Same; Same; Same.—There are two categories of repeal by implication.

The
Case #1 first is where provisions in the two acts on the same subject matter are in an
irreconcilable conflict, the later act to the extent of the conflict constitutes an
EN BANC implied repeal of the earlier one. The second is if the later act covers the whole
subject of the earlier one and is clearly intended as a substitute, it will operate
G.R. No. 103982 December 11, 1992 to repeal the earlier law. Implied repeal by irreconcilable inconsistency takes
place when the two statutes cover the same subject matter; they are so clearly
ANTONIO A. MECANO, petitioner,
inconsistent and incompatible with each other that they cannot be reconciled
vs.
or harmonized; and both cannot be given effect, that is, that one law cannot
COMMISSION ON AUDIT, respondent.
be enforced without nullifying the other. Comparing the two Codes, it is
apparent that the new Code does not cover nor attempt to cover the entire
SYLLABI
subject matter of the old Code. There are several matters treated in the old
Code which are not found in the new Code, such as the provisions on notaries
Statutes; Administrative Code of 1987; Implied repeal.—In the case of the two
public, the leave law, the public bonding law, military reservations, claims for
Administrative Codes in question, the ascertainment of whether or not it was
sickness benefits under Section 699, and still others.
the intent of the legislature to supplant the old Code with the new Code partly
depends on the scrutiny of the repealing clause of the new Code. This
Same; Same; Same.—Lastly, it is a well-settled rule of statutory construction
provision is found in Section 27, Book VII (Final Provisions) of the
that repeals of statutes by implication are not favored. The presumption is
Administrative Code of 1987 which reads: “Sec. 27. Repealing Clause.—All
against inconsistency and repugnancy for the legislature is presumed to know
laws, decrees, orders, rules and regulations, or portions thereof, inconsistent
the existing laws on the subject and not to have enacted inconsistent or
with this Code are hereby repealed or modified accordingly.” The question
conflicting statutes. This Court, in a case, explains the principle in detail as
that should be asked is: What is the nature of this repealing clause? It is
follows: “Repeals by implication are not favored, and will not be decreed
certainly not an express repealing clause because it fails to identify or
unless it is manifest that the legislature so intended. As laws are presumed to
designate the act or acts that are intended to be repealed. Rather, it is an
be passed with deliberation with full knowledge of all existing ones on the
example of a general repealing provision, as stated in Opinion No. 73, S. 1991.
subject, it is but reasonable to conclude that in passing a statute it was not
It is a clause which predicates the intended repeal under the condition that a
intended to interfere with or abrogate any former law relating to some matter,
substantial conflict must be found in existing and prior acts. The failure to add
unless the repugnancy between the two is not only irreconcilable, but also
a specific repealing clause indicates that the intent was not to repeal any
clear and convincing, and flowing necessarily from the language used, unless
existing law, unless an irreconcilable inconsistency and repugnancy exist in the
the later act fully embraces the subject matter of the earlier, or unless the
terms of the new and old laws. This latter situation falls under the category of
reason for the earlier act is beyond peradventure renewed. Hence, every
an implied repeal.
effort must be used to make all acts stand and if, by any reasonable
construction, they can be reconciled, the later act will not operate as a repeal
of the earlier.
Administrative Code of 1917; Allowances in case of injury, death or sickness
incurred in performance of duty; Payment of compensation under Employees’
Compensation Program does not bar recovery under Sec. 699 of the Revised
Administrative Code.—Regarding respondent’s contention that recovery
under this subject section shall bar the recovery of benefits under the
Employees’ Compensation Program, the same cannot be upheld. The second
sentence of Article 173, Chapter II, Title II (dealing on Employees’
Compensation and State Insurance Fund), Book IV of the Labor Code, as
amended by P.D. 1921, expressly provides that “the payment of compensation
under this Title shall not bar the recovery of benefits as provided for in Section
699 of the Revised Administrative Code x x x whose benefits are administered
by the system (meaning SSS or GSIS) or by other agencies of the government.”
CAMPOS, JR., J.:
Antonio A. Mecano, through a petition for certiorari, seeks to nullify the
decision of the Commission on Audit (COA, for brevity) embodied in its 7th
Indorsement, dated January 16, 1992, denying his claim for reimbursement
under Section 699 of the Revised Administrative Code (RAC), as amended, in
the total amount of P40,831.00.
Petitioner is a Director II of the National Bureau of Investigation (NBI). He was
hospitalized for cholecystitis from March 26, 1990 to April 7, 1990, on account
of which he incurred medical and hospitalization expenses, the total amount
of which he is claiming from the COA.
On May 11, 1990, in a memorandum to the NBI Director, Alfredo S. Lim
(Director Lim, for brevity), he requested reimbursement for his expenses on
the ground that he is entitled to the benefits under Section 6991 of the RAC,
the pertinent provisions of which read:
Sec. 699. Allowances in case of injury, death, or sickness
incurred in performance of duty. — When a person in the
service of the national government of a province, city,
municipality or municipal district is so injured in the
performance of duty as thereby to receive some actual
physical hurt or wound, the proper Head of Department may
direct that absence during any period of disability thereby
occasioned shall be on full pay, though not more than six
months, and in such case he may in his discretion also
authorize the payment of the medical attendance, necessary
transportation, subsistence and hospital fees of the injured
person. Absence in the case contemplated shall be charged
first against vacation leave, if any there be.
xxx xxx xxx
In case of sickness caused by or connected directly with the
performance of some act in the line of duty, the Department
head may in his discretion authorize the payment of the
necessary hospital fees.
Director Lim then forwarded petitioner's claim, in a 1st Indorsement dated
June 22, 1990, to the Secretary of Justice, along with the comment, bearing
the same date, of Gerarda Galang, Chief, LED of the NBI, "recommending
favorable action thereof". Finding petitioner's illness to be service-connected,
the Committee on Physical Examination of the Department of Justice favorably
recommended the payment of petitioner's claim.
However, then Undersecretary of Justice Silvestre H. Bello III, in a 4th
Indorsement dated November 21, 1990, returned petitioner's claim to
Director Lim, having considered the statements of the Chairman of the COA in
its 5th Indorsement dated 19 September 1990, to the effect that the RAC being
relied upon was repealed by the Administrative Code of 1987.
Petitioner then re-submitted his claim to Director Lim, with a copy of Opinion
No. 73, S. 19912 dated April 26, 1991 of then Secretary of Justice Franklin M.
Drilon (Secretary Drilon, for brevity) stating that "the issuance of the
Administrative Code did not operate to repeal or abregate in its entirety the
Revised Administrative Code, including the particular Section 699 of the
latter".
On May 10, 1991, Director Lim, under a 5th Indorsement transmitted anew
Mecano's claim to then Undersecretary Bello for favorable consideration.
Under a 6th Indorsement, dated July 2, 1991, Secretary Drilon forwarded
petitioner's claim to the COA Chairman, recommending payment of the same.
COA Chairman Eufemio C. Domingo, in his 7th Indorsement of January 16,
1992, however, denied petitioner's claim on the ground that Section 699 of
the RAC had been repealed by the Administrative Code of 1987, solely for the
reason that the same section was not restated nor re-enacted in the
Administrative Code of 1987. He commented, however, that the claim may be
filed with the Employees' Compensation Commission, considering that the
illness of Director Mecano occurred after the effectivity of the Administrative
Code of 1987.
Eventually, petitioner's claim was returned by Undersecretary of Justice
Eduardo Montenegro to Director Lim under a 9th Indorsement dated February
7, 1992, with the advice that petitioner "elevate the matter to the Supreme
Court if he so desires".
On the sole issue of whether or not the Administrative Code of 1987 repealed
or abrogated Section 699 of the RAC, this petition was brought for the
consideration of this Court.
Petitioner anchors his claim on Section 699 of the RAC, as amended, and on
the aforementioned Opinion No. 73, S. 1991 of Secretary Drilon. He further
maintains that in the event that a claim is filed with the Employees'
Compensation Commission, as suggested by respondent, he would still not be
barred from filing a claim under the subject section. Thus, the resolution of
whether or not there was a repeal of the Revised Administrative Code of 1917
would decide the fate of petitioner's claim for reimbursement.
The COA, on the other hand, strongly maintains that the enactment of the
Administrative Code of 1987 (Exec. Order No. 292) operated to revoke or
supplant in its entirety the Revised Administrative Code of 1917. The COA
claims that from the "whereas" clauses of the new Administrative Code, it can
be gleaned that it was the intent of the legislature to repeal the old Code.
Moreover, the COA questions the applicability of the aforesaid opinion of the
Secretary of Justice in deciding the matter. Lastly, the COA contends that
employment-related sickness, injury or death is adequately covered by the
Employees' Compensation Program under P.D. 626, such that to allow
simultaneous recovery of benefits under both laws on account of the same
contingency would be unfair and unjust to the Government.
The question of whether a particular law has been repealed or not by a
subsequent law is a matter of legislative intent. The lawmakers may expressly
repeal a law by incorporating therein a repealing provision which expressly and
specifically cites the particular law or laws, and portions thereof, that are
intended to be repealed.3 A declaration in a statute, usually in its repealing
clause, that a particular and specific law, identified by its number or title, is
repealed is an express repeal; all others are implied repeals.4
In the case of the two Administrative Codes in question, the ascertainment of
whether or not it was the intent of the legislature to supplant the old Code
with the new Code partly depends on the scrutiny of the repealing clause of
the new Code. This provision is found in Section 27, Book VII (Final Provisions)
of the Administrative Code of 1987 which reads:
Sec. 27. Repealing Clause. — All laws, decrees, orders, rules
and regulations, or portions thereof, inconsistent with this
Code are hereby repealed or modified accordingly.
The question that should be asked is: What is the nature of this repealing
clause? It is certainly not an express repealing clause because it fails to identify
or designate the act or acts that are intended to be repealed.5 Rather, it is an
example of a general repealing provision, as stated in Opinion No. 73, S. 1991.
It is a clause which predicates the intended repeal under the condition that
substantial conflict must be found in existing and prior acts. The failure to add
a specific repealing clause indicates that the intent was not to repeal any
existing law, unless an irreconcilable inconcistency and repugnancy exist in the
terms of the new and old laws.6 This latter situation falls under the category of
an implied repeal.
Repeal by implication proceeds on the premise that where a statute of later
date clearly reveals an intention on the part of the legislature to abrogate a
prior act on the subject, that intention must be given effect.7 Hence, before
there can be a repeal, there must be a clear showing on the part of the
lawmaker that the intent in enacting the new law was to abrogate the old one.
The intention to repeal must be clear and manifest;8 otherwise, at least, as a
general rule, the later act is to be construed as a continuation of, and not a
substitute for, the first act and will continue so far as the two acts are the same
from the time of the first enactment.9
There are two categories of repeal by implication. The first is where provisions
in the two acts on the same subject matter are in an irreconcilable conflict, the
later act to the extent of the conflict constitutes an implied repeal of the earlier
one. The second is if the later act covers the whole subject of the earlier one
and is clearly intended as a substitute, it will operate to repeal the earlier law.10
Implied repeal by irreconcilable inconsistency takes place when the two
statutes cover the same subject matter; they are so clearly inconsistent and
incompatible with each other that they cannot be reconciled or harmonized;
and both cannot be given effect, that is, that one law cannot be enforced
without nullifying the other.11
Comparing the two Codes, it is apparent that the new Code does not cover nor
attempt to cover the entire subject matter of the old Code. There are several
matters treated in the old Code which are not found in the new Code, such as
the provisions on notaries public, the leave law, the public bonding law,
military reservations, claims for sickness benefits under Section 699, and still
others.
Moreover, the COA failed to demonstrate that the provisions of the two Codes
on the matter of the subject claim are in an irreconcilable conflict. In fact, there
can be no such conflict because the provision on sickness benefits of the
nature being claimed by petitioner has not been restated in the Administrative
Code of 1987. However, the COA would have Us consider that the fact that
Section 699 was not restated in the Administrative Code of 1987 meant that
the same section had been repealed. It further maintained that to allow the
particular provisions not restated in the new Code to continue in force argues
against the Code itself. The COA anchored this argument on the whereas
clause of the 1987 Code, which states:
WHEREAS, the effectiveness of the Government will be
enhanced by a new Administrative Code which incorporate in
a unified document the major structural, functional and
procedural principles and rules of governance; and
xxx xxx xxx
It argues, in effect, that what is contemplated is only one Code — the
Administrative Code of 1987. This contention is untenable.
The fact that a later enactment may relate to the same subject matter as that
of an earlier statute is not of itself sufficient to cause an implied repeal of the
prior act, since the new statute may merely be cumulative or a continuation
of the old one. 12 What is necessary is a manifest indication of legislative
purpose to repeal.13
We come now to the second category of repeal — the enactment of a statute
revising or codifying the former laws on the whole subject matter. This is only
possible if the revised statute or code was intended to cover the whole subject
to be a complete and perfect system in itself. It is the rule that a subsequent
statute is deemed to repeal a prior law if the former revises the whole subject
matter of the former statute.14 When both intent and scope clearly evidence
the idea of a repeal, then all parts and provisions of the prior act that are
omitted from the revised act are deemed repealed.15 Furthermore, before
there can be an implied repeal under this category, it must be the clear intent
of the legislature that the later act be the substitute to the prior act.16
According to Opinion No. 73, S. 1991 of the Secretary of Justice, what appears
clear is the intent to cover only those aspects of government that pertain to
administration, organization and procedure, understandably because of the
many changes that transpired in the government structure since the
enactment of the RAC decades of years ago. The COA challenges the weight
that this opinion carries in the determination of this controversy inasmuch as
the body which had been entrusted with the implementation of this particular
provision has already rendered its decision. The COA relied on the rule in
administrative law enunciated in the case of Sison vs. Pangramuyen17 that in
the absence of palpable error or grave abuse of discretion, the Court would be
loathe to substitute its own judgment for that of the administrative agency
entrusted with the enforcement and implementation of the law. This will not
hold water. This principle is subject to limitations. Administrative decisions
may be reviewed by the courts upon a showing that the decision is vitiated by
fraud, imposition or mistake.18 It has been held that Opinions of the Secretary
and Undersecretary of Justice are material in the construction of statutes in
pari materia.19
Lastly, it is a well-settled rule of statutory construction that repeals of statutes
by implication are not favored.20 The presumption is against inconsistency and
repugnancy for the legislature is presumed to know the existing laws on the
subject and not to have enacted inconsistent or conflicting statutes.21
This Court, in a case, explains the principle in detail as follows: "Repeals by
implication are not favored, and will not be decreed unless it is manifest that
the legislature so intended. As laws are presumed to be passed with
deliberation with full knowledge of all existing ones on the subject, it is but
reasonable to conclude that in passing a statute it was not intended to
interfere with or abrogate any former law relating to some matter, unless the
repugnancy between the two is not only irreconcilable, but also clear and
convincing, and flowing necessarily from the language used, unless the later
act fully embraces the subject matter of the earlier, or unless the reason for
the earlier act is beyond peradventure renewed. Hence, every effort must be
used to make all acts stand and if, by any reasonable construction, they can be
reconciled, the later act will not operate as a repeal of the earlier.22
Regarding respondent's contention that recovery under this subject section
shall bar the recovery of benefits under the Employees' Compensation
Program, the same cannot be upheld. The second sentence of Article 173,
Chapter II, Title II (dealing on Employees' Compensation and State Insurance
Fund), Book IV of the Labor Code, as amended by P.D. 1921, expressly provides
that "the payment of compensation under this Title shall not bar the recovery
of benefits as provided for in Section 699 of the Revised Administrative Code .
. . whose benefits are administered by the system (meaning SSS or GSIS) or by
other agencies of the government."
WHEREFORE, premises considered, the Court resolves to GRANT the petition;
respondent is hereby ordered to give due course to petitioner's claim for
benefits. No costs.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado, Davide,
Jr., Romero, Nocon, Bellosillo and Melo, JJ., concur.
Gutierrez, Jr., J., concur in the result.
Case #2
THIRD DIVISION
G.R. No. 102976 October 25, 1995
IRON AND STEEL AUTHORITY, petitioner,
vs.
THE COURT OF APPEALS and MARIA CRISTINA FERTILIZER
CORPORATION, respondents.
SYLLABI
Actions; Parties; Pleadings and Practice; Those who can be parties to a civil
action may be broadly categorized into two (2) groups—i.e., persons, whether
natural or juridical, and, entities authorized by law.—Rule 3, Section 1 of the
Rules of Court specifies who may be parties to a civil action: “Section 1. Who
May Be Parties.—Only natural or juridical persons or entities authorized by law
may be parties in a civil action.” Under the above quoted provision, it will be
seen that those who can be parties to a civil action may be broadly categorized
into two (2) groups: (a) those who are recognized as persons under the law
whether natural, i.e., biological persons, on the one hand, or juridical persons
such as corporations, on the other hand; and (b) entities authorized by law to
institute actions
Administrative Law; Government Owned and Controlled Corporations;
Government Agencies and Instrumentalities; The Iron and Steel Authority (ISA)
appears to be a non-incorporated agency or instrumentality of the Republic of
the Philippines, or more precisely of the Government of the Republic of the
Philippines.—Clearly, ISA was vested with some of the powers or attributes
normally associated with juridical personality. There is, however, no provision
in P.D. No. 272 recognizing ISA as possessing general or comprehensive
juridical personality separate and distinct from that of the Government. The
ISA in fact appears to the Court to be a non-incorporated agency or
instrumentality of the Republic of the Philippines, or more precisely of the
Government of the Republic of the Philippines. It is common knowledge that
other agencies or instrumentalities of the Government of the Republic are cast
in corporate form, that is to say, are incorporated agencies or
instrumentalities, sometimes with and at other times without capital stock,
and accordingly vested with a juridical personality distinct from the personality
of the Republic.
Same; Same; Same; Words and Phrases; The term “Authority” has been used
to designate both incorporated and non-incorporated agencies or
instrumentalities of the Government.—It is worth noting that the term
“Authority” has been used to designate both incorporated and non-
incorporated agencies or instrumentalities of the Government. Same; Same;
Same; Agency; The ISA is an agent or delegate of the Republic, while the
Republic itself is a body corporate and juridical person vested with the full
panoply of powers and attributes which are compendiously described as “legal
personality.”—We consider that the ISA is properly regarded as an agent or
delegate of the Republic of the Philippines. The Republic itself is a body
corporate and juridical person vested with the full panoply of powers and
attributes which are compendiously described as “legal personality.”
Same; Same; Same; Same; When the statutory term of a non-incorporated
agency expires, the powers, duties and functions as well as the assets and
liabilities of that agency revert back to, and are reassumed by, the Republic of
the Philippines, in the absence of special provisions of law specifying some
other disposition thereof.—When the statutory term of a non-incorporated
agency expires, the powers, duties and functions as well as the assets and
liabilities of that agency revert back to, and are re-assumed by, the Republic
of the Philippines, in the absence of special provisions of law specifying some
other disposition thereof such as e.g., devolution or transmission of such
powers, duties, functions, etc to some other identified successor agency or
instrument ality of the Republic of the Philippines. When the expiring agency
is an incorporated one, the consequences of such expiry must be looked for,
in the first instance, in the charter of that agency and, by way of
supplementation, in the provisions of the Corporation Code. Since, in the
instant case, ISA is a non-incorporated agency or instrumentality of the
Republic, its powers, duties, functions, assets and liabilities are properly
regarded as folded back into the Government of the Republic of the
Philippines and hence assumed once again by the Republic, no special
statutory provision having been shown to have mandated succession thereto
by some other entity or agency of the Republic.
Actions; Parties; Eminent Domain; The expiration of ISA’s statutory term did
not by itself require or justify the dismissal of the eminent domain
proceedings.—From the foregoing premises, it follows that the Republic of the
Philippines is entitled to be substituted in the expropriation proceedings as
party-plaintiff in lieu of ISA, the statutory term of ISA having expired. Put a little
differently, the expiration of ISA’s statutory term did not by itself require or enacted a continuing or standing delegation of authority to the President of
justify the dismissal of the eminent domain proceedings. the Philippines to exercise, or cause the exercise of, the power of eminent
domain on behalf of the Government of the Republic of the Philippines.
Same; Same; Same; Pleadings and Practice; The non-joinder of the Republic
which occurred upon the expiration of ISA’s statutory term was not a ground
for dismissal of the expropriation proceedings.—It is also relevant to note that FELICIANO, J.:
the non-joinder of the Republic which occurred upon the expiration of ISA’s
statutory term, was not a ground for dismissal of such proceedings since a Petitioner Iron and Steel Authority ("ISA") was created by Presidential Decree
party may be dropped or added by order of the court, on motion of any party (P.D.) No. 272 dated 9 August 1973 in order, generally, to develop and
or on the court’s own initiative at any stage of the action and on such terms as promote the iron and steel industry in the Philippines. The objectives of the
are just. In the instant case, the Republic has precisely moved to take over the ISA are spelled out in the following terms:
proceedings as party-plaintiff.
Sec. 2. Objectives — The Authority shall have the following
Same; Same; Same; Administrative Law; The Republic may initiate or objectives:
participate in actions involving its agents.—In E.B. Marcha Transport
Company, Inc. v. Intermediate Appellate Court, the Court recognized that the (a) to strengthen the iron and steel industry of the Philippines
Republic may initiate or participate in actions involving its agents. There the and to expand the domestic and export markets for the
Republic of the Philippines was held to be a proper party to sue for recovery products of the industry;
of possession of property although the “real” or registered owner of the
(b) to promote the consolidation, integration and
property was the Philippine Ports Authority, a government agency vested with
rationalization of the industry in order to increase industry
a separate juridical personality. The Court said: “It can be said that in suing for
capability and viability to service the domestic market and to
the recovery of the rentals, the Republic of the Philippines acted as principal
compete in international markets;
of the Philippine Ports Authority, directly exercising the commission it had
earlier conferred on the latter as its agent. x x x”
(c) to rationalize the marketing and distribution of steel
products in order to achieve a balance between demand and
Same; Same; Same; No new legislative act is necessary should the Republic
supply of iron and steel products for the country and to
decide, upon being substituted for ISA, in fact to continue to prosecute the
ensure that industry prices and profits are at levels that
expropriation proceedings—the legislative authority, a long time ago, enacted
provide a fair balance between the interests of investors,
a continuing or standing delegation of authority to the President of the
consumers suppliers, and the public at large;
Philippines to exercise, or cause the exercise of, the power of eminent domain
on behalf of the Government.—While the power of eminent domain is, in
(d) to promote full utilization of the existing capacity of the
principle, vested primarily in the legislative department of the government, we
industry, to discourage investment in excess capacity, and in
believe and so hold that no new legislative act is necessary should the Republic
coordination, with appropriate government agencies to
decide, upon being substituted for ISA, in fact to continue to prosecute the
encourage capital investment in priority areas of the industry;
expropriation proceedings. For the legislative authority, a long time ago,
 (e) to assist the industry in securing adequate and low-cost
supplies of raw materials and to reduce the excessive
dependence of the country on imports of iron and steel.
The list of powers and functions of the ISA included the following:
Sec. 4. Powers and Functions. — The authority shall have the
following powers and functions:
xxx xxx xxx
(j) to initiate expropriation of land required for basic iron and
steel facilities for subsequent resale and/or lease to the
companies involved if it is shown that such use of the State's
power is necessary to implement the construction of capacity
which is needed for the attainment of the objectives of the
Authority;
xxx xxx xxx
(Emphasis supplied)
P.D. No. 272 initially created petitioner ISA for a term of five (5) years counting
from 9 August 1973.1 When ISA's original term expired on 10 October 1978,
its term was extended for another ten (10) years by Executive Order No. 555
dated 31 August 1979.
The National Steel Corporation ("NSC") then a wholly owned subsidiary of the
National Development Corporation which is itself an entity wholly owned by
the National Government, embarked on an expansion program embracing,
among other things, the construction of an integrated steel mill in Iligan City.
The construction of such a steel mill was considered a priority and major
industrial project of the Government. Pursuant to the expansion program of
the NSC, Proclamation No. 2239 was issued by the President of the Philippines
on 16 November 1982 withdrawing from sale or settlement a large tract of
public land (totalling about 30.25 hectares in area) located in Iligan City, and
reserving that land for the use and immediate occupancy of NSC.
Since certain portions of the public land subject matter Proclamation No. 2239
were occupied by a non-operational chemical fertilizer plant and related
facilities owned by private respondent Maria Cristina Fertilizer Corporation
("MCFC"), Letter of Instruction (LOI), No. 1277, also dated 16 November 1982,
was issued directing the NSC to "negotiate with the owners of MCFC, for and
on behalf of the Government, for the compensation of MCFC's present
occupancy rights on the subject land." LOI No. 1277 also directed that should
NSC and private respondent MCFC fail to reach an agreement within a period
of sixty (60) days from the date of LOI No. 1277, petitioner ISA was to exercise
its power of eminent domain under P.D. No. 272 and to initiate expropriation
proceedings in respect of occupancy rights of private respondent MCFC
relating to the subject public land as well as the plant itself and related facilities
and to cede the same to the NSC.2
Negotiations between NSC and private respondent MCFC did fail. Accordingly,
on 18 August 1983, petitioner ISA commenced eminent domain proceedings
against private respondent MCFC in the Regional Trial Court, Branch 1, of Iligan
City, praying that it (ISA) be places in possession of the property involved upon
depositing in court the amount of P1,760,789.69 representing ten percent
(10%) of the declared market values of that property. The Philippine National
Bank, as mortgagee of the plant facilities and improvements involved in the
expropriation proceedings, was also impleaded as party-defendant.
On 17 September 1983, a writ of possession was issued by the trial court in
favor of ISA. ISA in turn placed NSC in possession and control of the land
occupied by MCFC's fertilizer plant installation.
The case proceeded to trial. While the trial was ongoing, however, the
statutory existence of petitioner ISA expired on 11 August 1988. MCFC then
filed a motion to dismiss, contending that no valid judgment could be rendered
against ISA which had ceased to be a juridical person. Petitioner ISA filed its
opposition to this motion.
In an Order dated 9 November 1988, the trial court granted MCFC's motion to
dismiss and did dismiss the case. The dismissal was anchored on the provision
of the Rules of Court stating that "only natural or juridical persons or entities
authorized by law may be parties in a civil case."3 The trial court also referred
to non-compliance by petitioner ISA with the requirements of Section 16, Rule
3 of the Rules of Court.4
Petitioner ISA moved for reconsideration of the trial court's Order, contending
that despite the expiration of its term, its juridical existence continued until
the winding up of its affairs could be completed. In the alternative, petitioner
ISA urged that the Republic of the Philippines, being the real party-in-interest,
should be allowed to be substituted for petitioner ISA. In this connection, ISA
referred to a letter from the Office of the President dated 28 September 1988
which especially directed the Solicitor General to continue the expropriation
case.
The trial court denied the motion for reconsideration, stating, among other
things that:
The property to be expropriated is not for public use or
benefit [__] but for the use and benefit [__] of NSC, a
government controlled private corporation engaged in
private business and for profit, specially now that the
government, according to newspaper reports, is offering for
sale to the public its [shares of stock] in the National Steel
Corporation in line with the pronounced policy of the present
administration to disengage the government from its private
business ventures.5 (Brackets supplied)
Petitioner went on appeal to the Court of Appeals. In a Decision dated 8
October 1991, the Court of Appeals affirmed the order of dismissal of the trial
court. The Court of Appeals held that petitioner ISA, "a government regulatory
agency exercising sovereign functions," did not have the same rights as an
ordinary corporation and that the ISA, unlike corporations organized under the
Corporation Code, was not entitled to a period for winding up its affairs after
expiration of its legally mandated term, with the result that upon expiration of
its term on 11 August 1987, ISA was "abolished and [had] no more legal
authority to perform governmental functions." The Court of Appeals went on
to say that the action for expropriation could not prosper because the basis
for the proceedings, the ISA's exercise of its delegated authority to
expropriate, had become ineffective as a result of the delegate's dissolution,
and could not be continued in the name of Republic of the Philippines,
represented by the Solicitor General:
It is our considered opinion that under the law, the complaint
cannot prosper, and therefore, has to be dismissed without
prejudice to the refiling of a new complaint for expropriation if
the Congress sees it fit." (Emphases supplied)
At the same time, however, the Court of Appeals held that it was
premature for the trial court to have ruled that the expropriation suit
was not for a public purpose, considering that the parties had not yet
rested their respective cases.
In this Petition for Review, the Solicitor General argues that since ISA initiated
and prosecuted the action for expropriation in its capacity as agent of the
Republic of the Philippines, the Republic, as principal of ISA, is entitled to be
substituted and to be made a party-plaintiff after the agent ISA's term had
expired.
Private respondent MCFC, upon the other hand, argues that the failure of
Congress to enact a law further extending the term of ISA after 11 August 1988
evinced a "clear legislative intent to terminate the juridical existence of ISA,"
and that the authorization issued by the Office of the President to the Solicitor
General for continued prosecution of the expropriation suit could not prevail
over such negative intent. It is also contended that the exercise of the eminent
domain by ISA or the Republic is improper, since that power would be
exercised "not on behalf of the National Government but for the benefit of
NSC."
The principal issue which we must address in this case is whether or not the
Republic of the Philippines is entitled to be substituted for ISA in view of the
expiration of ISA's term. As will be made clear below, this is really the only issue
which we must resolve at this time.
Rule 3, Section 1 of the Rules of Court specifies who may be parties to a civil
action:
Sec. 1. Who May Be Parties. — Only natural or juridical
persons or entities authorized by law may be parties in a civil
action.
Under the above quoted provision, it will be seen that those who can
be parties to a civil action may be broadly categorized into two (2)
groups:
(a) those who are recognized as persons under the law
whether natural, i.e., biological persons, on the one hand, or
juridical person such as corporations, on the other hand; and
(b) entities authorized by law to institute actions.
Examination of the statute which created petitioner ISA shows that ISA falls
under category (b) above. P.D. No. 272, as already noted, contains express
authorization to ISA to commence expropriation proceedings like those here
involved:
Sec. 4. Powers and Functions. — The Authority shall have the
following powers and functions:
xxx xxx xxx
(j) to initiate expropriation of land required for basic iron and
steel facilities for subsequent resale and/or lease to the
companies involved if it is shown that such use of the State's
power is necessary to implement the construction of capacity
which is needed for the attainment of the objectives of the
Authority;
xxx xxx xxx
(Emphasis supplied)
It should also be noted that the enabling statute of ISA expressly
authorized it to enter into certain kinds of contracts "for and in behalf
of the Government" in the following terms:
xxx xxx xxx
(i) to negotiate, and when necessary, to enter into contracts
for and in behalf of the government, for the bulk purchase of
materials, supplies or services for any sectors in the industry,
and to maintain inventories of such materials in order to
insure a continuous and adequate supply thereof and thereby
reduce operating costs of such sector;
xxx xxx xxx
(Emphasis supplied)
Clearly, ISA was vested with some of the powers or attributes normally
associated with juridical personality. There is, however, no provision in P.D.
No. 272 recognizing ISA as possessing general or comprehensive juridical
personality separate and distinct from that of the Government. The ISA in fact
appears to the Court to be a non-incorporated agency or instrumentality of the
Republic of the Philippines, or more precisely of the Government of the
Republic of the Philippines. It is common knowledge that other agencies or
instrumentalities of the Government of the Republic are cast
in corporate form, that is to say, are incorporated
agencies or instrumentalities, sometimes with and at other times without
capital stock, and accordingly vested with a juridical personality distinct from
the personality of the Republic. Among such incorporated agencies or
instrumentalities are: National Power Corporation;6 Philippine Ports
Authority;7 National Housing Authority;8 Philippine National Oil
9 10
Company; Philippine National Railways; Public Estates
Authority; 11 Philippine Virginia Tobacco Administration,12 and so forth. It is
worth noting that the term "Authority" has been used to designate both
incorporated and non-incorporated agencies or instrumentalities of the
Government.
We consider that the ISA is properly regarded as an agent or delegate of the
Republic of the Philippines. The Republic itself is a body corporate and juridical
person vested with the full panoply of powers and attributes which are
compendiously described as "legal personality." The relevant definitions are
found in the Administrative Code of 1987:
Sec. 2. General Terms Defined. — Unless the specific words of
the text, or the context as a whole, or a particular statute,
require a different meaning:
(1) Government of the Republic of the Philippines refers to
the corporate governmental entity through which the
functions of government are exercised throughout the
Philippines, including, save as the contrary appears from the
context, the various arms through which political authority is
made effective in the Philippines, whether pertaining to the
autonomous regions, the provincial, city, municipal or
barangay subdivisions or other forms of local government.
xxx xxx xxx
(4) Agency of the Government refers to any of the various
units of the Government, including a department,
bureau, office, instrumentality, or government-owned or
controlled corporation, or a local government or a distinct
unit therein.
xxx xxx xxx
(10) Instrumentality refers to any agency of the National
Government, not integrated within the department
framework, vested with special functions or jurisdiction by
law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational
autonomy, usually through a charter. This term includes
regulatory agencies, chartered institutions and government-
owned or controlled corporations.
xxx xxx xxx
(Emphases supplied)
When the statutory term of a non-incorporated agency expires, the powers,
duties and functions as well as the assets and liabilities of that agency revert
back to, and are re-assumed by, the Republic of the Philippines, in the absence
of special provisions of law specifying some other disposition thereof such as,
e.g., devolution or transmission of such powers, duties, functions, etc. to some
other identified successor agency or instrumentality of the Republic of the
Philippines. When the expiring agency is an incorporated one, the
consequences of such expiry must be looked for, in the first instance, in the
charter of that agency and, by way of supplementation, in the provisions of
the Corporation Code. Since, in the instant case, ISA is a non-incorporated
agency or instrumentality of the Republic, its powers, duties, functions, assets
and liabilities are properly regarded as folded back into the Government of the
Republic of the Philippines and hence assumed once again by the Republic, no
special statutory provision having been shown to have mandated succession
thereto by some other entity or agency of the Republic.
The procedural implications of the relationship between an agent or delegate
of the Republic of the Philippines and the Republic itself are, at least in part,
spelled out in the Rules of Court. The general rule is, of course, that an action
must be prosecuted and defended in the name of the real party in interest.
(Rule 3, Section 2) Petitioner ISA was, at the commencement of the
expropriation proceedings, a real party in interest, having been explicitly
authorized by its enabling statute to institute expropriation proceedings. The
Rules of Court at the same time expressly recognize the role of representative
parties:
Sec. 3. Representative Parties. — A trustee of an expressed
trust, a guardian, an executor or administrator, or a party
authorized by statute may sue or be sued without joining the
party for whose benefit the action is presented or defended;
but the court may, at any stage of the proceedings, order such
beneficiary to be made a party. . . . . (Emphasis supplied)
In the instant case, ISA instituted the expropriation proceedings in its capacity
as an agent or delegate or representative of the Republic of the Philippines
pursuant to its authority under P.D. No. 272. The present expropriation suit
was brought on behalf of and for the benefit of the Republic as the principal
of ISA. Paragraph 7 of the complaint stated:
7. The Government, thru the plaintiff ISA, urgently needs the
subject parcels of land for the construction and installation of
iron and steel manufacturing facilities that are indispensable
to the integration of the iron and steel making industry which
is vital to the promotion of public interest and welfare.
(Emphasis supplied)
The principal or the real party in interest is thus the Republic of the
Philippines and not the National Steel Corporation, even though the
latter may be an ultimate user of the properties involved should the
condemnation suit be eventually successful.
From the foregoing premises, it follows that the Republic of the Philippines is
entitled to be substituted in the expropriation proceedings as party-plaintiff in
lieu of ISA, the statutory term of ISA having expired. Put a little differently, the
expiration of ISA's statutory term did not by itself require or justify the
dismissal of the eminent domain proceedings.
It is also relevant to note that the non-joinder of the Republic which occurred
upon the expiration of ISA's statutory term, was not a ground for dismissal of
such proceedings since a party may be dropped or added by order of the
court, on motion of any party or on the court's own initiative at any stage of
the action and on such terms as are just. 13 In the instant case, the Republic
has precisely moved to take over the proceedings as party-plaintiff.
In E.B. Marcha Transport Company, Inc. v. Intermediate Appellate Court, 14 the
Court recognized that the Republic may initiate or participate in actions
involving its agents. There the Republic of the Philippines was held to be a
proper party to sue for recovery of possession of property although the "real"
or registered owner of the property was the Philippine Ports Authority, a
government agency vested with a separate juridical personality. The Court
said:
It can be said that in suing for the recovery of the rentals, the
Republic of the Philippines acted as principal of the Philippine
Ports Authority, directly exercising the commission it had
earlier conferred on the latter as its agent. . . .15 (Emphasis
supplied)
In E.B. Marcha, the Court also stressed that to require the Republic to
commence all over again another proceeding, as the trial court and
Court of Appeals had required, was to generate unwarranted delay
and create needless repetition of proceedings:
More importantly, as we see it, dismissing the complaint on
the ground that the Republic of the Philippines is not the
proper party would result in needless delay in the settlement
 of this matter and also in derogation of the policy against
multiplicity of suits. Such a decision would require the
Philippine Ports Authority to refile the very same complaint
already proved by the Republic of the Philippines and bring
back as it were to square one.16 (Emphasis supplied)
As noted earlier, the Court of Appeals declined to permit the substitution of
the Republic of the Philippines for the ISA upon the ground that the action for
expropriation could not prosper because the basis for the proceedings, the
ISA's exercise of its delegated authority to expropriate, had become legally
ineffective by reason of the expiration of the statutory term of the agent or
delegated i.e., ISA. Since, as we have held above, the powers and functions of
ISA have reverted to the Republic of the Philippines upon the termination of
the statutory term of ISA, the question should be addressed whether fresh
legislative authority is necessary before the Republic of the Philippines may
continue the expropriation proceedings initiated by its own delegate or agent.
While the power of eminent domain is, in principle, vested primarily in the
legislative department of the government, we believe and so hold that no new
legislative act is necessary should the Republic decide, upon being substituted
for ISA, in fact to continue to prosecute the expropriation proceedings. For the
legislative authority, a long time ago, enacted a continuing or standing
delegation of authority to the President of the Philippines to exercise, or cause
the exercise of, the power of eminent domain on behalf of the Government of
the Republic of the Philippines. The 1917 Revised Administrative Code, which
was in effect at the time of the commencement of the present expropriation
proceedings before the Iligan Regional Trial Court, provided that:
Sec. 64. Particular powers and duties of the President of the
Philippines. — In addition to his general supervisory authority,
the President of the Philippines shall have such other specific
powers and duties as are expressly conferred or imposed on
him by law, and also, in particular, the powers and duties set
forth in this Chapter.
Among such special powers and duties shall be:
xxx xxx xxx
(h) To determine when it is necessary or advantageous to
exercise the right of eminent domain in behalf of the
Government of the Philippines; and to direct the Secretary of
Justice, where such act is deemed advisable, to cause the
condemnation proceedings to be begun in the court having
proper jurisdiction. (Emphasis supplied)
The Revised Administrative Code of 1987 currently in force has
substantially reproduced the foregoing provision in the following
terms:
Sec. 12. Power of eminent domain. — The President
shall determine when it is necessary or advantageous to
exercise the power of eminent domain in behalf of the
National Government, and direct the Solicitor General,
whenever he deems the action advisable, to institute
expopriation proceedings in the proper court. (Emphasis
supplied)
In the present case, the President, exercising the power duly
delegated under both the 1917 and 1987 Revised Administrative
Codes in effect made a determination that it was necessary and
advantageous to exercise the power of eminent domain in behalf of
the Government of the Republic and accordingly directed the Solicitor
General to proceed with the suit. 17
It is argued by private respondent MCFC that, because Congress after
becoming once more the depository of primary legislative power, had not
enacted a statute extending the term of ISA, such non-enactment must be
deemed a manifestation of a legislative design to discontinue or abort the
present expropriation suit. We find this argument much too speculative; it
rests too much upon simple silence on the part of Congress and casually Case #3
disregards the existence of Section 12 of the 1987 Administrative Code already
quoted above. EN BANC

Other contentions are made by private respondent MCFC, such as, that the G.R. No. 1051 May 19, 1903
constitutional requirement of "public use" or "public purpose" is not present
in the instant case, and that the indispensable element of just compensation THE UNITED STATES, complainant-appellee,
is also absent. We agree with the Court of Appeals in this connection that these vs.
contentions, which were adopted and set out by the Regional Trial Court in its FRED L. DORR, ET AL., defendants-appellants.
order of dismissal, are premature and are appropriately addressed in the
proceedings before the trial court. Those proceedings have yet to produce a F. G. Waite for appellants.
decision on the merits, since trial was still on going at the time the Regional Solicitor-General Araneta for appellee.
Trial Court precipitously dismissed the expropriation proceedings. Moreover,
as a pragmatic matter, the Republic is, by such substitution as party-plaintiff, SYLLABI
accorded an opportunity to determine whether or not, or to what extent, the
1.CRIMINAL LAW; SEDITION; GOVERNMENT DEFINED.—The term
proceedings should be continued in view of all the subsequent developments
"government" as employed in Act No. 292 of the United States Philippine
in the iron and steel sector of the country including, though not limited to, the
Commission is used in the abstract sense of the existing political system as
partial privatization of the NSC.
distinguished from the concrete organism of the Government.
WHEREFORE, for all the foregoing, the Decision of the Court of Appeals dated
2.CRIMINAL PROCEDURE; COMPLAINT OR INFORMATION.—When an offense
8 October 1991 to the extent that it affirmed the trial court's order dismissing
may be committed in any of several different modes, and the complaint alleges
the expropriation proceedings, is hereby REVERSED and SET ASIDE and the
the crime to have been committed in two or more modes, it is sufficient to
case is REMANDED to the court a quo which shall allow the substitution of the
prove the offense committed in any one of them.
Republic of the Philippines for petitioner Iron and Steel Authority and for
further proceedings consistent with this Decision. No pronouncement as to
3.ID.; SEDITION.—The publication of an article can not be punished under Act
costs.
No. 202 of the United States Philippine Commission as having seditious
tendencies unless it has a tendency to produce disaffection or a feeling
SO ORDERED.
incompatible with a disposition to remain loyal to the Government and
Romero, Melo, Vitug and Panganiban, JJ., concur. obedient to its laws.

4.ID.; ID.—The publication of an article abusive of the United States Philippine

Commission and its members is not a libel upon the Government and does not
fall within said Act No. 292 of the United States Philippine Commission. United
States vs. Dorr, 2 Phil. 332, No. 1051 May 19, 1903
LADD, J.:
The defendants have been convicted upon a complaint charging them with the
offense of writing, publishing, and circulating a scurrilous libel against the
Government of the United States and the Insular Government of the Philippine
Islands. The complaint is based upon section 8 of Act No. 292 of the
Commission, which is as follows:
Every person who shall utter seditious words or speeches, write,
publish, or circulate scurrilous libels against the Government of the
United States or the Insular Government of the Philippine Islands, or
which tend to disturb or obstruct any lawful officer in executing his
office, or which tend to instigate others to cabal or meet together for
unlawful purposes, or which suggest or incite rebellious conspiracies
or riots, or which tend to stir up the people against the lawful
authorities, or to disturb the peace of the community, the safety and
order of the Government, or who shall knowingly conceal such evil
practices, shall be punished by a fine not exceeding two thousand
dollars or by imprisonment not exceeding two years, or both, in the
discretion of the court.
The alleged libel was published as an editorial in the issue of the "Manila
Freedom" of April 6, 1902, under the caption of "A few hard facts."
The Attorney-General in his brief indicates the following passages of the article
as those upon which he relies to sustain the conviction:
Sidney Adamson, in a late letter in "Leslie's Weekly," has the following
to say of the action of the Civil Commission in appointing rascally
natives to important Government positions:
"It is a strong thing to say, but nevertheless true, that the Civil
Commission, through its ex-insurgent office holders, and by
its continual disregard for the records of natives obtained
during the military rule of the Islands, has, in its distribution
of offices, constituted a protectorate over a set of men who
should be in jail or deported. . . . [Reference is then made to
the appointment of one Tecson as justice of the peace.] This
is the kind of foolish work that the Commission is doing all
over the Islands, reinstating insurgents and rogues and
turning down the men who have during the struggle, at the
risk of their lives, aided the Americans."
xxx xxx xxx
There is no doubt but that the Filipino office holders of the Islands are
in a good many instances rascals.
xxx xxx xxx
The commission has exalted to the highest positions in the Islands
Filipinos who are alleged to be notoriously corrupt and rascally, and
men of no personal character.
xxx xxx xxx
Editor Valdez, of "Miau," made serious charges against two of the native
Commissioners — charges against Trinidad H. Pardo de Tavera, which, if true,
would brand the man as a coward and a rascal, and with what result? . . .
[Reference is then made to the prosecution and conviction of Valdez for libel
"under a law which specifies that the greater the truth the greater the libel."]
Is it the desire of the people of the United States that the natives against whom
these charges have been made (which, if true, absolutely vilify their personal
characters) be permitted to retain their seats on the Civil Commission, the
executive body of the Philippine Government, without an investigation?
xxx xxx xxx
It is a notorious fact that many branches of the Government organized
by the Civil Commission are rotten and corrupt. The fiscal system,
 upon which life, liberty, and justice depends, is admitted by the
Attorney-General himself to be most unsatisfactory. It is a fact that the
Philippine judiciary is far from being what it should. Neither fiscals nor
judges can be persuaded to convict insurgents when they wish to
protect them.
xxx xxx xxx
Now we hear all sorts of reports as to rottenness existing in the
province [of Tayabas], and especially the northern end of it; it is said
that it is impossible to secure the conviction of lawbreakers and
outlaws by the native justices, or a prosecution by the native fiscals.
xxx xxx xxx
The long and short of it is that Americans will not stand for an arbitrary
government, especially when evidences of carpetbagging and rumors
of graft are too thick to be pleasant.
We do not understand that it is claimed that the defendants succeeded in
establishing at the trial the truth of any of the foregoing statements. The only
question which we have considered is whether their publication constitutes
an offense under section 8 of Act No. 292, above cited.
Several allied offenses or modes of committing the same offense are defined
in that section, viz: (1) The uttering of seditious words or speeches; (2) the
writing, publishing, or circulating of scurrilous libels against the Government
of the United States or the Insular Government of the Philippine Islands; (3)
the writing, publishing, or circulating of libels which tend to disturb or obstruct
any lawful officer in executing his office; (4) or which tend to instigate others
to cabal or meet together for unlawful purposes; (5) or which suggest or incite
rebellious conspiracies or riots; (6) or which tend to stir up the people against
the lawful authorities or to disturb the peace of the community, the safety and
order of the Government; (7) knowingly concealing such evil practices.
The complaint appears to be framed upon the theory that a writing, in order
to be punishable as a libel under this section, must be of a scurrilous nature
and directed against the Government of the United States or the Insular
Government of the Philippine Islands, and must, in addition, tend to some one
of the results enumerated in the section. The article in question is described
in the complaint as "a scurrilous libel against the Government of the United
States and the Insular Government of the Philippine Islands, which tends to
obstruct the lawful officers of the United States and the Insular Government
of the Philippine Islands in the execution of their offices, and which tends to
instigate others to cabal and meet together for unlawful purposes, and which
suggests and incites rebellious conspiracies, and which tends to stir up the
people against the lawful authorities, and which disturbs the safety and order
of the Government of the United States and the Insular Government of the
Philippine Islands." But it is "a well-settled rule in considering indictments that
where an offense may be committed in any of several different modes, and
the offense, in any particular instance, is alleged to have been committed in
two or more modes specified, it is sufficient to prove the offense committed
in any one of them, provided that it be such as to constitute the substantive
offense" (Com. vs. Kneeland, 20 Pick., Mass., 206, 215), and the defendants
may, therefore, be convicted if any one of the substantive charges into which
the complaint may be separated has been made out.
We are all, however, agreed upon the proposition that the article in question
has no appreciable tendency to "disturb or obstruct any lawful officer in
executing his office," or to "instigate" any person or class of persons "to cabal
or meet together for unlawful purposes," or to "suggest or incite rebellious
conspiracies or riots," or to "stir up the people against the lawful authorities
or to disturb the peace of the community, the safety and order of the
Government." All these various tendencies, which are described in section 8
of Act No. 292, each one of which is made an element of a certain form of libel,
may be characterized in general terms as seditious tendencies. This is
recognized in the description of the offenses punished by this section, which
is found in the title of the act, where they are defined as the crimes of the
"seditious utterances, whether written or spoken."
Excluding from consideration the offense of publishing "scurrilous libels
against the Government of the United States or the Insular Government of the
Philippine Islands," which may conceivably stand on a somewhat different
footing, the offenses punished by this section all consist in inciting, orally or in
writing, to acts of disloyalty or disobedience to the lawfully constituted
authorities in these Islands. And while the article in question, which is, in the
main, a virulent attack against the policy of the Civil Commission in appointing
natives to office, may have had the effect of exciting among certain classes
dissatisfaction with the Commission and its measures, we are unable to
discover anything in it which can be regarded as having a tendency to produce
anything like what may be called disaffection, or, in other words, a state of
feeling incompatible with a disposition to remain loyal to the Government and
obedient to the laws. There can be no conviction, therefore, for any of the
offenses described in the section on which the complaint is based, unless it is
for the offense of publishing a scurrilous libel against the Government of the
of the United States or the Insular Government of the Philippine Islands.
Can the article be regarded as embraced within the description of "scurrilous
libels against the Government of the United States or the Insular Government
of the Philippine Islands?" In the determination of this question we have
encountered great difficulty, by reason of the almost entire lack of American
precedents which might serve as a guide in the construction of the law. There
are, indeed, numerous English decisions, most of them of the eighteenth
century, on the subject of libelous attacks upon the "Government, the
constitution, or the law generally," attacks upon the Houses of Parliament, the
Cabinet, the Established Church, and other governmental organisms, but
these decisions are not now accessible to us, and, if they were, they were
made under such different conditions from those which prevail at the present
day, and are founded upon theories of government so foreign to those which
have inspired the legislation of which the enactment in question forms a part,
that they would probably afford but little light in the present inquiry. In
England, in the latter part of the eighteenth century, any "written censure
upon public men for their conduct as such," as well as any written censure
"upon the laws or upon the institutions of the country," would probably have
been regarded as a libel upon the Government. (2 Stephen, History of the
Criminal Law of England, 348.) This has ceased to be the law in England, and it
is doubtful whether it was ever the common law of any American State. "It is
true that there are ancient dicta to the effect that any publication tending to
"possess the people with an ill opinion of the Government" is a seditious libel
( per Holt, C. J., in R. vs. Tuchin, 1704, 5 St. Tr., 532, and Ellenborough, C. J., in
R. vs. Cobbett, 1804, 29 How. St. Tr., 49), but no one would accept that
doctrine now. Unless the words used directly tend to foment riot or rebellion
or otherwise to disturb the peace and tranquility of the Kingdom, the utmost
latitude is allowed in the discussion of all public affairs." (11 Enc. of the Laws
of England, 450.) Judge Cooley says (Const. Lim., 528): "The English common
law rule which made libels on the constitution or the government indictable,
as it was administered by the courts, seems to us unsuited to the condition
and circumstances of the people of America, and therefore never to have been
adopted in the several States."
We find no decisions construing the Tennessee statute (Code, sec. 6663),
which is apparently the only existing American statute of a similar character to
that in question, and from which much of the phraseology of then latter
appears to have been taken, though with some essential modifications.
The important question is to determine what is meant in section 8 of Act No.
292 by the expression "the Insular Government of the Philippine Islands." Does
it mean in a general and abstract sense the existing laws and institutions of the
Islands, or does it mean the aggregate of the individuals by whom the
government of the Islands is, for the time being, administered? Either sense
would doubtless be admissible.
We understand, in modern political science, . . . by the term government, that
institution or aggregate of institutions by which an independent society makes
and carries out those rules of action which are unnecessary to enable men to
live in a social state, or which are imposed upon the people forming that
society by those who possess the power or authority of prescribing them.
Government is the aggregate of authorities which rule a society. By
"dministration, again, we understand in modern times, and especially in more
or less free countries, the aggregate of those persons in whose hands the reins
of government are for the time being (the chief ministers or heads of
departments)." (Bouvier, Law Dictionary, 891.) But the writer adds that the
terms "government" and "administration" are not always used in their
strictness, and that "government" is often used for "administration."
In the act of Congress of July 14, 1798, commonly known as the "Sedition Act,"
it is made an offense to "write, print, utter, or published," or to "knowingly and
willingly assist or aid in writing, printing, uttering, or publishing any false,
scandalous, and malicious writing or writings against the Government of the
United States, or either House of the Congress of the United States, or the
President of the United States, with intent to defame the said Government, or
either House of the said Congress, or the said President, or to bring them, or
either of them, into contempt or disrepute, or to excite against them or either
or any of them the hatred of the good people of the United States," etc. The
term "government" would appear to be used here in the abstract sense of the
existing political system, as distinguished from the concrete organisms of the
Government — the Houses of Congress and the Executive — which are also
specially mentioned.
Upon the whole, we are of the opinion that this is the sense in which the term
is used in the enactment under consideration.
It may be said that there can be no such thing as a scurrilous libel, or any sort
of a libel, upon an abstraction like the Government in the sense of the laws
and institutions of a country, but we think an answer to this suggestion is that
the expression "scurrilous libel" is not used in section 8 of Act No. 292 in the
sense in which it is used in the general libel law (Act No. 277) — that is, in the
sense of written defamation of individuals — but in the wider sense, in which
it is applied in the common law to blasphemous, obscene, or seditious
publications in which there may be no element of defamation whatever. "The
word 'libel' as popularly used, seems to mean only defamatory words; but
words written, if obscene, blasphemous, or seditious, are technically called
libels, and the publication of them is, by the law of England, an indictable
offense." (Bradlaugh vs. The Queen, 3 Q. B. D., 607, 627, per Bramwell L. J. See
Com. vs. Kneeland, 20 Pick., 206, 211.)
While libels upon forms of government, unconnected with defamation of
individuals, must in the nature of things be of uncommon occurrence, the
offense is by no means an imaginary one. An instance of a prosecution for an
offense essentially of this nature is Republica vs. Dennie, 4 Yeates (Pa.), 267,
where the defendant was indicted "as a factious and seditious person of a
wicked mind and unquiet and turbulent disposition and conversation,
seditiously, maliciously, and willfully intending, as much as in him lay, to bring
into contempt and hatred the independence of the United States, the
constitution of this Commonwealth and of the United States, to excite popular
discontent and dissatisfaction against the scheme of polity instituted, and
upon trial in the said United States and in the said Commonwealth, to molest,
disturb, and destroy the peace and tranquility of the said United States and of
the said Commonwealth, to condemn the principles of the Revolution, and
revile, depreciate, and scandalize the characters of the Revolutionary patriots
and statesmen, to endanger, subvert, and totally destroy the republican
constitutions and free governments of the said United States and this
Commonwealth, to involve the said United States and this Commonwealth in
civil war, desolation, and anarchy, and to procure by art and force a radical
change and alteration in the principles and forms of the said constitutions and
governments, without the free will, wish, and concurrence of the people of
the said United States and this Commonwealth, respectively," the charge
being that "to fulfill, perfect, and bring to effect his wicked, seditious, and
detestable intentions aforesaid he . . . falsely, maliciously, factiously, and
seditiously did make, compose, write, and publish the following libel, to wit; 'A
democracy is scarcely tolerable at any period of national history. Its omens are
always sinister and its powers are unpropitious. With all the lights or
experience blazing before our eyes, it is impossible not to discover the futility
of this form of government. It was weak and wicked at Athens, it was bad in
Sparta, and worse in Rome. It has been tried in France and terminated in
despotism. it was tried in England and rejected with the utmost loathing and
abhorrence. It is on its trial here and its issue will be civil war, desolation, and
anarchy. No wise man but discerns its imperfections; no good man but
shudders at its miseries; no honest man but proclaims its fraud, and no brave
man but draws his sword against its force. The institution of a scheme of polity
so radically contemptible and vicious is a memorable example of what the
villainy of some men can devise, the folly of others receive, and both establish, The article in question contains no attack upon the governmental system of
in despite of reason, reflection, and sensation.'" the United States, and it is quite apparent that, though grossly abusive as
respects both the Commission as a body and some of its individual members,
An attack upon the lawfully established system of civil government in the it contains no attack upon the governmental system by which the authority of
Philippine Islands, like that which Dennie was accused of making upon the the United States is enforced in these Islands. The form of government by a
republican form of government lawfully established in the United States and Civil Commission and a Civil Governor is not assailed. It is the character of the
in the State of Pennsylvania would, we think, if couched in scandalous men who are intrusted with the administration of the government that the
language, constitute the precise offense described in section 8 of Act No. 292 writer is seeking to bring into disrepute by impugning the purity of their
as a scurrilous libel against the Insular Government of the Philippine Islands. motives, their public integrity, and their private morals, and the wisdom of
their policy. The publication of the article, therefore, no seditious tendency
Defamation of individuals, whether holding official positions or not, and being apparent, constitutes no offense under Act No. 292, section 8.
whether directed to their public conduct or to their private life, may always be
adequately punished under the general libel law. Defamation of the Civil The judgment of conviction is reversed and the defendants are acquitted, with
Commission as an aggregation, it being "a body of persons definite and small costs de oficio.
enough for its individual members to be recognized as such" (Stephen, Digest
of the Criminal Law, art. 277), as well as defamation of any of the individual Arellano, C.J. Torres, Willard and Mapa, JJ., concur.
members of the Commission or of the Civil Governor, either in his public
capacity or as a private individual, may be so punished. The general libel law
enacted by the Commission was in force when Act No. 292, was passed. There
was no occasion for any further legislation on the subject of libels against the Case #4
individuals by whom the Insular Government is administered — against the
Insular Government in the sense of the aggregate of such individuals. There EN BANC
was occasion for stringent legislation against seditious words or libels, and that
is the main if not the sole purpose of the section under consideration. It is not G.R. No. 116418 March 7, 1995
unreasonable to suppose that the Commission, in enacting this section, may
SALVADOR C. FERNANDEZ and ANICIA M. DE LIMA, petitioners,
have conceived of attacks of a malignant or scurrilous nature upon the existing
vs.
political system of the United States, or the political system established in
HON. PATRICIA A. STO. TOMAS, Chairman, and HON. RAMON B. ERENETA,
these Islands by the authority of the United States, as necessarily of a seditious
Commissioner, Civil Service Commission, respondents.
tendency, but it is not so reasonable to suppose that they conceived of attacks
upon the personnel of the government as necessarily tending to sedition. Had
SYLLABI
this been their view it seems probable that they would, like the framers of the
Sedition Act of 1798, have expressly and specifically mentioned the various
Civil Service Law; Civil Service Commission; Security of Tenure; Court considers
public officials and collegiate governmental bodies defamation of which they
that Resolution No. 94-3710 has not abolished any public office as that term is
meant to punish as sedition.
used in the law of public officers.—Petitioners argue that Resolution No. 94-
3710 effected the “abolition” of public offices, something which may be done
only by the same legislative authority which had created those public offices
in the first place. The Court is unable, in the circumstances of this case, to
accept this argument. The term “public office” is frequently used to refer to
the right, authority and duty, created and conferred by law, by which, for a
given period either fixed by law or enduring at the pleasure of the creating
power, an individual is invested with some portion of the sovereign functions
of government, to be exercised by that individual for the benefit of the public.
We consider that Resolution No. 94-3710 has not abolished any public office
as that term is used in the law of public officers. It is essential to note that none
of the “changes in organization” introduced by Resolution No. 94-3710 carried
with it or necessarily involved the termination of the relationship of public
employment between the Commission and any of its officers and employees.
We find it very difficult to suppose that the 1987 Revised Administrative Code
having mentioned fourteen (14) different “Offices” of the Civil Service
Commission, meant to freeze those Offices and to cast in concrete, as it were,
the internal organization of the Commission until it might please Congress to
change such internal organization regardless of the ever changing needs of the
Civil Service as a whole. To the contrary, the legislative authority had expressly
authorized the Commission to carry out “changes in the organization,” “as the
need [for such changes] arises.”
Same; Same; Same; Appointments to the staff of the Commission are not
appointments to a specified public office but rather appointments to particular
positions or ranks.—We note, firstly, that appointments to the staff of the
Commission are not appointments to a specified public office but rather
appointments to particular positions or ranks. Thus, a person may be
appointed to the position of Director III or Director IV; or to the position of
Attorney IV or Attorney V; or to the position of Records Officer I or Records
Officer II; and so forth. In the instant case, petitioners were each appointed to
the position of Director IV, without specification of any particular office or
station. The same is true with respect to the other persons holding the same
position or rank of Director IV of the Commission.
Same; Same; Same; Reassignment of petitioners Fernandez and de Lima from
their stations in the OPIA and OPR without their consent, did not constitute a
violation of their constitutional right to security of tenure.—For all the
foregoing, we conclude that the reassignment of petitioners Fernandez and de
Lima from their stations in the OPIA and OPR, respectively, to the Research
Development Office (RDO) and from the RDO to the Commission’s Regional
Offices in Regions V and III, respectively, without their consent, did not
constitute a violation of their constitutional right to security of tenure.
FELICIANO, J.:
In this Petition for Certiorari, Prohibition and Mandamus with Prayer for a
Temporary Restraining Order, petitioners Salvador C. Fernandez and Anicia M.
de Lima assail the validity of Resolution No. 94-3710 of the Civil Service
Commission ("Commission") and the authority of the Commission to issue the
same.
Petitioner Fernandez was serving as Director of the Office of Personnel
Inspection and Audit ("OPIA") while petitioner de Lima was serving as Director
of the Office of the Personnel Relations ("OPR"), both at the Central Office of
the Civil Service Commission in Quezon City, Metropolitan Manila. While
petitioners were so serving, Resolution No. 94-3710 signed by public
respondents Patricia A.. Sto. Tomas and Ramon Ereneta, Jr., Chairman and
Commissioner, respectively, of the Commission, was issued on 7 June
1994.1 Resolution No. 94-3710 needs to be quoted in full:
RESOLUTION NO. 94-3710
WHEREAS, Section 17 of Book V of Executive Order 292
provides that ". . . as an independent constitutional body, the
Commission may effect changes in the organization as the
need arises;"
WHEREAS, the Commission finds it imperative to effect
changes in the organization to streamline its operations and
improve delivery of public service;
WHEREAS, the Commission finds it necessary to immediately
effect changes in the organization of the Central Offices in
view of the need to implement new programs in lieu of those
functions which were transferred to the Regional Offices;
WHEREFORE, foregoing premises considered, the
Commission hereby RESOLVES to effect the following changes
in its organization, specifically in the Central Offices:
1. The OCSS [Office of Career Systems and Standards], OPIA
[Office of Personnel Inspection and Audit] and OPR [Office of
Personnel Relations] are merged to form the Research and
Development Office (RDO).
2. The Office for Human Resource Development (OHRD) is
renamed Human Resource Development Office (HRDO).
3. The following functions and the personnel assigned to the
unit performing said functions are hereby transferred to
HRDO:
a. Administration of the Honor and Awards
program under OCSS;
b. Registration and Accreditation of Unions
under OPR; and
c. Accreditation of Agencies to take final
action on appointments under OPIA.
4. The Office for Central Personnel Records (OCPR) is renamed
Management Information Office (MIO).
5. The Information technology functions of OPM and the
personnel assigned to the unit are transferred to MIO.
6. The following functions of OPM and the personnel assigned
to the unit performing said functions are hereby transferred
to the Office of the Executive Director:
a. Financial Audit and Evaluation;
b. Internal Management and Improvement;
c. Research and Statistics; and
d. Planning and Programming.
7. The library service and its personnel under OCPR are
transferred to the Central Administrative Office.
8. The budget allocated for the various functions shall be
transferred to the Offices where the functions are
transferred. Records, fixtures and equipment that go with the
functions shall be moved to where the functions are
transferred.
Annex A contains the manning list for all the offices, except
the OCES.
The changes in the organization and in operations shall take
place before end of July 1994.
Done in Quezon City, July 07, 1994.
 (Signed) The principal issues raised in this Petition are the following:
Patricia A. Sto. Tomas
Chairman (1) Whether or not the Civil Service Commission had legal
authority to issue Resolution No. 94-3710 to the extent it
(Signed) Did not participate merged the OCSS [Office of Career Systems and Standards],
Ramon P. Ereneta, Jr., Thelma P. Gaminde the OPIA [Office of Personnel Inspection and Audit] and the
Commissioner Commissioner OPR [Office of Personnel Relations], to form the RDO
[Research and Development Office]; and
Attested by:
(Signed) (2) Whether or not Resolution No. 94-3710 violated
Carmencita Giselle B. Dayson petitioners' constitutional right to security of tenure.
Board Secretary V 2
I.
During the general assembly of officers and employees of the Commission held
in the morning of 28 July 1994, Chairman Sto. Tomas, when apprised of The Revised Administrative Code of 1987 (Executive Order No. 292 dated 25
objections of petitioners, expressed the determination of the Commission to July 1987) sets out, in Book V, Title I, Subtitle A, Chapter 3, the internal
implement Resolution No. 94-3710 unless restrained by higher authority. structure and organization of the Commission in the following terms:

Petitioners then instituted this Petition. In a Resolution dated 23 August 1994, Sec. 16. Offices in the Commission — The Commission shall
the Court required public respondents to file a Comment on the Petition. On have the following offices:
21 September 1994, petitioners filed an Urgent Motion for Issuance of a
Temporary Restraining Order, alleging that petitioners had received Office (1) The Office of the Executive Director — . . .
Orders from the Commission assigning petitioner Fernandez to Region V at
Legaspi City and petitioner de Lima to Region III in San Fernando, Pampanga (2) The Merit System Protection Board — . . .
and praying that public respondents be restrained from enforcing these Office
(3) The Office of Legal Affairs — . . .
Orders. The Court, in a Resolution dated 27 September 1994, granted this
Motion and issued the Temporary Restraining Order prayed for by petitioners.
(4) The Office of Planning and Management — . . .
The Commission filed its own Comment, dated 12 September 1994, on the
(5) The Central Administrative Office — . . .
Petition and then moved to lift the Temporary Restraining Order. The Office of
the Solicitor General filed a separate Comment dated 28 November 1994,
(6) The Office of Central Personnel Records — . . .
defending the validity of Resolution No. 94-3710 and urging dismissal of the
Petition. Petitioners filed separate Replies to these Comments. The (7) The Office of Position Classification and
Commission in turn filed a Rejoinder (denominated "Comment [on] the Compensation — . . .
Reply").
(8) The Office of Recruitment, Examination and
Placement — . . .
(9) The Office of Career Systems and Standards shall provide
leadership and assistance in the formulation and evaluation
of personnel systems and standards relative to performance
appraisal, merit promotion and employee incentive benefits
and awards.
(10) The Office of Human Resource Development — . . .
(11) The Office of Personnel Inspection and Audit shall develop
policies, standards, rules and regulations for the effective
conduct of inspection and audit of personnel and personnel
management programs and the exercise of delegated
authority; provide technical and advisory services to Civil
Service Regional Offices and government agencies in the
implementation of their personnel programs and evaluation
systems.
(12) The Office of Personnel Relations shall provide leadership
and assistance in the development and implementation of
policies, standards, rules and regulations governing corporate
officials and employees in the areas of recruitment,
examination, placement, career development, merit and
awards systems, position classification and compensation,
performance appraisal, employee welfare and benefits,
discipline and other aspects of personnel management on the
basis of comparable industry practices.
(13) The Office of the Corporate Affairs — . . .
(14) The Office of Retirement Administration — . . .
(15) The Regional and Field Offices. — . . . (Emphases in the
original)
Immediately after the foregoing listing of offices of the Commission and their
respective functions, the 1987 Revised Administrative Code goes on to provide
as follows:
Sec. 17. Organizational Structure. — Each office of the
Commission shall be headed by a Director with at least one
(1) Assistant Director, and may have such divisions as are
necessary to carry out their respective functions. As an
independent constitutional body, the Commission may effect
chances in the organization as the need arises.
xxx xxx xxx 3
(Emphasis supplied)
Examination of the foregoing statutory provisions reveals that the OCSS, OPIA
and OPR, and as well each of the other Offices listed in Section 16 above,
consist of aggregations of Divisions, each of which Divisions is in turn a
grouping of Sections. Each Section, Division and Office comprises a group of
positions within the agency called the Civil Service Commission, each group
being entrusted with a more or less definable function or functions. These
functions are related to one another, each of them being embraced by a
common or general subject matter. Clearly, each Office is an internal
department or organizational unit within the Commission and that
accordingly, the OCSS, OPIA and OPR, as well as all the other Offices within the
Commission constitute administrative subdivisions of the CSC. Put a little
differently, these offices relate to the internal structure of the Commission.
What did Resolution No. 94-3710 of the Commission do? Examination of
Resolution No. 94-3710 shows that thereby the Commission re-
arranged some of the administrative units (i.e., Offices) within the Commission
and, among other things, merged three (3) of them (OCSS, OPIA and OPR) to
form a new grouping called the "Research and Development Office (RDO)."
The same Resolution renamed some of the Offices of the Commission, e.g.,
the Office for Human Resource Development (OHRD) was renamed Human
Resource Development Office (HRDO); the Office for Central Personnel
Records (OCPR) was renamed Management Information Office (MIO). The
Commission also re-allocated certain functions moving some functions from
one Office to another; e.g., the information technology function of OPM
(Office of Planning and Management) was transferred to the newly named
Management Information Office (MIO). This re-allocation or re-assignment of
some functions carried with it the transfer of the budget earmarked for such
function to the Office where the function was transferred. Moreover, the
personnel, records, fixtures and equipment that were devoted to the carrying
out of such functions were moved to the Offices to where the functions were
transferred.
The objectives sought by the Commission in enacting Resolution No. 94-3710
were described in that Resolution in broad terms as "effect[ing] changes in the
organization to streamline [the Commission's] operations and improve
delivery of service." These changes in internal organization were rendered
necessary by, on the one hand, the decentralization and devolution of the
Commission's functions effected by the creation of fourteen (14) Regional
Offices and ninety-five (95) Field Offices of the Commission throughout the
country, to the end that the Commission and its staff may be brought closer
physically to the government employees that they are mandated to serve. In
the past, its functions had been centralized in the Head Office of the
Commission in Metropolitan Manila and Civil Service employees all over the
country were compelled to come to Manila for the carrying out of personnel
transactions. Upon the other hand, the dispersal of the functions of the
Commission to the Regional Offices and the Field Offices attached to various
governmental agencies throughout the country makes possible the
implementation of new programs of the Commission at its Central Office in
Metropolitan Manila.
The Commission's Office Order assigning petitioner de Lima to the CSC
Regional Office No. 3 was precipitated by the incumbent Regional Director
filing an application for retirement, thus generating a need to find a
replacement for him. Petitioner de Lima was being assigned to that Regional
Office while the incumbent Regional Director was still there to facilitate her
take over of the duties and functions of the incumbent Director. Petitioner de
Lima's prior experience as a labor lawyer was also a factor in her assignment
to Regional Office No. 3 where public sector unions have been very active.
Petitioner Fernandez's assignment to the CSC Regional Office No. 5 had, upon
the other hand, been necessitated by the fact that the then incumbent
Director in Region V was under investigation and needed to be transferred
immediately to the Central Office. Petitioner Fernandez was deemed the most
likely designee for Director of Regional Office No. 5 considering that the
functions previously assigned to him had been substantially devolved to the
Regional Offices such that his reassignment to a Regional Office would result
in the least disruption of the operations of the Central Office.4
It thus appears to the Court that the Commission was moved by quite
legitimate considerations of administrative efficiency and convenience in
promulgating and implementing its Resolution No. 94-3710 and in assigning
petitioner Salvador C. Fernandez to the Regional Office of the Commission in
Region V in Legaspi City and petitioner Anicia M. de Lima to the Commission's
Regional Office in Region III in San Fernando, Pampanga. It is also clear to
the Court that the changes introduced and formalized through Resolution No.
94-3710 — re-naming of existing Offices; re-arrangement of the groupings of
Divisions and Sections composing particular Offices; re-allocation of existing
functions (and related personnel; budget, etc.) among the re-arranged Offices
— are precisely the kind of internal changes which are referred to in Section
17 (Book V, Title I, Subtitle A, Chapter 3) of the 1987 Revised Administrative
Code), quoted above, as "chances in the organization" of the Commission.
Petitioners argue that Resolution No. 94-3710 effected the "abolition" of
public offices, something which may be done only by the same legislative
authority which had created those public offices in the first place.
The Court is unable, in the circumstances of this case, to accept this argument.
The term "public office" is frequently used to refer to the right, authority and
duty, created and conferred by law, by which, for a given period either fixed
by law or enduring at the pleasure of the creating power, an individual is
invested with some portion of the sovereign functions of government, to be
exercised by that individual for the benefit of the public.5 We consider that
Resolution No. 94-3710 has not abolished any public office as that term is used
in the law of public officers.6 It is essential to note that none of the "changes
in organization" introduced by Resolution No. 94-3710 carried with it or
necessarily involved the termination of the relationship of public employment
between the Commission and any of its officers and employees. We find it very
difficult to suppose that the 1987 Revised Administrative Code having
mentioned fourteen (14) different "Offices" of the Civil Service Commission,
meant to freeze those Offices and to cast in concrete, as it were, the internal
organization of the commission until it might please Congress to change such
internal organization regardless of the ever changing needs of the Civil Service
as a whole. To the contrary, the legislative authority had expressly authorized
the Commission to carry out "changes in the organization," as the need [for
such changes] arises." 7 Assuming, for purposes of argument merely, that
legislative authority was necessary to carry out the kinds off changes
contemplated in Resolution No. 94-3710 (and the Court is not saying that such
authority is necessary), such legislative authority was validly delegated to the
Commission by Section 17 earlier quoted. The legislative standards to be
observed and respected in the exercise of such delegated authority are set out
not only in Section 17 itself (i.e., "as the need arises"), but also in the
Declaration of Policies found in Book V, Title I, Subtitle A, Section 1 of the 1987
Revised Administrative Code which required the Civil Service Commission
as the central personnel agency of the Government [to]
establish a Sec. 26. Personnel Actions. — . . .
career service, adopt measures to promote — efficiency —
[and] responsiveness . . . in the civil service . . . and that
personnel functions shall be decentralized, delegating the
corresponding authority to the departments, offices and
agencies where such functions can be effectively performed.
(Emphasis supplied)
II.
We turn to the second claim of petitioners that their right to security of tenure
was breached by the respondents in promulgating Resolution No. 94-3710 and
ordering petitioners' assignment to the Commission's Regional Offices in
Regions III and V. Section 2(3) of Article IX(B) of the 1987 Constitution declared
that "no officer or employee of the Civil Service shall be removed or suspended
except for cause provided by law." Petitioners in effect contend that they were
unlawfully removed from their positions in the OPIA and OPR by the
implementation of Resolution No. 94-3710 and that they cannot, without their
consent, be moved out to the Regional Offices of the Commission.
We note, firstly, that appointments to the staff of the Commission are not
appointments to a specified public office but rather appointments to particular
positions or ranks. Thus, a person may be appointed to the position of Director
III or Director IV; or to the position of Attorney IV or Attorney V; or to the
position of Records Officer I or Records Officer II; and so forth. In the instant
case, petitioners were each appointed to the position of Director IV, without
specification of any particular office or station. The same is true with respect
to the other persons holding the same position or rank of Director IV of the
Commission.
Section 26(7), Book V, Title I, Subtitle A of the 1987 Revised Administrative
Code recognizes reassignment as a management prerogative vested in the
Commission and, for that matter, in any department or agency of government
embraced in the civil service:
xxx xxx xxx
As used in this Title, any action denoting the movement or
progress of personnel in the civil service shall be known as
personnel action. Such action shall include appointment
through certification, promotion, transfer, re-instatement, re-
 employment, detail, reassignment, demotion, and
separation. All personnel actions shall be in accordance with
such rules, standards, and regulations as may be promulgated
by the Commission.
xxx xxx xxx
(7) Reassignment. An employee may be re-assigned from one
organizational unit to another in the same agency, Provided,
That such re-assignment shall not involve a reduction in
rank status and salary. (Emphasis supplied)
It follows that the reassignment of petitioners Fernandez and de Lima from
their previous positions in OPIA and OPR, respectively, to the Research and
Development Office (RDO) in the Central Office of the Commission in
Metropolitan Manila and their subsequent assignment from the RDO to the
Commission's Regional Offices in Regions V and III had been effected with
express statutory authority and did not constitute removals without lawful
cause. It also follows that such re-assignment did not involve any violation of
the constitutional right of petitioners to security of tenure considering that
they retained their positions of Director IV and would continue to enjoy the
same rank, status and salary at their new assigned stations which they had
enjoyed at the Head Office of the Commission in Metropolitan Manila.
Petitioners had not, in other words, acquired a vested right to serve at the
Commission's Head Office.
Secondly, the above conclusion is compelled not only by the statutory
provisions relevant in the instant case, but also by a long line of cases decided
by this Court in respect of different agencies or offices of government.
In one of the more recent of these cases, Department of Education Culture and
Sports, etc., et al. v. Court of Appeals, et al.,8 this Court held that a person who
had been appointed as "Secondary School Principal II" in the Division of City
Schools, District II, Quezon City, National Capital Region, and who had been
stationed as High School Principal in the Carlos Albert High School in Quezon
for a number of years, could lawfully be reassigned or transferred to the
Manuel Roxas High School, also in Quezon City, without demotion in rank or
diminution of salry. This Court held:
The aforequoted provision of Republic Act No. 4670 particularly Section 6
thereof which provides that except for cause and in the exigencies of the
service no teacher shall be transferred without his consent from one
station to another, finds no application in the case at bar as this
is predicated upon the theory that the teacher concerned is appointed —
not merely assigned — to a particular station. Thus:
The rule pursued by plaintiff only goes so far as
the appointed indicates a specification. Otherwise, the constitutionally
ordained security of tenure cannot shield her. In appointments of this
nature, this Court has consistently rejected the officer's demand to
remain — even as public service dictates that a transfer be made — in
a particular station. Judicial attitude toward transfers of this nature is
expressed in the following statement in Ibañez, et al. vs. Commission on
Elections, et al. (G.R. No.
L-26558, April 27, 1967; 19 SCRA 1002 [1967]);
That security of tenure is an essential and constitutionally guaranteed
feature of our Civil Service System, is not open to debate. The mantle of
its protection extends not only against removals without cause but also
against unconsented transfer which, as repeatedly enunciatEd, are
tantamount to removals which are within the ambit of the fundamental
guarantee. However, the availability of that security of tenure
necessarily depends, in the first instance, upon the nature of the
appointment (Hojilla vs. Marino, 121 Phil. 280 [1965].) Such that the rule
which proscribes transfers without consent as anathema to the security
of tenure is predicated upon the theory that the officer involved is
appointed — not merely assigned — to a particular station(Miclat v.
Ganaden, et al., 108 Phil. 439 [1960]; Jaro v. Hon. Valencia, et al., 118
Phil. 728 [1963]). [Brillantes v. Guevarra, 27 SCRA 138 (1969)]
 The appointment of Navarro as principal does not refer to any particular
station or school. As such, she could be assigned to any station and she is
not entitled to stay permanently at any specific school. (Bongbong v.
Parado, 57 SCRA 623) When she was assigned to the Carlos Albert High
School, it could not have been with the intention to let her stay in said
school permanently. Otherwise, her appointment would have so stated.
Consequently, she may be assigned to any station or school in Quezon City
as the exigencies of public service require even without consent. As this
Court ruled in Brillantes v. Guevarra, 27 SCRA 138,
143 —
Plaintiff's confident stride falters. She took too loose a view of the
applicable jurisprudence. Her refuge behind the mantle of security of
tenure guaranteed by the Constitution is not impenetrable. She proceeds
upon the assumption that she occupies her station in Sinalang Elementary
School by appointment. But her first appointment as Principal merely
reads thus: "You are hereby appointed a Principal (Elementary School) in
the Bureau of Public Schools, Department of Education", without
mentioning her station. She cannot therefore claim security of tenure as
Principal of Sinalang Elementary School or any particular station. She may
be assigned to any station as exigency of public service requires, even
without her consent. She thus has no right of choice.9 (Emphasis supplied;
citation omitted)
In the very recent case of Fernando, et al. v. Hon. Sto. Tomas, etc., et
a1., 10 the Court addressed appointments of petitioners as "Mediators-
Arbiters in the National Capital Region" in dismissing a challenge
on certiorari to resolutions of the CSC and orders of the Secretary of Labor.
The Court said:
Petitioners were appointed as Mediator Arbiters in the National Capital
Region. They were not, however, appointed to a specific station or
particular unit of the Department of Labor in the National Capital Region
(DOLE-NCR). Consequently, they can always be reassigned from one
organizational unit to another of the same agency where, in the opinion
of respondent Secretary, their services may be used more effectively. As
such they can neither claim a vested right to the station to which they
were assigned nor to security of tenure thereat. As correctly observed by
the Solicitor General, petitioners' reassignment is not a transfer for they
were not removed from their position as med-arbiters. They were not
given new appointments to new positions. It indubitably follows,
therefore, that Memorandum Order No. 4 ordering their reassignment in
the interest of the service is legally in order.11 (Emphases supplied)
In Quisumbing v. Gumban, 12 the Court, dealing with an appointment in the
Bureau of Public Schools of the Department of Education, Culture and Sports,
ruled as follows:
After a careful scrutiny of the records, it is to be underscored that the
appointment of private respondent Yap is simply that of a District
Supervisor of the Bureau of Public Schools which does not indicate a
specific station (Rollo, p. 13). A such, she could be assigned to any
station and she is no entitled to stay permanently at any specific
station (Bongbong v. Parado, 57 SCRA 623 [1974]; Department of
Education, Culture and Sports v. Court of Appeals [G.R. 81032, March 22,
1990] citing Brillantes v. Guevarra [27 SCRA 138 [1969]). 13
Again, in Ibañez v. Commission on Elections, 14 the Court had before it
petitioners' appointments as "Election Registrars in the Commission of
Elections," without any intimation to what city, municipality or municipal
district they had been appointed as such. 15 The Court held that since
petitioners "were not appointed to, and consequently not entitled to any
security of tenure or permanence in, any specific station," "on general
principles, they [could] be transferred as the exigencies of the service
required," and that they had no right to complain against any change in
assignment. The Court further held that assignment to a particular station
after issuance of the appointment was not necessary to complete such
appointment:
 . . . . We cannot subscribe to the theory that an assignment to a particular
station, in the light of the terms of the appointments in question, was
necessary to complete the said appointments. The approval thereof by the
Commissioner of Civil Service gave those appointments the stamp of
finality.With the view that the respondent Commission then took of its
power in the premises and the demand of the mission it set out to
accomplish with the appointments it extended, said appointments were
definitely meant to be complete as then issued. The subsequent
assignment of the appointees thereunder that the said respondent
Commission held in reserve to be exercised as the needs of each locality
justified did not in any way detract from the perfection attained by the
appointments beforehand. And the respective appointees were entitled
only to such security of tenure as the appointment papers concerned
actually conferred — not in that of any place to which they may have been
subsequently assigned. . . . As things stand, in default of any particular
station stated in their respective appointments, no security of tenure can
be asserted by the petitioners on the basis of the mere assignments which
were given to them. A contrary rule will erase altogether the demarcation
line we have repeatedly drawn between appointment and assignment as
two distinct concepts in the law of public officers. 16 (Emphases supplied)
The petitioner, in Miclat v. Ganaden, 17 had been appointed as a "Welfare
Office Incharge, Division of Urban, Rural and Community Administration,
Social Welfare Administration." She was assigned as Social Welfare Incharge
of the Mountain Province, by an office order of the Administrator, Social
Welfare Administration. After a little more than a year; petitioner was assigned
elsewhere and respondent Ganaden transferred to petitioner's first station in
Baguio City. The Court ruled that petitioner was not entitled to remain in her
first station, In Jaro v. Hon. Valencia, et al., 18petitioner Dr. Jaro had been
appointed "Physician in the Municipal Maternity and Charity Clinics, Bureau of
Hospitals." He was first assigned to the Municipal Maternity and Charity Clinics
in Batulati, Davao, and later to the corresponding clinic in Saug, Davao and
then to Catil, Davao. He was later assigned to the Municipality of Padada, also
of Davao Province. He resisted his last assignment and
brought mandamus against the Secretary of Health to compel the latter to
return him to his station in Catil, Davao as Municipal Health Officer thereof.
The Court, applying Miclat v. Ganaden dismissed this Petition holding that his
appointment not being to any specific station but as a physician in the
Municipal Maternity and Charity Clinics, Bureau of Hospitals, he could be
transferred or assigned to any station where, in the opinion of the Secretary
of Health, his services may be utilized more effectively. 19
Also noteworthy is Sta. Maria v. Lopez 20 which involved the appointment of
petitioner Sta. Maria as "Dean, College of Education, University of the
Philippines." Dean Sta. Maria was transferred by the President of the
University of the Philippines to the Office of the President, U.P., without
demotion in rank or salary, thereby acceding to the demands of student
activists who were boycotting their classes in the U.P. College of Education.
Dean Sta. Maria assailed his transfer as an illegal and unconstitutional removal
from office. In upholding Dean Sta. Maria's claim, the Court, speaking through
Mr. Justice Sanchez, laid down the applicable doctrine in the following terms:
4. Concededly, transfers there are which do not amount to removal. Some
such transfer can be effected without the need for charges being preferred,
without trial or hering, and even without the consent of the employee.
The clue to such transfers may be found in the "nature of the
appointment." Where the appointment does not indicate a specific station,
an employee may be transferred or reassigned provided the transfer affects
no substantial change in title, rank and salary. Thus one who is appointed
"principal in the Bureau of Public Schools" and is designated to head a pilot
school may be transferred to the post of principal of another school.
And the rule that outlaws unconsented transfers as anathema to security of
tenure applies only to an officer who is appointed — not merely assigned
— to a particular station. Such a rule does not prescribe a transfer carried
out under a specific statute that empowers the head of an agency to
periodically reassign the employees and officers in order to improve the
service of the agency. The use of approved techniques or methods in
 personnel management to harness the abilities of employees to promote
optimum public service cannot-be objected to. . . .
5. The next point of inquiry is whether or not Administrative Order 77
would stand the test of validity vis-a-vis the principles just enunciated.
xxx xxx xxx
To be stressed at this point, however, is that the appointment of Sta.
Maria is that of "Dean, College of Education, University of the
Philippines." He is not merely a dean "in the university." His
appointment is to a specific position; and, more importantly, to a
specific station. 21 (Citations omitted; emphases supplied)
For all the foregoing we conclude that the reassignment of petitioners
Fernandez and de Lima from their stations in the OPIA and OPR, respectively,
to the Research Development Office (RDO) and from the RDO to the
Commissions Regional Offices in Regions V and III, respectively, without their
consent, did not constitute a violation of their constitutional right to security
of tenure.
WHEREFORE, the Petition for Certiorari, Prohibition and Mandamus with
Prayer for Writ of Preliminary Injunction or Temporary Restraining Order is
hereby DISMISSED. The Temporary Restraining Order issued by this Court on
27 September 1994 is hereby LIFTED. Costs against petitioners.
SO ORDERED.
Narvasa, C.J., Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo
Quiason, Puno, Vitug, Kapunan, Mendoza and Francisco, JJ., concur.
*Case #5
FIRST DIVISION
G.R. No. L-39473 April 30, 1979
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
HON. COURT OF APPEALS and ISABEL LASTIMADO, respondents.
Eduardo G. Makalintal for private respondent.
SYLLABI
Land Registration; Reopening of decree of registration; Essential elements for
reopening.—The essential elements for the allowance of the reopening or
review of a decree are: a) that the petitioner has a real and dominical right; b)
that he has been deprived thereof; c) through fraud; d) that the petition is filed
within one year from the issuance of the decree; and e) that the property has
not as yet been transferred to an innocent purchaser.
Same; Same; Same; Same; State should he afforded opportunity to present
evidence of fraud in grant of decree of registration.—We find reversible error.
Although there was an agreement by the parties to submit for resolution the
Opposition to the Petition for Review, which was treated as a motion to
dismiss, the trial Court, in the exercise of sound judicial discretion, should not
have dismissed the Petition outright but should have afforded petitioner an
opportunity to present evidence in support of the facts alleged to constitute
actual and extrinsic fraud committed by private respondent. Thus, in the case
of Republic vs. Sioson, et al., it was held that “the action of the lower Court in
denying the petition for review of a decree of registration filed within one year
from entry of the decree, without hearing the evidence in support of the
allegation and claim that actual and extrinsic fraud upon which the petition is
predicated, is held to be in error, because the lower Court should have
afforded the petitioner an opportunity to prove it.”
Same; Same; Fraud; Fraud required to justify review of registration decree;
Extrinsic and collateral fraud distinguished.—However, for fraud to justify the
review of a decree, it must be extrinsic or collateral and the facts upon which
it is based have not been controverted or resolved in the case where the
judgment sought to be annulled was rendered. The following ruling spells out
the difference between extrinsic and intrinsic fraud; “Extrinsic or collateral
fraud, as distinguished from intrinsic fraud, connotes any fraudulent scheme
executed by a prevailing litigant “outside the trial of a case against the
defeated party, or his agents, attorneys for witnesses, whereby said defeated
party is prevented from presenting fully and fairly his side of the case.” But
intrinsic fraud takes the form of “acts of a party in a litigation during the trial,
such as the use of forged instruments or perjured testimony, which did not
affect the presentation of the case, but did prevent a fair and just
determination of the case.” The fraud is one that affects and goes into the
jurisdiction of the Court.
Same; Same; Cadastral Proceedings; Republic Act 931; Land inside military
reservation cannot be the object of cadastral proceedings or reopening under
Republic Act 931.—If the allegation of petitioner that the land in question was
inside the military reserva tion at the time it was claimed is true, then, it cannot
be the object of any cadastral proceeding nor can it be the object of reopening
under Republic Act No. 931.
Same; Same; No conversion of land into private property despite longer
possession of land; Reasons; Agency having jurisdiction to register under the
Torrens System land forming part of public forest.—Similarly, if the land in
question, indeed, forms part of the public forest, then, possession thereof,
however long, cannot convert it into private property as it is within the
exclusive jurisdiction of the Bureau of Forestry and beyond the power and
jurisdiction of the cadastral court to register under the Torrens Systems.
Same; Same; Estoppel, not a case of; Inaction of Office of Solicitor General to
oppose cadastral proceedings not a bar to State’s recovery of public land;
Reasons.—Even assuming that the government agencies can be faulted for
inaction and neglect (although the Solicitor General claims that it received no
notice), yet, the same cannot operate to bar action by the State as it cannot
be estopped by the mistake or error of its officials or agents. Further, we
cannot lose sight of the cardinal consideration that “State as a persona in law
is the juridical entity, which is the source of any asserted right to ownership in
land” under basic Constitutional precepts, and that it is moreover charged with
the conservation of such patrimony.
MELENCIO-HERRERA, J.:
This is a Petition for Review (Appeal) by certiorari filed by the Republic of the
Philippines from the Decision of the Court of Appeals promulgated on
September 30, 1974 in CA-G.R. No. Sp-01504 denying the State's Petition for
certiorari and Mandamus.
Briefly, the facts of the case are as follows:
Private respondent, Isabel Lastimado, filed on September 11, 1967, in the
Court of First Instance of Bataan, Branch I, a Petition for the reopening of
cadastral proceedings over a portion of Lot No. 626 of the Mariveles Cadastre,
consisting of 971.0569 hectares, pursuant to Republic Act No. 931, as
amended by Republic Act No. 2061, docketed as Cad. Case No. 19, LRC Cad.
Rec. No. 1097. In the absence of any opposition, whether from the
Government or from private individuals, private respondent was allowed to
present her evidence ex-parte. On October 14, 1967, the trial Court rendered
a Decision granting the Petition and adjudicating the land in favor of private
respondent. The trial Court issued an order for the issuance of a decree of
registration on November 20, 1967, and on November 21, 1967, the Land
Registration Commission issued Decree No. N-117573 in favor of private
respondent. Eventually, Original Certificate of Title No. N-144 was also issued
in her favor. Private respondent thereafter subdivided the land into ten lots,
and the corresponding titles. Transfer Certificates of Title Nos. 18905 to 18914
inclusive, were issued by the Register of Deeds.
On June 3, 1968, or within one year from the entry of the decree of
registration, petitioner filed a Petition for Review pursuant to Sec. 38, Act No.
496, on the ground of fraud alleging that during the period of alleged adverse
possession by private respondent, said parcel of land was part of the U.S.
Military Reservation in Bataan. which was formally turned over to the Republic
of the Philippines only on December 22, 1965, and that the same is inside the
public forest of Mariveles, Bataan and, therefore, not subject to disposition or
acquisition under the Public Land Law. Respondent field an Opposition
thereto, which was considered by the trial Court, as a Motion to Dismiss, and
on December 20,1968, said Court (Judge Tito V. Tizon, presiding) issued an
Order dismissing the Petition for Review mainly on the ground that the
Solicitor General had failed to file opposition to the original Petition for
reopening of the cadastral proceedings and was, therefore, estopped from
questioning the decree of registration ordered issued therein. On January 28,
1969, petitioner moved for reconsideration, which was denied by the trial
Court in its Order dated May 20, 1969, for lack of merit.
Petitioner seasonably filed a Notice of Appeal and a Record on Appeal, which
was objected to by private respondent. On July 15, 1972, or three years
later, * the trial Court (Judge Abraham P. Vera, presiding) refused to give due
course to the appeal. Petitioner filed a Motion for Reconsideration but the trial
Court denied it in its Order of October 14, 1972 on the ground that the proper
remedy of petitioner was a certiorari petition, not an ordinary appeal, and that
the Order sought to be appealed from had long become final and executory as
petitioner's Motion for Reconsideration was pro-forma and did not suspend
the running of the reglementary period of appeal.
On November 9, 1972, petitioner filed a Petition for certiorari and mandamus
with the Court of Appeals claiming that the trial Court gravely abused its
discretion, amounting to lack of jurisdiction when, without the benefit of
hearing, it summarily dismissed the Petition for Review; and since said Petition
raised certain issues of fact which cannot be decided except in a trial on the
merits, the dismissal of the Petition on the basis of private respondent's
Opposition, considered as a Motion to Dismiss, constituted a denial of due
process of law. Petitioner then prayed that the Order of the trial Court, dated
December 20, 1968 dismissing the Petition for Review, be declared null and
void, and that said trial Court be directed to give due course to the Petition for
Review; or, in the alternative, to give due course to petitioner's appeal.
On September 30, 1974, the Court of Appeals upheld the trial Court's dismissal
of the Petition for Review stating:
... We cannot find any allegation in the petition for review which shows
that private respondent had committed fraud against petitioner. Its
representations and officials were duly notified of private
respondent's petition for reopening and registration of title in her
name. In said petition, the technical descriptions of the portion of Lot
No. 626 of the Mariveles (Bataan) Cadastre, subject-matter of the
petition were expressly stated, the boundaries, specifically delineated.
The alleged ground that the land forms part of a forest land exists at
the time petitioner was duly notified of said petition. Failure to file
opposition is in effect, an admission that the petition is actually not
part of a forest land. Indubitably, therefore, no justifiable reason exists
for the annulment of the Order, dated December 20, 1968 (Annex D-
Petition) of the lower court dismissing herein petitioner's petition for
review of the decree issued in favor of private respondent Lastimado. 1
The Court of Appeals then disposed as follows:
WHEREFORE, finding that the respondent Judge has not committed
any grave abuse of discretion amounting to lack of jurisdiction in the
issuance of an Order, dated December 20, 1968 (Annex D-Petition)
dismissing herein petitioner's petition for review, the present petition
for review is hereby denied.
The issuance of the writ of mandamus as prayed for in the petition is
no longer necessary as this Court, in the exercise of its appellate
 jurisdiction and authority to supervise orderly administration of
justice, has already resolved on the merits the question whether or
not the dismissal of the petition for review had been done with grave
abuse of discretion amounting to lack of jurisdiction. 2
From this Decision, petitioner filed the present Petition for Review (Appeal) by
certiorari assigning the following errors to the Court of Appeals and to the trial
Court:
1. The Lower Court as well as the Court of Appeals erred in finding that
there can be possession, even for the purpose of claiming title, of land
which at the time of possession is subject to a military reservation.
2. The Lower Court as well as the Court of Appeals erred in finding that
such land which is subject to a government reservation, may
appropriately be the subject of cadastral proceedings, and hence. also
of a petition to reopen cadastral proceedings.
3. The Lower Court as well as the Court of Appeals erred in finding that
a parcel of land which is part of the public forest is susceptible of
occupation and registration in favor of private individual.
4. The Lower Court as well as the Court of Appeals erred in not finding
that the Republic of the Philippines is not estopped from questioning
the decree of registration and the title issued pursuant thereto in favor
of respondent Lastimado over the parcel of land in question.
5. The Lower Court erred in dismissing the petition for review of the
Republic of the Philippines.
6. The Court of Appeals erred in denying Petitioner's petition for
certiorari and mandamus.
Section 38 of the Land Registration Act (Act 496) provides:
Section 38. Decree of registration, and remedies after entry of decree.
If the court after hearing finds that the applicant or adverse claimant
has title as stated in his application or adverse claim and proper for
registration, a decree of confirmation and registration shall be
entered. Every decree of registration shall bind the land, and quiet title
thereto. subject only to the exceptions stated in the following section.
It shall be conclusive upon and against all persons, including the
Insular Government and all the branches thereof, whether mentioned
by name in the application, notice of citation, or included in the
general description "To all whom it may concern". Such decree shall
not be opened by reason of the absence, infancy, or other disability of
any person affect thereby, nor by any proceeding in any court for
reversing judgments or decrees; subject, however, to the right of any
person deprived of land or of any estate or interest therein by decree
of registration obtained by fraud to file in the competent Court of First
Instance a petition for review within one year after entry of the decree
provided no innocent purchaser for value has acquired an interest. ... 3
The essential elements for the allowance of the reopening or review of a
decree are: a) that the petitioner has a real and dominical right; b) that he has
been deprived thereof; c) through fraud; d) that the petition is filed within one
year from the issuance of the decree; and e) that the property has not as yet
been transferred to an innocent purchaser.4
However, for fraud to justify the review of a decree, it must be extrinsic or
collateral and the facts upon which it is based have not been controverted or
resolved in the case where the judgment sought to be annulled was
rendered. 5 The following ruling spells out the difference between extrinsic
and intrinsic fraud:
Extrinsic or collateral fraud, as distinguished from intrinsic fraud,
connotes any fraudulent scheme executed by a prevailing litigant
"outside the trial of a case against the defeated party, or his agents,
attorneys or witnesses, whereby said defeated party is prevented
 from presenting fully and fairly his side of the case." But intrinsic fraud
takes the form of "acts of a party in a litigation during the trial such as
the use of forged instruments or perjured testimony, which did not
affect the present action of the case, but did prevent a fair and just
determination of the case. 6
The fraud is one that affects and goes into the jurisdiction of the Court. 7
In its Petition for Review filed before the trial Court, petitioner alleged that
fraud was committed by private respondent when she misrepresented that
she and her predecessors-in-interest had been in possession of the land
publicly, peacefully, exclusively and adversely against the whole world as
owner for more than forty years when, in fact, the subject land was in. side the
former U.S. Military Reservation, which was formally turned over to the
Republic of the Philippines only on December 22, 1965, and that she likewise
contended that her rights, as derived from the original and primitive occupants
of the land in question, are capable of judicial confirmation under existing
laws, when the truth is, said parcel of land is within the public forest of
Mariveles, Bataan, and is not subject to disposition or acquisition by private
persons under the Public Land Law.
The trial Court ruled, and was upheld by the Court of Appeals, that no fraud
was committed by private respondent, which deprived petitioner of its day in
Court as there was no showing that she was aware of the facts alleged by the
Government, so that she could not have suppressed them with intent to
deceive. The trial Court also noted that petitioner had failed to file an
opposition to the reopening of the cadastral proceedings despite notices sent
not only to the Solicitor General as required by Republic Act No. 931. but to
the Bureau of Lands and the Bureau of Forestry as well. It then concluded that
"the remedy granted by section 38 of the Land Registration Act is designed to
give relief to victims of fraud, not to those who are victims of their own neglect,
inaction or carelessness, especially when no attempt is ever made to excuse
or justify the neglect." With the foregoing as the essential basis, the trial Court
dismissed the Petition for Review.
We find reversible error. Although there was an agreement by the parties to
submit for resolution the Opposition to the Petition for Review, which was
treated as a motion to dismiss, the trial Court, in the exercise of sound judicial
discretion, should not have dismissed the Petition outright but should have
afforded petitioner an opportunity to present evidence in support of the facts
alleged to constitute actual and extrinsic fraud committed by private
respondent. Thus, in the case of Republic vs. Sioson, et al., 8 it was held that
"the action of the lower Court in denying the petition for review of a decree of
registration filed within one year from entry of the d without hearing the
evidence in support of the allegation and claim that actual and extrinsic fraud
upon which the petition is predicated, is held to be in error, because the lower
Court should have afforded the petitioner an opportunity to prove it."
If the allegation of petitioner that the land in question was inside the military
reservation at the time it was claimed is true, then, it cannot be the object of
any cadastral p nor can it be the object of reopening under Republic Act No.
931. 9 Similarly, if the land in question, indeed forms part of the public forest,
then, possession thereof, however long, cannot convert it into private
property as it is within the exclusive jurisdiction of the Bureau of Forestry and
beyond the power and jurisdiction of the Cadastral Court to register under the
Torrens System. 10
Even assuming that the government agencies can be faulted for inaction and
neglect (although the Solicitor General claims that it received no notice), yet,
the same cannot operate to bar action by the State as it cannot be estopped
by the mistake or error of its officials or agents. 11 Further, we cannot lose sight
of the cardinal consideration that "the State as persona in law is the juridical
entity, which is the source of any asserted right to ownership in land" under
basic Constitutional Precepts, and that it is moreover charged with the
conservation of such patrimony. 12
WHEREFORE, the Decision of the Court of Appeals dated September 30, 1974,
dismissing the Petition for certiorari and mandamus filed before it, as well as
the Order of the Court of First Instance of Bataan (Branch I) dated December
20, 1968, dismissing the Petition for Review, are hereby set aside and the
records of this case hereby ed to the latter Court for further proceedings to
enable petitioner to present evidence in support of its Petition for Review.
No pronouncement as to costs.
SO ORDERED.
Teehankee (Chairman), Fernandez, Guerrero and De Castro, JJ., concur.
Makasiar, J., took no part.
Case #6
70 Phil. 726
[ G.R. No. 47800, December 02, 1940 ]
MAXIMO CALALANG, PETITIONER, VS. A. D. WILLIAMS, ET AL., RESPONDENTS.
SYLLABI
1.Constitutional Law; Constitutionality of Commonwealth Act No. 548;
Delegation op Legislative Power; Authority of Director of Public Works and
Secretary of Public Works and Communications to Promulgate Rules and
Regulations.—The provisions of section 1 of Commonwealth Act No. 548 do
not confer legislative power upon the Director of Public Works and the
Secretary of Public Works and Com-munications. The authority therein
conferred upon them and under which they promulgated the rules and
regulations now complained of is not to determine what public policy
demands but merely to carry out the legislative policy laid down by the
National Assembly in said Act, to wit, "to promote safe transit upon, and avoid
obstructions on, roads and streets de-signated as national roads by acts of the
National Assembly or by executive orders of the President of the Philippines"
and to close them temporarily to any or all classes of traffic "whenever the
condition of the road or the traffic thereon makes such action necessary or
advisable in the public con-venience and interest." The delegated power, if at
all, there-fore, is not the determination of what the law shall be, but merely
the ascertainment of the facts and circumstances upon which the application
of said law is to be predicated. To promulgate rules and regulations on the use
of national roads and to determine when and how long a national road should
be closed to traffic, in view of the condition of the road or the traffic thereon
and the requirements of public convenience and interest, is an administrative
function which cannot be di-rectly discharged by the National Assembly. It
must depend on the discretion of some other government official to whom is
confided the duty of determining whether the proper occa-sion exists for
executing the law. But it cannot be said that the exercise of such discretion is
the making of the law.
2.Id.; Id.; Police Power; Personal Liberty; Governmental Authority.—
Commonwealth Act No. 548 was passed by the Na-tional Assembly in the
exercise of the paramount police power of the state. Said Act, by virtue of
which the rules and reg-ulations complained of were promulgated, aims to
promote safe transit upon and avoid obstructions on national roads, in the
interest and convenience of the public. In enacting said law, therefore, the
National Assembly was prompted by considerations of public convenience and
welfare. It was in-spired by a desire to relieve congestion of traffic, which is, to
say the least, a menace to public safety. Public welfare, then, lies at the bottom
of the enactment of said law, and the state in order to promote the general
welfare may interfere with personal liberty, with property, and with business
and occu-pations. Persons and property may be subjected to all kinds of
restraints and burdens, in order to secure the general com-fort, health, and
prosperity of the state (U. S. vs. Gomez Jesus, 31 Phil., 218). To this
fundamental aim of our Gov-ernment the rights of the individual are
subordinated. Liber-ty is a blessing without which life is a misery, but liberty
should not be made to prevail over authority because then so-ciety will fall
into anarchy. Neither should authority be made to prevail over liberty because
then the individual will fall into slavery. The citizen should achieve the required
balance of liberty and authority in his mind through education and, personal
discipline, so that there may be established the resultant equilibrium, which
means peace and order and happiness for all. The moment greater authority
is con-ferred upon the government, logically so much is withdrawn from the
residuum of liberty which resides in the people. The paradox lies in the fact
that the apparent curtailment of lib-erty is precisely the very means of insuring
its preservation.
3.Id.; Id.; Social Justice.—Social justice is "neither communism, nor despotism,
nor atomism, nor anarchy," but the humanization of laws and the equalization
of social and economic for-ces by the State so that justice in its rational and
objectively secular conception may at least be approximated. Social jus-tice
means the promotion of the welfare of all the people, the adoption by the
Government of measures calculated to insure economic stability of all the
competent elements of society, through the maintenance of a proper
economic and social equi-librium in the interrelations of the members of the
commun-ity, constitutionally, through the adoption of measures legal-ly
justifiable, or extra-constitutionally, through the exercise of powers underlying
the existence of all governments on the time-honored principle of salus populi
est supremo, lex. Social justice, therefore, must be founded on the recognition
of the necessity of interdependence among divers and diverse units of a
society and of the protection that should be equally and evenly extended to
all groups as a combined force in our so-cial and economic life, consistent with
the fundamental and paramount objective of the state of promoting the
health, comfort, and quiet of all persons, and of bringing about "the greatest
good to the greatest number."
December 2, 1940
DECISION
LAUREL, J.:
Maximo Calalang, in his capacity as a private citizen and as a taxpayer of
Manila, brought before this court this petition for a writ of prohibition against
the respondents, A. D. Williams, as Chairman of the National Traffic
Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as
Acting Secretary of Public Works and Communications; Eulogio Rodriguez, as
Mayor of the City of Manila; and Juan Dominguez, as Acting Chief of Police of
Manila.
It is alleged in the petition that the National Traffic Commission, in its
resolution of July 17, 1940, resolved to recommend to the Director of Public
Works and to the Secretary of Public Works and Communications that animal-
drawn vehicles be prohibited from passing along Rosario Street extending
from Plaza Calderon de la Barca to Dasmariñas Street, from 7:30 a.m. to 12:30
p.m. and from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from
the railroad crossing at Antipolo Street to Echague Street, from 7 a.m. to 11
p.m., from a period of one year from the date of the opening of the Colgante
Bridge to traffic; that the Chairman of the National Traffic Commission, on July
18, 1940 recommended to the Director of Public Works the adoption of the
measure proposed in the resolution aforementioned, in pursuance of the
provisions of Commonwealth Act No. 548 which authorizes said Director of
Public Works, with the approval of the Secretary of Public Works and
Communications, to promulgate rules and regulations to regulate and control
the use of and traffic on national roads; that on August 2, 1940, the Director
of Public Works, in his first indorsement to the Secretary of Public Works and
Communications, recommended to the latter the approval of the
recommendation made by the Chairman of the National Traffic Commission
as aforesaid, with the modification that the closing of Rizal Avenue to traffic to
animal-drawn vehicles be limited to the portion thereof extending from the
railroad crossing at Antipolo Street to Azcarraga Street; that on August 10,
1940, the Secretary of Public Works and Communications, in his second
indorsement addressed to the Director of Public Works, approved the
recommendation of the latter that Rosario Street and Rizal Avenue be closed
to traffic of animal-drawn vehicles, between the points and during the hours
as above indicated, for a period of one year from the date of the opening of
the Colgante Bridge to traffic; that the Mayor of Manila and the Acting Chief
of Police of Manila have enforced and caused to be enforced the rules and
regulations thus adopted; that as a consequence of such enforcement, all
animal-drawn vehicles are not allowed to pass and pick up passengers in the
places above-mentioned to the detriment not only of their owners but of the
riding public as well.
It is contended by the petitioner that Commonwealth Act No. 548 by which
the Director of Public Works, with the approval of the Secretary of Public
Works and Communications, is authorized to promulgate rules and regulations
for the regulation and control of the use of and traffic on national roads and
streets is unconstitutional because it constitutes an undue delegation of
legislative power. This contention is untenable. As was observed by this court
in Rubi v. Provincial Board of Mindoro (39 Phil, 660, 700), "The rule has
nowhere been better stated than in the early Ohio case decided by Judge
Ranney, and since followed in a multitude of cases, namely: ’The true
distinction therefore is between the delegation of power to make the law,
which necessarily involves a discretion as to what it shall be, and conferring an
authority or discretion as to its execution, to be exercised under and in
pursuance of the law. The first cannot be done; to the latter no valid objection
can be made.’ (Cincinnati, W. & Z. R. Co. v. Comm’rs. Clinton County, 1 Ohio
St., 88.) Discretion, as held by Chief Justice Marshall in Wayman v. Southard
(10 Wheat., 1) may be committed by the Legislature to an executive
department or official. The Legislature may make decisions of executive
departments or subordinate officials thereof, to whom it has committed the
execution of certain acts, final on questions of fact. (U.S. v. Kinkead, 248 Fed.,
141.) The growing tendency in the decisions is to give prominence to the
’necessity’ of the case.
Section 1 of Commonwealth Act No. 548 reads as follows:
"SECTION 1. To promote safe transit upon, and avoid
obstructions on, roads and streets designated as national roads
by acts of the National Assembly or by executive orders of the
President of the Philippines, the Director of Public Works, with
the approval of the Secretary of Public Works and
Communications, shall promulgate the necessary rules and
regulations to regulate and control the use of and traffic on such
roads and streets. Such rules and regulations, with the approval
of the President, may contain provisions controlling or regulating
the construction of buildings or other structures within a
reasonable distance from along the national roads. Such roads
may be temporarily closed to any or all classes of traffic by the
Director of Public Works and his duly authorized representatives
whenever the condition of the road or the traffic thereon makes
such action necessary or advisable in the public convenience and
interest, or for a specified period, with the approval of the
Secretary of Public Works and Communications.
The above provisions of law do not confer legislative power upon the Director
of Public Works and the Secretary of Public Works and Communications. The
authority therein conferred upon them and under which they promulgated the
rules and regulations now complained of is not to determine what public policy
demands but merely to carry out the legislative policy laid down by the
National Assembly in said Act, to wit, "to promote safe transit upon and avoid
obstructions on, roads and streets designated as national roads by acts of the
National Assembly or by executive orders of the President of the Philippines"
and to close them temporarily to any or all classes of traffic "whenever the
condition of the road or the traffic makes such action necessary or advisable
in the public convenience and interest." The delegated power, if at all,
therefore, is not the determination of what the law shall be, but merely the
ascertainment of the facts and circumstances upon which the application of
said law is to be predicated. To promulgate rules and regulations on the use of
national roads and to determine when and how long a national road should be
closed to traffic, in view of the condition of the road or the traffic thereon and
the requirements of public convenience and interest, is an administrative
function which cannot be directly discharged by the National Assembly. It must
depend on the discretion of some other government official to whom is
confided the duty of determining whether the proper occasion exists for
executing the law. But it cannot be said that the exercise of such discretion is
the making of the law. As was said in Locke’s Appeal (72 Pa. 491): "To assert
that a law is less than a law, because it is made to depend on a future event or
act, is to rob the Legislature of the power to act wisely for the public welfare
whenever a law is passed relating to a state of affairs not yet developed, or to
things future and impossible to fully know." The proper distinction the court
said was this: "The Legislature cannot delegate its power to make the law; but
it can make a law to delegate a power to determine some fact or state of things
upon which the law makes, or intends to make, its own action depend. To deny
this would be to stop the wheels of government. There are many things upon
which wise and useful legislation must depend which cannot be known to the
law-making power, and, must, therefore, be a subject of inquiry and
determination outside of the halls of legislation." (Field v. Clark, 143 U. S. 649,
694; 36 L. Ed. 294.)
In the case of People v. Rosenthal and Osmeña, G.R. Nos. 46076 and 46077,
promulgated June 12, 1939, and in Pangasinan Transportation v. The Public
Service Commission, G.R. No. 47065, promulgated June 26, 1940, this Court
had occasion to observe that the principle of separation of powers has been
made to adapt itself to the complexities of modern governments, giving rise
to the adoption, within certain limits, of the principle of "subordinate
legislation," not only in the United States and England but in practically all
modern governments. Accordingly, with the growing complexity of modern
life, the multiplication of the subjects of governmental regulations, and the
increased difficulty of administering the laws, the rigidity of the theory of
separation of governmental powers has, to a large extent, been relaxed by
permitting the delegation of greater powers by the legislative and vesting a
larger amount of discretion in administrative and executive officials, not only
in the execution of the laws, but also in the promulgation of certain rules and
regulations calculated to promote public interest.
The petitioner further contends that the rules and regulations promulgated by
the respondents pursuant to the provisions of Commonwealth Act No. 548
constitute an unlawful interference with legitimate business or trade and
abridge the right to personal liberty and freedom of locomotion.
Commonwealth Act No. 548 was passed by the National Assembly in the
exercise of the paramount police power of the state.
Said Act, by virtue of which the rules and regulations complained of were
promulgated, aims to promote safe transit upon and avoid obstructions on
national roads, in the interest and convenience of the public. In enacting said
law, therefore, the National Assembly was prompted by considerations of
public convenience and welfare. It was inspired by a desire to relieve
congestion of traffic. which is, to say the least, a menace to public safety.
Public welfare, then, lies at the bottom of the enactment of said law, and the
state in order to promote the general welfare may interfere with personal
liberty, with property, and with business and occupations. Persons and
property may be subjected to all kinds of restraints and burdens, in order to
secure the general comfort, health, and prosperity of the state (U.S. v. Gomez
Jesus, 31 Phil., 218). To this fundamental aim of our Government the rights of
the individual are subordinated. Liberty is a blessing without which life is a
misery, but liberty should not be made to prevail over authority because then
society will fall into anarchy. Neither should authority be made to prevail over
liberty because then the individual will fall into slavery. The citizen should
achieve the required balance of liberty and authority in his mind through
education and personal discipline, so that there may be established the
resultant equilibrium, which means peace and order and happiness for all. The
moment greater authority is conferred upon the government, logically so
much is withdrawn from the residuum of liberty which resides in the people.
The paradox lies in the fact that the apparent curtailment of liberty is precisely
the very means of insuring its preservation.
The scope of police power keeps expanding as civilization advances. As was
said in the case of Dobbins v. Los Angeles (195 U.S. 223, 238; 49 L. ed. 169),
"the right to exercise the police power is a continuing one, and a business
lawful today may in the future, because of the changed situation, the growth
of population or other causes, become a menace to the public health and
welfare, and be required to yield to the public good." And in People v. Pomar
(46 Phil., 440), it was observed that "advancing civilization is bringing within
the police power of the state today things which were not thought of as being
within such power yesterday. The development of civilization, the rapidly
increasing population, the growth of public opinion, with an increasing desire
on the part of the masses and of the government to look after and care for the
interests of the individuals of the state, have brought within the police power
many questions for regulation which formerly were not so considered." Case #7

The petitioner finally avers that the rules and regulations complained of THIRD DIVISION
infringe upon the constitutional precept regarding the promotion of social
justice to insure the well-being and economic security of all the people. The G.R. No. 77707 August 8, 1988
promotion of social justice, however, is to be achieved not through a mistaken
sympathy towards any given group. Social justice is "neither communism, nor PEDRO W. GUERZON, petitioner,
despotism, nor atomism, nor anarchy," but the humanization of laws and the vs.
equalization of social and economic forces by the State so that justice in its COURT OF APPEALS, BUREAU OF ENERGY UTILIZATION, F. C. CAASI JR., and
rational and objectively secular conception may at least be approximated. PILIPINAS SHELL PETROLEUM CORPORATION, respondents.
Social justice means the promotion of the welfare of all the people, the
adoption by the Government of measures calculated to insure economic Llego, Llego & Collera for petitioner.
stability of all the competent elements of society, through the maintenance of
Florentino G. Dumlao, Jr. for respondent Pilipinas Shell Petroleum Corporation.
a proper economic and social equilibrium in the interrelations of the members
of the community, constitutionally, through the adoption of measures legally
SYLLABI
justifiable, or extra-constitutionally, through the exercise of powers underlying
the existence of all governments on the time-honored principle of salus populi
Administrative Law; Administrative Agencies; Powers of; An administrative
est suprema lex.
agency has only such powers as are expressly granted to it by law and those
that are necessarily implied in the exercise thereof.—As it is, jurisdiction to
Social justice, therefore, must be founded on the recognition of the necessity
order a lessee to vacate the leased premises is vested in the civil courts in an
of interdependence among divers and diverse units of a society and of the
appropriate case for unlawful detainer or accion publiciana [Secs. 19(2) and
protection that should be equally and evenly extended to all groups as a
33(2), B.P. Blg. 129, as amended.] There is nothing in P.D. No. 1206, as
combined force in our social and economic life, consistent with the
amended, that would suggest that the same or similar jurisdiction has been
fundamental and paramount objective of the state of promoting the health,
granted to the Bureau of Energy Utilization. It is a fundamental rule that an
comfort, and quiet of all persons, and of bringing about "the greatest good to
administrative agency has only such powers as are expressly granted to it by
the greatest number."
law and those that are necessarily implied in the exercise thereof [Makati
Stock Exchange, Inc. v. Securities and Exchange Commission, G.R. No. L-23004,
In view of the foregoing, the writ of prohibition prayed for is hereby denied,
June 30, 1965, 14 SCRA 620; Sy v. Central Bank, G.R. No. L-41480, April 30,
with costs against the petitioner.
1976, 70 SCRA 570.] That issuing the order to vacate was the most effective
way of stopping any illegal trading in petroleum products is no excuse for a
So ordered.
deviation from this rule. Otherwise, adherence to the rule of law would be
rendered meaningless.
Avanceña, C.J., Imperial, Diaz. and Horrilleno. JJ. concur.
Same; Same; Same; Bureau of Energy Utilization; The BEU has no power to
decide contractual disputes between gasoline dealers and oil companies in the
absence of an express provision of law granting to it such power.—Moreover,
contrary to the Solicitor General’s theory, the text of the assailed order leaves
no room for doubt that it was issued in connection with an adjudication of the
contractual dispute between respondent Shell and petitioner. But then the
Bureau of Energy Utilization, like its predecessor, the defunct Oil Industry
Commission, has no power to decide contractual disputes between gasoline
dealers and oil companies, in the absence of an express provision of law
granting to it such power [see Pilipinas Shell Petroleum Corp. v. Oil Industry
Commission, G.R. No. L-41315, November 13, 1986, 155 SCRA 433.] As
explicitly stated in the law, in connection with the exercise of quasi-judicial
powers, the Bureau’s jurisdiction is limited to cases involving violation or non-
compliance with any term or condition of any certificate, license or permit
issued by it or of any of its orders, decisions, rules or regulations.
Same; Same; Same; Due Process; PD 1206 requires that notice of hearing and
opportunity to be heard be given to the offender before any administrative
penalty provided under Sec. 7(e) may be imposed.—Even if the issuance of the
order to vacate was within the authority of respondent Caasi, Jr., still its nullity
is apparent because of the failure to comply with the requirement of notice
and hearing. That P.D. No. 1206, as amended, requires notice and hearing
before any administrative penalty provided in Sec. 7(e) may be imposed is
patent. Sec. 7(e) provides for a gradation of penalties of which the imposition
of a fine in an amount not exceeding P1,000.00 is the least severe, and
requires that even before a fine is imposed notice and an opportunity to be
heard be given to the offender.
CORTES, J.:
Raised by petitioner to this Court is the issue of whether or not the Bureau of
Energy Utilization, the agency charged with regulating the operations and
trade practices of the petroleum industry, has the power to order a service
station operator-lessee to vacate the service station and to turn over its
possession to the oil company-lessor upon the expiration of the dealership and
lease agreements.
The facts, as found by the Court of Appeals, are as follows:
Basic antecedent facts show that on January 9, 1981 petitioner Pedro
Guerzon executed with Basic Landoil Energy Corporation, which was later
acquired by respondent Pilipinas Shell Petroleum Corporation, a contract
denominated as "Service Station Lease" for the use and operation of
respondent SHELL's properties, facilities and equipment, which included
four (4) pieces of fuel dispensing Pumps and one (1) piece air compressor,
for a period of five (5) years from January 15, 1981 and ending on January
14, 1986. On January 7, 1981 petitioner likewise executed with the same
Corporation a "Dealer's Sales Contract" for the sale by petitioner of
respondent SHELL's petroleum and other products in the leased service
station which contract expired April 12,1986. On April 13,1981,
respondent Bureau of Energy Utilization (BEU) approved the Dealer's
Sales Contract pursuant to which petitioner was appointed dealer of
SHELL's gasoline and other petroleum products which he was to sell at
the gasoline station located at Cagayan de Oro City. On the same day,
respondent BEU issued a certificate of authority in petitioner's favor,
which had a 5-year period of validity, in line with the terms of the
contract.
Paragraph 9 of the Service Station Lease Contract provides:
The cancellation or termination of the Dealer's Sales Contract
executed between the COMPANY and the LESSEE on January 7,1981
shall automatically cancel this Lease.
As early as January 2, 1986 respondent SHELL through its District Manager—
Reseller Mindanao wrote to petitioner informing him that the Company was
not renewing the Dealer's Sales Contract which was to expire on April 12, 1986
together with the service station lease and reminding him to take appropriate
steps to wind up his business activities at the station and, on the appropriate
date to hand over the station with all its facilities and equipment to the
representative of respondent. A copy of this letter was furnished respondent
BEU, through the latter's Mindanao Division Office. On April 12, 1986,
respondent SHELL wrote petitioner reiterating the decision not to extend the
Dealer's Sales Contract, demanding the surrender of the station premises and
all company owned equipment to the respondent's representative.
On April 15, 1986 respondent BEU, through respondent Caasi, Jr., officer- in-
charge of its Mindanao Division Office, issued the assailed order directing the
petitioner as follows:
(1) immediately vacate the service station abovementioned and turn
it over to Pilipinas Shell Petroleum Corporation; and
(2) show cause in writing, under oath within ten (10) days from
receipt hereof why no administrative and/or criminal proceedings
shall be instituted against you for the aforesaid violation.
The order directed that a copy of the same be furnished the PCINP
Commander of Cagayan de Oro City, requesting prompt and effective
enforcement of the directive and submitting to the BEU of the result of the
action taken thereon.
On April 22, 1986, pursuant to the order of April 15, 1986, respondent
SHELL, accompanied by law enforcement officers, was able to secure
possession of the gasoline station in question together with the requisite
equipments and accessories, and turned them over to the control of the
personnel of respondent SHELL who accompanied them.
On May 9, 1986, petitioner filed with the Regional Trial Court of Misamis
Oriental a complaint for certiorari, injunction and damages with
preliminary mandatory injunction (Civil Case No. 10619) to annul the
disputed order dated April 15, 1986 of respondent F.C. Caasi, Jr., but on
September 18,1986 this complaint was dismissed for lack of jurisdiction to
annul the order of a quasi-judicial body of equivalent category as the
Regional Trial Court. [Rollo, pp. 37-39.]
Thus, petitioner filed in the Court of Appeals a petition for certiorari with a
prayer for preliminary mandatory injunction against Pilipinas Shell Petroleum
Corporation, F.C. Caasi, Jr. and the Bureau of Energy Utilization seeking the
annulment of respondent Caasi, Jr.'s order dated April 15, 1986 and the
restoration to petitioner of possession of the service station and the
equipment removed therefrom.
In a decision promulgated on February 10, 1987, the Court of Appeals denied
due course and dismissed the petition after holding the disputed order valid
and the proceedings undertaken to implement the same sanctioned by
Presidential Decree No. 1206, as amended.
Hence, petitioner's recourse to this Court.
In his petition for review, petitioner ascribed the following errors to the Court
of Appeals:
I
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENT
BUREAU OF ENERGY UTILIZATION HAS JURISDICTION TO EJECT THE
PETITIONER FROM THE GASOLINE SERVICE STATION LEASED.
II
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THERE IS NO
NECESSITY OF ANY NOTICE AND HEARING PRIOR TO THE ISSUANCE OF THE
DISPUTED ORDER ISSUED BY RESPONDENT BUREAU OF ENERGY UTILIZATION
ORDERING THE PETITIONER TO VACATE THE LEASED PREMISES. [Rollo, p. 13]
The controversy revolves around the assailed order issued by respondent F.C.
Caasi, Jr., Officer-in-Charge of the Mindanao Division Office of the Bureau of
Energy Utilization, which reads:
15 April 1986
Mr. Pedro W. Guerzon
Corner Velez-Recto Streets
Cagayan de Oro City
Sir:
We were officially informed by Pilipinas Shell Petroleum Corporation that
you refused to vacate its company-owned service station at the above
address despite the fact that you were advised by Shell in its letter of
January 02, 1986 that it will not renew the Dealer's Sales Contract
between yourself and the company upon its expiration on April 12,1986.
Your continued occupancy of the service station is not only considered a
violation of BEU laws, rules and regulations but is also detrimental to the
interests of the parties concerned and the public.
In view thereof, you are hereby directed to:
(1) immediately vacate the service station abovementioned and turn it
over to Pilipinas Shell Petroleum Corporation; and
(2) show cause in writing, under oath within ten (1O) days from receipt
hereof why no administrative and/or criminal proceedings shall be
instituted against you for the aforesaid violation.
Let a copy of this directive be furnished the PC-INP Commander of
Cagayan de Oro City, who is hereby requested to cause the prompt and
effective enforcement hereof and to submit to this Bureau the result/s
of the action/s taken thereon.
Very truly yours,
(Sgd.) F.C. CAASI JR.
Officer-in-Charge
cc: PC/INP Commander
Cagayan de Oro City Pilipinas Shell Petroleum Corporation
Sasa, Davao City/Cagayan de Oro City
BEU-Manila
[Rollo, p. 122; Emphasis supplied.]
As stated at the outset, whether or not it is within the jurisdiction of the
Bureau of Energy Utilization to issue the above order is the primary issue to be
resolved.
The Solicitor General contends that since petitioner's license to sell petroleum
products expired on April 12,1986, when his dealership and lease contracts
expired, as of the following day, April 13, 1986 he was engaged in illegal trading
in petroleum products in violation of Batas Pambansa Blg. 33 [Rollo, pp. 100-
101.] The pertinent provisions of B.P. No. 33 state:
Sec. 2. Prohibited Acts.—The following acts are prohibited and
penalized:
(a) Illegal trading in petroleum and/or petroleum products;
xxx xxx xxx
 Sec. 3. Definition of terms.—For the purposes of this Act, the si following
terms shall be understood to mean:
Illegal trading in petroleum and/or petroleum products-the sale or
distribution of petroleum products for profit without license or
authority from the Government; non-issuance of receipts by licensed
traders; misrepresentation as to quality and/or quantity; an sa oil
companies, distributors and/or dealers violative of government rules
and regulations.
xxx xxx xxx
Thus, concludes the Solicitor General, the Bureau of Energy nation had the
power to issue, and was justified in issuing, the order to vacate pursuant to
Presidential Decree No. 1206, as amended, the pertinent portion of which
provides:
Sec. 7. Bureau of Energy Utilization.—There is created in the
Department a Bureau of Energy Utilization, hereafter referred to in this
Section as the Bureau, which shall have the following powers and
functions, among others:
xxx xxx xxx
e. After due notice and hearing, impose and collect a fine not exceeding
One Thousand Pesos, for every violation or non-compliance with any
term or condition of any certificate, license, or permit issued by the
Bureau or of any of its orders, decisions, rules and regulations.
The fine so imposed shall be paid to the Bureau, and failure to pay the
fine within the time specified in the order or decision of the Bureau or
failure to cease and discontinue the violation or noncompliance shall be
deemed good and sufficient reason for the suspension, closure or
stoppage of operations of the establishment of the person guilty of the
violation or non-compliance. In case the violation or default is
committed by a corporation or association, the manager or person who
has charge of the management of the corporation or association and
the officers or directors thereof who have ordered or authorized the
violation or default shall be solidarily liable for the payment of the fine.
The Bureau shall have the power and authority to issue corresponding
writs of execution directing the City Sheriff or provincial Sheriff or other
peace officers whom it may appoint to enforce the fine or the order of
closure, suspension or stoppage of operations. Payment may also be
enforced by appropriate action brought in a court of competent
jurisdiction. The remedy provided herein shall not be a bar to or affect
any other remedy under existing laws, but shall be cumulative and
additional to such remedies;
xxx xxx xxx
However, the Solicitor General's line of reasoning is fatally flawed by the failure
of the facts to support it. From a cursory reading of the assailed order, it is
readily apparent that the order is premised on petitioner's refusal to vacate
the service station in spite of the expiration and non-renewal of his dealership
and lease agreements with respondent Shell. Nowhere in the order is it stated
that petitioner had engaged in illegal trading in petroleum products or had
committed any other violation of B.P. Blg. 33. The order merely makes a vague
reference to a "violation of BEU laws, rules and regulations," without stating
the specific provision violated. That petitioner had engaged in illegal trading in
petroleum products cannot even be implied from the wording of the assailed
order.
But then, even if petitioner was indeed engaged in illegal trading in petroleum
products, there was no basis under B.P. Blg. 33 to order him to vacate the
service station and to turn it over to respondent Shell. Illegal trading in
petroleum products is a criminal act wherein the injured party is the State.
Respondent Shell is not even alleged by the Solicitor General as a private party
prejudiced and, therefore, it can claim no relief if a criminal case is instituted. *
Even on the assumption that petitioner's continued occupancy and operation
of the service station constituted a violation of a law or regulation, still the
Court has no recourse but to rule against the legality of the order, the Bureau
of Energy Utilization not being empowered to issue it. Section 7 of P.D. No.
1206, as amended, is very clear as to the courses of action that the Bureau of
Energy Utilization may take in case of a violation or non- compliance with any
term or condition of any certificate, license or permit issued by the Bureau or
any of its orders, decisions, rules or regulations. The Bureau may: (1) impose a
fine not exceeding P1,000.00; and (2) in case of failure to pay the fine imposed
or to cease and discontinue the violation or non-compliance, order the
suspension, closure or stoppage of operations of the establishment of the
guilty party. Its authority is limited to these two (2) options. It can do no more,
as there is nothing in P.D. No. 1206, as amended, which empowers the Bureau
to issue an order to vacate in case of a violation.
As it is, jurisdiction to order a lessee to vacate the leased premises is vested in
the civil courts in an appropriate case for unlawful detainer or accion
publiciana [Secs. 19(2) and 33(2), B.P. Blg. 129, as amended.] There is nothing
in P.D. No. 1206, as amended, that would suggest that the same or similar
jurisdiction has been granted to the Bureau of Energy Utilization. It is a
fundamental rule that an administrative agency has only such powers as are
expressly granted to it by law and those that are necessarily implied in the
exercise thereof [Makati Stock Exchange, Inc. v. Securities and Exchange
Commission, G.R. No. L-23004, June 30,1965,14 SCRA 620; Sy v. Central Bank,
G.R. No. L-41480, April 30, 1976, 70 SCRA 570.] That issuing the order to vacate
was the most effective way of stopping any illegal trading in petroleum
products is no excuse for a deviation from this rule. Otherwise, adherence to
the rule of law would be rendered meaningless.
Moreover, contrary to the Solicitor General's theory, the text of the assailed
order leaves no room for doubt that it was issued in connection with an
adjudication of the contractual dispute between respondent Shell and
petitioner. But then the Bureau of Energy Utilization, like its predecessor, the
defunct Oil Industry Commission, has no power to decide contractual disputes
between gasoline dealers and oil companies, in the absence of an express
provision of law granting to it such power [see Pilipinas Shell Petroleum Corp.
v. Oil Industry Commission, G.R. No. L-41315, November 13, 1986,145 SCRA
433.] As explicitly stated in the law, in connection with the exercise of quasi-
judicial powers, the Bureau's jurisdiction is limited to cases involving violation
or non-compliance with any term or condition of any certificate, license or
permit issued by it or of any of its orders, decisions, rules or regulations.
Viewed from any angle, respondent F.C. Caasi, Jr., in issuing the assailed order,
acted beyond his authority and overstepped the powers granted by P.D. No.
1206, as amended. The assailed order was, therefore, null and void.
Even if the issuance of the order to vacate was within the authority of
respondent Caasi, Jr., still its nullity is apparent because of the failure to
comply with the requirement of notice and hearing. That P.D. No. 1206, as
amended, requires notice and hearing before any administrative penalty
provided in Sec. (7)e may be imposed is patent. Sec. (7)e provides for a
gradation of penalties of which the imposition of a fine in an amount not
exceeding P1,000.00 is the least severe, and requires that even before a fine
is imposed notice and an opportunity to be heard be given to the offender.
While the order dated April 15, 1986 is null and void, the Court, however, finds
itself unable to issue the writ of mandatory injunction prayed for ordering
respondent Shell to restore possession of the service station and the
equipment and facilities therein to petitioner. Petitioner himself had admitted
in his petition that his dealership and lease agreements with respondent Shell
had already expired. Recognized the validity of the termination of the
agreements, he requested for their renewal. However, this request was
denied. [Rollo, p. 9] Undeniably, after April 12, 1986, any right petitioner had
to possess the service station and the equipment and facilities therein had
been extinguished. No basis for an affirmative relief therefore exist.
WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals
dated February 10, 1987 is REVERSED and the Order dated April 15,1986
issued by respondent Caasi, Jr. of the Bureau of Energy Utilization is
ANNULLED and SET ASIDE.
However, the right of petitioner to the possession of the service station and
the equipment and facilities having been extinguished, the prayer for the
issuance of a writ of mandatory injunction is DENIED.
SO ORDERED.
Gutierrez, Jr., Feliciano and Bidin, JJ., concur.
Fernan, C.J., took no part.
Case #8
EN BANC
G.R. No. L-53581-83 December 19, 1980
MARIANO J. PIMENTEL, BENJAMIN R. RAMOS, AMANDO AMBULAN, SABINO
ANCHETA, JOSE APOLONIO, EDNA CABANILLA, GAUDENCIO CARINO, ESMENIO
TACADENA, ROSALINDA SAMOY and DELFIN VAGULAR JR., petitioners,
vs.
COMMISSION ON ELECTIONS, HON. PRESIDING JUDGE, COURT OF FIRST
INSTANCE OF QUIRINO, SILVERIO L. PASCUA, FAUSTINO S. TACTAC, JOSE
CABANERO, MARIA VALENCIA, REYNALDO DUPA, ALFREDO LADAO, DAVID
GARNACE DOMINGO CASIA MATEO GERVACIO and PAULA
VILLACORTA, respondents.
SYLLABI
Election Code; Jurisdiction; Jurisdiction cannot be conferred by the Rules of
Court.—Settled is the rule that jurisdiction is conferred only by the
Constitution or the law. (Bacalso vs. Ramolete, October 26, 1967, 21 SCRA
523). Thus, it cannot be conferred by the Rules of Court which are neither
constitutional provisions nor legislative enactments but mere procedural rules
promulgated by this Court in the exercise of its power to prescribe “rules
concerning pleading, practice and procedure in all courts” (Sec. 5(5), Art. X,
1973 Constitution; Sec. 13, Art. VIII, 1935 Constitution).
Same; Same; Certiorari; Court of Appeals; Section 4, Rule 65 of the Rules of
Court in connection with COMELEC Resolution No. 1451 prescribing rules of
procedure in election contests in the Court of First Instance, cannot by analogy
be interpreted as granting the COMELEC jurisdiction for certiorari, prohibition
or mandamus over interlocutory orders issued by the Court of First Instance.—
Accordingly, the aforequoted provision of Sec. 4, Rule 65 of the Rules of Court,
cannot be construed as a grant of jurisdiction to the Court of Appeals over
petitions for certiorari, prohibition or mandamus involving cases appealable to
it. Much less can such provision be interpreted, by analogy, as a grant to the
Commission on Elections of jurisdiction over petitions for certiorari,
prohibition or mandamus involving election cases cognizable by the Court of
First Instance and appealable to said commission under Sec. 196 of the Revised
Election Code. While it is true that the Court of Appeals has jurisdiction over
petitions for certiorari, prohibition or mandamus involving cases appealable to
it, the grant of jurisdiction is not by virtue of the afore-quoted provision of Sec.
4, Rule 65 of the Rules of Court, but by express legislative fiat, namely, Sec. 30
of the Judiciary Act (R. A. No. 296).
Same; Same; There is no law granting COMELEC appellate interlocutory
jurisdiction over the Court of First Instance in election contests.—No such
legislative grant of jurisdiction exists in the case of the Commission on
Elections. Consequently, respondents’ contention that the Commission on
Elections has jurisdiction over petitions for certiorari, prohibition and
mandamus involving election cases cognizable by the Court of First Instance
and appealable to said Commission cannot be sustained. It results, therefor,
that Resolution No. 9592 was issued by the COMELEC without authority to do
so.
Teehankee, J., concurring:
Election Code; The COMELEC’s order prohibiting the Court of First Instance
from examining ballots was, in any event, done with grave abuse of
discretion.—I concur. I only wish to add that even assuming that the Comelec
had jurisdiction to issue the prerogative writ of certiorari in the pending
election contest before the court of first instance because of its appellate
jurisdiction, its challenged order restraining the court of first instance from
opening the ballot boxes and examining the ballots and recounting the votes
and limiting the counting of votes cast in favor of petitioners-protestants to
those reflected in the election returns, as sought by respondents-protestees,
must be set aside as a grave abuse of discretion. An election protest conducted
under such a strait-jacket would be but an absurd and farcical exercise in
futility.
Aquino, J., concurring:
Election Code; Jurisdiction; Certiorari; The COMELEC is not a court of justice
and has not been conferred the power to issue writs of certiorari.—I agree
with the opinion of Justice Abad Santos that that contention is untenable. The
Comelec is not a court of justice. It has not been vested with the prerogative
to issue the writ of certiorari. Hence, it has no jurisdiction to issue writ.
Same; Same; Same; Same.—In my view, although the Comelec now exercises
judicial functions, still it has no certiorari jurisdiction to review the
interlocutory orders of the Court of First Instance in election contests involving
the election of municipal officials.
Same; Same; Same; Same.—Since there is no law expressly authorizing the
Comelec to issue the writ of certiorari, and the Comelec is not a court of
justice, it is powerless to issue that writ.
De Castro, J., dissenting:
Election Code; Jurisdiction; The COMELEC has been impliedly granted by law
the power to issue writs of certiorari on orders issued by the Court of First
Instance in election contests where the law transferred the appellate
jurisdiction over election contests to the COMELEC from the Court of
Appeals.—To hold that COMELEC has no jurisdiction to entertain the petition
for certiorari etc. would be to leave no other court to which recourse may be
had than the Supreme Court. But from the provision of the Revised Election
Code of 1978 giving the appellate jurisdiction over election cases decided
originally by the Courts of First Instance to the COMELEC, and the provision of
the Constitution limiting the power of the Supreme Court to exercising only
certiorari jurisdiction over decisions, orders and resolutions of the COMELEC,
I am unable to say that the intention of the 1978 Election Code is to disperse
or divide the authority over an election case filed in the Court of First Instance
by giving to the Supreme Court jurisdiction to issue writs of certiorari,
prohibition and mandamus against orders of the Court of First Instance but
giving to the COMELEC the jurisdiction over the ultimate appeal from the
decision of said court in the very same election case. It is more easy to say,
with full legal rationality, that the grant of appellate jurisdiction over election
cases filed in and decided by the Court of First Instance, carries with it the
power to issue writs of certiorari, prohibition and mandamus when necessary
in aid of its appellate jurisdiction, as indeed, it cannot be denied that, if it was
such aid with the Court of Appeals, it must be so in the same way with the
COMELEC.
ABAD SANTOS, J.:
The vital issue to be resolved in this petition for certiorari and prohibition with
preliminary mandatory injunction is whether or not the Commission on
Elections had jurisdiction to issue Resolution No. 9592, dated March 25, 1980,
which (1) required the herein petitioners to answer the petition for certiorari
and prohibition with preliminary injunction filed by the herein private
respondents, thereby taking cognizance of such special civil action which
questioned the validity of an interlocutory order, dated March 20, 1980, issued
by the Court of First Instance of Quirino in Election Cases Nos. 8, 9 and 10,
involving the offices of Mayor, Vice Mayor and Members of the Sangguniang
Bayan of the Municipality of Diffun, Quirino Province; and (2) temporarily
restrained said Court of First instance of Quirino from enforcing said order of
March 20. 1980, which denied herein private respondents' motion to prevent
the trial court from re-examining the ballots and to the counting of votes cast
in favor of petitioners-contestants to those reflected in the election returns.
The herein petitioners are the contestants while herein private respondents
are the contestees in Election Cases Nos. 8, 9 and 10 which are pending before
the court of First Instance of Quirino, Petitioners-contestants allege in their
election protests that they were duly certified candidates or mayor, vice-
mayor and members of the Sangguniang Bayan of the Municipality of Diffun,
Quirino, Province, in the general elections held last January 30, 1980, as shown
in the resolution of the Comelec dated February 4. 1980 attached to the
election protests as Annex "A") but that they were not considered as such by
the Municipal Board of Canvasser who, consequently, did not count the votes
east in their favor (having considered the same as stray votes) and proceeded
of proclaim the contestees as the duly elected officials oil Diffun. Petitioners
contestants contend that had it not been for the said error in the appreciation
of the votes cast in their favor, they would have certainly emerged as the
winners in said election. They therefore pray of said Court of First Instance of
Quirino - (1) to fix the bond to be filed by them: (2) to cause to be brought to
the court the registration list, the unused ballots and the documents used in
all of the precincts of the municipality of Diffun; (3) to order the examination
of the ballots, using the necessary officers with emoluments to be fixed by said
court: (4) to order the votes cast in favor of contestants to be counted in their
favor; and (5) to annul the proclamation of the contestees and to declare the
contestants as the duly elected officials of Diffun.
In their answers to the election protests, the contestees deny that contestants
are duly certified candidates and allege that during the voting and the counting
of votes in the voting centers, the contestants were not bona fide candidates
and it was for this reason that the votes cast in their favor were not counted.
They further allege that even assuming the authenticity of the corrected
certified list of candidates found in Annex "A" of the election protests, the
same does not include the names of contestants Edna Cabanilla, Gervacio
Carino, Esmenio Tacadena and Rosalina Samoy, and that as to them, therefore,
the protests should be summarily dismissed. By way of counter-contest, the
contestees allege that the ballots with votes in favor of KBL which should have
been counted in favor of the contestees (except contestees Jose Cabanero and
Reynaldo Dupa) as KBL official candidates were not so counted in their favor.
During the hearing of said protests, the contestees filed with the CFI of Quirino
a pleading dated March 10, 1980, and entitled: "Joint Motion to Limit
Reception of Evidence Pursuant to Material Allegations in the Protests."
Alleging that the election protests do not question the proceedings in the
Citizens Election Committees but only those before the Municipal Board of
Canvassers, the contestees pray that only the election returns should be
considered in the counting of the votes in favor of the contestants and that
the ballots should not be re-examined for that purpose.
On March 20, 1980, the CFI of Quirino issued an order denying the motion of
the contestees. On that same day the counsel for the contestees orally moved
for reconsideration of said order; but the court denied said motion for
reconsideration in an order of even date. Accordingly, the court ordered the
opening of the ballot boxes and the counting of the votes as reflected in the
ballots and not in the election returns.
On March 22, 1980, the contestees filed with the Commission on Elections a
petition for certiorari and prohibition with preliminary injunction seeking to
restrain the CFI of Quirino from enforcing its orders of March 20, 1980. Acting
on said petition, the COMELEC issued on March 25, 1980 Resolution No. 9592
which reads as follows:
9592. In the matter of the PETITION FOR certiorari AND PROHIBITION
WITH PRELIMINARY INJUNCTION filed by Petitioners-Contestees'
Counsel in EAC No. 1-80 Pascua, et al. vs. The Honorable Presiding
Judge, Court of First Instance of Quirino, et al): the Commission
RESOLVED (1) to require the Respondents- Contestants to file an
answer, not a motion to dismiss, within ten (10) days from date of notice
hereof, and (2) in the meantime to restrain respondent Presiding Judge
from enforcing his order of March 20, 1980.
In view of such resolution of the COMELEC, the CFI of Quirino issued on April
1, 1980, an order postponing the hearing of Election Cases Nos. 8, 9 and 10
"until such time that a superior Court orders otherwise or after the petition
for certiorari, etc., filed by contestees with the Commission on Elections has
been resolved." Contestants moved for a reconsideration of said order but the
CFI of Quirino denied the same.
Thus, on April 10, 1980, the contestants filed with this Court the present
petition for certiorari and prohibition with preliminary mandatory injunction
seeking to annul Resolution No. 9592 of the Commission on Elections; to
prohibit the enforcement of said resolution; and to compel the Court of First
Instance of Quirino to proceed with the hearing of the election cases.
Petitioners allege, among others, that the Commission on Elections has no
jurisdiction to take cognizance of the petition for certiorari and prohibition
filed by the herein private respondents questioning an interlocutory order
issued by the Court of First Instance of Quirino, much less to restrain said court
from enforcing said order.
On April 15, 1980, We required the respondents to file an answer to the
petition. On that same day, We issued an order temporarily restraining the
Commission on Elections from enforcing the questioned resolution to enable
the Court of First Instance of Quirino to proceed with Election Cases Nos. 8, 9
and 10.
On May 2, 1980, the private respondents filed their answer to the petition.
They contend that since election cases recognizable by Courts of First Instance
are appealable to the Commission on Elections under Sec. 196 of the 1978
Election Code, said Commission. therefore, has jurisdiction to take cognizance
of petitions for certiorari, prohibition or mandamus involving said cases in aid
of its appellate jurisdiction over the same. Touching on the merit of their
petition with the COMELEC, the herein private respondents allege that since
the members of the Board of Canvassers were impleaded as contestees in
Election Cases Nos. 8, 9 and 10 said cases should be limited to a recounting of
the votes as reflected in the election returns, To count the votes through the
ballots is, according to them, "not in-keeping with the rules of evidence and
jurisprudence," Private respondents further allege that petitioners Edna
Cabanilla, Gaudencio Carino, Esmenio Tacadena and Rosalinda Samoy were
not certified as candidates in the last election, as per Annex "A" (resolution of
the COMELEC dated February 4, 1980) of the election protests, and, therefore,
have no personality in the present petition.
Respondent Commission on Elections filed its answer to the petition on May
16, 1980, alleging, among others, that it had jurisdiction to issue Resolution
No. 9592 and that being interlocutory in nature, said resolution cannot be
challenged in the present petition for certiorari since there is no showing of
grave abuse of discretion committed in its issuance.
On July 3, 1980, We issued a resolution requiring the parties to submit
memoranda principally on the question as to whether or not the Commission
on Elections had the power to issue Resolution No. 9592.
Private respondents and respondent Commission on Elections filed their
memoranda on August 13, 1980, and September 6, 1980, respectively.
Petitioners failed to file their memorandum. Nonetheless, on December 2,
1980, We resolved to consider the case submitted for decision.
In support of the contention that the Commission on Elections has jurisdiction
over petitions for certiorari, prohibition and mandamus involving election
cases filed with the Court of First Instance by candidates for municipal offices,
the respondents argue as follow: That Section 192 of the 1978 Election Code
(P.D. No. 1296) grants the Commission on Elections the power to "prescribe
the rules to govern the procedure and other matters relating to election
contests"; that, accordingly, the COMELEC issued Resolution No. 1451
prescribing the procedural rules for election contests in the Court of First
Instance involving elective municipal and municipal district offices; that
Section 19 of said Rules provides that the Rules of Court of the Philippines
"shall serve as supplementary rules in election contests filed with the Court of
First Instance"; that under Section 4, Rule 65 of the Rules of Court of the
Philippines, petitions for certiorari, prohibition and mandamus may also be
filed with the Court of Appeals if it is in aid of its appellate jurisdiction"; that
since the COMELEC exercise appellate jurisdiction over election cases filed
with the Court of First Instance involving municipal offices, pursuant to Section
196 of the 1978 Election Code, said Commission is, thus, vested with
jurisdiction over petitions for certiorari, prohibition and mandamus involving
said election cases, applying by analogy the quoted provision of Sec. 4, Rule 65
of the Rules of Court of the Philippines.
The fallacy of the foregoing arguments of the respondents lies in the
erroneous interpretation of the aforequoted portion of Sec. 4, Rule 65 of the
Rules of Court of the Philippines, as a grant of jurisdiction to the Court of
Appeals and, by analogy, to the Commission on Elections, to take cognizance
of petitions for certiorari, prohibition or mandamus involving cases over which
said court or commission exercises appellate jurisdiction.
Settled is the rule that jurisdiction is conferred only by the Constitution or the
law. (Bacalso vs. Ramolete, October 26, 1967, 21 SCRA 519, 523.) Thus, it
cannot be conferred by the Rules of Court which are neither constitutional
provisions nor legislative enactments but mere procedural rules promulgated
by this Court in the exercise of its power to prescribe "rules concerning
pleading, practice and procedure in all courts" (Sec. 5 (5), Art. X, 1973
Constitution; Sec. 13, Art. VIII, 1935 Constitution).
Accordingly, the aforequoted provision of Sec. 4, Rule 65 of the Rules of Court,
cannot be construed as a grant of jurisdiction to the Court of Appeals over
petitions for certiorari, prohibition or mandamus involving cases appealable to
it. Much less can such provision be interpreted, by analogy, as a grant to the
Commission on Elections of jurisdiction over petitions for certiorari,
prohibition or mandamus involving election cases cognizable by the Court of
First Instance and appealable to said commission under Sec. 196 of the Revised
Election Code.
While it is true that the Court of Appeals has jurisdiction over petitions for
certiorari, prohibition or mandamus involving cases appealable to it, the grant
of jurisdiction is not by virtue of the aforequoted provision of Sec. 4, Rule 65
of the Rules of Court, but by express legislative fiat, namely, Sec. 30 of the
Judiciary Act (R.A. No. 296). to wit:
SEC. 30. ORIGINAL JURISDICTION OF THE COURT OF APPEALS. — The
Court of Appeals shall have original jurisdiction to issue writs of
mandamus, prohibition, injunction, certiorari, habeas corpus, and all
other auxiliary writs s and process in aid of its appellate jurisdiction.
No such legislative grant of jurisdiction exists in the case of the Commission on
Elections. Consequently, respondents' contention that the Commission on
Elections has Jurisdiction over petitions for certiorari, prohibition or man
mandamus involving election cases cognizable by the Courts of First Instance
and appealable to said Commission cannot be sustained. It results, therefore,
that Resolution, that Resolution No. 9592 was issued by the COMELEC without
authority to do so.
WHEREFORE, the petition for certiorari and prohibition is hereby granted.
Resolution No. 9592, issued by the Commission on Elections in EAC No. 1-80
is hereby declared null and void and said Commission is permanently enjoined
from taking any further action on said case except to dismiss the same for lack
of jurisdiction. Costs against private respondents.
SO ORDERED.
Makasiar, Concepcion, Jr., Fernandez, Guerrero and Melencio-Herrera, JJ.,
concur.
*separate opinions not included
*Case #9
SECOND DIVISION
[G.R. No. 83354. April 25, 1991.]

LEON MATEO and ANA VILORIA MATEO, Petitioners, v. THE HONORABLE
COURT OF APPEALS; THE HONORABLE JUDGE DAVID MOJICA, Presiding Judge
of Branch XIX, Regional Trial Court of Davao del Sur; THE HONORABLE JUDGE
PEDRO CASIA, Executive Judge of the Regional Trial Court of Davao del Sur;
ATTY. BONIFACIO J. GUYOT, Clerk of Court of Davao del Sur; JULIA MATEO and
FRANCISCO DEL ROSARIO, Respondents.
Rodolfo S.J. De Leon, for Petitioners.
Carlos A. Cadiente for Private Respondents.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; PETITION FOR RELIEF FROM
JUDGMENT; DENIAL OF, AN EXERCISE OF TRIAL COURT’S DISCRETION. — The
petitioners assail the decision of the respondent appellate court confirming
the trial court’s denial of both their Petition for Relief from Judgment and the
notice of appeal. As regards the denial of the Petition for Relief from
Judgment, there is no question that the same involved the exercise of
discretion by the trial court and, therefore, the granting thereof can not be
compelled by mandamus.
2. ID.; SPECIAL CIVIL ACTION; MANDAMUS. — A petition for mandamus lies
"when any tribunal, corporation, board or person unlawfully neglects the
performance of an act which the law enjoins as a duty resulting from an office,
trust, or station, or unlawfully excludes another from the use and enjoyment
of a right or office to which such other is entitled, and there is no plain and
adequate remedy in the ordinary course of law . . ." As the Court en banc
recently held in Cruz v. Major General Montano, "mandamus is a remedy
available only to compel the doing of an act specifically enjoined by law as a
duty. It cannot compel the exercise of discretion one way or the other."
Indeed, mandamus does not lie to compel the performance of a discretionary
duty.
3. ID.; ID.; ID.; DISTINCTIONS BETWEEN MINISTERIAL DUTY AND
DISCRETIONARY DUTY. — In Symaco v. Aquino, we had the occasion to clearly
distinguish between a ministerial duty and a discretionary duty. We explained:
. . . Ministerial duty is one which is so clear and specific as to leave no room for
the exercise of discretion in its performance. On the other hand, a
discretionary duty is that which by its nature requires the exercise of
judgment. A purely ministerial act or duty is one in which an officer or tribunal
performs in a given state of facts, in a prescribed manner, in obedience to the
mandate of legal authority, without regard to or the exercise of his own
judgment, upon the propriety of the act done. But if the law imposes a duty
upon a public officer and gives him the right to decide how or when the duty
shall be performed, such duty is discretionary and not ministerial. The duty is
ministerial only when the discharge of the same requires neither the exercise
of official discretion nor judgment. . . .
4. ID.; CIVIL PROCEDURE; PETITION FOR RELIEF FROM JUDGMENT; ABSENCE
OF ONE OF TWO PERIODS BARS FILING OF PETITION FOR RELIEF. — The
petitioners do not dispute the fact that the Petition for Relief from Judgment
was not filed with the trial court within the reglementary period, i.e., within
sixty (60) days from the time the petitioners learned of the judgment in
question and not more than six (6) months after such judgment was entered.
Although the petition was filed within six (6) months, it was not within sixty
(60) days from the time the petitioners learned of the judgment, but only after
107 days. The absence of one of the two said periods which are concurring
elements precludes the petitioners from availing of the Petition for Relief from
Judgment.
5. ID.; ID.; ID.; REMEDY IN CASE OF DENIAL IS APPEAL. — In this instance, the
remedy available to the petitioners is to appeal the denial of their Petition for
Relief from Judgment. As we held in De Jesus v. Domingo, an order denying a
petition for relief, being final, is appealable and may not be corrected through
the special civil action for certiorari and prohibition.
6. ID.; ID.; APPEAL; MINISTERIAL DUTY OF TRIAL COURT TO APPROVE NOTICE
OF APPEAL. — We agree with the contention of the petitioners that it was the
ministerial duty of the trial court to approve the notice of appeal. It must be
observed that the petitioners had filed within the prescribed period a notice
of appeal on December 1, 1987 when the petition in question was denied by
the trial court in an order dated November 9, 1987, a copy of which was
received by the petitioners on November 27, 1987. The refusal of the trial
court, therefore, to accept the said notice filed by petitioners in pursuance of
their statutory right to appeal is clearly enforceable by mandamus.
7. ID.; ID.; PETITION FOR RELIEF FROM JUDGMENT; REQUISITES. — The
petitioners, to be entitled to a Petition for Relief from Judgment, must not only
show excusable negligence but must likewise assert the facts constituting their
good and substantial cause of action. Still and all, considering the evidence
adduced by the petitioners, we see no reason to depart from the well-
grounded conclusion of the respondent appellate court finding the appeal not
meritorious for failure to establish both foregoing requisites.
DECISION
SARMIENTO, J.:
This is a petition for review on certiorari assailing the decision dated April 26,
1988 of the respondent Court of Appeals 1 denying the petition for mandamus
with preliminary injunction filed by the petitioners.
The antecedent facts are as follows:chanrob1es virtual 1aw library
On November 9, 1978, the private respondents (then plaintiffs) instituted an
action for recovery of possession and/or ownership with damages against the
petitioners (then defendants), of a two-hectare piece of land situated in
Calamagoy, Magsaysay, Davao del Sur, which land is covered by Transfer
Certification of Title No. 9309 in the name of private respondent (then
plaintiff) "Julia Mateo, married to Francisco del Rosario." 2
After protracted proceedings which lasted for almost nine years, the Regional
Trial Court of Digos, Davao del Sur, 3 rendered a decision dated March 21,
1987, the decretal portion of which states:chanrob1es virtual 1aw library
WHEREFORE, judgment is hereby rendered:chanrob1es virtual 1aw library
Ordering the defendants to vacate Lot No. 5072-A-2, Psd-211682, situated in
Calamagoy, Magsaysay, Davao del Sur, covered by T.C.T. No. 9309 in the name
of plaintiff Julia Mateo, married to Francisco del Rosario; to pay the plaintiffs
P2,000.00 for and as attorney’s fees; to pay the plaintiffs P4,000.00 per year,
commencing in the year 1978 until they shall have vacated the land, for the
income from the property that the plaintiffs failed to receive due to the refusal
of the defendants to return the same to them; and to pay the costs.
A copy of the said decision was served on the petitioners, defendants in the
trial court, on March 31, 1987, but since no appeal from this judgment had
been filed within the reglementary period, or up to April 15, 1987, the same
became final and executory. 4
On April 20, 1987, the private respondents, plaintiffs in the court a quo, filed
a motion for execution of the said final judgment and the trial court granted
the same, which was unopposed, after proper hearing. Upon the issuance on
May 13, 1987 of a writ of execution, the deputy sheriff issued a "Sheriffs Notice
of Sale" and a "Levy on Execution and/or Attachment" on May 18, 1987. 5
On June 8, 1987, the deputy sheriff attested in his delivery receipt the actual
reconveyance of the land in question to the private respondents.cralawnad
On July 16, 1987, or after the lapse of 107 days from the time the petitioners
received the said decision adverse to them, they filed a Petition for Relief from
Judgment in the same trial court, in the same cause, alleging excusable
negligence in their failure to appeal the said decision, and praying that the
same be set aside. the trial court’s denial of both their Petition for Relief from Judgment and the
notice of appeal. As regards the denial of the Petition for Relief from
On November 9, 1987, the trial court 6 denied the said Petition for Relief from Judgment, there is no question that the same involved the exercise of
Judgment as well as the motion to reconsider the denial of the petitioners’ discretion by the trial court and therefore, the granting thereof can not be
notice of appeal on the grounds that there was no excusable negligence to compelled by mandamus.
warrant relief from judgment and that the petition failed to show a valid and
sufficient cause of action. A petition for mandamus lies "when any tribunal, corporation, board or person
unlawfully neglects the performance of an act which the law specifically
The petitioners elevated the case to the respondent appellate court on a enjoins as a duty resulting from an office, trust, or station, or unlawfully
Petition for Mandamus alleging that the denial of their appeal was excludes another from the use and enjoyment of a right or office to which such
unwarranted and that the granting of the notice of appeal was a ministerial other is entitled, and there is no plain, speedy and adequate remedy in the
duty enforceable by mandamus. ordinary course of law . . ." 7

As adverted to at the outset, the respondent appellate court denied the said As the Court en banc recently held in Cruz v. Major General Montano, 8
Petition for Mandamus in a decision dated April 26, 1988. "mandamus is a remedy available only to compel the doing of an act
specifically enjoined by law as a duty. It cannot compel the exercise of
Hence, this recourse. discretion one way or the other." Indeed, mandamus does not lie to compel
the performance of a discretionary duty. 9
In their Petition, the petitioners submit the following assignment of
errors:chanrob1es virtual 1aw library In Symaco v. Aquino, 10 we had the occasion to clearly distinguish between a
ministerial duty and a discretionary duty. We explained
1. That the instant petition is a concrete and specific example of a violation of
section one, article IV, of the Constitution of the Philippines; x x x

2. That the respondents violated section 2, Rule 41 of the Rules of Court of the
Philippines. Ministerial duty is one which is so clear and specific as to leave no room for
the exercise of discretion in its performance. On the other hand, a
The petition is not meritorious. discretionary duty is that which by its nature requires the exercise of
judgment. A purely ministerial act or duty is one in which an officer or tribunal
Central to the controversy are the issues of whether or not the approval of a performs in a given state of facts, in a prescribed manner, in obedience to the
notice of appeal by the trial judge is a ministerial duty enforceable by mandate of legal authority, without regard to or the exercise of his own
mandamus, and if it is, whether or not the appeal of the petitioners is judgment, upon the propriety of the act done. But if the law imposes a duty
meritorious. upon a public officer and gives him the right to decide how or when the duty
shall be performed, such duty is discretionary and not ministerial. The duty is
The petitioners assails the decision of the respondent appellate court affirming
ministerial only when the discharge of the same requires neither the exercise
of official discretion nor judgment. . . .
x x x
Applying the foregoing distinctions, we agree with the observations made by
the respondent appellate court when it stated thus
x x x
In the present case, petitioner lost his right to appeal when he failed to perfect
his appeal within the reglementary period. The Petition for Relief From
Judgment granted by Section 2 of Rule 38, does not confer on petitioner the
right to appeal which had been lost. And the remedy of relief from judgment
can only be resorted to on any of the grounds mentioned by said rules, namely:
fraud, accident, mistake or excusable negligence. The determination of
whether the element of fraud, accident, mistake or excusable negligence is
present to warrant the granting of the relief prayed for, requires an exercise
of judgment and discretion by the judge. And the writ of mandamus can not
be issued and is not available to control the discretion of the judge or compel
him to decide a case in a particular way. (Diy v. Crossfield, 38 Phil. 934). The
trial court, in exercising its discretionary authority, denied the Petition for
Relief from Judgment on a finding that petitioners had no meritorious defense
and that the failure to perfect the appeal on time was not due to excusable
negligence. This is clearly an exercise of power or authority which cannot be
controlled by a writ of mandamus. 11
x x x by
Furthermore, the petitioners do not dispute the fact that the Petition for Relief
from Judgment was not filed with the trial court within the reglementary
period, i.e., within sixty (60) days from the time the petitioners learned of the
judgment in question and not more than six (6) months after such judgment
was entered. 12 Although the petition was filed within six (6) months, it was
not within sixty (60) days from the time the petitioners learned of the
judgment, but only after 107 days. The absence of one of the two said periods
which are concurring elements precludes the petitioners from availing of the
Petition for Relief from Judgment.
In this instance, the remedy available to the petitioners is to appeal the denial
of their Petition for Relief from Judgment. As we held in De Jesus v. Domingo,
13 an order denying a petition for relief, being final, is appealable and may not
be corrected through the special civil action for certiorari and prohibition.
Specifically, Section 2, par. 2 of Rule 41 of the Revised Rules of Court, in part,
states:
A judgment denying relief under Rule 38 is subject to appeal, and in the course
thereof, a party may also assail the judgment on the merits, upon the ground
that it is not supported by the evidence or it is contrary to law.
Hence, we agree with the contention of the petitioners that it was the
ministerial duty of the trial court to approve the notice of appeal. It must be
observed that the petitioners had filed within the prescribed period a notice
of appeal on December 1, 1987 when the petition in question was denied by
the trial court in an order dated November 9, 1987, a copy of which was
received by the petitioners on November 27, 1987.
The refusal of the trial court, therefore, to accept the said notice filed by
petitioners in pursuance of their statutory right to appeal is clearly enforceable
mandamus.
Be that as it may, to remand the instant case to the respondent appellate court
for a review of its merits would be an exercise in futility. In its questioned
decision, the respondent appellate court nonetheless ruled on the merits of
the present controversy which we find to be adequately supported by the
evidence on record.
The petitioners, to be entitled to a Petition for Relief from Judgment, must not
only show excusable negligence but must likewise assert the facts constituting
their good and substantial cause of action. Still and all, considering the
evidence adduced by the petitioners, we see no reason to depart from the
well-grounded conclusion of the respondent appellate court finding the
appeal not meritorious for failure to establish both foregoing requisites. Thus:
x x x
. . . As it is known to them that their case was pending decision, a little
diligence, a little exercise of prudence, a little attention here and there, a little
haste made slowly ought to have alerted and urged them to see their lawyer
about their pending case before leaving for Manila. At the very least, to leave
instructions to their lawyer on what to do should the decision be adverse to
them. But they did not. The decision was rendered on March 21, 1987. By the
records their lawyer received it on March 31, 1987. They left on April 1, 1987.
There was time enough to save their case. Indeed, had they seen their lawyer
before they left they would have known that a decision adverse to them had
been rendered. Or, having left instructions, their lawyer could have appealed.
Negligence, to be EXCUSABLE, must be one which ordinary diligence and
prudence could not have guarded against.
The affidavit of Lina Mateo, Leon Mateo and Virgilio Gomintong which are
attached to the petition to show excusable negligence are too apt. They invite
serious doubt. Consider that Virgilio Gomintong, a distant neighbor, knew of
the arrival of the petitioners on April 25, 1987. It is obvious that he learned of
it only from a member of petitioners’ household. It followed that Lina Mateo,
a daughter who lives with her parents, knew of it. Why then would she (Lina
Mateo) leave for North Cotabato on April 24, 1987 for a vacation when her
parents were supposed to arrive on April 25, 1987 and leave the task of
meeting her parents to Virgilio who is not even a relative? Her alleged return
to Calamagoy on May 19, 1987 appears to this Court to be so carefully tailored
to fit the events. It has been said that evidence to be believed must not only
come from a credible witness; it must be believable in itself and must conform
to observable human behaviour. Moreover, despite the testimony of Virgilio
Gomintong, it is reasonable to believe that only Leon Mateo left for Manila, no
ticket having been presented to show that petitioner Ana Viloria Mateo also
made the trip." (Rollo, pp. 16-17).
We agree with the trial court’s findings that the negligence is not excusable to
justify the granting of a relief from the judgment, ordering the defendants
(petitioners) to vacate the premises. 14
x x x
Moreover, as the respondent court correctly observed, the petitioners did not
present any valid and sufficient cause of action to justify any relief from
judgment. Correctly the Court of Appeals ruled:
x x x
. . . Petitioners’ defense rests mainly on their allegation of "continuous
possession for 15 years." This is not a valid defense as against the plaintiffs’
rights over the property or owner with an indefeasible title. The land in
question is covered by Transfer Certificate of Title No. 9309 in the name of
plaintiff Julia Mateo, married to Francisco del Rosario. There can be no claim
of rights based on 15 years continuous possession if the land is registered
under the Torrens System in the name of another because the latter’s rights
are indefeasible as against the whole world. The transfer certificate of title
issued to the plaintiff is on February 21, 1956, bringing the land under the
operation of the Torrens System, confers on the plaintiffs an imprescriptible
title over such land after the lapse of one year from issuance thereof. 15
x x x
Indeed, the respondent court did not commit any reversible error.
WHEREFORE, the petition for review on certiorari is DENIED. Cost against the
petitioners.
SO ORDERED.
Melencio-Herrera, Paras, Padilla and Regalado, JJ., concur.
Case #10
EN BANC
G.R. No. L-26862 March 30, 1970
REPUBLIC OF THE PHILIPPINES, Plaintiff-Appellant, v.PHILIPPINE RABBIT BUS
LINES, INC., Defendant-Appellee.
Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General
Pacifico P. de Castro and Solicitor Enrique M. Reyes for plaintiff-appellant.
Angel A. Sison for defendant-appellee.
SYLLABI
Political law; Taxation; Back pay certificates; Payment of taxes; Use of backpay
certificate for payment of taxes does not extend to registration fees of motor
vehicles; Sec. 2 of Republic Act No. 304 as amended by Republic Act Nos. 800
and 897 interpreted.—While a holder of a backpay certificate may use it in the
payment of his taxes as authorized by law (Sec. 2 of RA 304 as amended), he
may not use it in payment of a registration fee under the Motor Vehicle Act
imposed under the police power. A registration fee is not a tax, hence the
inapplicability of Section 2 of the Back Pay Law.
Same; Public officers; Government is never estopped by mistake or error of its
agents.—The Government is never estopped by mistake or error on the part
of its agents. Hence, the mistake of the Collector in giving allowance to the
payment of a tax in a form not sanctioned by law, is at least prima, facie valid
only.
FERNANDO, J.:
The right of a holder of a backpay certificate to use the same in the payment
of his taxes has been recognized by law.1Necessarily, this Court, in Tirona v.
Cudiamat,2yielding obedience to such statutory prescription, saw nothing
objectionable in a taxpayer taking advantage of such a provision. That much is
clear; it is settled beyond doubt. What is involved in this appeal from a lower
court decision of November 24, 1965, dismissing a complaint by plaintiff-
appellant Republic of the Philippines, seeking the invalidation of the payment
by defendant-appellee Philippine Rabbit Bus Lines, Inc. for the registration
fees3of its motor vehicles in the sum of P78,636.17, in the form of such
negotiable backpay certificates of indebtedness, is the applicability of such a
provision to such a situation. The lower court held that it did. The Republic of
the Philippines appealed. While originally the matter was elevated to the Court
of Appeals, it was certified to us, the decisive issue being one of law. The
statute having restricted the privilege to the satisfaction of a tax, a liability for
fees under the police power being thus excluded from its benefits, we cannot
uphold the decision appealed from. We reverse.
The complaint of plaintiff-appellant Republic of the Philippines was filed on
January 17, 1963 alleging that defendant-appellee, as the registered owner of
two hundred thirty eight (238) motor vehicles, paid to the Motor Vehicles
Office in Baguio the amount of P78,636.17, corresponding to the second
installment of registration fees for 1959, not in cash but in the form of
negotiable certificate of indebtedness, the defendant being merely an
assignee and not the backpay holder itself. The complaint sought the payment
of such amount with surcharges plus the legal rate of interest from the filing
thereof and a declaration of the nullity of the use of such negotiable certificate
of indebtedness to satisfy its obligation. The answer by defendant-appellee,
filed on February 18, 1963, alleged that what it did was in accordance with law,
both the Treasurer of the Philippines and the General Auditing Office having
signified their conformity to such a mode of payment. It sought the dismissal
of the complaint.
After noting the respective theories of both parties in its pleadings, the lower
court, in its decision, stated that the issue before it "is whether or not the
acceptance of the negotiable certificates of indebtedness tendered by
defendant bus firms to and accepted by the Motor Vehicles Office of Baguio
City and the corresponding issuance of official receipts therefor
acknowledging such payment by said office is valid and binding on plaintiff
Republic."
In the decision now on appeal, the lower court, after referring to a
documentary evidence introduced by plaintiff-appellant continued: "From the
evidence adduced by defendant bus firm, it appears that as early as August 28,
1958, the National Treasurer upon whom devolves the function of
administering the Back Pay Law (Republic Act 304 as amended by Republic Act
Nos. 800 and 897), in his letter to the Chief of the Motor Vehicles Office who
in turn quoted and circularized same in his Circular No. 5 dated September 1,
1958, to draw the attention thereto of all Motor Vehicle Supervisors,
Registrars and employees ..., had approved the acceptance of negotiable
certificates of indebtedness in payment of registration fees of motor vehicles
with the view that such certificates 'should be accorded with the same
confidence by other governmental instrumentalities as other evidences of
public debt, such as bonds and treasury certificates'. Significantly, the Auditor
General concurred in the said view of the National Treasurer."
The argument of plaintiff-appellant that only the holders of the backpay
certificates themselves could apply the same to the payment of motor vehicle
registration fees did not find favor with the lower court. Thus, "[Plaintiff]
Republic urges that defendant bus firm being merely an assignee of the
negotiable certificates of indebtedness in question, it could not use the same
in payment of taxes. Such contention, this Court believes, runs counter to the
recitals appearing on the said certificates which states that 'the Republic of the
Philippines hereby acknowledges to (name) or assigns ...', legally allowing the
assignment of backpay rights."6
It therefore, as above noted, rendered judgment in favor of defendant-
appellee "upholding the validity and efficacy" of such payment made and
dismissing the complaint. Hence this appeal which, on the decisive legal issue
already set forth at the outset, we find meritorious.
1. If a registration fee were a tax, then what was done by defendant-appellee
was strictly in accordance with law and its nullity, as sought by plaintiff-
appellant Republic of the Philippines, cannot be decreed. But is it? The answer
to that question is decisive of this controversy. A tax refers to a financial
obligation imposed by a state on persons, whether natural or juridical, within
its jurisdiction, for property owned, income earned, business or profession
engaged in, or any such activity analogous in character for raising the
necessary revenues to take care of the responsibilities of government.7An
often-quoted definition is that of Cooley: "Taxes are the enforced proportional
contributions from persons and property levied by the state by virtue of its
sovereignty for the support of government and for all public needs."8
As distinguished from other pecuniary burdens, the differentiating factor is
that the purpose to be subserved is the raising of revenue. A tax then is neither
a penalty that must be satisfied or a liability arising from contract.9Much less
can it be confused or identified with a license or a fee as a manifestation of an
exercise of the police power. It has been settled law in this jurisdiction as far
back as Cu Unjieng v. Potstone, decided in 1962, 10 that this broad and all-
encompassing governmental competence to restrict rights of liberty and
property carries with it the undeniable power to collect a regulatory fee.
Unlike a tax, it has not for its object the raising of revenue but looks rather to
the enactment of specific measures that govern the relations not only as
between individuals but also as between private parties and the political
society. To quote from Cooley anew: "Legislation for these purposes it would
seem proper to look upon as being made in the exercise of that authority ...
spoken of as the police power." 11
The registration fee which defendant-appellee had to pay was imposed by
Section 8 of the Revised Motor Vehicle Law. 12 Its heading speaks of
"registration fees." The term is repeated four times in the body thereof.
Equally so, mention is made of the "fee for registration." 13 A subsection starts
with a categorical statement "No fees shall be charged." 14 The conclusion is
difficult to resist therefore that the Motor Vehicle Act requires the payment
not of a tax but of a registration fee under the police power. Hence the
inapplicability of the section relied upon by defendant-appellee under the
Back Pay Law. It is not held liable for a tax but for a registration fee. It therefore
cannot make use of a backpay certificate to meet such an obligation.
Any vestige of any doubt as to the correctness of the above conclusion should
be dissipated by Republic Act No. 5448. 15 A special science fund was thereby
created and its title expressly sets forth that a tax on privately-owned
passenger automobiles, motorcycles and scooters was imposed. The rates
thereof were provided for in its Section 3 which clearly specifies that
"additional tax" was to be paid as distinguished from the registration fee under
the Motor Vehicle Act. There cannot be any clearer expression therefore of
the legislative will, even on the assumption that the earlier legislation could be
stretching the point be susceptible of the interpretation that a tax rather than
a fee was levied. What is thus most apparent is that where the legislative body
relies on its authority to tax it expressly so states, and where it is enacting a
regulatory measure, it is equally explicit.
It may further be stated that a statute is meaningful not only by what it
includes but also by what it omits. What is left out is not devoid of significance.
As observed by Frankfurter: "An omission at the time of enactment, whether
careless or calculated, cannot be judicially supplied however much later
wisdom may recommend the inclusion. 16 In the light of this consideration,
the reversal of the appealed judgment is unavoidable.
2. In the brief for plaintiff-appellant Republic of the Philippines, filed by the
then Solicitor General, now Justice Antonio P. Barredo, the principal error
imputed to the trial court is its failure to hold that the Back Pay Law prohibits
an assignee, as is defendant-appellee, from using certificates of indebtedness
to pay their taxes. In view of the conclusion reached by us that the liability of
defendant-appellee under the Motor Vehicle Act does not arise under the
taxing power of the state, there is no need to pass upon this particular
question.
3. The Republic of the Philippines, in its brief, likewise assigned as error the
failure of the lower court to hold that estoppel does not lie against the
government for mistakes committed by its agents. As could be discerned from
an excerpt of the decision earlier referred to, the lower court was impressed
by the fact that the national treasurer to whom it correctly referred as being
vested with the function of administering the backpay law did in a
communication to the Motor Vehicles Office approve the acceptance of
negotiable certificate of indebtedness in payment of registration fees, a view
with which the Auditor General was in concurrence. The appealed decision
likewise noted: "By the testimonies of Pedro Flores, the then Registrar of the
Motor Vehicles Office of Baguio City and Casiano Catbagan, the Cashier of the
Bureau of Public Highways in the same city, defendant bus firm has
undisputedly shown that, after the said certificates of indebtedness were
properly indorsed in favor of the Motor Vehicles Office of Baguio City and
accepted by the Bureau of Public Highways on May 29, 1959, it was duly and
properly issued official receipts ... acknowledging full payment of its
registration fees for the second installment of 1959 of its 238 vehicles, and
that the Bureau of Public Highways, thru its collecting and disbursing officer,
was validly and regularly authorized to receive such payment."
Thus did the lower court, as pointed out by the then Solicitor General,
conclude that the government was bound by the mistaken interpretation
arrived at by the national treasurer and the auditor general. It would consider
estoppel as applicable. That is not the law. Estoppel does not lie. Such a
principle dates back to Aguinaldo de Romero v. Director of Lands, 18 a 1919
decision. Insofar as the taxing power is concerned, Pineda v. Court of First
Instance, a 1929 decision, speaks categorically: "The Government is never
estopped by mistake or error on the part of its agents. It follows that, in so far
as this record shows, the petitioners have not made it appear that the
additional tax claimed by the Collector is not in fact due and collectible. The
assessment of the tax by the Collector creates, it must be remembered, a
charge that is at least prima facie valid." 19 That principle has since been
subsequently followed. 20While the question here is one of the collection of a
regulatory fee under the police power, reliance on the above course of
decisions is not inappropriate. There is nothing to stand in the way, therefore,
of the collection of the registration fees from defendant-appellee.
WHEREFORE, the decision of November 24, 1965 is reversed and defendant-
appellee ordered to pay the sum of P78,636.17. With costs against defendant-
appellee.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Teehankee and Constitutional Law; Franchise; Public Utilities; Constitution does not require a
Villamor, JJ., concur. franchise before one can own the facilities needed to operate a public utility
so long as it does not operate them to serve the public.—The Constitution, in
Castro, J., concurs in the result. no uncertain terms, requires a franchise for the operation of a public utility.
However, it does not require a franchise before one can own the facilities
Barredo, J., took no part. needed to operate a public utility so long as it does not operate them to serve
the public.

Same; Same; Same; There is distinction between “operation” of a public utility

Case #11 and ownership of the facilities used to serve the public.—In law, there is a clear
distinction between the “operation” of a public utility and the ownership of
EN BANC
the facilities and equipment used to serve the public.

G.R. No. 114222 April 6, 1995

Same; Same; Same; Ownership Defined.—Ownership is defined as a relation
in law by virtue of which a thing pertaining to one person is completely
FRANCISCO S. TATAD, JOHN H. OSMENA and RODOLFO G. BIAZON, petitioners,
subjected to his will in everything not prohibited by law or the concurrence
vs.
with the rights of another (Tolentino, II Commentaries and Jurisprudence on
HON. JESUS B. GARCIA, JR., in his capacity as the Secretary of the Department
the Civil Code of the Philippines 45 [1992]).
of Transportation and Communications, and EDSA LRT CORPORATION,
LTD., respondents.
Same; Same; Same; The operation of a rail system as a public utility includes
the transportation of passengers from one point to another point, their
SYLLABI
loading and unloading at designated places and the movement of the trains at
prescheduled times.—The exercise of the rights encompassed in ownership is
Public Utilities; Administrative Law; What constitutes a public utility is not their
limited by law so that a property cannot be operated and used to serve the
ownership but their use to serve the public.—The phrasing of the question is
public as a public utility unless the operator has a franchise. The operation of
erroneous; it is loaded. What private respondent owns are the rail tracks,
a rail system as a public utility includes the transportation of passengers from
rolling stocks like the coaches, rail stations, terminals and the power plant, not
one point to another point, their loading and unloading at designated places
a public utility. While a franchise is needed to operate these facilities to serve
and the movement of the trains at prescheduled times (cf. Arizona Eastern R.R.
the public, they do not by themselves constitute a public utility. What
Co. v. J.A. Matthews, 20 Ariz 282, 180 P. 159, 7 A.L.R. 1149 [1919]; United
constitutes a public utility is not their ownership but their use to serve the
States Fire Ins. Co. v. Northern P.R. Co., 30 Wash 2d. 722, 193 P. 2d 868, 2
public (Iloilo Ice & Cold Storage Co. v. Public Service Board, 44 Phil. 551, 557-
A.L.R. 2d 1065 [1948]).
558 [1923]).
Same; Same; Same; Right to operate a public utility may exist independently
and separately from the ownership of the facilities thereof.—The right to
operate a public utility may exist independently and separately from the
ownership of the facilities thereof. One can own said facilities without
operating them as a public utility, or conversely, one may operate a public
utility without owning the facilities used to serve the public. The devotion of
property to serve the public may be done by the owner or by the person in
control thereof who may not necessarily be the owner thereof.
Same; Same; Same; Mere owner and lessor of the facilities used by a public
utility is not a public utility.—Indeed, a mere owner and lessor of the facilities
used by a public utility is not a public utility (Providence and W.R. Co. v. United
States, 46 F. 2d 149, 152 [1930]; Chippewa Power Co. v. Railroad Commission
of Wisconsin, 205 N.W. 900, 903, 188 Wis. 246 [1925]; Ellis v. Interstate
Commerce Commission, Ill. 35 S. Ct. 645, 646, 237 U.S. 434, 59 L. Ed. 1036
[1914]). Neither are owners of tank, refrigerator, wine, poultry and beer cars
who supply cars under contract to railroad companies considered as public
utilities (Crystal Car Line v. State Tax Commission, 174 P. 2d 984, 987 [1946]).
Same; Same; Same; Mere formation of public utility corporation does not ipso
facto characterize the corporation as one operating a public utility. It becomes
so when it applies for a franchise, certificate or any other form of authorization
for that purpose.—Even the mere formation of a public utility corporation
does not ipso facto characterize the corporation as one operating a public
utility. The moment for determining the requisite Filipino nationality is when
the entity applies for a franchise, certificate or any other form of authorization
for that purpose (People v. Quasha, 93 Phil. 333 [1953]).
Administrative Law; Public Utilities; Build-Operate-Transfer (BOT) Scheme;
Build-operate-and-transfer (BOT) scheme is defined as one where the
contractor undertakes the construction and financing of an infrastructure
facility, and operates and maintains the same.—The BOT scheme is expressly
defined as one where the contractor undertakes the construction and
financing of an infrastructure facility, and operates and maintains the same.
The contractor operates the facility for a fixed period during which it may
recover its expenses and investment in the project plus a reasonable rate of
return thereon. After the expiration of the agreed term, the contractor
transfers the ownership and operation of the project to the government.
Same; Same; Build-and-Transfer (BT) Scheme; In build-and-transfer (BT)
scheme, contractor undertakes the construction and financing of facility, but
after completion, ownership and operation thereof are turned over to the
government.—In the BT scheme, the contractor undertakes the construction
and financing of the facility, but after completion, the ownership and
operation thereof are turned over to the government. The government, in
turn, shall pay the contractor its local investment on the project in addition to
a reasonable rate of return. If payment is to be effected through amortization
payments by the government infrastructure agency or local government unit
concerned, this shall be made in accordance with a scheme proposed in the
bid and incorporated in the contract (R.A. No. 6957, Sec. 6).
Same; Same; BOT Scheme; Under the BOT scheme, owner of the infrastructure
facility must comply with the citizenship requirement under the
Constitution.—Emphasis must be made that under the BOT scheme, the
owner of the infrastructure facility must comply with the citizenship
requirement of the Constitution on the operation of a public utility. No such a
requirement is imposed in the BT scheme.
Same; Same; Contracts; Lease Purchase Agreement; Stipulation that title to
leased premises shall be transferred to the lessee at the end of the lease
period upon payment of agreed sum, the lease becomes a lease-purchase
agreement.—A lease is a contract where one of the parties binds himself to
give to another the enjoyment or use of a thing for a certain price and for a
period which may be definite or indefinite but not longer than 99 years (Civil
Code of the Philippines, Art. 1643). There is no transfer of ownership at the
end of the lease period. But if the parties stipulate that title to the leased
premises shall be transferred to the lessee at the end of the lease period upon
the payment of an agreed sum, the lease becomes a lease-purchase
agreement
Same; Same; Same; P.D. No. 1594; Section 5 of BOT Law in relation to
Presidential Decree No. 1594 allows the negotiated award of government
infrastructure projects.—Contrary to the comments of then Executive
Secretary Drilon, Section 5 of the BOT Law in relation to Presidential Decree
No. 1594 allows the negotiated award of government infrastructure projects.
Same; Same; Same; Same; P.D. No. 1594 is the general law on government
infrastructure contracts while BOT Law governs particular arrangements or
schemes aimed at encouraging private sector participation in government
infrastructure projects.—Indeed, where there is a lack of qualified bidders or
contractors, the award of government infrastructure contracts may be made
by negotiation. Presidential Decree No. 1594 is the general law on government
infrastructure contracts while the BOT Law governs particular arrangements
or schemes aimed at encouraging private sector participation in government
infrastructure projects. The two laws are not inconsistent with each other but
are in pari materia and should be read together accordingly.
Same; Same; Same; Same; Section 3 of R.A. 7718 authorizes government
infrastructure agencies, government-owned or controlled corporations and
local government units to enter into contract with any duly prequalified
proponent.—Petitioners’ claim that the BLT scheme and direct negotiation of
contracts are not contemplated by the BOT Law has now been rendered moot
and academic by R.A. No. 7718. Section 3 of this law authorizes all government
infrastructure agencies, government-owned and controlled corporations and
local government units to enter into contract with any duly prequalified
proponent for the financing, construction, operation and maintenance of any
financially viable infrastructure or development facility through a BOT, BT, BLT,
BOO (Build-own-and-operate), BTO (Build-transfer-and-operate), CAO
(Contract-add-operate), DOT (Develop-operate-and-transfer), ROT
(Rehabilitate-operate-and-transfer), and ROO (Rehabilitate-own-operate)
(R.A. No. 7718, Sec. 2 [b-j]).
Statutory Construction; Curative Statute; Curative statute makes valid that
which before enactment of the statute was invalid.—Republic Act No. 7718 is
a curative statute. It is intended to provide financial incentives and “a climate
of minimum government regulations and procedures and specific government
undertakings in support of the private sector” (Sec. 1). A curative statute
makes valid that which before enactment of the statute was invalid. Thus,
whatever doubts and alleged procedural lapses private respondent and DOTC
may have engendered and committed in entering into the questioned
contracts, these have now been cured by R.A. No. 7718 (cf. Development Bank
of the Philippines v. Court of Appeals, 96 SCRA 342 [1980]; Santos v. Duata, 14
SCRA 1041 [1965]; Adong v. Cheong Seng Gee, 43 Phil. 43 [1922]).
Public Officials; Regularity of Performance of Function; Government officials
are presumed to perform their functions with regularity and strong evidence
is necessary to rebut this presumption.—Government officials are presumed
to perform their functions with regularity and strong evidence is necessary to
rebut this presumption. Petitioners have not presented evidence on the
reasonable rentals to be paid by the parties to each other. The matter of
valuation is an esoteric field which is better left to the experts and which this
Court is not eager to undertake.
Administrative Law; Public Utilities; DOTC has the power, authority and
technical expertise to determine whether or not a specific transportation or
communications project is necessary, viable and beneficial to the people.—
Definitely, the agreements in question have been entered into by DOTC in the
exercise of its governmental function. DOTC is the primary policy, planning,
programming, regulating and administrative entity of the Executive branch of
government in the promotion, development and regulation of dependable
and coordinated networks of transportation and communications systems as
well as in the fast, safe, efficient and reliable postal, transportation and
communications services (Administrative Code of 1987, Book IV, Title XV, Sec.
2). It is the Executive department, DOTC in particular, that has the power,
authority and technical expertise to determine whether or not a specific
transportation or communications project is necessary, viable and beneficial
to the people. The discretion to award a contract is vested in the government
agencies entrusted with that function (Bureau Veritas v. Office of the
President, 205 SCRA 705 [1992]). Tatad vs. Garcia, Jr., 243 SCRA 436, G.R. No.
114222 April 6, 1995
QUIASON, J.:
This is a petition under Rule 65 of the Revised Rules of Court to prohibit
respondents from further implementing and enforcing the "Revised and
Restated Agreement to Build, Lease and Transfer a Light Rail Transit System
for EDSA" dated April 22, 1992, and the "Supplemental Agreement to the 22
April 1992 Revised and Restated Agreement To Build, Lease and Transfer a
Light Rail Transit System for EDSA" dated May 6, 1993.
Petitioners Francisco S. Tatad, John H. Osmena and Rodolfo G. Biazon are
members of the Philippine Senate and are suing in their capacities as Senators
and as taxpayers. Respondent Jesus B. Garcia, Jr. is the incumbent Secretary
of the Department of Transportation and Communications (DOTC), while
private respondent EDSA LRT Corporation, Ltd. is a private corporation
organized under the laws of Hongkong.
I of general circulation once a week for three consecutive weeks starting
In 1989, DOTC planned to construct a light railway transit line along EDSA, a
major thoroughfare in Metropolitan Manila, which shall traverse the cities of
Pasay, Quezon, Mandaluyong and Makati. The plan, referred to as EDSA Light
Rail Transit III (EDSA LRT III), was intended to provide a mass transit system
along EDSA and alleviate the congestion and growing transportation problem
in the metropolis.
On March 3, 1990, a letter of intent was sent by the Eli Levin Enterprises, Inc.,
represented by Elijahu Levin to DOTC Secretary Oscar Orbos, proposing to
construct the EDSA LRT III on a Build-Operate-Transfer (BOT) basis.
On March 15, 1990, Secretary Orbos invited Levin to send a technical team to
discuss the project with DOTC.
On July 9, 1990, Republic Act No. 6957 entitled "An Act Authorizing the
Financing, Construction, Operation and Maintenance of Infrastructure
Projects by the Private Sector, and For Other Purposes," was signed by
President Corazon C. Aquino. Referred to as the Build-Operate-Transfer (BOT)
Law, it took effect on October 9, 1990.
Republic Act No. 6957 provides for two schemes for the financing,
construction and operation of government projects through private initiative
and investment: Build-Operate-Transfer (BOT) or Build-Transfer (BT).
In accordance with the provisions of R.A. No. 6957 and to set the EDSA LRT III
project underway, DOTC, on January 22, 1991 and March 14, 1991, issued
Department Orders Nos. 91-494 and 91-496, respectively creating the
Prequalification Bids and Awards Committee (PBAC) and the Technical
Committee.
After its constitution, the PBAC issued guidelines for the prequalification of
contractors for the financing and implementation of the project The notice,
advertising the prequalification of bidders, was published in three newspapers
February 21, 1991.
The deadline set for submission of prequalification documents was March 21,
1991, later extended to April 1, 1991. Five groups responded to the invitation
namely, ABB Trazione of Italy, Hopewell Holdings Ltd. of Hongkong, Mansteel
International of Mandaue, Cebu, Mitsui & Co., Ltd. of Japan, and EDSA LRT
Consortium, composed of ten foreign and domestic corporations: namely,
Kaiser Engineers International, Inc., ACER Consultants (Far East) Ltd. and
Freeman Fox, Tradeinvest/CKD Tatra of the Czech and Slovak Federal
Republics, TCGI Engineering All Asia Capital and Leasing Corporation, The Salim
Group of Jakarta, E. L. Enterprises, Inc., A.M. Oreta & Co. Capitol Industrial
Construction Group, Inc, and F. F. Cruz & co., Inc.
On the last day for submission of prequalification documents, the
prequalification criteria proposed by the Technical Committee were adopted
by the PBAC. The criteria totalling 100 percent, are as follows: (a) Legal aspects
— 10 percent; (b) Management/Organizational capability — 30 percent; and
(c) Financial capability — 30 percent; and (d) Technical capability — 30 percent
(Rollo, p. 122).
On April 3, 1991, the Committee, charged under the BOT Law with the
formulation of the Implementation Rules and Regulations thereof, approved
the same.
After evaluating the prequalification, bids, the PBAC issued a Resolution on
May 9, 1991 declaring that of the five applicants, only the EDSA LRT
Consortium "met the requirements of garnering at least 21 points per criteria
[sic], except for Legal Aspects, and obtaining an over-all passing mark of at
least 82 points" (Rollo, p. 146). The Legal Aspects referred to provided that the
BOT/BT contractor-applicant meet the requirements specified in the
Constitution and other pertinent laws (Rollo, p. 114).
Subsequently, Secretary Orbos was appointed Executive Secretary to the
President of the Philippines and was replaced by Secretary Pete Nicomedes
Prado. The latter sent to President Aquino two letters dated May 31, 1991 and
June 14, 1991, respectively recommending the award of the EDSA LRT III
project to the sole complying bidder, the EDSA LRT Consortium, and
requesting for authority to negotiate with the said firm for the contract
pursuant to paragraph 14(b) of the Implementing Rules and Regulations of the
BOT Law (Rollo, pp. 298-302).
In July 1991, Executive Secretary Orbos, acting on instructions of the President,
issued a directive to the DOTC to proceed with the negotiations. On July 16,
1991, the EDSA LRT Consortium submitted its bid proposal to DOTC.
Finding this proposal to be in compliance with the bid requirements, DOTC and
respondent EDSA LRT Corporation, Ltd., in substitution of the EDSA LRT
Consortium, entered into an "Agreement to Build, Lease and Transfer a Light
Rail Transit System for EDSA" under the terms of the BOT Law (Rollo, pp. 147-
177).
Secretary Prado, thereafter, requested presidential approval of the contract.
In a letter dated March 13, 1992, Executive Secretary Franklin Drilon, who
replaced Executive Secretary Orbos, informed Secretary Prado that the
President could not grant the requested approval for the following reasons:
(1) that DOTC failed to conduct actual public bidding in compliance with
Section 5 of the BOT Law; (2) that the law authorized public bidding as the only
mode to award BOT projects, and the prequalification proceedings was not
the public bidding contemplated under the law; (3) that Item 14 of the
Implementing Rules and Regulations of the BOT Law which authorized
negotiated award of contract in addition to public bidding was of doubtful
legality; and (4) that congressional approval of the list of priority projects
under the BOT or BT Scheme provided in the law had not yet been granted at
the time the contract was awarded (Rollo, pp. 178-179).
In view of the comments of Executive Secretary Drilon, the DOTC and private
respondents re-negotiated the agreement. On April 22, 1992, the parties
entered into a "Revised and Restated Agreement to Build, Lease and Transfer
a Light Rail Transit System for EDSA" (Rollo, pp. 47-78) inasmuch as "the parties
[are] cognizant of the fact the DOTC has full authority to sign the Agreement
without need of approval by the President pursuant to the provisions of
Executive Order No. 380 and that certain events [had] supervened since
November 7, 1991 which necessitate[d] the revision of the Agreement" (Rollo,
p. 51). On May 6, 1992, DOTC, represented by Secretary Jesus
Garcia vice Secretary Prado, and private respondent entered into a
"Supplemental Agreement to the 22 April 1992 Revised and Restated
Agreement to Build, Lease and Transfer a Light Rail Transit System for EDSA"
so as to "clarify their respective rights and responsibilities" and to submit [the]
Supplemental Agreement to the President, of the Philippines for his approval"
(Rollo, pp. 79-80).
Secretary Garcia submitted the two Agreements to President Fidel V. Ramos
for his consideration and approval. In a Memorandum to Secretary Garcia on
May 6, 1993, approved the said Agreements, (Rollo, p. 194).
According to the agreements, the EDSA LRT III will use light rail vehicles from
the Czech and Slovak Federal Republics and will have a maximum carrying
capacity of 450,000 passengers a day, or 150 million a year to be achieved- effect 15 days thereafter or on May 28, 1994. The law expressly recognizes
through 54 such vehicles operating simultaneously. The EDSA LRT III will run BLT scheme and allows direct negotiation of BLT contracts.
at grade, or street level, on the mid-section of EDSA for a distance of 17.8
kilometers from F.B. Harrison, Pasay City to North Avenue, Quezon City. The II
system will have its own power facility (Revised and Restated Agreement, Sec.
2.3 (ii); Rollo p. 55). It will also have thirteen (13) passenger stations and one In their petition, petitioners argued that:
depot in 16-hectare government property at North Avenue (Supplemental
Agreement, Sec. 11; Rollo, pp. 91-92). (1) THE AGREEMENT OF APRIL 22, 1992, AS AMENDED BY THE
SUPPLEMENTAL AGREEMENT OF MAY 6, 1993, INSOFAR AS IT GRANTS
Private respondents shall undertake and finance the entire project required EDSA LRT CORPORATION, LTD., A FOREIGN CORPORATION, THE
for a complete operational light rail transit system (Revised and Restated OWNERSHIP OF EDSA LRT III, A PUBLIC UTILITY, VIOLATES THE
Agreement, Sec. 4.1; Rollo, p. 58). Target completion date is 1,080 days or CONSTITUTION AND, HENCE, IS UNCONSTITUTIONAL;
approximately three years from the implementation date of the contract
inclusive of mobilization, site works, initial and final testing of the system (2) THE BUILD-LEASE-TRANSFER SCHEME PROVIDED IN THE
(Supplemental Agreement, Sec. 5; Rollo, p. 83). Upon full or partial completion AGREEMENTS IS NOT DEFINED NOR RECOGNIZED IN R.A. NO. 6957 OR ITS
and viability thereof, private respondent shall deliver the use and possession IMPLEMENTING RULES AND REGULATIONS AND, HENCE, IS ILLEGAL;
of the completed portion to DOTC which shall operate the same
(3) THE AWARD OF THE CONTRACT ON A NEGOTIATED BASIS VIOLATES R;
(Supplemental Agreement, Sec. 5; Revised and Restated Agreement, Sec.
A. NO. 6957 AND, HENCE, IS UNLAWFUL;
5.1; Rollo, pp. 61-62, 84). DOTC shall pay private respondent rentals on a
monthly basis through an Irrevocable Letter of Credit. The rentals shall be
(4) THE AWARD OF THE CONTRACT IN FAVOR OF RESPONDENT EDSA LRT
determined by an independent and internationally accredited inspection firm
CORPORATION, LTD. VIOLATES THE REQUIREMENTS PROVIDED IN THE
to be appointed by the parties (Supplemental Agreement, Sec. 6; Rollo, pp. 85-
IMPLEMENTING RULES AND REGULATIONS OF THE BOT LAW AND,
86) As agreed upon, private respondent's capital shall be recovered from the
HENCE, IS ILLEGAL;
rentals to be paid by the DOTC which, in turn, shall come from the earnings of
the EDSA LRT III (Revised and Restated Agreement, Sec. 1, p. 5; Rollo, p. 54).
(5) THE AGREEMENTS VIOLATE EXECUTIVE ORDER NO 380 FOR THEIR
After 25 years and DOTC shall have completed payment of the rentals,
FAILURE TO BEAR PRESIDENTIAL APPROVAL AND, HENCE, ARE ILLEGAL
ownership of the project shall be transferred to the latter for a consideration
AND INEFFECTIVE; AND
of only U.S. $1.00 (Revised and Restated Agreement, Sec. 11.1; Rollo, p. 67).
(6) THE AGREEMENTS ARE GROSSLY DISADVANTAGEOUS TO THE
On May 5, 1994, R.A. No. 7718, an "Act Amending Certain Sections of Republic
GOVERNMENT (Rollo, pp. 15-16).
Act No. 6957, Entitled "An Act Authorizing the Financing, Construction,
Operation and Maintenance of Infrastructure Projects by the Private Sector, Secretary Garcia and private respondent filed their comments separately and
and for Other Purposes" was signed into law by the President. The law was claimed that:
published in two newspapers of general circulation on May 12, 1994, and took
(1) Petitioners are not the real parties-in-interest and have no legal standing
to institute the present petition;
(2) The writ of prohibition is not the proper remedy and the petition requires
ascertainment of facts;
(3) The scheme adopted in the Agreements is actually a build-transfer scheme
allowed by the BOT Law;
(4) The nationality requirement for public utilities mandated by the
Constitution does not apply to private respondent;
(5) The Agreements executed by and between respondents have been
approved by President Ramos and are not disadvantageous to the
government;
(6) The award of the contract to private respondent through negotiation and
not public bidding is allowed by the BOT Law; and
(7) Granting that the BOT Law requires public bidding, this has been amended
by R.A No. 7718 passed by the Legislature On May 12, 1994, which provides
for direct negotiation as a mode of award of infrastructure projects.
III
Respondents claimed that petitioners had no legal standing to initiate the
instant action. Petitioners, however, countered that the action was filed by
them in their capacity as Senators and as taxpayers.
The prevailing doctrines in taxpayer's suits are to allow taxpayers to question
contracts entered into by the national government or government-owned or
controlled corporations allegedly in contravention of the law (Kilosbayan, Inc.
v. Guingona, 232 SCRA 110 [1994]) and to disallow the same when only
municipal contracts are involved (Bugnay Construction and Development
Corporation v. Laron, 176 SCRA. 240 [1989]).
For as long as the ruling in Kilosbayan on locus standi is not reversed, we have
no choice but to follow it and uphold the legal standing of petitioners as
taxpayers to institute the present action.
IV
In the main, petitioners asserted that the Revised and Restated Agreement of
April 22, 1992 and the Supplemental Agreement of May 6, 1993 are
unconstitutional and invalid for the following reasons:
(1) the EDSA LRT III is a public utility, and the ownership and operation
thereof is limited by the Constitution to Filipino citizens and domestic
corporations, not foreign corporations like private respondent;
(2) the Build-Lease-Transfer (BLT) scheme provided in the agreements
is not the BOT or BT Scheme under the law;
(3) the contract to construct the EDSA LRT III was awarded to private
respondent not through public bidding which is the only mode of
awarding infrastructure projects under the BOT law; and
(4) the agreements are grossly disadvantageous to the government.
1. Private respondent EDSA LRT Corporation, Ltd. to whom the contract to
construct the EDSA LRT III was awarded by public respondent, is admittedly a
foreign corporation "duly incorporated and existing under the laws of
Hongkong" (Rollo, pp. 50, 79). There is also no dispute that once the EDSA LRT
III is constructed, private respondent, as lessor, will turn it over to DOTC, as
lessee, for the latter to operate the system and pay rentals for said use.
The question posed by petitioners is:
Can respondent EDSA LRT Corporation, Ltd., a foreign corporation own
EDSA LRT III; a public utility? (Rollo, p. 17).
The phrasing of the question is erroneous; it is loaded. What private
respondent owns are the rail tracks, rolling stocks like the coaches, rail
stations, terminals and the power plant, not a public utility. While a franchise
is needed to operate these facilities to serve the public, they do not by
themselves constitute a public utility. What constitutes a public utility is not
their ownership but their use to serve the public (Iloilo Ice & Cold Storage Co.
v. Public Service Board, 44 Phil. 551, 557 558 [1923]).
The Constitution, in no uncertain terms, requires a franchise for the operation
of a public utility. However, it does not require a franchise before one can own
the facilities needed to operate a public utility so long as it does not operate
them to serve the public.
Section 11 of Article XII of the Constitution provides:
No franchise, certificate or any other form of authorization for
the operation of a public utility shall be granted except to citizens of the
Philippines or to corporations or associations organized under the laws of
the Philippines at least sixty per centum of whose capital is owned by such
citizens, nor shall such franchise, certificate or authorization be exclusive
character or for a longer period than fifty years . . . (Emphasis supplied).
In law, there is a clear distinction between the "operation" of a public utility
and the ownership of the facilities and equipment used to serve the public.
Ownership is defined as a relation in law by virtue of which a thing pertaining
to one person is completely subjected to his will in everything not prohibited
by law or the concurrence with the rights of another (Tolentino, II
Commentaries and Jurisprudence on the Civil Code of the Philippines 45
[1992]).
The exercise of the rights encompassed in ownership is limited by law so that
a property cannot be operated and used to serve the public as a public utility
unless the operator has a franchise. The operation of a rail system as a public
utility includes the transportation of passengers from one point to another
point, their loading and unloading at designated places and the movement of
the trains at pre-scheduled times (cf. Arizona Eastern R.R. Co. v. J.A..
Matthews, 20 Ariz 282, 180 P.159, 7 A.L.R. 1149 [1919] ;United States Fire Ins.
Co. v. Northern P.R. Co., 30 Wash 2d. 722, 193 P. 2d 868, 2 A.L.R. 2d 1065
[1948]).
The right to operate a public utility may exist independently and separately
from the ownership of the facilities thereof. One can own said facilities without
operating them as a public utility, or conversely, one may operate a public
utility without owning the facilities used to serve the public. The devotion of
property to serve the public may be done by the owner or by the person in
control thereof who may not necessarily be the owner thereof.
This dichotomy between the operation of a public utility and the ownership of
the facilities used to serve the public can be very well appreciated when we
consider the transportation industry. Enfranchised airline and shipping
companies may lease their aircraft and vessels instead of owning them
themselves.
While private respondent is the owner of the facilities necessary to operate
the EDSA. LRT III, it admits that it is not enfranchised to operate a public utility
(Revised and Restated Agreement, Sec. 3.2; Rollo, p. 57). In view of this
incapacity, private respondent and DOTC agreed that on completion date,
private respondent will immediately deliver possession of the LRT system by
way of lease for 25 years, during which period DOTC shall operate the same as
a common carrier and private respondent shall provide technical maintenance
and repair services to DOTC (Revised and Restated Agreement, Secs. 3.2, 5.1
and 5.2; Rollo, pp. 57-58, 61-62). Technical maintenance consists of providing
(1) repair and maintenance facilities for the depot and rail lines, services for
routine clearing and security; and (2) producing and distributing maintenance
manuals and drawings for the entire system (Revised and Restated
Agreement, Annex F).
Private respondent shall also train DOTC personnel for familiarization with the
operation, use, maintenance and repair of the rolling stock, power plant,
substations, electrical, signaling, communications and all other equipment as
supplied in the agreement (Revised and Restated Agreement, Sec. 10; Rollo,
pp. 66-67). Training consists of theoretical and live training of DOTC
operational personnel which includes actual driving of light rail vehicles under
simulated operating conditions, control of operations, dealing with
emergencies, collection, counting and securing cash from the fare collection
system (Revised and Restated Agreement, Annex E, Secs. 2-3). Personnel of
DOTC will work under the direction and control of private respondent only
during training (Revised and Restated Agreement, Annex E, Sec. 3.1). The
training objectives, however, shall be such that upon completion of the EDSA
LRT III and upon opening of normal revenue operation, DOTC shall have in their
employ personnel capable of undertaking training of all new and replacement
personnel (Revised and Restated Agreement, Annex E Sec. 5.1). In other
words, by the end of the three-year construction period and upon
commencement of normal revenue operation, DOTC shall be able to operate
the EDSA LRT III on its own and train all new personnel by itself.
Fees for private respondent' s services shall be included in the rent, which
likewise includes the project cost, cost of replacement of plant equipment and
spare parts, investment and financing cost, plus a reasonable rate of return
thereon (Revised and Restated Agreement, Sec. 1; Rollo, p. 54).
Since DOTC shall operate the EDSA LRT III, it shall assume all the obligations
and liabilities of a common carrier. For this purpose, DOTC shall indemnify and
hold harmless private respondent from any losses, damages, injuries or death
which may be claimed in the operation or implementation of the system,
except losses, damages, injury or death due to defects in the EDSA LRT III on
account of the defective condition of equipment or facilities or the defective
maintenance of such equipment facilities (Revised and Restated Agreement,
Secs. 12.1 and 12.2; Rollo, p. 68).
In sum, private respondent will not run the light rail vehicles and collect fees
from the riding public. It will have no dealings with the public and the public
will have no right to demand any services from it.
It is well to point out that the role of private respondent as lessor during the
lease period must be distinguished from the role of the Philippine Gaming
Management Corporation (PGMC) in the case of Kilosbayan Inc. v. Guingona,
232 SCRA 110 (1994). Therein, the Contract of Lease between PGMC and the
Philippine Charity Sweepstakes Office (PCSO) was actually a collaboration or
joint venture agreement prescribed under the charter of the PCSO. In the
Contract of Lease; PGMC, the lessor obligated itself to build, at its own
expense, all the facilities necessary to operate and maintain a nationwide on-
line lottery system from whom PCSO was to lease the facilities and operate the
same. Upon due examination of the contract, the Court found that PGMC's
participation was not confined to the construction and setting up of the on-
line lottery system. It spilled over to the actual operation thereof, becoming
indispensable to the pursuit, conduct, administration and control of the highly
technical and sophisticated lottery system. In effect, the PCSO leased out its
franchise to PGMC which actually operated and managed the same.
Indeed, a mere owner and lessor of the facilities used by a public utility is not
a public utility (Providence and W.R. Co. v. United States, 46 F. 2d 149, 152
[1930]; Chippewa Power Co. v. Railroad Commission of Wisconsin, 205 N.W.
900, 903, 188 Wis. 246 [1925]; Ellis v. Interstate Commerce Commission, Ill 35
S. Ct. 645, 646, 237 U.S. 434, 59 L. Ed. 1036 [1914]). Neither are owners of
tank, refrigerator, wine, poultry and beer cars who supply cars under contract
to railroad companies considered as public utilities (Crystal Car Line v. State
Tax Commission, 174 p. 2d 984, 987 [1946]).
Even the mere formation of a public utility corporation does not ipso
facto characterize the corporation as one operating a public utility. The
moment for determining the requisite Filipino nationality is when the entity
applies for a franchise, certificate or any other form of authorization for that
purpose (People v. Quasha, 93 Phil. 333 [1953]).
2. Petitioners further assert that the BLT scheme under the Agreements in
question is not recognized in the BOT Law and its Implementing Rules and
Regulations.
Section 2 of the BOT Law defines the BOT and BT schemes as follows:
(a) Build-operate-and-transfer scheme — A contractual arrangement
whereby the contractor undertakes the construction including financing,
of a given infrastructure facility, and the operation and maintenance
thereof. The contractor operates the facility over a fixed term during
which it is allowed to charge facility users appropriate tolls, fees, rentals
and charges sufficient to enable the contractor to recover its operating
and maintenance expenses and its investment in the project plus a
reasonable rate of return thereon. The contractor transfers the facility to
the government agency or local government unit concerned at the end
of the fixed term which shall not exceed fifty (50) years. For the
construction stage, the contractor may obtain financing from foreign
and/or domestic sources and/or engage the services of a foreign and/or
Filipino constructor [sic]: Provided, That the ownership structure of the
contractor of an infrastructure facility whose operation requires a public
utility franchise must be in accordance with the Constitution: Provided,
however, That in the case of corporate investors in the build-operate-
and-transfer corporation, the citizenship of each stockholder in the
corporate investors shall be the basis for the computation of Filipino
equity in the said corporation: Provided, further, That, in the case of
foreign constructors [sic], Filipino labor shall be employed or hired in the
different phases of the construction where Filipino skills are available:
Provided, furthermore, that the financing of a foreign or foreign-
controlled contractor from Philippine government financing institutions
shall not exceed twenty percent (20%) of the total cost of the
infrastructure facility or project: Provided, finally, That financing from
foreign sources shall not require a guarantee by the Government or by
government-owned or controlled corporations. The build-operate-and-
transfer scheme shall include a supply-and-operate situation which is a
contractual agreement whereby the supplier of equipment and
machinery for a given infrastructure facility, if the interest of the
Government so requires, operates the facility providing in the process
technology transfer and training to Filipino nationals.
(b) Build-and-transfer scheme — "A contractual arrangement whereby
the contractor undertakes the construction including financing, of a given
infrastructure facility, and its turnover after completion to the
government agency or local government unit concerned which shall pay
the contractor its total investment expended on the project, plus a
reasonable rate of return thereon. This arrangement may be employed in
the construction of any infrastructure project including critical facilities
which for security or strategic reasons, must be operated directly by the
government (Emphasis supplied).
The BOT scheme is expressly defined as one where the contractor undertakes
the construction and financing in infrastructure facility, and operates and
maintains the same. The contractor operates the facility for a fixed period
during which it may recover its expenses and investment in the project plus a
reasonable rate of return thereon. After the expiration of the agreed term, the
contractor transfers the ownership and operation of the project to the
government.
In the BT scheme, the contractor undertakes the construction and financing of
the facility, but after completion, the ownership and operation thereof are
turned over to the government. The government, in turn, shall pay the
contractor its total investment on the project in addition to a reasonable rate
of return. If payment is to be effected through amortization payments by the
government infrastructure agency or local government unit concerned, this
shall be made in accordance with a scheme proposed in the bid and
incorporated in the contract (R.A. No. 6957, Sec. 6).
Emphasis must be made that under the BOT scheme, the owner of the
infrastructure facility must comply with the citizenship requirement of the
Constitution on the operation of a public utility. No such a requirement is
imposed in the BT scheme.
There is no mention in the BOT Law that the BOT and BT schemes bar any
other arrangement for the payment by the government of the project cost.
The law must not be read in such a way as to rule out or unduly restrict any
variation within the context of the two schemes. Indeed, no statute can be
enacted to anticipate and provide all the fine points and details for the
multifarious and complex situations that may be encountered in enforcing the
law (Director of Forestry v. Munoz, 23 SCRA 1183 [1968]; People v. Exconde,
101 Phil. 1125 [1957]; United States v. Tupasi Molina, 29 Phil. 119 [1914]).
The BLT scheme in the challenged agreements is but a variation of the BT
scheme under the law.
As a matter of fact, the burden on the government in raising funds to pay for
the project is made lighter by allowing it to amortize payments out of the
income from the operation of the LRT System.
In form and substance, the challenged agreements provide that rentals are to
be paid on a monthly basis according to a schedule of rates through and under
the terms of a confirmed Irrevocable Revolving Letter of Credit (Supplemental
Agreement, Sec. 6; Rollo, p. 85). At the end of 25 years and when full payment
shall have been made to and received by private respondent, it shall transfer
to DOTC, free from any lien or encumbrances, all its title to, rights and interest
in, the project for only U.S. $1.00 (Revised and Restated Agreement, Sec. 11.1;
Supplemental Agreement, Sec; 7; Rollo, pp. 67, .87).
A lease is a contract where one of the parties binds himself to give to another
the enjoyment or use of a thing for a certain price and for a period which may
be definite or indefinite but not longer than 99 years (Civil Code of the
Philippines, Art. 1643). There is no transfer of ownership at the end of the
lease period. But if the parties stipulate that title to the leased premises shall
be transferred to the lessee at the end of the lease period upon the payment
of an agreed sum, the lease becomes a lease-purchase agreement.
Furthermore, it is of no significance that the rents shall be paid in United States
currency, not Philippine pesos. The EDSA LRT III Project is a high priority project
certified by Congress and the National Economic and Development Authority
as falling under the Investment Priorities Plan of Government (Rollo, pp. 310-
311). It is, therefore, outside the application of the Uniform Currency Act (R.A.
No. 529), which reads as follows:
Sec. 1. — Every provision contained in, or made with respect to, any
domestic obligation to wit, any obligation contracted in the Philippines
which provisions purports to give the obligee the right to require
payment in gold or in a particular kind of coin or currency other than
Philippine currency or in an amount of money of the Philippines
measured thereby, be as it is hereby declared against public policy, and
null, void, and of no effect, and no such provision shall be contained in,
or made with respect to, any obligation hereafter incurred. The above
prohibition shall not apply to (a) . . .; (b) transactions affecting high-
priority economic projects for agricultural, industrial and power
development as may be determined by
the National Economic Council which are financed by or through foreign
funds; . . . .
3. The fact that the contract for the construction of the EDSA LRT III was
awarded through negotiation and before congressional approval on January
22 and 23, 1992 of the List of National Projects to be undertaken by the private
sector pursuant to the BOT Law (Rollo, pp. 309-312) does not suffice to
invalidate the award.
Subsequent congressional approval of the list including "rail-based projects
packaged with commercial development opportunities" (Rollo, p. 310) under
which the EDSA LRT III projects falls, amounts to a ratification of the prior
award of the EDSA LRT III contract under the BOT Law.
Petitioners insist that the prequalifications process which led to the negotiated
award of the contract appears to have been rigged from the very beginning to
do away with the usual open international public bidding where qualified
internationally known applicants could fairly participate.
The records show that only one applicant passed the prequalification process.
Since only one was left, to conduct a public bidding in accordance with Section
5 of the BOT Law for that lone participant will be an absurb and pointless
exercise (cf. Deloso v. Sandiganbayan, 217 SCRA 49, 61 [1993]).
Contrary to the comments of the Executive Secretary Drilon, Section 5 of the
BOT Law in relation to Presidential Decree No. 1594 allows the negotiated
award of government infrastructure projects.
Presidential Decree No. 1594, "Prescribing Policies, Guidelines, Rules and
Regulations for Government Infrastructure Contracts," allows the negotiated
award of government projects in exceptional cases. Sections 4 of the said law
reads as follows:
Bidding. — Construction projects shall generally be undertaken by
contract after competitive public bidding. Projects may be undertaken
by administration or force account or by negotiated contract only in
exceptional cases where time is of the essence, or where there is lack
of qualified bidders or contractors, or where there is conclusive
evidence that greater economy and efficiency would be achieved
through this arrangement, and in accordance with provision of laws
and acts on the matter, subject to the approval of the Minister of
Public Works and Transportation and Communications, the Minister
of Public Highways, or the Minister of Energy, as the case may be, if
the project cost is less than P1 Million, and the President of the
Philippines, upon recommendation of the Minister, if the project cost
is P1 Million or more (Emphasis supplied).
xxx xxx xxx
Indeed, where there is a lack of qualified bidders or contractors, the award of
government infrastructure contracts may he made by negotiation. Presidential
Decree No. 1594 is the general law on government infrastructure contracts
while the BOT Law governs particular arrangements or schemes aimed at
encouraging private sector participation in government infrastructure
projects. The two laws are not inconsistent with each other but are in pari
materia and should be read together accordingly.
In the instant case, if the prequalification process was actually tainted by foul
play, one wonders why none of the competing firms ever brought the matter
before the PBAC, or intervened in this case before us (cf. Malayan Integrated
Industries Corp. v. Court of Appeals, 213 SCRA 640 [1992]; Bureau Veritas v.
Office of the President, 205 SCRA 705 [1992]).
The challenged agreements have been approved by President Ramos himself.
Although then Executive Secretary Drilon may have disapproved the
"Agreement to Build, Lease and Transfer a Light Rail Transit System for EDSA,"
there is nothing in our laws that prohibits parties to a contract from
renegotiating and modifying in good faith the terms and conditions thereof so
as to meet legal, statutory and constitutional requirements. Under the
circumstances, to require the parties to go back to step one of the
prequalification process would just be an idle ceremony. Useless bureaucratic
"red tape" should be eschewed because it discourages private sector
participation, the "main engine" for national growth and development (R.A.
No. 6957, Sec. 1), and renders the BOT Law nugatory.
Republic Act No. 7718 recognizes and defines a BLT scheme in Section 2
thereof as:
(e) Build-lease-and-transfer — A contractual arrangement whereby a
project proponent is authorized to finance and construct an
infrastructure or development facility and upon its completion turns it
over to the government agency or local government unit concerned on
a lease arrangement for a fixed period after which ownership of the
facility is automatically transferred to the government unit concerned.
Section 5-A of the law, which expressly allows direct negotiation of contracts,
provides:
Direct Negotiation of Contracts. — Direct negotiation shall be resorted
to when there is only one complying bidder left as defined hereunder.
 (a) If, after advertisement, only one contractor applies for
prequalification and it meets the prequalification requirements, after
which it is required to submit a bid proposal which is subsequently
found by the agency/local government unit (LGU) to be complying.
(b) If, after advertisement, more than one contractor applied for
prequalification but only one meets the prequalification
requirements, after which it submits bid/proposal which is found by
the agency/local government unit (LGU) to be complying.
(c) If, after prequalification of more than one contractor only one
submits a bid which is found by the agency/LGU to be complying.
(d) If, after prequalification, more than one contractor submit bids but
only one is found by the agency/LGU to be complying. Provided, That,
any of the disqualified prospective bidder [sic] may appeal the decision
of the implementing agency, agency/LGUs prequalification bids and
awards committee within fifteen (15) working days to the head of the
agency, in case of national projects or to the Department of the
Interior and Local Government, in case of local projects from the date
the disqualification was made known to the disqualified bidder:
Provided, furthermore, That the implementing agency/LGUs
concerned should act on the appeal within forty-five (45) working days
from receipt thereof.
Petitioners' claim that the BLT scheme and direct negotiation of contracts are
not contemplated by the BOT Law has now been rendered moot and academic
by R.A. No. 7718. Section 3 of this law authorizes all government infrastructure
agencies, government-owned and controlled corporations and local
government units to enter into contract with any duly prequalified proponent
for the financing, construction, operation and maintenance of any financially
viable infrastructure or development facility through a BOT, BT, BLT, BOO
(Build-own-and-operate), CAO (Contract-add-operate), DOT (Develop-
operate-and-transfer), ROT (Rehabilitate-operate-and-transfer), and ROO
(Rehabilitate-own-operate) (R.A. No. 7718, Sec. 2 [b-j]).
From the law itself, once and applicant has prequalified, it can enter into any
of the schemes enumerated in Section 2 thereof, including a BLT arrangement,
enumerated and defined therein (Sec. 3).
Republic Act No. 7718 is a curative statute. It is intended to provide financial
incentives and "a climate of minimum government regulations and procedures
and specific government undertakings in support of the private sector" (Sec.
1). A curative statute makes valid that which before enactment of the statute
was invalid. Thus, whatever doubts and alleged procedural lapses private
respondent and DOTC may have engendered and committed in entering into
the questioned contracts, these have now been cured by R.A. No. 7718
(cf. Development Bank of the Philippines v. Court of Appeals, 96 SCRA 342
[1980]; Santos V. Duata, 14 SCRA 1041 [1965]; Adong V. Cheong Seng Gee, 43
Phil. 43 [1922].
4. Lastly, petitioners claim that the agreements are grossly disadvantageous to
the government because the rental rates are excessive and private
respondent's development rights over the 13 stations and the depot will rob
DOTC of the best terms during the most productive years of the project.
It must be noted that as part of the EDSA LRT III project, private respondent
has been granted, for a period of 25 years, exclusive rights over the depot and
the air space above the stations for development into commercial premises
for lease, sublease, transfer, or advertising (Supplemental Agreement, Sec.
11; Rollo, pp. 91-92). For and in consideration of these development rights,
private respondent shall pay DOTC in Philippine currency guaranteed revenues
generated therefrom in the amounts set forth in the Supplemental Agreement
(Sec. 11; Rollo, p. 93). In the event that DOTC shall be unable to collect the
guaranteed revenues, DOTC shall be allowed to deduct any shortfalls from the
monthly rent due private respondent for the construction of the EDSA LRT III
(Supplemental Agreement, Sec. 11; Rollo, pp. 93-94). All rights, titles, interests
and income over all contracts on the commercial spaces shall revert to DOTC
upon expiration of the 25-year period. (Supplemental Agreement, Sec.
11; Rollo, pp. 91-92).
The terms of the agreements were arrived at after a painstaking study by SO ORDERED
DOTC. The determination by the proper administrative agencies and officials
who have acquired expertise, specialized skills and knowledge in the Bellosillo and Kapunan, JJ., concur.
performance of their functions should be accorded respect absent any
showing of grave abuse of discretion (Felipe Ysmael, Jr. & Co. v. Deputy Padilla and Regalado, JJ., concurs in the result.
Executive Secretary, 190 SCRA 673 [1990]; Board of Medical Education v.
Alfonso, 176 SCRA 304 [1989]). Romero, J., is on leave.

Government officials are presumed to perform their functions with regularity *separate opinion not included
and strong evidence is necessary to rebut this presumption. Petitioners have
not presented evidence on the reasonable rentals to be paid by the parties to
each other. The matter of valuation is an esoteric field which is better left to Case #12
the experts and which this Court is not eager to undertake.
EN BANC
That the grantee of a government contract will profit therefrom and to that
extent the government is deprived of the profits if it engages in the business G.R. No. 96409 February 14, 1992
itself, is not worthy of being raised as an issue. In all cases where a party enters
into a contract with the government, he does so, not out of charity and not to CITIZEN J. ANTONIO M. CARPIO, petitioner,
lose money, but to gain pecuniarily. vs.
THE EXECUTIVE SECRETARY, THE SECRETARY OF LOCAL GOVERNMENTS, THE
5. Definitely, the agreements in question have been entered into by DOTC in SECRETARY OF NATIONAL DEFENSE and THE NATIONAL
the exercise of its governmental function. DOTC is the primary policy, planning, TREASURER, respondents.
programming, regulating and administrative entity of the Executive branch of
government in the promotion, development and regulation of dependable SYLLABI
and coordinated networks of transportation and communications systems as
well as in the fast, safe, efficient and reliable postal, transportation and Administrative Law; The presidential power of control was held to mean the
communications services (Administrative Code of 1987, Book IV, Title XV, Sec. power of the President to alter or modify or nullify or set aside what a
2). It is the Executive department, DOTC in particular that has the power, subordinate officer had done in the performance of his duties and to
authority and technical expertise determine whether or not a specific substitute the judgment of the former with that of the latter.—This
transportation or communication project is necessary, viable and beneficial to presidential power of control over the executive branch of government
the people. The discretion to award a contract is vested in the government extends over all executive officers from Cabinet Secretary to the lowliest clerk
agencies entrusted with that function (Bureau Veritas v. Office of the and has been held by us, in the landmark case of Mondano vs. Silvosa, to mean
President, 205 SCRA 705 [1992]). “the power of [the President] to alter or modify or nullify or set aside what a
subordinate officer had done in the performance of his duties and to
WHEREFORE, the petition is DISMISSED.
substitute the judgment of the former with that of the latter.” It is said to be
at the very “heart of the meaning of Chief Executive.”
Same; Same; The “Doctrine of Qualified Political Agency” equally accepted as
a corollary rule to the control powers of the President.—Equally well accepted,
as a corollary rule to the control powers of the President, is the “Doctrine of
Qualified Political Agency.” As the President cannot be expected to exercise
his control powers all at the same time and in person, he will have to delegate
some of them to his Cabinet members.
Same; Same; Same; The President’s power of control is directly exercised by
him over the members of the Cabinet who in turn and by his authority, control
the bureaus and other offices under their respective jurisdiction in the
executive department.—Thus, and in short, “the President’s power of control
is directly exercised by him over the members of the Cabinet who, in turn, and
by his authority, control the bureaus and other offices under their respective
jurisdictions in the executive department.”
Same; National Police Commission; There is no usurpation of the power of
control of the NAPOLCOM under Section 51.—We agree, and so hold, with the
view of the Solicitor General that “there is no usurpation of the power of
control of the NAPOLCOM under Section 51 because under this very same
provision, it is clear that the local executives are only acting as representatives
of the NAPOLCOM. XXX As such deputies, they are answerable to the
NAPOLCOM for their actions in the exercise of their functions under that
section. Thus, unless countermanded by the NAPOLCOM, their acts are valid
and binding as acts of the NAPOLCOM.”
Same; Same; Same; The grant of disciplinary powers over PNP Members to the
People’s Law Enforcement Boards and city and municipal mayors is also not in
derogation of the Commission’s power of control over the PNP.—The grant of
disciplinary powers over PNP members to the “People’s Law Enforcement
Boards” (or the PLEB) and city and municipal mayors is also not in derogation
of the Commission’s power of control over the PNP.
Same; Same; The police force not being integrated with the military is not a
part of the Armed Forces of the Philippines.—It thus becomes all too apparent
then that the provision herein assailed precisely gives muscle to and enforces
the proposition that the national police force does not fall under the
Commander-in-Chief powers of the President. This is necessarily so since the
police force, not being integrated with the military, is not a part of the Armed
Forces of the Philippines. As a civilian agency of the government, it properly
comes within, and is subject to, the exercise by the President of the power of
executive control.
Same; Same; Same; The President, as Commander-in-Chief is not a member of
the Armed Forces.—Consequently, Section 12 does not constitute abdication
of commander-in-chief powers. It simply provides for the transition period or
process during which the national police would gradually assume the civilian
function of safeguarding the internal security of the State. Under this instance,
the President, to repeat, abdicates nothing of his war powers. It would bear to
here state, in reiteration of the preponderant view, that the President, as
Commander-in-Chief, is not a member of the Armed Forces. He remains a
civilian whose duties under the Commander-in-Chief provision “represent only
a part of the organic duties imposed upon him. All his other functions are
clearly civil in nature.” His position as a civilian Commander-in-Chief is
consistent with, and a testament to, the constitutional principle that “civilian
authority is, at all times, supreme over the military.”
PARAS, J.:
At the very outset, it should be well to set forth the constitutional provision
that is at the core of the controversy now confronting us, thus:
Article XVI, Section 6:
The State shall establish and maintain one police force, which stall be
national in scope and civilian in character, to be administered and
controlled by a national police commission. The authority of local
 executives over the police units in their jurisdiction shall be provided by
law. 1
With the aforequoted provision in mind, Congress passed Republic Act No.
6975 entitled "AN ACT ESTABLISHING THE PHILIPPINE NATIONAL POLICE
UNDER A REORGANIZED DEPARTMENT OF THE INTERIOR AND LOCAL
GOVERNMENT, AND FOR OTHER PURPOSES" as the consolidated version of
House Bill No. 23614 and Senate Bill No. 463.
Following the said Act's approval by President Corazon C. Aquino on December
13, 1990, it was published on December 17, 1990. 2
Presently, however, petitioner as citizen, taxpayer and member of the
Philippine Bar sworn to defend the Constitution, filed the petition now at bar
on December 20, 1990, seeking this Court's declaration of unconstitutionality
of RA 6975 with prayer for temporary restraining order.
But in an en banc resolution dated December 27, 1990, We simply required
the public respondents to file their Comment, without however giving due
course to the petition and the prayer therein. Hence, the Act took effect after
fifteen days following its publication, or on January 1, 1991. 3
Before we settle down on the merits of the petition, it would likewise be well
to discuss albeit briefly the history of our police force and the reasons for the
ordination of Section 6, Article XVI in our present Constitution.
During the Commonwealth period, we had the Philippine Constabulary as the
nucleus of the Philippine Ground Force (PGF), now the Armed Forces of the
Philippines (AFP). The PC was made part of the PGF but its administrative,
supervisory and directional control was handled by the then Department of
the Interior. After the war, it remained as the "National Police" under the
Department of National Defense, as a major service component of the AFP. 4
Later, the Integration Act of 1975 5 created the Integrated National Police
(INP) under the Office of the President, with the PC as the nucleus, and the
local police forces as the civilian components. The PC-INP was headed by the
PC Chief who, as concurrent Director-General of the INP, exercised command
functions over the INP. 6
The National Police Commission (NAPOLCOM) 7 exercised administrative
control and supervision while the local executives exercised operational
supervision and direction over the INP units assigned within their respective
localities. 8
The set-up whereby the INP was placed under the command of the military
component, which is the PC, severely eroded the INP's civilian character and
the multiplicity in the governance of the PC-INP resulted in inefficient police
service. 9 Moreover, the integration of the national police forces with the PC
also resulted in inequities since the military component had superior benefits
and privileges. 10
The Constitutional Commission of 1986 was fully aware of the structural errors
that beset the system. Thus, Com. Teodulo C. Natividad explained that:
xxx xxx xxx
MR. NATIVIDAD. . . . The basic tenet of a modern police organization is
to remove it from the military. 11
xxx xxx xxx
Here in our draft Constitution, we have already made a constitutional
postulate that the military cannot occupy any civil service position [in
Section 6 of the Article on the Civil Service 12] Therefore, in keeping with
this and because of the universal acceptance that a police force is a
civilian function, a public service, and should not be performed by
military force, one of the basic reforms we are presenting here is that it
should be separated from the military force which is the PC. 13
xxx xxx xxx
 Furthermore:
xxx xxx xxx
. . . the civilian police cannot blossom into full profession because most
of the key positions are being occupied by the military So, it is up to this
Commission to remove the police from such a situation so that it can
develop into a truly professional civilian police. . . . 14
Hence, the "one police force, national in scope, and civilian in character"
provision that is now Article XVI, Section 6 of the 1987 Constitution.
And so we now come to the merits of the petition at hand.
In the main, petitioner herein respectfully advances the view that RA 6975
emasculated the National Police Commission by limiting its power
"to administrative control" over the Philippine National Police (PNP), thus,
"control" remained with the Department Secretary under whom both the
National Police Commission and the PNP were placed. 15
We do not share this view.
To begin with, one need only refer to the fundamentally accepted principle in
Constitutional Law that the President has control of all executive departments,
bureaus, and offices to lay at rest petitioner's contention on the matter.
This presidential power of control over the executive branch of government
extends over all executive officers from Cabinet Secretary to the lowliest
clerk 17 and has been held by us, in the landmark case of Mondano
vs. Silvosa, 18to mean "the power of [the President] to alter or modify or nullify
or set aside what a subordinate officer had done in the performance of his
duties and to substitute the judgment of the former with that of the latter." It
is said to be at the very "heart of the meaning of Chief Executive." 19
Equally well accepted, as a corollary rule to the control powers of the
President, is the "Doctrine of Qualified Political Agency". As the President
cannot be expected to exercise his control powers all at the same time and in
person, 20he will have to delegate some of them to his Cabinet members.
Under this doctrine, which recognizes the establishment of a single
executive, 21 "all executive and administrative organizations are adjuncts of
the Executive Department, the heads of the various executive departments
are assistants and agents of the Chief Executive, and, except in cases where
the Chief Executive is required by the Constitution or law to act in person on
the exigencies of the situation demand that he act personally, the multifarious
executive and administrative functions of the Chief Executive are performed
by and through the executive departments, and the acts of the Secretaries of
such departments, performed and promulgated in the regular course of
business, unless disapproved or reprobated by the Chief Executive
presumptively the acts of the Chief Executive." 22 (emphasis ours)
Thus, and in short, "the President's power of control is directly exercised by
him over the members of the Cabinet who, in turn, and by his authority,
control the bureaus and other offices under their respective jurisdictions in
the executive department." 23
Additionally, the circumstance that the NAPOLCOM and the PNP are placed
under the reorganized Department of Interior and Local Government is merely
an administrative realignment that would bolster a system of coordination and
cooperation among the citizenry, local executives and the integrated law
enforcement agencies and public safety agencies created under the assailed
Act, 24 the funding of the PNP being in large part subsidized by the national
government.
Such organizational set-up does not detract from the mandate of the
Constitution that the national police force shall be administered and
controlled by a national police commission as at any rate, and in fact, the Act
in question adequately provides for administration and control at the
commission level, as shown in the following provisions, to wit:
Sec. 14. Powers and Functions of the Commission. — The Commission
shall exercise the following powers and functions:
xxx xxx xxx
(i) Approve or modify plans and programs on education and training,
logistical requirements, communications, records, information
systems, crime laboratory, crime prevention and crime reporting;
(j) Affirm, reverse or modify, through the National Appellate Board,
personnel disciplinary actions involving demotion or dismissal from
the service imposed upon members of the Philippine National Police
by the Chief of the PNP;
(k) Exercise appellate jurisdiction through .the regional. appellate
boards over administrative cases against policemen and over
decisions on claims for police benefits;
xxx xxx xxx
Sec. 26. The Command and direction of the PNP shall be vested in the
Chief of the PNP . . . Such command and direction of the Chief of the
PNP may be delegated to subordinate officials with respect to the
units under their respective commands, in accordance with the rules
and regulations prescribed by the Commission. . . .
xxx xxx xxx
Sec. 35. . . . To enhance police operational efficiency and effectiveness,
the Chief of the PNP may constitute such other support units as may
be necessary subject to the approval of the Commission. . . .
xxx xxx xxx
Sec. 37. . . . There shall be established a performance evaluation
system which shall be administered in accordance with the rules,
regulations and standards; and a code of conduct promulgated by the
Commission for members of the PNP. . . .
xxx xxx xxx
Petitioner further asserts that in manifest derogation of the power of control
of the NAPOLCOM over the PNP, RA 6975 vested the power to choose the PNP
Provincial Director and the Chiefs of Police in the Governors and Mayors,
respectively; the power of "operational supervision and control" over police
units in city and municipal mayors; in the Civil Service Commission,
participation in appointments to the positions of Senior Superintendent to
Deputy Director-General as well as the administration of qualifying entrance
examinations; disciplinary powers over PNP members in the "People's Law
Enforcement Boards" and in city and municipal mayors. 25
Once more, we find no real controversy upon the foregoing assertions.
It is true that when the Constitutional Commissioners of 1986 provided that
the authority of local executives over the police units in their jurisdiction shall
be provided by law, they intended that the day-to-day functions of police work
like crime, investigation, crime prevention activities, traffic control, etc., would
be under the operational control of the local executives as it would not be
advisable to give full control of the police to the local executives. 26
They reasoned that in the past, this gave rise to warlordism, bossism, and
sanctuaries for vices and abuses. 27
It would appear then that by vesting in the local executives the power to
choose the officers in question, the Act went beyond the bounds of the
Constitution's intent.
Not so. We find light in the principle of constitutional construction that every
presumption should be indulged in favor of constitutionality and the court in
considering the validity of the statute in question should give it such
reasonable construction as can be reached to bring it within the fundamental
law. 28
Under the questioned provisions, which read as follows:
D. PARTICIPATION OF LOCAL EXECUTIVES IN THE ADMINISTRATION OF
THE PNP.
Sec. 51. Powers of Local Government Officials over the PNP Units or
Forces.
Governors and mayors shall be deputized as representatives of the
Commission in their respective territorial jurisdictions. As such, the
local executives shall discharge the following functions:
a.) Provincial Governor — (1) . . .
The provincial governor shall choose the provincial director from a list
of three (3) eligibles recommended by the PNP Regional Director.
4) . . . City and municipal mayors shall have the following authority
over the PNP units in their respective jurisdictions:
i.) Authority to choose the chief of police from a list of five (5) eligibles
recommended by the Provincial Police Director. . . . (Emphasis ours)
full control remains with the National Police Commission.
We agree, and so hold, with the view of the Solicitor General that "there is no
usurpation of the power of control of the NAPOLCOM under Section 51
because under this very same provision, it is clear that the local executives are
only acting as representatives of the NAPOLCOM. . . . As such deputies, they
are answerable to the NAPOLCOM for their actions in the exercise of their
functions under that section. Thus, unless countermanded by the NAPOLCOM,
their acts are valid and binding as acts of the NAPOLCOM." 29 It is significant to
note that the local officials, as NAPOLCOM representatives, will choose the
officers concerned from a list of eligibles (those who meet the general
qualifications for appointment to the PNP) 30 to be recommended by PNP
officials.
The same holding is true with respect to the contention on the operational
supervision and control exercised by the local officials. Those officials would
simply be acting as representatives of the Commission.
As regards the assertion involving the Civil Service Commission, suffice it to say
that the questioned provisions, which read:
Sec. 31. Appointment of PNP Officers and Members. — The
Appointment of the officers and members of the PNP shall be effected
in the following manner:
a.) Police Officer I to Senior Police Officer IV. — Appointed by the PNP
regional director for regional personnel or by the Chief of the PNP for
national headquarters personnel and attested by the Civil Service
Commission;
b.) Inspector to Superintendent. — Appointed by the Chief of the PNP,
as recommended by their immediate superiors, and attested by the Civil
Service Commission;
c.) Senior Superintendent to Deputy Director-General. — Appointed by
the President upon recommendation of the Chief of the PNP, with
proper endorsement by the Chairman of the Civil Service
Commission . . .
Sec. 32. Examinations for Policemen. — The Civil Service Commission
shall administer the qualifying entrance examinations for policemen on
the basis of the standards set by the NAPOLCOM.
precisely underscore the civilian character of the national police force, and will
undoubtedly professionalize the same.
The grant of disciplinary powers over PNP members to the "People's Law
Enforcement Boards" (or the PLEB) and city and municipal mayors is also not
in derogation of the commission's power of control over the PNP.
Pursuant to the Act, the Commission exercises appellate jurisdiction, thru the
regional appellate boards, over decisions of both the PLEB and the said
mayors. This is so under Section 20(c). Furthermore, it is the Commission
which shall issue the implementing guidelines and procedures to be adopted
by the PLEB for in the conduct of its hearings, and it may assign NAPOLCOM
hearing officers to act as legal consultants of the PLEBs (Section 43-d4, d5).
As a disciplinary board primarily created to hear and decide citizen's
complaints against erring officers and members of the PNP, the establishment
of PLEBs in every city, and municipality would all the more help professionalize
the police force.
Petitioner would likewise have this Court imagine that Section 12 of the
questioned Act, the pertinent portion of which reads:
Sec. 12. Relationship of the Department with the Department of
National Defense. — During a period of twenty- four (24) months from
the effectivity of this Act, the Armed Forces of the Philippines (AFP)
shall continue its present role of preserving the internal and external
security of the State: Provided, that said period may be extended by
the President, if he finds it justifiable, for another period not exceeding
twenty-four (24) months, after which, the Department shall
automatically take over from the AFP the primary role of preserving
internal security, leaving to the AFP its primary role of preserving
external security.
xxx xxx xxx
constitutes an "encroachment upon, interference with, and an abdication by
the President of, executive control and commander-in-chief powers."
That We are not disposed to do for such is not the case at all here. A rejection
thus of petitioner's submission anent Section 12 of the Act should be in order
in the light of the following exchanges during the CONCOM deliberations of
Wednesday, October 1, 1986:
xxx xxx xxx
MR. RODRIGO. Just a few questions. The President of the Philippines
is the Commander-in-Chief of all the armed forces.
MR. NATIVIDAD. Yes, Madam President.
MR. RODRIGO. Since the national police is not integrated with the
armed forces, I do not suppose they come under the Commander-in-
Chief powers of the President of the Philippines.
MR. NATIVIDAD. They do, Madam President. By law they are under the
supervision and control of the President of the Philippines.
MR. RODRIGO. Yes, but the President is not the Commander-in-Chief
of the national police.
MR. NATIVIDAD. He is the President.
MR. RODRIGO. Yes, the Executive. But they do not come under that
specific provision that the President is Commander-in-Chief of all the
armed forces.
MR. NATIVIDAD. No, not under the Commander-in-Chief provision.
MR. RODRIGO. There are two other powers of the President. The
President has control over departments, bureaus and offices, and
supervision over local governments. Under which does the police fall,
under control or under supervision?
MR. NATIVIDAD. Both, Madam President.
 MR. RODRIGO. Control and Supervision.
MR. NATIVIDAD. Yes, in fact, the National Police Commission is under
the Office of the President. (CONCOM RECORDS, Vol. 5, p. 296)
It thus becomes all too apparent then that the provision herein assailed
precisely gives muscle to and enforces the proposition that the national police
force does not fall under the Commander-in-Chief powers of the President.
This is necessarily so since the police force, not being integrated with the
military, is not a part of the Armed Forces of the Philippines. As a civilian
agency of the government, it properly comes within, and is subject to, the
exercise by the President of the power of executive control.
Consequently, Section 12 does not constitute abdication of commander-in-
chief powers. It simply provides for the transition period or process during
which the national police would gradually assume the civilian function of
safeguarding the internal security of the State. Under this instance, the
President, to repeat, abdicates nothing of his war powers. It would bear to
here state, in reiteration of the preponderant view, that the President, as
Commander-in-Chief, is not a member of the Armed Forces. He remains a
civilian whose duties under the Commander-in-Chief provision "represent only
a part of the organic duties imposed upon him. All his other functions are
clearly civil in nature." 31 His position as a civilian Commander-in-Chief is
consistent with, and a testament to, the constitutional principle that "civilian
authority is, at all times, supreme over the military." (Article II, Section 3, 1987
Constitution)
Finally, petitioner submits that the creation of a "Special Oversight
Committee" under Section 84 of the Act, especially the inclusion therein of
some legislators as members (namely: the respective Chairmen of the
Committee on Local Government and the Committee on National Defense and
Security in the Senate, and the respective Chairmen of the Committee on
Public Order and Security and the Committee on National Defense in the
House of Representatives) is an "unconstitutional encroachment upon and a
diminution of, the President's power of control over all executive
departments, bureaus and offices."
But there is not the least interference with the President's power of control
under Section 84. The Special Oversight Committee is simply an ad hoc or
transitory body, established and tasked solely with planning and overseeing
the immediate "transfer, merger and/or absorption" into the Department of
the Interior and Local Governments of the "involved agencies." This it will
undertake in accordance with the phases of implementation already laid down
in Section 85 of the Act and once this is carried out, its functions as well as the
committee itself would cease altogether. 32 As an ad hoc body, its creation and
the functions it exercises, decidedly do not constitute an encroachment and in
diminution of the power of control which properly belongs to the President.
What is more, no executive department, bureau or office is placed under the
control or authority, of the committee. 33
As a last word, it would not be amiss to point out here that under the
Constitution, there are the so-called independent Constitutional Commissions,
namely: The Civil Service Commission, Commission on Audit, and the
Commission on Elections. (Article IX-A, Section 1)
As these Commissions perform vital governmental functions, they have to be
protected from external influences and political pressures. Hence, they were
made constitutional bodies, independent of and not under any department of
the government. 34 Certainly, they are not under the control of the President.
The Constitution also created an independent office called the "Commission
on Human Rights." (Article XIII, Section 17[1]).However, this Commission is not
on the same level as the Constitutional Commissions under Article IX, although
it is independent like the latter Commissions. 35 It still had to be constituted
thru Executive Order No. 163 (dated May 5, 1987).
In contrast, Article XVI, Section 6 thereof, merely mandates the statutory
creation of a national police commission that will administer and control the
national police force to be established thereunder.
This commission is, for obvious reasons, not in the same category as
the independent Constitutional Commissions of Article IX and the other
constitutionally created independent Office, namely, the Commission on
Human Rights.
By way of resume, the three Constitutional Commissions (Civil Service, Audit,
Elections) and the additional commission created by the Constitution (Human
Rights) are all independent of the Executive; but the National Police
Commission is not. 36 In fact, it was stressed during the CONCOM deliberations
that this commission would be under the President, and hence may be
controlled by the President, thru his or her alter ego, the Secretary of the
Interior and Local Government.
WHEREFORE, having in view all of the foregoing holdings, the instant petition
is hereby DISMISSED for lack of merit.
SO ORDERED.
Narvasa, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin,
Griño-Aquino, Medialdea, Regalado, Davide, Jr., Romero and Nocon, JJ.,
concur.
Case #13
EN BANC
[G.R. No. L-61554-55. July 31, 1984.]
TOMASA VDA. DE JACOB, Petitioner, v. HON. RICARDO C. PUNO, in his capacity
as Minister of Justice; and JORGE CENTENERA, TEODORO ALARCON, PABLO
PAQUEO, JR., AMELIA LAMIT, ALFREDO SILVA, JOSE CEA, MIGUEL MOLL and
OLYMPIO CLAPIS, Respondents.
Benitor P. Favie for Petitioner.
The Solicitor General and Ramon Quisumbing, Jr. for Respondents.
SYLLABI
Remedial Law; Criminal Procedure; Administrative Law; Fiscals; Nature, scope
and meaning of power of supervision and control by the Minister of Justice
over Fiscals.—The power of supervision and control by the Minister of Justice
over the fiscals cannot be denied. As stated in Noblejas vs. Salas, 67 SCRA 47,
“Section 79 (c) of the Revised Administrative Code defines the extent of a
department secretary’s power. The power of control therein contemplated
‘means (the power of the department head) to alter, modify or nullify or set
aside what a subordinate officer had done in the performance of his duties
and to substitute the judgment of the former for that of the latter. ‘The power
of control . . . implies the right of the President (and, naturally, of his alter ego)
to interfere in the exercise of such discretion as may be vested by law in the
officers of the national government, as well as to act in lieu of such officers.’
“For, while it is the duty of the fiscal to prosecute persons who, according to
evidence received from the complainant, are shown to be guilty of a crime,
the Minister of Justice is likewise bound by his oath of office to protect
innocent persons from groundless, false or serious prosecution. He would be
committing a serious dereliction of duty if he orders or sanctions the filing of
an information based upon a complaint where he is not convinced that the
evidence would warrant the filing of the action in court. As he has the power
of supervision and control over prosecuting officers, the Minister of Justice has
the ultimate power to decide which as between conflicting theories of the
complainant and the respondents should be believed. “It should be realized
that when a man is haled to court on a criminal charge, it brings in its wake
problems not only for the accused but for his family as well. Therefore, it
behooves a prosecutor to weigh the evidence carefully and to deliberate
thereon to determine the existence of prima facie case before filing the
information in Court. Anything less would be a dereliction of duty (Bernardo
vs. Mendoza, 90 SCRA 214).”
Same; Same; Same; Same; Remedy of complainant when the Minister of
Justice would not allow the filing of a criminal complaint against an accused, is
to file a civil action as provided in Article 35 of the Civil Code.—The remedy of
complainant in a case where the Minister of Justice would not allow the filing
of a criminal complaint against an accused because it is his opinion that the
evidence is not sufficient to sustain an information for the complaint with
which the respondents are charged of, is to file a civil action as indicated in
Article 35 of the Civil Code.
Same; Same; Same; Same; PD 911; Discretion of Minister of Justice under PD
911 in case of reversal of resolution of the Provincial Fiscal or Chief State
Prosecutor, to authorize and direct the dismissal of a case where he finds no
prima facie case, or cause the filing of an information in court against the
respondent when he finds a prima facie case.—Further, Presidential Decree
No. 911 specifically provides: “x x x Provided, Finally, That where the resolution
of the Provincial or City Fiscal or the Chief State Prosecutor is, upon review,
reversed by the Secretary (now Minister) of Justice, the latter may, where he
finds that no prima facie case exists, authorize and direct the investigating
fiscal concerned or any other fiscal or state prosecutor to cause or move for
the dismissal of the case, or, where he finds a prima facie case, to cause the
filing of an information in court against the respondent, based on the same
sworn statement or evidence submitted, without the necessity of conducting
another preliminary investigation.”
DECISION
RELOVA, J.:
The question raised in the petition is whether respondent Minister of Justice
committed grave abuse of discretion in directing the Provincial Fiscal of
Camarines Sur "to desist from filing in court the corresponding informations
against respondents based on your resolution, or to move for their dismissal if
they have already been filed, and to thereafter dismiss the twin complaints
filed in your office under I.S. Nos. 1162 and 1163, reporting the action you
have taken on this directive within ten days from receipt hereof." (p. 35, Rollo)
The facts of this case are as follows:chanrob1es virtual 1aw library
Herein petitioner, Tomasa Vda. de Jacob, filed with the Office of the Provincial
Fiscal of Camarines Sur two (2) criminal complaints for falsification of public
documents which purport to have been executed by her deceased husband,
Dr. Alfredo E. Jacob, to wit:
"(1) A Deed of Absolute Sale dated December 2, 1977 over a parcel of
residential land situated in the Poblacion, Municipality of Tigaon, Province of
Camarines Sur, in favor of Jorge M. Centenera. This deed was ratified on the
same date before Notary Public Teodoro Alarcon and had for instrumental
witnesses Pablo Paqueo, Jr. and Amelia Lamit. This is the subject of I.S. No.
1162.
"(2) A Deed of Absolute Sale dated October 20, 1976 conveying ownership of
454,987 square meters of agricultural land situated at Barrio Mabalodbalod,
Municipality of Tigaon, Province of Camarines Sur to Dr. Daniel Mercado and
Dr. Alfredo V. Silva. This deed was ratified on October 25, 1976 before Notary
Public Jose Cea and had as instrumental witnesses, Miguel Moll and Olympio
Clapis. While this deed is the only one involved in I.S. No. 1163, records show
that sometime thereafter, on January 24, 1977, Dr. Jacob appears to have
executed another deed of sale covering the same parcel of land to Daniel
Mercado only. This deed was ratified on the same date before the same Notary
Public, Jose Cea." (pp. 32-33, Rollo)
In charging herein private respondents, namely: Jorge Centenera, Teodoro
Alarcon, Pablo Paqueo, Jr., Amelia Lamit, Alfredo Silva, Jose Cea, Miguel Moll
and Olympio Clapis, with falsification of public documents, petitioner Tomasa
Vda. de Jacob who, since January 16, 1979, had been the court-appointed
guardian of the then incompetent Dr. Alfredo Jacob, claims that respondents
connived and confederated with each other in falsifying the two deeds of
absolute sale aforementioned by making it appear therein that her husband
participated in the execution thereof as seller when in truth and in fact he
never did so participate in any manner as he was already seriously ill and
practically bed ridden on October 20, 1976 and December 2, 1977 when the
said documents appeared to have been executed.chanrobles virtual lawlibrary
After preliminary investigation, Assistant Provincial Fiscal Ceferino P. Goce, on
May 15, 1979, issued separate resolutions in I.S. Nos. 1162 and 1163 when the deed of October 20, 1976 was executed.
recommending the filing in court of the corresponding informations "for
falsification of public documents by private individuals as defined and "Moreover, the categorical declarations of the instrumental witnesses and
punished under Article 171, par. 2 in relation to Article 172, par. 1 of the Notary Public Teodoro Alarcon who respectively participated in the execution
Revised Penal Code . . ." (p. 46, Rollo) of the deeds in question, to the effect that Dr. Jacob actually and personally
executed the Deed of Absolute Sale referred to cannot simply be overcome by
The private respondents appealed the aforementioned resolutions to the the aforementioned medical certificates, most especially in the absence of
respondent Minister of Justice, who, on April 15, 1981, directed the Provincial corroborating evidence tending to show in definite and precise terms that Dr.
Fiscal to desist from filing in court the corresponding informations against the Jacob was actually not in Camarines Sur on the dates of the execution of the
respondents. Reasons for this directive are — deeds in question. Complainant herself could not qualify to assert this fact
considering that on the dates of the execution of the said documents she was
"While the three medical certificates submitted in evidence tend to indicate not yet married to Dr. Jacob.
that Dr. Alfredo Jacob underwent medical treatment since 1975 for
arteriosclerosis and Parkinson’s disease, these could not be considered "Besides, even without the aforementioned declarations of the instrumental
weighty enough to give credence to the claim that Dr. Jacob could not have witnesses and notary public, the medical certificates, standing alone, which
been at Camarines Sur on December 2, 1977 to execute the Deed of Absolute raise merely assumptions cannot destroy the presumption of regularity in the
Sale involved in I.S. No. 1162. There is no showing that he was no longer execution of documents.
ambulatory and mobile while undergoing treatment.
"In their totality, we are of the opinion that the evidence on hand cannot
"In this regard, it will be noted that the descriptive portion of the Medical sustain a prima facie case of falsification of public documents against
Certificate issued by Dr. Rodolfo Talag indicating the weak physical condition respondents in both cases." (pp. 33-34, Rollo)
of the patient and the uncoordinated movements of his legs has reference to
the physical condition of Dr. Jacob at the time of examination immediately The first and second motions for reconsideration of the aforementioned order
prior to the issuance of the medical certificate on March 18, 1978. This of respondent Minister of Justice were denied. Hence, this appeal
observation is amply fortified by the suggestion in the medical certificate that by certiorari, petitioner arguing that respondent Minister "has transcended his
the patient undergo immediate hospitalization. It in no way reflects the authority to merely determine the existence of a prima facie case in pursuance
patient’s state of health on December 2, 1977 when he executed one of the of P.D. No. 911 and in so doing arrogated to himself the prerogatives or power
Deeds of Absolute Sale in question. vested in the courts." (pp. 28-29, Rollo)

"Also, there is nothing in the medical certificates issued by three different
doctors that would suggest that Dr. Alfredo Jacob could not have been in
Camarines Sur on October 20 when he executed the Deed of Absolute Sale
subject matter of I.S. No. 1163. The medical certificates do not indicate that
he was confined or was under treatment from May 31, 1976 when he was
discharged from the hospital after a cardio-vascular clearance to the date
It is apparent from the facts above-stated that certiorari does not lie.
The power of supervision and control by the Minister of Justice over the fiscals
cannot be denied. As stated in Noblejas v. Salas, 67 SCRA 47, "Section 79 (c) of
the Revised Administrative Code defines the extent of a department
secretary’s power. The power of control therein contemplated ‘means (the
power of the department head) to alter, modify or nullify or set aside what a
subordinate officer had done in the performance of his duties and to
substitute the judgment of the former for that of the latter.’ ‘The power of
control .. implies the right of the President (and, naturally, of his alter ego) to
interfere in the exercise of such discretion as may be vested by law in the
officers of the national government, as well as to act in lieu of such officers.’
For, while it is the duty of the fiscal to prosecute persons who, according to
evidence received from the complainant, are shown to be guilty of a crime,
the Minister of Justice is likewise bound by his oath of office to protect
innocent persons from groundless false or serious prosecution. He would be
committing a serious dereliction of duty if he orders or sanctions the filing of
an information based upon a complaint where he is not convinced that the
evidence would warrant the filing of the action in court. As he has the power
of supervision and control over prosecuting officers, the Minister of Justice has
the ultimate power to decide which as between conflicting theories of the
complainant and the respondents should be believed. "It should be realized
that when a man is haled to court on a criminal charge, it brings in its wake
problems not only for the accused but for his family as well. Therefore, it
behooves a prosecutor to weigh the evidence carefully and to deliberate
thereon to determine the existence of prima facie case before filing the
information in Court. Anything less would be a dereliction of duty (Bernardo v.
Mendoza, 90 SCRA 214)."
The remedy of complainant in a case where the Minister of Justice would not
allow the filing of a criminal complaint against an accused because it is his
opinion that the evidence is not sufficient to sustain an information for the
complaint with which the respondents are charged of, is to file a civil action as
indicated in Article 35 of the Civil Code, which provides:
Such civil action may be supported by a preponderance of evidence. Upon the
defendant’s motion, the court may require the plaintiff to file a bond to
indemnify the defendant in case the complaint should be found to be
malicious.
"If during the pendency of the civil action, an information should be presented
by the prosecuting attorney, the civil action shall be suspended until the
termination of the criminal proceedings."
Further, Presidential Decree No. 911 specifically provides:
". . . Provided, Finally, That where the resolution of the Provincial or City Fiscal
or the Chief State Prosecutor is, upon review, reversed by the Secretary (now
Minister) of Justice, the latter may, where he finds that no prima facie case
exists, authorize and direct the investigating fiscal concerned or any other
fiscal or state prosecutor to cause or move for the dismissal of the case, or,
where he finds a prima facie case, to cause the filing of an information in court
against the respondent, based on the same sworn statement or evidence
submitted, without the necessity of conducting another preliminary
investigation."
ACCORDINGLY, the petition is DENIED for lack of merit.
SO ORDERED.
Aquino, Concepcion, Jr., Guerrero, Abad Santos, Melencio-Herrera, Plana,
Escolin, Gutierrez, Jr., De la Fuente and Cuevas, JJ., concur.

"ARTICLE 35. When a person, claiming to be injured by a criminal offense, Fernando, C.J., took no part.
charges another with the same, for which no independent civil action is
granted in this Code or any special law, but the justice of the peace finds no Teehankee, J., I reserve my vote.
reasonable grounds to believe that a crime has been committed, or the
prosecuting attorney refuses or fails to institute criminal proceedings, the Makasiar, J., concurs in the result.
complainant may bring a civil action for damages against the alleged offender.
Case #14
[ G.R. No. L-17169, November 30, 1963 ]
ISIDRO C. ANG-ANGCO, PETITIONER, VS. NATALIO P. CASTILLO, ET
AL.,RESPONDENTS.
SYLLABI
Constitutional Law; Executive Powers; President has no power to take direct
action of removal of classified civil service official.—The action taken by
respondent Executive Secretary, even with the authority of the President, in
taking direct action by considering petitioner resigned with prejudice to
reinstatement in the same bureau in the administrative case of petitioner,
without submitting the same to the Commissioner of Civil Service, is contrary
to law and should be set aside.
Same; Civil Service; Commissioner of Civil Service has original and exclusive
jurisdiction over administrative cases of personnel in the classified service;
Limitation.—Under Section 16(1) of the Civil Service Act of 1959 it is the
Commissioner of Civil Service who has original and exclusive jurisdiction to
decide administrative cases of all officers and employees in the classified
service. The only limitation to this power is that the decision of the
Commissioner may be appealed to the Civil Service Board of Appeals, whose
decision in such cases shall be final.
Same; Executive Powers; No appeal to President in administrative cases of civil
service officials and employees.—The Civil Service Law of 1959 does not
provide for any appeal to the President, nor is he given the power to review
the decision in administrative cases motu proprio, unlike the provision of the
previous law, Com. Act No. 598, which was expressly repealed by the new law.
Same; Same; Power of control by President over officers and employees in
executive department; Extent.—The extent of the power of control given to
the President by the Constitution over all officers and employees in the
executive department was interpreted by this Court in the case of Hebron vs.
Reyes (L-9124, July 28, 1958) to mean “the power of an officer to alter or
modify or nullify or set aside what a subordinate officer had done in the
performance of his duties and to substitute the judgment of the former for
that of the latter”, to distinguish it from the power of general supervision over
municipal government, but the decision does not go to the extent of including
the power to remove an officer or employee in the executive department. The
power merely applies to the exercise of control over the acts of the
subordinate, and not over the actor or agent himself of the act.
Same; Same; Civil Service; Security of tenure of civil service employees and
power of control of President reconciled.—The power of control of the
President may extend to the power to investigate, suspend or remove officers
and employees who belong to the executive department if they are
presidential appointees or do not belong to the classified service, for such can
be justified under the principle that the power to remove is inherent in the
power to appoint, but not with regard to those officers or employees who
belong to the classified service for as to them that inherent power cannot be
exorcised. This is in line with the provision of our Constitution which says that
“the Congress may by law vest the appointment of the inferior officer, in the
President alone, in the courts, or in heads of department”. With regard to
those officers whose appointments are vested on heads of departments,
Congress has provided by law for a procedure for their removal precisely in
view of this constitutional authority. On such law is the Civil Service Act of
1959.
DECISION
BAUTISTA ANGELO, J.:
On October 8, 1956, the Pepsi-Cola Far East Trade Development Co., Inc. wrote
a letter to the Secretary of Commerce and Industry requesting for special
permit to withdraw certain commodities from the customshouse which were
imported without any dollar allocation or remittance of foreign exchange. Said
commodities consisted of 1,183 units of pepsi-cola concentrates which were
not covered by any Central Bank release certificate. On the same date, the
company addressed an identical request to the Secretary of Finance who was
also the Chairman of the Monetary Board of the Central Bank. Senator Pedro
Sabido, in behalf of the company, likewise wrote said official urging that
authority be given to withdraw the abovementioned concentrates. Not
content with this step, he also wrote to Dr. Andres Castillo, Acting Governor of
the Central Bank, urging the same matter. Then Secretary Hernandez wrote
another letter to Dr. Castillo stating, "Senator Sabido is taking this to you
personally. Unless we have legal objection, I would like to authorize the
withdrawal of the concentrates upon payment of all charges. Please expedite
action."
Almost at the same time, the Import-Export Committee of the Central Bank,
thru Mr. Gregorio Licaros, submitted to the Monetary Board a memorandum
on the joint petition of the company and Sabido Law Office for authority to
withdraw the concentrates from the customhouse stating therein that it sees
no objection to the proposal. The Monetary Board, however, failed to take up
the matter in its meeting of October 12, 1956 for the reason that the
transaction did not involve any dollar allocation of foreign exchange, and of
this decision Mr. Licaros was informed.
Having failed to secure the necessary authority from the Central Bank, on
October 13, 1956, the counsel of the Pepsi-Cola Far East Trade Development
Co., Inc. approached Collector of Customs lsidro Ang-Angco in an attempt to
secure from him the immediate release of the concentrates, but this official
seeing perhaps that the importation did not carry any release certificate from
the Central Bank advised the counsel to try to secure the necessary release
certificate from the No-Dollar Import Office that had jurisdiction over the case.
In the morning of the same day, Mr. Aquiles J. Lopez, of said Office, wrote a
letter addressed to the Collector of Customs stating, among other things, that
his office had no objection to the release of the 1,188 units of concentrates
but that it could not take action on the request as "the same is not within the
jurisdiction of the No-Dollar Import Office within the contemplation of R. A.
No. 1410." The counsel already referred to above showed the letter to
Collector of Customs Ang-Angco who upon perusing it still hesitated to grant
the release. Instead he suggested that the letter be amended in order to
remove the ambiguity appearing therein, but Mr. Lopez refused to amend the
letter stating that the same was neither a permit nor a release. Secretary of
Finance Hernandez having been contacted by telephone, Collector of Customs
Ang-Angco read to him the letter after which the Secretary verbally expressed
his approval of the release on the basis of said certificate. Collector Ang-Angco,
while still in doubt as to the propriety of the action suggested, finally
authorized the release of the concentrates upon payment of the
corresponding duties, customs charges, fees and taxes.
When Commissioner of Customs Manuel P. Manahan learned of the release
of the concentrates in question he immediately ordered their seizure but only
a negligible portion thereof remained in the warehouse. Whereupon, he filed
an administrative complaint against Collector of Customs Ang-Angco charging
him with having committed a grave neglect of duty and observed a conduct
prejudicial to the best interest of the customs service. On the strength of this
complaint President Ramon Magsaysay constituted an investigating
committee to investigate Ang-Angco composed of former Solicitor General
Ambrosio Padilla, as Chairman, and Atty. Arturo A. Alafriz and Lt. Col. Angel A.
Salcedo, as members. Together with Collector Ang-Angco, Mr. Aquiles J. Lopez
was aJso investigated by the same Committee, who was also charged in a
separate complaint with serious misconduct in office or conduct prejudicial to
the best interest of the State. As a result, Collector Ang-Angco was suspended
from office in the latter part of December, 1956.
After the investigation, the committee submitted to President Magsaysay its
report recommending that a suspension of 15 days, without pay, be imposed
upon Ang-Angco chargeable against the period of his suspension. On April 1,
1957, Collector Ang-Angco was reinstated to his office by Secretary
Hernandez, but the decision on the administrative case against him remained
pending until the death of President Magsaysay. After around three years from
the termination of the investigation during which period Ang-Angco had been
discharging the duties of his office, Executive Secretary Natalio P. Castillo, by
authority of the President, rendered a decision on the case on February 12,
1960 finding Ang-Angco "guilty of conduct prejudicial to the best interest of
the service", and considering him resigned effective from the date of notice,
with prejudice to reinstatement in the Bureau of Customs.
Upon learning said decision from the newspapers, Collector Ang-Angco wrote
a letter to President Carlos P. Garcia calling attention to the fact that the action
taken by Secretary Castillo in removing him from office had the effect of
depriving him of his statutory right to have his case originally decided by the
Commissioner of Civil Service, as well as of his right of appeal to the Civil
Service Board of Appeals, whose decision under Republic Act No. 2260 is final,
besides the fact that such decision is in violation of the guaranty vouchsafed
by the Constitution to officers or employees in the civil service against removal
or suspension except for cause in the manner provided by law.
In a letter dated February 16, 1960, Secretary Castillo, also by authority of the
President, denied the request for reconsideration. Not satisfied with this
resolution, Collector Ang-Angco sent a memorandum to President Garcia
reiterating once more the same grounds on which he predicated his request
for reconsideration. Again Secretary Castillo, also by authority of the President,
in a letter dated July 1, 1960, denied the appeal. In this instance, Secretary
Castillo asserted that the President by virtue of his power of control over all
executive departments, bureaus and offices, can take direct action and
dispose of the administrative case in question inasmuch as the provisions of
law that would seem to vest final authority in subordinate officers of the
executive branch of the government over administrative matters falling under
their jurisdiction cannot divest the President of his power of control nor
diminish the same.
Hence, after exhausting all the administrative remedies available to him to
secure his reinstatement to the office from which he was removed without
any valid cause or in violation of his right to due process of law, Collector Ang-
Angco filed before this Court the present petition for certiorari, prohibition
and mandamus with a petition for the issuance of a preliminary mandatory
injunction. The Court gave due course to the petition, but denied the request
for injunction.
The main theme of petitioner is that respondent Executive Secretary Natalio
P. Castillo in acting on his case by authority of the President in the sense of
considering him as resigned from notice thereof, violated the guaranty
vouchsafed by the Constitution to officers and employees in the classified
service in that he acted in violation of Section 16 (i) of the Civil Service Act of
1959 which vests in the Commissioner of Civil Service the original and exclusive
jurisdiction to decide administrative cases against officers and employees in
the classified service, deprived him of his right of appeal under Section 18 (b)
of the same Act to the Civil Service Board of Appeals whose decision on the
matter is final, and removed him from the service without due process in
violation of Section 32 of the same Act which expressly provides that the
removal or suspension of any officer or employee from the civil service shall
be accomplished only after due process, and of Section, 4, Article XII of our
Constitution which provides that "no officer or employee in the civil service
shall be removed except for cause as provided for by law." Since petitioner is
an officer who belongs to the classified civil service and is not a presidential
appointee, but one appointed by the Secretary of Finance under the Revised
Administrative Code, he cannot be removed from the service by the President
in utter disregard of the provision of the Civil Service Act of 1959.
Respondents, on their part, do not agree with this theory entertained by
petitioner. They admit that if the theory is to be considered in the light of the
provisions of the Civil Service Act of 1959, the same may be correct, for indeed
the Civil Service Law as it now stands provides that all officers and employees
who belong to the classified service come under the exclusive jurisdiction of
the Commissioner of Civil Service and as such all administrative cases aginst
them shall be indorsed to said official whose decision may be appealed to the
Civil Service Board of Appeals from whose decision no further appeal can be
taken. They also admit that petitioner belongs to the classified civil service. But
it is their theory that that pertinent provisions of the Civil Service Law
applicable to employees in the classified service do not apply to the particular
case of petitioner since to hold otherwise would be to deprive the President
of his power of control over the officers and employees of the executive
branch of the government. In other words, respondents contend that,
whether the officer or employees concerned are presidential appointees or
belong to the classified service, if they are all officers and employees in the
executive department, they all come under the control of the President and,
therefore, his power of removal may be exercised over them directly without
distinction. Indeed, respondents contend that, if, as held in the case of
Negado vs. Castro, 55 Off. Gaz. 10534, the President may modify or set aside
a decision of the Civil Service Board of Appeals al the instance of the office
concerned, or the respondent employee, or may even do so motu proprio,
there would be in the final analysis no logical difference between removing
petitioner by direct action of the President and separating him from the
service by ultimate action by the President should an appeal be taken from the
decision of the Civil Service Board of Appeals to him, or if in his discretion he
may motu proprio consider it necessary to review the Board's decision. It is
contended that this ruling still holds true in spite of the new provision wrought
into the law by Republic Act 2260 which eliminated the power of review given
to the President because the power of control given by the Constitution to the
President over officers and employees in the executive department can only
be limited by the Constitution and not by Congress, for to permit Congress to
do so would be to diminish the authority conferred on the President by the
Constitution which is tantamount to amending the Constitution itself
(Hebron vs. Reyes, L-9124, July 28, 1958). Indeed this is the argument invoked
by respondent Castillo in taking direct action against petitioner instead of
following the procedure outlined in the Civil Service Act of 1959 as may be
seen from the following portion of his decision:
"In connection with the second ground advanced in support of your petition,
it is contended that in deciding the case directly, instead of transmitting it to
the Commissioner of Civil Service for original decision, this Office deprived the
respondent of his right to appeal to the Civil Service Board of Appeals. This
contention overlooks the principle that the President may modify or set aside
a decision of the Civil Service Board of Appeals at the instance of either the
office concerned or the respondent employee, or may even do so motu
proprio (Negado vs. Castro, 55 Off. Gaz., No. 51, p. 10534, Dec. 21, 1959).
There would therefore be no difference in effect between direct action by the
President and ultimate action by him should an appeal be taken from the
decision of the Commissioner of Civil Service or the Civil Service Board of
Appeals. The result is that the President's direct action would be the final
decision that would be reached in case an appeal takes its due course."
Thus, we see that the main issue involved herein is whether the President has
the power to take direct action on the case of petitioner even if he belongs to
the classified service in spite of the provisions now in force in the Civil Service
Act of 1959. Petitioner sustains the negative contending that the contrary view
would deprive him of his office without due process of law while respondents
sustain the affirmative invoking the power of control given to the President by
the Constitution over all officers and employees belonging to the executive
department.
To begin with, we may state that under Section 16 (i) of the Civil Service Act of
1959 it is the Commissioner of Civil Service who has original and exclusive
jurisdiction to decide administrative cases of all officers and employees in the
classified service for in said section the following is provided: "Except as
otherwise provided by law, (the Commissioner shall) have final authority to
pass upon the removal, separation and suspension of all permanent officers
and employees in the competitive or classified service and upon all matters
relating to the employees." The only limitation to this power is that the
decision of the Commissioner may be appealed to the Civil Service Board of
Appeals, in which case said Board shall decide the appeal within a period of 90
days after the same has been submitted for decision, whose decision in such
case shall be final (Section 18, Republic Act 2260). It should be noted that the
law as it now stands does not provide for any appeal to the President, nor is
he given the power to review the decision motu proprio, unlike the provision
of the previous law, Commonwealth Act No. 598, which was expressly
repealed by the Civil Service of 1959 (Rep. Act 2260), which provides that the
decision of the Civil Service Board of Appeals may be reversed or
modified motu proprio by the President. It is, therefore, clear that under the
present provision of the Civil Service Act of 1959, the case of petitioner comes
under the exclusive jurisdiction of the Commissioner of Civil Service, and
having been deprived of the procedure laid down therein in connection with
the investigation and disposition of his case, it may be said that he has been
deprived of due process as guranteed by said law.
It must, however, be noted that the removal, separation and suspension of the
officers and employees of the classified service are subject to the saving clause
"except as otherwise provided by law" (Section 16 (i), Republic Act No. 2260).
The question then may be asked: Is the President empowered by any other
law to remove officers and employees in the classified civil service?
The only law that we can recall on the point is Section 64(b) of the Revised
Administrative Code, the pertinent portion of which we quote:
"(b) To remove officials from office conformably to law and to declare vacant
the offices held by such removed officials. For disloyalty to the ( United States)
Republic of the Philippines, the (Governor-General) President of the
Philippines may at any time remove a person from any position of trust or
authority under the Government of the (Philippine Islands) Philippines."
The phrase "conformably to law" is significant. It shows that the President does
not have blanket authority to remove any officer or employee of the
government but that his power must still be subject to the law that may be
passed by the legislative body particularly with regard to the procedure, cause
and finality of the removal of the persons who may be the subject of
disciplinary action. Here, as abovestated, we have such law which governs the
action to be taken against officers and employees in the classified civil service.
This law is binding upon the President.
Another provision that may be mentioned is Section 79 (D) of the Revised
Administrative Code, which provides:
"Power to appoint and remove. The Department Head, upon the
recommendation of the chief of the Bureau or office concerned, shall appoint
all subordinate officers and employees whose appointment is
not expressly vested by law in the (Governor-General) President of the
Philippines, and may remove or punish them, except as especially provided
otherwise, in accordance with the Civil Service Law."
The phrase "in accordance with the Civil Service Law" is also significant. So we
may say that even granting that, for administrative purposes, the President of
the Philippines is considered as the Department Head of the Civil Service
Commission, his power to remove is still subject to the Civil Service Act of
1959, and we already know that with regard to officers and employees who
belong to the classified service the finality of the action is given either to the
Commissioner of Civil Service or the Civil Service Board of Appeals.
Let us now take up the power of control given to the President by the
Constitution over all officers and employees in the executive department
which is now invoked by respondents as justification to override the specific
provisions of the Civil Service Act. This power of control is couched in general
terms for it does not set in specific manner its extent and scope. Yes, this Court
in the case of Hebron vs. Reyes, supra, had already occasion to interpret the
extent of such power to mean "the power of an officer to alter or modify or
nullify or set aside what a subordinate officer had done in the performance of
his duties and to substitute the judgment of the former for that of the
latter" [1], to distinguish it from the power of general supervision over
municipal government, but the decision does not go to the extent of including
the power to remove an officer or employee in the executive department.
Apparently, the power merely applies to the exercise of control over the acts
of the subordinate and not over the actor or agent himself of the act. It only
means that the President may set aside the judgment or action taken by a
subordinate in the performance of his duties.
That meaning is also the meaning given to the word "control" as used in
administrative law. Thus, the Department Head pursuant to Section 79 (C) is
given direct control of all bureaus and offices under his department by virtue
of which he may "repeal or modify decisions of the chiefs of said bureaus or
offices", and under Section 74 of the same Code, the President's control over
the executive department only refers to matters of general policy. The term
"policy" means a settled or definite course or method adopted and followed
by a government, body, or individual [2], and it cannot be said that the removal
of an inferior officer comes within the meaning of control over a specific policy
of government.
But the strongest argument against the theory of respondents is that it would
entirely nullify and set at naught the beneficent purpose of the whole civil
service system implanted in this jurisdiction which is to give stability to the
tenure of office of those who belong to the classified service in derogation of
the provision of our Constitution which provides that "No officer or employee
in the civil service shall be removed or suspended except for cause as provided
by law" (Section 4, Article XII, Constitution). Here, we have two provisions of
our Constitution which are apparently in conflict, the power of control by the
President embodied in Section 10 (1), Article VII, and the protection extended
to those who are in the civil service of our government embodied in Section 4,
Article XII. It is our duty to reconcile and harmonize these conflicting provisions
in a manner that may be given to both full force and effect and the only logical, appointments but in all that is incident thereto." ( U. S. vs. Perkins, 116 U. S.
practical and rational way is to interpret them in the manner we do it in this 483)
decision. As this Court has aptly said in the case of Lacson vs. Romero: In resumé we may conclude that the step taken by respondent Executive
Secretary, even with the authority of the President, in taking direct action on
"* * * To hold that civil service officials hold their office at the will of the
the administrative case of petitioner, without submitting the same to the
appointing power subject to removal or forced transfer at any time, would
Commissioner of Civil Service, is contrary to law and should be set aside.
demoralize and undermine and eventually destroy the whole Civil Service
System and structure. The country would then go back to the days of the old Wherefore, it is hereby ordered that petitioner be immediately reinstated to
Jacksonian Spoils System under which a victorious Chief Executive, after the his office as Collector of Customs for the Port of Manila, without prejudice of
elections could if so minded, sweep out of office, civil service employees submitting his case to the Commissioner of Civil Service to be dealt with in
differing in political color or affiliation from him, and sweep in his political accordance with law. No costs.
followers and adherents, especially those who have given him help, political
Bengzon, C.J., Padilla, Labrador, Concepción, Barrera, Paredes, Dizon,
or otherwise." (Lacson vs. Romero, 84 Phil., 740, 754)
Regala, and Makalintal, JJ., concur.
There is some point in the argument that the power of control of the President
may extend to the power to investigate, suspend or remove officers and
employees who belong to the executive department if they are presidential
appointees or do not belong to the classified service for such can be justified
under the principle that the power to remove is inherent in the power to
appoint (Lacson vs. Romero, supra), but not with regard to those officers and
employees who belong to the classified service for as to them that inherent
power cannot be exercised. This is in line with the provision of our Constitution
which says that "the Congress may by law vest the appointment of the inferior
officers, in the President alone, in the courts, or in heads of department"
(Article VII, Section 10 (3), Constitution). With regard to these officers whose
appointments are vested on heads of departments, Congress has provided by
law for a procedure for their removal precisely in view of this constitutional
authority. One such law is the Civil Service Act of 1959.

"We have no doubt that when Congress, by law, vests the appointment of
inferior officers in the heads of departments it may limit and restrict power of
removal as it seems best for the public interest. The constitutional authority in
Congress to thus vest the appointment implies authority to limit, restrict, and
regulate the removal by such laws as Congress may enact in relation to the
officers so appointed. The head of a department has no constitutional
prerogative of appointment to officers independently of legislation of
Congress, and by such legislation he must be governed, not only in making