REDHORSE NOTES AQUINO PART 3

Constitutional Law 2 Case Digests

Professor: Atty. Rodolfo Aquino

Compiled by Raphael Andrada

GLOBE V. NTC

G.R. No. 143964. July 26, 2004

FACTS:

On 4 June 1999, Smart filed a Complaint with public respondent NTC,praying that NTC order the
immediate interconnection of Smarts and Globes GSM networks. Smart alleged that Globe, with evident
bad faith and malice, refused to grant Smarts request for the interconnection of SMS.

Globe filed its Answer with Motion to Dismiss on 7 June 1999, interposing grounds that the Complaint
was premature, Smarts failure to comply with the conditions precedent required in Section 6 of NTC
Memorandum Circular 9-7-93,19 and its omission of the mandatory Certification of Non-Forum Shopping.

On 19 July 1999, NTC issued the Order now subject of the present petition.

According to NTC Both Smart and Globe were equally blameworthy for their lack of cooperation in the
submission of the documentation required for interconnection and for having unduly maneuvered the
situation into the present impasse.

NTC held that since SMS falls squarely within the definition of value-added (VAS) service or enhanced-
service given in NTC Memorandum Circular No. 8-9-95 (MC No. 8-9-95) their implementation of SMS
interconnection is mandatory.The NTC also declared that both Smart and Globe have been providing SMS
without authority from it.

Globe filed with the CA a Petition for Certiorari and Prohibition to nullify and set aside the Order and to
prohibit NTC from taking any further action in the case.

Globe reiterated its previous arguments that the complaint should have been dismissed for failure to
comply with conditions precedent and the non-forum shopping rule.They claimed that NTC acted without
jurisdiction in declaring that it had no authority to render SMS, pointing out that the matter was not raised
as an issue before it at all.

They alleged that the Order is a patent nullity as it imposed an administrative penalty for an offense for
which neither it nor Smart was sufficiently charged nor heard on in violation of their right to due process.
The CA issued a Temporary Restraining Order (TRO) on 31 Aug 1999. In its Memorandum, Globe called
the attention of the CA in an earlier NTC decision regarding Islacom, holding that SMS is a deregulated
special feature and does not require the prior approval of the NTC.

ISSUE:

Whether NTC may legally require Globe to secure NTC approval before it continues providing SMS.

WON SMS is a Value Added Service (VAS) under Public telecommunications Act (PTA) of 1995;

HELD:

1. NO. The NTC may not legally require Globe to secure its approval for Globe to continue providing SMS.
This does not imply though that NTC lacks authority to regulate SMS or to classify it as VAS. However, the
move should be implemented properly, through unequivocal regulations applicable to all entities that are
similarly situated, and in an even-handed manner. This should not be interpreted, however, as removing
SMS from the ambit of jurisdiction and review by the NTC. The NTC will continue to exercise, by way of its
broad grant, jurisdiction over Globe and Smart’s SMS offerings, including questions of rates and customer
complaints. Yet caution must be had. Much complication could have been avoided had the NTC adopted
a proactive position, promulgating the necessary rules and regulations to cope up with the advent of the
technologies it superintends. With the persistent advent of new offerings in the telecommunications
industry, the NTC’s role will become more crucial than at any time before.

2. NO. There is no legal basis under the PTA or the memorandum circulars promulgated by the NTC to
denominate SMS as VAS, and any subsequent determination by the NTC on whether SMS is VAS should
be made with proper regard for due process and in conformity with the PTA.

Is SMS a VAS, enhanced service, or a special feature? Apparently, even the NTC is unsure. It had told
Islacom that SMS was a special feature, then subsequently held that it was a VAS. However, the pertinent
laws and regulations had not changed from the time of the Islacom letter up to the day the Order was
issued. Only the thinking of NTC did.

More significantly, NTC never required ISLACOM to apply for prior approval in order to provide SMS, even
after the Order to that effect was promulgated against Globe and Smart. This fact was admitted by NTC
during oral arguments. NTCs treatment of Islacom, apart from being obviously discriminatory, puts into
question whether or not NTC truly believes that SMS is VAS. NTC is unable to point out any subsequent
rule or regulation, enacted after it promulgated the adverse order against Globe and Smart, affirming the
newly-arrived determination that SMS is VAS.

In fact, as Smart admitted during the oral arguments, while it did comply with the NTC Order requiring it
to secure prior approval, it was never informed by the NTC of any action on its request. While NTC
counters that it did issue a Certificate of Registration to Smart, authorizing the latter as a provider of SMS,
such Certificate of Registration was issued only on 13 March 2003, or nearly four (4) years after Smart had
made its request.This inaction indicates a lack of seriousness on the part of the NTC to implement its own
rulings. Also, it tends to indicate the lack of belief or confusion on NTCs part as to how SMS should be
treated. Given the abstract set of rules the NTC has chosen to implement, this should come as no surprise.
Yet no matter how content the NTC may be with its attitude of sloth towards regulation, the effect may
prove ruinous to the sector it regulates.

Moreover, the Court realizes that the PTA of 1995 is not intended to constrain the industry within a
cumbersome regulatory regime. The policy as pre-ordained by legislative fiat renders the traditionally
regimented business in an elementary free state to make business decisions, avowing that it is under this
atmosphere that the industry would prosper.

It is disappointing at least if the deregulation thrust of the law is skirted deliberately. But it is ignominious
if the spirit is defeated through a crazy quilt of vague, overlapping rules that are implemented
haphazardly.

CORONA v. UNITED HARBOR PILOT ASSOC. OF THE PHIL.

GR NO. 111953 (DEC. 12 1997)

FACTS:

PPA General Manager Rogelio Dayan issued PPA-AO No. 04-92 on July 15, 1992, whose avowed policy was
to “instill effective discipline and thereby afford better protection to the port users through the
improvement of pilotage services.” This was implanted by providing therein that “all existing regular
appointments which have been previously issued either by the Bureau of Customs or the PPA shall remain
valid up to 31 December 1992 only” and that “all appointments to harbour pilot positions in all pilotage
districts shall, henceforth, be only for a term of one (1) year from the date of effectivity subject to yearly
renewal or cancellation by the authority after conduct of rigid evaluation of performance.”

Respondents United Harbor Pilots Association and the Manila Ports Association, through Capt. Alberto C.
Compas, questioned PPA-AO No 04-92. They argued that due process was not observed in the adoption
of PPA-AO No. 04-92 allegedly because no hearing was conducted whereby “relevant government
agencies” and the pilot themselves could ventilate their views.

On March 17, 1993, the office of the president, through then assistant executive secretary for legal affairs
Renato C. Corona, dismissed the appeal/petition and lifted the restraining order issued earlier. Secretary
Corona cited section 26 of P.D. No. 857, which merely requires the PPA to consult with “relevant
Government agencies.” Since the PPA Board of Directors is composed of the secretaries of the DOTC, the
Department of Public Works and Highways, the Department of Finance, and the Department of
Environment and natural Resources, as well as the DirectorGeneral of the National Economic
Development Agency, the MARINA, and the private sector representative who, due to his knowledge and
expertise, was appointed by the President to the Board, he concluded that the law has been sufficiently
complied with by the PPA in issuing the assailed administrative order.
Consequently, respondents filed a petition before the RTC of Manila which declared PPA Admin. Order
04-92 and its implementing Circular Orders null and void.

ISSUE: Whether due process was not observed in the adoption of PPA-AO No. 04-92

HELD:

THE COURT IS CONVINCED THAT PPA-AO NO. 04-92 WAS ISSUED IN STARK DISREGARD OF RESPONDENTS'
RIGHT AGAINST DEPRIVATION OF PROPERTY WITHOUT DUE PROCESS OF LAW. THE SUPREME COURT SAID
THAT IN ORDER TO FALL WITHIN THE AEGIS OF THIS PROVISION, TWO CONDITIONS MUST CONCUR,
NAMELY, THAT THERE IS A DEPRIVATION AND THAT SUCH DEPRIVATION IS DONE WITHOUT PROPER
OBSERVANCE OF DUE PROCESS. AS A GENERAL RULE, NOTICE AND HEARING, AS THE FUNDAMENTAL
REQUIREMENTS OF PROCEDURAL DUE PROCESS, ARE ESSENTIAL ONLY WHEN AN ADMINISTRATIVE BODY
EXERCISES ITS QUASI-JUDICIAL FUNCTION. IN THE PERFORMANCE OF ITS EXECUTIVE OR LEGISLATIVE
FUNCTIONS, SUCH AS ISSUING RULES AND REGULATIONS, AN ADMINISTRATIVE BODY NEED NOT COMPLY
WITH THE REQUIREMENTS OF NOTICE AND HEARING.

THERE IS NO DISPUTE THAT PILOTAGE AS A APROFESSION HAS TAKEN ON THE NATURE OF A PROPERTY
RIGHT. IT IS READILY APPARENT THAT PPA-AO NO. 04-92 UNDULY RESTRICTS THE RIGHT OF HARBOR
PILOTS TO ENJOY THEIR PROFESSION BEFORE THEIR COMPULSORY RETIREMENT.

NPC V. ZOZOBRADO G. R. No. 153022 April 10, 2006

FACTS:

Agustin A. Zozobrado, herein respondent, is a permanent employee of petitioner National Power

Corporation (NPC) assigned as Pilot in the aviation group, received a letter from NPC President Frederico
C. Puno, informing him that he was being dropped from the rolls.

Zozobrado filed an appeal before the CSC questioning NPCs implementation of dropping him from the
rolls.

CSC dismissed Zobrado’s appeal and MR.

Respondent filed with the Court of Appeals a Petition for Review on Certiorari under Rule 43 of the Rules
of Court and was granted.

Petitioner filed for MR but was denied.

Respondent had been dropped by petitioner from the rolls due to Unsatisfactory or Poor Performance.

CA ruled in favor of herein respondents finding that the separation was made with utter lack of due
process.
ISSUE:

WON due process was followed in dropping respondent from the rolls.

HELD:

NO. Both the substantive and procedural aspect of due process were violated by petitioner in dismissing
respondent.

As to the procedural aspect, not even one requisites laid down by Memorandum Circular No. 12 has been
complied with. Respondent was never notified in writing of his Unsatisfactory rating within 30 days from
the end of the semester when the Unsatisfactory rating was given.

Respondent was never warned in writing that a succeeding Unsatisfactory performance shall warrant his
separation from the service. Even the allegation of the oral notice itself (that petitioner claims and
respondent categorically denies) is clearly an afterthought, having been utilized for the first time in the
Motion for Reconsideration of the assailed Court of Appeals decision and was never used as an argument
in the administrative proceedings. The proof of such notice, a self-serving affidavit of the very individual
who unilaterally gave the apparently groundless rating, deserves scant consideration.

As to the substantive aspect, evidence shows that petitioner never denied that respondents unsatisfactory
rating was due to respondents testimony in court concerning the graft charges against NPC employees.
On the day respondent was supposed to testify in court under pain of contempt, Gen. Lagera suddenly
sent him to fly the NPC President despite the fact that another pilot was assigned to such mission.

Moreover, Gen. Lagera’s ill motive is further proved by the fact that respondent was kept in the dark as
to the status of his employment even though the same had already been terminated two months earlier.
It appears that the sad news was relayed to respondent only on his natal day affair. We can see no reason
for the two months delay other than the devastation Gen. Lagera expected to cause by imparting the
shocking news on respondents birth anniversary, during a celebration and in front of other people.

As further found by the Court of Appeals, when respondent brought to the Grievance Committee the
matter of his unsatisfactory ratings, the Grievance Committee recommended a review thereof to take into
account respondents quantity of flying hours. Pilots have traditionally been rated by the number of flying
hours spent in their career, and respondent had more than double the flying hours of the two other pilots
of the Aviation Group combined. However, Gen. Lagera blocked such review, claiming that he had already
considered the same, albeit minimally. This is a clear indication that Gen. Lagera really wanted to take it
upon himself to solely give the Unsatisfactory ratings to respondent, in violation of the approved
Performance Appraisal System (PAS) of the NPC.
SALAW V. NLRC G.R. No. 90786 September 27, 1991

FACTS:

Espero Santos Salaw was a credit investigator-appraiser of herein respondent Associated Bank.

His duties included inspecting, investigating, appraising, and identifying the company's foreclosed assets;
giving valuation to its real properties and verifying the genuineness and encumbrances of the titles of
properties mortgaged to the respondents.

Salaw and a fellow employee were alleged to have conspired in selling twenty (20) sewing machines and
electric generators which had been foreclosed by the respondent bank from Worldwide Garment and L.P.
Money Garment, for P60,000.00, and divided the proceeds thereof in equal shares of P30,000.00 between
the two of them. The Criminal Investigation Service (CIS) of the Philippine Constabulary extracted Sworn
Statement from them without the assistance of a counsel.

Rollie Tuazon, the bank manager, requested petitioner to appear before the bank's Personnel Discipline
and Investigation Committee (PDIC) which petitioner attended and 3 months after, his termination
became effective for alleged serious misconduct or willful disobedience and fraud or willful breach of the
trust reposed on him by the private respondents.

Petitioner filed an illegal dismissal case against respondent and likewise submitted an affidavit recanting
his Sworn Statement before the CIS.

The labor arbiter ruled in favor of the petitioner.

Private respondents appealed to the NLRC and reversed the LA’s decision.

Petitioner’s MR was denied.

Hence, this petition.

ISSUE:

WON petitioner’s dismissal was legally justified.

HELD:

NO. Under the Labor Code, as amended, the requirements for the lawful dismissal of an employee by his
employer are two-fold: the substantive and the procedural. Not only must the dismissal be for a valid or
authorized cause as provided by law (Articles 279, 281, 282-284, New Labor Code), but the rudimentary
requirements of due process — notice and hearing — must also be observed before an employee may be
dismissed. One does not suffice; without their concurrence, the terminate would, in the eyes of the law,
be illegal.

As to the LA’s finding, petitioner was terminated without the benefit of due process of law. The
respondents' initial act in convening their Personnel Discipline and Investigation Committee (PDIC) to
investigate complainant (after the CIS experience) would have complied with the demands of due process
had complainant been given the opportunity to present his own defense and confront the witnesses, if
any, and examine the evidence against him. But as the records clearly show, the complainant was denied
that constitutional right when his subsequent request refute the allegations against him was granted and
a hearing was set "without counsel or representative.

The investigation of petitioner Salaw by the respondent Bank' investigating committee violated his
constitutional right to due process, in as much as he was not given a chance to defend himself, as provided
in Rule XIV, Book V of the Implementing Rules and Regulations of the Labor Code governing the dismissal
of employees. Section 5 of the said Rule requires that "the employer shall afford the worker ample
opportunity to be heard and to defend himself with the assistance of his representative if he so desires."11
(Emphasis supplied.) Here petition was perfunctorily denied the assistance of counsel during the
investigation to be conducted by the PDIC. No reasons preferred which vitiated the denial with irregularity
and unfairness.

As aptly observed by the labor arbiter, the respondents premised their action in dismissing the
complainant on his supposed admission of the offense imputed to him by the Criminal Investigation
Service (CIS) in its interrogation in November 1984. The said admission was carried in a three-page Sworn
Statement signed by the complainant. Aside from this Statement, other evidence was presented by the
respondents to establish the culpability of the complainant in the fraudulent sale of respondents'
foreclosed properties. Even the minutes of proceeding taken during the investigation conducted by
respondents were not presented. ... This is a glaring denial of due process.

Considering further that the admission by the petitioner which was extracted from him by the Criminal
Investigate Service of the Philippine Constabulary (National Capital Region) without the assistance of
counsel and which was made the sole basis for his dismissal, cannot be admitted in evidence against him,
then, the finding of guilt of the PDIC, which was affirmed by the public respondent NLRC; has no more leg
stand on. A decision with absolutely nothing to support it is a nullity.

Significantly, the dismissal of the petitioner from his employment was characterized by undue haste. The
law is clear that even in the disposition of labor cases, due process must not be subordinated to
expediency or dispatch. Otherwise, the dismissal of the employee will be tainted with illegality.

CASTILLO-CO V. BARBERS G.R. No. 129952. June 16, 1998

FACTS:

Petitioner Josie Castillo-Co is a Governor of Quirino. Congressman Junie Cua filed a complaint before the
Office of the Ombudsman against Governor Castillo-Co and Provincial Engineer Virgilio Ringor for alleged
fraud against the public treasury and malversation. (Sections 3(e) and 3(g) of the Anti-Graft and Corrupt
Practices Act, as amended, and Articles 213 and 217 of the Revised Penal Code.)
Congressman Cua charged that the equipment purchased was reconditioned instead of brand new as
required by resolutions of the provinces Sanggunian authorizing such purchase. Other irregularities
claimed to have been committed included overpricing, lack of public bidding, lack of inspection, advance
payment prior to delivery in violation of Section 338 of the Local Government Code, and an attempt to
cover up such irregularities.

A week after the complaint was filed, Governor Castillo-Co and Provincial Engineer Ringor were placed
under preventive suspension for a period of six (6) months.

Said order was signed by Emilio A. Gonzalez III, Director, and approved by Jesus Guerrero, Deputy
Ombudsman for Luzon.

Petitioners thereafter filed separate motions for reconsideration. Both motions were denied in a Joint
Order signed by Director Gonzales and approved by Deputy Ombudsman Guerrero.

Petitioner file for special civil action for certiorari and prohibition, with a prayer for temporary restraining
order/writ of preliminary injunction, seeks to nullify the Order of the Deputy Ombudsman directing her
preventive suspension and claiming that the Deputy Ombudsman has no authority to issue the preventive
suspension against them.

ISSUE:

WON the Deputy Ombudsman has authority to issue the preventive suspension

WON petitioner was denied due process because she was not afforded the opportunity to controvert the
evidence against her before the order of preventive suspension was issued.

HELD:

1. YES. Petitioner claims that under Republic Act No. 7975, only the Ombudsman has the authority to sign
the order placing officials with a 27 salary grade or above, like petitioner-governor, under preventive
suspension. In this case, the suspension order was neither signed nor approved by Ombudsman Aniano
Desierto. Rather, said order was signed by Director Emilio Gonzales III and approved by Deputy
Ombudsman for Luzon Jesus Guerrero.

There is nothing in RA 7975, however, that would remotely suggest that only the Ombudsman, and not
his Deputy, may sign an order preventively suspending officials occupying positions classified as grade 27
or above.

Moreover, Section 24 of Republic Act No. 6770 and Section 9, Rule III of the Rules of Procedure of the
Office of Ombudsman similarly provides:

SEC. 24. Preventive Suspension. -- The Ombudsman or his Deputy may preventively suspend any officer
or employee under his authority pending an investigation, if in his judgment, the evidence of guilt is
strong, and (a) the charge against such officer or employee involves dishonesty, oppression or gross
misconduct, or neglect in the performance of duty; or (b) the charge would warrant removal from the
service; or (c) the respondents continued stay in office may prejudice the case filed against him. Xxx

SEC. 9. Preventive suspension. Pending investigation, the respondent may be preventively suspended
without pay for a period of not more than six (6) months, if, in the judgment of the Ombudsman or his
proper deputy, the evidence of guilt is strong, and (a) the charge against such officer or employee involves
dishonesty, oppression or gross misconduct, or neglect in the performance of duty, (b) the charge would
warrant removal from the service; or (c) the respondents continued stay in office may prejudice the case
filed against him. xxx

Under these provisions, there cannot be any doubt that the Ombudsman or his Deputy may preventively
suspend an officer or employee, where appropriate, as indicated by the word or between the Ombudsman
and his Deputy. The word or is a disjunctive term signifying disassociation and independence of one thing
from each of the other things enumerated. The law does not require that only the Ombudsman himself
may sign the order of suspension.

2. NO. A preventive suspension, however, can be decreed on an official under investigation after charges
are brought and even before the charges are heard since the same is not in the nature of a penalty,[13]
but merely a preliminary step in an administrative investigation.

In connection with the suspension of petitioner before he could file his answer to the administrative
complaint, suffice it to say that the suspension was not a punishment or penalty for the acts of dishonesty
and misconduct in office, but only as a preventive measure. A suspension is a preliminary step in an
administrative investigation. If after such investigation, the charges are established and the person
investigated is found guilty of acts warranting his removal, then he is removed or dismissed. This is the
penalty. There is, therefore, nothing improper in suspending an officer pending his investigation and
before the charges against him are heard and be given an opportunity to prove his innocence.

The fact that the said order was issued seven days after the complaint was filed did not constitute grave
abuse of discretion. The immediate issuance of such order is required in order to prevent the subject of
the suspension from committing further irregularities. Such prompt action, moreover, is in consonance
with Section 15 of RA 6770 which exhorts the Ombudsman to:

xxx give priority to complaints filed against high ranking government officials and/or those occupying
supervisory positions, complaints involving grave offenses as well as complaints involving large sums of
money and/or properties.
AMERICAN INTER-FASHION CORP. V. OFFICE OF THE PRESIDENT

G.R. No. 92422 May 23, 1991

FACTS:

On April 27, 1984, respondent Glorious Sun Fashion (GLORIOUS)was found guilty of dollar-salting ((occurs
when dollars are removed from the Philippines without approval from the Central Bank and transferred
to an account outside the county.) ) and misdeclaration of importations by the Garments and Textile
Export Board (GTEB) in OSC Case No. 84-B-1 and, as a result of which, the export quotas allocated to it
were cancelled.

Soon after the rendition of the GTEB decision, respondent GLORIOUS filed a petition for certiorari and
prohibition with the Court, docketed as G.R. No. 67180, contending that its right to due process of law
was violated, and that the GTEB decision was not supported by substantial evidence.

Giving credence to the allegations of respondent GLORIOUS, the Court issued a resolution on June 4, 1984,
ordering GTEB to conduct further proceedings in the administrative case against respondent GLORIOUS.

However, on July 25, 1984, respondent GLORIOUS filed a manifestation of its intention to withdraw the
petition. On August 20, 1984, the Court granted respondent GLORIOUS' motion for withdrawal.

Respondent GLORIOUS filed another motion to dismiss with prejudice, which was duly noted by the Court
in a resolution dated September 10, 1984.

More than two years later, on October 15, 1986, respondent GLORIOUS filed with the GTEB a petition for
the restitution of its export quota allocation and requested for a reconsideration of the GTEB decision
dated April 27, 1984.

Once again, respondent GLORIOUS alleged that the charges against it in OSC Case No. 84-B-1 were not
supported by evidence. Moreover, it alleged that the GTEB decision cancelling its export quotas was
rendered as a result of duress, threats, intimidation and undue influence exercised by former Minister
Roberto V. Ongpin in order to transfer GLORIOUS' export quotas to "Marcos crony-owned" corporations
De Soleil Apparel Manufacturing Corporation [DSA] and petitioner American Inter-fashion (AIFC).

Respondent GLORIOUS further alleged that it was coerced by Mr. Roberto Ongpin to withdraw its petition
in G.R. No. 67180 and to enter into joint venture agreements paving the way for the creation of DSA and
petitioner AIFC which were allowed to service respondent GLORIOUS' export quotas and to use its plant
facilities, machineries and equipment.

On September 4, 1987, the GTEB denied the petition of respondent GLORIOUS. An appeal was then taken
on October 5, 1987 to the Office of the President, docketed as OP Case No. 3781.

At this point, petitioner AIFC sought to intervene in the proceedings and filed its opposition to GLORIOUS'
appeal on November 27, 1987, claiming that the GTEB decision dated April 27, 1984 has long become
final, and that a favorable action on the appeal would result in the forfeiture of the export quotas which
were legally allocated to it.

On September 7, 1989, the Office of the President ruled in favor of respondent GLORIOUS, finding the
proceedings before the GTEB in 1984 irregular, and remanded the case to GTEB for further proceedings.

The motion for reconsideration of AIFC was subsequently denied on February 20, 1990.

Hence, this petition.

ISSUE:

WON the final judgment in G.R. No. 67180 constitutes res judicata to the instant case on the ground that
the final judgment in G.R. NO. 67180 was a judgment on the merits.

WON private respondent Glorious Sun was not denied due process during the hearings held in GTEB.

HELD:

1. NO. The petitioner contends that in entertaining the appeal of private respondent Glorious, the
Office of the President “had unwittingly made itself a tool in a cunning move to resurrect a decision which
had become final and executory more than three years earlier. The petitioner asseverates resolution
dismissing G.R. No. 67180 was res judicata on the matter.

The Supreme Court said that one of the requirements for a judgment to be a bar to a subsequent
case is that it must be a judgment on the merits. A judgment is upon the merits when it amounts to a
declaration of the law as to the respective rights and duties of the parties, based upon the ultimate fact
or state of facts disclosed by the pleadings and evidence, and upon which the right of recovery depends,
irrespective of formal, technical or dilatory objection or contentions.

Certainly, the dismissal of G.R. No. 67180 cannot be categorized as a judgment on the merits. The
action in 1984 did not resolve anything. In fact, when the court heard the parties during the oral
arguments, GTEB was not able to present any showing of misdeclaration of imports.

The motion to withdraw the petition arose from the fears of Mr. Nemesio Co that not only
Glorious Sun but his other businesses would be destroyed by the martial law regime. The resolution
dismissing G.R. No. 67180 was based solely on the notice of withdrawal by the private respondent. The
dismissal of the petition was clearly based on a technical matter rather than on the merits of the petition.

Hence, it cannot constitute res judicata.

2. NO. The Petitioner contends that Glorious Sun was not denied due process. Although AIFC
admits that the 1984 GTEB decision failed to disclose to Glorious vital evidence used by GTEB in arriving
at its conclusion that Glorious was guilty of dollar-salting, it contends that the subsequent disclosure in
1987, where relevant documents were given to Glorious and that the latter was given an opportunity to
comment thereon, cured the defect.
 This contention by AIFC, the court holds, is misleading. The SC recognized that the instant petition
involves the 1984 resolution of the GTEB.

AIFC cannot use as an excuse the subsequent disclosure of the evidence used by the GTEB to
Glorious in 1987 to justify the 1984 GTEB resolution.

The glaring fact is that Glorious was denied due process when GTEB failed to disclose evidence
used by it in rendering a resolution against Glorious.

Moreover, the documents disclosed to Glorious by GTEB in 1987 enhanced the charge that the
former was denied due process.

Attention was also brought to the Puno affidavit, wherein Puno, the Chairman of the Investigating
Panel created by the Ministry of Trade and Industry admitted that he was pressured by Minister Ongpin
to look for ways and means to remove the quotas from Glorious. AIFC claims that it is an inconsequential
matter in that the GTEB Board did not give credence to it and also, none of the members of the committee
would agree that there was any pressure or instruction from Minister Ongpin.

The Supreme Court said that the fact that the other members would not agree that there was
pressure from Ongpin does not mean that Puno was not telling the truth. Mr. Puno stated that he was
pressured. He did not state that the members of the investigating panel were pressured. Mr. Puno was
the Chairman of the Investigating Panel. Hence, it is plausible that in view of his position he was the one
pressured by Minister Ongpin. There is every reason to suspect that even before Glorious Sun was
investigated, a decision to strip it of its quotas and to award them to friends of their administration had
already been made.

The Supreme Court also held that although factual findings of administrative agencies are
generally accorded respect, such factual findings may be disregarded if they are not supported by
evidence; where the findings are initiated by fraud, imposition or collusion; where the procedures which
lead to the factual findings are irregular; when palpable errors are committed; or when grave abuse of
discretion arbitrariness or capriciousness is manifest.

Contrary to the petitioner's posture, the record clearly manifests that in canceling the export
quotas of the private respondent GTEB violated the private respondent’s constitutional right to due
process. Before the cancellation in 1984, Glorious had been enjoying export quotas granted to it since
1977. In effect, the private respondent’s export quota allocation which initially was a privilege evolved
into some form of property right which should not be removed from it arbitrarily and without due process
only to hurriedly confer it on another.
THE UNITED STATES, plaintiff-appellee, vs. LUIS TORIBIO, defendant-appellant

Facts:

The appellant, Turibio slaugtered or caused to be slaughtered for human consumption, his
carabao, without the permit from the municipal treasure of Carmen, Bohol wherein it was slaughtered,
which is in violation of the provisions of sections 30 and 33 of Act No. 1147, an Act regulating the
registration, branding, and slaughter of large cattle. The said act of slaughtering the carabao took place
after his application for a permit to slaughter his carabao was denied to him on the ground that the animal
was not unfit "for agricultural work or for draft purposes."

The counsel for appellant contends that under such circumstances the provisions of Act No. 1147
do not prohibit nor penalize the slaughter of large cattle without a permit of the municipal treasure,
Sections 30, 31, 32, and 33 of the Act because there is no slaughter house in the said municipality.
However, according to the states the prohibition refers to the slaughter of large cattle for human
consumption, anywhere, without a permit duly secured from the municipal treasurer.

Counsel for appellant contends that the statute, in so far as it undertakes to penalize the slaughter
of carabaos for human consumption as food, without first obtaining a permit which cannot be procured
in the event that the animal is not unfit "for agricultural work or draft purposes," is unconstitutional and
in violation of the terms of section 5 of the Philippine Bill (Act of Congress, July 1, 1902), which provides
that "no law shall be enacted which shall deprive any person of life, liberty, or property without due
process of law."

Issue:

W/O Act No. 1147, an Act regulating the registration, branding, and slaughter of large cattle is
unconstitutional and in violation of the terms of section 5 of the Philippine Bill which provides that "no
law shall be enacted which shall deprive any person of life, liberty, or property without due process of
law."

Held:

The SC Ruled against Turibio. Because it is a valid exercise of Police power.

An examination of the general provisions of the statute in relation to the public interest which it
seeks to safeguard and the public necessities for which it provides, leaves no room for doubt that the
limitations and restraints imposed upon the exercise of rights of ownership by the particular provisions of
the statute under consideration were imposed not for private purposes but, strictly, in the promotion of
the "general welfare" and "the public interest" in the exercise of the sovereign police power which every
State possesses for the general public welfare and which "reaches to every species of property within the
commonwealth."

The power we allude to is rather the police power, the power vested in the legislature by the
constitution, to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and
ordinances, either with penalties or without, not repugnant to the constitution, as they shall judge to be
for the good and welfare of the commonwealth, and of the subjects of the same.
 From what has been said, we think it is clear that the enactment of the provisions of the statute
under consideration was required by "the interests of the public generally, as distinguished from those of
a particular class;" and that the prohibition of the slaughter of carabaos for human consumption, so long
as these animals are fit for agricultural work or draft purposes was a "reasonably necessary" limitation on
private ownership, to protect the community from the loss of the services of such animals by their
slaughter by improvident owners, tempted either by greed of momentary gain, or by a desire to enjoy the
luxury of animal food, even when by so doing the productive power of the community may be measurably
and dangerously affected.

Ynot vs IAC GR No. 74457, 20 March 1987

“Strike, but hear me first” -Themistocles

Facts:

Executive Order No. 626-A prohibited the transportation of carabaos and carabeef from one
province to another. The carabaos of petitioner were confiscated for violation of Executive Order No 626-
A while he was transporting them from Masbate to Iloilo. Petitioner challenged the constitutionality of
Executive Order No. 626-A. The government argued that Executive Order No. 626-A was issued in the
exercise of police power to conserve the carabaos that were still fit for farm work or breeding.

Issue: Whether or Not EO No. 626-A is a violation of Substantive Due Process.

Held:

Yes. The thrust of his petition is that the executive order is unconstitutional insofar as it authorizes
outright confiscation of the carabao or carabeef being transported across provincial boundaries. His claim
is that the penalty is invalid because it is imposed without according the owner a right to be heard before
a competent and impartial court as guaranteed by due process.

The closed mind has no place in the open society. It is part of the sporting Idea of fair play to hear
"the other side" before an opinion is formed or a decision is made by those who sit in judgment. Obviously,
one side is only one-half of the question; the other half must also be considered if an impartial verdict is
to be reached based on an informed appreciation of the issues in contention. It is indispensable that the
two Alliance for Alternative Action THE ADONIS CASES 2014-2015 San Beda College of Law Based on ATTY.
ADONIS V. GABRIEL lectures 61 sides complement each other, as unto the bow the arrow, in leading to
the correct ruling after examination of the problem not from one or the other perspective only but in its
totality. A judgment based on less that this full appraisal, on the pretext that a hearing is unnecessary or
useless, is tainted with the vice of bias or intolerance or ignorance, or worst of all, in repressive regimes,
the insolence of power.

The minimum requirements of due process are notice and hearing which, generally speaking, may
not be dispensed with because they are intended as a safeguard against official arbitrariness. It is a
gratifying commentary on our judicial system that the jurisprudence of this country is rich with
applications of this guaranty as proof of our fealty to the rule of law and the ancient rudiments of fair play.
We have consistently declared that every person, faced by the awesome power of the State, is entitled to
"the law of the land," which Daniel Webster described almost two hundred years ago in the famous
Dartmouth College Case, as "the law which hears before it condemns, which proceeds upon inquiry and
renders judgment only after trial." It has to be so if the rights of every person are to be secured beyond
the reach of officials who, out of mistaken zeal or plain arrogance, would degrade the due process clause
into a worn and empty catchword.

This is not to say that notice and hearing are imperative in every case for, to be sure, there are a
number of admitted exceptions. (1)The conclusive presumption, for example, bars the admission of
contrary evidence as long as such presumption is based on human experience or there is a rational
connection between the fact proved and the fact ultimately presumed therefrom. (2)There are instances
when the need for expeditions action will justify omission of these requisites, as in the summary
abatement of a nuisance per se, like a mad dog on the loose, which may be killed on sight because of the
immediate danger it poses to the safety and lives of the people. (3)Pornographic materials, contaminated
meat and narcotic drugs are inherently pernicious and may be summarily destroyed. (4)The passport of a
person sought for a criminal offense may be cancelled without hearing, to compel his return to the country
he has fled. (5) Filthy restaurants may be summarily padlocked in the interet of the public health and
bawdy houses to protect the public morals. In such instances, previous judicial hearing may be omitted
without violation of due process in view of the nature of the property involved or the urgency of the need
to protect the general welfare from a clear and present danger.

In the instant case, the carabaos were arbitrarily confiscated by the police station commander,
were returned to the petitioner only after he had filed a complaint for recovery and given a supersedeas
bond of P12,000.00, which was ordered confiscated upon his failure to produce the carabaos when
ordered by the trial court. The executive order defined the prohibition, convicted the petitioner and
immediately imposed punishment, which was carried out forthright. The measure struck at once and
pounced upon the petitioner without giving him a chance to be heard, thus denying him the centuries-old
guaranty of elementary fair play.

It has already been remarked that there are occasions when notice and hearing may be validly
dispensed with notwithstanding the usual requirement for these minimum guarantees of due process. It
is also conceded that summary action may be validly taken in administrative proceedings as procedural
due process is not necessarily judicial only. In the exceptional cases accepted, however. there is a
justification for the omission of the right to a previous hearing, to wit, the immediacy of the problem
sought to be corrected and the urgency of the need to correct it.
CHURCHILL v. RAFFERTY [G.R. No. 10572]

Facts:

Appellees, Francis A. Churchill and Stewart Tait are involved in the advertising business,
particularly in billboard advertising. Their billboards, located upon private lands in the Province of Rizal,
were removed uponcomplaints and by the orders of the defendant Collector of Internal Revenue by virtue
of the provisions ofsubsection (b) of section 100 of Act No. 2339.

The plaintiffs proved by Mr. Churchill that the “billboards were quite a distance from the road and
that they were strongly built, not dangerous to the safety of the people, and contained no advertising
matter which is filthy, indecent, or deleterious to the morals of the community." Appellees, in their
supplementary complaint, challenge the power of the of the Collector of Internal Revenue to remove any
sign, signboard, or billboard upon the ground that the same is offensive to the sight or is otherwise a
nuisance and maintain that the billboards in question “ in no sense constitute a nuisance and are not
deleterious to the health, morals, or general welfare of the community, or of any persons .” Defendant
Collector of Internal Revenue avers that after due investigation made upon the complaints of the British
and German Consuls, the defendant “decided that the billboard complained of was and st ill offensive to
the sight and is otherwise a nuisance.” Counsel for the plaintiffs alleges that the Act is unconstitutional
because it constitutes a deprivation of property without due process of law.

The pertinent provisions of subsection (b) of section 100 of Act No. 2339 read: "If after due
investigation the Collector of Internal Revenue shall decide that any sign, signboard, or billboard displayed
or exposed to public view is offensive to the sight or is otherwise a nuisance, he may by summary order
direct the removal of such sign, signboard, or billboard, and if same is not removed within ten days after
he has issued such order he may himself cause its removal, and the sign, signboard, or billboard shall
thereupon be forfeited to the Government, and the owner thereof charged with the expenses of the
removal so effected. When the sign, signboard, or billboard ordered to be removed as herein provided
shall not comply with the provisions of the general regulations of the Collector of Internal Revenue, no
rebate or refund shall be allowed for any portion of a yearfor which the taxes may have been paid.
Otherwise, the Collector of Internal Revenue may in his discretion make a proportionate refund of the tax
for the portion of the year remaining for which the taxes were paid. An appeal may be had from the order
of the Collector of Internal Revenue to the Secretary of Finance and Justice whose decision thereon shall
be final."

Issues:

1) WoN the court has the power to restrain by injunction the collection of tax complained of – NO
2) (2) WoN the provisions of subsection (b) of section 100 of Act No. 2339, conferring power upon
the Collector of Internal Revenue to remove any sign, signboard, or billboard upon the ground
that the same is offensive to the sight or is otherwise a nuisance, is valid and constitutional – YES
3) WoN there was a valid exercise of police power – YES
Held

(1) The sections of Act No. 2339, which bear directly upon the subject, are 139 and 140. The two
sections involve the right of a dissatisfied taxpayer to use an exceptional remedy to test the
validity of any tax or to determine any other question connected therewith, and the question
whether the remedy by injunction is exceptional. The inhibition applies to all internal revenue
taxes imposed, or authorized to be imposed, by Act No. 2339. And, futhermore, the mere fact
that a tax is illegal, or that the law, by virtue of which it is imposed, is unconstitutional, does not
authorize a court of equity to restrain its collection by injunction. The courts invariably give the
most careful consideration to questions involving the interpretation and application of the
Constitution, and approach constitutional questions with great deliberation, exercising their
power in this respect with the greatest possible caution and even reluctance; and they should
never declare a statute void, unless its invalidity is, in their judgment, beyond reasonable doubt.
To justify a court in pronouncing a legislative act unconstitutional, or a provision of a state
constitution to be in contravention of the Constitution of the United States, the case must be so
clear as to be free from doubt, and the conflict of the statute with the constitution must be
irreconcilable, because it is but a decent respect to the wisdom, the integrity, and the patriotism
of the legislative body by which any law is passed to presume in favor of its validity until the
contrary is shown beyond reasonable doubt. Therefore, in no doubtful case will the judiciary
pronounce a legislative act to be contrary to the constitution. To doubt the constitutionality of a
law is to resolve the doubt in favor of its validity.

A citizen's property, both real and personal, may be taken, and usually is taken, by the
government in payment of its taxes without any judicial proceedings whatever. In this country, as
well as in the United States, the officer charged with the collection of taxes is authorized to seize
and sell the property of delinquent taxpayers without applying to the courts for assistance, and
the constitutionality of the law authorizing this procedure never has been seriously questioned.
It is upon taxation that the Government chiefly relies to obtain the means to carry on its
operations, and it is of the utmost importance that the modes adopted to enforce the collection
of the taxes levied should be summary and interfered with as little as possible. No government
could exist if every litigious man were permitted to delay the collection of its taxes. The origin and
history of these provisions are found in substance in the Constitution of the United States and in
that of every state in the Union. In the internal revenue branch it has further prescribed that no
such suit shall be brought until the remedy by appeal has been tried; and, if brought after this, it
must be within six months after the decision on the appeal, We regard this as a condition on which
alone the government consents to litigate the lawfulness of the original tax.

(2) Offensive noises and smells have been for a long time considered susceptible of suppression in
thickly populated districts. Without entering into the realm of psychology, we think it quite
demonstrable that sight is as valuable to a human being as any of his other senses, and that the
proper ministration to this sense conduces as much to his contentment as the care bestowed
upon the senses of hearing or smell, and probably as much as both together. Objects may be
offensive to the eye as well as to the nose or ear. Man's esthetic feelings are constantly being
appealed to through his sense of sight. Large investments have been made in theaters and other
forms of amusement, in paintings and spectacular displays, the success of which depends in great
part upon the appeal made through the sense of sight. Moving picture shows could not be
possible without the sense of sight. Governments have spent millions on parks and 'boulevards
and other forms of civic beauty, the first aim of which is to appeal to the sense of sight. Why, then,
should the Government not interpose to protect from annoyance this most Valuable of man's
senses as readily as to protect him from offensive noises and smells? The success of billboard
advertising depends not so much upon the use of private property as it does upon the use of the
channels of travel used by the general public. Suppose that the owner of private property, who
so vigorously objects to the restriction of this form of advertising, should require the advertiser
to paste his posters upon the billboards so that they would f ace the interior of the property
instead of the exterior. Billboard advertising would die a natural death if this were done, and its
real dependency not upon the unrestricted use of private property but upon the unrestricted use
of the public highways is at once apparent. Ostensibly located on private property, the real and
sole value of the billboard is its proximity to the public thoroughfares. Hence, we conceive that
the regulation of billboards and their restriction is not so much a regulation of private property as
it is a regulation of these of the streets and other public thoroughfares. It has been urged against
ministering to the sense of sight that tastes are so diversified that there is no safe standard of
legislation in this direction. A source of annoyance and irritation to the public does not minister
to the comfort and convenience of the public. And we are of the opinion that the prevailing
sentiment is manifestly against the erection of billboards which are offensive to the sight.

• Sec. 100 of Act #2339 gives power to the CIR to remove offensive billboards, signs and
signboards after due investigation. An Act of the Legislature which is obviously and
undoubtedly foreign to any of the purposes of the police power and interferes with the
ordinary enjoyment of property would, without doubt, be held to be invalid. But where the
Act is reasonably within a proper consideration of and care for the public health, safety, or
comfort, it should not be disturbed by the courts. Police power is reasonable insofar as it
properly considers public health, safety, comfort, etc. The basic idea of civil polity in US is that
the government should interfere with individual effort only to the extent necessary to
preserve a healthy social and economic condition of society. The State interferes with private
property through taxation, eminent domain, and police power. Only under the last are the
benefits derived from the maintenance of a healthy economic standard of society.

• While the state may interfere wherever the public interests demand it, and in this particular
a large discretion is necessarily vested in the legislature to determine, not only what the
interests of the public require, but what measures are necessary for the protection of such
interests; yet, its determination in these matters is not final or conclusive, but is subject to
the supervision of the courts.
 • "The police power of the State, so far, has not received a full and complete definition. It
may be said, however, to be the right of the State, or state functionary, to prescribe
regulations for the good order, peace, health, protection, comfort, convenience andmorals
of the community, which do not ... violate any of the provisions of the organiclaw." Courts
have consistently and wisely declined to set any fixed limitations upon subjectscalling for the
exercise of this power. It is elastic and is exercised from time to time asvarying social
conditions demand correction.

• Those noises and smells, though ostensibly regulated for health reasons, are actually
regulated more for aesthetics reasons. Other courts in the US hold the view that police power
cannot interfere with private property rights for purely aesthetic purposes. But this court is
of the opinion that unsightly advertisements which are offensive to the sight are not
dissociated from the general welfare of the public.

People v. Fajardo GR 12172, Aug. 29 1958

Facts:

The municipal council of Baao, Camarines Sur stating among others that construction of a building,
which will destroy the view of the plaza, shall not be allowed and therefore be destroyed at the expense
of the owner, enacted an ordinance. Herein appellant filed a written request with the incumbent
municipal mayor for a permit to construct a building adjacent to their gasoline station on a parcel of land
registered in Fajardo's name, located along the national highway and separated from the public plaza by
a creek. The request was denied, for the reason among others that the proposed building would destroy
the view or beauty of the public plaza. Defendants reiterated their request for a building permit, but again
the mayor turned down the request. Whereupon, appellants proceeded with the construction of the
building without a permit, because they needed a place of residence very badly, their former house having
been destroyed by a typhoon and hitherto they had been living on leased property. Thereafter,
defendants were charged in violation of the ordinance and subsequently convicted. Hence this appeal.

Issue: W/N the ordinance is a valid exercise of police power.

Held:

No. It is not a valid exercise of police power. The ordinance is unreasonable and oppressive, in
that it operates to permanently deprive appellants of the right to use their own property; hence, it
oversteps the bounds of police power, and amounts to a taking of appellant’s property without just
compensation. We do not overlook that the modern tendency is to regard the beautification of
neighborhoods as conducive to the comfort and happiness of residents.
 As the case now stands, every structure that may be erected on appellants' land, regardless of its
own beauty, stands condemned under the ordinance in question, because it would interfere with the view
of the public plaza from the highway. The appellants would, in effect, be constrained to let their land
remain idle and unused for the obvious purpose for which it is best suited, being urban in character. To
legally achieve that result, the municipality must give appellants just compensation and an opportunity to
be heard.

Ermita Malate Hotel & Motel Operators Association v. City of Manila [GR L-24693, 31 July 1967]

Facts :

On 13 June 1963, Ordinance 4760 was issued by the municipal board of the City of Manila and
approved by Vice Mayor Herminio Astorga, who was at the time acting Mayor of the City of Manila. The
ordinance (1) imposes a P6,000.00 fee per annum for first class motels and P4,500.00 for second class
motels; (2) requires the owner, manager, keeper or duly authorized representative of a hotel, motel, or
lodging house to refrain from entertaining or accepting any guest or customer or letting any room or other
quarter to any person or persons without his filling up the prescribed form in a lobby open to public view
at all times and in his presence, wherein the surname, given name and middle name, the date of birth,
the address, the occupation, the sex, the nationality, the length of stay and the number of companions in
the room, if any, with the name, relationship, age and sex would be specified, with data furnished as to
his residence certificate as well as his passport number, if any, coupled with a certification that a person
signing such form has personally filled it up and affixed his signature in the presence of such owner,
manager, keeper or duly authorized representative, with such registration forms and records kept and
bound together; (3) provides that the premises and facilities of such hotels, motels and lodging houses
would be open for inspection either by the City Mayor, or the Chief of Police, or their duly authorized
representatives. The ordinance also classified motels into two classes and required the maintenance of
certain minimum facilities in first class motels such as a telephone in each room, a dining room or
restaurant and laundry; while second class motels are required to have a dining room. It prohibited a
person less than 18 years old from being accepted in such hotels, motels, lodging houses, tavern or
common inn unless accompanied by parents or a lawful guardian and made it unlawful for the owner,
manager, keeper or duly authorized representative of such establishments to lease any room or portion
thereof more than twice every 24 hours. It provided a penalty of automatic cancellation of the license of
the offended party in case of conviction. On 5 July 1963, the Ermita-Malate Hotel and Motel Operators
Association (EMHMOA), its member Hotel del Mar, and a certain Go Chiu filed a petition for prohibition
against the mayor of the City of Manila in his capacity as he is charged with the general power and duty
to enforce ordinances of the City of Manila and to give the necessary orders for the faithful execution and
enforcement of such ordinances. There was a plea for the issuance of preliminary injunction and for a
final judgment declaring the above ordinance null and void and unenforceable. The lower court on 6 July
1963 issued a writ of preliminary injunction ordering the Mayor to refrain from enforcing said Ordinance
4760 from and after 8 July 1963. After the submission of the memoranda, ruled that the City of Manila
lack authority to regulate motels and rendering Ordinance 4760 unconstitutional and therefore null and
void. It made permanent the preliminary injunction issued by the Mayor and his agents to restrain him
from enforcing the ordinance. The Mayor of Manila appealed to the Supreme Court.

Issue:

Whether the regulations imposed on motels and hotels (increasing license fees, partially restricting the
freedom to contract, and restraining the liberty of individuals) is valid and/or constitutional.

Held:

Yes. The ordinance was enacted to minimize certain practices hurtful to public morals. It was
made as there is observed an alarming increase in the rate of prostitution, adultery and fornication in
Manila traceable in great part to the existence of motels, which provide a necessary atmosphere for
clandestine entry, presence and exit and thus become the ideal haven for prostitutes and thrill seekers.
The ordinance proposes to check the clandestine harboring of transients and guests of these
establishments by requiring these transients and guests to fill up a registration form, prepared for the
purpose, in a lobby open to public view at all times, and by introducing several other amendatory
provisions calculated to shatter the privacy that characterizes the registration of transients and guests.
The increase in the license fees was intended to discourage establishments of the kind from operating for
purpose other than legal and to increase the income of the city government. Further, the restriction on
the freedom to contract, insofar as the challenged ordinance makes it unlawful for the owner, manager,
keeper or duly authorized representative of any hotel, motel, lodging house, tavern, common inn or the
like, to lease or rent any room or portion thereof more than twice every 24 hours, with a proviso that in
all cases full payment shall be charged, cannot be viewed as a transgression against the command of due
process. It is neither unreasonable nor arbitrary. Precisely it was intended to curb the opportunity for the
immoral or illegitimate use to which such premises could be, and, are being devoted. Furthermore, the
right of the individual is necessarily subject to reasonable restraint by general law for the common good.
The liberty of the citizen may be restrained in the interest of the public health, or of the public order and
safety, or otherwise within the proper scope of the police power. 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

White Light Corporations v. City of Manila

TINGA, J.

Mayor Lim of Manila passed an ordinance which prohibited hotels, motels and other lodging
establishments from offering short time admission (stay for less than 12 hours) and wash up rates (stay
for only 3 hours), providing for a fine and imprisonment for violation of said ordinance. Affected
businesses filed a complaint to have the ordinance annulled, on the ground that it was unconstitutional.
The Court held in favor of the petitioners, ruling that the ordinance failed the strict scrutiny test and was
thus violative of substantial due process and unconstitutional.
DOCTRINE
Although the goal of regulating public morals falls under the purview of police power, it does not
automatically justify any and all means of achieving this goal. The means must still align with the
Constitution, the Bill of Rights, and specifically due process. If the restriction involves one restricting
liberty, the Government must satisfy the strict scrutiny test: the burden is on them to show that a) there
is compelling State interest for the restriction; b) that the means is necessary to address that compelling
state interest, and c) that there is no other alternative for the accomplishment of the purpose that is less
intrusive.

FACTS
1. Mayor Alfredo Lim passed an Ordinance which penalized hotels, motels, lodging houses, pension
houses and similar establishments that offer short time admission (stay for less than 12-hours) and
“wash-up” rates (stay for only 3 hours). Any violation would result to either P5, 000 or imprisonment
for less than 1 year or both.
2. Malate Tourist and Development Corporation (MTDC) filed a complaint for declaratory relief:
a. Praying for an injunction/TRO be issued, and
b. praying to have the Ordinace be declared invalid and unconstitutional. They alleged that PD
259 authorized them to charge customers on a short-time basis and to charge them for wash-
up rates.
3. White Light Corporation (WLC), Titanium Corporation (TC) and Sta. Mesa Tourist and Development
Corporation (STDC) filed a motion to intervene in support of MTDC’s petition on the ground that the
Ordinance affected their business interests as they operate several drive-in hotels and motels in
Manila.
4. The petitioners agreed to submit the case for judgment since it was a based on a purely legal question.
5. RTC declared the Ordinance null and void because
a. it was against personal liberty of the individual guaranteed by the Constitution
b. it went against encouraging private enterprises and the incentive to need investment.
c. The Ordinance was similar to another Ordinance annulled in another case, wherein what it
sought to prevent could easily be circumvented (i.e. Preventing illicit relationships festering
in the motels/hotels could easily be consummated by paying for a 12-hour stay).
6. The City filed a petition for review on certiorari with SC, which the latter treated as a petition for
certiorari and referred it to CA.
7. The City argued that the Ordinance was a valid exercise of police power under Section 458(4)(iv) of
the Local Government Code and Art. 3, Sec. 18(kk) of the Reivsed Manila Charter.
8. Petitioners argued that the Ordinance is unconstitutional because it violates right to privacy and the
freedom of movement. Furthermore, it is an invalid exercise of police power because it was
unreasonable and oppressive interference in their business.
9. CA reversed RTC’s decision and found it to be constitutional for the following reasons:
 a. The Ordinance didn’t violate the right to privacy or freedom to movement because it only
penalizes a small group – the owners or operators of establishments that offer short time
stays.
b. Police power is limited only by having a lawful object obtained through a lawful method,
which what the Ordinance satisfied.
c. The adverse effects to such establishments is justified by the well-being of its constituents.
d. As ruled in Ermita-Malate Motel Operators Association v. City Mayor of Manila, liberty is
regulated by the law.

ISSUE with HOLDING

1. WON the Ordinance is constitutional. NO.
a. Test of a valid ordinance as laid in several cases including City of Manila:
i. must not contravene the Constitution or any statute;
ii. must not be unfair or oppressive;
iii. must not be partial or discriminatory;
iv. must not prohibit but may regulate trade;
v. must be general and consistent with public policy; and
vi. must not be unreasonable.
b. The purpose of the ordinance is to regulate public morals. The ban is rooted in the police
power as conferred on LGU’s by the Local Government Code. Brief discussion on police
power:
i. No exact definition but it highlights its comprehensiveness and its flexibility to meet
different conditions.
ii. It is based on the necessity of the State and its corresponding right to protect itself
and its people.
iii. Although the goal of regulating public morals falls under the purview of police power,
it does not automatically justify any and all means of achieving this goal.
1. The means must still align with the Constitution, the Bill of Rights, and
specifically due process.
c. Due process evades a precise definition.
i. The purpose of due process is to prevent arbitrary government encroachment against
the life, liberty, and property of individuals
ii. Two kinds of due process:
1. Procedural: procedures government must follow before it deprives a person of
life, liberty or property.
2. Substantive: inquires whether the government has sufficient justification for
depriving a person of life, liberty or property
3. Test:
Test Source/Case Means End Application

• Freedom
of the
US v. mind
Strict
Carolene Necessary Compelling • Liberty
Scrutiny
Products • Restricting
the
political
process
Intermediate Craig v. • Gender
Substantial Important
Scrutiny Boren
• Legitimacy
US v.
Rational • Economic
Carolene Reasonable Legitimate
Basis legislation
Products

• Discussion on Liberty
o Not a list of what may be done or not be done
o Atmosphere of freedom where they don’t feel labored under a Big Brother as they
interact with each other, their society, and nature, in a manner innately understood
by them as inherent, without doing harm or injury to others
o Right to exist and to be free from arbitrary servitude or restraint
o The spirit behind the Ordinance is to curtail sexual behavior since these
establishments are notorious for venues for prostitution, adultery, and fornications.
o Despite the veracity of such, legitimate sexual behavior, which is constitutionally
protected, will be curtailed as well.
o The concept of liberty compels respect for the individual whose claim to privacy and
interference demands respect.
o There are other legitimate activities that may be affected by the Ordinance and that
cannot be discounted.
• Applying the Test to the Ordinance:
o The Court did not use the rational basis test in this case because the ordinance did
not just prejudice the property or business of the petitioners, but the constitutional
rights of their patrons as well. They would be deprived of availing short time access
or wash-up rates to lodging establishments.
o This thus constitutes a restriction on the fundamental right to liberty, which must
pass the strict scrutiny test.
▪ The Government must show that no other alternative for the
accomplishment of the purpose that is less intrusive.
 ▪ There must be a reasonable relation between the purpose of the measure
and the means for its accomplishment because such measure will be struck
down if it arbitrarily intrudes into private rights.
o Urban decay as seen in the rampant prostitution, drug use, and adultery, should not
be used to prevent legitimate businesses from offering a legitimate product.
▪ The Ordinance did not distinguish between the places frequented by people
doing illicit activities and those doing legitimate actions.
▪ What the Ordinance seeks to curtail is already prohibited, so why not apply
those laws instead?
▪ There are other less intrusive ways in curbing prostitution and drug use –
active police work or strict enforcement of laws regulating prostitution.
o Individual rights may be adversely affected only to the extent that may fairly be
required by the legitimate demands of public interest.
o The promotion of public welfare and a sense of morality among citizens deserve the
full endorsement of the judiciary provided that such measures don’t trample rights
this Court is sworn to protect.

DISPOSITIVE PORTION
WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals is REVERSED, and the Decision
of the Regional Trial Court of Manila, Branch 9, is REINSTATED. Ordinance No. 7774 is hereby declared
UNCONSTITUTIONAL. No pronouncement as to costs.

SO ORDERED

OTHER NOTES

2. WoN petitioners have standing to plead for protection of their patrons’ equal protection rights

• Petitioners were arguing that their business is being unlawfully interfered by the Ordinance and
that it infringed on their clients’ right to equal protection.
• According to the Court, they have standing. The third party standing and the overbreadth doctrine
applies.
o In Powers v. Ohio, the US SC outlined the criteria to invoke such standing:
▪ Petitioner must have suffered an injury-in-fact, giving him a sufficient concrete
interest in the outcome of the issue at hand.
▪ Petitioner must have a close relation to the the third party.
▪ There is a hindrance between the third party and his ability to protect his
interests.
o In overbreadth analysis, challengers to government action are allowed to raise the rights
of third parties.
o This doctrine applies when a statue restrains constitutionally guaranteed rights.
o The petitioners here are alleging that the Ordinance intrudes on their right to liberty of
their clients, therefore the overbreadth doctrine applies.
CARLOS BALACUIT ET.AL V. CFI OF AGUSAN DEL NORTE

G.R. No. L-38429 June 30, 1988

FACTS:

the Municipal Board of the City of Butuan pass an ordinance penalizing any person, group of persons,
entity, or corporation engaged in the business of selling admission tickets to any movie or other public
exhibitions, games, contests, or other performances to require children between seven (7) and twelve
(12) years of age to pay full payment for admission tickets intended for adults but should charge only one-
half of the value of the said tickets.

The Petitioners, theater owners, aggrieved by said ordinance, they file a complaint before the Court of
First Instance of Agusan del Norte and Butuan City assailing the constitutionalit of Ordinance No. 640.

The Court rendered judgment declaring Ordinance No. 640 of the City of Butuan constitutional and valid.

ISSUE:

WON Ordinance No. 640 is a valid exercise of police power

HELD:

YES. Ordinance No. 640 infringes theater owners’ right to property.

While it is true that a business may be regulated, it is equally true that such regulation must be within the
bounds of reason, that is, the regulatory ordinance must be reasonable, and its provisions cannot be
oppressive amounting to an arbitrary interference with the business or calling subject of regulation. A
lawful business or calling may not, under the guise of regulation, be unreasonably interfered with even by
the exercise of police power.33 A police measure for the regulation of the conduct, control and operation
of a business should not encroach upon the legitimate and lawful exercise by the citizens of their property
rights.34 The right of the owner to fix a price at which his property shall be sold or used is an inherent
attribute of the property itself and, as such, within the protection of the due process clause."" Hence, the
proprietors of a theater have a right to manage their property in their own way, to fix what prices of
admission they think most for their own advantage, and that any person who did not approve could stay
away.

Ordinance No. 640 clearly invades the personal and property rights of petitioners for even if We could
assume that, on its face, the interference was reasonable, from the foregoing considerations, it has been
fully shown that it is an unwarranted and unlawful curtailment of the property and personal rights of
citizens. For being unreasonable and an undue restraint of trade, it cannot, under the guise of exercising
police power, be upheld as valid.

Wherefore, the decision of the trial court in Special Civil Case No. 237 is REVERSED and SET ASIDE and a
new judgment is hereby rendered declaring Ordinance No. 640 unconstitutional and, therefore, null and
void.
CARLOS SUPERDRUG ET. AL V. DSWD

G.R. No. 166494 June 29, 2007

FACTS:

Petitioners are domestic corporations and proprietors operating drugstores in the Philippines.

Public respondents, on the other hand, include the DSWD, DOH, DOF, DOJ, and the DILG, specifically
tasked to monitor the drugstores’ compliance with the law; promulgate the implementing rules and
regulations for the effective implementation of the law; and prosecute and revoke the licenses of erring
drugstore establishments.

President Gloria Macapagal-Arroyo signed into law R.A. No. 9257 otherwise known as the “Expanded
Senior Citizens Act of 2003.”

Sec. 4(a) of the Act states that The senior citizens shall be entitled to the following: (a) the grant of twenty
percent (20%) discount from all establishments relative to the utilization of services in hotels and similar
lodging establishments, restaurants and recreation centers, and purchase of medicines in all
establishments for the exclusive use or enjoyment of senior citizens, including funeral and burial services
for the death of senior citizens;

Petitioners assert that Section 4(a) of the law is unconstitutional because it constitutes deprivation of
private property. Compelling drugstore owners and establishments to grant the discount will result in a
loss of profit and capital because according to them drugstores impose a mark-up of only 5% to 10% on
branded medicines, and the law failed to provide a scheme whereby drugstores will be justly compensated
for the discount.

ISSUE:

WON RA 9257 is constitutional.

HELD:

YES. The law is a legitimate exercise of police power which, similar to the power of eminent domain, has
general welfare for its object. Police power is not capable of an exact definition, but has been purposely
veiled in general terms to underscore its comprehensiveness to meet all exigencies and provide enough
room for an efficient and flexible response to conditions and circumstances, thus assuring the greatest
benefits. Accordingly, it has been described as the most essential, insistent and the least limitable of
powers, extending as it does to all the great public needs. It is [t]he power vested in the legislature by the
constitution to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and
ordinances, either with penalties or without, not repugnant to the constitution, as they shall judge to be
for the good and welfare of the commonwealth, and of the subjects of the same.
For this reason, when the conditions so demand as determined by the legislature, property rights must
bow to the primacy of police power because property rights, though sheltered by due process, must yield
to general welfare.

Police power as an attribute to promote the common good would be diluted considerably if on the mere
plea of petitioners that they will suffer loss of earnings and capital, the questioned provision is invalidated.
Moreover, in the absence of evidence demonstrating the alleged confiscatory effect of the provision in
question, there is no basis for its nullification in view of the presumption of validity which every law has
in its favor.

Given these, it is incorrect for petitioners to insist that the grant of the senior citizen discount is unduly
oppressive to their business, because petitioners have not taken time to calculate correctly and come up
with a financial report, so that they have not been able to show properly whether or not the tax deduction
scheme really works greatly to their disadvantage.

In treating the discount as a tax deduction, petitioners insist that they will incur losses.
However,petitioner’s computation is clearly flawed.

For purposes of reimbursement, the law states that the cost of the discount shall be deducted from gross
income, the amount of income derived from all sources before deducting allowable expenses, which will
result in net income. Here, petitioners tried to show a loss on a per transaction basis, which should not be
the case. An income statement, showing an accounting of petitioners sales, expenses, and net profit (or
loss) for a given period could have accurately reflected the effect of the discount on their income. Absent
any financial statement, petitioners cannot substantiate their claim that they will be operating at a loss
should they give the discount. In addition, the computation was erroneously based on the assumption
that their customers consisted wholly of senior citizens. Lastly, the 32% tax rate is to be imposed on
income, not on the amount of the discount.

While the Constitution protects property rights, petitioners must accept the realities of business and the
State, in the exercise of police power, can intervene in the operations of a business which may result in
an impairment of property rights in the process.

NDC AGRIX V. PHILIPPINE VETERANS BANK (PVB)

GR No. 84132-33 December 10, 1990

FACTS:

The particular enactment in question is Presidential Decree No. 1717, which ordered the rehabilitation of
the Agrix Group of Companies to be administered mainly by the National Development Company.

The law outlined the procedure for filling claims against the Agrix Companies and created a claims
committee to process these claims.
Especially relevant to this case, and noted at the outset, is section 4(1) thereof providing that “all
mortgages and other liens presently attaching to any of the assets of the dissolved corporations are
hereby extinguished.”

Earlier, the Agrix Marketing Inc. had executed in favor of private respondent Philippine Veterans Bank a
real estate mortgage dated July 7, 1978 over three parcels of land situated in Los Baños, Laguna.

During the existence of the mortgage, Agrix went bankrupt. It was the expressed purpose of salvaging this
and the other Agrix companies that the aforementioned decree was issued by President Marcos.

Pursuant thereto, the private respondent filed a claim with the AGRIX Claims Committee for the payment
of its loan credit. In the meantime, the New Agrix, Inc. and the National Development Company,
petitioners herein, invoking Sec. 4 (1) of the decree, filed a petition with the Regional Trial Court of
Calamba, Laguna, for the cancellation of the mortgage lien in favor of the private respondent. For its part,
the private respondent took steps to extrajudicially foreclose the mortgage, prompting the petitioners to
file a second case with the same court to stop the foreclosure. The two cases were consolidated

After the submission by the parties of their respective pleadings, the trial court rendered the impugned
decision. Judge Francisco Ma. Guerrero annulled not only the challenged provision, viz., Sec. 4 (1), but the
entire Pres. Decree No. 1717 on the grounds that:

(1) the presidential exercise of legislative power was a violation of the principle of separation of powers;

(2) The law impaired the obligation of contracts; and

(3) the decree violated the equal protection clause. The motion for reconsideration of this decision having
been denied, the present petition was filed.

The Court granted the petitioner's prayer for a temporary restraining order and instructed the
respondents to cease and desist from conducting a public auction sale of the lands in question.

The petitioners contend that the private respondent is now estopped from contesting the validity of the
decree.

The Court, after noting that the petitioners had already filed their claims with the AGRIX Claims Committee
created by the decree, had simply dismissed the petition on the ground of estoppel.

The petitioners stress that in the case at bar the private respondent also invoked the provisions of Pres.
Decree No. 1717 by filing a claim with the AGRIX Claims Committee. Failing to get results, it sought to
foreclose the real estate mortgage executed by AGRIX in its favor, which had been extinguished by the
decree. It was only when the petitioners challenged the foreclosure on the basis of Sec. 4 (1) of the decree,
that the private respondent attacked the validity of the provision. At that stage, however, consistent with
Mendoza, the private respondent was already estopped from questioning the constitutionality of the
decree.
ISSUE:

WON Philippine Veterans Bank as creditor of Agrix is still entitled for payment without prejudice to PD
1717.

HELD:

YES. A mortgage lien is a property right derived from contract and so comes under the protection of Bill
of rights so do interests on loans, as well as penalties and charges, which are also vested rights once they
accrue. Private property cannot simply be taken by law from one person and given to another without
just compensation and any known public purpose. This is plain arbitrariness and is not permitted under
the constitution.

The court also feels that the decree impairs the obligation of the contract between Agrix and the private
respondent without justification. While it is true that the police power is superior to the impairment
clause, the principle will apply only where the contract is so related to the public welfare that it will be
considered congenitally susceptible to change by the legislature in the interest of greater number.

Our finding in sum, is that PD 1717 is an invalid exercise of the police power, not being in conformity with
the traditional requirements of a lawful subject and a lawful method. The extinction of the mortgage and
other liens and of the interest and other charges pertaining to the legitimate creditors of Agrix constitutes
taking without due process of law, and this is compounded by the reduction of the secured creditors to
the category of unsecured creditors in violation of the equal protection clause. Moreover, the new
corporation being neither owned nor controlled by the government, should have been created only by
general and not special law. And in so far as the decree also interferes with purely private agreements
without any demonstrated connection with the public interest, there is likewise an impairment of the
obligation of the contract.

AGUSTIN V. EDU

G.R. No. L-49112 February 2, 1979

FACTS:

Petitioner, Agustin assails the validity of the Letter of Instruction No. 229 which requires an early warning
device to be carried by users of motor vehicles as being violative of the constitutional guarantee of due
process and transgresses the fundamental principle of non-delegation of legislative power.

Herein respondent Romeo Edu in his capacity as Land Transportation Commisioner set forth the
implementing rules and regulations of the said instruction.

Petitioner make known that he "is the owner of a Volkswagen Beetle Car, Model 13035, already properly
equipped when it came out from the assembly lines with blinking lights fore and aft, which could very well
serve as an early warning device in case of the emergencies mentioned in Letter of Instructions No. 229,
as amended, as well as the implementing rules and regulations in Administrative Order No. 1 issued by
the land transportation Commission,"

Furthermore, he contends that the law is "one-sided, onerous and patently illegal and immoral because
[they] will make manufacturers and dealers instant millionaires at the expense of car owners who are
compelled to buy a set of the so-called early warning device at the rate of P 56.00 to P72.00 per set." are
unlawful and unconstitutional and contrary to the precepts of a compassionate New Society [as being]
compulsory and confiscatory on the part of the motorists who could very well provide a practical
alternative road safety device, or a better substitute to the specified set of Early Warning Device (EWD)."

This instruction, signed by President Marcos, aims to prevent accidents on streets and highways, including
expressways or limited access roads caused by the presence of disabled, stalled or parked motor vehicles
without appropriate early warning devices. The hazards posed by these disabled vehicles are recognized
by international bodies concerned with traffic safety. The Philippines is a signatory of the 1968 Vienna
Convention on Road Signs and Signals and the United Nations Organizations and the said Vienna
Convention was ratified by the Philippine Government under PD 207.

ISSUE:

WON the LOI 229 is invalid and violated constitutional guarantees of due process.

HELD:

NO. The assailed Letter of Instruction was a valid exercise of police power and there was no unlawful
delegation of legislative power on the part of the respondent. As identified, police power is a state
authority to enact legislation that may interfere personal liberty or property in order to promote the
general welfare. In this case, the particular exercise of police power was clearly intended to promote
public safety.

It cannot be disputed that the Declaration of Principle found in the Constitution possesses relevance: “The
Philippines adopts the generally accepted principles of international law as part of the law of the nation.”

Thus, as impressed in the 1968 Vienna Convention it is not for this country to repudiate a commitment to
which it had pledged its word. Our country’s word was resembled in our own act of legislative ratification
of the said Hague and Vienna Conventions thru P.D. No. 207 .

The concept of Pacta sunt servanda stands in the way of such an attitude which is, moreoever, at war with
the principle of international morality.
Magtajas v. Pryce Properties Corp. (G.R. No. 111097)

Facts:

PAGCOR decided to expand its operations to Cagayan de Oro City. It leased a portion of a building
belonging to Pryce Properties Corporations, Inc., renovated & equipped the same, and prepared to
inaugurate its casino during the Christmas season.

Civil organizations angrily denounced the project. Petitioners opposed the casino’s opening and enacted
Ordinance No. 3353, prohibiting the issuance of business permit and canceling existing business permit
to the establishment for the operation of the casino, and Ordinance No. 3375-93, prohibiting the
operation of the casino and providing a penalty for its violation.

Respondents assailed the validity of the ordinances on the ground that they both violated Presidential
Decree No. 1869. Petitioners contend that, pursuant to the Local Government Code, they have the police
power authority to prohibit the operation of casino for the general welfare.

Issue: Whether the Ordinances are valid.

Ruling:

No. Cagayan de Oro City, like other local political subdivisions, is empowered to enactordinances for the
purposes indicated in the Local Government Code. It is expressly vested with the police power under what
is known as the General Welfare Clause now embodied in Section 16 as follows: Sec. 16.

General Welfare. — Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and
effective governance, and those which are essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall ensure and support, among other things,
the preservation and enrichment of culture, promote health and safety, enhance the right of the people
to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific
and technological capabilities, improve public morals, enhance economic prosperity and social justice,
promote full employment among their residents, maintain peace and order, and preserve the comfort
and convenience of their inhabitants.

Local Government Code, local government units are authorized to prevent or suppress, among
others, "gambling and other prohibited games of chance. "Obviously, this provision excludes games of
chance which are not prohibited but are in fact permitted by law.

The tests of a valid ordinance are well established. A long line of decisions has held that to be
valid, an ordinance must conform to the following substantiverequirements:

1) It must not contravene the constitution or any statute.

2) It must not be unfair or oppressive.

 3) It must not be partial or discriminatory.

4) It must not prohibit but may regulate trade.

5) It must be general and consistent with public policy.

6) It must not be unreasonable.

The rationale of the requirement that the ordinances should not contravene a statutes obvious. Casino
gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or
nullified by a mere ordinance. Local councils exercise only delegated legislative powers conferred on them
by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise
powers higher than those of the latter. It is a heresy to suggest that the local government units can undo
the acts of Congress, from which they have derived their power in the first place, and negate by mere
ordinance the mandate of the statute. Hence, it was not competent for the Sangguniang Panlungsod of
Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the use of buildings for the operation of a
casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For all their praiseworthy motives,
these ordinances are contrary to P.D.1869 and the public policy announced therein and are therefore
ultra vires and void.

Wherefore, the petition is denied.

Version 1 Dans, Jr. v. People / Imelda R. Marcos v. Sandiganbayan 283 SCRA 504

SYNOPSIS

Sometime in 1984, petitioners Imelda R. Marcos and Jose P. Dans, Jr. served as ex-officio Chairman and
ex-officio Vice Chairman of a government corporate entity the Light Rail Transit Authority (LRTA) and as
Chairman and Director of the Board of Trustees of a private corporation, the Philippine General Hospital
Foundation, Inc. (PGHFI), respectively. Marcos and Dans, acting in behalf of the LRTA, entered into a Lease
Agreement covering LRTA properties located in Pasay City and Sta. Cruz, Manila with the PGHFI. The
monthly rental agreed upon between the LRTA and the PGHFI for the lease of the Pasay lot was
P102,760.00 and for the Sta. Cruz lot was P92,473.00. Barely ten days later, the very same properties were
subleased by PGHFI to private entities for P734,000.00 for the Pasay lot and P199,710.00 for the Sta. Cruz
lot.

Consequently, Marcos and Dans were charged in five (5) separate criminal informations docketed as Crim.
Cases Nos. 17449, 17450, 17451, 17452 and 17453 for violations of Section 3 (d) and (g) of RA 3019, as
amended. Upon arraignment, they pleaded not guilty to all of the charges.

After trial, Marcos and Dans were convicted by the Sandiganbayan as charged in Crim. Cases Nos. 17450
and 17453 and were sentenced to suffer the penalty of imprisonment for the indeterminate period of
nine (9) years and one (1) day as minimum to twelve (12) years and ten (10) days as minimum. They were
acquitted in Crim. Cases Nos. 17449, 17451 and 17452.

Hence, this petition.

In Criminal Case No. 17453, the Court did not concur with the conclusions reached by the court a quo. The
culpability of petitioners in this case stems from their entering into the lease agreement (Exhibit "C") over
the Sta. Cruz lot under terms and conditions manifestly and grossly disadvantageous to the government,
which, in this instance, is the LRTA. To prove this assertion, the prosecution presented in evidence the
sublease agreement (Exhibit "E") over the same property showing the disparity in the rental price. While
the authenticity of Exhibit "D," which was used to prove the manifest and gross disadvantage to the
government occasioned by Exhibit "B," was admitted by the court and by the parties themselves, the
validity of Exhibit "E" cannot, even up to this point, be determined with certainty because it is a mere
uncertified photocopy of the original. Thus, the "gross and manifest" disadvantage to the government,
which Exhibit "E" was supposed to engender, remains an allegation which cannot be proved by other
direct evidence. The fact that only Dans objected to its admissibility does not mean that it is valid as to
Marcos. As a result, both petitioners should be, as they are hereby, acquitted in Criminal Case No. 17453
on ground of reasonable doubt.

In Criminal Case No. 17450, we must further qualify our judgment.

As regards petitioner Dans, the Court opined that the prosecution failed to prove his guilt in committing
the offenses charged beyond a reasonable doubt. Even though he was a Board Director of the PGHFI, Dans
denied any knowledge of the execution of Exhibits "D" and "E," and his denial was never disproved by the
prosecution. In fact, his signature does not appear in either sublease agreements. Neither was the alleged
conspiracy between him and Marcos established by the prosecution.

It is the Court's opinion, however, that the guilt of petitioner Marcos was proved by the State beyond
reasonable doubt. She was charged with violation of Section 3(g) of R.A. No. 3019, as amended, for
executing a lease agreement (Exhibit "B") in behalf of the PGHFI, a private enterprise of which she was
the Chairman, over a lot located in Pasay City owned by the LRTA, a government corporation of which she
was undeniably also the Chairman. The consideration therefor was shown to be unfair and unreasonable
upon comparison with the rental price stipulated in the sublease agreement (Exhibit "D") which she
subsequently signed for the PGHFI in favor of TNCC. That she should be held responsible is shown by the
presence of her signature in Exhibits "A" to "E," where she acts in different capacities. She cannot, under
these circumstances, claim ignorance of the great disparity between the rental price stipulated in the
lease and the sublease agreements. Consequently, in Criminal Case No. 17450, the conviction of petitioner
Marcos should be, as it is hereby, upheld.

SYLLABUS

CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS; QUESTIONING BY COURT SHOWING SLIGHT
SEMBLANCE OF CROSS-EXAMINATION, OFFENSIVE THERETO. — The court questions were far from being
clarificatory. They were, in the main, queries that have no basis on the records. It has been said that purely
abstract questions, assuming facts or theories for which there is no foundation in the evidence, are not
admissible as a matter of right, although such questions may be permitted on cross-examination for the
purpose of testing the knowledge of the witness as to the subject on which he has testified. But cross-
examination is the exclusive function of the advocate. Thus, any trend of court questioning which shows
even a slight semblance of cross-examination is already offensive to fundamental requirements of due
process, for this Court in "People v. Opida" has admonished that: ". . . the judge must not only be impartial
but must also appear to be impartial, to give added assurance to the parties that his decision will be just.
The parties are entitled to no less than this, as a minimum guaranty of due process.

||| (Dans, Jr. v. People, G.R. Nos. 127073 & 126995, [January 29, 1998], 349 PHIL 434-513)

Version 2

MARCOS VS. SANDIGANBAYAN, G.R. No. 126995, October 6, 1998

Purisima, J.

Facts:

1. On June 8, 1984, IMELDA MARCOS and JOSE DANS, as Chairman and Vice Chairman of the Light
Railway Transit Authority (LRTA) entered into a Lease Contract with the Philippine General Hospital
Foundation (PGHFI) involving an LRTA property in Pasay City for P102,760.00 per month for 25 years;

2. On June 27,1984, the PGHFI subleased the said property for P734,000.00 per month to the
Transnational Construction Corporation represented by one Ignacio Jumenez;

3. After petitioner’s husband was deposed as President of the Philippines, she and Dans were
charged of alleged violation of Section 3 [g] of RA 3019, otherwise known as the Anti-Graft and Corrupt
Practices Act before the Sandiganbayan;

4. After trial , the First Division of the Sandiganbayan failed to comply with the legal requirement
that all the 3 justices must be unanimous in its Decision because Justice Garchitorena and Justice Jose
Balajadia voted for the conviction of both accused while Justice Narciso Atienza voted to acquit them;

5. Thereafter, Justice Garchitorena as Presiding Justice issued Administrative Order No. 288-93
constituting a Special Division of five and designating Justices Augusto Amores and Cipriano del Rosario;

6. On September 21, 1993, Justice Amores wrote Justice Garchitorena that he be given 15 days his
Manifestation. On the same date, however, Justice Garchitorena dissolved the division of 5 allegedly
because he and Justice Balajadia had agreed to the opinion of Justice del Rosario;

7. On September 24, 1993, a Decision was rendered convicting the petitioner and Dans of violation
of Sec. 3 [g] of RA 3019;
8. On June 29, 1998, the Third Division of the Supreme Court by a vote of 3-2 affirmed the conviction
of the petitioner but acquitted DANS;

9. Petitioner then filed a Motion for Reconsideration and at the same time prayed that her Motion
be heard by the Supreme Court en banc claiming that her right to due process of law, both substantive
and procedural, was violated:

a. as a result of the fact that she was convicted as a result of the alleged disparity of the
rentals agreed upon with PGHFI and the subsequent sub-lease contract between PGHFI and Transnational
Construction Corporation; and

b. the First Division convicted her after Justice Garchitorena dissolved the Special Division
of 5 after a lunch in a Quezon City restaurant where they agreed to convict her in one case and acquit her
in her other cases. The said meeting was attended by another justice who is not a member of the First
Division or the Special Division in violation of the Rules of the Sandiganbayan which requires that sessions
of the court shall be done only in its principal office in Manila and that only justices belonging to the
division should join the deliberations.

Held:

The petitioner is hereby acquitted.

1. The great disparity between the rental price of the lease agreement signed by the petitioner
(P102,760.00 per month) and the sub-lease rental (P734,000.00 per month) does not necessarily render
the monthly rate of P102,760.00 manifestly and grossly disadvantageous to the government in the
absence of any evidence using rentals of adjacent properties showing that the rentals in the property
subject of the lease agreement is indeed very low. NO EVIDENCE WHATSOEVER WAS PRESENTED BY THE
PROSECUTION REGARDING THE RENTAL RATE OF ADJACENT PROPERTIES.. As such, the prosecution failed
to prove the guilt of the petitioner reasonable doubt.

2. The court notes likewise the bias and prejudice of Presiding Justice Garchitorena against the petitioner
as shown by his leading, misleading and baseless hypothetical questions of said justice to RAMON F.
CUERVO, witness for the petitioner. Said justice asked 179 questions to the witness as against the
prosecutor who cross-examined the witness which was 73. Said number of questions could no longer be
described as “clarificatory questions”. Another ground therefore for the acquittal of the petitioner is that
she was denied IMPARTIAL TRIAL before the Sandiganbayan. This is one reason why the case could no
longer be remanded to the Sandiganbayan especially so that the other Sandiganbayan Justices in the
Special Division of 5 have retired. There is therefore no compelling reason why the case should still be
remanded to the lower court when all the evidence are already with the Supreme Court.

(NOTE: The vote was 9-5 for Acquittal. CJ Narvasa, Justices Regalado, Davide, Jr., Romero, and Panganiban
voted for conviction while Justice Vitug was the only Justice who voted for the return of the case to the
Sandiganbayan “to allow the corrections of the perceived ‘irregularities’ in the proceedings below.)
CORONA v. UNITED HARBOR PILOT ASSOC. OF THE PHIL.

GR NO. 111953 (DEC. 12 1997) (same as earlier case, see syllabus)

FACTS:

PPA General Manager Rogelio Dayan issued PPA-AO No. 04-92 on July 15, 1992, whose avowed policy was
to “instill effective discipline and thereby afford better protection to the port users through the
improvement of pilotage services.” This was implanted by providing therein that “all existing regular
appointments which have been previously issued either by the Bureau of Customs or the PPA shall remain
valid up to 31 December 1992 only” and that “all appointments to harbour pilot positions in all pilotage
districts shall, henceforth, be only for a term of one (1) year from the date of effectivity subject to yearly
renewal or cancellation by the authority after conduct of rigid evaluation of performance.”

Respondents United Harbor Pilots Association and the Manila Ports Association, through Capt. Alberto C.
Compas, questioned PPA-AO No 04-92. They argued that due process was not observed in the adoption
of PPA-AO No. 04-92 allegedly because no hearing was conducted whereby “relevant government
agencies” and the pilot themselves could ventilate their views.

On March 17, 1993, the office of the president, through then assistant executive secretary for legal affairs
Renato C. Corona, dismissed the appeal/petition and lifted the restraining order issued earlier. Secretary
Corona cited section 26 of P.D. No. 857, which merely requires the PPA to consult with “relevant
Government agencies.” Since the PPA Board of Directors is composed of the secretaries of the DOTC, the
Department of Public Works and Highways, the Department of Finance, and the Department of
Environment and natural Resources, as well as the DirectorGeneral of the National Economic
Development Agency, the MARINA, and the private sector representative who, due to his knowledge and
expertise, was appointed by the President to the Board, he concluded that the law has been sufficiently
complied with by the PPA in issuing the assailed administrative order.

Consequently, respondents filed a petition before the RTC of Manila which declared PPA Admin. Order
04-92 and its implementing Circular Orders null and void.

ISSUE: Whether due process was not observed in the adoption of PPA-AO No. 04-92

HELD:

THE COURT IS CONVINCED THAT PPA-AO NO. 04-92 WAS ISSUED IN STARK DISREGARD OF RESPONDENTS'
RIGHT AGAINST DEPRIVATION OF PROPERTY WITHOUT DUE PROCESS OF LAW. THE SUPREME COURT SAID
THAT IN ORDER TO FALL WITHIN THE AEGIS OF THIS PROVISION, TWO CONDITIONS MUST CONCUR,
NAMELY, THAT THERE IS A DEPRIVATION AND THAT SUCH DEPRIVATION IS DONE WITHOUT PROPER
OBSERVANCE OF DUE PROCESS. AS A GENERAL RULE, NOTICE AND HEARING, AS THE FUNDAMENTAL
REQUIREMENTS OF PROCEDURAL DUE PROCESS, ARE ESSENTIAL ONLY WHEN AN ADMINISTRATIVE BODY
EXERCISES ITS QUASI-JUDICIAL FUNCTION. IN THE PERFORMANCE OF ITS EXECUTIVE OR LEGISLATIVE
FUNCTIONS, SUCH AS ISSUING RULES AND REGULATIONS, AN ADMINISTRATIVE BODY NEED NOT COMPLY
WITH THE REQUIREMENTS OF NOTICE AND HEARING.
THERE IS NO DISPUTE THAT PILOTAGE AS A APROFESSION HAS TAKEN ON THE NATURE OF A PROPERTY
RIGHT. IT IS READILY APPARENT THAT PPA-AO NO. 04-92 UNDULY RESTRICTS THE RIGHT OF HARBOR
PILOTS TO ENJOY THEIR PROFESSION BEFORE THEIR COMPULSORY RETIREMENT.

SYNOPSIS (from CDAsia)

July 15, 1992, PPA General Manager Rogelio A. Dayan issued PPA-AO No. 04-92, limiting the term of
Appointment of harbor pilots to one (1) year subject to renewal or cancellation by the authority after
conduct of a rigid evaluation of the appointee's performance. Respondents, through Capt. Alberto C.
Compas, questioned PPA-AO No. 04-92 before the Department of Transportation and Communication,
but they were informed by the Department Secretary that the matter of reviewing, recalling or annulling
PPA's administrative issuances lies exclusively with its Board of Directors as its governing body.
Respondents appealed to the Office of the President which ordered the PPA to hold in abeyance the
implementation of the administrative order. However, the Office of the President through then Assistant
Executive Secretary for Legal Affairs Renato C. Corona dismissed the appeal/petition and lifted the
restraining order issued earlier. Respondents filed a petition for certiorari, prohibition and injunction with
the Regional Trial Court of Manila. The trial court ruled that herein petitioners have acted in excess of
jurisdiction and with grave abuse of discretion in promulgating PPA AO No. 04-92 including its
implementing memoranda. The trial court also declared the administrative order null and void and
permanently enjoined its implementation. Hence, herein petitioners elevated the case to the Court on
certiorari.

The Supreme Court ruled that PPA-AO No. 04-92 was issued in utter disregard of respondent's right
against deprivation of property without due process of law. The Court held that the provision limiting the
term of appointment of harbor pilots unduly restricts the right of harbor pilots to enjoy their profession
before their retirement. Renewal of the license is now dependent on a rigid evaluation of performance
which is conducted only after the license has been canceled. Hence, the use of the term "renewal." It is
the "pre-evaluation" cancellation which primarily makes PPA-AO No. 04-92 unreasonable and
constitutionally infirm. In a real sense, it is deprivation of property without due process of law.

Petition denied.

SYLLABUS

CONSTITUTIONAL LAW; BILL OF RIGHTS; PPA-AO NO. 04-92; DECLARED UNCONSTITUTIONAL; THE PRE-
EVALUATION CANCELLATION OF THE HARBOR PILOTS' LICENSES IS WHAT PRIMARILY MAKES THE
ADMINISTRATIVE ORDER UNREASONABLE AND CONSTITUTIONALLY INFIRM; IT CONSTITUTES
DEPRIVATION OF PROPERTY WITHOUT DUE PROCESS OF LAW. — It is readily apparent that PPA-AO No.
04-92 unduly restricts the right of harbor pilots to enjoy their profession before their compulsory
retirement. In the past, they enjoyed a measure of security knowing that after passing five examinations
and undergoing years of on-the-job training, they would have a license which they could use until their
retirement, unless sooner revoked by the PPA for mental or physical unfitness. Under the new issuance,
they have to contend with an annual cancellation of their license which can be temporary or permanent
depending on the outcome of their performance evaluation. Veteran pilots and neophytes alike are
suddenly confronted with one-year terms which ipso facto expire at the end of that period. Renewal of
their license is now dependent on a "rigid evaluation of performance" which is conducted only after the
license has already been canceled. Hence, the use of the term "renewal." It is this pre-evaluation
cancellation which primarily makes PPA-AO No. 04-92 unreasonable and constitutionally infirm. In a real
sense, it is a deprivation of property without due process of law.

||| (Corona v. United Harbor Pilots Association of the Philippines, G.R. No. 111953, [December 12, 1997],
347 PHIL 333-345)

PEOPLE V. DELA PIEDRA

G.R. No. 121777. January 24, 2001

FACTS:

Accused-appellant Carol M. dela Piedra was charged of illegal recruitment in large scale by promising an
employment abroad Maria Lourdes Modesto y Gadrino, Nancy Araneta y Aliwanag and Jennelyn Baez y
Timbol, a job to Singapore without having previously obtained from the Philippine Overseas Employment
Administration, a license or authority to engage in recruitment and overseas placement of workers. In fact
said Maria Lourdes Modesto had already advanced the amount of P2,000.00 to the accused for and in
consideration of the promised employment which did not materialize. Thus causing damage and prejudice
to the latter in the said sum.

Erlie Ramos, Attorney II of the Philippine Overseas Employment Agency (POEA), received a telephone call
from an unidentified woman inquiring about the legitimacy of the recruitment conducted by a certain
Mrs. Carol Figueroa. Ramos. An entrapment was then planned by the Criminal Investigation Service (CIS)
headed by Capt. Mendoza and successfully arrested the accused-appellant.

Later on, in the course of their investigation, the CIS discovered that Carol Figueroa had many aliases,
among them, Carol Llena and Carol dela Piedra.

At the trial, the prosecution presented five (5) witnesses, namely, Erlie Ramos, SPO2 Erwin Manalopilar,
Eileen Fermindoza, Nancy Araneta and Lourdes Modesto and all of them positively testified that the
accused offer them a job to Singapore.

The trial found the accused-appellant guilty of beyond reasonable doubt of Illegal Recruitment committed
in a large scale.

ISSUE:

WON Article 13 (b) of the Labor Code defining recruitment and placement is void for vagueness and, thus,
violates the due process clause.
HELD:

NO. Article 13 (b) of the Labor Code is not a vague provision.

As a rule, a statute or act may be said to be vague when it lacks comprehensible standards that men of
common intelligence must necessarily guess at its meaning and differ as to its application. It is repugnant
to the Constitution in two respects: (1) it violates due process for failure to accord persons, especially the
parties targeted by it, fair notice of the conduct to avoid; and (2) it leaves law enforcers unbridled
discretion in carrying out its provisions and become an arbitrary flexing of the Government muscle.

The court cannot sustain the Appellant argument that the acts that constitute recruitment and placement
suffer from overbreadth since by merely referring a person for employment, a person may be convicted
of illegal recruitment.

Evidently, appellant has taken the penultimate paragraph in the excerpt quoted above out of context. The
Court, in Panis case, merely bemoaned the lack of records that would help shed light on the meaning of
the proviso. The absence of such records notwithstanding, the Court was able to arrive at a reasonable
interpretation of the proviso by applying principles in criminal law and drawing from the language and
intent of the law itself. Section 13 (b), therefore, is not a perfectly vague act whose obscurity is evident
on its face. If at all, the proviso therein is merely couched in imprecise language that was salvaged by
proper construction. It is not void for vagueness.

An act will be declared void and inoperative on the ground of vagueness and uncertainty, only upon a
showing that the defect is such that the courts are unable to determine, with any reasonable degree of
certainty, what the legislature intended. x x x. In this connection we cannot permit reference to the rule
that legislation should not be held invalid on the ground of uncertainty if susceptible of any reasonable
construction that will support and give it effect. An Act will not be declared inoperative and ineffectual on
the ground that it furnishes no adequate means to secure the purpose for which it is passed, if men of
common sense and reason can devise and provide the means, and all the instrumentalities necessary for
its execution are within the reach of those entrusted therewith.

That Section 13 (b) encompasses what appellant apparently considers as customary and harmless acts
such as labor or employment referral (referring an applicant, according to appellant, for employment to
a prospective employer) does not render the law over broad. Evidently, appellant misapprehends concept
of over breadth.

A statute may be said to be over broad where it operates to inhibit the exercise of individual freedoms
affirmatively guaranteed by the Constitution, such as the freedom of speech or religion. A generally
worded statute, when construed to punish conduct which cannot be constitutionally punished is
unconstitutionally vague to the extent that it fails to give adequate warning of the boundary between the
constitutionally permissible and the constitutionally impermissible applications of the statute

In Blo Umpar Adiong vs. Commission on Elections,for instance, we struck down as void for overbreadth
provisions prohibiting the posting of election propaganda in any place including private vehicles other
than in the common poster areas sanctioned by the COMELEC. We held that the challenged provisions
not only deprived the owner of the vehicle the use of his property but also deprived the citizen of his right
to free speech and information. The prohibition in Adiong, therefore, was so broad that it covered even
constitutionally guaranteed rights and, hence, void for over breadth.

In the present case, however, appellant did not even specify what constitutionally protected freedoms
are embraced by the definition of recruitment and placement that would render the same constitutionally
over broad.

ESTRADA V. SANDIGANBAYAN

G.R. No. 148560. November 19, 2001

FACTS:

Former President Estrada and co-accused were charged for Plunder under RA 7080 (An Act Defining and
Penalizing the Crime of Plunder), as amended by RA 7659.

On the information, it was alleged that Estrada have received billions of pesos through any or a
combination or a series of overt or criminal acts, or similar schemes or means thereby unjustly enriching
himself or themselves at the expense and to the damage of the Filipino people and the Republic of the
Philippines.

Estrada questions the constitutionality of the Plunder Law since for him:

1. it suffers from the vice of vagueness

2. it dispenses with the "reasonable doubt" standard in criminal prosecutions

3. it abolishes the element of mens rea in crimes already punishable under The Revised Penal Code.

Office of the Ombudsman filed before the Sandiganbayan 8 separate Informations against petitioner.

Estrada filed an Omnibus Motion on the grounds of lack of preliminary investigation,

reconsideration/reinvestigation of offenses and opportunity to prove lack of probable cause but was
denied.

Later on, the Sandiganbayan issued a Resolution in Crim. Case No. 26558 finding that a probable cause for
the offense of plunder exists to justify the issuance of warrants for the arrest of the accused.

Estrada moved to quash the Information in Criminal Case No. 26558 on the ground that the facts alleged
therein did NOT constitute an indictable offense since the law on which it was based was unconstitutional
for vagueness and that the Amended Information for Plunder charged more than one offense. Same was
denied.
The questioned provisions of the petitioners are Secs. 1, par. (d), 2 and 4 of the Plunder Law which states
that:

Section 1. x x x x (d) "Ill-gotten wealth" means any asset, property, business, enterprise or material
possession of any person within the purview of Section Two (2) hereof, acquired by him directly or
indirectly through dummies, nominees, agents, subordinates and/or business associates by any
combination or series of the following means or similar schemes:

(1) Through misappropriation, conversion, misuse, or malversation of public funds or raids on the public
treasury;

(2) By receiving, directly or indirectly, any commission, gift, share, percentage, kickbacks or any other form
of pecuniary benefit from any person and/or entity in connection with any government contract or project
or by reason of the office or position of the public office concerned;

(3) By the illegal or fraudulent conveyance or disposition of assets belonging to the National Government
or any of its subdivisions, agencies or instrumentalities, or government owned or controlled corporations
and their subsidiaries;

(4) By obtaining, receiving or accepting directly or indirectly any shares of stock, equity or any other form
of interest or participation including the promise of future employment in any business enterprise or
undertaking;

(5) By establishing agricultural, industrial or commercial monopolies or other combinations and/or

implementation of decrees and orders intended to benefit particular persons or special interests; or

(6) By taking advantage of official position, authority, relationship, connection or influence to unjustly
enrich himself or themselves at the expense and to the damage and prejudice of the Filipino people and
the Republic of the Philippines.

Section 2. Definition of the Crime of Plunder, Penalties. - Any public officer who, by himself or in
connivance with members of his family, relatives by affinity or consanguinity, business associates,
subordinates or other persons, amasses, accumulates or acquires ill-gotten wealth through a combination
or series of overt or criminal acts as described in Section 1 (d) hereof, in the aggregate amount or total
value of at least fifty million pesos (P50,000,000.00) shall be guilty of the crime of plunder and shall be
punished by reclusion perpetua to death. Any person who participated with the said public officer in the
commission of an offense contributing to the crime of plunder shall likewise be punished for such offense.
In the imposition of penalties, the degree of participation and the attendance of mitigating and
extenuating circumstances as provided by the Revised Penal Code shall be considered by the court. The
court shall declare any and all ill-gotten wealth and their interests and other incomes and assets including
the properties and shares of stocks derived from the deposit or investment thereof forfeited in favor of
the State (underscoring supplied).

Section 4. Rule of Evidence. - For purposes of establishing the crime of plunder, it shall not be necessary
to prove each and every criminal act done by the accused in furtherance of the scheme or conspiracy to
amass, accumulate or acquire ill-gotten wealth, it being sufficient to establish beyond reasonable doubt
a pattern of overt or criminal acts indicative of the overall unlawful scheme or conspiracy (underscoring
supplied).

ISSUE:

WON the crime of plunder is unconstitutional for being vague?

HELD:

NO. As long as the law affords some comprehensible guide or rule that would inform those who are
subject to it what conduct would render them liable to its penalties, its validity will be sustained. The
amended information itself closely tracks the language of the law, indicating w/ reasonable certainty the
various elements of the offense w/c the petitioner is alleged to have committed.

We discern nothing in the foregoing that is vague or ambiguous that will confuse petitioner in his defense.

Petitioner, however, bewails the failure of the law to provide for the statutory definition of the terms
“combination” and “series” in the key phrase “a combination or series of overt or criminal acts. These
omissions, according to the petitioner, render the Plunder Law unconstitutional for being impermissibly
vague and overbroad and deny him the right to be informed of the nature and cause of the accusation
against him, hence violative of his fundamental right to due process.

A statute is not rendered uncertain and void merely because general terms are used herein, or because
of the employment of terms without defining them.

A statute or act may be said to be vague when it lacks comprehensible standards that men of common
intelligence most necessarily guess at its meaning and differ in its application. In such instance, the statute
is repugnant to the Constitution in two (2) respects – it violates due process for failure to accord persons,
especially the parties targeted by it, fair notice of what conduct to avoid; and, it leaves law enforcers
unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the Government
muscle.

A facial challenge is allowed to be made to vague statute and to one which is overbroad because of
possible “chilling effect” upon protected speech. The possible harm to society in permitting some
unprotected speech to go unpunished is outweighed by the possibility that the protected speech of others
may be deterred and perceived grievances left to fester because of possible inhibitory effects of overly
broad statutes. But in criminal law, the law cannot take chances as in the area of free speech.
ABAKADA GURO PARTY LIST (Formerly AASJAS) OFFICERS SAMSON S. ALCANTARA and ED VINCENT S.
ALBANO, Petitioners,

vs.

THE HONORABLE EXECUTIVE SECRETARY EDUARDO ERMITA; HONORABLE SECRETARY OF THE

DEPARTMENT OF FINANCE CESAR PURISIMA; and HONORABLE COMMISSIONER OF INTERNAL REVENUE
GUILLERMO PARAYNO, JR., Respondent.

Facts:

Petitioners ABAKADA GURO Party List challenged the constitutionality of R.A. No. 9337 particularly
Sections 4, 5 and 6, amending Sections 106, 107 and 108, respectively, of the National Internal Revenue
Code (NIRC). These questioned provisions contain a uniform proviso authorizing the President, upon
recommendation of the Secretary of Finance, to raise the VAT rate to 12%, effective January 1, 2006, after
any of the following conditions have been satisfied, to wit:

. . . That the President, upon the recommendation of the Secretary of Finance, shall, effective January 1,
2006, raise the rate of value-added tax to twelve percent (12%), after any of the following conditions has
been satisfied:

(i) Value-added tax collection as a percentage of Gross Domestic Product (GDP) of the previous year
exceeds two and four-fifth percent (2 4/5%); or

(ii) National government deficit as a percentage of GDP of the previous year exceeds one and one-half
percent (1 ½%).

Petitioners argue that the law is unconstitutional, as it constitutes abandonment by Congress of its
exclusive authority to fix the rate of taxes under Article VI, Section 28(2) of the 1987 Philippine
Constitution. They further argue that VAT is a tax levied on the sale or exchange of goods and services and
cannot be included within the purview of tariffs under the exemption delegation since this refers to
customs duties, tolls or tribute payable upon merchandise to the government and usually imposed on
imported/exported goods. They also said that the President has powers to cause, influence or create the
conditions provided by law to bring about the conditions precedent. Moreover, they allege that no guiding
standards are made by law as to how the Secretary of Finance will make the recommendation. They claim,
nonetheless, that any recommendation of the Secretary of Finance can easily be brushed aside by the
President since the former is a mere alter ego of the latter, such that, ultimately, it is the President who
decides whether to impose the increased tax rate or not.

Issues:

Whether or not R.A. No. 9337 has violated the provisions in Article VI, Section 24, and Article VI, Section
26 (2) of the Constitution.
Whether or not there was an undue delegation of legislative power in violation of Article VI Sec 28 Par 1
and 2 of the Constitution.

Whether or not there was a violation of the due process and equal protection under Article III Sec. 1 of
the Constitution.

Discussions:

Basing from the ruling of Tolentino case, it is not the law, but the revenue bill which is required by the
Constitution to “originate exclusively” in the House of Representatives, but Senate has the power not only
to propose amendments, but also to propose its own version even with respect to bills which are required
by the Constitution to originate in the House. the Constitution simply means is that the initiative for filing
revenue, tariff or tax bills, bills authorizing an increase of the public debt, private bills and bills of local
application must come from the House of Representatives on the theory that, elected as they are from
the districts, the members of the House can be expected to be more sensitive to the local needs and
problems. On the other hand, the senators, who are elected at large, are expected to approach the same
problems from the national perspective. Both views are thereby made to bear on the enactment of such
laws.

In testing whether a statute constitutes an undue delegation of legislative power or not, it is usual to
inquire whether the statute was complete in all its terms and provisions when it left the hands of the
legislature so that nothing was left to the judgment of any other appointee or delegate of the legislature.

The equal protection clause under the Constitution means that “no person or class of persons shall be
deprived of the same protection of laws which is enjoyed by other persons or other classes in the same
place and in like circumstances.”

Rulings:

R.A. No. 9337 has not violated the provisions. The revenue bill exclusively originated in the House
of Representatives, the Senate was acting within its constitutional power to introduce amendments to
the House bill when it included provisions in Senate Bill No. 1950 amending corporate income taxes,
percentage, excise and franchise taxes. Verily, Article VI, Section 24 of the Constitution does not contain
any prohibition or limitation on the extent of the amendments that may be introduced by the Senate to
the House revenue bill.

There is no undue delegation of legislative power but only of the discretion as to the execution of
a law. This is constitutionally permissible. Congress does not abdicate its functions or unduly delegate
power when it describes what job must be done, who must do it, and what is the scope of his authority;
in our complex economy that is frequently the only way in which the legislative process can go forward.

Supreme Court held no decision on this matter. The power of the State to make reasonable and
natural classifications for the purposes of taxation has long been established. Whether it relates to the
subject of taxation, the kind of property, the rates to be levied, or the amounts to be raised, the methods
of assessment, valuation and collection, the State’s power is entitled to presumption of validity. As a rule,
the judiciary will not interfere with such power absent a clear showing of unreasonableness,
discrimination, or arbitrariness.

GSIS V. MONTESCLAROS

G.R. No. 146494. July 14, 2004

FACTS:

Nicolas Montesclaros, a 72-year-old widower married Milagros Orbiso, who was then 43 years
old, on 10 July 1983. Nicolas filed with the GSIS an application for retirement benefits under the Revised
Government Insurance Act of 1977.

In his retirement application, he designated his wife as his sole beneficiary. GSIS approved Nicolas’
application for retirement effective 17 February 1984, granting a lump sum payment of annuity for the
first five years and a monthly annuity after.

Nicolas died on 22 April 1992. Milagros filed with the GSIS a claim for survivorship pension under
PD 1146 but was denied the claim because, under section 18 of PD 1146, the surviving spouse has no right
to survivorship pension if the surviving spouse contracted the marriage with the pensioner within three
years before the pensioner qualified for the pension.

Nicolas wed Milagros on 10 July 1983, less than one year from his date of retirement on 17
February 1984. Milagros filed with the trial court a special civil action for declaratory relief questioning
the validity of Sec. 18 of PD 1146.

The trial court rendered judgment declaring Milagros eligible for survivorship pension and
ordered GSIS to pay Milagros the benefits including interest. Citing Articles 115and 117 of the Family Code,
the trial court held that retirement benefits, which the pensioner has earned for services rendered and
for which the pensioner has contributed through monthly salary deductions, are onerous acquisitions.
Since retirement benefits are property the pensioner acquired through labor, such benefits are conjugal
property. The trial court held that the prohibition in Section 18 of PD 1146 is deemed repealed for being
inconsistent with the Family Code, a later law. The Family Code has retroactive effect if it does not
prejudice or impair vested rights.

The trial court held that Section 18 of PD 1146 was repealed by the Family Code, a later law. GSIS
appealed to the Court of Appeals, which affirmed the trial court’s decision. Hence, this appeal.

In a letter dated 10 January 2003, Milagros informed the Court that she has accepted GSIS’
decision disqualifying her from receiving survivorship pension and that she is no longer interested in
pursuing the case. However, the Court will still resolve the issue despite the manifestation of Milagros
because social justice and public interest demand the resolution of the constitutionality of the proviso.
ISSUE:

Whether the proviso in Section 18 of PD 1146 is constitutional.

HELD:

NO. The sole proviso Sec. 18 of PD 1146 is unconstitutional. Under Section 18 of PD 1146, it
prohibits the dependent spouse from receiving survivorship pension if such dependent spouse married
the pensioner within three years before the pensioner qualified for the pension. The Court holds that such
proviso is discriminatory and denies equal protection of the law.

The proviso is contrary to Section 1, Article III of the Constitution, which provides that [n]o person
shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied
the equal protection of the laws.

The proviso is unduly oppressive in outrightly denying a dependent spouses claim for survivorship
pension if the dependent spouse contracted marriage to the pensioner within the three-year prohibited
period.

There is outright confiscation of benefits due the surviving spouse without giving the surviving
spouse an opportunity to be heard.

The proviso undermines the purpose of PD 1146, which is to assure comprehensive and integrated
social security and insurance benefits to government employees and their dependents in the event of
sickness, disability, death, and retirement of the government employees.

A statute based on reasonable classification does not violate the constitutional guaranty of the
equal protection of the law. The requirements for a valid and reasonable classification are:

(1) it must rest on substantial distinctions;

(2) it must be germane to the purpose of the law;

(3) it must not be limited to existing conditions only; and

(4) it must apply equally to all members of the same class. Thus, the law may treat and regulate
one class differently from another class provided there are real and substantial differences to distinguish
one class from another.

The proviso in question does not satisfy these requirements. The proviso discriminates against
the dependent spouse who contracts marriage to the pensioner within three years before the pensioner
qualified for the pension. Under the proviso, even if the dependent spouse married the pensioner more
than three years before the pensioners death, the dependent spouse would still not receive survivorship
pension if the marriage took place within three years before the pensioner qualified for pension. The
object of the prohibition is vague. There is no reasonable connection between the means employed and
the purpose intended. The law itself does not provide any reason or purpose for such a prohibition. If the
purpose of the proviso is to prevent deathbed marriages, then we do not see why the proviso reckons the
three-year prohibition from the date the pensioner qualified for pension and not from the date the
pensioner died. The classification does not rest on substantial distinctions. Worse, the classification lumps
all those marriages contracted within three years before the pensioner qualified for pension as having
been contracted primarily for financial convenience to avail of pension benefits.

Indeed, the classification is discriminatory and arbitrary. This is probably the reason Congress
deleted the proviso in Republic Act No. 8291 (RA 8291), otherwise known as the Government Service
Insurance Act of 1997, the law revising the old charter of GSIS (PD 1146). Under the implementing rules
of RA 8291, the surviving spouse who married the member immediately before the members death is still
qualified to receive survivorship pension unless the GSIS proves that the surviving spouse contracted the
marriage solely to receive the benefit.

Thus, the present GSIS law does not presume that marriages contracted within three years before
retirement or death of a member are sham marriages contracted to avail of survivorship benefits. The
present GSIS law does not automatically forfeit the survivorship pension of the surviving spouse who
contracted marriage to a GSIS member within three years before the members retirement or death. The
law acknowledges that whether the surviving spouse contracted the marriage mainly to receive
survivorship benefits is a matter of evidence. The law no longer prescribes a sweeping classification that
unduly prejudices the legitimate surviving spouse and defeats the purpose for which Congress enacted
the social legislation.

Wherefore, the proviso in Section 18 of Presidential Decree No. 1146 is void for being violative of
the constitutional guarantees of due process and equal protection of the law.

From the Full Text; Related to Due Process

Retirement Benefits as Property Interest

Under Section 5 of PD 1146, it is mandatory for the government employee to pay monthly
contributions. PD 1146 mandates the government to include in its annual appropriation the necessary
amounts for its share of the contributions. It is compulsory on the government employer to take off and
withhold from the employees' monthly salaries their contributions and to remit the same to GSIS. 16 The
government employer must also remit its corresponding share to GSIS. 17 Considering the mandatory
salary deductions from the government employee, the government pensions do not constitute mere
gratuity but form part of compensation.

In a pension plan where employee participation is mandatory, the prevailing view is that
employees have contractual or vested rights in the pension where the pension is part of the terms of
employment. 18 The reason for providing retirement benefits is to compensate service to the government.
Retirement benefits to government employees are part of emolument to encourage and retain qualified
employees in the government service. Retirement benefits to government employees reward them for
giving the best years of their lives in the service of their country. 19
 Thus, where the employee retires and meets the eligibility requirements, he acquires a vested right
to benefits that is protected by the due process clause. 20 Retirees enjoy a protected property interest
whenever they acquire a right to immediate payment under pre-existing law. 21 Thus, a pensioner acquires
a vested right to benefits that have become due as provided under the terms of the public employees'
pension statute. 22 No law can deprive such person of his pension rights without due process of law, that
is, without notice and opportunity to be heard. 23

In addition to retirement and disability benefits, PD 1146 also provides for benefits to survivors of
deceased government employees and pensioners. Under PD 1146, the dependent spouse is one of the
beneficiaries of survivorship benefits. A widow's right to receive pension following the demise of her
husband is also part of the husband's contractual compensation. 24

Denial of Due Process

The proviso is contrary to Section 1, Article III of the Constitution, which provides that "[n]o person
shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the
equal protection of the laws." The proviso is unduly oppressive in outrightly denying a dependent spouse's
claim for survivorship pension if the dependent spouse contracted marriage to the pensioner within the
three-year prohibited period. There is outright confiscation of benefits due the surviving spouse without
giving the surviving spouse an opportunity to be heard. The proviso undermines the purpose of PD 1146,
which is to assure comprehensive and integrated social security and insurance benefits to government
employees and their dependents in the event of sickness, disability, death, and retirement of the
government employees.

The "whereas" clauses of PD 1146 state:

WHEREAS, the Government Service Insurance System in promoting the efficiency and welfare of
the employees of the Government of the Philippines, administers the laws that grant to its members social
security and insurance benefits;

WHEREAS, it is necessary to preserve at all times the actuarial solvency of the funds administered
by the System; to guarantee to the government employee all the benefits due him; and to expand and
increase the benefits made available to him and his dependents to the extent permitted by available
resources;

WHEREAS, provisions of existing laws have impeded the efficient and effective discharge by the
System of its functions and have unduly hampered the System from being more responsive to the dramatic
changes of the times and from meeting the increasing needs and expectations of the Filipino public
servant;

WHEREAS, provisions of existing laws that have prejudiced, rather than benefited, the government
employee; restricted, rather than broadened, his benefits, prolonged, rather than facilitated the payment
of benefits, must now yield to his paramount welfare;
 WHEREAS, the social security and insurance benefits of government employees must be
continuously re-examined and improved to assure comprehensive and integrated social security and
insurance programs that will provide benefits responsive to their needs and those of their dependents in
the event of sickness, disability, death, retirement, and other contingencies; and to serve as a fitting reward
for dedicated public service;

WHEREAS, in the light of existing economic conditions affecting the welfare of government
employees, there is a need to expand and improve the social security and insurance programs administered
by the Government Service Insurance System, specifically, among others, by increasing pension benefits,
expanding disability benefits, introducing survivorship benefits, introducing sickness and income benefits,
and eventually extending the compulsory coverage of these programs to all government employees
regardless of employment status.

PD 1146 has the following purposes:

a. to preserve at all times the actuarial solvency of the funds administered by the System;

b. to guarantee to the government employee all the benefits due him; and

c. to expand, increase, and improve the social security and insurance benefits made available to
him and his dependents such as:

• increasing pension benefits

• expanding disability benefits

• introducing survivorship benefits

• introducing sickness income benefits

• extending compulsory membership to all government employees irrespective of status 25

The law extends survivorship benefits to the surviving and qualified beneficiaries of the deceased
member or pensioner to cushion the beneficiaries against the adverse economic effects resulting from the
death of the wage earner or pensioner. 26

||| (Government Service Insurance System v. Montesclaros, G.R. No. 146494, [July 14, 2004], 478 PHIL
573-591)
MIRASOL V. DPWH

G.R. No. 158793 June 8, 2006

FACTS:

Petitioners filed before the court a petition for declaratory judgment with application for temporary
restraining order and injunction. It seeks the declaration of nullification of administrative issuances for
being inconsistent with the provisions of Republic Act 2000 (Limited Access Highway Act) which was
enacted in 1957.

Previously, pursuant to its mandate under RA 2000, DPWH issued on June 25, 1998 Dept. Order no. 215
declaring the Manila Cavite (Coastal Road) Toll Expressway as limited access facilities.

Petitioners filed an Amended Petition on February 8, 2001 wherein petitioners sought the declaration of
nullity of the aforesaid administrative issuances.

The petitioners prayed for the issuance of a temporary restraining order to prevent the enforcement of
the total ban on motorcycles along NLEX, SLEX, Manila-Cavite (Coastal Road) toll Expressway under DO
215.

RTC, after due hearing, granted the petitioner’s application for preliminary injunction conditioned upon
petitioner’s filing of cash bond in the amount of P100, 000 which petitioners complied.

DPWH issued an order (DO 123) allowing motorcycles with engine displacement of 400 cubic centimeters
inside limited access facilities (toll ways).

Upon assumption of Hon. Presiding Judge Cornejo, both the petitioners and respondents were required
to file their Memoranda.

The court issued an order dismissing the petition but declaring invalid DO 123.

The petitioners moved for reconsideration but it was denied.

RTC ruled that DO 74 is valid but DO 123 is invalid being violative of the equal protection clause of the
Constitution

ISSUE:

Whether RTC’s decision is barred by res judicata?

Whether DO 74, DO 215 and the TRB regulation contravene RA 2000.

Whether AO 1 is unconstitutional.
HELD:

1. NO. The petitioners are mistaken because they rely on the RTC’s Order granting their prayer for a writ
of preliminary injunction. Since petitioners did not appeal from that order, the petitioners presumed that
the order became a final judgment on the issues.

The order granting the prayer is not an adjudication on the merits of the case that would trigger res
judicata.

A preliminary injunction does not serve as a final determination of the issues, it being a provisional
remedy.

2. YES. The petitioners claimed that DO 74, DO 215 and TRB’s rules and regulation issued under them
unduly expanded the power of the DPWH in sec. 4 of RA 2000 to regulate toll ways.

They contend that DPWH’s regulatory authority is limited to acts like redesigning curbings or central
dividing sections.

They claim that DPWH is only allowed to redesign the physical structure of toll ways and not to determine
“who or what can be qualifies as toll ways user”.

The court ruled that DO 74 and DO 215 are void because the DPWH has no authority to declare certain
expressways as limited access facilities.

Under the law, it is the DOTC which is authorized to administer and enforce all laws, rules and regulations
in the field of transportation and to regulate related activities.

Since the DPWH has no authority to regulate activities relative to transportation, the Toll Regulatory
Board (TRB) cannot derive its power from the DPWH to issue regulations governing limited access
facilities.

The DPWH cannot delegate a power or function which it does not possess in the first place.

3. NO. The Court emphasized that the secretary of the then Department of Public Works and
Communications had issued AO 1 in February 1968, as authorized under Section 3 of Republic Act 2000,
prior to the splitting of the department and the eventual devolution of its powers to the DOTC.

Because administrative issuances had the force and effect of law, AO 1 enjoyed the presumption of validity
and constitutionality. The burden to prove its unconstitutionality rested on the party assailing it, more so
when police power was at issue and passed the test of reasonableness. The Administrative Order was not
oppressive, as it did not impose unreasonable restrictions or deprive petitioners of their right to use the
facilities. It merely set rules to ensure public safety and the uninhibited flow of traffic within those limited-
access facilities.

The right to travel did not mean the right to choose any vehicle in traversing a tollway. Petitioners were
free to access the tollway as much as the rest of the public. However, the mode in which they wished to
travel, pertaining to their manner of using the tollway, was a subject that could validly be limited by
regulation. There was no absolute right to drive; on the contrary, this privilege was heavily regulated.

Discussion related to Due Process

A police power measure may be assailed upon proof that it unduly violates constitutional limitations like
due process and equal protection of the law. 43 Petitioners' attempt to seek redress from the motorcycle
ban under the aegis of equal protection must fail. Petitioners' contention that AO 1 unreasonably singles
out motorcycles is specious. To begin with, classification by itself is not prohibited

||| (Mirasol v. Department of Public Works and Highways, G.R. No. 158793, [June 8, 2006], 523 PHIL 713-
766)