attendance in the official activities of civic or religious organizations are
allowed during the curfew hours. Unlike in the Navotas Ordinance, the
right to the free exercise of religion is sufficiently safeguarded in the
Quezon City Ordinance by exempting attendance at religious masses even
during curfew hours. In relation to their right to travel, the ordinance
allows the minor-participants to move to and from the places where these
activities are held. Thus, with these numerous exceptions, the Quezon City
Ordinance, in truth, only prohibits unsupervised activities that hardly
contribute to the well-being of minors who publicly loaf and loiter within
the locality at a time where danger is perceivably more prominent.
To note, there is no lack of supervision when a parent duly authorizes
his/her minor child to run lawful errands or engage in legitimate activities
during the night, notwithstanding curfew hours. As astutely observed by
Senior Associate Justice Antonio T. Carpio and Associate Justice Marvic
M.V.F. Leonen during the deliberations on this case, parental permission is
implicitly considered as an exception found in Section 4, item (a) of the
Quezon City Ordinance, i.e., "[t]hose accompanied by their parents or
guardian", as accompaniment should be understood not only in its actual
but also in its constructive sense. As the Court sees it, this should be the
reasonable construction of this exception so as to reconcile the juvenile
curfew measure with the basic premise that State interference is not
superior but only complementary to parental supervision. After all, as the
Constitution itself prescribes, the parents' right to rear their children is not
only natural but primary.
Ultimately, it is important to highlight that this Court, in passing judgment
on these ordinances, is dealing with the welfare of minors who are
presumed by law to be incapable of giving proper consent due to their
incapability to fully understand the import and consequences of their
actions. In one case it was observed that:
A child cannot give consent to a contract under our civil laws. This is on the
rationale that she can easily be the victim of fraud as she is not capable of
fully understanding or knowing the nature or import of her actions. The
State, as parens patriae, is under the obligation to minimize the risk of
harm to those who, because of their minority, are as yet unable to take
care of themselves fully. Those of tender years deserve its protection.153
Under our legal system's own recognition of a minor's inherent lack of full
rational capacity, and balancing the same against the State's compelling
interest to promote juvenile safety and prevent juvenile crime, this Court
finds that the curfew imposed under the Quezon City Ordinance is
reasonably justified with its narrowly drawn exceptions and hence,
constitutional. Needless to say, these exceptions are in no way limited or
restricted, as the State, in accordance with the lawful exercise of its police
power, is not precluded from crafting, adding, or modifying exceptions in
similar laws/ordinances for as long as the regulation, overall, passes the
parameters of scrutiny as applied in this case.
D. Penal Provisions of the Manila Ordinance.
Going back to the Manila Ordinance, this Court deems it proper - as it was
raised- to further discuss the validity of its penal provisions in relation to RA
9344, as amended.
To recount, the Quezon City Ordinance, while penalizing the parentis or
guardian under Section 8 thereof,154 does not impose any penalty on the
minors. For its part, the Navotas Ordinance requires the minor, along with
his or her parent/s or guardian/s, to render social civic duty and community
service either in lieu of - should the parent/s or guardian/s of the minor be
unable to pay the fine imposed - or in addition to the fine imposed
therein.155Meanwhile, the Manila Ordinance imposed various sanctions to
the minor based on the age and frequency of violations, to wit:
SEC. 4. Sanctions and Penalties for Violation. Any child or youth violating this
ordinance shall be sanctioned/punished as follows:
(a) If the offender is Fifteen (15) years of age and below, the sanction shall
consist of a REPRIMAND for the youth offender and ADMONITION to the
offender's parent, guardian or person exercising parental authority.
(b) If the offender is Fifteen (15) years of age and under Eighteen (18) years
of age, the sanction/penalty shall be:
For the FIRST OFFENSE, Reprimand and Admonition;
For the SECOND OFFENSE, Reprimand and Admonition, and a warning about
the legal impostitions in case of a third and subsequent violation; and
For the THIRD AND SUBSEQUENT OFFENSES, Imprisonment of one (1) day
to ten (10) days, or a Fine of TWO THOUSAND PESOS (Php2,000.00), or both
at the discretion of the Court, PROVIDED, That the complaint shall be filed by
the Punong Barangay with the office of the City Prosecutor.156 (Emphases
and underscoring supplied).
Thus springs the question of whether local governments could validly impose
on minors these sanctions - i.e., (a) community service; (b) reprimand and
admonition; (c) fine; and (d) imprisonment. Pertinently, Sections 57 and
57-A of RA 9344, as amended, prohibit the imposition of penalties on minors
for status offenses such as curfew violations, viz.:
SEC. 57. Status Offenses. — Any conduct not considered an offense or not
penalized if committed by an adult shall not be considered an offense and
shall not be punished if committed by a child.
SEC. 57-A. Violations of Local Ordinances. — Ordinances enacted by local
governments concerning juvenile status offenses such as, but not limited to,
curfew violations, truancy, parental disobedience, anti-smoking and
anti-drinking laws, as well as light offenses and misdemeanors against public
order or safety such as, but not limited to, disorderly conduct, public scandal,
harassment, drunkenness, public intoxication, criminal nuisance, vandalism,
gambling, mendicancy, littering, public urination, and trespassing, shall be
for the protection of children. No penalty shall be imposed on children for
said violations, and they shall instead be brought to their residence or to any
barangay official at the barangay hall to be released to the custody of their
parents. Appropriate intervention programs shall be provided for in such
ordinances. The child shall also be recorded as a "child at risk" and not as a
"child in conflict with the law." The ordinance shall also provide for
intervention programs, such as counseling, attendance in group activities for
children, and for the parents, attendance in parenting education seminars.
(Emphases and underscoring supplied.)
To clarify, these provisions do not prohibit the enactment of regulations that
curtail the conduct of minors, when the similar conduct of adults are not
considered as an offense or penalized (i.e., status offenses). Instead, what
they prohibit is the imposition of penalties on minors for violations of these
regulations. Consequently, the enactment of curfew ordinances on minors,
without penalizing them for violations thereof, is not violative of Section
57-A.
"Penalty" 157 is defined as "[p]unishment imposed on a wrongdoer usually
in the form of imprisonment or fine";158 "[p]unishment imposed by lawful
authority upon a person who commits a deliberate or negligent act."159
Punishment, in turn, is defined as "[a] sanction - such as fine, penalty,
confinement, or loss of property, right, or privilege - assessed against a
person who has violated the law."160
The provisions of RA 9344, as amended, should not be read to mean that all
the actions of the minor in violation of the regulations are without legal
consequences. Section 57-A thereof empowers local governments to adopt
appropriate intervention programs, such as community-based programs161
recognized under Section 54162 of the same law.
In this regard, requiring the minor to perform community service is a valid
form of intervention program that a local government (such as Navotas City
in this case) could appropriately adopt in an ordinance to promote the
welfare of minors. For one, the community service programs provide minors
an alternative mode of rehabilitation as they promote accountability for their
delinquent acts without the moral and social stigma caused by jail detention.
In the same light, these programs help inculcate discipline and compliance
with the law and legal orders. More importantly, they give them the
opportunity to become productive members of society and thereby promote
their integration to and solidarity with their community.
The sanction of admonition imposed by the City of Manila is likewise
consistent with Sections 57 and 57-A of RA 9344 as it is merely a formal
way of giving warnings and expressing disapproval to the minor's
misdemeanor. Admonition is generally defined as a "gentle or friendly G.R. No. 172352, September 16, 2015
reproof' or "counsel or warning against fault or oversight."163 The Black's
Law Dictionary defines admonition as "[a]n authoritatively issued warning
or censure";164 while the Philippine Law Dictionary defines it as a "gentle LAND BANK OF THE PHILIPPINES, Petitioner, v. ALFREDO
or friendly reproof, a mild rebuke, warning or reminder, [counseling], on a
fault, error or oversight, an expression of authoritative advice or HABABAG, SR., SUBSTITUTED BY HIS WIFE, CONSOLACION,
warning."165 Notably, the Revised Rules on Administrative Cases in the AND CHILDREN, NAMELY: MANUEL, SALVADOR, WILSON,
Civil Service (RRACCS) and our jurisprudence in administrative cases
explicitly declare that "a warning or admonition shall not be considered a JIMMY, ALFREDO, JR., AND JUDITH, ALL SURNAMED
penalty."166
HABABAG, Respondents.
In other words, the disciplinary measures of community-based programs
and admonition are clearly not penalties - as they are not punitive in
nature - and are generally less intrusive on the rights and conduct of the G.R. Nos. 172387-88
minor. To be clear, their objectives are to formally inform and educate the
minor, and for the latter to understand, what actions must be avoided so
as to aid him in his future conduct.
ALFREDO HABABAG, SR., SUBSTITUTED BY HIS WIFE,
A different conclusion, however, is reached with regard to reprimand and CONSOLACION, AND CHILDREN, NAMELY: MANUEL,
fines and/or imprisonment imposed by the City of Manila on the minor.
Reprimand is generally defined as "a severe or formal reproof."167 The SALVADOR, WILSON, JIMMY, ALFREDO, JR., AND JUDITH, ALL
Black's Law Dictionary defines it as "a mild form of lawyer discipline that
does not restrict the lawyer's ability to practice law";168 while the
SURNAMED HABABAG, Petitioners, v. LAND BANK OF THE
Philippine Law Dictionary defines it as a "public and formal censure or PHILIPPINES AND THE DEPARTMENT OF AGRARIAN
severe reproof, administered to a person in fault by his superior officer or
body to which he belongs. It is more than just a warning or REFORM, Respondents.
admonition."169 In other words, reprimand is a formal and public
pronouncement made to denounce the error or violation committed, to
sharply criticize and rebuke the erring individual, and to sternly warn the DECISION
erring individual including the public against repeating or committing the
same, and thus, may unwittingly subject the erring individual or violator to
unwarranted censure or sharp disapproval from others. In fact, the
PERLAS-BERNABE, J.:
RRACCS and our jurisprudence explicitly indicate that reprimand is a
penalty,170 hence, prohibited by Section 57-A of RA 9344, as amended. Assailed in these consolidated petitions for review
Fines and/or imprisonment, on the other hand, undeniably constitute on certiorari1 are the Decision2 dated November 15, 2005 and
penalties - as provided in our various criminal and administrative laws and
jurisprudence - that Section 57-A of RA 9344, as amended, evidently the Resolution3 dated April 19, 2006 of the Court of Appeals
prohibits. (CA) in CA-G.R. SP Nos. 86066 and 86167, which set aside the
As worded, the prohibition in Section 57-A is clear, categorical, and Amended Decision4 dated March 22, 2004 and the
unambiguous. It states that "[n]o penalty shall be imposed on children for
x x x violations [of] juvenile status offenses]." Thus, for imposing the Order5 dated August 10, 2004 of the Regional Trial Court of
sanctions of reprimand, fine, and/or imprisonment on minors for curfew
violations, portions of Section 4 of the Manila Ordinance directly and
Sorsogon City, Branch 52 (RTC) in Civil Case No. 96-6217, fixing
irreconcilably conflict with the clear language of Section 57-A of RA 9344, the amount of just compensation at P2,398,487.24, with
as amended, and hence, invalid. On the other hand, the impositions of
community service programs and admonition on the minors are allowed as interest at 12% per annum (p.a.), in view of the expropriation
they do not constitute penalties.
of certain parcels of land owned by the Heirs of Alfredo
CONCLUSION Hababag, Sr. (Hababag Heirs).chanrobleslaw
In sum, while the Court finds that all three Curfew Ordinances have passed
the first prong of the strict scrutiny test - that is, that the State has The Facts
sufficiently shown a compelling interest to promote juvenile safety and
prevent juvenile crime in the concerned localities, only the Quezon City
Ordinance has passed the second prong of the strict scrutiny test, as it is
the only issuance out of the three which provides for the least restrictive
means to achieve this interest. In particular, the Quezon City Ordinance
Alfredo Hababag, Sr. (Alfredo) was the owner of several parcels
provides for adequate exceptions that enable minors to freely exercise of agricultural land with an aggregate area of 82.4927 hectares
their fundamental rights during the prescribed curfew hours, and therefore,
narrowly drawn to achieve the State's purpose. Section 4 (a) of the said (has.) situated in Barangays Carriedo, Manapao, and Casili, in
ordinance, i.e., "[t]hose accompanied by their parents or guardian", has
also been construed to include parental permission as a constructive form the Municipality of Gubat, Sorsogon, and covered by Transfer
of accompaniment and hence, an allowable exception to the curfew Certificate of Title No. T-12107. The aforesaid landholdings
measure; the manner of enforcement, however, is left to the discretion of
the local government unit. were voluntarily offered for sale (VOS) to the government
In fine, the Manila and Navotas Ordinances are declared unconstitutional under Republic Act No. (RA) 6657,6 otherwise known as the
and thus, null and void, while the Quezon City Ordinance is declared as "Comprehensive Agrarian Reform Law of 1988," but only
constitutional and thus, valid in accordance with this Decision.
69.3857 has. thereof7 (subject lands) were acquired in 1990.8
For another, the Court has determined that the Manila Ordinance's penal
provisions imposing reprimand and fines/imprisonment on minors conflict
with Section 57-A of RA 9344, as amended. Hence, following the rule that
ordinances should always conform with the law, these provisions must be
The Land Bank of the Philippines (LBP) initially valued the
struck down as invalid. subject lands at P1,237,850.00, but Alfredo rejected the
WHEREFORE, the petition is PARTLY GRANTED. The Court hereby declares valuation. After summary administrative proceedings for the
Ordinance No. 8046, issued by the local government of the City of Manila,
and Pambayang Ordinansa Blg. No. 99-02, as amended by Pambayang
determination of the amount of just compensation, the Office
Ordinansa Blg. 2002-13 issued by the local government of Navotas City, of the Provincial Agrarian Reform Adjudicator (PARAD) of the
UNCONSTITUTIONAL and, thus, NULL and VOID; while Ordinance No.
SP-2301, Series of 2014, issued by the local government of the Quezon Department of Agrarian Reform (DAR) Adjudication Board
City is declared CONSTITUTIONAL and, thus,VALID in accordance with this
Decision. (DARAB) fixed the value of the subject lands at
P1,292,553.20.9 Dissatisfied, Alfredo filed a Complaint10 for the
determination of the amount of just compensation before the
RTC.

As a matter of course, the RTC appointed two commissioners

designated by each party to conduct an evaluation and
appraisal of the subject lands. Subsequently, the LBP-appointed
commissioner, Francisco M. Corcuera (Commissioner mathematical error in computing the amount of just
Corcuera), submitted his Commissioner's Report,11 fixing the compensation for the subject lands, as well as in fixing the
amount of just compensation for the subject lands at remaining productive life of the coconut trees to only 20 years
P2,358,385.48 based on (DAR) Administrative Order (AO) No. instead of 40 to 45 years.
6, series of 1992 (DAR AO 6-92), as amended by DAR AO No.
11, series of 1994 (DAR AO 11-94). On the other hand, the On January 16, 2004, the CA rendered a Decision17 (January 16,
commissioner designated by Alfredo, Margarito Cuba 2004 CA Decision) in the aforesaid case, indeed finding a
(Commissioner Cuba) of Banco Sorsogon, valued the lands at mathematical error in the computation of the reasonable
P5,420,600.00.12 income from the coconut trees, which if corrected would have
been P23,335,200.00.18 Accordingly, adding to the same the
On December 20, 1999, the RTC rendered a total land appraised value of P3,465,500.00,19 the CA came up
Decision13 (December 20, 1999 Decision) fixing the amount of with a total of P26,800,700.00.20 It, however, rejected Alfredo's
just compensation of the subject lands at P5,653,940.00 claim for the adjustment of the productive life of the coconut
computed as follows:chanRoblesvirtualLawlibrary trees to anywhere between 40 to 45 years, as it gave credence
to the Inspection and Appraisal Report submitted by
Coconut land - Commissioner Cuba which stated that the remaining
63.61 has @ P3,180,500.00 productive iife of the coconut trees would only be 20 years.
P50,000.00/ha. While expressing misgivings to the resultant amount which far
Rice land - 4.75 exceeded the computations made by the parties'
has. @ 285,000.00 commissioners,21 it nonetheless remanded the case for the
P60,000.00/ha. re-computation of the accurate amount of just compensation,
applying thereto the Income Productivity Approach. In this light,
Total Land it ratiocinated that the "court a quo, with the aid of its
Appraised 3,465,500.00 duly-appointed commissioner, x x x is in the best position to
Value appreciate the technical elements involved in the formula used
to determine the just compensation for [Alfredo's] property."22
Fruit-bearing
coconut trees -
1,944,600.00 Pursuant to the January 16, 2004 CA Decision, the RTC ordered
9,723 x
Commissioner Cuba to re-compute the accurate amount of just
P200.00
compensation applying the Income Productivity Approach.
Timber trees 7 Accordingly, the latter submitted the following
10,500.00 re-computation:chanRoblesvirtualLawlibrary
x P1,500.00

Total Plants RE-COMPUTATION OF COCONUT PRODUCTION ALFREDO

and Trees HABABAG PROPERTY
1,955,100.00
Appraised
Situated at Brgy[s]. Carriedo, Manapao,[and] Casili, all at
Value
Gubat[,] Sorsogon
Reasonable
income of the
coconut trees Date: February 24, 2004
for the next 20
years (based
on the Income A. Itemized re: computation of coconut production
Productivity
233,340.00
Approach)14
1. Total existing coconut fruit bearing trees 9,723 x x x
Total P5,653,940.0015
2. Average nuts produce per tree per
In reaching the above-stated total amount, the RTC applied 10 pcs.
harvest
the Income Productivity Approach. It also considered the
Inspection and Appraisal Report submitted by Commissioner 3. An average of eight regular harvest of
80 pcs.
Cuba, finding the same to be "the more realistic appraisal [,] nuts/tree/year
considering the economic condition of the country [,] as well
as the acquisition of the property and the present assessed 4. Total nuts produce per year from (9,723)
777,840 pcs.
value and also the proximity of the property to the fruits bearing tree
commercial center."16

Alfredo appealed to the CA, which was docketed as CA-G.R. B. Re: computation of copra production
CV No. 66824, averring that the RTC committed a
 twenty (20)
years
1. Total nuts produce per year 777,840 pcs. economic life
2. Average weight of one nut to copra .30 kls. of the 9,723
coconut fruit
3. Total kilos of copra produce per year 233,352 kls. bearing trees

4. Gross income of copra produce per year P

P 3,500,280.00 Total
by average of P15.00/kilo 40,423,400.0025

Less: fifty percent labor cost/transportation
1,750.140.00
expense and tenant share
Total net income of copra produce per year P 1,750,140.00
5. Estimated income of copra for the
remaining (20) years economic life of
P35,002,800.0023
(9,723) coconut fruit bearing trees is
more or less
Commissioner Cuba, however, retained the total appraised
values for the subject lands and the plants/trees at
P3,465,500.00 and P1,955,100.00, respectively, as similarly
indicated in the December 20, 1999 RTC
Decision.chanrobleslaw
With their motions for reconsideration having been denied in
an Order26 dated August 10, 2004, the LBP and the DAR filed
separate petitions27 for review with the CA, docketed as CA-G.R.
SP Nos. 86066 and 86167, respectively. For its part, the LBP
averred28 that the RTC gravely erred in disregarding the factors
under Section 17 of RA 6657 and DAR AO 6-92, as amended by
DAR AO 11-94, as ordained by the Court in the case of LBP v.
Banal.29 On the other hand, the DAR contended that the RTC
erred30 in including in its computation the estimated income of
the coconut trees for their remaining economic life (computed
at 20 years) and in adjudging a just compensation award which
is higher than the offered valuation of the landowner. Pending
appeal, Alfredo passed away and was substituted by his
heirs, i.e., the Hababag Heirs.chanrobleslaw

The RTC Ruling The CA Ruling

On March 22, 2004, the RTC rendered an Amended In the assailed Decision31 dated November 15, 2005, the CA set
Decision,24 fixing the amount of the just compensation for the aside the RTC's valuation for failure to give due consideration
subject lands at P40,423,400.00 computed as to the factors enumerated in Section 17 of RA 6657 and the
follows:chanRoblesvirtualLawlibrary formula under DAR AO 6-92, as amended by DAR AO 11-94.
Moreover, contrary to the limitation imposed by DAR AO 6-92
Coconut land -
- i.e., that the computed value using the applicable formula
63.61 has. @ P3,180,500.00
shall not exceed the landowner's offer to sell - the CA found
P50,000.00/ha.
that the amount as recomputed by the RTC was way beyond
Rice Land - the landowner's offer of P1,750,000.00 as stated in the Claims
4.75 has. @ 285,000.00 Valuation and Processing Form.32 Consequently, it gave more
P60,000.00/ha. credence to the report submitted by Commissioner Corcuera
which made use of the DAR formula derived from the factors
Total Land enumerated under Section 17 of RA 6657. The just
Appraised 3,465,500.00 compensation for the subject lands was thus computed33 as
Value follows:chanRoblesvirtualLawlibrary

Fruit-bearing Land
coconut trees - Land Use Area (ha.) Total
1,944,600.00 Value/ha.
9,723 x
P200.00 Coconut 66.9961 P35,586.24 P2,384,139.2034

Timber trees 7 Unirrigated

10,500.00 1.3896 8,243.71 11,455.4635
x P1,500.00 Riceland

Total Plants Cogonal 1.0000 2,892.58 2,892.5836

and Trees
1,955,100.00 69.3857 has. P2,398,487.2437
Appraised
Value Based on the foregoing, the average value per hectare of the
69.3857 hectare lands would therefore be P34,567.4576.
Recomputed
Estimated
The CA likewise considered the government's obligation to pay
Income of the
just compensation to be in the nature of a forbearance of
Copra for the 35,002,800.00 money and, as such, additionally imposed interests on the just
remaining
compensation award at 12% p.a., to be reckoned from the time
of the taking or the filing of the complaint, whichever is
earlier.38
The LBP and the Hababag Heirs filed their respective motions
for partial reconsideration which were both denied in a
Resolution39 dated April 19, 2006; hence, the instant petitions
for review on certiorari.chanrobleslaw
The Issues Before the Court
The present controversy revolves around the CA's award of
just compensation, including interests at the rate of 12% p.a.
In G.R. No. 172352, the LBP assails the award of interests by
the CA, contending that since the Hababag Heirs were already
paid the provisional compensation, no interest can legally
accrue to them. Further, it argues that unless there is a final
and executory decision, it is under no obligation to pay
interests since there could be no delay as of yet in the
payment of just compensation. Besides, it maintains that RA
6657 did not provide for the payment of such interests.
In G.R. Nos. 172387-88, the Hababag Heirs contend that the
CA erred in setting aside the just compensation fixed by the
RTC which was in accordance with the provisions of Section
17 of RA 6657 and the final decision of the CA in CA-G.R. CV
No. 66824 directing its re-computation.chanrobleslaw
The Court's Ruling
The petitions lack merit.
In the landmark case of Association of Small Landowners in
the Philippines, Inc. v. Hon. Secretary of Agrarian
Reform,40 the Court defined the term "just compensation" as
follows:chanRoblesvirtualLawlibrary
Just compensation is defined as the full and fair equivalent of
the property taken from its owner by the expropriator. It has
been repeatedly -stressed by this Court that the measure is
not the taker's gain but the owner's loss. The word "just" is
used to intensify the meaning of the word "compensation" to
convey the idea that the equivalent to be rendered for the
property to be taken shall be real, substantial, full [and]
ample.41ChanRoblesVirtualawlibrary
In this relation, the RTC, sitting as a Special Agrarian Court,
has been conferred with the original and exclusive power to
determine just compensation for parcels of land acquired by
the State pursuant to the agrarian reform program.42 To
guide the RTC in this function, Section 1743 of RA 6657
enumerates the factors which must be taken into
consideration to accurately determine the amount of just
compensation to be awarded in a particular case. They are: (a)
the acquisition cost of the land; (b) the current value of like
properties; (c) the nature and actual use of the property, and
the income therefrom; (d) the owner's sworn valuation; (e)
the tax declarations; (f) the assessment made by government
assessors; (g) the social and economic benefits contributed
by the farmers and the farmworkers, and by the government
to the property; and (h) the nonpayment of taxes or loans
secured from any government financing institution on the said
land, if any.44 Corollarily, pursuant to its rule-making power
under Section 4945 of the same law, the DAR translated these
factors into a basic formula,46 which courts have often referred
to and applied, as the CA did in this case. It, however, bears
stressing that courts are not constrained to adopt the said
formula in every case since the determination of the amount of
just compensation essentially partakes the nature of a judicial
function. In this accord, courts may either adopt the DAR
formula or proceed with its own application for as long as the
factors listed in Section 17 of RA 6657 have been duly
considered.47
In keeping with these considerations, the Court finds the CA's
valuation - which made use of the DAR formula - as reflective
of the factors set forth in Section 17 of RA 6657. Records
disclose that the CA's computation, as adopted from the LBP's
own computation, is based on: (a) actual production data; (b)
the appropriate industry selling prices of the products from the
Philippine Coconut Authority and the Bureau of Agricultural
Statistics of Sorsogon; and (c) the actual uses of the property.
Likewise, the (a) income from the coconut fruit-bearing trees,
as well as the unirrigated riceland, (b) cumulative cost of the
non-fruit-bearing trees; and (c) market value of the cogonal
land have been duly considered. The Court observes that the
holistic data gathered therefrom adequately consider the
factors set forth in Section 17 of RA 6657, as well as the DAR
formula. As such, the CA's computation, which was derived
from the same, must be sustained. Lest it be misunderstood,
the ascertainment of just compensation on the basis of the
landholdings' nature, location, and market value, as well as the
volume and value of the produce is valid and accords with
Section 17 of RA 665748 and the DAR formula, as in this case.
On the contrary, the Court finds the RTC's valuation to be
improper, as it contradicts the definition of "market value" as
crafted by established jurisprudence on expropriation.
To elucidate, in determining the amount of just compensation
for the subject lands, the RTC applied the Income Productivity
Approach which approximated the income for the remaining
productive life of the crops therein, without considering the
fortuitous events and plant diseases, and with the expectation
that they would be compensated by developments which could
be made by the property owner.49 The Court has repeatedly
ruled that the constitutional limitation of just compensation is
considered to be the sum equivalent of the market value of the
property, which is, in turn, defined as 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, fixed
at the time of the actual taking by the government.50 In this
accord, therefore, the Court cannot sustain the formula used
by the RTC which was "based on the principle
of anticipation which implies that the value of a property is
dependent on the potential net benefit that may be derived
from its ownership."51 Clearly, this approach, which is largely
characterized by the element of futurity, is inconsistent with
the idea of valuing the expropriated property at the time of
the taking.
Furthermore, the Court also observes that the Income
Productivity Approach, as applied by the RTC, adopts an
investor's point of view which is actually off-tangent with the
governmental purpose behind the acquisition of agricultural
lands. On this score, case law states that agricultural lands are
not acquired for investment purposes but for redistribution
to landless farmers in order to lift their economic status52 by
enabling them to own directly or collectively the lands they
till or to receive a just share of the fruits thereof.53 In this
regard, farmer-beneficiaries are not given those lands so they
can live there but so that they can till them. Since they
generally live on a hand-to-mouth existence, their source of
repaying the just compensation is but derived out of their
income from their cultivation of the land. Hence, in order to
be just, the compensation for the land must be what the
farmer-beneficiaries can reasonably afford to pay based on
what the land can produce.54 It would therefore be highly
inequitable that in the 30-year allowable period55 to pay the
annual amortizations for the lands, farmer-beneficiaries
would be required to pay for the same income they expect to
earn therefrom on top of the computed market value of the
landholdings. Such could not have been the intent of the
State's agrarian reform program. In fine, the Court cannot
sustain the RTC's application of the Income Productivity
Approach used as one of its bases in arriving at its decreed
valuation. Not only is the same aversive to the jurisprudential
concept of "market value," but it also deviates from the
factors laid down in Section 17 of RA 6657 and thus, remains
legally baseless and unfounded.
On the issue of interests, suffice it to state that the just
compensation due to the landowners for their expropriated
property is treated as an effective forbearance on the part of
the State.56 The rationale therefor, as enunciated in the case
of Apo Fruits Corporation v. LBP,57 is to compensate the
landowners for the income they would have made had they
been properly compensated for their properties at the time
of the taking. In other words, the award of 12% interests is
imposed in the nature of damages for the delay in the
payment of the full just compensation award.58
In the present case, the LBP had already made the
corresponding deposit of their offered valuation in the
amount of P1,237,850.00 in cash and in bonds prior to the
DAR's possession of the property.59 This amount is lower than
the just compensation awarded and, hence, in view of the
above-stated principle, the payment of interests remains in
order insofar as the unpaid balance is concerned.
Anent the time of accrual, the interests should be computed
from the time of the taking of the subject lands. This is based
on the principle that interest "runs as a matter of law and
follows from the right of the landowner to be placed in as
good position as money can accomplish, as of the date of the
taking."60
With respect to the rate of interests, the Court observes that
from the time of the taking up until June 30, 2013, the interest
must be pegged at the rate of 12% p.a. pursuant to Section
261 of Central Bank Circular No. 905, series of 1982, which was
the prevailing rule on interest rates during such period. From
July 1, 2013 onwards and until full payment, the interest rate
should then be pegged at the rate of 6% p.a. pursuant to
Bangko Sentral ng Pilipinas Circular No. 799, series of
2013,62 which accordingly amended the old 12% p.a. interest
rate.
WHEREFORE, the petitions are DENIED. Accordingly, the
Decision dated November 15, 2005 and the Resolution dated
April 19, 2006 of the Court of Appeals in CA-G.R. SP Nos. 86066
and 86167 are hereby AFFIRMED with
the MODIFICATION imposing interests on the unpaid balance
of the just compensation due to the Heirs of Alfredo Hababag,
Sr. at the rate of 12% p.a., reckoned from the taking of the
expropriated property until June 30, 2013, and thereafter, at 6%
p.a. until full payment.
SO ORDERED.chanroblesvirtuallawlibrary
[ G.R. No. 196140, January 27, 2016 ]
NATIONAL POWER CORPORATION, PETITIONER, VS. ELIZABETH
MANALASTAS AND BEA CASTILLO, RESPONDENTS.
DECISION
PERALTA, J.:
This resolves the Petition for Review on Certiorari under Rule
45 of the Rules of Court, praying that the Decision[1] of the
Court of Appeals (CA) promulgated on September 9, 2010, and
its Resolution[2] dated March 14, 2011, denying petitioner's
Motion for Partial Reconsideration be reversed and set aside.
Sometime in 1977 to 1978, petitioner, a government-owned
and controlled corporation involved in the development of
hydro-electric generation of power and production of
electricity, and the construction, operation and maintenance of
power plants, transmission lines, power stations and
substations, among others, constructed a 230 KV transmission
line for the Naga-Tiwi line and a 69 KV transmission line for the
Naga-Tinambac line on respondents' parcel of land covered by
TCT No. 26263, affecting an area of 26,919 square meters.
Petitioner entered said land without the knowledge or consent
of respondents, without properly initiating expropriation
proceedings, and without any compensation to
respondents-landowners. Because of said transmission lines,
respondents alleged that they could no longer use their land as
part of a subdivision project as originally intended, which
ultimately caused financial loss to their family. Thus, in July
2000, respondents (plaintiffs below, who were then joined by
their mother, Celedonia, and brother, Mariano; Celedonia and
Mariano are no longer impleaded as parties in this petition as
the CA Decision has attained finality as to them)[3] filed a
complaint against petitioner and its officers with the Regional
Trial Court of Naga City (RTC). Respondents demanded the
removal of the power lines and its accessories and payment
of damages, or in the alternative, payment of the fair market
value of the affected areas totalling 26,000 square meters of
respondents' land at P800.00 per square meter.
On November 17, 2006, the RTC issued a Decision, the
dispositive portion of which reads as follows:
WHEREFORE, defendant NAPOCOR is hereby ordered to:
1) Pay plaintiffs the amount of PESOS: NINETY-TWO MILLION
EIGHT HUNDRED TWENTY-SEVEN THOUSAND and THREE
HUNDRED FIFTY-ONE (P92,827,351.00), by way of just
compensation, broken down as follows:
a) For (he plaintiffs Elizabeth Manalastas and Bea Castillo:
P32,033,610.00 - Value of the land
P53,816,461.00 - Interest at 6% per annum for 28 years
P85,850,071.00 - Total
b) For the plaintiffs Celedonia Mariano and Enrico Mariano:
P1,000,200.00 - Value of the land
P5,887,080.00 - Interest at 6% per annum for 9 years
P6,977,280.00 - Total
2) Pay Attorney's fees to plaintiffs in the amount of Pesos:
One Hundred Thousand (P100,000.00).
With cost against plaintiff (sic) NAPOCOR.
SO ORDERED.[4]
On appeal to the CA, herein petitioner argued that the RTC
erred in factoring the devaluation of the peso in the
computation of the fair market value of respondents' land. In
a Decision dated September 9, 2010, the CA affirmed the RTC
judgment with modification, reducing the award to Celedonia
and Enrico Mariano (respondents' co-plaintiffs below) to
P1,678,908.00. The CA ruled that petitioner could no longer
assail the valuation that petitioner itself recommended, the
same being a judicial admission. Moreover, the CA pointed
out that taking an inconsistent position on appeal cannot be
allowed. Petitioner's motion for reconsideration was denied
in a Resolution dated March 14, 2010.
Hence, the present petition where petitioner alleges as
follows:
I.
ESTOPPEL IS INOPERATIVE AGAINST THE GOVERNMENT; THE
INFLATION FACTOR SHOULD NOT BE INCLUDED IN THE
COMPUTATION OF JUST COMPENSATION
II.
THE DETERMINATION OF JUST COMPENSATION IS A JUDICIAL
FUNCTION. COURTS ARE THEREFORE NOT BOUND TO UPHOLD
A PARTY'S FORMULATION OF JUST COMPENSATION; [and]
III.
THE AWARD OF EIGHTY-FIVE MILLION EIGHT HUNDRED FIFTY
THOUSAND AND SEVENTY-ONE PESOS (Php85,850,071.00)
WILL UNJUSTLY ENRICH THE RESPONDENTS.[5]
The Court finds the petition meritorious.
The bone of contention in this case is the inclusion of the
inflation rate of the Philippine Peso in determining the just
compensation due to respondents. Petitioners maintain that
such inclusion of the inflation rate in arriving at the value of
just compensation has no legal basis, and it was a palpable
mistake on the part of its representatives and counsel below to
make a recommendation factoring in said inflation rate in the
computation of just compensation. None of the parties contest
the finding that the fair market value of the property at the
time of taking was Php 170.00 per square meter.
It should be noted that in Secretary of the Department of Public
Works and Highways, et al. v. Spouses Heracleo and Ramona
Tecson,[6] the Court stressed that "just compensation is the
value of the property at the time of taking that is controlling for
purposes of compensation." In a motion for reconsideration of
the Decision in said case, the landowners argued that it would
be unjust if the amount that will be awarded to them today will
be based on the value of the property at the time of actual
taking. In its Resolution dated April 21, 2015, the Court fully
explained that:
x x x the State is not obliged to pay premium to the properly
owner for appropriating the latter's property; it is only bound
to make good the loss sustained by the landowner, with due
consideration of the circumstances availing at the time the
property was taken. More, the concept of just compensation
does not imply fairness to the property owner alone.
Compensation must also be just to the public, which ultimately
bears the cost of expropriation.
Notwithstanding the foregoing, we recognize that the owner's
loss is not only his property but also its income-generating
potential. Thus, when properly is taken, full compensation of
its value must immediately be paid to achieve a fair exchange
for the property and the potential income lost. Accordingly, in
Apo, we held that the rationale for imposing the interest is to
compensate the petitioners for the income they would have
made had they been proprely compensated for their
properties at the time of the taking. Thus:
We recognized in Republic v. Court of Appeals the need for
prompt payment and the necessity of the payment of interest
to compensate for any delay in the payment of compensation
for property already taken. We ruled in this ease that:
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, i[f]
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 interest/sj 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 interest/sj 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. [Emphasis
supplied]
In other words, the just compensation due to the
landowners amounts to an effective forbearance on the part
of the State—a proper subject of interest computed from
the time the property was taken until the full amount of just
compensation is paid—in order to eradicate the issue of the
constant variability of the value of the currency over time. In
the Court's own words:
The Bulacan trial court, in its 1979 decision, was correct in
imposing interests on the zonal value of the property to he
computed from the time petitioner instituted condemnation
proceedings and "look" the property in September 1969. 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 fl net nation and inflation
of the value of the currency over time x x x.[7]
The foregoing clearly dictates that valuation of the land for
purposes of determining just compensation should not
include the inflation rate of the Philippine Peso because the
delay in payment of the price of expropriated land is
sufficiently recompensed through payment of interest on the
market value of the land as of the time of taking from the
landowner.
Moreover, the fact that it was petitioner's own counsel below
that recommended the inclusion of the inflation rate in the
determination of just compensation should not be taken
against petitioner. Alter all, it is ultimately the courts'
mandated duty to adjudge whether the parties' submissions
are correct. It is the courts, not the litigants, who decide on the
proper interpretation or application of the law and, thus, only
the courts may determine the rightful compensation in
accordance with the law and evidence presented by the parties.
It is incongruous for the court below to uphold a proposition
merely because it was recommended by a party, despite the
same being erroneous. Thus, in Secretary of Finance v. Oro
Maura Shipping Lines,[8] the Court emphasized, thus:
x x x Assuming further x x x that the Collector of the Port of
Manila similarly erred, we reiterate the legal principle that
estoppel generally finds no application against the State when
it acts to rectify mistakes, errors, irregularities, or illegal acts, of
its officials and agents, irrespective of rank. This ensures
efficient conduct of the affairs of the State without any
hindrance on the part of the government from irnplementing
laws and regulations, despite prior mistakes or even illegal acts
of its agents shackling government operations and allowing
others, some by malice, to profit from official error or
misbehavior. The rule holds true even if the rectification
prejudices parties who had meanwhile received benefits.[9]
Such important principle was reiterated in the more
recent Republic v. Bacas,[10] where the Court stated that even
"[g]ranting that the persons representing the government were
negligent, the doctrine of estoppel cannot be taken against the
Republic."[11] Again, in National Power Corporation v.
Samar,[12] the Court admonished the trial court to disregard
even the panel of commissioners' recommended valuation of
the land if such valuation is not the relevant value at the time
the NPC took possession of the property.[13] The cases cited by
the lower court to justify its ruling that petitioner is bound by
the recommendation made by its counsel before the trial court,
are all inapplicable to the present case as said cases do not
involve agencies or instrumentalities of the State.
Lastly, in addition to the award for interests, Article 2229 of the
Civil Code provides that "[e]xemplary or corrective damages
are imposed by way of example or correction for the public
good" and Article 2208 of the same code states that attorney's
fees may be awarded by the court in cases where such would
be just and equitable. As held in the Resolution dated April 21,
2015 in Secretary of the Department of Public Works and
Highways, et al. v. Spouses Heracleo and Ramona
Tecson,[14] additional compensation in the form of exemplary
damages and attorney's fees should likewise be awarded as a
consequence of the government agency's illegal occupation of
the owner's property for a very long time, resulting in
pecuniary loss to the owner. Indeed, government agencies
should be admonished and made to realize that its negligence
and inaction in failing to commence the proper expropriation
proceedings before taking private property, as provided for by
law, cannot be countenanced by the Court.

To recapitulate, the formula for determination of just
compensation to landowners does not include the factor for
inflation rate, as inflation is properly accounted for through
payment of interest on the amount due to the landowner,
and through the award of exemplary damages and attorney's
fees in cases where there was irregularity in the taking of
property.
WHEREFORE, the petition is GRANTED. The Decision of the
Court of Appeals in CA-G.R. CV No. 89366 is MODIFIED, such
that petitioner is adjudged liable to PAY JUST
COMPENSATION to respondents at the rate of Php 170.00
per square meter, subject to interest at the rate of twelve
percent (12%) per annum from the time of taking in 1978 up
to June 30, 2013 and, thereafter, six percent (6%) per annum
from July 1, 2013 until full satisfaction, pursuant to Bangko
Sentral ng Pilipinas -Monetary Board Circular No. 799, Series
of 2013 and applicable jurisprudence. Petitioner is,
likewise, ORDERED to PAY respondents exemplary damages
in the amount of Php500,000.00 and attorney's fees in the
amount of Php200,000.00.
SO ORDERED.
LEONEN, J.:
Article III, Section 9[1] of the Constitution provides a
substantive guarantee that private property that is taken by
the state for public use should be paid for with just
compensation. If the state does not agree with the property
owner on a price, the state, through the competent
government agency, should file the proper expropriation
action under Rule 67 of the Revised Rules of Court.
In case of a taking without the proper expropriation action
filed, the property owner may file its own action to question
the propriety of the taking or to compel the payment of just
compensation. Among these inverse condemnation actions is
a complaint for payment of just compensation and damages.
When an inverse condemnation is filed, the provisions for the
appointment of commissioners under Rule 32—not Sections
5, 6, 7, or 8 of Rule 67 of the Rules of Court—will be followed.
This resolves a Petition for Review on Certiorari[2] filed by the
National Power Corporation to nullify and set aside the
November 21, 2005 Decision[3] and May 3, 2006
Resolution[4] of the Court of Appeals in CA-G.R. CV No. 76313.
The assailed Decision affirmed with modification the
judgment of Branch 31 of the Regional Trial Court, Calbayog
City, which, in turn, directed the National Power Corporation
to pay the value of the 4,352-square-meter portion of
Spouses Margarito and Tarcinia Asoque's (Spouses Asoque)
land utilized in its Leyte-Luzon Transmission Line
Project.[5] The assailed Resolution denied the National Power
Corporation's Motion for Reconsideration.[6]
Spouses Asoque are the registered owners of a parcel of
coconut land located in Barangay Bugtong, Calbayog City. The
parcel of land has an area of 59,099 square meters and is
covered by Original Certificate of Title No. 2376.[7]
Sometime in November 1995, the National Power Corporation
entered the Spouses Asoque's land to install transmission lines
for its 350 KV Leyte-Luzon HVDC Power Transmission Line
Project.[8] The National Power Corporation utilized 4,352
square meters for the project.[9]
Spouses Asoque allege that beforehand, they were made to
understand that the National Power Corporation would pay
them the value of the portion of the land used and all
improvements that would be destroyed for the National Power
Corporation's project.[10] Spouses Asoque incurred actual
damages as a result of the National Power Corporation's
cutting off some coconut trees and other fruit- and
non-fruit-bearing plants during the construction.[11] They were
also prohibited from introducing on the 4,352-square-meter
area any improvement that could rise by a few meters from the
ground.[12]
Upon Spouses Asoque's demand for just compensation, the
National Power Corporation only paid for the improvements
destroyed and refused to pay for the actual value of the
4,352-square-meter area utilized for the project.[13] The
National Power Corporation claimed that it was only liable to
pay for right of way at 10% of the market value under Section
3-A of Republic Act No. 6395,[14] as amended.[15]
On September 20, 1999, Spouses Asoque filed before the
Regional Trial Court of Calbayog City a Complaint[16] for
payment of just compensation and damages against the
National Power Corporation. The case was docketed as Civil
Case No. 737 and was raffled to Branch 31.
In its Answer[17] dated February 7, 2000, the National Power
Corporation denied Spouses Asoque's claims that it had illegally
utilized their property. It alleged that it entered the property
with Spouses Asoque's consent, as shown by the
acknowledgment receipt[18] for P9,897.00 as payment for
damaged improvements and waiver of claims to improvements
damaged.[19] By virtue of the acknowledgement receipt and the
waiver, the National Power Corporation claimed that there was
no more need for it to institute an expropriation proceeding.[20]
When Civil Case No. 737 was called for pre-trial on May 8, 2000,
the case was ordered dismissed by the trial court due to the
non-appearance of both parties and their counsel.[21] However,
the case was reinstated after Spouses Asoque's counsel
explained to the trial court the reason why he arrived late. The
pre-trial of the case was reset to May 24, 2000.[22]
On May 24, 2000, the trial court, noting the absence of the
National Power Corporation and its counsel, allowed Spouses
Asoque to present their evidence ex parte before a
court-appointed Commissioner. It simultaneously dismissed
the National Power Corporation's counterclaim.[23]
On June 6, 2000, the trial court denied National Power
Corporation's Urgent Manifestation and Motion to Reset
Pre-trial, finding it to have been filed out of time and also
moot and academic.[24] National Power Corporation's
subsequent Motion for Reconsideration was denied in the
trial court's Order dated June 21, 2000.[25]
"On June 22, July 24[,] and August 28, 2000, Spouses Asoque
presented evidence ex parte before Atty. Ferdinand S. Arpon,
Branch Clerk of Court, who was appointed Commissioner by
the trial court."[26] Spouses Asoque then filed their Formal
Offer of Documentary Exhibits[27] on September 6, 2000, to
which the National Power Corporation filed its
Comment/Objection[28] on October 13, 2000, citing the
inadmissibility of the exhibits presented.[29]
On July 20, 2001, the Commissioner submitted to the trial
court his Commissioner's Report dated July 19, 2001.[30] He
recommended that the fair market value of the land be
placed at P800.00 per square meter and that the schedule of
prevailing market value of the trees, plants, and crops
prepared by the Office of the Provincial Agriculturist,
Catbalogan, Samar be adopted to compute the amount of
compensation for the damaged improvements.[31]
On August 21, 2001, the trial court received the National
Power Corporation's Comment/Opposition to Commissioner's
Report, to which Spouses Asoque filed their Rejoinder on
September 20, 2001.[32]
The National Power Corporation and Spouses Asoque filed
their respective memoranda on February 5, 2002 and April 1,
2002. Thereafter, the case was deemed submitted for
decision.[33]
On June 25, 2002, the Regional Trial Court rendered the
Decision[34] in favor of Spouses Asoque and ordered the
National Power Corporation to pay them the amounts of:
P3,481,600.00 as just compensation of the land
containing an area of 4,352 square meters at P800.00 per
(1)
square meter, with legal interest from November 1995
until fully paid; and
P158,369.00 as compensation for the improvements on
(2) the land, with interest at the legal rate from November
1995 until fully paid.
Aggrieved, the National Power Corporation filed an appeal
before the Court of Appeals.[35]
The Court of Appeals denied[36] the National Power
Corporation's appeal in its Decision dated November 21, 2005.
It affirmed with modification the Regional Trial Court Decision
by deleting the amount of P158,369.00 as compensation for
the damaged improvements for lack of legal and factual
basis.[37]
The Court of Appeals found no impropriety on the part of the
Regional Trial Court in allowing Spouses Asoque to present
their evidence ex parte and in appointing the Branch Clerk of
Court as Commissioner to receive Spouses Asoque's evidence
ex parte.[38] It also found no irregularity in the trial court's
adoption of the Commissioner's report/recommendation,
which was found to be comprehensive and supported by
evidence.[39]
Rejecting the National Power Corporation's stance that only an
easement of right of way was acquired at 10% of the market
value under Section 3-A of Republic Act No. 6395, the Court of
Appeals ruled that the determination of just compensation is a
judicial function and cannot be diminished by Republic Act No.
6395, as amended.[40]
Finally, the Court of Appeals found that Spouses Asoque have
already been properly compensated for the damaged
improvements per disbursement vouchers in the total amount
of P17,133.50, and Spouses Asoque failed to present
competent proof that they were entitled to an additional
award of actual damages.[41]
The National Power Corporation moved for reconsideration,
but the Motion was denied in the Resolution dated May 3,
2006.
Hence, petitioner National Power Corporation filed the present
Petition, assigning the following errors purportedly committed
by the appellate court:
[1]
The appellate court erred in affirming respondents'
presentation of evidence ex parte[;]
[2]
The appellate court erred in affirming the trial court's
appointment of a commissioner, and validating the
proceedings he conducted[;]
[3]
The appellate court erred in affirming the trial court's
directive to petitioner NPC to compensate respondents for the
value of the land notwithstanding that only an easement
thereon was acquired[;] [and]
[4]
Assuming that petitioner NPC is liable to pay just
compensation for the subject property and the improvements
thereon, the trial court nonetheless erred in the determination
of the values thereof.[42]
This Court outright denied the Petition for lack of a verified
statement of material date of filing of the Motion for
Reconsideration of the assailed judgment under Rule 45,
Sections 4(b) and 5, in relation to Rule 56, Section
5(d).[43] However, on petitioner's Motion for
Reconsideration,[44] this Court reinstated[45] the Petition and
required respondents to comment.
Respondents Spouses Margarito and Tarcinia Asoque filed
their Comments[46] on October 25, 2006, and petitioner filed
its Reply[47] on April 17, 2007. Pursuant to this Court's
Resolution[48] dated June 25, 2007, petitioner and
respondents filed their respective memoranda on December
14, 2007[49] and November 29, 2007.[50]
On February 11, 2008, this Court noted the memoranda of
the parties.[51]
Petitioner contends that it was not given a reasonable
opportunity to be heard, which is the essence of due
process.[52] Only a very short notice was given to its counsel
to attend the pre-trial, even though petitioner's lawyers were
based in Cebu.[53] In contrast, respondents' counsel held
office in Catbalogan City, where the trial court sits.[54]
The May 24, 2000 pre-trial setting was allegedly too close to
May 8, 2000, the date of the Order that set it, as to afford
petitioner a reasonable opportunity to make arrangements
for it.[55] The May 8, 2000 Order, which was served by
registered mail, was received by petitioner only on May 22,
2000, just two (2) days before the pre-trial on May 24,
2000.[56] By then, both of petitioner's lawyers were out of
town (one was in Manila and the other was in San Isidro,
Northern Samar) on official business.[57] Petitioner contends
that despite having been informed through the Urgent
Manifestation and Motion to Reset Pre-trial dated May 24,
2000 and the Motion for Reconsideration dated June 8, 2000
of the reason for the failure of petitioner's counsel to appear
at the May 24, 2000 pre-trial, the trial court refused to
reconsider its default order; thus, the trial court deprived
petitioner of its right to due process.[58]
Petitioner further argues that the trial court's appointment of
a commissioner and the latter's appraisal of the fair market
value of the property and the improvements made were
defective and ultra vires.[59] It contends that Rule 18, Section
2(f) of the Rules of Court does not give the Commissioner
such authority but merely allows him to assist in defining the
issues to be resolved during the trial.[60]Petitioner also points
out that the May 8, 2000 Order merely designated a
commissioner to receive respondents' evidence and nothing
more.[61] There is likewise no showing that the Commissioner
took an oath before performing his function, as required by
the Rules.[62]
As to the third and fourth assigned errors, petitioner claims
that it is liable to pay only an easement fee under Section 3-A
of its Charter, which is computed as 10% of the fair market
value of the affected portion of respondents' land based on
the valuation (P3.31 per square meter) specified in Tax
Declaration No. 96-03023-00104.[63] Petitioner contends that
the three (3) expropriation cases decided in 1997 by other
branches of the Regional Trial Court of Catbalogan City, which
were cited by the trial court in adopting the Commissioner's
recommendation, were not reliable bases for determining the
fair market value of respondents' property. This is because
the parcels of land in the three (3) expropriation cases were
located in other barangays of Calbayog City and there is no
showing that the decisions therein have attained
finality.[64] Finally, petitioner submits that the City Assessor's
valuation of the subject property appearing in Tax Declaration
No. 96-03023-00104 should prevail over that determined by
the Commissioner—the Branch Clerk of Court—who does not
have the expertise or competence to conduct property
appraisals as required under Rule 67, Section 5.[65]
Respondents aver that the trial court was justified in allowing
them to present evidence ex parte because (1) petitioner and
its counsel failed to appear at the pre-trial on May 24, 2000;
and (2) petitioner's Urgent Manifestation and Motion to
postpone the pre-trial setting on May 24, 2000 was filed
late.[66] They add that due process was satisfied in the court a
quo as petitioner was afforded the fair and reasonable
opportunity to defend its side and to move for the
reconsideration of the trial court ruling.[67]
As to the appointment of the Branch Clerk of Court as
Commissioner, respondents aver that this was proper and
sanctioned by the Rules; that the Commissioner's preliminary
determination of just compensation was merely
recommendatory and did not make the ex parte proceedings
invalid; and that the final determination of the amount of just
compensation still rests on the trial judge.[68]
Lastly, respondents contend that Section 3-A of Republic Act
No. 6395 cannot defeat the trial court's determination of the
just compensation of their property; that the determination of
just compensation is a judicial function; and that it has been
ruled in previous cases that the acquisition of right-of-way
easement is a taking under the power of eminent domain and
the owner is entitled to the money equivalent of the property
expropriated.[69]
The issues for resolution are:
First, whether petitioner was deprived of due process when
respondents were allowed to present evidence ex parte;
Second, whether the appraisal of the property was valid and
the court-appointed Commissioner exceeded his authority
when he conducted an appraisal of the property and
recommended a valuation for just compensation;
Third, whether petitioner should be made to pay simple
easement fee or full compensation for the land traversed by its
transmission lines; and
Lastly, whether the trial court erred in its determination of the
amount of just compensation to be paid to respondents.
The Petition lacks merit.
I

The Regional Trial Court did not err in allowing respondents
to present their evidence ex parte. The action of the trial
court is expressly allowed under Rule 18, Section 5 of the
1997 Rules of Civil Procedure. Section 5 provides that if it is
the defendant who fails to appear, then the plaintiff may be
allowed "to present his evidence ex parte and the court to
render judgment on the basis thereof." Petitioner's stance
that it was deprived of due process because it was not given
the reasonable opportunity to attend the second pre-trial
setting is likewise untenable.
Petitioner and its counsel were absent during the first
pre-trial setting on May 8, 2000. Respondents' counsel
attended, although he was late. Had petitioner and its
counsel appeared on the first setting, they would have been
reasonably notified then and there of the second pre-trial
resetting on May 24, 2000 and would have had the
opportunity to ask for a later date. Nonetheless, petitioner's
counsel should have tried to inquire from the court the next
schedule of the pre-trial.
Attendance by the party and its counsel during a pre-trial
conference is mandatory as expressly stated under Rule 18,
Section 4 of the 1997 Rules of Civil Procedure.[70] Petitioner
alleges that it filed a motion for postponement of the first
pre-trial setting. This notwithstanding, it was still its duty to
appear at the pre-trial first set on May 8, 2000. A motion for
postponement should never be presumed to be granted.[71]
Petitioner does not refute respondents' argument that
its Urgent Manifestation and Motion, although dated May 24,
2000, was filed only one (1) day after the scheduled pre-trial
sought to be postponed, on May 25, 2000. The trial court was,
therefore, justified in denying petitioner's motion for
postponement for having been filed out of time. A motion for
postponement should be filed on or before the lapse of the
day sought to be postponed.[72] In any case, "the matter of
postponement of a hearing is addressed to the sound
discretion of the court [and] unless there is a grave abuse of
discretion in the exercise thereof the same should not be
disturbed on review."[73]
Petitioner's counsel received the Regional Trial Court Order
resetting the pre-trial to May 24, 2000 on May 22, 2000.
Assuming its counsel was unable to appear at the second
pre-trial setting, petitioner could and should have sent a
representative on May 24, 2000 to ask for postponement of
the second pre-trial setting. During the second pre-trial
setting, it was not only petitioner's counsel who failed to
appear, but petitioner as well.
Under the circumstances, petitioner cannot claim that it was
denied due process. "Parties are presumed to have known
the governing rules and the consequences for the violation of
such rules."[74] Moreover, the essence of due process is an
opportunity to be heard. Petitioner was given that
opportunity. Yet, it failed to appear at the two (2) pre-trial
settings. A pre-trial cannot be taken for granted for it serves a
vital objective: the simplification and expedition of the trial, if
not its dispensation. Non-appearance of a party may only be
excused for a valid cause. We see none in this case.
In Air Philippines Corporation v. International Business Aviation
Services Philippines, Inc.,[75] the petitioner and its counsel did
not appear during the scheduled pre-trials and did not file a
pre-trial brief even after filing a motion to extend the date for
filing. Hence, the respondent was allowed to adduce its
evidence ex parte. The petitioner moved for reconsideration,
but the motion was denied. After the ex parte presentation of
the respondent's evidence, the trial court rendered a judgment
in favor of the respondent. The petitioner moved for new trial
arguing that it was deprived of its day in court due to the gross
negligence of its counsel, but the trial court denied the motion.
Affirming the trial court, this Count ruled that the petitioner
and its counsel's lapses showed a plain disregard of the duty
imposed by law. Ruling that there was no denial of due process,
this Court held:
"The essence of due process is to be found in the reasonable
opportunity to be heard and submit any evidence one may
have in support of one's defense." Where the opportunity to
be heard, either through verbal arguments or pleadings, is
accorded, and the party can "present its side" or defend its
"interest in due course," "there is no denial of procedural due
process." Petitioner has been given its chance, and after being
declared in default, judgment has not been automatically
"rendered in favor of the non-defaulting party." Rather,
judgment was made only after carefully weighing the evidence
presented. Substantive and adjective laws do complement
each other "in the just and speedy resolution of the dispute
between the parties."[76] (Citations omitted)
Similarly, petitioner in this case was not deprived of its day in
court. Petitioner was able to file a Motion for Reconsideration,
participate in further proceedings, and was allowed to submit
its objections to respondents' evidence and to the
Commissioner's recommendation before the trial court
rendered judgment. It must, therefore, bear the consequences
of its lapses.
II
On the second issue, we likewise find petitioner's arguments
untenable.
The procedure of designating the clerk of court as
commissioner to receive and report evidence to the court is
likewise sanctioned by Rule 32, Sections 2 and 3 of the 1997
Rules of Civil Procedure. Section 3 of the same Rule, speaking
of the authority that may be granted to a Commissioner,
provides:
RULE 32
Trial by Commissioner

....
SEC. 3. Order of reference; powers of the commissioner. —
When a reference is made, the clerk shall forthwith furnish
the commissioner with a copy of the order of reference. The
order may specify or limit the powers of the commissioner,
and may direct him to report only upon particular issues, or
to do or perform particular acts, or to receive and report
evidence only, and may fix the date for beginning and closing
the hearings and for the filing of his report. Subject to the
specifications and limitations stated in the order, the
commissioner has and shall exercise the power to regulate
the proceedings in every hearing before him and to do all acts
and take all measures necessary or proper for the efficient
performance of his duties under the order. He may issue
subpoenas and subpoenas duces tecum, swear witnesses, and
unless otherwise provided in the order of reference, he may
rule upon the admissibility of evidence. The trial or hearing
before him shall proceed in all respects as it would if held
before the court.
Furthermore, after the hearing before the Commissioner, the
Commissioner must file a written report, which may contain
his or her factual findings and conclusions of law:
RULE 32
Trial by Commissioner
....
SEC. 9. Report of commissioner. - Upon the completion of the
trial or hearing or proceeding before the commissioner, he
shall file with the court his report in writing upon the matters
submitted to him by the order of reference. When his powers
are not specified or limited, he shall set forth his findings of
fact and conclusions of law in his report. He shall attach
thereto all exhibits, affidavits, depositions, papers and the
transcript, if any, of the testimonial evidence presented
before him.
With respect to the proceedings in the court a quo, the Court
of Appeals observed that:
The report of the commissioner shows clearly that he
received and evaluated [respondents'] evidence which were
adduced ex parte. His preliminary determination of the just
compensation of the property [in] issue would not necessarily
render invalid the ex parteproceedings conducted by him.
The valuations suggested by the commissioner as just
compensation for [respondents'] land that was utilized by
[petitioner] were merely recommendatory. The final
determination of just compensation was left to the court a
quo as it rests within the exclusive domain of the latter.
Simply stated, the court a quo was still at liberty to reject or
adopt the recommendations of the
commissioner.[77] (Emphasis in the original)
Hence, absent any express limitation in the order of reference,
Branch Clerk of Court Arty. Ferdinand S. Arpon, as the
court-appointed Commissioner, may make factual findings and
recommendations on the valuation of the property. Indeed, the
Commissioner's recommendation could have been necessarily
rejected had it been an ultra vires act.
Besides, the proceedings before the Regional Trial Court were
not for expropriation—for which petitioner itself claims that
there is no need—but were for recovery of just compensation
and damages initiated by respondents. Hence, Rule 67, Section
5 on the ascertainment of the just compensation to be paid
was no longer applicable. A trial before commissioners, for
instance, was dispensable.[78]
In Republic of the Philippines v. Court of Appeals,[79] the
National Irrigation Administration took possession of the
property without the benefit of expropriation proceedings. The
property owner subsequently filed a case for recovery of
possession or its value and damages. This Court held that Rule
67 presupposes a prior filing of a complaint by the expropriator
for eminent domain with the appropriate court. If no such
complaint is filed, the expropriator is considered to have
violated procedural requirements and, hence, waived the usual
procedure prescribed in Rule 67. This includes the appointment
of commissioners to ascertain just compensation, thus:
NIA contends that it was deprived of due process when the trial
court determined the compensation due to respondent
without the assistance of commissioners. NIA refers to the
procedure found in Section 5, Rule 67 of the 1964 Rules of
Court applicable at the time[.]
....
Rule 67, however, presupposes that NIA exercised its right of
eminent domain by filing a complaint for that purpose before
the appropriate court. Judicial determination of the propriety
of the exercise of the power of eminent domain and the just
compensation for the subject property then follows. The
proceedings give the property owner the chance to object to
the taking of his property and to present evidence on its value
and on the consequential damage to other parts of his
property.
Respondent was not given these opportunities, as NIA did not
observe the procedure in Rule 67. Worse, NIA refused to pay
respondent just compensation. The seizure of ones property
without payment, even though intended for public use, is a
taking without due process of law and a denial of the equal
protection of the laws. NIA, not respondent, transgressed the
requirements of due process.
When a government agency itself violates procedural
requirements, it waives the usual procedure prescribed in Rule
67. This Court ruled in the recent case of National Power
Corporation (NPC) v. Court of Appeals, to wit:
We have held that the usual procedure in the determination
of just compensation is waived when the government itself
initially violates procedural requirements. NPC's taking of
Pobre's property without filing the appropriate expropriation
proceedings and paying him just compensation is a
transgression of procedural due process.
Like in NPC, the present case is not an action for
expropriation. NIA never filed expropriation proceedings
although it had ample opportunity to do so. Respondents'
complaint is an ordinary civil action for the recovery of
possession of the Property or its value, and damages. Under
these circumstances, a trial before commissioners is not
necessary.[80] (Emphasis in the original, citations omitted)
We hold that the non-appointment of three (3)
Commissioners in the court a quo does not render infirm the
entire proceedings. Neither do we find improper the trial
court's appointment of the Branch Clerk of Court as
Commissioner to receive and report on respondents'
evidence. The trial court is not bound by the Commissioner's
recommended valuation of the property. It still has the
discretion on whether to adopt the Commissioner's
recommendation or to make its own independent valuation
as gathered from the evidence reported by the Commissioner.
III
Petitioner is liable to pay respondents just compensation and
not merely an easement fee on the basis that its acquisition
of a right-of-way easement over the portion of respondents'
land was a taking under the power of eminent domain.
While expropriation normally involves a taking of title to and
possession of the property, an easement of right of way on a
private property can be considered a taking under eminent
domain under certain conditions. In Republic v. PLDT:[81]
Normally, of course, the power of eminent domain results in
the taking or appropriation of title to, and possession of, the
expropriated property; but no cogent reason appears why the
said power may not be availed of to impose only a burden
upon the owner of condemned property, without loss of title
and possession. It is unquestionable that real property may,
through expropriation, be subjected to an easement of right
of way.[82]
There is taking in the context of the state's power of eminent
domain when the following elements are present:
(1) The expropriator enters a private property;
The entrance into the private property is indefinite or
(2)
permanent;
There is color of legal authority in the entry into the
(3)
property;
(4) The property is devoted to public use or purpose; and
The use of property for public use removed from the
(5)
owner all beneficial enjoyment of the property.[83]
A right-of-way easement or burden becomes a "taking" under
eminent domain when there is material impairment of the
value of the property or prevention of the ordinary uses of the
property for an indefinite period.[84] The intrusion into the
property must be so immediate and direct as to subtract from
the owner's full enjoyment of the property and to limit his or
her exploitation of it.
In Republic v. Andaya,[85] the enforcement by the Republic of its
legal easement on Andaya's property for concrete levees and
floodwalls would render the remaining property unusable and
uninhabitable. This Court held that there was a taking of the
remaining area of Andaya's property:
We are, however, unable to sustain the Republic's argument
that it is not liable to pay consequential damages if in enforcing
the legal easement on Andaya's property, the remaining area
would be rendered unusable and uninhabitable. "Taking," in
the exercise of the power of eminent domain, occurs not only
when the government actually deprives or dispossesses the
property owner of his property or of its ordinary use, but also
when there is a practical destruction or material impairment of
the value of his property. Using this standard, there was
undoubtedly a taking of the remaining area of Andaya's
property. True, no burden was imposed thereon and Andaya
still retained title and possession of the property. But, as
correctly observed by the Board and affirmed by the courts a
quo, the nature and the effect of the Jloodwalls would deprive
Andaya of the normal use of the remaining areas. It would
prevent ingress and egress to the property and turn it into a
catch basin for the floodwaters coming from the Agusan
River.[86] (Emphasis supplied, citations omitted)
National Power Corporation v. Heirs of Sangkay[87] held that the
National Power Corporation's surreptitious construction of a
tunnel underneath the respondents' land adversely affected
the respondent's rights and interests. This is because the
National Power Corporation's subterranean intervention
prevented the respondents from introducing any
developments on the surface and from disposing of the land or
any portion of it. Hence, there was a taking of the land as to
entitle the owners to just compensation:
We agree with both the RTC and the CA that there was a full
taking on the part of NPC, notwithstanding that the owners
were not completely and actually dispossessed. It is settled
that the taking of private property for public use, to be
compensable, need not be an actual physical taking or
appropriation. Indeed, the expropriator's action may be short
of acquisition of title, physical possession, or occupancy but
may still amount to a taking. Compensable taking includes
destruction, restriction, diminution, or interruption of the
rights of ownership or of the common and necessary use and
enjoyment of the property in a lawful manner, lessening or
destroying its value. It is neither necessary that the owner be
wholly deprived of the use of his property, nor material
whether the property is removed from the possession of the
owner, or in any respect changes hands.[88] (Citations
omitted)
The right-of-way easement resulting in a limitation on
property rights over the land traversed by transmission lines
also falls within the ambit of the term "expropriation."[89]
In National Power Corporation v. Spouses Gutierrez,[90] the
petitioner argued that it should only be made to pay
easement fees instead of the full market value of the land
traversed by its transmission lines. In striking down the
petitioner's argument and ruling that the property owners
were entitled to the full market value of the land in question,
the Court ruled that:
The trial court's observation shared by the appellate court
show that "x x x While it is true that plaintiff [is] only after a
right-of-way easement, it nevertheless perpetually deprives
defendants of their proprietary rights as manifested by the
imposition by the plaintiff upon defendants that below said
transmission lines no plant higher than three (3) meters is
allowed. Furthermore, because of the high-tension current
conveyed through said transmission lines, danger to life and
limbs that may be caused beneath said wires cannot
altogether be discounted, and to cap it all, plaintiff only pays
the fee to defendants once, while the latter shall continually-
pay the taxes due on said affected portion of their property."
The foregoing facts considered, the acquisition of the
right-of-way easement falls within the purview of the power
of eminent domain. Such conclusion finds support in similar
cases of easement of right-of-way where the Supreme Court
sustained the award of just compensation for private
property condemned for public use[.]
....
In the case at bar, the easement of right-of-way is definitely a
taking under the power of eminent domain. Considering the
nature and effect of the installation of the 230 KV
Mexico-Limay transmission lines, the limitation imposed by
NPC against the use of the land for an indefinite period
deprives private respondents of its ordinary use.[91]
In National Power Corporation v. Judge Paderanga,[92] despite
the National Power Corporation's protestation that the
traversed land could still be used for agricultural purposes,
subject only to its easement, this Court nevertheless held that
the right-of-way easement was a taking under the power of
eminent domain:
From the Commissioners Report chronicling the following
findings:
....
IMPROVEMENTS AFFECTED
Per ocular inspection made on lot own[ed] by PETRONA O.
DILAO, et al. traversed by a transmission line of NPC and with
my verification as to the number of improvements, the
following trees had been damaged.
1. 55 coco trees productive
2. 10 mango trees productive
3. 30 cacao trees productive
4. 110 bananas
5. 400 ipil-ipil trees
....
it cannot be gainsaid that NPCs complaint merely involves a
simple case of mere passage of transmission lines over Dilao, et
al.'s property. Aside from the actual damage done to the
property traversed by the transmission lines, the agricultural
and economic activity normally undertaken on the entire
property is unquestionably restricted and perpetually
hampered as the environment is made dangerous to the
occupants' life and limb.[93]
In National Power Corporation v. Tiangco:[94]
While the power of eminent domain results in the taking or
appropriation of title to, and possession of, the expropriated
property, no cogent reason appears why said power may not
be availed of to impose only a burden upon the owner of the
condemned property, without loss of title and possession.
However, if the easement is intended to perpetually or
indefinitely deprive the owner of his proprietary rights through
the imposition of conditions that affect the ordinary use, free
enjoyment and disposal of the property or through restrictions
and limitations that are inconsistent with the exercise of the
attributes of ownership, or when the introduction of structures
or objects which, by their nature, create or increase the
probability of injury, death upon or destruction of life and
property found on the land is necessary, then the owner should
be compensated for the monetary equivalent of the land, in
accordance with our ruling in NPC v. Manubay Agro-Industrial:
....
The evidence suggests that NPCs transmission line project that
traverses the respondents' property is perpetual, or at least
indefinite, in nature. Moreover, not to be discounted is the fact
that the high-tension current to be conveyed through said
transmission lines evidently poses a danger to life and limb;
injury, death or destruction to life and property within the
vicinity. As the Court held in NPC v. Chiong, it is not improper to
assume that NPC will erect structures for its transmission
lines within the property. What is sought to be expropriated
in this case is, at its longest extent, 326.34 meters, and
through it may be built several structures, not simply
one[.][95] (Emphasis supplied, citations omitted)
Hence, due to the nature of the easement, which will deprive
the normal use of the land for an indefinite period and
expose the property owners' lives and limbs to danger, just
compensation must be based on the full market value of the
affected property.[96]
Section 3(a) of Republic Act No. 6395, as amended, states
that only 10% of the market value of the property is due the
owner of the property subject to a right-of-way easement.
However, this rule is not binding on the Court. Well-settled is
the rule that the determination of just compensation for
property taken in expropriation is a judicial
prerogative.[97] Such discretion cannot be curtailed by
legislation.
In Export Processing Zone Authority v. Dulay:[98]
The determination of "just compensation" in eminent domain
cases is a judicial function. The executive department or the
legislature may make the initial determinations but when a
party claims a violation of the guarantee in the Bill of Rights
that private property may not be taken for public use without
just compensation, no statute, decree, or executive order can
mandate that its own determination shall prevail over the
court's findings. Much less can the courts be precluded from
looking into the "just-ness" of the decreed
compensation.[99] (Emphasis supplied)
Therefore, the Regional Trial Court was correct when it
adjudged the National Power Corporation liable to pay the
value of the 4,352-square-meter portion of respondents' land
that was used for its transmission line project.
IV
As regards the amount of just compensation, factual issues
pertaining to the valuation of the expropriated property are
generally beyond the pale of review under a Rule 45
petition.[100] Factual findings of the trial and appellate courts
will not be disturbed by this Court unless they are grounded
entirely on speculations, surmises, or conjectures, among
others,[101] which do not obtain in this case.
Just compensation has been defined as the "fair and fall
equivalent of the loss."[102] In National Power Corporation v.
YCLA Sugar Development Corporation:[103]
The word "just" is used to intensify the meaning of the word
"compensation" and to convey thereby the idea that the
equivalent to be rendered for the property to be taken shall
be real, substantial, full and ample. The constitutional
limitation of "just compensation" is considered to be a sum
equivalent to the market value of the property, broadly defined
as 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, fixed at the time of the actual taking by
the government.[104]
The value and character of the land at the time it was taken by
government are the criteria for determining just
compensation.[105] "All the facts as to the condition of the
property and its surroundings, as well as its improvements and
capabilities, must thus be considered."[106]
Some factors that have been previously considered by the
courts were acquisition cost, current value of like properties, its
actual or potential uses, its size, shape, and location, and the
tax declarations on the property.[107] In this regard, the
standards enumerated in statutes such as Section 5[108] of
Republic Act No. 8974[109] are merely recommendatory, and
courts are not bound to consider all of them.[110]
In this case, the Branch Clerk of Court as Commissioner
reported that an inquiry with the Register of Deeds, Calbayog
City involving transfer of realties from January 1998 to
December 2000 showed that no transaction involved a parcel
of land located at Barangay Bugtong or its adjacent barangays
of Tinaplacan and Caglanipao Sur.[111] On the other hand, he
found Exhibits F and G not sufficient to prove respondents'
claim that their land was worth P1,000.00 per square meter as
the properties in Exhibits F and G were located several
kilometers away from respondents' land and were of a
different classification.[112]
Furthermore, the Branch Clerk of Court as Commissioner stated
that one high-ranking personnel of the City Assessor's Office of
Calbayog observed that the market value of respondents' land
in the Tax Declaration is a very low appraisal.[113] As such, when
he made the recommendation, he considered other factors
such as the accessibility of the property, availability of basic
services in the area, land valuation trend in the City of Calbayog
(which was somewhere between P600.00 and P3,000.00 per
square meter),[114] and interviews with some landowners of the
adjacent lots stating that they would not sell their lands lower
than P500.00 per square meter.[115]
The Regional Trial Court found the amount recommended by
the Commissioner as just compensation for the property to be
reasonable, thus:
[T]he Court finds the amount recommended by the
commissioner as just compensation of the property
expropriated by defendant to be reasonable and fairly based
on the evidence adduced by plaintiff. Exhibits "F" and series,
"G" and series, and "H" and series show the comparative value
of the lands in Western Samar. The Court takes note that in the
three cases of expropriation involving lands in Catbalogan,
Samar, the National Power Corporation was adjudged to pay
the value of the properties from Php2,000.00 to Php2,200.00
per square meter, and these were cases decided in 1997.
Likewise, this Court takes cognizance of the fact that the
commissioner may avail or consider certain factors in
determining the fair market value of the property apart from
the preferred documentary evidences. Thus, the factors
taken into account by the commissioner in arriving at the
recommended fair market value of the property at Php800.00
per square meter, aside from the evidence available, were
valid criteria or gauge in the determination of the just
compensation of the subject property.[116]
The determination of just compensation being a judicial
function, we find no compelling reason to disturb the
valuation set by the Regional Trial Court and approved by the
Court of Appeals. It has not been sufficiently shown to be
grossly exorbitant or otherwise unjustified.[117]
WHEREFORE, the Petition is DENIED. The November 21, 2005
Decision of the Court of Appeals in CA-G.R CV No. 76313
is AFFIRMED. Petitioner National Power Corporation
is ORDERED to pay respondents Spouses Margarito and
Tarcinia Asoque the amount of P3,481,600.00 as just
compensation for the 4,352-square-meter property, with
legal interest at 6% per annum from November 1995 until
fully paid. Upon petitioner's payment of the full amount,
respondents are ORDERED to execute a Deed of Conveyance
of the 4,352-square-meter property in favor of petitioner.
SO ORDERED.
G.R. No. 185638
HONORABLE ALVIN P. VERGARA, IN HIS CAPACITY AS CITY
MAYOR OF CABANATUAN CITY AND SANGGUNIANG
PANLUNGSOD OF CABANATUAN CITY, Petitioners
vs.
LOURDES MELENCIO S GRECIA, REPRESENTED BY RENATO
GRECIA, AND SANDRA MELENCIO IN REPRESENTATION OF
MA. PAZ SAGADO VDA. DE MELENCIO, CONCHITA
MELENCIO, CRISTINA MELENCIO AND LEONARDO MELENCIO,
Respondents
DECISION
REYES, J.:
Before this Cpurt is a petition for review on certiorari1 seking
to annul and set aside the Decision2 dated August 8, 2008 and
the Resolution3 dated December 5, 2008 of the Court of
Appeals(CA) in CA-G.R. SP No. 97851. The CA affirmed with
modification the Order4 dated November 8, 2006 of the
Regional Trial Court (RTC) of Cabanatuan City, Branch 86, and
the Order5 dated January 30, 2007 issued by the RTC of
Cabanatuan City, Branch 30, in Civil Case No. 5078, and
reduced the amount to be paid by Honorable Julius Cesar
Vergara (Mayor Vergara), in his capacity as Mayor of
Cabanatuan City, and the Sangguniang Panlungsod of
Cabanatuan (Sanggunian) (petitioners) from Ten Million Pesos
(Pl0,000,000.00) to Two Million Five Hundred Fifty-Four
Thousand Three Hundred Thirty-Five Pesos (₱2,554,335.00)
representing 15o/o of the total value of the property of
Lourdes Melencio S. Grecia (Lourdes), represented by Renato
Grecia, and Sandra Melencio, in representation of Ma. Paz,
Conchita, Cristina and Leonardo, all surnamed Melencio
(respondents).
The Facts
The subject of this petition is a parcel of land covered by
Transfer Certificate of Title No. T-101793, with an area of 7,420
square meters, more or less, situated in Barangay Barrera,
Cabanatuan City, and registered under the name of the
respondents.6
The record showed that sometime in 1989, the subject land
was taken by the Sanggunian for road-right-of-way and road
widening projects. Despite the taking of the subject land and
the completion of the road widening projects, the Sanggunian
failed to tender the just compensation to the respondents.
Upon the request of Lourdes, the Sanggunian created an
appraisal committee, composed of City Assessor of Cabanatuan
Lorenza L. Esguerra as Chairman, with City Treasurer Bernardo
C. Pineda and City Engineer Mac Arthur C. Yap as members, to
determine the proper amount of just compensation to be paid
by the Sanggunian for the subject land. The Appraisal
Committee then issued Resolution No. 20-S-2001 7
recommending the payment of P2,295.00 per sq mas just
compensation.8
Thereafter, the Sanggunian issued Resolution No.
148-20009 authorizing Mayor Vergara to negotiate, acquire,
purchase and accept properties needed by the Sanggunian for
its project.
Pursuant to the said resolution, on December 4, 2001, Mayor
Vergara executed a Memorandum of Agreement10(MOA) with
Lourdes as Attorney-in-fact of the respondents, whereby
the Sanggunian bound itself to pay the respondents the
amount of Pl 7,028,900.00 in 12 years at the rate of
₱1,419,075.00 every year starting the first quarter of 2002 as
payment of the subject land.
More than four years had lapsed after the signing of the MOA
but no payment was ever made by the petitioners to the
respondents despite the fact that the subject land was already
taken by the petitioners and was being used by the
constituents of the City of Cabanatuan.11
Despite personal and written demands,12 the petitioners still
failed to pay the respondents the just and fair compensation of
the subject land.13 In a letter14 dated November 18, 2005,
Mayor Vergara said that the Sangguniandenied the ratification
of the MOA per its Resolution No. 129-20015 on the ground of
fiscal restraint or deficit of the Sanggunian. In view of this
resolution, Mayor Vergara claimed that the said MOA could
neither be enforced, nor bind the Sanggunian.
Aggrieved, on December 29, 2005, the respondents filed a
petition for mandamus16 before the RTC of Cabanatuan City,
which was raffled to Branch 86.
On September 18, 2006, R TC-Branch 86 rendered its
Order17 in favor of the respondents, thus:
WHEREFORE, let a writ of mandamus be issued compelling
[the petitioners] to pay the [respondents] the following sums
of money:
1. Php17,028,900.00 as just compensation of their.property
taken by the Sanggunian plus accrued legal interest thereon
from the filing of this case until fully paid;
2. Php50,000.00 as attorney's fees; and
3. Php50,000.00 as actual expenses and damages.
SO ORDERED. 18
The petitioners immediately filed their appeal19 before the CA,
docketed as CA-G.R. SP No. 98397. However, before the
records of appeal were submitted to the CA, the respondents
filed a Motion for Partial Execution20 before the RTC-Branch
86.21
On November 8, 2006, the RTC-Branch 86 issued an
Order22 granting the respondents' motion and thereby
ordering the petitioners to pay the sum of ₱10,000,000.00 as
partial execution of the decision. The petitioners then filed a
motion for inhibition and a motion for reconsideration.23
On November 17, 2006, RTC-Branch 86 issued an Order
granting the motion for inhibition which subsequently led to
the assignment by raffle of the case to RTC-Branch 30.24
On January 30, 2007, RTC-Branch 30 issued an
Order25 denying the petitioners' motions.
On February 7, 2007, a writ of execution was issued.
Accordingly, a Notice· of Garnishment was issued to the
manager of United Coconut Planters Bank of Cabanatuan
City. 26
Aggrieved, the petitioners filed a Petition for Certiorari with
urgent Motion for the Issuance of a Temporary Restraining
Order and Writ of Preliminary Injunction27 before the CA.
In a Resolution28 dated February 26, 2007, the CA granted the
petitioners’ prayer for an injunctive relief and enjoined the
RTC-Branch 30 Presiding Judge and Sheriff from enforcing the
said writ of execution and orders.
On appeal, the CA, in its Decision29 dated August 8, 2008,
affirmed the trial court's order but modified the same by
reducing the amount to be paid by the petitioners from
₱10,000,000.00 to ₱2,554,335.00 representing 15% of the
value of the property as provided by law.30 Undeterred, the
petitioners filed a motion for reconsideration31 but it was
denied. 32 Hence, this petition.
For their part, the petitioners argue that the subject land is a
subdivision road which is beyond the commerce of man as
provided for in Section 50 of Presidential Decree (P.D.) No.
1529.33 Thus, the said contract entered into by Mayor Vergara
with the respondents is null and void, and there is no obligation
on the part of the petitioners to pay the respondents. 34
The Issue
The main issue before this Court is whether there is propriety
in the partial execution of the judgment pending appeal.
Ruling of the Court
The petition is bereft of merit.
To begin with, the Court notes that there has already been a
final judgment in CA-G.R. SP No. 98397. The CA Third. Division
issued a Resolution35 dated March 14, 2008 dismissing the
petitioners' appeal on the ground of lack of jurisdiction stating
that the issues that were raised are pure questions of law. The
petitioners filed a motion for reconsideration but it was also
denied.36 hence, the case was elevated to this Court which was
docketed as G.R. No. 186211. However, in a Resolution dated
June 22, 2011, the Court Second Division likewise denied the
petition.
It is uncontroverted that the subject land was taken by the
petitioners without paying any compensation to the
respondents that is too long to be ignored. The petitioners,
however, argue that they are not obliged to pay the
respondents because the subject land is burdened by
encumbrances37 which showed that it is a subdivision lot which
is beyond the commerce of man. Thus, the MOA between the
petitioners and the respondents is null and void. To support
their argument, they invoked Section 50 of P.D. No.
1529.38 Essentially, the sole issue for resolution is whether the
petitioners are liable for just compensation. Hence, the
pertinent point of inquiry is whether the subject land of the
respondents is beyond the commerce of man as provided for in
Section 50 of P.D. No. 1529.
Meanwhile, a look at the petition in CA-G.R. SP No. 98397, now
G.R. No. 186211, would show that the petitioners interposed
the same issues in their appeal: (1) the subject land is not
within the commerce of men, hence, the MOA is void; (2) the
petitioners are under estoppel to deny its liability under the
MOA; (3) Mayor Vergara has no authority to sign the MOA
prior to its approval by the Sanggunian; and (4) there is no
basis for the lower court to award attorney's fees and
damages.39
Since these issues did not merit the attention of the Court in
G.R. No. 1 86211, the Court will now put all these issues to rest.
ONE. The alleged encumbrance in the respondents’ title ad
interpretation and application of Section 5040 of P.D. No. 1529
are no longer novel since this Court had already made a
definitive ruling on the mater in the case of Republic of the
Philippines v. Ortigas and Company Limited Partnership,41
where the Court ruled that therein petitioners' reliance on
Section 50 of P.D. No. 1529 is erroneous since it contemplates
roads and streets in a subdivided property, not public
thoroughfares built on a private property that was taken from
an owner for public purpose. A public thoroughfare is not a
subdivision road or street.
Section 50 contemplates roads and streets in a subdivided
property, not public thoroughfares built on a private property
that was taken from an owner for public purpose. A public
thoroughfare is not a subdivision road or street.
xxxx
Delineated roads and streets, whether part of a subdivision or
segregated for public use, remain private and will remain as
such until conveyed to the ·government by donation or
through expropriation proceedings. An owner may not be
forced to donate his or her property even if it has been
delineated as road lots because that would partake of an
illegal taking. He or she may even choose to retain said
properties. If he or she chooses to retain them, however, he
or she also retains the burden of maintaining them and
paying for real estate taxes.
xxxx
x x x [W]hen the road or street was delineated upon
government request and taken for public use, as in this case,
the government has no choice but to compensate the owner
for his or her sacrifice, lest it violates the constitutional
provision against taking without just . compensation, thus:
Section 9. Private property shall not be taken for public use
without just compensation.
As with all laws, Section 50 of the Property Registration
Decree cannot be interpreted to mean a license on the part
of the government to disregard constitutionally guaranteed
rights. 42 (Citations omitted)
Apparently, the subject land is within the commerce of man
and is therefore a proper subject of an expropriation
proceeding. Pursuant to this, the MOA between the
petitioners and the respondents is valid and binding. Thus,
there is no need to discuss the matter of the petitioners'
estoppel or the authority of Mayor Vergara to sign the MOA.
TWO. The petitioners are liable to pay the full market value of
the subject land.
Without a doubt, the respondents are entitled to the
payment of just compensation. The right to recover just
compensation is enshrined in the Bill of Rights; Section 9,
Article III of the 1987 Constitution states that no private
property shall be taken for public use without just
compensation.
There is no question raised concerning the right of the
petitioners here to acquire the subject land under the power
of eminent domain. But the exercise of such right is not
unlimited, for two mandatory requirements should underlie
the Government's exercise of the power of eminent domain
namely: (1) that it is for a particular public purpose; and (2)
that just compensation be paid to the property owner. These
requirements partake the nature of implied conditions that
should be complied with to enable the condemnor to keep the
property expropriated. 43
Undisputedly, in this case, the purpose of the condemnation is
public but there was no payment of just compensation to the
respondents. The petitioners should have first instituted
eminent domain proceedings and deposit with the authorized
government depositary an amount equivalent to the assessed
value of the subject land before it occupied the same. Due to
the petitioners' omission, the respondents were constrained to
file inverse condemnation proceedings to demand the payment
of just compensation before the trial court. From 1989 until the
present, the respondents were deprived of just compensation,
while the petitioners continuously burdened their property.
The determination of just compensation in eminent domain
cases is a judicial function and any valuation for just
compensation laid down in the statutes may serve only as a
guiding principle or one of the factors in determining just
compensation but it may not substitute the court's own
judgment as to what amount should be awarded and how to
arrive at such amount.44
An evaluation of the circumstances of this case and the parties'
arguments showed that the petitioners acted oppressively in
their position to deny the respondents of the just
compensation that the immediate taking of their property
entailed. The Court cannot allow the petitioners to profit from
its failure to comply with the mandate of the law. To
adequately compensate the respondents from the decades of
burden on their land, the petitioners should be made to pay
the full value of Pl 7,028,900.00 representing the just
compensation of the subject land at the time of the filing of the
instant complaint when the respondents made a judicial
demand for just compensation.
THREE. The undue delay of the petitioners to pay the just
compensation brought about the basis for the grant of
interest.1âwphi1
Apart from the requirement that compensation for
expropriated land must be fair and reasonable, compensation,
to be "just", must also be made without delay. Without prompt
payment, compensation cannot be considered "just" if the
property is immediately taken as the property owner suffers
the immediate deprivation of both his land and its fruits or
income. 45
Obviously, the delay in payment of just compensation occurred
and cannot at all be disputed. The undisputed fact is that the
respondents were deprived of their lands since 1989 and have
not received a single centavo to date. The petitioners should
not be allowed to exculpate itself from this delay and should
suffer all the consequences the delay has caused.
The Court has already dealt with cases involving similar
background and issues, that is, the government took control
and possession of the subject properties for public use without
initiating expropriation proceedings and without payment of
just compensation, and the landowners failed for a long period
of time to question such government act and later instituted
actions to recover just compensation with damages.
Here, the records showed that the respondents fully
cooperated with the petitioners' road widening program, and
allowed their landholdings to be taken by the petitioners
without any questions. The present case therefore is not one
where substantial conflict arose on the issue of whether
expropriation is proper; the respondents voluntarily
submitted to expropriation and surrendered their
landholdings, and never contested the valuation that was
made. Apparently, had the petitioners paid the just
compensation on the subject land, there would have been no
need for this case. But, as borne by the records, the
petitioners refused to pay, telling instead that the subject
land is beyond the commerce of man. Hence, the
respondents have no choice but to file actions to claim what
is justly due to them. Consequently, interest must be granted
to the respondents.
The rationale for imposing the interest is to compensate the
petitioners for the income they would have made had thel
been properly compensated for their properties at the time
of the taking. 46 There is a need for prompt payment and the
necessity of the payment of interest to compensate for any
delay in the payment of compensation for property already
taken. 47 Settled is the rule that the award of interest is
imposed in the nature of damages for delay in payment
which in effect makes the obligation on the part of the
government one of forbearance. This is to ensure prompt
payment of the value of the land and limit the opportunity
loss of the owner that can drag from days to decades. 48
Based on a judicious review of the records and application of
jurisprudential rulings, legal interest shall be pegged at the
rate of twelve percent (12%) per annum, reckoned from the
time of the filing of the complaint for expropriation, which in
this case is on December 29, 2005, the date when the
respondents filed a petition for mandamus to compel the
petitioners to comply with the MOA. Thereafter, or beginning
July 1, 2013, until fully paid, just compensation shall earn
interest at the new legal rate of six percent (6%) per annum,
conformably with the modification on the rules respecting
interest rates introduced by the Bangko Sentral ng Pilipinas
Monetary Board Circular No. 799, Series of 2013.49 To clarify,
this incremental interest is not granted on the computed just
compensation; rather, it is a penalty imposed for damages
incurred by the landowner due to the delay in its payment.50
FOURTH. The award of exemplary damages and attorney's
fees is warranted.
The taking of the respondents' subject land without the
benefit of expropriation proceedings and without payment of
just compensation, clearly resulted in an "expropriate now,
pay later" situation, which the Court abhors. It has been more
than two decades since the petitioners took the subject land
without a timely expropriation proceeding and without the
petitioners exerting efforts to negotiate with the
respondents.
This irregularity will not proceed without any consequence.
The Court had repeatedly ruled that the failure of the
government to initiate an expropriation proceeding to the
prejudice of the landowner may be corrected with the
awarding of exemplary damages, attorney's fees and costs of
litigation.51
Evidently, the petitioners' oppressive taking of the subject land
for a very long period of time surely resulted in pecuniary loss
to the respondents. The petitioners cannot now be heard to
claim that they were simply protecting their interests when
they stubbornly defended their erroneous arguments before
the courts. The more truthful statement is that they adopted a
grossly unreasonable position and the unwanted developments
that followed, particularly the attendant delay, should be
directly chargeable to them.
Indeed, the respondents were deprived of their subject land for
road widening programs, were uncompensated, and were left
without any expropriation proceeding undertaken. Hence, in
order to serve as a deterrent to the State for failing to institute
such proceedings within the prescribed period under the law,
the award of exemplary damages and attorney's fees is in
order.
In sum, the respondents have waited too long before the
petitioners fully pay the amount of the just compensation due
them. Since the trial court had already made the proper
determination of the amount of just compensation in
accordance with law and to forestall any further delay in the
resolution of this case, it is but proper to order the petitioners
to pay in full the amount of ₱17,028,900.00 representing the
just compensation of the subject land. Furthermore, the
respondents are entitled to· an additional grant of interest,
exemplary damages and attorney's fees. In accordance with
existing jurisprudence, the award of exemplary damages in the
amount of ₱200,000.00 is proper, as well as attorney's fees
equivalent to one percent (1%) of the total amount due.
WHEREFORE, the petition is DENIED. The Decision dated ,
August 8, 2008 and the Resolution dated December 5, 2008 of
the Court of Appeals in CA-G.R. SP No. 97851
are AFFIRMED with MODIFICATION. Honorable Alvin P.
Vergara, in his capacity as Mayor of Cabanatuan City, and the
Sangguniang Panlungsod of Cabanatuan are hereby ordered
to PAY Lourdes Melencio S. Grecia, represented by Renato
Grecia, and Sandra Melencio, in representation of Ma. Paz
Salgado V da. De Melencio, Conchita Melencio, Cristina
Melencio and Leonardo Melencio the amount of Seventeen
Million Twenty-Eight Thousand Nine Hundred Pesos
(₱17,028,900.00) representing the just compensation of the
subject land, exemplary damages in the amount of Two
Hundred Thousand Pesos (₱200,000.00), and attorney's fees
equivalent to one percent (1%) of the amount due. Lastly, legal
interest shall be pegged at the rate of twelve percent (2%) per
annum, from the time of judicial demand on December 29,
2005. Thereafter, or beginning July 1, 2013, until fully paid, just
compensation shall earn interest at the new legal rate of six
percent (6%) per annum.
SO ORDERED.

[ G.R. No. 211731, December 07, 2016 ]
NATIONAL POWER CORPORATION, PETITIONER, V. SPOUSES
CONCHITA MALAPASCUA-MALIJAN AND LAZARO MALIJAN,
RESPONDENTS.
[G.R. No. 211818, December 7, 2016]
CONCHITA MALAPASCUA-MALIJAN AND HEIRS OF LAZARO
MALIJAN, PETITIONERS, V. NATIONAL POWER CORPORATION,
RESPONDENT.
DECISION
PERALTA, J.:
This is to resolve the Petition for Review on Certiorari under
Rule 45 of the Rules of Court dated May 11, 2014 of Conchita
Malapascua-Malijan and Heirs of Lazaro Malijan in G.R. No.
211818 which seeks to set aside the Decision[1] dated June 13,
2012 of the Court of Appeals (CA) and its subsequent
Resolution dated March 12, 2014 reversing the
Decision[2] dated February 22, 2008 of the Regional Trial
Court (RTC), Branch 6, Tanauan City, Batangas in an
expropriation case, and the Petition for Review
on Certiorari under Rule 45 dated April 21, 2014 of National
Power Corporation that seeks the modification of the same
Decision dated June 13, 2012 of the CA.
The facts follow.
National Power Corporation (NAPOCOR) sought to
expropriate a 3,907-square-meter portion of a property
owned by the Spouses Conchita Malapascua-Malijan and
Lazaro Malijan (the Spouses Malijan) located at Barangay San
Felix, Sto. Tomas, Batangas and covered by Tax Declaration
No. 15032. An expropriation case was, therefore, filed with
the RTC, Branch 6 of Tanauan City, Batangas.
The Spouses Malijan did not interpose any objection to the
expropriation of the property, hence, the sole issue that
needed to be resolved was the determination of the just
compensation.
In an Order dated August 22, 2007, the RTC created a Board
of Commissioners that would recommend the amount of just
compensation. In the Commissioner's Report submitted by
the same Board, the recommended price of the property was
P3,500.00 per square meter or a total amount of Thirteen
Million Six Hundred Seventy-Four Thousand Five Hundred
Pesos (P13,674,500.00). Such amount of just compensation
was based on the ocular inspection made on the property;
the local market condition; and the standards set in Section 5
of the Implementing Rules and Regulations (IRR) of Republic
Act (R.A.) No. 8974. In view of the presence and proliferation
of the several commercial and industrial establishments near
the subject property, the Commissioners found it more
prudent and reasonable to appraise the property as
commercial or industrial.
It was also shown in the Commissioner's Report that at present
the property is being used as main access road leading to
NAPOCOR's Mak-ban Geothermal Power Plant.
NAPOCOR opposed the Board's recommendation for being
excessive, unconscionable, exorbitant and without legal basis
and claimed that they entered the subject property in 1972.
Based on the provisions of Section 4, Rule 67 of the Rules of
Court, the just compensation of the property should be based
on the value of the property at the time the taking of the same
or the filing of the complaint, whichever came first, thus:
Rule 67, Section 4. x x x payment of just compensation to be
determined as of the date of the taking of the property or the
filing of the complaint, whichever came first.
According to NAPOCOR, the taking of the property occurred in
1972 whereas the institution of the complaint was made
thirty-four (34) years after, hence, the just compensation
should be based on the value of the property in 1972.
The Spouses Malijan, on the other hand, argued that the
above-cited provision merely applies in situations wherein the
time of the taking coincides with the filing of the complaint and
that since NAPOCOR is claiming the exception provided in
Section 4, Rule 67 of the Rules of Court, it has the burden of
proving its claim that its occupancy and use was the direct
cause of the increase in valuation. The Spouses Malijan claimed
that NAPOCOR has belatedly argued that it entered the
property in 1972 and that such fact was not alleged in the
complaint.
The RTC, on February 22, 2008, rendered its Decision denying
NAPOCOR's plea that the just compensation be based on the
value of the property in 1972, thus:
WHEREFORE, premises considered, judgment is hereby
rendered condemning the 3,907-square-meter portion of the
property of the Spouses Conchita Malapascua-Malijan and
Lazaro Malijan covered by Tax Declaration No. 15032 which is
the subject matter of this case in favor of plaintiff National
Power Corporation and thus ordering the plaintiff to pay the
defendants-owners the amount of PhP3,500.00 per square
meter or a total amount of Thirteen Million Six Hundred
Seventy-Four Thousand Five Hundred Pesos (PhP13,676,500.00)
representing the just compensation of the affected area.
SO ORDERED.
NAPOCOR elevated the case to the CA insisting that it is not
liable for the payment of just compensation in the amount of
P3,500.00 per square meter or a total amount of
P13,676,500.00 pertaining to the affected area of the subject
property; instead, it is only liable for an amount equivalent to
the fair market value of the same property at the time it was
taken in 1972. On June 13, 2012, the CA rendered the assailed
Decision in favor of NAPOCOR, thus:
WHEREFORE, in view of the foregoing, the instant Appeal is
GRANTED. Accordingly, the challenged Decision dated 22
February 2008 is hereby SET ASIDE.
The Regional Trial Court of Tanauan City, Batangas, Branch 6,
is hereby DIRECTED to immediately determine the just
compensation due to appellees Spouses Lazaro and Conchita
Malijan based on the fair market value of the subject
property at the time it was taken in 1972 with legal interest
at the rate of six (6%) percent per annum from the time of
taking until full payment is made.
Appellant National Power Corporation is ORDERED to pay
appellees the amounts of P200,000.00 as exemplary damages
and P100,00.00 as attorney's fees.
SO ORDERED.
Hence, the present petitions. Conchita Malapascua-Malijan
and the heirs of Lazaro Malijan, in their petition, raised the
following arguments:
I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED
UNDER THE LAW IN HOLDING THAT THE SUBJECT PROPERTY
WAS TAKEN IN 1972, AS THE COMPLAINT FOR
EXPROPRIATION ITSELF IS BEREFT OF ANY SUCH ALLEGATION.
ADDITIONALLY, THERE IS NO EVIDENCE ON RECORD THAT
WILL SHOW THAT RESPONDENT HAS COMPLETELY TAKEN
THE PROPERTY UNDER WARRANT OR COLOR OF LEGAL
AUTHORITY SO AS TO OUST THE OWNER OF ALL BENEFICIAL
ENJOYMENT OF THE PROPERTY.
II. THE HONORABLE COURT OF APPEALS GRAVELY ERRED
UNDER THE LAW WHEN IT HELD IN THE QUESTIONED
DECISION THAT JUST COMPENSATION BE BASED IN 1972
WHEN THE SUBJECT PROPERTY WAS ALLEGEDLY TAKEN.
III. THE HONORABLE COURT OF APPEALS GRAVELY ERRED
UNDER THE LAW WHEN IT APPLIED THE CASE OF EUSEBIO V.
LUIS TO JUSTIFY ITS DECISION, SIMPLY BECAUSE, THERE IS NO
SIMILARITY OF THE FACTUAL MILIEU IN THE EUSEBIO CASE
WITH THE INSTANT CASE. ON THE CONTRARY, THE INSTANT
CASE IS MORE IN ALL FOURS WITH THE HEIRS OF MATEO
PINDACAN, ET AL. V. ATO.
NAPOCOR, on the other hand, assigned the following error in
its petition:
THE AWARD OF EXEMPLARY DAMAGES AND ATTORNEY'S
FEES TO RESPONDENT-SPOUSES LAZARO AND CONCHITA
MALIJAN IS WITHOUT ANY FACTUAL AND LEGAL BASIS.
The Rules of Court require that only questions of law should
be raised in petitions filed under Rule 45.[3] This court is not a
trier of facts. It will not entertain questions of fact as the
factual findings of the appellate courts are "final, binding[,] or
conclusive on the parties and upon this [c]ourt"[4] when
supported by substantial evidence.[5] Factual findings of the
appellate courts will not be reviewed nor disturbed on appeal
to this court.[6]
This court's Decision in Cheesman v. Intermediate Appellate
Court[7] distinguished questions of law from questions of fact:
As distinguished from a question of law - which exists "when
the doubt or difference arises as to what the law is on a
certain state of facts" - "there is a question of fact when the
doubt or difference arises as to the truth or the falsehood of
alleged facts;" or when the "query necessarily invites
calibration of the whole evidence considering mainly the
credibility of witnesses, existence and relevancy of specific
surrounding circumstances, their relation to each other and to
the whole and the probabilities of the situation."[8]
Seeking recourse from this Court through a petition for review
on certiorari under Rule 45 bears significantly on the manner
by which this Court shall treat findings of fact and evidentiary
matters. As a general rule, it becomes improper for this court
to consider factual issues: the findings of fact of the trial court,
as affirmed on appeal by the Court of Appeals, are conclusive
on this court. "The reason behind the rule is that [this] Court is
not a trier of facts and it is not its duty to review, evaluate, and
weigh the probative value of the evidence adduced before the
lower courts."[9]
However, these rules do admit exceptions. Over time, the
exceptions to these rules have expanded.[10] At present, there
are 10 recognized exceptions that were first listed in Medina v.
Mayor Asistio, Jr.:[11]
(1) When the conclusion is a finding grounded entirely on
speculation, surmises or conjectures; (2) When the inference
made is manifestly mistaken, absurd or impossible; (3) Where
there is a grave abuse of discretion; (4) When the judgment is
based on a misapprehension of facts; (5) When the findings of
fact are conflicting; (6) When the Court of Appeals, in making
its findings, went beyond the issues of the case and the same is
contrary to the admissions of both appellant and appellee; (7)
The findings of the Court of Appeals are contrary to those of
the trial court; (8) When the findings of fact are conclusions
without citation of specific evidence on which they are based;
(9) When the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the
respondents; and (10) The finding of fact of the Court of
Appeals is premised on the supposed absence of evidence and
is contradicted by the evidence on record.[12]
In this case, the findings of the CA are contrary to those of the
trial court, therefore, there is a need for this Court to finally
settle the issues presented before it.
This Court shall first resolve the petition filed by Conchita
Malapascua-Malijan and the heirs of Lazaro Malijan.
Conchita Malapascua-Malijan, et al., insist that there is no
single evidence on record that would show that NAPOCOR had
completely taken the property in 1972. Thus, they argue that
NAPOCOR is in estoppel to make a belated claim of taking in its
Comment and Opposition to the Commissioner's Report.
Furthermore, they claim that the right of way that NAPOCOR
had been enjoying was only due to the long tolerance on their
part and not by complete dominion by NAPOCOR to the
exclusion of others.
Highly instructive is the case of Secretary of the Department of
Public Works and Highways, et al. v. Spouses Heracleo and
Ramona Tecson[13] where this Court addressed situations in
which the government took control and possession of
properties for public use without initiating expropriation
proceedings and without payment of just compensation,
while the landowners failed for a long period of time to
question such government act and later instituted actions for
recovery of possession with damages. This Court ruled that
just compensation is the value of the property at the time of
taking and that is what is controlling for purposes of
compensation, thus:
Just compensation is "the fair value of the property as
between one who receives, and one who desires to sell, x x x
fixed at the time of the actual taking by the government."
This rule holds true when the property is taken before the
filing of an expropriation suit, and even if it is the property
owner who brings the action for compensation.[14]
The issue in this case is not novel.
In Forfom Development Corporation [Forfom] v. Philippine
National Railways [PNR],[15] PNR entered the property of
Forfom in January 1973 for public use, that is, for railroad
tracks, facilities and appurtenances for use of the Carmona
Commuter Service without initiating expropriation
proceedings.[16] In 1990, Forfom filed a complaint for recovery
of possession of real property and/or damages against PNR.
In Eusebio v. Luis,[17] respondent's parcel of land was taken in
1980 by the City of Pasig and used as a municipal road now
known as A. Sandoval Avenue in Pasig City without the
appropriate expropriation proceedings. In 1994, respondent
demanded payment of the value of the property, but they
could not agree on its valuation prompting respondent to file
a complaint for reconveyance and/or damages against the
city government and the mayor. In Manila International
Airport Authority v. Rodriguez,[18] in the early 1970s,
petitioner implemented expansion programs for its runway
necessitating the acquisition and occupation of some of the
properties surrounding its premises. As to respondent's
property, no expropriation proceedings were
initiated.lawphil In 1997, respondent demanded the payment
of the value of the property, but the demand remained
unheeded prompting him to institute a case for accion
reinvindicatoria with damages against petitioner. In Republic
v. Sarabia,[19] sometime in 1956, the Air Transportation Office
(ATO) took possession and control of a portion of a lot
situated in Aklan, registered in the name of respondent,
without initiating expropriation proceedings. Several
structures were erected thereon including the control tower,
the Kalibo crash fire rescue station, the Kalibo airport
terminal and the headquarters of the PNP Aviation Security
Group. In 1995, several stores and restaurants were
constructed on the remaining portion of the lot. In 1997,
respondent filed a complaint for recovery of possession with
damages against the storeowners where ATO intervened
claiming that the storeowners were its lessees.
The Court in the above-mentioned cases was confronted with
common factual circumstances where the government took
control and possession of the subject properties for public
use without initiating expropriation proceedings and without
payment of just compensation, while the landowners failed
for a long period of time to question such government act
and later instituted actions for recovery of possession with
damages. The Court thus determined the landowners' right to
the payment of just compensation and, more importantly, the
amount of just compensation. The Court has uniformly ruled
that just compensation is the value of the property at the time
of taking that is controlling for purposes of compensation. In
Forfom, the payment of just compensation was reckoned from
the time of taking in 1973; in Eusebio, the Court fixed the just
compensation by determining the value of the property at the
time of taking in 1980; in MIAA, the value of the lot at the time
of taking in 1972 served as basis for the award of
compensation to the owner; and in Republic, the Court was
convinced that the taking occurred in 1956 and was thus the
basis in fixing just compensation. As in said cases, just
compensation due respondents in this case should, therefore,
be fixed not as of the time of payment but at the time of taking,
that is, in 1940.
The reason for the rule has been clearly explained in Republic v.
Lara, et al.,[20] and repeatedly held by the Court in recent cases,
thus:
x x x "The value of the property should be fixed as of the date
when it was taken and not the date of the filing of the
proceedings." For where property is taken ahead of the filing of
the condemnation proceedings, the value thereof may be
enhanced by the public purpose for which it is taken; the entry
by the plaintiff upon the property may have depreciated its
value thereby; or, there may have been a natural increase in
the value of the property from the time it is taken to the time
the complaint is filed, due to general economic conditions. The
owner of private property should be compensated only for
what he actually loses; it is not intended that his compensation
shall extend beyond his loss or injury. And what he loses is only
the actual value of his property at the time it is taken x x x.[21]
Clearly, the need to establish the time of the taking is
necessary in order to accurately determine the amount of just
compensation. NAPOCOR claims that the taking occurred in
1972. The RTC has acknowledged 1972 as the time of the
taking but ruled that the just compensation must be
determined at the time of the filing of the complaint because it
did not deem appropriate that NAPOCOR should be given
undue advantage by declaring that the just compensation be
based on the property's value in 1972. It ruled:
Given the fact that plaintiff entered the subject property in
1972, however, the Court is not convinced that plaintiff
NAPOCOR should be given undue advantage by declaring that
the just compensation of the property be based on its value in
that year. The court wonders why after a period of more than
three decades it is only now that the plaintiff is pursuing the
expropriation of the subject property. The plaintiff has tended
to imply that the property has not yet been taken by the
plaintiff through its allegations in paragraphs 5 and 8 in its
Complaint and its prayer therein to enter and take possession
of the property but it opposes the recommendation made by
the Board of Commissioners contending that the property was
taken in 1972 and thus the just compensation must be based at
that time of the taking.
The inconsistency in the claims of the plaintiff is further
shown by the survey plan attached to the complaint as Annex
"B". It shows that as early as 1980, when the survey plan was
prepared, the plaintiff has really intended to use that portion
of property of the defendant as access road. Although it has
been alleged that the plaintiff has attempted to negotiate
with the defendants on the price of the property (paragraph
7, Complaint), the lapse of time it filed the present complaint
has made the real intention of the plaintiff doubtful. It would
seem, as in this case of NAPOCOR v. CA and Mangondato, G.R.
No. 113194, March 11, 1996, that NAPOCOR has neglected
and/or refused to exercise the power of eminent domain by
letting 34 years to pass before it filed the instant complaint,
and after it has already taken possession and made use of the
defendant's property.
In Heirs of Mateo Pidacan and Romana Eigo v. ATO, G.R. No.
162779, June 15, 2007, it was held that as a rule, the
determination of just compensation in eminent domain cases
is reckoned from the time of taking. It was however said that
the application of the said rule would lead to grave injustice.
In that case it was noted that the Air Transportation Office
has been using the property of therein petitioners since 1948
without having instituted the proper expropriation
proceedings. It was then held that to peg the value of the
property at the time of the taking in 1948, despite the
exponential increase in its value considering the lapse of over
half a century, would be iniquitous. Thus, the Supreme Court
said, "We cannot allow the ATO to conveniently invoke the
right of eminent domain to take advantage of the ridiculously
low value of the property at the time of the taking that it
arbitrarily chooses to the prejudice of the petitioners."
xxxx
Clearly, the plaintiff will be given undue advantage if it will be
declared that the just compensation will be based on the
value of the property in 1972, at the time it entered the
property because as early as that time it could have filed its
complaint for expropriation and then pay the just
compensation. But it chose to file the instant complaint only
after more than thirty years of occupying the land. It would
seem now that if that will always be the case, the NAPOCOR
can conveniently occupy a property, utilize it for public
purpose and then later file a complaint for expropriation and
pay the value of the property at the time of its occupancy.
Following the ruling in the above-cited cases of Heirs of
Mateo Pidacan and Romano Eigo v. ATO and NAPOCOR v.
CA and Mangondato, it would be unfair and unjust to declare
that the just compensation of the subject property be based
on its value in 1972 despite the considerable increase of the
value of the property from the time it was occupied by the
plaintiff up to the time the case for expropriation of the same
was filed.
The CA also acknowledged the findings of the RTC that the
taking happened in 1972, hence, its ruling that the just
compensation must be computed at the time of the taking,
thus:
Evidently, it is thus clear that the court a quo gravely erred in
ruling that "the [appellant] will be given undue advantage if it
will be declared that the just compensation will be based on
the value of the property in 1972 ..." However, We do not close
Our eyes on the court a quo's observation that if it had ruled
for the appellant, the latter "can conveniently occupy a
property, utilize it for public purpose and then later file a
complaint for expropriation and pay the value of the property
at the time of the occupancy. In this view, and in line with the
pronouncement of the Supreme Court in several expropriation
cases, this Court recognizes the damage the appellee has
incurred when the appellant took possession of the subject
property without the benefit of the expropriation proceedings.
Consequently, justice and equity dictate that the appellant be
held liable for damages for taking the appellee's property
without payment of just compensation.
As insisted by Conchita Malapascua-Malijan, et al., it was not
established that the taking happened in 1972. This is, however,
belied by their own admission, as found by the RTC, that the
right-of-way was already in existence for about thirty years,
thus:
x x x They commented that the plaintiff had belatedly argued
that it entered the property in 1972. They pointed out that it
was not alleged in the complaint that the plaintiff entered the
property in 1972. It was also in the latter's comment
/opposition to the commissioner's report that it alleged that
the entry to the property was made on that year and claim that
the just compensation must be based on the value of the
property in that time of entry. Incidentally, the defendant
admitted that the right of way was in existence for about thirty
years now. (Order dated June 22, 2007).
In fact, Conchita Malapascua-Malijan, et al. argued in their
petition that although there was an admission that the
right-of-way was in existence for about thirty years, their
admission refers only to the existence of the right-of-way, but
not the fact of the complete taking. They then proceeded to
discuss that the right-of-way that NAPOCOR was enjoying was
only due to the long tolerance on their part and not by the
complete dominion of NAPOCOR to the exclusion of others.
Such argument is misleading.
It is settled that the taking of private property for public use, to
be compensable, need not be an actual physical taking or
appropriation.[22] Indeed, the expropriator's action may be
short of acquisition of title, physical possession, or occupancy
but may still amount to a taking.[23] Compensable taking
includes destruction, restriction, diminution, or interruption of
the rights of ownership or of the common and necessary use
and enjoyment of the property in a lawful manner, lessening or
destroying its value.[24] It is neither necessary that the owner be
wholly deprived of the use of his property,[25] nor material
whether the property is removed from the possession of the
owner, or in any respect changes hands.[26]
Thus, there exists no reversible error on the part of the CA
when it ruled that just compensation must be computed at the
time of the taking in 1972.
It is noteworthy that the CA, in its Decision dated June 13,
2012, aside from directing the RTC to immediately determine
the just compensation due to the Spouses Malijan based on
the fair market value of the subject property at the time of
the taking in 1972, it also imposed the payment of a legal
interest at the rate of six percent (6%) per annum from the
time of the taking until full payment is made. This is in
accordance with this Court's ruling in Secretary of
the Department of Public Works and highways, et al. v.
Spouses Heracleo and Ramona Tecson[27] which discussed the
proper rate of interest to be applied in similar cases, thus:
On this score, a review of the history of the pertinent laws,
rules and regulations, as well as the issuances of the Central
Bank (CB) or Bangko Sentral ng Pilipinas (BSP) is imperative in
arriving at the proper amount of interest to be awarded
herein.
On May 1, 1916, Act No. 2655[28] took effect prescribing an
interest rate of six percent (6%) or such rate as may be
prescribed by the Central Bank Monetary Board (CB-MB) for
loans or forbearance of money, in the absence of express
stipulation as to such rate of interest, to wit:
Section 1. The rate of interest for the loan or forbearance of
any money goods, or credits and the rate allowed in
judgments, in the absence of express contract as to such rate
of interest, shall be six per centum per annum or such rate as
may be prescribed by the Monetary Board of the Central
Bank of the Philippines for that purpose in accordance with
the authority hereby granted.
Sec. 1-a. The Monetary Board is hereby authorized to
prescribe the maximum rate or rates of interest for the loan
or renewal thereof or the forbearance of any money, goods
or credits, and to change such rate or rates whenever
warranted by prevailing economic and social conditions.
In the exercise of the authority herein granted, the Monetary
Board may prescribe higher maximum rates for loans of low
priority, such as consumer loans or renewals thereof as well
as such loans made by pawnshops finance companies and
other similar credit institutions although the rates prescribed
for these institutions need not necessarily be uniform. The
Monetary Board is also authorized to prescribe different
maximum rate or rates for different types of borrowings,
including deposits and deposit substitutes, or loans of
financial intermediaries.
Under the aforesaid law, any amount of interest paid or
stipulated to be paid in excess of that fixed by law is
considered usurious, therefore unlawful.[29]
On July 29, 1974, the CB-MB, pursuant to the authority
granted to it under the aforequoted provision, issued
Resolution No. 1622. On even date, Circular No. 416 was
issued, implementing MB Resolution No. 1622, increasing the
rate of interest for loans and forbearance of money to twelve
percent (12%) per annum, thus:
By virtue of the authority granted to it under Section 1 of Act
No. 2655, as amended, otherwise known as the "Usury Law,"
the Monetary Board, in its Resolution No. 1622 dated July 29,
1974, has prescribed that the rate of interest for the loan or
forbearance of any money, goods or credits and the rate
allowed in judgments, in the absence of express contract as to
such rate of interest, shall be twelve per cent (12%) per
annum.
The foregoing rate was sustained in CB Circular No.
905[30] which took effect on December 22, 1982, particularly
Section 2 thereof, which states:
Sec. 2. The rate of interest for the loan or forbearance of any
money, goods or credits and the rate allowed in judgments, in
the absence of express contract as to such rate of
interest, shall continue to be twelve per cent (12%) per
annum.
Recently, the BSP Monetary Board (BSP-MB), in its Resolution
No. 796 dated May 16, 2013, approved the amendment of
Section 2 of Circular No. 905, Series of 1982, and accordingly,
issued Circular No. 799, Series of 2013, effective July 1, 2013,
the pertinent portion of which reads:
The Monetary Board, in its Resolution No. 796 dated 16 May
2013, approved the following revisions governing the rate of
interest in the absence of stipulation in loan contracts, thereby
amending Section 2 of Circular No. 905, Series of 1982:
Section 1. The rate of interest for the loan or forbearance of
any money, goods or credits and the rate allowed in
judgments, in the absence of an express contract as to such
rate of interest, shall be six percent (6%) per annum.
Section 2. In view of the above, Subsection X305.1 of the
Manual of Regulations for Banks and Sections 4305Q.1,
4305S.3 and 4303P.1 of the Manual of Regulations for
Non-Bank Financial Institutions are hereby amended
accordingly.
This Circular shall take effect on 01 July 2013.
Accordingly, the prevailing interest rate for loans and
forbearance of money is six percent (6%) per annum, in the
absence of an express contract as to such rate of interest.
In summary, the interest rates applicable to loans and
forbearance of money, in the absence of an express contract as
to such rate of interest, for the period of 1940 to present are as
follows:
Law, Rule and
Date of Interest
Regulations,
Effectivity Rate
BSP Issuances
May 1,
Act No. 2655 6%
1916
CB Circular No. July 29,
12%
416 1974
CB Circular No. December
12%
905 22, 1982
CB Circular No. July 1,
6%
799 2013
It is important to note, however, that interest shall be
compounded at the time judicial demand is made pursuant to
Article 2212[31]of the Civil Code of the Philippines, and
sustained in Eastern Shipping Lines v. Court of
Appeals,[32] then later on in Nacar v. Gallery Frames,[33] save
for the reduction of interest rate to 6% for loans or
forbearance of money, thus:
1. When the obligation is breached, and it consists in the
payment of a sum of money, i.e., a loan or forbearance of
money, the interest due should be that which may have been
stipulated in writing. Furthermore, the interest due shall
itself earn legal interest from the time it is judicially
demanded. In the absence of stipulation, the rate of interest
shall be 6% per annum to be computed from default, i.e.,
from judicial or extrajudicial demand under and subject to
the provisions of Article 1169 of the Civil Code.[34]
Anent the award of exemplary damages and attorney's fees,
subject of NAPOCOR's petition, wherein it seeks their
non-inclusion or deletion in the CA's disposition, this Court
finds the same to be meritorious.
Under Article 2229 of the Civil Code, "[e]xemplary or
corrective damages are imposed, by way of example or
correction for the public good, in addition to the moral,
temperate, liquidated or compensatory damages." As this
court has stated in the past: "Exemplary damages are
designed by our civil law to permit the courts to reshape
behaviour that is socially deleterious in its consequence by
creating negative incentives or deterrents against such
behaviour."[35]
It must be remembered that in this case, it was NAPOCOR
who filed a complaint for eminent domain, albeit after a long
period of time. This means that NAPOCOR does not have any
intention of causing any harm to the landowners nor its
action can be considered as socially deleterious in its
consequence. Furthermore, the cases cited by the CA to
justify the award of exemplary damages and attorney's fees
are inapplicable in this case, as correctly pointed out by
NAPOCOR, through the Office of the Solicitor General, thus:
It must be noted that the Court of Appeals, in holding
petitioner liable for payment of exemplary damages and
attorney's fees to respondents-spouses Malijan, used as basis
this Honorable Court's ruling in Manila International Airport
Authority (MIAA) v. Rodgriguez, as cited in City of Iloilo v.
Contreras-Besna.
In said MIAA case, the landowner instituted an accion
reinvindicatoria with damages against MIAA. This Honorable
Court ordered MIAA to pay exemplary damages and
attorney's fees to the landowner for occupying the latter's
property for more than twenty (20) years without the benefit
of expropriation proceedings and without exerting efforts to
ascertain the ownership of the lot and negotiating with the
owner thereof. According to this Honorable Court, such
omissions on the part of MIAA constitute "wanton and
irresponsible acts which should be suppressed and corrected.
With all due respect, said MIAA case does not squarely apply to
the present case, First, this case is a complaint for eminent
domain initiated by petitioner and not an accion
reinvindicatoria with damages filed by respondens-spouses.
Second, there is no evident showing of bad faith or
arbitrariness on the part of petitioner in occupying a portion of
respondents-spouses' property. As opposed to said MIAA case.,
petitioner herein had been negotiating with
respondents-spouses as early as 1972 for the acquisition of an
easement of right-of-way over a portion of their property. It
was after failing to reach an agreement with respondents
spouses for over thirty (30) years that petitioner was
constrained to file a complaint for eminent domain in 2005.
Definitely, there is no bad faith or wanton conduct that can be
imputed to petitioner that would warrant the imposition of
exemplary damages and attorney's fees inasmuch as petitioner
exerted serious and continuous efforts to negotiate with
respondents-spouses for the taking of their property, but to no
avail.
Neither does the City of Iloilo case apply because the facts
therein are not on all fours with those of the present case. In
the City of Iloilo case, the City of Iloilo initiated a complaint for
eminent domain against the landowner sometime in 1981.
After a writ of possession was issued in its favor, the City of
Iloilo took physical possession of the property in the middle of
1985. However, it was discovered that despite the order of
expropriation becoming final, the City of Iloilo did not deposit
the required amount for the expropriation of the property. The
expropriation proceedings remained dormant, and for over
twenty-five (25) years, there was no indication whatsoever that
the City of Iloilo compensated the landowner for the taking of
his property. Indisputably, the existence of bad faith on the
part of the City of Iloilo in taking possession of the landowner's
property is glaring, thus warranting the imposition of
exemplary damages and attorney's fees.[36]
The award of attorney's fees is also unwarranted because of
the lack of factual and legal justification. An award of attorney's
fees has always been the exception rather than the rule. To
start with, attorney's fees are not awarded every time a party
prevails in a suit.[37] Nor should an adverse decision ipso
facto justify an award of attorney's fees to the winning
party.[38] The policy of the Court is that no premium should be
placed on the right to litigate.[39] Too, such fees, as part of
damages, are assessed only in the instances specified in Article
2208[40] of the Civil Code. Indeed, attorney's fees are in the
nature of actual damages.[41] But even when a claimant is
compelled to litigate with third persons or to incur expenses to
protect his rights, attorney's fees may still be withheld where
no sufficient showing of bad faith could be reflected in a party's
persistence in a suit other than an erroneous conviction of the
righteousness of his cause.[42] And lastly, the trial court must
make express findings of fact and law that would bring the suit
within the exception. What this demands is that the factual,
legal or equitable justifications for the award must be set forth
not only in the fallo but also in the text of the decision, or else,
the award should be thrown out for being speculative and
conjectural.[43]
WHEREFORE, the Petition for Review on Certiorari under Rule
45 of the Rules of Court dated May 11, 2014 of Conchita
Malapascua-Malijan and Heirs of Lazaro Malijan in G.R. No.
211818 is DENIED for lack of merit, while the Petition for
Review on Certiorari under Rule 45 dated April 21, 2014 of
the National Power Corporation is GRANTED. Consequently,
the Decision dated June 13, 2012 of the Court of Appeals and
its subsequent Resolution dated March 12, 2014, reversing
the Decision dated February 22, 2008 of the Regional Trial
Court, Branch 6, Tanauan City, Batangas, are AFFIRMED with
the modification that the award of exemplary damages and
attorney's fees is DELETED.
SO ORDERED.
[ G.R. No. 192345, March 29, 2017 ]
LAND BANK OF THE PHILIPPINES, PETITIONER, V. SPOUSES
ESTEBAN AND CRESENCIA CHU, RESPONDENTS.
DECISION
DEL CASTILLO, J.:
Petitioner Land Bank of the Philippines (LBP) is assailing the
January 18, 2010 Decision[1] of the Court of Appeals (CA) in CA
G.R. SP No. 93518 over the amount of just compensation
awarded to respondents Esteban and Cresencia Chu, as well
as its May 24, 2010 Resolution[2] which denied LBP's Motion
for Reconsideration of the said Decision.
Factual Antecedents
Respondents were the registered owners of two parcels of
agricultural land located in San Antonio, Pilar, Sorsogon which
were acquired by the government pursuant to its agrarian
reform program.[3] The first parcel of land covered by Transfer
Certificate of Title (TCT) Nos. T-27060 and 27062 and with an
area of 14.9493 hectares (14.9493 has.) was acquired under
Presidential Decree No. 27[4] (PD 27-acquired land) and
initially valued by the LBP at P177,657.98.[5] The second
parcel of land covered by TCT No. T-27060 (pt.) was acquired
under Republic Act No. 6657[6] (RA 6657-acquired property)
and has an area of 7.7118 hectares (7.7118 has.). LBP valued
the same at P263,928.57.[7]
Respondents rejected LBP's valuation; hence summary
administrative proceedings were conducted before the
Provincial Agrarian Reform Adjudication Board (PARAD) to
determine the just compensation. The administrative
proceedings were docketed as Land Valuation Case No.
LV-30-'03 for the RA 6657-acquired property and Land
Valuation Case No. LV-48-'03 for the PD 27- acquired land.
Ruling of the Provincial Agrarian Reform Adjudicator
On April 11, 2003, the PARAD issued two separate
Decisions[8] recomputing the valuations arrived at by the LBP.
The PARAD recomputed the value of the RA 6657-acquired
property at P1,542,360.00 (or P200,000.00/ha.) based on the
comparable sales transaction of similar nearby lots as well as
Municipal Resolution No. 79, series of 2002, declaring Hacienda
Chu as industrial area. In addition, it considered the subject
property's good production, topography, and accessibility. As
regards the PD 27-acquired land, the PARAD valued the subject
property at P983,663.94 using the formula: Land Value= AGP x
ASP x 2.5 (or Average Gross Production of 75.2 x Actual Support
Price of P350.00 x 2.5).
LBP's Motion for Reconsideration was denied by the DARAB in
its June 19, 2003 Order.[9]
Ruling of the Regional Trial Court (RTC) as Special Agrarian
Court (SAC)
Dissatisfied, LBP filed a Petition for Determination of Just
Compensation before the RTC of Sorsogon City, Branch 52,
docketed as Civil Case No. 2003- 7205.[10]
In its September 21, 2005 Decision,[11] the RTC fixed the just
compensation at P2,313,478.00 for the RA 6657-acquired
property and P1,155,173.00 for the PD 27-acquired land.[12]
In arriving at these amounts, the RTC took cognizance of the
factors considered by the LBP and the PARAD. In addition, it
considered the "potentials" of the subject properties, to wit:
The Court considers the decision of the Provincial Adjudicator
of Sorsogon, the testimony of the witnesses presented by the
Private Respondent namely the Secretary of the Sangguniang
Bayan and the Municipal Assessor of the Municipality of Pilar,
Sorsogon who testified on the Municipal Ordinance/Resolution
specifically declaring x x x the land of the private respondents
including the subject landholding x x x is the subject [of]
Municipal Expansion for Agri-Economic Cum Industrial Area
The Court also consider[ed] the applicable law and
jurisprudence on the matter in arriving [at] the just
compensation of the subject property. The Court further
consider[ed] the present economic condition of the country as
well as the present assessed value of the acquired property.
The subject property is very near the industrial center that was
planned by the local government thus transforming the area
adjacent to the acquired property into an economic hub of the
province of Sorsogon partly thru industrial program,
eco-tourism development and agricultural productivity into an
Agri-Economic Zone to serve as the backbone of a
comprehensive and sustainable program of community[;] thus
it will provide enormous livelihood opportunities and
tremendous economic multiplier effect not only for residents
of barangay San Antonio (Sapa) but also for the entire citizenry
of Pilar, Sorsogon.
According to the answer filed by the private respondents, the
property is fully planted to coconut (TCT-T-27060) and only
more or less 20 meters away from the provincial road and is
more or less half [a] kilometer away from the barangay
poblacion. These characteristics are likewise true [for] TCT No.
T-27062. That the area covered under P.D. 27 yields an
average of 73 sacks of clean palay per harvest while that
covered under R.A. 6657 x x x yields an average of 10 nuts per
tree every 45 days at 110 fruit[-]bearing trees per hectare.
For all the foregoing potentials of the property, the Court not
only took into consideration the amount of just
compensation fixed by the Provincial Adjudicator of Sorsogon
but further took into account such potentials of the acquired
property which can command a price of not less than
P100,000.00 per hectare. The Provincial Adjudicator valued
the 7.7118 hectares acquired under TCT No. T-27060 [at]
P1,542,360.00 under R.A. 6657 while that portion acquired
inside the property titled under TCT No. T-27062 [at]
P983,663.94 under P.D. 27 and considering the potentials of
the land in terms of the enormous livelihood opportunities
and tremendous economic multiplier effect not only for the
residents of [B]arangay San Antonio but also the entire
municipality of Pilar, Sorsogon, the Court further valued the
acquired property in the amount of P100,000.00 per hectare.
Adding the value of the land in terms of the fair market value
as determined by the Provincial Adjudicator of Sorsogon,
which includes the value of the actual production of the
coconut trees and the palay produced, to wit: P1,542,360.00
and P983,663.94 respectively and the potentials of the
property [at] P100,000.00 per hectare or the value of
P771,118.00 for the 7.7118 hectares and P171,510.00 for the
1.7151 hectares, we get the total of P2,313,478.00 as just
compensation for the 7.7118 hectares and the just
compensation in the amount of P1,155,173.94 for the 1.7151
hectares.[13]
The dispositive portion of the RTC Decision reads:
WHEREFORE, premises considered, judgment is hereby
rendered:
1) Fixing the amount of TWO MILLION THREE HUNDRED
THIRTEEN THOUSAND FOUR HUNDRED SEVENTY EIGHT
(P2,313,478.00)[14] Pesos, Philippine Currency for the
7.7118[15] hectares and the amount of ONE MILLION ONE
HUNDRED FIFTY FIVE THOUSAND AND ONE HUNDRED
SEVENTY THREE (P1,155,173.00) Pesos, Philippine currency
for the 1.7151 hectares,[16] to be the just compensation of
said acquired portions which agricultural land are situated [in]
San Antonio (Sapa) Pilar, Sorsogon, covered by TCT No.
T-27060 and TCT No. T-27062 in the name of the Sps. Esteban
and Cresencia Chu, which property was taken by the
government pursuant to the Agrarian Reform Program
provided by R.A. 6657.
2) Ordering the Petitioner Land Bank of the Philippines to pay
the Private Respondents the total amount of just
compensation in the sum of THREE MILLION FOUR HUNDRED
SIXTY EIGHT THOUSAND AND SIX HUNDRED FIFTY ONE
(P3,468,651.00) Pesos, Philippine currency, in the manner
provided by R.A. No. 6657 by way of full payment of the said
just compensation after deducting whatever amount
previously received by the Private Respondents from the
Petitioner Land Bank as part of the just compensation.
3) Ordering the Private Respondents to pay whatever
deficiency in the docket fees to the Clerk of Court based on the
valuation fixed by the Court.
4) Without pronouncement as to cost.
SO ORDERED.[17]
LBP's motion for reconsideration[18] was denied by the RTC in
its Order[19] dated February 13, 2006.
Ruling of the Court of Appeals
On appeal, the CA modified the RTC's ruling. The CA noted that
the formula used by the PARAD (i.e., LV= AGP x ASP x 2.5) in
computing the valuation for the PD 27-acquired land is correct.
However, the amount used for the ASP, which is P350, is
erroneous. According to the CA, the mandated ASP in Executive
Order No. 228[20] (EO 228) is only P35, not P350, pursuant to
our ruling in Gabatin v. Land Bank of the
Philippines.[21] Moreover, the CA opined that this formula
remains applicable to PD 27-acquired lands notwithstanding
the passage of RA 6657, citing as basis EO 229.[22] In addition,
interest at the rate of 12% per annum must be imposed to
compensate for the delay. Accordingly, it upheld LBP's
valuation for the PD 27-acquired land at P177,657.98 but
awarded legal interest at the rate of 12% per annum.[23]
On the other hand, for the property acquired under RA 6657,
the CA opined that Section 17 thereof, as well as Department
of Agrarian Reform Administrative Order No. 5,[24] series of
1998 (DAR A.O. 05-98), must be considered in fixing just
determination. As such, the formula to be used is LV= (CNI x 0.6)
+ (CS x 0.3) + (MV x 0.1) where LV is land value; CNI is
capitalized net income; CS is comparable sales; and, MV is
market value per tax declaration. The alternative formula of
LV= (CNI x 0.9) + (MV x 0.1) may be used if the CS factor is not
present. The CA found that although the LBP used this formula,
it, however, failed to consider the rising values of the lands in
Pilar, Sorsogon which resulted from the economic
developments mentioned in the municipal resolution and the
current assessment of industrial lands in the area – this,
despite the fact that evidence was presented to show that
comparable sales (the CS in the formula) have gone up to at
least P200,000.00 per hectare. Thus, it affirmed the estimate
that the RA 6657-acquired property may be priced at
P200,000.00 per hectare as fixed by the PARAD.[25]
The CA disposed of the case, thus:
IN VIEW OF TIIE FOREGOING, the RTC decision dated
September 21, 2005 is modified in that:
1) Just compensation for the PD 27-acquired property of 14.9 3
hectares shall be P177,657.98 with interest of 12 percent per
annum from November 1994 until paid, and
2) Just compensation for the RA 6657-acquired property of
7.7118 hectares shall be computed at P200,000 per hectare, or
P1,542,360.
The petitioner is ordered to pay the respondents the amounts
as set forth herein. All other aspects of the decision stand.
SO ORDERED.[26]
The LBP filed a Motion for Reconsideration[27] which was
denied by the appellate court in its Resolution dated May 24,
2010.
Thus, the present Petition for Review on Certiorari.
Issues
The HONORABLE COURT OF APPEALS COMMITTED A SERIOUS
ERROR OF LAW WHEN:
A.
INSOFAR AS THE RA 6657-ACQUIRED LAND, IT DISREGARDED
THE VALUATION FACTORS UNDER SECTION 17 OF RA 6657
AND THE PERTINENT DAR ADMINISTRATIVE ORDERS IN
FIXING ITS VALUE AT P1,542,360.00.
B.
INSOFAR AS THE PD 27-ACQUIRED LAND, IT REFUSED TO
REMAND THE INSTANT CASE TO THE TRIAL COURT FOR A
RECOMPUTATION OF ITS VALUE PURSUANT TO SECTION 17
OF RA 6657, AS AMENDED.
C.
IT IMPOSED THE PAYMENT OF INTEREST AT 12% PER ANNUM
ON THE VALUE OF THE PD 27-ACQUIRED LAND.[28]
LBP's Argument
The LBP posits that the appellate court improperly relied on
extraneous factors, such as the rising value of the lands in
Pilar, Sorsogon, potentials of the subject property considering
its strategic location, livelihood opportunities and economic
multiplier effect to the community, in determining the just
compensation for the subject properties. The LBP insists on
the mandatory application of RA 6657 vis-à-vis the formula
provided in DAR A.O. No. 05-98.
Likewise, the LBP avers that the computation of the just
compensation for the PD 27-acquired land must be revised in
view of the enactment of RA 9700.[29] In particular, Section 5
thereof provides that all previously acquired lands, the
valuation of which is subject to challenge by the landowners,
shall be completed and finally resolved pursuant to Section
17 of RA 6657, as amended. LBP posits that the contested
valuation of the PD 27-acquired land, should now be
computed in accordance with Section 17 of RA 6657, as
amended; hence, the need to remand the case to the RTC for
a re-computation of its value.
Lastly, the LBP contends that the CA's award of 12% interest
per annum is without basis. It posits that with the enactment
of RA 9700 vis-à-vis RA 6657, interest should no longer be
imposed since the valuation of the PD 27-acquired land
would no longer be pegged at 1972 prices but would be
brought to current values pursuant to Section 5 of RA 9700 in
relation to Section 17 of RA 6657, as amended, vis-à-vis DAR
A.O. Nos. 02-09[30] and 01-10.[31]
Respondents did not file a comment to the Petition and were
deemed to have waived the filing thereof.[32]
Our Ruling
We grant the Petition in part.
Only questions of law may be raised in
a Petition for Review Under Rule 45,
exceptions thereto
Under Rule 45 of the Rules of Court, only questions of law may
be raised as this Court is not a trier of facts; it is not our
function to re-examine and weigh anew the evidence of the
parties. This Court shall examine or evaluate the evidence again
only in the exercise of its discretion and for compelling
reasons,[33] as when the judgment is based on a
misapprehension of facts and when the findings of fact are
conflicting.[34] Here, we find that the judgment arrived at by the
PARAD and the RTC, which rulings were subsequently
affirmed in totoand with modifications, respectively, by the CA,
as to the RA 6657-acquired property, was to some extent
based on a misapprehension or erroneous appreciation of facts.
As regards the PARAD's and the CA's ruling, on one hand, and
the RTC's on the other, on the PD 27-acquired land, their
findings thereon are conflicting. Additionally, the PARAD's and
the CA's reliance on PD 27 and its implementing rules, which
formed the basis of their respective Decisions, are now
inapplicable thereto.
RA 6657-acquired property
The LBP correctly argued that consideration of the valuation
factors under Section 17 of RA 6657 and the formula under
DAR A.O. No. 05-98[35] is mandatory in ascertaining just
compensation for purposes of agrarian reform cases. In Land
Bank of the Philippines v. Gonzalez,[36] we held that although
the determination of just compensation is fundamentally a
judicial function vested in the RTC, the judge must still exercise
his discretion within the bounds of law. He ought to take
into full consideration the factors specifically identified in RA
6657 and its implementing rules, as contained under the
pertinent Administrative Orders of the DAR, such as DAR A.O.
No. 05-98, which contains the basic formula of the factors
enumerated under said law. He may not disregard the
procedure laid down therein because unless an administrative
order is declared invalid courts have no option but to apply it.
Otherwise, the judge runs the risk of violating the agrarian
reform law should he choose not to use the formula laid down
by the DAR for the determination of just compensation. The
Court reaffirmed this established jurisprudential rule in Alfonso
v. Land Bank of the Philippines[37] when it categorically gave
"full constitutional presumptive weight and credit to Section 17
of RA 6657, DAR AO No.5 (1998) and the resulting DAR basic
formulas."[38]
The Court then made the following pronouncement:
For clarity, we restate the body of rules as follows: The factors
listed under Section 17 of RA 6657 and its resulting formulas
provide a uniform framework or structure for the computation
of just compensation which ensures that the amounts to be
paid to affected landowners are not arbitrary, absurd or even
contradictory to the objectives of agrarian reform. Until and
unless declared invalid in a proper case, the DAR formulas
partake of the nature of statutes, which under the 2009
amendment became law itself, and thus have in their favor
the presumption of legality, such that courts shall consider,
and not disregard, these formulas in the determination of just
compensation for properties covered by the CARP. When
faced with situations which do not warrant the formula's
strict application, courts may, in the exercise of their judicial
discretion, relax the formula's application to fit the factual
situations before them, subject only to condition that they
clearly explain in their Decision their reasons (as borne by the
evidence on record) for the deviation undertaken. It is thus
entirely allowable for a court to allow a landowner's claim for
an amount higher than what would otherwise have been
offered (based on an application of the formula) for as long as
there is evidence on record sufficient to support the award.
xxxx
For the guidance of the bench, the bar, and the public, we
reiterate the rule: Out of regard for the DAR's expertise as the
concerned implementing agency, courts should henceforth
consider the factors stated in Section 17 of RA 6657, as
amended, as translated into the applicable DAR formulas in
their determination of just compensation for the properties
covered by the said law. If, in the exercise of their judicial
discretion, courts find that a strict application of said
formulas is not warranted under the specific circumstances of
the case before them, they may deviate or depart therefrom
provided that this departure or deviation is supported by a
reasoned explanation grounded on the evidence on record. In
other words, courts of law possess the power to make a final
determination of just compensation.[39]
Be that as it may, we cannot sustain LBP's valuation of
P263,928.57 as just compensation for the RA 6657-acquired
property for failure to substantiate the same.
In Land Bank of the Philippines v. Livioco,[40] we held that "in
determining just compensation, LBP must substantiate its
valuation." This pronouncement is a reiteration of our ruling
in Land Bank of the Philippines v. Luciano[41] that:
Clearly, Land Bank's valuation of lands covered by CARL is
considered only as an initial determination, which is not
conclusive, as it is the RTC, sitting as a [SAC], that should
make the final determination of just compensation, taking
into consideration the factors enumerated in Section 17 of RA
6657 and the applicable DAR regulations. Land Bank's
valuation had to be substantiated during the hearing before
it could be considered sufficient in accordance with Section
17 of RA No. 6657 and DAR AO No. x x x (Emphasis supplied)
In this case, we hold that the LBP was not able to justify its
valuation. Although the LBP maintained that it stringently
applied the pertinent law and its relevant implementing rules
in arriving at its computation, it failed to adduce sufficient
evidence to prove the truthfulness or correctness of its
assertions. Its Formal Offer of Exhibits, and the reasons
therefor, consisted only of the following:
1) Exhibit A – Field Investigation Report for the 7.7118 hectares
- To prove that an actual investigation of the area subject
matter of the case was conducted and participated by the
personnel of the Department of Agrarian Reform, Land Bank of
the Philippines and the representative of the Agrarian Reform
Committee that will show the actual condition of the property
at the time of the voluntary offer of the landowner of her
property to the government;
2) Exhibit B – Market Value per Ocular Inspection for the
7.7118 hectares
- To prove where the location adjustment factor is taken which
is used in the computation of valuation
xxxx
4) Exhibit D – Claims Valuation and Processing Form for the
7.7118 hectares
- To show the detailed computation/valuation made on the
properties subject matter of this case under DAR
Administrative Order No. 5, series of 1998 using the formula
LV= (CNI x .90) + (MV x .10)
- To show the date of receipt of LANDBANK of the claim folder
from the Department of Agrarian Reform which is used as the
basis [in] determining the average price of the crops found in
the property at the time of the field investigation/ocular
inspection
xxxx
7) Exhibit G – PCA Municipal Selling Price for Coconut
(Sorsogon Province)
- T[o] show the average selling price of copra per kilo for the
municipality of Pilar[,] Sorsogon for the period October 2001 to
September 2002 which is P9.97 per kilo.[42] (Emphasis supplied)
The LBP used the formula LV = (CNI x. 90) + (MV x .10).
Concededly, it was able to sufficiently establish the Capitalized
Net Income (CNI) factor[43] of the formula. However, the same
is not true regarding the Market Value (MV) component
thereof. While the CNI factor, as computed in the Claims
Valuation and Processing Form (Claims Form), finds support
from and can be adequately explained by a simple perusal of
the documents forming part of the records of this case,[44] the
MV component, on the other hand, does not have any similar
support and basis as a thorough search of the records failed to
produce the same.
The Claims Form, which the LBP insists embodies a detailed
computation using the formula earlier cited, did not reflect
how the data and figures were arrived at and if they were
indeed correct. The LBP did not present any testimonial
evidence before the RTC which could explain or corroborate
how it came up with the figures and what credence ought to be
accorded to them. All that the Claims Form showed is the LBP's
computation, and nothing more. As we held in Land Bank of
the Philippines v. Livioco,[45] "the computation in the Form may
be mathematically correct, but there is no way of knowing if
the values or data used in the computation are true." For this
reason we cannot uphold the LBP's valuation. Besides, LBP's
Formal Offer of Exhibits was admitted only when respondents
failed to offer any objection. In any case, even considering
the absence of objection on the part of respondents, LBP
must still prove the basis and correctness of its computation.
LBP miserably failed in this regard.
We cannot agree to the valuations fixed by the PARAD and
the RTC, valuations that found their way into rulings that
were affirmed in totoand with modification by the CA,
respectively. These rulings were arrived at in clear disregard
of the formula set forth under DAR A.O. No. 05-98. As borne
out by their respective Decisions, these tribunals
considered only the Comparable Sales (CS) factor to the
exclusion of the other factors, namely, the CNI and MV.
Aggravating the situation, the CS factor was not determined
pursuant to the guidelines laid down in DAR A.O. No. 05-98.
Respondents merely submitted a notarized Deed of Absolute
Sale between them and Wilson Tarog reflecting an amount of
P200,000.00[46] per hectare. A second notarized Deed of
Voluntary Land Transfer executed between Rudy Balisalisa
and Abegail Sapanza was submitted fixing the amount per
hectare at P241,462.00.[47] Additionally, respondents
proffered in evidence Municipal Resolution No. 79, Series of
2002,[48] declaring the intent of Pilar, Sorsogon to develop
Hacienda Chu as an agri-economic-industrial site in
accordance with its town expansion program. All of these,
however, are irrelevant as DAR A.O. No. 05-98 itself
categorically enumerates the guidelines for determining the
CS factor, thus:
C.1. The following rules shall be observed in the computation
of CS:
a. As a general rule, there shall be at least three (3) Sales
Transactions.
At least one comparable sales transaction must involve land
whose area is at least ten percent (10%) of the area being
offered or acquired but in no case less than one hectare. The
other transaction/s should involve land whose area is/are at
least one hectare each.
b. If there are more than three (3) STs available in the same
barangay, all of them shall be considered.
c. If there are less than three (3) STs available, the use of STs
may be allowed only if AC and/or MVM are/is present.
xxxx
C. 2. The criteria in the selection of the comparable sales
transactions (ST) shall be as follows:
a. When the required number of STs is not available at the
barangay level, additional STs may be secured from the
municipality where the land being offered/covered is situated
to complete the required three comparable STs. In case there
are more STs available than what is required at the municipal
level, the most recent transactions shall be considered. The
same rule shall apply at the provincial level when no STs are
available at the municipal level. In all cases, the combination
of STs sourced from the barangay, municipality and province
shall not exceed three transactions.
b. The land subject of acquisition as well as those subject of
comparable sales transactions should be similar in topography,
land use, i.e., planted to the same crop. Furthermore, in case of
permanent crops, the subject properties should be more or less
comparable in terms of their stages of productivity and plant
density.
c. The comparable sales transactions should have been
executed within the period January 1, 1985 to June 15, 1988,
and registered within the period January 1, 1985 to September
13, 1988.
d. STs shall be grossed up from the date of registration up to
the date of receipt of CF by LBP from DAR for processing, in
accordance with Items II.A.9.
Respondents presented only two comparable sales
transactions. This falls short of the requirements of DAR A.O.
No. 05-98.
The PARAD erroneously considered the municipal resolution as
the third comparable sales transaction when it noted and held
that:
x x x And, last is a Municipal Resolution No. 79 Series of2002
declaring the entire Hacienda Chu [in] San Antonio Sapa, Pilar,
Sorsogon as Town Expansion and classified the same as an
Industrial Area (Annex "C"). That the subject property is very
productive, with good location, very near x x x the Poblacion,
and, accessible by land and water x x x
It is a well-settled rule that in determining the valuation of the
properties a comparable sale transaction of similar nearby
places is admissible in evidence x x x. Thus from the evidence
submitted by the landowner, the Board is convinced that the
valuation by the Land Bank of the Philippines is in fact
unreasonable, considering that the subject property [has] good
production, topography and [is] accessible on both land and
water. The Board however cannot grant the prayer for Three
Hundred Fifty Thousand Pesos per hectare considering that in
comparable sales transactions the Board can only grant the
lowest among those presented as [evidence]. And, therefore
the Board can only grant the amount of Two Hundred
Thousand Pesos per hectare (Annex A).[49] (Emphasis supplied)
The municipal resolution could not in any manner be regarded
as a comparable sales transaction precisely because no sale
transaction ever took place. At best, the said resolution merely
manifested the formal intention of the local government of
Pilar to acquire certain portions of the subject properties.
Equally glaring is the fact that none of the tribunals below took
into full consideration the factors laid down in Section 17 of RA
6657 – a necessary requirement which no court of law is at
liberty to disregard if sound judicial discretion is to be exercised
at all in determining just compensation. Instead, this Court
notes that the RTC, not to mention the CA, primarily took
account of an extraneous factor – potentials of the land – to
justify the award of P200,000.00 per hectare. Discounting
respondents' evidence on the comparable sales transactions,
the potentials of the landholding may then be said to have
become the main factor supporting the valuation thereof.
This conclusion is even borne out by the Decisions of the
PARAD, the RTC, and the CA whose discussions centered
thereon. However, this Court has already reiterated in Land
Bank of the Philippines v. Livioco[50] that, such factor, standing
alone, has already been dismissed as improper basis for
assessing the just compensation in the expropriation of
agricultural lands. Thus:
x x x While the potential use of an expropriated property is
sometimes considered in cases where there is a great
improvement in the general vicinity of the expropriated
property, it should never control the determination of just
compensation (which appears to be what the lower courts
have erroneously done). The potential use of a property
should not be the principal criterion for determining just
compensation for this will be contrary to the well-settled
doctrine that the fair market value of an expropriated
property is determined by its character and its price at the
time of taking, not its potential uses. If at all, the potential
use of the property or its "adaptability for conversion in the
future is a factor, not the ultimate in determining just
compensation.[51] (Emphasis supplied)
Despite the foregoing, the PARAD, the RTC, and the CA,
proceeded to rule in respondents' favor on the basis of their
evidence and, with meager evidence to support their
pronouncements, pegged the price of the RA 6657-acquired
property at P200,000.00 and P300,000.00, respectively, per
hectare. We cannot uphold the same.
As may be gleaned from the above discussion, the respective
evidence of both parties are insufficient to enable this Court
to come up with a correct computation on the just
compensation to which respondents are entitled. However,
as this Court is not a trier of facts, this Court cannot receive
new evidence from the parties that would aid or assist it in
the prompt resolution of this case. Thus, this Court is
constrained to remand the case to the RTC for the reception
of evidence and the determination of just compensation in
accordance with our pronouncement in Alfonso v. Land Bank
of the Philippines.[52]
PD 27-acquired land
Remand case to the
RTC for
a.
determination of just
compensation
b.Award of interest
a. Remand case to the RTC for determination of just
compensation
The appellate court also incorrectly ruled that the formula
under EO 228 should be followed for purposes of computing
just compensation in relation to PD 27-acquired lands.
Citing Land Bank of the Philippines v. Imperial,[53] the CA held
that the guidelines provided under PD 27 and EO 228
remained operative despite the passage of RA 6657 given
that EO 229 states that PD 27 shall continue to operate with
respect to rice and corn lands.
In a number of cases, such as Land Bank of the Philippines v.
Hon. Natividad,[54] Lubrica v. Land Bank of the
Philippines,[55] Land Bank of the Philippines v. Gallego,
Jr.,[56] Land Bank of the Philippines v. Heirs of Maximo and
Gloria Puyat,[57] and Land Bank of the Philippines v. Santiago,
Jr.,[58] we definitively ruled that when the agrarian reform
process is still incomplete as the just compensation due the
landowner has yet to be settled, just compensation should be
determined, and the process concluded, under Section 17 of
RA 6657, which contains the specific factors to be considered in
ascertaining just compensation, viz.:
SECTION 17. Determination of Just Compensation. —
In determining just compensation, the cost of acquisition of the
land, the current value of like properties, its nature, actual use
and income, the sworn valuation by the owner, the tax
declarations, the assessment made by government assessors
shall be considered. The social and economic benefits
contributed by the farmers and the farmworkers and by the
Government to the property as wel1 as the non-payment of
taxes or loans secured from any government financing
institution on the said land shall be considered as additional
factors to determine its valuation.
In Land Bank of the Philippines v. Gallego, Jr.,[59] we explained
that:
The Court has already ruled on the applicability of agrarian
laws, namely, P.D. No. 27/E.O. No. 228 in relation to Republic
Act (R.A.) No. 6657, in prior cases concerning just
compensation.
In Paris v. Alfeche, the Court held that the provisions of R.A.
No. 6657 are also applicable to the agrarian reform process of
lands placed under the coverage of P.D. No. 27/E.O. No. 228,
which has not been completed upon the effectivity of R.A. No.
6657. Citing Land Bank of the Philippines v. Court of Appeals,
the Court in Paris held that P.D. No. 27 and E.O. No.228 have
suppletory effect to R.A. No.6657, to wit:
We cannot see why Sec. 18 of RA [No.] 6657 should not apply
to rice and com lands under PD [No.] 27. Section 75 of RA [No.]
6657 clearly states that the provisions of PD [No.] 27 and EO
[No.] 228 shall only have a suppletory effect. Section 7 of the
Act also provides –
Sec. 7. Priorities. The DAR, in coordination with the PARC shall
plan and program the acquisition and distribution of all
agricultural lands through a period of (10) years from the
effectivity of this Act. Lands shall be acquired and distributed as
follows:
Phase One: Rice and Corn lands under P.D. 27; all idle or
abandoned lands; all private lands voluntarily offered by the
owners of agrarian reform; x x x and all other lands owned by
the government devoted to or suitable for agriculture, which
shall be acquired and distributed immediately upon the
effectivity of this Act, with the implementation to be
completed within a period of not more than four (4) years x x x.
This eloquently demonstrates that RA (No.) 6657 includes
PD [No.] 27 lands among the properties which the DAR shall
acquire and distribute to the landless. And to facilitate the
acquisition and distribution thereof, Secs.16, 17 and 18 of
the Act should be adhered to. In Association of Small
Landowners of the Philippines v. Secretary of Agrarian
Reform[,] this Court applied the provisions (of) RA 6657 to
rice and corn lands when it upheld the constitutionality of the
payment of just compensation for PD [No.] 27 lands through
the different modes stated in Sec. 18.
Particularly, in Land Bank of the Philippines v. Natividad,
where the agrarian reform process in said case "is still
incomplete as the just compensation to be paid private
respondents has yet to be settled," the Court held therein
that just compensation should be determined and the
process concluded under R.A No. 6657.
The retroactive application of RA. No. 6657 is not only
statutory but is also founded on equitable considerations.
In Lubrica v. Land Bank of the Philippines, the Court declared
that it would be highly inequitable on the part of the
landowners therein to compute just compensation using the
values at the time of taking in 1972, and not at the time of
payment, considering that the government and the
farmer-beneficiaries have already benefited from the land
although ownership thereof bas not yet been transferred in
their names. The same equitable consideration is applicable
to the factual milieu of the instant case. The records show
that respondents’ property had been placed under the
agrarian reform program in 1972 and had already been
distributed to the beneficiaries but respondents have yet to
receive just compensation due them. (Emphases supplied)
It bears stressing that while this case was pending, Congress
enacted RA 9700 entitled "An Act Strengthening the
Comprehensive Agrarian Reform Program [CARP], Extending
the Acquisition and Distribution of All Agricultural Lands,
Instituting Necessary Reforms, Amending for the Purpose
Certain Provisions of Republic Act No. 6657, Otherwise
known as The Comprehensive Agrarian Reform Law of 1988,
as amended, and Appropriating Funds Therefor."
Significantly, just as RA 6657 had so provided, RA 9700 also
provides that it shall apply even to PD 27-acquired lands,
albeit those that are yet to be acquired and distributed by the
DAR. It likewise provided for further amendments to RA 6657,
as amended, including Section 17 thereof, by including two
new factors in the determination of just compensation,
namely (a) the value of the standing crop and (b) seventy
percent (70%) of the zonal valuation of the Bureau of Internal
Revenue, translated into basic formula by the DAR, subject to
the final decision of the proper court.
Nevertheless, despite the enactment of RA 9700, we take the
view that this case still falls within the ambit of Section 17 of
RA 6657, as amended. To emphasize, RA 9700 applies to
landholdings that are yet to be acquired and distributed by
the DAR. In addition, RA 9700 itself contains the qualification
that "previously acquired lands wherein valuation is subject
to challenge," such as the landholding subject of this case,
"shall be completed and resolved pursuant to Section 17 of RA
6657, as amended,”[60] thus:
Section 5. Section 7 of Republic Act No. 6657, as amended, is
hereby further amended to read as follows:
SEC. 7. Priorities. - The DAR, in coordination with the
Presidential Agrarian Reform Council (PARC) shall plan and
program the final acquisition and distribution of all remaining
unacquired and undistributed agricultural lands from the
effectivity of this Act until June 30, 2014. Lands shall be
acquired and distributed as follows:
Phase One: During the five (5)-year extension period hereafter
all remaining lands above fifty (50) hectares shall be covered
for purposes of agrarian reform upon the effectivity of this Act.
All private agricultural lands of landowners with aggregate
landholdings in excess of fifty (50) hectares which have already
been subjected to a notice of coverage issued on or before
December 10, 2008; rice and corn lands under Presidential
Decree No. 27; all idle or abandoned lands; all private lands
voluntarily offered by the owners for agrarian reform: Provided,
That with respect to voluntary land transfer, only those
submitted by June 30, 2009 shall be allowed Provided,
further, That after June 30, 2009, the modes of acquisition shall
be limited to voluntary offer to sell and compulsory
acquisition: Provided, furthermore, That all previously
acquired lands wherein valuation is subject to challenge by
landowners shall be completed and finally resolved pursuant
to Section 17 of Republic Act No. 6657, as amended: x x x
(Emphases supplied.)
Our ruling further finds support in DAR A.O. No. 02-09, the
implementing rules of RA 9700, Chapter VI (Transitory
Provision) of which specifically provides:
VI. Transitory Provision
With respect to cases where the Master List of ARBs has been
finalized on or before July 1, 2009 pursuant to Administrative
Order No.7, Series of 2003, the acquisition and distribution of
landholdings shall continue to be processed under the
provisions of R.A No. 6657 prior to its amendment by R.A. No.
9700.
However, with respect to land valuation, all Claim Folders
received by LBP prior to July 1, 2009 shall be valued in
accordance with Section 17 of R.A. No. 6657 prior to its
amendment by R.A. No. 9700. (Emphasis supplied)
From the foregoing, it is evident that DAR A.O. No. 02-09
requires that landholdings, the claim folders of which had been
received by LBP prior to July 1, 2009, be valued pursuant to the
old Section 17 of RA 6657, as amended,[61] or prior to its further
amendment by RA 9700.
Here, the Claim Folder was received on November 27, 2002, as
evidenced by the Memorandum Request to Value the
Land.[62] Hence, by express mandate of RA 9700 vis-à-vis DAR
A.O. No, 02-09, Section 17 of RA 6657, as amended, shall apply
for purposes of ascertaining just compensation.
This pronouncement finds support in the Court's ruling
in Land Bank of the Philippines v. Kho,[63] viz.:
Case law dictates that when the acquisition process under PD
27 is still incomplete, such as in this case where the just
compensation due to the landowner has yet to be settled,
just compensation should be determined and the process
concluded under RA 6657, as amended.
For the purposes of determining just compensation, the fair
market value of an expropriated property is determined by
its character and its price at the time of taking, or the time
when the landowner was deprived of the use and benefit of
his property, such as when the title is transferred in the name
of the beneficiaries. In addition, the factors enumerated
under Section 17 of RA 6657, as amended, i.e., (a) the
acquisition cost of the land, (b) the current value of like
properties, (c) the nature and actual use of the property, and
the income therefrom, (d) the owner’s sworn valuation, (e)
the tax declarations, (f) the assessment made by government
assessors, (g) the social and economic benefits contributed by
the farmers and the farmworkers, and by the government to
the property, and (h) the nonpayment of taxes or loans
secured from any government financing institution on the
said land, if any, must be equally considered.
However, it bears pointing out that while Congress passed RA
9700 on August 7, 2009, further amending certain provisions
of RA 6657, as amended, among them, Section 17, and
declaring '[t]hat all previously acquired lands wherein
valuation is subject to challenge by landowners shall be
completed and finally resolved pursuant to Section 17 of [RA
6657], as amended,' DAR AO 2, series of 2009, which is the
implementing rules of RA 9700, had clarified that the said law
shall not apply to claims/cases where the claim folders were
received by the LBP prior to July 1, 2009. In such situation,
just compensation shall be determined in accordance with
Section 17 of RA 6657, as amended, prior to its further
amendment by RA 9700.
xxxx
It is significant to stress x x x that DAR AO 1, series of 2010
which was issued in line with Section 31 of RA 9700
empowering the DAR to provide the necessary rules and
regulations for its implementation, became effective
only subsequent to July 1, 2009. Consequently, it cannot be
applied in the determination of just compensation for the
subject land where the claim folders were undisputedly
received by the LBP prior to July 1, 2009, and, as such, should
be valued in accordance with Section 17 of RA 6657 prior to
its further amendment by RA 9700 pursuant to the cut-off
date set under DARAO 2, series of 2009 (cut-off rule). Notably,
DAR AO 1, series of 2010 did not expressly or impliedly repeal
the cut-off rule set under DAR AO 2, series of 2009, having
made no reference to any cut-off date with respect to land
valuation for previously acquired lands under PA 27 and EO
228 wherein valuation is subject to challenge by landowners.
Consequently, the application of DAR AO 1, series of 2010
should be, thus, limited to those where the claim folders
were received on or subsequent to July 1, 2009.
In this case, x x x [s]ince the claim folders were received by the
LBP prior to July 1, 2009, the RTC should have computed just
compensation using pertinent DAR regulations applying Section
17 of RA 6657 prior to its amendment by RA 9700 instead of
adopting the new DAR issuance, absent any cogent
justifications otherwise. Therefore, as it stands, the RTC and
the CA were duty-bound to utilize the basic formula prescribed
and laid down in pertinent DAR regulations existing prior to the
passage of RA 9700, to determine just compensation.
Nonetheless, the RTC, acting as a SAC, is reminded that it is not
strictly bound by the different [formulas] created by the DAR if
the situations before it do not warrant their application. To
insist on a rigid application of the formula goes beyond the
intent and spirit of the law, bearing in mind that the valuation
of property or the determination of just compensation is
essentially a judicial function which is vested with the courts,
and not with administrative agencies. Therefore, the RTC must
still be able to reasonably exercise its judicial discretion in the
evaluation of the factors for just compensation, which cannot
be restricted by a formula dictated by the DAR when faced with
situations that do not warrant its strict application. However,
the RTC must explain and justify in clear the reason for any
deviation from the prescribed factors and formula. (Emphasis
in the original)
b. Award of interest
We also agree with the LBP's stance that the award of
compounded interest is not proper.
In Land Bank of the Philippines v. Spouses Chico,[64] we held that
"when just compensation is determined under R.A. No. 6657,
no incremental, compounded interest of six percent (6%) per
annum shall be assessed x x x as the same applies only to lands
taken under P.D. No. 27 and E.O. No. 228, pursuant to DAR A.O.
No. [13-94], x x x and not Sec. 26 of R.A. No. 6657 x x x."
The rationale for this is explained in Land Bank of the
Philippines v. Court of Appeals[65] to wit: that DAR A.O. No.
13-94 aims to compensate the landowners for unearned
interests because had payment been made in 1972 when the
GSP for rice was pegged at P35.00, and this amount was
deposited in a bank, it would have earned a compounded
interest of 6% per annum:
x x x Thus, if the PARAD used the 1972 GSP, then the product of
(2.5 x AGP x P35 x x x) could be multiplied by (1.06)n to
determine the value of the land plus the additional 6%
compounded interest it would have earned from
1972. However, since the PARAD already increased the GSP
from P35.00 to P300.00/cavan of palay x x x, there is no more
need to add any interest thereon, much less compound it. To
the extent that it granted 6% compounded interest to private
respondent Jose Pascual, the Court of Appeals
erred.[66] (Emphasis supplied)
If upon remand of this case the LBP is found to be in delay in
the payment of just compensation, then it is bound to pay
interest. In Land Bank of the Philippines v. Santiago, Jr.,[67] we
ruled that interest may be awarded in expropriation cases,
particularly where delay attended the payment of just
compensation. There, we categorically stressed that the
interest imposed in case of delay in payments in agrarian
cases is in the nature of damages for delay in payment which,
"in effect, makes the obligation on the part of the
government one of forbearance."[68] Upon this point, nothing
could be any clearer than our pronouncement in Land Bank
of the Philippines v. Santiago, Jr., thus:
Quoting Republic v. Court of Appeals this Court, in Land Bank
of the Philippines v. Rivera, held:
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, if
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 interest 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
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.
xxxx
The Court, in Republic, recognized that the just
compensation due to the landowners for their expropriated
property amounted to an effective forbearance on the part
of the State. x x x[69] (Emphases supplied)
Be that as it may, the LBP is bound to pay interest at 12% per
annum “from the time of taking until June 30, 2013.
Thereafter, or beginning July 1, 2013, until fully paid, the just
compensation due the landowners shall earn interest at the
new legal rate of 6% per annum x x x.[70] In Nacar v. Gallery
Frames,[71] citing Eastern Shipping Lines v. Court of
Appeals[72] which has been modified to reflect Bangko Sentral
ng Pilipinas-Monetary Board Circular No. 799,[73] we held
that:
x x x [T]he guidelines laid down in the case of Eastern
Shipping Lines are accordingly modified to embody BSP-MB
Circular No. 799, as follows:
I. When an obligation, regardless of its source, i.e., law,
contracts, quasi-contracts, delicts or quai-delicts is breached,
the contravenor can be held liable for damages. 'The
provisions under Title XVIII on "Damages" of the Civil Code
govern in determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the
concept of actual and compensatory damages, the rate of
interest, as well as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the
payment of a sum of money, i.e., a loan or forbearance of
money, the interest due should be that which may have
been stipulated in writing. Furthermore, the interest due
shall itself earn legal interest from the time it is judicially
demanded. In the absence of stipulation, the rate of interest
shall be 6% per annum to be computed from default, i.e.,
from judicial or extrajudicial demand under and subject to the
provisions of Article 1169 of the Civil Code. (Emphasis
supplied)
Against the foregoing backdrop, a 12% interest per
annum computed from the date of the taking of the subject
property until June 30, 2013, and 6% interest per annum from
July 1, 2013 until fully paid, on the just compensation to be
ascertained by the RTC, shall be imposed although not
specifically prayed for by respondents. In Prince Transport, Inc.
v. Garcia,[74] citing BPI Family Bank v. Buenaventura,[75] we
recognized that "the general prayer is broad enough to justify
[the grant] of a remedy different from or together with the
specific remedy" sought. Moreover, we stressed in Prince
Transport, Inc. v. Garcia that even if a specific remedy is not
prayed for, we may confer on the party the proper relief if the
facts alleged in the complaint and the evidence presented so
warrant as "[t]he prayer in the complaint for other reliefs
equitable and just in the premises justifies the grant of a relief
not otherwise specifically prayed for."[76] This is the situation
here.
Guidelines in the remand of the case
The Court notes that the date of taking of both of respondents'
property cannot be reasonably ascertained from the records of
the case as neither the pleadings filed by the parties nor the
Decisions rendered by the lower tribunals contained any
allegations nor findings thereon. Thus, the Court hereby
resolves to order the RTC to determine the date of taking – it
being an indispensable component of just compensation – of
the subject landholdings. Accordingly, the LBP may submit in
evidence the Certificates of Land Ownership Award (for the RA
6657-acquired property) and Emancipation Patents (for the PD
27-acquired land), which are conclusive proof of actual taking
of the properties, granted to the farmer-beneficiaries of said
lands. Alternatively, it may present the Notice of Coverage,
Notice of Valuation, Letter of Invitation to A Preliminary
Conference and Notice of Acquisition issued by the DAR to
confirm symbolic compulsory taking of the RA 6657-acquired
property.[77]
It bears emphasis that despite the enactment of RA 9700, the
determination of just compensation for both landholdings shall
be pursuant to Section 17 of RA 6657, as amended, in view of
the qualifications imposed by RA 9700.
It must be reiterated too that the factors laid down in Section
17 of RA 6657, as amended, and the formula as translated by
the DAR in its implementing rules, are mandatory and may not
be disregarded by the RTC. Both parties are reminded that they
ought to present evidence in accordance with the
requirements set forth in the relevant DAR issuances. For this
reason, this Court restates that even if the landowner fails to
prove a higher amount as just compensation, the LBP must
substantiate its valuation and prove the correctness of its
claims. Naturally, it behooves the LBP to present clear and
convincing documentary and, if necessary, testimonial,
evidence to justify its valuation and how this was arrived at.
Moreover, as regards the RA 6657-acquired property, the RTC
must be reminded that although the potential use of an
expropriated property may be factored in, especially in
instances where there is a significant improvement in the
locality of the expropriated property, that factor, however,
should not be the controlling component in the
determination of just compensation. Otherwise, it will run
afoul of the well-settled principle that the fair market value of
an expropriated property is determined essentially by its
character and by its price at the time of taking, not by its
potential uses.
Finally, the RTC may not award compounded interest on the
PD 27- acquired land, considering that RA 6657, which is now
applicable even to landholdings covered by PD 27, does not
itself expressly grant it; what is allowed is the grant of
interest in the nature of delay in payment of just
compensation. Hence, the LBP is obliged to pay interest at
12% per annum from the date of taking until June 30, 2013,
and 6% per annum from July 1, 2013 until fully paid, in the
event it is found to be in delay in the payment of just
compensation.
WHEREFORE, the Petition is hereby PARTLY GRANTED. The
January 18, 2010 Decision and May 24, 2010 Resolution of
the Court of Appeals in CA-G.R. SP No. 93518
are REVERSED and SET ASIDE. Land Valuation Case Nos.
LV-30-'03 and LV-48-'03 are hereby REMANDED to the
Regional Trial Court of Sorsogon City, Branch 52, for the
determination of the just compensation strictly in accordance
with the guidelines set forth in this Decision.
SO ORDERED.
VELASCO JR., J.:
Nature of the Case
Before the Court is a Petition for Review on Certiorari
assailing the Decision[1] and Resolution of the Court of
Appeals (CA) in CA-G.R. CV No. 100523, dated July 10, 2015
and March 7, 2016, respectively. The challenged rulings
denied petitioner's claim for just compensation on
the ground that the portion of his property that was used by
the government was subject to an easement of right of way.
Additionally, the CA ordered petitioner to return any
payment made to him by the government in relation to the
enforcement of the easement.
The Facts of the Case
Petitioner Danilo Bartolata acquired ownership over a 400
square meter parcel of land identified as Lot 5, Blk. 1, Phase 1,
AFP Officer's Village, Taguig, Metro Manila by virtue of an
Order of Award from the Bureau of Lands dated December 14,
1987.[2] It appears from the Order of Award that petitioner was
the sole bidder for the property during a public auction
conducted on August 14, 1987,[3] with the offer of P15 per
square meter or P6,000 total for the 400 square meter lot.[4]
Sometime in 1997, respondents acquired 223 square meters of
petitioner's property for the development of the Metro Manila
Skyway Project. The parties agreed that in exchange for the
acquisition, petitioner would be paid just compensation for the
appraised value of the property, fixed at P55,000 per square
meter or an aggregate of P12,265,000 for the entire affected
area by the Municipal Appraisal Committee of Taguig, Metro
Manila.[5] Subsequently, on August 14, 1997, respondents
appropriated P1,480,000 in favor of petitioner as partial
payment.
Since the date of initial payment, petitioner had, on numerous
occasions, demanded from respondents the balance of
Php10,785,000.00, but the latter refused to settle their
outstanding obligation. This prompted petitioner to file, on
September 20, 2006, a Complaint[6] for a sum of money with
the Regional Trial Court (RTC), Branch 166 in Pasig City,
docketed as Civil Case No. 70969.[7]
In their Supplemental Answer, dated July 9, 2009, respondents
raised that the Order of Award from the Bureau of Lands
granting title to petitioner over the subject property contained
the following encumbrance:
This award shall further be subject to the provisions of the
Public Land Law (Commonwealth Act No. 141, as amended),
and particularly the following conditions:
xxxx
2. The land shall be subject to the easement and servitudes
provided for in Section 109-114 of Commonwealth Act No.
141, as amended.[8](emphasis added)
Respondents then argued that pursuant to Section 112 of
Commonwealth Act No. 141 (CA 141),[9] the government is
entitled to an easement of right of way not exceeding 60
meters in width, without need of payment for just
compensation, save for the value of improvements existing.
The pertinent provision reads:

SECTION 112. Said land shall further be subject to a
right-of-way not exceeding sixty (60) meters in width for
public highways, railroads, irrigation ditches, aqueducts,
telegraph and telephone lines and similar works as the
Government or any public or quasi-public service or
enterprise, including mining or forest concessionaires, may
reasonably require for carrying on their business, with
damages for the improvements only. (emphasis added)
Under the above-cited provision, any payment for the
government's use of the easement, unless made to
compensate the landowner for the value of the
improvements affected, is unwarranted. Consequently,
respondents prayed, by way of counterclaim, that the
P1,480,000 partial payment made to petitioner for the
acquisition of the latter's property, which was well within the
60-meter threshold width, be returned to the government.
In rebuttal, petitioner contended that Presidential Decree No.
2004 (PD 2004),[10] which amended Republic Act No. 730 (RA
730),[11]allegedly removed the statutory lien attached to the
subject property. Sec. 2 of RA 730, as amended, now reads:
SEC. 2. Lands acquired under the provisions of this Act shall
not be subject to any restrictions against encumbrance or
alienation before and after the issuance of the patents
thereon.
Respondents, however, countered that petitioner could not
have benefited from PD 2004 since the removal of
restrictions and encumbrances contained in PD 2004 only
applies to public land sold by the government for residential
purposes without public auction, whereas petitioner was
awarded the subject property through a public auction sale.
Ruling of the RTC
On November 28, 2012, the RTC promulgated its Decision in
Civil Case No. 70969 disposing the case in the following wise:
WHEREFORE, premises considered, judgment is hereby
rendered dismissing plaintiffs complaint for lack of merit and
insufficiency of evidence.
Defendant's counterclaims are likewise denied and dismissed
for insufficiency of evidence.
No pronouncement as to costs.
SO ORDERED.[12]
Giving credence to respondents' postulation, the RTC ruled that
PD 2004 could not have removed the encumbrances attached
to petitioner's property since the law does not cover public
lands sold through auction. The RTC, therefore, ruled that the
government is entitled to a 60-meter width right of way on the
property, for which it is not entitled to pay just compensation
under Sec. 112 of CA 141.[13]
Nevertheless, the RTC found no reason to grant respondents'
counterclaim. In ruling that petitioner is not under obligation to
return the initial payment made, the RTC considered the fact
that respondents effectively entered into a contract of sale
with petitioner for the acquisition of the piece of land to be
used for the Metro Manila Skyway Project, which contract of
sale was consummated by respondents' partial payment.[14] By
virtue of this consummated contract of sale, so the RTC further
ratiocinated, petitioner never opposed the taking of his
property. He was made to believe, as he did in fact believe,
that he will be paid just compensation as agreed upon by the
parties. It cannot then be said that petitioner was illegally paid
when he transacted with the government in good faith and
when he relied on respondents' representations that he is
entitled to just compensation.
Ruling of the CA
On appeal, the CA modified the RTC ruling thusly:
WHEREFORE, premises considered, plaintiff-appellant's appeal
is DENIED. On the other hand, defendants' appeal is GRANTED.
Accordingly, the Decision dated November 28, 2012 of Branch
166, Regional Trial Court of Pasig City in Civil Case No. 70969 is
hereby AFFIRMED with the MODIFICATION that
plaintiff-appellant is ordered to return the amount of
Php1,480,000.00 to the Republic of the Philippines.
SO ORDERED.[15]
The appellate court affirmed the RTC's finding that the subject
property is still subject to the easement of right of way, which
is free of any compensation, except only for the value of the
existing improvements that may have been affected. Echoing
the RTC's line of reasoning, the CA ruled that PD 2004 could not
be extended to benefit petitioner who acquired the subject
property through an auction sale. The lot in issue is, therefore,
subject to the statutory lien embodied in Sec. 112 of CA 141.
Further upholding the government's right to enforce against
petitioner's property the easement for public highways
without cost, the CA granted respondents' counterclaim on
appeal. The CA noted that the portion of petitioner's property
that was used by respondents corresponds to the widths of
13.92 meters and 13.99 meters, well within the 60-meter
limit under CA 141.[16] Given that respondents never
exceeded the threshold width, and that petitioner never
established that there were improvements in his property
that were affected, the CA held that petitioner is not entitled
to any form of compensation. Consequently, the CA ordered
him to return the P1,480,000 partial payment made, lest he
be unjustly enriched by respondents' use of the legal
easement that under the law should have been free of charge.
Aggrieved, petitioner moved for reconsideration of the
appellate court's Decision, which motion was denied by the
CA through its March 7, 2016 Resolution. Hence, petitioner
elevated the case to this Court.
The Issues
In the instant recourse, petitioner raises the following issues:
1. THE HONORABLE COURT OF APPEALS
SERIOUSLY/GRAVELY COMMITTED AN ERROR IN LAW
AND WITH THE ESTABLISHED/ACCEPTED
JURISPRUDENCE IN UPHOLDING AND SUSTAINING
THE DECISION DATED 28 NOVEMBER 2012 OF THE
HONORABLE REGIONAL TRIAL COURT BRANCH 166
OF PASIG CITY IN RULING THAT THE PROVISIONS OF
PRESIDENTUIAL DECREE NO. 2004 IS INAPPLICABLE
OVER THE SUBJECT PARCEL OF LAND OF PETITIONER.
2. THE HONORABLE COURT OF APPEALS
SERIOUSLY/GRAVELY COMMITTED AN ERROR IN LAW
AND WITH THE ESTABLISHED/ACCEPTED
JURISPRUDENCE IN UPHOLDING AND SUSTAINING
THE DECISION DATED 28 NOVEMBER 2012 OF THE
HONORABLE REGIONAL TRIAL COURT BRANCH 166
OF PASIG CITY IN RULING THAT THE PROVISIONS OF
COMMONWEALTH ACT NO. 141 APPLIES AS
ENCUMBRANCE OVER THE SUBJECT PARCEL OF LAND
OF PETITIONER.
xxxx
3. THE HONORABLE COURT OF APPEALS
SERIOUSLY/GRAVELY COMMITED AN ERROR IN LAW
AND WITH THE ESTABLISHED/ACCEPTED
JURISPRUDENCE IN UPHOLDING AND SUSTAINING
THE DECISION DATED 28 NOVEMBER 2012 OF THE
HONORABLE REGIONAL TRIAL COURT BRANCH 166
OF PASIG CITY IN RULING THAT PETITIONER IS NOT
ENTITLED TO BE PAID THE BALANCE OF JUST
COMPENSATION IN THE AMOUNT OF TEN MILLION
SEVEN HUNDRED EIGHTY-FIVE THOUSAND PESOS,
(Php10,785,000.00) WITH LEGAL INTEREST
COMMENCING FROM ACTUAL TAKING OF PROPERTY
ON 14 AUGUST 1997 UNTIL FULLY PAID.
4. THE HONORABLE COURT OF APPEALS
SERIOUSLY/GRAVELY COMMITTED AN ERROR IN LAW
AND WITH THE ESTABLISHED/ACCEPTED
JURISPRUDENCE IN UPHOLDING AND SUSTAINING THE
DECISION DATED 28 NOVEMBER 2012 OF THE
HONORABLE REGIONAL TRIAL COURT BRANCH 166 OF
PASIG CITY IN RULING THAT THE PARTIAL PAYMENT
MADE BY RESPONDENT IN THE AMOUNT OF ONE
MILLION FOUR HUNDRED EIGHTY THOUSAND PESOS
(Php1,480,000.00), BE RETURNED BY PETITIONER TO
RESPONDENT.
5. ASSUMING WITHOUT ADMITTING AND FOR THE SAKE
OF ARGUMENT THAT THE SUBJECT PARCEL OF LAND
LAWFULLY OWNED BY PETITIONER IS SUBJECT TO THE
PROVISIONS OF COMMONWEALTH ACT NO. 141 WITH
THE SIXTY (6) METERS ENCUMBRANCE OF RIGHT OF
WAY, PETITIONER SHOULD STILL BE ENTITLED TO THE
DIFFERENCE OF ONE HUNDRED SIXTY-THREE SQUARE
METERS, (163 sq.m.), OUT OF THE TWO HUNDRED
TWENTY-THREE SQUARE METERS (223 sq.m.) TAKEN BY
RESPONDENT FOR THE USE OF THE METRO MANILA
SKYWAY PROJECT, TO WHICH JUST COMPENSATION
THERETO MUST AND SHOULD BE PAID BY
RESPONDENT TO PETITIONER [17]
To simplify, the Court is faced with the same issues that
confronted the CA, to wit:
1. Whether or not the subject property owned by
petitioner is subject easement of right of way in favor
of the government;
2. Whether or not respondents are liable to pay just
compensation to petitioner; and
3. Whether or not petitioner should return the initial
payment made by respondents in the amount of
P1,480,000.
Petitioner maintains that RA 730 relaxed the mode of acquiring
public land, from the strict method of public auction to the
more lenient non-auction sale. Thus, petitioner postulates
that the CA's interpretation of PD 2004—that only public
lands sold without auction sale are covered by the decree's
removal of encumbrance—would lead to a scenario wherein
properties acquired through the more stringent process
would be subjected to more restrictions than those acquired
through the more relaxed means.[18] Petitioner, therefore,
submits that PD 2004 should be interpreted to cover all
government sales of public land, with or without auction.
Furthermore, petitioner cites his constitutional right to just
compensation in exchange for public property taken for
public use.[19] He laments that as early as August 14, 1997,
respondents have deprived him of his ownership rights over
more than half of his property for the development of the
Metro Manila Skyway Project. For 19 years and counting, the
government has been enjoying full use of 223 square meters
of his parcel of land, all the while denying petitioner payment
for just compensation, resulting in the violation of his
constitutionally enshrined right.[20] Petitioner, therefore,
prays that respondents be directed to pay the balance of
P10,785,000 pursuant to the parties' covenant, plus legal
interest.
In connection with the foregoing, petitioner asserts that he
could not be held liable to return the initial payment made by
respondents in the amount of P1,480,000. This amount, to
petitioner, constitutes part and parcel of the just
compensation he is legally entitled to for the government's
use of his private property. Respondents' payment was then
not tainted with illegality for which petitioner may be held
liable for its return.
Assuming for the sake of argument that petitioner illegally
obtained payment, petitioner claims that respondents are
barred from recovering the same as they themselves are in
pari delicto.[21] Being the same parties who cajoled petitioner
into parting with his property in the promise of being paid the
appraised value and who did, in fact, make such payment,
albeit partial, respondents could no longer recover what they
have already paid. To sustain the CA's finding that petitioner
ought to return the downpayment would be tantamount not
only to allowing respondents to abscond liability for paying
the balance, but also to virtually allowing the government to
rob petitioner of his property through machinations.[22]
Lastly, petitioner claims that in the alternative, even if the
property awarded to him by the Bureau of Lands is subject to
the easement under Sec. 112 of CA 141, he is still entitled to
just compensation in the amount of P8,959,000, representing
163 sq.m. (223 sq.m. taken property less the 60 sq.m.
easement) multiplied by the appraised value of the property
of P55,000 per square meter. Deducting the initial payment
made from the aggregate amount would leave respondents'
total unpaid balance in the amount of P7,485,000, plus legal
interest, as per petitioner's computation.[23]
The Court's Ruling
The petition is partly meritorious.
The easement of right of way in
favor of the government subsists
despite the enactment of PD 2004
Resolving the first issue, the Court rejects petitioner's claim
that the subject property is no longer subject to the 60-meter
width easement of right of way in favor of the government.
First, no less than the Order of Award granting petitioner title
over the subject property reads that the parcel of land
conferred to him is subject to the restrictions contained under
Sec. 109-114 of CA 141, which necessarily includes the
easement provided in Sec. 112. Notably, petitioner was
awarded the subject property in 1987, while PD 2004, which
allegedly removed all encumbrances and restrictions from
awarded properties, was signed into law much earlier in 1985.
This alone raises suspicion on the applicability of PD 2004 to
the subject property.
Second, the Court finds no reversible error in the RTC and CA's
interpretation of the coverage of PD 2004 and RA 730. The title
of RA 730 itself supports the rulings of the courts a quo that
the laws petitioner relied upon only cover the sale of public
lands for residential purposes and to qualified
applicants without public auction. To quote:
REPUBLIC ACT NO. 730 – AN ACT TO PERMIT
THE SALE WITHOUT PUBLIC AUCTION OF PUBLIC LANDS OF
THE REPUBLIC OF THE PHILIPPINES FOR RESIDENTIAL
PURPOSES TO QUALIFIED APPLICANTS UNDER CERTAIN
CONDITIONS (emphasis added)
It can readily be inferred from the title of RA 730 that the
definite ambit of the law could not be extended to sales of
public lands via public auction, through which mode of
disposition petitioner acquired the subject property.
Consequently, when RA 730 was amended by PD 2004 to the
effect of removing encumbrances and restrictions on
purchased properties without public auction, petitioner could
not have benefitted from the same.
Lastly, even the contents of RA 730 belie petitioners claim. The
foremost section of the law reads:
Section 1. Notwithstanding the provisions of sections
sixty-one and sixty-seven of Commonwealth Act Numbered
One hundred forty-one, as amended by Republic Act
Numbered Two hundred ninety-three, any Filipino citizen of
legal age who is not the owner of a home lot in the
municipality or city in which he resides and who has in good
faith established his residence on a parcel of the public land of
the Republic of the Philippines which is not needed for the
public service, shall be given preference to purchase at a
private sale of which reasonable notice shall be given to him
not more than one thousand square meters at a price to be
fixed by the Director of Lands with the approval of the
Secretary of Agriculture and Natural Resources. It shall be an
essential condition of this sale that the occupants has
constructed his house on the land and actually resided
therein. Ten per cent of the purchase price shall be paid upon
the approval of the sale and the balance may be paid in full,
or in ten equal annual installments. (emphasis added)
As can be gleaned, RA 730 was crafted as an exception to
Sees. 61[24] and 67[25] of CA 141. These provisions govern the
mode of disposition of the alienable public lands enumerated
under Sec. 59 of the same law.[26] Synthesizing the provisions,
CA 141 provides that public lands under Sec. 59 can only be
disposed for residential, commercial, industrial, and other
similar purposes through lease or sale, in both cases, "to the
highest bidder." The conduct of an auction is then required
under Secs. 61 and 67.
By way of exception, however, RA 730 now allows the sale of
public lands without public auction to qualified
applicants.[27] It is through this exceptional case of purchase
of public land without public auction wherein PD 2004 would
apply.
Petitioner's assertion that both sales of public land with and
without public auction are subsumed under the coverage of
PD 2004 is contrary to the very tenor of the law. Sec. 2 of RA
730, as amended by PD 2004, is clear and unambiguous:
SEC. 2. Lands acquired under the provisions of this Act shall
not be subject to any restrictions against encumbrance or
alienation before and after the issuance of the patents
thereon. (emphasis added)
Under its plain meaning, only public lands acquired by
qualified applicants without public auction and for residential
purposes are free from any restrictions against encumbrance
or alienation. The provision is inapplicable to petitioner's
property which was awarded to petitioner not in accordance
with RA 730, but through public auction.
What is more, the easement of right of way under Sec. 112 of
CA 141 is not subsumed in the phrase "restrictions against
encumbrance or alienation" appearing in the amendment
introduced by PD 2004. This becomes obvious upon
examining the original text of Sec. 2 of RA 730, before PD
2004 took effect:
Sec. 2. Except in favor of the Government or any of its branches,
units, or institutions, lands acquired under the provisions of
this act shall not be subject to encumbrance or alienation
before the patent is issued and for a term of ten years from the
date of the issuance of such patent, nor shall they become
liable to the satisfaction of any debt contracted prior to the
expiration of the said period. No transfer or alienation made
after the said period of ten years and within fifteen years from
the issuance of such patent except those made by virtue of the
right of succession shall be valid unless when duly authorized
by the Secretary of Agriculture and Natural Resources and the
transferee of vendee is a Filipino citizen. Every convenyance
made shall be subject to repurchase by the original purchaser
or his legal heirs within a period of five years from the date of
conveyance.
Any contract or agreement made or executed in violation of
this section shall be void ab initio.
Consequently, it was erroneous for petitioner to harp on Sec. 2
of RA 730, as amended by PD 2004, in his bid to unshackle his
property from its servient state, to release it from the statutory
lien prescribed under Sec. 112 of CA 141.
Petitioner is not entitled to just compensation
The Court now determines how the subsisting easement of
right of way in favor of the government bears on petitioner's
entitlement to just compensation. In resolving petitioner's
principal claim, we apply the doctrine in Republic v. Andaya
(Andaya).[28]
The seminal case of Andaya likewise involved property subject
to the statutory lien under Sec. 112 of CA 141. As held in the
case:
It is undisputed that there is a legal easement of right-of-way in
favor of the Republic. Andaya's transfer certificates of title
contained the reservation that the lands covered thereby are
subject to the provisions of the Land Registration Act and the
Public Land Act. Section 112 of the Public Land Act provides
that lands granted by patent shall be subject to a right-of-way
not exceeding 60 meters in width for public
highways, irrigation ditches, aqueducts, and other similar
works of the government or any public enterprise, free of
charge, except only for the value of the
improvements existing thereon that may be affected. In view
of this, the Court of Appeals declared that all the Republic
needs to do is to enforce such right without having to initiate
expropriation proceedings and without having to pay any just
compensation. Hence, the Republic may appropriate the 701
square meters necessary for the construction of the
floodwalls without paying for it.[29](emphasis added)
The Court affirmed the CA's interpretation of Sec. 112 of CA
141 and ruled that the Republic was under no obligation to
pay therein respondent Andaya just compensation in
enforcing its right of way. Be that as it may the Court did not
foreclose the possibility of the property owner being entitled
to just compensation if the enforcement of the right of way
resulted in the "taking" of the portions notsubject to the legal
easement.
Jurisprudence teaches us that "taking, " in the exercise of the
power of eminent domain, "occurs not only when the
government actually deprives or dispossesses the property
owner of his property or of its ordinary use, but also when
there is a practical destruction or material impairment of the
value of his property."[30] As in Andaya, even though the
Republic was not legally bound to pay just compensation for
enforcing its right of way, the Court nevertheless found that
its project to be undertaken—the construction of floodwalls
for Phase 1, Stage 1 of the Lower Agusan Development
Project—would prevent ingress and egress in Andayas private
property and turn it into a catch basin for the floodwaters
coming from the Agusan River, effectively depriving him of
the normal use of the remainder of his property. To the mind
of the Court, this resulted in a "taking" of what was left of
Andaya's property, entitling him to consequential damages,
awarded by the Court in the form of just compensation.
To demonstrate in concrete terms, the property involved
in Andaya contained a total area of 10,380 square meters,
which can be divided in the following manner:
i. The 4,443 square meter portion subject to the
easement of right of way, which can further be
subdivided into two:
a. The 701 square meter portion corresponding
to total area of the 10-meter easement
actually utilized by the Republic; and
b. The 3,742 square meter portion
corresponding to the unutilized area of the
portion subject to the 60-meter width
easement; and
ii. The remainder 5,937 square meter portion not
subject to the government's easement of right of
way.
The 701 square meter easement in Andaya was the site for
the floodwall project. This was the extent of the right of way
enforced by the government. The Court affirmed the CA
ruling that the Republic may acquire the 701 square meter
property free of charge, save only for the value of the
improvements that may be affected.
As previously discussed, the floodwall project on the 701
square meter property would have deprived Andaya of the
normal use of the remainder, i.e., both the 3,742 and the 5,937
square meter residual portions. But of the two, the Court held
that Andaya is entitled to just compensation only for the 5,937
square meter span. The Court ratiocinated that though
unutilized, the 3,742 square meter portion is still covered by
Sec. 112 of CA 141 that limits the property owner's
compensation to the value of the improvements, not of the
value of the property per se.
To recapitulate, two elements must concur before the property
owner will be entitled to just compensation for the remaining
property under Sec. 112 of CA 141: (1) that the remainder is
not subject to the statutory lien of right of way; and (2) that the
enforcement of the right of way results in the practical
destruction or material impairment of the value of the
remaining property, or in the property owner being
dispossessed or otherwise deprived of the normal use of the
said remainder.
This doctrine in Andaya was reiterated in the recent Republic v.
Regulto.[31] We now apply the same parameters for
determining petitioner's entitlement to just compensation in
the case at bar.
Recall that the subject property in this case is a 400 square
meter parcel of land. The 223 square meter portion of the
subject property was traversed by respondents' Metro Manila
Skyway Project. And as noted by the CA, the subdivision plan
shows that the covered area corresponds to the widths of
13.92 meters and 13.99 meters, well within the 60-meter width
threshold provided by law. Respondents are then not under
any legal obligation to pay just compensation for utilizing the
223 square meter portion pursuant to the Republic's right of
way under Sec. 112 of CA 141, and in accordance with our
ruling in Andaya.
Anent the remaining 177 square meters of the 400 square
meter lot, suffice it to state that it was never proved that the
said area was not subject to the statutory lien. Neither was it
established that despite not having been utilized for the Metro
Manila Skyway Project, the enforcement of the easement
resulted in the "taking" of the remaining property all the same.
There is then no evidentiary basis for awarding petitioner just
compensation, as correctly ruled by the RTC and the CA.
However, petitioner remains the owner of the said 177 square
meters and can fully exercise all the rights of ownership over
the same.
Respondents are barred by estoppel
from recovering the initial payment
of P1,480,000 from petitioner
Guilty of reiteration, Sec. 112 of CA 141 precludes petitioner
from claiming just compensation for the government's
enforcement of its right of way. The contract allegedly entered
by the parties for the government's acquisition of the
affected portion of the property in exchange for just
compensation is then void ab initio for being contrary to
law.[32] Consequently, petitioner has no right to collect just
compensation for the government's use of the 223 square
meter lot. Anent the P1,480,000 partial payment already
made by respondents, such amount paid shall be governed by
the provisions on solutio indebiti or unjust enrichment.
"Solutio indebiti" arises when something is delivered through
mistake to a person who has no right to demand it. It
obligates the latter to return what has been received through
mistake. As defined in Article 2154 of the Civil Code,[33] the
concept has two indispensable requisites: first, that
something has been unduly delivered through mistake;
and second, that something was received when there was no
right to demand it.[34]
As discussed above, petitioner was never entitled to collect
and receive just compensation for the government's
enforcement of its right of way, including the P1,480,000
payment made by respondents. For its part, the government
erroneously made payment to petitioner because of its
failure to discover earlier on that the portion of the property
acquired was subject to a statutory lien in its favor, which it
could have easily learned of upon perusal of petitioner's
Order of Award. These circumstances satisfy the
requirements for solutio indebiti to apply.
Regardless, respondents' action to compel petitioner to
return what was mistakenly delivered is now barred by the
doctrine of estoppel. The doctrine is based upon the grounds
of public policy, fair dealing, good faith and justice, and its
purpose is to forbid one to speak against his own act,
representations, or commitments to the injury of one to
whom they were directed and who reasonably relied thereon.
The doctrine of estoppel springs from equitable principles
and the equities in the case.[35]
As a general rule, the State cannot be barred by estoppel by
the mistakes or errors of its officials or agents. But as
jurisprudence elucidates, the doctrine is subject to exceptions,
viz:
Estoppels against the public are little favored. They should
not be invoked except [in rare] and unusual circumstances,
and may not be invoked where they would operate to defeat
the effective operation of a policy adopted to protect the
public. They must be applied with circumspection and should
be applied only in those special cases where the interests of
justice clearly require it. Nevertheless, the government must
not be allowed to deal dishonorably or capriciously with its
citizens, and must not play an ignoble part or do a shabby
thing; and subject to limitations ..., the doctrine of equitable
estoppel may be invoked against public authorities as well as
against private individuals.[36]
In this case, petitioner was erroneously paid P1,480,000 on
August 14, 1997 when respondents appropriated the amount
in his favor. However, because of respondents' representation
that the amount was a mere downpayment for just
compensation, petitioner never objected to the taking of his
land and peacefully parted with his property, expecting to be
paid in full for the value of the taken property thereafter. As
the events unfolded, respondents did not make good their
guarantee. Instead, they would claim for the recovery of the
wrongful payment after almost twelve (12) years, on July 9,
2009, as a counterclaim in their Supplemental Answer.
Indubitably, respondents are barred by estoppel from
recovering from petitioner the amount initially paid. A
modification of the assailed CA ruling is, therefore, in order.
WHEREFORE, premises considered, the Court resolves
to PARTIALLY GRANT the petition. The award to respondents
for the recovery of the P1,480,000 initial payment is
hereby DELETED as their right to a refund has already
prescribed. Petitioner Danilo Bartolata remains the owner of
the 177 square meter portion and can exercise all rights of
ownership over the said lot.
SO ORDERED.
G.R. No. 223366
NATIONAL TRANSMISSION CORPORATION, Petitioner,
vs.
OROVILLE DEVELOPMENT CORPORATION, Respondent
DECISION
MENDOZA, J.:
This is a petition for review on certiorari seeking to reverse and
set aside the September 18, 2015 Decision1 and January 25,
2016 Resolution2 of the Court of Appeals (CA) in CA-G.R. CV No.
03571, which affirmed with modification the December 12,
2012 Decision3 of the Regional Trial Court, Branch 17, Misamis
Oriental (RTC) in Civil Case No. 2007-85, a case for
expropriation.
The Antecedents
The present case involves two (2) parcels of land located in
Puerto, Cagayan de Oro City, which originally belonged to
Alfredo Reyes (Reyes) and Grace Calingasan (Calingasan),
covered by Original Certificate of Title (OCT) No. P-3 and OCT
No. P-13, respectively.
In 1983, petitioner National Transmission Corporation (TransCo)
constructed a power transmission line on these properties,
known as the Tagoloan-Pulangi 138 kV transmission line.
At some point, Reyes sold his land to Antonio Navarette, who
later sold the same property to respondent Oroville
Development Corporation (Oroville), which is now covered by
Transfer Certificate of Title (TCT) No. T-85121. Likewise,
Calingasan sold her land to Oroville, now registered under
TCT No. T-104365. Thus, in 1995, Oroville became the
registered owner of these properties with a total area of
13 ,904 square meters traversed by the existing
Tagoloan-Pulangi 138 kV transmission line.
On November 17, 2006, Transco offered to buy these
properties from Oroville to be used for the construction of
the Abaga-Kirahon 230 kV transmission line in Mindanao.
During the negotiation, Oroville, through its representative
Antonio Tiu (Tiu), requested to reroute the Abaga-Kirahon
230 kV transmission line because the Tagoloan-Pulangi 138
kV transmission line is already traversing its properties. Tiu
also informed Transco that Oroville has not been paid just
compensation for the constn1ction of the Tagoloan-Pulangi
138 kV transmission line in its property. Transco, however,
refused to reroute the proposed Abaga-Kirahon 230 kV
transmission line because it planned to construct the said
transmission line parallel to the existing Tagoloan-Pulangi 138
kV transmission line.
Consequently, on April 20, 2007, Oroville filed a complaint for
injunction and damages with prayer for issuance of a
temporary restraining order against Transco, seeking to
enjoin the construction of the Abaga-Kirahon 230 kV
transmission line.
On May 9, 2007, Transco filed its Answer denying the
allegations in Oroville's complaint. It also manifested that it
would file the required expropriation proceedings against
Oroville in order to acquire the latter's properties for the
Abaga-Kirahon 230 kV transmission line project.
During trial, the parties agreed to have the subject properties
surveyed for purposes of fixing the just compensation. As a
result, the trial court suspended the proceedings and directed
Transco to conduct a survey of the properties.
Subsequently, Oroville filed an omnibus motion to convert
the proceedings into an expropriation case and to require
Transco to pay the Bureau of Internal Revenue (BIR) the zonal
value of the subject properties. Transco made no objections
to the motion.
On May 17, 2010, the trial court directed Transco to make a
provisional deposit of ₱7,647,200.00 as just compensation for
Oroville's properties consisting of 13,904 square meters and
affected by the existing Tagoloan-Pulangi 138 kV transmission
line. Transco complied after the trial court denied its
objections.
On February 4, 2011, the trial court directed the Land Bank of
the Philippines, NAPOCOR Branch, to release the aforesaid
deposit to Tiu.
On March 21, 2011, the trial court issued a writ of possession
directing Oroville to surrender possession of the properties to
Transco.
Subsequently, on August 8, 2011, per nomination of the parties,
the trial court appointed three (3) Commissioners, namely,
Engr. Marilyn P. Legaspi, Engr. Norberto Badelles and Atty.
Avelino Pakino, to determine the just compensation of the
properties affected by the Abaga-Kirahon 230 kV transmission
line.
A summary of the Commissioners' report reads as follows:
1. Engr. Marilyn Legaspi (Court-appointed Commissioner)
Date of 1983 per Transmission Line Data and
Taking: Information
(Tagoloan-Pulangi 138 kV Transmission
Line)
Valuation of the Property: ₱78.65 per square meter or a total
of ₱5,924,772.48 inclusive of interests4
2. Engr. Norberto Badelles (engaged by Transco)
Date of 1983 per Transmission Line Data and
Taking: Information
(Tagoloan-Pulangi 138 kV Transmission
Line)
Valuation of the Property: ₱1.20 per square meter or a total of
₱45,716.35 inclusive of interests5
3. Atty. Avelino Pakino (nominated by Oroville)
Date of 1983 per Transmission Line Data and
Taking: Information
(Tagoloan-Pulangi 138 kV Transmission
Line)
Valuation of the Property: ₱2,000.00 per square meter or a
total of ₱27,808,000.00 inclusive of interests6
The RTC Ruling
In its Decision, dated December 12, 2012, the RTC set aside the
Commissioners' report and fixed the just compensation at the
rate of ₱1,520.00 per square meter with legal interest of 12%
per annum reckoned from April 20, 2007, the date of filing of
the complaint. It held that the said amount was based on the
fair market value of lots along the national highway of
Barangay Puerto, Cagayan de Oro City in accordance with the
schedule of values under City Ordinance No. 10425-2006
otherwise known as An Ordinance Prescribing the Revised
Schedule of Fair Market Values of Real Property in Cagayan de
Oro and in accordance with the BIR Comparative Value of Zonal
Fair Market Values. The RTC opined that the just compensation
should not be reckoned from 1983, the time of taking, because
it was established by the landowners that entry into their
property was without their knowledge. The falloreads:
WHEREFORE, in view of the foregoing premises, judgment is
hereby rendered as follows:
1) FIXING the just compensation of the affected area of 13,904
square meters at ₱1,520.oo per square meter reckoned from
April 20, 2007, the date the complaint was filed, at interest
rate of 12% per annum until the liability is fully paid
2) ORDERING defendant TRANSCO to pay plaintiff the just
compensation in the amount of ₱1,520.00 per square meter
for the 13,904 square meters the affected area at the rate of
12% per annum reckoned from April 20, 2007, the data of
filing the complaint minus the amount of ₱7,647,200.oo
representing the amount paid by TRANSCO as provisional
payments
3) ORDERING defendant TRANSCO to pay plaintiff the interest
of 12% per annum based on the deficiency amount;
4) ORDERING Plaintiff and Defendant to pay the
Commissioners' fee in the amount of ₱10,000.00 each within
15 days from receipt of this Order.
The Court will leave to the parties the correct mathematical
computation as to what is due to plaintiff based on the
foregoing premises.
SO ORDERED.7
Aggrieved, Transco elevated an appeal before the CA.
The CA Ruling
In its assailed Decision, dated September 18, 2015, the CA
ruled that TransCo's entry into Oroville's lots in 1983 was
made without warrant or color of authority because at the
time Transco constructed the Tagoloan-Pulangi 138 kV
transmission line over the disputed properties in 1983, it was
made without intent to expropriate. It added that Transco
constructed the transmission line without bothering to
negotiate with the owner to purchase or expropriate the
disputed lots.
Further, the CA adjudged that the construction of the
Tagoloan-Pulangi 138 kV transmission line did not oust or
deprive Oroville or its previous owners of the beneficial
enjoyment of their properties as they continued to possess
the same. It observed that the previous owners were able to
sell the properties to Oroville; and that after acquiring them,
Oroville considered developing the lots for residential
subdivision purposes, but the subject properties were later
on classified as agricultural lands covered by the
Comprehensive Agrarian Reform Program (CARP) of the
government.
The CA concluded that there was no actual taking of the
subject properties in 1983 when Transco constructed the
Tagoloan-Pulangi 138 kV transmission
line.1âwphi1 Accordingly, the computation of the just
compensation should be reckoned at the time of the filing of
the complaint in 2007. The dispositive portion reads:
WHEREFORE, the Judgment dated 12 December 2012 of the
Regional Trial Court, (Branch 17), 10th Judicial Region,
Cagayan de Oro City, is MODIFIED. Appellant National
Transmission Corporation is hereby ORDERED to pay appellee
Oroville Corporation the unpaid balance of the just
compensation in the sum of P13,486,880.oo with legal
interest of TWELVE PERCENT (12%) per annum computed from
21 March 2011 to 30 June 2013 and SIX PERCENT (6%) per
annum from 1 July 2013 until its full payment. Both parties are
DIRECTED to pay the Commissioners' fee in the amount of
₱10,000.00 each within 15 days from notice.
SO ORDERED.8
Transco moved for reconsideration, but the same was denied
by the CA in its assailed Resolution, dated January 25, 2016.
Hence, this petition.
ISSUES
WHETHER THE COMPUTATION OF JUST COMPENSATION FOR
THE EXPROPRIATED PROPERTY SHOULD BE BASED ON ITS
VALUE AT THE TIME OF THE TAKING OF THE PROPERTY
WHETHER THE IMPOSITION OF A LEGAL INTEREST OF 12% IS
UNJUSTIFIED9
Petitioner argues that Section 4, Rule 67 of the Rules of Court
and applicable jurisprudence are explicit in saying that just
compensation for expropriated property shall be determined
based on its fair market value at the time of its taking; that
Oroville could not claim lack of knowledge to the construction
of the transmission line since it is in plain view, considering its
height and the huge space that it occupied; that Oroville should
not be allowed to benefit from its failure to question such
construction more than a decade after its completion; and that
it should not be made to pay 12% interest per annum in the
nature of damages for delay as it complied with the RTC's
directive to make provisional deposit for the subject property.
In its Comment,10 dated August 5, 2016, Oroville averred that
to sustain the argument of Transco that the basis of the
payment for just compensation is the value of the property at
the time of taking would sow immeasurable injustice; that the
P78.65 per square meter valuation as recommended by
Commissioner Legaspi and the ₱1.20 per square meter
recommended by Commissioner Badelles would not be enough
to reimburse Oroville for the realty taxes it paid from the year
1983 up to the present; that while it paid these annual taxes,
Transco had been earning billions of pesos from transmission
charges; that as held in Napocor v. Campos, Jr., there were
instances when Transco removed transmission lines from the
affected properties due to diversion of its lines, thus, upon
entry, Transco did not have intent to expropriate the property
because there might be a change of plans; that Transco would
initiate expropriation proceedings only when it was certain of
its transmission plans; that the earlier entry into and/or
possession of Transco of the subject properties was patently
without any color of legal authority as it did not have the
slightest intention to acquire ownership of the subject
properties either by voluntary purchase or by exercise of
eminent domain; and that the delay in the payment of just
compensation justified the payment of 12% interest per
annum.
In its Reply,11 dated November 25, 2016, Transco contended
that this case is not an exception to the settled rule that just
compensation should be based on the property's value at the
time of its taking; that the value and classification of the
subject property at the time of its taking in 1983 should be
the basis for the computation of just compensation; that it
informed Oroville of the construction of the new transmission
line over its properties and readily agreed to the conversion
of its complaint for injunctive relief into an expropriation case;
and that the landowner should also bear the cost of being
remiss in guarding against the effects of a belated claim.
The Court's Ruling
The petition is meritorious.
Eminent domain is the right or power of a sovereign state to
appropriate private property to particular uses to promote
public welfare. It is an indispensable attribute of sovereignty;
a power grounded in the primary duty of government to
serve the common need and advance the general
welfare.12 The power of eminent domain is inseparable in
sovereignty being essential to the existence of the State and
inherent in government. But the exercise of such right is not
unlimited, for two mandatory requirements should underlie
the Government's exercise of the power of eminent domain,
namely: (1) that it is for a particular public purpose; and (2)
that just compensation be paid to the property
owner.13 These requirements partake the nature of implied
conditions that should be complied with to enable the
condemnor to keep the property expropriated.14
Taking of Oroville's property
occurred in 1983 upon construction of
the transmission lines
The landmark case of Republic v. Vda. De Castellvi15 provides
an enlightening discourse on the requisites of taking.
First, The expropriator must enter a private property; Second,
the entrance into private property must be for more than a
momentary period; Third, the entry into the property should
be under warrant or color of legal authority; Fourth, the
property must be devoted to a public use or otherwise
informally appropriated or injuriously affected; and Fifth, the
utilization of the property for public use must be in such a
way as to oust the owner and deprive him of all beneficial
enjoyment of the property.16
The Court rules that there is taking of the property for
purposes of eminent domain in 1983.
The first and fourth requisites are present in this case.
Transco took possession of Oroville's property in order to
construct transmission lines to be used in generating
electricity for the benefit of the public.
The second requisite is likewise present as there can be no
question that the construction of transmission lines meant an
indefinite stay in the property of Oroville. Further, Trans Co's
exercise of eminent domain is pursuant to its authority
granted under Section 8 of Republic Act (R.A.) No. 9136 or the
Electric Power Industry Reform Act of 2001.17
Finally, Oroville has been deprived of the beneficial
enjoyment of its property. In several rulings, notably National
Power Corporation v. Spouses Zabala,18 Republic v. Spouses
Libunao,19 and National Power Corporation v. Tuazon20 this
Court has already declared that "since the high-tension electric
current passing through the transmission lines will perpetually
deprive the property owners of the nonnal use of their land, it
is only just and proper to require Napocor to recompense them
for the full market value of their property."
Just compensation reckoned from the
date of actual taking
The next question to be resolved is whether just compensation
should be reckoned from 1983 when the taking took place.
Just compensation is defined as the full and fair equivalent of
the property taken from its owner by the expropriator. The
measure is not the taker's gain, but the owner's loss. The word
"just" is used to intensify the meaning of the word
"compensation" and to convey thereby the idea that the
equivalent to be rendered for the property to be taken shall be
real, substantial, full, and ample.21
In addition, Section 4, Rule 67 of the Rules of Court provides:
Section 4. Order of expropriation. - If the objections to and the
defenses against the right of the plaintiff to expropriate the
property are overruled, or when no party appears to defend as
required by this Rule, the court may issue an order of
expropriation declaring that the plaintiff has a lawful right to
take the property sought to be expropriated, for the public use
or purpose described in the complaint, upon the payment of
just compensation to be determined as of the date of the
taking of the property or the filing of the complaint,
whichever came first. xxxx[Emphasis supplied]
The case of Secretary of the Department of Public Works and
Highways v. Spouses Tecson (Tecson)22 provides a discussion of
cases wherein the Court conformed to the abovementioned
rule and held that payment of just compensation should be
reckoned from the date of taking when such preceded the
filing of the complaint for expropriation, to wit:
In Forfom Development Corporation [Forlorn] v. Philippine
National Railways [PNR], PNR entered the property of Forfom
in January 1973 for public use, that is, for railroad tracks,
facilities and appurtenances for use of the Carmona Commuter
Service without initiating expropriation proceedings. In 1990,
Forlorn filed a complaint for recovery of possession of real
property and/ or damages against PNR. In Eusebio v. Luis,
respondent's parcel of land was taken in 1980 by the City of
Pasig and used as a municipal road now known as A Sandoval
Avenue in Pasig City without the appropriate expropriation
proceedings. In 1994, respondent demanded payment of the
value of the property, but they could not agree on its valuation
prompting respondent to file a complaint for reconveyance
and/ or damages against the city government and the mayor.
In Manila International Airport Authority v. Rodriguez, in the
early 1970s, petitioner implemented expansion programs for
its runway necessitating the acquisition and occupation of
some of the properties surrounding its premises. AB to
respondent's property, no expropriation proceedings were
initiated. In 1997, respondent demanded the payment of the
value of the property, but the demand remained unheeded
prompting him to institute a case for accion
reivindicatoria with damages against petitioner. In Republic v.
Sarabia, sometime in 1956, the Air Transportation Office
(ATO) took possession and control of a portion of a lot
situated in Aldan, registered in the name of respondent,
without initiating expropriation proceedings. Several
structures were erected thereon including the control tower,
the Kalibo crash fire rescue station, the Kalibo airport
terminal and the headquarters of the PNP Aviation Security
Group. In 1995, several stores and restaurants were
constructed on the remaining portion of the lot. In 1997,
respondent filed a complaint for recovery of possession with
damages against the storeowners where ATO intervened
claiming that the storeowners were its lessees.
The Court in the above-mentioned cases was confronted
with common factual circumstances where the government
took control and possession of the subject properties for
public use without initiating expropriation proceedings and
without payment of just compensation, while the
landowners failed for a long period of time to question such
government act and later instituted actions for recovery of
possession with damages. The Court thus determined the
landowners' right to the payment of just compensation and,
more importantly, the amount of just compensation. The
Court has uniformly ruled that just compensation is the
value of the property at the time of taking that is controlling
for purposes of compensation. In Forlorn, the payment of
just compensation was reckoned from the time of taking in
1973; in Eusebio, the Court fixed the just compensation by
determining the value of the property at the time of taking in
1980; in MIAA, the value of the lot at the time of taking in
1972 served as basis for the award of compensation to the
owner; and in Republic, the Court was convinced that the
taking occurred in 1956 and was thus the basis in fixing just
compensation.23 [Citations omitted and emphases supplied]
As further pointed out in Republic v. Lara, et al.,24 thus:
x x x "The value of the property should be fixed as of the date
when it was taken and not the date of the filing of the
proceedings." For where property is taken ahead of the filing
of the condemnation proceedings, the value thereof may be
enhanced by the public purpose for which it is taken; the
entry by the plaintiff upon the property may have
depreciated its value thereby; or, there may have been a
natural increase in the value of the property from the time it
is taken to the time the complaint is filed, due to general
economic conditions. The owner of private property should
be compensated only for what he actually loses; it is not
intended that his compensation shall extend beyond his loss
or injury. And what he loses is only the actual value of his
property at the time it is taken x x x.25
Indeed, the State is only obliged to make good the loss
sustained by the landowner, with due consideration of the
circumstances availing at the time the property was taken.
The concept of just compensation does not imply fairness to
the property owner alone. Compensation must also be just to
the public, which ultimately bears the cost of expropriation.26
The sequence of events in all of these cited cases as well as in
Tecson is similar to that obtaining in the case at bench, that is,
the government took possession of private properties without
initiating expropriation proceedings and later on, the property
owners demanded either the return of their properties or the
payment of just compensation. Thus, pursuant to the Rules of
Court and in accordance with prevailing jurisprudence, the
Court rules that just compensation must be ascertained as of
the year 1983 when Transco commenced construction of the
transmission lines. Just compensation is therefore fixed at
₱78.65 per square meter, which is the fair market value of the
property at the time of taking. As will be discussed later on, the
imposition of interest would adequately compensate the
property owner for the delay in the payment of just
compensation considering that more often than not, the
amount of interest to be paid is higher than the increase in the
property's market value.
The rulings in Macabangkit
Sangkay and Saludares are
mere exceptions
The Court is not unaware of the rulings in National Power
Corporation v. Heirs of Macabangkit Sangkay (Macabangkit
Sangkay)27 and National Power Corporation v. Spouses
Saludares (Saludares) 28 wherein it was held that just
compensation should be reckoned from the time the property
owners initiated inverse condemnation proceedings
notwithstanding that the taking of the properties occurred
earlier.
In Macabangkit Sangkay, NAPOCOR, in the 1970s, undertook
the construction of several underground tunnels to be used in
diverting the water flow from the Agus River to the
hydroelectric plants. On November 21, 1997, respondents
therein sued NAPOCOR for recovery of property and damages,
alleging that they belatedly discovered that one of the
underground tunnels of NPC traversed their land.29 In that case,
the Court adjudged that the value of the property at the time
the property owners initiated inverse condemnation
proceedings should be considered for purposes of just
compensation for the following reasons, viz:
Compensation that is reckoned on the market value prevailing
at the time either when NPC entered or when it completed the
tunnel, as NPC submits, would not be just, for it would
compound the gross unfairness already caused to the owners
by NPC's entering without the intention of formally
expropriating the land, and without the prior knowledge and
consent of the Heirs of Macabangkit. NPC's entry denied
elementary due process of law to the owners since then until
the owners commenced the inverse condemnation
proceedings. The Court is more concerned with the necessity
to prevent NPC from unjustly profiting from its deliberate acts
of denying due process of law to the owners. As a measure of
simple justice and ordinary fairness to them, therefore,
reckoning just compensation on the value at the time the
owners commenced these inverse condemnation proceedings
is entirely warranted.30
On the other hand, in Saludares, respondents therein filed a
complaint for the payment of just compensation against
NAPOCOR, averring that it had entered and occupied their
property by erecting high-tension transmission lines and
failed to reasonably compensate them for the intrusion. For
its part, NAPOCOR countered that it had already paid just
compensation for the establishment of the transmission lines
by virtue of its compliance with the final and executory
decision in National Power Corporation v. Pereyras.31 In ruling
that the reckoning value of just compensation is that
prevailing at the time of the filing of the inverse
condemnation proceedings, the Court declared:
x x x To reiterate, NAPOCOR should have instituted eminent
domain proceedings before it occupied respondent spouses'
property.1âwphi1 Because it failed to comply with this duty,
respondent spouses were constrained to file the instant
Complaint for just compensation before the trial court. From
the 1970s until the present, they were deprived of just
compensation, while NAPOCOR continuously burdened their
property with its transmission lines. This Court cannot allow
petitioner to profit from its failure to comply with the
mandate of the law. We therefore rule that, to adequately
compensate respondent spouses from the decades of burden
on their property, NAPOCOR should be made to pay the value
of the property at the time of the filing of the instant
Complaint when respondent spouses made a judicial demand
for just compensation.32
These rulings, however, are exceptions to the general rule
that just compensation must be reckoned from the time of
taking or filing of the complaint, whichever came first. The
special circumstances of the aforementioned cases called for
the valuation of just compensation at the time the
landowners initiated inverse condemnation proceedings
notwithstanding that taking of the properties occurred first.
In Macabangkit Sangkay, NAPOCOR did not even inform the
property owners of the construction of the underground
tunnels. Hence, it could be said that NAPOCOR employed
stealth instead of complying with the legal process of
expropriation. Further, considering that the tunnels were
constructed underground, the property owners came to
know thereof only when the purchaser of the property
refused to proceed with the sale upon discovery of the
underground tunnels. In this case, however, the transmission
lines are visible, such that Oroville could not deny knowledge
of its construction in 1983. In Saludares, NAPOCOR refused to
acknowledge the respondents' claim and insisted that it
already paid just compensation because the respondents'
property was the same one involved in the Pereyra case. Thus,
NAPOCOR had no intention to pay just compensation. This
circumstance does not exist in the case at bench.
The rulings in Macabangkit Sangkay and Saludares are more
in consonance with the rules of equity than with the Rules of
Court, specifically Rule 67 on expropriation. Indeed, the
practice of construct first, expropriate later is reprehensible
and must not be countenanced. The Court, however, must
not lose sight of Section 4, Rule 67 which mandates that just
compensation must be determined "as of the date of the
taking of the property or the filing of the complaint,
whichever came first." This provision is, first and foremost, part
of the Rules which the Court itself promulgated for purposes of
uniformity, among others.
Further, the doctrine of stare decisis constrains the Court to
follow the ruling laid down in Tecson and similar cases. "Time
and again, the court has held that it is a very desirable and
necessary judicial practice that when a court has laid down a
principle of law as applicable to a certain state of facts, it will
adhere to that principle and apply it to all future cases in which
the facts are substantially the same. Stare decisis et non quieta
movere. Stand by the decisions and disturb not what is
settled. Stare decisis simply means that for the sake of
certainty, a conclusion reached in one case should be applied
to those that follow if the facts are substantially the same, even
though the parties may be different. It proceeds from the first
principle of justice that, absent any powerful countervailing
considerations, like cases ought to be decided alike."33
To reiterate, the facts of the instant case are substantially the
same with Tecson and similar cases cited therein. A
government agency took possession of private property for the
benefit of the public without, however, initiating expropriation
proceedings, which thus, constrained the landowner to file
actions to recover their properties or to demand payment of
just compensation. Hence, in the absence of any compelling
reason to deviate from the rulings in the aforecited cases, the
Court, in the case at bench, must adhere to the doctrines
established therein.
Amount of interest to be paid
The owner's loss, of course, is not only his property but also its
income-generating potential.34 Thus, when property is taken,
full compensation of its value must immediately be paid to
achieve a fair exchange for the property and the potential
income lost.35 Thus, the rationale for imposing the interest is to
compensate the landowners for the income they would have
made had they been properly compensated for their properties
at the time of the taking.36
The Court, in Republic v. Court of Appeals,37 further enunciated
on the necessity of the payment of interest to compensate for
delay in the payment of just compensation, viz:
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, if 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 interest [s] 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 interest [s] 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.38 [Emphasis
supplied]
Tecson also clarified the amount of interest due the
landowners, to wit:
x x x In other words, the just compensation due to the
landowners amounts to an effective forbearance on the part
of the State - a proper subject of interest computed from the
time the property was taken until the full amount of just
compensation is paid - in order to eradicate the issue of the
constant variability of the value of the currency over time.
x x xx
It is important to note, however, that interest shall be
compounded at the time judicial demand is made pursuant to
Article 2212 of the Civil Code of the Philippines, and sustained
in Eastern Shipping Lines v. Court of Appeals, then later on
in Nacar v. Gallery Frames, save for the reduction of interest
rate to 6% for loans or forbearance of money.39 x x x
In the case at bench, Transco made a provisional deposit of
₱7,647,200.00 on January 21, 2011. Consequently, from 1983
to January 21, 2011, Oroville is entitled to twelve percent
(12%) interest per annum which is the prevailing rate during
such period pursuant to Central Bank Circular No.
905,40 effective from December 22, 1982 to June 30, 2013.
Oroville is also awarded additional compensation by way of
exemplary damages and attorney's fees. In Republic v.
CA,41 the Court held that the failure of the government to
initiate an expropriation proceeding to the prejudice of the
landowner may be corrected with the awarding of exemplary
damages, attorney's fees and costs of litigation. Thus:
x x x However, we find it proper to award temperate and
exemplary damages in light of NIA's misuse of its power of
eminent domain. Any arm of the State that exercises the
delegated power of eminent domain must wield that power
with circumspection and utmost regard for procedural
requirements. A government instrumentality that fails to
observe the constitutional guarantees of just compensation
and due process abuses the authority delegated to it, and is
liable to the property owner for damages.42 x x x
Hence, considering that Oroville was deprived of beneficial
ownership over their property without the benefit of a timely
expropriation proceeding, and to serve as a deterrent to the
State from failing to institute such proceedings, a grant of
exemplary damages in the amount of One Million Pesos
(₱1,000,000.00) is fair and reasonable. Moreover, an award
for attorney's fees in the amount of Two Hundred Thousand
Pesos (₱200,000.00) in favor of Oroville is in order.
To recapitulate, Transco is liable to pay Oroville ₱78.65 per
square meter representing the fair market value of the
property at the time of taking in 1983 and 12% interest per
annum on the total fair market value, computed from 1983 to
January 21, 2011, the date when Transco made a provisional
deposit in favor of Oroville. Considering that the actual date
of taking cannot be determined from the records of the case,
the date of taking is pegged on January 1, 1983. Oroville is
also awarded exemplary damages in the amount of
₱1,000,000.00 and attorney's fees in the amount of
₱200,000.00.
On a final note, there are several cases which reached this
Court in which Transco and even other government agencies
constructed transmission lines, tunnels and other
infrastructures before it decided to expropriate the private
properties upon which they built the same. The Court reminds
the government and its agencies that it is their obligation to
initiate eminent domain proceedings whenever they intend to
take private property for any public purpose. Before the
expropriating power enters a private property, it must first file
an action for eminent domain43and deposit with the authorized
government depositary an amount equivalent to the assessed
value of the property.44
Transco should first file an expropriation case before it
proceeds to construct transmission lines or any other
infrastructure on any private property. The practice of
construct first, expropriate later must be put to a stop.
WHEREFORE, the petition is GRANTED. The September 18,
2015 Decision and January 25, 2016 Resolution of the Court of
Appeals in CAG.R. CV No. 03571, are REVERSED and SETASIDE.
The valuation of the subject property owned by respondent
Oroville shall be ₱78.65 per square meter, with interest at
twelve percent (12%) per annum from January 1983 until
January 21, 2011. Petitioner Transco is also ordered to pay
respondent Oroville exemplary damages in the amount of
₱1,000,000.00 and attorney's fees in the amount of
₱200,000.00.
SO ORDERED.
JOSE CATRAL ME
G.R. No. 213847, July 12, 2016
JUAN PONCE ENRILE, Petitioner, v. SANDIGANBAYAN (THIRD
DIVISION), AND PEOPLE OF THE PHILIPPINES., Respondents.
RESOLUTION
BERSAMIN, J.:
The People of the Philippines, represented by the Office of the
Special Prosecutor of the Office of the Ombudsman, have filed
their Motion for Reconsideration to assail the decision
promulgated on August 18, 2015 granting the petition
for certiorari of the petitioner, and disposing
thusly:ChanRoblesVirtualawlibrary
WHEREFORE, the Court GRANTS the petition
for certiorari; ISSUES the writ
of certiorariANNUL[L]ING and SETTING ASIDE the Resolutions
issued by the Sandiganbayan (Third Division) in Case No.
SB-14-CRM-0238 on July 14, 2014 and August 8,
2014; ORDERS the PROVISIONAL RELEASE of petitioner Juan
Ponce Enrile in Case No. SB-14-CRM-0238 upon posting of a
cash bond of P1,000,000.00 in the Sandiganbayan;
and DIRECTS the immediate release of petitioner Juan Ponce
Enrile from custody unless he is being detained for some
other lawful cause.
No pronouncement on costs of suit.
SO ORDERED.1chanroblesvirtuallawlibrary
The People rely on the following grounds for the reversal of
the decision of August 18, 2015, to
wit:ChanRoblesVirtualawlibrary
I. THE DECISION GRANTING BAIL TO PETITIONER WAS
PREMISED ON A FACTUAL FINDING THAT HE IS NOT A
FLIGHT RISK, ON A DETERMINATION THAT HE
SUFFERS FROM A FRAGILE STATE OF HEALTH AND ON
OTHER UNSUPPORTED GROUNDS UNIQUE AND
PERSONAL TO HIM. IN GRANTING BAIL TO
PETITIONER ON THE FOREGOING GROUNDS,
THE DECISION UNDULY AND RADICALLY MODIFIED
CONSTITUTIONAL AND PROCEDURAL PRINCIPLES
GOVERNING BAIL WITHOUT SUFFICIENT
CONSTITUTIONAL, LEGAL AND JURIS PRUDENTIAL
BASIS.
A. THE DECISION OPENLY IGNORED AND
ABANDONED THE
CONSTITUTIONALLY-MANDATED PROCEDURE
FOR DETERMINING WHETHER A PERSON
ACCUSED OF A CRIME PUNISHABLE
BY RECLUSION PERPETUAOR LIFE
IMPRISONMENT SUCH AS PLUNDER CAN BE
GRANTED BAIL.
B. THE DECISION ALSO DISREGARDED
CONSTITUTIONAL PRINCIPLES AND RELEVANT
COURT PROCEDURES WHEN IT GRANTED
PETITIONER'S REQUEST FOR BAIL ON THE
GROUND THAT HE IS NOT A FLIGHT RISK,
PREMISED ON A LOOSE FINDING THAT THE
PRINCIPAL PURPOSE OF BAIL IS MERELY TO
SECURE THE APPEARANCE OF AN ACCUSED
DURING TRIAL.
C. CONTRARY TO THE STRICT REQUIREMENTS
OF THE 1987 CONSTITUTION ON THE
MATTER OF GRANTING BAIL TO PERSONS
ACCUSED OF CRIMES PUNISHABLE
BY RECLUSION PERPETUA OR LIFE
IMPRISONMENT,
THE DECISION ERRONEOUSLY HELD THAT
PETITIONER SHOULD BE GRANTED BAIL
BECAUSE OF HIS FRAGILE STATE OF HEALTH,
AND BECAUSE OF OTHER UNSUPPORTED
AND DEBATABLE GROUNDS AND
CIRCUMSTANCES PURELY PERSONAL AND
PECULIAR TO HIM, WITHOUT REFERENCE TO
THE STRENGTH OF THE PROSECUTION'S
EVIDENCE AGAINST HIM.
II. THE DECISION VIOLATES THE PEOPLE'S
CONSTITUTIONAL RIGHT TO DUE PROCESS OF LAW
SINCE IT WAS BASED ON GROUNDS NOT RAISED IN
THE PETITION AND THEREFORE NEVER REFUTED OR
CONTESTED.
III. THE DECISION GAVE PREFERENTIAL TREATMENT AND
UNDUE FAVOR TO PETITIONER IN A MANNER
INCONSISTENT WITH THE EQUAL PROTECTION CLAUSE
OF THE 1987 CONSTITUTION.2
The People argue that the decision is inconsonant with
deeply-embedded constitutional principles on the right to bail;
that the express and unambiguous intent of the 1987
Constitution is to place persons accused of crimes punishable
by reclusion perpetua on a different plane, and make their
availment of bail a matter of judicial discretion, not a matter of
right, only upon a showing that evidence of their guilt is not
strong; and that the Court should have proceeded from the
general proposition that the petitioner had no right to bail
because he does not stand on equal footing with those accused
of less grave crimes.
The People contend that the grant of provisional liberty to a
person charged with a grave crime cannot be predicated solely
on the assurance that he will appear in court, but should also
consider whether he will endanger other important interests of
the State, the probability of him repeating the crime
committed, and how his temporary liberty can affect the
prosecution of his case; that the petitioner's fragile state of
health does not present a compelling justification for his
admission to bail; that age and health considerations are
relevant only in fixing the amount of bail; and that even so, his
age and health condition were never raised or litigated in
the Sandiganbayan because he had merely filed thereat
a Motion to Fix Bail and did not thereby actually apply for bail.
Lastly, the People observe that the decision specially
accommodated the petitioner, and thus accorded him
preferential treatment that is not ordinarily enjoyed by persons
similarly situated.
Ruling of the Court
The Court finds no compelling or good reason to reverse its
decision of August 18, 2015.
To start with, the People were not kept in the dark on the
health condition of the petitioner. Through his Omnibus
Motion dated June 10, 2014 and his Motion to Fix Bail dated
July 7, 2014, he manifested to the Sandiganbayan his currently
frail health, and presented medical certificates to show that his
physical condition required constant medical
attention.3 The Omnibus Motion and his Supplemental
Oppositiondated June 16, 2014 were both heard by
the Sandiganbayan after the filing by the Prosecution of
its Consolidated Opposition.4 Through his Motion for
Reconsideration, he incorporated the findings of the
government physicians to establish the present state of his
health. On its part, the Sandiganbayan, to satisfy itself of the
health circumstances of the petitioner, solicited the medical
opinions of the relevant doctors from the Philippine General
Hospital.5 The medical opinions and findings were also
included in the petition for certiorari and now form part of
the records of the case.
Clearly, the People were not denied the reasonable
opportunity to challenge or refute the allegations about his
advanced age and the instability of his health even if the
allegations had not been directly made in connection with
his Motion to Fix Bail.
Secondly, the imputation of "preferential treatment" in
"undue favor" of the petitioner is absolutely bereft of
basis.6 A reading of the decision of August 18, 2015 indicates
that the Court did not grant his provisional liberty because he
was a sitting Senator of the Republic. It did so because there
were proper bases - legal as well as factual - for the favorable
consideration and treatment of his plea for provisional liberty
on bail. By its decision, the Court has recognized his right to
bail by emphasizing that such right should be curtailed only if
the risks of flight from this jurisdiction were too high. In our
view, however, the records demonstrated that the risks of
flight were low, or even nil. The Court has taken into
consideration other circumstances, such as his advanced age
and poor health, his past and present disposition of respect
for the legal processes, the length of his public service, and
his individual public and private reputation.7 There was really
no reasonable way for the Court to deny bail to him simply
because his situation of being 92 years of age when he was
first charged for the very serious crime in court was quite
unique and very rare. To ignore his advanced age and
unstable health condition in order to deny his right to bail on
the basis alone of the judicial discretion to deny bail would be
probably unjust. To equate his situation with that of the other
accused indicted for a similarly serious offense would be
inherently wrong when other conditions significantly
differentiating his situation from that of the latter's
unquestionably existed.8chanrobleslaw
Section 2, Rule 114 of the Rules of Court expressly states that
one of the conditions of bail is for the accused to "appear
before the proper court whenever required by the court or
these Rules." The practice of bail fixing supports this purpose.
Thus, in Villaseñor v. Abaño,9 the Court has pronounced that
"the principal factor considered (in bail fixing), to the
determination of which most factors are directed, is the
probability of the appearance of the accused, or of his flight
to avoid punishment."10 The Court has given due regard to
the primary but limited purpose of granting bail, which was to
ensure that the petitioner would appear during his trial and
would continue to submit to the jurisdiction of
the Sandiganbayan to answer the charges levelled against
him.11chanrobleslaw
Bail exists to ensure society's interest in having the accused
answer to a criminal prosecution without unduly restricting
his or her liberty and without ignoring the accused's right to be
presumed innocent. It does not perform the function of
preventing or licensing the commission of a crime. The notion
that bail is required to punish a person accused of crime is,
therefore, fundamentally misplaced. Indeed, the practice of
admission to bail is not a device for keeping persons in jail upon
mere accusation until it is found convenient to give them a trial.
The spirit of the procedure is rather to enable them to stay out
of jail until a trial with all the safeguards has found and
adjudged them guilty. Unless permitted this conditional
privilege, the individuals wrongly accused could be punished by
the period of imprisonment they undergo while awaiting trial,
and even handicap them in consulting counsel, searching for
evidence and witnesses, and preparing a defense.12 Hence, bail
acts as a reconciling mechanism to accommodate both the
accused's interest in pretrial liberty and society's interest in
assuring his presence at trial.13chanrobleslaw
Admission to bail always involves the risk that the accused will
take flight.14 This is the reason precisely why the probability or
the improbability of flight is an important factor to be taken
into consideration in granting or denying bail, even in capital
cases. The exception to the fundamental right to bail should be
applied in direct ratio to the extent of the probability of
evasion of prosecution. Apparently, an accused's official and
social standing and his other personal circumstances are
considered and appreciated as tending to render his flight
improbable.15chanrobleslaw
The petitioner has proven with more than sufficient evidence
that he would not be a flight risk. For one, his advanced age
and fragile state of health have minimized the likelihood that
he would make himself scarce and escape from the jurisdiction
of our courts. The testimony of Dr. Jose C. Gonzales, Director of
the Philippine General Hospital, showed that the petitioner was
a geriatric patient suffering from various medical
conditions,16 which, singly or collectively, could pose significant
risks to his life. The medical findings and opinions have been
uncontested by the Prosecution even in their present Motion
for Reconsideration.
WHEREFORE, the Court DENIES the Motion for
Reconsideration for lack of merit.
SO ORDERED.chanRoblesvirtualLawlibrary
Sereno, C.J., I join J. Leonen's dissent.
Velasco, Jr., Leonardo-De Castro, Peralta, Perez, and Mendoza,
JJ., concur.
Carpio, J., I join the dissenting opinion of J. Leonen.
Brion, J., see separate concurring opinion
Del Castillo, J., I join the dissent of J. Leonen.
Reyes, J., on official leave.
Perlas-Bernabe, J., I join J. Leonen's dissent.
Leonen, J., I dissent. see separate opinion.
Jardeleza, J., no part.
Caguioa, J., I join the dissent of J. Leonen.
Endnotes:
 1855.
1
Rollo, pp. 624-625. 16
(1) Chronic Hypertension with fluctuating blood pressure
levels on multiple drug therapy;
2
Id. at 686-687.
(2) Diffure atherosclerotic cardiovascular disease composed of
3
Id. at 152, 160-162, 253. the following:ChanRoblesVirtualawlibrary
4
Id. at 611. a. Previous history of cercbrovascular disease with carotid and
vertebral artery disease;
5
Id. at 309-311.
b. Heavy coronary artery classifications;
6
Id. at 712.
c. Ankle Brachial Index suggestive of arterial classifications.
7
Id. at 620.
(3) Atrial and Ventricular Arrhythmia (irregular heart beat)
8
E.g., Stack v. Boyle, 342 U.S. 1 ("Since the function of bail is documented by Holter monitoring;
limited, the fixing of bail for any individual defendant must be
based upon standards relevant to the purpose of assuring the (4) Asthma-COPD Overlap Syndrome (ACOS) and postnasal drip
syndrome;
presence of that defendant. The traditional standards, as
expressed in the Federal Rules of Criminal Procedure, are to
be applied in each case to each defendant."). (5) Ophthalmology:ChanRoblesVirtualawlibrary

a. Age-related mascular degeneration, neovascular s/p laser of

In his concurring opinion in Stack v. Boyle, Justice Jackson the Retina, s/p Lucentis intra-ocular injections;
reminded:ChanRoblesVirtualawlibrary

It is complained that the District Court fixed a uniform b. S/p Cataract surgery with posterior chamber intraocular
blanket bail chiefly by consideration of the nature of the lens.
accusation, and did not take into account the difference in (6) Historical diagnoses of the
circumstances between different defendants. If this occurred, following:ChanRoblesVirtualawlibrary
it is a clear violation of Rule 46(c). Each defendant stands
before the bar of justice as an individual. Even on a a. High blood sugar/diabetes on medications;
conspiracy charge, defendants do not lose their
separate-ness or identity. While it might be possible that b. High cholesterol levels/clyslipidemia;
these defendants are identical in financial ability, character,
and relation to the charge — elements Congress has directed c. Alpha thalassemia;
to be regarded in fixing bail — I think it violates the law of
probabilities. Each accused is entitled to any benefits due to d. Gait/balance disorder;
his good record, and misdeeds or a bad record should
prejudice only those who are guilty of them. The question e. Upper gastrointestinal bleeding (etiology uncertain) in 2014;
when application for bail is made relates to each one's
trustworthiness to appear for trial and what security will f. Benign prostatic hypertrophy (with documented enlarged
supply reasonable assurance of his appearance. prostate on recent ultrasound).
(Bold Emphasis supplied.)
9
L-23599, September 29, 1967, 21 SCRA 312.

10
Id. at 317.

11
See Basco v. Rapatalo, A.M. No. RTJ-96-1335, March 5, SEPARATE CONCURRING OPINION
1997, 269 SCRA 220, 224.
BRION, J.:
12
Stack v. Boyle, supra note 8. I write this Separate Opinion to reflect my view and explain my
vote on the deliberations of the Court En Banc on August 18,
13
Leviste v. Court of Appeals, G.R. No. 189122, March 17, 2015 on the issue of the provisional release of petitioner Juan
2010, 615 SCRA 619, 628. Ponce Enrile from detention. I also explain in this Opinion why I
vote to deny the motion for reconsideration filed by the People
14
See Justice Jackson's concurring opinion in Stack v. Boyle, of the Philippines.
supra note 8.
On August 18, 2015, the Court, voting 8-4, granted the petition
15
See Montana v. Ocampo, L-6352, January 29, 1953, 49 O.G.
for certiorari filed by Enrile to assail and annul the resolutions
dated July 14, 2014 and August 8, 2014 issued by the
Sandiganbayan (Third Division) in Case No. SB-14-CRM-0238.
The dispositive portion of this decision
provides:ChanRoblesVirtualawlibrary
WHEREFORE, the Court GRANTS the petition
for certiorari; ISSUES the writ
of certiorariANNULING and SETTING ASIDE the Resolutions
issued by the Sandiganbayan (Third Division) in Case No.
SB-14-CRM-0238 on July 14, 2014 and August 8,
2014; ORDERS the PROVISIONAL RELEASE of petitioner Juan
Ponce Enrile in Case No. SB-14-CRM-0238 upon posting of a
cash bond of P1,000,000.00 in the Sandiganbayan;
and DIRECTS the immediate release of petitioner Juan Ponce
Enrile from custody unless he is being detained for some
other lawful cause.
No pronouncement on costs of suit.
SO ORDERED.
The People, through the Office of the Special Prosecutor,
moved to reconsider this decision, and claimed that the grant
of bail to Enrile "unduly and radically modified constitutional
and procedural principles governing bail without sufficient
constitutional, legal and jurisprudential basis."1 It argued that
since Enrile was charged with a grave crime punishable
by reclusion perpetua to death, he cannot be admitted to bail
as a matter of right unless it had been determined that
evidence of his guilt was not strong.
The People further alleged that the ponencia erred in granting
Enrile provisional liberty on the erroneous premise that the
principal purpose of bail is to ensure the appearance of the
accused during trial. It maintained that the grant of
provisional liberty must be counter-balanced with the
legitimate interests of the State to continue placing the
accused under preventive detention when circumstances
warrant.
The People further claimed that there is no obligation on the
part of the State to allow Enrile to post bail even under
international law since the latter's detention was an incident
of a lawful criminal prosecution. It added that age and health
are not relevant in the determination of whether the
evidence of guilt against Enrile is strong; and that "there is no
provision in the 1987 Constitution, in any statute or in the
Rules of Court"2 that allows the grant of bail for humanitarian
considerations.
The People likewise claimed that its constitutional right to
due process had been violated since the Court granted
provisional liberty to Enrile based on grounds that were not
raised by Enrile in connection with his bail request.
Finally, the People alleged that the ponencia violated the
equal protection clause of the 1987 Constitution when it
"gave preferential treatment and undue favor"3 to Enrile.
My Position:
I reiterate that Enrile should be admitted to bail. I likewise vote
to deny the motion for reconsideration filed by the Office of
the Special Prosecutor.
The Right to Bail and the Court's Equity Jurisdiction
Our Constitution zealously guards every person's right to life
and liberty against unwarranted state intrusion; indeed, no
state action is permitted to invade this sacred zone except
upon observance of due process of law.
Like the privilege of the writ of habeas corpus, the right to bail
provides complete substance to the guarantee of liberty under
the Constitution; without it, the right to liberty would not be
meaningful, while due process would almost be an empty
slogan.4 A related right is the right to be presumed
innocent from where, the right to bail also draws its strength.
Bail is accorded to a person under the custody of the law who,
before conviction and while he enjoys the presumption of
innocence, may be allowed provisional liberty upon the filing of
a bond to secure his appearance before any court, as required
under specified conditions.5 State interest is recognized
through the submitted bond and by the guarantee that the
accused would appear before any court as required under the
terms of the bail.
In Leviste v. Court of Appeals,6 the Court explained the nature
of bail in the following manner:ChanRoblesVirtualawlibrary
Bail, the security given by an accused who is in the custody of
the law for his release to guarantee his appearance before any
court as may be required, is the answer of the criminal justice
system to a vexing question: what is to be done with the
accused, whose guilt has not yet been proven, in the "dubious
interval," often years long, between arrest and final
adjudication. Bail acts as a reconciling mechanism to
accommodate both the accused's interest in pretrial liberty and
society's interest in assuring the accused's presence at trial.
The constitutional mandate is that "[a]ll persons, except those
charged with offenses punishable by reclusion perpetua when
evidence of guilt is strong, shall, before conviction, be bailable
by sufficient sureties, or be released on recognizance as may be
provided by law. x x x."7chanrobleslaw
Under this provision, bail is clearly a demandable constitutional
right; it only ceases to be so recognized when evidence of guilt
of the person - charged with a crime that carries the penalty
of reclusion perpetua, life imprisonment, or death - is found to
be strong. From the perspective of innocence, this degree of
evidence apparently renders less certain the presumption of
innocence that the accused enjoys before conviction.
But while bail is separately treated for those charged with a
crime that carries the penalty of reclusion perpetua or
higher, the Constitution does not expressly and absolutely
prohibit the grant of bail even for the accused who are so
charged.

If the evidence of guilt is not strong, as the courts may
determine in their discretion, then the accused may be
demanded still as of right.
If the evidence of guilt, on the other hand, is strong, this
preliminary evaluation, made prior to conviction, may render
the presumption of innocence lighter in its effects, but does
not totally negate it; constitutionally, the presumption of
innocence that the accused enjoys still exists as only final
conviction erases it.
Hand in hand with these thoughts, I have considered the
judicial power that the courts have been granted under the
Constitution. This power includes the duty to settle actual
controversies involving rights which are legally demandable
and enforceable. It likewise encompasses the protection and
enforcement of constitutional rights, through promulgated
rules that also cover pleading, practice and
procedure.8chanrobleslaw
I hold the view that judicial power, by its express terms,
is inclusive rather than exclusive: the specific powers
mentioned in the Constitution do not. constitute the totality
of the judicial power that the Constitution grants the courts.
Time and again, the Supreme Court has given this
constitutional reality due recognition by acting, not only
within the clearly defined parameters of the law, but also
within that penumbral area not definitively defined by the law
but not excluded from the Court's authority by the
Constitution and the law.
The Court has particularly recognized its authority to so act if
sufficiently compelling reasons exist that would serve the
ends of the Constitution - the higher interests of justice, in
this case, the protection and recognition of the right to liberty
based on the special circumstances of the accused.
A prime example of an analogous Court action would be in
the case of Leo Echagaray where the Court issued a
temporary restraining order (TRO) to postpone the execution
of Echegaray and asserted its authority to act even in the face
of the clear authority of the President to implement the
death penalty.
9
In Echegaray v. Secretary of Justice, the public respondents
(Secretary of Justice, et al.) questioned the Court's resolution
dated January 4, 1999 temporarily restraining the execution
of Leo Echegaray and argued, among others, that the decision
had already become final and executory, and that the grant
of reprieve encroaches into the exclusive authority of the
executive department to grant reprieve.
In ruling that it had jurisdiction to issue the disputed TRO, the
Court essentially held that an [a]ccused who has been
convicted by final judgment still possesses collateral rights
and these rights can be claimed in the appropriate courts. We
further reasoned out that the powers of the Executive, the
Legislative and the Judiciary to save the life of a death convict
do not exclude each other for the simple reason that there is
no higher right than the right to life.10chanrobleslaw
While Echegaray did not involve the right to bail, it nonetheless
shows that the Court will not hesitate to invoke its jurisdiction
to effectively safeguard constitutional rights and liberties.
In Secretary of Justice v. Hon. Lantion,11 the Court applied what
it termed as "rules of fair play" so as not to deny due process to
Mark Jimenez during the evaluation process of an extradition
proceeding.
In this case, the United States Government requested the
Philippine Government for the extradition of Mark Jimenez to
the United States. The Secretary of Foreign Affairs forwarded
this request to the Department of Justice. Pending the
evaluation of the extradition documents by the DOJ, Jimenez
requested for copies of the official extradition request and all
pertinent documents, and the holding in abeyance of the
proceedings.
When the DOJ denied his request for being premature, Jimenez
filed an action for mandamus, certiorariand prohibition before
the Regional Trial Court, Branch 25, Manila. The RTC issued an
order directing the Secretary of Justice, the Secretary of
Foreign Affairs, and the NBI to maintain the status quo by
refraining from conducting proceedings in connection with the
extradition request of the US Government. The Secretary of
Justice questioned the RTC's order before this Court.
In dismissing this petition, the Court ruled that although the
Extradition Law does not specifically indicate whether the
extradition proceeding is criminal, civil, or a special proceeding,
the evaluation process - understood as the extradition
proceedings proper - belongs to a class by itself; it is sui
generis. The Court thus characterized the evaluation process
to be similar to a preliminary investigation in criminal cases so
that certain constitutional rights are available to the
prospective extraditee. Accordingly, the Court ordered the
Secretary of Justice to furnish Jimenez copies of the extradition
request and its supporting papers, and lo grant him a
reasonable time within which to file his comment with
supporting evidence.
The Court explained that although there was a gap in the
provisions of the RP-US Extradition Treaty regarding the basic
due process rights available to the prospective extradite at. the
evaluation stage of the proceedings, the prospective extraditee
faces the threat of arrest, not only after the extradition petition
is filed in court, but even during, the evaluation proceeding
itself by virtue of the provisional arrest allowed under the
treaty and the implementing law. It added that the Rules of
Court guarantees the respondent's basic due process rights in a
preliminary investigation, granting him the right to be
furnished a copy of the complaint, the affidavits and other
supporting documents, and the right to submit
counter-affidavits and other supporting documents, as well as
the right to examine all other evidence submitted by the
complainant.

While the Court in Lantion applied the "rules of fair play" and
not its equity jurisdiction, the distinction between the two
with respect to this case, to me, is just pure semantics. I note
in this case that the Court still recognized Jimenez's right to
examine the extradition request and all other pertinent
documents pertaining to his extradition despite the gap in the
law regarding the right to due process of the person being
extradited during the evaluation stage.
Based on these constitutional considerations, on the dictates
of equity and the need to serve the higher interest of justice, I
believe that it is within the authority of the Court to inquire if
the special circumstances the accused submitted are
sufficiently compelling reasons for the grant of bail to Enrile.
Equity jurisdiction is used to describe the power of the court
to resolve issues presented in a case in accordance
with natural rules of fairness and justice in the absence of a
clear, positive law governing the resolution of the issues
posed.12 Equity jurisdiction aims to do complete justice in
cases where a court of law is unable to adapt its judgments to
the special circumstances of a case because of the inflexibility
of its statutory or legal jurisdiction. Equity is the principle by
which substantial justice may be attained in cases where the
prescribed or customary forms of ordinary law are
inadequate.13chanrobleslaw
In Daan v. Hon. Sandiganbayan (Fourth Division),14 we further
expounded on this concept as
follows:ChanRoblesVirtualawlibrary
Equity as the complement of legal jurisdiction seeks to reach
and do complete justice where courts of law, through the
inflexibility of their rules and want of power to adapt their
judgments to the special circumstances of cases, are
incompetent so to do. Equity regards the spirit of and not the
letter, the intent and not the form, the substance rather than
the circumstance, as it is variously expressed by different
courts.
I am not unaware that courts exercising equity jurisdiction
must still apply the law and have no discretion to disregard
the law.15 Equitable principles must always remain
subordinate to positive law, and cannot be allowed to subvert
it, nor do these principles give to the Courts authority to
make it possible to do so.16 Thus, where the law prescribes a
particular remedy with fixed and limited boundaries, the
court cannot, by exercising equity jurisdiction, extend the
boundaries further than the law allows.17 As the Court
explained in Mangahas v. Court of Appeals:18
For all its conceded merits, equity is available only in the
absence of law and not as its replacement. Equity is described
as justice outside legality, which simply means that it cannot
supplant although it may, as often happens, supplement the
law. x x x all abstract arguments based only on equity should
yield to positive rules, which pre-empt and prevail over such
persuasions. Emotional appeals for justice, while they may
wring the heart of the Court, cannot justify disregard of the
mandate of the law as long as it remains in force.
Similarly, in Phil. Rabbit Bus Lines, Inc. v. Judge Arciaga,19 the
Court held [t]hat there are instances, indeed, in which a court
of equity gives a remedy, where the law gives none; but where
a particular remedy is given by the law, and that remedy is
bounded and circumscribed by particular rules, it would be
very improper for the court to take it up where the law leaves
it and to extend it further than the law allows.
Where the libertarian intent of the Constitution, however, is
beyond dispute; where this same Constitution itself does
not substantively prohibit the grant of provisional liberty even
to those charged with crimes punishable with reclusion
perpetua where evidence of guilt is strong; and where
exceptional circumstances are present as compelling reasons
for humanitarian considerations, I submit that the Court does
not stray from the parameters of judicial power if it uses
equitable considerations in resolving a case.
I note in this regard that together with Section 13, Article III of
the Constitution which provides
that:ChanRoblesVirtualawlibrary
[a]ll persons, except those charged with offenses punishable
by reclusion perpetua when evidence of guilt is strong, shall,
before conviction, be bailable by sufficient sureties, or be
released on recognizance as may be provided by law. x x x
Section 7 of Rule 114 of the Revised Rules of Court states that
no person charged with a capital offense, or an offense
punishable by reclusion perpetua or life imprisonment when
the evidence of guilt is strong, shall be admitted to bail
regardless of the stage of the criminal action. Thus, seemingly,
there exists a law or, to be exact, a remedial rule, that
forecloses the grant of bail to an accused who falls within the
exception identified under Section 13, Article III of the
Constitution.
Rule 114 of the Revised Rules of Court, however, cannot
foreclose the exercise by the Court of a discretionary grant of
bail because the constitutional provision on bail speaks only of
bail as a matter of right and does not prohibit a discretionary
grant by the courts, particularly by the Supreme Court which is
the fountainhead of all rules of procedure and which can, when
called for, suspend the operation of a rule of procedure. In
hierarchal terms, the constitutional provision on bail occupies a
very much higher plane than a procedural rule.
Notably, Rule 114 directly addresses the grant of a right under
the constitutional provision - a situation where no equitable
considerations are taken into account. In this situation, the
Court's hands are in fact tied as it must comply with the direct
command of the Constitution.
But when compelling circumstances exist, as has been
described above, the situation cannot but change and shifts
into that penumbral area that is not covered by the exact
parameters of the express words of the Constitution yet is not
excluded by it. In this domain, when compelling reasons exist
to carry into effect the intent of the Constitution, equity can
come into play.
 b. S/p Cataract surgery with posterior chamber
I reiterate that the fundamental consideration in confining an
intraocular lens
accused before conviction is to assure his presence at the trial.
The denial of bail in capital offense is on the theory that the
proof being strong, the defendant would flee, if he has the
(6) Historical diagnoses of the following:
opportunity, rather than face a verdict in court. Hence, the
exception to the fundamental right to be bailed should be
applied in direct ratio to the extent of the probability of the
a. High blood sugar/diabetes on medications;
evasion of the prosecution.20chanrobleslaw

As the ponencia recognized, these circumstances are Enrile's

advanced age (91), his state of health (he has been in and out b. High cholesterol levels/dyslipidemia;
of hospital before and since his arrest, a condition that is not
surprising based on his age alone), and the almost nil chance
that Enrile would evade arrest. c. Alpha thalassemia;

Dr. Jose C. Gonzales, the Director of the PGH, testified that

Enrile underwent clinical and laboratory examinations, as well
as pulmonary evaluation and pulmonary function tests on
various dates on August 2014, and was found to be suffering
from the following conditions:ChanRoblesVirtualawlibrary
(1) Chronic Hypertension with fluctuating blood pressure
levels on multiple drug theraphy;
(2) Diffuse atherosclerotic cardiovascular disease composed
of the following:
a. Previous history of cerebrovascular disease with
carotid and vertebral artery disease;
b. Heavy coronary artery calcifications;
c. Ankle Brachial Index suggestive of arterial
calcifications.
(3) Atrial and ventricular Arrhythmia (irregular heartbeat)
documented by Holter monitoring;
d. Gait/balance disorder;
e. Upper gastrointestinal bleeding (etiology uncertain)
in 2014;
f. Benign prostatic hypertrophy (with documented
enlarged prostate on recent ultrasound).
In his Manifestation and Compliance, Dr. Gonzales further
added that "the following medical conditions of Senator Enrile
pose a significant risk for life-threatening events": (1)
fluctuating hypertension, which may lead to brain or heart
complications, including recurrence of stroke; (2) arrhythmias,
which may lead to fatal or nonfatal cardiovascular events; (3)
diffuse atherosclerotic vascular disease may indicate a high risk
for cardiovascular events; (4) exacerbations of asthma-COPD
Overlap Syndrome may be triggered by certain circumstances
(excessive heat, humidity, dust or allergen exposure) which
may cause a deterioration in patients with Asthma or COPD.
During the July 14, 2014 hearing, the witness-cardiologist
expounded on the delicate and unpredictable nature of Enrile's
arrhythmia under the following exchange with the
court:ChanRoblesVirtualawlibrary

AJ MARTIRES:
(4) Asthma-COPD Overlap Syndrome and postnasal drip
syndrome;
Q: So, the holter monitoring was able to record that the
accused is suffering from arrhythmia?
(5) Ophthalmology:
What is arrhythmia, Doctor?

a. Age-related macular degeneration, neovascular s/p

laser of the Retina, s/p Lucentis intra-ocular CARDIOLOGIST:
injections

A: Arrhythmia is an irregular heartbeat. We just reviewed the

holter of Senator Enrile this morning again, prior to

coming here, and we actually identified the following
irregularities:
There were episodes of atrial fibrillation, which is a very
common arrhythmia in elderly individuals, pre-disposing
elderly dangers for stroke;
There were episodes of premature ventricular contractions of
PVCs; and episodes of QT tachy cardia.
xxxx
Q: So, what are these different types of arrhythmia?
A: Okay, Senator Enrile actually has three (3) different types
of arrhythmia, at least, based on our holter.
One is atrial fibrillation. I would say that it is the most
common arrhythmia found in our geriatric patients. It is a
very important arrhythmia, because it is a risk factor for
stroke, and Senator Enrile actually already has one
documentation of previous stroke based on an MRI study.
Second, he has premature ventricular contractions (PVCs).
Again, very normal in patients who are in his age group;
and cralawlawlibrary
Third, is the atrial tachy cardia, which is another form of atrial
fibrillation. He has these three types of irregular heartbeat.
Q: These three types are all dangerous?
A: Yes, your Honor. These arrhythmias are dangerous under
stressful conditions. There is no way we can predict
when these events occur which can lead to
life-threatening events.
x x x x.21 (Emphasis supplied)
Dr. Gonzales likewise classified Enrile as a patient "under
pharmacy medication" owing to the fact that for arrhythmia
alone, he is taking the following medications: cilostazol;
telmisartan; amlodipine; Coumadin; norvasc; rosuvastin;
pantoprazole; metformin; glycoside; centrum silver;
nitramine and folic acid.
The records further disclosed that: (1) Enrile has "diabetes
mellitus, dyslipidemia, essential hypertension, extensive
coronary artery calcification in the right coronary, left
anterior descending and left circumflex, multifocal ventricular
premature beats, episodes of bradycardia, colonic
diverticulosis, thoracic and lumbar spondylosis L4-L5, alpha
thalassemia and mucular degeneration, chronic lacunar
ischemic zones, scattered small luminal plaques of proximal
middle segments of basilar artery, both horizontal and insular
opercural branches of middle cerebral arteries," and that he
takes approximately 20 medicines a day; and (2) Enrile needs
to undergo "regular opthlamologic check-up, monitoring and
treatment for his sight threatening condition;" and that since
2008, he has been receiving monthly intravitreal injections to
maintain and preserve his vision.
Notably, when Dr. Gonzales (PGH Medical Director) was asked
during the July 14, 2014 hearing on whether Enrile - based on
his observation - was capable of escaping, he replied that Enrile
"has a problem with ambulation;" and that "even in sitting
down, he needs to be assisted."
Significantly, the use of humanitarian considerations in the
grant of bail on the basis of health is not without precedent.
In Dela Rama v. People,22 accused Francisco Dela Rama filed a
motion before the People's Court asking for permission to be
confined and treated in a hospital while his bail petition was
being considered. The People's Court ordered that the Dela
Rama be temporarily confined and treated at the Quezon
Institute. It also rejected Dela Rama's bail application.
During Dela Rama's stay in the hospital. Dr. Miguel Canizares of
the Quezon Institute submitted a report to the People's Court
stating that Dela Rama suffered from a minimal, early, unstable
type of pulmonary tuberculosis, and chronic granular
pharyngitis. He also recommended that Dela Rama continue his
stay in the sanatorium for purposes of proper management,
treatment and regular periodic radiographic check-up up of his
illness.23chanrobleslaw
Dela Rama re-applied for bail on the grounds of poor health,
but the People Court rejected his petition for bail was again
rejected. Instead, it ordered that Dela Rama be further treated
at the Quezon Institute, and that the Medical Director of the
Quezon Institute submit monthly reports on the patient's
condition.
Acting on Dela Rama's second petition for certiorari, this Court
ruled that the People's Court had acted with grave abuse of
discretion by refusing to release Dela Rama on bail. It reasoned
out as follows:ChanRoblesVirtualawlibrary
The fact that the denial by the People's Court of the petition for
bail is accompanied by the above quoted order of confinement
of the petitioner in the Quezon Institute for treatment without
the letter's consent, does not in any way modify or qualify the
denial so as to meet or accomplish the humanitarian purpose
or reason underlying the docfrine adopted by modern trend of
courts decision which permit bail to prisoners, irrespective of
the nature and merits of the charge against them, if their
continuous confinement during the pendency of their case
would be injurious to their health or endanger their life.
xxxx
Considering the report of the Medical Director of the Quezon
Institute to the effect that the petitioner "is actually suffering
from minimal, early, unstable type of pulmonary tuberculosis,
and chronic, granular pharyngitis," and that in said institute
they "have seen many similar cases, later progressing into
advance stages when treatment and medicine are no longer
of any avail;" taking into consideration that the petitioner's
previous petition for bail was denied by the People's Court on
the ground that the petitioner was suffering from quieseent
and not active tuberculosis, and the implied purpose of the
People's Court in sending the petitioner to the Quezon
Institute for clinical examination and diagnosis of the actual
condition of his lungs, was evidently to verify whether the
petitioner is suffering from active tuberculosis, in order to act
accordingly in deciding his petition for bail; and considering
further that the said People's Court has adopted and applied
the well-established doctrine cited in our above quoted
resolution, in several cases, among them, the cases against
Pio Duran (case No. 3324) and Benigno Aquino (case No.
3527), in which the said defendants were released on bail on
the ground that they were ill and their continued
confinement in New Bilibid prison would be injurious to
their health or endanger their life; it is evident and we
consequently hold that the People's Court acted with grave
abuse of discretion in refusing to release the petitioner on
bail. (Emphasis ours).
Contrary to what the People insinuated in its motion, there
has been no Court decision expressly abandoning Dela Rama.
That the amendments to Rule 114 did not incorporate the
pronouncement in Dela Rama (that bail may be granted if
continued confinement in prison would be injurious to their
health or endanger their life) did not ipso facto mean that the
Court was precluding an accused from citing humanitarian
considerations as a ground for bail.
In United States v. Jones,24 the United States Circuit Court
held that [w]here an application for bail showed that the
prisoner's health was bad, his complaint pulmonary, and that,
in the opinion of his physician, confinement during the
summer might so far increase his disorder as to render it
ultimately dangerous, x x x [t]he humanity of our laws, not
less than the feelings of the court, favor the liberation of a
prisoner upon bail under such circumstances. According to
the court, it is not necessary that the danger which may arise
from his confinement should be either immediate or certain.
If, in the opinion of a skillful physician, the nature of his
disorder is such that the confinement must be injurious and
may be fatal, the prisoner "ought to be bailed."
I also point out that per the testimony of Dr. Servillano, the
facilities of the PNP General Hospital (where Enrile had been
detained) were inadequate to address emergency situations,
such as when Enrile's condition suddenly worsens. Thus,
Enrile's continued confinement at this hospital endangered
his life.
While it could be argued that Enrile could have been
transferred to another, better-equipped, hospital, this move
does not guarantee that his health would improve. The
dangers associated with a prolonged hospital stay were
revealed in court by the government's own doctor, Dr.
Gonzales. To directly quote from the
records:ChanRoblesVirtualawlibrary
AJ QUIROZ:
Q: Being confined in a hospital is also stressful, right?
DIRECTOR GONZALES:
A: Yes, your Honor, you can also acquire pneumonia, hospital
intensive pneumonia, if you get hospital acquired
pneumonia, these are bacteria or micro organisms that
can hit you, such that we don't usually confine a patient.
If it is not really life threatening, such that it is better to
have a community acquired pneumonia, because you
don't have to use sophisticated antibiotics. But if you have
a prolonged hospital stay, definitely, you would get the
bacteria in there, which will require a lot of
degenerational antibiotics.
x x x x25cralawredcralawred
I therefore reiterate, to the point of repetition, that Enrile is
already 91- years old, and his immune system is expectedly
weak. His body might not adjust anymore to another transfer
to a different medical facility.
To be sure, Enrile's medical condition was not totally
unknown to the prosecution. To recall, Enrile filed his Motion
for Detention at the PNP General Hospital and his Motion to Fix
Bail before the Sandiganbayan on July 4, 2014 and July 7, 2014,
respectively. In the former motion, Enrile claimed that that "his
advanced age and frail medical condition" merited hospital
arrest in the Philippine National Police General Hospital under
such conditions that may be prescribed by the Sandiganbayan.
He additionally prayed that in the event of a medical
emergency that cannot be addressed by the Philippine National
Police General Hospital, he may be allowed to access an
outside medical facility. In his motion to fix bail, Enrile argued
that his age and voluntary surrender were mitigating and
extenuating circumstances. The Office of the Ombudsman filed
its Opposition to the Motion to Fix Bail on July 9, 2014; the
prosecution also submitted its Opposition to the Motion for
Detention at the PNP General Hospital. To be sure, the
prosecution had not been kept in the dark as regards the
medical condition of Enrile.
I also submit, on the matter of evasion, that we can take
judicial notice that Enrile had been criminally charged in the
past and not once did he attempt to evade the jurisdiction of
the courts; he submitted himself to judicial jurisdiction and met
the cases against him head-on.26chanrobleslaw
The People's insinuation that Enrile has shown "propensity to
take exception to the laws and rules that are otherwise
applicable to all, perhaps out of a false sense of superiority or
entitlement" due to his refusal to enter a plea before the
Sandiganbayan; his act of questioning the insufficiency of the
details of his indictment; a motion to fix bail that he filed
instead of a petition for bail; and his act of seeking detention
in a hospital instead of in a regular facility, were uncalled for.
Enrile was well within his right to avail of those remedies or
actions since they were not prohibited by the Rules.
We are well aware that Enrile, after posting bail, immediately
reported for work in the Senate. This circumstance, however,
does not ipso facto mean that he is not suffering from the
ailments we enumerated above (as found and testified to by
the physicians).
To be fair, the majority did not hold that Enrile was so weak
and ill that he was incapacitated and unable to perform his
duties as Senator; it merely stated that he should be
admitted to bail due to his old age and ill health.
Surely, one may be ill, and yet still opt to report for work. We
note that Enrile told the media that he reported to work "to
earn my pay," adding that, "I will perform my duty for as long
as I have an ounce of energy."27 If Enrile chose to continue
reporting for work despite his ailments, that is his prerogative.
Misplaced reliance on the equal protection clause
Contrary to the Ombudsman's claim, the grant of provisional
liberty to Enrile did not violate the equal protection clause
under the Constitution.
The guarantee of equal protection of the law is a branch of
the right to due process embodied in Article III, Section 1 of
the Constitution. It is rooted in the same concept of fairness
that underlies the due process clause. In its simplest sense, it
requires equal treatment, i.e., the absence of discrimination,
for all those under the same situation.28chanrobleslaw
In Biraogo v. Philippine Truth Commission of 2010,29 the Court
explained this concept as follows:ChanRoblesVirtualawlibrary
x x x [E]qual protection simply requires that all persons or
things similarly situated should be treated alike, both as to
rights conferred and responsibilities imposed. It requires
public bodies and institutions to treat similarly situated
individuals in a similar manner. The purpose of the equal
protection clause is to secure every person within a state's
jurisdiction against intentional and arbitrary discrimination,
whether occasioned by the express terms of a statue or by its
improper execution through the state's duly constituted
authorities. In other words, the concept of equal justice
under the law requires the state to govern impartially, and it
may not draw distinctions between individuals solely on
differences that are irrelevant to a legitimate governmental
objective.
Hence, any claim of violation of the equal protection clause
must convincingly show that there exists a classification that is
blatantly arbitrary or capricious, and that there is no rational
basis for the differing treatment. The present motion for
reconsideration had not shown that there were other
nonagenarian charged with a capital offense who are
currently behind bars.
We note in this regard that Resolution No. 24-4-10 (Re:
Amending and Repealing Certain Rules and Sections of the
Rules on Parole and Amended Guidelines for Recommending
Executive Clemency of the 2006 Revised Manual of the Board
of Pardons and Parole) directs the Board to recommend to the
President the grant of executive clemency of, among
other, inmates who are seventy (70) years old and above
whose continued imprisonment is inimical to their health as
recommended by a physician of the Bureau of Corrections
Hospital and certified under oath by a physician designated by
the Department of Health. If convicted persons (i.e., persons
whose guilt have been proven with moral certainty) are
allowed to be released on account of their old age and health,
then there is no reason why a mere accused could not be
released on bail based on the same grounds.
The Joint Resolution of the Ombudsman did nor show any direct
link of Enrile to the so-called PDAF scam
As the ponente of another Enrile case, I also made a
painstaking cross-reference to the 144-page Joint Resolution of
the Office of the Ombudsman dated March 28, 2014 (which
became the basis of Enrile's indictment before the
Sandiganbayan), but did not see anything there to show that
Enrile received kickbacks and/or commissions from Napoles or
her representatives.
This Joint Resolution contained an enumeration of the amounts
of Special Allotment Release Order (SARO) released by the
DBM; the projects and activities; the intended
beneficiaries/LGUs; the total projects/activities cost; the
implementing agency; the project partners/NGOs; the
disbursement vouchers and their respective amounts and dates;
the check numbers; the paying agencies/claimant or payee; the
signatories of the vouchers; and the signatories of the
Memorandum of Agreement (MOA).
Notably, Enrile's signature did not appear in any of the
documents listed by the prosecution. The sworn statements of
the so-called whistleblowers, namely Benhur Luy, Marina Sula,
Merlina Suñas, as well as Ruby Tuason's Counter-Affidavit, also
did not state that Enrile personally received money, rebates,
kickbacks or commissions. In her affidavit, Tuason also merely
presumed that whatever Reyes "was doing was with Senator
Enrile's blessing" since there were occasions when "Senator
Enrile would join us for a cup of coffee when he would pick her
up." Luy's records also showed that that the commissions,
rebates, or kickbacks amounting to at least P172,834,500.00
(the amount alleged in the plunder charge) were received
by either Reyes or Tuason.
My findings were verified by recent news reports stating that
the prosecutors admitted that they had no evidence
indicating that Enrile personally received kickbacks from the
multi-billion-peso pork barrel scam during the oral
summation for the petition to post bail of alleged pork scam
mastermind Janet Lim-Napoles before the Sandiganbayan
Third Division. These reports also stated that prosecutor
Edwin Gomez admitted that the endorsement letters
identifying the Napoles-linked foundations as the
beneficiaries of Enrile's PDAF were not signed by Enrile
(Gomez said six of the endorsement letters were signed by
Reyes while the rest were signed by Enrile's other chief of
staff, Atty. Jose Antonio Evangelista).30chanrobleslaw
I make it clear that I am not in any way prejudging the case
against Enrile before the Sandiganbayan. I am simply pointing
out that based on the records available to me as
the ponente of a related Enrile case, there was no showing
that Enrile received kickbacks or commissions relating to his
PDAF. Whether Enrile conspired with his co-accused is a
matter that needs to be threshed out by the Anti-Graft Court.
WHEREFORE, premises considered, I vote to DENY the
present motion for reconsideration.
Endnotes:
 ORDINANCE NO. 0309-07
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EN BANC
[ GR No. 189185, Aug 16, 2016 ]
WILFREDO MOSQUEDA v. PILIPINO BANANA GROWERS &
EXPORTERS ASSOCIATION +
RESOLUTION
BERSAMIN, J.:
This appeal through the consolidated petitions for review
on certiorari assails the decision promulgated on January 9,
2009[1] whereby the Court of Appeals (CA) reversed and set
aside the judgment rendered on September 22, 2007 by the
Regional Trial Court (RTC), Branch 17, in Davao City upholding
the validity and constitutionality of Davao City Ordinance No.
0309-07, to wit:
WHEREFORE, premises considered, the appeal is GRANTED.
The assailed September 22, 2007 Decision of the Regional Trial
Court (RTC), 11th Judicial Region, Branch 17, Davao City,
upholding the validity and constitutionality of Davao City
Ordinance No. 0309-07, is hereby REVERSED and SET ASIDE.
FURTHER, the Writ of Preliminary Injunction dated 28 January
2008 enjoining the City Government of Davao, and any other
person or entity acting in its behalf, from enforcing and
implementing City Ordinance No. 0309-07, is hereby made
permanent.
SO ORDERED.
Antecedents
After several committee hearings and consultations with
various stakeholders, the Sangguniang Panlungsod of Davao
City enacted Ordinance No. 0309, Series of 2007, to impose a
ban against aerial spraying as an agricultural practice by all
agricultural entities within Davao City, viz.:
Series of 2007
AN ORDINANCE BANNING AERIAL SPRAYING AS AN
AGRICULTURAL PRACTICE IN ALL AGRICULTURAL ACTIVITIES BY
ALL AGRICULTURAL ENTITIES IN DAVAO CITY
Be it enacted by the Sangguniang Panlungsod of Davao City in
session assembled that:
SECTION 1. TITLE. This Ordinance shall be known as "An
Ordinance Banning Aerial Spraying as an Agricultural Practice in
all Agricultural Activities by all Agricultural Entities in Davao
City";
SECTION 2. POLICY OF THE CITY. It shall be the policy of the City
of Davao to eliminate the method of aerial spraying as an
agricultural practice in all agricultural activities by all entities
within Davao City;
SECTION 3. DEFINITION OF TERMS:
a. Aerial Spraying - refers to application of substances through
the use of aircraft of any form which dispenses the substances
in the air.
b. Agricultural Practices - refer to the practices conducted by
agricultural entities in relation to their agricultural activities;
c. Agricultural Activities - refer to activities that include, but
not limited to, land preparation, seeding, planting, cultivation,
harvesting and bagging;
d. Agricultural Entities - refer to persons, natural or juridical,
involved in agricultural activities
e. Buffer Zone - is an identified 30-meter zone within and
around the boundaries of agricultural farms/plantations that
need special monitoring to avoid or minimize harm to the
environment and inhabitants pursuant to policies and
guidelines set forth in this Ordinance and other government
regulations. It is an area of land that must lie within the
property which does not include public lands, public
thoroughfares or adjacent private properties. It must be
planted with diversified trees that grow taller than what are
usually planted and grown in the plantation to protect those
within the adjacent fields, neighboring farms, residential area,
schools and workplaces.
SECTION 4. SCOPE AND APPLICABILITY - The provisions of this
Ordinance shall apply to all agricultural entities within the
territorial jurisdiction of Davao City;
SECTION 5. BAN OF AERIAL SPRAYING - A ban on aerial
spraying shall be strictly enforced in the territorial jurisdiction
of Davao City three (3) months after the effectivity of this
Ordinance.
SECTION 6. BUFFER ZONE - Consistent with national
legislation and government regulations, all agricultural
entities must provide for a thirty (30) meter buffer zone
within the boundaries of their agricultural farms/plantations.
This buffer zone must be properly identified through Global
Positioning System (GPS) survey. A survey plan showing the
metes and bounds of each agricultural farm/plantation must
be submitted to the City Mayor's Office, with the buffer zone
clearly identified therein;
SECTION 7. PENAL PROVISION - Violation of any provision of
this Ordinance shall be punished as follows:
a. First Offense: Fine of P5,000.00 and imprisonment of not
less than one (1) month but not more than three (3) months;
b. Second Offense: Fine of P5,000.00 and imprisonment of
not less than three (3) months but not more than six (6)
months and suspension of City-issued permits and licenses
for one (1) year;
c. Third Offense: Fine of P5,000.00 and imprisonment of not
less than six (6) months but not more than one (1) year and
perpetual cancellation of City issued permits and licenses;
Provided, that in case the violation has been committed by a
juridical person, the person in charge of the management
thereof shall be held liable;
SECTION 8. REPEALING CLAUSE - Any Ordinance that is contrary
to or inconsistent with any of the provisions of this Ordinance
shall be deemed amended or repealed accordingly.
SECTION 9. EFFECTIVITY - This Ordinance shall take effect thirty
(30) days from its publication in a newspaper of general
circulation in Davao City;
ENACTED, January 23, 2007 by a majority vote of all the
Members of the Sangguniang Panlungsod.[2]
City Mayor Rodrigo Duterte approved the ordinance on
February 9, 2007.[3] The ordinance took effect on March 23,
2007 after its publication in the newspaper Mindanao
Pioneer.[4] Pursuant to Section 5 of the ordinance, the ban
against aerial spraying would be strictly enforced three months
thereafter.
The Pilipino Banana Growers and Exporters Association, Inc.
(PBGEA) and two of its members, namely: Davao Fruits
Corporation and Lapanday Agricultural and Development
Corporation (PBGEA, et al.), filed their petition in the RTC to
challenge the constitutionality of the ordinance, and to seek
the issuance of provisional reliefs through a temporary
restraining order (TRO) and/or writ of preliminary
injunction.[5] They alleged that the ordinance exemplified the
unreasonable exercise of police power; violated the equal
protection clause; amounted to the confiscation of property
without due process of law; and lacked publication pursuant]
to Section 511[6] of Republic Act No. 7160 (Local Government
Code).
On May 8, 2007, the residents living within and adjacent to
banana plantations in Davao City led by Wilfredo
Mosqueda,[7] joined by other residents of Davao
City,[8] (Mosqueda, et al.) submitted their Motion for Leave to
Intervene and Opposition to the Issuance of a Preliminary
Injunction.[9] The RTC granted their motion on June 4, 2007.[10]
On June 20, 2007, the RTC granted the prayer for issuance of
the writ of preliminary injunction, and subsequently issued the
writ.[11]
Judgment of the RTC
On September 22, 2007, after trial, the RTC rendered judgment
declaring Ordinance No. 0309-07 valid and constitutional,
decreeing thusly:
WHEREFORE, finding the subject [O]rdinance No. 0309-07 valid
and constitutional in all aspect of the grounds assailed by the
petitioner, said [C]ity [O]rdinance No. 0309-07, is sustained of
its validity and constitutionality.
Accordingly, the order of this court dated June 20, 2007,
granting the writ of preliminary injunction as prayed for by
petitioner is ordered cancelled and set aside as a result of this because of the absence of a separability clause.
decision.
The City of Davao and the intervenors filed their respective
[12]
SO ORDERED. motions for reconsideration, but the CA denied the motions on
August 7, 2009.[23]
The RTC opined that the City of Davao had validly exercised
police power[13] under the General Welfare Clause of Hence, the separate, but now consolidated, appeals by petition
the Local Government Code;[14] that the ordinance, being
for review on certiorari.
based on a valid classification, was consistent with the Equal
Protection Clause; that aerial spraying was distinct from other
methods of pesticides application because it exposed the
residents to a higher degree of health risk caused by aerial Issues
drift;[15] and that the ordinance enjoyed the presumption of
constitutionality, and could be invalidated only upon a clear
showing that it had violated the Constitution.[16] In G.R. No. 189185, petitioners Mosqueda, et al. rely on the
following grounds, namely:
However, the RTC, recognizing the impracticability of the
3-month transition period under Section 5 of Ordinance No. I
0309-07, recommended the parties to agree on an extended
transition period.[17]
THE COURT OF APPEALS IGNORED FUNDAMENTAL PRECEPTS
AND CONCEPTS OF LAW WHICH, PROPERLY CONSIDERED,
NECESSARILY LEAD TO THE CONCLUSION THAT THE DAVAO
Decision of the CA ORDINANCE IS CONSTITUTIONAL AND VALID

PBGEA, et al. appealed,[18] and applied for injunctive relief

from the CA,[19] which granted the application[20] and II
consequently issued a TRO to meanwhile enjoin the
effectivity of the ordinance.[21]
THE DAVAO ORDINANCE IS CONSISTENT WITH THE EQUAL
On January 9, 2009, the CA promulgated its assailed decision PROTECTION CLAUSE
reversing the judgment of the RTC.[22] It declared Section 5 of
Ordinance No. 0309-07 as void and unconstitutional for being
unreasonable and oppressive; found the three-month
III
transition period impractical and oppressive in view of the
engineering and technical requirements of switching from
aerial spraying to truck-mounted boom spraying; and opined THE MEANS EMPLOYED BY THE DAVAO ORDINANCE IS MORE
that the ban ran afoul with the Equal Protection Clause THAN REASONABLY RELATED TO THE PURPOSE IT SEEKS TO
inasmuch as Section 3(a) of the ordinance - which defined the ACHIEVE
term aerial spraying - did not make reasonable distinction
between the hazards, safety and beneficial effects of liquid
substances that were being applied aerially; the different
classes of pesticides or fungicides; and the levels of IV
concentration of these substances that could be beneficial
and could enhance agricultural production.
THE DAVAO ORDINANCE IS VALID, BEING DEMONSTRABLY
REASONABLE AND FAIR
The CA did not see any established relation between the
purpose of protecting the public and the environment against
the harmful effects of aerial spraying, on one hand, and the
imposition of the ban against aerial spraying of all forms of V
substances, on the other. It ruled that the maintenance of the
30-meter buffer zone within and around the agricultural
plantations under Section 6 of Ordinance No. 0309-07 THE REQUIREMENT RELATING TO THE 30-METER BUFFER ZONE
constituted taking of property without due process because ARE [SIC] CONSISTENT WITH DUE PROCESS OF LAW, BEING A
the landowners were thereby compelled to cede portions of VALID EXERCISE OF POLICE POWER
their property without just compensation; that the exercise
Mosqueda, et al. state that the CA ignored well-established
of police power to require the buffer zone was invalid
precepts like the primacy of human rights over property rights
because there was no finding that the 30-meter surrounding
and the presumption of validity in favor of the ordinance; that
belt was obnoxious to the public welfare; and that,
the CA preferred the preservation of the profits of respondents
accordingly, Ordinance No. 0309-07 was unconstitutional
PBGEA, et al. to the residents' right to life, health and
ecology,[24] thereby disregarding the benevolent purpose of
the ordinance; that the CA assumed the functions of the
lawmaker when it set aside the wisdom behind the
enactment of the ordinance; that the CA failed to apply the
precautionary principle, by which the State was allowed to
take positive actions to prevent harm to the environment and
to human health despite the lack of scientific certainty; that
the CA erred in applying the "strict scrutiny method" in
holding that the ordinance violated the Equal Protection
Clause because it only thereby applied in reviewing
classifications that affected fundamental rights; that there
was nothing wrong with prohibiting aerial spraying per
se considering that even the aerial spraying of water
produced drift that could affect unwilling neighbors whose,
constitutional right to a clean and healthy environment might
be impinged;[25] that as far as the three-month period was
concerned, the CA should have considered that manual
spraying could be conducted while the PBGEA, et al. laid
down the preparations for the conduct of boom
spraying;[26] that "reasonableness" could be more
appropriately weighed by balancing the interests of the
parties against the protection of basic rights, like the right to
life, to health, and to a balanced and healthful
ecology;[27] that PBGEA, et al. did not substantiate their claim
of potential profit losses that would result from the shift; that
business profits should remain inferior and subordinate to
their fundamental rights as residents of Davao City, which
were the rights that the assailed ordinance has sought to
protect;[28] that PBGEA, et al. did not explore other modes of
pesticide treatment either as a stop-gap or as a temporary
measure while shifting to truck mounted boom
spraying;[29] that the imposition of the 30-meter buffer zone
was a valid exercise of police power that necessarily flowed
from the protection afforded by the ordinance from the
unwanted effects of ground spraying; that the imposition of
the buffer zone did not constitute compensable taking under
police power, pursuant to the pronouncements in Seng Kee &
Co. v. Earnshaw and Piatt[30] Patalinghug v. Court of
Appeals,[31] and Social Justice Society (SJS) v. Atienza,
Jr.;[32] and that the 30-meter buffer zone conformed with the
ISO 14000[33] and the DENR Environmental Compliance
Certificate (ECC) requirement.[34]
In G.R. No. 189305, petitioner City of Davao submits the
following as the issues to be considered and resolved, to wit:
I
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
ERRED IN HOLDING THAT SECTION 5 OF ORDINANCE NO.
0309-07, SERIES OF 2007 IS OPPRESSIVE AND AN
UNREASONABLE EXERCISE OF DELEGATED POLICE POWER
II
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
ERRED IN HOLDING THAT ORDINANCE NO. 0309-07 IS
VIOLATIVE OF THE EQUAL PROTECTION CLAUSE OF THE
CONSTITUTION;
III
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
ERRED IN HOLDING THAT ORDINANCE NO. 0309-07
CONSTITUTES TAKING OF PROPERTY WITHOUT
COMPENSATION, THUS, VIOLATIVE OF THE DUE PROCESS
CLAUSE OF THE CONSTITUTION
IV
WHETHER OR NOT AERIAL SPRAYING OF FUNGICIDES IS SAFE
TO THE PEOPLE AND THE ENVIRONMENT
The City of Davao explains that it had the authority to enact the
assailed ordinance because it would thereby protect the
environment and regulate property and business in the interest
of the general welfare pursuant to Section 458 of the Local
Government Code;[35] that the ordinance was enacted to carry
out its mandate of promoting the public welfare under the
General Welfare Clause (Section 16 of the Local Government
Code); that the ordinance did not violate the Equal Protection
Clause because the distinction lies in aerial spray as a method
of application being more deleterious than other modes; that
aerial spraying produces more drift that causes discomfort, and
an extremely offensive and obnoxious experience the part of
the residents; that spray drift cannot be controlled even with
use by the respondents of highly advanced apparatus, such as
the Differential Global Positioning System, Micronair Rotary
Drift Control Atomizers, Intellimap, Intelliflow Spray Valve
System, Control and Display Unit and the Target Flow Spray
Valve Switch System;[36] that because of the inherent toxicity of
Mancozeb (the fungicide aerially applied by the respondents),
there is no need to provide for a substantial distinction based
on the level of concentration;[37] that as soon as fungicides are
released in the air, they become air pollutants pursuant to
Section 5 of Republic Act No. 8749 (Philippine Clean Air Act of
1999),[38] and the activity thus falls under the authority of the
local government units to ban; and that the ordinance does not
only seek to protect and promote human health but also serves
as a measure against air pollution.
The City of Davao insists that it validly exercised police power
because it does not thereby oblige the shift from aerial to
truck-mounted boom spraying; that the respondents only
choose boom spraying to justify the alleged impracticability of
the transition period by erroneously adding the months
required for each of the stages without considering other steps
that may be simultaneously undertaken;[39] that the Court
should apply its ruling in Social Justice Society v. Atienza,
Jr.,[40] by which the six-month period for the folding-up of
business operations was declared a legitimate exercise of
police power; that the respondents did not present any
documentary evidence on the feasibility of adopting other
methods;[41] that only 1,800 hectares out of 5,200 hectares of
plantations owned and operated by PBGEA's members use
aerial spraying, hence, the perceived ominous consequence
of imposing a ban on aerial spray to the banana industry is
entirely misleading;[42] that the urgency of prohibiting aerial
spray justifies the three-month transition period; that the
complaints of the community residents - ranging from skin
itchiness, contraction and/or tightening in the chest, nausea,
appetite loss and difficulty in breathing after exposure to
spray mist - only prove that aerial spraying brings discomfort
and harm to the residents; that considering that the
testimony of Dr. Lynn Crisanta R. Panganiban, a
pharmacologist and toxicologist, established that fungicides
could cause debilitating effects on the human body once
inhaled or digested, the CA erred in holding that there was no
correlation between aerial application and the complaints of
the residents; that given that aerial spray produces more drift
and is uncontrollable compared to the other methods of
applying fungicides, the ordinance becomes
reasonable;[43] and that the medical-related complaints of the
residents need not be proven by medical records considering
that these were based on personal knowledge.[44]
The City of Davao contends that the imposition of the
30-meter buffer zone is a valid exercise of police power,
rendering the claim for just compensation untenable; that the
maintenance of the buffer zone does not require the
respondents to cede a portion of their landholdings; that the
planting of diversified trees within the buffer zone will serve
to insulate the residents from spray drift; that such buffer
zone does not deprive the landowners of the lawful and
beneficial use of their property;[45] and that the buffer zone is
consistent with the Constitution, which reminds property
owners that the use of property bears a social function.[46]
In their comment, the respondents posit that the petition of
the City; of Davao should be dismissed for failure to attach
material portions of the records, and for raising factual errors
that are not within the realm of this appeal by petition for
review on certiorari;[47] that the CA correctly declared the
ordinance as unreasonable due to the impossibility of
complying with the three-month transition period; that
shifting from aerial to truck-mounted boom spraying will take
at least three years and entails careful planning, equipment
and machineries, civil works, and capital funding of at least
P400,000,000.00;[48] that the Court could rely on its ruling
in City of Manila v. Laguio, Jr.,[49] where an ordinance
directing an existing establishment to wind up or to transfer
its business was declared as confiscatory in nature, and,
therefore, unconstitutional;[50] that the total ban against
aerial sprayig, coupled with the inadequate time to shift to
truck-mounted boom spraying, effectively deprives the
respondents with an efficient means to control the spread of
the Black Sigatoka disease that threatens the banana
plantations; that the ordinance will only expose the
plantations to the virulent disease that is capable of infecting
60% of the plantations on a single cycle[51] missed;[52] that
compared with other modes of application, aerial spraying is
more cost-efficient, safe and accurate; that truck-mounted
boom spraying, for instance, requires 80-200 liters of solution
per hectare,[53] while manual spraying uses 200-300 liters of
solution per hectare; that aerial spraying oily requires 30 liters
per hectare; that in terms of safety and accuracy, manual
spraying is the least safe and accurate,[54] and produces more
drift than aerial spraying;[55] that due to the 300-liter solution
required, the workers will be more exposed to the solution
during manual application and such application will thus be
more in conflict with the purpose of the ordinance to prevent
human exposure;[56] that the respondents also find the
irrigation sprinklers suggested by the City of Davao as wasteful,
unsafe and impractical because it cannot provide the needed
coverage for application of the solution to effectively control.
the Black Sigatoka disease; that in contrast, aerial application,
coupled with the latest state of the art technology and
equipment, ensures accuracy, effectiveness, efficiency and
safety compared to the other methods of application; that the
respondents vouch for the safety of the fungicides they use by
virtue of such fungicides having been registered with the
Fertilizer and Pesticide Authority (FPA) and classified as
Category IV,[57] and found to be mild; and that oral ingestion in
large doses is required before any adverse effects to humans
may result.[58]
The respondents lament that the ban was imposed without any
scientific basis; that the report[59] prepared by a fact-finding
team (composed of the Vice Mayor, the City Health Officer, The
City Planning and Development Coordinator and the Assistance
City Planning and Development Coordinator) organized by the
City of Davao revealed that there was no scientific evidence to
support the clamor for the ban against aerial spraying; that
furthermore, national government agencies like the
Department of Agriculture (DA), Department of Health (DOR)
and the Department of Trade and Industry (DTI) similarly
concluded that there was no scientific evidence to support the
ban;[60] that for four decades since the adoption of aerial
spraying, there has been no reported outbreak or any
predisposition to ailment connected with the pesticides applied;
that the testimonies of the residents during the trial were mere
"emotional anecdotal evidence" that did not establish any
scientific or medical bases of any causal connection between
the alleged health conditions complained of and the fungicides
applied during aerial spraying;[61] that the allegations of health
and environmental harm brought by the pesticides used to
treat the banana plantations were unfounded; that the 2001
study of the International Agency for Research on Cancer
showed that, contrary to the claim of Dra. Panganiban, the
by-product of Mancozeb (Ethylenethiourea or ETU) was
"non-genotoxic" and not expected to produce thyroid
cancer;[62] that Carlos Mendoza, a geo-hydrologist and
geophysicist, testified that underground water contamination
through aerial spraying would be impossible because of the
presence of latex, thick layers of clay and underlying rock
formations;[63] that even the study conducted by the Philippine
Coconut Authority (PCA) showed that the rhinoceros beetle
infestation in coconut plantations adjacent to the banana
plantations was due to the farmer's failure to observe
phyto-sanitary measures, not to aerial spraying;[64] that
furthermore, aerial spraying is internationally accepted as a
"Good Agricultural Practice" (GAP)[65] under the International
Code of Conduct on the Distribution and Use of Pesticides by
the United Nations-Food and Agricultural Organization
(UN-FAO); that as such, they observe the standards laid down
by the UN-FAO, and utilize aerial spraying equipment that will
ensure accuracy, safety and efficiency in applying the
substances, and which more than complies with the
requirement under the Guidelines on Good Practice for Aerial
Application of Pesticides (Rome 2001);[66] that in addition,
they strictly observe standard operating procedures prior to
take-off,[67] in-flight[68] and post-flight;[69] that they
substantially invested in state-of-the-art technology and
equipment designed to ensure safety, accuracy, and
effectiveness of aerial spraying operations, to avoid aerial
drift;[70] that their equipment include: wind meters (to
measure the wind velocity in a specific area), wind cones (to
determine the wind direction, and whether the wind is a
headwind, tailwind or a crosswind); central weather station
(to measure wind speed, the temperature and relative
humidity), Differential Global Positioning System
(DGPS),[71] Intellimap,[72] Control and Display
Unit,[73] Micronair Rotary Drift Control Atomizers (AU 5000
Low-Drift model),[74] Intelliflow Spray Valve System,[75] and
Target Flow Spray Valve Switch System;[76] and that they want
to minimize, if not, eliminate the occurrence of spray drift in
order to minimize wastage of resources and reduced
efficiency of spraying programs implemented to control the
Black Sigatoka disease.[77]
The respondents maintain that Ordinance No. 0309-07 will
regulate aerial spraying as a method of application, instead of
the substances being used therein; that the prohibition is
overbroad in light of other available reasonable measures
that may be resorted to by the local government; that the
ordinance is unreasonable, unfair, oppressive, and
tantamount to a restriction or prohibition of trade;[78] that the
ordinance will effectively impose a prohibition against all
pesticides, including fungicides that fall under the mildest
type of substance; that as such, the petitioner has
disregarded existing valid and substantive classifications
established and recognized by the World Health Organization
(WHO) that are adopted by the FPA; that the FPA is the
national agency armed with the professional competence,
technical expertise, and legal mandate to deal with the issue
of use and application of pesticides in our country; that the
fungicides they administer are duly registered with the FPA,
and with other more developed countries that have observed
a stricter environmental and public health regulation such as
the United States Environmental Protection Agency (EPA) and
the European Union (EU); that as such, the City of Davao has
disregarded valid, substantial and significant distinctions
between levels of concentration of the fungicides in the
water solution aerially sprayed; that it is the FPA that
regulates the level of concentration of agricultural chemicals
prior to commercial distribution and use in the country; that
the members of PBGEA only spray a water solution (water
cocktail) containing 0.1 liter to 1.5 liters of the active ingredient
of fungicide in a 30-liter water solution per hectare that has
undergone rigorous testing and .evaluation prior to registration
by the FPA; that the active ingredients of the fungicide are so
diluted that no harm may be posed to public health or to the
environment through aerial application;[79] that the ordinance
was so broad that it prohibits aerial application of any
substance, including water;[80]and that aside from fungicides,
the respondents also aerially apply vitamins, minerals and
organic fertilizers.[81]
The respondents submit that the maintenance of the 30-meter
buffer zone under Section 5 of the ordinance constitutes an
improper exercise of police power; that the ordinance will
require all landholdings to maintain the buffer zone, thereby
diminishing to a mere 1,600 square meters of usable and
productive land for every hectare of the plantation bounding
residential areas, with the zone being reserved for planting
"diversified trees;" that this requirement amounts to taking
without just compensation or due process; and that the
imposition of the buffer zone unduly deprives all landowners
within the City of Davao the beneficial use of their
property;[82] that the precautionary principle cannot be applied
blindly, because its application still requires some scientific
basis; that the principle is also based on a mere declaration
that has not even reached the level of customary international
law, not on a treaty binding on the Government.[83]
The respondents argue that the illegality of the transition
period results in the invalidity of the ordinance as it does not
carry a separability clause; and that the absence of such clause
signifies the intention of the Sangguniang Panlungsod of City of
Davao to make the ordinance effective as a whole.[84]
The main issue is whether or not Ordinance No. 0309-07 is
unconstitutional on due process and equal protection grounds
for being unreasonable and oppressive, and an invalid exercise
of police power: (a) in imposing a ban on aerial spraying as an
agricultural practice in Davao City under Section 5; (b) in
decreeing a 3-month transition-period to shift to other modes
of pesticide application under Section 5; and (c) in requiring the
maintenance of the 30-meter buffer zone under Section 6
thereof in all agricultural lands in Davao City.
Ruling of the Court
We deny the petitions for review for their lack of merit.
I
Preliminary considerations:
The significant role of the banana industry
in ensuring economic stability and food security
There is no question that the implementation of Ordinance No.
0309-07, although the ordinance concerns the imposition of
the ban against aerial spraying in all agricultural lands within
Davao City, will inevitably have a considerable impact on the
country's banana industry, particularly on export trading.
Banana exportation plays a significant role in the
maintenance of the country's economic, stability and food
security. Banana is a consistent dollar earner and the fourth
largest produced commodity in the Philippines.[85] In 2010,
the Philippines figured among the top three banana
producing countries in the world.[86] In 2014, fresh bananas
accounted for 17% of the country's top agricultural export
commodities, gaining a close second to coconut oil with
18%.[87] The Davao Region (Region XI)[88] was the top banana
producing region in 2013, with a production growth rate of
16.4%, and 33.76% share in the total agricultural output of
the Region.[89]
Despite these optimistic statistics, the banana industry
players struggle to keep up with the demands of the trade by
combatting the main threat to production posed by two
major fungal diseases: the Panama Disease Tropical Race 4
(Fusarium oxysprum f.sp. cubense) and the Black Sigatoka leaf
spot disease (Mycosphaerella ffiensis morelet). Pesticides
have proven to be effective only against the Black Sigatoka
disease. There is yet no known cure for the Panama
disease.[90]
The menace of the Black Sigatoka disease cannot be taken
lightly. The disease causes destruction of the plant by
significantly reducing the leaf area, leading to premature
ripening of the produce and resulting in yield losses of at least
50%.[91] Due to its effects on banana export trading, the
disease has emerged as a global concern that has
correspondingly forced banana producers to increase the use
of chemical pesticides.[92] Protectant fungicides such as
Mancozeb, chlorothalonil and Propiconazole are applied to
combat the disease.[93] These agricultural chemicals are
aerially applied by the respondents in the banana plantations
within the jurisdiction of Davao City to arrest the proliferation
of the disease.
Considering that banana export plantations exist in vast
monocultures, effective treatment of the Black Sigatoka
disease is done by frequent aerial application of fungicides.
This is an expensive practice because it requires permanent
landing strips, facilities for the mixing and loading of
fungicides, and high recurring expense of spray
materials.[94] The cost of aerial spraying accounts to 15-20% of
the final retail price of the crop, making the technology
essentially unavailable to small landholdings that are more
vulnerable to the disease.[95]
Aerial spraying has become an agricultural practice in Davao
City since the establishment of the banana plantations in
1960.[96] Out of the 5,205 hectares of commercial plantations
devoted to Cavendish banana being operated by the
respondents in Davao City,[97] around 1,800 hectares receive
treatment through aerial application. These plantations are
situated in Barangays Sirib, Manuel Guianga, Tamayong,
Subasta Dacudao, Lasang, Mandug, Waan, Tigatto and
Callawa,[98] and are affected by the ban imposed by Ordinance
No. 0309-07. The DTI has issued a statement to the effect that
the ban against aerial spraying in banana plantations "is
expected to kill the banana industry," affects the
socio-economic development of the barangays hosting the
affected plantations, and has a disastrous impact on export
trading. The DTI has forecasted that the ban would discourage
the entry of new players in the locality, which would have a
potential drawback in employment generation.[99]
II
The Sangguniang Bayan of Davao City
enacted Ordinance No. 0309-07
under its corporate powers
The petitioners assert that Ordinance No. 0309-07 is a valid act
of the Sangguniang Bayan of Davao City- pursuant to its
delegated authority to exercise police power in the furtherance
of public welfare and in ensuring a sound and balanced
environment for its constituents. The respondents negate this
assertion, describing the ordinance as unreasonable,
discriminatory and oppressive.
The petitioners' assertion of its authority to enact Ordinance
No. 0309-07 is upheld.
To be considered as a valid police power measure, an
ordinance must pass a two-pronged test: the formal (i.e.,
whether the ordinance is enacted within the corporate powers
of the local government unit, and whether it is passed in
accordance with the procedure prescribed by law); and
the substantive (i.e., involving inherent merit, like the
conformity of the ordinance with the limitations under the
Constitution and the statutes, as well as with the requirements
of fairness and reason, and its consistency with public
policy).[100]
The formalities in enacting an ordinance are laid down in
Section 53[101] and Section 54[102] of The Local Government Code.
These provisions require the ordinance to be passed by the
majority of the members of the sanggunian concerned, and to
be presented to the mayor for approval. With no issues
regarding quorum during its deliberation having been raised,
and with its approval of by City Mayor Duterte not being
disputed, we see no reason to strike down Ordinance No.
0309-07 for non-compliance with the formal requisites under
the Local Government Code.
We next ascertain whether the City of Davao acted within the
limits of its corporate powers in enacting Ordinance No.
0309-07.
The corporate powers of the local government unit confer the
basic authority to enact legislation that may interfere with
personal liberty, property, lawful businesses and occupations in
order to promote the general welfare.[103] Such legislative
powers spring from the delegation thereof by Congress
through either the Local Government Code or a special law.
The General Welfare Clause in Section 16 of the Local
Government Code embodies the legislative grant that enables
the local government unit to effectively accomplish and carry
out the declared objects of its creation, and to promote and
maintain local autonomy.[104] Section 16 reads:
Sec. 16. General Welfare. — Every local government unit shall
exercise the powers expressly granted, those necessarily
implied therefrom, as well as powers necessary, appropriate,
or incidental for its efficient and effective governance, and
those which are essential to the promotion of the general
welfare. Within their respective territorial jurisdictions, local
government units shall ensure and support among other
things, the preservation and enrichment of culture, promote
health and safety, enhance the right of the people to a
balanced ecology, encourage and support the development
of appropriate and self-reliant scientific and technological
capabilities, improve public morals, enhance economic
prosperity and social justice, promote full employment
among their residents, maintain peace and order, and
preserve the comfort and convenience of their inhabitants.
Section 16 comprehends two branches of delegated powers,
namely: the general legislative power and the police power
proper. General legislative power refers to the power
delegated by Congress to the local legislative body, or
the Sangguniang Panlungsod in the case of Dayao City,[105] to
enable the local legislative body to enact ordinances and
make regulations. This power is limited in that the enacted
ordinances must not be repugnant to law, and the power
must be exercised to effectuate and discharge the powers
and duties legally conferred to the local legislative body. The
police power proper, on the other hand, authorizes the local
government unit to enact ordinances necessary and proper
for the health and safety, prosperity, morals, peace, good
order, comfort, and convenience of the local government unit
and its constituents, and for the protection of their
property.[106]
Section 458 of the Local Government Code explicitly vests the
local government unit with the authority to enact
legislation .aimed at promoting the general welfare, viz.:
Section 458. Powers, Duties, Functions and Compensation. —
(a) The sangguniang panlungsod, as the legislative body of the
city, shall enact ordinances, approve resolutions and
appropriate funds for the general welfare of the city and its
inhabitants pursuant to Section 16 of this Code and in the
proper exercise of the corporate powers of the city as
provided for under Section 22 of this Code. x x x
In terms of the right of the citizens to health and to a
balanced and healthful ecology, the local government unit
takes its cue from Section 15 and Section 16, Article II of the
1987 Constitution. Following the provisions of the Local
Government Code and the Constitution, the acts of the local
government unit designed to ensure the health and lives of its
constituents and to promote a balanced and healthful ecology
are well within the corporate powers vested in the local
government unit. Accordingly, the Sangguniang Bayan of Davao
City is vested with the requisite authority to enact an ordinance
that seeks to protect the health and well-being of its
constituents.
The respondents pose a challenge against Ordinance No.
0309-07 on the ground that the Sangguniang Bayan of Davao
City has disregarded the health of the plantation workers,
contending that by imposing the ban against aerial spraying the
ordinance would place the plantation workers at a higher
health risk because the alternatives of either manual or
truck-boom spraying method would be adopted; and that
exposing the workers to the same risk sought to be prevented
by the ordinance would defeat its purported purpose.
We disagree with the respondents.
With or without the ban against aerial spraying, the health and
safety of plantation workers are secured by existing state
policies, rules and regulations implemented by the FPA, among
others, which the respondents are lawfully bound to comply
with. The respondents even manifested their strict compliance
with these rules, including those in the UN-FAO Guidelines on
Good Practice for Aerial Application of Pesticides (Rome 2001).
We should note that the Rome 2001 guidelines require the
pesticide applicators to observe the standards provided therein
to ensure the health and safety of plantation workers. As such,
there cannot be any imbalance between the right to health of
the residents vis-a-vis the workers even if a ban will be
imposed against aerial spraying and the consequent adoption
of other modes of pesticide treatment.
Furthermore, the constitutional right to health and maintaining
environmental integrity are privileges that do not only advance
the interests of a group of individuals. The benefits of
protecting human health and the environment transcend
geographical locations and even generations. This is the
essence of Sections 15 and 16, Article II of the Constitution.
In Oposa v. Factoran, Jr.[107] we declared that the right to a
balanced and healthful ecology under Section 16 is an issue of
transcendental importance with intergenerational implications.
It is under this milieu that the questioned ordinance should be
appreciated.
Advancing the interests of the residents who are vulnerable to
the alleged health risks due to their exposure to pesticide drift
justifies the motivation behind the enactment of the ordinance.
The City of Davao has the authority to enact pieces of
legislation that will promote the general welfare, specifically
the health of its constituents. Such authority should not be
construed, however, as a valid license for the City of Davao to
enact any ordinance it deems fit to discharge its mandate. A
thin but well-defined line separates authority to enact
legislations from the method of accomplishing the same.
By distinguishing authority from method we face this question:
Is a prohibition against aerial spraying a lawfully permissible
method that the local government unit of Davao City may
adopt to prevent the purported effects of aerial drift? To
resolve this question, the Court must dig deeper into the
intricate issues arising from these petitions.
II
Ordinance No. 0309-07 violates the Due Process Clause
A valid ordinance must not only be enacted within the
corporate powers of the local government and passed
according to the procedure prescribed by law.[108] In order to
declare it as a valid piece of local legislation, it must also
comply with the following substantive requirements, namely:
(1) it must not contravene the Constitution or any statute; (2)
it must be fair, not oppressive; (3) it must not be partial or
discriminatory; (4) it must not prohibit but may regulate trade;
(5) it must be general and consistent with public policy; and
(6) it must not be unreasonable.[109]
In the State's exercise of police power, the property rights of
individuals may be subjected to restraints and burdens in
order to fulfill the objectives of the Government.[110] A local
government unit is considered to have properly exercised its
police powers only if it satisfies the following requisites, to
wit: (1) the interests of the public generally, as distinguished
from those of a particular class, require the interference of
the State; and (2) the means employed are reasonably
necessary for the attainment of the object sought to be
accomplished and not unduly oppressive.[111] The first
requirement refers to the Equal Protection Clause of the
Constitution; the second, to the Due Process Clause of the
Constitution.[112]
Substantive due process requires that a valid ordinance must
have a sufficient justification for the Government's
action.[113] This means that in exercising police power the
local government unit must not arbitrarily, whimsically or
despotically enact the ordinance regardless of its salutary
purpose. So long as the ordinance realistically serves a
legitimate public purpose, and it employs means that are
reasonably necessary to achieve that purpose without unduly
oppressing the individuals regulated, the ordinance must
survive a due process challenge.[114]
The respondents challenge Section 5 of Ordinance No.
0309-07 for being unreasonable and oppressive in that it sets
the effectivity of the ban at three months after publication of
the ordinance. They allege that three months will be
inadequate time to shift from aerial to truck-mounted boom
spraying, and effectively deprives them of efficient means to
combat the Black Sigatoka disease.
The petitioners counter that the period is justified
considering the urgency of protecting the health of the
residents.
We find for the respondents.
The impossibility of carrying out a shift to another mode of
pesticide application within three months can readily be
appreciated given the vast area of the affected plantations and
the corresponding resources required therefor. To recall, even
the RTC recognized the impracticality of attaining a full-shift to
other modes of spraying within three months in view of the
costly financial and civil works required for the
conversion.[115] In the assailed decision, the CA appropriately
observed:
There appears to be three (3) forms of ground spraying, as
distinguished from aerial spraying, which are: 1.
"Truck-mounted boom spraying;" 2. "manual or backpack
spraying." and 3. "sprinkler spraying." Petitioners-appellants
claim that it was physically impossible for them to shift to
"truck-mounted boom spraying" within three (3) months
before the aerial spraying ban is actually enforced. They cited
the testimony of Dr. Maria Emilia Rita G. Fabregar, Ph.D, PBGEA
Chairperson, to the effect that since banana plantations in
Davao City were configured for aerial spraying, the same lack
the road network to make "truck-mounted boom spraying"
possible. According to Dr. Fabregar, it was impossible to
construct such road networks in a span of three (3) months.
Engr. Magno P. Porticos, Jr., confirmed that the shift demands
the construction of three hundred sixty (360) linear kilometers
of road which cannot be completed in three (3) months.
In their separate testimonies, Dr. Fabregar and Engr. Porticos
explained that a shift to "truck-mounted boom spraying"
requires the following steps which may be completed in three
(3) years:
1. six (6) months for planning the reconfiguration of banana
plantations to ensure effective truck-mounted boom spraying
for the adequate protections of the plantations from the Black
Sigatoka fungus and other diseases, while maximizing land use;
2. two (2) months to secure government permits for
infrastructure works to be undertaken thereon;
3. clearing banana plants and dismantling or reconstructing
fixed infrastructures, such as roads, drains, cable ways, and
irrigation facilities, which phase may be completed in eighteen
(18) months;
4. importation and purchase of trucks mounted with boom
spraying, nurse trucks and protective gears. The placing of
orders and delivery of these equipments, including the training
[of] the personnel who would man the same, would take six (6)
months; and
5. securing the needed capitalization to finance these
undertakings would take six (6) months to a year.
Ms. Maria Victoria E. Sembrano, CPA, Chairperson of the
PBGEA Finance Committee, testified that her committee and
the Technical Committee and Engineering Group of PBGEA
conducted a feasibility study to determine the cost in
undertaking the shift to ground spraying. Their findings fixed
the estimated cost for the purpose at Php 400 Million.
xxxx
Both appellees failed to rebut the foregoing testimonies with
empirical findings to the contrary.
xxxx
Thus, in view of the infrastructural requirements as
methodically explained, We are convinced that it was
physically impossible for petitioners-appellants to carry out a
carefully planned configuration of vast hectares of banana
plantations and be able to actually adopt "truck-mounted
boom spraying" within three (3) months. To compel
petitioners-appellants to abandon aerial spraying in favor of
"manual or backpack spraying" or "sprinkler spraying" within
3 months puts petitioners-appellants in a vicious dilemma
between protecting its investments and the health of its
workers, on the one hand, and the threat of prosecution if
they refuse to comply with the imposition. We even find the
3-months transition period insufficient, not only in acquiring
and gearing-up the plantation workers of safety
appurtenances, but more importantly in reviewing safety
procedures for "manual or backpack spraying" and in training
such workers for the purpose. Additionally, the engineering
works for a sprinkler system in vast hectares of banana
plantations could not possibly be completed within such
period, considering that safety and efficiency factors need to
be considered in its structural re-designing.
xxxx
Respondent-appellee argues that the Ordinance merely
banned an agricultural practice and did not actually prohibit
the operation of banana plantations; hence, it is not
oppressive. While We agree that the measure did not impose
a closure of a lawful enterprise, the proviso in Section 5,
however, compels petitioners-appellants to abandon aerial
spraying without affording them enough time to convert and
adopt other spraying practices. This would preclude
petitioners-appellants from being able to fertilize their
plantations with essential vitamins and minerals substances,
aside from applying thereon the needed fungicides or
pesticides to control, if not eliminate the threat of, plant
diseases. Such an apparent eventuality would prejudice the
operation of the plantations, and the economic repercussions
thereof would just be akin to shutting down the venture.
This Court, therefore, finds Section 5 of Ordinance No.
0309-07 an invalid provision because the compulsion
thereunder to abandon aerial spraying within an
impracticable period of "three (3) months after the effectivity
of this Ordinance" is "unreasonable, oppressive and
impossible to comply with."[116]
The required civil works for the conversion to truck-mounted
boom spraying alone will consume considerable time and
financial resources given the topography and geographical
features of the plantations.[117] As such, the conversion could
not be completed within the short timeframe of three months.
Requiring the respondents and other affected individuals to
comply with the consequences of the ban within the
three-month period under pain of penalty like fine,
imprisonment and even cancellation of business permits would
definitely be oppressive as to constitute abuse of police power.
The respondents posit that the requirement of maintaining a
buffer zone under Section 6 of the ordinance violates due
process for being confiscatory; and that the imposition unduly
deprives all agricultural landowners within Davao City of the
beneficial use of their property that amounts to taking without
just compensation.
The position of the respondents is untenable.
In City of Manila v. Laguio, Jr.,[118] we have thoroughly
explained that taking only becomes confiscatory if it
substantially divests the owner of the beneficial use of its
property, viz.:
An ordinance which permanently restricts the use of property
that it cannot be used for any reasonable purpose goes beyond
regulation and must be recognized as a taking of the property
without just compensation. It is intrusive and violative of the
private property rights of individuals.
The Constitution expressly provides in Article III, Section 9, that
"private property shall not be taken for public use without just
compensation." The provision is the most important protection
of property rights in the Constitution. This is a restriction on
the general power of the government to take property. The
constitutional provision is about ensuring that the government
does not confiscate the property of some to give it to others. In
part too, it is about loss spreading. If the government takes
away a person's property to benefit society, then society
should pay. The principal purpose of the guarantee is "to bar
the Government from forcing some people alone to bear public
burdens which, in all fairness and justice, should be borne by
the public as a whole.
There are two different types of taking that can be identified. A
"possessory" taking occurs when the government confiscates
or physically occupies property. A "regulatory" taking occurs
when the government's regulation leaves no reasonable
economically viable use of the property.
In the landmark case of Pennsylvania Coal v. Mahon, it was
held that a taking also could be found if government regulation
of the use of property went "too far." When regulation reaches
a certain magnitude, in most if not in all cases there must be an
exercise of eminent domain and compensation to support the
act. While property may be regulated to a certain extent, if
regulation goes too far it will be recognized as a taking.
No formula or rule can be devised to answer the questions of
what is too far and when regulation becomes a taking.
In Mahon, Justice Holmes recognized that it was "a question
of degree and therefore cannot be disposed of by general
propositions." On many other occasions as well, the U.S.
Supreme Court has said that the issue of when regulation
constitutes a taking is a matter of considering the facts in
each case. The Court asks whether justice and fairness
require that the economic loss caused by public action must
be compensated by the government and thus borne by the
public as a whole, or whether the loss should remain
concentrated on those few persons subject to the public
action.
What is crucial in judicial consideration of regulatory takings
is that government regulation is a taking if it leaves no
reasonable economically viable use of property in a manner
that interferes with reasonable expectations for use. A
regulation that permanently denies all economically
beneficial or productive use of land is, from the owner's point
of view, equivalent to a "taking" unless principles of nuisance
or property law that existed when the owner acquired the
land make the use prohibitable. When the owner of real
property has been called upon to sacrifice all economically
beneficial uses in the name of the common good, that is, to
leave his property economically idle, he has suffered a taking.
A regulation which denies all economically beneficial or
productive use of land will require compensation under the
takings clause. Where a regulation places limitations on land
that fall short of eliminating all economically beneficial use, a
taking nonetheless may have occurred, depending on a
complex of factors including the regulation's economic effect
on the landowner, the extent to which the regulation
interferes with reasonable investment-backed expectations
and the character of government action. These inquiries are
informed by the purpose of the takings clause which is to
prevent the government from forcing some people alone to
bear public burdens which, in all fairness and justice, should
be borne by the public as a whole.
A restriction on use of property may also constitute a "taking"
if not reasonably necessary to the effectuation of a
substantial public purpose or if it has an unduly harsh impact
on the distinct investment-backed expectations of the owner.
(bold emphasis supplied)
The establishment of the buffer zone is required for the
purpose of minimizing the effects of aerial spraying within
and near the plantations. Although Section 3(e) of the
ordinance requires the planting of diversified trees within the
identified buffer zone, the requirement cannot be construed
and deemed as confiscatory requiring payment of just
compensation. A landowner may only be entitled to
compensation if the taking amounts to a permanent denial of
all economically beneficial or productive uses of the land. The
respondents cannot be said to be permanently and
completely deprived of their landholdings because they can
still cultivate or make other productive uses of the areas to
be identified as the buffer zones.
III
Ordinance No. 0309-07 violates the Equal Protection Clause
A serious challenge being posed against Ordinance No. 0309-07
rests on its supposed collision with the Equal Protection Clause.
The respondents submit that the ordinance transgresses this
constitutional guaranty on two counts, to wit: (1) by prohibiting
aerial spraying per se, regardless of the substance or the level
of concentration of the chemicals to be applied; and (2) by
imposing the 30-meter buffer zone in all agricultural lands in
Davao City regardless of the sizes of the landholding.
The constitutional right to equal protection requires that all
persons or things similarly situated should be treated alike,
both as to rights conferred and responsibilities imposed. It
requires public bodies and institutions to treat similarly
situated individuals in a similar manner. The guaranty equal
protection secures every person within the State's jurisdiction
against intentional and arbitrary discrimination, whether
occasioned by the express terms of a statue or by its improper
execution through the State's duly constituted authorities. The
concept of equal justice under the law demands that the State
governs impartially, and not to draw distinctions between
individuals solely on differences that are irrelevant to the
legitimate governmental objective.[119]
Equal treatment neither requires universal application of laws
to all persons or things without distinction,[120] nor intends to
prohibit legislation by limiting the object to which it is directed
or by the territory in which it is to operate.[121] The guaranty of
equal protection envisions equality among equals determined
according to a valid classification.[122] If the groupings are
characterized by substantial distinctions that make real
differences, one class may be treated and regulated differently
from another.[123] In other word, a valid classification must be:
(1) based on substantial distinctions; (2) germane to the
purposes of the law; (3) not limited to existing conditions only;
and (4) equally applicable to all members of the class.[124]
Based on these parameters, we find for the respondents.
The reasonability of a distinction and sufficiency of the
justification given by the Government for its conduct is gauged
by using the means-end test.[125] This test requires analysis of:
(1) the interests of the public that generally require its exercise,
as distinguished from those of a particular class; and (2) the
means employed that are reasonably necessary for the
accomplishment of the purpose and are not unduly oppressive
upon individuals.[126] To determine the propriety of the
classification, courts resort to three levels of scrutiny, viz:
the rational scrutiny, intermediate scrutiny and strict scrutiny.
The rational basis scrutiny (also known as the rational relation
test or rational basis test) demands that the classification
reasonably relate to the legislative purpose.[127] The rational
basis test often applies in cases involving economics or social
welfare,[128] or to any other case not involving a suspect
class.[129]
When the classification puts a quasi-suspect class at a
disadvantage, it will be treated under intermediate or
heightened review. Classifications based on gender or
illegitimacy receives intermediate scrutiny.[130] To survive
intermediate scrutiny, the law must not only further an
important governmental interest and be substantially related
to that interest, but the justification for the classification
must be genuine and must not depend on broad
generalizations.[131]
The strict scrutiny review applies when a legislative
classification impermissibly interferes with the exercise of a
fundamental right or operates to the peculiar class
disadvantage of a suspect class. The Government carries the
burden to prove that the classification is necessary to achieve
a compelling state interest, and that it is the least restrictive
means to protect such interest.[132]
The petitioners advocate the rational basis test. In particular,
the petitioning residents of Davao City argue that the CA
erroneously applied the strict scrutiny approach when it
declared that the ordinance violated the Equal Protection
Clause because the ban included all substances including
water and vitamins. The respondents agree with the CA,
however, and add that the ordinance does not rest on a valid
distinction because it has lacked scientific basis and has
ignored the classifications of pesticides observed by the FPA.
We partly agree with both parties.
In our view, the petitioners correctly argue that the rational
basis approach appropriately applies herein. Under the
rational basis test, we shall: (1) discern the reasonable
relationship between the means and the purpose of the
ordinance; and (2) examine whether the means or the
prohibition against aerial spraying is based on a substantial or
reasonable distinction. A reasonable classification includes all
persons or things similarly situated with respect to the
purpose of the law.[133]
Applying the test, the established classification under
Ordinance No. 0309-07 is to be viewed in relation to the
group of individuals similarly situated with respect to the
avowed purpose. This gives rise to two classes, namely: (1)
the classification under Ordinance No. 0309-07 (legislative
classification); and (2) the classification based on purpose
(elimination of the mischief). The legislative classification
found in Section 4 of the ordinance refers to "all agricultural
entities" within Davao City. Meanwhile, the classification
based on the purpose of the ordinance cannot be easily
discerned because the ordinance does not make any express
or implied reference to it. We have to search the voluminous
records of this case to divine the animus behind the action of
the Sangguniang Panglungsod in prohibiting aerial spraying as
an agricultural activity. The effort has led uS to the following
proposed resolution of the Sangguniang Panglungsod,[134] viz.:
RESOLUTION NO. ____
Series of 2007
A RESOLUTION TO ENACT AN ORDINANCE BANNING AERIAL
SPRAYING AS AN AGRICULTURAL PRACTICE IN ALL
AGRICULTURAL ENTITIES IN DAVAO CITY
WHEREAS, the City of Davao, with fertile lands and ideal
climactic condition, hosts various large farms planted with
different crops;
WHEREAS, these farms, lay adjacent to other agricultural
businesses and that residential areas abuts these farm
boundaries;
WHEREAS, aerial spraying as a mode of applying chemical
substances such as fungicides and pesticides is being used by
investors/companies over large agricultural plantations in
Davao City;
WHEREAS, the Davao City watersheds and ground water
sources, located within and adjacent to Mount Apo may be
affected by the aerial spraying of chemical substances on the
agricultural farms and plantations therein;
WHEREAS, the effects of aerial spraying are found to be
detrimental to the health of the residents of Davao City most
especially the inhabitants nearby agricultural plantations
practicing aerials spraying;
WHEREAS, the unstable wind direction during the conduct of
aerial spray application of these chemical substances pose
health hazards to people, animals, other crops and ground
water sources;
WHEREAS, in order to achieve sustainable development,
politics must be based on the Precautionary Principle.
Environment measures must anticipate, prevent, and attack
the causes of environmental degradation. Where there are
threats of serious, irreversible damage, lack of scientific
certainty should not be used as a reason for postponing
measures to prevent environmental degradation;
WHEREAS, it is the policy of the City of Davao to ensure the
safety of its inhabitants from all forms of hazards, especially if
such hazards come from development activities that are
supposed to be beneficial to everybody;
WHEREAS, pesticides are by its nature poisonous, it is all the
more dangerous when dispensed aerially through aircraft
because of unstable wind conditions which in turn makes aerial
spray drifting to unintended targets a commonplace.
WHEREAS, aerial spraying of pesticides is undeniably a
nuisance.
WHEREAS, looking at the plight of the complainants and other
stakeholders opposed to aerial spraying, the issue of aerial
spraying of pesticides is in all fours a nuisance. Given the
vastness of the reach of aerial spraying, the said form of
dispensation falls into the category of a public nuisance. Public
nuisance is defined by the New Civil Code as one which
affects a community or neighborhood or any considerable
number of persons, although the extent of the annoyance,
danger or damage upon individuals may be unequal.
WHEREAS, the General Welfare Clause of the Local
Government Code empowers Local Government Units to
enact ordinances that provide for the health and safety,
promote the comfort and convenience of the City and the
inhabitants thereof.
NOW THEREFORE, BE IT RESOLVED AS IT IS HEREBY
RESOLVED, that for the health, safety and peace of mind of
all the inhabitants of Davao City, let an ordinance be enacted
banning aerial spraying as an agricultural practice in all
agricultural entities in Davao City.
xxxx
The proposed resolution identified aerial spraying of
pesticides as a nuisance because of the unstable wind
direction during the aerial application, which (1) could
potentially contaminate the Davao City watersheds and
ground water sources; (2) was detrimental to the health of
Davao City residents, most especially those living in the.
nearby plantations; and (3) posed a hazard to animals and
other crops. Plainly, the mischief that the prohibition sought
to address was the fungicide drift resulting from the aerial
application; hence, the classification based on the intent of
the proposed ordinance covered all agricultural entities
conducting aerial spraying of fungicides that caused drift.
The assailed ordinance thus becomes riddled with several
distinction issues.
A brief discussion on the occurrence of the drift that the
ordinance seeks to address is necessary.
Pesticide treatment is based on the use of different methods
of application and equipment,[135] the choice of which
methods depend largely on the objective of distributing the
correct dose to a defined target with the minimum of
wastage due to "drift."[136] The term "drift" refers to the
movement of airborne spray droplets, vapors, or dust
particles away from the target area during pesticide
application.[137] Inevitably, any method of application causes
drift, which may either be primary or secondary. As fittingly
described by scholars:[138]
Primary drift is the off-site movement of spray droplets at, or
very close to, the time of application. For example, a field
application using a boom in a gusty wind situation could
easily lead to a primary drift. Primary spray drift
is not product specific, and the active ingredients do not
differ in their potential to drift. However, the type of
formulation, surfactant, or other adjuvant may affect spray
drift potential.
Secondary drift is associated with pesticide vapor. Pesticide
vapor drift is the movement of the gas that forms when an
active ingredient evaporates from plants, soil, or other surfaces.
And while vapor drift is an important issue, it only pertains to
certain volatile products. Vapor drift and other forms
of secondary drift are product specific. Water-based sprays will
volatize more quickly than oil-based sprays. However, oil-based
sprays can drift farther, especially above 95°F, because they are
lighter.
Understandably, aerial drift occurs using any method of
application, be it through airplanes, ground sprayers, airblast
sprayers or irrigation systems.[139] Several factors contribute to
the occurrence of drift depending on the method of
application, viz.:
AERIAL AIRBLAST GROUND CHEMIGATION
Application
Droplet size Crop canopy Droplet size
height
Application
Droplet size Boom height Wind speed
height
Wind speed Wind speed Wind speed
Swath
adjustment
Canopy
Boom length
Tank mix
physical
properties
Source: F.M. Fishel and J.A. Ferrell, "Managing Pesticide Drift,"
available at http://edis.ifas.edu/pi232. citing Pesticide Notes,
MSU Extension.
The four most common pesticide treatment methods adopted
in Davao City are aerial, truck-mounted boom, truck-mounted
mechanical, and manual spraying.[140] However, Ordinance No.
0309-07 imposes the prohibition only against aerial spraying.
Davao City justifies the prohibition against aerial spraying by
insisting that the occurrence of drift causes inconvenience and
harm to the residents and degrades the environment. Given
this justification, does the ordinance satisfy the requirement
that the classification must rest on substantial distinction?
We answer in the negative.
The occurrence of pesticide drift is not limited to aerial
spraying but results from the conduct of any mode of pesticide
application. Even manual spraying or truck-mounted boom
spraying produces drift that may bring about the same
inconvenience, discomfort and alleged health risks to the
community and to the environment.[141] A ban against aerial
spraying does not weed out the harm that the ordinance seeks
to achieve.[142] In the process, the ordinance suffers from being
"underinclusive" because the classification does not include all
individuals tainted with the same mischief that the law seeks
to eliminate.[143] A classification that is drastically
underinclusive with respect to the purpose or end appears as
an irrational means to the legislative end because it poorly
serves the intended purpose of the law.[144]
The claim that aerial spraying produces more aerial drift
cannot likewise be sustained in view of the petitioners' failure
to substantiate the same. The respondents have refuted this
claim, and have maintained that on the contrary, manual
spraying produces more drift than aerial treatment[145] As
such, the decision of prohibiting only aerial spraying is tainted
with arbitrariness.
Aside from its being underinclusive, the assailed ordinance
also tends to be "overinclusive" because its .impending
implementation will affect groups that have no relation to the
accomplishment of the legislative purpose. Its
implementation will unnecessarily impose a burden on a
wider range of individuals than those included in the
intended class based on the purpose of the law.[146]
It can be noted that the imposition of the ban is too broad
because the ordinance applies irrespective of the substance
to be aerially applied and irrespective of the agricultural
activity to be conducted. The respondents admit that they
aerially treat their plantations not only with pesticides but
also vitamins and other substances. The imposition of the ban
against aerial spraying of substances other than fungicides
and regardless of the agricultural activity being performed
becomes unreasonable inasmuch as it patently bears no
relation to the purported inconvenience, discomfort, health
risk and environmental danger which the ordinance, seeks to
address. The burden now will become more onerous to
various entities including the respondents and even others
with no connection whatsoever to the intended purpose of
the ordinance.
In this respect, the CA correctly observed:
Ordinance No. 0309-07 defines "aerial spraying" as the
"application of substances through the use of aircraft of any
form which dispenses the substances in the air." Inevitably,
the ban imposed therein encompasses aerial application of
practically all substances, not only pesticides or fungicides but
including water and all forms of chemicals, regardless of its
elements, composition, or degree of safety.
Going along with respondent-appellee's ratiocination that the
prohibition in the Ordinance refers to aerial spraying as a
method of spraying pesticides or fungicides, there appears to
be a need to single out pesticides or fungicides in imposing
such a ban because there is a striking distinction between
such chemicals and other substances (including water),
particularly with respect to its safety implications to the
public welfare and ecology.
xxxx
We are, therefore, convinced that the total ban on aerial
spraying runs afoul with the equal protection clause because it
does not classify which substances are prohibited from being
applied aerially even as reasonable distinctions should be made
in terms of the hazards, safety or beneficial effects of liquid
substances to the public health, livelihood and the
environment.[147]
We clarify that the CA did not thereby apply the strict scrutiny
approach but only evaluated the classification established by
the ordinance in relation to the purpose. This is the essence of
the rational basis approach.
The petitioners should be made aware that the rational basis
scrutiny is not based on a simple means-purpose correlation;
nor does the rational basis scrutiny automatically result in a
presumption of validity of the ordinance or deference to the
wisdom of the local legislature.[148] To reiterate, aside from
ascertaining that the means and purpose of the ordinance are
reasonably related, the classification should be based on a
substantial distinction.
However, we do not subscribe to the respondents' position
that there must be a distinction based on the level of
concentration or the classification imposed by the FPA on
pesticides. This strenuous requirement cannot be expected
from a local government unit that should only be concerned
with general policies in local administration and should not be
restricted by technical concerns that are best left to agencies
vested with the appropriate special competencies. The
disregard of the pesticide classification is not an equal
protection issue but is more relevant in another aspect of
delegated police power that we consider to be more
appropriate in a later discussion.
The overinclusiveness of Ordinance No. 0309-07 may also be
traced to its Section 6 by virtue of its requirement for the
maintenance of the 30- meter buffer zone. This requirement
applies regardless of the area of the agricultural landholding,
geographical location, topography, crops grown and other
distinguishing characteristics that ideally should bear a
reasonable relation to the evil sought to be avoided. As earlier
discussed, only large banana plantations could rely on aerial
technology because of the financial capital required therefor.
The establishment and maintenance of the buffer zone will
become more burdensome to the small agricultural
landholders because: (1) they have to reserve the 30-meter
belt surrounding their property; (2) that will have to be
identified through GPS; (3) the metes and bounds of the buffer
zone will have to be plotted in a survey plan for submission to
the local government unit; and (4) will be limited as to the
crops that may be cultivated therein based on the mandate
that the zone shall be devoted to "diversified trees" taller than
what are being grown therein.[149] The arbitrariness of Section 6
all the more becomes evident when the land is presently
devoted to the cultivation of root crops and vegetables, and
trees or plants slightly taller than the root crops and vegetables
are then to be planted. It is seriously to be doubted whether
such circumstance will prevent the occurrence of the drift to
the nearby residential areas.
Section 6 also subjects to the 30-meter buffer zone
requirement agricultural entities engaging in organic farming,
and' do not contribute to the occurrence of pesticide drift.
The classification indisputably becomes arbitrary and
whimsical.
A substantially overinclusive or underinclusive classification
tends to undercut the governmental claim that the
classification serves legitimate political ends.[150] Where
overinclusiveness is the problem, the vice is that the law has
a greater discriminatory or burdensome effect than
necessary.[151] In this light, we strike down Section 5 and
Section 6 of Ordinance No. 0309-07 for carrying an invidious
classification, and for thereby violating the Equal Protection
Clause.
The discriminatory nature of the ordinance can be seen from
its policy as stated in its Section 2, to wit:
Section 2. POLICY OF THE CITY. It shall be the policy of the
City of Davao to eliminate the method of aerial spraying as an
agricultural practice in all agricultural activities by all entities
within Davao City.
Evidently, the ordinance discriminates against large
farmholdings that are the only ideal venues for the
investment of machineries and equipment capable of aerial
spraying. It effectively denies the affected individuals the
technology aimed at efficient and cost-effective operations
and cultivation not only of banana but of other crops as well.
The prohibition against aerial spraying will seriously hamper
the operations of the banana plantations that depend on
aerial technology to arrest the spread of the Black Sigatoka
disease and other menaces that threaten their production
and harvest. As earlier shown, the effect of the ban will not
be limited to Davao City in view of the significant contribution
of banana export trading to the country's economy.
The discriminatory character of the ordinance makes it
oppressive and unreasonable in light of the existence and
availability of more permissible and practical alternatives that
will not overburden the respondents and those dependent on
their operations as well as those who stand to be affected by
the ordinance. In the view of Regional Director Roger C. Chio
of DA Regional Field Unit XI, the alleged harm caused by
aerial spraying may be addressed by following the GAP that
the DA has been promoting among plantation operators. He
explained his view thusly:
The allegation that aerial spraying is hazardous to animal and
human being remains an allegation and assumptions until
otherwise scientifically proven by concerned authorities and
agencies. This issue can be addressed by following Good
Agricultural Practices, which DA is promoting among fruit and
vegetable growers/plantations. Any method of agri-chemical
application whether aerial or non-aerial if not properly done
in accordance with established procedures and code of good
agricultural practices and if the chemical applicators and or
handlers lack of necessary competency, certainly it could be
hazardous. For the assurance that commercial
applicators/aerial applicators possessed the competency and
responsibility of handling agri-chemical, such applicators are
required under Article III, Paragraph 2 of FPA Rules and
Regulation No. 1 to secure license from FPA.
Furthermore users and applicators of agri-chemicals are also
guided by Section 6 Paragraph 2 and 3 under column of
Pesticides and Other agricultural Chemicals of PD 11445 which
stated: "FPA shall establish and enforce tolerance levels and
good agricultural practices in raw agricultural commodities; to
restrict or ban the use of any chemical or the formulation of
certain pesticides in specific areas or during certain period
upon evidence that the pesticide is eminent [sic] hazards has
caused, or is causing widespread serious damage to crops, fish,
livestock or to public health and environment."
Besides the aforecited policy, rules and regulation enforced by
DA, there are other laws and regulations protecting and
preserving the environment. If the implementation and
monitoring of all these laws and regulation are closely
coordinated with concerned LGUs, Gas and NGAs and other
private sectors, perhaps we can maintain a sound and health
environment x x x.[152]
Indeed, based on the Summary Report on the Assessment and
Factfinding Activities on the Issue of Aerial Spraying in Banana
Plantations,[153] submitted by the fact-finding team organized
by Davao City, only three out of the 13 barangays consulted by
the fact-finding team opposed the conduct of aerial spraying;
and of the three barangays, aerial spraying was conducted only
in Barangay Subasta. In fact, the fact-finding team found that
the residents in those barangays were generally in favor of the
operations of the banana plantations, and did not oppose the
conduct of aerial spraying.
IV
The Precautionary Principle still requires scientific basis
The petitioners finally plead that the Court should look at the
merits of the ordinance based on the precautionary principle.
They argue that under the precautionary principle, the City of
Davao is justified in enacting Ordinance No. 0309-07 in order to
prevent harm to the environment and human health despite
the lack of scientific certainty.
The petitioners' plea and argument cannot be sustained.
The principle of precaution originated as a social planning
principle in Germany. In the 1980s, the Federal Republic of
Germany used the Vorsogeprinzip ("foresight principle") to
justify the implementation of vigorous policies to tackle acid
rain, global warming and pollution of the North Sea.[154] It has
since emerged from a need to protect humans and the
environment from increasingly unpredictable, uncertain, and
unquantifiable but possibly catastrophic risks such as those
associated with Genetically Modified Organisms and climate
change,[155] among others. The oft-cited Principle 15 of the
1992 Rio Declaration on Environment and Development
(1992 Rio Agenda), first embodied this principle, as follows:
Principle 15
In order to protect the environment, the precautionary
approach shall be widely applied by States according to their
capabilities. Where there are threats of serious or irreversible
damage, lack of full scientific certainty shall not be used as a
reason for postponing cost-effective measures to prevent
environmental degradation.
In this jurisdiction, the principle of precaution appearing in
the Rules of Procedure for Environmental Cases (A.M. No.
09-6-8-SC) involves matters of evidence in cases where there
is lack of full scientific certainty in establishing a causal link
between human activity and environmental effect.[156] In such
an event, the courts may construe a set of facts as warranting
either judicial action or inaction with the goal of preserving
and protecting the environment.[157]
It is notable, therefore, that the precautionary principle shall
only be relevant if there is concurrence of three elements,
namely: uncertainty, threat of environmental damage and
serious or irreversible harm. In situations where the threat is
relatively certain, or that the causal link between an action
and environmental damage can be established, or the
probability of occurrence can be calculated, only preventive,
not precautionary measures, may be taken. Neither will the
precautionary principle apply if there is no indication of a
threat of environmental harm; or if the threatened harm is
trivial or easily reversible.[158]
We cannot see the presence of all the elements. To begin
with, there has been no scientific study. Although the
precautionary principle allows lack of full scientific certainty
in establishing a connection between the serious or
irreversible harm and the human activity, its application is
still premised on empirical studies. Scientific analysis is still a
necessary basis for effective policy choices under the
precautionary principle.[159]
Precaution is a risk management principle invoked after
scientific inquiry takes place. This scientific stage is often
considered synonympus with risk assessment.[160] As such,
resort to the principle shall not be based on anxiety or
emotion, but from a rational decision rule, based in
ethics.[161] As much as possible, a complete and objective
scientific evaluation of the risk to the environment or health
should be conducted and made available to decision-makers
for them to choose the most appropriate course of
action.[162] Furthermore, the positive and negative effects of
an activity is also important in the application of the principle.
The potential harm resulting from certain activities should
always be judged in view of the potential benefits they offer,
while the positive and negative effects of potential
precautionary measures should be considered.[163]
The only study conducted to validate the effects of aerial
spraying appears to be the Summary Report on the Assessment
and Fact-Finding Activities on the Issue of Aerial Spraying in
Banana Plantations.[164] Yet, the fact-finding team that
generated the report was not a scientific study that could
justify the resort to the .precautionary principle. In fact, the
Sangguniang Bayan ignored the findings and conclusions of the
fact-finding team that recommended only a regulation, not a
ban, against aerial spraying. The recommendation was in line
with the advocacy of judicious handling and application of
chemical pesticides by the DOH-Center for Health
Development in the Davao Region in view of the scarcity of
scientific studies to support the ban against aerial spraying.[165]
We should not apply the precautionary approach in sustaining
the ban against aerial spraying if little or nothing is known of
the exact or potential dangers that aerial spraying may bring to
the health of the residents within and near the plantations and
to the integrity and balance of the environment. It is dangerous
to quickly presume that the effects of aerial spraying would be
adverse even in the absence of evidence. Accordingly, for lack
of scientific data supporting a ban on aerial spraying,
Ordinance No. 0309-07 should be struck down for being
unreasonable.
V
Ordinance No. 0309-07 is an ultra vires act
The Court further holds that in addition to its
unconstitutionality for carrying an unwarranted classification
that contravenes the Equal Protection Clause, Ordinance No.
0309-07 suffers from another legal infirmity.
The petitioners represent that Ordinance No. 0309-07 is a valid
exercise of legislative and police powers by the Sangguniang
Bayan of Davao City pursuant to Section 458 in relation to
Section 16 both of the Local Government Code. The
respondents counter that Davao City thereby disregarded the
regulations implemented by the Fertilizer and Pesticide
Authority (FPA), including its identification and classification of
safe pesticides and other agricultural chemicals.
We uphold the respondents.
An ordinance enjoys the presumption of validity on the basis
that:
The action of the elected representatives of the people cannot
be lightly set aside. The councilors must, in the very nature of
things, be familiar with the necessities of their particular
municipality and with all the facts and circumstances which
surround the subject, and necessities of their particular
municipality and with all the facts and circumstances which
surround the subject, and necessitate action. The local
legislative body, by enacting the ordinance, has in effect given
notice that the regulations are essential to the well-being of
the people.[166]
Section 5(c) of the Local Government Code accords a liberal
interpretation to its general welfare provisions. The policy of
liberal construction is consistent with the spirit of local
autonomy that endows local government units with sufficient
power and discretion to accelerate their economic
development and uplift the quality of life for their
constituents.
Verily, the Court has championed the cause of public welfare
on several occasions. In so doing, it has accorded liberality to
the general welfare provisions of the Local Government
Code by upholding the validity of local ordinances enacted for
the common good. For instance, in Social Justice Society (SJS)
v. Atienza, Jr.,[167] the Court validated a zoning ordinance that
reclassified areas covered by a large oil depot from industrial
to commercial in order to ensure the life, health and property
of the inhabitants residing within the periphery of the oil
depot. Another instance is Gancayco v. City Government of
Quezon City,[168] where the Court declared as valid a city
ordinance ordering the construction of arcades that would
ensure the health and safety of the city and its inhabitants,
improvement of their morals, peace, good order, comfort and
convenience, as well as the promotion of their prosperity.
Even in its early years, the Court already extended liberality
towards the exercise by the local government units; of their
legislative powers in order to promote the general welfare of
their communities. This was exemplified in United States v.
Salaveria,[169] wherein gambling was characterized as "an act
beyond the pale of good morals" that the local legislative
council could validly suppress to protect the well-being of its
constituents; and in United States v. Abendan,[170] whereby
the right of the then Municipality of Cebu to enact an
ordinance relating to sanitation and public health was upheld.
The power to legislate under the General Welfare Clause is
not meant to be an invincible authority. In
fact, Salaveria and Abendanemphasized the reasonableness
and consistency of the exercise by the local government units
with the laws or policies of the State.[171]More importantly,
because the police power of the local government units flows
from the express delegation of the power by Congress, its
exercise is to be construed in strictissimi juris. Any doubt or
ambiguity arising out of the terms used in granting the power
should be construed against the local legislative
units.[172] Judicial scrutiny comes into play whenever the
exercise of police power affects life, liberty or
property.[173] The presumption of validity and the policy of
liberality are not restraints on the power of judicial review in
the face of questions about whether an ordinance conforms
with the Constitution, the laws or public policy, or if it is
unreasonable, oppressive, partial, discriminating or in
derogation of a common right. The ordinance must pass the
test of constitutionality and the test of consistency with the
prevailing laws.[174]
Although the Local Government Code vests the municipal
corporations with sufficient power to govern themselves and
manage their affairs and activities, they definitely have no right
to enact ordinances dissonant with the State's laws and policy.
The Local Government Code has been fashioned to delineate
the specific parameters and limitations to guide each local
government unit in exercising its delegated powers with the
view of making the local government unit a fully functioning
subdivision of the State within the constitutional and statutory
restraints.[175] The Local Government Code is not intended to
vest in the local government unit the blanket authority to
legislate upon any subject that it finds proper to legislate upon
in the guise of serving the common good.
The function of pesticides control, regulation and development
is within the jurisdiction of the FPA under Presidential Decree
No. 1144.[176] The FPA was established in recognition of the
need for a technically oriented government entity[177] that will
protect the public from the risks inherent in the use of
pesticides.[178] To perform its mandate, it was given under
Section 6 of Presidential Decree No. 1144 the following powers
and functions with respect to pesticides and other agricultural
chemicals, viz.:
Section 6. Powers and functions. The FPA shall have jurisdiction,
on over all existing handlers of pesticides, fertilizers and other
agricultural chemical inputs. The FPA shall have the following
powers and functions:
xxxx
III. Pesticides and Other Agricultural Chemicals
1. To determine specific uses or manners of use for each
pesticide or pesticide formulation;
2. To establish and enforce levels and good agricultural
practices for use of pesticides in raw agricultural commodities;
3. To restrict or ban the use of any pesticide or the formulation
of certain pesticides in specific areas or during certain periods
upon evidence that the pesticide is an imminent hazard, has
caused, or is causing widespread serious damage to crops, fish
or livestock, or to public health and environment;
xxxx
5. To inspect the establishment and premises of pesticide
handlers to insure that industrial health and safety rules and
anti-pollution regulations are followed;
6. To enter and inspect farmers' fields to ensure that only the
recommended pesticides are used in specific crops in
accordance with good agricultural practice;
x x x x (Emphasis supplied).
Evidently, the FPA was responsible for ensuring the
compatibility between the usage and the application of
pesticides in agricultural activities and the demands for human
health and environmental safety. This responsibility includes
not only the identification of safe and unsafe pesticides, but
also the prescription of the safe modes of application in
keeping with the standard of good agricultural practices.
On the other hand, the enumerated devolved functions to
the local government units do not include the regulation and
control of pesticides and other agricultural chemicals.[179] The
non-inclusion should preclude the Sangguniang Bayan of
Davao City from enacting Ordinance No. 0309-07, for
otherwise it would be arrogating unto itself the authority to
prohibit the aerial application of pesticides in derogation of
the authority expressly vested in the FPA by Presidential
Decree No. 1144.
In enacting Ordinance No. 0309-07 without the inherent and
explicit authority to do so, the City of Davao performed
an ultra vires act. As a local government unit, the City of
Davao could act only as an agent of Congress, and its every
act should always conform to and reflect the will of its
principal.[180] As clarified in Batangas CATV, Inc. v. Court of
Appeals:[181]
[W]here the state legislature has made provision for the
regulation of conduct, it has manifested its intention that the
subject matter shall be fully covered by the statute, and that
a municipality, under its general powers, cannot regulate the
same conduct. In Keller vs. State, it was held that: "Where
there is no express power in the charter of a municipality
authorizing it to adopt ordinances regulating certain matters
which are specifically covered by a general statute, a
municipal ordinance, insofar as it attempts to regulate the
subject which is completely covered by a general statute of
the legislature, may be rendered invalid. x x x Where the
subject is of statewide concern, and the legislature has
appropriated the field and declared the rule, its declaration is
binding throughout the State." A reason advanced for this
view is that such ordinances are in excess of the powers
granted to the municipal corporation.
Since E.O. No. 205, a general law, mandates that the
regulation of CATV operations shall be exercised by the NTC,
an LGU cannot enact an ordinance or approve a resolution in
violation of the said law.
It is a fundamental principle that municipal ordinances are
inferior in status and subordinate to the laws of the state. An
ordinance in conflict with a state law of general character and
statewide application is universally held to be invalid. The
principle is frequently expressed in the declaration that
municipal authorities, under a general grant of power, cannot
adopt ordinances which infringe the spirit of a state law or
repugnant to the general policy of the state. In every power
to pass ordinances given to a municipality, there is an implied
restriction that the ordinances shall be consistent with the
general law.[182] (Emphasis ours)
For sure, every local government unit only derives its
legislative authority from Congress. In no instance can the
local government unit rise above its source of authority. As
such, its ordinance cannot run against or contravene existing
laws, precisely because its authority is only by virtue of the
valid delegation from Congress. As emphasized in City of
Manila v. Laguio, Jr.:[183]
The requirement that the enactment must not violate existing
law gives stress to the precept that local government units are
able to legislate only by virtue of their derivative legislative
power, a delegation of legislative power from the national
legislature. The delegate cannot be superior to the principal or
exercise powers higher than those of the latter.
This relationship between the national legislature and the local
government units has not been enfeebled by the new
provisions in the Constitution strengthening the policy of local
autonomy. The national legislature is still the principal of the
local government units, which cannot defy its will or modify or
violate it.[184]
Moreover, Ordinance No. 0309-07 proposes to prohibit an
activity already covered by the jurisdiction of the FPA, which
has issued its own regulations under its Memorandum Circular
No. 02, Series of 2009, entitled Good Agricultural Practices for
Aerial Spraying of Fungicide in Banana Plantations.[185] While
Ordinance No. 0309-07 prohibits aerial spraying in banana
plantations within the City of Davao, Memorandum Circular No.
02 seeks to regulate the conduct of aerial spraying in banana
plantations[186] pursuant to Section 6, Presidential Decree No.
1144, and in conformity with the standard of Good Agricultural
Practices (GAP). Memorandum Circular No. 02 covers safety
procedures,[187] handling[188] and post-application,[189] including
the qualifications of applicators,[190] storing of
fungicides,[191] safety and equipment of plantation
personnel,[192] all of which are incompatible with the
prohibition against aerial spraying under Ordinance No.
0309-07.
Although Memorandum Circular No. 02 and Ordinance No.
0309-07 both require the maintenance of the buffer zone, they
differ as to their treatment and maintenance of the buffer zone.
Under Memorandum Circular No. 02, a 50-meter "no-spray
boundary" buffer zone should be observed by the spray
pilots,[193] and the observance of the zone should be recorded
in the Aerial Spray Final Report (ASFR) as a post-application
safety measure.[194] On the other hand, Ordinance No. 0309-07
requires the maintenance of the 30-meter buffer zone to be
planted with diversified trees.[195]
Devoid of the specific delegation to its local legislative body,
the City of Davao exceeded its delegated authority to enact
Ordinance No. 0309-07. Hence, Ordinance No. 0309-07 must
be struck down also for being an ultra vires act on the part of
the Sangguniang Bayan of Davao City.
We must emphasize that our ruling herein does not seek to
deprive the LGUs their right to regulate activities within their
jurisdiction. They are empowered under Section 16 of the Local
Government Code to promote the general welfare of the
people through regulatory, not prohibitive, ordinances that
conform with the policy directions of the National
Government. Ordinance No. 0309-07 failed to pass this test
as it contravenes the specific regulatory policy on aerial
spraying in banana plantations on a nationwide scale of the
National Government, through the FPA.
Finally, the unconstitutionality of the ban renders nugatory
Ordinance No. 0309-07 in its entirety. Consequently, any
discussion on the lack of the separability clause becomes
entirely irrelevant.
WHEREFORE, the Court DENIES the consolidated petitions for
review on certiorari for their lack of merit; AFFIRMS the
decision promulgated on January 9, 2009 in C.A.-G.R. CV No.
01389-MIN. declaring Ordinance No.
0309-07 UNCONSTITUTIONAL; PERMANENTLY
ENJOINS respondent City of Davao, and all persons or entities
acting in its behalf or under its authority, from enforcing and
implementing Ordinance No. 0309-07; and ORDERS the
petitioners to pay the costs of suit.
SO ORDERED.
---
PERALTA, J.:
Before us is a Petition for Review on Certiorari[1] with a Prayer
for a Temporary Restraining Order and/or Writ of Preliminary
Injunction which seeks to annul and set aside the
Decision[2] dated July 26, 2010, and the Resolution[3] dated
November 19, 2010 of the Court of Appeals (CA) in CA-G.R. SP
No. 109903. The CA dismissed petitioners' Petition for
Prohibition[4] and upheld the constitutionality of the
mandatory twenty percent (20%) discount on the purchase of
medicine by persons with disability (PWD).
The antecedents are as follows:
On March 24, 1992, Republic Act (R.A.) No. 7277, entitled "An
Act Providing for the Rehabilitation, Self-Development and
Self-Reliance of Disabled Persons and their Integration into
the Mainstream of Society and for Other Purposes,"
otherwise known as the "Magna Carta for Disabled Persons,"
was passed into law.[5] The law defines "disabled persons",
"impairment" and "disability" as follows:
SECTION 4. Definition of Terms. - For purposes of this Act,
these terms are defined as follows:
(a) Disabled Persons are those suffering from restriction of
different abilities, as a result of a mental, physical or sensory
impairment, to perform an activity in the manner or within
the range considered normal for a human being;
(b) Impairment is any loss, diminution or aberration of
psychological, physiological, or anatomical structure of function;
(c) Disability shall mean (1) a physical or mental impairment
that substantially limits one or more psychological,
physiological or anatomical function of an individual or
activities of such individual; (2) a record of such an impairment;
or (3) being regarded as having such an impairment.[6]
On April 30, 2007, Republic Act No. 9442[7] was enacted
amending R.A. No. 7277. The Title of R.A. No. 7277 was
amended to read as "Magna Carta for Persons with Disability"
and all references on the law to "disabled persons" were
amended to read as "persons with disability"
(PWD).[8] Specifically, R.A. No. 9442 granted the PWDs a twenty
(20) percent discount on the purchase of medicine, and a tax
deduction scheme was adopted wherein covered
establishments may deduct the discount granted from gross
income based on the net cost of goods sold or services
rendered:
CHAPTER 8. Other Privileges and Incentives. SEC. 32. Persons
with disability shall be entitled to the following:
xxxx
At least twenty percent (20%) discount for the purchase
(d) of medicines in all drugstores for the exclusive use or
enjoyment of persons with disability;
xxxx
The abovementioned privileges are available only to persons
with disability who are Filipino citizens upon submission of any
of the following as proof of his/her entitlement thereto:
An identification card issued by the city or municipal
(i) mayor or the barangay captain of the place where the
person with disability resides;
(ii) The passport of the person with disability concerned; or
Transportation discount fare Identification Card (ID)
(ii) issued by the National Council for the Welfare of Disabled
Persons (NCWDP).
xxxx
The establishments may claim the discounts granted in sub-
sections (a), (b), (c), (f) and (g) as tax deductions based on the
net cost of the goods sold or services rendered: Provided,
however, That the cost of the discount shall be allowed as
deduction from gross income for the same taxable year that
the discount is granted: Provided, further, That the total
amount of the claimed tax deduction net of value-added tax if
applicable, shall be included in their gross sales receipts for tax
purposes and shall be subject to proper documentation and
to the provisions of the National Internal Revenue Code
(NIRC), as amended.[9]
The Implementing Rules and Regulations (IRR) of R.A. No.
9442[10] was jointly promulgated by the Department of Social
Welfare and Development (DSWD), Department of Education,
Department of Finance (DOF), Department of Tourism,
Department of Transportation and Communication,
Department of the Interior and Local Government (DILG) and
Department of Agriculture. Insofar as pertinent to this
petition, the salient portions of the IRR are hereunder
quoted:[11]
RULE III. DEFINITION OF TERMS
Section 5. Definition of Terms. For purposes of these Rules
and Regulations, these terms are defined as follows:
5.1. Persons with Disability - are those individuals defined
under Section 4 of RA 7277 "An Act Providing for the
Rehabilitation, Self-Development and Self-Reliance of Persons
with Disability as amended and their integration into the
Mainstream of Society and for Other Purposes". This is
defined as a person suffering from restriction or different
abilities, as a result of a mental, physical or sensory
impairment, to perform an activity in a manner or within the
range considered normal for human being. Disability shall
mean (1) a physical or mental impairment that substantially
limits one or more psychological, physiological or anatomical
function of an individual or activities of such individual; (2) a
record of such an impairment; or (3) being regarded as having
such an impairment.
xxxx
RULE IV. PRIVILEGES AND INCENTIVES FOR THE PERSONS
WITH DISABILITY
Section 6. Other Privileges and Incentives. Persons with
disability shall be entitled to the following:
xxxx
6.1.d. Purchase of Medicine - at least twenty percent (20%)
discount on the purchase of medicine for the exclusive use
and enjoyment of persons with disability. All drugstores,
hospital, pharmacies, clinics and other similar establishments
selling medicines are required to provide at least twenty
percent (20%) discount subject to the guidelines issued by
DOH and PHILHEALTH.[12]
xxxx
6.11 The abovementioned privileges are available only to
persons with disability who are Filipino citizens upon
submission of any of the following as proof of his/her
entitlement thereto subject to the guidelines issued by the
NCWDP in coordination with DSWD, DOH and DILG.
6.11.1 An identification card issued by the city or municipal
mayor or the barangay captain of the place where the person
with disability resides;
6.11.2 The passport of the persons with disability concerned; or
6.11.3 Transportation discount fare Identification Card (ID)
issued by the National Council for the Welfare of Disabled
Persons (NCWDP). However, upon effectivity of this
Implementing Rules and Regulations, NCWDP will already
adopt the Identification Card issued by the Local Government
Unit for purposes of uniformity in the implementation. NCWDP
will provide the design and specification of the identification
card that will be issued by the Local Government Units.[13]
6.14. Availmenl of Tax Deductions by Establishment Granting
Twenty Percent. 20% Discount - The establishments may claim
the discounts granted in sub-sections (6.1), (6.2), (6.4), (6.5)
and (6.6) as tax deductions based on the net cost of the goods
sold or services rendered: Provided, however, that the cost of
the discount shall be allowed as deduction from gross income
for the same taxable year that the discount is granted:
Provided, further, That the total amount of the claimed tax
deduction net of value-added tax if applicable, shall be
included in their gross sales receipts for tax purposes and shall
be subject to proper documentation and to the provisions of
the National Internal Revenue Code, as amended.
On April 23, 2008, the National Council on Disability Affairs
(NCDA)[14] issued Administrative Order (A.O.) No. 1, Series of
2008,[15]prescribing guidelines which should serve as a
mechanism for the issuance of a PWD Identification Card (IDC)
which shall be the basis for providing privileges and discounts
to bona fide PWDs in accordance with R.A. 9442:
IV. INSTITUTIONAL ARRANGEMENTS
A. The Local Government Unit of the City or Municipal
Office shall implement these guidelines in the issuance
of the PWD-IDC
xxxx
D. Issuance of the appropriate document to confirm the
medical condition of the applicant is as follows:
Disability Document Issuing Entity
Licensed Private or
Medical
Apparent Disability Government
Certificate
Physician
Licensed Teacher
School
duly signed by the
Assessment
School Principal
 Head of the Business
Establishment or
Certificate of
Head of
Disability
Non-Government
Organization
Licensed Private or
Non-Apparent Medical
Government
Disability Certificate
Physician
E. PWD Registration Forms and ID Cards shall be issued and
signed by the City or Municipal Mayor, or Barangay Captain.
xxxx
V. IMPLEMENTING GUIDELINES AND PROCEDURES
Any bonafide person with permanent disability can apply for
the issuance of the PWD-IDC. His/her caregiver can assist in
the application process. Procedures for the issuance of the ID
Cards are as follows:
A. Completion of the Requirements. Complete and/or make
available the following requirements:
1. Two "1x1" recent ID pictures with the names, and
signatures or thumbmarks at the back of the picture
2. One (1) Valid ID
3. Document to confirm the medical or disability
condition (See Section IV, D for the required
document).
On December 9, 2008, the DOF issued Revenue Regulations
No. 1-2009[16] prescribing rules and regulations to implement
R.A. 9442 relative to the tax privileges of PWDs and tax
incentives for establishments granting the discount. Section 4
of Revenue Regulations No. 001-09 states that drugstores can
only deduct the 20% discount from their gross income subject
to some conditions.[17]
On May 20, 2009, the DOH issued A.O. No.
2009-0011[18] specifically stating that the grant of 20%
discount shall be provided in the purchase of branded
medicines and unbranded generic medicines from all
establishments dispensing medicines for the exclusive use of
the PWDs.[19] It also detailed the guidelines for the provision
of medical and related discounts and special privileges to
PWDs pursuant to R.A. 9442.[20]
On July 28, 2009, petitioners filed a Petition for Prohibition
with application for a Temporary Restraining Order and/or a
Writ of Preliminary Injunction[21] before the Court of Appeals
to annul and enjoin the implementation of the following laws:
1) Section 32 of R.A. No. 7277 as amended by R.A. No. 9442;
2) Section 6, Rule IV of the Implementing Rules and Regulations
of R.A. No. 9442;
3) NCDA A.O. No. 1;
4) DOF Revenue Regulation No. 1-2009;
5) DOH A.O. No. 2009-0011.
On July 26, 2010, the CA rendered a Decision upholding the
constitutionality of R.A. 7277 as amended, as well as the
assailed administrative issuances. However, the CA suspended
the effectivity of NCDA A.O. No. 1 pending proof of respondent
NCDA's compliance with filing of said administrative order with
the Office of the National Administrative Register (ONAR) and
its publication in a newspaper of general circulation. The
dispositive portion of the Decision states:
WHEREFORE, the petition is PARTLY GRANTED. The effectivity
of NCDA Administrative Order No. 1 is hereby SUSPENDED
pending Respondent's compliance with the proof of filing of
NCDA Administrative Order No. 1 with the Office of the
National Administrative Register and its publication in a
newspaper of general circulation.
Respondent NCDA filed a motion for reconsideration before
the CA to lift the suspension of the implementation of NCDA
A.O. No. 1 attaching thereto proof of its publication in
the Philippine Star and Daily Tribune on August 12, 2010, as
well as a certification from the ONAR showing that the same
was filed with the said office on October 22, 2009.[22] Likewise,
petitioners filed a motion for reconsideration of the CA
Decision.
In a Resolution dated November 19, 2010, the CA dismissed
petitioners' motion for reconsideration and lifted the
suspension of the effectivity of NCDA A.O. No. 1 considering
the filing of the same with ONAR and its publication in a
newspaper of general circulation.
Hence, the instant petition raising the following issues:
I. THE CA SERIOUSLY ERRED ON A QUESTION OF SUBSTANCE
WHEN IT RULED THAT THE MANDATED PWD DISCOUNT IS A
VALID EXERCISE OF POLICE POWER. ON THE CONTRARY, IT IS
AN INVALID EXERCISE OF THE POWER OF EMINENT DOMAIN
BECAUSE IT FAILS TO PROVIDE JUST COMPENSATION TO
PETITIONERS AND OTHER SIMILARLY SITUATED DRUGSTORES;
II. THE CA SERIOUSLY ERRED WHEN IT RULED THAT SECTION 32
OF RA 7277 AS AMENDED BY RA 9442, NCDA AO 1 AND THE
OTHER IMPLEMENTING REGULATIONS DID NOT VIOLATE THE
DUE PROCESS CLAUSE;
III. THE CA SERIOUSLY ERRED WHEN IT RULED THAT THE
DEFINITIONS OF DISABILITIES UNDER SECTION 4(A), SECTION
4(B) AND SECTION 4(C) OF RA 7277 AS AMENDED BY RA 9442,
RULE 1 OF THE IMPLEMENTING RULES AND
REGULATIONS[23] OF RA 7277, SECTION 5.1 OF THE
IMPLEMENTING RULES AND REGULATIONS OF RA 9442,
NCDA AO 1 AND DOH AO 2009-11 ARE NOT VAGUE,
AMBIGUOUS AND UNCONSTITUTIONAL;
IV. THE CA SERIOUSLY ERRED WHEN IT RULED THAT THE
MANDATED PWD DISCOUNT DOES NOT VIOLATE THE EQUAL
PROTECTION CLAUSE.
We deny the petition.
The CA is correct when it applied by analogy the case
of Carlos Superdrug Corporation et al. v. DSWD, et
al.[24] wherein We pronouced that Section 4 of R.A. No. 9257
which grants 20% discount on the purchase of medicine of
senior citizens is a legitimate exercise of police power:
The law is a legitimate exercise of police power which, similar
to the power of eminent domain, has general welfare for its
object. Police power is not capable of an exact definition, but
has been purposely veiled in general terms to underscore its
comprehensiveness to meet all exigencies and provide
enough room for an efficient and flexible response to
conditions and circumstances, thus assuring the greatest
benefits.[25] Accordingly, it has been described as the most
essential, insistent and the least limitable of powers,
extending as it does to all the great public needs.[26] It is [t]he
power vested in the legislature by the constitution to make,
ordain, and establish all manner of wholesome and
reasonable laws, statutes, and ordinances, either with
penalties or without, not repugnant to the constitution, as
they shall judge to be for the good and welfare of the
commonwealth, and of the subjects of the same.[27]
For this reason, when the conditions so demand as
determined by the legislature, property rights must bow to
the primacy of police power because property rights, though
sheltered by due process, must yield to general welfare.[28]
Police power as an attribute to promote the common good
would be diluted considerably if on the mere plea of
petitioners that they will suffer loss of earnings and capital,
the questioned provision is invalidated. Moreover, in the
absence of evidence demonstrating the alleged confiscatory
effect of the provision in question, there is no basis for its
nullification in view of the presumption of validity which
every law has in its favor.[29]
Police power is the power of the state to promote public
welfare by restraining and regulating the use of liberty and
property. On the other hand, the power of eminent domain is
the inherent right of the state (and of those entities to which
the power has been lawfully delegated) to condemn private
property to public use upon payment of just compensation. In
the exercise of police power, property rights of private
individuals are subjected to restraints and burdens in order to
secure the general comfort, health, and prosperity of the
state.[30] A legislative act based on the police power requires
the concurrence of a lawful subject and a lawful method. In
more familiar words, (a) the interests of the public generally,
as distinguished from those of a particular class, should justify
the interference of the state; and (b) the means employed are
reasonably necessary for the accomplishment of the purpose
and not unduly oppressive upon individuals.[31]
R.A. No. 7277 was enacted primarily to provide full support to
the improvement of the total well-being of PWDs and their
integration into the mainstream of society. The priority given
to PWDs finds its basis in the Constitution:
ARTICLE XII
NATIONAL ECONOMY AND PATRIMONY
xxxx
Section 6. The use of property bears a social function, and all
economic agents shall contribute to the common good.
Individuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall have
the right to own, establish, and operate economic enterprises,
subject to the duty of the State to promote distributive justice
and to intervene when the common good so demands.[32]
ARTICLE XIII
SOCIAL JUSTICE AND HUMAN RIGHTS
xxxx
Section 11. The State shall adopt an integrated and
comprehensive approach to health development which shall
endeavor to make essential goods, health and other social
services available to all the people at affordable cost. There
shall be priority for the needs of the underprivileged, sick,
elderly, disabled, women, and children. The State shall
endeavor to provide free medical care to paupers.[33]
Thus, R.A. No. 7277 provides:
SECTION 2. Declaration of Policy. The grant of the rights and
privileges for disabled persons shall be guided by the following
principles:
(a). Disabled persons are part of the Philippine society, thus the
Senate shall give full support to the improvement of the total
well-being of disabled persons and their integration into the
mainstream of society.
Toward this end, the State shall adopt policies ensuring the
rehabilitation, self-development and self-reliance of disabled
persons.
It shall develop their skills and potentials to enable them to
compete favorably for available opportunities.
(b). Disabled persons have the same rights as other people to
take their proper place in society. They should be able to live
freely and as independently as possible. This must be the
concern of everyone - the family, community and all
government and non-government organizations.
Disabled person's rights must never be perceived as welfare
services by the Government.
xxxx
(d). The State also recognizes the role of the private sector in
promoting the welfare of disabled persons and shall
encourage partnership in programs that address their needs
and concerns.[34]
To implement the above policies, R.A. No. 9442 which
amended R.A. No. 7277 grants incentives and benefits
including a twenty percent (20%) discount to PWDs in the
purchase of medicines; fares for domestic air, sea and land
travels including public railways and skyways; recreation and
amusement centers including theaters, food chains and
restaurants.[35] This is specifically stated in Section 4 of the
IRR of R.A. No. 9442:
Section 4. Policies and Objectives - It is the objective of
Republic Act No. 9442 to provide persons with disability, the
opportunity to participate fully into the mainstream of
society by granting them at least twenty percent (20%)
discount in all basic services. It is a declared policy of RA
7277 that persons with disability are part of Philippine society,
and thus the State shall give full support to the improvement
of their total wellbeing and their integration into the
mainstream of society. They have the same rights as other
people to take their proper place in society. They should be
able to live freely and as independently as possible. This must
be the concern of everyone the family, community and all
government and non-government organizations. Rights of
persons with disability must never be perceived as welfare
services. Prohibitions on verbal, non-verbal ridicule and
vilification against persons with disability shall always be
observed at all times.[36]
Hence, the PWD mandatory discount on the purchase of
medicine is supported by a valid objective or purpose as
aforementioned. It has a valid subject considering that the
concept of public use is no longer confined to the traditional
notion of use by the public, but held synonymous with public
interest, public benefit, public welfare, and public convenience.
As in the case of senior citizens,[37] the discount privilege to
which the PWDs are entitled is actually a benefit enjoyed by
the general public to which these citizens belong. The means
employed in invoking the active participation of the private
sector, in order to achieve the purpose or objective of the law,
is reasonably and directly related.[38] Also, the means
employed to provide a fair, just and quality health care to
PWDs are reasonably related to its accomplishment, and are
not oppressive, considering that as a form of reimbursement,
the discount extended to PWDs in the purchase of medicine
can be claimed by the establishments as allowable tax
deductions pursuant to Section 32 of R.A. No. 9442 as
implemented in Section 4 of DOF Revenue Regulations No.
1-2009. Otherwise stated, the discount reduces taxable income
upon which the tax liability of the establishments is computed.
Further, petitioners aver that Section 32 of R.A. No. 7277 as
amended by R.A. No. 9442 is unconstitutional and void for
violating the due process clause of the Constitution since
entitlement to the 20% discount is allegedly merely based on
any of the three documents mentioned in the provision,
namely: (i) an identification card issued by the city or municipal
mayor or the barangay captain of the place where the PWD
resides; (ii) the passport of the PWD; or (iii) transportation
discount fare identification card issued by NCDA. Petitioners,
thus, maintain that none of the said documents has any
relation to a medical finding of disability, and the grant of the
discount is allegedly without any process for the determination
of a PWD in accordance with law.
Section 32 of R.A. No. 7277, as amended by R.A. No. 9442,
must be read with its IRR which stated that upon its effectivity,
NCWDP (which is the government agency tasked to ensure the
implementation of RA 7277), would adopt the IDC issued by
the local government units for purposes of uniformity in the
implementation.[39] Thus, NCDA A.O. No. 1 provides the
reasonable guidelines in the issuance of IDCs to PWDs as proof
of their entitlement to the privileges and incentives under the
law[40] and fills the details in the implementation of the law.
As stated in NCDA A.O. No. 1, before an IDC is issued by the city
or municipal mayor or the barangay captain,[41] or the
Chairman of the NCDA,[42] the applicant must first secure a
medical certificate issued by a licensed private or government
physician that will confirm his medical or disability condition. If
an applicant is an employee with apparent disability, a
"certificate of disability" issued by the head of the business
establishment or the head of the non-governmental
organization is needed for him to be issued a PWD-IDC. For a
student with apparent disability, the "school assessment"
issued by the teacher and signed by the school principal should
be presented to avail of a PWD-ID.
Petitioners' insistence that Part IV (D) of NCDA Administrative
Order No. 1 is void because it allows allegedly non-competent
persons like teachers, head of establishments and heads of
Non-Governmental Organizations (NGOs) to confirm the
medical condition of the applicant is misplaced. It must be
stressed that only for apparent disabilities can the teacher or
head of a business establishment validly issue the mentioned
required document because, obviously, the disability is easily
seen or clearly visible. It is, therefore, not an unqualified grant
of authority for the said non-medical persons as it is simply
limited to apparent disabilities. For a non-apparent disability or
a disability condition that is not easily seen or clearly visible,
the disability can only be validated by a licensed private or
government physician, and a medical certificate has to be
presented in the procurement of an IDC. Relative to this issue,
the CA validly ruled, thus:
We agree with the Office of the Solicitor General's (OSG)
ratiocination that teachers, heads of business establishments
and heads of NGOs can validly confirm the medical condition
of their students/employees with apparent disability for
obvious reasons as compared to non-apparent disability
which can only be determined by licensed physicians. Under
the Labor Code, disabled persons are eligible as apprentices
or learners provided that their handicap are not as much as
to effectively impede the performance of their job. We find
that heads of business establishments can validly issue
certificates of disability of their employees because aside
from the fact that they can obviously validate the disability,
they also have medical records of the employees as
a pre-requisite in the hiring of employees. Hence, Part IV (D)
of NCDA AO No. 1 is logical and valid.[43]
Furthermore, DOH A.O. No. 2009-11 prescribes additional
guidelines for the 20% discount in the purchase of all
medicines for the exclusive use of PWD.[44] To avail of the
discount, the PWD must not only present his I.D. but also the
doctor's prescription stating, among others, the generic name
of the medicine, the physician's address, contact number and
professional license number, professional tax receipt number
and narcotic license number, if applicable. A purchase
booklet issued by the local social/health office is also
required in the purchase of over-the-counter medicines.
Likewise, any single dispensing of medicine must be in
accordance with the prescription issued by the physician and
should not exceed a one (1) month supply. Therefore, as
correctly argued by the respondents, Section 32 of R.A. No.
7277 as amended by R.A. No. 9442 complies with the
standards of substantive due process.
We are likewise not persuaded by the argument of
petitioners that the definition of "disabilities" under the
subject laws is vague and ambiguous because it is allegedly so
general and broad that the person tasked with implementing
the law will undoubtedly arrive at different interpretations
and applications of the law. Aside from the definitions of a
"person with disability" or "disabled persons" under Section 4
of R.A. No. 7277 as amended by R.A. No. 9442 and in the IRR
of RA 9442, NCDA A.O. No. 1 also provides:
4. Identification Cards shall be issued to
any bonafide PWD with permanent disabilities due to
any one or more of the following conditions:
psychosocial, chronic illness, learning, mental, visual,
orthopedic, speech and hearing conditions. This
includes persons suffering from disabling diseases
resulting to the person's limitations to do day to day
activities as normally as possible such as but not
limited to those undergoing dialysis, heart disorders,
severe cancer cases and such other similar cases
resulting to temporary or permanent disability.[45]
Similarly, DOH A.O. No. 2009-0011 defines the different
categories of disability as follows:
Rule IV, Section 4, Paragraph B of the Implementing Rules and
Regulations (IRR) of this Act required the Department of Health
to address the health concerns of seven (7) different categories
of disability, which include the following: (1) Psychological and
behavioral disabilities (2) Chronic illness with disabilities
(3)Learning(cognitive or intellectual) disabilities (4) Mental
disabilities (5) Visual/seeing disabilities (6) Orthopedic/moving,
and (7) communication deficits.[46]
Elementary is the rule that when laws or rules are clear, when
the law is unambiguous and unequivocal, application not
interpretation thereof is imperative. However, where the
language of a statute is vague and ambiguous, an
interpretation thereof is resorted to. A law is deemed
ambiguous when it is capable of being understood by
reasonably well-informed persons in either of two or more
senses. The fact that a law admits of different interpretations is
the best evidence that it is vague and ambiguous.[47]
In the instant case, We do not find the aforestated definition of
terms as vague and ambiguous. Settled is the rule that courts
will not interfere in matters which are addressed to the sound
discretion of the government agency entrusted with the
regulation of activities coming under the special and technical
training and knowledge of such agency.[48] As a matter of policy,
We accord great respect to the decisions and/or actions of
administrative authorities not only because of the doctrine of
separation of powers but also for their presumed knowledge,
ability, and expertise in the enforcement of laws and
regulations entrusted to their jurisdiction. The rationale for this
rule relates not only to the emergence of the multifarious
needs of a modern or modernizing society and the
establishment of diverse administrative agencies for addressing
and satisfying those needs; it also relates to the accumulation
of experience and growth of specialized capabilities by the
administrative agency charged with implementing a particular
statute.[49]
Lastly, petitioners contend that R.A. No. 7227, as amended by
R.A. No. 9442, violates the equal protection clause of the
Constitution because it fairly singles out drugstores to bear the
burden of the discount, and that it can hardly be said to
"rationally" meet a legitimate government objective which is
the purpose of the law. The law allegedly targets only retailers
such as petitioners, and that the other enterprises in the drug
industry are not imposed with similar burden. This same
argument had been raised in the case of Carlos Superdrug Corp.,
et al. v. DSWD, et al.,[50] and We reaffirm and apply the ruling
therein in the case at bar:
The Court is not oblivious of the retail side of the
pharmaceutical industry and the competitive pricing
component of the business. While the Constitution protects
property rights, petitioners must accept the realities of
business and the State, in the exercise of police power, can
intervene in the operations of a business which may result in
an impairment of property rights in the process.
Moreover, the right to property has a social dimension. While
Article XIII of the Constitution provides the precept for the
protection of property, various laws and jurisprudence,
particularly on agrarian reform and the regulation of
contracts and public utilities, continuously serve as a
reminder that the right to property can be relinquished upon
the command of the State for the promotion of public
good.[51]
Under the equal protection clause, all persons or things
similarly situated must be treated alike, both in the privileges
conferred and the obligations imposed. Conversely, all
persons or things differently situated should be treated
differently.[52] In the case of ABAKADA Guro Party List, et al. v.
Hon. Purisima, et al.,[53] We held:
Equality guaranteed under the equal protection clause is
equality under the same conditions and among persons
similarly situated; it is equality among equals, not similarity of
treatment of persons who are classified based on substantial
differences in relation to the object to be accomplished.
When things or persons are different in fact or circumstance,
they may be treated in law differently. In Victoriano v.
Elizalde Rope Workers' Union, this Court declared:
The guaranty of equal protection of the laws is not a guaranty
of equality in the application of the laws upon all citizens of
the State. It is not, therefore, a requirement, in order to avoid
the constitutional prohibition against inequality, that every
man, woman and child should be affected alike by a statute.
Equality of operation of statutes does not mean
indiscriminate operation on persons merely as such, but on
persons according to the circumstances surrounding them. It
guarantees equality, not identity of rights. The Constitution
does not require that things which are different in fact be
treated in law as though they were the same. The equal
protection clause does not forbid discrimination as to things
that are different. It does not prohibit legislation which is
limited either in the object to which it is directed or by the
territory within which it is to operate.
The equal protection of the laws clause of the Constitution
allows classification. Classification in law, as in the other
departments of knowledge or practice, is the grouping of
things in speculation or practice because they agree with one
another in certain particulars. A law is not invalid because of
simple inequality. The very idea of classification is that of
inequality, so that it goes without saying that the mere fact of
inequality in no manner determines the matter of
constitutionality. All that is required of a valid classification
is that it be reasonable, which means that the classification
should be based on substantial distinctions which make for
real differences, that it must be germane to the purpose of
the law; that it must not be limited to existing conditions
only; and that it must apply equally to each member of the
class. This Court has held that the standard is satisfied if the
classification or distinction is based on a reasonable
foundation or rational basis and is not palpably arbitrary.
In the exercise of its power to make classifications for the
purpose of enacting laws over matters within its jurisdiction,
the state is recognized as enjoying a wide range of discretion. It
is not necessary that the classification be based on scientific or
marked differences of things or in their relation. Neither is it
necessary that the classification be made with mathematical
nicety. Hence, legislative classification may in many cases
properly rest on narrow distinctions, for the equal protection
guaranty does not preclude the legislature from recognizing
degrees of evil or harm, and legislation is addressed to evils as
they may appear.
The equal protection clause recognizes a valid classification,
that is, a classification that has a reasonable foundation or
rational basis and not arbitrary.[54] With respect to R.A. No.
9442, its expressed public policy is the rehabilitation,
self-development and self-reliance of PWDs. Persons with
disability form a class separate and distinct from the other
citizens of the country. Indubitably, such substantial distinction
is germane and intimately related to the purpose of the law.
Hence, the classification and treatment accorded to the PWDs
fully satisfy the demands of equal protection. Thus, Congress
may pass a law providing for a different treatment to persons
with disability apart from the other citizens of the country.
Subject to the determination of the courts as to what is a
proper exercise of police power using the due process clause
and the equal protection clause as yardsticks, the State may
interfere wherever the public interests demand it, and in this
particular, a large discretion is necessarily vested in the
legislature to determine, not only what interests of the public
require, but what measures are necessary for the protection of
such interests.[55] Thus, We are mindful of the fundamental
criteria in cases of this nature that all reasonable doubts should
be resolved in favor of the constitutionality of a statute.[56] The
burden of proof is on him who claims that a statute is
unconstitutional. Petitioners failed to discharge such burden of
proof.
WHEREFORE, the petition is DENIED. The Decision of the Court
of Appeals dated July 26, 2010, and the Resolution dated
November 19, 2010, in CA-G.R. SP No. 109903 are AFFIRMED.
SO ORDERED.
Rama vs Moises 2016
BERSAMIN, J.:
A law enacted prior to the 1987 Constitution, like a presidential
decree, is presumed to be valid and constitutional on the
theory that it was carefully studied by the Legislative and
Executive Departments prior to its enactment, and
determined to be in accord with the Fundamental Law.
However, the presumption of validity and constitutionality is
overturned and the law should be struck down once it
becomes inconsistent with the present Constitution and the
later laws.
Antecedents
On May 25, 1973, President Ferdinand E. Marcos issued
Presidential Decree No. 198 (Provincial Water Utilities Act of
1973). By virtue of P. D. No. 198, Cebu City formed the Metro
Cebu Water District (MCWD) in 1974. Thereafter, the Cities of
Mandaue, Lapu-Lapu and Talisay, and the Municipalities of
Liloan, Compostela, Consolacion, and Cordova turned over
their waterworks systems and services to the MCWD. Since
then, the MCWD has distributed water and sold water
services to said cities and municipalities. From 1974 to 2002,
the Cebu City Mayor appointed all the members of the
MCWD Board of Directors in accordance with Section 3 (b) of
P. D. No. 198, to wit:
Section 3. Definitions. - As used in this Decree, the following
words and terms shall have the meanings herein set forth,
unless a different meaning clearly appears from the context.
The definition of a word or term applies to any of its variants.
(a) Act. This is the Provincial Water Utilities Act of 1973.
(b) Appointing authority. The person empowered to appoint
the members of the board of Directors of a local water
district, depending upon the geographic coverage and
population make-up of the particular district. In the event
that more than seventy-five percent of the total active
water service connections of a local water district are within
the boundary of any city or municipality, the appointing
authority shall be the mayor of that city or municipality, as
the case may be; otherwise, the appointing authority shall
be the governor of the province within which the district is
located. If portions of more than one province are included
within the boundary of the district, and the appointing
authority is to be the governors then the power to appoint
shall rotate between the governors involved with the initial
appointments made by the governor in whose province the
greatest number of service connections exists. (bold
underscoring supplied for emphasis)
In July 2002, Cebu Provincial Governor Pablo L. Garcia wrote
to the MCWD to assert his authority and intention to appoint
the members of the MCWD Board of Directors.[1] He stated in
his letter that since 1996, the active water service
connections in Cebu City had been below 75% of the total
active water service connection of the MCWD; that no other
city or municipality under the MCWD had reached the
required percentage of 75%; and that, accordingly, he, as the
Provincial Governor of Cebu, was the appointing authority for
the members of the MCWD Board of Directors pursuant to
Section 3 (b) of P. D. No. 198.
Later on, the MCWD commenced in the Regional Trial Court in
Cebu City (RTC) its action for declaratory relief seeking to
declare Section 3(b) of P.D. No. 198 unconstitutional; or, should
the provision be declared valid, it should be interpreted to
mean that the authority to appoint the members of the MCWD
Board of Directors belonged solely to the Cebu City Mayor.[2]
The RTC (Branch 7) dismissed the action for declaratory relief
without any finding and declaration as to the proper appointing
authority for the members of the MCWD Board of Directors
should none of the cities and municipalities reach 75% of the
total water service connections in the areas under the MCWD.[3]
In the meanwhile, the terms of two members of the MCWD
Board of Directors ended, resulting in two vacancies. To avoid a
vacuum and in the exigency of the service, Provincial Governor
Gwendolyn F. Garcia and Cebu City Mayor Tomas R. Osmeña
jointly appointed Atty. Adelino Sitoy and Leo Pacaña to fill the
vacancies.[4] However, the position of Atty. Sitoy was deemed
vacated upon his election as the Municipal Mayor of Cordova,
Cebu in the 2007 elections.
Consequently, Governor Garcia commenced an action for
declaratory relief to seek the interpretation of Section 3 (b) of
P.D. No. 198 on the proper appointing authority for the
members of the MCWD Board of Directors.[5]
It appears that on February 7, 2008, the Cebu Provincial Legal
Office, upon being informed that Mayor Osmeña would be
appointing Joel Mari S. Yu to replace Atty. Sitoy as a member of
the MCWD Board of Directors, formally advised in writing
Cynthia A. Barrit, the MCWD Board Secretary, to defer the
submission of the list of nominees to any appointing authority
until the RTC rendered its final ruling on the issue of the proper
appointing authority.[6] On February 22, 2008, however, Mayor
Osmeña appointed Yu as a member of the MCWD Board of
Directors.[7] Accordingly, on May 20, 2008, the RTC dismissed
the action for declaratory relief on the ground that declaratory
relief became improper once there was a breach or violation of
the provision.[8]
On June 13, 2008, Governor Garcia filed a complaint to declare
the nullity of the appointment of Yu as a member of the MCWD
Board of Directors (docketed as Civil Case No. CEB-34459),
alleging that the appointment by Mayor Osmeña was illegal;
that under Section 3(b) of P.D. No. 198, it was she as the
Provincial Governor of Cebu who was vested with the authority
to appoint members of the MCWD Board of Directors because
the total active water service connections of Cebu City and of
the other cities and municipalities were below 75% of the total
water service connections in the area of the MCWD.[9] She
impleaded Mayor Osmeña, the MCWD, and Yu as defendants.
In his answer, Mayor Osmeña contended that the authority to
appoint the members of the MCWD Board of Directors solely
belonged to him; that since the creation of the MCWD in 1974,
it was the Cebu City Mayor who had been appointing the
members of the MCWD Board of Directors; that the Province
of Cebu had not invested or participated in the creation of
the MCWD; and that Cebu City, being a highly urbanized city
(HUC), was independent from the Province of Cebu under the
provisions on local autonomy of the 1987 Constitution.[10]
The RTC (Branch 18), to which the case was raffled, required
the parties to submit their memorandum.
In their joint memorandum, Osmeña and Yu posited that the
Province of Cebu did not participate in the organization of the
MCWD; that the words and sentences of Section 3(b) of P.D.
No. 198 should not be read and understood or interpreted
literally; and that the case should be dismissed because: (1)
Section 3(b) of P.D. No. 198 was unconstitutional for being
arbitrary and unreasonable; (2) Governor Garcia had no
authority to appoint any members of the MCWD Board of
Directors; and (3) that the Mayor of the city or municipality
having the majority of water connections within the area
under the MCWD had the power to appoint the members of
the MCWD Board of Directors.[11]
On November 16, 2010, the RTC rendered the assailed
judgment declaring the appointment of Yu as illegal and
void,[12] holding as follows:
The questioned provision, paragraph (b) of Section 3 of P.O.
198 is clear enough that it needs no interpretation. It
expressly states in unequivocal terms the appointing
authority in the water district's board of directors --- if more
than seventy-five percent of the total active water service
connections of a local water district are within the boundary
of any city or municipality, the appointing authority shall be
the mayor of the city or municipality, as the case may be;
otherwise, the appointing authority shall be the governor of
the province within which the district is located.
It has not been belied by defendants that the active water
service connections of Cebu City in the Metropolitan Cebu
Water District (MCWD), at 61.28%, have gone below the
required 75% required by law for the city mayor to have the
authority to appoint members of the board of directors of the
water district. Lacking such percentage requisite, the
appointing power is now vested with the governor of the
Province of Cebu. While it may be true that the governor had
not participated in organizing MCWD and neither did the
Province of Cebu invest in establishing waterworks in the
component local governments, the law, however, does not
impose any condition or restriction in transferring the power
to the governor to appoint members of the board of directors
when the percentage falls below 75%. Thus, there is no doubt
that when any of the water district's participating city or
municipality could not obtain 75% of the active water service
connections, the governor shall appoint the members of the
board of directors of the water district, whether it is a
participant or not, in its organization.
As to the constitutionality of the questioned provision, the
Court finds that Sec. 3 of P.O. 198 does not violate the
Constitution or the Local Government Code. Vesting the
authority in the governor to appoint a member of the board of
directors of a water district is not intruding into the affairs of
the highly urbanized cities and component cities which
comprise the district, and neither is it a threat to their
autonomy. It does not interfere with their powers and
functions and neither can it be considered an exercise of the
provincial government's supervisory powers. At most, it is
simply giving the authority to appoint the head of the
government unit (the governor) where all the members of the
water district are geographically located, and only when none
of these cities and municipalities has the required 75% of the
active water service connections. Nevertheless, the issue is not
whether the governor took any part in organizing the water
district or has contributed to its formation, but that by law, she
has been made the appointing authority even if she has no
participation or involvement in the cooperative effort of the
members of the water district. This may not be the most
expedient and appropriate solution, but still, it is not illegal. As
to why this is so is a question only our lawmakers could answer.
All presumptions are indulged in favor of constitutionality, one
who attacks a statute, alleging constitutionality must prove its
invalidity beyond a reasonable doubt; that a law may work
hardship does not render it unconstitutional, that if any
reasonable basis may be conceived which supports the statute,
it will be upheld and the challenger must negate all possible
bases; that the courts are not concerned with the wisdom,
justice, policy or expediency of a statute, and that a liberal
interpretation of the constitution in favour of the
constitutionality of legislation should be adopted.
Notably, among the admissions found in the Answer for
defendants Yu and MCWD states: "x x x with respect to the two
(2) vacancies in the Board of MCWD and that joint appointment
was made by the plaintiff and defendant Mayor Osmeña to
Atty. Adelino Sitoy and Mr. Eligio Pacana." The Court surmises
from this statement that as early as the previous appointments
(of Mr. Pacana and Atty. Sitoy) defendants have already
recognized the appointing authority of the governor for
members of the MCWD board of directors, considering Cebu
City's failure to reach the 75% benchmark on active water
service connections.
In sum, the Court has not been able to find any constitutional
infirmity in the questioned provision (Sec. 3) of Presidential
Decree No. 198. The fundamental criterion is that all
reasonable doubts should be resolved in favor of the
constitutionality of a statute. Every law has in its favor the
presumption of constitutionality. For a law to be nullified, there
must be shown that there is a clear and unequivocal breach of
the Constitution. The ground for nullity must be clear and
beyond reasonable doubt. Those who seek to declare the law,
or parts thereof unconstitutional, must clearly establish the
basis therefore. Otherwise, the arguments fall short.
Based on the grounds raised by defendants to challenge the
constitutionality of Section 3 of P.D. 198, the Court finds that
defendants have failed to overcome the presumption of
constitutionality of the law. As to whether the questioned
section constitutes a wise legislation, considering the issues
being raised by petitioners, is for Congress to determine.
WHEREFORE, Judgment is hereby rendered in favour of
plaintiff and against defendants, finding the appointment of
defendant Joel Mari S. Yu as member of the Metropolitan
Cebu Water District (MCWD) as illegal, null and void.[13]
Mayor Osmeña and Yu jointly moved for
reconsideration,[14] but the RTC denied their motion.[15]
Issues
Hence, the petitioners have instituted this special civil action
for certiorari,[16] contending that:
I.
THE RESPONDENT COURT ABDICATED ITS CONSTITUTIONAL
DUTY IN REFUSING TO DELVE ON THE ISSUE OF
CONSTITUTIONALITY.
II.
THE JUDGMENT IS VOID ON ITS FACE BECAUSE OF CLEAR
CONSTITUTIONAL VIOLATIONS APPARENT BY A MERE
READING OF THE DECREE.
III.
THE JUDGMENT VIOLATES DUE PROCESS AND THE EQUAL
PROTECTION CLAUSE OF THE CONSTITUTION.[17]
Ruling of the Court
The petition for certiorari is granted.
1.
Preliminary Matter:
Yu's expiration of term did not render case moot and
academic
We note that respondent Yu's term as a member of the
MCWD Board of Directors expired on December 31,
2012.[18] However, this fact does not justify the dismissal of
the petition on the ground of its being rendered moot and
academic. The case should still be decided, despite the
intervening developments that could have rendered the case
moot and academic, because public interest is involved, and
because the issue is capable of repetition yet evading review.[19]
For sure, the appointment by the proper official of the
individuals to manage the system of water distribution and
service for the consumers residing in the concerned cities and
municipalities involves the interest of their populations and the
general public affected by the services of the MCWD as a public
utility. Moreover, the question on the proper appointing
authority for the members of the MCWD Board of Directors
should none of the cities and municipalities have at least 75%
of the water consumers will not be definitively resolved with
finality if we dismiss the petition on the ground of mootness. It
is notable that the two cases for declaratory relief filed for the
purpose of determining the proper appointing authority were
dismissed without any definitive declaration or ultimate
determination of the merits of the issue. The issue festers.
Hence, the Court needs to decide it now, not later.
2.
First Issue:
RTC explained its holding of the assailed provision as valid
and constitutional but it thereby erred nonetheless
The petitioners take the RTC to task for not explaining why it
held Section 3(b) of P.D. No. 198 to be not violative of the
constitutional provision on local autonomy and HUCs, and why
it only opined that the question of constitutionality of the
provision should be left to Congress; that it did not determine
whether the requisites for raising the constitutional issue had
been met; that it did not discuss the reasons for holding that
the issue about Section 3(b) of P.D. No. 198 was a political
question; that no political question was involved because what
was being inquired into was not the wisdom of the provision
but its validity; and that because it did not perform its
constitutional duty of reviewing the provision, its judgment
was void.[20]
The petitioners are mistaken on the first issue. The records
show that the RTC, which indisputably had the power and the
duty to determine and decide the issue of the constitutionality
of Section 3(b) of P.D. No. 198,[21] fully discharged its duty. In its
assailed decision of November 16, 2010, the RTC ruled as
follows:
As to the constitutionality of the questioned provision, the
Court finds that Sec. 3 of P.D. 198 does not violate the
Constitution or the Local Government Code. Vesting the
authority in the governor to appoint a member of the board of
directors of a water district is not intruding into the affairs of
the highly urbanized cities and component cities which
comprise the district, and neither is it a threat to their
autonomy. It does not interfere with their powers and
functions and neither can it be considered an exercise of the
provincial government's supervisory powers. At most, it is
simply giving the authority to appoint the head oftbe
government unit (the governor) where all the members of
the water district are geographically located, and only when
none of these cities and municipalities has the required 75%
of the active water service connections. Nevertheless, the
issue is not whether the governor took any part in organizing
the water district or has contributed to its formation, but that
by law, she has been made the appointing authority even if
she has no participation or involvement in the cooperative
effort of the members of the water district. This may not be
the most expedient and appropriate solution, but still, it is
not illegal. As to why this is so is a question only our
lawmakers could answer.
All presumptions are indulged in favor of constitutionality;
one who attacks a statute, alleging constitutionality must
prove its invalidity beyond a reasonable doubt; that a law
may work hardship does not render it unconstitutional; that if
any reasonable basis may be conceived which supports the
statute, it will be upheld and the challenger must negate all
possible bases, that the courts are not concerned with the
wisdom, justice, policy or expediency of a statute; and that a
liberal interpretation of the constitution in favor of the
constitutionality of legislation should be adopted.
xxxx
In sum, the Court has not been able to find any constitutional
infirmity in the questioned provision (Sec. 3) of Presidential
Decree No. 198. The fundamental criterion is that all
reasonable doubts should be resolved in favor of the
constitutionality of a statute. Every law has in its favor the
presumption of constitutionality. For a law to be nullified,
there must be shown that there is a clear and unequivocal
breach of the Constitution. The ground for nullity must be
clear and beyond reasonable doubt. Those who seek to
declare the law, or parts thereof, unconstitutional, must
clearly establish the basis therefore. Otherwise, the
arguments fall short.[22]
Nonetheless, the petitioners rightly contend that the RTC
improperly regarded the matter about Section 3(b) of P.D. No.
198 as a political question; hence, not justiciable. It was not.
Political questions refer 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 legislature or executive
branch of the government."[23] They are "neatly associated
with the wisdom" of a particular act.[24]
The difference between the political and the justiciable
questions has been noted in Sanidad v. Commission on
Elections,[25] as follows:
x x x The implementing Presidential Decree Nos. 991, 1031,
and 1033, which commonly purport to have the force and
effect of legislation are assailed as invalid, thus the issue of
the validity of said Decrees is plainly a justiciable one, within
the competence of this Court to pass upon. Section 2 (2),
Article X of the new Constitution provides: "All cases involving
the constitutionality of a treaty, executive agreement, or law
may shall be heard and decided by the Supreme Court en bane
and no treaty, executive agreement, or law may be declared
unconstitutional without the concurrence of at least ten
Members...." The Supreme Court has the last word in the
construction not only of treaties and statutes, but also of the
Constitution itself. The amending, like all other powers
organized in the Constitution, is in form a delegated and hence
a limited power, so that the Supreme Court is vested with that
authority to determine whether that power has been
discharged within its limits. (Emphasis supplied)
The petitioners have averred the unconstitutionality or
invalidity of Section3 (b) of P.D. No 198 based on the
provision's arbitrariness in denying substantive due process
and equal protection to the affected local government units
(LGUs). Such issue, being justiciable, comes within the power of
judicial review. As such, the RTC skirted its duty of judicial
review by improperly relying on the political question doctrine.
It should have instead adhered to the pronouncement
in Estrada v. Desierto,[26] to wit:
To a great degree, the 1987 Constitution has narrowed the
reach of the political question doctrine when it expanded the
power of judicial review of this court not only to settle actual
controversies involving rights which are legally demandable
and enforceable but also 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 government. Heretofore, the judiciary has
focused on the "thou shalt not's" of the Constitution directed
against the exercise of its jurisdiction. With the new provision,
however, courts are given a greater prerogative to determine
what it can do to prevent grave abuse of discretion amounting
to lack or excess of jurisdiction on the part of any branch or
instrumentality of government. Clearly, the new provision did
not just grant the Court power of doing nothing. x x x (Italics
omitted)
3.
Second Issue:
Section 3(b) of P.D. 198 is already superseded
The petitioners argue that the MCWD became a water district
by the pooling of the water utilities belonging to several HUCs
and municipalities; that the active water connections in the
MCWD have been distributed as follows: Cebu City: 61.28%;
Mandaue City: 16%; Lapulapu City: 6.8%; Talisay City and the
Municipalities of Liloan, Consolacion, Compostela, and Cordova:
16.92%; that Section 3 (b) of P.D. No. 198 was unconstitutional
on its face for being unreasonable and arbitrary because the
determination of who would exercise the power to appoint the
members of the MCWD Board of Directors was thereby made
to depend on the shifting number of water users in the water
district's component LGUs; that the provision on the authority
of the Provincial Governor to appoint in cases where the water
connections of any of the water district's cities or
municipalities were below 75% was arbitrary for not
distinguishing whether or not the province had contributed
any waterworks to the water district; that the provision did
not consider whether a city or municipality comprised the
majority or more of the water consumers; that the provision
was irrational as it gave the Provincial Governor the power to
appoint regardless of whether the province had participated
in the organization of the water district or not; that in a
democracy, the principle that if power or authority was
conferred through determination of numerical figures then
the numerical superiority or the rule of the majority should
apply; that the rule of the majority was being applied in
electing government leaders as well as in choosing the
leaders in the private sector; that the provision violated the
rule of the majority; that at the time of the filing of this case,
the majority of MCWD water service connections were in
Cebu City (61.28%); and that the appointing power should
necessarily remain in the City Mayor of Cebu City because the
appointing power was based on the number of water service
connections.
The petitioners asseverate that the provision or any part of
P.D. No. 198 did not state any reason for departing from the
rule of the majority; that the provision failed reasonableness
as a standard of substantive due process; that the appointing
authority should be the mayor of the city or municipality
having the majority of the water connections; that if such
majority could not be attained, there must be a power
sharing scheme among those having the largest number of
water connections conformably with the rule of the majority;
that the temporary alternative was the Board of Directors
themselves, who, under Section 10 of P.D. No. 198, could
appoint upon failure of the appointing authority to do so;
that the assailed provision was void on its face for violating
the constitutional provision on local autonomy and
independence of HUCs under Article X of the 1987
Constitution; that the provision unduly interfered with the
internal affairs of Cebu City, and diminished the autonomy of
the LGUs; that the provision undermined the independence
of HUCs; that both the Office of the Government Corporate
Counsel and the Office of the Solicitor General have opined
that because Cebu City was an HUC, the City Mayor of Cebu
City should retain the right to appoint the members of the
MCWD Board of Directors; that the chief executive of the LGU
having the majority of water consumers was in the best
position to exercise the discretion of choosing the most
competent persons who could best serve the constituents;
that because the largest number of water consumers were in
Cebu City, any intrusion on the City Mayor's power to appoint
would violate its independence and autonomy; that the
Province of Cebu could not exercise powers that affected the
constituents of HUCs; that providing water to constituents
was the sole responsibility of the concerned LGU; that the
water utility of the LGU was a patrimonial property that was
not for public use; that as such, the operation, ownership and
management of the public utility should belong to the LGU;
and that the operation of the water utilities involved the
private rights of the LGUs that could not be amended or
altered by a statute.[27]
The Court opines that Section 3(b) of P.D. No. 198 should be
partially struck down for being repugnant to the local
autonomy granted by the 1987 Constitution to LGUs, and for
being inconsistent with R.A. No. 7160 (1991 Local Government
Code) and related laws on local governments.
P.D. No. 198 - issued by President Marcos in the exercise of his
legislative power during the period of Martial Law proclaimed
under the 1973 Constitution - relevantly provided:
MALACAÑANG
Manila
PRESIDENTIAL DECREE No. 198 May 25, 1973
DECLARING A NATIONAL POLICY FAVORING LOCAL OPERATION
AND CONTROL OF WATER SYSTEMS; AUTHORIZING THE
FORMATION OF LOCAL WATER DISTRICTS AND PROVIDING FOR
THE GOVERNMENT AND ADMINISTRATION OF SUCH DISTRICTS;
CHARTERING A NATIONAL ADMINISTRATION TO FACILITATE
IMPROVEMENT OF LOCAL WATER UTILITIES; GRANTING SAID
ADMINISTRATION SUCH POWERS AS ARE NECESSARY TO
OPTIMIZE PUBLIC SERVICE FROM WATER UTILITY OPERATIONS,
AND FOR OTHER PURPOSES
WHEREAS, one of the pre-requisites to the orderly and well
balanced growth of urban areas is an effective system of local
utilities, the absence of which is recognized as a deterrent to
economic growth, a hazard to public health and an irritant to
the spirit and well-being of the citizenry;
WHEREAS, domestic water systems and sanitary sewers are
two of the most basic and essential elements of local utility
system, which, with a few exceptions, do not exist in provincial
areas in the Philippines;
WHEREAS, existing domestic water utilities are not meeting the
needs of the communities they serve; water quality is
unsatisfactory; pressure is inadequate; and reliability of service
is poor; in fact, many persons receive no piped water service
whatsoever;
WHEREAS, conditions of service continue to worsen for two
apparent reasons, namely: (1) that key element of existing
systems are deteriorating faster than they are being
maintained or replaced, and (2) that they are not being
expanded at a rate sufficient to match population growth; and
WHEREAS, local water utilities should be locally-controlled and
managed, as well as have support on the national level in the
area of technical advisory services and financing;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in my by the
Constitution, as Commander-in-Chief of all the Armed Forces of
the Philippines, and pursuant to Proclamation No. 1081 dated
September 21, 1972 and General Order No. 1 dated September
22, 1972, as amended, do hereby decree, order and make as
part of the law of the land the following measure:
TITLE I
PRELIMINARY PROVISIONS
Section 1. Title. - This Decree shall be known and referred to
as the "Provincial Water Utilities Act of 1973."
Section 2. Declaration of Policy. - The creation, operation,
maintenance and expansion of reliable and economically
viable and sound water supply and wastewater disposal
system for population centers of the Philippines is hereby
declared to be an objective of national policy of high priority.
For purpose of achieving said objective, the formulation and
operation of independent, locally controlled public water
districts is found and declared to be the most feasible and
favored institutional structure. To this end, it is hereby
declared to be in the national interest that said districts be
formed and that local water supply and wastewater disposal
systems be operated by and through such districts to the
greatest extent practicable. To encourage the formulation of
such local water districts and the transfer thereto to existing
water supply and wastewater disposal facilities, this Decree
provides the general act the authority for the formation
thereof, on a local option basis. It is likewise declared
appropriate, necessary and advisable that all funding
requirements for such local water systems, other than those
provided by local revenues, should be channeled through and
administered by an institution on the national level, which
institution shall be responsible for and have authority to
promulgate and enforce certain rules and regulations to
achieve national goals and the objective of providing public
waterworks services to the greatest number at least cost, to
effect system integration or joint investments and operations
whenever economically warranted and to assure the
maintenance of uniform standards, training of personnel and
the adoption of sound operating and accounting procedures.
Section 3. Definitions. - As used in this Decree, the following
words and terms shall have the meanings herein set forth,
unless a different meaning clearly appears from the context.
The definition of a word or term applies to any of its variants.
(a) Act. This Provincial Water Utilities Act of 1973.
(b) Appointing authority. The person empowered to appoint
the members of the Board of Directors of a local water
district, depending upon the geographic coverage and
population make-up of the particular district. In the event
that more than seventy-five percent of the total active
water service connections of a local water district are within
the boundary of any city or municipality, the appointing
authority shall be the mayor of that city or municipality, as
the case may be; otherwise, the appointing authority shall
be the governor of the province within which the district is
located. If portions of more than one province are included
within the boundary of the district, and the appointing
authority is to be the governors then the power to appoint
shall rotate between the governors involved with the initial
appointments made by the governor in whose province the
greatest number of service connections exists. (Emphasis
supplied)
xxxx
The enactment of P.D. No. 198 on May 25, 1973 was prior to
the enactment on December 22, 1979 of Batas Pambansa Blg.
51 (An Act Providing for the Elective or Appointive Positions in
Various Local Governments and for Other Purposes) and
antedated as well the effectivity of the 1991 Local Government
Code on January 1, 1992. At the time of the enactment of P.D.
No. 198, Cebu City was still a component city of Cebu Province.
Section 3[28] of B.P. Blg. 51 reclassified the cities of the
Philippines based on well-defined criteria. Cebu City thus
became an HUC, which immediately meant that its inhabitants
were ineligible to vote for the officials of Cebu Province. In
accordance with Section 12 of Article X of the 1987
Constitution, cities that are highly urbanized, as determined by
law, and component cities whose charters prohibit their voters
from voting for provincial elective officials, shall
be independent of the province, but the voters of component
cities within a province, whose charters contain no such
prohibition, shall not be deprived of their right to vote for
elective provincial officials. Later on, Cebu City, already an HUC,
was further effectively rendered independent from Cebu
Province pursuant to Section 29 of the 1991 Local Government
Code, viz.:
Section 29. Provincial Relations with Component Cities and
Municipalities. - The province, through the governor, shall
ensure that every component city and municipality within its
territorial jurisdiction acts within the scope of its prescribed
powers and functions. Highly urbanized cities and
independent component cities shall be independent of the
province. (Emphasis supplied)
Hence, all matters relating to its administration, powers and
functions were exercised through its local executives led by the
City Mayor, subject to the President's retained power of
general supervision over provinces, HUCs, and independent
component cities pursuant to and in accordance with Section
25[29] of the 1991 Local Government Code, a law enacted for
the purpose of strengthening the autonomy of the LGUs in
accordance with the 1987 Constitution.
Article X of the 1987 Constitution guarantees and promotes the
administrative and fiscal autonomy of the LGUs.[30] The
foregoing statutory enactments enunciate and implement the
local autonomy provisions explicitly recognized under the 1987
Constitution. To conform with the guarantees of the
Constitution in favor of the autonomy of the LGUs, therefore, it
becomes the duty of the Court to declare and pronounce
Section 3(b) of P.D. No. 198 as already partially
unconstitutional. We note that this pronouncement is also
advocated by the National Government, as shown in the
comment of the Solicitor General.[31]
In Navarro v. Ermita,[32] the Court has pointed out that the
central policy considerations in the creation of local
government units are economic viability, efficient
administration, and capability to deliver basic services to their
constituents. These considerations must be given importance
as they ensure the success of local autonomy. It is accepted
that the LGUs, more than the National Government itself,
know the needs of their constituents, and cater to such needs
based on the particular circumstances of their localities.
Where a particular law or statute affecting the LGUs infringes
on their autonomy, and on their rights and powers to
efficiently and effectively address the needs of their
constituents, we should lean in favor of their autonomy, their
rights and their powers.
Water and its efficient supply are among the primary
concerns of every LGU. Issues that tend to reduce or diminish
the authority of the boards of directors to manage the water
districts are imbued with public interest. Bearing this in mind,
and recalling that the MCWD had been established from the
erstwhile Osmeña Waterworks Systems (OWS) without any
investment or contribution of funds and material from the
Province of Cebu towards the creation and maintenance of
OWS and the MCWD,[33] and considering that it had always
been the City Mayor of the City of Cebu who appointed the
members of the MCWD Board of Directors regardless of the
percentage of the water subscribers, our pronouncement
herein rests on firm ground.
4.
Third Issue:
Section 3(b) of P.D. 198 is unconstitutional for violating the
Due Process Clause and the Equal Protection Clause
The petitioners assert that Section 3(b) of P.D. No. 198, being
unfair, violated substantive due process; that Governor
Garcia could not determine the water needs of each of the
LGUs within the MCWD; that the provision allowed inequality
of treatment of the cities and municipalities in relation to the
province, and thus violated the Equal Protection Clause of the
Constitution; that the provision unduly deprived Cebu City of
the power to determine the membership in the MCWD Board
of Directors despite Cebu City having the majority of the
water service connections; that the Province of Cebu was
given unreasonable and unwarranted benefit despite Cebu
City being independent from the Province of Cebu; that
Section 3(b) of P.D. No. 198 did not distinguish whether the
province contributed any resource to the water district or not;
that under the provision, if two or more provinces
contributed to the water district, they were not subject to the
75% requirement to avail of the power of appointment,
indicating that the power to appoint devolved only in the
provinces; that this violated the guarantee of equality of
treatment in favor of the participating LGUs; that the
provision created a privileged class (the provinces) without
any justification in reason; and that "the classification is not
germane to the purpose of the law and is not based on
substantial distinctions that make real differences."[34]
Substantive due process "requires that the law itself, not
merely the procedures by which the law would be enforced, is
fair, reasonable, and just."[35] It demands the intrinsic validity of
the law in interfering with the rights of the person to life,
liberty or property. In short, to be determined is whether the
law has a valid governmental objective, like the interest of the
public as against that of a particular class.[36]
On the other hand, the principle of equal protection enshrined
in the Constitution does not require the territorial uniformity of
laws. According to Tiu v. Court of Appeals,[37] the fundamental
right of equal protection of the law is not absolute, but subject
to reasonable classification. Classification, to be valid, must: (1)
rest on substantial distinctions; (2) be germane to the purpose
of the law; (3) not be limited to existing conditions only; and (4)
apply equally to all members of the same class.
We opine that although Section 3(b) of P.D. No. 198 provided
for substantial distinction and was germane to the purpose of
P.D. No. 198 when it was enacted in 1973, the intervening
reclassification of the City of Cebu into an HUC and the
subsequent enactment of the 1991 Local Government
Code rendered the continued application of Section 3(b) in
disregard of the reclassification unreasonable and unfair.
Clearly, the assailed provision no longer provided for
substantial distinction because, firstly, it ignored that the
MCWD was built without the participation of the provincial
government; secondly, it failed to consider that the MCWD
existed to serve the community that represents the needs of
the majority of the active water service connections; and,
thirdly, the main objective of the decree was to improve the
water service while keeping up with the needs of the growing
population.
The Whereas Clauses of P.D. No. 198 essentially state
the raison d'etre of its enactment, to wit:
WHEREAS, existing domestic water utilities are not meeting
the needs of the communities they serve; water quality is
unsatisfactory; pressure is inadequate; and reliability of service
is poor; in fact, many persons receive no piped water service
whatsoever;
WHEREAS, conditions of service continue to worsen for two
apparent reasons, namely: (1) that key element of existing
systems are deteriorating faster than they are being
maintained or replaced, and (2) that they are not being
expanded at a rate sufficient to match population growth;
and
WHEREAS, local water utilities should be locally-controlled
and managed, as well as have support on the national level in
the area of technical advisory services and financing;
(bold emphasis supplied)
Verily, the decree was enacted to provide adequate, quality
and reliable water and waste-water services to meet the
needs of the local communities and their growing populations.
The needs of the communities served were paramount.
Hence, we deem it to be inconsistent with the true objectives
of the decree to still leave to the provincial governor the
appointing authority if the provincial governor had
administrative supervision only over municipalities and
component cities accounting for 16.92% of the active water
service connection in the MCWD. In comparison, the City of
Cebu had 61.28%[38] of the active service water connections;
Mandaue, another HUC, 16%; and Lapu Lapu City, another
HUC, 6.8%. There is no denying that the MCWD has been
primarily serving the needs of Cebu City. Although it is
impermissible to inquire into why the decree set 75% as the
marker for determining the proper appointing authority, the
provision has meanwhile become unfair for ignoring the
needs and circumstances of Cebu City as the LGU accounting
for the majority of the active water service connections, and
whose constituency stood to be the most affected by the
decisions made by the MCWD's Board of Directors. Indeed,
the classification has truly ceased to be germane or related to
the main objective for the enactment of P.D. No. 198 in 1973.
Grave abuse of discretion means either that the judicial or
quasi judicial power was exercised in an arbitrary or despotic
manner by reason of passion or personal hostility, or that the
respondent judge, tribunal or board evaded a positive duty,
or virtually refused to perform the duty enjoined or to act in
contemplation of law, such as when such judge, tribunal or
board exercising judicial or quasi-judicial powers acted in a
capricious or whimsical manner as to be equivalent to lack of
jurisdiction. Mere abuse of discretion is not enough to
warrant the issuance of the writ. The abuse of discretion
must be grave.[39]
Under the foregoing circumstances, therefore, the RTC
gravely abused its discretion in upholding Section 3(b) of P.D.
No. 198. It thereby utterly disregarded the clear policies
favoring local autonomy enshrined in the 1987 Constitution
and effected by the 1991 Local Government Code and related
subsequent statutory enactments, and for being violative of
the Due Process Clause and the Equal Protection Clause of
the 1987 Constitution.
WHEREFORE, we GRANT the petition
for certiorari; ANNUL and SET ASIDE the decision rendered in
Civil Case No. CEB-34459 on November 16, 2010 by the
Regional Trial Court, Branch 18, in Cebu City;
and DECLARE as UNCONSTITUTIONAL Section 3(b) of
Presidential Decree No. 198 to the extent that it applies to
highly urbanized cities like the City of Cebu and to component
cities with charters expressly providing for their voters not to
be eligible to vote for the officials of the provinces to which
they belong for being in violation of the express policy of the
1987 Constitution on local autonomy, the 1991 Local
Government Code and subsequent statutory enactments, and
for being also in violation of the Due Process Clause and the
Equal Protection Clause.
ACCORDINGLY, the Mayor of the the City of Cebu is declared to
be the appointing authority of the Members of the Board of
Directors of the Metro Cebu Water District.
No pronouncement on costs of suit.
SO ORDERED.
G.R. No. 199669
SOUTHERN LUZON DRUG CORPORATION, Petitioner,
vs.
THE DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT,
THE NATIONAL COUNCIL FOR THE WELFARE OF DISABLED
PERSONS, THE DEPARTMENT OF FINANCE, and THE BUREAU
OF INTERNAL REVENUE, Respondents
DECISION
REYES, J.:
Before the Court is a Petition for Review on Certiorari1under
Rule 45 of the Rules of Court, assailing the Decision2dated June
17, 2011, and Resolution3 dated November 25, 2011 of the
Court of Appeals (CA) in CA-G.R. SP No. 102486, which
dismissed the petition for prohibition filed by Southern Luzon
Drug Corporation (petitioner) against the Department of1
Social Welfare and Development (DSWD), the National Council
for the Welfare of Disabled Persons (NCWDP) (now National
Council on Disability Affairs or NCDA), the Department of
Finance (DOF) and the Bureau of: Internal Revenue (collectively,
the respondents), which sought to prohibit the implementation
of Section 4(a) of Republic Act (R.A.) No. 9257, otherwise
known as the "Expanded Senior Citizens Act of 2003" and
Section 32 of R.A. No. 9442, which amends the "Magna Carta
for Disabled Persons," particularly the granting of 20% discount
on the purchase of medicines by senior citizens and persons
with disability (PWD),: respectively, and treating them as tax
deduction.
The petitioner is a domestic corporation engaged in the
business of: drugstore operation in the Philippines while the
respondents are government' agencies, office and bureau
tasked to monitor compliance with R.A. Nos. 9257 and 9442,
promulgate implementing rules and regulations for their
effective implementation, as well as prosecute and revoke
licenses of erring1 establishments.
Factual Antecedents
On April 23, 1992, R.A. No. 7432, entitled "An Act to Maximize
the Contribution of Senior Citizens to Nation-Building, Grant
Benefits and Special Privileges and For Other Purposes," was
enacted. Under the said law, a senior citizen, who must be at
least 60 years old and has an annual income of not more than
P60,000.00,4 may avail of the privileges provided in Section 4
thereof, one of which is 20% discount on the purchase of
medicines. The said provision states:
Sec. 4. Privileges for the Senior Citizen. - x x x:
a) the grant of twenty percent (20%) discount from all
establishments relative to utilization of transportation
services, hotels and similar lodging establishment,
restaurants and recreation centers and purchase of medicine
anywhere in the country: Provided, That private
establishments may claim the cost as tax credit[.]
x x x x (Emphasis ours)
To recoup the amount given as discount to qualified senior
citizens, covered establishments can claim an equal amount
as tax credit which can be applied against the income tax due
from them.
On February 26, 2004, then President Gloria
Macapagal-Arroyo signed R.A. No. 9257, amending some
provisions of R.A. No. 7432. The new law retained the 20%
discount on the purchase of medicines but removed the
annual income ceiling thereby qualifying all senior citizens to
the privileges under the law. Further, R.A. No. 9257 modified
the tax treatment of the discount granted to senior citizens,
from tax credit to tax deduction from gross income,
computed based on the net cost of goods sold or services
rendered. The pertinent provision, as amended by R.A. No.
9257, reads as follows:
SEC. 4. Privileges for the Senior Citizens. - The senior citizens
shall be entitled to the following:
(a) the grant of twenty percent (20%) discount from all
establishments relative to the utilization of services in hotels
and similar lodging establishments, restaurants and
recreation centers, and purchase of medicines in all
establishments for the exclusive use or enjoyment of senior
citizens, including funeral and burial services for the death of
senior citizens;
xxxx
The establishment may claim the discounts granted under
(a), (f), (g) and (h) as tax deduction based on the net cost of
the goods sold or services rendered: Provided, That the cost
of the discount shall be allowed as deduction from gross
income for the same taxable year that the discount is
granted. Provided, further, That the total amount of the
claimed tax deduction net of value-added tax if applicable,
shall be included in their gross sales receipts for tax purposes
and shall be subject to proper documentation and to the
provisions of the National Internal Revenue Code, as
amended. (Emphasis ours)
On May 28, 2004, the DSWD issued the Implementing Rules
and Regulations (IRR) of R.A. No. 9257. Article 8 of Rule VI of
the said IRR provides:
Article 8. Tax Deduction of Establishments. - The
establishment may claim the discounts granted under Rule V,
Section 4 - Discounts for Establishments; Section 9, Medical
and Dental Services in Private Facilities and Sections 10 and
11 -Air, Sea and Land Transportation as tax deduction based
on the net cost of the goods sold or services
rendered. Provided, That the cost of the discount shall be
allowed as deduction from gross income for the same
taxable year that the discount is granted; Provided, further,
That the total amount of the claimed tax deduction net of
value-added tax if applicable, shall be included in their gross
sales receipts for tax purposes and shall be subject to proper
documentation and to the provisions of the National Internal
Revenue Code, as amended; Provided, finally, that the
implementation of the tax deduction shall be subject to the
Revenue Regulations to be issued by the Bureau of Internal
Revenue (BIR) and approved by the Department of Finance
(DOF). (Emphasis ours)
The change in the tax treatment of the discount given to senior
citizens did not sit well with some drug store owners and
corporations, claiming it affected the profitability of their
business. Thus, on January 13, 2005, I Carlos Superdrug
Corporation (Carlos Superdrug), together with other.
corporation and proprietors operating drugstores in the
Philippines, filed a Petition for Prohibition with Prayer for
Temporary Restraining Order (TRO) I and/or Preliminary
Injunction before this Court, entitled Carlos
Superdrug I Corporation v. DSWD,5docketed as G.R. No. 166494,
assailing the constitutionality of Section 4(a) of R.A. No. 9257
primarily on the ground that it amounts to taking of private
property without payment of just compensation. In a Decision
dated June 29, 2007, the Court upheld the constitutionality of
the assailed provision, holding that the same is a legitimate
exercise of police power. The relevant portions of the decision
read, thus:
The law is a legitimate exercise of police power which, similar
to the power of eminent domain, has general welfare for its
object. Police power is not capable of an exact definition, but
has been purposely veiled in general terms to underscore its
comprehensiveness to meet all exigencies and provide enough
room for an efficient and flexible response to conditions and
circumstances, thus assuring the greatest benefits. Accordingly,
it has been described as "the most essential, insistent and the
least limitable of powers, extending as it does to all the great
public needs." It is "[t]he power vested in the legislature by the
constitution to make, ordain, and establish all manner of
wholesome and reasonable laws, statutes, and ordinances,
either with penalties or without, not repugnant to the
constitution, as they shall judge to be for the good and welfare
of the commonwealth, and of the subjects of the same."
For this reason, when the conditions so demand as determined
by the legislature, property rights must bow to the primacy of
police power because property rights, though sheltered by due
process, must yield to general welfare.
xxxx
Moreover, the right to property has a social dimension. While
Article XIII of the Constitution provides the precept for the
protection of property, various laws and jurisprudence,
particularly on agrarian reform and the regulation of contracts
and public utilities, continuously serve as a reminder that the
right to property can be relinquished upon the command of the
State for the promotion of public good. Undeniably, the
success of the senior citizens program rests largely on the
support imparted by petitioners and the other private
establishments concerned. This being the case, the means
employed in invoking the active participation of the private
sector, in order to achieve the purpose or objective of the law,
is reasonably and directly related. Without sufficient proof
that Section 4(a) of RA. No. 9257 is arbitrary, and that the
continued implementation of the same would be
unconscionably detrimental to petitioners, the Court will
refrain from quashing a legislative act.
WHEREFORE, the petition is DISMISSED for lack of
merit.6 (Citations omitted)
On August 1, 2007, Carlos Superdrug filed a motion for
reconsideration of the foregoing decision. Subsequently, the
Court issued Resolution dated August 21, 2007, denying the
said motion with finality. 7
Meanwhile, on March 24, 1992, R.A. No. 7277 pertaining to
the "Magna Carta for Disabled Persons" was enacted,
codifying the rights and privileges of PWDs. Thereafter, on
April 30, 2007, R.A. No. 9442 was enacted, amending R.A. No.
7277. One of the salient amendments in the law is the
insertion of Chapter 8 in Title 2 thereof, which enumerates
the other privileges and incentives of PWDs, including the
grant of 20% discount on the purchase of medicines. Similar
to R.A. No. 9257, covered establishments shall claim the
discounts given to PWDs as tax deductions from the gross
income, based on the net cost of goods sold or services
rendered. Section 32 ofR.A. No. 9442 reads:
CHAPTER 8. Other Privileges and Incentives
SEC. 32. Persons with disability shall be entitled to the
following:
xxxx
(c) At least twenty percent (20%) discount for the purchase of
medicines in all drugstores for the exclusive use or enjoyment
of persons with disability;
xxxx
The establishments may claim the discounts granted in
subsections (a), (b), (c), (e), (t) and (g) as taxdeductions
based on the net cost of the goods sold or services
rendered: Provided, however, That the cost of the discount
shall be allowed as deduction from gross income for the same
taxable year that the discount is granted: Provided,
further, That the total amount of the claimed tax deduction
net of value-added tax if applicable, shall be included in their
gross sales receipts for tax purposes and shall be subject to
proper documentation and to the provisions of the National
Internal Revenue Code (NIRC), as amended. (Emphasis ours)
Pursuant to the foregoing, the IRR of R.A. No. 9442 was
promulgated by the DSWD, Department of Education, DOF,
Department of Tourism and the Department of
Transportation and Communications.8Sections 5 .1 and 6.1.d
thereof provide:
Sec. 5. Definition of Terms. For purposes of these Rules and
Regulations, these terms are defined as follows:
5.1. Persons with Disability are those individuals defined under
Section 4 of RA 7277, "An Act Providing for the Rehabilitation,
Self-Development and Self-Reliance of Persons with Disability
as amended and their integration into the Mainstream of
Society and for Other Purposes." This is defined as a person
suffering from restriction or different abilities, as a result of a
mental, physical or sensory impairment, to perform an activity
in a manner or within the range considered normal for human
being. Disability shall mean: (1) a physical or mental
impairment that substantially limits one or more psychological,
physiological or anatomical function of an individual or
activities of such individual; (2) a record of such an impairment;
or (3) being regarded as having such an impairment.
xxxx
6.1.d Purchase of Medicine - At least twenty percent (20%)
discount on the purchase of medicine for the exclusive use and
enjoyment of persons with disability. All drug stores, hospital,
pharmacies, clinics and other similar establishments selling
medicines are required to provide at least twenty percent (20%)
discount subject to the guidelines issued by DOH and
PHILHEALTH.
On February 26, 2008, the petitioner filed a Petition for
Prohibition with Application for TRO and/or Writ of Preliminary
Injunction9 with the CA, seeking to declare as unconstitutional
(a) Section 4(a) of R.A. No. 9257, and (b) Section 32 of R.A. No.
9442 and Section 5.1 of its IRR, insofar as these provisions only
allow tax deduction on the gross income based on the net cost
of goods sold or services rendered as compensation to private
establishments for the 20% discount that they are required to
grant to senior citizens and PWDs. Further, the petitioner
prayed that the respondents be permanently enjoined from
implementing the assailed provisions.
Ruling of the CA
On June 17, 2011, the CA dismissed the petition, reiterating the
ruling of the Court in Carlos Superdrug10particularly that
Section 4(a) of R.A. No. 9257 was a valid exercise of police
power. Moreover, the CA held that considering that the same
question had been raised by parties similarly situated and was
resolved in Carlos Superdrug, the rule of stare decisis stood as a
hindrance to any further attempt to relitigate the same issue. It
further noted that jurisdictional considerations also compel the
dismissal of the action. It particularly emphasized that it has no
original or appellate jurisdiction to pass upon the
constitutionality of the assailed laws, 11 the same pertaining to
the Regional Trial Court (RTC). Even assuming that it had
concurrent jurisdiction with the RTC, the principle of hierarchy
of courts mandates that the case be commenced and heard by
the lower court. 12 The CA further ruled that the petitioner
resorted to the wrong remedy as a petition for prohibition will
not lie to restrain the actions of the respondents for the simple
reason that they do not exercise judicial, quasi-judicial or
ministerial duties relative to the issuance or implementation of
the questioned provisions. Also, the petition was wanting of
the allegations of the specific acts committed by the
respondents that demonstrate the exercise of these powers
which may be properly challenged in a petition for
prohibition.13
The petitioner filed its Motion for Reconsideration 14 of the
Decision dated June 17, 2011 of the CA, but the same was
denied in a Resolution 15 dated November 25, 2011.
Unyielding, the petitioner filed the instant petition, raising
the following assignment of errors, to wit:
I prohibition. In Diaz, et al. v. The Secretary of Finance, et
THE CA SERIOUSLY ERRED WHEN IT RULED THAT A PETITION
FOR PROHIBITION FILED WITH THE CA IS AN IMPROPER
REMEDY TO ASSAIL THE CONSTITUTIONALITY OF THE 20%,
SALES DISCOUNT FOR SENIOR CITIZENS AND PWDs;
II
THE CA SERIOUSLY ERRED WHEN IT HELD THAT THE
SUPREME COURT'S RULING IN CARLOS
SUPERDRUG CONSTITUTES STARE DECISIS;
III
THE CA SERIOUSLY ERRED ON A QUESTION OF SUBSTANCE
WHEN IT RULED THAT THE 20%, SALES DISCOUNT FOR
SENIOR CITIZENS AND PWDs IS A VALID EXERCISE OF POLICE
POWER. ON THE CONTRARY, IT IS AN INVALID EXERCISE OF
THE POWER OF EMINENT DOMAIN BECAUSE IT FAILS TO
PROVIDE JUST COMPENSATION TO THE PETITIONER AND
OTHER SIMILARLY SITUATED DRUGSTORES;
IV
THE CA SERIOUSLY ERRED ON A QUESTION OF SUBSTANCE
WHEN IT RULED THAT THE 20°/o SALES DISCOUNT FOR
SENIOR CITIZENS AND PWDs DOES NOT VIOLATE THE
PETITIONER'S RIGHT TO EQUAL PROTECTION OF THE
LAW; and
V and the Philippine Drug Enforcement Agency from enforcing
THE CA SERIOUSLY ERRED ON A QUESTION OF SUBSTANCE
WHEN IT RULED THAT THE DEFINITIONS OF DISABILITIES
AND PWDs ARE NOT VAGUE AND DO NOT VIOLATE THE
PETITIONER'S RIGHT TO DUE PROCESS OF LAW.16
Ruling of the Court
Prohibition may be filed to question
the constitutionality of a law
In the assailed decision, the CA noted that the action,
although denominated as one for prohibition, seeks the
declaration of the unconstitutionality of Section 4(a) of R.A.
No. 9257 and Section 32 of R.A. No.9442. It held that in such
a case, the proper remedy is not a special civil 1 action but a
petition for declaratory relief, which falls under the exclusive
original jurisdiction of the RTC, in the first instance, and of the
Supreme Court, on appeal. 17
The Court clarifies.
Generally, the office of prohibition is to prevent the unlawful
and oppressive exercise of authority and is directed against
proceedings that are done without or in excess of jurisdiction,
or with grave abuse of discretion, there being no appeal or
other plain, speedy, and adequate remedy in the ordinary
course of law. It is the remedy to prevent inferior courts,
corporations, boards, or persons from usurping or exercising a
jurisdiction or power with which they have not been vested by
law. 18 This is, however, not the lone office of an action for
al., 19 prohibition was also recognized as a proper remedy to
prohibit or nullify acts of executive officials that amount to
usurpation of legislative authority. 20 And, in a number of
jurisprudence, prohibition was allowed as a proper action to
assail the constitutionality of a law or prohibit its
implementation.
In Social Weather Stations, Inc. v. Commission on
Elections,21therein petitioner filed a petition for prohibition to
assail the constitutionality of Section 5.4 of R.A. No. 9006, or
the "Fair Elections Act," which prohibited the publication of
surveys within 15 days before an election for national
candidates, and seven days for local candidates. Included in the
petition is a prayer to prohibit the Commission on Elections
from enforcing the said provision. The Court granted the
Petition and struck down the assailed provision for being
unconstitutional. 22
In Social Justice Society (SJS) v. Dangerous Drugs Board, et
al.,23 therein petitioner assailed the constitutionality of
paragraphs (c ), (d), (f) and (g) of Section 36 of R.A. No. 9165,
otherwise known as the "Comprehensive Dangerous Drugs Act
of 2002," on the ground that they constitute undue delegation
of legislative power for granting unbridled discretion to schools
and private employers in determining the manner of drug
'testing of their employees, and that the law constitutes a
violation of the right against unreasonable searches and
seizures. It also sought to enjoin the Dangerous Drugs Board
the challenged provision.24The Court partially granted the
petition by declaring Section 36(f) and (g) of R.A. No. 9165
unconstitutional, and permanently enjoined the concerned
agencies from implementing them. 25
In another instance, consolidated petitions for
prohibitions26 questioning the constitutionality of the Priority
Development Assistance Fund were deliberated upon by this
Court which ultimately granted the same.
Clearly, prohibition has been found an appropriate remedy to
challenge the constitutionality of various laws, rules, and
regulations.
There is also no question regarding the jurisdiction of the CA to
hear and decide a petition for prohibition. By express provision
of the law, particularly Section 9(1) of Batas Pambansa Bilang
129,27 the CA was granted "original jurisdiction to issue writs
of mandamus, prohibition, certiorari, habeas corpus, and quo
warranto, and auxiliary writs or I processes, whether or not in
aid of its appellate jurisdiction." This authority· the CA enjoys
concurrently with RTCs and this Court.
In the same manner, the supposed violation of the principle
of the ·. hierarchy of courts does not pose any hindrance to
the full deliberation of the issues at hand. It is well to
remember that "the judicial hierarchy of courts is not an
iron-clad rule. It generally applies to cases involving warring
factual allegations. For this reason, litigants are required to
[refer] to the trial courts at the first instance to determine the
truth or falsity of these contending allegations on the basis of
the evidence of the parties. Cases which depend on disputed
facts for decision cannot be brought immediately before
appellate courts as they are not triers of facts. Therefore, a
strict application of the rule of hierarchy of courts is not
necessary when the cases brought before the appellate
courts do not involve factual but legal questions."28
Moreover, the principle of hierarchy of courts may be set
aside for special and important reasons, such as when
dictated by public welfare and ' the advancement of public
policy, or demanded by the broader interest of justice.29Thus,
when based on the good judgment of the court, the urgency
and significance of the issues presented calls for its
intervention, it should not hesitate to exercise its duty to
resolve.
The instant petition presents an exception to the principle as
it basically raises a legal question on the constitutionality of
the mandatory discount and the breadth of its rightful
beneficiaries. More importantly, the resolution of the issues
will redound to the benefit of the public as it will put to rest
the questions on the propriety of the granting of discounts to
senior citizens and PWDs amid the fervent insistence of
affected establishments that the measure transgresses their
property rights. The Court, therefore, finds it to the best
interest of justice that the instant petition be resolved.
The instant case is not barred by
stare decisis
The petitioner contends that the CA erred in holding that the
ruling in Carlos Superdrug constitutes as stare decisis or law
of the case which bars the relitigation of the issues that had
been resolved therein and had been raised anew in the
instant petition. It argues that there are substantial
differences between Carlos Superdrug and the circumstances
in the instant case which take it out from the operation of the
doctrine of stare decisis. It cites that in Carlos Superdrug, the
Court denied the petition because the petitioner therein
failed to prove the confiscatory effect of the tax deduction
scheme as no proof of actual loss was submitted. It believes
that its submission of financial statements for the years 2006
and 2007 to prove the confiscatory effect of the law is a
material fact that distinguishes the instant case from that
of Carlos Superdrug. 30
The Court agrees that the ruling in Carlos Superdrug does not
constitute stare decisis to the instant case, not because of the
petitioner's submission of financial statements which were
wanting in the first case, but because it had the good sense of
including questions that had not been raised or deliberated in
the former case of Carlos Superdrug, i.e., validity of the 20%
discount granted to PWDs, the supposed vagueness of the
provisions of R.A. No. 9442 and violation of the equal
protection clause.
Nonetheless, the Court finds nothing in the instant case that
merits a reversal of the earlier ruling of the Court in Carlos
Superdrug. Contrary to the petitioner's claim, there is a very
slim difference between the issues in Carlos Superdrug and the
instant case with respect to the nature of the senior citizen
discount. A perfunctory reading of the circumstances of the
two cases easily discloses marked similarities in the issues and
the arguments raised by the petitioners in both cases that
semantics nor careful play of words can hardly obscure.
In both cases, it is apparent that what the petitioners are
ultimately questioning is not the grant of the senior citizen
discount per se, but the manner by which they were allowed to
recoup the said discount. In particular, they are protesting the
change in the tax treatment of the senior citizen discount from
tax credit to being merely a deduction from gross income
which they claimed to have significantly reduced their profits.
This question had been settled in Carlos Superdrug, where the
Court ruled that the change in the tax treatment of the
discount was a valid exercise of police power, thus:
Theoretically, the treatment of the discount as a deduction
reduces the net income of the private establishments
concerned. The discounts given would have entered the coffers
and formed part of the gross sales of the private
establishments, were it not for R.A. No. 9257.
xxxx
A tax deduction does not offer full reimbursement of the senior
citizen discount. As such, it would not meet the definition of
just compensation.
Having said that, this raises the question of whether the State,
in promoting the health and welfare of a special group of
citizens, can impose upon private establishments the burden of
partly subsidizing a government program.
The Court believes so.
The Senior Citizens Act was enacted primarily to maximize the
contribution of senior citizens to nation-building, and to grant
benefits and privileges to them for their improvement and
well-being as the State considers them an integral part of our
society.
The priority given to senior citizens finds its basis in the
Constitution as set forth in the law itself. Thus, the Act
provides:
SEC. 2. [R.A.] No. 7432 is hereby amended to read as follows:
SEC. 1. Declaration of Policies and Objectives.- Pursuant to
Article XV, Section 4 of the Constitution, it is the duty of the
family to take care of its elderly members while the State may
design programs of social security for them. In addition to this,
Section 10 in the Declaration of Principles and State Policies
provides: "The State shall provide social justice in all phases of
national development." Further, Article XIII, Section 11,
provides: "The State shall adopt an integrated and
comprehensive approach to health development which shall
endeavor to make essential goods, health and other social
services available to all the people at affordable cost. There
shall be priority for the needs of the underprivileged sick,
elderly, disabled, women and children." Consonant with
these constitutional principles the following are the declared
policies of this Act:
xxxx
(f) To recognize the important role of the private sector in
the improvement of the welfare of senior citizens and to
actively seek their partnership.
To implement the above policy, the law grants a twenty
percent discount to senior citizens for medical and dental
services, and diagnostic and laboratory fees; admission fees
charged by theaters, concert halls, circuses, carnivals, and
other similar places of culture, leisure and amusement; fares
for domestic land, air and sea travel; utilization of services in
hotels and similar lodging establishments, restaurants and
recreation centers; and purchases of medicines for the
exclusive use or enjoyment of senior citizens. As a form of
reimbursement, the law provides that business
establishments extending the twenty percent discount to
senior citizens may claim the discount as a tax deduction.
The law is a legitimate exercise of police power which, similar
to the power of eminent domain, has general welfare for its
object. Police power is not capable of an exact definition, but
has been purposely veiled in general terms to underscore its
comprehensiveness to meet all exigencies and provide
enough room for an efficient and flexible response to
conditions and circumstances, thus assuring the greatest
benefits. Accordingly, it has been described as "the most
essential, insistent and the least limitable of powers,
extending as it does to all the great public needs." It is "[t]he
power vested in the legislature by the constitution to make,
ordain, and establish all manner of wholesome and
reasonable laws, statutes, and ordinances, either with
penalties or without, not repugnant to the constitution, as
they shall judge to be for the good and welfare of the
commonwealth, and of the subjects of the same."
For this reason, when the conditions so demand as
determined by the legislature, property rights must bow to
the primacy of police power because proper rights, though
sheltered by due process, must yield to general
welfare. 31 (Citations omitted and emphasis in the original)
Verily, it is the bounden duty of the State to care for the
elderly as they reach the point in their lives when the vigor of
their youth has diminished and resources have become
scarce. Not much because of choice, they become needing of
support from the society for whom they presumably spent
their productive days and for whose betterment they'
exhausted their energy, know-how and experience to make
our days better to live.
In the same way, providing aid for the disabled persons is an
equally important State responsibility. Thus, the State is
obliged to give full support to the improvement of the total
well-being of disabled persons and their integration into the
mainstream of society. 32This entails the creation of
opportunities for them and according them privileges if only to
balance the playing field which had been unduly tilted against
them because of their limitations.
The duty to care for the elderly and the disabled lies not only
upon the State, but also on the community and even private
entities. As to the State, the duty emanates from its role
as parens patriae which holds it under obligation to provide
protection and look after the welfare of its people especially
those who cannot tend to themselves. Parens patriae means
parent of his or her country, and refers to the State in its role
as "sovereign", or the State in its capacity as a provider of
protection to those unable to care for themselves. 33 In fulfilling
this duty, the State may resort to the exercise of its inherent
powers: police power, eminent domain and power of taxation.
In Gerochi v. Department of Energy,34the Court passed upon
one of the inherent powers of the state, the police power,
where it emphasized, thus:
[P]olice power is the power of the state to promote public
welfare by restraining and regulating the use of liberty and
property. It is the most pervasive, the least limitable, and the
most demanding of the three fundamental powers of the State.
The justification is found in the Latin maxim salus populi est
suprema lex (the welfare of the people is the supreme law)
and sic utere tuo ut alienum non laedas (so use your property
as not to injure the property of others). As an inherent
attribute of sovereignty which virtually extends to all public
needs, police power grants a wide panoply of instruments
through which the State, as parens patriae, gives effect to a
host of its regulatory powers. We have held that the power to
"regulate" means the power to protect, foster, promote,
preserve, and control, with due regard for the interests, first
and foremost, of the public, then of the utility and of its
patrons. 35 (Citations omitted)
It is in the exercise of its police power that the Congress
enacted R.A. Nos. 9257 and 9442, the laws mandating a 20%
discount on purchases of medicines made by senior citizens
and PWDs. It is also in further exercise of this power that the
legislature opted that the said discount be claimed as tax
deduction, rather than tax credit, by covered establishments.
The petitioner, however, claims that the change in the tax
treatment of the discount is illegal as it constitutes taking
without just compensation. It even submitted financial
statements for the years 2006 and 2007 to support its claim of
declining profits when the change in the policy was
implemented.
The Court is not swayed.
To begin with, the issue of just compensation finds no
relevance in the instant case as it had already been made clear
in Carlos Superdrug that the power being exercised by the
State in the imposition of senior citizen discount was its police
power. Unlike in the exercise of the power of eminent domain,
just compensation is not required in wielding police power.
This is precisely because there is no taking involved, but only
an imposition of burden.
In Manila Memorial Park, Inc., et al. v. Secretary of the DSWD,
et al., 36 the Court ruled that by examining the nature and the
effects of R.A. No. 9257, it becomes apparent that the
challenged governmental act was an exercise of police power.
It was held, thus:
[W]e now look at the nature and effects of the 20% discount
to determine if it constitutes an exercise of police power or
eminent domain.
The 20% discount is intended to improve the welfare of
senior citizens who, at their age, are less likely to be gainfully
employed, more prone to illnesses and other disabilities, and,
thus, in need of subsidy in purchasing basic commodities. It
may not be amiss to mention also that the discount serves to
honor senior citizens who presumably spent the productive
years of their lives on contributing to the development and
progress of the nation. This distinct cultural Filipino practice
of honoring the elderly is an integral part of this law.
As to its nature and effects, the 20% discount is a regulation
affecting the ability of private establishments to price their
products and services relative to a special class of individuals,
senior citizens, for which the Constitution affords preferential
concern. In turn, this affects the amount of profits or
income/gross sales that a private establishment can derive
from senior citizens. In other words, the subject regulation
affects the pricing, and, hence, the profitability of a private
establishment. However, it does not purport to appropriate
or burden specific properties, used in the operation or
conduct of the business of private establishments, for the use
or benefit of the public, or senior citizens for that matter, but
merely regulates the pricing of goods and services relative to,
and the amount of profits or income/gross sales that such
private establishments may derive from, senior citizens.
The subject regulation may be said to be similar to, but with
substantial distinctions from, price control or rate of 'return
on investment control laws which are traditionally regarded
as police power measures. x x x.37 (Citations omitted)
In the exercise of police power, "property rights of private
individuals are subjected to restraints and burdens in order to
secure the general comfort, health, and prosperity of the
State."38 Even then, the State's claim of police power cannot
be arbitrary or unreasonable. After all, the overriding purpose
of the exercise of the power is to promote general welfare,
public health and safety, among others. It is a measure, which
by sheer necessity, the State exercises, even to the point of
interfering with personal liberties or property rights in order
to advance common good. To warrant such interference, two
requisites must concur: (a) the interests of the public
generally, as distinguished from those of a particular class,
require the interference of the! State; and (b) the means
employed are reasonably necessary to the: attainment of the
object sought to be accomplished and not unduly oppressive
upon individuals. In other words, the proper exercise of the
police power requires the concurrence of a lawful subject and
a lawful method.39
The subjects of R.A. Nos. 9257 and 9442, i.e., senior citizens
and PWDs, are individuals whose well-being is a recognized
public duty. As a public duty, the responsibility for their care
devolves upon the concerted efforts of the State, the family
and the community. In Article XIII, Section 1 of the Constitution,
the State is mandated to give highest priority to the enactment
of measures that protect and enhance the right of all the
people to human dignity, reduce social, economic, and political
inequalities, and remove cultural inequities by equitably
diffusing wealth and political power1 for the common good.
The more apparent manifestation of these social inequities is
the unequal distribution or access to healthcare services. To:
abet in alleviating this concern, the State is committed to adopt
an integrated! and comprehensive approach to health
development which shall endeavor to make essential goods,
health and other social services available to all the people at
affordable cost, with priority for the needs of the
underprivileged sick, elderly, disabled, women, and children.40
In the same manner, the family and the community have
equally significant duties to perform in reducing social
inequality. The family as the basic social institution has the
foremost duty to care for its elderly members.41 On the other
hand, the community, which include the private sector, is
recognized as an active partner of the State in pursuing greater
causes. The private sector, being recipients of the privilege to
engage business in our land, utilize our goods as well as the
services of our people for proprietary purposes, it is only fitting
to expect their support in measures that contribute to common
good. Moreover, their right to own, establish and operate
economic enterprises is always subject to the duty of the State
to promote distributive justice and to intervene when the
common good so demands.42
The Court also entertains no doubt on the legality of the
method taken by the legislature to implement the declared
policies of the subject laws, that is, to impose discounts on the
medical services and purchases of senior citizens and PWDs
and to treat the said discounts as tax deduction rather than tax
credit. The measure is fair and reasonable and no credible
proof was presented to prove the claim that it was confiscatory.
To be considered confiscatory, there must be taking of
property without just compensation.
Illuminating on this point is the discussion of the Court on the
concept of taking in City of Manila v. Hon. Laguio, Jr.,43viz.:
There are two different types of taking that can be identified. A
"possessory" taking occurs when the government confiscates
or physically occupies property. A "regulatory" taking occurs
when the government's regulation leaves no reasonable
economically viable use of the property.
xxxx
No formula or rule can be devised to answer the questions of
what is too far and when regulation becomes a taking.
In Mahon, Justice Holmes recognized that it was "a question of
degree and therefore cannot be disposed of by general
propositions." On many other occasions as well, the U.S.
Supreme Court has said that the issue of when regulation
constitutes a taking is a matter of considering the facts in
each case. x x x.
What is crucial in judicial consideration of regulatory takings
is that government regulation is a taking if it leaves no
reasonable economically viable use of property in a manner
that interferes with reasonable expectations for use. A
regulation that permanently denies all economically
beneficial or productive use of land is, from the owner's point
of view, equivalent to a "taking" unless principles of nuisance
or property law that existed when the owner acquired the
land make the use prohibitable. When the owner of real
property has been called upon to sacrifice all economically
beneficial uses in the name of the common good, that is, to
leave his property economically idle, he has suffered a taking.
xxxx
A restriction on use of property may also constitute a "taking"
if not reasonably necessary to the effectuation of a
substantial public purpose or if it has an unduly harsh impact
on the distinct investment-backed expectations of the
owner.44 (Citations omitted)
The petitioner herein attempts to prove its claim that the
pertinent provisions of R.A. Nos. 9257 and 9442 amount to
taking by presenting financial statements purportedly
showing financial losses incurred by them due to the
adoption of the tax deduction scheme.
For the petitioner's clarification, the presentation of the
financial statement is not of compelling significance in
justifying its claim for just compensation. What is imperative
is for it to establish that there was taking in the constitutional
sense or that, in the imposition of the mandatory discount,
the power exercised by the state was eminent domain.
According to Republic of the Philippines v. Vda. de
Castellvi,45five circumstances must be present in order to
qualify "taking" as an exercise of eminent domain. First, the
expropriator must enter a private property. Second, the
entrance into private property must be for more than a
momentary period. Third, the entry into the property should
be under warrant or color of legal authority. Fourth, the
property must be devoted to a public use or otherwise
informally appropriated or injuriously affected. Fifth, the
utilization of the property for public use must be in such a
way as to oust the owner and deprive him of all beneficial
enjoyment of the property. 46
The first requirement speaks of entry into a private property
which clearly does not obtain in this case. There is no private
property that is; invaded or appropriated by the State. As it is,
the petitioner precipitately deemed future profits as private
property and then proceeded to argue that the State took it
away without full compensation. This seemed preposterous
considering that the subject of what the petitioner supposed
as taking was not even earned profits but merely an
expectation of profits, which may not even occur. For obvious
reasons, there cannot be taking of a contingency or of a mere
possibility because it lacks physical existence that is necessary
before there could be any taking. Further, it is impossible to
quantify the compensation for the loss of supposed profits
before it is earned.
The supposed taking also lacked the characteristics of
permanence 47 and consistency.1âwphi1 The presence of these
characteristics is significant because they can establish that the
effect of the questioned provisions is the same on all
establishments and those losses are indeed its unavoidable
consequence. But apparently these indications are wanting in
this case. The reason is that the impact on the establishments
varies depending on their response to the changes brought
about by the subject provisions. To be clear, establishments,
are not prevented from adjusting their prices to accommodate
the effects of the granting of the discount and retain their
profitability while being fully compliant to the laws. It follows
that losses are not inevitable because establishments are free
to take business measures to accommodate the contingency.
Lacking in permanence and consistency, there can be no taking
in the constitutional sense. There cannot be taking in one
establishment and none in another, such that the former can
claim compensation but the other may not. Simply told, there
is no taking to justify compensation; there is only poor business
decision to blame.
There is also no ousting of the owner or deprivation of
ownership. Establishments are neither divested of ownership
of any of their properties nor is anything forcibly taken from
them. They remain the owner of their goods and their profit or
loss still depends on the performance of their sales.
Apart from the foregoing, covered establishments are also
provided with a mechanism to recoup the amount of discounts
they grant the senior citizens and PWDs. It is provided in
Section 4(a) of R.A. No. 9257 and Section 32 of R.A. No. 9442
that establishments may claim the discounts as "tax deduction
based on the net cost of the goods sold or services rendered."
Basically, whatever amount was given as discount, covered
establishments may claim an equal amount as an expense or
tax deduction. The trouble is that the petitioner, in protesting
the change in the tax treatment of the discounts, apparently
seeks tax incentive and not merely a return of the amount
given as discounts. It premised its interpretation of financial
losses in terms of the effect of the change in the tax treatment
of the discount on its tax liability; hence, the claim that the
measure was confiscatory. However, as mentioned earlier in
the discussion, loss of profits is not the inevitable result of the
change in tax treatment of the discounts; it is more
appropriately a consequence of poor business decision.
It bears emphasizing that the law does not place a cap on the
amount of mark up that covered establishments may impose
on their items. This rests on the discretion of the establishment
which, of course, is expected to put in the price of the
overhead costs, expectation of profits and other considerations
into the selling price of an item. In a simple illustration, here
is Drug A, with acquisition cost of ₱8.00, and selling price of
₱10.00. Then comes a law that imposes 20% on senior citizens
and PWDs, which affected Establishments 1, 2 and 3. Let us
suppose that the approximate number of patrons who
purchases Drug A is 100, half of which are senior citizens and
PWDs. Before the passage of the law, all of the establishments
are earning the same amount from profit from the sale Sales
of Drug A, viz.:

Before the passage of the law: 100 x ₱10.00 = ₱1,000.00

Drug A Deduction: ₱112.00

Acquisition cost ₱8.00 Profit: ₱208.00

Selling price ₱10.00
For its part, Establishment 3 raised the mark up on Drug A to
Number of patrons 100 only ₱3.00 just to even out the effect of the law. This measure
left a negligible effect on its profit, but Establishment 3 took it
as a social duty: to share in the cause being promoted by the
Sales:
government while still maintaining profitability.

100 x ₱10.00 = ₱1,000.00 Establishment 3

Profit: ₱200 Drug A

After the passage of the law, the three establishments Acquisition cost ₱8.00
reacted differently. Establishment 1 was passive and Selling price ₱11.20
maintained the price of Drug A at ₱8.00 which
understandably resulted in diminution of profits. Number of patrons 100
Senior Citizens/PWD 50
Establishment 1

Drug A Sales

Acquisition cost ₱8.00 100 x ₱10.00 = ₱1,000.00

Selling price ;₱10.00
Deduction: ₱110.00
Number of patrons 100
Senior Citizens/PWD 50 Profit: ₱190.00

Sales The foregoing demonstrates that it is not the law per se which
occasioned the losses in the covered establishments but bad
business I judgment. One of the main considerations in making
100 x ₱10.00 = ₱1,000.00
business decisions is the law because its effect is widespread
and inevitable. Literally, anything can be a subject of legislation.
Deduction: ₱100.00
It is therefore incumbent upon business managers to cover this
contingency and consider it in making business strategies. As
Profit: ₱100.00 shown in the illustration, the better responses were
exemplified by Establishments 2 and 3 which promptly put in
On the other hand, Establishment 2, mindful that the new law the additional costs brought about by the law into the price
will affect the profitability of the business, made a calculated of Drug A. In doing so, they were able to maintain the
decision by increasing the mark up of Drug A to ₱3.20, profitability of the business, even earning some more, while at
instead of only ₱2.00. This brought a positive result to the the same time being fully compliant with the law. This is not to
earnings of the company. mention that the illustration is even too simplistic and not' the
most ideal since it dealt only with a single drug being
Establishment 2
purchased by both regular patrons and senior citizens and
PWDs. It did not consider the accumulated profits from the
Drug A
other medical and non-medical products being sold by the
establishments which are expected to further curb the effect of
Acquisition cost ;₱8.00 the granting of the discounts in the business.
Selling price ₱11.20
It is therefore unthinkable how the petitioner could have
Number of patron 100 suffered losses due to the mandated discounts in R.A. Nos.
Senior Citizens/PWDs 50 9257 and 9442, when a fractional increase in the prices of
items could bring the business standing at a balance even with
the introduction of the subject laws. A level adjustment in the
pricing of items is a reasonable business measure to take in
order to adapt to the contingency. This could even make
establishments earn more, as shown in the illustration, since
every fractional increase in the price of covered items
translates to a wider cushion to taper off the effect of the
granting of discounts and ultimately results to additional
profits gained from the purchases of the same items by
regular patrons who are not entitled to the discount. Clearly,
the effect of the subject laws in the financial standing of
covered companies depends largely on how they respond and
forge a balance between profitability and their sense of social
responsibility. The adaptation is entirely up to them and they
are not powerless to make adjustments to accommodate the
subject legislations.
Still, the petitioner argues that the law is confiscatory in the
sense that the State takes away a portion of its supposed
profits which could have gone into its coffers and utilizes it
for public purpose. The petitioner claims that the action of
the State amounts to taking for which it should be
compensated.
To reiterate, the subject provisions only affect the petitioner's
right to profit, and not earned profits. Unfortunately for the
petitioner, the right to profit is not a vested right or an
entitlement that has accrued on the person or entity such
that its invasion or deprivation warrants compensation.
Vested rights are "fixed, unalterable, or irrevocable."48 More
extensively, they are depicted as follows:
Rights which have so completely and definitely accrued to or
settled in a person that they are not subject to be defeated or
cancelled by the act of any other private person, and which it
is right and equitable that the government should recognize
and protect, as being lawful in themselves, and settled
according to the then current rules of law, and of which the
individual could not be deprived arbitrarily without injustice,
or of which he could not justly be deprived otherwise than by
the established methods of procedure and for the public
welfare. x x x A right is not 'vested' unless it is more than a
mere expectation based on the anticipated continuance of
present laws; it must be an established interest in property,
not open to doubt. x x x To be vested in its accurate legal
sense, a right must be complete and consummated, and one
of which the person to whom it belongs cannot be divested
without his consent.x x x.49 (Emphasis ours)
Right to profits does not give the petitioner the cause of
action to ask for just compensation, it being only an inchoate
right or one that has not fully developed50 and therefore
cannot be claimed as one's own. An inchoate right is a mere
expectation, which may or may not come into existence. It is
contingent as it only comes "into existence on an event or
condition which may not happen or be performed until some
other event may prevent their vesting."51Certainly, the
petitioner cannot claim confiscation or taking of something
that has yet to exist. It cannot claim deprivation of profit
before the consummation of a sale and the purchase by a
senior citizen or PWD.
Right to profit is not an accrued right; it is not fixed, absolute
nor indefeasible. It does not come into being until the
occurrence or realization of a condition precedent. It is a mere
"contingency that might never eventuate into a right. It stands
for a mere possibility of profit but nothing might ever be
payable under it."52
The inchoate nature of the right to profit precludes the
possibility of compensation because it lacks the quality or
characteristic which is necessary before any act of taking or
expropriation can be effected. Moreover, there is no yardstick
fitting to quantify a contingency or to determine compensation
for a mere possibility. Certainly, "taking" presupposes the
existence of a subject that has a quantifiable or determinable
value, characteristics which a mere contingency does not
possess.
Anent the question regarding the shift from tax credit to tax
deduction, suffice it is to say that it is within the province of
Congress to do so in the exercise of its legislative power. It has
the authority to choose the subject of legislation, outline the
effective measures to achieve its declared policies and even
impose penalties in case of non-compliance. It has the sole
discretion to decide which policies to pursue and devise means
to achieve them, and courts often do not interfere in this
exercise for as long as it does not transcend constitutional
limitations. "In performing this duty, the legislature has no
guide but its judgment and discretion and the wisdom of
experience."53 In Carter v. Carter Coal Co.,54legislative
discretion has been described as follows:
Legislative congressional discretion begins with the choice of
means, and ends with the adoption of methods and details to
carry the delegated powers into effect. x x x [W]hile the powers
are rigidly limited to the enumerations of the Constitution, the
means which may be employed to carry the powers into effect
are not restricted, save that they must be appropriate, plainly
adapted to the end, and not prohibited by, but consistent with,
the letter and spirit of the Constitution. x x x. 55 (Emphasis ours)
Corollary, whether to treat the discount as a tax deduction or
tax credit is a matter addressed to the wisdom of the
legislature. After all, it is within its prerogative to enact laws
which it deems sufficient to address a specific public concern.
And, in the process of legislation, a bill goes through rigorous
tests of validity, necessity and sufficiency in both houses of
Congress before enrolment. It undergoes close scrutiny of the
members of Congress and necessarily had to surpass the
arguments hurled against its passage. Thus, the presumption of
validity that goes with every law as a form of deference to the
process it had gone through and also to the legislature's
exercise of discretion. Thus, in lchong, etc., et al. v. Hernandez)
etc., and Sarmiento,56the Court emphasized, thus:
It must not be overlooked, in the first place, that the
legislature, which is the constitutional repository of police
power and exercises the prerogative of determining the policy
of the State, is by force of circumstances primarily the judge of
necessity, adequacy or reasonableness and wisdom, of any
law promulgated in the exercise of the police power, or of the
measures adopted to implement the public policy or to
achieve public interest.x x x.57 (Emphasis ours)
The legislature may also grant rights and impose additional
burdens: It may also regulate industries, in the exercise of
police power, for the protection of the public. R.A. Nos. 9257
and 9442 are akin to regulatory laws, the issuance of which is
within the ambit of police power. The minimum wage law,
zoning ordinances, price control laws, laws regulating the
operation of motels and hotels, laws limiting the working
hours to eight, and the like fall under this category. 58
Indeed, regulatory laws are within the category of police
power measures from which affected persons or entities
cannot claim exclusion or compensation. For instance, private
establishments cannot protest that the imposition of the
minimum wage is confiscatory since it eats up a considerable
chunk of its profits or that the mandated remuneration is not
commensurate for the work done. The compulsory nature of
the provision for minimum wages underlies the effort of the
State; as R.A. No. 672759 expresses it, to promote
productivity-improvement and gain-sharing measures to
ensure a decent standard of living for the workers and their
families; to guarantee the rights of labor to its just share in
the fruits of production; to enhance employment generation
in the countryside through industry dispersal; and to allow
business and industry reasonable returns on investment,
expansion and growth, and as the Constitution expresses it,
to affirm labor as a primary social economic force. 60
Similarly, the imposition of price control on staple goods in
R.A. No. 758161 is likewise a valid exercise of police power
and affected establishments cannot argue that the law was
depriving them of supposed gains. The law seeks to ensure
the availability of basic necessities and prime commodities at
reasonable prices at all times without denying legitimate
business a fair return on investment. It likewise aims to
provide effective and sufficient protection to consumers
against hoarding, profiteering and cartels with respect to the
supply, distribution, marketing and pricing of said goods,
especially during periods of calamity, emergency, widespread
illegal price manipulation and other similar situations.62
More relevantly, in Manila Memorial Park, Inc.,63it was ruled
that it is within the bounds of the police power of the state to
impose burden on private entities, even if it may affect their
profits, such as in the imposition of price control measures.
There is no compensable taking but only a recognition of the
fact that they are subject to the regulation of the State and
that all personal or private interests must bow down to the
more paramount interest of the State.
This notwithstanding, the regulatory power of the State does
not authorize the destruction of the business. While a
business may be regulated, such regulation must be within
the bounds of reason, i.e., the regulatory ordinance must be
reasonable, and its provision cannot be oppressive
amounting to an arbitrary interference with the business or
calling subject of regulation. A lawful business or calling may
not, under the guise of regulation, be unreasonably
interfered with even by the exercise of police power. 64 After
all, regulation only signifies control or restraint, it does not
mean suppression or absolute prohibition. Thus, in Philippine
Communications Satellite Corporation v. Alcuaz, 65the Court
emphasized:
The power to regulate is not the power to destroy useful and
harmless enterprises, but is the power to protect, foster,
promote, preserve, and control with due regard for the interest,
first and foremost, of the public, then of the utility and of its
patrons. Any regulation, therefore, which operates as an
effective confiscation of private property or constitutes an
arbitrary or unreasonable infringement of property rights is
void, because it is repugnant to the constitutional guaranties of
due process and equal protection of the laws. 66 (Citation
omitted)
Here, the petitioner failed to show that R.A. Nos. 9257 and
9442, under the guise of regulation, allow undue interference
in an otherwise legitimate business.1avvphi1 On the contrary,
it was shown that the questioned laws do not meddle in the
business or take anything from it but only regulate its
realization of profits.
The subject laws do not violate the
equal protection clause
The petitioner argues that R.A. Nos. 9257 and 9442 are
violative of the equal protection clause in that it failed to
distinguish between those who have the capacity to pay and
those who do not, in granting the 20% discount. R.A. No. 9257,
in particular, removed the income qualification in R.A. No. 7432
of'₱60,000.00 per annum before a senior citizen may be
entitled to the 20o/o discount.
The contention lacks merit.
The petitioner's argument is dismissive of the reasonable
qualification on which the subject laws were based. In City of
Manila v. Hon. Laguio, Jr., 67 the Court emphasized:
Equal protection requires that all persons or things similarly
situated should be treated alike, both as to rights conferred
and responsibilities imposed. Similar subjects, in other words,
should not be treated differently, so as to give undue favor to
some and unjustly discriminate against others. The guarantee
means that no person or class of persons shall be denied the
same protection of laws which is enjoyed by other persons or
other classes in like circumstances.68 (Citations omitted)
"The equal protection clause is not infringed by legislation
which applies only to those persons falling within a specified
class. If the groupings are characterized by substantial
distinctions that make real differences, one class may be
treated and regulated differently from another."69 For a
classification to be valid, (1) it must be based upon substantial
distinctions, (2) it must be germane to the purposes of the law,
(3) it must not be limited to existing conditions only, and (4) it
must apply equally to all members of the same class. 70
To recognize all senior citizens as a group, without distinction
as to income, is a valid classification. The Constitution itself
considered the elderly as a class of their own and deemed it a
priority to address their needs. When the Constitution declared
its intention to prioritize the predicament of the
underprivileged sick, elderly, disabled, women, and
children,71 it did not make any reservation as to income, race,
religion or any other personal circumstances. It was a blanket
privilege afforded the group of citizens in the enumeration in
view of the vulnerability of their class.
R.A. No. 9257 is an implementation of the avowed policy of
the Constitution to enact measures that protect and enhance
the right of all the people to human dignity, reduce social,
economic, and political inequalities. 72 Specifically, it caters
to the welfare of all senior citizens. The classification is based
on age and therefore qualifies all who have attained the age
of 60. Senior citizens are a class of their own, who are in need
and should be entitled to government support, and the fact
that they may still be earning for their own sustenance should
not disqualify them from the privilege.
It is well to consider that our senior citizens have already
reached the age when work opportunities have dwindled
concurrently as their physical health.1âwphi1 They are no
longer expected to work, but there are still those who
continue to work and contribute what they can to the
country. Thus, to single them out and take them out of the
privileges of the law for continuing to strive and earn income
to fend for themselves is inimical to a welfare state that the
Constitution envisions. It is tantamount to penalizing them
for their persistence. It is commending indolence rather than
rewarding diligence. It encourages them to become wards of
the State rather than productive partners.
Our senior citizens were the laborers, professionals and
overseas contract workers of the past. While some may be
well to do or may have the capacity to support their
sustenance, the discretion to avail of the privileges of the law
is up to them. But to instantly tag them. as undeserving of the
privilege would be the height of ingratitude; it is an outright
discrimination.
The same ratiocination may be said of the recognition of
PWDs as a class in R.A. No. 9442 and in granting them
discounts.1âwphi1 It needs no further explanation that PWDs
have special needs which, for most,' last their entire lifetime.
They constitute a class of their own, equally deserving of
government support as our elderlies. While some of them
maybe willing to work and earn income for themselves, their
disability deters them from living their full potential. Thus,
the need for assistance from the government to augment the
reduced income or productivity brought about by their
physical or intellectual limitations.
There is also no question that the grant of mandatory
discount is germane to the purpose of R.A. Nos. 9257 and
9442, that is, to adopt an integrated and comprehensive
approach to health development and make essential goods
and other social services available to all the people at
affordable cost, with special priority given to the elderlies and
the disabled, among others. The privileges granted by the
laws ease their concerns and allow them to live more
comfortably.
The subject laws also address a continuing concern of the
government for the welfare of the senior citizens and PWDs. It
is not some random predicament but an actual, continuing and
pressing concern that requires preferential attention. Also, the
laws apply to all senior citizens and PWDs, respectively,
without further distinction or reservation. Without a doubt, all
the elements for a valid classification were met.
The definitions of "disabilities" and
"PWDs" are clear and unequivocal
Undeterred, the petitioner claims that R.A. No. 9442 is
ambiguous particularly in defining the terms "disability" and
"PWDs," such that it lack comprehensible standards that men
of common intelligence must guess at its meaning. It likewise
bewails the futility of the given safeguards to prevent abuse
since government officials who are neither experts nor
practitioners of medicine are given the authority to issue
identification cards that authorizes the granting of the
privileges under the law.
The Court disagrees.
Section 4(a) of R.A. No. 7277, the precursor of R.A. No. 94421
defines "disabled persons" as follows:
(a) Disabled persons are those suffering from restriction or
different abilities, as a result of a mental, physical or sensory
impairment, to perform an activity in the manner or within the
range considered normal for a human being[.]
On the other hand, the term "PWDs" is defined in Section 5.1
of the IRR of R.A. No. 9442 as follows:
5.1. PersonswithDisability are those individuals defined under
Section 4 of [R.A. No.] 7277 [or] An Act Providing for the
Rehabilitation, Self-Development and Self-Reliance of Persons
with Disability as amended and their integration into the
Mainstream of Society and for Other Purposes. This is defined
as a person suffering from restriction or different abilities, as a
result of a mental, physical or sensory impairment, to perform
an activity in a manner or within the range considered normal
for human being. Disability shall mean (1) a physical 1or mental
impairment that substantially limits one or more psychological,
physiological or anatomical function of an individual or
activities of such individual; (2) a record of such an impairment;
or (3) being regarded as having such an impairment.
The foregoing definitions have a striking conformity with the
definition of "PWDs" in Article 1 of the United Nations
Convention on the Rights of Persons with Disabilities which
reads:
Persons with disabilities include those who have long-term
physical, mental, intellectual or sensory impairments which in
interaction with various barriers may hinder their full and
effective participation in society on an equal basis with others.
(Emphasis and italics ours)
The seemingly broad definition of the terms was not without
good reasons. It recognizes that "disability is an evolving
concept"73 and appreciates the "diversity of PWDs."74 The
terms were given comprehensive definitions so as to
accommodate the various forms of disabilities, and not 1. Two "1 x l" recent ID pictures with the names, and signatures
confine it to a particular case as this would effectively exclude or thumb marks at the back of the picture.
other forms of physical, intellectual or psychological
impairments. 2. One (1) Valid ID

Moreover, in Estrada v. Sandiganbayan, 75 it was declared, 3. Document to confirm the medical or disability condition 78
thus: To confirm his disability, the person must obtain a medical
A statute is not rendered uncertain and void merely because certificate or assessment, as the case maybe, issued by a
general terms are used therein, or because of the licensed private or government physician, licensed teacher or
employment of terms without defining them; much less do head of a business establishment attesting to his impairment.
we have to define every word we use. Besides, there is no The issuing entity depends on whether the disability is
positive constitutional or statutory command requiring the apparent or non-apparent. NCDAA.O. No. 001 further
legislature to define each and every word in an enactment. provides:79
Congress is not restricted in the form of expression of its will,
DISABILITY DOCUMENT ISSUING ENTITY
and its inability to so define the words employed in a statute
will not necessarily result in the vagueness or ambiguity of
Apparent
the law so long as the legislative will is clear, or at least, can Medical Licensed Private or
be gathered from the whole act x x x.76 (Citation omitted) Disability Certificate Government Physician

At any rate, the Court gathers no ambiguity in the provisions

of R.A. No. 9442. As regards the petitioner's claim that the School Licensed Teacher duly
law lacked reasonable standards in determining the persons Assessment signed by the School
entitled to the discount, Section 32 thereof is on point as it Principal
identifies who may avail of the privilege and the manner of its
availment. It states: Certificate of  Head of the Bus
Sec. 32. x x x Disability

The abovementioned privileges are available only to persons Establishment

with disability who are Filipino citizens upon submission of  Head of
any of the following as proof of his/her entitlement thereto: Non-Governme
(I) An identification card issued by the city or municipal mayor Organization
or the barangay captain of the place where the persons with
disability resides; Non-Apparent Medical Licensed Private or
Disability Certificate Government Physician
(II) The passport of the persons with disability concerned; or

(III) Transportation discount fare Identification Card (ID)

issued by the National Council for the Welfare of Disabled
Persons (NCWDP).
It is, however, the petitioner's contention that the foregoing
authorizes government officials who had no medical
background to exercise discretion in issuing identification
cards to those claiming to be PWDs. It argues that the
provision lends to the indiscriminate availment of the
privileges even by those who are not qualified.
The petitioner's apprehension demonstrates a superficial
understanding of the law and its implementing rules. To be
clear, the issuance of identification cards to PWDs does not
depend on the authority of the city or municipal mayor, the
DSWD or officials of the NCDA (formerly NCWDP). It is well to
remember that what entitles a person to the privileges of the
law is his disability, the fact of which he must prove to qualify.
Thus, in NCDA Administrative Order (A.O.) No. 001, series of
2008, 77 it is required that the person claiming disability must
submit the following requirements before he shall be issued a
PWD Identification Card:
To provide further safeguard, the Department of Health issued
A.O. No. 2009-0011, providing guidelines for the availment of
the 20% discount on the purchase of medicines by PWDs. In
making a purchase, the individual must present the documents
enumerated in Section VI(4)(b ), to wit:
i. PWD identification card x x x
ii. Doctor's prescription stating the name of the PWD, age, sex,
address, date, generic name of the medicine, dosage form,
dosage strength, quantity, signature over printed name of
physician, physician's address, contact number of physician or
dentist, professional license number, professional tax receipt
number and narcotic license number, if applicable. To
safeguard the health of PWDs and to prevent abuse of [R.A.
No.] 9257, a doctor's prescription is required in the purchase of
over-the-counter medicines. x x x.
iii. Purchase booklet issued by the local social/health office to
PWDs for free containing the following basic information:
a) PWD ID number

b) Booklet control number

c) Name of PWD
d) Sex
e) Address
f) Date of Birth
g) Picture
h) Signature of PWD
i) Information of medicine purchased:
i.1 Name of medicine
i.2 Quantity
i.3 Attending Physician
i.4 License Number
i.5 Servicing drug store name
i.6 Name of dispensing pharmacist
j) Authorization letter of the PWD x x x in case the medicine is
bought by the representative or caregiver of the PWD.
The PWD identification card also has a validity period of only
three years which facilitate in the monitoring of those who
may need continued support and who have been relieved of
their disability, and therefore may be taken out of the
coverage of the law.
At any rate, the law has penal provisions which give
concerned establishments the option to file a case against
those abusing the privilege Section 46(b) of R.A. No. 9442
provides that "[a]ny person who abuses the privileges
granted herein shall be punished with imprisonment of not
less than six months or a fine of not less than Five Thousand
pesos (₱5,000.00), but not more than Fifty Thousand pesos
(₱50,000.00), or both, at the discretion of the court." Thus,
concerned establishments, together with the proper
government agencies, must actively participate in monitoring
compliance with the law so that only the intended
beneficiaries of the law can avail of the privileges.
Indubitably, the law is clear and unequivocal, and the
petitioner claim of vagueness to cast uncertainty in the
validity of the law does not stand.
WHEREFORE, in view of the foregoing disquisition, Section
4(a) of Republic Act No. 9257 and Section 32 of Republic Act
No. 9442 are hereby declared CONSTITUTIONAL.
<<page>>
SO ORDERED.
PERALTA, J.:
This is a Petition for Review on Certiorari under Rule 45[1] of the
Rules of Court seeking the reversal of the Decision[2] dated
August 29, 2013 and Resolution[3] dated January 22, 2014 of
the Court of Appeals in CA-G.R. SP No. 101482, which affirmed
the Decision dated July 2, 2007 and Resolution dated October
31, 2007 of the Office of the President.
Petitioners Mindanao Shopping Destination Corporation, Ace
Hardware Philippines, Inc., International Toyworld, Inc., Star
Appliance Center, Inc., Surplus Marketing Corporation,
Watsons Personal Care Stores (Philippines), Inc. and Supervalue,
Inc. (collectively as petitioners) are corporations duly organized
and existing under and by virtue of Philippine law and engaged
in the retail business of selling general merchandise within the
territorial jurisdiction of Davao City.[4]
The facts are as follows:
On November 16, 2005, respondent Sangguniang
Panglungsod of Davao City (Sanggunian), after due notice and
hearing, enacted the assailed Davao City Ordinance No. 158-05,
Series of 2005, otherwise known as "An Ordinance Approving
the 2005 Revenue Code of the City of Davao, as
Amended”[5] attested to by Vice-Mayor Hon. Luis B. Bonguyan
(respondent Vice-Mayor), as Presiding Officer of
the Sanggunian, and approved by then City Mayor, Hon.
Rodrigo R. Duterte, now the President of the Republic of the
Philippines. The Ordinance took effect after the publication in
the Mindanao Mercury Times, a newspaper of general
circulation in Davao City, for three (3) consecutive days,
December 23, 24 and 25, 2005.[6]
Petitioners' particular concern is Section 69 (d)[7] of the
questioned Ordinance which provides:
Section 69. Imposition of Tax. There is hereby imposed on the
following persons who establish, operate, conduct or maintain
their respective business within the City a graduated business
tax in the amounts prescribed:
xxxx
(d) On Retailers
Gross Sales/Receipts for Rates of Tax Per
the Preceding Year Annum
More than P50,000 but
2%
not over P400,000.00
In excess of P400,000.00 1 ½ %
However, barangays shall have the exclusive power to levy
taxes on stores where the gross sales or receipts of the
preceding calendar year does not exceed Fifty Thousand Pesos
(P50,000) subject to existing laws and regulations.
xxx
Petitioners claimed that they used to pay only 50% of 1% of
the business tax rate under the old Davao City Ordinance No.
230, Series of 1990, but in the assailed new ordinance, it will
require them to pay a tax rate of 1.5%, or an increase of 200%
from the previous rate. Petitioners believe that the increase is
not allowed under Republic Act (RA) No. 7160, The Local
Government Code (LGC). Consequently, invoking the LGC,
petitioners appealed to the DOJ, docketed as MTO-DOJ Case
No. 02-2006, asserting the unconstitutionality and illegality of
Section 69 (d), for being unjust, excessive, oppressive,
confiscatory and contrary to the 1987 Constitution and the
provisions of the LGC. Petitioners prayed that the questioned
ordinance, particularly Section 69 (d) thereof be declared as
null and void ab initio.
For lack of material time, the appeal was filed and served
through registered mail. Unfortunately, when the appeal was
mailed on January 24, 2006, the verification/certification of
non-forum shopping and the postal money order, covering
the payment of filing fees were not attached. The
attachments were mailed the next day, January 25, 2006,
together with a covering manifestation. Petitioners received
respondents' Comment on the appeal on March 2, 2006; and,
on June 27, 2006, petitioners received respondents'
manifestation alleging that the appeal should be deemed
filed out of time for failure to pay the filing fees within the
prescribed period.
In a Resolution[8] dated July 12, 2006, the DOJ-OSec dismissed
the appeal and denied petitioners' motion for
reconsideration.[9]
Meanwhile, on September 26, 2006, Davao City Ordinance No.
0253, Series of 2006 (Amended Ordinance), amended Section
69 (d) of the questioned ordinance. In it, tax rate on retailers
with gross receipts in excess of P400,000.00 was reduced
from one and one-half percent (1 ½%) to one and one-fourth
percent (1 ¼% Section 69 (d), as amended, now reads:
(d) On Retailers
Gross Sales/Receipts for Rates of Tax Per
the Preceding Year Annum
More than P50,000 but
2%
not over P400,000.00
In excess of P400,000.00 1 ¼ %
However, barangays shall have the exclusive power to levy
taxes on stores where the gross sales or receipts of the
preceding calendar year does not exceed Fifty Thousand
Pesos (P50,000) subject to existing laws and regulations.
With the above development, respondents maintained that
the adjustment in the tax base no longer exceeds the
limitation as set forth in Section 191 of the LGC considering
that the current Davao City tax rate of 1.25% on retailers with
gross receipts/sales of over P400,000.00 under the assailed
ordinance is way below or 0.25% short of the maximum tax
rates of 1.5% for cities sanctioned by the LGC. Respondents
insist that there is thus no increase or adjustment to speak of
under the premises which is violative of Section 191 of the LGC.
From the dismissal of the appeal and the denial of their motion
for reconsideration, petitioners filed an appeal before the
Office of the President (OP). On July 2, 2007, the OP, finding no
merit on petitioners' appeal, dismissed the latter.[10] Petitioners
moved for reconsideration, but was denied anew in a
Resolution[11] dated October 31, 2007.
Unperturbed, petitioners filed a petition for review before the
Court of Appeals.[12]
On August 29, 2013, in the disputed Decision of the appellate
court, the latter dismissed the petition, to wit:
WHEREFORE, the Petition is DISMISSED. The Decision dated
July 2, 2007 and the Resolution dated October 31, 2007 of the
Office of the President in O.P. Case no. 06-L-425
are AFFIRMED.
SO ORDERED. [13]
Petitioners moved for reconsideration, but were denied in a
Resolution[14] dated January 22, 2014. Thus, the instant petition
for review on certiorari under Rule 45 of the Rules of Court
raising the following issues:
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
DESPITE THE PATENT ILLEGALITY AND UNCONSTITUTIONALITY,
UPHELD THE VALIDITY OF THE ORDINANCE AS WELL AS THE
LOCAL SANGGUNIAN'S ARBITRARY EXERCISE OF ITS POWER TO
TAX
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
ERRED IN NOT ADDRESSING THE MAIN ISSUE RAISED BY
PETITIONERS AS A CONSTITUTIONAL ISSUE.
WHETHER THE COURT OF APPEALS ERRED IN FAILING TO
APPRECIATE SUBSTANTIAL COMPLIANCE OVER PROCEDURAL
DEFICIENCIES
On the procedural issues, We find that at this stage of the
proceeding, it is futile to belabor on the procedural deficiencies
since the issue of timeliness of the appeal has become moot
and academic considering that petitioners' appeal was given
due course by the OP. In fact, both the OP and the appellate
court decided the appeal on the merits and not merely on
technicality. We will, thus, proceed with the substantive issues
of the instant case.
Petitioners assert that although the maximum rate that may be
imposed by cities on retailers with gross receipts exceeding
P400,000.00 is 1.5% of the gross receipts, the maximum
adjustment which can be applied once every five (5) years, is
only 0.15% or 10% of the maximum rate of 1.5% of the gross
receipts in accordance with Section 191 of the LGC. However,
petitioners lamented that the assailed Ordinance increased the
tax rate on them, as retailers, by more than the maximum
allowable rate of 0.15%, from 50% of 1% (0.5%) of the gross
receipts to 1.5% (now, 1.25%). of the gross receipts, thus,
violating Section 191 in relation to Sections 143 and 151 of in the amount of:
the Code.
400,000.00 or less 2.00%
A perusal of the assailed new ordinance, particularly Section
69 (a) and (b) of Davao City Ordinance No. 158-05, Series of More than P400,000.00 1.00 %
2005, provides: xxxx
Section 69. Imposition of Tax. - There is hereby imposed on Section 151. Scope of Taxing Powers. - Except as otherwise
the following persons who establish, operates, conduct or provided in this Code, the city, may levy the taxes, fees, and
maintain their respective business within the city a graduated charges which the province or municipality may impose:
tax in the amounts hereafter prescribed: Provided, however, That the taxes, fees and charges levied and
xxxx collected by highly urbanized and independent component
cities shall accrue to them and distributed in accordance with
(b) On WHOLESALERS, DISTRIBUTORS, OR DEALERS, in any the provisions of this Code.
article of commerce of whatever kind or nature in accordance
The rates of taxes that the city may levy may exceed the
with the following schedules:
maximum rates allowed for the province or municipality by
Gross Sales/Receipts for not more than fifty percent (50%) except the rates of
Amount of Tax per
the Preceding Calendar professional and amusement taxes.[16]
Annum
Year
We disagree.
xxxx
Under the old tax ordinance of Davao City, Ordinance No. 230,
At a rate of fifty-five Series of 1990, wholesalers and retailers were grouped as one,
(55%) thus, the tax base and tax rate imposed upon retailers were the
In excess P2,000,00.00
percent of one percent same as that imposed upon wholesalers. Subsequently, with
(1%) the implementation of Republic Act No. 7160, otherwise
known as the Local Government Code of the Philippines, the
xxxx latter authorized a difference in the tax treatment between
(d) On RETAILERS: wholesale and retail businesses. Where before under the old
tax ordinance, Davao City retailers only paid ½ of 1% of the
Gross Sales/Receipts for gross sales/receipts exceeding P2,000,000.00, now under the
Amount of Tax per
the Preceding Calendar new tax ordinance, retailers would have to pay 1.25% of the
Annum
Year gross sales/receipts exceeding P400,000.00.

More than P50,000.00 However, it must be emphasized that the assailed new tax
but not over 2% ordinance is actually the initial implementation by the Davao
P400,000.00 City local government of the tax provisions of R.A 7160 (LGC)
considering that the old tax ordinance of Davao City was
In excess of P400,000.00 1 1/2%
enacted in 1990, or prior to the effectivity of the LGC on
x x x[15] January 1, 1992. It then would explain why the old tax
ordinance of Davao City lumped under one business tax and
Petitioners claim that the assailed tax ordinance is violative of under the same set of tax rates these two business activities
the Local Government Code, specifically Section 191, in - retail and wholesale. There is no provision under Batas
relation to Sections 143 and 151, to wit: Pambansa Blg. 337,[17] the old LGC, which specifically define
these business activities. Under Section 131 of R.A.
Section 191. Authority of Local Government Units to Adjust
7160,[18] however, wholesale andretail are now defined,
Rates of Tax Ordinances. - Local government units shall have
classified and taxed differently. It cannot be said then that
the authority to adjust the tax rates as prescribed herein not
Davao City, on its own, deliberately grouped these two
oftener than once every five (5) years, but in no case shall
business activities under one business tax. To reiterate, it is
such adjustment exceed ten percent (10%) of the rates fixed
only with the implementation of R.A. 7160 that these two
under this Code.
business activities, i.e., wholesale and retail, were specifically
Section 143 (d). Tax on Business. -The municipality may defined, classified in different categories, and, thus, taxed
impose taxes on the following businesses: differently. Corollarily, it is only sound that by
analogy, wholesalers and retailers should likewise be treated
xxxx and classified differently to provide accuracy to the very
meaning of its rootword and to give meaning to the intention
(d) On retailers
of the law.
With gross sales or
Rate of Tax Per Annum Thus, considering that wholesale and retail were defined and
receipts for the
classified differently under the LGC, it is then logical that they
preceding calendar year
are, likewise, given separate and distinct tax base. Article II, 15,000.00 or more
Sections 142 and 143 of the LGC provides: but less than 275.00
20,000.00
ARTICLE I
Municipalities 20,000.00 or more
but less than 330.00
Section 142. Scope of Taxing Powers. - Except as otherwise
30,000.00
provided in this Code, municipalities may levy taxes, fees, and
charges not otherwise levied by provinces. 30,000.00 or more
but less than 440.00
Section 143. Tax on Business. -The municipality may impose 40,000.00
taxes on the following businesses:
40,000.00 or more
xxxx but less than 660.00
(b) On wholesalers, distributors, or dealers in any article of 50,000.00
commerce of whatever kind or nature in accordance with the 50,000.00 or more
following schedule: but less than 990.00
With gross sales or 75,000.00
Amount
receipts for the 75,000.00 or more
of
preceding calendar but less than
Tax Per 1,320.00
year in the amount
Annum 100,000.00
of:
100,000.00 or more
but less than 1,870.00
Less than P1,000.00 18 150,000.00

P1,000.00 or more 150,000.00 or more

but less than 33.00 but less than 2,420.00
2,000.00 200,000.00

2,000.00 or more 200,000.00 or more

but less than 50.00 but less than 3,300.00
3,000.00 300,000.00

3,000.00 or more 300,000.00 or more

but less than 72.00 but less than 4,400.00
4,000.00 500,000.00

4,000.00 or more 500,000.00 or more

but less than 100.00 but less than 6,600.00
5,000.00 750,000.00

5,000.00 or more 750,000.00 or more

but less than 121.00 but less than 8,800.00
6,000.00 1,000,000.00

6,000.00 or more 1,000,000.00 or

but less than 143.00 more but less than 10,000.00
7,000.00 2,000,000.00

7,000.00 or more 2,000,000.00 or more at a rate not

but less than 165.00 exceeding fifty percent (50%) of
8,000.00 one percent (1%).

8,000.00 or more xxxx

but less than 187.00 (d) On retailers.
10,000.00
With gross
10,000.00 or more sales or Rate of Tax
but less than 220.00 receipts for the Per Annum
15,000.00 preceding
calendar year
in the amount
of:
P400,000.00 or
2%
less
more than
1%
P400,000.00
Provided, however, That barangays shall have the exclusive
power to levy taxes, as provided under Section 152 hereof,
on gross sales or receipts of the preceding calendar year of
Fifty thousand pesos (P50,000.00) or less, in the case of cities,
and Thirty thousand pesos (P30,000.00) or less, in the case of
municipalities.[19]
From the foregoing, it can be shown that the assailed
ordinance does not violate the limitation imposed by Section
191 of the LGC on the adjustment of tax rate for the following
reasons:
Firstly, Section 191 of the LGC presupposes that the following
requirements are present for it to apply, to wit: (i) there is a
tax ordinance that already imposes a tax in accordance with
the provisions of the LGC; and (ii) there is a second tax
ordinance that made adjustment on the tax rate fixed by the
first tax ordinance. In the instant case, both elements are not
present.
As to the first requirement, it cannot be said that the old tax
ordinance (first ordinance) was imposed in accordance with
the provisions of the LGC. To reiterate, the old tax ordinance
of Davao City was enacted before the LGC came into law.
Thus, the assailed new ordinance, Davao City Ordinance No.
158-05, Series of 2005 was actually the first to impose the tax
on retailers in accordance with the provisions of the LGC.
As to the second requirement, the new tax ordinance (second
ordinance) imposed the new tax base and the new tax rate as
provided by the LGC for retailers. It must be emphasized that
a tax has two components, a tax base and a tax rate. However,
Section 191 contemplates a situation where there is already
an existing tax as authorized under the LGC and only a change
in the tax rate would be effected. Again, the new ordinance
Davao City provided, not only a tax rate, but also a tax base
that were appropriate for retailers, following the parameters
provided under the LGC. Suffice it to say, the second
requirement is absent. Thus, given the absence of the above
two requirements for the application of Section 191 of the
LGC, there is no reason for the latter to cover a situation
where the ordinance, as in this case, was an initial
implementation of R.A. 7160.
Secondly, Section 191 of the LGC will not apply because with
the assailed tax ordinance, there is no outright or unilateral
increase of tax to speak of. The resulting increase in the tax
rate for retailers was merely incidental. When Davao City
enacted the assailed ordinance, it merely intended to rectify
the glaring error in the classification of wholesaler and
retailer in the old ordinance. Petitioners are retailers as
contemplated by the LGC. Petitioners never disputed their
classification as retailers.[20] Thus, being retailers, they are
subject to the tax rate provided under Section 69 (d) and not
under Section 69 (b) of the assailed ordinance. In effect, under
the assailed ordinance as amended, petitioners as retailers are
now assessed at the tax rate of one and one-fourth (1 ¼%)
percent on their gross sales and not the fifty-five (55%) percent
of one (1%) percent on their gross sales since the latter tax rate
is only applicable to wholesalers, distributors, or dealers. The
assailed ordinance merely imposes and collects the proper and
legal tax due to the local government pursuant to the LGC.
While it may appear that there was indeed a significant
adjustment on the tax rate of retailers which affected the
petitioners, it must, however, be emphasized that the
adjustment was not by virtue of a unilateral increase of the tax
rate of petitioners as retailers, but again, merely incidental as a
result of the correction of the classification of wholesalers and
retailers and its corresponding tax rates in accordance with the
provisions of the LGC.
Indeed, as correctly pointed out by the appellate court, Section
191 is a limitation upon the adjustment, specifically on the
increase in the tax rates imposed by the local government units.
We quote the appellate court's ruling with approval, to wit:
x x x Section 191 has no bearing in the instant case because
what actually took place in the questioned Ordinance was the
correction of an erroneous classification, and not, an upward
adjustment or increase of tax rates. The fact that there
occurred an increase in payment due to the reclassification is
of no moment, because: (1) reclassification is not prohibited; (2)
reclassification was made to effect a correction; and (3) the
taxes imposed upon the reclassified taxpayers, was not
amended or increased from that stated in the Local
Government Code. And, it is worthwhile to mention that
petitioners have not denied that they are engaged in the retail
business, hence, the reclassification was right, proper and
legal.[21]
Couched in similar conclusion is the ruling of the Office of the
President where in the same manner it agreed that the
adjustment in the tax rate of petitioners did not violate the
provisions of the LGC and the Constitution. The pertinent
portion of the decision reads, thus:
Secondly, the office a quo correctly ruled that the City
Government of Davao merely reclassified taxpayers earlier
treated as one class into separate classes thus subjecting them
to different tax bases and tax rates such that "retailers" are no
longer treated and taxed in the same way as "wholesalers"
unlike in the old ordinance. Distinctly defined from each other,
a different tax treatment for each class of taxpayer is
reasonable. Such being the case, the maximum tax rate and tax
base ceilings provided in Section 143, in relation to Section 151
of the Local Government Code, is not in point as the
prohibition/limitation refers to an adjustment or increase in
the tax rate or tax base for the same class of taxpayer. As held
in PLDT, Inc. vs. City of Davao (399 SCRA 442), "statutes in
derogation of sovereignty such as those containing exemption
from taxation should be strictly construed in favor of the
State."[22]
Thirdly, it must be pointed out that the limitation under
Section 191 of the LGC was provided to guard against
possible abuse of the LGU's power to tax.[23] In this case,
however, strictly speaking, the new tax rate for petitioners as
retailers under the assailed ordinance is not a case where
there was an imposition of a new tax rate, rather there is
merely a rectification of an erroneous classification of
taxpayers and tax rates, i.e., of grouping retailers and
wholesalers in one category, and their corresponding rates.
The amendment of the old tax ordinance was not intended to
abuse the LGU's taxing powers but merely sought to impose
the rates as provided under the LGC as in fact the tax rate
imposed was even lower than the rate authorized by the LGC.
In effect, the assailed ordinance merely corrected the old
ordinance so that it will be in accord with the LGC. To rule
otherwise is tantamount to pronouncing that Davao City can
no longer correct the apparent error in classifying wholesaler
and retailer in the same category under its old tax ordinance.
Such proposition runs counter to the well-entrenched
principle that estoppel does not apply to the government,
especially on matters of taxation. Taxes are the nation's
lifeblood through which government agencies continue to
operate and with which the State discharges its functions for
the welfare of its constituents.[24]
However, while Davao City may rectify and amend their old
tax ordinance in order to give full implementation of the LGC,
it, however, cannot impose a straight 1.25% at its initial
implementation of the LGC in so far as retailers are
concerned. Davao City should, at the very least, start with 1%
(the minimum tax rate) as provided under Section 143 (d) of
the LGC. While Davao City cannot be faulted in failing to
immediately implement the LGC, petitioners cannot likewise
be unjustly prejudiced by its initial implementation of the LGC.
It is but fair and reasonable that Davao City at its initial
implementation of the LGC, impose the tax rates as provided
in Section 143. It is only then that the imposition of the tax
rate on retailers will not be considered as confiscatory or
oppressive, considering that the reclassification of wholesaler
and retailer and their corresponding tax rate being observed
now is in accord with the LGC.
Furthermore, to clarify, the old ordinance, because it
remained unchanged until the new tax ordinance was
enacted in 2005, charged lower tax rates for retailers which
resulted in lower revenues of Davao City. Corollarily, while
there was an increase in the amount of taxes to be paid by
petitioners as retailers, it should not be overlooked that the
retailer has, in fact, benefited already for a long time under
the old tax ordinance because it paid lower taxes due to
Davao City's failure to immediately implement the LGC.
Davao City has already foregone a substantial loss in
revenues as a result of an unadjusted lower tax rate for
retailers. Thus, dictated by justice and fairness, in its initial
attempt to implement the LGC, Davao City should, at the very
least, start with 1% (the minimum tax rate) as provided under
Section 143 (d) of the LGC. Considering that 11 years had
already elapsed from its implementing in 2006, Davao City
could adjust its tax rate twice now which will make its
adjusted tax rate for retailers pegged at 1.2%, in accordance
with Section 191 of the LGC. To clarify, from 2006-2011 (first 5
years), the initial tax rate should start with 1%; from 2011-2016
(next 5 years) - 1.1%, thus, for the years 2017-2021, the tax
adjustment is 1.21%. However, for this purpose, Davao City
should pass an ordinance to give effect to the above-discussed
tax adjustments.
Again, based on the foregoing, Davao City merely implemented
the LGC, albeit it resulted in - an increase in retailer's tax
liability - which nevertheless is not covered by Section 191 of
the LGC. In any case, an ordinance based on reasonable
classification does not violate the constitutional guaranty of the
equal protection of the law. The requirements for a valid and
reasonable classification are: (1) it must rest on substantial
distinctions; (2) it must be germane to the purpose of the law;
(3) it must not be limited to existing conditions only; and (4) it
must apply equally to all members of the same class. For the
purpose of rectifying the erroneous classification of wholesaler
and retailer in the old ordinance in order to conform to the
classification and the tax rates as imposed by the LGC is neither
invalid nor unreasonable. The differentiation of wholesaler and
retailer conforms to the practical dictates of justice and equity
and is not discriminatory within the meaning of the
Constitution. It is inherent in the power to tax that a State is
free to select the subjects of taxation. Inequities which result
from a singling out of one particular class for taxation or
exemption infringe no constitutional limitation.[25]
Settled is the rule that every law, in this case an ordinance, is
presumed valid. To strike down a law as unconstitutional,
petitioner has the burden to prove a clear and unequivocal
breach of the Constitution, which petitioner miserably failed to
do.[26]
In Smart Communications, Inc. v. Municipality of Malvar,
Batangas,[27] citing Lawyers Against Monopoly and Poverty
(LAMP) v. Secretary of Budget and Management,[28] the Court
held, thus:
To justify the nullification of the law or its implementation,
there must be a clear and unequivocal, not a doubtful, breach
of the Constitution. In case of doubt in the sufficiency of proof
establishing unconstitutionality, the Court must sustain
legislation because "to invalidate [a law] based on x x x
baseless supposition is an affront to the wisdom not only of the
legislature that passed it but also of the executive which
approved it." This presumption of constitutionality can be
overcome only by the clearest showing that there was indeed
an infraction of the Constitution, and only when such a
conclusion is reached by the required majority may the Court
pronounce, in the discharge of the duty it cannot escape, that
the challenged act must be struck down.
WHEREFORE, the instant petition is PARTIALLY GRANTED. The
Decision dated August 29, 2013 and the Resolution dated
January 22, 2014 of the Court of Appeals in CA-G.R. SP No.
101482 are hereby AFFIRMED with MODIFICATION in so far as
the tax rate of 1.25% to be imposed on petitioners
is REDUCED to 1.21%.
SO ORDERED.

DEL CASTILLO, J.:
Assailed in this Petition for Review on Certiorari is the April 16,
2012 Decision[1] of the Court of Appeals (CA) in CA-GR. CV Nos.
88723 and 89313. The CA partially granted the appeal by
setting aside the December 29, 2005 Resolution[2] and May 22,
2006 Order[3] of the Regional Trial Court of La Trinidad,
Benguet, Branch 8 (RTC-La Trinidad) which granted the
Motions to Quash Search Warrant (SW) Nos. 05-70 and 05-71
against Zenaida Co, Wilson Tan, Wilbert Tan, Norma Yao, Lino
Sandil, Hemiogenes Pacheco and/or occupants of Benguet
Gas Corporation (Benguet Gas); but affirmed the December
29, 2005 Resolution[4] and March 30, 2006 Order[5] of the
RTC-La Trinidad which granted the Motions to Quash SW Nos,
05-72 and 05-73 against Elena Lao, Imelda Lao, Pompidou
Golangco, Jeremy Wilson Golangco, Carmen Castillo and/or
occupants of Baguio Gas Corporation (Baguio Gas) for
violation of Section 2(a),[6] in relation to Sections 3(c)[7] and
4[8] of Batas Pambansa Bilang 33 (BP 33),[9] as amended, and
for violation of Section 2(c),[10] in relation to Section 4 of BP
33, as amended. Also assailed is the December 12, 2012 CA
Resolution[11] denying the Motion for Partial Reconsideration
of its April 16, 2012 Decision.
Factual Antecedents
In his separate Affidavits[12] dated May 19, 2005, Darwin
Lising (Using), Supervising Agent of the National Bureau of
Investigation-Cordillera Administrative Region (NBI-CAR),
stated that on March 1, 2005, Atty. Genesis Adarlo (Atty.
Adarlo), counsel of private complainants LPG Dealers
Associations (Shellane Dealers Association, Inc., Petron Gasul
Dealers Association, Inc., Totalgaz Dealers Association, Inc.
and Caltex Starflame LPG Dealers Association) requested
assistance from NBI-CAR. for the investigation and if
necessary, the prosecution of persons and/or establishments
in the Cordillera and Mountain Province engaged in illegal
trade of petroleum products and/or sale of underfilled
liquefied petroleum gas (LPG) or possession of underfilled
LPG cylinders in violation of BP 33, as amended.[13]
Lising averred that upon his verification, among the
suspected persons and/or establishments that violated BP 33,
as amended, were Benguet Gas, is located at Km. 14,
Caponga, Tublay, Benguet, and Baguio Gas, which is located
at Km. 3, Naguilian Road, Irisan, Baguio City; based on their
Articles of Incorporation[14] and General Information
Sheet[15] respectively, Benguet Gas is majority-owned and
controlled by Zenaida Co, Wilson Tan, Wilbert Tan, Norma
Yao, Lino Sandil and Hermogenes Pacheco (Benguet Gas
owners); while Baguio Gas is majority-owned and controlled
by Elena Lao, Imelda Lao, Pompidou Golangco, Jeremy Wilson
Golangco and Carmen Castillo (Baguio Gas owners).
Lising also averred that Atty. Adarlo certified that Benguet Gas
and Baguio Gas were not authorized to refill LPG cylinders
bearing the brands of Pilipinas Shell Petroleum Corporation,
Petron Gasul Corporation, Total (Philippines)
Corporation/Superkalan Gaz Corporation, and Caltex
(Philippines), Inc.[16] He added that for several days in March
2005, he and other NBI-CAR operatives, particularly, Security
Officer I William A. Fortea (Fortea), conducted surveillance on
Benguet Gas and Baguio Gas, On April 1, 2005, he and Fortea
brought empty LPG cylinders with assorted brands and
executed "test-buy" operations in both Benguet Gas and
Baguio Gas. He confirmed that he witnessed the actual refilling
of these tanks by the Benguet Gas employees for a total
consideration of P3,300.00; and by the Baguio Gas employees
for P3,650.00.
Upon purchase of said illegally refilled LPG tanks, Lising and
Fortea brought and marked them in their office. Lising also
asserted that such tanks were underfilled and had fake seals.
He added that after the initial test-buy, the NBI-CAR conducted
further surveillance and investigation on Benguet Gas' and
Baguio Gas' illegal activities from the third week of April 2005
up to the second week of May 2005.
On May 19, 2005, on behalf of the People of the Philippines,
Lising filed with the RTC-La Trinidad separate
Applications[17] for Search Warrant (SW) against Benguet Gas
and its owners; and Baguio Gas and its owners (respondents)
for illegal trade of LPG products, and underfilling of LPG
products and/or possession of underfilled LPG cylinders. He
affirmed that Benguet Gas and Baguio Gas were respectively in
control of the following items being utilized, kept, displayed
and/or stored at their respective premises:
Empty/filled Fifty Kilogram (50 Kg.) and/or Twenty-Two
Kilogram (22 Kg.) and/or Eleven Kilogram (11 Kg.) and/or
Five and 5/10 Kilogram (5.5 Kg.) and/or Two and 7/10
Kilogram (2.7 Kg.) [LPG] cylinders being used and/or
intended to be vised for the illegal trading of LPG
A) products, i.e., refilling of the branded LPG cylinders
enumerated hereunder without the written authorization
of their respective companies, [and for the underfilling
beyond authorized limits of LPG products for the purpose
of sale, distribution, transportation, exchange or
barter][18] more particularly described as follows:
Empty/filled Shellane 50 Kg. and/or 11 Kg. LPG
(a) cylinders owned by Pilipinas Shell Petroleum
Corporation;
Empty/filled Petron Gasul 50 Kg. and/or 11 Kg. LPG
(b)
cylinders owned by Petron Corporation;
Empty/filled Petron Gasulette 2.7 Kg. LPG cylinders
(c)
owned by Petron Corporation;
 Empty/filled Totalgaz 50 Kg. and/or 22 Kg. and/or 11
(d)Kg. LPG cylinders owned by Total (Philippines)
Corporation;
Empty/filled Superkalan Gaz 2.7 Kg. LPG cylinders
(e)
owned by Superkalan Gaz Corporation; and
Empty/filled Caltex Starflame 50 Kg. and/or 11 Kg. LPG
(f)
cylinders owned by Caltex Philippines, Inc.;
Machinery and/or equipment, such as but not limited
to, LPG bullet tanks, LPG filling heads, LPG filling scales,
LPG seals bearing the marks of the abovementioned
companies, compressors, pumps, electric switches,
and/or panel boards, being used or intended to be
B)
used for the illegal trading [and for the underfilling
beyond authorized limits x x x for the purpose of sale,
distribution, transportation, exchange or barter][19] of
the abovementioned LPG cylinders owned by the
aforementioned companies;
Invoices, ledgers, journals, delivery receipts, official
receipts, purchase orders, cash and/or check vouchers,
counter-receipts, and all other books of accounts
and/or documents showing the illegal trading [and the
C)
underfilling beyond authorized limits x x x for the
purpose of sale, distribution, transportation, exchange
or barter][20] of the abovementioned LPG cylinders
owned by the aforementioned companies; and
Delivery vehicles, tanker tony, and/or conveyances
being used or intended to be used for the illegal
trading of the abovementioned LPG cylinders owned
by the aforementioned companies;[21] [and for the
D)
underfilling beyond authorized limits of the
above-mentioned LPG cylinders owned by the
aforementioned companies for the purpose of sale,
distribution, transportation, exchange or barter].[22]
Moreover, Lising declared that his SW Applications with the
RTC-La Trinidad included Baguio Gas even if it is located in
Baguio City because of "compelling reasons of urgency,
subject, time, and place." Using explained that a) time is of
essence here as the volume of LPG cylinders being illegally
refilled by Baguio Gas reflected the capacity of its facilities to
perpetrate illegal acts resulting to unhampered illegal trade
of LPG and unhampered underfilling of LPG products or
possession of underfilled LPG cylinders for the purpose of
sale, distribution, exchange or barter; b) the brisk sales of LPG
cylinders may result in the depletion of stocks, leaving
nothing to be seized if an SW will be eventually issued but at
a later date; and, c) the immediate hearing on and issuance of
SW are precautions against possible leakage of information to
Baguio Gas.
On May 19, 2005, the RTC-La Trinidad issued SW Nos. 05-70
and 05-71[23] against Benguet Gas and its owners; and SW Nos.
05-72 and 05-73[24] against respondents. It ordered Lising to
make an immediate search on the above-described premises,
and seize the personal properties subject of the SWs.
On May 20, 2005, Lising served upon Benguet Gas and its
owners, and respondents the corresponding SWs against them.
On the same day, he submitted to the RTC the respective
Consolidated Returns[25] and Inventory Sheets[26] relating to the
SWs. The Inventory Sheets revealed that the following were
the items seized from Benguet Gas:
1) Gas Compressor - 1 unit
2) Pump Motor - 1 unit
3) Hydraulic Operator - 1 unit
4) Filling Scale - 4 unit[s]
5) Filling Heads with Hose - 4 pieces
6) Otex weighing Scale 100 Kg - 1 unit
7) Air Compressor (Vespa) 1.5 HP - 1 unit
8) Air Compressor (Vespa) 2.0 HP - 1 unit
Tampered Cylinders
1) Shell 11 Kg - 9 [Empty]
2) Caltex 11 Kg - 9 [Empty]
3) Caltex 22 Kg - 1 [Empty]
4) GasulllKg - 1 [Empty]
5) Caltex 11 Kg - 1 (Filled)
Grinded Nameplates - 11 Kgs - 9 cylinders[27]
On the other hand, the items seized from Baguio Gas were as
follows;
2 Units Wt. Scale w/o S/N Akiba
8 Units Wt. Scale No Brand Name w/o S/N
1 Unit Corken gas Compressor w/ S/N WC29794
2 Units Blackmer LPG Pump w/ SN - 2526 & BX110252
respectively
1 Unit Truck (Mitsubishi Canter) w/ P/N AHF 968
2 Units Pump Motor - US Electrical Frame# 213T
- Fuji Electric Co. Frame 1325
3 Units Weitex Toledo Wt. Scale - S/N 6844, 11444, & 18058
respectively
1 Unit Air Compressor, Quincy, Color Blue
100 Gasul Cylinders
20 Shellane Cylinders
15 Caltex Cylinders
1 Spare Tire 7.50 x 15 for Mitsubishi Canter PN # AHF968[28]
Lising also filed with the RTC-La Trinidad Motions[29] for
Temporary Custody of the Seized Items alleging that the seized
items were flammable, combustible and hazardous by nature,
and the RTC and/or NBI-CAR were incapable of storing them.
On May 23, 2005, the RTC-La Trinidad granted[30] Lising's
Motions and ordered that the seized items be stored at the
warehouse of Asephil Manufacturing Corporation in Antipolo
deputizing the NBI-CAR to be responsible for its custody. It
noted that such items shall remain in custodia legissubject to
the control of the RTC-La Trinidad.
Thereafter, Benguet Gas and its owners, and respondents
respectively moved for the quashal of the SWs against them.[31]
According to Benguet Gas and its owners, there existed no
probable cause for the issuance of SWs against them; such
SWs failed to describe with particularity the place to be
searched and the items to be seized; and the transfer of the
seized items to another place will cause their deterioration
resulting to business losses and inconvenience.
Meanwhile, respondents argued that the offenses imputed
against them were committed outside the RTC-La Trinidad's
territorial jurisdiction, and there is no showing of any
compelling reason that would warrant the issuance of SWs
against them. They further contended that the SWs were not
supported by probable cause and that they failed to describe
with particularity the place to be searched and the items to
be seized.
On December 29, 2005, the RTC-La Trinidad granted the
respective Motions to Quash SWs filed by Benguet Gas and its
owners, and by respondents.
Lising and private complainants appealed.
On April 16, 2012, the CA partially granted the consolidated
appeal, the dispositive portion of its Decision reads:
WHEREFORE, in view of the foregoing premises, the
consolidated appeal is PARTIALLY GRANTED, thus:
1. We hereby REVERSE and SET ASIDE the Resolution dated
29 December 2005 of the Regional Trial Court of La Trinidad,
Benguet, Branch 8 granting the Motion to Quash Search
Warrant Nos. 05-70 and 05-71 and its Order dated 22 March
2006 denying complainants-appellants' Motion for
Reconsideration. Accordingly, Search Warrant Nos. 05-70 and
05-71 are hereby REINSTATED.
2. We AFFIRM the Resolution dated 29 December 2005 of the
Regional Trial Court of La Trinidad, Benguet, Branch 8
granting the Motion to Quash Search Warrant Nos. 05-72 and
05-73 and its Order dated 30 March 2006 denying
complainants-appellants' Motion for
Reconsideration-Complainants-appellants are hereby ordered
to return to respondents-appellees Elena Lao, Imelda Lao,
Pompidou Golangco, Jeremy Wilson Golangco, Carmen
Castillo and/or occupants of Baguio Gas Corporation the
items and equipment seized under Search Wan-ant Nos.
05-72 and 05-73.
No costs.
SO ORDERED.[32]
The CA held that considering that the RTC-La Trinidad initially
ordered the issuance of SWs against Benguet Gas and its
owners, then there is probable cause, or such good and
sufficient reason to bejieve that violation of BP 33 had been
committed in the place sought to be searched. It added that
it is rather unusual for the court to later on claim that its
searching questions on Lising and his witness were not
exhaustive enough. It also declared that the items to be
seized were sufficiently described as circumstances would
allow and the SWs were issued in relation to specific offenses
indicated in each warrant.
However, the CA was unconvinced that there was any
compelling reason for RTC-La Trinidad to issue SWs against
respondents as Baguio Gas is located outside its jurisdiction,
Echoing the RTC-La Trinidad's quashal of SWs against
respondents, the CA noted that Lising received Atty. Adarlo's
complaint on March 1, 2005; the test-buy was conducted on
April 1, 2005; and the SW applications were filed on May 19,
2005. It held that these circumstances disproved that there
was any urgency on the SW applications against respondents. It
added that the supposed influence of Baguio Gas in Baguio City
is inconsequential as the SW applicants themselves admitted
that Baguio Gas is influential not only in Baguio City but in the
whole of Benguet Province.
On December 12, 2012, the CA denied Using and private
complainants' Motion for Partial Reconsideration.
Issue
Hence, Petron Gasul LPG Dealers Association and Totalgaz LPG
Dealers Association (petitioners) filed this Petition raising the
sole ground as follows:
THE, COURT OF APPEALS MADE A DECISION NOT IN ACCORD
WITH THE: 2000 RULES ON CRIMINAL PROCEDURE x x x AND
THE APPLICABLE DECISIONS OF THE HONORABLE COURT WHEN
IT RULED THAT THERE ARE NO 'COMPELLING REASONS' TO
JUSTIFY THE APPLICABLITY OF SECTION 2 (B) OF RULE 126 OF
THE RULES.[33]
Petitioners' Arguments
Petitioners concede that Baguio Gas is outside the territorial
jurisdiction of the RTC-La Trinidad; however, they maintain that
there are compelling reasons that will justify the issuance of
SWs against respondents. They also stress that even after the
test-buy or from the third week of April 2005 until the second
week of May 2005, the NBI-CAR conducted additional
surveillance and investigation to validate their April 1, 2005
test-buy operation on respondents. They argue that after the
completion of the gathering of the evidence, the NBI-CAR was
pressed for time to file the SW applications and to enforce the
SWs against respondents.
Petitioners further claim that the immediate hearing on and
issuance of SWs were precautions taken since the possibility of
information leakage to Baguio Gas is foreseeable and imminent
because of its influence and pervasive connections in Baguio
City and the entire Benguet Province.
Respondents' Arguments
For their part, respondents counter that there is no valid
justification why the SW applications against them were filed
before RTC-La Trinidad and not in Baguio City. They also
argue that during the hearing, Lising failed to prove that
respondents' wealth and influence fall within the "compelling
reasons," which would support such issuance of SWs.
In addition, respondents state that contrary to Lising's
position, the seized items are bulky and may not be easily
moved or sold briskly. They also aver that the seized items
are not illegal by themselves but are equipment necessary for
the conduct of respondents' business. They likewise allege
that the possible information leakage was not shown to
factually exist.
Finally, respondents reiterate that considering the length of
time between the test-buy and the SW applications, there
appears no urgency of time as would amount to compelling
reason for the issuance of SW against them.
Our Ruling
The Court grants the Petition.
A search warrant (SW) is defined as a written order issued in
the name of the People of the Philippines, signed by a judge,
and directed to a peace officer commanding him to search for
the personal property described therein and bring it to the
court.[34]
In Malaloan v. Court of Appeals,[35] the Court held that the
requisites, procedure and purpose for SW issuance are totally
different from those of a criminal action. It stressed that the
application for and issuance of a SW is not a criminal action
but a judicial process, more particularly, a special criminal
process designed to respond to an incident in the main case,
if one has been instituted, or in anticipation thereof. The
power to issue SW is inherent in all courts, such that the
power of courts to issue SWs where the place to be searched
is within their jurisdiction is not intended to exclude other
courts from exercising the same power.
In addition, SW shall be issued only upon probable cause
personally determined by the judge after examination under
oath or affirmation of the complainant and the witnesses he
may produce, and particularly describing the place to be
searched, and the persons or things to be seized.[36] In turn,
probable cause for SW refers to such "facts and
circumstances which would lead a reasonably discreet and
prudent man to believe that an offense has been committed
and that the objects sought in connection with the offense
are in the place to be searched."[37]
In its separate Orders dated May 19, 2005, the RTC-La
Trinidad found probable cause in the SW applications after
conducting a hearing in relation thereto, hence it granted the
applications. In these Orders, the RTC-La Trinidad expressly
declared that there are sufficient reasons to believe that the
alleged offenses were committed and that respondents were in
possession of the subject personal properties.[38] Similarly, the
CA found that there is probable cause for the SWs when it
sustained the SWs against Benguet Gas. Worth noting is that it
only affirmed the quashal of the SWs against respondents on
the ground that they were defective for the supposed failure to
establish compelling reasons supporting the SW applications in
a court not having jurisdiction over the place where a crime
was committed.[39]
Hence, there is no dispute that in this case, both the RTC-La
Trinidad and the CA found that there exists probable cause that
respondents had committed an offense and that the objects
used in committing the offense are in the place to be searched.
Consequently, the only issue for resolution is whether there is
any compelling reason warranting the RTC-La Trinidad's
issuance of SW on respondents, whose business presence is in
Baguio City, not in La Trinidad.
In this regard, Section 2 of Rule 126 of the Rules of Court
provides for the proper court where an SW application shall be
filed, to wit:
Section 2. Court where application for search warrant shall be
filed. — An application tor search warrant shall be filed with
the following:
a) Any court within whose territorial jurisdiction a crime was
committed.
b) For compelling reasons stated in the application, any court
within the judicial region where the crime was committed if the
place of the commission of the crime is known, or any court
within the judicial region where the warrant shall be enforced.
xxxx
The foregoing provision is clear. Generally, the SW application
must be filed with the court which has territorial jurisdiction
over the place where the offense was alleged to be committed.
This, however, is not an iron-clad rule. For compelling reasons,
which must be expressly stated in the application, an SW
application may be filed in a court other than the one having
jurisdiction over the place where the purported offense was
committed and where the SW shall be enforced.[40]
In this case, Using cited the foregoing compelling reasons on
why the two separate SW applications against respondents
were filed with the RTC-La Trinidad instead in RTC-Baguio City,
to wit:
4.1. The 'compelling reasons of urgency, subject, time and
place' in the instant applieation[s] are:
(a) Time is absolutely of the essence in the case.
As attested to by [Lising] and his witness [Fortea] in their
attached affidavits, the volume of the LPG cylinders being
illegally refilled by the respondents reflects the capacity of
respondents' facilities to perpetrate their unauthorized and
illegal acts. Respondents' continued and unhampered acts of
illegally tracing LPG products, in violation of Section 2 (a), in
relation to Sections 3 (c) and 4, of BP 33, as amended; [and of
underdelivery or underfilling of LPG products or possession of
underfilled LPG cylinders for the purpose of sale, distribution,
transportation, exchange or baiter, in violation of Section 2
(c), in relation to Section 4, of BP 33, as amended[,] will result
in the unabated and unhampered endangerment of
consumers, deprivation of business from the legitimate LPG
industry players, and denial of payment of proper taxes to the
government.
(b) Tine brisk sales of the subject LPG cylinders might result in
the depletion of available stocks, leaving nothing to be seized
in case a search warrant be issued but on a later date.
(c) The immediate hearing on and issuance of the search
warrant applied for are precautions against possible leakage
of information to respondents.[41]
We find that the above-cited portions of the SW applications
satisfactorily comply with the required statement of
compelling reasons on why they were filed in RTOLa Trinidad
and not in a court in Baguio City, Nonetheless, in quashing
the SWs against respondents, the RTC-La Trinidad, ruled that
these stated reasons in the applications were not compelling
because:
x x x There is no urgency of time as the affidavit of the
applicant states that his office received the letter-complaint
of the lawyers of LPG Dealers Association on March 1, 2005.
They conducted surveillance on the property of the
respondents from that time on until they conducted a
test-buy on April 1, 2005, Yet it was only on May 19, 2005
that they applied for a search warrant. Where now is the
urgency of time when the search warrant was filed more than
two months after the applicant received the
letter-complaint?[42]
We do not agree with the pronouncement of the RTC-La
Trinidad for the following reasons:
First, in his Affidavit attached to the SW applications, Lising
explicitly stated that after the April 1, 2005 test-buy,
additional surveillance and investigation were made on
respondents, viz.:
12. To further validate the aforementioned illegal activities,
the NBI- CAR conducted additional surveillances and
investigations from the third week of April 2005 to the
second week of May 2005. As expected, the illegal trading
and underfilling [activities] of Baguio Gas remained
unhampered. A copy of the photograph of Baguio Gas taken
during the additional surveillance and investigation is hereto
attached. x x x
13. After the conduct of the numerous surveillance and
investigation proceedings, and taking into consideration all
the evidence at hand, I have every reasonable ground to
believe that Baguio Gas is indeed engaged in the illegal trading
of LPG products, in violation of BP 33, as
amended.[43] (Emphasis supplied)
Second, the searching questions and answers thereto show
that Lising, and his witness (Fortea) explained the gap between
the test-buy made on April 1, 2005 and the filing of the SW
applications on May 19, 2005. They testified that after the
test-buy, further surveillance and investigation were conducted
against persons and/or entities suspected to be engaged in the
illegal trade and underfilling of LPG products, and/or
possession of underfilled LPG cylinders. Lising declared that:
So all of these - from what I gather, all of these
Q-
transactions were conducted in one day?
Yes, your honor. April 1, your honor, but we conducted
A- surveillance on different dates before April 1 and after
April 1.
And were they still selling prior [to] and after your own
Q-
transactions?
A- Yes, your honor.
And usually, are there a lot of customers [y]ou see [there]
Q-
in all of these?
A- Yes, your honor.[44] (Emphasis supplied)
Fortea corroborated Lising's testimony in this manner:
So you said that you helped in the surveillance. When was
Q-
the surveillance conducted?
First week of March, third week of April and second
A-
week of May, your honor.
Q- But you made your purchase April 1st 2005?
A- Yes, your honor.[45] (Emphasis supplied)
As properly argued by petitioners, the urgency of time here
refers to urgency to secure and enforce the SWs against
respondents, Credence should thus be given to the fact that, as
above discussed, immediately after the gathering and
completion of evidence, NBI-CAR operatives were pressed for
time to file the SW applications.
To reiterate, both Lising and Fortea pointed out that further
surveillance and investigation were conducted even after the
test-buy; as such, the RTC-La Trinidad and the CA erred in using
April 1, 2005 as the reckoning point to determine the urgency
of the SW issuance. This is because from April 1, 2005 up to
second week of May 2005 the evidence was still being
gathered, assessed and completed, and after which, the filing
of the SW applications were immediately made on May 19,
2005.
The period of time between the test-buy and the filing of the
applications does not by itself negate the strength of the
applicant's allegations or his testimony, including that of his
witness. It even strengthens the case as it shows that
thorough investigations were first made so that the
applications would not just be filed hastily without first
obtaining sufficient evidence in support of the probable cause
necessary for the issuance of SWs.
Third, in issuing SW, the court must consider the subject, the
time and the place of its enforcement. When the RTC-La
Trinidad initially granted SWs applications against
respondents, the same was based on its sound judicial
discretion, taking into consideration that there are indeed
compelling reasons which convinced it that SWs must be
issued even if the place where they shall be enforced is
outside of its jurisdiction.[46]
In People v. Chlu,[47] the Court sustained the issuance of SW
against therein appellant even if the SW was issued by RTC
Pasay, and not RTC-Quezon City, which has jurisdiction over
the place where the SW would be enforced. Among the
compelling reasons enumerated therein were the possibility
of appellant's removal of the subject items therein, and the
possibility that SW application may come to the knowledge of
appellant and his co-accused rendering its enforcement a
useless effort.
The foregoing reasons, aside from the above-discussed
urgency of time, were also cited as compelling reasons in this
case. The Court reiterates that RTC-La Trinidad took
cognizance of and initially granted the SWs against
respondents based on its determination of probable cause as
well as its finding of compelling reasons in the applications.
To our mind, to later on quash the SWs on the ground that
the applicant failed to prove compelling reasons is a mere
afterthought and cannot defeat its initial finding that that
there are indeed good and sufficient justifications for the SWs
against respondents.
Simply put, to quash SW Nos. 05-72 and 05-73 against
respondents on a belated view that no compelling reason was
established, is to disregard established facts, which facts
include - the required statement of compelling reasons in the
applications; Lising's Affidavit and the searching questions
and answers supporting this statement; and, the RTC-La
Trinidad's own finding of probable cause and compelling
reasons in its initial grant of SWs against respondents. When
it reversed itself, the RTC-La Trinidad ignored clear dictates of
reason;[48]therefore, its quashal of the SWs against
respondents cannot be sustained.
Given these, the CA erred in affirming the RTC-La Trinidad
Orders granting the Motion to Quash SW Nos. 05-72 and
05-73 against respondents.
WHEREFORE, the Petition is GRANTED. The April 16, 2012
Decision and December 12, 2012 Resolution of the Court of
Appeals in CA-G.R. CV Nos. 88723 and 89313
are REVERSED and SET ASIDE insofar as they affirmed the
December 29, 2005 Resolution and March 30, 2006 Order of
the Regional Trial Court, La Trinidad, Branch 8 granting the
Motion to Quash Search Warrant Nos. 05-72 arid 05-73 against
Elena Lao, Imelda Lao, Pompidou Golangco, Jeremy Wilson
Golangco, Carmen Castillo and/or occupants of Baguio Gas
Corporation. Accordingly, Search Warrant Nos. 05-72 and
05-73 are REINSTATED.
SO ORDERED.
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari[1] are the
Decision[2] dated March 26, 2015 and the Resolution[3] dated
June 17, 2015 of the Court of Appeals (CA) in CA-G.R. CR No.
36117, which affirmed the Decision[4] dated September 20,
2013 of the Regional Trial Court of Tuguegarao City, Cagayan,
Branch 5 (RTC) in Criminal Case No. 10086, finding petitioner
Edmund Bulauitan y Mauayan (Bulauitan) guilty beyond
reasonable doubt, for violating Section 11, Article II of Republic
Act No. (RA) 9165,[5] otherwise known as the "Comprehensive
Dangerous Drugs Act of 2002."
The Facts
The instant case stemmed from an Information[6] dated
November 7, 2003 filed before the RTC, charging Bulauitan of
illegal possession of dangerous drugs, defined and penalized
under Section 11, Article II of RA 9165,[7] the accusatory portion
of which reads:
That on or about October 03, 2003, in the Municipality of
Solana, Province of Cagayan and within the jurisdiction of this
Honorable Court, the said accused, [Bulauitan], without
authority, did then and there willfully[,] unlawfully[,] and
feloniously have in his possession and under his control and
custody three (03) pieces of heat sealed plastic sachet
containing Methamphetamine Hydrochloride, a dangerous
drug commonly known as shabu which he kept inside his
residence/dwelling at Centro Northeast, Solana, Cagayan
weighing 0.22 grams which dangerous drug was confiscated by
elements of the PNP Solana, Cagayan which conducted a
search at the residence/dwelling of the accused by virtue of
Search Warrant No. 21 issued by Executive Judge, Honorable
VILMA T[.] PAUIG of RTC Branch II, Tuguegarao City, Cagayan
which resulted to the confiscation of the above-mentioned
dangerous drug as the accused while in possession thereof do
not have necessary permit and/or authority [sic].
CONTRARY TO LAW.[8]
The prosecution alleged that on October 3, 2003, the
Philippine National Police of Solana, Gagayan constituted a
team headed by P/Insp. Kevin Bulayungan (P/Insp.
Bulayungan) as leader, with SPO2 Lito Baccay (SPO2 Baccay)
and PO3 Elizalde Tagal (PO3 Tagal) as search officer and
investigator, respectively, to implement a search warrant
issued by Executive Judge Vilma T. Pauig to search Bulauitan's
residence. Before going to the target residence, the search
team first went to the house of Barangay Chairman Jane
Busilan, who in turn, assigned Kagawad (Kgd.) Jerry Soliva
(Kgd. Soliva) and Kgd. Herald de Polonia (Kgd. Polonia) as
search witnesses. Upon arriving at Bulauitan's residence, the
search team was met by Bulauitan's two (2) children and
housekeeper, who informed them that Bulauitan was not
home. This notwithstanding, the search team explained to
the children and housekeeper the reason for their presence,
prompting the latter to allow them inside the house and
conduct the search. SPO2 Baccay then proceeded to
Bulauitan's room and there, discovered three (3) heat-sealed
plastic sachets containing white crystalline substance.
Suspecting that the contents are shabu, the search team
showed the sachets to the children and housekeeper and
photographed the same. SPO2 Baccay then gave the sachets
to P/Insp. Bulayungan, who in turn, handed them over to PO3
Tagal who wrapped the confiscated items with a piece of
paper for transport to the Solana PNP Station. When
Bulauitan arrived at his residence, the search team effected
his arrest and took him to the police station with the seized
sachets. Upon arrival thereat, PO3 Tagal prepared the police
blotter and request for laboratory examination, marked the
sachets with his initials, and delivered the same to forensic
chemist S/Insp. Myrna Madriaga Tulauan of the PNP Crime
Laboratory. A qualitative examination revealed that the three
(3) plastic sachets contained an aggregate of 0.22 gram
of shabu.[9]
In his defense, Bulauitan denied owning the sachets allegedly
recovered by the search team in his house. He narrated that
in the morning of the fateful day, he went with his wife to
Tuguegarao City to tend to their meat shop. He eventually
received a call from his daughter, Maria Bulauitan (Maria),
informing him that policemen are in their house and
conducting a search therein, prompting him to immediately
go home. Upon reaching his house, the policemen informed
him that they recovered shabu from his room, and thus,
arrested him. Finally, Bulauitan averred that Joseph Juan - the
person who executed the affidavit in support of the
application for search warrant — wanted to get even with
him as his wife testified against Juan in a theft case. Upon
arraignment, Bulauitan pleaded not guilty to the charges
against him.[10]
The RTC Ruling
In a Decision[11] dated September 20, 2013, the RTC found
Bulauitan guilty beyond reasonable doubt of the crime
charged, and accordingly, sentenced him to suffer the penalty
of twelve (12) years and one (1) day, as minimum, to fourteen
(14) years, two (2) months, and one (1) day, as maximum, and
to pay a fine in the amount of P300,000.00.[12]
The RTC found that Bulauitan constructively possessed the
sachets containing shabu as they were found inside his house
where he exercised dominion and control. In this relation, the
RTC opined that the policemen must be accorded the
presumption of regularity in the performance of their official
duties, especially in the absence of any evidence from
Bulauitan to show otherwise.[13]
Aggrieved, Bulauitan elevated his conviction before the CA.
The CA Ruling
In a Decision[14] dated March 26, 2015, the CA affirmed
Bulauitan's conviction. It held that all the elements of illegal
possession of dangerous drugs are present, considering that
Bulauitan without any authority constructively possessed the
seized sachets containing shabu as they were found inside his
house. The CA further held that the prosecution had
established an unbroken chair, of custody of the seized sachets.
Finally, the CA ruled that the search which yielded the seized
sachets was properly implemented as it was done in the
presence of Bulauitan's two (2) children and housekeeper.[15]
Aggrieved, Bulauitan moved for reconsideration which the CA
denied in a Resolution[16] dated June 17, 2015; hence, this
petition.
The Issue Before the Court
The issue for the Court's resolution is whether or not
Bulauitan's conviction for illegal possession of dangerous drugs,
defined and penalized under Section 11, Article II of RA 9165,
should be upheld.
The Court's Ruling
The appeal is meritorious.
At the outset, it must be stressed that in criminal cases, an
appeal throws the entire case wide open for review and the
reviewing tribunal can correct errors, though unassigned in the
appealed judgment, or even reverse the trial court's decision
based on grounds other than those that the parties raised as
errors. The appeal confers the appellate court full jurisdiction
over the case and renders such court competent to examine
records, revise the judgment appealed from, increase the
penalty, and cite the proper provision of the penal law.[17]
In this light and as will be explained hereunder, the Court is of
the view that Bulauitan's conviction must be set aside.
Section 2,[18] Article III of the 1987 Constitution mandates
that a search and seizure must be carried out through or on
the strength of a judicial warrant predicated upon the
existence of probable cause, absent which such search and
seizure becomes "unreasonable" within the meaning of the
said constitutional provision. To protect the people from
unreasonable searches and seizures, Section 3 (2),[19] Article
III of the 1987 Constitution provides that evidence obtained
from unreasonable searches and seizures shall be
inadmissible in evidence for any purpose in any proceeding.
In other words, evidence obtained and confiscated on the
occasion of such unreasonable searches and seizures are
deemed tainted and should be excluded for being the
proverbial fruit of a poisonous tree.[20]
It must, however, be clarified that a search warrant[21] issued
in accordance with the provisions of the Revised Rules of
Criminal Procedure does not give the authorities limitless
discretion in implementing the same as the same Rules
provide parameters in the proper conduct of a search.
Section 8, Rule 126 of the aforesaid Rules, states that:
SEC. 8. Search of house, room, or premises to be made in
presence of two witnesses. — No search of a house, room or
any other premises shall be made except in the presence of
the lawful occupant thereof or any member of his family or in
the absence of the latter, two witnesses of sufficient age and
discretion residing in the same locality.
Under this provision, a search under the strength of a warrant
is required to be witnessed by the lawful occupant of the
premises sought to be searched. It must be stressed that it is
only upon their absence that their presence may be replaced
by two (2) persons of sufficient age and discretion residing in
the same locality. In People v. Go,[22] the Court held that a
departure from the said mandatory rule - by preventing the
lawful occupant or a member of his family from actually
witnessing the search and choosing two (2) other witnesses
observe the search - violates the spirit and letter of the law,
and thus, taints the search with the vice of unreasonableness,
rendering the seized articles inadmissible due to the
application of the exclusionary rule, viz.:
As pointed out earlier, the members of the raiding team
categorically admitted that the search of the upper floor,
which allegedly resulted in the recovery of the plastic bag
containing the shabu, did not take place in the presence of
either the lawful occupant of the premises, i.e. appellant
(who was out), or his son Jack Go (who was handcuffed to a
chair on the ground floor). Such a procedure, whereby the
witnesses prescribed by law are prevented from actually
observing and monitoring the search of the premises,
violates both the spirit and letter of the law:
xxxx
That the raiding party summoned two barangay kagawads to
witness the search at the second floor is of no moment. The
Rules of Court clearly and explicitly establishes a hierarchy
among the witnesses in whose presence the search of the
premises must be conducted. Thus, Section 8, Rule 126
provides that the search should be witnessed by "two
witnesses of sufficient age and discretion residing in the same
locality" only in the absence of either the lawful occupant of
the premises or any member of his family. Thus, the search of
appellant's residence clearly should have been witnessed by his
son Jack Go who was present at the time. The police officers
were without discretion to substitute their choice of witnesses
for those prescribed by the law.
xxxx
The raiding team's departure from the procedure mandated
by Section 8, Rule 126 of tote Rules of Court, taken together
with the numerous other irregularities attending the search of
appellant's residence, tainted the search with the vice of
unreasonableness, thus compelling this Court to apply the
exclusionary rule and declare the seized articles inadmissible
in evidence. This must necessarily be so since it is this Court's
solemn duty to be ever watchful for the constitutional rights of
the people, and against any stealthy encroachments thereon.
In the oft-quoted language of Judge Learned Hand:
As we understand it, the reason for the exclusion of evidence
competent as such, which has been unlawfully acquired, is
that exclusion is the only practical way of enforcing the
constitutional privilege. In earlier times the action of trespass
against the offending official may have been protection enough;
but that is true no longer. Only in case the prosecution which
itself controls the seizing officials, knows that it cannot profit
by their wrong, will that wrong be repressed.[23] (Emphases and
underscoring supplied)
In People v. Del Castillo,[24] the Court similarly held that the
search of the premises must be witnessed by the lawful
occupant or the family members; otherwise, the search
become unreasonable, thus rendering the seized items
inadmissible under the exclusionary rule.
In this case, a judicious perusal of the records reveals that the
policemen involved in the search of Bulauitan's residence — as
shown in their own testimonies - did not conduct the search in
accordance with Section 8, Rule 126 of the Revised Rules of
Criminal Procedure.
In his testimony, P/Insp. Bulayungan was adamant that
Bulauitan was present when the search was commenced, to
wit:
[Asst. Pros. Frederick D. Aquino (Pros. Aquino)]: And was
[Bulauitan] then present when you implemented the search
warrant?
[P/Insp. Bulayungan]: Yes, sir.
xxxx

[Pros. Aquino]: So after showing to the accused a copy of the
search warrant, what did the members of your team do, if
any?
[P/Insp. Bulayungan]: We conducted an orderly search at the
residence of the accused I Bulauitan], sir.
xxx
[Atty. Rolando C. Acacio (Atty. Acacio)] So you mean to say
that [Bulauitan] was not present when you went to
implement the search warrant?
[P/Insp. Bulayungan]: He was present, sir.
[Atty. Acacio]: At what point in time was he present Mr.
Witness?
[P/Insp. Bulayungan]: When we introduced ourselves as
policemen and tell our purpose of being there, [Bulauitan]
arrived, sir.
xxxx
[Atty. Acacio]: But at that time that there was a sort of
reluctance you know for a fact that the accused was not in
their house?
[P/Insp. Bulayungan]: He was there already, sir.
[Atty. Acacio]: He was there?
[P/Insp. Bulayungan]: Yes sir because before we enter the
house, that is the time that [Bulauitan] was already there
after we introduced ourselves as police officers and tell our
purpose of being there [sic].[25] (Emphases and underscoring
supplied)
However P/Insp. Bulayungan's testimony was belied by that
of another member of the search team, PO3 Tagal, who
testified that Bulauitan was not in the premises when they
conducted the search:
[Asst. Pros. Maita Grace Deray-Israel (Pros. Israel)]: And what
happened when you reached the residence of [Bulauitan]
[PO3 Tagal]: The house helper met us together with the two
(2) children of [Bulauitan] and we asked them where is
[Bulauitan] and they answered us that [Bulauitan] was out
of his house and he is in Tuguegarao City, Ma'am.
xxxx
[Pros. Israel]: And what happened when you arrived in the
house of [Bulauitan]?
[PO3 Tagal]: I asked our team leader [P/Insp. Bulayungan] if
we continue [sic] to search the house of [Bulauitan]
considering that the owner of the house is not around, Ma'am.
xxxx
[Pros. Israel]: And what is the reply of this [P/Insp.
Bulayungan]?
[PO3 Tagal]: He said that we will continue, Ma'am.
xxxx
[Pros. Israel]: Alright, Mr.Witness, after you have presented
that search warrant to the two (2) children of [Bulauitan], what
happened next, if any?
[PO3 Tagal]: We requested them to open the door of their
house, Ma'am.
[Pros. Israel]: And they accede [sic]?
[PO3 Tagal]: Yes, Ma'am.
[Pros. Israel]: And after they have opened the door of their
house, what happened next?
[PO3 Tagal]: Then we explained to them what is our subject
and we requested them to follow us inside the room of
[Bulauitan] together with the two (2) Barangay kagawads,
Ma'am.[26]
x x x (Emphases and underscoring supplied)
While Bulauitan's absence in the search, per se, did not violate
Section 8, Rule 126 of the 2000 Rules on Criminal Procedure,
the search team committed other errors which led to such
violation. For instance, Bulauitan's daughter, Maria, was
effectively precluded from witnessing the search conducted by
SPO2 Baccay in Bulauitan's room as PO3 Tagal kept her in the
living room by searching the area and asking her a lot of
questions. Maria's testimony states:
[Atty. Acacio]: And who were with you then at the house at
that time?
[Maria]: I was alone, sir.
xxxx
[Atty. Acacio]: And when [the police officers] asked you the
whereabouts of your father what did you tell them?
[Maria]: I told them that they were in Tuguegarao selling, sir.
[Atty. Acacio]: And then when you told them that your father is
in Tuguegarao selling, what did the policemen do?
[Maria]: They said that they have a search warrant against my
father, sir.
xxxx
[Atty. Acacio]: When the policemen told you that there is a
search warrant for your father, what did they do?
[Maria]: I was not supposed to let them enter the house
because my father was not around but they said that they will
still enter because they have a search warrant for my father
otherwise they will force to open the door, sir [sic].
xxxx
[Atty. Acacio]: And what did you do when they told you that
even without your father we still have to search the house?
[Maria]: I let them entered [sic] the house, sir.
xxxx
[Atty. Acacio]: When these three policemen were allowed
access in the house by you, what did they do?
[Maria]: When they were at the receiving room [SPO2 Baccay]
read the contents of the search warrant and asked me and to
confirm the room of my father, sir.
[Atty. Acacio]: And when [SPO2 Baccay] did that, what did
you do?
[Maria]: I told them that this is the room of my father, sir.
[Atty. Acacio]: And after confirming that indeed that is the
room of your father, what did they do?
[Maria]: [SPO2 Baccay] and the other policemen went inside
the room while [PO3 Tagal] was left at the receiving room,
sir.
[Atty. Acacio]: Now, what was [PO3 Tagal] doing when he
stayed in the sala or receiving room?
[Maria]: He was searching our belongings and at the same
time inquiring from me, sir.
xxxx
[Atty. Acacio]: Now, when you were in the sala were you able
to observe what was happening inside the room of your
parents?
[Maria]: No, sir.
[Atty. Acacio]: And why can't you see what was happening
inside the room of your parents?
[Maria]: Because the door of the room was then half closed,
sir.[27] (Emphases and underscoring supplied)
Maria's direct testimony was further bolstered by her
consistency during cross examination, to wit:
[Pros. Ronnel B. Nicolas (Pros. Nicolas)]: In other words,
madam witness, you confirm that when the policemen
conducted a search, the search was conducted in the presence
of these two barangay councilmen?
[Maria]: Yes they were present but they were outside the
house, sir.
xxx
[Pros. Nicolas]: You also made mention madam witness that
when the search was being conducted one of the policemen
remained in the sala and conducted search therein, is it not?
[Maria]: Yes, sir.
[Pros. Nicolas]: And in fact you were present at the time the
policemen conducting a search in the sala? [sic]
[Maria]: Yes, sir.
[Pros. Nicolas]: You also made mention madam witness that
two policemen conducted search inside the room of your
father, is it not? [sic]
[Maria]: Yes, sir.
[Pros. Nicolas]: And you also made mention that you were not
able to actually see them searching because the door leading
to the room of your father was half closed, is it not?
[Maria]: Yes, sir.
[Pros. Nicolas]: And of course you just opted to stay in
the sala even you had the opportunity to enter the room of 3
our parents if you chose it, is it not? [sic]
[Maria]: Because while [PO3 Tagal] was conducting search he
had so many questions that I need to answer, sir. [sic]
[Pros. Nicolas]: And definitely madam witness nobody
prevented you to enter the room of your father at the time the
policemen conducted the search inside the room of your
parents?
[Maria]: I was supposed to go with [SPO2 Baccay] inside the
room of my parents but [PO3 Tagal] talked to me so we
remained in the sala (receiving room), sir.[28] (Emphases and
underscoring supplied)
Worse, the search team even instructed Maria to contact her
father via telephone, which she could only do by leaving their
residence and going to the house of a certain Dr. Romeo Bago
(Dr. Bago) to use the telephone therein. It was only after her
return to their residence that SPO2 Baccay announced that
they have allegedly found shabu in Bulauitan's room:
[Atty. Acacio]: Now, what did you do when they told you that
you contact your father [through] telephone?
[Maria]: I left our house and went to the house of [Dr. Bago],
sir.
xxxx
[Atty. Acacio]: And what happened when you were able to
contact the phone number at the stall of your father?
[Maria]: When the call rang the owner of the phone and then
she let me waited and I was able to talk to my mother, sir
[sic].
[Atty. Acacio]: And what did you tell your mother?
[Maria]: When I was able to talk to my mother I told her to let
my father to go home because policemen were there inside
the house, sir [sic].
xxxx
[Atty. Acacio]: And what happened when you went home?
[Maria]: When I was able to reach our house I saw [PO3 Tagal]
and he asked from me if I was able to contact my father, sir.
[Atty. Acacio]: And what did you tell him?
[Maria]: I told him that I was able to talk to my mother and
she will ask my father to go home, sir.
[Atty. Acacio]: And after telling that to [PO3 Tagal] what
happened next?
[Maria]: [PO3 Tagal] told to [SPO2 Baccay] to enter inside and
then we went inside the house, sir. [sic]
[Atty. Acacio]: And when you entered to the house, what
happened next? [sic]
[Maria]: When we reached the receiving room, [SPO2 Baccay]
said that they found something, sir.
[Atty. Acacio]: And where was [SPO2 Baccay] when he made
that announcement that he found something?
[Maria]: He was inside the room, sir.
[Atty. Acacio]: And at that time where were you?
[Maria]: I was at the receiving room, sir.
xxxx
[Atty. Acacio]: And did your father finally arrive?
[Maria]: Yes, sir.
[Atty. Acacio]: Where were you when your father arrived?
[Maria]: I was outside of our house, sir.[29] (Emphases and
underscoring supplied)
The foregoing statements were corroborated by Kgd. Soliva's
testimony, which essentially stated that: (a) Bulauitan was not
present when the search was conducted; (b) Maria wasn't able
to witness the conduct of such search; and (c) even he and Kgd.
Polonia - the two (2) witnesses designated by the barangay
chairman - did not witness the search as they remained outside
Bulauitan's residence:
[Atty. Acacio]: And what happened when you reached the
house of [Bulauitan]?
[Kgd. Soliva]: They [the police officers and the PDEA agents]
knocked at the door of the house of [Bulauitan] and the door
was opened by the daughter of [Bulauitan], sir.
xxxx
[Atty. Acacio]: And what was the response of the daughter of
[Bulauitan] when asked as to his whereabouts?
[Kgd. Soliva]: She answered that they were at the public market,
sir.
[Atty. Acacio]: And after that, what happened next?
[Kgd. Soliva]: They sent the daughter to contact her father, sir.
xxxx
[Atty. Acacio]: While the members of the police and the PDEA
were inside the house of [Bulauitan], what transpired
thereafter, if any?
xxxx
[Kgd. Soliva]: I was surprised when they said that they
seized shabu inside the house, sir.
xxxx
[Court]: When the PDEA and the police operatives conducted
a search, you were outside?
[Kgd. Soliva]: Yes, your Honor.
[Court]: And when the police authorities were able to find what
they were looking for you did not see how they find [sic] it?
[Kgd. Soliva]: No more your Honor because when I saw them
they were already holding the seized item.
[Court]: And then the first time you saw the seized item, was
that when you enter [sic] the house after they were already
seized, is that right?
[Kgd. Soliva]: Yes, your Honor.
xxxx
Q: And when you entered the house for the first time after
you heard that something was seized inside the house, did
you see already [Bulauitan] inside the house?
[Kgd. Soliva]: No, your honor.
xxxx
[Atty. Acacio]: After you got out of the house together with
the members of the police and the PDEA and you went all
outside of the house, did you see [Buluaitan]?
xxxx
[Kgd. Soliva]: No, sir.[30] (Emphases and underscoring
supplied)
The testimonies given in the case at bar ultimately prove that:
(a) Bulauitan was not in his residence when the search was
conducted; (b) his daughter, Maria, was not able to witness
SPO2 Baccay's search of Bulauitan's room as PO3 Tagal kept
her in the living room and even instructed her to leave the
house to contact her parents; and (c) Kgd. Soliva and Kgd.
Polonia neither witnessed the search as they remained
outside Bulauitan's residence. Accordingly, the search
conducted therein by the search team fell way below the
standard mandated by Section 8, Rule 126 of the Revised
Rules of Criminal Procedure, and thus deemed unreasonable
within the purview of the exclusionary rule of the 1987
Constitution. As a consequence, the three (3) plastic sachets
containing an aggregate amount of 0.22 gram
of shabu recovered therefrom are inadmissible in evidence
for being the proverbial fruit of the poisonous tree. Since the
confiscated shabu is the very corpus delicti of the crime
charged,[31] Bulauitan must necessarily be acquitted and
exonerated from all criminal liability.
As a final note, it is fitting to mention that "[t]he Court
strongly supports the campaign of the government against
drug addiction and commends the efforts of our law
enforcement officers against those who would inflict this
malediction upon our people, especially the susceptible youth.
But as demanding as this campaign may be, it cannot be
more so than the compulsions of the Bill of Rights for the
protection of liberty of every individual in the realm, including
the basest of criminals. The Constitution covers with the
mantle of its protection the innocent and the guilty alike
against any manner of high-handedness from the authorities,
however praiseworthy their intentions. Those who are
supposed to enforce the law are not justified in disregarding
the right of the individual in the name of order. Order is too
high a price for the loss of liberty. As Justice Holmes [once
said,] x x x 'I think it is less evil that some criminals should
escape than that the government should play an ignoble part.'
It is simply not allowed in the free society to violate a law to
enforce another, especially if the law violated is the
Constitution itself."[32]
WHEREFORE, the appeal is GRANTED. The Decision dated
March 26, 2015 and the Resolution dated June 17, 2015 of the
Court of Appeals in CA-G.R. CR No. 36117 are
hereby REVERSED and SET ASIDE. Accordingly, petitioner
Edmund Bulauitan y Mauayan is ACQUITTED of the crime
charged.
SO ORDERED.
G.R. No. 204419, November 07, 2016
PEOPLE OF THE PHILIPPINES, Petitioner, v. HON. EDMAR P.
CASTILLO, SR., AS PRESIDING JUDGE OF BRANCH 6, REGIONAL
TRIAL COURT, APARRI, CAGAYAN AND JEOFREY JIL RABINO Y
TALOZA, Respondent.
DECISION
PERALTA,** J.:
This is to resolve the Petition for Certiorari under Rule 65 of the
Rules of Court dated November 12, 2012 of petitioner People
of the Philippines as represented by Second Assistant Provincial
Prosecutor Carlos B. Sagucio, that seeks to reverse and set
aside the Regional Trial Court's (RTC, Branch 6, Aparri, Cagayan)
Joint Resolution1 dated May 14, 2012 quashing Search Warrant
No. 45 issued by the Municipal Trial Court (MTC) of Gattaran,
Cagayan and eventually dismissing Criminal Case No. 11-10881
against private respondent Jeofrey Jil Rabino y Taloza.
The facts follow.
On January 13, 2012, Judge Marcelo C. Cabalbag of the MTC of
Gattaran, Cagayan issued Search Warrant No. 45, which reads,
in part, as follows:ChanRoblesVirtualawlibrary
SEARCH AND SEIZURE ORDER
TO ANY OFFICER OF THE LAW:
chanRoblesvirtualLawlibraryIt appearing to the satisfaction of
the undersigned, after examining under oath SPO1 RONEL P.
SATURNO of the Regional Intelligence Division based at
Regional Office 2, Camp Adduru, Tuguegarao City, the applicant
herein, and his witness that there is probable cause to believe
that a Violation [of] R.A. 9165 Comprehensive Dangerous Drug,
has been and is being committed and there are good and
sufficient reasons to believe that JOEFREY JIL RABINO @
JEFF/JEO, a resident of Rizal Street, Maura, Aparri, Cagayan has
in his possession or control the following items, to wit:

chanRoblesvirtualLawlibrarySHABU (Methamphetamine and
PARAPHERNALIAS you are hereby ordered to make an
immediate search at any time of the day or night but
preferably at daytime at the afore-stated residential place of
JEOFREY JIL RABINO @ JEFF/JEO and its premises and
forthwith seize and take possession of the above-described
items to immediately bring him, thereafter, to the
undersigned to be dealt with in accordance with Section 12,
Rule 126 of the December 1, 2000 Rules on Criminal
Procedure.
WITNESS MY HAND and SEAL this 13th day of January 2012, at
Gattaran, Cagayan.2
Thereafter, to effect the above Search and Seizure Order, a
search was conducted by elements of the Philippine Drug
Enforcement Agency (PDEA) and officers of the Philippine
National Police (PNP) yielding one (1) sachet containing
residue of suspected methamphetamine hydrochloride inside
the house of private respondent Rabino located in Aparri,
Cagayan. When the confiscated item was submitted to the
Regional Crime Laboratory Office No. 2 of the PNP in
Tuguegarao City for qualitative examination, the test gave
positive result for the presence of methamphetamine
hydrochloride, a dangerous drug.3chanrobleslaw
Thus, an Information4 dated January 15, 2012 was filed
against private respondent Rabino for violation of Section 11
of Republic Act (R.A.) No. 9165, which reads as
follows:ChanRoblesVirtualawlibrary
That on or about January 14, 2012, in the Municipality of
Aparri, [P]rovince of Cagayan, and within, the jurisdiction of
this Honorable Court, the above-named accused, without any
legal authority thereof, did then and there willfully,
unlawfully and feloniously have in his possession and under
his control and custody one (1) big zip-lock transparent plastic
sachet containing two (2) pieces of transparent plastic
sachets containing white crystalline substance, one sachet
with traces of said substance gave POSITIVE results to the
tests for the presence of Methamphetamine Hydrochloride,
commonly known as Shabu, a dangerous drag, while the
other sachet gave negative results to said tests, the said
accused knowing fully well and aware that it is prohibited for
any person to possess or use any dangerous drug regardless
of the quality of the purity thereof, unless authorized by law.
CONTRARY TO LAW.
Docketed as Criminal Case No. 11-10881, the case was raffled
to the RTC, Branch 6, Aparri, Cagayan, presided by
respondent Judge Castillo.
Before the case was set for arraignment, or on March 13,
2012, private respondent Rabino filed a Motion to Quash
Search Warrant and for Suppression of Illegally Acquired
Evidence with the following
grounds:ChanRoblesVirtualawlibrary
Search Warrant; Issuing Court must have territorial jurisdiction
over the place to be searched; No compelling reason for MTC
Gattaran to issue warrant
xxxx
No probable cause to issue Search Warrant
xxxx
No searching question elicited from deponent
x xx x
No particularity in the places to be searched
xxxx
Irregularity in the implementation of the search
x x xx
Suppression of Evidence Just and
Proper5chanroblesvirtuallawlibrary
The RTC, through respondent Judge Castillo, granted the above
motion in its Joint Resolution dated May 14, 2012, which partly
reads as follows:ChanRoblesVirtualawlibrary
It is indubitable from the foregoing that the minimum penalty
for illegal possession of methamphetamine hydrochloride or
shabu is imprisonment of twelve (12) years and one (1) day to
twenty (20) years, which penalty is way beyond imprisonment
of six (6) years. A fortiori, MTC Gattaran did not have
jurisdiction to entertain the application for and to issue Search
Warrant No. 45. As such, Search Warrant No. 45 is null and void.
[Corollary] thereto, all proceedings had in virtue thereof are
likewise null and void.
With the foregoing conclusion, any further discussion on the
grounds relied upon by the accused to buttress his motion and
the opposition interposed by the public prosecutor are deemed
mere surplusage.
WHEREFORE, in view of all the foregoing, the motion is
GRANTED. Search Warrant No. 45 is hereby ordered QUASHED.
Consequently, all evidence obtained in the execution of Search
Warrant No. 45 are likewise ordered SUPPRESSED. There being
no more evidence to support them, the Informations in the
above-captioned cases are hereby dismissed.
SO ORDERED.6chanroblesvirtuallawlibrary
Petitioner filed a motion for reconsideration, but it was denied
by the same court in its Joint Order7 dated September 24, 2012.
Hence, the present petition.
The issue and arguments raised by petitioner are as
follows:ChanRoblesVirtualawlibrary
With all due respect, the assailed Resolution of May 14, 2012
was issued by respondent Judge Castillo with grave abuse of
discretion amounting to lack of jurisdiction and/or is patently
erroneous. It is respectfully submitted that the Municipal
Trial Court of Gattaran, Cagayan has the authority to issue
Search Warrant No. 45 earlier mentioned to search and seize
the shabu stated therein in Aparri, Cagayan a place which is
within the same second judicial region in violation of R.A.
9165, notwithstanding the fact that the power to hear and try
the offense is within the exclusive jurisdiction of the Regional
Trial Court.
Private respondent, on the other hand, in his
Comment8 dated January 25, 2016, claims that the petition
was filed in violation of the doctrine of hierarchy of courts. He
also argues that the petition should have been filed by the
State, through the Office of the Solicitor General, and not
petitioner Second Assistant Provincial Prosecutor Carlos B,
Sagucio. Lastly, private respondent insists that the petition
does not show that the assailed Joint Resolution of the RTC
was issued with grave abuse of discretion amounting to lack
or excess of jurisdiction.
This Court finds merit to the petition.
Before proceeding with the discussion on the substantial
issue raised in the petition, certain procedural issues have
been pointed out by private respondent that need to be
tackled. According to the private respondent, the petition
for certiorari under Rule 65 filed by petitioner before this
Court must be struck down as it violates the doctrine on
hierarchy of courts. Private respondent further argues that
petitioner did not provide any compelling reason that would
merit the direct filing with this Court of a petition
for certiorari under Rule 65. It is also averred that the petition
should have been filed by the Office of the Solicitor General
and not the Assistant Provincial Prosecutor because the
petition is in the nature of an appeal and the former is vested
with the power of representing the people before any court.
Rule 65 of the Rules of Court provides as
follows:ChanRoblesVirtualawlibrary
Section 1. Petition for certiorari. - When any tribunal, board
or officer exercising judicial or quasi-judicial functions has
acted without or in excess of its or his jurisdiction, or with
grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the proper
court, alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the
proceedings of such tribunal, board or officer, and granting
such incidental reliefs as law and justice may require.
A petition for certiorari under Rule 65 of the Rules of Court is
proper when (1) any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted without or in
excess of jurisdiction or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and (2) there is no
appeal, nor plain, speedy and adequate remedy in the
ordinary course of law for the purpose of annulling or
modifying the proceeding.9 Grave abuse of discretion exists
when there is an arbitrary or despotic exercise of power due to
passion, prejudice or personal hostility; or a whimsical,
arbitrary, or capricious exercise of power that amounts to an
evasion or refusal to perform a positive duty enjoined by law or
to act at all in contemplation of law. For an act to be struck
down as having been done with grave abuse of discretion, the
abuse of discretion must be patent and gross.10 On the other
hand, a remedy is considered "plain, speedy and adequate" if it
will promptly relieve the petitioner from the injurious effects of
the judgment the acts of the lower court or agency.11 Its
principal office is only to the inferior court within the
parameters of its jurisdiction or to prevent it from committing
such a grave abuse of discretion amounting to lack or excess of
jurisdiction.12chanrobleslaw
The special civil action for certiorari is the proper recourse
availed of by petitioner in questioning the quashal of the
search warrant as the petition alleges grave abuse of discretion
on the part of the judge that ordered the said quashal. In his
allegation that the judge misapplied the rules on jurisdiction or
on the proper courts authorized to issue a search warrant,
petitioner has shown that the quashal of the search warrant
was patently and grossly done. In any case, the Court had
allowed even direct recourse to this Court13 or to the Court of
Appeals14 via a special civil action for certiorari from a trial
court's quashal of a search warrant.15 The general rule is that a
party is mandated to follow the hierarchy of courts. Howevever,
in exceptional cases, the Court, for compelling reasons or if
warranted by the nature of the issues raised, may take
cognizance of petitions filed directly before it.16 In this case,
since the pivotal issue raised by petitioner involves an
application of a rule promulgated by this Court in the exercise
of its rule-making power under the Constitution17 regarding the
jurisdiction of courts in the proper issuance of a search warrant,
this Court deems it proper to resolve the present petition.
As such, even if the petitioner in this case, representing the
People, is only the Assistant Provincial Prosecutor and not the
Office of the Solicitor General, such technicality can be relaxed
in the interest of justice. The Court has allowed some
meritorious cases to proceed despite inherent procedural
defects and lapses. This is in keeping with the principle that
rules of procedure are mere tools designed to facilitate the
attainment of justice and that strict and rigid application of
rules which would result in technicalities that tend to frustrate
rather than promote substantial justice must always be
avoided.18 It is a far better and more prudent cause of action
for the court to excuse a technical lapse and afford the parties
a review of the case to attain the ends of justice, rather than
dispose of the case on technicality and cause grave injustice to
the parties, giving a false impression of speedy disposal of
cases while actually resulting in more delay, if not a miscarriage
of justice.19 In certain cases, this Court even allowed private
complainants to file petitions for certiorari and considered the
said petitions as if filed by the Office of the Solicitor General.
In United Laboratories, Inc. v. Isip,20 this Court ruled that an
exception exists to the general rule that the proper party to file
a petition in the CA or Supreme Court assailing any adverse
order of the RTC in the search warrant proceedings is the
People of the Philippines, through the OSG,
thus:ChanRoblesVirtualawlibrary
The general rule is that the proper party to file a petition in
the CA or Supreme Court to assail any adverse order of the
RTC in the search warrant proceedings is the People of the
Philippines, through the OSG. However, in Columbia Pictures
Entertainment, Inc. v. Court of Appeals, the Court allowed a
private corporation (the complainant in the RTC) to file a
petition for certiorari, and considered the petition as one
filed by the OSG. The Court in the said case even held that the
petitioners therein could argue its case in lieu of the
OSG:ChanRoblesVirtualawlibrary
From the records, it is clear that, as complainants, petitioners
were involved in the proceedings which led to the issuance of
Search Warrant No. 23. In People v. Nano, the Court declared
that while the general rule is that it is only the Solicitor
General who is authorized to bring or defend actions on
behalf of the People or the Republic of the Philippines once
the case is brought before this Court or the Court of Appeals,
if there appears to be grave error committed by the judge or
a lack of due process, the petition will be deemed filed by the
private complainants therein as if it were filed by the Solicitor
General. In line with this ruling, the Court gives this petition
due course and will allow petitioners to argue their case
against the questioned order in lieu of the Solicitor General.
The general rule is that a party is mandated to follow the
hierarchy of courts. However, in exceptional cases, the Court,
for compelling reasons or if warranted by the nature of the
issues raised, may take cognizance of petitions filed directly
before it. In this case, the Court has opted to take cognizance
of the petition, considering the nature of the issues raised by
the parties.21chanroblesvirtuallawlibrary
Therefore, if this Court had previously considered the
petitions filed by private complainants and deemed them as if
filed by the Office of the Solicitor General, there is no reason
to disallow the petition herein filed by the Assistant Provincial
Prosecutor.
Anent the main issue as to whether a municipal trial court has
the authority to issue a search warrant involving an offense in
which it has no jurisdiction, this Court answers in the
affirmative.
Section 2, Article III of the Constitution
provides:ChanRoblesVirtualawlibrary
SEC. 2. The right of the people to be secure in their persons,
houses, papers, and effects against unreasonable searches
and seizures of whatever nature and for any purpose shall be
inviolable, and no search warrant or warrant of arrest shall
issue except upon probable cause to be determined
personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may
produce, and particularly describing the place to be searched
and the persons or things to be seized.
The requisites for the issuance of a search warrant are: (1)
probable cause is present; (2) such probable cause must be
determined personally by the judge; (3) the judge must
examine, in writing and under oatn or affirmation, the
complainant and the witnesses he or she may produce; (4) the
applicant and the witnesses testify on the facts personally
known to them; and (5) the warrant specifically describes the
place to be searched and the things to be seized.22 Necessarily,
a motion to quash a search warrant may be based on grounds
extrinsic of the search warrant, such as (1) the place searched
or the property seized are not those specified or described in
the search warrant; and (2) there is no probable cause for the
issuance of the search warrant.23chanrobleslaw
The respondent RTC judge, in this case, quashed the search
wan-ant and eventually dismissed the case based merely on
the fact that the seerch warrant was issued by the MTC of
Gattaran, Cagayan proceeding from a suspected violation of
R.A. 9165 or The Dangerous Drugs Act, an offense which is
beyond the jurisdiction of the latter court. It is therefore safe
to presume that the other grounds raised by the private
respondent in his motion to quash are devoid of any merit. By
that alone, the respondent judge gravely abused his discretion
in quashing the search warrant on a basis other than the
accepted grounds. It must be remembered that a search
warrant is valid for as long as it has all the requisites set forth
by the Constitution and must only be quashed when any of its
elements are found to be wanting.
This Court has provided rules to be followed in the application
for a search warrant. Rule 126 of the Rules of Criminal
Procedure provides:ChanRoblesVirtualawlibrary
Sec. 2. Court where application for search warrant shall be filed.
- An application for search warrant shall be filed with the
following:
chanRoblesvirtualLawlibrary(a) Any court within whose
territorial jurisdiction a crime was committed.
(b) For compelling reasons stated in the application, any court
within the judicial region where the crime was committed if the
place of the commission of the crime is known, or any court
within the judicial region where the warrant shall be enforced.
However, if the criminal action has already been filed, the
application shall only be made in the court where the criminal
action is pending.
Apparently, in this case, the application for a search warrant
was filed within the same judicial region where the crime was
allegedly committed. For compelling reasons, the Municipal
Trial Court of Gattaran, Cagayan has the authority to issue a
search warrant to search and seize the dangerous drugs stated
in the application thereof in Aparri, Cagayan, a place that is
within the same judicial region. The fact that the search
warrant was issued means that the MTC judge found probable
cause to grant the said application after the latter was found by
the same judge to have been filed for compelling reasons.
Therefore, Sec. 2, Rule 126 of the Rules of Court was duly
complied with.
It must be noted that nothing in the above-quoted rule does
it say that the court issuing a search warrant must also have
jurisdiction over the offense. A search warrant may be issued
by any court pursuant to Section 2, Rule 126 of the Rules of
Court and the resultant case may be filed in another court
that has jurisdiction over the offense committed. What
controls here is that a search warrant is merely a process,
generally issued by a court in the exercise of its ancillary
jurisdiction, and not a criminal action to be entertained by a
court pursuant to its original jurisdiction.24 Thus, in certain
cases when no criminal action has yet been filed, any court
may issue a search warrant even though it has no jurisdiction
over the offense allegedly committed, provided that all the
requirements for the issuance of such warrant are present.
WHEREFORE, the Petition for Certiorari under Rule 65 of the
Rules of Court, dated November 12, 2012, of petitioner
People of the Philippines is GRANTED. Consequently, the
Joint Resolution dated May 14, 2012 of the Regional Trial
Court, Branch 6, Aparri, Cagayan, insofar as it quashed Search
Warrant No. 45 issued by the Municipal Trial Court of
Gattaran, Cagayan, is REVERSED and SET ASIDE, and Criminal
Case No. 11-10881 against private respondent Jeofrey Jil
Rabino y Taloza is REINSTATED.
SO ORDERED.chanRoblesvirtualLawlibrary
G.R. No. 200396
MARTIN VILLAMOR y TAYSON, and VICTOR BONAOBRA y
GIANAN, Petitioners
vs
PEOPLE OF THE PIDLIPPINES, Respondents
DECISION
DEL CASTILLO, J.:
The Constitution guarantees the right of the people to be
secure in their persons, houses, papers, and effects against
unreasonable searches and seizures of whatever nature and
for any purpose.1 A mere tip from an unnamed informant
does not vest police officers with the authority to barge into
private homes without first securing a valid warrant of arrest
or search warrant. While there are instances where arrests
and searches may be made without a warrant, the Court finds
that the constitutionally-protected right against unreasonable
searches and seizures was violated in the case at bar.
This Petition for Review under Rule 45 of the Rules of Court
seeks to set aside the June 13, 2011 Decision2 of the Court of
Appeals (CA) in CA-G.R. CR No. 30457 which affirmed the
October 25, 2006 Judgment3 of the Regional Trial Court (RTC),
Branch 43 of Virac, Catanduanes in Criminal Case Nos. 3463
and 3464) convicting both petitioners for Violation of
Presidential Decree (PD) No. 1602 as amended by Republic Act
(RA) No. 9287, otherwise known as "An Act Increasing the
Penalties for Illegal Numbers Games Amending Certain
Provisions of PD 1602 and for Other Purposes." Petitioner
Martin T. Villamor (Villamor) was convicted as a collector of
bets in the illegal numbers game of "lotteng" under Section 3(c)
of RA 9287, while petitioner Victor G. Bonaobra (Bonaobra)
was convicted as a coordinator, controller, or supervisor under
Section 3(d) of the said Jaw. The RTC sentenced Villamor to
suffer the penalty of imprisonment from eight (8) years and
one (1) day as minimum to nine (9) years as maximum, while
Bonaobra was sentenced to suffor the penalty of imprisonment
of ten (10) years and one (1) day as minimum to eleven (11)
years as maximum.
Factual Antecedents
Villamor was charged with violation of Section 3(c) of RA 9287
for collecting and soliciting bets for an illegal numbers game
locally known as "lotteng' and possessing a list of various
numbers, a calculator, a cellphone, and cash. The charge
stemmed from the following lnformation:4
That on or ahout the 17th day of June 2005 in the morning, in
barangay Francia, municipality of Virac, province of
Catanduanes, Philippines, \vi thin the jurisdiction of this
Honorable Court the said accused with intent [to] gain thru
illegal means did then and there, [ willfully ], unlawfully and
feloniously engage, collect [and] solicit x x x bets for illegal
numbers game locally known as "Lotteng" by having in his
possession [a] calculator, cellphone, [list] of various numbers
and money and lotteng paraphernalias.
CONTRARY TO LAW.
Another Information5 was filed in the same court charging
Bonaobra with violation of the same law, committed as
follows:
That on or about the 17th day of June 2005 in the morning, in
barangay Francia, municipality of Virac, province of
Catanduanes, Philippines, within the jurisdiction of this
Honorable Court the said accused with intent [to] gain thru
illegal means did then and there, [willfully], unlawfully and
feloniously maintain and operate illegal numbers game locally
known as "lotteng" while in possession of gambling
paraphernalias, such as [a] calculator, cellphone, list of various
numbers and cash in the amount of ₱1,500.00 representing
collection of bets.
CONTRARY TO LAW.
Petitioners filed t1eir respective Motions for Reinvestigation,
which were both granted by the RTC. Subsequently, the Office
of the Provincial Prosecutor issued separate Resolutions both
dated September 13, 2005 amending the Informations in both
cases.
In the Amended Information, the phrase "acting as a collector"
was included to charge Villamor as a collector in an illegal
numbers game. The Amended Information6 provides:
That on or about the 17th day of June 2005 in the morning, in
barangay Francia, municipality of Virac, province of
Catanduanes, Philippines, within the jurisdiction of this
Honorable Court the said accused acting as a collector with
intent [to] gain thru illegal means[,] did then and there,
willfully, unlawfully and foloniously engage, collect and solicit
bets for illegal numbers game locally known as "Lotteng" by
having in his possession [a] calculator, cellphone, [list] of
various numbers and money and lotteng paraphernalias.
CONTRARY TO LAW.
On the other hand, Bonaobra was charged as a manager or
operator in the Amended Info1mation,7 the incriminatory
paragraph of which states:
That on or about the 17th day of June 2005 in the morning, in
barangay Francia, municipality of Virac, province of
Catanduanes, Philippines, within the jurisdiction of this
Honorable Court the said accused acting as manager and
operator with intent [to] gain thru illegal means did then and
there, [willfully], unlawfully and feloniously maintain and
operate illegal numbers game locally known as "lotteng"
while in possession of gambling paraphernalia, such as [a]
calculator, cellphone, lists of variott5 numbers and cash in
the amount of ₱l,500,00 representing colleciion of bets.
CONTRARY TO LAW.
When separately arraigned, Villamor, on October 4, 2005 and
Bonaobra, on November 29, 2005, both pleaded not guilty to
the respective charges filed against them. After the pre-trial
conference, a joint trial on the merits followed.
Version of the Prosecution
The prosecution presented four witnesses, namely: Domingo
Tejerero (Tejerero), Provincial Director, Police Superintendent
Francisco Penaflor (PD Peñaflor), SP04 Severino Malasa, Jr.,
and POI David Adrian Saraspi (POI Saraspi). Culled from the
records were the following facts:
On June 17, 2005, at around 9:00 a.m., PD Peñaflor received a
call from an infonnant regarding an ongoing illegal numbers
game at Barangay Francia, Virac, Catanduanes, specifically at
the residence of Bonaobra. A team composed of PD Peñaflor,
Saraspi, PO 1 Rolando Ami, a driver, and a civilian asset
proceeded to Bonaobra's residence to confirm the report.
Upon arrival at the target area, the team parked their service
vehicle outside the compound fenced by bamboo slats
installed two inches apart which allowed them to see the
goings on inside. According to the police officers, they saw
petitioners in the act of counting bets, described by the Bicol
term "revisar," which means collating and examining
numbers placed in "papelitos," which are slips of paper
containing bet numbers, and counting money bets.
When they entered the gate of the compound, they
introduced themselves as police officers and confiscated the
items found on the table consisting of cash amounting to
₱l,500.00 in different denominations, the "papelitos," a
calculator, a cellular phone, and a pen. Petitioners were then
brought to Camp Francisco Camacho where they were
investigated for illegal gambling. Subsequently, a case was filed
against the petitioners before the Office of the Provincial
Prosecutor.
Version of the Defense
The defense presented six witnesses, namely Villamor,
Bonaobra, Demetrio Bonaobra. the brother of Bonaobra,
Florencio Bonaobra (Florencio), the father of Bonaobra, Juan
Vargas, and Jonah Bonaobra (Jonah), the wife of Bonaobra.
Their testimonies are summarized below.
On June 17, 2005, at around 8:30 a.m., Villamor went to
Bonaobra's house to pay a debt he owed to the latter's wife,
Jonah. At that time, Bonaobra was having coffee with his father
Florencio inside their house. Villamor gave Bonaobra ₱2,000.00
which the latter placed on top of the table. Bonaobra then
went outside the house to answer his cellphone. When
Bonaobra was at the door, a man later identified as PD
Peñaflor kicked the fence of Bonaobra's house, grabbed
Bonaobra's right arm, and said, "Caught in the act ka!"
Florencio went outside and asked PD Peñaflor if he had a
search warrant. Two more men entered the house and took
the money from the table. Petitioners were then made to
board the service vehicle and brought in for investigation at the
police headquarters.
Ruling of the Regional Trial Court
On October 25, 2006, the RTC of Virac, Catanduanes, Branch 43
rendered its Judgment finding petitioners guilty beyond
reasonable doubt of committing illegal numbers game locally
known as ''lotteng," a variant of the game Last
Two,8 respectively as a collector or agent under Section 3(c),
and as a coordinator, controller, or supervisor under Section
3(d), of RA 9287.
The RTC gave credence to the testimonies of the arresting
officers and held that petitioners were caught in flagrante
delicto committing an illegal numbers game locally known as
"lotteng," a variant of Last Two. The RTC held that petitioners
were seen by the arresting officers in the act of counting bets
before the arrest was made inside Bonaobra' s compound. 1he
petitioners were also caught holding "'papelitos," which
contained the three rows of two-number combinations. Since
the winning combination in "lotteng" is taken from the first
two numbers of the winning combinations in the daily draw of
the lotto in the Philippine Charity Sweepstakes, the RTC held
that the number combinations shown in the ''papelitos" were
meant to correspond to the lotto results.
The RTC further held that Villamor's participation in the illegal
numbers game was that of a collector since he brought bet
money to Bonaobra while the latter was that of a coordinator,
controller, or supervisor after it was shown that he received
the money from Villamor.
The dispositive part of the Judgment of the RTC reads:
WHEREFORE, applying the Indeterminate Sentence Law, this
Court hereby SENTENCES Martin Villamor to suffer a penalty of
imprisonment from eight (8) years and one (1) day as minimum
to nine (9) years as maximum, and Victor Bonaobra to suffer
a penalty of ten (10) years and one (1) day as minimum to
eleven (11) years as maximum. Likewise, the money
amounting to ₱l,500.00 and the other personal properties
used as gambling paraphernalia, like the calculator, ballpen
and cellular phone are confiscated in favor of the state.
SO ORDERED9
Ruling of the Court of Appeals
On June 13, 2011, the CA affirmed the RTC's Decision. The CA
brushed aside Bonaobra's argument that his right to due
process was violated when he was convicted of a crime
different from that with which he was charged. The CA held
that the classification of a maintainer, manager, or operator
includes a coordinator, controller, or supervisor.10The CA
ratiocinated that to hold a maintainer guilty of the lesser
offense of acting as a coordinator will not be violative of his
right to be informed of the nature and cause of his accusation
since the graver offense of acting as a maintainer necessarily
includes being a coordinator.
With respect to Villamor, the CA gave more weight and
credence to the testimonies of the arresting officer who were
presumed to have acted regularly in the performance of their
official functions. The CA held that Villamor' s denials cannot
prevail over the positive assertions of the police officers who
caught him in the act of revising and counting bets.
The CA disposed the case as follows:
IN VIEW OF THE FOREGOING, the decision appealed from is
affirmed.
SO ORDERED.11
Hence, this Petition.
Issue
The main issue in this case is whether the petitioners'
conviction for violation of RA 9287 as collector or agent under
Section 3(c) for Villamor, and as coordinator, controller, or
supervisor m1der Section 3(d) for Bonaobra, should be
upheld.
Our Ruling
We find the Petition meritorious.
In criminal cases, an appeal throws the entire "case wide
open for review and the reviewing tribunal can correct errors,
though unassigned in the appealed judgment, or even
reverse the trial court's decision [based on] x x x grounds
other than those that the parties raised as errors."12
The Court finds that the right of the petitioners against
unreasonable searches and seizures was violated by the
arresting officers when they barged into Bonaobra's
compound without a valid warrant of arrest or a search
warrant. While there are exceptions to the rule requiring a
warrant for a valid search and seizure, none applies in the
case at bar. Consequently, the evidence obtained by the
police officers is inadmissible against the petitioners, the same
having been obtained in violation of the said right.
Section 2, Article Ill of the 1987 Constitution requires a judicial
warrant based on the existence of probable cause before a
search and an arrest may be effected by law enforcement
agents. Without the said warrant, a search or seizure becomes
unreasonable within the context of the Constitution and any
evidence obtained on the occasion of such unreasonable
search and seizure shall be inadmissible in evidence for any
purpose in any proceeding.13"Evidence obtained and
confiscated on the occasion of such an unreasonable search
and seizure is tainted and should be excluded for being the
proverbial fruit of the poisonous tree."14
In this case, the apprehending officers claim that petitioners
were caught in flagrante delicto, or caught in the act of
committing an offense. PD Peñaflor and his team of police
officers claim that petitioners were committing the offense of
illegal numbers game when they were arrested without a
warrant.
We are not persuaded.
Under Section 5 of Rule 113 of the Rules of Court, a lawful
arrest may be effected even without a warrant of arrest in the
following instances:
Sec. 5. Arrest without warrant; when lawful. - A peace officer or
a private person may, without a warrant, arrest a person:
(a) When, in his presence, the person to be arrested has
committed, is actually committing, or is attempting to commit
an offense;
(b) When an offense has in fact just been committed, and he
has probable cause to believe based on personal knowledge of
facts or circumstances that the person to be arrested has
committed it; and
(c) When the person to be arrested is a prisoner who has
escaped from a penal establishment or place where he is
serving final judgment or temporarily confined while his case is
pending, or has escaped while being transferred from one
confinement to another.
In cases falling under paragraphs (a) and (b) above, the person
arrested without a warrant shall be forthwith delivered to the
nearest police station or jail and shall be proceeded against in
accordance with Section 7 of Rule 112.
In warrantless arrests made pursuant to Section 5(a), Rule 113,
two elements must concur, namely "(a) the person to be
arrested must execute an overt act indicating that he has just
committed, is actually committing, or is attempting to commit
a crime; and (b) such overt act is done in the presence or within
the view of the arresting officer."15
After a judicious review of the records of the case, the Court
finds that there was no valid warrantless arrest on
petitioners.1âwphi1 It was not properly established that
petitioners had just committed, or were actually committing,
or attempting to commit a crime and that said act or acts were
done in the presence of the arresting officers. Based on the
testimonies of PO1 Saraspi and PD Peñaflor, they were
positioned some 15 to 20 meters away from petitioners. PO 1
Saraspi's testimony during cross examination reveals the
following:
ATTY. SAMONTE:
Q While you were outside the compound of Bonaobra, what
was your distance to accused Martin Villamor and Victor
Bonaobra?
A More or less fifteen (15) to twenty (20) meters.
Q Is it not that the compound of Bonaobra is surrounded with
fence?
A Yes, sir.
Q Bamboo fence, right?
A Yes, sir, without a gate.
Q Are you sure it's without a gate?
A Probably it was open.
Q Can you determine the height of the fence?
A Between 5'7" to 5'9".
Q More than your height?
A Yes, sir.
Q Can you tell us whether you can see what the person is
doing inside the compound while you are outside?
A The fence is made up [sic] of bamboo and there were gaps
as far as the fence is concerned that is why when we alighted
from the Frontier we saw what was inside the compound.
Q And the space of each bamboo, can you determine [sic]?
A One and half to two inches apart.
Q When you were already outside the compound what were
the accused doing?
A They were sitting and they were revising.
Q Were they seated with [sic] a table?
A They were sitting and Victor Bonaobra was without a shirt.
Q What were they holding?
A 'Papelitos'.
Q What else?
A While they were holding 'papelitos' the monies were just
on the table.
Q At the distance of 15 to 10 meters can you determine the
contents of the 'papelitos'?
A No, sir.
Q So you are not sure whether those are gambling
paraphernalia?
A No, sir.
Q Because you do not know the contents of that and you are
not sure whether those are gambling paraphernalia you went
inside, is that right?
A After we introduced ourselves that we are [sic] police officers
we entered the compound.
Q Meaning to say you were outside the compound and saying
you are policemen?
A We entered first and we introduced ourselves.
Q Which is first, going inside or introducing yourselves?
A While entering we were also introducing ourselves
simultaneously.
Q When you reached inside, what did you determine?
A We determined that there were lotteng paraphernalia on the
table.
Q That is the only time that you determined that those were
gambling paraphernalia?
A No, even on the [sic] outside we identified it already.
Q A while ago you said at a distance of 15 to 10 meters you can
determine whether they were in possession of the illegal
gambling paraphernalia?
A What I am trying to say is that I cannot identify those that are
written on the 'papelitos' at the distance and I saw the
calculator, the money bets.
Q So what you saw within a distance of 15 to 10 meters are
calculators, money and cellphone?
A Yes, sir.
Q Do you consider money gambling paraphernalia?
A Yes, sir.
Q So every time you see money you will consider that a
gambling paraphernalia?
A In other situations.
Q How about calculator, do you consider calculator gambling
paraphernalia?
A Yes, sir.
Q When you go to a department store there are calculators, do
you consider those calculators gambling paraphernalia?
A If you are going to consolidate all these items in a table all of
these are gambling paraphernalia
Q So when you consolidate these items and papers and
calculators, if you see those items at Century Trading, will you
consider those as gambling paraphernalia?16
Considering that 15 to 20 meters is a significant distance
between the police officers and the petitioners, the Court
finds it doubtful that the police officers were able to
determine that a c1iminal activity was ongoing to allow them
to validly effect an in flagrante delicto warrantless arrest and
a search incidental to a warrantless arrest thereafter. The
police officers even admitted that the compound was
surrounded by a bamboo fence 5'7" to 5'9" in height, which
made it harder to see what was happening inside the
compound. It appears that the police officers acted based
solely on the information received from PD Peñaflor's
informant and not on personal knowledge that a crime had
just been c01m11itted, was actually being committed, or was
about to be committed in their presence. The Court finds it
doubtful that the police officers witnessed any overt act
before entering the private home of Bonaobra immediately
preceding the arrest. PO1 Saraspi even admitted that from his
position outside the compound, he could not read the
contents of the so-called "papelitos;" yet, upon seeing the
calculator, phone, papers and money on the table, he readily
concluded the same to be gambling paraphernalias.
On the part of PD Peñaflor, he likewise admitted that from his
position outside the compound, he could not determine the
activities of the persons inside. It was only after he had
illegally entered the compound, since he was not armed with
a warrant, that he supposedly saw the gambling
paraphernalia. PD Peñaflor's testimony in this regard is as
follows:
Q Can you tell the Honorable Court, Mr. Witness, the distance
of the house of Victor Bonaobra to that place where you
parked your vehicle when you arrived in the vicinity?
A When I parked my vehicle in front of the compound
because that is a street, the distance from the street to that
place where there is an on-going 'revisar' of 'lotteng', more or
less 15 to 20 meters, I believe, from the gate.
Q So, you did not immediately go inside the compound of
Victor Bonaobra?
A Yes, sir. I verified first if there is really [sic] persons in the
compound.
Q So, at that distance of 15 to 20 meters, you were able to
verify what they were doing on the particular 1ime, Mt.
Witness?
A No, sir.17
During his direct examination, Bonaobra testified that he was
only answering his cellphone when PD Peñaflor barged into
his compound and arrested him. The relevant portions of his
testimony reveals the following:
ATTY SAMONTE:
Q At around 9:00 a.m. of June 17, 2005, what were you doing
if you still remember?
A I stood up and I went out and made [sic] three steps from the
door to answer the cellphone and later on I was surprised
when the police whom I could not identify, kicked the door.
Q Mr. Witness, which door [are you] referring to [that] was
kicked by the police?
A The gate outside of our fence.
xxxx
Q You said a while ago that the policeman kicked the door of
your fence x
xx who was that policeman, if you know him?
A: Provincial Director Peñaflor.
Q: Who was with PD Peñaflor on [sic] that particular time, if
any, Mr. Witness?
A Two (2) persons in civilian clothes.
xx xx
Q After PD Peñaflor kicked the door of your fence, what
happened next, Mr. Witness?
A He held my hand and he seized my cellphone.
xxxx
Q After PD Peñaflor seized your cellphone, what else did he
do?
A He said, "caught in the act."
Q Which comes first, Mr. Witness, the utterance made by PD
Peñaflor that you were caught in the act or the utterance made
by your father whether they had a warrant?
A When my father asked them whether they have a warrant.
Q And what was the answer of PD Peñaflor when your father
asked that question?
A He said, "caught in the act."
Q And what was the reply of your father?
A My father said that what you am doing is wrong, that is
prohibited.
Q And what did PD Peñaflor answered [sic] to your father?
A He shouted at my father, "Di na kailangan yan" (That is not
needed).18
From the circumstances above, it is highly suspect that PD
Peñaflor had witnessed any overt act indicating that the
petitioners were actually committing a crime. While PD
Peñaflor claims that he caught the petitioners in the act of
collecting bets and counting bet money, this observation was
highly improbable given the distance of the police from the
petitioners and the fact that the compound was surrounded by
a bamboo fence.
For his part, Villamor claimed that he was at the Bonaobra
compound to repay his loan to Jonah. The prosecution,
through Prosecutor Tañon, even admitted this fact during
Jonah's direct examination. The following exchange between
the prosecution and the defense was quite revealing:
ATTY. SAMONTE:
Your Honor, please, [may] I respectfully offer the testimony
of Jona[h] Bonaobra to show that she is the ·wife of Victor
Bonaobra; that at around 8:30 a.m. of June 17, 2005 she was
inside their residence at Bonaobra's compound, Francia, Virac,
Catanduances and on that particular time and date, Martin
Villamor arrived to pay his debt and she personally witnessed
the unlawful act committed by the policemen who entered
their dwelling on that particular lime and date and such other
matters relative thereto, Your Honor.
COURT:
Any comment from the prosecution?
PROS. TAÑON:
We will admit that she is the wife of Victor Bonaobra; that on
Jw1e 17, 2005 at 8:30 in the morning she was inside the
residence of Bonaobra's compound; that accused Martin
Villamor arrived to pay his debt. We are to contest on that
she personally witnessed the unlawful act.
A1TY. SAMONTE:
To clarify that, the prosecution is admitting the fact that
Martin arrived to pay the loan on that particular day?
PROS. TAÑON:
Yes, Your Honor.
COURT:
Okay, so that we can proceed to the other
matters.19 (Emphasis supplied)
From the exchange above, it is clear that the prosecution
admitted that Villamor went to Bonaobra's house to pay his
loan to Jonah. Thus, at the exact moment of the arrest,
neither Bonaobra, who was answering his cellphone, nor
Villarr1or, who was paying his loan. was performing any overt
act constitutive of a crime.
Verily, the warrantless arrest conducted by PD Peñaflor and
his team was unlawful as the same does not satisfy the
requirements of an in flagrante delicto arrest. Consequently,
the search and seizure of the effects found inside the house
of Bonaobra are likewise illegal since there could be no valid
search incident to an illegal warrantless arrest. Thus,
evidence seized from Bonaobra's house is inadmissible for
being a fruit of the poisonous tree.
The Court is aware that any question regarding the legality of
a warrantless arrest must be raised before arraignment.
Failure to do so constitutes a waiver of the right to question
the legality of the arrest especially when the accused actively
participated during trial as in this case. However, we have
clarified that such waiver is only confined to the defects of the
arrest and not on the inadmissibility of the evidence seized
during an illegal arrest. In People v. Racho,20 the Court held
that:
Obviously, this is an instance of seizure of the 'fruit of the
poisonous tree', hence, the confiscated item is inadmissible in
evidence consonant with Article III, Section 3(2) of the 1987
Constitution, 'any evidence obtained in violation of this or the
preceding section shall be inadmissible for any purpose in any
proceeding'.
Without the confiscated shabu, appellant's conviction cannot
be sustained based on the remaining evidence. Thus, an
acquittal is warranted, despite the waiver of appellant of his
right to question the illegality of his arrest by entering a plea
and his active participation in the trial of the case. As earlier
mentioned, the legality of an arrest affects only the jurisdiction
of the court over the person of the accused. A waiver of an
illegal, warrantless arrest does not carry with it a waiver of the
inadmissibility of evidence seized during an illegal warrantless
arrest. (Emphasis supplied)
In this case, the prosecution failed to clearly establish the acts
that constitute the offense of illegal gambling as a collector or
an agent under Section 3(c), and as a coordinator, controller, or
supervisor under Section 3(d), of RA 9287. Under the said law,
a collector or agent is "any person who collects, solicits or
produces bets in behalf of his/her principal for any illegal
numbers game who is usually in possession of gambling
paraphernalia."21 On the other hand, a coordinator, controller,
or supervisor is defined as, ''any person who exercises control
and supervision over the collector or agent."22 The prosecution
merely relied on the alleged illegal gambling paraphernalia
found and confiscated inside the house of Bonaobra and not on
the specific overt acts that constitute the offense.
All told, the evidence purportedly seized from the Bonaobra
compound is inadmissible in evidence since it was obtained in
violation of Section 3(2), Article III of the 1987 Constitution.
Since the alleged illegal gambling paraphernalia is the
very corpus delicti of the crime charged, the Court acquits
petitioners.
WHEREFORE, the June 13, 2011 Decision of the Court of
Appeals in CA-G.R. CR No. 30457 which affirmed the Judgment
of the Regional Trial Court of Virac, Catanduanes, Branch 43 in
Criminal Case Nos. 3463 and 3464 is hereby REVERSED and SET
ASIDE. Petitioners Martin Villamor y Tayson and Victor
Bonaobra y Gianan are ACQUITTED and are ordered to be
immediately RELEASED from detention, unless they are
confined for any other lawful cause.
The Director of the Bureau of Corrections is DIRECTED to
IMPLEMENT this Decision and to report to this Court the action
taken hereon within five days from receipt.
SO ORDERED.
MARIANO C. DEL CA

People vs gayoso
DEL CASTILLO, J.:
In criminal prosecutions for the illegal sale and possession
of shabu, primordial importance must be given to "the
preservation of the integrity and the evidentiary value of the
seized items as they will be used to determine the guilt or
innocence of the accused."[1]
This is an appeal from the June 23, 2011 Decision[2] of the
Court of Appeals (CA) in CA-G.R. CR-HC No. 00744 that
affirmed in toto the April 12, 2007 Decision[3] of the Regional
Trial Court (RTC) of Guiuan, Eastern Samar, Branch 3, in
Criminal Case Nos. 2079 and 2078, finding Myrna
Gayoso y Arguelles (appellant) guilty beyond reasonable
doubt of violating Sections 5 (illegal sale of a dangerous drug)
and 11 (illegal possession of a dangerous drug), Article II of
Republic Act (RA) No. 9165, respectively, and imposing upon
her the penalty of life imprisonment and a fine of
P500,000.00 for selling shabu, and the indeterminate prison
term of eight (8) years and one (1) day, as minimum, to
fourteen (14) years, eight (8) months and one (1) day, as
maximum, for possessing 0.53 gram of shabu.
Factual Antecedents
The Information in Criminal Case No. 2078 contained the
following accusatory allegations against appellant:
That on or about the 24th day of March, 2004, at about 5:30
o’clock in the morning at Jetty, Brgy. Hollywood, Guian,
Eastern Samar, Philippines, within the jurisdiction of this
Honorable Court, the abovementioned accused who acted
without the necessary permit from proper authorities
whatsoever, did then and there willfully, unlawfully and
feloniously have in her possession, control and custody
eleven (11) x x x sachets [containing] Methamphetamine
Hydrochloride commonly known as "shabu" weighing 0.53
[gram], a dangerous drug.
Contrary to law.[4]
The Information in Criminal Case No. 2079 charged appellant
in the following manner:
That on or about the 24th day of March, 2004, at about 5:00
o’clock in the morning at Jetty, Brgy. Hollywood, Guian,
Eastern Samar, Philippines, within the jurisdiction of this
Honorable Court, the abovementioned accused who acted
without the necessary permit or authority whatsoever, did
then and there willfully, unlawfully and criminally sell, deliver
and dispense one (1) pc. small heat sealed sachet of
Methamphetamine Hydrochloride commonly known as
"shabu" weighing 0.06 [gram], a dangerous drug.
Contrary to law.[5]
During arraignment, appellant entered a plea of ''not guilty" in
both cases. Joint trial then ensued.
Version of the Prosecution
Based on the testimonies of SPO3 Victorino de Dios (SPO3 De
Dios), SPO3 Rolando G. Salamida (SPO3 Salamida), PO2 Rex Isip
(PO2 Isip), SPO4 Josefina Bandoy (SPO4 Bandoy), P/Insp.
Eleazar Barber, Jr. (PI Barber), PS/Insp. Benjamin Cruto (PSI
Cruto), and the documentary exhibits, the following facts
emerged:
PI Barber of the PNP[6] Guiuan Police Station directed SPO3 De
Dios to conduct a surveillance on appellant after receiving
several reports that she was peddling prohibited drugs. Three
weeks later, SPO3 De Dios confirmed that appellant was indeed
engaged in illegal drug activities. PI Barber filed for and was
issued a search warrant. However, prior to implementing the
search warrant, PI Barber decided to conduct a "confirmatory
test-buy" designating SPO3 De Dios as poseur-buyer and giving
him P200.00 marked money for the operation.
On March 24, 2004, SPO3 De Dios and a civilian asset
proceeded to the house of appellant and asked her if they
could buy shabu. The sale was consummated when appellant
took the marked money from SPO3 De Dios after giving him a
sachet of shabu. SPO3 De Dios immediately informed PI Barber
by text message about the successful "confirmatory test-buy".
PI Barber and his team of police officers who were positioned
100 meters away rushed towards the house of appellant. He
also instructed SPO3 De Dios and the civilian asset to summon
the Barangay Chairman to witness the search of the house.
When he arrived together with a kagawad and a media
representative, SPO3 Salamida read the search warrant to
appellant.
During the search of the house, SPO4 Bandoy found a tin foil
under the mattress. SPO3 De Dios took it from SPO4 Bandoy
and gave it to SPO3 Salamida who found seven sachets
of shabu inside, in addition to the four sachets of shabu found
inside the right pocket of the short pants of appellant. The
search of the house also revealed several drug paraphernalia.
An inventory of seized items was prepared and the same was
signed by the Barangay Chairman, PO2 Isip, SPO4 Bandoy, and
appellant. The sachets of shabu were brought to the Philippine
Drug Enforcement Agency (PDEA) then to the PNP Crime
Laboratory for qualitative examination. The results of the
examination verified that the seized sachets contained shabu.
Version of Appellant
Appellant denied the charges against her. She claimed that on
March 24, 2004, somebody forcibly kicked the front door of her
house and tried to break it open. When she opened the door,
PI Barber pushed her aside and told his companions to move
quickly. They went directly to her room; when PO2 Isip
emerged therefrom seconds later, he was holding a substance
that looked like tawas. SPO3 De Dios and SPO3 Salamida went
in and out of her house. She maintained that the search
warrant was shown to her only after an hour and that the
sachets of shabu were planted. She argued that the police
officers fabricated the charges against her since her family
had a quarrel with a police officer named Rizalina Cuantero
regarding the fence separating their houses.
The Ruling of the Regional Trial Court
The RTC found appellant guilty beyond reasonable doubt of
illegal sale and illegal possession of shabu. It declared that the
prosecution ably established the elements of illegal sale and
possession of shabu through the testimonies of its witnesses
who arrested appellant after selling a sachet of the illegal
drug in a "test-buy operation" and for possessing 11 sachets
of the same drug in her house after enforcing a search
warrant immediately thereafter. Appellant had no evidence
that she had license or authority to possess the shabu.
The RTC ruled that the evidence sufficiently established the
chain of custody of the sachets of shabu from the time they
were bought from appellant and/or seized from her house, to
its turnover to the PDEA and submission to the PNP Crime
Laboratory for examination. The RTC rejected appellant's
defense of denial and frame-up in view of her positive
identification by eyewitnesses as the criminal offender.
The RTC therefore sentenced appellant to life imprisonment
and to pay a fine of P500,000.00 for the illegal sale of shabu.
It also sentenced appellant to suffer the indeterminate prison
term of eight (8) years and one (1) day, as minimum to
fourteen (14) years, eight (8) months and one (1) day, as
maximum and a fine of P300,000 for illegal possession
of shabu.
From this judgment, appellant appealed to the CA. In her
Brief,[7] she assailed the validity of the search warrant
claiming that it was not issued by the RTC upon
determination of probable cause. She argued that the
"confirmatory test-buy" conducted by the poseur buyer and
the confidential asset was not valid since they forced her to
engage in a drug sale. She maintained that
the shabu presented during trial was inadmissible in evidence
due to several gaps in its chain of custody.
The Office of the Solicitor General (OSG) filed its Brief for the
Appellee[8] praying for the affirmance of the appealed
Decision. It argued that the evidence on which the RTC based
its determination of probable cause was sufficient for the
issuance of the search warrant. It asserted that the "'test buy
operation" was an entrapment and not an inducement. The
OSG maintained that the shabu confiscated from appellant
was admissible in evidence since the prosecution established
the proper chain of custody.
The Ruling of the Court of Appeals
The CA affirmed in toto the RTC ruling finding appellant guilty
of unauthorized sale and possession of shabu. The CA ruled
that all the elements for the sale of shabu were established
during the "test-buy operation". It held that the illegal sale
of shabu was proven by SPO3 De Dios who participated in
said operation as the designated poseur buyer. His offer to
buy shabu with marked money and appellant's acceptance by
delivering the illegal drug consummated the offense. The CA
likewise declared that the elements for possession
of shabuwere present in the case against appellant. After
appellant's arrest for illegal sale of shabu, a valid search
resulted in the discovery of 11 sachets of shabu inside her
house, which were under her possession and control. She did
not have legal authority to possess the same and failed to
overcome the presumption that she consciously knew she was
in possession of the illegal drug discovered in her home.
The CA noted that the examination by the trial judge
established probable cause in issuing the search warrant. The
deposition of PO3 Salamida shows that he had personal
knowledge of appellant's drug activities, and the same served
as basis for the finding of probable cause for the purpose of
issuing a search warrant.
The CA was not swayed by appellant's contention that the
"test-buy operation" amounted to instigation since it is settled
jurisprudence that a ''decoy solicitation" is not tantamount to
inducement or instigation. The CA was also unconvinced by
appellant's claim that the proof against her was inadmissible
since the prosecution failed to show strict compliance with
Section 21 of RA 9165 and its implementing rules on the
custody and disposition of the evidence.
Appellant filed a Notice of Appeal.[9] On July 15, 2013,[10] the
Court notified the parties to file their supplemental briefs.
However, appellant opted not to file a supplemental brief since
she had extensively argued her cause in her appellants'
brief.[11] For its part, the OSG manifested that it would not file a
supplemental brief since its appellee's brief filed in the CA had
already discussed and refuted the arguments raised by
appellant.[12]
Our Ruling
The RTC Issued A Search Warrant After
Finding Probable Cause
Appellant contends that there was no probable cause for the
issuance of the search warrant. She claims that PI Barber had
no personal knowledge of her alleged drug dealings.
There is no merit in this contention.
Probable cause for a valid search warrant is defined "as such
facts and circumstances which would lead a reasonably
discreet and prudent man to believe that an offense has been
committed, and that objects sought in connection with the
offense are in the place sought to be searched."[13] The
probable cause must be "determined personally by the judge,
after examination under oath or affirmation of the complainant
and the witnesses he may produce, and particularly describing
the place to be searched and the persons or things to be
seized."[14] Probable cause does not mean actual and positive
cause, nor does it import absolute certainty. The determination
of the existence of probable cause is concerned only with the
question of whether the affiant has reasonable grounds to
believe that the accused committed or is committing the
crime charged.[15]
Here, the records reveal that the trial court issued the search
warrant after deposing two witnesses, namely PI Barber and
SPO3 Salamida. In particular, the deposition of SPO3 Salamida
shows that he had personal knowledge of appellant's drug
pushing activities which served as basis for the finding of
probable cause for the issuance of the search warrant. Thus,
whether or not PI Barber had personal knowledge of the
illegal drug activities committed by appellant will not
adversely affect the findings of probable cause for the
purpose of issuance of search warrant.
Confirmatory test-buy solicitation does
not constitute instigation.
Appellant argues that the "confirmatory test-buy" by the
police officers was not valid since she was induced by the
designated poseur buyer, SPO3 De Dios, and the confidential
informant to sell the seized shabu.
There is no merit in this argument.
In inducement or instigation —
the criminal intent originates in the mind of the instigator and
the accused is lured into the commission of the offense
charged in order to prosecute him. The instigator practically
induces the would-be accused into the commission of the
offense and himself becomes a co-principal. [This is
distinguished from entrapment wherein] ways and means are
resorted to for the purpose of capturing the lawbreaker in
flagrante delicto.[16]
The "test-buy" operation conducted by the police officers is
not prohibited by law. It does not amount to instigation. As in
this case, the solicitation of drugs from appellant by the
poseur buyer merely furnishes evidence of a course of
conduct.[17] The police received an intelligence report that
appellant habitually deals with shabu. They designated a
poseur buyer to confirm the report by engaging in a drug
transaction with appellant. There was no proof that the
poseur buyer induced appellant to sell illegal drugs to him.
Notwithstanding the foregoing disquisition, appellant still
deserves an acquittal as will be discussed below.
The chain of custody of evidence was not
established
Appellant impugns the prosecution's failure to establish the
charges of illegal sale and possession of shabu against her
due to the gaps in the chain of custody and the assailable
integrity of the evidence in view of non-compliance with
Section 21, Article II of RA 9165.
There is merit in this protestation.
The offense of illegal sale of shabu has the following elements:
"(1) the identities of the buyer and the seller, the object and
consideration of the sale; and (2) the delivery of the thing
sold and the payment therefor."[18] On the other hand, the
offense of illegal possession of shabu has the following
elements: "(1) the accused is in possession of an item or an
object which is identified to be a prohibited drug; (2) such
possession is not authorized by law; and (3) the accused freely
and consciously possessed said drug."[19] In the prosecution for
illegal sale and possession of shabu, there must be proof that
these offenses were actually committed, coupled with the
presentation in court of evidence of corpus delicti.[20]
In both illegal sale and illegal possession of [shabu,] conviction
cannot be sustained if there is a persistent doubt on the
identity of said drug. The identity of the [shabu] must be
established with moral certainty. Apart from showing that the
elements of possession or sale are present, the fact that the
[shabu] illegally possessed and sold x x x is the same [shabu]
offered in court as exhibit must likewise be established with
the same degree of certitude as that needed to sustain a guilty
verdict.[21]
"'The chain of custody requirement performs this function in
that it ensures that unnecessary doubts concerning the identity
of the evidence are removed."[22]
Chain of custody is defined as "duly recorded authorized
movements and custody of seized drugs or controlled
chemicals or plant sources of dangerous drugs or laboratory
equipment of each stage, from the time of seizure/confiscation
to receipt in the forensic laboratory to safekeeping, to
presentation in court for destruction."[23] In People v.
Havana,[24] the Court expounded on the custodial chain
procedure in this wise:
As a method of authenticating evidence, the chain of custody
rule requires that the admission of an exhibit be preceded by
evidence sufficient to support a finding that the matter in
question is what the proponent claims it to be. It would include
testimony about every link in the chain, from the moment the
item was picked up to the time it is offered in evidence, in such
a way that every person who touched the exhibit would
describe how and from whom it was received, where it was
and what happened to it while in the witness' possession, the
condition in which it was received and the condition in which it
was delivered to the next link in the chain. These witnesses
would then describe the precautions taken to ensure that there
had been no change in the condition of the item and no
opportunity for someone not in the chain to have possession of
the same.
While the testimony about a perfect chain is not always the
standard because it is almost always impossible to obtain, an
unbroken chain of custody becomes indispensable and
essential when the item of real evidence is not distinctive and
is not readily identifiable, or when its condition at the time of
testing or trial is critical, or when a witness has failed to
observe its uniqueness. The same standard obtains in case the
evidence is susceptible of alteration, tampering, contamination
and even substitution and exchange. In other words, the
exhibit's level of susceptibility to fungibility, alteration or
tampering -without regard to whether the same is advertent or
otherwise not - dictates the level of strictness in the application
of the chain of custody rule.
Thus, as a general rule, four links in the chain of custody of
the confiscated item must be established:
first, the seizure and marking, if practicable, of the illegal drug
recovered from the accused by the apprehending officer;
second, the turnover of the illegal drug seized by the
apprehending officer to the investigating officer; third, the
turnover by the investigating officer of the illegal drug to the
forensic chemist for laboratory examination; and fourth, the
turnover and submission of the marked illegal drug seized
from the forensic chemist to the court.[25]
Marking is the placing by the arresting officer or the
poseur-buyer of his/her initials and signature on the items
after they have been seized. It is the starting point in the
custodial link. It is vital that the seized items be marked
immediately since the succeeding handlers thereof will use
the markings as reference.[26] The chain of custody rule also
requires that the marking of the seized contraband be done
"(1) in the presence of the apprehended violator, and (2)
immediately upon confiscation."[27]
In this case, the records do not show that the arresting
officers marked the seized items with their initials in the
presence of appellant and immediately upon confiscation.
While PO2 Isip testified that the seized sachets of shabu were
marked in the police station,[28] no evidence was presented to
show that the marking was accomplished in the presence of
appellant. Moreover, the author of the markings on said
items was never identified. None of the police officers
admitted placing the markings. There was therefore a
complete absence of evidence to prove authorship of the
markings.
While marking of the evidence is allowed in the nearest
police station, this contemplates a case of warrantless
searches and seizures.[29]Here, the police officers secured a
search warrant prior to their operation. They therefore had
sufficient time and opportunity to prepare for its
implementation. However, the police officers failed to mark
immediately the plastic sachets of shabu seized inside
appellant's house in spite of an Inventory of Property Seized
that they prepared while still inside the said house. The
failure of the arresting officers to comply with the marking of
evidence immediately after confiscation constitutes the first
gap in the chain of custody.
The turnover of the seized shabu from the arresting officers
to the investigating officer in the police station constitutes
the second link in the chain of custody. In this regard, the
Court takes note that the testimonies of the prosecution
witnesses failed to identify the person to whom the seized
items were turned over at the police station. While SPO3
Salamida was identified as the property custodian of the
police station, this does not necessarily mean that he is also
the investigating officer. There is nothing in the records to
substantiate this presumption. This total want of evidence
gains importance considering that none of the arresting
officers presented as witnesses identified
the shabu presented during trial as the same shabu seized
from appellant. Thus, the second link in the chain of custody is
missing.
The transfer of the seized shabu from the investigating officer
to the forensic chemist in the crime laboratory is the third link
in the chain of custody. While the seized shabu was turned
over by PI Barber to the PDEA, he no longer had any personal
knowledge of the manner it was handled therein. He also did
not identify the police officer in whose custody the seized
sachets of shabu were placed at the PDEA. He left it to the
responsibility of the PDEA to forward the seized shabu to the
crime laboratory. The request for laboratory examination of
the PDEA identifies the police officer who delivered the
seized shabu as a certain SPO1 Asis, but he was not presented
to testify that the shabudelivered to the crime laboratory was
the same shabu confiscated from appellant. There is a third
break in the chain of custody.
Nothing also can be gained from the testimony of the forensic
chemist PSI Cruto. His testimony is not clear and positive since
he failed to assert that the alleged packs of chemical substance
presented for laboratory examination and tested positive
for shabu were the very same substance allegedly recovered
from appellant. His testimony was limited to the result of the
examination he conducted and not on the source of the
substance.
From the foregoing, it appears that no chain of custody was
established at all. What we have here are individual links with
breaks in-between which could not be seamlessly woven or
tied together. The so-called links in the chain of custody show
that the seized shabu was not handled properly starting from
the actual seizure, to its turnover in the police station and the
PDEA, as well as its transfer to the crime laboratory for
examination. The Court therefore cannot conclude with moral
certainty that the shabu confiscated from appellant was the
same as that presented tor laboratory examination and then
presented in court.
It is indeed desirable that the chain of custody should be
perfect and unbroken. In reality however, this rarely occurs.
The legal standard that must therefore be observed "is the
preservation of the integrity and the evidentiary value of the
seized items as they will be used to determine the guilt or
innocence of the accused."[30] Here, the Court finds that the
apprehending officers failed to properly preserve the integrity
and evidentiary value of the confiscated shabu. There are just
too many breaks and gaps to the effect that a chain of custody
could not be established at all. Failure of the prosecution to
offer testimony to establish a substantially complete chain of
custody of the shabuand the inappropriate manner of handling
the evidence prior to its offer in court diminishes the
government's chance of successfully prosecuting a drug
case.[31]
Aside from the failure of the prosecution to establish an
unbroken chain of custody, another procedural lapse casts
further uncertainty on the identity and integrity of the
subject shabu. This refers to the non-compliance by the
arresting officers with the most basic procedural safeguards
relative to the custody and disposition of the seized item
under Section 21(1), Article II of RA 9165, which reads as
follows:
SEC. 21. Custody and Disposition of Confiscated, Seized,
and/or Surrendered Dangerous Drugs, Plant Sources of
Dangerous Drugs, Controlled Precursors and Essential
Chemicals, Instruments/Paraphernalia and/or Laboratory
Equipment. - The PDEA shall take charge and have custody of
all dangerous drugs, plant sources of dangerous drugs,
controlled precursors and essential chemicals, as well as
instruments/paraphernalia and/or laboratory equipment so
confiscated, seized and/or surrendered, for proper
disposition in the following manner:
(1) The apprehending team having initial custody and control
of the drug shall, immediately after seizure and confiscation,
physically inventory and photograph the same in the
presence of the accused or the person/s from whom such
items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media
and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies of the
inventory and be given a copy thereof.
Corollarily, Section 21(a) of the Implementing Rules and
Regulations provides as follows:
Section 21(a) The apprehending officer/team having initial
custody and control of the drug shall, immediately after
seizure and confiscation, physically inventory and photograph
the same in the presence of the accused or the person/s from
whom such items were confiscated and/or seized, or his/her
representative or counsel, a representative from the media,
the Department of Justice (DOJ), and a public official who
shall be required to sign the copies of the inventory and be
given a copy thereof: Provided, that the physical inventory
and photograph shall be conducted at the place where the
search warrant is served; or at the nearest office of the
apprehending officer/team, whichever is practicable, in case
of warrantless seizures; Provided, further, that
non-compliance with these requirements under justifiable
grounds, as long as the integrity and the evidentiary value of
the seized items are properly preserved by the apprehending
officer/team, shall not render void and invalid such seizure of
and custody over said items.
In this case, the apprehending team never conducted a
physical inventory of the seized items at the place where the
search warrant was served in the presence of a
representative of the Department of Justice, nor did it
photograph the same in the presence of appellant after their
initial custody and control of said drug, and after immediately
seizing and confiscating the same. Neither was an explanation
offered for such failure. While this directive of rigid
compliance has been tempered in certain cases, "such
liberality, as stated in the Implementing Rules and
Regulations can be applied only when the evidentiary value
and integrity of the illegal drug are properly
preserved."[32] Such an exception does not obtain in this case.
"Serious uncertainty is generated on the identity of the
[shabu] in view of the broken linkages in the chain of custody.
[Thus,] the presumption of regularity in the performance of
official duty accorded to the [apprehending officers] by the
courts below cannot arise."[33]
WHEREFORE, the appeal is GRANTED. The Decision of the
Court of Appeals in CA-G.R. CR-HC No. 00744 dated June 23,
2011 is REVERSED and SET ASIDE. Appellant Myrna Gayoso y
Arguelles is hereby ACQUITTED of the charges, her guilt not
having been established beyond reasonable doubt.
The Superintendent for the Correctional Institute for Women is
hereby ORDERED to immediately RELEASE the appellant from
custody, unless she is held for another lawful cause.
SO ORDERED.
September 5, 2017
A.M. No. 16-05-142-RTC
Re: Report on the Preliminary Results of the Spot Audit in the
Regional Trial Court, Branch 170, Malabon City.,
DECISION
DEL CASTILLO, J.:
This administrative matter refers to the report on the
preliminary results of the spot audit conducted by the Office of
the Court Administrator (OCA) in the Regional Trial Court,
Branch 170, Malabon City.
The Factual Antecedents
On April 26, 2016, the OCA sent a team to conduct a spot audit
of search warrant applications raffled to Branch 170, due to
persistent reports pertaining to the alleged irregular issuance
of search warants by Presiding Judge Zaldy B. Docena (Judge
Docena).
The Report on the Preliminary Results of the Spot Audit
On May 26, 2016, the OCA submitted to the Court its
Report1 dated May 23, 2016 on the preliminary results of the
spot audit. In the Report, the OCA made the following
observations:
First, a total of 938 applications for search warrants were filed
before the RTC of Malabon City from January 2015 up to April
13, 2016. These applications were distributed among the
following judges: Judge Docena, Branch 170, with 761
applications; then Executive Judge Celso Raymundo L. Magsino,
Jr. (Judge Magsino), Branch 74, with 175 applications; and
Judge Jimmy Edmund G. Batara (Judge Batara), Branch 172,
with two applications.2
Second. the RTC of ivfalabon City exceeded the number of
search warrants issued by the RTC of Manila (with 56 branches)
and the RTC of Quezon City (with 48 branches),
 notwithstanding the fact that the latter courts are allowed to
issue search warrants which are enforceable nationwide.3
The data provided by the Statistical Reports Division of the
Court Management Office show the number of search
warrants issued by selected RTCs in the National Capital
Judicial Region from January 2015 up to March 2016:4
NUMBER OF SEARCH
ISSUING COURT
WARRANTS ISSUED
RTC of Malabon City 763
The OCA found this to be in violation of Section 2(a) of Rule 126
of the Rules of Court which provides that an application for a
search warrant shall be filed with "[a]ny court within whose
territorial jurisdiction a crime was committed."6
Fourth, Judge Docena issued 418 search warrants which are
also enforceable outside the territorial jurisdiction of the RTC
of Malabon City, but this time the applicants specifically
invoked Section 2(b) of Rule 126 which allows, for compelling
reasons, the filing of the application with any court within the
judicial region where the crime was committed or where the
warrant shall be enforced.7

The OCA, however, pointed out that said search warrant

RTC of Manila 675 applications merely cited the bare allegations of possible
leakage of information and/or that the person subject of the
RTC of Makati City 75 application is influential in the area, or has friends working in
the local government offices and the courts.8
RTC of Quezon City 68
Fifth, Branch 170 has admitted returns on search warrants
where the seizing officer did not proceed with the operation
RTC of Pasig City 9 because of new developments and/or information that the
subject has already moved out, when the proper procedure is
Third, out of the 761 applications assigend to Branch 170, for the applicant to file a motion to set aside the search
Judge Docena issued 113 search warrants which are warrant.9
enforceable outside the territorial jurisdiction of the RTC of
Malabon City, viz:5 There are also several cases where the returns have yet to be
submitted to the court despite the lapse of the 10-day period
SEARCH JUDICIAL REGION within which to do so. The OCA considered this to be a failure
SEARCH WARRANTS
WERE ISSUED on the part of Branch 170 "to ascertain if the return has been
made, and if none, [to] summon the person to whom the
warrant was issued and require him to explain why no return
was made."10
National Capital Judicial Region 46
And sixth, the OCA noted that Branch 170:
National Capital Judicial Region 16
a) x x x issues search warrants even [though] the application is
not accompanied with pertinent papers to establish that the
National Capital Judicial Region 14
applicant [had] conducted a surveillance prior to the filing of
said application x x x;
National Capital Judicial Region 8
b) x x x issues search warrants even when the authority of the
head of the agency to file the application is a mere photocopy;
National Capital Judicial Region 7
c) [admits] mere photocopies of the inventory of the seized
City National Capital Judicial Region 6 items and inventories that are not under oath; and,

d) x x x always grants custody of the seized items to the

National Capital Judicial Region
National Capital Judicial Region
y National Capital Judicial Region
y National Capital Judicial Region
ty National Capital Judicial Region
4
applicant and/or his agency for forensic examination or due to
lack of space in the court premises.11
3
Upon the OCA's recommendation, the Court issued a
Resolution12 dated May 31, 2016 placing Judge Docena under
2
immediate preventive suspension for a period of six months.
Thus:
2
x x x The Court resolved, upon the recommendation of the
1 Office of the Court Administrator (OCA), to:

(a) PREVENTIVELY SUSPEND, effective immediately, effective

4th Judicial Region 1 immediately, Judge Zaldy B. Docena, Regional Trial Court (RTC),
Branch 170, Malabon City, for six (6) months pending the
113 completion of a more comprehensive and detailed
investigation on the issuance of search warrants;
 (b) RELIEVE Judge Celso Raymundo L. Magsino, Jr., Branch 74,
same court, from his duties as Executive Judge of RTC,
Malabon City, and INCLUDE him IN THE INVESTIGATION in
view of the apparent irregularity in the raffle of applications
for search warrants;
According to Atty. Esmeralda G. Dizon (Atty. Dizon), Clerk of
Court VI, Office of the Clerk of Court (OCC), this distribution
system is in accordance with their internal policies on the raffle
of cases.18 The pertinent portions of said internal policies are
quoted as follows:

(c) DESIGNATE Judge Jimmy Edmund G. Batara, Branch 72,
same court, and Judge Emmanuel D. Laurea, Branch 169,
same court, as Executive Judge and Vice-Executive Judge,
respectively, of RTC, Malabon City; and
(d) DIRECT the OCA to IMMEDIATELY SEAL/SECURE all
records/folders pertaining to applications for search warrant
received by Judge Docena.
Let this resolutiion be personally and immediately served on
the parties concerned. x x x13
In compliance with the May 31, 2016 Resolution of the Court,
the OCA's Audit Team conducted an investigation on the
raffle of applications for and issuance of search warrants in
the R TC of Malabon City. The investigation was thereafter
concluded on June 17, 2016.
The Result of the Investigation
In a Memorandum14 dated August 4, 2016, the Audit Team
submitted the result of the investigation to Court
Administrator Jose Midas P. Marquez.
INTERNAL OFFICE MEMO
TO: CLERK IN CHARGE OF RAFFLE (Millet/Pam, Mark, Paul)
RE: SW/TRO/TPO
DATE: MAY 2014
Per executive session with the Executive Judge, the following
are the innovations with respect to raflling:
xxx
3. Raffle of TRO/TPO/SW shall be special and shall reqmre
notices/Returns/complete documentation and presence of
witness/applicant in case of SW;
4. Due to its confidentiality, only the Clerk of Court and the
Clerk In Charge sha11 receive any application for SW. Raffle of
this nature shall be held at the chambers/office of the EJNice EJ
and only the ordinary courts (170 and 74) are eligible for raffle
unless the nature subject of application falls exclusively under
the powers of EJ or in his absence, the Vice EJ;

On the Distribution/Raffle of Search Warrant Applications
The Audit Team noted that only two out of the five
branches15 in the RTC of Malabon City, specifically, Branches
74 and 170, took cognizance of search warrant applications,
as Branches 72 (Drugs Court), 73 (Family Court), and 169
(Family Court and Agrarian Court) which exclusively handle
drugs and family court cases, respectively, are not included in
the raffle of said applications.16
The distribution of applications for search warrants in the RTC
of Malabon City from January 2015 up to May 10, 2016 is as
follows:17
5. Ratio of cases between the EJ and Branch 170 shall be in
accordance with the Guidelines on the Selection and
Designation of EJs (A.M. 03-8- 02-SC) which is 2 :3;
6. SW shall be raffled on 1:2 daily basis and counted per
applicant. Since Br. 74 is also the EJ, then, SW shall be raffled
exclusively to the remaining ordinary court when the EJ is on
official leave, official business, official meeting.
xxx
(Sgd.)
ATTY. ESMERALDA G. DIZON
Clerk of Court VI19

BRANCH/JUDGE
Branch 170 (Judge Docena)
Branch 74 (Judge Magsino)
- Involving ordinary criminal cases
(received by raffle)
- Involving special criminal cases
(received in his s,apacity as
Executive Judge)
APPLICATIONS RECEIVED After a thorough examination of the records of the OCC, the
Audit Team concluded that the RTC ofMalabon City failed to
795 observe the existing rules in the distribution of search warrant
applications involving ordinary criminal cases as provided in
Chapter V of the Guidelines on the Selection and Designation of
185
Executive Judges.20
(152)
The Audit Team cited three instances where the raffle of search
(33) warrant applications was clearly inequitable:
a) in January 2016, Branch 170 received all 16 search warrant
applications filed in the RTC ofMalabon City;21

Branch 72 (Judge Batara) 4 4 b) in February 2016, 44 search warrant applications were

- Involving special criminal cases
(received in his capacity as the Vice
Executive Judge)
TOTAL
assigned to Branch 170, while only five ordinary criminal cases
were given to Branch 74·22 and ' '
c) in March 2016, 87 search warrant applications went to
Branch 170, while only three ordinary criminal cases were
984
raffled to Branch 74.23
In addition, the Audit Team also made the following WARRANTS REASON REASON
observations: ENFORCEBLE
First, the application docketed as SW16-183 was raffled to
Branch 170, when it should have been directly assigned to Laguna 1 - 1
the Executive Judge as it involved violations of Republic Act
No. 9165, or the Comprehensive Dangerous Drugs Act of Caloocan City 7 8 15
2002, and Presidential Decree No. 1866, as amended, or the
law on the illegal possession of firearms.24
Las Piñas City - 6 6
Second, it could not be ascertained whether a special raffle
for applications for search warrant was actually conducted in Makati City 18 170 188
the RTC of Malabon City because the OCC did not prepare the
minutes of the raffle.25 Mandaluyong City 6 13 19

Third, there are discrepancies between the date of receipt of

some search. warrant applications appearing in the OCC's Manila 54 116 170
logbook and the date stamped on the face of said
applications as received by Branch 170.26 Muntinlupa City 1 15 16

For instance, SW15-120-MN appears to have been received

Parañaque City 2 65 67
by the OCC on May 6, 2015 at 9:00 a.m. and thereafter raffled
to Branch 170 on the same ,day, based on the date stamped
on the face of the application.27 However,1 the case was Pasay City 6 75 81
recorded in the OCC's logbook only on May 7, 2015.28 The
corresponding search warrant was also issued on May 7, Pasig City 15 68 83
2015.29

The same observation is true for the following applications: Quezon City 11 50 61
SW15- 427 to SW15-432 - logged as filed with the OCC on
September 9, 2015,30 but the applications were all stamped Taguig City 7 33 40
received on September 8, 2015 at 10:30 a.m.;31and SW15-592
to SW15-596 - logged as filed with the OCC on November 27, Valenzuela City 2 9 11
2015,32 but the applications were stamped received on
November 26, 2015, at 1 :00 p.m.33 TOTAL 130 62839 758
And fourth, there are cases where the caption of search
warrant applications already indicates that it is being filed The Audit Team likewise observed that there are instances
with Branch 170, and typewritten at the bottom of the where the compelling reasons cited by the applicant appear to
applications is the name of Judge Docena to whom the be without merit, and Judge Docena failed to ask the required
application would be subscribed and sworn to.34 probing and exhaustive inquiry on the veracity of the
compelling reason invoked.40
On the Issuance of Search Warrants by Branch 170
In addition to its preliminary findings, the Audit Team pointed
The Audit Team noted that Judge Docena granted all 790 out the following irregularities pertaining to Judge Docena's
search warrant applications raffled to Branch 170 from issuance of search warrants:
January 2015 up to May 10, 2016, and 19235 of which are
John/Jane Doe search warrants. Out of the 790 search a) There are search warrants that were issued ahead of the
warrants issued, 442 or 55.95% thereof have yielded negative date of filing of the application.41
results, remained unserved, or were otherwise never b) Judge Docena is the signatory of the jurat of all the
returned to the court.36 applications for search warrants before Branch 170. In some
The Audit Team also found that Judge Docena granted 758 cases, the signature appearing thereon is not his customary
search warrant applications even though the places of signature.42
commission of the crimes involved therein were outside the c) There are some applications that are not under oath
territorial jurisdiction of the RTC of Malabon City. Out of 758 although the affidavits were signed by Judge Docena.43
applications,37 130 had completely failed to cite compelling
reasons to warrant their filing in the RTC of Malabon d) Page 3 of the application in SWl 5-588 is missing, but Judge
City.38 Thus: Docena signed on another page containing the sketch of the
place to be searched.44
PLACES WHERE NO WITH TOTAL
e) Judge Docena signed the jurat of some affidavits of
SEARCH COMPELLING COMPELLING
witnesses, despite the lack of signature of the affiant.45
 f) Some affidavits of witnesses are replicated, where only the Marikina City - 2 2
dates and the addresses relating to the supposed surveillance
are changed.46
Muntinlupa City - 2 2
g) Judge Docena has admitted as proof of surveillance the
attachment of a map and pictures of the door of the unit to Parañaque City 7 10 17
be searched, as well as the screen of a computer.47

The Audit Team also noted several lapses in the management Pasay City - 16 16
of case records in Branch 170:
Pasig City 4 10 14
a) Case records have no minutes of the proceedings.48

b) There were two sets of stenographic notes found in 16 Quezon City 3 3 6

search warrant applications.49
Taguig City 3 7 10
c) In most applications, there are no searching questions and
answers in writing and under oath, in violation of Section 5,
Rule 126 of the Rules of Court.50 TOTAL 33 106 139

d) The search warrant case folders of Branch 170 are not
paginated.51
e) In cases where an applicant filed several search warrant
applications, some of the documents attached are not
original copies.52
f) Case folders are not properly stitched, and some folders
loose pages. Other folders, too, are merely attached using
fasteners.53
g) Stenographic notes are not attached to the records.54
h) Transcripts of stenographic notes are similarly not
attached to the records.55
i) Branch 170 does not maintain a logbook where entries shall
be made within 24 hours after the issuance of the search
warrant.56
Issuance of Search Warrants by Branch 74
Nevertheless, the Audit Team found no patent irregularities in
Judge Magsino's issuance of search warrants assigned to
Branch 74,59 considering that:
1. There is no instance where the date of receipt by the OCC
and the date ofraftle of the search warrant application to
Branch 74, as stamp the face of the application, are ahead of
the date recorded in the logbook of the OCC.60
2. There is also no instance where the date of the search
warrant issued is ahead of the date of filing of the application
in court.61
3. The minutes of the proceedings are attached to the case
records, but the contents are not complete.62
4. Aside from the issuance of search warrants, Judge Magsino
also issues an order stating, among others, that the court
conducted a hearing and examined the applicant and his
witness/informant.63

The Audit Team noted that Judge Magsino also granted a
considerable number of search warrant applications from
January 2015 up to May 10, 2016, where the offenses
involved were committed outside the territorial jurisdiction
of the RTC ofMalabon City.57 Thus:58
5. The stenographic notes are all attached to the records,
although some have yet to be transcribed.64
6. Branch 74 observes the guidelines on the custody of
computer data under Sections 15 and 16, Chapter IV of
Republic Act No. 10175, or the Cybercrime Prevention Act. 65

PLACES WHERE For these reasons, the Audit Team no longer discussed the
NO WITH
SEARCH details of the rest of the acts and omissions of Branch 74.
COMPELLING COMPELLING TOTAL
WARRANTS
REASON REASON In its 1st Indorsement66 dated September 27, 2016, the OCA
ENFORCEBLE
directed Judge Docena and Judge Magsino, as well as the
concerned court personnel, to submit their comments on the
Rizal 1 - 1
final report of the Audit Team.

Caloocan City 1 1 2 Judge Docena's Comment

In his Comment67 dated October 28, 2016, Judge Docena

Makati City - 35 35 submits that he granted the search warrant applications before
him "in the good faith belief that there was probable cause for
Mandaluyong City 13 2 15 their issuance and in compliance with law and procedure."68

Judge Docena clarifies that he had no control over which

Manila 1 18 19
search warrant applications will be filed in the RTC of Malabon
City, much less those that will be raffled to Branch 170.69
Neither does he or the court personnel under him have any
hand in the implementation of the search warrants issued by
him or the outcome or results thereof. 70
Judge Docena likewise contends that there is nothing
irregular in his issuance of 192 John/Jane Doe search
warrants, considering that the crimes involved therein are
mostly violations of the Cybercrime Prevention Act and the
£-Commerce Act, where there is indeed difficulty in obtaining
the identities of the alleged perpetrators. 71
As for his issuance of search warrants involving crimes
committed outside the territorial jurisdiction of the RTC of
Malabon City, Judge Docena denies having violated Section
2(a) of Rule 126 of the Rules of Court and Section 12, Chapter
V of A.M. No. 03-8-02, given that the issuance of search
warrants is inherent in all courts and venue in search warrant
applications is merely procedural and not jurisdictional. 72
Judge Docena further argues that he "cannot consider the
issues of absence of compelling reasons in the [search
warrant] application[s], and improper venue mo tu proprio to
deny [said] applications outright," as "these have to be raised
by the respondent/accused in a motion to quash."73 And as
for those respondents in the search warrants who did not
question the venue of the pertinent search warrant
applications, they should be deemed to have waived said
defense and considered to have acquiesced to the venue of
said applications.74
In addition, Judge Docena maintains that "he granted the
search warrant applications in the good faith belief that there
is merit to the compelling reasons provided by the
applicants." He insists that "this determination should be
respected unless it is shown that [he] is guilty of grave abuse
of discretion amounting to excess or lack of jurisdiction."75
Judge Docena also explains that "the rule requiring judges to
conduct a probing and exhaustive inquiry is applicable only to
the determination of probable cause" and not to the
compelling reasons cited by an applicant in a search warrant
application, 76 as the existence of compelling reasons does
not relate to the existence of probable cause which is the
basis for the issuance of the search warrant. 77
While Judge Docena admits that there are search warrants
that appear to have been issued ahead of the date of filing of
their respective applications, he argues that the incorrect
dates on said warrants are typographical errors which are
attributable to honest mistake and inadvertence.78 He claims
that Branch 170 uses previous documents as templates in
order to save time and effort,79 and he surmises that the
dates in the orders pertaining to some search warrant
applications were unfortunately not properly edited to reflect
the correct date. 80
Finally, Judge Docena begs the Court for understanding and
leniency for his failure to properly monitor the submission of
returns of the search warrants he issued and to summon
those applicants who have yet to file their respective returns,
given the extraordinarily high number of search warrants
raffled to Branch 170. 81
Recommendations of the OCA
In a Memorandum82 dated February 20, 2017, the OCA made
the following recommendations:
IN VIEW OF ALL THE FOREGOING, it is respectfully
recommended for the consideration of the Honorable Court
that:
1. Hon. CELSO R. L. MAGSINO, JR., Presiding Judge, RTC,
Branch 74, Malabon City, and then Executive Judge, RTC,
Malabon City, be found GUILTY of (a) violation of Supreme
Court rules and circulars concerning the raffle of search
warrant applications, and Section 2, Rule 126 of the Rules of
Court and Section 12, Chapter V of the Guidelines in the
Selection and Designation of 1'.,xecutive Judges and Defining
their Powers, Prerogatives and Duties on the issuance of search
warrants, and Section 12(b ), Rule 126, Rules of Court on,
among others, the filing of the returns; and (b) inefficiency in
the performance of his duties as Presiding Judge of Branch 74,
same court, and FINED in the amount of ₱20,000.00;
2. Atty. ESMERALDA G. DIZON, Clerk of Court, Office of the
Clerk of Court, RTC, Malabon City, be found GUILTY of simple
neglect of duty and SUSPENDED from the service for six (6)
months, effective immediately;
3. Hon. ZALDY B. DOCENA, Presiding Judge, RTC, Branch 170,
Malabon City, be found GUILTY of gross ignorance of the law,
gross negligence, and gross misconduct and DISMISSED FROM
THE SERVICE with forfeiture of retirement benefits, except
accrued leave credits, and disqualification from re-employment
in any government institution;
4. Atty. JESUS S. HERNANDEZ, Branch Clerk of Court, RTC,
Branch 170, Malabon City, be found GUILTY of simple neglect
of duty and SUSPENDED from the service for six (6) months,
effective immediately;
5. MS. OLIVIA M. LABAGNAO, MS. DEBHEM E. FARDO, MS.
ROSARIO [M. SAN PEDRO], and MS. GIGI M. MENDOZA, Court
Stenographers, and MS. ZENAIDA Z. SALONGA, Clerk-in-Charge,
all of RTC, Branch 170, Malabon City, be found GUILTY of
simple neglect of duty and ADMONISHED to be more diligent
and circumspect in the performance of their duties; and
6. Atty. EVELYN M. LOZANO-AGUILAR, Branch Clerk of Court,
MA. ALICIA C. MALUBAY, Court Interpreter, and DALISAY C.
CASUGA, MYRA D. SANTOS, SHERREE ANN R. RUZGAL, MA.
THERESA P. REYES, Court Stenographers, all of RTC, Branch 74,
Malabon City, be REMINDED to henceforth strictly comply with
existing court issuances on search warrants without necessarily
giving up their endeavor to preserve the confidentiality of the
information in the records.
Considering the herein recommendation of the OCA that Judge
Docena be dismissed from the service, and considering further
that the preventive suspension of Judge Docena will in the
meantime expire on 1 March 2017, it is likewise hereby
recommended that the PREVENTIVE SUSPENSION of Judge
Docena expiring on 1 March 2017 BE INDEFINITELY
EXTENDED until such time the Court has resolved this
administrative matter.
In a Resolution83 dated February 28, 2017, the Court
extended the preventive suspension of Judge Docena for
another three (3) months reckoned from March 1, 2017.
Finally, on June 20, 2017, the Court resolved to extend Judge
Docena's suspension until such time that this administrative
matter would have been resolved.84
The Court's Ruling
Section 2, Rule 126 of the Rules of Court provides for the
proper venue where applications for search warrant should
be filed:
SEC. 2. Court where applications for search warrant shall be
filed. - An application for search warrant shall be filed with
the following:
(a) Any court within whose jurisdiction a crime was
committed.
(b) For compelling reasons stated in the application, any court
within the judicial region where the crime was committed if
the place of the commission of the crime is known, or any
court within the judicial region where the warrant shall be
enforced.
However, if the criminal action has already been filed, the
application shall only be made in the court where the criminal
action is pending.85
It is settled that the inclusion of a statement of compelling
reasons in a search warrant application that is filed in a court
which does not have territorial jurisdiction over the place of
commission of the alleged crime is a mandatory requirement,
and the absence of such statement renders the
application defective.86
The absence of a statement of compelling reasons, however,
is not a ground for the outright denial of a search warrant
application, since it is not one of the requisites for the
issuance of a search warrant. Section 4 of Rule 126 is clear on
this point:
SEC. 4. Requisites for issuing search warrant. - A search
warrant shall not issue except upon probable cause in
connection with one specific offense to be determined
personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may
produce, and particularly describing the place to be
searched and the things to be seized which may be
anywhere in the Philippines.87
In other words, the statement of compelling reasons is only a
mandatory requirement in so far as the proper venue for the
filing of search warrant application is concerned. It cannot be
viewed as an additional requisite for the issuance of a search
warrant.
It is also important to stress that an application for a search
warrant merely constitutes a criminal process and is not in
itself a criminal action.88 The rule, therefore, that venue is
jurisdictional in criminal cases does not apply thereto.89 Simply
stated, venue is only procedural, and not jurisdictional, in
applications for the issuance of a search warrant.
In Pilipinas Shell Petroleum Corporation v. Romars International
Gases Corporation,90 the Court ruled that the issue on the
absence of a statement of compelling reasons in an application
for a search warrant does not involve a question of jurisdiction
over the subject matter, as the power to issue search warrants
is inherent in all courts.91Thus, the trial court may only take
cognizance of such issue if it is raised in a timely motion to
quash the search warrant. Otherwise, the objection shall be
deemed waived, pursuant to the Omnibus Motion Rule.92
Consequently, the Court in Pilipinas Shell upheld the validity of
the questioned search warrants despite the lack of a statement
of compelling reasons in their respective applications,93 as the
objection was not properly raised in a motion to quash.94
Note, too, that the determination of the existence of
compelling reasons under Section 2(b) of Rule 126 is a matter
squarely addressed to the sound discretion of the court where
such application is filed, subject to review by an appellate
court in case of grave abuse of discretion amounting to excess
or lack of jurisdiction.95
Clearly, this administrative proceeding is not the proper forum
to review the search warrants issued by Judge Docena and
Judge Magsino in order to determine whether the compelling
reasons cited in their respective applications are indeed
meritorious.
Given these circumstances, we cannot agree with the OCA's
findings that Judge Docena and Judge Magsino violated Section
2 of Rule 126 by simply issuing search warrants involving
crimes committed outside the territorial jurisdiction of the RTC
of Malabon City where: a) there is no compelling reason to take
cognizance of the applications; and b) the compelling reasons
alleged in the applications appear to be unmeritorious.96
It is obvious that Judge Docena and Judge Magsino simply
exercised the trial court's ancillary jurisdiction over a special
criminal process97 when they took cognizance of the
applications and issued said search warrants. And as previously
discussed, the propriety of the issuance of these warrants is a
matter that should have been raised in a motion to quash or in
a certiorari petition, if there are allegations of grave abuse of
discretion on the part of the issuing judge.
The Administrative Liabilities
To hold a judge administratively liable for gross misconduct,
ignorance of the law or incompetence of official acts in the
exercise of judicial functions and duties, it must be shown that
his acts were committed with fraud, dishonesty, corruption,
malice or ill-will, bad faith, or deliberate intent to do an
injustice.98 Absent such proof, the judge is fresumed to have
acted in good faith in exercising his judicial functions.99
In this case, the OCA found Judge Docena's issuance of the
subject search warrants to have been motivated by bad
faith, 100 as evidenced by the following attendant
circumstances:
First, the high incidence of search warrant operations that
yielded negative results, remained unserved, or otherwise
were never returned to the court;101
Second, Judge Docena appears to have thrown leading
questions during the examination of the applicant and the
witness in SW16-257 and SW14-134;102
Third, four search warrants issued by Judge Docena, i.e.
Search Warrant Nos. 13-160-MN, 13-161-MN, MN-13-162,
and MN-13-163, have been nullified by the Court of Appeals
(CA) in CA-G.R. SP No. 132860 for insufficiency of the
compelling reasons alleged in the search warrant
applications;103
And fourth, there were search warrants that appear to have
been issued ahead of the dates of filing of their respective
applications; search warrants that were released to the
witness instead of the applicant; and search warrants which
were issued on the date of filing of the application, but
appear to have been received by the applicant a day in
advance.104
We are not convinced. These circumstances alone are clearly
insufficient to overturn the presumption that Judge Docena
acted in good faith in issuing the subject search warrants.
For one thing, it is unfair to hold the low rate of success of
search warrant operations against Judge Docena, given that
the courts have absolutely no participation in the
implementation of the search warrants that they
issue.1âwphi1
For another, it is a grave error to consider the CA's
nullification of four search warrants issued by Judge Docena
as an indication that all warrants issued by him suffer from
the same infirmity. After all, not every mistake or error of
judgment of a judge in the performance of his official duties
makes him liable therefor. 105
Nevertheless, we find sufficient evidence to hold Judge
Docena administratively liable for gross neglect of duty for
the serious mismanagement of search warrant applications in
Branch 170.
Section 12, Rule 126 of the Rules of Court provides:
SEC. 12. Delivery of property and inventory thereof to court;
return and proceedings thereon. -
a) The officer must forthwith deliver the property seized to
the judge who issued the warrant, together with a true
inventory thereof duly verified under oath.
b) Ten (10) days after issuance of the search warrant,
the issuing judge shall ascertain if the return has been made,
and if none, shall summon the person to whom the warrant
was issued and require him to explain why no return was
made. If the return has been made, the judge shall ascertain
whether Section 11 of this Rule has been complied with and
shall require that the property seized be delivered to him.
The judge shall see to it that subsection (a) hereof has been
complied with.
c) The return on the search warrant shall be filed and kept by
the custodian of the log book on search warrants who shall
enter therein the date of the return, the result, and other
actions of the judge.106
The records show that Judge Docena has failed to properly
monitor the submission of returns as required under Section l
2(b) and (c) of Rule 126, considering that:
1. the returns on 172 search warrants107 have yet to be
submitted, and Judge Docena failed to summon each of the 39
applicants thereof to court to explain why no return was
made.108
2. 350 returns109 were filed by applicants well beyond the
10-day period to do so, with the delay ranging from 11 days up
to six months and five days (in SW 15-477).110
3. 43 returns111 were not immediately acted upon, with the
delay ranging from one month and 22 days up to five months
and 12 days (in SW 15-435).112
4. 29 returns 113 have yet to be acted upon.
Judge Docena likewise committed several lapses in
ascertammg whether Section 12(a) of Rule 126 was complied
with by the applicants in: a) SW 15-503-MN, where mere
photocopies of the inventory of the seized items were
submitted;114 b) in SW 16-286-MN, where the inventories are
not under oath and the signatures of the witnesses are
unidentifiable because their printed names are not indicated in
the inventory; 115 and c) in SW 16- 273-MN, where only one
witness signed the inventory sheet.116
We also find that Judge Docena failed to comply with his
administrative responsibilities under Rules 3.08 and 3.09 of the
Code of Judicial Conduct which provide:
RULE 3.08 - A judge should diligently discharge administrative
responsibilities, maintain professional competence in court
management, and facilitate the performance of the
administrative functions of other judges and court personnel.
RULE 3.09 - A judge should organize and supervise the court
personnel to ensure the prompt and efficient dispatch of
business, and require at all times the observance of high
standards of public service and fidelity.117
as it appears that the concerned court personnel in Branch 170,
namely Atty. Jesus S. Hernandez (Atty. Hernandez), the Branch
Clerk of Court, Ms. Zenaida Z. Salonga, the Clerk-in-Charge,
together with Ms. Olivia M. Labagnao, Ms. Rosario M. San
Pedro, Ms. Debhem N. Fajardo, and Ms. Gigi M. Mendoza, all
court stenographers, too, are all guilty of simple neglect of duty
for failure to diligently perform their respective administrative
duties.
Atty. Hernandez, as the administrative officer in Branch 170,
fell short of the diligence and care required of him in the
following instances:
a. Case records have no minutes of the proceedings.118
b. Some search warrants are incorrectly dated, thus making it
appear that they were issued ahead of the date of filing of
their respective applications.119
c. Some search warrants were handed over to the witnesses
instead of the applicants.120
d. There is no date and time of receipt of the case folder by
Branch 170 on the face of the search warrant
applications.121 e. The search warrant case folders in Branch
170 are not paginated.122
f. In several applications, some documents attached thereto
are not original copies.123
g. Case folders are not property stitched, and some folders
have loose pages. Other folders, too, are merely attached
using fasteners.124
The court stenographers were likewise remiss in the
performance of their duties under Section 17, Rule 136 of the
Rules of Court, given that they failed to produce a total of 34
stenographic notes or seven sets of consolidated notes, and
to properly label their stenographic notes.125 It also appears
that they only prepared transcripts of stenographic notes
upon request of the applicants.126
As for the Clerk-in-Charge, she clearly violated Section 12(c)
of Rule 126,127 when she unjustifiably failed to maintain the
required log book for search warrant applications in Branch
170.
It is settled that "[a] judge presiding over a branch of a court
is, in legal contemplation, the head thereof having effective
control and authority to discipline all employees within the
branch."128 Consequently, Judge Docena shares
accountability for the administrative lapses of his staff that
contributed to the clearly disorganized and inefficient
dispatch of business in Branch 170.
Finally, we hold Judge Magsino and Atty. Dizon
administratively liable for simple misconduct, in their
capacities as the Executive Judge and the Clerk of Court of the
RTC of Malabon, respectively, for imposing their own internal
policies and practices129 in lieu of the existing rules in the
raffle of applications involving ordinary cases covered by
Chapter V of the Guidelines on the Selection and Designation
of Executive Judges and Defining their Powers, Prerogatives
and Duties (Guidelines).
To be specific, Judge Magsino and Atty. Dizon failed to
observe the pertinent portion of Section 6 of the Guidelines
which requires the search warrant applications assigned to a
branch during the special raffle to be deducted from the
number of cases allotted to on the next scheduled regular
raffle. This, however, was not implemented in the RTC of
Malabon City.130
Judge Magsino and Atty. Dizon also failed to observe the
proper ratio of the raffling of cases prescribed under par. 1,
Chapter V of Administrative Order No. 6 dated June 30,
1975,131 which states:
V. CASELOAD AND HONORARIUM
1. The caseload of the Executive Judge shall be as follows:
xxxx
c. In case of multiple branches (salas) of more than five (5), the
distribution of cases shall be in the proportion of one (1) case
for the Executive Judge and two (2) for each of the other
judges.132
Their use of an improvised system of counting the applicants
(instead of the applications)133 in the special raffle is simply
unacceptable, as the Executive Judge, much less the Clerk of
Court, has absolutely no discretion to deviate from the
prescribed ratio for the raffling of cases without prior approval
from this Court.
This resulted in an inequitable distribution of search warrant
applications between Branches 170 and 74 at a ratio of almost
6:1, or a six out of seven chance that an application will be
raffled to Branch 170, thereby removing the unpredictability of
the raffling process, so much so that some applicants already
indicate that their applications are being filed with Branch
170.134
The Penalties
On the one hand, gross neglect of duty or gross negligence
"refers to negligence characterized by the want of even slight
care, or by acting or omitting to act in a situation where there
is a duty to act, not inadvertently but willfully and intentionally,
with a conscious indifference to the consequences, in so far as
other persons may be affected. x x x In case involving public
officials, [there is gross negligence] when a breach of duty
is flagrant and palpable."135
It is important to stress, however, that the term "gross neglect
of duty" does not necessarily include willful neglect or
intentional wrongdoing. It can also arise from situations where
"such neglect which, from the gravity of the case or the
frequency of instances, becomes so serious in its character"
that it ends up endangering or threatening the public
welfare.136
In contrast, simple neglect of duty means the failure of an
employee to give proper attention to a required task or to
discharge a duty due to carelessness or indifference.137
Under Section 46(A), Rule 10 of the Revised Rules on
Administrative Cases in the Civil Service (RRACCS), gross
neglect of duty is classified as a grave offense punishable by
dismissal from the service (even for the first offense), while
simple neglect of duty is a less grave offense, punishable by
suspension without pay for one (1) month and one (1) day to
six (6) months for the first offense.
In this case, we find the gravity of Judge Docena's neglect in
the performance of his duties to be so serious in character that
the Court may unquestionably impose against him the penalty
of dismissal from the service.
Nevertheless, we take into consideration his length of service
of thirty (30) years in various sectors of the government, with
eight (8) years spent rendering service in the Judiciary as a
Technical Assistant in the Supreme Court from 1985 to 1987
and as an RTC Judge from 2010 up to present,138 his candid
admission of his lapses and his commitment to undertake
stringent steps to address the matters brought to his
attention by the OCA139 as mitigating factors that serve to
temper the penalty to be imposed upon him.140 We also note
that this is Judge Docena's first time to be administratively
sanctioned by this Court. Thus, instead of imposing the
penalty of dismissal, we deem it proper to impose against
Judge Docena the penalty of suspension for two (2) years
without pay.
As for Atty. Hernandez, we agree with the OCA's conclusion
that he undoubtedly failed to meet the standards required of
him as an effective and competent clerk of court.141 The OCA
recommended that Atty. Hernandez be suspended without
pay for six (6) months. 142 We, however, modify this
recommendation and reduce the penalty to suspension
without pay for one (1) month and (1) day, considering the
fact that this is his first offense,143 and the errors he
committed are purely administrative in nature and are not
gross or patent.
Four of the Justices voted for the dismissal of Judge Docena
from the service.
WHEREFORE, the Court:
1. FINDS Hon. Celso R. L. Magsino, Jr., Presiding Judge, Regional
Trial Court, Branch 74, Malabon City, and then Executive Judge,
Regional Trial Court, Malabon City, GUILTY of simple
misconduct, and hereby orders him to pay a FINE in the
amount of Twenty Thousand Pesos (₱20,000.00), with a STERN
WARNING that a repetition of the same or similar acts will be
dealt with more severely;
2. FINDS Atty. Esmeralda G. Dizon, Clerk of Court, Office of the
Clerk of Court, Regional Trial Court,. Malabon City, GUILTY of
simple misconduct, and hereby orders her to pay a FINE in the
amount of Twenty Thousand Pesos (₱20,000.00), with a STERN
WARNING that a repetition of the same or similar acts will be
dealt with more severely;
3. FINDS Hon. Zaldy B. Docena, Presiding Judge, Regional Trial
Court, Branch 170, Malabon City, GUILTY of gross neglect of
duty, and hereby SUSPENDS him from office for a period of
two (2) years without pay, with a STERN WARNING that a
repetition of the same or similar acts will be dealt with more
severely;

We likewise agree with the OCA's finding that Ms. Salonga
(the Clerk-in-Charge) and Ms. Labagnao, Ms. Fardo, Ms. San
Pedro, and Ms. Mendoza (the court stenographers) also failed
to diligently perform their respective duties.144Since this, too,
is their first offense, we adopt the OCA's
recommendation145 and impose the penalty of admonition
that they be more circumspect in the performance of their
respective duties.
On the other hand, "[m]isconduct is a transgression of some
established and definite rule of action, more particularly,
unlawful behavior or gross negligence by a public officer. The
misconduct is grave if it involves any of the additional
elements of corruption, willful intent to violate the law or to
disregard established rules, which must be proved by
substantial evidence. Otherwise, the misconduct is only
simple."146
4. FINDS Atty. Jesus S. Hernandez, Branch Clerk of Court,
Regional Trial Court, Branch 170, Malabon City, GUILTY of
simple neglect of duty, and hereby SUSPENDS him from office
for a period of one (1) month without pay, with a STERN
WARNING that a repetition of the same or similar acts will be
dealt with more severely;
5. FINDS Ms. Zenaida Z. Salonga, Clerk-in-Charge, and Ms.
Olivia M. Labagnao, Ms. Debhem E. Fardo, Ms. Rosario M. San
Pedro, and Ms. Gigi M. Mendoza, Court Stenographers,
Regional Trial Court, Branch 170, Malabon City, GUILTY of
simple neglect of duty, and are ADMONISHED to be more
diligent and circumspect in the performance of their duties.
SO ORDERED.

In this case, there is no substantial evidence to show that

Judge Magsino and Atty. Dizon's actions involved the
elements of corruption, willful intent to violate the law or to
disregard established rules to qualify their misconduct as
grave. Absent such malicious intent or bad faith on their part,
they may only be held administratively liable for simple
misconduct.

Although the penalty for simple misconduct is suspension

without pay of one (1) month and one (1) day to six (6)
months,147 the RRACCS allows the payment of a fine in place
of suspension if the offense is committed without abusing the
powers of one's position or office.148 Considering that this is
also the first offense for both Judge Magsino and Atty. Dizon,
we find the imposition of a fine of ₱20,000.00 to be proper
and commensurate for their transgressions.