527 Phil.

518

SECOND DIVISION
[ G.R. NO. 141667, July 17, 2006 ]
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY NATIONAL TELECOMMUNICATIONS
COMMISSION (NTC), PETITIONER, VS. INTERNATIONAL COMMUNICATIONS CORPORATION
(ICC), RESPONDENT.

DECISION

GARCIA, J.:

In this petition for review under Rule 45 of the Rules of Court, petitioner Republic, through the National
Telecommunications Commission (NTC), seeks the annulment and setting aside of the Amended
Decision[1] dated September 30, 1999 of the Court of Appeals (CA), setting aside the orders dated
June 4, 1996 and June 25, 1997 of the NTC insofar as said orders required respondent International
Communications Corporation (ICC) to pay the amount of P1,190,750.50 by way of permit fee as a
condition for the grant of a provisional authority to operate an international telecommunications leased
circuit service, and the Resolution[2] dated January 24, 2000, denying NTC's motion for
reconsideration.

There is no dispute as to the facts:

On April 4, 1995, respondent ICC, holder of a legislative franchise under Republic Act (RA) No. 7633
to operate domestic telecommunications, filed with the NTC an application for a Certificate of Public
Convenience and Necessity to install, operate, and maintain an international telecommunications
leased circuit service between the Philippines and other countries, and to charge rates therefor, with
provisional authority for the purpose.

In an Order[3] dated June 4, 1996, the NTC approved the application for a provisional authority subject,
among others, to the condition:
2. That applicant [ICC] shall pay a permit fee in the amount of P1,190,750.00, in accordance with
section 40(g) of the Public Service Act,[4] as amended;Respondent ICC filed a motion for partial
reconsideration of the Order insofar as the same required the payment of a permit fee. In a subsequent
Order dated June 25, 1997, the NTC denied the motion.

Therefrom, ICC went to the CA on a petition for certiorari with prayer for a temporary restraining order
and/or writ of preliminary injunction, questioning the NTC's imposition against it of a permit fee of
P1,190,750.50 as a condition for the grant of the provisional authority applied for.

In its original decision[5] dated January 29, 1999, the CA ruled in favor of the NTC whose challenged
orders were sustained, and accordingly denied ICC's certiorari petition, thus:
WHEREFORE, the instant petition is hereby DENIED. In view thereof, the assailed orders dated 4 June
1996 and 25 June 1997, requiring the payment of permit fees in the amount of One Million One Hundred
Ninety Thousand Seven Hundred Fifty and 50/100 Pesos (P1,190,750.50) as a condition for the grant
of a Provisional Authority to operate an International Circuit service, are hereby AFFIRMED.
ACCORDINGLY, the International Communications Corporation is hereby ordered to pay the amount
of One Million One Hundred Ninety Thousand Seven Hundred Fifty and 50/100 Pesos (P1,190,750.50)
to the National Telecommunications Commission.

1
SO ORDERED.In time, ICC moved for a reconsideration. This time, the CA, in its Amended Decision
dated September 30, 1999, reversed itself, to wit:
WHEREFORE, the instant Motion for Reconsideration is hereby GRANTED. Accordingly, the Decision
dated 29 January 1999 including the imposition by the public respondent of permit fees with respect to
[ICC's] international leased circuit service is hereby REVERSED. Judgment is hereby rendered, setting
aside the questioned orders dated 04 June 1996 and 25 June 1997, insofar as they impose upon
petitioner ICC the payment of the amount of One Million One Hundred Ninety Thousand Seven
Hundred Fifty and Fifty Centavos (P1,190,750.50) by way of permit fees as a condition for the grant of
a provisional authority to operate an International Leased Circuit Service. No costs.

SO ORDERED. (Word in bracket added).Petitioner NTC filed a motion for reconsideration, but its
motion was denied by the CA in its equally challenged Resolution dated January 24, 2000. Hence,
NTC's present recourse claiming that the CA erred in ruling that:
1. NTC has arrogated upon itself the power to tax an entity;

2. Section 40(g) of the Public Service Act has been amended by Section 5(g) of R.A. 7925; [6]

3. The imposition of permit fees is no longer authorized by R.A. 7925; and

4. The imposed permit fee in the amount of P1,190,750.50 for respondent's provisional authority is
exorbitant.Before addressing the issues raised, we shall first dwell on the procedural matter raised by
respondent ICC, namely, that the present petition should be dismissed outright for having been filed
out of time. It is respondent's posture that petitioner's motion for reconsideration filed with the CA vis-
a-vis the latter's Amended Decision is a pro forma motion and, therefore, did not toll the running of the
reglementary period to come to this Court via this petition for review.

Under Section 2 of Rule 45 of the Rules of Court, a recourse to this Court by way of a petition for review
must be filed within fifteen (15) days from notice of the judgment or final order or resolution appealed
from, or of the denial of the petitioner's motion for new trial or reconsideration filed in due time after
notice of the judgment. While a motion for reconsideration ordinarily tolls the period for appeal, one
that fails to point out the findings or conclusions which were supposedly contrary to law or the evidence
does not have such

an effect on the reglementary period as it is merely a pro forma motion.[7]

In arguing for the outright dismissal of this petition, respondent ICC claims that the motion for
reconsideration filed by petitioner NTC in connection with the CA's Amended Decision failed to point
out specifically the findings or conclusions of the CA which were supposedly contrary to law.
Respondent contends that the issues raised by the petitioner in its motion for reconsideration were
mere reiterations of the same issues which had already been considered and passed upon by the CA
when it promulgated its Amended Decision. On this premise, respondent maintains that petitioner's
aforementioned motion for reconsideration is a mere pro forma motion that did not toll the period for
filing the present petition.

Under established jurisprudence, the mere fact that a motion for reconsideration reiterates issues
already passed upon by the court does not, by itself, make it a pro forma motion.[8] Among the ends to
which a motion for reconsideration is addressed is precisely to convince the court that its ruling is
erroneous and improper, contrary to the law or evidence; and in so doing, the movant has to dwell of

2
necessity on issues already passed upon. If a motion for reconsideration may not discuss those issues,
the consequence would be that after a decision is rendered, the losing party would be confined to filing
only motions for reopening and new trial.[9]

Where there is no apparent intent to employ dilatory tactics, courts should be slow in declaring outright
a motion for reconsideration as pro forma. The doctrine relating to pro forma motions has a direct
bearing upon the movant's valuable right to appeal. Hence, if petitioner's motion for reconsideration
was indeed pro forma, it would still be in the interest of justice to review the Amended Decision a quo
on the merits, rather than to abort the appeal due to a technicality, especially where, as here, the
industry involved (telecommunications) is vested with public interest. All the more so given that the
instant petition raises some arguments that are well-worth resolving for future reference.

This brings us to the substantive merits of the petition.

In its Amended Decision, the CA ruled that petitioner NTC had arrogated upon itself the power to tax
an entity, which it is not authorized to do. Petitioner disagreed, contending the fee in question is not in
the nature of a tax, but is merely a regulatory measure.

Section 40(g) of the Public Service Act provides:

Sec. 40. The Commission is authorized and ordered to charge and collect from any public service or
applicant, as the case may be, the following fees as reimbursement of its expenses in the authorization,
supervision and/or regulation of the public services:

xxx xxx xxx

g) For each permit, authorizing the increase in equipment, the installation of new units or authorizing
the increase of capacity, or the extension of means or general extensions in the services, twenty
centavos for each one hundred pesos or fraction of the additional capital necessary to carry out the
permit. (Emphasis supplied)Clearly, Section 40(g) of the Public Service Act is not a tax measure but a
simple regulatory provision for the collection of fees imposed pursuant to the exercise of the State's
police power. A tax is imposed under the taxing power of government principally for the purpose of
raising revenues. The law in question, however, merely authorizes and requires the collection of fees
for the reimbursement of the Commission's expenses in the authorization, supervision and/or
regulation of public services. There can be no doubt then that petitioner NTC is authorized to collect
such fees. However, the amount thereof must be reasonably related to the cost of such supervision
and/or regulation.[10]

Petitioner NTC also assails the CA's ruling that Section 40(g) of the Public Service Act had been
amended by Section 5(g) of R.A. No. 7925, which reads:
Sec. 5. Responsibilities of the National Telecommunications Commission. - The National
Telecommunications Commission (Commission) shall be the principal administrator of this Act and as
such shall take the necessary measures to implement the policies and objectives set forth in this Act.
Accordingly, in addition to its existing functions, the Commission shall be responsible for the following:

xxx xxx xxx

g) In the exercise of its regulatory powers, continue to impose such fees and charges as may be
necessary to cover reasonable costs and expenses for the regulation and supervision of the operations
of telecommunications entities. (Emphasis supplied)The CA ratiocinated that while Section 40(g) of the

3
Public Service Act (CA 146, as amended), supra, allowed NTC to impose fees as reimbursement of its
expenses related to, among other things, the "authorization" of public services, Section 5(g), above, of
R.A. No. 7921 no longer speaks of "authorization" but only of "regulation" and "supervision." To the
CA, the omission by Section 5(g) of R.A. No. 7921 of the word "authorization" found in Section 40(g)
of the Public Service Act, as amended, meant that the fees which NTC may impose are only for
reimbursement of its expenses for regulation and supervision but no longer for authorization purposes.

We find, however, that NTC is correct in saying that there is no showing of legislative intent to repeal,
even impliedly, Section 40(g), supra, of the Public Service Act, as amended. An implied repeal is
predicated on a substantial conflict between the new and prior laws. In the absence of an express
repeal, a subsequent law cannot be construed as repealing a prior one unless an irreconcilable
inconsistency and repugnancy exist in the terms of the new and old laws.[11] The two laws must be
absolutely incompatible such that they cannot be made to stand together.[12]

Courts of justice, when confronted with apparently conflicting statutes or provisions, should endeavor
to reconcile the same instead of declaring outright the validity of one as against the other. Such alacrity
should be avoided. The wise policy is for the judge to harmonize such statutes or provisions if this is
possible, bearing in mind that they are equally the handiwork of the same legislature, and so give effect
to both while at the same time also according due respect to a coordinate department of the
government. It is this

policy the Court will apply in arriving at the interpretation of the laws and the conclusions that should
follow therefrom.[13]

It is a rule of statutory construction that repeals by implication are not favored. An implied repeal will
not be allowed unless it is convincingly and unambiguously demonstrated that the two laws are so
clearly repugnant and patently inconsistent with each other that they cannot co-exist. This is based on
the rationale that the will of the legislature cannot be overturned by the judicial function of construction
and interpretation. Courts cannot take the place of Congress in repealing statutes. Their function is to
try to harmonize, as much as possible, seeming conflicts in the laws and resolve doubts in favor of
their validity and co-existence.[14]

Here, there does not even appear to be a conflict between Section 40(g) of the Public Service Act, as
amended, and Section 5(g) of R.A. 7925. In fact, the latter provision directs petitioner NTC to "continue
to impose such fees and charges as may be necessary to cover reasonable costs and expenses for
the regulation and supervision of telecommunications entities." The absence alone of the word
"authorization" in Section 5(g) of R.A. No. 7921 cannot be construed to mean that petitioner NTC had
thus been deprived of the power to collect such fees. As pointed out by the petitioner, the words
"authorization, supervision and/or regulation" used in Section 40(g) of the Public Service Act are not
distinct and completely separable concepts which may be taken singly or piecemeal. Taken in their
entirety, they are the quintessence of the Commission's regulatory functions, and must go hand-in-
hand with one another. In petitioner's own words, "[t]he Commission authorizes, supervises and
regulates telecommunications entities and these functions... cannot be considered singly without
destroying the whole concept of the Commission's regulatory functions."[15] Hence, petitioner NTC is
correct in asserting that the passage of R.A. 7925 did not bring with it the abolition of permit fees.

However, while petitioner had made some valid points of argument, its position must, of necessity,
crumble on the fourth issue raised in its petition. Petitioner itself admits that the fees imposed are
precisely regulatory and supervision fees, and not taxes. This necessarily implies, however, that such

4
fees must be commensurate to the costs and expenses involved in discharging its supervisory and
regulatory functions. In the words of Section 40(g) of the Public Service Act itself, the fees and charges
which petitioner NTC is authorized to collect from any public service or applicant are limited to the
"reimbursement of its expenses in the authorization, supervision and/or regulation of public services."
It is difficult to comprehend how the cost of licensing, regulating, and surveillance could amount to
P1,190,750.50. The CA was correct in finding the amount imposed as permit fee exorbitant and in
complete disregard of the basic limitation that the fee should be at least approximately commensurate
to the expense. Petitioner itself admits that it had imposed the maximum amount possible under the
Public Service Act, as amended. That is hardly taking into consideration the actual costs of fulfilling its
regulatory and supervisory functions.

Independent of the above, there is one basic consideration for the dismissal of this petition, about which
petitioner NTC did not bother to comment at all. We refer to the fact that, as respondent ICC aptly
observed, the principal ground given by the CA in striking down the imposition of the P1,190,750.50
fee is that respondent ICC is entitled to the benefits of the so-called "parity clause" embodied in Section
23 of R.A. No. 7925, to wit:
Section 23. Equality of Treatment in the Telecommunications Industry. - Any advantage, favor,
privilege, exemption, or immunity granted under existing franchises, or may hereafter be granted, shall
ipso facto become part of previously granted telecommunications franchises and shall be accorded
immediately and unconditionally to the grantees of such franchises x x x.In this connection, it is
significant to note that the subsequent congressional franchise granted to the Domestic Satellite
Corporation under Presidential Decree No. 947, states:
Section 6. In consideration of the franchise and rights hereby granted, the grantee shall pay to the
Republic of the Philippines during the life of this franchise a tax of one-half percent of gross earnings
derived by the grantee from its operation under this franchise and which originate from the Philippines.
Such tax shall be due and payable annually within ten days after the audit and approval of the accounts
by the Commission on Audit as prescribed in Section 11 hereof and shall be in lieu of all taxes,
assessments, charges, fees, or levies of any kind, nature, or description levied, established or
collected by any municipal, provincial, or national authority x x x (Emphasis supplied)The CA was
correct in ruling that the above-quoted provision is, by law, considered as ipso facto part of ICC's
franchise due to the "parity clause" embodied in Section 23 of R.A. No. 7925. Accordingly, respondent
ICC cannot be made subject to the payment of the subject fees because its payment of the franchise
tax is "in lieu" of all other taxes and fees.

WHEREFORE, the petition is hereby DENIED and the assailed Amended Decision and Resolution of
the CA are AFFIRMED.

SO ORDERED.

Puno, (Chairperson), Sandoval-Gutierrez, Corona, and Azcuna, JJ., concur.

Penned by former Associate Justice Demetrio G. Demetria, with Associate Justices Ramon A.
[1]

Barcelona (ret.) and Martin S. Villarama, Jr., concurring; Rollo, pp. 34-53.

[2] Rollo, p. 55.

[3] Rollo, p. 65.

5
 [4]Commonwealth Act No. 146, as amended, "An Act to reorganize the Public Service Commission,
prescribe its powers and duties, define and regulate public services, provide and fix the rates and quota
of expenses to be paid by the same and for other purposes."

[5] Rollo, pp. 71-79.

[6] Republic Act No. 7925, "An Act to promote and govern the development of Philippine
telecommunications and the delivery of public telecommunications services," otherwise known as the
Public Telecommunications Policy Act of the Philippines, March 1, 1995.

Section 2, Rule 37 of The Rules of Court; Luzon Stevedoring Company, Inc. v. Court of Industrial
[7]

Relations, G.R. No. L-16682, July 26, 1963, 8 SCRA 447.

[8] Cruz v.
Villaluz, G.R. No. L-41684, February 21, 1979, 88 SCRA 506; People v. Rodriguez, G.R. No.
32657, September 1, 1992, 213 SCRA 171; Marina Properties Corp. v. CA, G.R. No. 125447, August
14, 1998, 294 SCRA 273.

Guerra Enterprises Co., Inc. v. CFI of Lanao del Sur, G.R. No. L-28310, April 17, 1970, 32 SCRA
[9]

314.

[10] PLDT v. Public Service Commission, G.R. No. L-26762, August 29, 1975, 66 SCRA 341, 351.

Iloilo Palay and Corn Planters Association, Inc. v. Feliciano, G.R. No. L-24022, March 3, 1965, 13
[11]

SCRA 377.

[12] Compania General de Tabacos v. Collector of Customs, 46 Phil. 8 [1924].

[13] Gordon v. Meridiano, G.R. No. L-55230, November 8, 1988, , 167 SCRA 51, 58-59.

[14] Ty v. Trampe, G.R. No. 117577, December 1, 1995, 250 SCRA 500.

[15] Reply; Rollo, p. 141.

Source: Supreme Court E-Library | Date created: August 13, 2014

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CIR v. PRIMETOWN PROPERTY GROUP, GR NO. 162155, 2007-08-28

Facts:
This petition for review on certiorari [1] seeks to set aside the August 1, 2003 decision[2] of the Court of Appeals
(CA) in CA-G.R. SP No. 64782 and its February 9, 2004 resolution denying... reconsideration.

6
On March 11, 1999, Gilbert Yap, vice chair of respondent Primetown Property Group, Inc., applied for the refund
or credit of income tax respondent paid in 1997. In Yap's letter to petitioner revenue district officer Arturo V.
Parcero of Revenue District No. 049 (Makati) of the
Bureau of Internal Revenue (BIR),[4] he explained that the increase in the cost of labor and materials and
difficulty in obtaining financing for projects and collecting receivables caused the real estate industry to
slowdown.[5] As a... consequence, while business was good during the first quarter of 1997, respondent
suffered losses amounting to P71,879,228 that year.[6]
According to Yap, because respondent suffered losses, it was not liable for income taxes.[7] Nevertheless,
respondent paid its quarterly corporate income tax and remitted creditable withholding tax from real estate sales
to the BIR in the total amount of
P26,318,398.32.[8] Therefore, respondent was entitled to tax refund or tax credi
Issues:
Section 27, Book VII (Final
Provisions) of the Administrative Code of 1987 states
Ruling:
A law may be repealed expressly (by a categorical declaration that the law is revoked and abrogated by
another) or impliedly (when the provisions of a more recent law cannot be reasonably reconciled with the
previous one).[31] Section 27, Book VII (Final
Provisions) of the Administrative Code of 1987 states:
Sec. 27. Repealing clause. - All laws, decrees, orders, rules and regulation, or portions thereof, inconsistent with
this Code are hereby repealed or modified accordingly.
A repealing clause like Sec. 27 above is not an express repealing clause because it fails to identify or designate
the laws to be abolished. [32] Thus, the provision above only impliedly repealed all laws inconsistent with the
Administrative Code of

1987.

Implied repeals, however, are not favored. An implied repeal must have been clearly and unmistakably intended
by the legislature. The test is whether the subsequent law encompasses entirely the subject matter of the former
law and they cannot be logically or reasonably... reconciled.[33]
Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the Administrative Code of 1987 deal
with the same subject matter - the computation of legal periods. Under the Civil Code, a year is equivalent to
365 days whether it be a regular year or a leap year.
Under the Administrative Code of 1987, however, a year is composed of 12 calendar months. Needless to state,
under the Administrative Code of 1987, the number of days is irrelevant

G.R. Nos. L-68379-81 – 144 SCRA 194 – Political Law – Due Process – impartial and competent court

Javier and Pacificador, a member of the KBL under Marcos, were rivals to be members of the Batasan in May
1984 in Antique. During election, Javier complained of “massive terrorism, intimidation, duress, vote-buying,

7
fraud, tampering and falsification of election returns under duress, threat and intimidation, snatching of ballot
boxes perpetrated by the armed men of Pacificador.” COMELEC just referred the complaints to the AFP. On the
same complaint, the 2nd Division of the Commission on Elections directed the provincial board of canvassers of
Antique to proceed with the canvass but to suspend the proclamation of the winning candidate until further
orders. On June 7, 1984, the same 2nd Division ordered the board to immediately convene and to proclaim the
winner without prejudice to the outcome of the case before the Commission. On certiorari before the SC, the
proclamation made by the board of canvassers was set aside as premature, having been made before the lapse
of the 5-day period of appeal, which the Javier had seasonably made. Javier pointed out that the irregularities of
the election must first be resolved before proclaiming a winner. Further, Opinion, one of the Commissioners
should inhibit himself as he was a former law partner of Pacificador. Also, the proclamation was made by only
the 2ndDivision but the Constitute requires that it be proclaimed by the COMELEC en banc. In Feb 1986, during
pendency, Javier was gunned down. The Solicitor General then moved to have the petition close it being moot
and academic by virtue of Javier’s death.

ISSUE: Whether or not there had been due process in the proclamation of Pacificador.

HELD: The SC ruled in favor of Javier and has overruled the Sol-Gen. The SC has repeatedly and consistently
demanded “the cold neutrality of an impartial judge” as the indispensable imperative of due process. To bolster
that requirement, we have held that the judge must not only be impartial but must also appear to be impartial as
an added assurance to the parties that his decision will be just. The litigants are entitled to no less than that.
They should be sure that when their rights are violated they can go to a judge who shall give them justice. They
must trust the judge, otherwise they will not go to him at all. They must believe in his sense of fairness,
otherwise they will not seek his judgment. Without such confidence, there would be no point in invoking his
action for the justice they expect.

Due process is intended to insure that confidence by requiring compliance with what Justice Frankfurter calls
the rudiments of fair play. Fair play calls for equal justice. There cannot be equal justice where a suitor
approaches a court already committed to the other party and with a judgment already made and waiting only to
be formalized after the litigants shall have undergone the charade of a formal hearing. Judicial (and also
extrajudicial) proceedings are not orchestrated plays in which the parties are supposed to make the motions and
reach the denouement according to a prepared script. There is no writer to foreordain the ending. The judge will
reach his conclusions only after all the evidence is in and all the arguments are filed, on the basis of the
established facts and the pertinent law.

MENDOZA, J.:
This petition for certiorari under Rule 64 of the Revised Rules of Court seeks to reverse and set aside the July
18, 2014 Decision[1] and the March 9, 2015 Resolution[2] of the Commission on Audit (COA), which affirmed the
April 25, 2011 Decision[3] of the COA Regional Office No. II (Regional Office), upholding Notice of Disallowance
(ND) No. 2010-01-101,[4] dated March 9, 2010, representing the overpayment of salary and year-end bonus of
petitioner Engr. Artemio A. Quintero, Jr. (Quintero), the General Manager (GM) of Cauayan City Water District
(CCWD).

On March 28, 2008, the Board of Directors (BOD) of CCWD passed Board Resolution No. 004, Series of
2008,[5] which upgraded the monthly salary of the GM from P25,392.00 to P45,738.00 on the basis of Section 2
of Republic Act (R.A.) No. 9286.[6] The CCWD's Plantilla of Personnel and Salary Adjustment was thereafter

8
submitted to the Department of Budget and Management (DBM) for approval. After going over the plantilla, the
DBM informed Quintero through a letter that although Section 2 of R.A. No. 9286 empowered the BOD of LWDs
to fix the compensation of the GM, it should comply with the compensation standardization policy laid down in
R.A. No. 6758 or the Salary Standardization Law (SSL).[7]

After the COA'S audit and advice,[8] on December 2009, Quintero voluntarily stopped receiving his salary based
on the adjusted rates.[9]On March 9, 2010, the COA, through Auditor Mercedes V. Reyes, issued ND No. 2010-
01-101 disallowing the overpayment in Quintero's adjusted salary, which amounted to P364,659.50.[10]

Disagreeing with the findings of the COA Auditor, Quintero appealed before the COA Regional Office.

The Regional Office Ruling

In its April 25, 2011 decision, the COA Regional Office upheld ND No. 2010-01-101 and stated that the BOD of
CCWD should have taken into consideration the provisions of R.A. No. 6758 or the SSL when it issued the
resolution fixing the salary of its GM. The Regional Office pointed out that if it were the intent of the Congress to
exempt the local water district (LWD) from the coverage of R.A. No. 6758, then it should have expressly
provided it in R.A. No. 9286.

Also, the COA Regional Office disagreed with Quintero that the upgraded salary of the GM was subject to
Section 7 of Executive Order (E.O.) No. 811[11] on non-diminution in the salary of incumbent employees. The
Regional Office noted that the provision of the E.O. presupposed that the basic salary given was sanctioned
under the law because no vested right could be derived from the upgrading of salary made in contravention of
the law. It explained that the BOD of CCWD could upgrade Quintero's salary of P25,392.00, but it should be
within the provision of R.A. No. 6758 which fixed it at no more than P35,615.00 a month for the year 2008 and
2009.

Unsatisfied with the decision, Quintero appealed before the COA.

The COA Ruling

In its July 18, 2014 decision, the COA upheld the decision of its Regional Office. Although it agreed with
Quintero that the BOD had the authority to fix the compensation of the GM, it stated that the said authority was
not absolute as the compensation of the GM should conform to the provisions of R.A. No. 6758, or the SSL, and
to existing rules and regulations. Further, the COA reiterated that no vested right could be derived from the
salary increase of Quintero as it emanated from an erroneous interpretation of law.

Aggrieved, Quintero moved for reconsideration of the decision but his motion was denied by the COA in its
March 9, 2015 resolution.

Hence, this present petition raising the following:

ISSUES

A] WHETHER OR NOT COA COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR

EXCESS OF JURISDICTION IN DECLARING THAT THE CCWD BOARD HAS NO AUTHORITY TO FIX THE
SALARY OF THE GENERAL MANAGER, THAT RA 9286 IS NOT INCONSISTENT WITH THE PROVISIONS
OF THE SSL.

9
B] WHETHER OR NOT COA COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF JURISDICTION IN NOT RECOGNIZING THAT SECTION 23 OF PD 198, AS AMENDED BY RA
9286, IS NOT AN EXCEPTION TO THE SSL.

C] WHETHER OR NOT ENGR. ARTEMIO A. QUINTERO SHOULD BE HELD LIABLE TO REFUND THE
AMOUNT RECEIVED AND DISALLOWED.[12]
Basically, the main issue to be resolved is whether the salary increase of Quintero was rightfully disallowed by
the COA.

Quintero argues that by the express provision of Section 23 of Presidential Decree (P.D.) No. 198,[13] as
amended by R.A. No. 9286, the BOD of LWDs is empowered to fix the compensation of its GM. He claims that
this legislative grant of authority is clear and unequivocal. He posits that in enacting R.A. No. 9286, Congress
knew of the provisions of the SSL but it still chose to delegate to the BOD of LWDs the authority to fix the
compensation of the GM. Thus, he concludes that the salary of the GM cannot be limited by the SSL provision
because to do so will diminish the authority bestowed upon the BOD of LWDs.

Quintero also avers that R.A. No. 9286, a later law, repealed the SSL, a prior law, because the provisions of the
latter were inconsistent with the provisions of the former. He further stated that his salary as fixed by the BOD of
CCWD was valid because it should be deemed an exception from the coverage of the SSL.

Quintero then points out that the LWDs did not receive any budget from the DBM or the national government
and, therefore, it might be deemed from the provisions of P.D. No. 198 that the BOD of LWDs had the full
authority to fix the compensation of its GM. He is of the view that his salary could not be adversely affected even
with the provisions of the SSL claiming protection under Section 7 of E.O. No. 811 on diminution of salaries. He,
nevertheless, insists that in the event that his adjusted salary would be ultimately disapproved, he should not be
required to refund the same on the basis of good faith.

In its Comment,[14] dated October 5, 2015, the COA countered that R.A. No. 9286 did not impliedly repeal the
SSL because an implied repeal was disfavored by law. It noted that the amendment introduced by R.A. No.
9286 only changed the last sentence of Section 23 of P.D. No. 198 to state that the GM should not be removed
from office except for cause and after due process.

The COA explained that R.A. No. 9286 did not give additional power to the BOD to determine the compensation
of the GM beyond the rate prescribed by the SSL and, as such, no inconsistency was created as regards the
power of the BOD to fix the salary of the GM. It likewise opined that R.A. No. 9286 did not constitute an
exception to the coverage of the SSL.

Moreover, the COA assailed Quintero's claim of good faith contending that no sufficient evidence on record was
available to establish that the latter received the disallowed amount in good faith. It also held that good faith was
raised for the first time on appeal because Quintero's position before the COA Regional Office was that he had
acquired a vested right over the adjusted salary.

In his Reply,[15] dated February 29, 2016, Quintero alleged that the Congress, by virtue of its Joint Resolution
No. 4,[16] expressly recognized that R.A. No. 9286 was inconsistent with the SSL. Due to the inconsistency, he
argued that there could be no other conclusion but that R.A. No. 9286 had amended provisions of the SSL
which was incongruous therewith particularly the authority of the BOD to fix and determine the salary of the GM.

Quintero once again invoked good faith claiming that he was a mere recipient of the salary and that there was

10
neither evidence nor any allegation that it was he who caused the increase of his salary beyond the limit
provided under the SSL. He manifested that the BOD merely relied on the provisions of R.A. No. 9286 and that
he immediately stopped the processing of his adjusted salary when so advised by the COA sometime in 2009.

The Court's Ruling

Central to the resolution of the issue at hand is the power of the BOD to fix the compensation of its GM, as
vested by Section 23 of P.D. No. 198, as amended by Section 2 of R.A. No. 9286.

Section 23 of P.D. No. 198 reads:

At the first meeting of the Board, or as soon thereafter practicable, the Board shall appoint, by a majority vote, a
general manager and shall define his duties and fix his compensation. Said officer shall serve at the pleasure of
the Board.
Section 2 of R.A. No. 9286 amended Section 23 of P.D. No. 198, which now provides:

At the first meeting of the Board, or as soon thereafter practicable, the Board shall appoint, by a majority vote, a
general manager and shall define his duties and fix his compensation. Said officer shall not be removed from
office, except for cause and after due process.
A reading of the above-cited provisions reveals that R.A No. 9286 reiterated the power of the BOD to set the
salary of the GM and that it merely amended the provisions of P.D. No. 198 to provide the GMs with security of
tenure preventing their removal without cause and due process. Indubitably, the Congress empowered the BOD
of LWDs to fix the salary of its GM.

Quintero views this power to be immutable as the BOD may fix the salary of its GM even beyond the limits
prescribed by the SSL. The COA, on the other hand, concedes that the BOD of CCWD has the power to
increase Quintero's salary. It opines, however, that this power is not an unbridled power and the salary to be set
by the BOD must always be within the standards set by the SSL.

The question on whether the salaries of GMs of LWDs are covered by the provisions of the SSL is not a novel
one as it had long been laid to rest by the Court. In Mendoza v. COA (Mendoza),[17] the Court categorically ruled
that the LWDs must observe the limits provided in the SSL in fixing the salaries of their GMs, to wit:

The Salary Standardization Law applies to all government positions, including those in government-owned or
controlled corporations, without qualification. The exception to this rule is when the government-owned or
controlled corporation's charter specifically exempts the corporation from the coverage of the Salary
Standardization Law.To resolve this case, We examine the provisions of Presidential Decree No. 198
exempting water utilities from the Salary Standardization Law. The petitioner asserts that it is Section 23 of
Presidential Decree No. 198, as amended, which grants water utilities this exemption.

Section 23 of Presidential Decree No. 198, promulgated on May 25,1973, was originally phrased as follows:

Section 23. Additional Officers. — At the first meeting of the board, or as soon thereafter as practicable, the
board shall appoint, by a majority vote, a general manager, an auditor, and an attorney, and shall define their
duties and fix their compensation. Said officers shall service at the pleasure of the board.

11
On April 2, 2004, Republic Act No. 9286 was passed amending certain provisions of Presidential Decree No.
198, including its Section 23, thus:

Sec. 23. The General Manager. — At the first meeting of the Board, or as soon thereafter as practicable, the
Board shall appoint, by a majority vote, a general manager and shall define his duties and fix his compensation.
Said officer shall not be removed from office, except for cause and after due process.
We are not convinced that Section 23 of Presidential Decree No. 198, as amended, or any of its provisions,
exempts water utilities from the coverage of the Salary Standardization Law. In statutes subsequent to Republic
Act No. 6758, Congress consistently provided not only for the power to fix compensation but also the agency's
or corporation's exemption from the Salary Standardization Law. If Congress had intended to exempt water
utilities from the coverage of the Salary Standardization Law and other laws on compensation and
position classification, it could have expressly provided in Presidential Decree No. 198 an exemption
clause similar to those provided in the respective charters of the Philippine Postal Corporation, Trade
Investment and Development Corporation, Land Bank of the Philippines, Social Security System, Small
Business Guarantee and Finance Corporation, Government Service Insurance System, Development
Bank of the Philippines, Home Guaranty Corporation, and the Philippine Deposit Insurance Corporation.

Congress could have amended Section 23 of Presidential Decree No. 198 to expressly provide that the
compensation of a general manager is exempted from the Salary Standardization Law. However,
Congress did not.Section 23 was amended to emphasize that the general manager "shall not be removed from
office, except for cause and after due process."[18]

[Emphases Supplied]
Applying the pronouncements in Mendoza, the Court cannot counterance Quintero's position that the provisions
of Section 23 of P.D. No. 198, as amended, should be deemed an exception to the SSL. In amending P.D. No.
198, R.A. No. 9286 merely provided security of tenure for the GM but it did not state that the LWDs were to be
exempt from the coverage of the SSL. If Congress indeed intended to exempt the LWDs from the SSL, it could
have easily provided for an exemption clause similar to the charters of other government-owned and controlled
corporations which were legislated to be exempt from the provisions of R.A. No. 6758 or the SSL.

Moreover, R.A. No. 9286 did not repeal the SSL. Neither was there an express provision repealing the SSL nor
can repeal be implied in this case. An implied repeal transpires when a substantial conflict exists between the
new and the prior laws, and occurs only when there is an irreconcilable inconsistency and repugnancy in the
terms of the new and the old statute.[19] It must be remembered that repeal by implication is disfavored as laws
are presumed to be passed with deliberation and full knowledge of all laws existing on the subject, the
congruent application of which the courts must generally presume.[20]

Contrary to Quintero's claims, no irreconcilable inconsistency exists between the SSL and R.A. No. 9286 to
warrant the conclusion that the latter impliedly repealed the former. The two seemingly contradicting laws may
be harmoniously construed in such a manner that the power of the BOD of LWDs to fix the salary of its GM is
still recognized. This power, however, is subject to the limitation that the salary set must be within the rates
prescribed by the SSL.

Good faith exempts responsible officers from making a refund

The Court, nevertheless, finds that Quintero need not refund the amount subject of ND No. 2010-01-101 on the
basis of good faith. In Mendoza, the Court exempted the responsible officer from refunding the disallowed

12
amount on the basis of good faith, to wit:

The salaries petitioner Mendoza received were fixed by the Talisay Water District's board of directors pursuant
to Section 23 of the Presidential Decree No. 198. Petitioner Mendoza had no hand in fixing the amount of
compensation he received. Moreover, at the time petitioner Mendoza received the disputed amount in
2005 and 2006, there was no jurisprudence yet ruling that water utilities are not exempted from the
Salary Standardization Law.

Pursuant to De Jesus v. Commission on Audit, petitioner Mendoza received the disallowed salaries in good
faith. He need not refund the disallowed amount.[21]

[Emphasis Supplied]
Similar to the above-quoted case, Quintero had no hand in fixing the amount of the salary he received as it was
fixed pursuant to the resolution issued by the BOD of CCWD. Also, at the time his salary increase was
approved, there was no categorical pronouncement yet from the Court that the LWDs were subject to the
coverage of the SSL.

WHEREFORE, the July 18, 2014 Decision of the Commission on Audit is AFFIRMED with MODIFICATION in
that Engr. Artemio Quintero, Jr. is absolved from refunding the amount covered by Notice of Disallowance No.
2010-01-101.

SO ORDERED.

Sereno, C. J., Carpio, Velasco, Jr., Brion, Peralta, Bersamin, Del Castillo, Perez, Reyes, Leonen, and Caguioa,
JJ., concur.
Leonardo-De Castro, Perlas-Bernabe, and Jardeleza, JJ., on official leave.

NOTICE OF JUDGMENT

Sirs/Mesdames:

Please take notice that on May 31, 2016 a Decision/Resolution, copy attached herewith, was rendered by the
Supreme Court in the above-entitled case, the original of which was received by this Office on June 23, 2016 at
10:31 a.m.

Very truly yours,

(SGD)FELIPA G. BORLONGAN-ANAMA
Clerk of Court

13
 Concurred in by Chairperson Ma. Gracia M. Pulido Tan, Commissioner Heidi L. Mendoza and Commissioner
[1]

Jose A. Fabia; rollo pp. 19-23.

[2] Id. at 34.

[3] Penned by Officer-in-Charge Atty. Elwin Gregorio A. Torre; id. at 29-33.

[4] Id. at 92.

[5] Id. at 77.

[6]An Act Further Amending Presidential Decree No. 198, otherwise known as the "Provincial Water Utilities Act
of 1973," as amended.

[7] Rollo, p. 29.

[8] Id. at 87-91.

[9] Id. at 7.

[10] Id. at 30.

[11] June 17, 2009.

[12] Rollo, p. 8.

[13] The Provincial Water Utilities Act of 1973.

[14] Rollo, pp. 58-73.

[15] Id. at 117-123.

[16] June 17, 2009.

[17] G.R. No. 195395, September 10, 2013, 705 SCRA 306.

[18] Id. at 331-334.

[19] Javier v. COMELEC, G.R. No. 215847, January 12, 2016.

[20] Philippine International Trading Corporation v. COA, 635 Phil. 447, 459 (2010).

[21] Supra note 17, at 339.

14
G.R. No. L-39990 July 22, 1975

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
RAFAEL LICERA, defendant-appellant.

Office of the Solicitor General Felix Q. Antonio, Assistant Solicitor General Crispin V. Bautista and Solicitor
Pedro A. Ramirez for plaintiff-appellee.

Romeo Mercado (as Counsel de Oficio) for defendant-appellant.

CASTRO, J.:

Facts:

On December 3, 1965, Rafael Licera was charged with illegal possession of a

Winchester rifle by the Chief of Police on the municipal court of Abra de Ilog, Occidental Mindoro. In
August 14, 1968, the court acquitted Licera on the charge of assault upon an agent ofa person in authority, but
convicting him of illegal possession of firearm under the Mapa rule (1967). In 1974, Licera appeal to the Court of
Appeals invoking his legal justification to possess the Winchester rifle because he was appointed as secret
agent by Governor Feliciano Leviste on December 11, 1961 pursuant to the Supreme Court decision in People
vs Macarandang . People vs Macarandang (1959) – the appointment of civilian as “secret agent” whom section
879 of the Revised Administrative Code exempts from the requirements relating to firearm licenses.

Issue: Whether or not the trial court erred in the application of Mapa rule retrospectively?

Held: Yes, at the time of Licera’s designation as secret agent in 1961 and at the time of his
apprehension for possession of the Winchester rifle without the requisite license or permit thereof
in 1965, the Macarandang rule formed part of the jurisprudence and, hence, of this jurisdiction’s legal
system. Mapa revoked the Macarandang precedent only in 1967.

Art. 8 of the Civil Code decrees that judicial decisions applying or interpreting the laws or the Constitution form
part of this jurisdiction’s legal system. These decisions, although in themselves not law, constitute evidence of
what the laws mean. The application or interpretation placed by the courts upon a law is part of the law as of the

15
date of the enactment of the said law since the Court’s application or interpretation merely establishes the
contemporaneous legislative intent that the construed law purports to carry into effect.

Certainly, where a new doctrine abrogates and old rule, the new doctrine should operate respectively only and
should not adversely affect those favored by the old rule, especially those who relied thereon and acted on the
faith thereof.

INOCENCIO TUGADE v. COURT OF APPEALS, and PEOPLE OF THE PHILIPPINES

[G.R. No. L-47772. August 31, 1978.]

Facts:

Tugade was found guilty beyond beyond reasonable doubt of Reckless Imprudence Resulting in
Damage to Property for bumping the car of Holden caused by faulty brakes of his taxicab. He sought
to exculpate himself with the explanation that this fault could not and should not be traced to him.

Issue:

Is the mishap caused by defective brakes fortuitous in character?

Held:

No. An essential element of a caso fortuito is the occurrence of some extraordinary circumstance
independent of the will of the obligor, or of his employees. This element is lacking in the present
case. It is not suggested that the accident in question was due to an act of God or to adverse road
conditions which could not have been foreseen. As far as the record shows, the accident was caused
either by defects in the automobile or else through the negligence of its driver. This is not a caso
fortuito which would call for an acquittal of the driver.

PERFECTO S. FLORESCA et al vs. PHILEX MINING CORPORATION et al

G.R. No. L-30642
April 30, 1985

FACTS: Floresca and his heirs are the deceased employees of Philex Mining Corp. who at that time
working at its copper mines underground operation at Tuba Benguet on June 28 19, died as a result
of cave-in that buried them in tunnels of the mine. The petitioners claim that Philex, in violation of
government rules and regulations, negligently and deliberately failed to take the required precautions

16
 for the protection of the lives of its workers specialy those working underground. The petitioners
moved to claim their benefits pursuant to the Worker’s Compensation Act and petitioned before
regular courts and sue Philex for additional damages. Philex, in return, invoked that the can longer be
sued due to the benefits they have already claimed under the Worker’s Compensation Act.

ISSUE: Whether or not Floresca et al can claim benefits under the Worker’s Compensation Act and
suing in regular courts under the civil code for higher damage.
HELD: No. under the law, floresca and his heirs could only do either one. In case they filed for
benefits under the Worker’s Compensation Act, they can no longer proceed with a civil case before
any regular courts. Also, if they filed a civil case under regular courts, they will be stopped from
claiming benefits from Worker’s Compensation Act. However, the Supreme Court ruled that the
petitioners are excused from this deficiency due to ignorance of the fact. In case they have been
aware of this ruling, they may have not avail of such a remedy. In any case they’ll win in the lower
court, whatever award may be granted, whatever amount given to them will be deducted under the
Worker’s Compensation Act.

Albino Co vs. Court of Appeals (G.R. No. 100776. October 28, 1993)

31MAY

ALBINO S. CO, petitioner,

vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.
Antonio P. Barredo for petitioner.
The Solicitor General for the people.
Ponente: NARVASA
FACTS:
A criminal complaint for violation of Batas Pambansa Bilang 22 was filed by the salvage company against
petitioner with the Regional Trial Court. The case eventuated in petitioner’s conviction of the crime charged on
the basis that a check issued merely to guarantee the performance of an obligation is nevertheless covered by
B.P. Blg. 22. Pending litigation, Ministry of Justice Circular No. 4 (which excludes guarantee check from
application of B.P. Blg. 22) was subsequently reversed by Ministry Circular No. 12 which ruled that a check issued
merely to guarantee the performance of an obligation is nevertheless covered by B.P. Blg. 22. Petitioner appealed
to the Court of Appeals. There he sought exoneration upon the theory that it was reversible error for the Regional
Trial Court but the Court of Appeals affirmed his conviction.
ISSUE:
Whether or not Ministry Circular No. 12 dated August 8, 1984 declaring the guarantee check will no longer be
considered as a valid defense be retroactively applied.

HELD:

17
NO. Decision of the Court of Appeals and RTC were set aside. Criminal prosecution against accused-petitioner
was dismissed.

RATIO:
It would seem that the weight of authority is decidedly in favor of the proposition that the Court’s decision of
September 21, 1987 in Que v. People, 154 SCRA 160 (1987) that a check issued merely to guarantee the
performance of an obligation is nevertheless covered by B.P. Blg. 22 — should not be given retrospective effect
to the prejudice of the petitioner and other persons situated, who relied on the official opinion of the Minister of
Justice that such a check did not fall within the scope of B.P. Blg. 22.
This is after all a criminal action all doubts in which, pursuant to familiar, fundamental doctrine, must be resolved
in favor of the accused. Everything considered, the Court sees no compelling reason why the doctrine of mala
prohibita should override the principle of prospectivity, and its clear implications as herein above set out and
discussed, negating criminal liability.
PAGPALAIN HAULERS v. CRESENCIANO B. TRAJANO, GR No. 133215, 1999-07-15
Facts:
respondent Integrated Labor Organization-Pagpalain Haulers Worker's Union (hereafter referred to as ILO-
PHILS), in a bid to represent the rank-and-file drivers and helpers of petitioner Pagpalain Haulers, Inc.
(hereafter referred to as
Pagpalain), filed a petition for certification election with the Department of Labor and Employment. ILO-PHILS
attached to the petition copies of its charter certificate, its constitution and by-laws, its books of account, and a
list of its officers and their addresses
Pagpalain filed a motion to dismiss the petition, alleging that ILO-PHILS was not a legitimate labor organization
due to its failure to comply with the requirements for registration under the Labor Code. Specifically, it claimed
that the books of account... submitted by ILO-PHILS were not verified under oath by its treasurer and attested to
by its president, a required by Rule II, Book V of the Omnibus Rules Implementing the Labor Code.
ILO-PHILS dismissed Pagpalain's claims, saying that Department Order No. 9, Series of 1997 had dispensed
with the requirement that a local or chapter of a national union submit books of account in order to be registered
with the Department of
Labor and Employment.
Finding in favor of ILO-PHILS, the Med-Arbiter, on August 27, 1997, ordered the holding of certification elections
among the rank-and-file of Pagpalain Haulers. Pagpalain promptly appealed the decision to the Secretary of
Labor and Employment. It claimed that the Med-Arbiter had... gravely abused his discretion in allowing
Department Order No. 9 to take precedence over a ruling of the Supreme Court. Pagpalain cited Protection
Technology v. Secretary, Department of Labor and Employment[1] and Progressive Development
Issues:
DEPARTMENT ORDER NO. 9, SERIES OF 1997, ISSUED BY PUBLIC RESPONDENT SECRETARY OF
LABOR IS NULL AND VOID FOR BEING CONTRARY TO PUBLIC POLICY
DEPARTMENT ORDER NO. 9, SERIES OF 1997, OF PUBLIC RESPONDENT SECRETARY OF LABOR
CANNOT ALTER THE REQUIREMENTS OF ARTICLES 241(H) AND (J) OF THE LABOR CODE OF THE
PHILIPPINES, NOR CAN IT PREVAIL OVER THE RULINGS OF THE SUPREME COURT, WHICH FORM
PART OF THE LAW OF THE

18
LAND.
Ruling:
Pagpalain's contentions are without merit.
Neither can Pagpalain contend that Department Order No. 9 is an invalid exercise of rule-making power by the
Secretary of Labor. For an administrative order to be valid, it must (i) be issued on the authority of law and (ii) it
must not be contrary to the law and
Constitution.[7]... epartment Order No. 9 has been issued on authority of law. Under the law, the Secretary is
authorized to promulgate rules and regulations to implement the Labor Code. Specifically, Article 5 of the Labor
Code provides that "[t]he Department of Labor and other government... agencies charged with the
administration and enforcement of this Code or any of its parts shall promulgate the necessary implementing
rules and regulations." Consonant with this article, the Secretary of Labor and Employment promulgated the
Omnibus Rules Implementing the Labor
Code. By virtue of this self-same authority, the Secretary amended the above-mentioned omnibus rules by
issuing Department Order No. 9, Series of 1997.
Moreover, Pagpalain has failed to show that Department Order No. 9 is contrary to the law or the Constitution.
At the risk of being repetitious, the Labor Code does not require a local or chapter to submit books of account in
order for it to be registered as a legitimate labor... organization. There is, thus, no inconsistency between the
Labor Code and Department Order No. 9. Neither has Pagpalain shown that said order contravenes any
provision of the Constitution.
agpalain cannot also allege that Department Order No. 9 is violative of public policy. As adverted to earlier, the
sole function of our courts is to apply or interpret the laws.[8] It does not formulate public policy, which is the
province of the... legislative and executive branches of government. It cannot, thus, be said that the principles
laid down by the court in Progressive and Protection Technology constitute public policy on the matter. They do,
however, constitute the Court's interpretation of public... policy, as formulated by the executive department
through its promulgation of rules implementing the Labor Code. However, this public policy has itself been
changed by the executive department, through the amendments introduced in Book V of the Omnibus Rules by
Department Order
No. 9. It is not for us to question this change in policy, it being a well-established principle beyond question that
it is not within the province of the courts to pass judgment upon the policy of legislative or executive action.[9]
Notwithstanding the... expanded judicial power under Section 1, Article VIII of the Constitution, an inquiry on the
above-stated policy would delve into matters of wisdom not within the powers of this Court.
WHEREFORE, premises considered, the instant petition is hereby DISMISSED for lack of merit and the
resolution of the Secretary of Labor dated February 27, 1998 AFFIRMED
Principles:
Labor Law - Rule making power of Secretary of Labor
Department Order No. 9 has been issued on authority of law. Under the law, the Secretary is authorized to
promulgate rules and regulations to implement the Labor Code. Specifically, Article 5 of the Labor Code
provides that "[t]he Department of Labor and other government... agencies charged with the administration and
enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and
regulations." Consonant with this article, the Secretary of Labor and Employment promulgated the Omnibus
Rules Implementing the Labor

19
Code. By virtue of this self-same authority, the Secretary amended the above-mentioned omnibus rules by
issuing Department Order No. 9, Series of 1997.

De Castro vs. JBC

G.R. No. 191002

April 20, 2010
FACTS:
This is a Motion for Reconsideration on the March 17, 2010 decision of the Court. The said decision directs the
Judicial and Bar Council to resume its proceedings for the nomination of candidates to fill the vacancy created
by the compulsory retirement of Chief Justice Reynato S. Puno by May 17, 2010, and to prepare the short list
of nominees and submit it to the incumbent President. Movants argue that the disputed constitutional provision,
Art. VII, Sec. 15 and Art. VIII, Sec. 4(1), clearly intended the ban on midnight appointments to cover the
members of the Judiciary, and they contended that the principle of stare decisis is controlling, and insisted that
the Court erred in disobeying or abandoning the Valenzuela ruling.
ISSUE (Section 4):
Did the Constitutional Commission extend to the Judiciary the ban on presidential appointments during the
period stated in Sec. 15,
Article VII?
RULING:
The Constitutional Commission did not extend to the Judiciary the ban on presidential appointments during the
period stated in Sec. 15, Art. VII. The deliberations that the dissent of Justice Carpio Morales quoted from the
records of the Constitutional Commission did not concern either Sec. 15, Art. VII or Sec. 4(1), Art. VIII, but only
Sec. 13, Art. VII, a provision on nepotism. Election ban on appointments does not extend to the Supreme Court.
The Court upheld its March 17, 2010 decision ruling that the prohibition under Art. VII, Sec. 15 of the
Constitution against presidential appointments immediately before the next presidential elections and up to the
end of the term of the outgoing president does not apply to vacancies in the Supreme Court.

Ty vs. Banco Filipino Savings and Mortgage Bank (G.R 188302)

Petitioner: Nancy L. Ty

Respondent: Banco Filipino Savings and Mortgage Bank

FACTS:

Sometime in 1979, the Banco Filipino Savings and Mortgage Bank (respondent) wanted to purchase
real properties as new branch sites for its expansion program. Since the General Banking Act4 limits a
bank’s real estate holdings to no more than 50% of its capital assets, the respondent’s Board of
Directors decided to warehouse some of its existing properties and branch sites to allow more flexibility
in the opening of branches, and to enable it to acquire new branch sites.

The petitioner, a major stockholder and a director of the respondent, persuaded two other major

20
stockholders, Pedro Aguirre and his brother Tomas Aguirre, to organize and incorporate Tala Realty
Services Corporation (Tala Realty) to hold and purchase real properties in trust for the respondent.

Subsequently, Remedios A. Dupasquier prodded her brother Tomas to endorse to her his shares in
Tala Realty and she registered them in the name of her controlled corporation, Add International
Services, Inc. The petitioner, Remedios, and Pedro controlled Tala Realty through their respective
nominees.

In implementing their trust agreement, the respondent sold to Tala Realty some of its properties. Tala
Realty simultaneously leased to the respondent the properties for 20 years, renewable for another 20
years at the respondent’s option with a right of first refusal in the event Tala Realty decides to sell
them. However, in August 1992, Tala Realty repudiated(renounced) the trust, claimed the titles for
itself, and demanded payment of rentals, deposits, and goodwill, with a threat to eject the respondent.

The respondent filed 17 complaints against Tala Realty, the petitioner, Pedro, Remedios, and their
respective nominees for reconveyance of different properties with 17 Regional Trial Courts (RTCs)
nationwide, including Civil Case No. 2506-MN before Branch 170 of the RTC of Malabon (Malabon
case), subject of the present case.

The petitioner and her co-defendants moved to dismiss the Malabon case for forum shopping and litis
pendentia, citing the 16 other civil cases filed in various courts involving the same facts, issues, parties,
and reliefs pleaded in the respondent’s complaint.

The Malabon RTC denied the motion to dismiss, finding no commonality in the 16 other civil cases
since they involved different causes of action.

The petitioner filed a motion to hold proceedings in abeyance, citing the pendency with this Court of
G.R. No. 127611 that assailed the denial of their motion to dismiss Civil Case No. 4521 before the
Batangas City RTC (Branch 84), and also prayed for a writ of prohibition to order the 17 RTC branches
and the three CA divisions, where the same cases were pending, to desist from further proceeding with
the trial of the cases.

The Malabon RTC granted to hold proceedings in abeyance. When the Malabon RTC denied the
respondent’s motion for reconsideration, the respondent elevated its case to the CA via a Rule 65
petition for certiorari. The CA initially dismissed the petition, but on motion for reconsideration, it
modified its ruling, setting aside the RTC’s order to hold proceedings in abeyance for mootness, due
to this Court’s dismissal of G.R. No. 127611 for late filing.

The respondent moved for pre-trial. Tala Realty opposed the motion and filed again a motion to
suspend proceedings.

The petitioner filed her separate opposition to the respondent’s motion for pre-trial and a motion to hold
proceedings in abeyance, stating that after the dismissal of G.R. No. 127611, two other similar petitions
have been elevated to this Court: (1) G.R. No. 130184,3involving the CA’s reversal of the dismissal of
Civil Case No. Q-95-24830 in the Quezon City RTC (Branch 91), and (2) G.R. No. 132703.31

21
The Malabon RTC granted the motion, and again ordered to hold proceedings in abeyance.

Six years later, the Malabon RTC directed the parties’ counsels to inform it of the status of the pending
cases.

In her compliance, the petitioner summarized this Court’s rulings in the consolidated cases of G.R.
Nos. 130184 and 139166, and in G.R. No. 132703, and reported on the other cases involving the same
parties decided by this Court, such as G.R. Nos. 129887, 137980, 132051, 137533, 143263, and
142672, as well as the other related cases decided by this Court, i.e., G.R. Nos.
144700, 147997, 167255, and 144705.

On the other hand, the respondent filed its compliance with motion to revive proceedings, citing the
Court’s consolidated decision in G.R. Nos. 130184 and 139166, and the decisions in G.R. Nos.
144700, 167255, and 144705, commonly holding that there existed no forum shopping, litis pendentia
and res judicata among the respondent’s reconveyance cases pending in the other courts of justice.

In her comment to the respondent’s motion to revive proceedings, the petitioner argued that the
proceedings should not be revived since all the reconveyance cases are grounded on the same theory
of implied trust which this Court in G.R. No. 137533 found void for being illegal as it was a scheme to
circumvent the 50% limitation on real estate holdings under the General Banking Act.

Tala Realty, on the other hand, pointed out that it was the court’s prerogative to suspend or not its
proceedings pending the resolution of issues by another court, in order to avoid multiplicity of suits and
prevent vexatious litigations.

In its May 6, 2008 order, the RTC granted the respondent’s motion to revive proceedings, noting that
res judicata is not applicable since there are independent causes of action for each of the properties
sought to be recovered.

When the RTC denied the petitioner’s motion for reconsideration, she elevated her case to the CA via
a Rule 65 petition for certiorari, assailing the RTC orders.

In its March 31, 2009 decision, the CA affirmed the RTC’s orders. It noted that res judicata does
not apply since the issue of validity or enforceability of the trust agreement was raised in an ejectment
case, not an action involving title or ownership, citing the Court’s pronouncement in G.R. No.
144705 that G.R. No. 137533 does not put to rest all pending litigations involving the issues of
ownership between the parties since it involved only an issue of de facto possession.

When the CA denied her motion for reconsideration, the petitioner filed the present petition.

The petitioner argues that the CA erred in refusing to apply G.R. No. 137533 under the principle of
res judicata by conclusiveness of judgment and stare decisis, and ignoring the November 26, 2007
minute resolution in G.R. No. 177865 and the April 7, 2009 consolidated decision in G.R. Nos. 130088,
131469, 155171, 155201, and 16660865 that reiterated the Court’s pronouncement in G.R. No. 137533.

The petition is GRANTED. The assailed decision and resolution of the Court of Appeals in CA-G.R. SP
No. 107104 are hereby REVERSED and SET ASIDE. Civil Case No. 2506-MN before Branch 170 of
the Regional Trial Court of Malabon, Metro Manila is hereby DISMISSED.

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 SUMMARY:

1. Respondents filed 17 complaints against petitioner including Civil Case No. 2506-MN before Branch 170
of the RTC of Malabon.
2. Petitioner moved for the dismissal of the case in RTC of Malabon which was denied denied, finding no
commonality in the 16 other civil cases since they involved different causes of action.
3. Petitioner filed a motion to hold proceedings in abeyance.
4. The Malabon RTC granted to hold proceedings in abeyance.
5. Respondent’s filed for motion for reconsideration but it was denied by the RTC.
6. Respondent’s elevated its case to the CA. The CA initially dismissed the petition, but on motion for
reconsideration, it modified its ruling, setting aside the RTC’s order to hold proceedings in abeyance
for mootness (An issue presenting no real controversy), due to Court’s dismissal of G.R. No. 127611 for
late filing.
7. The respondent moved for pre-trial.
8. Petitioner opposed the motion and filed again a motion to suspend proceedings.
9. The Malabon RTC granted the motion, and again ordered to hold proceedings in abeyance.
10. The respondent filed its compliance with motion to revive proceedings.
11. The petitioner argued that the proceedings should not be revived since all the reconveyance cases are
grounded on the same theory of implied trust which this Court in G.R. No. 137533 found void for being
illegal as it was a scheme to circumvent the 50% limitation on real estate holdings under the General
Banking Act.
12. RTC granted the respondent’s motion to revive proceedings.
13. Petitioner filed for motion for reconsideration but it was denied by the RTC. She elevated her case to the
CA via a Rule 65 petition for certiorari, assailing the RTC orders.
14. The CA affirmed the RTC’s orders.
15. When the CA denied her motion for reconsideration, the petitioner filed the present petition.
16. The petition is GRANTED. The assailed decision and resolution of the Court of Appeals in CA-G.R. SP
No. 107104 are hereby REVERSED and SET ASIDE. Civil Case No. 2506-MN before Branch 170 of the
Regional Trial Court of Malabon, Metro Manila is hereby DISMISSED.

ISSUE:

Whether or not the whether the Court’s ruling in G.R. No. 137533 applies as stare decisis to the
present case.

LEGAL BASIS:

DOCTRINE OF STARE DECISIS, "to adhere to precedents, and not to unsettle things which are
established." Under the doctrine, when this Court has once 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, where facts are
substantially the same; regardless of whether the parties and property are the same. The doctrine of
stare decisis is based upon the legal principle or rule involved and not upon the judgment, which results
therefrom. In this particular sense, stare decisis differs from res judicata, which is based upon the
judgment.

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RULING:

WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the Court of
Appeals in CA-G.R. SP No. 107104 are hereby REVERSED and SET ASIDE. Civil Case No. 2506-
MN before Branch 170 of the Regional Trial Court of Malabon, Metro Manila is hereby DISMISSED.

The 17 cases filed by the respondents have exactly the same point and the facts are substantially the
same and according to the Principle of Stare Decisis once a case has been decided one way, any
other case involving exactly the same point at issue, as in the present case, should be decided in the
same manner.

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