[G.R. No. 104768. July 21, 2003] Republic of the Philippines, petitioner, vs.

Sandiganbayan, Major General Josephus Q. Ramas and Elizabeth Dimaano, respondents. DECISION CARPIO, J.: The Case Before this Court is a petition for review on certiorari seeking to set aside the Resolutions of the Sandiganbayan (First Division) dated 18 November 1991 and 25 March 1992 in Civil Case No. 0037. The first Resolution dismissed petitioners Amended Complaint and ordered the return of the confiscated items to respondent Elizabeth Dimaano, while the second Resolution denied petitioners Motion for Reconsideration. Petitioner prays for the grant of the reliefs sought in its Amended Complaint, or in the alternative, for the remand of this case to the Sandiganbayan (First Division) for further proceedings allowing petitioner to complete the presentation of its evidence. Antecedent Facts Immediately upon her assumption to office following the successful EDSA Revolution, then President Corazon C. Aquino issued Executive Order No. 1 (EO No. 1) creating the Presidential Commission on Good Government (PCGG). EO No. 1 primarily tasked the PCGG to recover all ill-gotten wealth of former President Ferdinand E. Marcos, his immediate family, relatives, subordinates and close associates. EO No. 1 vested the PCGG with the power (a) to conduct investigation as may be necessary in order to accomplish and carry out the purposes of this order and the power (h) to promulgate such rules and regulations as may be necessary to carry out the purpose of this order. Accordingly, the PCGG, through its then Chairman Jovito R. Salonga, created an AFP Anti-Graft Board (AFP Board) tasked to investigate reports of unexplained wealth and corrupt practices by AFP personnel, whether in the active service or retired. Based on its mandate, the AFP Board investigated various reports of alleged unexplained wealth of respondent Major General Josephus Q. Ramas (Ramas). On 27 July 1987, the AFP Board issued a Resolution on its findings and recommendation on the reported unexplained wealth of Ramas. The relevant part of the Resolution reads: III. FINDINGS and EVALUATION:

Evidence in the record showed that respondent is the owner of a house and lot located at 15-Yakan St., La Vista, Quezon City. He is also the owner of a house and lot located in Cebu City. The lot has an area of 3,327 square meters. The value of the property located in Quezon City may be estimated modestly at P700,000.00. The equipment/items and communication facilities which were found in the premises of Elizabeth Dimaano and were confiscated by elements of the PC Command of Batangas were all covered by invoice receipt in the name of CAPT. EFREN SALIDO, RSO Command Coy, MSC, PA. These items could not have been in the possession of Elizabeth Dimaano if not given for her use by respondent Commanding General of the Philippine Army. Aside from the military equipment/items and communications equipment, the raiding team was also able to confiscate money in the amount of P2,870,000.00 and $50,000 US Dollars in the house of Elizabeth Dimaano on 3 March 1986. Affidavits of members of the Military Security Unit, Military Security Command, Philippine Army, stationed at Camp Eldridge, Los Baos, Laguna, disclosed that Elizabeth Dimaano is the mistress of respondent. That respondent usually goes and stays and sleeps in the alleged house of Elizabeth Dimaano in Barangay Tengga, Itaas, Batangas City and when he arrives, Elizabeth Dimaano embraces and kisses respondent. That on February 25, 1986, a person who rode in a car went to the residence of Elizabeth Dimaano with four (4) attache cases filled with money and owned by MGen Ramas. Sworn statement in the record disclosed also that Elizabeth Dimaano had no visible means of income and is supported by respondent for she was formerly a mere secretary. Taking in toto the evidence, Elizabeth Dimaano could not have used the military equipment/items seized in her house on March 3, 1986 without the consent of respondent, he being the Commanding General of the Philippine Army. It is also impossible for Elizabeth Dimaano to claim that she owns the P2,870,000.00 and $50,000 US Dollars for she had no visible source of income. This money was never declared in the Statement of Assets and Liabilities of respondent. There was an intention to cover the existence of these money because these are all ill-gotten and unexplained wealth. Were it not for the affidavits of the members of the Military Security Unit assigned at Camp Eldridge, Los Baos, Laguna, the existence and ownership of these money would have never been known.

The Statement of Assets and Liabilities of respondent were also submitted for scrutiny and analysis by the Boards consultant. Although the amount of P2,870,000.00 and $50,000 US Dollars were not included, still it was disclosed that respondent has an unexplained wealth of P104,134. 60. IV. CONCLUSION: In view of the foregoing, the Board finds that a prima facie case exists against respondent for ill-gotten and unexplained wealth in the amount of P2,974,134.00 and $50,000 US Dollars. V. RECOMMENDATION: Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be prosecuted and tried for violation of RA 3019, as amended, otherwise known as Anti-Graft and Corrupt Practices Act and RA 1379, as amended, otherwise known as The Act for the Forfeiture of Unlawfully Acquired Property. Thus, on 1 August 1987, the PCGG filed a petition for forfeiture under Republic Act No. 1379 (RA No. 1379) against Ramas. Before Ramas could answer the petition, then Solicitor General Francisco I. Chavez filed an Amended Complaint naming the Republic of the Philippines (petitioner), represented by the PCGG, as plaintiff and Ramas as defendant. The Amended Complaint also impleaded Elizabeth Dimaano (Dimaano) as co-defendant. The Amended Complaint alleged that Ramas was the Commanding General of the Philippine Army until 1986. On the other hand, Dimaano was a confidential agent of the Military Security Unit, Philippine Army, assigned as a clerk-typist at the office of Ramas from 1 January 1978 to February 1979. The Amended Complaint further alleged that Ramas acquired funds, assets and properties manifestly out of proportion to his salary as an army officer and his other income from legitimately acquired property by taking undue advantage of his public office and/or using his power, authority and influence as such officer of the Armed Forces of the Philippines and as a subordinate and close associate of the deposed President Ferdinand Marcos. The Amended Complaint also alleged that the AFP Board, after a previous inquiry, found reasonable ground to believe that respondents have violated RA No. 1379. The Amended Complaint prayed for, among others, the forfeiture of respondents properties, funds and equipment in favor of the State. Ramas filed an Answer with Special and/or Affirmative Defenses and Compulsory Counterclaim to the Amended Complaint. In his Answer, Ramas

contended that his property consisted only of a residential house at La Vista Subdivision, Quezon City, valued at P700,000, which was not out of proportion to his salary and other legitimate income. He denied ownership of any mansion in Cebu City and the cash, communications equipment and other items confiscated from the house of Dimaano. Dimaano filed her own Answer to the Amended Complaint. Admitting her employment as a clerk-typist in the office of Ramas from January-November 1978 only, Dimaano claimed ownership of the monies, communications equipment, jewelry and land titles taken from her house by the Philippine Constabulary raiding team. After termination of the pre-trial, the court set the case for trial on the merits on 9-11 November 1988. On 9 November 1988, petitioner asked for a deferment of the hearing due to its lack of preparation for trial and the absence of witnesses and vital documents to support its case. The court reset the hearing to 17 and 18 April 1989. On 13 April 1989, petitioner filed a motion for leave to amend the complaint in order to charge the delinquent properties with being subject to forfeiture as having been unlawfully acquired by defendant Dimaano alone x x x. Nevertheless, in an order dated 17 April 1989, the Sandiganbayan proceeded with petitioners presentation of evidence on the ground that the motion for leave to amend complaint did not state when petitioner would file the amended complaint. The Sandiganbayan further stated that the subject matter of the amended complaint was on its face vague and not related to the existing complaint. The Sandiganbayan also held that due to the time that the case had been pending in court, petitioner should proceed to present its evidence. After presenting only three witnesses, petitioner asked for a postponement of the trial. On 28 September 1989, during the continuation of the trial, petitioner manifested its inability to proceed to trial because of the absence of other witnesses or lack of further evidence to present. Instead, petitioner reiterated its motion to amend the complaint to conform to the evidence already presented or to change the averments to show that Dimaano alone unlawfully acquired the monies or properties subject of the forfeiture. The Sandiganbayan noted that petitioner had already delayed the case for over a year mainly because of its many postponements. Moreover, petitioner would want the case to revert to its preliminary stage when in fact the case had long

been ready for trial. The Sandiganbayan ordered petitioner to prepare for presentation of its additional evidence, if any. During the trial on 23 March 1990, petitioner again admitted its inability to present further evidence. Giving petitioner one more chance to present further evidence or to amend the complaint to conform to its evidence, the Sandiganbayan reset the trial to 18 May 1990. The Sandiganbayan, however, hinted that the re-setting was without prejudice to any action that private respondents might take under the circumstances. However, on 18 May 1990, petitioner again expressed its inability to proceed to trial because it had no further evidence to present. Again, in the interest of justice, the Sandiganbayan granted petitioner 60 days within which to file an appropriate pleading. The Sandiganbayan, however, warned petitioner that failure to act would constrain the court to take drastic action. Private respondents then filed their motions to dismiss based on Republic v. Migrino. The Court held in Migrino that the PCGG does not have jurisdiction to investigate and prosecute military officers by reason of mere position held without a showing that they are subordinates of former President Marcos. On 18 November 1991, the Sandiganbayan rendered a resolution, the dispositive portion of which states: WHEREFORE, judgment is hereby rendered dismissing the Amended Complaint, without pronouncement as to costs. The counterclaims are likewise dismissed for lack of merit, but the confiscated sum of money, communications equipment, jewelry and land titles are ordered returned to Elizabeth Dimaano. The records of this case are hereby remanded and referred to the Hon. Ombudsman, who has primary jurisdiction over the forfeiture cases under R.A. No. 1379, for such appropriate action as the evidence warrants. This case is also referred to the Commissioner of the Bureau of Internal Revenue for a determination of any tax liability of respondent Elizabeth Dimaano in connection herewith. SO ORDERED. On 4 December 1991, petitioner filed its Motion for Reconsideration. In answer to the Motion for Reconsideration, private respondents filed a Joint Comment/Opposition to which petitioner filed its Reply on 10 January 1992. On 25 March 1992, the Sandiganbayan rendered a Resolution denying the Motion for Reconsideration.

Ruling of the Sandiganbayan The Sandiganbayan dismissed the Amended Complaint on the following grounds: (1.) The actions taken by the PCGG are not in accordance with the rulings of the Supreme Court in Cruz, Jr. v. Sandiganbayan and Republic v. Migrino which involve the same issues. No previous inquiry similar to preliminary investigations in criminal cases was conducted against Ramas and Dimaano. The evidence adduced against Ramas does not constitute a prima facie case against him. There was an illegal search and seizure of the items confiscated.

(2.)

(3.)

(4.) The Issues

Petitioner raises the following issues: A. RESPONDENT COURT SERIOUSLY ERRED IN CONCLUDING THAT PETITIONERS EVIDENCE CANNOT MAKE A CASE FOR FORFEITURE AND THAT THERE WAS NO SHOWING OF CONSPIRACY, COLLUSION OR RELATIONSHIP BY CONSANGUINITY OR AFFINITY BY AND BETWEEN RESPONDENT RAMAS AND RESPONDENT DIMAANO NOTWITHSTANDING THE FACT THAT SUCH CONCLUSIONS WERE CLEARLY UNFOUNDED AND PREMATURE, HAVING BEEN RENDERED PRIOR TO THE COMPLETION OF THE PRESENTATION OF THE EVIDENCE OF THE PETITIONER. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING THAT THE ACTIONS TAKEN BY THE PETITIONER, INCLUDING THE FILING OF THE ORIGINAL COMPLAINT AND THE AMENDED COMPLAINT, SHOULD BE STRUCK OUT IN LINE WITH THE RULINGS OF THE SUPREME COURT IN CRUZ, JR. v. SANDIGANBAYAN, 194 SCRA 474 AND REPUBLIC v. MIGRINO, 189 SCRA 289, NOTWITHSTANDING THE FACT THAT:

B.

1.

The cases of Cruz, Jr. v. Sandiganbayan, supra, and Republic v. Migrino, supra, are clearly not applicable to this case; Any procedural defect in the institution of the complaint in Civil Case No. 0037 was cured and/or waived by respondents with the filing of their respective answers with counterclaim; and The separate motions to dismiss were evidently improper considering that they were filed after commencement of the presentation of the evidence of the petitioner and even before the latter was allowed to formally offer its evidence and rest its case;

necessary in order to accomplish and to carry out the purposes of this order. EO No. 1 gave the PCGG specific responsibilities, to wit: SEC. 2. The Commission shall be charged with the task of assisting the President in regard to the following matters: (a) The recovery of all ill-gotten wealth accumulated by former President Ferdinand E. Marcos, his immediate family, relatives, subordinates and close associates, whether located in the Philippines or abroad, including the takeover and sequestration of all business enterprises and entities owned or controlled by them, during his administration, directly or through nominees, by taking undue advantage of their public office and/ or using their powers, authority, influence, connections or relationship. The investigation of such cases of graft and corruption as the President may assign to the Commission from time to time.

2.

3.

(b) C. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING THAT THE ARTICLES AND THINGS SUCH AS SUMS OF MONEY, COMMUNICATIONS EQUIPMENT, JEWELRY AND LAND TITLES CONFISCATED FROM THE HOUSE OF RESPONDENT DIMAANO WERE ILLEGALLY SEIZED AND THEREFORE EXCLUDED AS EVIDENCE.

x x x. The PCGG, through the AFP Board, can only investigate the unexplained wealth and corrupt practices of AFP personnel who fall under either of the two categories mentioned in Section 2 of EO No. 1. These are: (1) AFP personnel who have accumulated ill-gotten wealth during the administration of former President Marcos by being the latters immediate family, relative, subordinate or close associate, taking undue advantage of their public office or using their powers, influence x x x; or (2) AFP personnel involved in other cases of graft and corruption provided the President assigns their cases to the PCGG. Petitioner, however, does not claim that the President assigned Ramas case to the PCGG. Therefore, Ramas case should fall under the first category of AFP personnel before the PCGG could exercise its jurisdiction over him. Petitioner argues that Ramas was undoubtedly a subordinate of former President Marcos because of his position as the Commanding General of the Philippine Army. Petitioner claims that Ramas position enabled him to receive orders directly from his commander-in-chief, undeniably making him a subordinate of former President Marcos. We hold that Ramas was not a subordinate of former President Marcos in the sense contemplated under EO No. 1 and its amendments. Mere position held by a military officer does not automatically make him a subordinate as this term is used in EO Nos. 1, 2, 14 and 14-A absent a

The Courts Ruling First Issue: PCGGs Jurisdiction to Investigate Private Respondents This case involves a revisiting of an old issue already decided by this Court in Cruz, Jr. v. Sandiganbayan and Republic v. Migrino. The primary issue for resolution is whether the PCGG has the jurisdiction to investigate and cause the filing of a forfeiture petition against Ramas and Dimaano for unexplained wealth under RA No. 1379. We hold that PCGG has no such jurisdiction. The PCGG created the AFP Board to investigate the unexplained wealth and corrupt practices of AFP personnel, whether in the active service or retired. The PCGG tasked the AFP Board to make the necessary recommendations to appropriate government agencies on the action to be taken based on its findings. The PCGG gave this task to the AFP Board pursuant to the PCGGs power under Section 3 of EO No. 1 to conduct investigation as may be

showing that he enjoyed close association with former President Marcos. Migrino discussed this issue in this wise: A close reading of EO No. 1 and related executive orders will readily show what is contemplated within the term subordinate. The Whereas Clauses of EO No. 1 express the urgent need to recover the ill-gotten wealth amassed by former President Ferdinand E. Marcos, his immediate family, relatives, and close associates both here and abroad. EO No. 2 freezes all assets and properties in the Philippines in which former President Marcos and/or his wife, Mrs. Imelda Marcos, their close relatives, subordinates, business associates, dummies, agents, or nominees have any interest or participation. Applying the rule in statutory construction known as ejusdem generis that is-

President or by former President Marcos acquiescence in Ramas own accumulation of ill-gotten wealth if any. This, the PCGG failed to do. Petitioners attempt to differentiate the instant case from Migrino does not convince us. Petitioner argues that unlike in Migrino, the AFP Board Resolution in the instant case states that the AFP Board conducted the investigation pursuant to EO Nos. 1, 2, 14 and 14-A in relation to RA No. 1379. Petitioner asserts that there is a presumption that the PCGG was acting within its jurisdiction of investigating crony-related cases of graft and corruption and that Ramas was truly a subordinate of the former President. However, the same AFP Board Resolution belies this contention. Although the Resolution begins with such statement, it ends with the following recommendation: V. RECOMMENDATION:

[W]here general words follow an enumeration of persons or things by words of a particular and specific meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same kind or class as those specifically mentioned [Smith, Bell & Co, Ltd. vs. Register of Deeds of Davao, 96 Phil. 53, 58, citing Black on Interpretation of Laws, 2nd Ed., 203]. [T]he term subordinate as used in EO Nos. 1 & 2 refers to one who enjoys a close association with former President Marcos and/or his wife, similar to the immediate family member, relative, and close associate in EO No. 1 and the close relative, business associate, dummy, agent, or nominee in EO No. 2. xxx It does not suffice, as in this case, that the respondent is or was a government official or employee during the administration of former President Marcos. There must be a prima facie showing that the respondent unlawfully accumulated wealth by virtue of his close association or relation with former Pres. Marcos and/or his wife. (Emphasis supplied) Ramas position alone as Commanding General of the Philippine Army with the rank of Major General does not suffice to make him a subordinate of former President Marcos for purposes of EO No. 1 and its amendments. The PCGG has to provide a prima facie showing that Ramas was a close associate of former President Marcos, in the same manner that business associates, dummies, agents or nominees of former President Marcos were close to him. Such close association is manifested either by Ramas complicity with former President Marcos in the accumulation of ill-gotten wealth by the deposed

Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be prosecuted and tried for violation of RA 3019, as amended, otherwise known as Anti-Graft and Corrupt Practices Act and RA 1379, as amended, otherwise known as The Act for the Forfeiture of Unlawfully Acquired Property. Thus, although the PCGG sought to investigate and prosecute private respondents under EO Nos. 1, 2, 14 and 14-A, the result yielded a finding of violation of Republic Acts Nos. 3019 and 1379 without any relation to EO Nos. 1, 2, 14 and 14-A. This absence of relation to EO No. 1 and its amendments proves fatal to petitioners case. EO No. 1 created the PCGG for a specific and limited purpose, and necessarily its powers must be construed to address such specific and limited purpose. Moreover, the resolution of the AFP Board and even the Amended Complaint do not show that the properties Ramas allegedly owned were accumulated by him in his capacity as a subordinate of his commander-in-chief. Petitioner merely enumerated the properties Ramas allegedly owned and suggested that these properties were disproportionate to his salary and other legitimate income without showing that Ramas amassed them because of his close association with former President Marcos. Petitioner, in fact, admits that the AFP Board resolution does not contain a finding that Ramas accumulated his wealth because of his close association with former President Marcos, thus: 10. While it is true that the resolution of the Anti-Graft Board of the New Armed Forces of the Philippines did not categorically find a prima facie evidence showing that respondent Ramas unlawfully accumulated wealth by virtue of his close association or relation with former President Marcos and/or his wife, it is submitted that such omission was not fatal. The

resolution of the Anti-Graft Board should be read in the context of the law creating the same and the objective of the investigation which was, as stated in the above, pursuant to Republic Act Nos. 3019 and 1379 in relation to Executive Order Nos. 1, 2, 14 and 14-a; (Emphasis supplied) Such omission is fatal. Petitioner forgets that it is precisely a prima facie showing that the ill-gotten wealth was accumulated by a subordinate of former President Marcos that vests jurisdiction on PCGG. EO No. 1 clearly premises the creation of the PCGG on the urgent need to recover all ill-gotten wealth amassed by former President Marcos, his immediate family, relatives, subordinates and close associates. Therefore, to say that such omission was not fatal is clearly contrary to the intent behind the creation of the PCGG. In Cruz, Jr. v. Sandiganbayan, the Court outlined the cases that fall under the jurisdiction of the PCGG pursuant to EO Nos. 1, 2, 14, 14-A: A careful reading of Sections 2(a) and 3 of Executive Order No. 1 in relation with Sections 1, 2 and 3 of Executive Order No. 14, shows what the authority of the respondent PCGG to investigate and prosecute covers: (a) the investigation and prosecution of the civil action for the recovery of ill-gotten wealth under Republic Act No. 1379, accumulated by former President Marcos, his immediate family, relatives, subordinates and close associates, whether located in the Philippines or abroad, including the take-over or sequestration of all business enterprises and entities owned or controlled by them, during his administration, directly or through his nominees, by taking undue advantage of their public office and/or using their powers, authority and influence, connections or relationships; and the investigation and prosecution of such offenses committed in the acquisition of said ill-gotten wealth as contemplated under Section 2(a) of Executive Order No. 1.

The proper government agencies, and not the PCGG, should investigate and prosecute forfeiture petitions not falling under EO No. 1 and its amendments. The preliminary investigation of unexplained wealth amassed on or before 25 February 1986 falls under the jurisdiction of the Ombudsman, while the authority to file the corresponding forfeiture petition rests with the Solicitor General. The Ombudsman Act or Republic Act No. 6770 (RA No. 6770) vests in the Ombudsman the power to conduct preliminary investigation and to file forfeiture proceedings involving unexplained wealth amassed after 25 February 1986. After the pronouncements of the Court in Cruz, the PCGG still pursued this case despite the absence of a prima facie finding that Ramas was a subordinate of former President Marcos. The petition for forfeiture filed with the Sandiganbayan should be dismissed for lack of authority by the PCGG to investigate respondents since there is no prima facie showing that EO No. 1 and its amendments apply to respondents. The AFP Board Resolution and even the Amended Complaint state that there are violations of RA Nos. 3019 and 1379. Thus, the PCGG should have recommended Ramas case to the Ombudsman who has jurisdiction to conduct the preliminary investigation of ordinary unexplained wealth and graft cases. As stated in Migrino: [But] in view of the patent lack of authority of the PCGG to investigate and cause the prosecution of private respondent for violation of Rep. Acts Nos. 3019 and 1379, the PCGG must also be enjoined from proceeding with the case, without prejudice to any action that may be taken by the proper prosecutory agency. The rule of law mandates that an agency of government be allowed to exercise only the powers granted to it. Petitioners argument that private respondents have waived any defect in the filing of the forfeiture petition by submitting their respective Answers with counterclaim deserves no merit as well. Petitioner has no jurisdiction over private respondents. Thus, there is no jurisdiction to waive in the first place. The PCGG cannot exercise investigative or prosecutorial powers never granted to it. PCGGs powers are specific and limited. Unless given additional assignment by the President, PCGGs sole task is only to recover the ill-gotten wealth of the Marcoses, their relatives and cronies. Without these elements, the PCGG cannot claim jurisdiction over a case. Private respondents questioned the authority and jurisdiction of the PCGG to investigate and prosecute their cases by filing their Motion to Dismiss as soon as they learned of the pronouncement of the Court in Migrino. This case was decided on 30 August 1990, which explains why private respondents only filed their Motion to Dismiss on 8 October 1990. Nevertheless, we have held that

(b)

However, other violations of the Anti-Graft and Corrupt Practices Act not otherwise falling under the foregoing categories, require a previous authority of the President for the respondent PCGG to investigate and prosecute in accordance with Section 2 (b) of Executive Order No. 1. Otherwise, jurisdiction over such cases is vested in the Ombudsman and other duly authorized investigating agencies such as the provincial and city prosecutors, their assistants, the Chief State Prosecutor and his assistants and the state prosecutors. (Emphasis supplied)

the parties may raise lack of jurisdiction at any stage of the proceeding. Thus, we hold that there was no waiver of jurisdiction in this case. Jurisdiction is vested by law and not by the parties to an action. Consequently, the petition should be dismissed for lack of jurisdiction by the PCGG to conduct the preliminary investigation. The Ombudsman may still conduct the proper preliminary investigation for violation of RA No. 1379, and if warranted, the Solicitor General may file the forfeiture petition with the Sandiganbayan. The right of the State to forfeit unexplained wealth under RA No. 1379 is not subject to prescription, laches or estoppel. Second Issue: Propriety of Dismissal of Case Before Completion of Presentation of Evidence Petitioner also contends that the Sandiganbayan erred in dismissing the case before completion of the presentation of petitioners evidence. We disagree. Based on the findings of the Sandiganbayan and the records of this case, we find that petitioner has only itself to blame for non-completion of the presentation of its evidence. First, this case has been pending for four years before the Sandiganbayan dismissed it. Petitioner filed its Amended Complaint on 11 August 1987, and only began to present its evidence on 17 April 1989. Petitioner had almost two years to prepare its evidence. However, despite this sufficient time, petitioner still delayed the presentation of the rest of its evidence by filing numerous motions for postponements and extensions. Even before the date set for the presentation of its evidence, petitioner filed, on 13 April 1989, a Motion for Leave to Amend the Complaint. The motion sought to charge the delinquent properties (which comprise most of petitioners evidence) with being subject to forfeiture as having been unlawfully acquired by defendant Dimaano alone x x x. The Sandiganbayan, however, refused to defer the presentation of petitioners evidence since petitioner did not state when it would file the amended complaint. On 18 April 1989, the Sandiganbayan set the continuation of the presentation of evidence on 28-29 September and 9-11 October 1989, giving petitioner ample time to prepare its evidence. Still, on 28 September 1989, petitioner manifested its inability to proceed with the presentation of its evidence. The Sandiganbayan issued an Order expressing its view on the matter, to wit: The Court has gone through extended inquiry and a narration of the above events because this case has been ready for trial for over a year and much of the delay hereon has been due to the inability of the government to produce on

scheduled dates for pre-trial and for trial documents and witnesses, allegedly upon the failure of the military to supply them for the preparation of the presentation of evidence thereon. Of equal interest is the fact that this Court has been held to task in public about its alleged failure to move cases such as this one beyond the preliminary stage, when, in view of the developments such as those of today, this Court is now faced with a situation where a case already in progress will revert back to the preliminary stage, despite a five-month pause where appropriate action could have been undertaken by the plaintiff Republic. On 9 October 1989, the PCGG manifested in court that it was conducting a preliminary investigation on the unexplained wealth of private respondents as mandated by RA No. 1379. The PCGG prayed for an additional four months to conduct the preliminary investigation. The Sandiganbayan granted this request and scheduled the presentation of evidence on 26-29 March 1990. However, on the scheduled date, petitioner failed to inform the court of the result of the preliminary investigation the PCGG supposedly conducted. Again, the Sandiganbayan gave petitioner until 18 May 1990 to continue with the presentation of its evidence and to inform the court of what lies ahead insofar as the status of the case is concerned x x x. Still on the date set, petitioner failed to present its evidence. Finally, on 11 July 1990, petitioner filed its ReAmended Complaint. The Sandiganbayan correctly observed that a case already pending for years would revert to its preliminary stage if the court were to accept the Re-Amended Complaint. Based on these circumstances, obviously petitioner has only itself to blame for failure to complete the presentation of its evidence. The Sandiganbayan gave petitioner more than sufficient time to finish the presentation of its evidence. The Sandiganbayan overlooked petitioners delays and yet petitioner ended the long-string of delays with the filing of a Re-Amended Complaint, which would only prolong even more the disposition of the case. Moreover, the pronouncements of the Court in Migrino and Cruz prompted the Sandiganbayan to dismiss the case since the PCGG has no jurisdiction to investigate and prosecute the case against private respondents. This alone would have been sufficient legal basis for the Sandiganbayan to dismiss the forfeiture case against private respondents. Thus, we hold that the Sandiganbayan did not err in dismissing the case before completion of the presentation of petitioners evidence. Third Issue: Legality of the Search and Seizure Petitioner claims that the Sandiganbayan erred in declaring the properties confiscated from Dimaanos house as illegally seized and therefore inadmissible in evidence. This issue bears a significant effect on petitioners

case since these properties comprise most of petitioners evidence against private respondents. Petitioner will not have much evidence to support its case against private respondents if these properties are inadmissible in evidence. On 3 March 1986, the Constabulary raiding team served at Dimaanos residence a search warrant captioned Illegal Possession of Firearms and Ammunition. Dimaano was not present during the raid but Dimaanos cousins witnessed the raid. The raiding team seized the items detailed in the seizure receipt together with other items not included in the search warrant. The raiding team seized these items: one baby armalite rifle with two magazines; 40 rounds of 5.56 ammunition; one pistol, caliber .45; communications equipment, cash consisting of P2,870,000 and US$50,000, jewelry, and land titles. Petitioner wants the Court to take judicial notice that the raiding team conducted the search and seizure on March 3, 1986 or five days after the successful EDSA revolution. Petitioner argues that a revolutionary government was operative at that time by virtue of Proclamation No. 1 announcing that President Aquino and Vice President Laurel were taking power in the name and by the will of the Filipino people. Petitioner asserts that the revolutionary government effectively withheld the operation of the 1973 Constitution which guaranteed private respondents exclusionary right. Moreover, petitioner argues that the exclusionary right arising from an illegal search applies only beginning 2 February 1987, the date of ratification of the 1987 Constitution. Petitioner contends that all rights under the Bill of Rights had already reverted to its embryonic stage at the time of the search. Therefore, the government may confiscate the monies and items taken from Dimaano and use the same in evidence against her since at the time of their seizure, private respondents did not enjoy any constitutional right. Petitioner is partly right in its arguments. The EDSA Revolution took place on 23-25 February 1986. As succinctly stated in President Aquinos Proclamation No. 3 dated 25 March 1986, the EDSA Revolution was done in defiance of the provisions of the 1973 Constitution. The resulting government was indisputably a revolutionary government bound by no constitution or legal limitations except treaty obligations that the revolutionary government, as the de jure government in the Philippines, assumed under international law. The correct issues are: (1) whether the revolutionary government was bound by the Bill of Rights of the 1973 Constitution during the interregnum, that is, after the actual and effective take-over of power by the revolutionary government following the cessation of resistance by loyalist forces up to 24

March 1986 (immediately before the adoption of the Provisional Constitution); and (2) whether the protection accorded to individuals under the International Covenant on Civil and Political Rights (Covenant) and the Universal Declaration of Human Rights (Declaration) remained in effect during the interregnum. We hold that the Bill of Rights under the 1973 Constitution was not operative during the interregnum. However, we rule that the protection accorded to individuals under the Covenant and the Declaration remained in effect during the interregnum. During the interregnum, the directives and orders of the revolutionary government were the supreme law because no constitution limited the extent and scope of such directives and orders. With the abrogation of the 1973 Constitution by the successful revolution, there was no municipal law higher than the directives and orders of the revolutionary government. Thus, during the interregnum, a person could not invoke any exclusionary right under a Bill of Rights because there was neither a constitution nor a Bill of Rights during the interregnum. As the Court explained in Letter of Associate Justice Reynato S. Puno: A revolution has been defined as the complete overthrow of the established government in any country or state by those who were previously subject to it or as a sudden, radical and fundamental change in the government or political system, usually effected with violence or at least some acts of violence. In Kelsen's book, General Theory of Law and State, it is defined as that which occurs whenever the legal order of a community is nullified and replaced by a new order . . . a way not prescribed by the first order itself. It was through the February 1986 revolution, a relatively peaceful one, and more popularly known as the people power revolution that the Filipino people tore themselves away from an existing regime. This revolution also saw the unprecedented rise to power of the Aquino government. From the natural law point of view, the right of revolution has been defined as an inherent right of a people to cast out their rulers, change their policy or effect radical reforms in their system of government or institutions by force or a general uprising when the legal and constitutional methods of making such change have proved inadequate or are so obstructed as to be unavailable. It has been said that the locus of positive law-making power lies with the people of the state and from there is derived the right of the people to abolish, to reform and to alter any existing form of government without regard to the existing constitution. xxx

It is widely known that Mrs. Aquinos rise to the presidency was not due to constitutional processes; in fact, it was achieved in violation of the provisions of the 1973 Constitution as a Batasang Pambansa resolution had earlier declared Mr. Marcos as the winner in the 1986 presidential election. Thus it can be said that the organization of Mrs. Aquinos Government which was met by little resistance and her control of the state evidenced by the appointment of the Cabinet and other key officers of the administration, the departure of the Marcos Cabinet officials, revamp of the Judiciary and the Military signaled the point where the legal system then in effect, had ceased to be obeyed by the Filipino. (Emphasis supplied) To hold that the Bill of Rights under the 1973 Constitution remained operative during the interregnum would render void all sequestration orders issued by the Philippine Commission on Good Government (PCGG) before the adoption of the Freedom Constitution. The sequestration orders, which direct the freezing and even the take-over of private property by mere executive issuance without judicial action, would violate the due process and search and seizure clauses of the Bill of Rights. During the interregnum, the government in power was concededly a revolutionary government bound by no constitution. No one could validly question the sequestration orders as violative of the Bill of Rights because there was no Bill of Rights during the interregnum. However, upon the adoption of the Freedom Constitution, the sequestered companies assailed the sequestration orders as contrary to the Bill of Rights of the Freedom Constitution. In Bataan Shipyard & Engineering Co. Inc. vs. Presidential Commission on Good Government, petitioner Baseco, while conceding there was no Bill of Rights during the interregnum, questioned the continued validity of the sequestration orders upon adoption of the Freedom Constitution in view of the due process clause in its Bill of Rights. The Court ruled that the Freedom Constitution, and later the 1987 Constitution, expressly recognized the validity of sequestration orders, thus: If any doubt should still persist in the face of the foregoing considerations as to the validity and propriety of sequestration, freeze and takeover orders, it should be dispelled by the fact that these particular remedies and the authority of the PCGG to issue them have received constitutional approbation and sanction. As already mentioned, the Provisional or Freedom Constitution recognizes the power and duty of the President to enact measures to achieve the mandate of the people to . . . (r)ecover ill-gotten properties amassed by the leaders and supporters of the previous regime and protect the interest of the people through orders of sequestration or freezing of assets or accounts. And as also already adverted to, Section 26, Article XVIII of the 1987 Constitution treats of, and

ratifies the authority to issue sequestration or freeze orders under Proclamation No. 3 dated March 25, 1986. The framers of both the Freedom Constitution and the 1987 Constitution were fully aware that the sequestration orders would clash with the Bill of Rights. Thus, the framers of both constitutions had to include specific language recognizing the validity of the sequestration orders. The following discourse by Commissioner Joaquin G. Bernas during the deliberations of the Constitutional Commission is instructive: FR. BERNAS: Madam President, there is something schizophrenic about the arguments in defense of the present amendment. For instance, I have carefully studied Minister Salongas lecture in the Gregorio Araneta University Foundation, of which all of us have been given a copy. On the one hand, he argues that everything the Commission is doing is traditionally legal. This is repeated by Commissioner Romulo also. Minister Salonga spends a major portion of his lecture developing that argument. On the other hand, almost as an afterthought, he says that in the end what matters are the results and not the legal niceties, thus suggesting that the PCGG should be allowed to make some legal shortcuts, another word for niceties or exceptions. Now, if everything the PCGG is doing is legal, why is it asking the CONCOM for special protection? The answer is clear. What they are doing will not stand the test of ordinary due process, hence they are asking for protection, for exceptions. Grandes malos, grandes remedios, fine, as the saying stands, but let us not say grandes malos, grande y malos remedios. That is not an allowable extrapolation. Hence, we should not give the exceptions asked for, and let me elaborate and give three reasons: First, the whole point of the February Revolution and of the work of the CONCOM is to hasten constitutional normalization. Very much at the heart of the constitutional normalization is the full effectivity of the Bill of Rights. We cannot, in one breath, ask for constitutional normalization and at the same time ask for a temporary halt to the full functioning of what is at the heart of constitutionalism. That would be hypocritical; that would be a repetition of Marcosian protestation of due process and rule of law. The New Society word for that is backsliding. It is tragic when we begin to backslide even before we get there. Second, this is really a corollary of the first. Habits tend to become ingrained. The committee report asks for extraordinary exceptions from the Bill of Rights for six months after the convening of Congress, and Congress may even extend this longer. Good deeds repeated ripen into virtue; bad deeds repeated become vice. What the committee report is asking for is that we should allow

the new government to acquire the vice of disregarding the Bill of Rights. Vices, once they become ingrained, become difficult to shed. The practitioners of the vice begin to think that they have a vested right to its practice, and they will fight tooth and nail to keep the franchise. That would be an unhealthy way of consolidating the gains of a democratic revolution. Third, the argument that what matters are the results and not the legal niceties is an argument that is very disturbing. When it comes from a staunch Christian like Commissioner Salonga, a Minister, and repeated verbatim by another staunch Christian like Commissioner Tingson, it becomes doubly disturbing and even discombobulating. The argument makes the PCGG an auctioneer, placing the Bill of Rights on the auction block. If the price is right, the search and seizure clause will be sold. Open your Swiss bank account to us and we will award you the search and seizure clause. You can keep it in your private safe. Alternatively, the argument looks on the present government as hostage to the hoarders of hidden wealth. The hoarders will release the hidden health if the ransom price is paid and the ransom price is the Bill of Rights, specifically the due process in the search and seizure clauses. So, there is something positively revolving about either argument. The Bill of Rights is not for sale to the highest bidder nor can it be used to ransom captive dollars. This nation will survive and grow strong, only if it would become convinced of the values enshrined in the Constitution of a price that is beyond monetary estimation. For these reasons, the honorable course for the Constitutional Commission is to delete all of Section 8 of the committee report and allow the new Constitution to take effect in full vigor. If Section 8 is deleted, the PCGG has two options. First, it can pursue the Salonga and the Romulo argument that what the PCGG has been doing has been completely within the pale of the law. If sustained, the PCGG can go on and should be able to go on, even without the support of Section 8. If not sustained, however, the PCGG has only one honorable option, it must bow to the majesty of the Bill of Rights. The PCGG extrapolation of the law is defended by staunch Christians. Let me conclude with what another Christian replied when asked to toy around with the law. From his prison cell, Thomas More said, "I'll give the devil benefit of law for my nations safety sake. I ask the Commission to give the devil benefit of law for our nations sake. And we should delete Section 8. Thank you, Madam President. (Emphasis supplied) Despite the impassioned plea by Commissioner Bernas against the amendment excepting sequestration orders from the Bill of Rights, the

Constitutional Commission still adopted the amendment as Section 26, Article XVIII of the 1987 Constitution. The framers of the Constitution were fully aware that absent Section 26, sequestration orders would not stand the test of due process under the Bill of Rights. Thus, to rule that the Bill of Rights of the 1973 Constitution remained in force during the interregnum, absent a constitutional provision excepting sequestration orders from such Bill of Rights, would clearly render all sequestration orders void during the interregnum. Nevertheless, even during the interregnum the Filipino people continued to enjoy, under the Covenant and the Declaration, almost the same rights found in the Bill of Rights of the 1973 Constitution. The revolutionary government, after installing itself as the de jure government, assumed responsibility for the States good faith compliance with the Covenant to which the Philippines is a signatory. Article 2(1) of the Covenant requires each signatory State to respect and to ensure to all individuals within its territory and subject to its jurisdiction the rights recognized in the present Covenant. Under Article 17(1) of the Covenant, the revolutionary government had the duty to insure that [n]o one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence. The Declaration, to which the Philippines is also a signatory, provides in its Article 17(2) that [n]o one shall be arbitrarily deprived of his property. Although the signatories to the Declaration did not intend it as a legally binding document, being only a declaration, the Court has interpreted the Declaration as part of the generally accepted principles of international law and binding on the State. Thus, the revolutionary government was also obligated under international law to observe the rights of individuals under the Declaration. The revolutionary government did not repudiate the Covenant or the Declaration during the interregnum. Whether the revolutionary government could have repudiated all its obligations under the Covenant or the Declaration is another matter and is not the issue here. Suffice it to say that the Court considers the Declaration as part of customary international law, and that Filipinos as human beings are proper subjects of the rules of international law laid down in the Covenant. The fact is the revolutionary government did not repudiate the Covenant or the Declaration in the same way it repudiated the 1973 Constitution. As the de jure government, the revolutionary government could not escape responsibility for the States good faith compliance with its treaty obligations under international law. It was only upon the adoption of the Provisional Constitution on 25 March 1986 that the directives and orders of the revolutionary government became subject to a higher municipal law that, if contravened, rendered such directives and

orders void. The Provisional Constitution adopted verbatim the Bill of Rights of the 1973 Constitution. The Provisional Constitution served as a self-limitation by the revolutionary government to avoid abuses of the absolute powers entrusted to it by the people. During the interregnum when no constitution or Bill of Rights existed, directives and orders issued by government officers were valid so long as these officers did not exceed the authority granted them by the revolutionary government. The directives and orders should not have also violated the Covenant or the Declaration. In this case, the revolutionary government presumptively sanctioned the warrant since the revolutionary government did not repudiate it. The warrant, issued by a judge upon proper application, specified the items to be searched and seized. The warrant is thus valid with respect to the items specifically described in the warrant. However, the Constabulary raiding team seized items not included in the warrant. As admitted by petitioners witnesses, the raiding team confiscated items not included in the warrant, thus: Direct Examination of Capt. Rodolfo Sebastian AJ AMORES A. Q. According to the search warrant, you are supposed to seize only for weapons. What else, aside from the weapons, were seized from the house of Miss Elizabeth Dimaano? The communications equipment, money in Philippine currency and US dollars, some jewelries, land titles, sir. Now, the search warrant speaks only of weapons to be seized from the house of Elizabeth Dimaano. Do you know the reason why your team also seized other properties not mentioned in said search warrant? During the conversation right after the conduct of said raid, I was informed that the reason why they also brought the other items not included in the search warrant was because the money and other jewelries were contained in attach cases and cartons with markings Sony Trinitron, and I think three (3) vaults or steel safes. Believing that the attach cases and the steel safes were containing firearms, they forced open these containers only to find out that they contained money. xxx

Q. A.

You said you found money instead of weapons, do you know the reason why your team seized this money instead of weapons? I think the overall team leader and the other two officers assisting him decided to bring along also the money because at that time it was already dark and they felt most secured if they will bring that because they might be suspected also of taking money out of those items, your Honor.

Cross-examination Atty. Banaag Q. A. Yes, sir. Q. Yes, sir. And the search warrant applied for by you was for the search and seizure of five (5) baby armalite rifles M-16 and five (5) boxes of ammunition? Were you present when the search warrant in connection with this case was applied before the Municipal Trial Court of Batangas, Branch 1?

AJ AMORES A. Q. A. Q. Before you applied for a search warrant, did you conduct surveillance in the house of Miss Elizabeth Dimaano? The Intelligence Operatives conducted surveillance together with the MSU elements, your Honor.

Q.

A.

A.

And this party believed there were weapons deposited in the house of Miss Elizabeth Dimaano? Yes, your Honor. Q. A. Q. And they so swore before the Municipal Trial Judge? Yes, your Honor. But they did not mention to you, the applicant for the search warrant, any other properties or contraband which could be found in the residence of Miss Elizabeth Dimaano? They just gave us still unconfirmed report about some hidden items, for instance, the communications equipment and money. However, I did not include that in the

xxx

A.

application for search warrant considering that we have not established concrete evidence about that. So when Q. A. xxx Q. A. Q. You stated that a .45 caliber pistol was seized along with one armalite rifle M-16 and how many ammunition? Forty, sir. And this became the subject of your complaint with the issuing Court, with the fiscals office who charged Elizabeth Dimaano for Illegal Possession of Firearms and Ammunition? Yes, sir. Do you know what happened to that case? I think it was dismissed, sir. In the fiscals office? Yes, sir. Because the armalite rifle you seized, as well as the .45 caliber pistol had a Memorandum Receipt in the name of Felino Melegrito, is that not correct? I think that was the reason, sir. There were other articles seized which were not included in the search warrant, like for instance, jewelries. Why did you seize the jewelries? I think it was the decision of the overall team leader and his assistant to bring along also the jewelries and other items, sir. I do not really know where it was taken but they brought along also these articles. I do not really know their reason for bringing the same, but I just learned that these were taken because they might get lost if they will just leave this behind. A. So that when you applied for search warrant, you had reason to believe that only weapons were in the house of Miss Elizabeth Dimaano? Yes, your Honor. Q.

cases. These attach cases were suspected to be containing pistols or other high powered firearms, but in the course of the search the contents turned out to be money. So the team leader also decided to take this considering that they believed that if they will just leave the money behind, it might get lost also. That holds true also with respect to the other articles that were seized by your raiding team, like Transfer Certificates of Title of lands? Yes, sir. I think they were contained in one of the vaults that were opened.

A. Q. A. Q. A. Q. A. Q. A.

It is obvious from the testimony of Captain Sebastian that the warrant did not include the monies, communications equipment, jewelry and land titles that the raiding team confiscated. The search warrant did not particularly describe these items and the raiding team confiscated them on its own authority. The raiding team had no legal basis to seize these items without showing that these items could be the subject of warrantless search and seizure. Clearly, the raiding team exceeded its authority when it seized these items. The seizure of these items was therefore void, and unless these items are contraband per se, and they are not, they must be returned to the person from whom the raiding seized them. However, we do not declare that such person is the lawful owner of these items, merely that the search and seizure warrant could not be used as basis to seize and withhold these items from the possessor. We thus hold that these items should be returned immediately to Dimaano. WHEREFORE, the petition for certiorari is DISMISSED. The questioned Resolutions of the Sandiganbayan dated 18 November 1991 and 25 March 1992 in Civil Case No. 0037, remanding the records of this case to the Ombudsman for such appropriate action as the evidence may warrant, and referring this case to the Commissioner of the Bureau of Internal Revenue for a determination of any tax liability of respondent Elizabeth Dimaano, are AFFIRMED. SO ORDERED. Bellosillo, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr. and Azcuna, JJ., concur.

xxx Q. A. How about the money seized by your raiding team, they were not also included in the search warrant? Yes sir, but I believe they were also taken considering that the money was discovered to be contained in attach

Davide, Jr., C.J., in the result. I concur with Mr. Justice Vitug in his concurring opinion.

Puno and Vitug, JJ., see separate opinion Panganiban, J., in the result. Quisumbing and Sandoval-Gutierrez, JJ., on official leave. Ynares-Santiago, J., in the result. I concur in the separate opinion of J. Reynato Puno. Tinga, J., separate opinion reserved.

G.R. No. 175888

February 11, 2009

AZCUNA, J.: These are petitions for certiorari, etc. as special civil actions and/or for review of the Decision of the Court of Appeals in Lance Corporal Daniel J. Smith v. Hon. Benjamin T. Pozon, et al., in CA-G.R. SP No. 97212, dated January 2, 2007. The facts are not disputed. Respondent Lance Corporal (L/CPL) Daniel Smith is a member of the United States Armed Forces. He was charged with the crime of rape committed against a Filipina, petitioner herein, sometime on November 1, 2005, as follows: The undersigned accused LCpl. Daniel Smith, Ssgt. Chad Brian Carpentier, Dominic Duplantis, Keith Silkwood and Timoteo L. Soriano, Jr. of the crime of Rape under Article 266-A of the Revised Penal Code, as amended by Republic Act 8353, upon a complaint under oath filed by Suzette S. Nicolas, which is attached hereto and made an integral part hereof as Annex "A," committed as follows: "That on or about the First (1st) day of November 2005, inside the Subic Bay Freeport Zone, Olongapo City and within the jurisdiction of this Honorable Court, the above-named accuseds (sic), being then members of the United States Marine Corps, except Timoteo L. Soriano, Jr., conspiring, confederating together and mutually helping one another, with lewd design and by means of force, threat and intimidation, with abuse of superior strength and taking advantage of the intoxication of the victim, did then and there willfully, unlawfully and feloniously sexually abuse and have sexual intercourse with or carnal knowledge of one Suzette S. Nicolas, a 22-year old unmarried woman inside a Starex Van with Plate No. WKF-162, owned by Starways Travel and Tours, with Office address at 8900 P. Victor St., Guadalupe, Makati City, and driven by accused Timoteo L. Soriano, Jr., against the will and consent of the said Suzette S. Nicolas, to her damage and prejudice. CONTRARY TO LAW."1 Pursuant to the Visiting Forces Agreement (VFA) between the Republic of the Philippines and the United States, entered into on February 10, 1998, the United States, at its request, was granted custody of defendant Smith pending the proceedings. During the trial, which was transferred from the Regional Trial Court (RTC) of Zambales to the RTC of Makati for security reasons, the United States Government faithfully complied with its undertaking to bring defendant Smith to the trial court every time his presence was required.

SUZETTE NICOLAS y SOMBILON, Petitioner, vs. ALBERTO ROMULO, in his capacity as Secretary of Foreign Affairs; RAUL GONZALEZ, in his capacity as Secretary of Justice; EDUARDO ERMITA, in his capacity as Executive Secretary; RONALDO PUNO, in his capacity as Secretary of the Interior and Local Government; SERGIO APOSTOL, in his capacity as Presidential Legal Counsel; and L/CPL. DANIEL SMITH, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 176051 February 11, 2009

JOVITO R. SALONGA, WIGBERTO E. TAADA, JOSE DE LA RAMA, EMILIO C. CAPULONG, H. HARRY L. ROQUE, JR., FLORIN HILBAY, and BENJAMIN POZON, Petitioners, vs. DANIEL SMITH, SECRETARY RAUL GONZALEZ, PRESIDENTIAL LEGAL COUNSEL SERGIO APOSTOL, SECRETARY RONALDO PUNO, SECRETARY ALBERTO ROMULO, The Special 16th Division of the COURT OF APPEALS, and all persons acting in their capacity, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 176222 February 11, 2009

BAGONG ALYANSANG MAKABAYAN (BAYAN), represented by Dr. Carol Araullo; GABRIELA, represented by Emerenciana de Jesus; BAYAN MUNA, represented by Rep. Satur Ocampo; GABRIELA WOMEN'S PARTY, represented by Rep. Liza Maza; KILUSANG MAYO UNO (KMU), represented by Elmer Labog; KILUSANG MAGBUBUKID NG PILIPINAS (KMP), represented by Willy Marbella; LEAGUE OF FILIPINO STUDENTS (LFS), represented by Vencer Crisostomo; and THE PUBLIC INTEREST LAW CENTER, represented by Atty. Rachel Pastores, Petitioners, vs. PRESIDENT GLORIA MACAPAGAL-ARROYO, in her capacity as concurrent Defense Secretary, EXECUTIVE SECRETARY EDUARDO ERMITA, FOREIGN AFFAIRS SECRETARY ALBERTO ROMULO, JUSTICE SECRETARY RAUL GONZALEZ, AND INTERIOR AND LOCAL GOVERNMENT SECRETARY RONALDO PUNO, Respondents. DECISION

On December 4, 2006, the RTC of Makati, following the end of the trial, rendered its Decision, finding defendant Smith guilty, thus: WHEREFORE, premises considered, for failure of the prosecution to adduce sufficient evidence against accused S/SGT. CHAD BRIAN CARPENTER, L/CPL. KEITH SILKWOOD AND L/CPL. DOMINIC DUPLANTIS, all of the US Marine Corps assigned at the USS Essex, are hereby ACQUITTED to the crime charged. The prosecution having presented sufficient evidence against accused L/CPL. DANIEL J. SMITH, also of the US Marine Corps at the USS Essex, this Court hereby finds him GUILTY BEYOND REASONABLE DOUBT of the crime of RAPE defined under Article 266-A, paragraph 1 (a) of the Revised Penal Code, as amended by R.A. 8353, and, in accordance with Article 266-B, first paragraph thereof, hereby sentences him to suffer the penalty of reclusion perpetua together with the accessory penalties provided for under Article 41 of the same Code. Pursuant to Article V, paragraph No. 10, of the Visiting Forces Agreement entered into by the Philippines and the United States, accused L/CPL. DANIEL J. SMITH shall serve his sentence in the facilities that shall, thereafter, be agreed upon by appropriate Philippine and United States authorities. Pending agreement on such facilities, accused L/CPL. DANIEL J. SMITH is hereby temporarily committed to the Makati City Jail. Accused L/CPL. DANIEL J. SMITH is further sentenced to indemnify complainant SUZETTE S. NICOLAS in the amount of P50,000.00 as compensatory damages plus P50,000.00 as moral damages. SO ORDERED.2 As a result, the Makati court ordered Smith detained at the Makati jail until further orders. On December 29, 2006, however, defendant Smith was taken out of the Makati jail by a contingent of Philippine law enforcement agents, purportedly acting under orders of the Department of the Interior and Local Government, and brought to a facility for detention under the control of the United States government, provided for under new agreements between the Philippines and the United States, referred to as the Romulo-Kenney Agreement of December 19, 2006 which states: The Government of the Republic of the Philippines and the Government of the United States of America agree that, in accordance with the Visiting Forces Agreement signed between our two nations, Lance Corporal Daniel J. Smith,

United States Marine Corps, be returned to U.S. military custody at the U.S. Embassy in Manila. (Sgd.) Kristie A. Kenney Representative of the United States of America DATE: 12-19-06 (Sgd.) Alberto G. Romulo Representative of the Republic of the Philippines DATE: December 19, 2006

and the Romulo-Kenney Agreement of December 22, 2006 which states: The Department of Foreign Affairs of the Republic of the Philippines and the Embassy of the United States of America agree that, in accordance with the Visiting Forces Agreement signed between the two nations, upon transfer of Lance Corporal Daniel J. Smith, United States Marine Corps, from the Makati City Jail, he will be detained at the first floor, Rowe (JUSMAG) Building, U.S. Embassy Compound in a room of approximately 10 x 12 square feet. He will be guarded round the clock by U.S. military personnel. The Philippine police and jail authorities, under the direct supervision of the Philippine Department of Interior and Local Government (DILG) will have access to the place of detention to ensure the United States is in compliance with the terms of the VFA. The matter was brought before the Court of Appeals which decided on January 2, 2007, as follows: WHEREFORE, all the foregoing considered, we resolved to DISMISS the petition for having become moot.3 Hence, the present actions. The petitions were heard on oral arguments on September 19, 2008, after which the parties submitted their memoranda. Petitioners contend that the Philippines should have custody of defendant L/CPL Smith because, first of all, the VFA is void and unconstitutional. This issue had been raised before, and this Court resolved in favor of the constitutionality of the VFA. This was in Bayan v. Zamora, 4 brought by Bayan, one of petitioners in the present cases. Against the barriers of res judicata vis--vis Bayan, and stare decisis vis--vis all the parties, the reversal of the previous ruling is sought on the ground that the issue is of primordial importance, involving the sovereignty of the Republic, as well as a specific mandate of the Constitution.

The provision of the Constitution is Art. XVIII, Sec. 25 which states: Sec. 25. After the expiration in 1991 of the Agreement between the Philippines and the United States of America concerning Military Bases, foreign military bases, troops, or facilities shall not be allowed in the Philippines except under a treaty duly concurred in by the Senate and, when the Congress so requires, ratified by a majority of the votes cast by the people in a national referendum held for that purpose, and recognized as a treaty by the other contracting State. The reason for this provision lies in history and the Philippine experience in regard to the United States military bases in the country. It will be recalled that under the Philippine Bill of 1902, which laid the basis for the Philippine Commonwealth and, eventually, for the recognition of independence, the United States agreed to cede to the Philippines all the territory it acquired from Spain under the Treaty of Paris, plus a few islands later added to its realm, except certain naval ports and/or military bases and facilities, which the United States retained for itself. This is noteworthy, because what this means is that Clark and Subic and the other places in the Philippines covered by the RP-US Military Bases Agreement of 1947 were not Philippine territory, as they were excluded from the cession and retained by the US. Accordingly, the Philippines had no jurisdiction over these bases except to the extent allowed by the United States. Furthermore, the RP-US Military Bases Agreement was never advised for ratification by the United States Senate, a disparity in treatment, because the Philippines regarded it as a treaty and had it concurred in by our Senate. Subsequently, the United States agreed to turn over these bases to the Philippines; and with the expiration of the RP-US Military Bases Agreement in 1991, the territory covered by these bases were finally ceded to the Philippines. To prevent a recurrence of this experience, the provision in question was adopted in the 1987 Constitution. The provision is thus designed to ensure that any agreement allowing the presence of foreign military bases, troops or facilities in Philippine territory shall be equally binding on the Philippines and the foreign sovereign State involved. The idea is to prevent a recurrence of the situation in which the terms and conditions governing the presence of foreign armed forces in our territory were binding upon us but not upon the foreign State.

Applying the provision to the situation involved in these cases, the question is whether or not the presence of US Armed Forces in Philippine territory pursuant to the VFA is allowed "under a treaty duly concurred in by the Senate xxx and recognized as a treaty by the other contracting State." This Court finds that it is, for two reasons. First, as held in Bayan v. Zamora,5 the VFA was duly concurred in by the Philippine Senate and has been recognized as a treaty by the United States as attested and certified by the duly authorized representative of the United States government. The fact that the VFA was not submitted for advice and consent of the United States Senate does not detract from its status as a binding international agreement or treaty recognized by the said State. For this is a matter of internal United States law. Notice can be taken of the internationally known practice by the United States of submitting to its Senate for advice and consent agreements that are policymaking in nature, whereas those that carry out or further implement these policymaking agreements are merely submitted to Congress, under the provisions of the so-called CaseZablocki Act, within sixty days from ratification.6 The second reason has to do with the relation between the VFA and the RP-US Mutual Defense Treaty of August 30, 1951. This earlier agreement was signed and duly ratified with the concurrence of both the Philippine Senate and the United States Senate. The RP-US Mutual Defense Treaty states:7 MUTUAL DEFENSE TREATY BETWEEN THE REPUBLIC OF THE PHILIPPINES AND THE UNITED STATES OF AMERICA. Signed at Washington, August 30, 1951. The Parties of this Treaty Reaffirming their faith in the purposes and principles of the Charter of the United Nations and their desire to live in peace with all peoples and all governments, and desiring to strengthen the fabric of peace in the Pacific area. Recalling with mutual pride the historic relationship which brought their two peoples together in a common bond of sympathy and mutual ideals to fight side-by-side against imperialist aggression during the last war.

Desiring to declare publicly and formally their sense of unity and their common determination to defend themselves against external armed attack, so that no potential aggressor could be under the illusion that either of them stands alone in the Pacific area. Desiring further to strengthen their present efforts for collective defense for the preservation of peace and security pending the development of a more comprehensive system of regional security in the Pacific area. Agreeing that nothing in this present instrument shall be considered or interpreted as in any way or sense altering or diminishing any existing agreements or understandings between the Republic of the Philippines and the United States of America. Have agreed as follows: Article I. The parties undertake, as set forth in the Charter of the United Nations, to settle any international disputes in which they may be involved by peaceful means in such a manner that international peace and security and justice are not endangered and to refrain in their international relation from the threat or use of force in any manner inconsistent with the purposes of the United Nations. Article II. In order more effectively to achieve the objective of this Treaty, the Parties separately and jointly by self-help and mutual aid will maintain and develop their individual and collective capacity to resist armed attack. Article III. The Parties, through their Foreign Ministers or their deputies, will consult together from time to time regarding the implementation of this Treaty and whenever in the opinion of either of them the territorial integrity, political independence or security of either of the Parties is threatened by external armed attack in the Pacific. Article IV. Each Party recognizes that an armed attack in the Pacific area on either of the parties would be dangerous to its own peace and safety and declares that it would act to meet the common dangers in accordance with its constitutional processes. Any such armed attack and all measures taken as a result thereof shall be immediately reported to the Security Council of the United Nations. Such measures shall be terminated when the Security Council has taken the measures necessary to restore and maintain international peace and security. Article V. For the purpose of Article IV, an armed attack on either of the Parties is deemed to include an armed attack on the metropolitan territory of either of

the Parties, or on the island territories under its jurisdiction in the Pacific Ocean, its armed forces, public vessels or aircraft in the Pacific. Article VI. This Treaty does not affect and shall not be interpreted as affecting in any way the rights and obligations of the Parties under the Charter of the United Nations or the responsibility of the United Nations for the maintenance of international peace and security. Article VII. This Treaty shall be ratified by the Republic of the Philippines and the United Nations of America in accordance with their respective constitutional processes and will come into force when instruments of ratification thereof have been exchanged by them at Manila. Article VIII. This Treaty shall remain in force indefinitely. Either Party may terminate it one year after notice has been given to the other party. In withness whereof the undersigned Plenipotentiaries have signed this Treaty. Done in duplicate at Washington this thirtieth day of August, 1951. For the Republic of the Philippines: (Sgd.) Carlos P. Romulo (Sgd.) Joaquin M. Elizalde (Sgd.) Vicente J. Francisco (Sgd.) Diosdado Macapagal For the United States of America: (Sgd.) Dean Acheson (Sgd.) John Foster Dulles (Sgd.) Tom Connally (Sgd.) Alexander Wiley8 Clearly, therefore, joint RP-US military exercises for the purpose of developing the capability to resist an armed attack fall squarely under the provisions of the RP-US Mutual Defense Treaty. The VFA, which is the instrument agreed upon

to provide for the joint RP-US military exercises, is simply an implementing agreement to the main RP-US Military Defense Treaty. The Preamble of the VFA states: The Government of the United States of America and the Government of the Republic of the Philippines, Reaffirming their faith in the purposes and principles of the Charter of the United Nations and their desire to strengthen international and regional security in the Pacific area; Reaffirming their obligations under the Mutual Defense Treaty of August 30, 1951; Noting that from time to time elements of the United States armed forces may visit the Republic of the Philippines; Considering that cooperation between the United States and the Republic of the Philippines promotes their common security interests; Recognizing the desirability of defining the treatment of United States personnel visiting the Republic of the Philippines; Have agreed as follows:9 Accordingly, as an implementing agreement of the RP-US Mutual Defense Treaty, it was not necessary to submit the VFA to the US Senate for advice and consent, but merely to the US Congress under the CaseZablocki Act within 60 days of its ratification. It is for this reason that the US has certified that it recognizes the VFA as a binding international agreement, i.e., a treaty, and this substantially complies with the requirements of Art. XVIII, Sec. 25 of our Constitution.10 The provision of Art. XVIII, Sec. 25 of the Constitution, is complied with by virtue of the fact that the presence of the US Armed Forces through the VFA is a presence "allowed under" the RP-US Mutual Defense Treaty. Since the RPUS Mutual Defense Treaty itself has been ratified and concurred in by both the Philippine Senate and the US Senate, there is no violation of the Constitutional provision resulting from such presence. The VFA being a valid and binding agreement, the parties are required as a matter of international law to abide by its terms and provisions.

The VFA provides that in cases of offenses committed by the members of the US Armed Forces in the Philippines, the following rules apply: Article V Criminal Jurisdiction xxx 6. The custody of any United States personnel over whom the Philippines is to exercise jurisdiction shall immediately reside with United States military authorities, if they so request, from the commission of the offense until completion of all judicial proceedings. United States military authorities shall, upon formal notification by the Philippine authorities and without delay, make such personnel available to those authorities in time for any investigative or judicial proceedings relating to the offense with which the person has been charged. In extraordinary cases, the Philippine Government shall present its position to the United States Government regarding custody, which the United States Government shall take into full account. In the event Philippine judicial proceedings are not completed within one year, the United States shall be relieved of any obligations under this paragraph. The one year period will not include the time necessary to appeal. Also, the one year period will not include any time during which scheduled trial procedures are delayed because United States authorities, after timely notification by Philippine authorities to arrange for the presence of the accused, fail to do so. Petitioners contend that these undertakings violate another provision of the Constitution, namely, that providing for the exclusive power of this Court to adopt rules of procedure for all courts in the Philippines (Art. VIII, Sec. 5[5]). They argue that to allow the transfer of custody of an accused to a foreign power is to provide for a different rule of procedure for that accused, which also violates the equal protection clause of the Constitution (Art. III, Sec. 1.). Again, this Court finds no violation of the Constitution. The equal protection clause is not violated, because there is a substantial basis for a different treatment of a member of a foreign military armed forces allowed to enter our territory and all other accused.11 The rule in international law is that a foreign armed forces allowed to enter ones territory is immune from local jurisdiction, except to the extent agreed upon. The Status of Forces Agreements involving foreign military units around the world vary in terms and conditions, according to the situation of the parties involved, and reflect their bargaining power. But the principle remains, i.e., the

receiving State can exercise jurisdiction over the forces of the sending State only to the extent agreed upon by the parties.12 As a result, the situation involved is not one in which the power of this Court to adopt rules of procedure is curtailed or violated, but rather one in which, as is normally encountered around the world, the laws (including rules of procedure) of one State do not extend or apply except to the extent agreed upon to subjects of another State due to the recognition of extraterritorial immunity given to such bodies as visiting foreign armed forces. Nothing in the Constitution prohibits such agreements recognizing immunity from jurisdiction or some aspects of jurisdiction (such as custody), in relation to long-recognized subjects of such immunity like Heads of State, diplomats and members of the armed forces contingents of a foreign State allowed to enter another States territory. On the contrary, the Constitution states that the Philippines adopts the generally accepted principles of international law as part of the law of the land. (Art. II, Sec. 2). Applying, however, the provisions of VFA, the Court finds that there is a different treatment when it comes to detention as against custody. The moment the accused has to be detained, e.g., after conviction, the rule that governs is the following provision of the VFA: Article V Criminal Jurisdiction xxx Sec. 10. The confinement or detention by Philippine authorities of United States personnel shall be carried out in facilities agreed on by appropriate Philippines and United States authorities. United States personnel serving sentences in the Philippines shall have the right to visits and material assistance. It is clear that the parties to the VFA recognized the difference between custody during the trial and detention after conviction, because they provided for a specific arrangement to cover detention. And this specific arrangement clearly states not only that the detention shall be carried out in facilities agreed on by authorities of both parties, but also that the detention shall be "by Philippine authorities." Therefore, the Romulo-Kenney Agreements of December 19 and 22, 2006, which are agreements on the detention of the accused in the United States Embassy, are not in accord with the VFA itself because such detention is not "by Philippine authorities."

Respondents should therefore comply with the VFA and negotiate with representatives of the United States towards an agreement on detention facilities under Philippine authorities as mandated by Art. V, Sec. 10 of the VFA. Next, the Court addresses the recent decision of the United States Supreme Court in Medellin v. Texas ( 552 US ___ No. 06-984, March 25, 2008), which held that treaties entered into by the United States are not automatically part of their domestic law unless these treaties are self-executing or there is an implementing legislation to make them enforceable.1avvphi1 On February 3, 2009, the Court issued a Resolution, thus: "G.R. No. 175888 (Suzette Nicolas y Sombilon v. Alberto Romulo, et al.); G.R. No. 176051 (Jovito R. Salonga, et al. v. Daniel Smith, et al.); and G.R. No. 176222 (Bagong Alyansang Makabayan [BAYAN], et al. v. President Gloria Macapagal-Arroyo, et al.). The parties, including the Solicitor General, are required to submit within three (3) days a Comment/Manifestation on the following points: 1. What is the implication on the RP-US Visiting Forces Agreement of the recent US Supreme Court decision in Jose Ernesto Medellin v. Texas, dated March 25, 2008, to the effect that treaty stipulations that are not self-executory can only be enforced pursuant to legislation to carry them into effect; and that, while treaties may comprise international commitments, they are not domestic law unless Congress has enacted implementing statutes or the treaty itself conveys an intention that it be "self-executory" and is ratified on these terms? 2. Whether the VFA is enforceable in the US as domestic law, either because it is self-executory or because there exists legislation to implement it. 3. Whether the RP-US Mutual Defense Treaty of August 30, 1951 was concurred in by the US Senate and, if so, is there proof of the US Senate advice and consent resolution? Peralta, J., no part." After deliberation, the Court holds, on these points, as follows: First, the VFA is a self-executing Agreement, as that term is defined in Medellin itself, because the parties intend its provisions to be enforceable, precisely because the Agreement is intended to carry out obligations and undertakings under the RP-US Mutual Defense Treaty. As a matter of fact, the VFA has been implemented and executed, with the US faithfully complying with its obligation to produce L/CPL Smith before the court during the trial.

Secondly, the VFA is covered by implementing legislation, namely, the CaseZablocki Act, USC Sec. 112(b), inasmuch as it is the very purpose and intent of the US Congress that executive agreements registered under this Act within 60 days from their ratification be immediately implemented. The parties to these present cases do not question the fact that the VFA has been registered under the Case-Zablocki Act.1avvphi1 In sum, therefore, the VFA differs from the Vienna Convention on Consular Relations and the Avena decision of the International Court of Justice (ICJ), subject matter of the Medellin decision. The Convention and the ICJ decision are not self-executing and are not registrable under the Case-Zablocki Act, and thus lack legislative implementing authority. Finally, the RP-US Mutual Defense Treaty was advised and consented to by the US Senate on March 20, 1952, as reflected in the US Congressional Record, 82nd Congress, Second Session, Vol. 98 Part 2, pp. 2594-2595. The framers of the Constitution were aware that the application of international law in domestic courts varies from country to country. As Ward N. Ferdinandusse states in his Treatise, DIRECT APPLICATION OF INTERNATIONAL CRIMINAL LAW IN NATIONAL COURTS, some countries require legislation whereas others do not. It was not the intention of the framers of the 1987 Constitution, in adopting Article XVIII, Sec. 25, to require the other contracting State to convert their system to achieve alignment and parity with ours. It was simply required that the treaty be recognized as a treaty by the other contracting State. With that, it becomes for both parties a binding international obligation and the enforcement of that obligation is left to the normal recourse and processes under international law. Furthermore, as held by the US Supreme Court in Weinberger v. Rossi,13 an executive agreement is a "treaty" within the meaning of that word in international law and constitutes enforceable domestic law vis--vis the United States. Thus, the US Supreme Court in Weinberger enforced the provisions of the executive agreement granting preferential employment to Filipinos in the US Bases here. Accordingly, there are three types of treaties in the American system: 1. Art. II, Sec. 2 treaties These are advised and consented to by the US Senate in accordance with Art. II, Sec. 2 of the US Constitution.

2. ExecutiveCongressional Agreements: These are joint agreements of the President and Congress and need not be submitted to the Senate. 3. Sole Executive Agreements. These are agreements entered into by the President. They are to be submitted to Congress within sixty (60) days of ratification under the provisions of the Case-Zablocki Act, after which they are recognized by the Congress and may be implemented. As regards the implementation of the RP-US Mutual Defense Treaty, military aid or assistance has been given under it and this can only be done through implementing legislation. The VFA itself is another form of implementation of its provisions. WHEREFORE, the petitions are PARTLY GRANTED, and the Court of Appeals Decision in CA-G.R. SP No. 97212 dated January 2, 2007 is MODIFIED. The Visiting Forces Agreement (VFA) between the Republic of the Philippines and the United States, entered into on February 10, 1998, is UPHELD as constitutional, but the Romulo-Kenney Agreements of December 19 and 22, 2006 are DECLARED not in accordance with the VFA, and respondent Secretary of Foreign Affairs is hereby ordered to forthwith negotiate with the United States representatives for the appropriate agreement on detention facilities under Philippine authorities as provided in Art. V, Sec. 10 of the VFA, pending which the status quo shall be maintained until further orders by this Court. The Court of Appeals is hereby directed to resolve without delay the related matters pending therein, namely, the petition for contempt and the appeal of L/CPL Daniel Smith from the judgment of conviction. No costs. SO ORDERED.

G.R. No. 129406

March 6, 2006

REPUBLIC OF THE PHILIPPINES represented by the PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG), Petitioner, vs. SANDIGANBAYAN (SECOND DIVISION) and ROBERTO S. BENEDICTO, Respondents. DECISION GARCIA, J.: Before the Court is this petition for certiorari under Rule 65 of the Rules of Court to nullify and set aside the March 28, 1995 1 and March 13, 19972 Resolutions of the Sandiganbayan, Second Division, in Civil Case No. 0034, insofar as said resolutions ordered the Presidential Commission on Good Government (PCGG) to pay private respondent Roberto S. Benedicto or his corporations the value of 227 shares of stock of the Negros Occidental Golf and Country Club, Inc. (NOGCCI) at P150,000.00 per share, registered in the name of said private respondent or his corporations. The facts: Civil Case No. 0034 entitled Republic of the Philippines, plaintiff, v. Roberto S. Benedicto, et al., defendants, is a complaint for reconveyance, reversion, accounting, reconstitution and damages. The case is one of several suits involving ill-gotten or unexplained wealth that petitioner Republic, through the PCGG, filed with the Sandiganbayan against private respondent Roberto S. Benedicto and others pursuant to Executive Order (EO) No. 14,3 series of 1986. Pursuant to its mandate under EO No. 1,4 series of 1986, the PCGG issued writs placing under sequestration all business enterprises, entities and other properties, real and personal, owned or registered in the name of private respondent Benedicto, or of corporations in which he appeared to have controlling or majority interest. Among the properties thus sequestered and taken over by PCGG fiscal agents were the 227 shares in NOGCCI owned by private respondent Benedicto and registered in his name or under the names of corporations he owned or controlled. Following the sequestration process, PCGG representatives sat as members of the Board of Directors of NOGCCI, which passed, sometime in October 1986, a resolution effecting a corporate policy change. The change consisted of assessing a monthly membership due of P150.00 for each NOGCCI share. Prior to this resolution, an investor purchasing more than one NOGCCI share was exempt from paying monthly membership due for the second and subsequent shares that he/she owned. Subsequently, on March 29, 1987, the NOGCCI Board passed another resolution, this time increasing the monthly membership due from P150.00 to P250.00 for each share. As sequestrator of the 227 shares of stock in question, PCGG did not pay the corresponding monthly membership due thereon totaling P2,959,471.00. On account thereof, the 227 sequestered shares were declared delinquent to be disposed of in an auction sale. Apprised of the above development and evidently to prevent the projected auction sale of the same shares, PCGG filed a complaint for injunction with the Regional Trial Court (RTC) of Bacolod City, thereat docketed as Civil Case No. 5348. The complaint, however, was dismissed, paving the way for the auction sale for the delinquent 227 shares of stock. On August 5, 1989, an auction sale was conducted. On November 3, 1990, petitioner Republic and private respondent Benedicto entered into a Compromise Agreement in Civil Case No. 0034. The agreement contained a general release clause5 whereunder petitioner Republic agreed and bound itself to lift the sequestration on the 227 NOGCCI shares, among other Benedictos properties, petitioner Republic acknowledging that it was within private respondent Benedictos capacity to acquire the same shares out of his income from business and the exercise of his profession.6 Implied in this undertaking is the recognition by petitioner Republic that the subject shares of stock could not have been ill-gotten. In a decision dated October 2, 1992, the Sandiganbayan approved the Compromise Agreement and accordingly rendered judgment in accordance with its terms. In the process of implementing the Compromise Agreement, either of the parties would, from time to time, move for a ruling by the Sandiganbayan on the proper manner of implementing or interpreting a specific provision therein. On February 22, 1994, Benedicto filed in Civil Case No. 0034 a "Motion for Release from Sequestration and Return of Sequestered Shares/Dividends" praying, inter alia, that his NOGCCI shares of stock be specifically released from sequestration and returned, delivered or paid to him as part of the parties Compromise Agreement in that case. In a Resolution7 promulgated on

December 6, 1994, the Sandiganbayan granted Benedictos aforementioned motion but placed the subject shares under the custody of its Clerk of Court, thus: WHEREFORE, in the light of the foregoing, the said "Motion for Release From Sequestration and Return of Sequestered Shares/Dividends" is hereby GRANTED and it is directed that said shares/dividends be delivered/placed under the custody of the Clerk of Court, Sandiganbayan, Manila subject to this Courts disposition. On March 28, 1995, the Sandiganbayan came out with the herein first assailed Resolution,8 which clarified its aforementioned December 6, 1994 Resolution and directed the immediate implementation thereof by requiring PCGG, among other things: (b) To deliver to the Clerk of Court the 227 sequestered shares of [NOGCCI] registered in the name of nominees of ROBERTO S. BENEDICTO free from all liens and encumbrances, or in default thereof, to pay their value at P150,000.00 per share which can be deducted from [the Republics] cash share in the Compromise Agreement. [Words in bracket added] (Emphasis Supplied). Owing to PCGGs failure to comply with the above directive, Benedicto filed in Civil Case No. 0034 a Motion for Compliance dated July 25, 1995, followed by an Ex-Parte Motion for Early Resolution dated February 12, 1996. Acting thereon, the Sandiganbayan promulgated yet another Resolution9 on February 23, 1996, dispositively reading: WHEREFORE, finding merit in the instant motion for early resolution and considering that, indeed, the PCGG has not shown any justifiable ground as to why it has not complied with its obligation as set forth in the Order of December 6, 1994 up to this date and which Order was issued pursuant to the Compromise Agreement and has already become final and executory, accordingly, the Presidential Commission on Good Government is hereby given a final extension of fifteen (15) days from receipt hereof within which to comply with the Order of December 6, 1994 as stated hereinabove. On April 1, 1996, PCGG filed a Manifestation with Motion for Reconsideration,10 praying for the setting aside of the Resolution of February 23, 1996. On April 11, 1996, private respondent Benedicto filed a Motion to Enforce Judgment Levy. Resolving these two motions, the Sandiganbayan, in its second assailed Resolution11 dated March 13, 1997, denied that portion of the PCGGs Manifestation with Motion for Reconsideration concerning the subject 227 NOGCCI shares and granted Benedictos Motion to Enforce Judgment Levy.

Hence, the Republics present recourse on the sole issue of whether or not the public respondent Sandiganbayan, Second Division, gravely abused its discretion in holding that the PCGG is at fault for not paying the membership dues on the 227 sequestered NOGCCI shares of stock, a failing which eventually led to the foreclosure sale thereof. The petition lacks merit. To begin with, PCGG itself does not dispute its being considered as a receiver insofar as the sequestered 227 NOGCCI shares of stock are concerned. 12 PCGG also acknowledges that as such receiver, one of its functions is to pay outstanding debts pertaining to the sequestered entity or property,13 in this case the 227 NOGCCI shares in question. It contends, however, that membership dues owing to a golf club cannot be considered as an outstanding debt for which PCGG, as receiver, must pay. It also claims to have exercised due diligence to prevent the loss through delinquency sale of the subject NOGCCI shares, specifically inviting attention to the injunctive suit, i.e., Civil Case No. 5348, it filed before the RTC of Bacolod City to enjoin the foreclosure sale of the shares. The filing of the injunction complaint adverted to, without more, cannot plausibly tilt the balance in favor of PCGG. To the mind of the Court, such filing is a case of acting too little and too late. It cannot be over-emphasized that it behooved the PCGGs fiscal agents to preserve, like a responsible father of the family, the value of the shares of stock under their administration. But far from acting as such father, what the fiscal agents did under the premises was to allow the element of delinquency to set in before acting by embarking on a tedious process of going to court after the auction sale had been announced and scheduled. The PCGGs posture that to the owner of the sequestered shares rests the burden of paying the membership dues is untenable. For one, it lost sight of the reality that such dues are basically obligations attached to the shares, which, in the final analysis, shall be made liable, thru delinquency sale in case of default in payment of the dues. For another, the PCGG as sequestrator-receiver of such shares is, as stressed earlier, duty bound to preserve the value of such shares. Needless to state, adopting timely measures to obviate the loss of those shares forms part of such duty and due diligence. The Sandiganbayan, to be sure, cannot plausibly be faulted for finding the PCGG liable for the loss of the 227 NOGCCI shares. There can be no quibbling, as indeed the graft court so declared in its assailed and related resolutions respecting the NOGCCI shares of stock, that PCGGs fiscal agents, while sitting in the NOGCCI Board of Directors agreed to the amendment of the rule pertaining to membership dues. Hence, it is not amiss to state, as did the

Sandiganbayan, that the PCGG-designated fiscal agents, no less, had a direct hand in the loss of the sequestered shares through delinquency and their eventual sale through public auction. While perhaps anti-climactic to so mention it at this stage, the unfortunate loss of the shares ought not to have come to pass had those fiscal agents prudently not agreed to the passage of the NOGCCI board resolutions charging membership dues on shares without playing representatives. Given the circumstances leading to the auction sale of the subject NOGCCI shares, PCGGs lament about public respondent Sandiganbayan having erred or, worse still, having gravely abused its discretion in its determination as to who is at fault for the loss of the shares in question can hardly be given cogency. For sure, even if the Sandiganbayan were wrong in its findings, which does not seem to be in this case, it is a well-settled rule of jurisprudence that certiorari will issue only to correct errors of jurisdiction, not errors of judgment. Corollarily, errors of procedure or mistakes in the courts findings and conclusions are beyond the corrective hand of certiorari.14 The extraordinary writ of certiorari may be availed only upon a showing, in the minimum, that the respondent tribunal or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion.15 The term "grave abuse of discretion" connotes capricious and whimsical exercise of judgment as is equivalent to excess, or a lack of jurisdiction. 16 The abuse must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility. 17 Sadly, this is completely absent in the present case. For, at bottom, the assailed resolutions of the Sandiganbayan did no more than to direct PCGG to comply with its part of the bargain under the compromise agreement it freely entered into with private respondent Benedicto. Simply put, the assailed resolutions of the Sandiganbayan have firm basis in fact and in law. Lest it be overlooked, the issue of liability for the shares in question had, as both public and private respondents asserted, long become final and executory. Petitioners narration of facts in its present petition is even misleading as it conveniently fails to make reference to two (2) resolutions issued by the Sandiganbayan. We refer to that courts resolutions of December 6, 199418 and February 23, 199619 as well as several intervening pleadings which served as basis for the decisions reached therein. As it were, the present petition questions only and focuses on the March 28, 199520 and March 13, 199721 resolutions, which merely reiterated and clarified the graft courts underlying resolution of December 6, 1994. And to place matters in the proper perspective,

PCGGs failure to comply with the December 6, 1994 resolution prompted the issuance of the clarificatory and/or reiteratory resolutions aforementioned. In a last-ditch attempt to escape liability, petitioner Republic, through the PCGG, invokes state immunity from suit.22 As argued, the order for it to pay the value of the delinquent shares would fix monetary liability on a government agency, thus necessitating the appropriation of public funds to satisfy the judgment claim.23 But, as private respondent Benedicto correctly countered, the PCGG fails to take stock of one of the exceptions to the state immunity principle, i.e., when the government itself is the suitor, as in Civil Case No. 0034. Where, as here, the State itself is no less the plaintiff in the main case, immunity from suit cannot be effectively invoked.24 For, as jurisprudence teaches, when the State, through its duly authorized officers, takes the initiative in a suit against a private party, it thereby descends to the level of a private individual and thus opens itself to whatever counterclaims or defenses the latter may have against it.25 Petitioner Republics act of filing its complaint in Civil Case No. 0034 constitutes a waiver of its immunity from suit. Being itself the plaintiff in that case, petitioner Republic cannot set up its immunity against private respondent Benedictos prayers in the same case. In fact, by entering into a Compromise Agreement with private respondent Benedicto, petitioner Republic thereby stripped itself of its immunity from suit and placed itself in the same level of its adversary. When the State enters into contract, through its officers or agents, in furtherance of a legitimate aim and purpose and pursuant to constitutional legislative authority, whereby mutual or reciprocal benefits accrue and rights and obligations arise therefrom, the State may be sued even without its express consent, precisely because by entering into a contract the sovereign descends to the level of the citizen. Its consent to be sued is implied from the very act of entering into such contract,26 breach of which on its part gives the corresponding right to the other party to the agreement. Finally, it is apropos to stress that the Compromise Agreement in Civil Case No. 0034 envisaged the immediate recovery of alleged ill-gotten wealth without further litigation by the government, and buying peace on the part of the aging Benedicto.27 Sadly, that stated objective has come to naught as not only had the litigation continued to ensue, but, worse, private respondent Benedicto passed away on May 15, 2000,28 with the trial of Civil Case No. 0034 still in swing, so much so that the late Benedicto had to be substituted by the administratrix of his estate.29 WHEREFORE, the instant petition is hereby DISMISSED. SO ORDERED.

G.R. No. 129406

March 6, 2006

REPUBLIC OF THE PHILIPPINES represented by the PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG), Petitioner, vs. SANDIGANBAYAN (SECOND DIVISION) and ROBERTO S. BENEDICTO, Respondents. DECISION GARCIA, J.: Before the Court is this petition for certiorari under Rule 65 of the Rules of Court to nullify and set aside the March 28, 1995 1 and March 13, 19972 Resolutions of the Sandiganbayan, Second Division, in Civil Case No. 0034, insofar as said resolutions ordered the Presidential Commission on Good Government (PCGG) to pay private respondent Roberto S. Benedicto or his corporations the value of 227 shares of stock of the Negros Occidental Golf and Country Club, Inc. (NOGCCI) at P150,000.00 per share, registered in the name of said private respondent or his corporations. The facts: Civil Case No. 0034 entitled Republic of the Philippines, plaintiff, v. Roberto S. Benedicto, et al., defendants, is a complaint for reconveyance, reversion, accounting, reconstitution and damages. The case is one of several suits involving ill-gotten or unexplained wealth that petitioner Republic, through the PCGG, filed with the Sandiganbayan against private respondent Roberto S. Benedicto and others pursuant to Executive Order (EO) No. 14,3 series of 1986. Pursuant to its mandate under EO No. 1,4 series of 1986, the PCGG issued writs placing under sequestration all business enterprises, entities and other properties, real and personal, owned or registered in the name of private respondent Benedicto, or of corporations in which he appeared to have controlling or majority interest. Among the properties thus sequestered and taken over by PCGG fiscal agents were the 227 shares in NOGCCI owned by private respondent Benedicto and registered in his name or under the names of corporations he owned or controlled. Following the sequestration process, PCGG representatives sat as members of the Board of Directors of NOGCCI, which passed, sometime in October 1986, a resolution effecting a corporate policy change. The change consisted of assessing a monthly membership due of P150.00 for each NOGCCI share. Prior to this resolution, an investor purchasing more than one NOGCCI share was exempt from paying monthly membership due for the second and subsequent shares that he/she owned. Subsequently, on March 29, 1987, the NOGCCI Board passed another resolution, this time increasing the monthly membership due from P150.00 to P250.00 for each share. As sequestrator of the 227 shares of stock in question, PCGG did not pay the corresponding monthly membership due thereon totaling P2,959,471.00. On account thereof, the 227 sequestered shares were declared delinquent to be disposed of in an auction sale. Apprised of the above development and evidently to prevent the projected auction sale of the same shares, PCGG filed a complaint for injunction with the Regional Trial Court (RTC) of Bacolod City, thereat docketed as Civil Case No. 5348. The complaint, however, was dismissed, paving the way for the auction sale for the delinquent 227 shares of stock. On August 5, 1989, an auction sale was conducted. On November 3, 1990, petitioner Republic and private respondent Benedicto entered into a Compromise Agreement in Civil Case No. 0034. The agreement contained a general release clause5 whereunder petitioner Republic agreed and bound itself to lift the sequestration on the 227 NOGCCI shares, among other Benedictos properties, petitioner Republic acknowledging that it was within private respondent Benedictos capacity to acquire the same shares out of his income from business and the exercise of his profession.6 Implied in this undertaking is the recognition by petitioner Republic that the subject shares of stock could not have been ill-gotten. In a decision dated October 2, 1992, the Sandiganbayan approved the Compromise Agreement and accordingly rendered judgment in accordance with its terms. In the process of implementing the Compromise Agreement, either of the parties would, from time to time, move for a ruling by the Sandiganbayan on the proper manner of implementing or interpreting a specific provision therein. On February 22, 1994, Benedicto filed in Civil Case No. 0034 a "Motion for Release from Sequestration and Return of Sequestered Shares/Dividends" praying, inter alia, that his NOGCCI shares of stock be specifically released from sequestration and returned, delivered or paid to him as part of the parties Compromise Agreement in that case. In a Resolution7 promulgated on

December 6, 1994, the Sandiganbayan granted Benedictos aforementioned motion but placed the subject shares under the custody of its Clerk of Court, thus: WHEREFORE, in the light of the foregoing, the said "Motion for Release From Sequestration and Return of Sequestered Shares/Dividends" is hereby GRANTED and it is directed that said shares/dividends be delivered/placed under the custody of the Clerk of Court, Sandiganbayan, Manila subject to this Courts disposition. On March 28, 1995, the Sandiganbayan came out with the herein first assailed Resolution,8 which clarified its aforementioned December 6, 1994 Resolution and directed the immediate implementation thereof by requiring PCGG, among other things: (b) To deliver to the Clerk of Court the 227 sequestered shares of [NOGCCI] registered in the name of nominees of ROBERTO S. BENEDICTO free from all liens and encumbrances, or in default thereof, to pay their value at P150,000.00 per share which can be deducted from [the Republics] cash share in the Compromise Agreement. [Words in bracket added] (Emphasis Supplied). Owing to PCGGs failure to comply with the above directive, Benedicto filed in Civil Case No. 0034 a Motion for Compliance dated July 25, 1995, followed by an Ex-Parte Motion for Early Resolution dated February 12, 1996. Acting thereon, the Sandiganbayan promulgated yet another Resolution9 on February 23, 1996, dispositively reading: WHEREFORE, finding merit in the instant motion for early resolution and considering that, indeed, the PCGG has not shown any justifiable ground as to why it has not complied with its obligation as set forth in the Order of December 6, 1994 up to this date and which Order was issued pursuant to the Compromise Agreement and has already become final and executory, accordingly, the Presidential Commission on Good Government is hereby given a final extension of fifteen (15) days from receipt hereof within which to comply with the Order of December 6, 1994 as stated hereinabove. On April 1, 1996, PCGG filed a Manifestation with Motion for Reconsideration,10 praying for the setting aside of the Resolution of February 23, 1996. On April 11, 1996, private respondent Benedicto filed a Motion to Enforce Judgment Levy. Resolving these two motions, the Sandiganbayan, in its second assailed Resolution11 dated March 13, 1997, denied that portion of the PCGGs Manifestation with Motion for Reconsideration concerning the subject 227 NOGCCI shares and granted Benedictos Motion to Enforce Judgment Levy.

Hence, the Republics present recourse on the sole issue of whether or not the public respondent Sandiganbayan, Second Division, gravely abused its discretion in holding that the PCGG is at fault for not paying the membership dues on the 227 sequestered NOGCCI shares of stock, a failing which eventually led to the foreclosure sale thereof. The petition lacks merit. To begin with, PCGG itself does not dispute its being considered as a receiver insofar as the sequestered 227 NOGCCI shares of stock are concerned. 12 PCGG also acknowledges that as such receiver, one of its functions is to pay outstanding debts pertaining to the sequestered entity or property,13 in this case the 227 NOGCCI shares in question. It contends, however, that membership dues owing to a golf club cannot be considered as an outstanding debt for which PCGG, as receiver, must pay. It also claims to have exercised due diligence to prevent the loss through delinquency sale of the subject NOGCCI shares, specifically inviting attention to the injunctive suit, i.e., Civil Case No. 5348, it filed before the RTC of Bacolod City to enjoin the foreclosure sale of the shares. The filing of the injunction complaint adverted to, without more, cannot plausibly tilt the balance in favor of PCGG. To the mind of the Court, such filing is a case of acting too little and too late. It cannot be over-emphasized that it behooved the PCGGs fiscal agents to preserve, like a responsible father of the family, the value of the shares of stock under their administration. But far from acting as such father, what the fiscal agents did under the premises was to allow the element of delinquency to set in before acting by embarking on a tedious process of going to court after the auction sale had been announced and scheduled. The PCGGs posture that to the owner of the sequestered shares rests the burden of paying the membership dues is untenable. For one, it lost sight of the reality that such dues are basically obligations attached to the shares, which, in the final analysis, shall be made liable, thru delinquency sale in case of default in payment of the dues. For another, the PCGG as sequestrator-receiver of such shares is, as stressed earlier, duty bound to preserve the value of such shares. Needless to state, adopting timely measures to obviate the loss of those shares forms part of such duty and due diligence. The Sandiganbayan, to be sure, cannot plausibly be faulted for finding the PCGG liable for the loss of the 227 NOGCCI shares. There can be no quibbling, as indeed the graft court so declared in its assailed and related resolutions respecting the NOGCCI shares of stock, that PCGGs fiscal agents, while sitting in the NOGCCI Board of Directors agreed to the amendment of the rule pertaining to membership dues. Hence, it is not amiss to state, as did the

Sandiganbayan, that the PCGG-designated fiscal agents, no less, had a direct hand in the loss of the sequestered shares through delinquency and their eventual sale through public auction. While perhaps anti-climactic to so mention it at this stage, the unfortunate loss of the shares ought not to have come to pass had those fiscal agents prudently not agreed to the passage of the NOGCCI board resolutions charging membership dues on shares without playing representatives. Given the circumstances leading to the auction sale of the subject NOGCCI shares, PCGGs lament about public respondent Sandiganbayan having erred or, worse still, having gravely abused its discretion in its determination as to who is at fault for the loss of the shares in question can hardly be given cogency. For sure, even if the Sandiganbayan were wrong in its findings, which does not seem to be in this case, it is a well-settled rule of jurisprudence that certiorari will issue only to correct errors of jurisdiction, not errors of judgment. Corollarily, errors of procedure or mistakes in the courts findings and conclusions are beyond the corrective hand of certiorari.14 The extraordinary writ of certiorari may be availed only upon a showing, in the minimum, that the respondent tribunal or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion.15 The term "grave abuse of discretion" connotes capricious and whimsical exercise of judgment as is equivalent to excess, or a lack of jurisdiction. 16 The abuse must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility. 17 Sadly, this is completely absent in the present case. For, at bottom, the assailed resolutions of the Sandiganbayan did no more than to direct PCGG to comply with its part of the bargain under the compromise agreement it freely entered into with private respondent Benedicto. Simply put, the assailed resolutions of the Sandiganbayan have firm basis in fact and in law. Lest it be overlooked, the issue of liability for the shares in question had, as both public and private respondents asserted, long become final and executory. Petitioners narration of facts in its present petition is even misleading as it conveniently fails to make reference to two (2) resolutions issued by the Sandiganbayan. We refer to that courts resolutions of December 6, 199418 and February 23, 199619 as well as several intervening pleadings which served as basis for the decisions reached therein. As it were, the present petition questions only and focuses on the March 28, 199520 and March 13, 199721 resolutions, which merely reiterated and clarified the graft courts underlying resolution of December 6, 1994. And to place matters in the proper perspective,

PCGGs failure to comply with the December 6, 1994 resolution prompted the issuance of the clarificatory and/or reiteratory resolutions aforementioned. In a last-ditch attempt to escape liability, petitioner Republic, through the PCGG, invokes state immunity from suit.22 As argued, the order for it to pay the value of the delinquent shares would fix monetary liability on a government agency, thus necessitating the appropriation of public funds to satisfy the judgment claim.23 But, as private respondent Benedicto correctly countered, the PCGG fails to take stock of one of the exceptions to the state immunity principle, i.e., when the government itself is the suitor, as in Civil Case No. 0034. Where, as here, the State itself is no less the plaintiff in the main case, immunity from suit cannot be effectively invoked.24 For, as jurisprudence teaches, when the State, through its duly authorized officers, takes the initiative in a suit against a private party, it thereby descends to the level of a private individual and thus opens itself to whatever counterclaims or defenses the latter may have against it.25 Petitioner Republics act of filing its complaint in Civil Case No. 0034 constitutes a waiver of its immunity from suit. Being itself the plaintiff in that case, petitioner Republic cannot set up its immunity against private respondent Benedictos prayers in the same case. In fact, by entering into a Compromise Agreement with private respondent Benedicto, petitioner Republic thereby stripped itself of its immunity from suit and placed itself in the same level of its adversary. When the State enters into contract, through its officers or agents, in furtherance of a legitimate aim and purpose and pursuant to constitutional legislative authority, whereby mutual or reciprocal benefits accrue and rights and obligations arise therefrom, the State may be sued even without its express consent, precisely because by entering into a contract the sovereign descends to the level of the citizen. Its consent to be sued is implied from the very act of entering into such contract,26 breach of which on its part gives the corresponding right to the other party to the agreement. Finally, it is apropos to stress that the Compromise Agreement in Civil Case No. 0034 envisaged the immediate recovery of alleged ill-gotten wealth without further litigation by the government, and buying peace on the part of the aging Benedicto.27 Sadly, that stated objective has come to naught as not only had the litigation continued to ensue, but, worse, private respondent Benedicto passed away on May 15, 2000,28 with the trial of Civil Case No. 0034 still in swing, so much so that the late Benedicto had to be substituted by the administratrix of his estate.29 WHEREFORE, the instant petition is hereby DISMISSED. SO ORDERED.

REPUBLIC OF THE PHILIPPINES, Petitioner,

G.R. No. 161657 Via this verified petition for certiorari and prohibition under Rule 65 of the Rules of Court, the Republic of the Philippines (Republic, for short), thru the Office of the Solicitor General (OSG), comes to this Court to nullify and set aside the decision dated August 27, 2003 and other related issuances of the Regional Trial Court (RTC) of Manila, Branch 37, in its Civil Case No. 9994075. In directly invoking the Courts original jurisdiction to issue the extraordinary writs of certiorari and prohibition, without challenge from any of the respondents, the Republic gave as justification therefor the fact that the case involves an over TWO BILLION PESO judgment against the State, allegedly rendered in blatant violation of the Constitution, law and jurisprudence.

Present:

PUNO, C.J.,Chairperson, versus SANDOVAL-GUTIERREZ, CORONA, AZCUNA, and GARCIA, JJ. HON. VICENTE A. HIDALGO, in his capacity as Presiding Judge of the Regional Trial Court of Manila, Branch 37, CARMELO V. CACHERO, in his capacity as Sheriff IV, Regional Trial Court of Manila, and TARCILA LAPERAL MENDOZA, Respondents.

By any standard, the case indeed involves a colossal sum of money which, on the face of the assailed decision, shall be the liability of the national government or, in fine, the taxpayers. This consideration, juxtaposed with the constitutional and legal questions surrounding the controversy, presents special and compelling reasons of public interests why direct recourse to the Court should be allowed, as an exception to the policy on hierarchy of courts. Promulgated: At the core of the litigation is a 4,924.60-square meter lot once covered by Transfer Certificate of Title (TCT) No. 118527 of the Registry of Deeds of Manila in the name of the herein private respondent Tarcila Laperal Mendoza (Mendoza), married to Perfecto Mendoza. The lot is situated at No. 1440 Arlegui St., San Miguel, Manila, near the Malacaang Palace complex. On this lot, hereinafter referred to as the Arlegui property, now stands the Presidential Guest House which was home to two (2) former Presidents of the Republic and now appears to be used as office building of the Office of the President.

October 4, 2007 x----------------------------------------------------------------------------------------x

DECISION The facts: GARCIA, J.:

Sometime in June 1999, Mendoza filed a suit with the RTC of Manila for reconveyance and the corresponding declaration of nullity of a deed of sale and title against the Republic, the Register of Deeds of Manila and one Atty. Fidel Vivar. In her complaint, as later amended, docketed as Civil Case No. 9994075 and eventually raffled to Branch 35 of the court, Mendoza essentially alleged being the owner of the disputed Arlegui property which the Republic forcibly dispossessed her of and over which the Register of Deeds of Manila issued TCT No. 118911 in the name of the Republic.

Answering, the Republic set up, among other affirmative defenses, the States immunity from suit.

The intervening legal tussles are not essential to this narration. What is material is that in an Order of March 17, 2000, the RTC of Manila, Branch 35, dismissed Mendozas complaint. The court would also deny, in another order dated May 12, 2000, Mendozas omnibus motion for reconsideration. On a petition for certiorari, however, the Court of Appeals (CA), in CA-G.R. SP No. 60749, reversed the trial courts assailed orders and remanded the case to the court a quo for further proceedings. On appeal, this Court, in G.R. No. 155231, sustained the CAs reversal action.

In her adverted third amended complaint for recovery and reconveyance of the Arlegui property, Mendoza sought the declaration of nullity of a supposed deed of sale dated July 15, 1975 which provided the instrumentation toward the issuance of TCT No. 118911 in the name of the Republic. And aside from the cancellation of TCT No. 118911, Mendoza also asked for the reinstatement of her TCT No. 118527. In the same third amended complaint, Mendoza averred that, since time immemorial, she and her predecessors-in-interest had been in peaceful and adverse possession of the property as well as of the owners duplicate copy of TCT No. 118527. Such possession, she added, continued until the first week of July 1975 when a group of armed men representing themselves to be members of the Presidential Security Group [PSG] of the then President Ferdinand E. Marcos, had forcibly entered [her] residence and ordered [her] to turn over to them her Copy of TCT No. 118525 and compelled her and the members of her household to vacate the same ; thus, out of fear for their lives, [she] handed her Owners Duplicate Certificate Copy of TCT No. 118527 and had left and/or vacated the subject property. Mendoza further alleged the following:

1. Per verification, TCT No. 118527 had already been cancelled by virtue of a deed of sale in favor of the Republic allegedly executed by her and her deceased husband on July 15, 1975 and acknowledged before Fidel Vivar which deed was annotated at the back of TCT No. 118527 under PE: 2035/T118911 dated July 28, 1975; and

From Branch 35 of the trial court whose then presiding judge inhibited himself from hearing the remanded Civil Case No. 99-94075, the case was reraffled to Branch 37 thereof, presided by the respondent judge.

2. That the aforementioned deed of sale is fictitious as she (Mendoza) and her husband have not executed any deed of conveyance covering the disputed property in favor of the Republic, let alone appearing before Fidel Vivar.

On May 5, 2003, Mendoza filed a Motion for Leave of Court to file a Third Amended Complaint with a copy of the intended third amended complaint thereto attached. In the May 16, 2003 setting to hear the motion, the RTC, in open court and in the presence of the Republics counsel, admitted the third amended complaint, ordered the Republic to file its answer thereto within five (5) days from May 16, 2003 and set a date for pre-trial.

Inter alia, she prayed for the following:

4. Ordering the Republic to pay plaintiff [Mendoza] a reasonable compensation or rental for the use or occupancy of the subject property in the

sum of FIVE HUNDRED THOUSAND (P500,000.00) PESOS a month with a five (5%) per cent yearly increase, plus interest thereon at the legal rate, beginning July 1975 until it finally vacates the same;

Eventually, the trial court rendered a judgment by default for Mendoza and against the Republic. To the trial court, the Republic had veritably confiscated Mendozas property, and deprived her not only of the use thereof but also denied her of the income she could have had otherwise realized during all the years she was illegally dispossessed of the same.

5. Ordering the Republic to pay plaintiffs counsel a sum equivalent to TWENTY FIVE (25%) PER CENT of the current value of the subject property and/or whatever amount is recovered under the premises; Further, plaintiff prays for such other relief, just and equitable under the premises.

Dated August 27, 2003, the trial courts decision dispositively reads as follows:

WHEREFORE, judgment is hereby rendered: On May 21, 2003, the Republic, represented by the OSG, filed a Motion for Extension (With Motion for Cancellation of scheduled pre-trial). In it, the Republic manifested its inability to simply adopt its previous answer and, accordingly, asked that it be given a period of thirty (30) days from May 21, 2003 or until June 20, 2003 within which to submit an Answer. June 20, 2003 came and went, but no answer was filed. On July 18, 2003 and again on August 19, 2003, the OSG moved for a 30-day extension at each instance. The filing of the last two motions for extension proved to be an idle gesture, however, since the trial court had meanwhile issued an order dated July 7, 2003 declaring the petitioner Republic as in default and allowing the private respondent to present her evidence ex-parte.

1. Declaring the deed of sale dated July 15, 1975, annotated at the back of [TCT] No. 118527 as PE:2035/T-118911, as non-existent and/or fictitious, and, therefore, null and void from the beginning;

2. Declaring that [TCT] No. 118911 of the defendant Republic of the Philippines has no basis, thereby making it null and void from the beginning;

The evidence for the private respondent, as plaintiff a quo, consisted of her testimony denying having executed the alleged deed of sale dated July 15, 1975 which paved the way for the issuance of TCT No. 118911. According to her, said deed is fictitious or inexistent, as evidenced by separate certifications, the first (Exh. E), issued by the Register of Deeds for Manila and the second (Exh. F), by the Office of Clerk of Court, RTC Manila. Exhibit E states that a copy of the supposed conveying deed cannot, despite diligent efforts of records personnel, be located, while Exhibit F states that Fidel Vivar was not a commissioned notary public for and in the City of Manila for the year 1975. Three other witnesses testified, albeit their testimonies revolved around the appraisal and rental values of the Arlegui property.

3. Ordering the defendant Register of Deeds for the City of Manila to reinstate plaintiff [Mendozas TCT] No. 118527;

4. Ordering the defendant Republic to pay just compensation in the sum of ONE HUNDRED FORTY THREE MILLION SIX HUNDRED THOUSAND (P143,600,000.00) PESOS, plus interest at the legal rate, until the whole amount is paid in full for the acquisition of the subject property;

5. Ordering the plaintiff, upon payment of the just compensation for the acquisition of her property, to execute the necessary deed of conveyance in favor of the defendant Republic ; and, on the other hand, directing the defendant Register of Deeds, upon presentation of the said deed of

conveyance, to cancel plaintiffs TCT No. 118527 and to issue, in lieu thereof, a new Transfer Certificate of Title in favor of the defendant Republic;

2. December 17, 2003 - - Order denying the Notice of Appeal filed on November 27, 2003, the same having been filed beyond the reglementary period.

6. Ordering the defendant Republic to pay the plaintiff the sum of ONE BILLION FOUR HUNDRED EIGHTY MILLION SIX HUNDRED TWENTY SEVEN THOUSAND SIX HUNDRED EIGHTY EIGHT (P1,480,627,688.00) PESOS, representing the reasonable rental for the use of the subject property, the interest thereon at the legal rate, and the opportunity cost at the rate of three (3%) per cent per annum, commencing July 1975 continuously up to July 30, 2003, plus an additional interest at the legal rate, commencing from this date until the whole amount is paid in full;

3. December 19, 2003 - - Order granting the private respondents motion for execution.

4.

December 22, 2003 - - Writ of Execution.

Hence, this petition for certiorari. 7. Ordering the defendant Republic to pay the plaintiff attorneys fee, in an amount equivalent to FIFTEEN (15%) PER CENT of the amount due to the plaintiff. With pronouncement as to the costs of suit.

SO ORDERED. (Words in bracket and emphasis added.)

By Resolution of November 20, 2006, the case was set for oral arguments. On January 22, 2007, when this case was called for the purpose, both parties manifested their willingness to settle the case amicably, for which reason the Court gave them up to February 28, 2007 to submit the compromise agreement for approval. Following several approved extensions of the February 28, 2007 deadline, the OSG, on August 6, 2007, manifested that it is submitting the case for resolution on the merits owing to the inability of the parties to agree on an acceptable compromise. In this recourse, the petitioner urges the Court to strike down as a nullity the trial courts order declaring it in default and the judgment by default that followed. Sought to be nullified, too, also on the ground that they were issued in grave abuse of discretion amounting to lack or in excess of jurisdiction, are the orders and processes enumerated immediately above issued after the rendition of the default judgment.

Subsequently, the Republic moved for, but was denied, a new trial per order of the trial court of October 7, 2003. Denied also was its subsequent plea for reconsideration. These twin denial orders were followed by several orders and processes issued by the trial court on separate dates as hereunder indicated:

1. November 27, 2003 - - Certificate of Finality declaring the August 27, 2003 decision final and executory.

Petitioner lists five (5) overlapping grounds for allowing its petition. It starts off by impugning the order of default and the judgment by default. To the petitioner, the respondent judge committed serious jurisdictional error when he proceeded to hear the case and eventually awarded the private respondent a staggering amount without so much as giving the petitioner the opportunity to present its defense.

Petitioners posture is simply without merit.

Deprivation of procedural due process is obviously the petitioners threshold theme. Due process, in its procedural aspect, guarantees in the minimum the opportunity to be heard. Grave abuse of discretion, however, cannot plausibly be laid at the doorstep of the respondent judge on account of his having issued the default order against the petitioner, then proceeding with the hearing and eventually rendering a default judgment. For, what the respondent judge did hew with what Section 3, Rule 9 of the Rules of Court prescribes and allows in the event the defending party fails to seasonably file a responsive pleading. The provision reads:

Under the premises, the mere issuance by the trial court of the order of default followed by a judgment by default can easily be sustained as correct and doubtless within its jurisdiction. Surely, a disposition directing the Republic to pay an enormous sum without the trial court hearing its side does not, without more, vitiate, on due procedural ground, the validity of the default judgment. The petitioner may have indeed been deprived of such hearing, but this does not mean that its right to due process had been violated. For, consequent to being declared in default, the defaulting defendant is deemed to have waived his right to be heard or to take part in the trial. The handling solicitors simply squandered the Republics opportunity to be heard. But more importantly, the law itself imposes such deprivation of the right to participate as a form of penalty against one unwilling without justification to join issue upon the allegations tendered by the plaintiff.

SEC. 3. Default; declaration of.- If the defending party fails to answer within the time allowed therefor, the court shall, upon motion of the claiming party with notice to the defending party, and proof of such failure, declare the defending party in default. Thereupon, the court shall proceed to render judgment granting the claimant such relief as his pleading may warrant, unless the court in its discretion requires the claimant to submit evidence .

And going to another point, the petitioner would ascribe jurisdictional error on the respondent judge for denying its motion for new trial based on any or a mix of the following factors, viz., (1) the failure to file an answer is attributable to the negligence of the former handling solicitor; (2) the meritorious nature of the petitioners defense; and (3) the value of the property involved.

While the ideal lies in avoiding orders of default, the policy of the law being to have every litigated case tried on its full merits, the act of the respondent judge in rendering the default judgment after an order of default was properly issued cannot be struck down as a case of grave abuse of discretion.

The term grave abuse of discretion, in its juridical sense, connotes capricious, despotic, oppressive or whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse must be of such degree as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, as where the power is exercised in a capricious manner. The word capricious, usually used in tandem with arbitrary, conveys the notion of willful and unreasoning action.

The Court is not convinced. Even as the Court particularly notes what the trial court had said on the matter of negligence: that all of the petitioners pleadings below bear at least three signatures, that of the handling solicitor, the assistant solicitor and the Solicitor General himself, and hence accountability should go up all the way to the top of the totem pole of authority, the cited reasons advanced by the petitioner for a new trial are not recognized under Section 1, Rule 37 of the Rules of Court for such recourse. Withal, there is no cogent reason to disturb the denial by the trial court of the motion for new trial and the denial of the reiterative motion for reconsideration.

Then, too, the issuance by the trial court of the Order dated December 17, 2003 denying the petitioners notice of appeal after the court caused the issuance on November 27, 2003 of a certificate of finality of its August 27, 2003 decision can hardly be described as arbitrary, as the petitioner would have this

Court believe. In this regard, the Court takes stock of the following key events and material dates set forth in the assailed December 17, 2003 order, supra: (a) The petitioner, thru the OSG, received on August 29, 2003 a copy of the RTC decision in this case, hence had up to September 13, 2003, a Saturday, within which to perfect an appeal; (b) On September 15, 2003, a Monday, the OSG filed its motion for new trial, which the RTC denied, the OSG receiving a copy of the order of denial on October 9, 2003; and (c) On October 24, 2003, the OSG sought reconsideration of the order denying the motion for new trial. The motion for reconsideration was denied per Order dated November 25, 2003, a copy of which the OSG received on the same date.

Given the foregoing time perspective, what the trial court wrote in its aforementioned impugned order of December 17, 2003 merits approval:

It cannot be over-emphasized at this stage that the special civil action of certiorari is limited to resolving only errors of jurisdiction; it is not a remedy to correct errors of judgment. Hence, the petitioners lament, partly covered by and discussed under the first ground for allowing its petition, about the trial court taking cognizance of the case notwithstanding private respondents claim or action being barred by prescription and/or laches cannot be considered favorably. For, let alone the fact that an action for the declaration of the inexistence of a contract, as here, does not prescribe; that a void transfer of property can be recovered by accion reivindicatoria; and that the legal fiction of indefeasibility of a Torrens title cannot be used as a shield to perpetuate fraud, the trial courts disinclination not to appreciate in favor of the Republic the general principles of prescription or laches constitutes, at best, errors of judgment not correctable by certiorari.

In the case at bar, it is clear that the motion for new trial filed on the fifteenth (15th) day after the decision was received on August 29, 2003 was denied and the moving party has only the remaining period from notice of notice of denial within which to file a notice of appeal. xxx

Accordingly, when defendants [Republic et al.] filed their motion for new trial on the last day of the fifteen day (15) prescribed for taking an appeal, which motion was subsequently denied, they had one (1) day from receipt of a copy of the order denying new trial within which to perfect [an] appeal . Since defendants had received a copy of the order denying their motion for new trial on 09 October 2003, reckoned from that date, they only have one (1) day left within which to file the notice of appeal. But instead of doing so, the defendants filed a motion for reconsideration which was later declared by the Court as pro forma motion in the Order dated 25 November 2003. The running of the prescriptive period, therefore, can not be interrupted by a pro forma motion. Hence the filing of the notice of appeal on 27 November 2007 came much too late for by then the judgment had already become final and executory. (Words in bracket added; Emphasis in the original.)

The evidence adduced below indeed adequately supports a conclusion that the Office of the President, during the administration of then President Marcos, wrested possession of the property in question and somehow secured a certificate of title over it without a conveying deed having been executed to legally justify the cancellation of the old title (TCT No. 118527) in the name of the private respondent and the issuance of a new one (TCT No. 118911) in the name of petitioner Republic. Accordingly, granting private respondents basic plea for recovery of the Arlegui property, which was legally hers all along, and the reinstatement of her cancelled certificate of title are legally correct as they are morally right. While not exactly convenient because the Office of the President presently uses it for mix residence and office purposes, restoring private respondent to her possession of the Arlegui property is still legally and physically feasible. For what is before us, after all, is a registered owner of a piece of land who, during the early days of the martial law regime, lost possession thereof to the Government which appropriated the same for some public use, but without going through the legal process of expropriation, let alone paying such owner just compensation.

The Court cannot, however, stop with just restoring the private respondent to her possession and ownership of her property. The restoration ought to be complemented by some form of monetary compensation for having been unjustly deprived of the beneficial use thereof, but not, however, in the varying amounts and level fixed in the assailed decision of the trial court and set to be executed by the equally assailed writ of execution. The Court

finds the monetary award set forth therein to be erroneous. And the error relates to basic fundamentals of law as to constitute grave abuse of discretion.

As may be noted, private respondent fixed the assessed value of her Arlegui property at P2,388,990.00. And in the prayer portion of her third amended complaint for recovery, she asked to be restored to the possession of her property and that the petitioner be ordered to pay her, as reasonable compensation or rental use or occupancy thereof, the sum of P500,000.00 a month, or P6 Million a year, with a five percent (5%) yearly increase plus interest at the legal rate beginning July 1975. From July 1975 when the PSG allegedly took over the subject property to July 2003, a month before the trial court rendered judgment, or a period of 28 years, private respondents total rental claim would, per the OSGs computation, only amount to P371,440,426.00. In its assailed decision, however, the trial court ordered the petitioner to pay private respondent the total amount of over P1.48 Billion or the mind-boggling amount of P1,480,627,688.00, to be exact, representing the reasonable rental for the property, the interest rate thereon at the legal rate and the opportunity cost. This figure is on top of the P143,600,000.00 which represents the acquisition cost of the disputed property. All told, the trial court would have the Republic pay the total amount of about P1.624 Billion, exclusive of interest, for the taking of a property with a declared assessed value of P2,388,900.00. This is not to mention the award of attorneys fees in an amount equivalent to 15% of the amount due the private respondent.

Given the above perspective, the obvious question that comes to mind is the level of compensation which for the use and occupancy of the Arlegui property - would be fair to both the petitioner and the private respondent and, at the same time, be within acceptable legal bounds. The process of balancing the interests of both parties is not an easy one. But surely, the Arlegui property cannot possibly be assigned, even perhaps at the present real estate business standards, a monthly rental value of at least P500,000.00 or P6,000,000.00 a year, the amount private respondent particularly sought and attempted to prove. This asking figure is clearly unconscionable, if not downright ridiculous, attendant circumstances considered. To the Court, an award of P20,000.00 a month for the use and occupancy of the Arlegui property, while perhaps a little bit arbitrary, is reasonable and may be granted pro hac vice considering the following hard realities which the Court takes stock of:

1. The property is relatively small in terms of actual area and had an assessed value of only P2,388,900.00; 2. What the martial law regime took over was not exactly an area with a new and imposing structure, if there was any; and

3. The Arlegui property had minimal rental value during the relatively long martial law years, given the very restrictive entry and egress conditions prevailing at the vicinity at that time and even after.

In doing so, the respondent judge brazenly went around the explicit command of Rule 9, Section 3(d) of the Rules of Court which defines the extent of the relief that may be awarded in a judgment by default, i.e., only so much as has been alleged and proved. The court acts in excess of jurisdiction if it awards an amount beyond the claim made in the complaint or beyond that proved by the evidence. While a defaulted defendant may be said to be at the mercy of the trial court, the Rules of Court and certainly the imperatives of fair play see to it that any decision against him must be in accordance with law. In the abstract, this means that the judgment must not be characterized by outrageous one-sidedness, but by what is fair, just and equitable that always underlie the enactment of a law.

To be sure, the grant of monetary award is not without parallel. In Alfonso v. Pasay City, a case where a registered owner also lost possession of a piece of lot to a municipality which took it for a public purposes without instituting expropriation proceedings or paying any compensation for the lot, the Court, citing Herrera v. Auditor General, ordered payment of just compensation but in the form of interest when a return of the property was no longer feasible.

The award of attorneys fees equivalent to 15% of the amount due the private respondent, as reduced herein, is affirmed.

certificate of title is AFFIRMED. Should it be necessary, the Register of Deeds of Manila shall execute the necessary conveying deed to effect the reinstatement of title or the issuance of a new title to her.

The assessment of costs of suit against the petitioner is, however, nullified, costs not being allowed against the Republic, unless otherwise provided by law.

The assailed trial courts issuance of the writ of execution against government funds to satisfy its money judgment is also nullified. It is basic that government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgments. Republic v. Palacio teaches that a judgment against the State generally operates merely to liquidate and establish the plaintiffs claim in the absence of express provision; otherwise, they can not be enforced by processes of law.

It is MODIFIED in the sense that for the use and occupancy of the Arlegui property, petitioner Republic is ordered to pay private respondent the reasonable amount of P20,000.00 a month beginning July 1975 until it vacates the same and the possession thereof restored to the private respondent, plus an additional interest of 6% per annum on the total amount due upon the finality of this Decision until the same is fully paid. Petitioner is further ordered to pay private respondent attorney's fees equivalent to 15% of the amount due her under the premises.

Accordingly, a writ of certiorari is hereby ISSUED in the sense that:

Albeit title to the Arlegui property remains in the name of the petitioner Republic, it is actually the Office of the President which has beneficial possession of and use over it since the 1975 takeover. Accordingly, and in accord with the elementary sense of justice, it behooves that office to make the appropriate budgetary arrangements towards paying private respondent what is due her under the premises. This, to us, is the right thing to do. The imperatives of fair dealing demand no less. And the Court would be remiss in the discharge of its duties as dispenser of justice if it does not exhort the Office of the President to comply with what, in law and equity, is its obligation. If the same office will undertake to pay its obligation with reasonable dispatch or in a manner acceptable to the private respondent, then simple justice, while perhaps delayed, will have its day. Private respondent is in the twilight of her life, being now over 90 years of age. Any delay in the implementation of this disposition would be a bitter cut.

1. The respondent courts assailed decision of August 27, 2003 insofar as it ordered the petitioner Republic of the Philippines to pay private respondent Tarcila L. Mendoza the sum of One Billion Four Hundred Eighty Million Six Hundred Twenty Seven Thousand Six Hundred Eighty Eight Pesos (P1,480,627,688.00) representing the purported rental use of the property in question, the interest thereon and the opportunity cost at the rate of 3% per annum plus the interest at the legal rate added thereon is nullified. The portion assessing the petitioner Republic for costs of suit is also declared null and void.

WHEREFORE, the decision of the Regional Trial Court of Manila dated August 27, 2003 insofar as it nullified TCT No. 118911 of petitioner Republic of the Philippines and ordered the Register of Deeds of Manila to reinstate private respondent Tarcila L. Mendozas TCT No. 118527, or to issue her a new

2. The Order of the respondent court dated December 19, 2003 for the issuance of a writ of execution and the Writ of Execution dated December 22, 2003 against government funds are hereby declared null and void. Accordingly, the presiding judge of the respondent court, the private respondent, their agents and persons acting for and in their behalves are permanently enjoined from enforcing said writ of execution.

However, consistent with the basic tenets of justice, fairness and equity, petitioner Republic, thru the Office of the President, is hereby strongly enjoined to take the necessary steps, and, with reasonable dispatch, make the appropriate budgetary arrangements to pay private respondent Tarcila L. Mendoza or her assigns the amount adjudged due her under this disposition.

SO ORDERED.

TERESITA M. YUJUICO, Petitioner,

G.R. No. 164282

Member, City School Board of Manila, LIBERTY TOLEDO, Member, City School Board of Manila,

Present:

HON. FRANCESCA GERNALE (In substitution of PERCIVAL FLORIENDO),

- versus PUNO, J., Chairman, AUSTRIA-MARTINEZ, HON. JOSE L. ATIENZA, JR., Chairman, City School Board of Manila, DR. MA. LUISA S. QUIONES, Co-Chairman, City School Board, and Schools Division Superintendent, ROGER GERNALE, Member, City School Board of Manila, HON. MANUEL M. ZARCAL, October 12, 2005 Promulgated: CALLEJO, SR., TINGA, and CHICO-NAZARIO, JJ.

Member, City School Board of Manila, ISABELITA SANTOS, Secretary, City School Board of Manila, VICENTE MACARUBBO (In substitution of Isabelita Ching), Assistant Secretary, City School Board of Manila, CITY SCHOOL BOARD OF MANILA and JUDGE MERCEDES POSADA-LACAP, in her capacity as PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF MANILA, BRANCH 15, Respondents. x-------------------------------------------------------------------x

(in substitution of ARLENE ORTIZ), Member, City School Board of Manila, BENJAMIN VALBUENA (In substitution of MILES ROCES),

DECISION Tinga, J.: This is a Petition for Review on Certiorari instituted by Teresita M. Yujuico, petitioner in the case for mandamus docketed as Civil Case No. 02103748 before the Regional Trial Court (RTC) of Manila, Branch 15. Petitioner is questioning the propriety of the Order[1] dated 25 June 2004, granting

respondents Petition for Relief from Judgment under Section 2, Rule 38 of the 1997 Rules of Civil Procedure. The operative facts are not disputed. On 8 December 1995, the City Council of Manila enacted an Ordinance[2] authorizing the City Mayor to acquire by negotiation or expropriation certain parcels of land for utilization as a site for the Francisco Benitez Elementary School.[3] The property chosen is located along Solis St. near Juan Luna St. in the Second District of Manila and contains an approximate area of 3,979.10 square meters. It is covered by Transfer Certificates of Title Nos. 71541, 71548, 24423, 71544 and 71546, all in the name of petitioner. The Ordinance provides that an amount not to exceed the fair market value of the land then prevailing in the area will be allocated out of the Special Education Fund (SEF) of the City of Manila (City) to defray the cost of the propertys acquisition.[4] Failing to acquire the land by negotiation, the City filed a case for eminent domain against petitioner as owner of the property. Filed on 22 August 1996, the case was raffled to Branch 15, RTC of Manila and docketed as Civil Case No. 96-79699.[5] On 30 June 2000, the RTC rendered a Decision[6] in the expropriation case in favor of the City. The dispositive portion reads: WHEREFORE, judgment is hereby rendered as follows: 1.) The lots including the improvements therein of defendant Teresita M. Yujuico, as described in the complaint, are declared expropriated for public use; 2.) The fair market value of the lots of defendant is fixed at P18,164.80 per square meter. The fair market value of the improvements of lots subject of this action is fixed at P 978,000.00; 3.) The plaintiff must pay defendant the sum of P72,279,555.68 (3,979.10 sq. m. x P18,164.80) representing the value of the subject lots plus P978,000.00 representing the value of the improvements or the total amount of P73,257,555.00 as just compensation for the whole property (including the improvements) minus the sum of P5,363,289.00 that plaintiff deposited in Court per Order dated April 30, 1997, hence the balance of P67,894,266.00 with interest at the rate of 6% per annum from July 15, 1997 (date of possession of subject property for the purpose of this proceedings) until the day full payment is made to defendant or deposited in Court.[7]

The judgment became final and executory, no appeal having been interposed by either party.[8] On 6 April 2001, petitioner filed a Motion for Execution of Judgment[9] which the trial court granted. Pursuant to a Writ of Execution[10] dated 28 June 2001, the branch sheriff served a Notice of Garnishment on the funds of the City deposited with the Land Bank of the Philippines, YMCA Branch, Manila (Land Bank) to satisfy the judgment amount of P67,894,226.00, with interest at 6% per annum.[11] Invoking jurisprudence holding that public funds cannot be made subject to garnishment, the City filed a motion to quash the Notice of Garnishment.[12] Acting on the motion, the trial court issued an Order dated 2 August 2001. In the Order, the lower court recalled that during the hearing on the motion, the counsel for the City manifested that the amount of P36,403,170.00 had been appropriated by the City School Board (CSB) under CSB Resolutions Nos. 613 and 623, of which P31,039,881.00 was available for release. The amount of P5,363,269.00, representing fifteen percent (15%) of the assessed value of the property, had been deposited in court at the start of the expropriation proceedings and subsequently received by petitioner. In line with the manifestation made by the counsel for the City, the trial court ordered the release to petitioner of the amount of P31,039,881.00 deposited with the Land Bank, in partial payment of the just compensation adjudged in favor of petitioner.[13] The trial court further stated in the Order: Considering that this case is on all fours with the case of the Municipality of Makati vs. Court of Appeals (190 SCRA 206), wherein it was ruled that x x x Public funds are not subject to levy and execution, the Court therefore grants plaintiffs Motion to Quash the Notice of Garnishment and the Notice of Garnishment to the Landbank of the Philippines issued by the Branch Sheriff of this Court is hereby ordered lifted. There being no opposition for the release of the Thirty One Million Thirty Nine Thousand Eight Hundred Eighty One Pesos (P31,039,881.00) deposited with the Land Bank, YMCA Branch as Special Education Fund, the Manager of the Landbank of the Philippines, YMCA, Manila is hereby directed to release the said amount to defendant Teresita M. Yujuico in partial payment of the just compensation adjudged by this Court in its Decision dated June 30, 2000.

Upon manifestation of the counsel for the plaintiff that it is the City School Board which has the authority to pass a resolution allocating funds for the full satisfaction of the just compensation fixed, the said body is hereby given thirty (30) days from receipt of this Order to pass the necessary resolution for the payments of the remaining balance due to defendant Teresita M. Yujuico.[14] A copy of the Order dated 2 August 2001 was served on the CSB on 3 August 2001.[15] On 30 August 2001, petitioner submitted a manifestation before the trial court requesting that she be informed by both the City and the CSB if a resolution had already been passed by the latter in compliance with the Order. [16] Earlier, petitioner sent a letter to the Superintendent of City Schools of Manila to verify the CSBs compliance with the Order.[17] Not having been favored with a reply to her queries even after the lapse of the thirty (30)-day compliance period, petitioner sent a letter to the CSB dated 10 September 2001, demanding compliance with the Order.[18] As there was no action from the CSB, on 1 February 2002, petitioner filed a petition for contempt of court against respondents Hon. Jose L. Atienza, Jr., Dr. Ma. Luisa S. Quioes, Roger Gernale, Arlene Ortiz, Miles Roces, Percival Floriendo, Liberty Toledo, Isabelita Santos and Isabelita Ching in their capacities as officers and members of the CSB.[19] The case was docketed as Civil Case No. 02-102837 of the Manila RTC.[20] Countering the petition for contempt, respondents filed a Motion to Dismiss,[21] wherein they alleged inter alia that they never disregarded the Order as the matter had in fact been calendared and deliberated upon during the meetings of the CSB.[22] In their subsequent Omnibus Reply,[23] respondents argued that petitioners failure to avail of the proper recourse to enforce the final and executory judgment[24] should not be a ground to hold them in contempt of court. Citing the case of Municipality of Makati v. Court of Appeals,[25] respondents asserted that petitioner should have filed a petition for mandamus to force the CSB to pass the necessary resolution for immediate payment of the balance of the just compensation awarded in her favor.[26] According to respondents, petitioner took the Order as a writ of mandamus when in fact it was a mere order in furtherance of the Writ of Execution.[27] This interpretation, respondents insisted, should never be allowed since petitioner merely wanted to escape the payment of docket fees in the filing of the petition for mandamus.[28]

In an Order[29] dated 17 May 2002, the trial court denied the petition for contempt of court. On 6 June 2002, petitioner filed a Petition for Mandamus[30] against the members of the CSB, the same respondents in the petition for contempt of court, seeking to compel them to pass a resolution appropriating the amount necessary to pay the balance of the just compensation awarded to petitioner in the expropriation case, Civil Case No. 96-79699. The petition was docketed as Spl. Civil Action No. 02-103748 and raffled to Branch 51 of the RTC of Manila. [31] Upon petitioners motion,[32] Branch 51 of the Manila RTC before which the mandamus case was pending, in an Order[33] dated 23 August 2002, directed its consolidation with the expropriation case before Branch 15.[34] In a Decision[35] dated 9 October 2002, the lower court (Branch 15) granted the petition for mandamus. Specifically, it ordered respondents to immediately pass a resolution appropriating the necessary amount and the corresponding disbursement thereof for the full and complete payment of the balance of the court-adjudged compensation still due petitioner, ratiocinating as follows:[36] This case is on all fours with the case of Municipality of Makati v. Court of Appeals (190 SCRA 206). .... The States power of eminent domain should be exercised within the bounds of fair play and justice. In the case at bar, considering that valuable property has been taken, the compensation to be paid fixed and the municipality is in full possession and utilizing the property for the public purpose, for three (3) years, the Court finds that the municipality has had more than reasonable time to pay full compensation. The arguments of the herein respondents that passing the ordinance or the act of appropriating special educational fund is a discretionary act that could not be compelled by mandamus should be thrown overboard. It must be stressed that what we have here is a final and executory judgment, establishing a legal right for the petitioner to demand fulfillment which on the other hand became an imperative duty on the part of the respondent to perform the act required. WHEREFORE, premises considered, the petition is GRANTED, and the respondents are hereby ordered to immediately pass a

resolution appropriating the necessary amount; and the corresponding disbursement thereof, for the full and complete payment of the remaining balance of the court-adjudged compensation due and owing to petitioner Teresita M. Yujuico.

Before resolving the substantive issues raised by the parties, the Court will first address the procedural infirmities ascribed by respondents to the petition at bar.

SO ORDERED.[37]

Respondents filed a motion for reconsideration, which the trial court denied in an Order[38] dated 13 December 2002.

Respondents assail the correctness and propriety of the mode of appeal resorted to by petitioner.[47] According to them, the order granting the petition for relief from judgment is an interlocutory order which cannot be made the subject of an appeal.[48] Respondents likewise argue that petitioner failed to respect the rule on hierarchy of courts. This Court, they aver, had consistently held that its original jurisdiction to issue a writ of certiorari is not exclusive but is concurrent with that of the RTC and the Court of Appeals in certain cases.[49]

With respondents not interposing an appeal, the Decision became final and executory on 2 January 2003[39] and eventually, the corresponding Entry of Judgment was issued on 15 January 2003.[40] The court granted petitioners Motion for Execution[41] in an Order[42] dated 12 March 2003.

However, on 14 March 2003, respondents filed a Petition for Relief from Judgment,[43] wherein they also prayed for a temporary restraining order (TRO) and a writ of preliminary injunction. Respondents invoked excusable negligence as a ground for their failure to seasonably file an appeal.[44] While it denied the application for TRO in view of its prior order granting petitioners Motion for Execution, the court granted the Petition for Relief from Judgment in an Order[45] dated 25 June 2004. This had the effect of giving due course to respondents appeal despite the fact that the decision of the trial court had already attained finality.

Respondents have correctly pointed out that an interlocutory order cannot be made subject to an appeal. However, when viewed in context, the recitals of the petition clearly disclose and the Court is convinced that the lower court committed grave abuse of discretion amounting to lack or excess of jurisdiction when it granted respondents petition for relief from judgment. While this case should have been elevated to this Court not by way of a petition for review under Rule 45 but through a special civil action for certiorari under Rule 65, in the exercise of our sound discretion and in order to write finis to this case which has needlessly dragged on for so long, we shall treat the petition as a special civil action for certiorari. After all, it was filed within the reglementary period for the filing of a Rule 65 petition. As we held in Salinas v. NLRC,[50] in the interest of justice, this Court has often judiciously treated petitions erroneously captioned as petitions for review on certiorari as special civil actions for certiorari. This is in line with the principle that the strict application of procedural technicalities should not hinder the speedy disposition of the case on the merits.[51]

Finding the Order unacceptable, petitioner elevated it to this Court by way of a petition for certiorari under Rule 45. In her petition, petitioner asks that the order of the lower court giving due course to respondents appeal be reversed and set aside on a pure question of law.[46]

Accordingly, facial allegations of reversible error in the petition will be treated, as they should be, as contextual averments of grave abuse of discretion on the part of the court a quo. Appropriately, petitioner impleaded the RTC Presiding Judge as party-respondent in the instant petition.

Anent the alleged breach of the rule on hierarchy of courts, the doctrine is not an iron-clad dictum.[52] The rule may be relaxed when exceptional and compelling circumstances warrant the exercise of this Courts primary jurisdiction.[53] In this case, the judgment sought to be satisfied has long attained finality and the expropriated property has been utilized as a school site for five (5) years now; yet, the awarded just compensation has not been fully paid. These circumstances, in the Courts estimation, merit the relaxation of the technical rules of procedure to ensure that substantial justice will be served.

Concerning petitioners alleged failure to implead the CSB or its new members before the trial court,[54] respondents argue that since there are five (5) new members in the CSB any decision in the case requiring the CSB to act as a body would prove to be legally impossible. The former members of the CSB could no longer be compelled to act according to the orders of the Court since they no longer have the capacity to do so. On the other hand, respondents continue, the new members cannot be directed to comply with the Courts judgment either; they have never been impleaded in the case; thus, the Court never acquired jurisdiction over their persons.[55]

In the same Resolution, the Court ordered the impleading of the new CSB members Roger Gernale, Manuel M. Zarcal, Benjamin Valbuena and Francesca Gernale as party respondentsthe last three in substitution of Arlene Ortiz, Percival Floriendo, Miles Rocesand the new CSB Assistant Secretary Vicente Macarubbo in substitution of Isabelita Ching.[57] Only Manuel Zarcal filed a Comment[58] dated 30 August 2005 through a new counsel, adopting in toto the comment of his co-respondents. Hence, the other four newly impleaded party respondents are deemed to have retained the Office of the City Legal Officer (OCLO) as their counsel and to have adopted the Comment already filed by the OCLO in behalf of their co-respondents.

Thus, the proper substitutions of some party respondents have already taken place in this case.

The arguments were effectively neutered in our Resolution dated 8 August 2005. There, we declared:

Considering the arguments posited by both parties, this Court is of the view that a substitution of the original respondents by the members of the CSB who replaced them is warranted. The phrase or such time as may be granted by the Court in Sec. 17, Rule 3 of the 1997 Rules of Civil Procedure denotes that the Court before whom the motion for substitution is filed may grant a period longer than thirty (30) days for the purpose. In any event, technical rules on substitution of a party should not be so narrowly construed as to prevent this Court from taking cognizance of a case and deciding it on the merits. Moreover, petitioner did make an attempt to implead the new members of the CSB by making the CSB itself a respondent before this Court. There is also no showing that the new members of the CSB have deviated from the stand of their predecessors-in-interest; hence, there is a substantial need for continuing or maintaining petitioners action against them.[56]

The last procedural hurdle thrown petitioners way by respondents refers to the supposed failure of the petition to comply with the requirements of Section 4, Rule 7 and Section 4, Rule 45 of the 1997 Rules of Civil Procedure[59] as amended by Supreme Court Circular A.M. No. 00-2-10-SC.[60] Respondents claim that there was failure to include a verified statement indicating the material dates relative to the receipt of the judgments and the filing of the pleadings. The verification, moreover, allegedly failed to state that petitioner has read the petition[61] and that the copies attached thereto are based on authentic records.[62] The defects of the verification allegedly render the petition without legal effect and constitute grounds for its dismissal.

The purpose of requiring a verification is to secure an assurance that the allegations of the petition have been made in good faith; or are true and correct, not merely speculative.[63] This requirement is simply a condition affecting the form of pleadings and non-compliance therewith does not necessarily render it fatally defective.[64] Perusal of the verification in question shows that there was sufficient compliance with the requirements of the Rules and the alleged defects are not so material as to justify the dismissal of the petition.

Now, the substantial issues.

Up for determination is the tenability of the RTCs favorable action on respondents petition for relief from judgment. This engenders a look at the grounds and defenses relied upon by respondents in support of their petition. Sections 2 and 3, Rule 38 of the 1997 Rules of Civil Procedure provide that a petition for relief may be granted upon a showing that (1) through fraud, accident, mistake or excusable negligence, a party has been prevented from taking an appeal, and (2) the party has a good and substantial cause of action or defense.

. . . The excuse offered by respondent . . . as reason for his failure to perfect in due time his appeal from the judgment of the Municipal Court, that counsels clerk forgot to hand him the court notice, is the most hackneyed and habitual subterfuge employed by litigants who fail to observe the procedural requirements prescribed by the Rules of Court. The uncritical acceptance of this kind of common-place excuses, in the face of the Supreme Courts repeated rulings that they are neither credible nor constitutive of excusable negligence (Gaerlan v. Bernal, L-4039, 29 January 1952; Mercado v. Judge Domingo, L-19457, 17 December 1966) is certainly such whimsical exercise of judgment as to be a grave abuse of discretion.

.... The above requisites notwithstanding, it bears stressing that relief from judgment is premised on equity. It is an act of grace which is allowed only in exceptional cases.[65]

In this case, according to respondents they were unable to seasonably file a notice of appeal due to excusable negligence.[66] One Ronald Silva (Silva), an employee of the OCLO, allegedly failed to forward the Order denying respondents motion for reconsideration in Civil Case No. 02-103748 to the handling lawyers. When the order was delivered to the OCLO on 17 December 2002,[67] Silva was the one who received it because the employee designated to do so was out on official business.[68] Since the employees were busy preparing for the office Christmas party that day,[69] Silva forgot all about the order. He only remembered it when the order for entry of judgment in the case was received on 29 January 2003. By that time, however, the order dated 17 December 2002 had already been misplaced.[70]

In the face of all these facts and circumstances, . . . the respondent judge revealed a simple-minded willingness to swallow a story patently concocted to delay as much as possible the satisfaction of a judgment against respondent . . . .This indiscriminating credulity does not conform to what is to be expected of a judicial mind.[72]

Clearly, the situation does not present a case of excusable negligence which would warrant relief under Rule 38. Time and again, this Court has ruled that the inability to perfect an appeal in due time by reason of failure of a counsels clerk to notify the handling lawyer is not a pardonable oversight.[71] As held in one case:

Reiterated in numerous cases is the rule that the clerks faults are attributable to the handling lawyers.[73] Thus, excuses offered based on the formers negligence are not deemed excusable. That the admonitions issued out by this Court were mostly directed against lawyers in law firms does not exempt respondents herein from the same treatment. For all intents and purposes, the set-up at the OCLO is akin to that of a law firm, the only difference being that the former serves a public entity while the latter caters to private clients. The following pronouncement in Negros Stevedoring Co., Inc. v. Court of Appeals[74] is apropos:

The negligence committed in the case at bar cannot be considered excusable, nor is it unavoidable. Time and again, the Court has admonished law firms to

adopt a system of distributing pleadings and notices, whereby lawyers working therein receive promptly notices and pleadings intended for them, so that they will always be informed of the status of their cases. The Court has also often repeated that the negligence of clerks which adversely affect the cases handled by lawyers is binding upon the latter.[75]

amount of Thirty Six Million Four Hundred Three Thousand One Hundred Seventy Pesos (P36,403,170.00) had been appropriated by the City School Board (CSB) under CSB Resolution Nos. 613 and 623 for this purpose.

....

Without doubt, it was grave abuse of discretion for the lower court to have given due course to respondents appeal through the grant of their petition for relief from judgment based on the flimsy ground they proferred.

Even assuming that the negligence invoked by respondents could be considered excusable, still the petition should not have been granted. It must be borne in mind that two requisites must be satisfied before a petition under Rule 38 may be granted, the other being the existence of a good and substantial cause of action or defense.

Upon manifestation of the counsel for the plaintiff that it is the City School Board which has the authority to pass a resolution allocating funds for the full satisfaction of the just compensation fixed, the said body is hereby given thirty (30) days from receipt of this Order to pass the necessary resolution for the payments of the remaining balance due to defendant Teresita M. Yujuico. (Emphasis supplied.)[77]

Respondents defense consisted of their claim that the CSB has a personality separate and distinct from the City such that it should not be made to pay for the Citys obligations.[76] However, the argument is undercut by the particular circumstances of this case.

The manifestation was made by the same counsel now claiming that it is actually the City which should be made liable for the payment of its own obligations. This, after it trotted out the CSB as the entity with authority to pass a resolution that would satisfy the obligation it had vigorously pursued.

It is worthy of note that the records of this case clearly show that the same counsel, the OCLO, represented the City in the expropriation case and now, all except one of the individual respondents in the case at bar. Worthy of note are the following manifestations relied upon by the lower court in issuing the order on the motion to quash the Notice of Garnishment over the funds of the City, to wit:

The above circumstances, coupled with the rule that an act performed by counsel within the scope of a general or implied authority is regarded as an act of the client,[78] render the City and, through it, respondents in estoppel. By estoppel is meant that an admission or representation is rendered conclusive upon the person making it and cannot be denied or disproved as against the person relying thereon.[79] Petitioner and the courts acted in accordance with the Citys own manifestations by running after the CSB. At this point, respondents and the OCLO can no longer turn around and toss the obligation back to the City. After all, it was the legal counsel of both the City and respondents who made a big production out of showing that the liability incurred by the City will be borne by the CSB.

The Motion to Quash Notice of Garnishment was heard by this court this morning and Atty. Joseph Aquino appeared for the plaintiff (City of Manila) and Atty. Federico Alday, for the defendant. Atty. Aquino manifested that the

Contrary to respondents claim, the law does not make the CSB an entity independent from the City of Manila. This is evident from the provisions of the Local Government Code of 1991, the law providing for the creation of school boards. It states:

the local school board concerned, subject to existing accounting and auditing rules and regulations.[80] The fact that the highest ranking official of a local government unit (LGU) is designated as co-chairman of the school board negates the claim in this case that the CSB has a personality separate and distinct from the City. The other fact that government officials in the school board do not receive any compensation or remuneration while NGO representatives merely receive allowances underscores the absurdity of respondents argument all the more. Indeed, such would not be the situation if the school board has a personality separate and distinct from the LGU. Respondents also argue that the members of the CSB cannot be directed to decide a discretionary function in the specific manner the court desires.[81] The question of whether the enactment of an ordinance to satisfy the appropriation of a final money judgment rendered against an LGU may be compelled by mandamus has already been settled in Municipality of Makati v. Court of Appeals.[82] Nevertheless, this is not to say that private respondent and PSB are left with no legal recourse. Where a municipality fails or refuses, without justifiable reason, to effect payment of a final money judgment rendered against it, the claimant may avail of the remedy of mandamus in order to compel the enactment and approval of the necessary appropriation ordinance, and the corresponding disbursement of municipal funds therefore [See Viuda De Tan Toco v. The Municipal Council of Iloilo, supra, Baldivia v. Lota, 107 Phil 1099 (1960); Yuviengco v. Gonzales, 108 Phil 247 (1960)].[83] Clearly, mandamus is a remedy available to a property owner when a money judgment is rendered in its favor and against a municipality or city, as in this case. Moreover, the very ordinance authorizing the expropriation of petitioners property categorically states that the payment of the expropriated property will be defrayed from the SEF. To quote:

TITLE IV.- LOCAL SCHOOL BOARDS

Section 98. Creation, Composition and Compensation.-

(a) There shall be established in every province, city or municipality a provincial, city, or municipal school board, respectively.

(b) shall be as follows: ...

The composition of local school boards

(2) The city school board shall be composed of the city mayor and the city superintendent of schools as co-chairmen; the chairman of the education committee of the sangguniang panlungsod, the city treasurer, the representative of the pederasyon ng mga sangguniang kabataan in the sangguniang panlungsod, the duly elected president of the city federation of parents-teachers associations, the duly elected representative of the nonacademic personnel of public schools in the city, as members; ...

Section 101. Compensation and Remuneration.The co-chairmen and members of the provincial, city or municipal school board shall perform their duties as such without compensation or remuneration. Members thereof who are not government officials or employees shall be entitled to traveling expenses and allowances chargeable against the funds of

An amount not to exceed the current fair market value, prevailing in the area appraised in accordance with the requirements of existing laws, rules and regulations, of the property to be acquired or so much thereof as may be necessary for the purpose shall be allocated out of the Special Education Fund of the City to defray the cost of acquisition of the above-mentioned parcels of land.[84]

The legality of the above-quoted provision is presumed. The source of the amount necessary to acquire petitioners property having in fact been specified by the City Council of Manila, the passage of the resolution for the allocation and disbursement thereof is indeed a ministerial duty of the CSB. Furthermore, respondents had argued in the petition for contempt filed against them by petitioner that the latters failure to invoke the proper remedy of mandamus should not be a ground to penalize them with contempt. In their haste to have the contempt petition dismissed, respondents consistently contended that what petitioner should have filed was a case for mandamus to compel passage of the corresponding resolution of the CSB if she wanted immediate payment.[85] Having relied on these representations of respondents and having filed the action they adverted to, petitioner cannot now be sent by respondents on another wild goose chase to obtain ultimate recovery of what she is legally entitled to. While this Court recognizes the power of LGU to expropriate private property for public use, it will not stand idly by while the expropriating authority maneuvers to evade the payment of just compensation of property already in its possession. The notion of expropriation is hard enough to take for a private owner. He is compelled to give up his property for the common weal. But to give it up and wait in vain for the just compensation decreed by the courts is too much to bear. In cases like these, courts will not hesitate to step in to ensure that justice and fair play are served. As we have already ruled: . . . This Court will not condone petitioners blatant refusal to settle its legal obligation arising from expropriation proceedings it had in fact initiated. It cannot be over-emphasized that within the context of the States inherent power of eminent domain, . . . (j)ust compensation means not only the correct determination of the amount to be paid to the owner of the land but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered just for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss (Consculluela v. The Honorable Court of Appeals, G.R. No. 77765, August 15, 1988, 164 SCRA 393, 400. See also Provincial Government of Sorsogon v. Vda. De Villaroya, G.R. No. 64037, August 27, 1987, 153 SCRA 291).[86]

The decision rendering just compensation in petitioners favor was promulgated way back in the year 2000.[87] Five years have passed, yet the award still has not been fully satisfied. Recently, in Republic v. Lim,[88] this Court made the following pronouncement: . . . while the prevailing doctrine is that the non-payment of just compensation does not entitle the private landowner to recover possession of the expropriated lots, however, in cases where the government failed to pay just compensation within five (5) years from the finality of judgment in the expropriation proceedings, the owners concerned shall have the right to recover possession of their property. This is in consonance with the principle that the government cannot keep the property and dishonor the judgment. To be sure, the five-year period limitation will encourage the government to pay just compensation punctually. This is in keeping with justice and equity. After all, it is the duty of the government, whenever it takes property from private persons against their will, to facilitate the payment of just compensation.[89] (Citations omitted) Given the above ruling, the reversion of the expropriated property to the petitioner would prove not to be a remote prospect should respondents and the City they represent insist on trudging on their intransigent course. One final note. Respondents appeal from the Decision dated 9 October 2002 of the lower court, made possible by its grant of their petition for relief, is before the Court of Appeals where it is docketed as CA-G.R. No. 86692.[90] The courts Decision in this case would have obvious consequences on said appeal; hence, referral of this Decision to the Court of Appeals is in order. WHEREFORE, the petition is GRANTED. The Order of the trial court dated 25 June 2004, granting respondents Petition for Relief from Judgment is REVERSED and set aside and its Decision dated 9 October 2002, ordering respondents to immediately pass a resolution for the payment of the balance of the court-adjudged compensation due petitioner, is reinstated. Let a copy of this Decision be furnished the Court of Appeals for its information and guidance in relation to CA-G.R. No. 86692 entitled Teresita M. Yujuico v. Hon. Jose L. Atienza, Jr., et al.

SO ORDERED.

DEUTSCHE GESELLSCHAFT FR TECHNISCHE ZUSAMMENARBEIT, also known as GERMAN AGENCY FOR TECHNICAL COOPERATION, (GTZ) HANS PETER PAULENZ and ANNE NICOLAY, Petitioners,

G.R. No. 152318 x----------------------------------------------------------------------------x Present: DECISION QUISUMBING, J., Chairperson, CARPIO MORALES, TINGA, Tinga, J.:

VELASCO, and - versus BRION, JJ.

Promulgated: HON. COURT OF APPEALS, HON. ARIEL CADIENTE SANTOS, Labor Arbiter of the Arbitration Branch, National Labor Relations Commission, and BERNADETTE CARMELLA MAGTAAS, CAROLINA DIONCO, CHRISTOPHER RAMOS, MELVIN DELA PAZ, RANDY TAMAYO and EDGARDO RAMILLO, Respondents. April 16, 2009

On 7 September 1971, the governments of the Federal Republic of Germany and the Republic of the Philippines ratified an Agreement concerning Technical Co-operation (Agreement) in Bonn, capital of what was then West Germany. The Agreement affirmed the countries common interest in promoting the technical and economic development of their States, and recogni[zed] the benefits to be derived by both States from closer technical cooperation, and allowed for the conclusion of arrangements concerning individual projects of technical co-operation. While the Agreement provided for a limited term of effectivity of five (5) years, it nonetheless was stated that [t]he Agreement shall be tacitly extended for successive periods of one year unless either of the two Contracting Parties denounces it in writing three months prior to its expiry, and that even upon the Agreements expiry, its provisions would continue to apply to any projects agreed upon x x x until their completion.

On 10 December 1999, the Philippine government, through then Foreign Affairs Secretary Domingo Siazon, and the German government, agreed to an Arrangement in furtherance of the 1971 Agreement. This Arrangement affirmed the common commitment of both governments to promote jointly a project called, Social Health InsuranceNetworking and Empowerment (SHINE), which was designed to enable Philippine familiesespecially poor onesto maintain their health and secure health care of sustainable quality. It appears that SHINE had already been in existence even prior to the effectivity of the Arrangement, though the record does not indicate when exactly SHINE was constituted. Nonetheless, the Arrangement stated the various obligations of the

Filipino and German governments. The relevant provisions of the Arrangement are reproduced as follows:

3. The Government of the Federal Republic of Germany shall make the following contributions to the project.

five local experts in health economy, health insurance, community health systems, information technology, information systems, training and community mobilization for a total of up to 240 expert/months,

It shall

local and auxiliary personnel for a total of up to 120 months;

(c) supply inputs, in particular (a) second one expert in health economy, insurance and health systems for up to 48 expert/months, two cross-country vehicles,

ten computers with accessories,

one expert in system development for up to 10 expert/months

office furnishings and equipment

short-term experts to deal with special tasks for a total of up to 18 expert/months,

up to a total value of DM 310,000 (three hundred and ten thousand Deutsche Mark);

project assistants/guest students as required, who shall work on the project as part of their basic and further training and assume specific project tasks under the separately financed junior staff promotion programme of the Deutsche Gesellschaft fr Technische Zusammenarbeit (GTZ);

(c)

meet

the cost of accommodation for the seconded experts and their families in so far as this cost is not met by the seconded experts themselves, (b) provide in situ the cost of official travel by the experts referred to in sub-paragraph (a) above within and outside the Republic of the Philippines,

short-term experts to deal with diverse special tasks for a total of up to 27 expert/months,

the cost of seminars and courses, -

ensure that the project field offices have sufficient expendables, make available the land and buildings required for the project;

the cost of transport and insurance to the project site of inputs to be supplied pursuant to sub-paragraph (c) above, excluding the charges and storage fees referred to in paragraph 4(d) below,

(b) assume an increasing proportion of the running and operating costs of the project; (c) afford the seconded experts any assistance they may require in carrying out the tasks assigned to them and place at their disposal all necessary records and documents; (d) guarantee that

a proportion of the operating and administrative costs;

xxx the project is provided with an itemized budget of its own in order to ensure smooth continuation of the project. 4. The Government of the Republic of the Philippines shall make the following contributions to the project: the necessary legal and administrative framework is created for the project, It shall the project is coordinated in close cooperation with other national and international agencies relevant to implementation,

(a) provide the necessary Philippine experts for the project, in particular one project coordinator in the Philippine Health Insurance Corporation (Philhealth), at least three further experts and a sufficient number of administrative and auxiliary personnel, as well as health personnel in the pilot provinces and in the other project partners, in particular one responsible expert for each pilot province and for each association representing the various target groups,

release suitably qualified experts from their duties for attendance at the envisaged basic and further training activities; it shall only nominate such candidates as have given an undertaking to work on the project for at least five years after completing their training and shall ensure that these Philippine experts receive appropriate remuneration,

the inputs supplied for the project on behalf of the Government of the Federal Republic of Germany are exempted from the cost of licenses, harbour dues, import and export duties and other public charges and fees, as well as storage fees, or that any costs thereof are met, and that they are cleared by customs without delay. The aforementioned exemptions shall, at the request of the implementing agencies also apply to inputs procured in the Republic of the Philippines,

the tasks of the seconded experts are taken over as soon as possible by Philippine experts,

examinations passed by Philippine nationals pursuant to this Arrangement are recognized in accordance with their respective standards and that the persons concerned are afforded such opportunities with regard to careers, appointments and advancement as are commensurate with their training.

In the arraignment, both governments likewise named their respective implementing organizations for SHINE. The Philippines designated the Department of Health (DOH) and the Philippine Health Insurance Corporation (Philhealth) with the implementation of SHINE. For their part, the German government charge[d] the Deustche Gesellschaft fr Technische Zusammenarbeit[] (GTZ[]) GmbH, Eschborn, with the implementation of its contributions.

adjustments, and the course Nicolay was taking in the implementation of SHINE different from her predecessors. The dispute culminated in a letter dated 8 June 2000, signed by the private respondents, addressed to Nicolay, and copies furnished officials of the DOH, Philheath, and the director of the Manila office of GTZ. The letter raised several issues which private respondents claim had been brought up several times in the past, but have not been given appropriate response. It was claimed that SHINE under Nicolay had veered away from its original purpose to facilitate the development of social health insurance by shoring up the national health insurance program and strengthening local initiatives, as Nicolay had refused to support local partners and new initiatives on the premise that community and local government unit schemes were not sustainablea philosophy that supposedly betrayed Nicolays lack of understanding of the purpose of the project. Private respondents further alleged that as a result of Nicolays new thrust, resources have been used inappropriately; that the new management style was not congruent with the original goals of the project; that Nicolay herself suffered from cultural insensitivity that consequently failed to sustain healthy relations with SHINEs partners and staff.

Private respondents were engaged as contract employees hired by GTZ to work for SHINE on various dates between December of 1998 to September of 1999. Bernadette Carmela Magtaas was hired as an information systems manager and project officer of SHINE; Carolina Dionco as a Project Assistant of SHINE; Christopher Ramos as a project assistant and liason personnel of NHI related SHINE activities by GTZ; Melvin Dela Paz and Randy Tamayo as programmers; and Edgardo Ramilo as driver, messenger and multipurpose service man. The employment contracts of all six private respondents all specified Dr. Rainer Tollkotter, identified as an adviser of GTZ, as the employer. At the same time, all the contracts commonly provided that [i]t is mutually agreed and understood that [Dr. Tollkotter, as employer] is a seconded GTZ expert who is hiring the Employee on behalf of GTZ and for a Philippine-German bilateral project named Social Health Insurance Networking and Empowerment (SHINE) which will end at a given time.

The letter ended with these ominous words:

The issues that we [the private respondents] have stated here are very crucial to us in working for the project. We could no longer find any reason to stay with the project unless ALL of these issues be addressed immediately and appropriately.

In September of 1999, Anne Nicolay (Nicolay), a Belgian national, assumed the post of SHINE Project Manager. Disagreements eventually arose between Nicolay and private respondents in matters such as proposed salary

In response, Nicolay wrote each of the private respondents a letter dated 21 June 2000, all similarly worded except for their respective addressees. She informed private respondents that the projects orientations and evolution were decided in consensus with partner institutions, Philhealth and the DOH, and thus no longer subject to modifications. More pertinently, she stated:

You have firmly and unequivocally stated in the last paragraph of your 8 th June 2000 letter that you and the five other staff could no longer find any reason to stay with the project unless ALL of these issues be addressed immediately and appropriately. Under the foregoing premises and circumstances, it is now imperative that I am to accept your resignation, which I expect to receive as soon as possible.

corporation which entered into an employment contract; and that GTZ had failed to secure from the DFA a certification as to its diplomatic status.

Taken aback, private respondents replied with a common letter, clarifying that their earlier letter was not intended as a resignation letter, but one that merely intended to raise attention to what they perceived as vital issues. Negotiations ensued between private respondents and Nicolay, but for naught. Each of the private respondents received a letter from Nicolay dated 11 July 2000, informing them of the pre-termination of their contracts of employment on the grounds of serious and gross insubordination, among others, resulting to loss of confidence and trust.

On 7 February 2001, GTZ filed with the Labor Arbiter a Reiterating Motion to Dismiss, again praying that the Motion to Dismiss be granted on the jurisdictional ground, and reprising the arguments for dismissal it had earlier raised. No action was taken by the Labor Arbiter on this new motion. Instead, on 15 October 2001, the Labor Arbiter rendered a Decision granting the complaint for illegal dismissal. The Decision concluded that respondents were dismissed without lawful cause, there being a total lack of due process both substantive and procedural [sic]. GTZ was faulted for failing to observe the notice requirements in the labor law. The Decision likewise proceeded from the premise that GTZ had treated the letter dated 8 June 2000 as a resignation letter, and devoted some focus in debunking this theory.

On 21 August 2000, the private respondents filed a complaint for illegal dismissal with the NLRC. Named as respondents therein where GTZ, the Director of its Manila office Hans Peter Paulenz, its Assistant Project Manager Christian Jahn, and Nicolay.

The Decision initially offered that it need not discuss the jurisdictional aspect considering that the same had already been lengthily discussed in the Order de[n]ying respondents Motion to Dismiss. Nonetheless, it proceeded to discuss the jurisdictional aspect, in this wise:

On 25 October 2005, GTZ, through counsel, filed a Motion to Dismiss, on the ground that the Labor Arbiter had no jurisdiction over the case, as its acts were undertaken in the discharge of the governmental functions and sovereign acts of the Government of the Federal Republic of Germany. This was opposed by private respondents with the arguments that GTZ had failed to secure a certification that it was immune from suit from the Department of Foreign Affairs, and that it was GTZ and not the German government which had implemented the SHINE Project and entered into the contracts of employment.

On 27 November 2000, the Labor Arbiter issued an Order denying the Motion to Dismiss. The Order cited, among others, that GTZ was a private

Under pain of being repetitious, the undersigned Labor Arbiter has jurisdiction to entertain the complaint on the following grounds:

Firstly, under the employment contract entered into between complainants and respondents, specifically Section 10 thereof, it provides that contract partners agree that his contract shall be subject to the LAWS of the jurisdiction of the locality in which the service is performed.

Director and the then Project Manager of GTZ in the Philippines; so we have to presume that the arguments raised in behalf of GTZs alleged immunity from suit extend to them as well.

Secondly, respondent having entered into contract, they can no longer invoke the sovereignty of the Federal Republic of Germany.

The Court required the Office of the Solicitor General (OSG) to file a Comment on the petition. In its Comment dated 7 November 2005, the OSG took the side of GTZ, with the prayer that the petition be granted on the ground that GTZ was immune from suit, citing in particular its assigned functions in implementing the SHINE programa joint undertaking of the Philippine and German governments which was neither proprietary nor commercial in nature.

Lastly, it is imperative to be immune from suit, respondents should have secured from the Department of Foreign Affairs a certification of respondents diplomatic status and entitlement to diplomatic privileges including immunity from suits. Having failed in this regard, respondents cannot escape liability from the shelter of sovereign immunity.[sic]

Notably, GTZ did not file a motion for reconsideration to the Labor Arbiters Decision or elevate said decision for appeal to the NLRC. Instead, GTZ opted to assail the decision by way of a special civil action for certiorari filed with the Court of Appeals. On 10 December 2001, the Court of Appeals promulgated a Resolution dismissing GTZs petition, finding that judicial recourse at this stage of the case is uncalled for[,] [t]he appropriate remedy of the petitioners [being] an appeal to the NLRC x x x. A motion for reconsideration to this Resolution proved fruitless for GTZ.

The Court of Appeals had premised the dismissal of GTZs petition on its procedural misstep in bypassing an appeal to NLRC and challenging the Labor Arbiters Decision directly with the appellate court by way of a Rule 65 petition. In dismissing the petition, the Court of Appeals relied on our ruling in Air Service Cooperative v. Court of Appeals. The central issue in that case was whether a decision of a Labor Arbiter rendered without jurisdiction over the subject matter may be annulled in a petition before a Regional Trial Court. That case may be differentiated from the present case, since the Regional Trial Court does not have original or appellate jurisdiction to review a decision rendered by a Labor Arbiter. In contrast, there is no doubt, as affirmed by jurisprudence, that the Court of Appeals has jurisdiction to review, by way of its original certiorari jurisdiction, decisions ruling on complaints for illegal dismissal.

Thus, the present petition for review under Rule 45, assailing the decision and resolutions of the Court of Appeals and of the Labor Arbiter. GTZs arguments center on whether the Court of Appeals could have entertained its petition for certiorari despite its not having undertaken an appeal before the NLRC; and whether the complaint for illegal dismissal should have been dismissed for lack of jurisdiction on account of GTZs insistence that it enjoys immunity from suit. No special arguments are directed with respect to petitioners Hans Peter Paulenz and Anne Nicolay, respectively the then

Nonetheless, the Court of Appeals is correct in pronouncing the general rule that the proper recourse from the decision of the Labor Arbiter is to first appeal the same to the NLRC. Air Services is in fact clearly detrimental to petitioners position in one regard. The Court therein noted that on account of the failure to correctly appeal the decision of the Labor Arbiter to the NLRC, such judgment consequently became final and executory. GTZ goes as far as to request that the Court re-examine Air Services, a suggestion that is needlessly improvident under the circumstances. Air Services affirms doctrines grounded in sound procedural rules that have allowed for the considered and orderly disposition of labor cases.

The OSG points out, citing Heirs of Mayor Nemencio Galvez v. Court of Appeals, that even when appeal is available, the Court has nonetheless allowed a writ of certiorari when the orders of the lower court were issued either in excess of or without jurisdiction. Indeed, the Court has ruled before that the failure to employ available intermediate recourses, such as a motion for reconsideration, is not a fatal infirmity if the ruling assailed is a patent nullity. This approach suggested by the OSG allows the Court to inquire directly into what is the main issuewhether GTZ enjoys immunity from suit.

The principle of state immunity from suit, whether a local state or a foreign state, is reflected in Section 9, Article XVI of the Constitution, which states that the State may not be sued without its consent. Who or what consists of the State? For one, the doctrine is available to foreign States insofar as they are sought to be sued in the courts of the local State, necessary as it is to avoid unduly vexing the peace of nations. If the instant suit had been brought directly against the Federal Republic of Germany, there would be no doubt that it is a suit brought against a State, and the only necessary inquiry is whether said State had consented to be sued. However, the present suit was brought against GTZ. It is necessary for us to understand what precisely are the parameters of the legal personality of GTZ.

The arguments raised by GTZ and the OSG are rooted in several indisputable facts. The SHINE project was implemented pursuant to the bilateral agreements between the Philippine and German governments. GTZ was tasked, under the 1991 agreement, with the implementation of the contributions of the German government. The activities performed by GTZ pertaining to the SHINE project are governmental in nature, related as they are to the promotion of health insurance in the Philippines. The fact that GTZ entered into employment contracts with the private respondents did not disqualify it from invoking immunity from suit, as held in cases such as Holy See v. Rosario, Jr., which set forth what remains valid doctrine: Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. Such an act can only be the start of the inquiry. The logical question is whether the foreign state is engaged in the activity in the regular course of business. If the foreign state is not engaged regularly in a business or trade, the particular act or transaction must then be tested by its nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure imperii, especially when it is not undertaken for gain or profit.

Counsel for GTZ characterizes GTZ as the implementing agency of the Government of the Federal Republic of Germany, a depiction similarly adopted by the OSG. Assuming that characterization is correct, it does not automatically invest GTZ with the ability to invoke State immunity from suit. The distinction lies in whether the agency is incorporated or unincorporated. The following lucid discussion from Justice Isagani Cruz is pertinent:

Where suit is filed not against the government itself or its officials but against one of its entities, it must be ascertained whether or not the State, as the principal that may ultimately be held liable, has given its consent to be sued. This ascertainment will depend in the first instance on whether the government agency impleaded is incorporated or unincorporated.

Beyond dispute is the tenability of the comment points raised by GTZ and the OSG that GTZ was not performing proprietary functions notwithstanding its entry into the particular employment contracts. Yet there is an equally fundamental premise which GTZ and the OSG fail to address, namely: Is GTZ, by conception, able to enjoy the Federal Republics immunity from suit?

An incorporated agency has a charter of its own that invests it with a separate juridical personality, like the Social Security System, the University of the Philippines, and the City of Manila. By contrast, the unincorporated agency is so called because it has no separate juridical personality but is merged in the general machinery of the government, like the Department of Justice, the Bureau of Mines and the Government Printing Office.

If the agency is incorporated, the test of its suability is found in its charter. The simple rule is that it is suable if its charter says so, and this is true regardless of the functions it is performing. Municipal corporations, for example, like provinces and cities, are agencies of the State when they are engaged in governmental functions and therefore should enjoy the sovereign immunity from suit. Nevertheless, they are subject to suit even in the performance of such functions because their charter provides that they can sue and be sued.

functions thus becomes unnecessary to belabor. For by that waiver, a private citizen may bring a suit against it for varied objectives, such as, in this case, to obtain compensation in damages arising from contract, and even for tort.

A recent case squarely in point anent the principle, involving the National Power Corporation, is that of Rayo v. Court of First Instance of Bulacan, 110 SCRA 457 (1981), wherein this Court, speaking through Mr. Justice Vicente Abad Santos, ruled:

State special law government government suit, owing

immunity from suit may be waived by general or special law. The can take the form of the original charter of the incorporated agency. Jurisprudence is replete with examples of incorporated agencies which were ruled not entitled to invoke immunity from to provisions in their

charters manifesting their consent to be sued. These include the National Irrigation Administration, the former Central Bank, and the National Power Corporation. In SSS v. Court of Appeals, the Court through Justice MelencioHerrera explained that by virtue of an express provision in its charter allowing it to sue and be sued, the Social Security System did not enjoy immunity from suit:

"It is not necessary to write an extended dissertation on whether or not the NPC performs a governmental function with respect to the management and operation of the Angat Dam. It is sufficient to say that the government has organized a private corporation, put money in it and has allowed it to sue and be sued in any court under its charter. (R.A. No. 6395, Sec. 3[d]). As a government, owned and controlled corporation, it has a personality of its own, distinct and separate from that of the Government. Moreover, the charter provision that the NPC can 'sue and be sued in any court' is without qualification on the cause of action and accordingly it can include a tort claim such as the one instituted by the petitioners."

We come now to the amendability of the SSS to judicial action and legal responsibility for its acts. To our minds, there should be no question on this score considering that the SSS is a juridical entity with a personality of its own. It has corporate powers separate and distinct from the Government. SSS' own organic act specifically provides that it can sue and be sued in Court. These words "sue and be sued" embrace all civil process incident to a legal action. So that, even assuming that the SSS, as it claims, enjoys immunity from suit as an entity performing governmental functions, by virtue of the explicit provision of the aforecited enabling law, the Government must be deemed to have waived immunity in respect of the SSS, although it does not thereby concede its liability. That statutory law has given to the private citizen a remedy for the enforcement and protection of his rights. The SSS thereby has been required to submit to the jurisdiction of the Courts, subject to its right to interpose any lawful defense. Whether the SSS performs governmental or proprietary

It is useful to note that on the part of the Philippine government, it had designated two entities, the Department of Health and the Philippine Health Insurance Corporation (PHIC), as the implementing agencies in behalf of the Philippines. The PHIC was established under Republic Act No. 7875, Section 16(g) of which grants the corporation the power to sue and be sued in court. Applying the previously cited jurisprudence, PHIC would not enjoy immunity from suit even in the performance of its functions connected with SHINE, however, governmental in nature as they may be.

Is GTZ an incorporated agency of the German government? There is some mystery surrounding that question. Neither GTZ nor the OSG go beyond the claim that petitioner is the implementing agency of the Government of the Federal Republic of Germany. On the other hand, private respondents

asserted before the Labor Arbiter that GTZ was a private corporation engaged in the implementation of development projects. The Labor Arbiter accepted that claim in his Order denying the Motion to Dismiss, though he was silent on that point in his Decision. Nevertheless, private respondents argue in their Comment that the finding that GTZ was a private corporation was never controverted, and is therefore deemed admitted. In its Reply, GTZ controverts that finding, saying that it is a matter of public knowledge that the status of petitioner GTZ is that of the implementing agency, and not that of a private corporation.

GTZ is a federal enterprise based in Eschborn near Frankfurt am Main. It was founded in 1975 as a company under private law. The German Federal Ministry for Economic Cooperation and Development (BMZ) is its major client. The company also operates on behalf of other German ministries, the governments of other countries and international clients, such as the European Commission, the United Nations and the World Bank, as well as on behalf of private enterprises. GTZ works on a public-benefit basis. All surpluses generated are channeled [sic] back into its own international cooperation projects for sustainable development. GTZs own website elicits that petitioner is federally owned, a federal enterprise, and founded in 1975 as a company under private law. GTZ clearly has a very meaningful relationship with the Federal Republic of Germany, which apparently owns it. At the same time, it appears that GTZ was actually organized not through a legislative public charter, but under private law, in the same way that Philippine corporations can be organized under the Corporation Code even if fully owned by the Philippine government.

In truth, private respondents were unable to adduce any evidence to substantiate their claim that GTZ was a private corporation, and the Labor Arbiter acted rashly in accepting such claim without explanation. But neither has GTZ supplied any evidence defining its legal nature beyond that of the bare descriptive implementing agency. There is no doubt that the 1991 Agreement designated GTZ as the implementing agency in behalf of the German government. Yet the catch is that such term has no precise definition that is responsive to our concerns. Inherently, an agent acts in behalf of a principal, and the GTZ can be said to act in behalf of the German state. But that is as far as implementing agency could take us. The term by itself does not supply whether GTZ is incorporated or unincorporated, whether it is owned by the German state or by private interests, whether it has juridical personality independent of the German government or none at all.

GTZ itself provides a more helpful clue, inadvertently, through its own official Internet website. In the Corporate Profile section of the English language version of its site, GTZ describes itself as follows:

This self-description of GTZ in its own official website gives further cause for pause in adopting petitioners argument that GTZ is entitled to immunity from suit because it is an implementing agency. The above-quoted statement does not dispute the characterization of GTZ as an implementing agency of the Federal Republic of Germany, yet it bolsters the notion that as a company organized under private law, it has a legal personality independent of that of the Federal Republic of Germany.

The Federal Republic of Germany, in its own official website, also makes reference to GTZ and describes it in this manner: As an international cooperation enterprise for sustainable development with worldwide operations, the federally owned Deutsche Gesellschaft fr Technische Zusammenarbeit (GTZ) GmbH supports the German Government in achieving its development-policy objectives. It provides viable, forwardlooking solutions for political, economic, ecological and social development in a globalised world. Working under difficult conditions, GTZ promotes complex reforms and change processes. Its corporate objective is to improve peoples living conditions on a sustainable basis. x x x Going by the principle of sustainable development, the German Technical Cooperation (Deutsche Gesellschaft fr Technische Zusammenarbeit GmbH, GTZ) takes on non-profit projects in international technical cooperation. The GTZ is a private company owned by the Federal Republic of Germany.

Again, we are uncertain of the corresponding legal implications under German law surrounding a private company owned by the Federal Republic of Germany. Yet taking the description on face value, the apparent equivalent under Philippine law is that of a corporation organized under the Corporation Code but owned by the Philippine government, or a government-owned or controlled corporation without original charter. And it bears notice that Section 36 of the Corporate Code states that [e]very corporation incorporated under this Code has the power and capacity x x x to sue and be sued in its corporate name.

In Public International Law, when a state or international agency wishes to plead sovereign or diplomatic immunity in a foreign court, it requests the Foreign Office of the state where it is sued to convey to the court that said defendant is entitled to immunity.

It is entirely possible that under German law, an entity such as GTZ or particularly GTZ itself has not been vested or has been specifically deprived the power and capacity to sue and/or be sued. Yet in the proceedings below and before this Court, GTZ has failed to establish that under German law, it has not consented to be sued despite it being owned by the Federal Republic of Germany. We adhere to the rule that in the absence of evidence to the contrary, foreign laws on a particular subject are presumed to be the same as those of the Philippines, and following the most intelligent assumption we can gather, GTZ is akin to a governmental owned or controlled corporation without original charter which, by virtue of the Corporation Code, has expressly consented to be sued. At the very least, like the Labor Arbiter and the Court of Appeals, this Court has no basis in fact to conclude or presume that GTZ enjoys immunity from suit.

In the United States, the procedure followed is the process of "suggestion," where the foreign state or the international organization sued in an American court requests the Secretary of State to make a determination as to whether it is entitled to immunity. If the Secretary of State finds that the defendant is immune from suit, he, in turn, asks the Attorney General to submit to the court a "suggestion" that the defendant is entitled to immunity. In England, a similar procedure is followed, only the Foreign Office issues a certification to that effect instead of submitting a "suggestion" (O'Connell, I International Law 130 [1965]; Note: Immunity from Suit of Foreign Sovereign Instrumentalities and Obligations, 50 Yale Law Journal 1088 [1941]).

This absence of basis in fact leads to another important point, alluded to by the Labor Arbiter in his rulings. Our ruling in Holy See v. Del Rosario provided a template on how a foreign entity desiring to invoke State immunity from suit could duly prove such immunity before our local courts. The principles enunciated in that case were derived from public international law. We stated then:

In the Philippines, the practice is for the foreign government or the international organization to first secure an executive endorsement of its claim of sovereign or diplomatic immunity. But how the Philippine Foreign Office conveys its endorsement to the courts varies. In International Catholic Migration Commission v. Calleja, 190 SCRA 130 (1990), the Secretary of Foreign Affairs just sent a letter directly to the Secretary of Labor and Employment, informing the latter that the respondent-employer could not be sued because it enjoyed diplomatic immunity. In World Health Organization v. Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial court a telegram to that effect. In Baer v. Tizon, 57 SCRA 1 (1974), the U.S. Embassy asked the Secretary of Foreign Affairs to request the Solicitor General to make, in behalf of the Commander of the United States Naval Base at Olongapo City, Zambales, a "suggestion" to respondent Judge. The Solicitor General embodied the "suggestion" in a Manifestation and Memorandum as amicus curiae.

It is to be recalled that the Labor Arbiter, in both of his rulings, noted that it was imperative for petitioners to secure from the Department of Foreign

Affairs a certification of respondents diplomatic status and entitlement to diplomatic privileges including immunity from suits. The requirement might not necessarily be imperative. However, had GTZ obtained such certification from the DFA, it would have provided factual basis for its claim of immunity that would, at the very least, establish a disputable evidentiary presumption that the foreign party is indeed immune which the opposing party will have to overcome with its own factual evidence. We do not see why GTZ could not have secured such certification or endorsement from the DFA for purposes of this case. Certainly, it would have been highly prudential for GTZ to obtain the same after the Labor Arbiter had denied the motion to dismiss. Still, even at this juncture, we do not see any evidence that the DFA, the office of the executive branch in charge of our diplomatic relations, has indeed endorsed GTZs claim of immunity. It may be possible that GTZ tried, but failed to secure such certification, due to the same concerns that we have discussed herein.

enough of the endorsement by the Foreign Office. We do not find a similar circumstance that bears here.

The Court is thus holds and so rules that GTZ consistently has been unable to establish with satisfaction that it enjoys the immunity from suit generally enjoyed by its parent country, the Federal Republic of Germany. Consequently, both the Labor Arbiter and the Court of Appeals acted within proper bounds when they refused to acknowledge that GTZ is so immune by dismissing the complaint against it. Our finding has additional ramifications on the failure of GTZ to properly appeal the Labor Arbiters decision to the NLRC. As pointed out by the OSG, the direct recourse to the Court of Appeals while bypassing the NLRC could have been sanctioned had the Labor Arbiters decision been a patent nullity. Since the Labor Arbiter acted properly in deciding the complaint, notwithstanding GTZs claim of immunity, we cannot see how the decision could have translated into a patent nullity.

Would the fact that the Solicitor General has endorsed GTZs claim of States immunity from suit before this Court sufficiently substitute for the DFA certification? Note that the rule in public international law quoted in Holy See referred to endorsement by the Foreign Office of the State where the suit is filed, such foreign office in the Philippines being the Department of Foreign Affairs. Nowhere in the Comment of the OSG is it manifested that the DFA has endorsed GTZs claim, or that the OSG had solicited the DFAs views on the issue. The arguments raised by the OSG are virtually the same as the arguments raised by GTZ without any indication of any special and distinct perspective maintained by the Philippine government on the issue. The Comment filed by the OSG does not inspire the same degree of confidence as a certification from the DFA would have elicited.

As a result, there was no basis for petitioners in foregoing the appeal to the NLRC by filing directly with the Court of Appeals the petition for certiorari. It then follows that the Court of Appeals acted correctly in dismissing the petition on that ground. As a further consequence, since petitioners failed to perfect an appeal from the Labor Arbiters Decision, the same has long become final and executory. All other questions related to this case, such as whether or not private respondents were illegally dismissed, are no longer susceptible to review, respecting as we do the finality of the Labor Arbiters Decision.

Holy See made reference to Baer v. Tizon, and that in the said case, the United States Embassy asked the Secretary of Foreign Affairs to request the Solicitor General to make a suggestion to the trial court, accomplished by way of a Manifestation and Memorandum, that the petitioner therein enjoyed immunity as the Commander of the Subic Bay Naval Base. Such circumstance is actually not narrated in the text of Baer itself and was likely supplied in Holy See because its author, Justice Camilio Quiason, had appeared as the Solicitor in behalf of the OSG in Baer. Nonetheless, as narrated in Holy See, it was the Secretary of Foreign Affairs which directed the OSG to intervene in behalf of the United States government in the Baer case, and such fact is manifest

A final note. This decision should not be seen as deviation from the more common methodology employed in ascertaining whether a party enjoys State immunity from suit, one which focuses on the particular functions exercised by the party and determines whether these are proprietary or sovereign in nature. The nature of the acts performed by the entity invoking immunity remains the most important barometer for testing whether the privilege of State immunity from suit should apply. At the same time, our Constitution stipulates that a State immunity from suit is conditional on its withholding of consent; hence, the laws and circumstances pertaining to the creation and legal personality of an instrumentality or agency invoking immunity remain relevant. Consent to be

sued, as exhibited in this decision, is often conferred by the very same statute or general law creating the instrumentality or agency.

WHEREFORE, the petition is DENIED. No pronouncement as to costs.

SO ORDERED.

G.R. No. 169777*

April 20, 2006

SENATE OF THE PHILIPPINES, represented by FRANKLIN M. DRILON, in his capacity as Senate President, JUAN M. FLAVIER, in his capacity as Senate President Pro Tempore, FRANCIS N. PANGILINAN, in his capacity as Majority Leader, AQUILINO Q. PIMENTEL, JR., in his capacity as Minority Leader, SENATORS RODOLFO G. BIAZON, "COMPANERA" PIA S. CAYETANO, JINGGOY EJERCITO ESTRADA, LUISA "LOI" EJERCITO ESTRADA, JUAN PONCE ENRILE, RICHARD J. GORDON, PANFILO M. LACSON, ALFREDO S.LIM, M. A. MADRIGAL, SERGIO OSMENA III, RALPH G. RECTO, and MAR ROXAS, Petitioners, vs. EDUARDO R. ERMITA, in his capacity as Executive Secretary and alterego of President Gloria Macapagal-Arroyo, and anyone acting in his stead and in behalf of the President of the Philippines, Respondents. x-------------------------x G.R. No. 169659 April 20, 2006

ALTERNATIVE LAW GROUPS, INC. (ALG), Petitioner, vs. HON. EDUARDO R. ERMITA, in his capacity as Executive Secretary, Respondent. x-------------------------x G.R. No. 169834 April 20, 2006

PDPLABAN, Petitioner, vs. EXECUTIVE SECRETARY EDUARDO R. ERMITA, Respondent. x-------------------------x G.R. No. 171246 April 20, 2006

BAYAN MUNA represented by DR. REYNALDO LESACA, JR., Rep. SATUR OCAMPO, Rep. CRISPIN BELTRAN, Rep. RAFAEL MARIANO, Rep. LIZA MAZA, Rep. TEODORO CASINO, Rep. JOEL VIRADOR, COURAGE represented by FERDINAND GAITE, and COUNSELS FOR THE DEFENSE OF LIBERTIES (CODAL) represented by ATTY. REMEDIOS BALBIN, Petitioners, vs. EDUARDO ERMITA, in his capacity as Executive Secretary and alter-ego of President Gloria Macapagal-Arroyo, Respondent. x-------------------------x G.R. No. 169660 April 20, 2006

JOSE ANSELMO I. CADIZ, FELICIANO M. BAUTISTA, ROMULO R. RIVERA, JOSE AMOR AMORANDO, ALICIA A. RISOS-VIDAL, FILEMON C. ABELITA III, MANUEL P. LEGASPI, J. B. JOVY C. BERNABE, BERNARD L. DAGCUTA, ROGELIO V. GARCIA, and the INTEGRATED BAR FOR THE PHILIPPINES, Petitioners, vs. HON. EXECUTIVE SECRETARY EDUARDO R. ERMITA, Respondent. DECISION CARPIO MORALES, J.: A transparent government is one of the hallmarks of a truly republican state. Even in the early history of republican thought, however, it has been recognized that the head of government may keep certain information confidential in pursuit of the public interest. Explaining the reason for vesting executive power in only one magistrate, a distinguished delegate to the U.S. Constitutional Convention said: "Decision, activity, secrecy, and dispatch will generally characterize the proceedings of one man, in a much more eminent degree than the proceedings of any greater number; and in proportion as the number is increased, these qualities will be diminished."1 History has been witness, however, to the fact that the power to withhold information lends itself to abuse, hence, the necessity to guard it zealously.

FRANCISCO I. CHAVEZ, Petitioner, vs. EDUARDO R. ERMITA, in his capacity as Executive Secretary, AVELINO J. CRUZ, JR., in his capacity as Secretary of Defense, and GENEROSO S. SENGA, in his capacity as AFP Chief of Staff, Respondents. x-------------------------x G.R. No. 169667 April 20, 2006

The present consolidated petitions for certiorari and prohibition proffer that the President has abused such power by issuing Executive Order No. 464 (E.O. 464) last September 28, 2005. They thus pray for its declaration as null and void for being unconstitutional. In resolving the controversy, this Court shall proceed with the recognition that the issuance under review has come from a co-equal branch of government, which thus entitles it to a strong presumption of constitutionality. Once the challenged order is found to be indeed violative of the Constitution, it is dutybound to declare it so. For the Constitution, being the highest expression of the sovereign will of the Filipino people, must prevail over any issuance of the government that contravenes its mandates. In the exercise of its legislative power, the Senate of the Philippines, through its various Senate Committees, conducts inquiries or investigations in aid of legislation which call for, inter alia, the attendance of officials and employees of the executive department, bureaus, and offices including those employed in Government Owned and Controlled Corporations, the Armed Forces of the Philippines (AFP), and the Philippine National Police (PNP). On September 21 to 23, 2005, the Committee of the Senate as a whole issued invitations to various officials of the Executive Department for them to appear on September 29, 2005 as resource speakers in a public hearing on the railway project of the North Luzon Railways Corporation with the China National Machinery and Equipment Group (hereinafter North Rail Project). The public hearing was sparked by a privilege speech of Senator Juan Ponce Enrile urging the Senate to investigate the alleged overpricing and other unlawful provisions of the contract covering the North Rail Project. The Senate Committee on National Defense and Security likewise issued invitations2 dated September 22, 2005 to the following officials of the AFP: the Commanding General of the Philippine Army, Lt. Gen. Hermogenes C. Esperon; Inspector General of the AFP Vice Admiral Mateo M. Mayuga; Deputy Chief of Staff for Intelligence of the AFP Rear Admiral Tirso R. Danga; Chief of the Intelligence Service of the AFP Brig. Gen. Marlu Q. Quevedo; Assistant Superintendent of the Philippine Military Academy (PMA) Brig. Gen. Francisco V. Gudani; and Assistant Commandant, Corps of Cadets of the PMA, Col. Alexander F. Balutan, for them to attend as resource persons in a public hearing scheduled on September 28, 2005 on the following: (1) Privilege Speech of Senator Aquilino Q. Pimentel Jr., delivered on June 6, 2005 entitled "Bunye has Provided Smoking Gun or has Opened a Can of Worms that Show Massive Electoral Fraud in the Presidential Election of May 2005"; (2) Privilege

Speech of Senator Jinggoy E. Estrada delivered on July 26, 2005 entitled "The Philippines as the Wire-Tapping Capital of the World"; (3) Privilege Speech of Senator Rodolfo Biazon delivered on August 1, 2005 entitled "Clear and Present Danger"; (4) Senate Resolution No. 285 filed by Senator Maria Ana Consuelo Madrigal Resolution Directing the Committee on National Defense and Security to Conduct an Inquiry, in Aid of Legislation, and in the National Interest, on the Role of the Military in the So-called "Gloriagate Scandal"; and (5) Senate Resolution No. 295 filed by Senator Biazon Resolution Directing the Committee on National Defense and Security to Conduct an Inquiry, in Aid of Legislation, on the Wire-Tapping of the President of the Philippines. Also invited to the above-said hearing scheduled on September 28 2005 was the AFP Chief of Staff, General Generoso S. Senga who, by letter3 dated September 27, 2005, requested for its postponement "due to a pressing operational situation that demands [his utmost personal attention" while "some of the invited AFP officers are currently attending to other urgent operational matters." On September 28, 2005, Senate President Franklin M. Drilon received from Executive Secretary Eduardo R. Ermita a letter4 dated September 27, 2005 "respectfully request[ing] for the postponement of the hearing [regarding the NorthRail project] to which various officials of the Executive Department have been invited" in order to "afford said officials ample time and opportunity to study and prepare for the various issues so that they may better enlighten the Senate Committee on its investigation." Senate President Drilon, however, wrote5 Executive Secretary Ermita that the Senators "are unable to accede to [his request]" as it "was sent belatedly" and "[a]ll preparations and arrangements as well as notices to all resource persons were completed [the previous] week." Senate President Drilon likewise received on September 28, 2005 a letter6 from the President of the North Luzon Railways Corporation Jose L. Cortes, Jr. requesting that the hearing on the NorthRail project be postponed or cancelled until a copy of the report of the UP Law Center on the contract agreements relative to the project had been secured. On September 28, 2005, the President issued E.O. 464, "Ensuring Observance of the Principle of Separation of Powers, Adherence to the Rule on Executive Privilege and Respect for the Rights of Public Officials Appearing in Legislative Inquiries in Aid of Legislation Under the Constitution, and For Other Purposes," 7

which, pursuant to Section 6 thereof, took effect immediately. The salient provisions of the Order are as follows: SECTION 1. Appearance by Heads of Departments Before Congress. In accordance with Article VI, Section 22 of the Constitution and to implement the Constitutional provisions on the separation of powers between co-equal branches of the government, all heads of departments of the Executive Branch of the government shall secure the consent of the President prior to appearing before either House of Congress. When the security of the State or the public interest so requires and the President so states in writing, the appearance shall only be conducted in executive session. SECTION. 2. Nature, Scope and Coverage of Executive Privilege. (a) Nature and Scope. - The rule of confidentiality based on executive privilege is fundamental to the operation of government and rooted in the separation of powers under the Constitution (Almonte vs. Vasquez, G.R. No. 95367, 23 May 1995). Further, Republic Act No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees provides that Public Officials and Employees shall not use or divulge confidential or classified information officially known to them by reason of their office and not made available to the public to prejudice the public interest. Executive privilege covers all confidential or classified information between the President and the public officers covered by this executive order, including: Conversations and correspondence between the President and the public official covered by this executive order (Almonte vs. Vasquez G.R. No. 95367, 23 May 1995; Chavez v. Public Estates Authority, G.R. No. 133250, 9 July 2002); Military, diplomatic and other national security matters which in the interest of national security should not be divulged (Almonte vs. Vasquez, G.R. No. 95367, 23 May 1995; Chavez v. Presidential Commission on Good Government, G.R. No. 130716, 9 December 1998). Information between inter-government agencies prior to the conclusion of treaties and executive agreements (Chavez v. Presidential Commission on Good Government, G.R. No. 130716, 9 December 1998);

Discussion in close-door Cabinet meetings (Chavez v. Presidential Commission on Good Government, G.R. No. 130716, 9 December 1998); Matters affecting national security and public order (Chavez v. Public Estates Authority, G.R. No. 133250, 9 July 2002). (b) Who are covered. The following are covered by this executive order: Senior officials of executive departments who in the judgment of the department heads are covered by the executive privilege; Generals and flag officers of the Armed Forces of the Philippines and such other officers who in the judgment of the Chief of Staff are covered by the executive privilege; Philippine National Police (PNP) officers with rank of chief superintendent or higher and such other officers who in the judgment of the Chief of the PNP are covered by the executive privilege; Senior national security officials who in the judgment of the National Security Adviser are covered by the executive privilege; and Such other officers as may be determined by the President. SECTION 3. Appearance of Other Public Officials Before Congress. All public officials enumerated in Section 2 (b) hereof shall secure prior consent of the President prior to appearing before either House of Congress to ensure the observance of the principle of separation of powers, adherence to the rule on executive privilege and respect for the rights of public officials appearing in inquiries in aid of legislation. (Emphasis and underscoring supplied) Also on September 28, 2005, Senate President Drilon received from Executive Secretary Ermita a copy of E.O. 464, and another letter8 informing him "that officials of the Executive Department invited to appear at the meeting [regarding the NorthRail project] will not be able to attend the same without the consent of the President, pursuant to [E.O. 464]" and that "said officials have not secured the required consent from the President." On even date which was also the scheduled date of the hearing on the alleged wiretapping, Gen. Senga sent a letter9 to Senator Biazon, Chairperson of the Committee on National Defense and Security, informing him "that per instruction of [President Arroyo], thru the Secretary of National Defense, no officer of the [AFP] is authorized to appear before any Senate or Congressional hearings without seeking a written approval from the President" and "that no approval has been granted by the

President to any AFP officer to appear before the public hearing of the Senate Committee on National Defense and Security scheduled [on] 28 September 2005." Despite the communications received from Executive Secretary Ermita and Gen. Senga, the investigation scheduled by the Committee on National Defense and Security pushed through, with only Col. Balutan and Brig. Gen. Gudani among all the AFP officials invited attending. For defying President Arroyos order barring military personnel from testifying before legislative inquiries without her approval, Brig. Gen. Gudani and Col. Balutan were relieved from their military posts and were made to face court martial proceedings. As to the NorthRail project hearing scheduled on September 29, 2005, Executive Secretary Ermita, citing E.O. 464, sent letter of regrets, in response to the invitations sent to the following government officials: Light Railway Transit Authority Administrator Melquiades Robles, Metro Rail Transit Authority Administrator Roberto Lastimoso, Department of Justice (DOJ) Chief State Counsel Ricardo V. Perez, then Presidential Legal Counsel Merceditas Gutierrez, Department of Transportation and Communication (DOTC) Undersecretary Guiling Mamonding, DOTC Secretary Leandro Mendoza, Philippine National Railways General Manager Jose Serase II, Monetary Board Member Juanita Amatong, Bases Conversion Development Authority Chairperson Gen. Narciso Abaya and Secretary Romulo L. Neri.10 NorthRail President Cortes sent personal regrets likewise citing E.O. 464.11 On October 3, 2005, three petitions, docketed as G.R. Nos. 169659, 169660, and 169667, for certiorari and prohibition, were filed before this Court challenging the constitutionality of E.O. 464. In G.R. No. 169659, petitioners party-list Bayan Muna, House of Representatives Members Satur Ocampo, Crispin Beltran, Rafael Mariano, Liza Maza, Joel Virador and Teodoro Casino, Courage, an organization of government employees, and Counsels for the Defense of Liberties (CODAL), a group of lawyers dedicated to the promotion of justice, democracy and peace, all claiming to have standing to file the suit because of the transcendental importance of the issues they posed, pray, in their petition that E.O. 464 be declared null and void for being unconstitutional; that respondent Executive Secretary Ermita, in his capacity as Executive Secretary and alter-ego of President Arroyo, be prohibited from imposing, and threatening to impose sanctions on officials who appear before Congress due to congressional

summons. Additionally, petitioners claim that E.O. 464 infringes on their rights and impedes them from fulfilling their respective obligations. Thus, Bayan Muna alleges that E.O. 464 infringes on its right as a political party entitled to participate in governance; Satur Ocampo, et al. allege that E.O. 464 infringes on their rights and duties as members of Congress to conduct investigation in aid of legislation and conduct oversight functions in the implementation of laws; Courage alleges that the tenure of its members in public office is predicated on, and threatened by, their submission to the requirements of E.O. 464 should they be summoned by Congress; and CODAL alleges that its members have a sworn duty to uphold the rule of law, and their rights to information and to transparent governance are threatened by the imposition of E.O. 464. In G.R. No. 169660, petitioner Francisco I. Chavez, claiming that his constitutional rights as a citizen, taxpayer and law practitioner, are affected by the enforcement of E.O. 464, prays in his petition that E.O. 464 be declared null and void for being unconstitutional. In G.R. No. 169667, petitioner Alternative Law Groups, Inc.12 (ALG), alleging that as a coalition of 17 legal resource non-governmental organizations engaged in developmental lawyering and work with the poor and marginalized sectors in different parts of the country, and as an organization of citizens of the Philippines and a part of the general public, it has legal standing to institute the petition to enforce its constitutional right to information on matters of public concern, a right which was denied to the public by E.O. 464, 13 prays, that said order be declared null and void for being unconstitutional and that respondent Executive Secretary Ermita be ordered to cease from implementing it. On October 11, 2005, Petitioner Senate of the Philippines, alleging that it has a vital interest in the resolution of the issue of the validity of E.O. 464 for it stands to suffer imminent and material injury, as it has already sustained the same with its continued enforcement since it directly interferes with and impedes the valid exercise of the Senates powers and functions and conceals information of great public interest and concern, filed its petition for certiorari and prohibition, docketed as G.R. No. 169777 and prays that E.O. 464 be declared unconstitutional. On October 14, 2005, PDP-Laban, a registered political party with members duly elected into the Philippine Senate and House of Representatives, filed a similar petition for certiorari and prohibition, docketed as G.R. No. 169834, alleging that it is affected by the challenged E.O. 464 because it hampers its legislative agenda to be implemented through its members in Congress, particularly in the conduct of inquiries in aid of legislation and transcendental

issues need to be resolved to avert a constitutional crisis between the executive and legislative branches of the government. Meanwhile, by letter14 dated February 6, 2006, Senator Biazon reiterated his invitation to Gen. Senga for him and other military officers to attend the hearing on the alleged wiretapping scheduled on February 10, 2005. Gen. Senga replied, however, by letter15 dated February 8, 2006, that "[p]ursuant to Executive Order No. 464, th[e] Headquarters requested for a clearance from the President to allow [them] to appear before the public hearing" and that "they will attend once [their] request is approved by the President." As none of those invited appeared, the hearing on February 10, 2006 was cancelled.16 In another investigation conducted jointly by the Senate Committee on Agriculture and Food and the Blue Ribbon Committee on the alleged mismanagement and use of the fertilizer fund under the Ginintuang Masaganang Ani program of the Department of Agriculture (DA), several Cabinet officials were invited to the hearings scheduled on October 5 and 26, November 24 and December 12, 2005 but most of them failed to attend, DA Undersecretary Belinda Gonzales, DA Assistant Secretary Felix Jose Montes, Fertilizer and Pesticide Authority Executive Director Norlito R. Gicana,17 and those from the Department of Budget and Management18 having invoked E.O. 464. In the budget hearings set by the Senate on February 8 and 13, 2006, Press Secretary and Presidential Spokesperson Ignacio R. Bunye,19 DOJ Secretary Raul M. Gonzalez20 and Department of Interior and Local Government Undersecretary Marius P. Corpus21 communicated their inability to attend due to lack of appropriate clearance from the President pursuant to E.O. 464. During the February 13, 2005 budget hearing, however, Secretary Bunye was allowed to attend by Executive Secretary Ermita. On February 13, 2006, Jose Anselmo I. Cadiz and the incumbent members of the Board of Governors of the Integrated Bar of the Philippines, as taxpayers, and the Integrated Bar of the Philippines as the official organization of all Philippine lawyers, all invoking their constitutional right to be informed on matters of public interest, filed their petition for certiorari and prohibition, docketed as G.R. No. 171246, and pray that E.O. 464 be declared null and void. All the petitions pray for the issuance of a Temporary Restraining Order enjoining respondents from implementing, enforcing, and observing E.O. 464.

In the oral arguments on the petitions conducted on February 21, 2006, the following substantive issues were ventilated: (1) whether respondents committed grave abuse of discretion in implementing E.O. 464 prior to its publication in the Official Gazette or in a newspaper of general circulation; and (2) whether E.O. 464 violates the following provisions of the Constitution: Art. II, Sec. 28, Art. III, Sec. 4, Art. III, Sec. 7, Art. IV. Sec. 1, Art. VI, Sec. 21, Art. VI, Sec. 22, Art. XI, Sec. 1, and Art. XIII, Sec. 16. The procedural issue of whether there is an actual case or controversy that calls for judicial review was not taken up; instead, the parties were instructed to discuss it in their respective memoranda. After the conclusion of the oral arguments, the parties were directed to submit their respective memoranda, paying particular attention to the following propositions: (1) that E.O. 464 is, on its face, unconstitutional; and (2) assuming that it is not, it is unconstitutional as applied in four instances, namely: (a) the so called Fertilizer scam; (b) the NorthRail investigation (c) the Wiretapping activity of the ISAFP; and (d) the investigation on the Venable contract.22 Petitioners in G.R. No. 16966023 and G.R. No. 16977724 filed their memoranda on March 7, 2006, while those in G.R. No. 16966725 and G.R. No. 16983426 filed theirs the next day or on March 8, 2006. Petitioners in G.R. No. 171246 did not file any memorandum. Petitioners Bayan Muna et al. in G.R. No. 169659, after their motion for extension to file memorandum27 was granted, subsequently filed a manifestation28 dated March 14, 2006 that it would no longer file its memorandum in the interest of having the issues resolved soonest, prompting this Court to issue a Resolution reprimanding them.29 Petitioners submit that E.O. 464 violates the following constitutional provisions: Art. VI, Sec. 2130 Art. VI, Sec. 2231 Art. VI, Sec. 132 Art. XI, Sec. 133 Art. III, Sec. 734 Art. III, Sec. 435

Art. XIII, Sec. 16 36 Art. II, Sec. 2837 Respondents Executive Secretary Ermita et al., on the other hand, pray in their consolidated memorandum38 on March 13, 2006 for the dismissal of the petitions for lack of merit. The Court synthesizes the issues to be resolved as follows: 1. Whether E.O. 464 contravenes the power of inquiry vested in Congress; 2. Whether E.O. 464 violates the right of the people to information on matters of public concern; and 3. Whether respondents have committed grave abuse of discretion when they implemented E.O. 464 prior to its publication in a newspaper of general circulation. Essential requisites for judicial review Before proceeding to resolve the issue of the constitutionality of E.O. 464, ascertainment of whether the requisites for a valid exercise of the Courts power of judicial review are present is in order. Like almost all powers conferred by the Constitution, the power of judicial review is subject to limitations, to wit: (1) there must be an actual case or controversy calling for the exercise of judicial power; (2) the person challenging the act must have standing to challenge the validity of the subject act or issuance; otherwise stated, he must have a personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement; (3) the question of constitutionality must be raised at the earliest opportunity; and (4) the issue of constitutionality must be the very lis mota of the case.39 Except with respect to the requisites of standing and existence of an actual case or controversy where the disagreement between the parties lies, discussion of the rest of the requisites shall be omitted. Standing Respondents, through the Solicitor General, assert that the allegations in G.R. Nos. 169659, 169660 and 169667 make it clear that they, adverting to the non-

appearance of several officials of the executive department in the investigations called by the different committees of the Senate, were brought to vindicate the constitutional duty of the Senate or its different committees to conduct inquiry in aid of legislation or in the exercise of its oversight functions. They maintain that Representatives Ocampo et al. have not shown any specific prerogative, power, and privilege of the House of Representatives which had been effectively impaired by E.O. 464, there being no mention of any investigation called by the House of Representatives or any of its committees which was aborted due to the implementation of E.O. 464. As for Bayan Munas alleged interest as a party-list representing the marginalized and underrepresented, and that of the other petitioner groups and individuals who profess to have standing as advocates and defenders of the Constitution, respondents contend that such interest falls short of that required to confer standing on them as parties "injured-in-fact."40 Respecting petitioner Chavez, respondents contend that Chavez may not claim an interest as a taxpayer for the implementation of E.O. 464 does not involve the exercise of taxing or spending power.41 With regard to the petition filed by the Senate, respondents argue that in the absence of a personal or direct injury by reason of the issuance of E.O. 464, the Senate and its individual members are not the proper parties to assail the constitutionality of E.O. 464. Invoking this Courts ruling in National Economic Protectionism Association v. Ongpin42 and Valmonte v. Philippine Charity Sweepstakes Office,43 respondents assert that to be considered a proper party, one must have a personal and substantial interest in the case, such that he has sustained or will sustain direct injury due to the enforcement of E.O. 464.44 That the Senate of the Philippines has a fundamental right essential not only for intelligent public decision-making in a democratic system, but more especially for sound legislation45 is not disputed. E.O. 464, however, allegedly stifles the ability of the members of Congress to access information that is crucial to lawmaking.46 Verily, the Senate, including its individual members, has a substantial and direct interest over the outcome of the controversy and is the proper party to assail the constitutionality of E.O. 464. Indeed, legislators have standing to maintain inviolate the prerogative, powers and privileges vested by the Constitution in their office and are allowed to sue to question the validity of any official action which they claim infringes their prerogatives as legislators.47

In the same vein, party-list representatives Satur Ocampo (Bayan Muna), Teodoro Casino (Bayan Muna), Joel Virador (Bayan Muna), Crispin Beltran (Anakpawis), Rafael Mariano (Anakpawis), and Liza Maza (Gabriela) are allowed to sue to question the constitutionality of E.O. 464, the absence of any claim that an investigation called by the House of Representatives or any of its committees was aborted due to the implementation of E.O. 464 notwithstanding, it being sufficient that a claim is made that E.O. 464 infringes on their constitutional rights and duties as members of Congress to conduct investigation in aid of legislation and conduct oversight functions in the implementation of laws. The national political party, Bayan Muna, likewise meets the standing requirement as it obtained three seats in the House of Representatives in the 2004 elections and is, therefore, entitled to participate in the legislative process consonant with the declared policy underlying the party list system of affording citizens belonging to marginalized and underrepresented sectors, organizations and parties who lack well-defined political constituencies to contribute to the formulation and enactment of legislation that will benefit the nation.48 As Bayan Muna and Representatives Ocampo et al. have the standing to file their petitions, passing on the standing of their co-petitioners Courage and Codal is rendered unnecessary.49 In filing their respective petitions, Chavez, the ALG which claims to be an organization of citizens, and the incumbent members of the IBP Board of Governors and the IBP in behalf of its lawyer members,50 invoke their constitutional right to information on matters of public concern, asserting that the right to information, curtailed and violated by E.O. 464, is essential to the effective exercise of other constitutional rights51 and to the maintenance of the balance of power among the three branches of the government through the principle of checks and balances.52 It is well-settled that when suing as a citizen, the interest of the petitioner in assailing the constitutionality of laws, presidential decrees, orders, and other regulations, must be direct and personal. In Franciso v. House of Representatives,53 this Court held that when the proceeding involves the assertion of a public right, the mere fact that he is a citizen satisfies the requirement of personal interest. As for petitioner PDP-Laban, it asseverates that it is clothed with legal standing in view of the transcendental issues raised in its petition which this Court needs to resolve in order to avert a constitutional crisis. For it to be accorded standing

on the ground of transcendental importance, however, it must establish (1) the character of the funds (that it is public) or other assets involved in the case, (2) the presence of a clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or instrumentality of the government, and (3) the lack of any party with a more direct and specific interest in raising the questions being raised.54 The first and last determinants not being present as no public funds or assets are involved and petitioners in G.R. Nos. 169777 and 169659 have direct and specific interests in the resolution of the controversy, petitioner PDP-Laban is bereft of standing to file its petition. Its allegation that E.O. 464 hampers its legislative agenda is vague and uncertain, and at best is only a "generalized interest" which it shares with the rest of the political parties. Concrete injury, whether actual or threatened, is that indispensable element of a dispute which serves in part to cast it in a form traditionally capable of judicial resolution.55 In fine, PDP-Labans alleged interest as a political party does not suffice to clothe it with legal standing. Actual Case or Controversy Petitioners assert that an actual case exists, they citing the absence of the executive officials invited by the Senate to its hearings after the issuance of E.O. 464, particularly those on the NorthRail project and the wiretapping controversy. Respondents counter that there is no case or controversy, there being no showing that President Arroyo has actually withheld her consent or prohibited the appearance of the invited officials.56 These officials, they claim, merely communicated to the Senate that they have not yet secured the consent of the President, not that the President prohibited their attendance.57 Specifically with regard to the AFP officers who did not attend the hearing on September 28, 2005, respondents claim that the instruction not to attend without the Presidents consent was based on its role as Commander-in-Chief of the Armed Forces, not on E.O. 464. Respondents thus conclude that the petitions merely rest on an unfounded apprehension that the President will abuse its power of preventing the appearance of officials before Congress, and that such apprehension is not sufficient for challenging the validity of E.O. 464. The Court finds respondents assertion that the President has not withheld her consent or prohibited the appearance of the officials concerned immaterial in determining the existence of an actual case or controversy insofar as E.O. 464 is concerned. For E.O. 464 does not require either a deliberate withholding of

consent or an express prohibition issuing from the President in order to bar officials from appearing before Congress. As the implementation of the challenged order has already resulted in the absence of officials invited to the hearings of petitioner Senate of the Philippines, it would make no sense to wait for any further event before considering the present case ripe for adjudication. Indeed, it would be sheer abandonment of duty if this Court would now refrain from passing on the constitutionality of E.O. 464. Constitutionality of E.O. 464 E.O. 464, to the extent that it bars the appearance of executive officials before Congress, deprives Congress of the information in the possession of these officials. To resolve the question of whether such withholding of information violates the Constitution, consideration of the general power of Congress to obtain information, otherwise known as the power of inquiry, is in order. The power of inquiry The Congress power of inquiry is expressly recognized in Section 21 of Article VI of the Constitution which reads: SECTION 21. The Senate or the House of Representatives or any of its respective committees may conduct inquiries in aid of legislation in accordance with its duly published rules of procedure. The rights of persons appearing in or affected by such inquiries shall be respected. (Underscoring supplied) This provision is worded exactly as Section 8 of Article VIII of the 1973 Constitution except that, in the latter, it vests the power of inquiry in the unicameral legislature established therein the Batasang Pambansa and its committees. The 1935 Constitution did not contain a similar provision. Nonetheless, in Arnault v. Nazareno,58 a case decided in 1950 under that Constitution, the Court already recognized that the power of inquiry is inherent in the power to legislate. Arnault involved a Senate investigation of the reportedly anomalous purchase of the Buenavista and Tambobong Estates by the Rural Progress Administration. Arnault, who was considered a leading witness in the controversy, was called to testify thereon by the Senate. On account of his refusal to answer the questions of the senators on an important point, he was,

by resolution of the Senate, detained for contempt. Upholding the Senates power to punish Arnault for contempt, this Court held: Although there is no provision in the Constitution expressly investing either House of Congress with power to make investigations and exact testimony to the end that it may exercise its legislative functions advisedly and effectively, such power is so far incidental to the legislative function as to be implied. In other words, the power of inquiry with process to enforce it is an essential and appropriate auxiliary to the legislative function. A legislative body cannot legislate wisely or effectively in the absence of information respecting the conditions which the legislation is intended to affect or change; and where the legislative body does not itself possess the requisite information which is not infrequently true recourse must be had to others who do possess it. Experience has shown that mere requests for such information are often unavailing, and also that information which is volunteered is not always accurate or complete; so some means of compulsion is essential to obtain what is needed.59 . . . (Emphasis and underscoring supplied) That this power of inquiry is broad enough to cover officials of the executive branch may be deduced from the same case. The power of inquiry, the Court therein ruled, is co-extensive with the power to legislate.60 The matters which may be a proper subject of legislation and those which may be a proper subject of investigation are one. It follows that the operation of government, being a legitimate subject for legislation, is a proper subject for investigation. Thus, the Court found that the Senate investigation of the government transaction involved in Arnault was a proper exercise of the power of inquiry. Besides being related to the expenditure of public funds of which Congress is the guardian, the transaction, the Court held, "also involved government agencies created by Congress and officers whose positions it is within the power of Congress to regulate or even abolish." Since Congress has authority to inquire into the operations of the executive branch, it would be incongruous to hold that the power of inquiry does not extend to executive officials who are the most familiar with and informed on executive operations. As discussed in Arnault, the power of inquiry, "with process to enforce it," is grounded on the necessity of information in the legislative process. If the information possessed by executive officials on the operation of their offices is necessary for wise legislation on that subject, by parity of reasoning, Congress has the right to that information and the power to compel the disclosure thereof.

As evidenced by the American experience during the so-called "McCarthy era," however, the right of Congress to conduct inquiries in aid of legislation is, in theory, no less susceptible to abuse than executive or judicial power. It may thus be subjected to judicial review pursuant to the Courts certiorari powers under Section 1, Article VIII of the Constitution. For one, as noted in Bengzon v. Senate Blue Ribbon Committee,61 the inquiry itself might not properly be in aid of legislation, and thus beyond the constitutional power of Congress. Such inquiry could not usurp judicial functions. Parenthetically, one possible way for Congress to avoid such a result as occurred in Bengzon is to indicate in its invitations to the public officials concerned, or to any person for that matter, the possible needed statute which prompted the need for the inquiry. Given such statement in its invitations, along with the usual indication of the subject of inquiry and the questions relative to and in furtherance thereof, there would be less room for speculation on the part of the person invited on whether the inquiry is in aid of legislation. Section 21, Article VI likewise establishes crucial safeguards that proscribe the legislative power of inquiry. The provision requires that the inquiry be done in accordance with the Senate or Houses duly published rules of procedure, necessarily implying the constitutional infirmity of an inquiry conducted without duly published rules of procedure. Section 21 also mandates that the rights of persons appearing in or affected by such inquiries be respected, an imposition that obligates Congress to adhere to the guarantees in the Bill of Rights. These abuses are, of course, remediable before the courts, upon the proper suit filed by the persons affected, even if they belong to the executive branch. Nonetheless, there may be exceptional circumstances, none appearing to obtain at present, wherein a clear pattern of abuse of the legislative power of inquiry might be established, resulting in palpable violations of the rights guaranteed to members of the executive department under the Bill of Rights. In such instances, depending on the particulars of each case, attempts by the Executive Branch to forestall these abuses may be accorded judicial sanction. Even where the inquiry is in aid of legislation, there are still recognized exemptions to the power of inquiry, which exemptions fall under the rubric of "executive privilege." Since this term figures prominently in the challenged order, it being mentioned in its provisions, its preambular clauses,62 and in its very title, a discussion of executive privilege is crucial for determining the constitutionality of E.O. 464. Executive privilege

The phrase "executive privilege" is not new in this jurisdiction. It has been used even prior to the promulgation of the 1986 Constitution.63 Being of American origin, it is best understood in light of how it has been defined and used in the legal literature of the United States. Schwartz defines executive privilege as "the power of the Government to withhold information from the public, the courts, and the Congress."64 Similarly, Rozell defines it as "the right of the President and high-level executive branch officers to withhold information from Congress, the courts, and ultimately the public."65 Executive privilege is, nonetheless, not a clear or unitary concept. 66 It has encompassed claims of varying kinds.67 Tribe, in fact, comments that while it is customary to employ the phrase "executive privilege," it may be more accurate to speak of executive privileges "since presidential refusals to furnish information may be actuated by any of at least three distinct kinds of considerations, and may be asserted, with differing degrees of success, in the context of either judicial or legislative investigations." One variety of the privilege, Tribe explains, is the state secrets privilege invoked by U.S. Presidents, beginning with Washington, on the ground that the information is of such nature that its disclosure would subvert crucial military or diplomatic objectives. Another variety is the informers privilege, or the privilege of the Government not to disclose the identity of persons who furnish information of violations of law to officers charged with the enforcement of that law. Finally, a generic privilege for internal deliberations has been said to attach to intragovernmental documents reflecting advisory opinions, recommendations and deliberations comprising part of a process by which governmental decisions and policies are formulated. 68 Tribes comment is supported by the ruling in In re Sealed Case, thus: Since the beginnings of our nation, executive officials have claimed a variety of privileges to resist disclosure of information the confidentiality of which they felt was crucial to fulfillment of the unique role and responsibilities of the executive branch of our government. Courts ruled early that the executive had a right to withhold documents that might reveal military or state secrets. The courts have also granted the executive a right to withhold the identity of government informers in some circumstances and a qualified right to withhold information related to pending investigations. x x x"69 (Emphasis and underscoring supplied)

The entry in Blacks Law Dictionary on "executive privilege" is similarly instructive regarding the scope of the doctrine. This privilege, based on the constitutional doctrine of separation of powers, exempts the executive from disclosure requirements applicable to the ordinary citizen or organization where such exemption is necessary to the discharge of highly important executive responsibilities involved in maintaining governmental operations, and extends not only to military and diplomatic secrets but also to documents integral to an appropriate exercise of the executive domestic decisional and policy making functions, that is, those documents reflecting the frank expression necessary in intra-governmental advisory and deliberative communications.70 (Emphasis and underscoring supplied) That a type of information is recognized as privileged does not, however, necessarily mean that it would be considered privileged in all instances. For in determining the validity of a claim of privilege, the question that must be asked is not only whether the requested information falls within one of the traditional privileges, but also whether that privilege should be honored in a given procedural setting.71 The leading case on executive privilege in the United States is U.S. v. Nixon, 72 decided in 1974. In issue in that case was the validity of President Nixons claim of executive privilege against a subpoena issued by a district court requiring the production of certain tapes and documents relating to the Watergate investigations. The claim of privilege was based on the Presidents general interest in the confidentiality of his conversations and correspondence. The U.S. Court held that while there is no explicit reference to a privilege of confidentiality in the U.S. Constitution, it is constitutionally based to the extent that it relates to the effective discharge of a Presidents powers. The Court, nonetheless, rejected the Presidents claim of privilege, ruling that the privilege must be balanced against the public interest in the fair administration of criminal justice. Notably, the Court was careful to clarify that it was not there addressing the issue of claims of privilege in a civil litigation or against congressional demands for information. Cases in the U.S. which involve claims of executive privilege against Congress are rare.73 Despite frequent assertion of the privilege to deny information to Congress, beginning with President Washingtons refusal to turn over treaty negotiation records to the House of Representatives, the U.S. Supreme Court has never adjudicated the issue.74 However, the U.S. Court of Appeals for the District of Columbia Circuit, in a case decided earlier in the same year as Nixon, recognized the Presidents privilege over his conversations against a

congressional subpoena.75 Anticipating the balancing approach adopted by the U.S. Supreme Court in Nixon, the Court of Appeals weighed the public interest protected by the claim of privilege against the interest that would be served by disclosure to the Committee. Ruling that the balance favored the President, the Court declined to enforce the subpoena. 76 In this jurisdiction, the doctrine of executive privilege was recognized by this Court in Almonte v. Vasquez.77 Almonte used the term in reference to the same privilege subject of Nixon. It quoted the following portion of the Nixon decision which explains the basis for the privilege: "The expectation of a President to the confidentiality of his conversations and correspondences, like the claim of confidentiality of judicial deliberations, for example, has all the values to which we accord deference for the privacy of all citizens and, added to those values, is the necessity for protection of the public interest in candid, objective, and even blunt or harsh opinions in Presidential decision-making. A President and those who assist him must be free to explore alternatives in the process of shaping policies and making decisions and to do so in a way many would be unwilling to express except privately. These are the considerations justifying a presumptive privilege for Presidential communications. The privilege is fundamental to the operation of government and inextricably rooted in the separation of powers under the Constitution x x x " (Emphasis and underscoring supplied) Almonte involved a subpoena duces tecum issued by the Ombudsman against the therein petitioners. It did not involve, as expressly stated in the decision, the right of the people to information.78 Nonetheless, the Court recognized that there are certain types of information which the government may withhold from the public, thus acknowledging, in substance if not in name, that executive privilege may be claimed against citizens demands for information. In Chavez v. PCGG,79 the Court held that this jurisdiction recognizes the common law holding that there is a "governmental privilege against public disclosure with respect to state secrets regarding military, diplomatic and other national security matters."80 The same case held that closed-door Cabinet meetings are also a recognized limitation on the right to information. Similarly, in Chavez v. Public Estates Authority,81 the Court ruled that the right to information does not extend to matters recognized as "privileged information under the separation of powers,"82 by which the Court meant Presidential conversations, correspondences, and discussions in closed-door Cabinet meetings. It also held that information on military and diplomatic secrets and

those affecting national security, and information on investigations of crimes by law enforcement agencies before the prosecution of the accused were exempted from the right to information. From the above discussion on the meaning and scope of executive privilege, both in the United States and in this jurisdiction, a clear principle emerges. Executive privilege, whether asserted against Congress, the courts, or the public, is recognized only in relation to certain types of information of a sensitive character. While executive privilege is a constitutional concept, a claim thereof may be valid or not depending on the ground invoked to justify it and the context in which it is made. Noticeably absent is any recognition that executive officials are exempt from the duty to disclose information by the mere fact of being executive officials. Indeed, the extraordinary character of the exemptions indicates that the presumption inclines heavily against executive secrecy and in favor of disclosure. Validity of Section 1 Section 1 is similar to Section 3 in that both require the officials covered by them to secure the consent of the President prior to appearing before Congress. There are significant differences between the two provisions, however, which constrain this Court to discuss the validity of these provisions separately. Section 1 specifically applies to department heads. It does not, unlike Section 3, require a prior determination by any official whether they are covered by E.O. 464. The President herself has, through the challenged order, made the determination that they are. Further, unlike also Section 3, the coverage of department heads under Section 1 is not made to depend on the department heads possession of any information which might be covered by executive privilege. In fact, in marked contrast to Section 3 vis--vis Section 2, there is no reference to executive privilege at all. Rather, the required prior consent under Section 1 is grounded on Article VI, Section 22 of the Constitution on what has been referred to as the question hour. SECTION 22. The heads of departments may upon their own initiative, with the consent of the President, or upon the request of either House, as the rules of each House shall provide, appear before and be heard by such House on any matter pertaining to their departments. Written questions shall be submitted to the President of the Senate or the Speaker of the House of Representatives at least three days before their scheduled appearance. Interpellations shall not be limited to written questions, but may cover matters related thereto. When the

security of the State or the public interest so requires and the President so states in writing, the appearance shall be conducted in executive session. Determining the validity of Section 1 thus requires an examination of the meaning of Section 22 of Article VI. Section 22 which provides for the question hour must be interpreted vis--vis Section 21 which provides for the power of either House of Congress to "conduct inquiries in aid of legislation." As the following excerpt of the deliberations of the Constitutional Commission shows, the framers were aware that these two provisions involved distinct functions of Congress. MR. MAAMBONG. x x x When we amended Section 20 [now Section 22 on the Question Hour] yesterday, I noticed that members of the Cabinet cannot be compelled anymore to appear before the House of Representatives or before the Senate. I have a particular problem in this regard, Madam President, because in our experience in the Regular Batasang Pambansa as the Gentleman himself has experienced in the interim Batasang Pambansa one of the most competent inputs that we can put in our committee deliberations, either in aid of legislation or in congressional investigations, is the testimonies of Cabinet ministers. We usually invite them, but if they do not come and it is a congressional investigation, we usually issue subpoenas. I want to be clarified on a statement made by Commissioner Suarez when he said that the fact that the Cabinet ministers may refuse to come to the House of Representatives or the Senate [when requested under Section 22] does not mean that they need not come when they are invited or subpoenaed by the committee of either House when it comes to inquiries in aid of legislation or congressional investigation. According to Commissioner Suarez, that is allowed and their presence can be had under Section 21. Does the gentleman confirm this, Madam President? MR. DAVIDE. We confirm that, Madam President, because Section 20 refers only to what was originally the Question Hour, whereas, Section 21 would refer specifically to inquiries in aid of legislation, under which anybody for that matter, may be summoned and if he refuses, he can be held in contempt of the House.83 (Emphasis and underscoring supplied) A distinction was thus made between inquiries in aid of legislation and the question hour. While attendance was meant to be discretionary in the question hour, it was compulsory in inquiries in aid of legislation. The reference to Commissioner Suarez bears noting, he being one of the proponents of the

amendment to make the appearance of department heads discretionary in the question hour. So clearly was this distinction conveyed to the members of the Commission that the Committee on Style, precisely in recognition of this distinction, later moved the provision on question hour from its original position as Section 20 in the original draft down to Section 31, far from the provision on inquiries in aid of legislation. This gave rise to the following exchange during the deliberations: MR. GUINGONA. [speaking in his capacity as Chairman of the Committee on Style] We now go, Mr. Presiding Officer, to the Article on Legislative and may I request the chairperson of the Legislative Department, Commissioner Davide, to give his reaction. THE PRESIDING OFFICER (Mr. Jamir). Commissioner Davide is recognized.| avvphi|.net MR. DAVIDE. Thank you, Mr. Presiding Officer. I have only one reaction to the Question Hour. I propose that instead of putting it as Section 31, it should follow Legislative Inquiries. THE PRESIDING OFFICER. What does the committee say? MR. GUINGONA. I ask Commissioner Maambong to reply, Mr. Presiding Officer. MR. MAAMBONG. Actually, we considered that previously when we sequenced this but we reasoned that in Section 21, which is Legislative Inquiry, it is actually a power of Congress in terms of its own lawmaking; whereas, a Question Hour is not actually a power in terms of its own lawmaking power because in Legislative Inquiry, it is in aid of legislation. And so we put Question Hour as Section 31. I hope Commissioner Davide will consider this. MR. DAVIDE. The Question Hour is closely related with the legislative power, and it is precisely as a complement to or a supplement of the Legislative Inquiry. The appearance of the members of Cabinet would be very, very essential not only in the application of check and balance but also, in effect, in aid of legislation. MR. MAAMBONG. After conferring with the committee, we find merit in the suggestion of Commissioner Davide. In other words, we are accepting that and so this Section 31 would now become Section 22. Would it be, Commissioner Davide?

MR. DAVIDE. Yes.84 (Emphasis and underscoring supplied) Consistent with their statements earlier in the deliberations, Commissioners Davide and Maambong proceeded from the same assumption that these provisions pertained to two different functions of the legislature. Both Commissioners understood that the power to conduct inquiries in aid of legislation is different from the power to conduct inquiries during the question hour. Commissioner Davides only concern was that the two provisions on these distinct powers be placed closely together, they being complementary to each other. Neither Commissioner considered them as identical functions of Congress. The foregoing opinion was not the two Commissioners alone. From the abovequoted exchange, Commissioner Maambongs committee the Committee on Style shared the view that the two provisions reflected distinct functions of Congress. Commissioner Davide, on the other hand, was speaking in his capacity as Chairman of the Committee on the Legislative Department. His views may thus be presumed as representing that of his Committee. In the context of a parliamentary system of government, the "question hour" has a definite meaning. It is a period of confrontation initiated by Parliament to hold the Prime Minister and the other ministers accountable for their acts and the operation of the government,85 corresponding to what is known in Britain as the question period. There was a specific provision for a question hour in the 1973 Constitution86 which made the appearance of ministers mandatory. The same perfectly conformed to the parliamentary system established by that Constitution, where the ministers are also members of the legislature and are directly accountable to it. An essential feature of the parliamentary system of government is the immediate accountability of the Prime Minister and the Cabinet to the National Assembly. They shall be responsible to the National Assembly for the program of government and shall determine the guidelines of national policy. Unlike in the presidential system where the tenure of office of all elected officials cannot be terminated before their term expired, the Prime Minister and the Cabinet remain in office only as long as they enjoy the confidence of the National Assembly. The moment this confidence is lost the Prime Minister and the Cabinet may be changed.87 The framers of the 1987 Constitution removed the mandatory nature of such appearance during the question hour in the present Constitution so as to conform more fully to a system of separation of powers. 88 To that extent, the

question hour, as it is presently understood in this jurisdiction, departs from the question period of the parliamentary system. That department heads may not be required to appear in a question hour does not, however, mean that the legislature is rendered powerless to elicit information from them in all circumstances. In fact, in light of the absence of a mandatory question period, the need to enforce Congress right to executive information in the performance of its legislative function becomes more imperative. As Schwartz observes: Indeed, if the separation of powers has anything to tell us on the subject under discussion, it is that the Congress has the right to obtain information from any source even from officials of departments and agencies in the executive branch. In the United States there is, unlike the situation which prevails in a parliamentary system such as that in Britain, a clear separation between the legislative and executive branches. It is this very separation that makes the congressional right to obtain information from the executive so essential, if the functions of the Congress as the elected representatives of the people are adequately to be carried out. The absence of close rapport between the legislative and executive branches in this country, comparable to those which exist under a parliamentary system, and the nonexistence in the Congress of an institution such as the British question period have perforce made reliance by the Congress upon its right to obtain information from the executive essential, if it is intelligently to perform its legislative tasks. Unless the Congress possesses the right to obtain executive information, its power of oversight of administration in a system such as ours becomes a power devoid of most of its practical content, since it depends for its effectiveness solely upon information parceled out ex gratia by the executive.89 (Emphasis and underscoring supplied) Sections 21 and 22, therefore, while closely related and complementary to each other, should not be considered as pertaining to the same power of Congress. One specifically relates to the power to conduct inquiries in aid of legislation, the aim of which is to elicit information that may be used for legislation, while the other pertains to the power to conduct a question hour, the objective of which is to obtain information in pursuit of Congress oversight function. When Congress merely seeks to be informed on how department heads are implementing the statutes which it has issued, its right to such information is not as imperative as that of the President to whom, as Chief Executive, such department heads must give a report of their performance as a matter of duty. In such instances, Section 22, in keeping with the separation of powers, states that Congress may only request their appearance. Nonetheless, when the

inquiry in which Congress requires their appearance is "in aid of legislation" under Section 21, the appearance is mandatory for the same reasons stated in Arnault.90 In fine, the oversight function of Congress may be facilitated by compulsory process only to the extent that it is performed in pursuit of legislation. This is consistent with the intent discerned from the deliberations of the Constitutional Commission. Ultimately, the power of Congress to compel the appearance of executive officials under Section 21 and the lack of it under Section 22 find their basis in the principle of separation of powers. While the executive branch is a co-equal branch of the legislature, it cannot frustrate the power of Congress to legislate by refusing to comply with its demands for information. When Congress exercises its power of inquiry, the only way for department heads to exempt themselves therefrom is by a valid claim of privilege. They are not exempt by the mere fact that they are department heads. Only one executive official may be exempted from this power the President on whom executive power is vested, hence, beyond the reach of Congress except through the power of impeachment. It is based on her being the highest official of the executive branch, and the due respect accorded to a co-equal branch of government which is sanctioned by a long-standing custom. By the same token, members of the Supreme Court are also exempt from this power of inquiry. Unlike the Presidency, judicial power is vested in a collegial body; hence, each member thereof is exempt on the basis not only of separation of powers but also on the fiscal autonomy and the constitutional independence of the judiciary. This point is not in dispute, as even counsel for the Senate, Sen. Joker Arroyo, admitted it during the oral argument upon interpellation of the Chief Justice. Having established the proper interpretation of Section 22, Article VI of the Constitution, the Court now proceeds to pass on the constitutionality of Section 1 of E.O. 464. Section 1, in view of its specific reference to Section 22 of Article VI of the Constitution and the absence of any reference to inquiries in aid of legislation, must be construed as limited in its application to appearances of department heads in the question hour contemplated in the provision of said Section 22 of Article VI. The reading is dictated by the basic rule of construction that

issuances must be interpreted, as much as possible, in a way that will render it constitutional. The requirement then to secure presidential consent under Section 1, limited as it is only to appearances in the question hour, is valid on its face. For under Section 22, Article VI of the Constitution, the appearance of department heads in the question hour is discretionary on their part. Section 1 cannot, however, be applied to appearances of department heads in inquiries in aid of legislation. Congress is not bound in such instances to respect the refusal of the department head to appear in such inquiry, unless a valid claim of privilege is subsequently made, either by the President herself or by the Executive Secretary. Validity of Sections 2 and 3 Section 3 of E.O. 464 requires all the public officials enumerated in Section 2(b) to secure the consent of the President prior to appearing before either house of Congress. The enumeration is broad. It covers all senior officials of executive departments, all officers of the AFP and the PNP, and all senior national security officials who, in the judgment of the heads of offices designated in the same section (i.e. department heads, Chief of Staff of the AFP, Chief of the PNP, and the National Security Adviser), are "covered by the executive privilege." The enumeration also includes such other officers as may be determined by the President. Given the title of Section 2 "Nature, Scope and Coverage of Executive Privilege" , it is evident that under the rule of ejusdem generis, the determination by the President under this provision is intended to be based on a similar finding of coverage under executive privilege. En passant, the Court notes that Section 2(b) of E.O. 464 virtually states that executive privilege actually covers persons. Such is a misuse of the doctrine. Executive privilege, as discussed above, is properly invoked in relation to specific categories of information and not to categories of persons. In light, however, of Sec 2(a) of E.O. 464 which deals with the nature, scope and coverage of executive privilege, the reference to persons being "covered by the executive privilege" may be read as an abbreviated way of saying that the person is in possession of information which is, in the judgment of the head of office concerned, privileged as defined in Section 2(a). The Court shall thus proceed on the assumption that this is the intention of the challenged order.

Upon a determination by the designated head of office or by the President that an official is "covered by the executive privilege," such official is subjected to the requirement that he first secure the consent of the President prior to appearing before Congress. This requirement effectively bars the appearance of the official concerned unless the same is permitted by the President. The proviso allowing the President to give its consent means nothing more than that the President may reverse a prohibition which already exists by virtue of E.O. 464. Thus, underlying this requirement of prior consent is the determination by a head of office, authorized by the President under E.O. 464, or by the President herself, that such official is in possession of information that is covered by executive privilege. This determination then becomes the basis for the officials not showing up in the legislative investigation. In view thereof, whenever an official invokes E.O. 464 to justify his failure to be present, such invocation must be construed as a declaration to Congress that the President, or a head of office authorized by the President, has determined that the requested information is privileged, and that the President has not reversed such determination. Such declaration, however, even without mentioning the term "executive privilege," amounts to an implied claim that the information is being withheld by the executive branch, by authority of the President, on the basis of executive privilege. Verily, there is an implied claim of privilege. The letter dated September 28, 2005 of respondent Executive Secretary Ermita to Senate President Drilon illustrates the implied nature of the claim of privilege authorized by E.O. 464. It reads: In connection with the inquiry to be conducted by the Committee of the Whole regarding the Northrail Project of the North Luzon Railways Corporation on 29 September 2005 at 10:00 a.m., please be informed that officials of the Executive Department invited to appear at the meeting will not be able to attend the same without the consent of the President, pursuant to Executive Order No. 464 (s. 2005), entitled "Ensuring Observance Of The Principle Of Separation Of Powers, Adherence To The Rule On Executive Privilege And Respect For The Rights Of Public Officials Appearing In Legislative Inquiries In Aid Of Legislation Under The Constitution, And For Other Purposes". Said officials have not secured the required consent from the President. (Underscoring supplied) The letter does not explicitly invoke executive privilege or that the matter on which these officials are being requested to be resource persons falls under the

recognized grounds of the privilege to justify their absence. Nor does it expressly state that in view of the lack of consent from the President under E.O. 464, they cannot attend the hearing. Significant premises in this letter, however, are left unstated, deliberately or not. The letter assumes that the invited officials are covered by E.O. 464. As explained earlier, however, to be covered by the order means that a determination has been made, by the designated head of office or the President, that the invited official possesses information that is covered by executive privilege. Thus, although it is not stated in the letter that such determination has been made, the same must be deemed implied. Respecting the statement that the invited officials have not secured the consent of the President, it only means that the President has not reversed the standing prohibition against their appearance before Congress. Inevitably, Executive Secretary Ermitas letter leads to the conclusion that the executive branch, either through the President or the heads of offices authorized under E.O. 464, has made a determination that the information required by the Senate is privileged, and that, at the time of writing, there has been no contrary pronouncement from the President. In fine, an implied claim of privilege has been made by the executive. While there is no Philippine case that directly addresses the issue of whether executive privilege may be invoked against Congress, it is gathered from Chavez v. PEA that certain information in the possession of the executive may validly be claimed as privileged even against Congress. Thus, the case holds: There is no claim by PEA that the information demanded by petitioner is privileged information rooted in the separation of powers. The information does not cover Presidential conversations, correspondences, or discussions during closed-door Cabinet meetings which, like internal-deliberations of the Supreme Court and other collegiate courts, or executive sessions of either house of Congress, are recognized as confidential. This kind of information cannot be pried open by a co-equal branch of government. A frank exchange of exploratory ideas and assessments, free from the glare of publicity and pressure by interested parties, is essential to protect the independence of decision-making of those tasked to exercise Presidential, Legislative and Judicial power. This is not the situation in the instant case. 91 (Emphasis and underscoring supplied) Section 3 of E.O. 464, therefore, cannot be dismissed outright as invalid by the mere fact that it sanctions claims of executive privilege. This Court must look

further and assess the claim of privilege authorized by the Order to determine whether it is valid. While the validity of claims of privilege must be assessed on a case to case basis, examining the ground invoked therefor and the particular circumstances surrounding it, there is, in an implied claim of privilege, a defect that renders it invalid per se. By its very nature, and as demonstrated by the letter of respondent Executive Secretary quoted above, the implied claim authorized by Section 3 of E.O. 464 is not accompanied by any specific allegation of the basis thereof (e.g., whether the information demanded involves military or diplomatic secrets, closed-door Cabinet meetings, etc.). While Section 2(a) enumerates the types of information that are covered by the privilege under the challenged order, Congress is left to speculate as to which among them is being referred to by the executive. The enumeration is not even intended to be comprehensive, but a mere statement of what is included in the phrase "confidential or classified information between the President and the public officers covered by this executive order." Certainly, Congress has the right to know why the executive considers the requested information privileged. It does not suffice to merely declare that the President, or an authorized head of office, has determined that it is so, and that the President has not overturned that determination. Such declaration leaves Congress in the dark on how the requested information could be classified as privileged. That the message is couched in terms that, on first impression, do not seem like a claim of privilege only makes it more pernicious. It threatens to make Congress doubly blind to the question of why the executive branch is not providing it with the information that it has requested. A claim of privilege, being a claim of exemption from an obligation to disclose information, must, therefore, be clearly asserted. As U.S. v. Reynolds teaches: The privilege belongs to the government and must be asserted by it; it can neither be claimed nor waived by a private party. It is not to be lightly invoked. There must be a formal claim of privilege, lodged by the head of the department which has control over the matter, after actual personal consideration by that officer. The court itself must determine whether the circumstances are appropriate for the claim of privilege, and yet do so without forcing a disclosure of the very thing the privilege is designed to protect.92 (Underscoring supplied) Absent then a statement of the specific basis of a claim of executive privilege, there is no way of determining whether it falls under one of the traditional privileges, or whether, given the circumstances in which it is made, it should be

respected.93 These, in substance, were the same criteria in assessing the claim of privilege asserted against the Ombudsman in Almonte v. Vasquez94 and, more in point, against a committee of the Senate in Senate Select Committee on Presidential Campaign Activities v. Nixon.95 A.O. Smith v. Federal Trade Commission is enlightening: [T]he lack of specificity renders an assessment of the potential harm resulting from disclosure impossible, thereby preventing the Court from balancing such harm against plaintiffs needs to determine whether to override any claims of privilege.96 (Underscoring supplied) And so is U.S. v. Article of Drug:97 On the present state of the record, this Court is not called upon to perform this balancing operation. In stating its objection to claimants interrogatories, government asserts, and nothing more, that the disclosures sought by claimant would inhibit the free expression of opinion that non-disclosure is designed to protect. The government has not shown nor even alleged that those who evaluated claimants product were involved in internal policymaking, generally, or in this particular instance. Privilege cannot be set up by an unsupported claim. The facts upon which the privilege is based must be established. To find these interrogatories objectionable, this Court would have to assume that the evaluation and classification of claimants products was a matter of internal policy formulation, an assumption in which this Court is unwilling to indulge sua sponte.98 (Emphasis and underscoring supplied) Mobil Oil Corp. v. Department of Energy99 similarly emphasizes that "an agency must provide precise and certain reasons for preserving the confidentiality of requested information." Black v. Sheraton Corp. of America100 amplifies, thus: A formal and proper claim of executive privilege requires a specific designation and description of the documents within its scope as well as precise and certain reasons for preserving their confidentiality. Without this specificity, it is impossible for a court to analyze the claim short of disclosure of the very thing sought to be protected. As the affidavit now stands, the Court has little more than its sua sponte speculation with which to weigh the applicability of the claim. An improperly asserted claim of privilege is no claim of privilege. Therefore, despite the fact that a claim was made by the proper executive as Reynolds requires, the Court can not recognize the claim in the instant case

because it is legally insufficient to allow the Court to make a just and reasonable determination as to its applicability. To recognize such a broad claim in which the Defendant has given no precise or compelling reasons to shield these documents from outside scrutiny, would make a farce of the whole procedure.101 (Emphasis and underscoring supplied) Due respect for a co-equal branch of government, moreover, demands no less than a claim of privilege clearly stating the grounds therefor. Apropos is the following ruling in McPhaul v. U.S:102 We think the Courts decision in United States v. Bryan, 339 U.S. 323, 70 S. Ct. 724, is highly relevant to these questions. For it is as true here as it was there, that if (petitioner) had legitimate reasons for failing to produce the records of the association, a decent respect for the House of Representatives, by whose authority the subpoenas issued, would have required that (he) state (his) reasons for noncompliance upon the return of the writ. Such a statement would have given the Subcommittee an opportunity to avoid the blocking of its inquiry by taking other appropriate steps to obtain the records. To deny the Committee the opportunity to consider the objection or remedy is in itself a contempt of its authority and an obstruction of its processes. His failure to make any such statement was "a patent evasion of the duty of one summoned to produce papers before a congressional committee[, and] cannot be condoned." (Emphasis and underscoring supplied; citations omitted) Upon the other hand, Congress must not require the executive to state the reasons for the claim with such particularity as to compel disclosure of the information which the privilege is meant to protect.103 A useful analogy in determining the requisite degree of particularity would be the privilege against self-incrimination. Thus, Hoffman v. U.S.104 declares: The witness is not exonerated from answering merely because he declares that in so doing he would incriminate himself his say-so does not of itself establish the hazard of incrimination. It is for the court to say whether his silence is justified, and to require him to answer if it clearly appears to the court that he is mistaken. However, if the witness, upon interposing his claim, were required to prove the hazard in the sense in which a claim is usually required to be established in court, he would be compelled to surrender the very protection which the privilege is designed to guarantee. To sustain the privilege, it need only be evident from the implications of the question, in the setting in which it is asked, that a responsive answer to the question or an explanation of why it cannot be answered might be dangerous because injurious disclosure could result." x x x (Emphasis and underscoring supplied)

The claim of privilege under Section 3 of E.O. 464 in relation to Section 2(b) is thus invalid per se. It is not asserted. It is merely implied. Instead of providing precise and certain reasons for the claim, it merely invokes E.O. 464, coupled with an announcement that the President has not given her consent. It is woefully insufficient for Congress to determine whether the withholding of information is justified under the circumstances of each case. It severely frustrates the power of inquiry of Congress. In fine, Section 3 and Section 2(b) of E.O. 464 must be invalidated. No infirmity, however, can be imputed to Section 2(a) as it merely provides guidelines, binding only on the heads of office mentioned in Section 2(b), on what is covered by executive privilege. It does not purport to be conclusive on the other branches of government. It may thus be construed as a mere expression of opinion by the President regarding the nature and scope of executive privilege. Petitioners, however, assert as another ground for invalidating the challenged order the alleged unlawful delegation of authority to the heads of offices in Section 2(b). Petitioner Senate of the Philippines, in particular, cites the case of the United States where, so it claims, only the President can assert executive privilege to withhold information from Congress. Section 2(b) in relation to Section 3 virtually provides that, once the head of office determines that a certain information is privileged, such determination is presumed to bear the Presidents authority and has the effect of prohibiting the official from appearing before Congress, subject only to the express pronouncement of the President that it is allowing the appearance of such official. These provisions thus allow the President to authorize claims of privilege by mere silence. Such presumptive authorization, however, is contrary to the exceptional nature of the privilege. Executive privilege, as already discussed, is recognized with respect to information the confidential nature of which is crucial to the fulfillment of the unique role and responsibilities of the executive branch, 105 or in those instances where exemption from disclosure is necessary to the discharge of highly important executive responsibilities.106 The doctrine of executive privilege is thus premised on the fact that certain informations must, as a matter of necessity, be kept confidential in pursuit of the public interest. The privilege being, by definition, an exemption from the obligation to disclose information, in this case to Congress, the necessity must be of such high degree as to outweigh the public interest in enforcing that obligation in a particular case.

In light of this highly exceptional nature of the privilege, the Court finds it essential to limit to the President the power to invoke the privilege. She may of course authorize the Executive Secretary to invoke the privilege on her behalf, in which case the Executive Secretary must state that the authority is "By order of the President," which means that he personally consulted with her. The privilege being an extraordinary power, it must be wielded only by the highest official in the executive hierarchy. In other words, the President may not authorize her subordinates to exercise such power. There is even less reason to uphold such authorization in the instant case where the authorization is not explicit but by mere silence. Section 3, in relation to Section 2(b), is further invalid on this score. It follows, therefore, that when an official is being summoned by Congress on a matter which, in his own judgment, might be covered by executive privilege, he must be afforded reasonable time to inform the President or the Executive Secretary of the possible need for invoking the privilege. This is necessary in order to provide the President or the Executive Secretary with fair opportunity to consider whether the matter indeed calls for a claim of executive privilege. If, after the lapse of that reasonable time, neither the President nor the Executive Secretary invokes the privilege, Congress is no longer bound to respect the failure of the official to appear before Congress and may then opt to avail of the necessary legal means to compel his appearance. The Court notes that one of the expressed purposes for requiring officials to secure the consent of the President under Section 3 of E.O. 464 is to ensure "respect for the rights of public officials appearing in inquiries in aid of legislation." That such rights must indeed be respected by Congress is an echo from Article VI Section 21 of the Constitution mandating that "[t]he rights of persons appearing in or affected by such inquiries shall be respected." In light of the above discussion of Section 3, it is clear that it is essentially an authorization for implied claims of executive privilege, for which reason it must be invalidated. That such authorization is partly motivated by the need to ensure respect for such officials does not change the infirm nature of the authorization itself. Right to Information E.O 464 is concerned only with the demands of Congress for the appearance of executive officials in the hearings conducted by it, and not with the demands of citizens for information pursuant to their right to information on matters of public concern. Petitioners are not amiss in claiming, however, that what is

involved in the present controversy is not merely the legislative power of inquiry, but the right of the people to information. There are, it bears noting, clear distinctions between the right of Congress to information which underlies the power of inquiry and the right of the people to information on matters of public concern. For one, the demand of a citizen for the production of documents pursuant to his right to information does not have the same obligatory force as a subpoena duces tecum issued by Congress. Neither does the right to information grant a citizen the power to exact testimony from government officials. These powers belong only to Congress and not to an individual citizen. Thus, while Congress is composed of representatives elected by the people, it does not follow, except in a highly qualified sense, that in every exercise of its power of inquiry, the people are exercising their right to information. To the extent that investigations in aid of legislation are generally conducted in public, however, any executive issuance tending to unduly limit disclosures of information in such investigations necessarily deprives the people of information which, being presumed to be in aid of legislation, is presumed to be a matter of public concern. The citizens are thereby denied access to information which they can use in formulating their own opinions on the matter before Congress opinions which they can then communicate to their representatives and other government officials through the various legal means allowed by their freedom of expression. Thus holds Valmonte v. Belmonte: It is in the interest of the State that the channels for free political discussion be maintained to the end that the government may perceive and be responsive to the peoples will. Yet, this open dialogue can be effective only to the extent that the citizenry is informed and thus able to formulate its will intelligently. Only when the participants in the discussion are aware of the issues and have access to information relating thereto can such bear fruit.107 (Emphasis and underscoring supplied) The impairment of the right of the people to information as a consequence of E.O. 464 is, therefore, in the sense explained above, just as direct as its violation of the legislatures power of inquiry. Implementation of E.O. 464 prior to its publication While E.O. 464 applies only to officials of the executive branch, it does not follow that the same is exempt from the need for publication. On the need for

publishing even those statutes that do not directly apply to people in general, Taada v. Tuvera states: The term "laws" should refer to all laws and not only to those of general application, for strictly speaking all laws relate to the people in general albeit there are some that do not apply to them directly. An example is a law granting citizenship to a particular individual, like a relative of President Marcos who was decreed instant naturalization. It surely cannot be said that such a law does not affect the public although it unquestionably does not apply directly to all the people. The subject of such law is a matter of public interest which any member of the body politic may question in the political forums or, if he is a proper party, even in courts of justice.108 (Emphasis and underscoring supplied) Although the above statement was made in reference to statutes, logic dictates that the challenged order must be covered by the publication requirement. As explained above, E.O. 464 has a direct effect on the right of the people to information on matters of public concern. It is, therefore, a matter of public interest which members of the body politic may question before this Court. Due process thus requires that the people should have been apprised of this issuance before it was implemented. Conclusion Congress undoubtedly has a right to information from the executive branch whenever it is sought in aid of legislation. If the executive branch withholds such information on the ground that it is privileged, it must so assert it and state the reason therefor and why it must be respected. The infirm provisions of E.O. 464, however, allow the executive branch to evade congressional requests for information without need of clearly asserting a right to do so and/or proffering its reasons therefor. By the mere expedient of invoking said provisions, the power of Congress to conduct inquiries in aid of legislation is frustrated. That is impermissible. For [w]hat republican theory did accomplishwas to reverse the old presumption in favor of secrecy, based on the divine right of kings and nobles, and replace it with a presumption in favor of publicity, based on the doctrine of popular sovereignty. (Underscoring supplied)109 Resort to any means then by which officials of the executive branch could refuse to divulge information cannot be presumed valid. Otherwise, we shall not have merely nullified the power of our legislature to inquire into the operations

of government, but we shall have given up something of much greater value our right as a people to take part in government. WHEREFORE, the petitions are PARTLY GRANTED. Sections 2(b) and 3 of Executive Order No. 464 (series of 2005), "Ensuring Observance of the Principle of Separation of Powers, Adherence to the Rule on Executive Privilege and Respect for the Rights of Public Officials Appearing in Legislative Inquiries in Aid of Legislation Under the Constitution, and For Other Purposes," are declared VOID. Sections 1 and 2(a) are, however, VALID. SO ORDERED.

G.R. No. 167798

April 19, 2006

KILUSANG MAYO UNO, NATIONAL FEDERATION OF LABOR UNIONSKILUSANG MAYO UNO (NAFLU-KMU), JOSELITO V. USTAREZ, EMILIA P. DAPULANG, SALVADOR T. CARRANZA, MARTIN T. CUSTODIO, JR. and ROQUE M. TAN, Petitioners, vs. THE DIRECTOR-GENERAL, NATIONAL ECONOMIC DEVELOPMENT AUTHORITY, and THE SECRETARY, DEPARTMENT OF BUDGET and MANAGEMENT, Respondents. x-----------------------------------x G.R. No. 167930 April 19, 2006

REQUIRING ALL GOVERNMENT AGENCIES AND GOVERNMENT-OWNED AND CONTROLLED CORPORATIONS TO STREAMLINE AND HARMONIZE THEIR IDENTIFICATION (ID) SYSTEMS, AND AUTHORIZING FOR SUCH PURPOSE THE DIRECTOR-GENERAL, NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY TO IMPLEMENT THE SAME, AND FOR OTHER PURPOSES WHEREAS, good governance is a major thrust of this Administration; WHEREAS, the existing multiple identification systems in government have created unnecessary and costly redundancies and higher costs to government, while making it inconvenient for individuals to be holding several identification cards; WHEREAS, there is urgent need to streamline and integrate the processes and issuance of identification cards in government to reduce costs and to provide greater convenience for those transacting business with government; WHEREAS, a unified identification system will facilitate private businesses, enhance the integrity and reliability of government-issued identification cards in private transactions, and prevent violations of laws involving false names and identities. NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines by virtue of the powers vested in me by law, do hereby direct the following: Section 1. Adoption of a unified multi-purpose identification (ID) system for government.1avvphil.net All government agencies, including government-owned and controlled corporations, are hereby directed to adopt a unified multi-purpose ID system to ensure the attainment of the following objectives: a. To reduce costs and thereby lessen the financial burden on both the government and the public brought about by the use of multiple ID cards and the maintenance of redundant database containing the same or related information; b. To ensure greater convenience for those transacting business with the government and those availing of government services; c. To facilitate private businesses and promote the wider use of the unified ID card as provided under this executive order;

BAYAN MUNA Representatives SATUR C. OCAMPO, TEODORO A. CASIO, and JOEL G. VIRADOR, GABRIELA WOMENS PARTY Representative LIZA L. MAZA, ANAKPAWIS Representatives RAFAEL V. MARIANO and CRISPIN B. BELTRAN, Rep. FRANCIS G. ESCUDERO, Rep. EDUARDO C. ZIALCITA, Rep. LORENZO R. TAADA III, DR. CAROL PAGADUAN-ARAULLO and RENATO M. REYES, JR. of BAYAN, MARIE HILAO-ENRIQUEZ of KARAPATAN, ANTONIO L. TINIO of ACT, FERDINAND GAITE of COURAGE, GIOVANNI A. TAPANG of AGHAM, WILFREDO MARBELLA GARCIA, of KMP, LANA LINABAN of GABRIELA, AMADO GAT INCIONG, RENATO CONSTANTINO, JR., DEAN PACIFICO H. AGABIN, SHARON R. DUREMDES of the NATIONAL COUNCIL OF CHURCHES IN THE PHILIPPINES, and BRO. EDMUNDO L. FERNANDEZ (FSC) of the ASSOCIATION OF MAJOR RELIGIOUS SUPERIORS OF THE PHILIPPINES (AMRSP), Petitioners, vs. EDUARDO ERMITA, in his capacity as Executive Secretary, ROMULO NERI, in his capacity as Director-General of the NATIONAL ECONOMIC and DEVELOPMENT AUTHORITY (NEDA) and the Administrator of the NATIONAL STATISTICS OFFICE (NSO), Respondents. DECISION CARPIO, J.: This case involves two consolidated petitions for certiorari, prohibition, and mandamus under Rule 65 of the Rules of Court, seeking the nullification of Executive Order No. 420 (EO 420) on the ground that it is unconstitutional. EO 420, issued by President Gloria Macapagal-Arroyo on 13 April 2005, reads:

d. To enhance the integrity and reliability of government-issued ID cards; and e. To facilitate access to and delivery of quality and effective government service. Section 2. Coverage All government agencies and government-owned and controlled corporations issuing ID cards to their members or constituents shall be covered by this executive order. Section 3. Data requirement for the unified ID system The data to be collected and recorded by the participating agencies shall be limited to the following: Name Home Address Sex Picture Signature Date of Birth Place of Birth Marital Status Names of Parents Height Weight Two index fingers and two thumbmarks Any prominent distinguishing features like moles and others Tax Identification Number (TIN)

Provided that a corresponding ID number issued by the participating agency and a common reference number shall form part of the stored ID data and, together with at least the first five items listed above, including the print of the right thumbmark, or any of the fingerprints as collected and stored, shall appear on the face or back of the ID card for visual verification purposes. Section 4. Authorizing the Director-General, National Economic and Development Authority, to Harmonize All Government Identification Systems. The Director-General, National Economic Development Authority, is hereby authorized to streamline and harmonize all government ID systems. Section 5. Functions and responsibilities of the Director-General, National Economic and Development Authority. In addition to his organic functions and responsibilities, the Director-General, National Economic and Development Authority, shall have the following functions and responsibilities: a. Adopt within sixty (60) days from the effectivity of this executive order a unified government ID system containing only such data and features, as indicated in Section 3 above, to validly establish the identity of the card holder: b. Enter into agreements with local governments, through their respective leagues of governors or mayors, the Commission on Elections (COMELEC), and with other branches or instrumentalities of the government, for the purpose of ensuring government-wide adoption of and support to this effort to streamline the ID systems in government; b. Call on any other government agency or institution, or create sub committees or technical working groups, to provide such assistance as may be necessary or required for the effective performance of its functions; and d. Promulgate such rules or regulations as may be necessary in pursuance of the objectives of this executive order. Section 6. Safeguards. The Director-General, National Economic and Development Authority, and the pertinent agencies shall adopt such safeguard as may be necessary and adequate to ensure that the right to privacy of an individual takes precedence over efficient public service delivery. Such safeguards shall, as a minimum, include the following: a. The data to be recorded and stored, which shall be used only for purposes of establishing the identity of a person, shall be limited to those specified in Section 3 of this executive order;

b. In no case shall the collection or compilation of other data in violation of a persons right to privacy shall be allowed or tolerated under this order; c. Stringent systems of access control to data in the identification system shall be instituted; d. Data collected and stored for this purpose shall be kept and treated as strictly confidential and a personal or written authorization of the Owner shall be required for access and disclosure of data; e. The identification card to be issued shall be protected by advanced security features and cryptographic technology; and f. A written request by the Owner of the identification card shall be required for any correction or revision of relevant data, or under such conditions as the participating agency issuing the identification card shall prescribe. Section 7. Funding. Such funds as may be recommended by the Department of Budget and Management shall be provided to carry out the objectives of this executive order. Section 8. Repealing clause. All executive orders or issuances, or portions thereof, which are inconsistent with this executive order, are hereby revoked, amended or modified accordingly. Section 9. Effectivity. This executive order shall take effect fifteen (15) days after its publication in two (2) newspapers of general circulation. DONE in the City of Manila, this 13th day of April, in the year of Our Lord, Two Thousand and Five. Thus, under EO 420, the President directs all government agencies and government-owned and controlled corporations to adopt a uniform data collection and format for their existing identification (ID) systems. Petitioners in G.R. No. 167798 allege that EO 420 is unconstitutional because it constitutes usurpation of legislative functions by the executive branch of the government. Furthermore, they allege that EO 420 infringes on the citizens right to privacy.1 Petitioners in G.R. No. 167930 allege that EO 420 is void based on the following grounds:

1. EO 420 is contrary to law. It completely disregards and violates the decision of this Honorable Court in Ople v. Torres et al., G.R. No. 127685, July 23, 1998. It also violates RA 8282 otherwise known as the Social Security Act of 1997. 2. The Executive has usurped the legislative power of Congress as she has no power to issue EO 420. Furthermore, the implementation of the EO will use public funds not appropriated by Congress for that purpose. 3. EO 420 violates the constitutional provisions on the right to privacy (i) It allows access to personal confidential data without the owners consent. (ii) EO 420 is vague and without adequate safeguards or penalties for any violation of its provisions. (iii) There are no compelling reasons that will legitimize the necessity of EO 420. 4. Granting without conceding that the President may issue EO 420, the Executive Order was issued without public hearing. 5. EO 420 violates the Constitutional provision on equal protection of laws and results in the discriminatory treatment of and penalizes those without ID.2 Issues Essentially, the petitions raise two issues. First, petitioners claim that EO 420 is a usurpation of legislative power by the President. Second, petitioners claim that EO 420 infringes on the citizens right to privacy. Respondents question the legal standing of petitioners and the ripeness of the petitions. Even assuming that petitioners are bereft of legal standing, the Court considers the issues raised under the circumstances of paramount public concern or of transcendental significance to the people. The petitions also present a justiciable controversy ripe for judicial determination because all government entities currently issuing identification cards are mandated to implement EO 420, which petitioners claim is patently unconstitutional. Hence, the Court takes cognizance of the petitions. The Courts Ruling The petitions are without merit. On the Alleged Usurpation of Legislative Power

Section 2 of EO 420 provides, "Coverage. All government agencies and government-owned and controlled corporations issuing ID cards to their members or constituents shall be covered by this executive order." EO 420 applies only to government entities that issue ID cards as part of their functions under existing laws. These government entities have already been issuing ID cards even prior to EO 420. Examples of these government entities are the GSIS,3 SSS,4 Philhealth,5 Mayors Office,6 LTO,7 PRC,8 and similar government entities. Section 1 of EO 420 directs these government entities to "adopt a unified multipurpose ID system." Thus, all government entities that issue IDs as part of their functions under existing laws are required to adopt a uniform data collection and format for their IDs. Section 1 of EO 420 enumerates the purposes of the uniform data collection and format, namely: a. To reduce costs and thereby lessen the financial burden on both the government and the public brought about by the use of multiple ID cards and the maintenance of redundant database containing the same or related information; b. To ensure greater convenience for those transacting business with the government and those availing of government services; c. To facilitate private businesses and promote the wider use of the unified ID card as provided under this executive order; d. To enhance the integrity and reliability of government-issued ID cards; and e. To facilitate access to and delivery of quality and effective government service. In short, the purposes of the uniform ID data collection and ID format are to reduce costs, achieve efficiency and reliability, insure compatibility, and provide convenience to the people served by government entities. Section 3 of EO 420 limits the data to be collected and recorded under the uniform ID system to only 14 specific items, namely: (1) Name; (2) Home Address; (3) Sex; (4) Picture; (5) Signature; (6) Date of Birth; (7) Place of Birth; (8) Marital Status; (9) Name of Parents; (10) Height; (11) Weight; (12) Two index fingers and two thumbmarks; (13) Any prominent distinguishing features like moles or others; and (14) Tax Identification Number.

These limited and specific data are the usual data required for personal identification by government entities, and even by the private sector. Any one who applies for or renews a drivers license provides to the LTO all these 14 specific data. At present, government entities like LTO require considerably more data from applicants for identification purposes. EO 420 will reduce the data required to be collected and recorded in the ID databases of the government entities. Government entities cannot collect or record data, for identification purposes, other than the 14 specific data. Various laws allow several government entities to collect and record data for their ID systems, either expressly or impliedly by the nature of the functions of these government entities. Under their existing ID systems, some government entities collect and record more data than what EO 420 allows. At present, the data collected and recorded by government entities are disparate, and the IDs they issue are dissimilar. In the case of the Supreme Court,9 the IDs that the Court issues to all its employees, including the Justices, contain 15 specific data, namely: (1) Name; (2) Picture; (3) Position; (4) Office Code Number; (5) ID Number; (6) Height; (7) Weight; (8) Complexion; (9) Color of Hair; (10) Blood Type; (11) Right Thumbmark; (12) Tax Identification Number; (13) GSIS Policy Number; (14) Name and Address of Person to be Notified in Case of Emergency; and (15) Signature. If we consider that the picture in the ID can generally also show the sex of the employee, the Courts ID actually contains 16 data. In contrast, the uniform ID format under Section 3 of EO 420 requires only "the first five items listed" in Section 3, plus the fingerprint, agency number and the common reference number, or only eight specific data. Thus, at present, the Supreme Courts ID contains far more data than the proposed uniform ID for government entities under EO 420. The nature of the data contained in the Supreme Court ID is also far more financially sensitive, specifically the Tax Identification Number. Making the data collection and recording of government entities unified, and making their ID formats uniform, will admittedly achieve substantial benefits. These benefits are savings in terms of procurement of equipment and supplies, compatibility in systems as to hardware and software, ease of verification and thus increased reliability of data, and the user-friendliness of a single ID format for all government entities.

There is no dispute that government entities can individually limit the collection and recording of their data to the 14 specific items in Section 3 of EO 420. There is also no dispute that these government entities can individually adopt the ID format as specified in Section 3 of EO 420. Such an act is certainly within the authority of the heads or governing boards of the government entities that are already authorized under existing laws to issue IDs. A unified ID system for all these government entities can be achieved in either of two ways. First, the heads of these existing government entities can enter into a memorandum of agreement making their systems uniform. If the government entities can individually adopt a format for their own ID pursuant to their regular functions under existing laws, they can also adopt by mutual agreement a uniform ID format, especially if the uniform format will result in substantial savings, greater efficiency, and optimum compatibility. This is purely an administrative matter, and does not involve the exercise of legislative power. Second, the President may by executive or administrative order direct the government entities under the Executive department to adopt a uniform ID data collection and format. Section 17, Article VII of the 1987 Constitution provides that the "President shall have control of all executive departments, bureaus and offices." The same Section also mandates the President to "ensure that the laws be faithfully executed." Certainly, under this constitutional power of control the President can direct all government entities, in the exercise of their functions under existing laws, to adopt a uniform ID data collection and ID format to achieve savings, efficiency, reliability, compatibility, and convenience to the public. The Presidents constitutional power of control is self-executing and does not need any implementing legislation. Of course, the Presidents power of control is limited to the Executive branch of government and does not extend to the Judiciary or to the independent constitutional commissions. Thus, EO 420 does not apply to the Judiciary, or to the COMELEC which under existing laws is also authorized to issue voters ID cards.10 This only shows that EO 420 does not establish a national ID system because legislation is needed to establish a single ID system that is compulsory for all branches of government. The Constitution also mandates the President to ensure that the laws are faithfully executed. There are several laws mandating government entities to reduce costs, increase efficiency, and in general, improve public services.11 The adoption of a uniform ID data collection and format under EO 420 is designed

to reduce costs, increase efficiency, and in general, improve public services. Thus, in issuing EO 420, the President is simply performing the constitutional duty to ensure that the laws are faithfully executed. Clearly, EO 420 is well within the constitutional power of the President to promulgate. The President has not usurped legislative power in issuing EO 420. EO 420 is an exercise of Executive power the Presidents constitutional power of control over the Executive department. EO 420 is also compliance by the President of the constitutional duty to ensure that the laws are faithfully executed. Legislative power is the authority to make laws and to alter or repeal them. In issuing EO 420, the President did not make, alter or repeal any law but merely implemented and executed existing laws. EO 420 reduces costs, as well as insures efficiency, reliability, compatibility and user-friendliness in the implementation of current ID systems of government entities under existing laws. Thus, EO 420 is simply an executive issuance and not an act of legislation. The act of issuing ID cards and collecting the necessary personal data for imprinting on the ID card does not require legislation. Private employers routinely issue ID cards to their employees. Private and public schools also routinely issue ID cards to their students. Even private clubs and associations issue ID cards to their members. The purpose of all these ID cards is simply to insure the proper identification of a person as an employee, student, or member of a club. These ID cards, although imposed as a condition for exercising a privilege, are voluntary because a person is not compelled to be an employee, student or member of a club. What require legislation are three aspects of a government maintained ID card system. First, when the implementation of an ID card system requires a special appropriation because there is no existing appropriation for such purpose. Second, when the ID card system is compulsory on all branches of government, including the independent constitutional commissions, as well as compulsory on all citizens whether they have a use for the ID card or not. Third, when the ID card system requires the collection and recording of personal data beyond what is routinely or usually required for such purpose, such that the citizens right to privacy is infringed. In the present case, EO 420 does not require any special appropriation because the existing ID card systems of government entities covered by EO 420 have the proper appropriation or funding. EO 420 is not compulsory on all

branches of government and is not compulsory on all citizens. EO 420 requires a very narrow and focused collection and recording of personal data while safeguarding the confidentiality of such data. In fact, the data collected and recorded under EO 420 are far less than the data collected and recorded under the ID systems existing prior to EO 420. EO 420 does not establish a national ID card system. EO 420 does not compel all citizens to have an ID card. EO 420 applies only to government entities that under existing laws are already collecting data and issuing ID cards as part of their governmental functions. Every government entity that presently issues an ID card will still issue its own ID card under its own name. The only difference is that the ID card will contain only the five data specified in Section 3 of EO 420, plus the fingerprint, the agency ID number, and the common reference number which is needed for cross-verification to ensure integrity and reliability of identification. This Court should not interfere how government entities under the Executive department should undertake cost savings, achieve efficiency in operations, insure compatibility of equipment and systems, and provide user-friendly service to the public. The collection of ID data and issuance of ID cards are day-to-day functions of many government entities under existing laws. Even the Supreme Court has its own ID system for employees of the Court and all first and second level courts. The Court is even trying to unify its ID system with those of the appellate courts, namely the Court of Appeals, Sandiganbayan and Court of Tax Appeals. There is nothing legislative about unifying existing ID systems of all courts within the Judiciary. The same is true for government entities under the Executive department. If government entities under the Executive department decide to unify their existing ID data collection and ID card issuance systems to achieve savings, efficiency, compatibility and convenience, such act does not involve the exercise of any legislative power. Thus, the issuance of EO 420 does not constitute usurpation of legislative power. On the Alleged Infringement of the Right to Privacy All these years, the GSIS, SSS, LTO, Philhealth and other government entities have been issuing ID cards in the performance of their governmental functions. There have been no complaints from citizens that the ID cards of these government entities violate their right to privacy. There have also been no complaints of abuse by these government entities in the collection and recording of personal identification data.

In fact, petitioners in the present cases do not claim that the ID systems of government entities prior to EO 420 violate their right to privacy. Since petitioners do not make such claim, they even have less basis to complain against the unified ID system under EO 420. The data collected and stored for the unified ID system under EO 420 will be limited to only 14 specific data, and the ID card itself will show only eight specific data. The data collection, recording and ID card system under EO 420 will even require less data collected, stored and revealed than under the disparate systems prior to EO 420. Prior to EO 420, government entities had a free hand in determining the kind, nature and extent of data to be collected and stored for their ID systems. Under EO 420, government entities can collect and record only the 14 specific data mentioned in Section 3 of EO 420. In addition, government entities can show in their ID cards only eight of these specific data, seven less data than what the Supreme Courts ID shows. Also, prior to EO 420, there was no executive issuance to government entities prescribing safeguards on the collection, recording, and disclosure of personal identification data to protect the right to privacy. Now, under Section 5 of EO 420, the following safeguards are instituted: a. The data to be recorded and stored, which shall be used only for purposes of establishing the identity of a person, shall be limited to those specified in Section 3 of this executive order; b. In no case shall the collection or compilation of other data in violation of a persons right to privacy be allowed or tolerated under this order; c. Stringent systems of access control to data in the identification system shall be instituted; d. Data collected and stored for this purpose shall be kept and treated as strictly confidential and a personal or written authorization of the Owner shall be required for access and disclosure of data; e. The identification card to be issued shall be protected by advanced security features and cryptographic technology; f. A written request by the Owner of the identification card shall be required for any correction or revision of relevant data, or under such conditions as the participating agency issuing the identification card shall prescribe.

On its face, EO 420 shows no constitutional infirmity because it even narrowly limits the data that can be collected, recorded and shown compared to the existing ID systems of government entities. EO 420 further provides strict safeguards to protect the confidentiality of the data collected, in contrast to the prior ID systems which are bereft of strict administrative safeguards. The right to privacy does not bar the adoption of reasonable ID systems by government entities. Some one hundred countries have compulsory national ID systems, including democracies such as Spain, France, Germany, Belgium, Greece, Luxembourg, and Portugal. Other countries which do not have national ID systems, like the United States, Canada, Australia, New Zealand, Ireland, the Nordic Countries and Sweden, have sectoral cards for health, social or other public services.12 Even with EO 420, the Philippines will still fall under the countries that do not have compulsory national ID systems but allow only sectoral cards for social security, health services, and other specific purposes. Without a reliable ID system, government entities like GSIS, SSS, Philhealth, and LTO cannot perform effectively and efficiently their mandated functions under existing laws. Without a reliable ID system, GSIS, SSS, Philhealth and similar government entities stand to suffer substantial losses arising from false names and identities. The integrity of the LTOs licensing system will suffer in the absence of a reliable ID system. The dissenting opinion cites three American decisions on the right to privacy, namely, Griswold v. Connecticut,13 U.S. Justice Department v. Reporters Committee for Freedom of the Press,14 and Whalen v. Roe.15 The last two decisions actually support the validity of EO 420, while the first is inapplicable to the present case. In Griswold, the U.S. Supreme Court declared unconstitutional a state law that prohibited the use and distribution of contraceptives because enforcement of the law would allow the police entry into the bedrooms of married couples. Declared the U.S. Supreme Court: "Would we allow the police to search the sacred precincts of the marital bedrooms for telltale signs of the use of contraceptives? The very idea is repulsive to the notions of privacy surrounding the marriage relationship." Because the facts and the issue involved in Griswold are materially different from the present case, Griswold has no persuasive bearing on the present case. In U.S. Justice Department, the issue was not whether the State could collect and store information on individuals from public records nationwide but whether the State could withhold such information from the press. The premise of the

issue in U.S. Justice Department is that the State can collect and store in a central database information on citizens gathered from public records across the country. In fact, the law authorized the Department of Justice to collect and preserve fingerprints and other criminal identification records nationwide. The law also authorized the Department of Justice to exchange such information with "officials of States, cities and other institutions." The Department of Justice treated such information as confidential. A CBS news correspondent and the Reporters Committee demanded the criminal records of four members of a family pursuant to the Freedom of Information Act. The U.S. Supreme Court ruled that the Freedom of Information Act expressly exempts release of information that would "constitute an unwarranted invasion of personal privacy," and the information demanded falls under that category of exempt information. With the exception of the 8 specific data shown on the ID card, the personal data collected and recorded under EO 420 are treated as "strictly confidential" under Section 6(d) of EO 420. These data are not only strictly confidential but also personal matters. Section 7, Article III of the 1987 Constitution grants the "right of the people to information on matters of public concern." Personal matters are exempt or outside the coverage of the peoples right to information on matters of public concern. The data treated as "strictly confidential" under EO 420 being private matters and not matters of public concern, these data cannot be released to the public or the press. Thus, the ruling in U.S. Justice Department does not collide with EO 420 but actually supports the validity EO 420. Whalen v. Roe is the leading American case on the constitutional protection for control over information. In Whalen, the U.S. Supreme Court upheld the validity of a New York law that required doctors to furnish the government reports identifying patients who received prescription drugs that have a potential for abuse. The government maintained a central computerized database containing the names and addresses of the patients, as well as the identity of the prescribing doctors. The law was assailed because the database allegedly infringed the right to privacy of individuals who want to keep their personal matters confidential. The U.S. Supreme Court rejected the privacy claim, and declared: Disclosures of private medical information to doctors, to hospital personnel, to insurance companies, and to public health agencies are often an essential part of modern medical practice even when the disclosure may reflect unfavorably on the character of the patient. Requiring such disclosures to representatives of the State having responsibility for the health of the community does not

automatically amount to an impermissible invasion of privacy. (Emphasis supplied) Compared to the personal medical data required for disclosure to the New York State in Whalen, the 14 specific data required for disclosure to the Philippine government under EO 420 are far less sensitive and far less personal. In fact, the 14 specific data required under EO 420 are routine data for ID systems, unlike the sensitive and potentially embarrassing medical records of patients taking prescription drugs. Whalen, therefore, carries persuasive force for upholding the constitutionality of EO 420 as non-violative of the right to privacy. Subsequent U.S. Supreme Court decisions have reiterated Whalen. In Planned Parenthood of Central Missouri v. Danforth,16 the U.S. Supreme Court upheld the validity of a law that required doctors performing abortions to fill up forms, maintain records for seven years, and allow the inspection of such records by public health officials. The U.S. Supreme Court ruled that "recordkeeping and reporting requirements that are reasonably directed to the preservation of maternal health and that properly respect a patients confidentiality and privacy are permissible." Again, in Planned Parenthood of Southeastern Pennsylvania v. Casey,17 the U.S. Supreme Court upheld a law that required doctors performing an abortion to file a report to the government that included the doctors name, the womans age, the number of prior pregnancies and abortions that the woman had, the medical complications from the abortion, the weight of the fetus, and the marital status of the woman. In case of state-funded institutions, the law made such information publicly available. In Casey, the U.S. Supreme Court stated: "The collection of information with respect to actual patients is a vital element of medical research, and so it cannot be said that the requirements serve no purpose other than to make abortion more difficult." Compared to the disclosure requirements of personal data that the U.S. Supreme Court have upheld in Whalen, Danforth and Casey as not violative of the right to privacy, the disclosure requirements under EO 420 are far benign and cannot therefore constitute violation of the right to privacy. EO 420 requires disclosure of 14 personal data that are routine for ID purposes, data that cannot possibly embarrass or humiliate anyone. Petitioners have not shown how EO 420 will violate their right to privacy. Petitioners cannot show such violation by a mere facial examination of EO 420 because EO 420 narrowly draws the data collection, recording and exhibition while prescribing comprehensive safeguards. Ople v. Torres18 is not authority to

hold that EO 420 violates the right to privacy because in that case the assailed executive issuance, broadly drawn and devoid of safeguards, was annulled solely on the ground that the subject matter required legislation. As then Associate Justice, now Chief Justice Artemio V. Panganiban noted in his concurring opinion in Ople v. Torres, "The voting is decisive only on the need for appropriate legislation, and it is only on this ground that the petition is granted by this Court." EO 420 applies only to government entities that already maintain ID systems and issue ID cards pursuant to their regular functions under existing laws. EO 420 does not grant such government entities any power that they do not already possess under existing laws. In contrast, the assailed executive issuance in Ople v. Torres sought to establish a "National Computerized Identification Reference System,"19 a national ID system that did not exist prior to the assailed executive issuance. Obviously, a national ID card system requires legislation because it creates a new national data collection and card issuance system where none existed before. In the present case, EO 420 does not establish a national ID system but makes the existing sectoral card systems of government entities like GSIS, SSS, Philhealth and LTO less costly, more efficient, reliable and user-friendly to the public. Hence, EO 420 is a proper subject of executive issuance under the Presidents constitutional power of control over government entities in the Executive department, as well as under the Presidents constitutional duty to ensure that laws are faithfully executed. WHEREFORE, the petitions are DISMISSED. Executive Order No. 420 is declared VALID. SO ORDERED.

G.R. No. 166429

December 19, 2005

REPUBLIC OF THE PHILIPPINES, Represented by Executive Secretary Eduardo R. Ermita, the DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS (DOTC), and the MANILA INTERNATIONAL AIRPORT AUTHORITY (MIAA), Petitioners, vs. HON. HENRICK F. GINGOYON, In his capacity as Presiding Judge of the Regional Trial Court, Branch 117, Pasay City and PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC., Respondents TINGA, J.: The Ninoy Aquino International Airport Passenger Terminal III (NAIA 3) was conceived, designed and constructed to serve as the country's show window to the world. Regrettably, it has spawned controversies. Regrettably too, despite the apparent completion of the terminal complex way back it has not yet been operated. This has caused immeasurable economic damage to the country, not to mention its deplorable discredit in the international community. In the first case that reached this Court, Agan v. PIATCO,1 the contracts which the Government had with the contractor were voided for being contrary to law and public policy. The second case now before the Court involves the matter of just compensation due the contractor for the terminal complex it built. We decide the case on the basis of fairness, the same norm that pervades both the Court's 2004 Resolution in the first case and the latest expropriation law. The present controversy has its roots with the promulgation of the Court's decision in Agan v. PIATCO,2 promulgated in 2003 (2003 Decision). This decision nullified the "Concession Agreement for the Build-Operate-andTransfer Arrangement of the Ninoy Aquino International Airport Passenger Terminal III" entered into between the Philippine Government (Government) and the Philippine International Air Terminals Co., Inc. (PIATCO), as well as the amendments and supplements thereto. The agreement had authorized PIATCO to build a new international airport terminal (NAIA 3), as well as a franchise to operate and maintain the said terminal during the concession period of 25 years. The contracts were nullified, among others, that Paircargo Consortium, predecessor of PIATCO, did not possess the requisite financial capacity when it was awarded the NAIA 3 contract and that the agreement was contrary to public policy.3

At the time of the promulgation of the 2003 Decision, the NAIA 3 facilities had already been built by PIATCO and were nearing completion.4 However, the ponencia was silent as to the legal status of the NAIA 3 facilities following the nullification of the contracts, as well as whatever rights of PIATCO for reimbursement for its expenses in the construction of the facilities. Still, in his Separate Opinion, Justice Panganiban, joined by Justice Callejo, declared as follows: Should government pay at all for reasonable expenses incurred in the construction of the Terminal? Indeed it should, otherwise it will be unjustly enriching itself at the expense of Piatco and, in particular, its funders, contractors and investors - both local and foreign. After all, there is no question that the State needs and will make use of Terminal III, it being part and parcel of the critical infrastructure and transportation-related programs of government.5 PIATCO and several respondents-intervenors filed their respective motions for the reconsideration of the 2003 Decision. These motions were denied by the Court in its Resolution dated 21 January 2004 (2004 Resolution).6 However, the Court this time squarely addressed the issue of the rights of PIATCO to refund, compensation or reimbursement for its expenses in the construction of the NAIA 3 facilities. The holding of the Court on this crucial point follows: This Court, however, is not unmindful of the reality that the structures comprising the NAIA IPT III facility are almost complete and that funds have been spent by PIATCO in their construction. For the government to take over the said facility, it has to compensate respondent PIATCO as builder of the said structures. The compensation must be just and in accordance with law and equity for the government can not unjustly enrich itself at the expense of PIATCO and its investors.7 After the promulgation of the rulings in Agan, the NAIA 3 facilities have remained in the possession of PIATCO, despite the avowed intent of the Government to put the airport terminal into immediate operation. The Government and PIATCO conducted several rounds of negotiation regarding the NAIA 3 facilities.8 It also appears that arbitral proceedings were commenced before the International Chamber of Commerce International Court of Arbitration and the International Centre for the Settlement of Investment Disputes,9 although the Government has raised jurisdictional questions before those two bodies.10 Then, on 21 December 2004, the Government11 filed a Complaint for expropriation with the Pasay City Regional Trial Court (RTC), together with an

Application for Special Raffle seeking the immediate holding of a special raffle. The Government sought upon the filing of the complaint the issuance of a writ of possession authorizing it to take immediate possession and control over the NAIA 3 facilities. The Government also declared that it had deposited the amount of P3,002,125,000.0012 (3 Billion)13 in Cash with the Land Bank of the Philippines, representing the NAIA 3 terminal's assessed value for taxation purposes.14 The case15 was raffled to Branch 117 of the Pasay City RTC, presided by respondent judge Hon. Henrick F. Gingoyon (Hon. Gingoyon). On the same day that the Complaint was filed, the RTC issued an Order16 directing the issuance of a writ of possession to the Government, authorizing it to "take or enter upon the possession" of the NAIA 3 facilities. Citing the case of City of Manila v. Serrano,17 the RTC noted that it had the ministerial duty to issue the writ of possession upon the filing of a complaint for expropriation sufficient in form and substance, and upon deposit made by the government of the amount equivalent to the assessed value of the property subject to expropriation. The RTC found these requisites present, particularly noting that "[t]he case record shows that [the Government has] deposited the assessed value of the [NAIA 3 facilities] in the Land Bank of the Philippines, an authorized depositary, as shown by the certification attached to their complaint." Also on the same day, the RTC issued a Writ of Possession. According to PIATCO, the Government was able to take possession over the NAIA 3 facilities immediately after the Writ of Possession was issued.18 However, on 4 January 2005, the RTC issued another Order designed to supplement its 21 December 2004 Order and the Writ of Possession. In the 4 January 2005 Order, now assailed in the present petition, the RTC noted that its earlier issuance of its writ of possession was pursuant to Section 2, Rule 67 of the 1997 Rules of Civil Procedure. However, it was observed that Republic Act No. 8974 (Rep. Act No. 8974), otherwise known as "An Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National Government Infrastructure Projects and For Other Purposes" and its Implementing Rules and Regulations (Implementing Rules) had amended Rule 67 in many respects. There are at least two crucial differences between the respective procedures under Rep. Act No. 8974 and Rule 67. Under the statute, the Government is required to make immediate payment to the property owner upon the filing of the complaint to be entitled to a writ of possession, whereas in Rule 67, the Government is required only to make an initial deposit with an authorized government depositary. Moreover, Rule 67 prescribes that the initial deposit be

equivalent to the assessed value of the property for purposes of taxation, unlike Rep. Act No. 8974 which provides, as the relevant standard for initial compensation, the market value of the property as stated in the tax declaration or the current relevant zonal valuation of the Bureau of Internal Revenue (BIR), whichever is higher, and the value of the improvements and/or structures using the replacement cost method. Accordingly, on the basis of Sections 4 and 7 of Rep. Act No. 8974 and Section 10 of the Implementing Rules, the RTC made key qualifications to its earlier issuances. First, it directed the Land Bank of the Philippines, Baclaran Branch (LBP-Baclaran), to immediately release the amount of US$62,343,175.77 to PIATCO, an amount which the RTC characterized as that which the Government "specifically made available for the purpose of this expropriation;" and such amount to be deducted from the amount of just compensation due PIATCO as eventually determined by the RTC. Second, the Government was directed to submit to the RTC a Certificate of Availability of Funds signed by authorized officials to cover the payment of just compensation. Third, the Government was directed "to maintain, preserve and safeguard" the NAIA 3 facilities or "perform such as acts or activities in preparation for their direct operation" of the airport terminal, pending expropriation proceedings and full payment of just compensation. However, the Government was prohibited "from performing acts of ownership like awarding concessions or leasing any part of [NAIA 3] to other parties."19 The very next day after the issuance of the assailed 4 January 2005 Order, the Government filed an Urgent Motion for Reconsideration, which was set for hearing on 10 January 2005. On 7 January 2005, the RTC issued another Order, the second now assailed before this Court, which appointed three (3) Commissioners to ascertain the amount of just compensation for the NAIA 3 Complex. That same day, the Government filed a Motion for Inhibition of Hon. Gingoyon. The RTC heard the Urgent Motion for Reconsideration and Motion for Inhibition on 10 January 2005. On the same day, it denied these motions in an Omnibus Order dated 10 January 2005. This is the third Order now assailed before this Court. Nonetheless, while the Omnibus Order affirmed the earlier dispositions in the 4 January 2005 Order, it excepted from affirmance "the superfluous part of the Order prohibiting the plaintiffs from awarding concessions or leasing any part of [NAIA 3] to other parties."20 Thus, the present Petition for Certiorari and Prohibition under Rule 65 was filed on 13 January 2005. The petition prayed for the nullification of the RTC orders

dated 4 January 2005, 7 January 2005, and 10 January 2005, and for the inhibition of Hon. Gingoyon from taking further action on the expropriation case. A concurrent prayer for the issuance of a temporary restraining order and preliminary injunction was granted by this Court in a Resolution dated 14 January 2005.21 The Government, in imputing grave abuse of discretion to the acts of Hon. Gingoyon, raises five general arguments, to wit: (i) that Rule 67, not Rep. Act No. 8974, governs the present expropriation proceedings; (ii) that Hon. Gingoyon erred when he ordered the immediate release of the amount of US$62.3 Million to PIATCO considering that the assessed value as alleged in the complaint was only P3 Billion; (iii) that the RTC could not have prohibited the Government from enjoining the performance of acts of ownership; (iv) that the appointment of the three commissioners was erroneous; and (v) that Hon. Gingoyon should be compelled to inhibit himself from the expropriation case.22 Before we delve into the merits of the issues raised by the Government, it is essential to consider the crucial holding of the Court in its 2004 Resolution in Agan, which we repeat below: This Court, however, is not unmindful of the reality that the structures comprising the NAIA IPT III facility are almost complete and that funds have been spent by PIATCO in their construction. For the government to take over the said facility, it has to compensate respondent PIATCO as builder of the said structures. The compensation must be just and in accordance with law and equity for the government can not unjustly enrich itself at the expense of PIATCO and its investors.23 This pronouncement contains the fundamental premises which permeate this decision of the Court. Indeed, Agan, final and executory as it is, stands as governing law in this case, and any disposition of the present petition must conform to the conditions laid down by the Court in its 2004 Resolution. The 2004 Resolution Which Is Law of This Case Generally Permits Expropriation

The pronouncement in the 2004 Resolution is especially significant to this case in two aspects, namely: (i) that PIATCO must receive payment of just compensation determined in accordance with law and equity; and (ii) that the government is barred from taking over NAIA 3 until such just compensation is paid. The parties cannot be allowed to evade the directives laid down by this Court through any mode of judicial action, such as the complaint for eminent domain. It cannot be denied though that the Court in the 2004 Resolution prescribed mandatory guidelines which the Government must observe before it could acquire the NAIA 3 facilities. Thus, the actions of respondent judge under review, as well as the arguments of the parties must, to merit affirmation, pass the threshold test of whether such propositions are in accord with the 2004 Resolution. The Government does not contest the efficacy of this pronouncement in the 2004 Resolution,24 thus its application to the case at bar is not a matter of controversy. Of course, questions such as what is the standard of "just compensation" and which particular laws and equitable principles are applicable, remain in dispute and shall be resolved forthwith. The Government has chosen to resort to expropriation, a remedy available under the law, which has the added benefit of an integrated process for the determination of just compensation and the payment thereof to PIATCO. We appreciate that the case at bar is a highly unusual case, whereby the Government seeks to expropriate a building complex constructed on land which the State already owns.25 There is an inherent illogic in the resort to eminent domain on property already owned by the State. At first blush, since the State already owns the property on which NAIA 3 stands, the proper remedy should be akin to an action for ejectment. However, the reason for the resort by the Government to expropriation proceedings is understandable in this case. The 2004 Resolution, in requiring the payment of just compensation prior to the takeover by the Government of NAIA 3, effectively precluded it from acquiring possession or ownership of the NAIA 3 through the unilateral exercise of its rights as the owner of the ground on which the facilities stood. Thus, as things stood after the 2004 Resolution, the right of the Government to take over the NAIA 3 terminal was preconditioned by lawful order on the payment of just compensation to PIATCO as builder of the structures.

The determination of just compensation could very well be agreed upon by the parties without judicial intervention, and it appears that steps towards that direction had been engaged in. Still, ultimately, the Government resorted to its inherent power of eminent domain through expropriation proceedings. Is eminent domain appropriate in the first place, with due regard not only to the law on expropriation but also to the Court's 2004 Resolution in Agan? The right of eminent domain extends to personal and real property, and the NAIA 3 structures, adhered as they are to the soil, are considered as real property.26 The public purpose for the expropriation is also beyond dispute. It should also be noted that Section 1 of Rule 67 (on Expropriation) recognizes the possibility that the property sought to be expropriated may be titled in the name of the Republic of the Philippines, although occupied by private individuals, and in such case an averment to that effect should be made in the complaint. The instant expropriation complaint did aver that the NAIA 3 complex "stands on a parcel of land owned by the Bases Conversion Development Authority, another agency of [the Republic of the Philippines]."27 Admittedly, eminent domain is not the sole judicial recourse by which the Government may have acquired the NAIA 3 facilities while satisfying the requisites in the 2004 Resolution. Eminent domain though may be the most effective, as well as the speediest means by which such goals may be accomplished. Not only does it enable immediate possession after satisfaction of the requisites under the law, it also has a built-in procedure through which just compensation may be ascertained. Thus, there should be no question as to the propriety of eminent domain proceedings in this case. Still, in applying the laws and rules on expropriation in the case at bar, we are impelled to apply or construe these rules in accordance with the Court's prescriptions in the 2004 Resolution to achieve the end effect that the Government may validly take over the NAIA 3 facilities. Insofar as this case is concerned, the 2004 Resolution is effective not only as a legal precedent, but as the source of rights and prescriptions that must be guaranteed, if not enforced, in the resolution of this petition. Otherwise, the integrity and efficacy of the rulings of this Court will be severely diminished. It is from these premises that we resolve the first question, whether Rule 67 of the Rules of Court or Rep. Act No. 8974 governs the expropriation proceedings in this case. Application of Rule 67 Violates the 2004 Agan Resolution

The Government insists that Rule 67 of the Rules of Court governs the expropriation proceedings in this case to the exclusion of all other laws. On the other hand, PIATCO claims that it is Rep. Act No. 8974 which does apply. Earlier, we had adverted to the basic differences between the statute and the procedural rule. Further elaboration is in order. Rule 67 outlines the procedure under which eminent domain may be exercised by the Government. Yet by no means does it serve at present as the solitary guideline through which the State may expropriate private property. For example, Section 19 of the Local Government Code governs as to the exercise by local government units of the power of eminent domain through an enabling ordinance. And then there is Rep. Act No. 8974, which covers expropriation proceedings intended for national government infrastructure projects. Rep. Act No. 8974, which provides for a procedure eminently more favorable to the property owner than Rule 67, inescapably applies in instances when the national government expropriates property "for national government infrastructure projects."28 Thus, if expropriation is engaged in by the national government for purposes other than national infrastructure projects, the assessed value standard and the deposit mode prescribed in Rule 67 continues to apply. Under both Rule 67 and Rep. Act No. 8974, the Government commences expropriation proceedings through the filing of a complaint. Unlike in the case of local governments which necessitate an authorizing ordinance before expropriation may be accomplished, there is no need under Rule 67 or Rep. Act No. 8974 for legislative authorization before the Government may proceed with a particular exercise of eminent domain. The most crucial difference between Rule 67 and Rep. Act No. 8974 concerns the particular essential step the Government has to undertake to be entitled to a writ of possession. The first paragraph of Section 2 of Rule 67 provides: SEC. 2. Entry of plaintiff upon depositing value with authorized government depository. - Upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the authorized government depositary an amount equivalent to the assessed value of the property for purposes of taxation to be held by such bank subject to the orders of the court. Such deposit shall be in money, unless in lieu thereof the court authorizes the deposit of a certificate of deposit of a government bank of

the Republic of the Philippines payable on demand to the authorized government depositary. In contrast, Section 4 of Rep. Act No. 8974 relevantly states: SEC. 4. Guidelines for Expropriation Proceedings.- Whenever it is necessary to acquire real property for the right-of-way, site or location for any national government infrastructure project through expropriation, the appropriate proceedings before the proper court under the following guidelines: a) Upon the filing of the complaint, and after due notice to the defendant, the implementing agency shall immediately pay the owner of the property the amount equivalent to the sum of (1) one hundred percent (100%) of the value of the property based on the current relevant zonal valuation of the Bureau of Internal Revenue (BIR); and (2) the value of the improvements and/or structures as determined under Section 7 hereof; . . . c) In case the completion of a government infrastructure project is of utmost urgency and importance, and there is no existing valuation of the area concerned, the implementing agency shall immediately pay the owner of the property its proffered value taking into consideration the standards prescribed in Section 5 hereof. Upon completion with the guidelines abovementioned, the court shall immediately issue to the implementing agency an order to take possession of the property and start the implementation of the project. Before the court can issue a Writ of Possession, the implementing agency shall present to the court a certificate of availability of funds from the proper official concerned. . . . As can be gleaned from the above-quoted texts, Rule 67 merely requires the Government to deposit with an authorized government depositary the assessed value of the property for expropriation for it to be entitled to a writ of possession. On the other hand, Rep. Act No. 8974 requires that the Government make a direct payment to the property owner before the writ may issue. Moreover, such payment is based on the zonal valuation of the BIR in the case of land, the value of the improvements or structures under the replacement cost method,29 or if no such valuation is available and in cases of utmost urgency, the proffered value of the property to be seized.

It is quite apparent why the Government would prefer to apply Rule 67 in lieu of Rep. Act No. 8974. Under Rule 67, it would not be obliged to immediately pay any amount to PIATCO before it can obtain the writ of possession since all it need do is deposit the amount equivalent to the assessed value with an authorized government depositary. Hence, it devotes considerable effort to point out that Rep. Act No. 8974 does not apply in this case, notwithstanding the undeniable reality that NAIA 3 is a national government project. Yet, these efforts fail, especially considering the controlling effect of the 2004 Resolution in Agan on the adjudication of this case. It is the finding of this Court that the staging of expropriation proceedings in this case with the exclusive use of Rule 67 would allow for the Government to take over the NAIA 3 facilities in a fashion that directly rebukes our 2004 Resolution in Agan. This Court cannot sanction deviation from its own final and executory orders. Section 2 of Rule 67 provides that the State "shall have the right to take or enter upon the possession of the real property involved if [the plaintiff] deposits with the authorized government depositary an amount equivalent to the assessed value of the property for purposes of taxation to be held by such bank subject to the orders of the court."30 It is thus apparent that under the provision, all the Government need do to obtain a writ of possession is to deposit the amount equivalent to the assessed value with an authorized government depositary. Would the deposit under Section 2 of Rule 67 satisfy the requirement laid down in the 2004 Resolution that "[f]or the government to take over the said facility, it has to compensate respondent PIATCO as builder of the said structures"? Evidently not. If Section 2 of Rule 67 were to apply, PIATCO would be enjoined from receiving a single centavo as just compensation before the Government takes over the NAIA 3 facility by virtue of a writ of possession. Such an injunction squarely contradicts the letter and intent of the 2004 Resolution. Hence, the position of the Government sanctions its own disregard or violation the prescription laid down by this Court that there must first be just compensation paid to PIATCO before the Government may take over the NAIA 3 facilities. Thus, at the very least, Rule 67 cannot apply in this case without violating the 2004 Resolution. Even assuming that Rep. Act No. 8974 does not govern in this case, it does not necessarily follow that Rule 67 should then apply. After all, adherence to the letter of Section 2, Rule 67 would in turn violate the Court's

requirement in the 2004 Resolution that there must first be payment of just compensation to PIATCO before the Government may take over the property. It is the plain intent of Rep. Act No. 8974 to supersede the system of deposit under Rule 67 with the scheme of "immediate payment" in cases involving national government infrastructure projects. The following portion of the Senate deliberations, cited by PIATCO in its Memorandum, is worth quoting to cogitate on the purpose behind the plain meaning of the law: THE CHAIRMAN (SEN. CAYETANO). "x x x Because the Senate believes that, you know, we have to pay the landowners immediately not by treasury bills but by cash. Since we are depriving them, you know, upon payment, 'no, of possession, we might as well pay them as much, 'no, hindi lang 50 percent. xxx THE CHAIRMAN (REP. VERGARA). Accepted. xxx THE CHAIRMAN (SEN. CAYETANO). Oo. Because this is really in favor of the landowners, e. THE CHAIRMAN (REP. VERGARA). That's why we need to really secure the availability of funds. xxx THE CHAIRMAN (SEN. CAYETANO). No, no. It's the same. It says here: iyong first paragraph, di ba? Iyong zonal - talagang magbabayad muna. In other words, you know, there must be a payment kaagad. (TSN, Bicameral Conference on the Disagreeing Provisions of House Bill 1422 and Senate Bill 2117, August 29, 2000, pp. 14-20) xxx THE CHAIRMAN (SEN. CAYETANO). Okay, okay, 'no. Unang-una, it is not deposit, 'no. It's payment." REP. BATERINA. It's payment, ho, payment." (Id., p. 63)
31

It likewise bears noting that the appropriate standard of just compensation is a substantive matter. It is well within the province of the legislature to fix the standard, which it did through the enactment of Rep. Act No. 8974. Specifically, this prescribes the new standards in determining the amount of just compensation in expropriation cases relating to national government infrastructure projects, as well as the manner of payment thereof. At the same time, Section 14 of the Implementing Rules recognizes the continued applicability of Rule 67 on procedural aspects when it provides "all matters regarding defenses and objections to the complaint, issues on uncertain ownership and conflicting claims, effects of appeal on the rights of the parties, and such other incidents affecting the complaint shall be resolved under the provisions on expropriation of Rule 67 of the Rules of Court."32 Given that the 2004 Resolution militates against the continued use of the norm under Section 2, Rule 67, is it then possible to apply Rep. Act No. 8974? We find that it is, and moreover, its application in this case complements rather than contravenes the prescriptions laid down in the 2004 Resolution. Rep. Act No. 8974 Fits to the Situation at Bar and Complements the 2004 Agan Resolution Rep. Act No. 8974 is entitled "An Act To Facilitate The Acquisition Of Right-OfWay, Site Or Location For National Government Infrastructure Projects And For Other Purposes." Obviously, the law is intended to cover expropriation proceedings intended for national government infrastructure projects. Section 2 of Rep. Act No. 8974 explains what are considered as "national government projects." Sec. 2. National Government Projects. - The term "national government projects" shall refer to all national government infrastructure, engineering works and service contracts, including projects undertaken by government-owned and controlled corporations, all projects covered by Republic Act No. 6957, as amended by Republic Act No. 7718, otherwise known as the Build-Operateand-Transfer Law, and other related and necessary activities, such as site acquisition, supply and/or installation of equipment and materials, implementation, construction, completion, operation, maintenance, improvement, repair and rehabilitation, regardless of the source of funding. As acknowledged in the 2003 Decision, the development of NAIA 3 was made pursuant to a build-operate-and-transfer arrangement pursuant to Republic Act No. 6957, as amended,33 which pertains to infrastructure or development projects normally financed by the public sector but which are now wholly or

partly implemented by the private sector.34 Under the build-operate-and-transfer scheme, it is the project proponent which undertakes the construction, including the financing, of a given infrastructure facility.35 In Tatad v. Garcia,36 the Court acknowledged that the operator of the EDSA Light Rail Transit project under a BOT scheme was the owner of the facilities such as "the rail tracks, rolling stocks like the coaches, rail stations, terminals and the power plant."37 There can be no doubt that PIATCO has ownership rights over the facilities which it had financed and constructed. The 2004 Resolution squarely recognized that right when it mandated the payment of just compensation to PIATCO prior to the takeover by the Government of NAIA 3. The fact that the Government resorted to eminent domain proceedings in the first place is a concession on its part of PIATCO's ownership. Indeed, if no such right is recognized, then there should be no impediment for the Government to seize control of NAIA 3 through ordinary ejectment proceedings. Since the rights of PIATCO over the NAIA 3 facilities are established, the nature of these facilities should now be determined. Under Section 415(1) of the Civil Code, these facilities are ineluctably immovable or real property, as they constitute buildings, roads and constructions of all kinds adhered to the soil.38 Certainly, the NAIA 3 facilities are of such nature that they cannot just be packed up and transported by PIATCO like a traveling circus caravan. Thus, the property subject of expropriation, the NAIA 3 facilities, are real property owned by PIATCO. This point is critical, considering the Government's insistence that the NAIA 3 facilities cannot be deemed as the "right-of-way", "site" or "location" of a national government infrastructure project, within the coverage of Rep. Act No. 8974. There is no doubt that the NAIA 3 is not, under any sensible contemplation, a "right-of-way." Yet we cannot agree with the Government's insistence that neither could NAIA 3 be a "site" or "location". The petition quotes the definitions provided in Black's Law Dictionary of "location'" as the specific place or position of a person or thing and 'site' as pertaining to a place or location or a piece of property set aside for specific use.'"39 Yet even Black's Law Dictionary provides that "[t]he term [site] does not of itself necessarily mean a place or tract of land fixed by definite boundaries."40 One would assume that the Government, to back up its contention, would be able to point to a clear-cut rule that a "site" or "location" exclusively refers to soil, grass, pebbles and weeds. There is none. Indeed, we cannot accept the Government's proposition that the only properties that may be expropriated under Rep. Act No. 8974 are parcels of land. Rep. Act

No. 8974 contemplates within its coverage such real property constituting land, buildings, roads and constructions of all kinds adhered to the soil. Section 1 of Rep. Act No. 8974, which sets the declaration of the law's policy, refers to "real property acquired for national government infrastructure projects are promptly paid just compensation."41 Section 4 is quite explicit in stating that the scope of the law relates to the acquisition of "real property," which under civil law includes buildings, roads and constructions adhered to the soil. It is moreover apparent that the law and its implementing rules commonly provide for a rule for the valuation of improvements and/or structures thereupon separate from that of the land on which such are constructed. Section 2 of Rep. Act No. 8974 itself recognizes that the improvements or structures on the land may very well be the subject of expropriation proceedings. Section 4(a), in relation to Section 7 of the law provides for the guidelines for the valuation of the improvements or structures to be expropriated. Indeed, nothing in the law would prohibit the application of Section 7, which provides for the valuation method of the improvements and or structures in the instances wherein it is necessary for the Government to expropriate only the improvements or structures, as in this case. The law classifies the NAIA 3 facilities as real properties just like the soil to which they are adhered. Any sub-classifications of real property and divergent treatment based thereupon for purposes of expropriation must be based on substantial distinctions, otherwise the equal protection clause of the Constitution is violated. There may be perhaps a molecular distinction between soil and the inorganic improvements adhered thereto, yet there are no purposive distinctions that would justify a variant treatment for purposes of expropriation. Both the land itself and the improvements thereupon are susceptible to private ownership independent of each other, capable of pecuniary estimation, and if taken from the owner, considered as a deprivation of property. The owner of improvements seized through expropriation suffers the same degree of loss as the owner of land seized through similar means. Equal protection demands that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. For purposes of expropriation, parcels of land are similarly situated as the buildings or improvements constructed thereon, and a disparate treatment between those two classes of real property infringes the equal protection clause. Even as the provisions of Rep. Act No. 8974 call for that law's application in this case, the threshold test must still be met whether its implementation would conform to the dictates of the Court in the 2004 Resolution. Unlike in the case

of Rule 67, the application of Rep. Act No. 8974 will not contravene the 2004 Resolution, which requires the payment of just compensation before any takeover of the NAIA 3 facilities by the Government. The 2004 Resolution does not particularize the extent such payment must be effected before the takeover, but it unquestionably requires at least some degree of payment to the private property owner before a writ of possession may issue. The utilization of Rep. Act No. 8974 guarantees compliance with this bare minimum requirement, as it assures the private property owner the payment of, at the very least, the proffered value of the property to be seized. Such payment of the proffered value to the owner, followed by the issuance of the writ of possession in favor of the Government, is precisely the schematic under Rep. Act No. 8974, one which facially complies with the prescription laid down in the 2004 Resolution. Clearly then, we see no error on the part of the RTC when it ruled that Rep. Act No. 8974 governs the instant expropriation proceedings. The Proper Amount to be Paid under Rep. Act No. 8974 Then, there is the matter of the proper amount which should be paid to PIATCO by the Government before the writ of possession may issue, consonant to Rep. Act No. 8974. At this juncture, we must address the observation made by the Office of the Solicitor General in behalf of the Government that there could be no "BIR zonal valuations" on the NAIA 3 facility, as provided in Rep. Act No. 8974, since zonal valuations are only for parcels of land, not for airport terminals. The Court agrees with this point, yet does not see it as an impediment for the application of Rep. Act No. 8974. It must be clarified that PIATCO cannot be reimbursed or justly compensated for the value of the parcel of land on which NAIA 3 stands. PIATCO is not the owner of the land on which the NAIA 3 facility is constructed, and it should not be entitled to just compensation that is inclusive of the value of the land itself. It would be highly disingenuous to compensate PIATCO for the value of land it does not own. Its entitlement to just compensation should be limited to the value of the improvements and/or structures themselves. Thus, the determination of just compensation cannot include the BIR zonal valuation under Section 4 of Rep. Act No. 8974. Under Rep. Act No. 8974, the Government is required to "immediately pay" the owner of the property the amount equivalent to the sum of (1) one hundred percent (100%) of the value of the property based on the current relevant zonal

valuation of the [BIR]; and (2) the value of the improvements and/or structures as determined under Section 7. As stated above, the BIR zonal valuation cannot apply in this case, thus the amount subject to immediate payment should be limited to "the value of the improvements and/or structures as determined under Section 7," with Section 7 referring to the "implementing rules and regulations for the equitable valuation of the improvements and/or structures on the land." Under the present implementing rules in place, the valuation of the improvements/structures are to be based using "the replacement cost method."42 However, the replacement cost is only one of the factors to be considered in determining the just compensation. In addition to Rep. Act No. 8974, the 2004 Resolution in Agan also mandated that the payment of just compensation should be in accordance with equity as well. Thus, in ascertaining the ultimate amount of just compensation, the duty of the trial court is to ensure that such amount conforms not only to the law, such as Rep. Act No. 8974, but to principles of equity as well. Admittedly, there is no way, at least for the present, to immediately ascertain the value of the improvements and structures since such valuation is a matter for factual determination.43 Yet Rep. Act No. 8974 permits an expedited means by which the Government can immediately take possession of the property without having to await precise determination of the valuation. Section 4(c) of Rep. Act No. 8974 states that "in case the completion of a government infrastructure project is of utmost urgency and importance, and there is no existing valuation of the area concerned, the implementing agency shall immediately pay the owner of the property its proferred value, taking into consideration the standards prescribed in Section 5 [of the law]."44 The "proffered value" may strike as a highly subjective standard based solely on the intuition of the government, but Rep. Act No. 8974 does provide relevant standards by which "proffered value" should be based,45 as well as the certainty of judicial determination of the propriety of the proffered value.46 In filing the complaint for expropriation, the Government alleged to have deposited the amount of P3 Billion earmarked for expropriation, representing the assessed value of the property. The making of the deposit, including the determination of the amount of the deposit, was undertaken under the erroneous notion that Rule 67, and not Rep. Act No. 8974, is the applicable law. Still, as regards the amount, the Court sees no impediment to recognize this sum of P3 Billion as the proffered value under Section 4(b) of Rep. Act No. 8974. After all, in the initial determination of the proffered value, the Government is not strictly required to adhere to any predetermined standards,

although its proffered value may later be subjected to judicial review using the standards enumerated under Section 5 of Rep. Act No. 8974. How should we appreciate the questioned order of Hon. Gingoyon, which pegged the amount to be immediately paid to PIATCO at around $62.3 Million? The Order dated 4 January 2005, which mandated such amount, proves problematic in that regard. While the initial sum of P3 Billion may have been based on the assessed value, a standard which should not however apply in this case, the RTC cites without qualification Section 4(a) of Rep. Act No. 8974 as the basis for the amount of $62.3 Million, thus leaving the impression that the BIR zonal valuation may form part of the basis for just compensation, which should not be the case. Moreover, respondent judge made no attempt to apply the enumerated guidelines for determination of just compensation under Section 5 of Rep. Act No. 8974, as required for judicial review of the proffered value. The Court notes that in the 10 January 2005 Omnibus Order, the RTC noted that the concessions agreement entered into between the Government and PIATCO stated that the actual cost of building NAIA 3 was "not less than" US$350 Million.47 The RTC then proceeded to observe that while Rep. Act No. 8974 required the immediate payment to PIATCO the amount equivalent to 100% of the value of NAIA 3, the amount deposited by the Government constituted only 18% of this value. At this point, no binding import should be given to this observation that the actual cost of building NAIA 3 was "not less than" US$350 Million, as the final conclusions on the amount of just compensation can come only after due ascertainment in accordance with the standards set under Rep. Act No. 8974, not the declarations of the parties. At the same time, the expressed linkage between the BIR zonal valuation and the amount of just compensation in this case, is revelatory of erroneous thought on the part of the RTC. We have already pointed out the irrelevance of the BIR zonal valuation as an appropriate basis for valuation in this case, PIATCO not being the owner of the land on which the NAIA 3 facilities stand. The subject order is flawed insofar as it fails to qualify that such standard is inappropriate. It does appear that the amount of US$62.3 Million was based on the certification issued by the LBP-Baclaran that the Republic of the Philippines maintained a total balance in that branch amounting to such amount. Yet the actual representation of the $62.3 Million is not clear. The Land Bank Certification expressing such amount does state that it was issued upon request of the Manila International Airport Authority "purportedly as guaranty

deposit for the expropriation complaint."48 The Government claims in its Memorandum that the entire amount was made available as a guaranty fund for the final and executory judgment of the trial court, and not merely for the issuance of the writ of possession.49 One could readily conclude that the entire amount of US$62.3 Million was intended by the Government to answer for whatever guaranties may be required for the purpose of the expropriation complaint. Still, such intention the Government may have had as to the entire US$62.3 Million is only inferentially established. In ascertaining the proffered value adduced by the Government, the amount of P3 Billion as the amount deposited characterized in the complaint as "to be held by [Land Bank] subject to the [RTC's] orders,"50 should be deemed as controlling. There is no clear evidence that the Government intended to offer US$62.3 Million as the initial payment of just compensation, the wording of the Land Bank Certification notwithstanding, and credence should be given to the consistent position of the Government on that aspect. In any event, for the RTC to be able to justify the payment of US$62.3 Million to PIATCO and not P3 Billion Pesos, he would have to establish that the higher amount represents the valuation of the structures/improvements, and not the BIR zonal valuation on the land wherein NAIA 3 is built. The Order dated 5 January 2005 fails to establish such integral fact, and in the absence of contravening proof, the proffered value of P3 Billion, as presented by the Government, should prevail. Strikingly, the Government submits that assuming that Rep. Act No. 8974 is applicable, the deposited amount of P3 Billion should be considered as the proffered value, since the amount was based on comparative values made by the City Assessor.51 Accordingly, it should be deemed as having faithfully complied with the requirements of the statute.52 While the Court agrees that P3 Billion should be considered as the correct proffered value, still we cannot deem the Government as having faithfully complied with Rep. Act No. 8974. For the law plainly requires direct payment to the property owner, and not a mere deposit with the authorized government depositary. Without such direct payment, no writ of possession may be obtained. Writ of Possession May Not Be Implemented Until Actual Receipt by PIATCO of Proferred Value The Court thus finds another error on the part of the RTC. The RTC authorized the issuance of the writ of possession to the Government notwithstanding the

fact that no payment of any amount had yet been made to PIATCO, despite the clear command of Rep. Act No. 8974 that there must first be payment before the writ of possession can issue. While the RTC did direct the LBP-Baclaran to immediately release the amount of US$62 Million to PIATCO, it should have likewise suspended the writ of possession, nay, withdrawn it altogether, until the Government shall have actually paid PIATCO. This is the inevitable consequence of the clear command of Rep. Act No. 8974 that requires immediate payment of the initially determined amount of just compensation should be effected. Otherwise, the overpowering intention of Rep. Act No. 8974 of ensuring payment first before transfer of repossession would be eviscerated. Rep. Act No. 8974 represents a significant change from previous expropriation laws such as Rule 67, or even Section 19 of the Local Government Code. Rule 67 and the Local Government Code merely provided that the Government deposit the initial amounts53 antecedent to acquiring possession of the property with, respectively, an authorized Government depositary54 or the proper court.55 In both cases, the private owner does not receive compensation prior to the deprivation of property. On the other hand, Rep. Act No. 8974 mandates immediate payment of the initial just compensation prior to the issuance of the writ of possession in favor of the Government. Rep. Act No. 8974 is plainly clear in imposing the requirement of immediate prepayment, and no amount of statutory deconstruction can evade such requisite. It enshrines a new approach towards eminent domain that reconciles the inherent unease attending expropriation proceedings with a position of fundamental equity. While expropriation proceedings have always demanded just compensation in exchange for private property, the previous deposit requirement impeded immediate compensation to the private owner, especially in cases wherein the determination of the final amount of compensation would prove highly disputed. Under the new modality prescribed by Rep. Act No. 8974, the private owner sees immediate monetary recompense with the same degree of speed as the taking of his/her property. While eminent domain lies as one of the inherent powers of the State, there is no requirement that it undertake a prolonged procedure, or that the payment of the private owner be protracted as far as practicable. In fact, the expedited procedure of payment, as highlighted under Rep. Act No. 8974, is inherently more fair, especially to the layperson who would be hard-pressed to fully comprehend the social value of expropriation in the first place. Immediate

payment placates to some degree whatever ill-will that arises from expropriation, as well as satisfies the demand of basic fairness. The Court has the duty to implement Rep. Act No. 8974 and to direct compliance with the requirement of immediate payment in this case. Accordingly, the Writ of Possession dated 21 December 2004 should be held in abeyance, pending proof of actual payment by the Government to PIATCO of the proffered value of the NAIA 3 facilities, which totals P3,002,125,000.00. Rights of the Government upon Issuance of the Writ of Possession Once the Government pays PIATCO the amount of the proffered value of P3 Billion, it will be entitled to the Writ of Possession. However, the Government questions the qualification imposed by the RTC in its 4 January 2005 Order consisting of the prohibition on the Government from performing acts of ownership such as awarding concessions or leasing any part of NAIA 3 to other parties. To be certain, the RTC, in its 10 January 2005 Omnibus Order, expressly stated that it was not affirming "the superfluous part of the Order [of 4 January 2005] prohibiting the plaintiffs from awarding concessions or leasing any part of NAIA [3] to other parties."56 Still, such statement was predicated on the notion that since the Government was not yet the owner of NAIA 3 until final payment of just compensation, it was obviously incapacitated to perform such acts of ownership. In deciding this question, the 2004 Resolution in Agan cannot be ignored, particularly the declaration that "[f]or the government to take over the said facility, it has to compensate respondent PIATCO as builder of the said structures." The obvious import of this holding is that unless PIATCO is paid just compensation, the Government is barred from "taking over," a phrase which in the strictest sense could encompass even a bar of physical possession of NAIA 3, much less operation of the facilities. There are critical reasons for the Court to view the 2004 Resolution less stringently, and thus allow the operation by the Government of NAIA 3 upon the effectivity of the Writ of Possession. For one, the national prestige is diminished every day that passes with the NAIA 3 remaining mothballed. For another, the continued non-use of the facilities contributes to its physical deterioration, if it has not already. And still for another, the economic benefits to the Government and the country at large are beyond dispute once the NAIA 3 is put in operation.

Rep. Act No. 8974 provides the appropriate answer for the standard that governs the extent of the acts the Government may be authorized to perform upon the issuance of the writ of possession. Section 4 states that "the court shall immediately issue to the implementing agency an order to take possession of the property and start the implementation of the project." We hold that accordingly, once the Writ of Possession is effective, the Government itself is authorized to perform the acts that are essential to the operation of the NAIA 3 as an international airport terminal upon the effectivity of the Writ of Possession. These would include the repair, reconditioning and improvement of the complex, maintenance of the existing facilities and equipment, installation of new facilities and equipment, provision of services and facilities pertaining to the facilitation of air traffic and transport, and other services that are integral to a modern-day international airport. The Government's position is more expansive than that adopted by the Court. It argues that with the writ of possession, it is enabled to perform acts de jure on the expropriated property. It cites Republic v. Tagle,57 as well as the statement therein that "the expropriation of real property does not include mere physical entry or occupation of land," and from them concludes that "its mere physical entry and occupation of the property fall short of the taking of title, which includes all the rights that may be exercised by an owner over the subject property." This conclusion is indeed lifted directly from statements in Tagle, 58 but not from the ratio decidendi of that case. Tagle concerned whether a writ of possession in favor of the Government was still necessary in light of the fact that it was already in actual possession of the property. In ruling that the Government was entitled to the writ of possession, the Court in Tagle explains that such writ vested not only physical possession, but also the legal right to possess the property. Continues the Court, such legal right to possess was particularly important in the case, as there was a pending suit against the Republic for unlawful detainer, and the writ of possession would serve to safeguard the Government from eviction.59

At the same time, Tagle conforms to the obvious, that there is no transfer of ownership as of yet by virtue of the writ of possession. Tagle may concede that the Government is entitled to exercise more than just the right of possession by virtue of the writ of possession, yet it cannot be construed to grant the Government the entire panoply of rights that are available to the owner. Certainly, neither Tagle nor any other case or law, lends support to the Government's proposition that it acquires beneficial or equitable ownership of the expropriated property merely through the writ of possession. Indeed, this Court has been vigilant in defense of the rights of the property owner who has been validly deprived of possession, yet retains legal title over the expropriated property pending payment of just compensation. We reiterated the various doctrines of such import in our recent holding in Republic v. Lim:60 The recognized rule is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle is consistent both here and in other democratic jurisdictions. In Association of Small Landowners in the Philippines, Inc. et al., vs. Secretary of Agrarian Reform[61], thus: "Title to property which is the subject of condemnation proceedings does not vest the condemnor until the judgment fixing just compensation is entered and paid, but the condemnor's title relates back to the date on which the petition under the Eminent Domain Act, or the commissioner's report under the Local Improvement Act, is filed. x x x Although the right to appropriate and use land taken for a canal is complete at the time of entry, title to the property taken remains in the owner until payment is actually made. (Emphasis supplied.) In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title to property does not pass to the condemnor until just compensation had actually been made. In fact, the decisions appear to be uniform to this effect. As early as 1838, in Rubottom v. McLure, it was held that 'actual payment to the owner of the condemned property was a condition precedent to the investment of the title to the property in the State' albeit 'not to the appropriation of it to public use.' In Rexford v. Knight, the Court of Appeals of New York said that the construction upon the statutes was that the fee did not vest in the State until the payment of the compensation although the authority to enter upon and appropriate the land was complete prior to the payment. Kennedy further said that 'both on principle and authority the rule is . . . that the right to enter on and use the property is complete, as soon as the property is

actually appropriated under the authority of law for a public use, but that the title does not pass from the owner without his consent, until just compensation has been made to him." Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, that: 'If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be apparent that the method of expropriation adopted in this jurisdiction is such as to afford absolute reassurance that no piece of land can be finally and irrevocably taken from an unwilling owner until compensation is paid....'"(Emphasis supplied.) Clearly, without full payment of just compensation, there can be no transfer of title from the landowner to the expropriator. Otherwise stated, the Republic's acquisition of ownership is conditioned upon the full payment of just compensation within a reasonable time. Significantly, in Municipality of Bian v. Garcia[62] this Court ruled that the expropriation of lands consists of two stages, to wit: "x x x The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint" x x x. The second phase of the eminent domain action is concerned with the determination by the court of "the just compensation for the property sought to be taken." This is done by the court with the assistance of not more than three (3) commissioners. x x x. It is only upon the completion of these two stages that expropriation is said to have been completed. In Republic v. Salem Investment Corporation[63] , we ruled that, "the process is not completed until payment of just compensation." Thus, here, the failure of the Republic to pay respondent and his predecessorsin-interest for a period of 57 years rendered the expropriation process incomplete.

Lim serves fair warning to the Government and its agencies who consistently refuse to pay just compensation due to the private property owner whose property had been expropriated. At the same time, Lim emphasizes the fragility of the rights of the Government as possessor pending the final payment of just compensation, without diminishing the potency of such rights. Indeed, the public policy, enshrined foremost in the Constitution, mandates that the Government must pay for the private property it expropriates. Consequently, the proper judicial attitude is to guarantee compliance with this primordial right to just compensation. Final Determination of Just Compensation Within 60 Days The issuance of the writ of possession does not write finis to the expropriation proceedings. As earlier pointed out, expropriation is not completed until payment to the property owner of just compensation. The proffered value stands as merely a provisional determination of the amount of just compensation, the payment of which is sufficient to transfer possession of the property to the Government. However, to effectuate the transfer of ownership, it is necessary for the Government to pay the property owner the final just compensation. In Lim, the Court went as far as to countenance, given the exceptional circumstances of that case, the reversion of the validly expropriated property to private ownership due to the failure of the Government to pay just compensation in that case.64 It was noted in that case that the Government deliberately refused to pay just compensation. The Court went on to rule that "in cases where the government failed to pay just compensation within five (5) years from the finality of the judgment in the expropriation proceedings, the owners concerned shall have the right to recover possession of their property."65 Rep. Act No. 8974 mandates a speedy method by which the final determination of just compensation may be had. Section 4 provides: In the event that the owner of the property contests the implementing agency's proffered value, the court shall determine the just compensation to be paid the owner within sixty (60) days from the date of filing of the expropriation case. When the decision of the court becomes final and executory, the implementing agency shall pay the owner the difference between the amount already paid and the just compensation as determined by the court.

We hold that this provision should apply in this case. The sixty (60)-day period prescribed in Rep. Act No. 8974 gives teeth to the law's avowed policy "to ensure that owners of real property acquired for national government infrastructure projects are promptly paid just compensation."66 In this case, there already has been irreversible delay in the prompt payment of PIATCO of just compensation, and it is no longer possible for the RTC to determine the just compensation due PIATCO within sixty (60) days from the filing of the complaint last 21 December 2004, as contemplated by the law. Still, it is feasible to effectuate the spirit of the law by requiring the trial court to make such determination within sixty (60) days from finality of this decision, in accordance with the guidelines laid down in Rep. Act No. 8974 and its Implementing Rules. Of course, once the amount of just compensation has been finally determined, the Government is obliged to pay PIATCO the said amount. As shown in Lim and other like-minded cases, the Government's refusal to make such payment is indubitably actionable in court. Appointment of Commissioners The next argument for consideration is the claim of the Government that the RTC erred in appointing the three commissioners in its 7 January 2005 Order without prior consultation with either the Government or PIATCO, or without affording the Government the opportunity to object to the appointment of these commissioners. We can dispose of this argument without complication. It must be noted that Rep. Act No. 8974 is silent on the appointment of commissioners tasked with the ascertainment of just compensation.67 This protocol though is sanctioned under Rule 67. We rule that the appointment of commissioners under Rule 67 may be resorted to, even in expropriation proceedings under Rep. Act No. 8974, since the application of the provisions of Rule 67 in that regard do not conflict with the statute. As earlier stated, Section 14 of the Implementing Rules does allow such other incidents affecting the complaint to be resolved under the provisions on expropriation of Rule 67 of the Rules of Court. Even without Rule 67, reference during trial to a commissioner of the examination of an issue of fact is sanctioned under Rule 32 of the Rules of Court. But while the appointment of commissioners under the aegis of Rule 67 may be sanctioned in expropriation proceedings under Rep. Act No. 8974, the standards to be observed for the determination of just compensation are provided not in Rule 67 but in the statute. In particular, the governing standards

for the determination of just compensation for the NAIA 3 facilities are found in Section 10 of the Implementing Rules for Rep. Act No. 8974, which provides for the replacement cost method in the valuation of improvements and structures.68 Nothing in Rule 67 or Rep. Act No. 8974 requires that the RTC consult with the parties in the expropriation case on who should be appointed as commissioners. Neither does the Court feel that such a requirement should be imposed in this case. We did rule in Municipality of Talisay v. Ramirez 69 that "there is nothing to prevent [the trial court] from seeking the recommendations of the parties on [the] matter [of appointment of commissioners], the better to ensure their fair representation."70 At the same time, such solicitation of recommendations is not obligatory on the part of the court, hence we cannot impute error on the part of the RTC in its exercise of solitary discretion in the appointment of the commissioners. What Rule 67 does allow though is for the parties to protest the appointment of any of these commissioners, as provided under Section 5 of the Rule. These objections though must be made filed within ten (10) days from service of the order of appointment of the commissioners.71 In this case, the proper recourse of the Government to challenge the choice of the commissioners is to file an objection with the trial court, conformably with Section 5, Rule 67, and not as it has done, assail the same through a special civil action for certiorari. Considering that the expropriation proceedings in this case were effectively halted seven (7) days after the Order appointing the commissioners, 72 it is permissible to allow the parties to file their objections with the RTC within five (5) days from finality of this decision. Insufficient Ground for Inhibition of Respondent Judge The final argument for disposition is the claim of the Government is that Hon. Gingoyon has prejudged the expropriation case against the Government's cause and, thus, should be required to inhibit himself. This grave charge is predicated on facts which the Government characterizes as "undeniable." In particular, the Government notes that the 4 January 2005 Order was issued motu proprio, without any preceding motion, notice or hearing. Further, such order, which directed the payment of US$62 Million to PIATCO, was attended with error in the computation of just compensation. The Government also notes that the said Order was issued even before summons had been served on PIATCO. The disqualification of a judge is a deprivation of his/her judicial power73 and should not be allowed on the basis of mere speculations and surmises. It

certainly cannot be predicated on the adverse nature of the judge's rulings towards the movant for inhibition, especially if these rulings are in accord with law. Neither could inhibition be justified merely on the erroneous nature of the rulings of the judge. We emphasized in Webb v. People:74 To prove bias and prejudice on the part of respondent judge, petitioners harp on the alleged adverse and erroneous rulings of respondent judge on their various motions. By themselves, however, they do not sufficiently prove bias and prejudice to disqualify respondent judge. To be disqualifying, the bias and prejudice must be shown to have stemmed from an extrajudicial source and result in an opinion on the merits on some basis other than what the judge learned from his participation in the case. Opinions formed in the course of judicial proceedings, although erroneous, as long as they are based on the evidence presented and conduct observed by the judge, do not prove personal bias or prejudice on the part of the judge. As a general rule, repeated rulings against a litigant, no matter how erroneous and vigorously and consistently expressed, are not a basis for disqualification of a judge on grounds of bias and prejudice. Extrinsic evidence is required to establish bias, bad faith, malice or corrupt purpose, in addition to the palpable error which may be inferred from the decision or order itself. Although the decision may seem so erroneous as to raise doubts concerning a judge's integrity, absent extrinsic evidence, the decision itself would be insufficient to establish a case against the judge. The only exception to the rule is when the error is so gross and patent as to produce an ineluctable inference of bad faith or malice.75 The Government's contentions against Hon. Gingoyon are severely undercut by the fact that the 21 December 2004 Order, which the 4 January 2005 Order sought to rectify, was indeed severely flawed as it erroneously applied the provisions of Rule 67 of the Rules of Court, instead of Rep. Act No. 8974, in ascertaining compliance with the requisites for the issuance of the writ of possession. The 4 January 2005 Order, which according to the Government establishes Hon. Gingoyon's bias, was promulgated precisely to correct the previous error by applying the correct provisions of law. It would not speak well of the Court if it sanctions a judge for wanting or even attempting to correct a previous erroneous order which precisely is the right move to take. Neither are we convinced that the motu proprio issuance of the 4 January 2005 Order, without the benefit of notice or hearing, sufficiently evinces bias on the part of Hon. Gingoyon. The motu proprio amendment by a court of an erroneous order previously issued may be sanctioned depending on the circumstances, in line with the long-recognized principle that every court has

inherent power to do all things reasonably necessary for the administration of justice within the scope of its jurisdiction.76 Section 5(g), Rule 135 of the Rules of Court further recognizes the inherent power of courts "to amend and control its process and orders so as to make them conformable to law and justice," 77 a power which Hon. Gingoyon noted in his 10 January 2005 Omnibus Order. 78 This inherent power includes the right of the court to reverse itself, especially when in its honest opinion it has committed an error or mistake in judgment, and that to adhere to its decision will cause injustice to a party litigant.79 Certainly, the 4 January 2005 Order was designed to make the RTC's previous order conformable to law and justice, particularly to apply the correct law of the case. Of course, as earlier established, this effort proved incomplete, as the 4 January 2005 Order did not correctly apply Rep. Act No. 8974 in several respects. Still, at least, the 4 January 2005 Order correctly reformed the most basic premise of the case that Rep. Act No. 8974 governs the expropriation proceedings. Nonetheless, the Government belittles Hon. Gingoyon's invocation of Section 5(g), Rule 135 as "patently without merit". Certainly merit can be seen by the fact that the 4 January 2005 Order reoriented the expropriation proceedings towards the correct governing law. Still, the Government claims that the unilateral act of the RTC did not conform to law or justice, as it was not afforded the right to be heard. The Court would be more charitably disposed towards this argument if not for the fact that the earlier order with the 4 January 2005 Order sought to correct was itself issued without the benefit of any hearing. In fact, nothing either in Rule 67 or Rep. Act No. 8975 requires the conduct of a hearing prior to the issuance of the writ of possession, which by design is available immediately upon the filing of the complaint provided that the requisites attaching thereto are present. Indeed, this expedited process for the obtention of a writ of possession in expropriation cases comes at the expense of the rights of the property owner to be heard or to be deprived of possession. Considering these predicates, it would be highly awry to demand that an order modifying the earlier issuance of a writ of possession in an expropriation case be barred until the staging of a hearing, when the issuance of the writ of possession itself is not subject to hearing. Perhaps the conduct of a hearing under these circumstances would be prudent. However, hearing is not mandatory, and the failure to conduct one does not establish the manifest bias required for the inhibition of the judge.

The Government likewise faults Hon. Gingoyon for using the amount of US$350 Million as the basis for the 100% deposit under Rep. Act No. 8974. The Court has noted that this statement was predicated on the erroneous belief that the BIR zonal valuation applies as a standard for determination of just compensation in this case. Yet this is manifest not of bias, but merely of error on the part of the judge. Indeed, the Government was not the only victim of the errors of the RTC in the assailed orders. PIATCO itself was injured by the issuance by the RTC of the writ of possession, even though the former had yet to be paid any amount of just compensation. At the same time, the Government was also prejudiced by the erroneous ruling of the RTC that the amount of US$62.3 Million, and not P3 Billion, should be released to PIATCO. The Court has not been remiss in pointing out the multiple errors committed by the RTC in its assailed orders, to the prejudice of both parties. This attitude of error towards all does not ipso facto negate the charge of bias. Still, great care should be had in requiring the inhibition of judges simply because the magistrate did err. Incompetence may be a ground for administrative sanction, but not for inhibition, which requires lack of objectivity or impartiality to sit on a case. The Court should necessarily guard against adopting a standard that a judge should be inhibited from hearing the case if one litigant loses trust in the judge. Such loss of trust on the part of the Government may be palpable, yet inhibition cannot be grounded merely on the feelings of the party-litigants. Indeed, every losing litigant in any case can resort to claiming that the judge was biased, and he/she will gain a sympathetic ear from friends, family, and people who do not understand the judicial process. The test in believing such a proposition should not be the vehemence of the litigant's claim of bias, but the Court's judicious estimation, as people who know better than to believe any old cry of "wolf!", whether such bias has been irrefutably exhibited.

The Court acknowledges that it had been previously held that "at the very first sign of lack of faith and trust in his actions, whether well-grounded or not, the judge has no other alternative but to inhibit himself from the case."80 But this doctrine is qualified by the entrenched rule that "a judge may not be legally prohibited from sitting in a litigation, but when circumstances appear that will induce doubt to his honest actuations and probity in favor of either party, or incite such state of mind, he should conduct a careful self- examination. He should exercise his discretion in a way that the people's faith in the Courts of Justice is not impaired."81 And a self-assessment by the judge that he/she is not impaired to hear the case will be respected by the Court absent any evidence to the contrary. As held in Chin v. Court of Appeals: An allegation of prejudgment, without more, constitutes mere conjecture and is not one of the "just and valid reasons" contemplated in the second paragraph of Rule 137 of the Rules of Court for which a judge may inhibit himself from hearing the case. We have repeatedly held that mere suspicion that a judge is partial to a party is not enough. Bare allegations of partiality and prejudgment will not suffice in the absence of clear and convincing evidence to overcome the presumption that the judge will undertake his noble role to dispense justice according to law and evidence and without fear or favor. There should be adequate evidence to prove the allegations, and there must be showing that the judge had an interest, personal or otherwise, in the prosecution of the case. To be a disqualifying circumstance, the bias and prejudice must be shown to have stemmed from an extrajudicial source and result in an opinion on the merits on some basis other than what the judge learned from his participation in the case.82 The mere vehemence of the Government's claim of bias does not translate to clear and convincing evidence of impairing bias. There is no sufficient ground to direct the inhibition of Hon. Gingoyon from hearing the expropriation case. In conclusion, the Court summarizes its rulings as follows: (1) The 2004 Resolution in Agan sets the base requirement that has to be observed before the Government may take over the NAIA 3, that there must be payment to PIATCO of just compensation in accordance with law and equity. Any ruling in the present expropriation case must be conformable to the dictates of the Court as pronounced in the Agan cases. (2) Rep. Act No. 8974 applies in this case, particularly insofar as it requires the immediate payment by the Government of at least the proffered value of the

NAIA 3 facilities to PIATCO and provides certain valuation standards or methods for the determination of just compensation. (3) Applying Rep. Act No. 8974, the implementation of Writ of Possession in favor of the Government over NAIA 3 is held in abeyance until PIATCO is directly paid the amount of P3 Billion, representing the proffered value of NAIA 3 under Section 4(c) of the law. (4) Applying Rep. Act No. 8974, the Government is authorized to start the implementation of the NAIA 3 Airport terminal project by performing the acts that are essential to the operation of the NAIA 3 as an international airport terminal upon the effectivity of the Writ of Possession, subject to the conditions above-stated. As prescribed by the Court, such authority encompasses "the repair, reconditioning and improvement of the complex, maintenance of the existing facilities and equipment, installation of new facilities and equipment, provision of services and facilities pertaining to the facilitation of air traffic and transport, and other services that are integral to a modern-day international airport."83 (5) The RTC is mandated to complete its determination of the just compensation within sixty (60) days from finality of this Decision. In doing so, the RTC is obliged to comply with "law and equity" as ordained in Again and the standard set under Implementing Rules of Rep. Act No. 8974 which is the "replacement cost method" as the standard of valuation of structures and improvements. (6) There was no grave abuse of discretion attending the RTC Order appointing the commissioners for the purpose of determining just compensation. The provisions on commissioners under Rule 67 shall apply insofar as they are not inconsistent with Rep. Act No. 8974, its Implementing Rules, or the rulings of the Court in Agan. (7) The Government shall pay the just compensation fixed in the decision of the trial court to PIATCO immediately upon the finality of the said decision. (8) There is no basis for the Court to direct the inhibition of Hon. Gingoyon. All told, the Court finds no grave abuse of discretion on the part of the RTC to warrant the nullification of the questioned orders. Nonetheless, portions of these orders should be modified to conform with law and the pronouncements made by the Court herein.

WHEREFORE, the Petition is GRANTED in PART with respect to the orders dated 4 January 2005 and 10 January 2005 of the lower court. Said orders are AFFIRMED with the following MODIFICATIONS: 1) The implementation of the Writ of Possession dated 21 December 2005 is HELD IN ABEYANCE, pending payment by petitioners to PIATCO of the amount of Three Billion Two Million One Hundred Twenty Five Thousand Pesos (P3,002,125,000.00), representing the proffered value of the NAIA 3 facilities; 2) Petitioners, upon the effectivity of the Writ of Possession, are authorized start the implementation of the Ninoy Aquino International Airport Pasenger Terminal III project by performing the acts that are essential to the operation of the said International Airport Passenger Terminal project; 3) RTC Branch 117 is hereby directed, within sixty (60) days from finality of this Decision, to determine the just compensation to be paid to PIATCO by the Government. The Order dated 7 January 2005 is AFFIRMED in all respects subject to the qualification that the parties are given ten (10) days from finality of this Decision to file, if they so choose, objections to the appointment of the commissioners decreed therein. The Temporary Restraining Order dated 14 January 2005 is hereby LIFTED. No pronouncement as to costs. SO ORDERED.

for a change of name and sex appearing in the birth certificate to reflect the result of a sex reassignment surgery? On November 26, 2002, petitioner Rommel Jacinto Dantes Silverio filed a petition for the change of his first name and sex in his birth certificate in the Regional Trial Court of Manila, Branch 8. The petition, docketed as SP Case No. 02-105207, impleaded the civil registrar of Manila as respondent. Petitioner alleged in his petition that he was born in the City of Manila to the spouses Melecio Petines Silverio and Anita Aquino Dantes on April 4, 1962. His name was registered as "Rommel Jacinto Dantes Silverio" in his certificate of live birth (birth certificate). His sex was registered as "male." He further alleged that he is a male transsexual, that is, "anatomically male but feels, thinks and acts as a female" and that he had always identified himself with girls since childhood.1 Feeling trapped in a mans body, he consulted several doctors in the United States. He underwent psychological examination, hormone treatment and breast augmentation. His attempts to transform himself to a "woman" culminated on January 27, 2001 when he underwent sex reassignment surgery2 in Bangkok, Thailand. He was thereafter examined by Dr. Marcelino Reysio-Cruz, Jr., a plastic and reconstruction surgeon in the Philippines, who issued a medical certificate attesting that he (petitioner) had in fact undergone the procedure. From then on, petitioner lived as a female and was in fact engaged to be married. He then sought to have his name in his birth certificate changed from "Rommel Jacinto" to "Mely," and his sex from "male" to "female." An order setting the case for initial hearing was published in the Peoples Journal Tonight, a newspaper of general circulation in Metro Manila, for three consecutive weeks.3 Copies of the order were sent to the Office of the Solicitor General (OSG) and the civil registrar of Manila. On the scheduled initial hearing, jurisdictional requirements were established. No opposition to the petition was made. During trial, petitioner testified for himself. He also presented Dr. Reysio-Cruz, Jr. and his American fianc, Richard P. Edel, as witnesses. On June 4, 2003, the trial court rendered a decision4 in favor of petitioner. Its relevant portions read:

G.R. No. 174689

October 22, 2007 petitioner,

ROMMEL JACINTO DANTES SILVERIO, vs. REPUBLIC OF THE PHILIPPINES, respondent. DECISION CORONA, J.:

When God created man, He made him in the likeness of God; He created them male and female. (Genesis 5:1-2) Amihan gazed upon the bamboo reed planted by Bathala and she heard voices coming from inside the bamboo. "Oh North Wind! North Wind! Please let us out!," the voices said. She pecked the reed once, then twice. All of a sudden, the bamboo cracked and slit open. Out came two human beings; one was a male and the other was a female. Amihan named the man "Malakas" (Strong) and the woman "Maganda" (Beautiful). (The Legend of Malakas and Maganda) When is a man a man and when is a woman a woman? In particular, does the law recognize the changes made by a physician using scalpel, drugs and counseling with regard to a persons sex? May a person successfully petition

Petitioner filed the present petition not to evade any law or judgment or any infraction thereof or for any unlawful motive but solely for the purpose of making his birth records compatible with his present sex. The sole issue here is whether or not petitioner is entitled to the relief asked for. The [c]ourt rules in the affirmative. Firstly, the [c]ourt is of the opinion that granting the petition would be more in consonance with the principles of justice and equity. With his sexual [reassignment], petitioner, who has always felt, thought and acted like a woman, now possesses the physique of a female. Petitioners misfortune to be trapped in a mans body is not his own doing and should not be in any way taken against him. Likewise, the [c]ourt believes that no harm, injury [or] prejudice will be caused to anybody or the community in granting the petition. On the contrary, granting the petition would bring the much-awaited happiness on the part of the petitioner and her [fianc] and the realization of their dreams. Finally, no evidence was presented to show any cause or ground to deny the present petition despite due notice and publication thereof. Even the State, through the [OSG] has not seen fit to interpose any [o]pposition. WHEREFORE, judgment is hereby rendered GRANTING the petition and ordering the Civil Registrar of Manila to change the entries appearing in the Certificate of Birth of [p]etitioner, specifically for petitioners first name from "Rommel Jacinto" to MELY and petitioners gender from "Male" to FEMALE. 5 On August 18, 2003, the Republic of the Philippines (Republic), thru the OSG, filed a petition for certiorari in the Court of Appeals.6 It alleged that there is no law allowing the change of entries in the birth certificate by reason of sex alteration. On February 23, 2006, the Court of Appeals7 rendered a decision8 in favor of the Republic. It ruled that the trial courts decision lacked legal basis. There is no law allowing the change of either name or sex in the certificate of birth on the ground of sex reassignment through surgery. Thus, the Court of Appeals granted the Republics petition, set aside the decision of the trial court and ordered the dismissal of SP Case No. 02-105207. Petitioner moved for reconsideration but it was denied.9 Hence, this petition.

Petitioner essentially claims that the change of his name and sex in his birth certificate is allowed under Articles 407 to 413 of the Civil Code, Rules 103 and 108 of the Rules of Court and RA 9048.10 The petition lacks merit. A Persons First Name Cannot Be Changed On the Ground of Sex Reassignment Petitioner invoked his sex reassignment as the ground for his petition for change of name and sex. As found by the trial court: Petitioner filed the present petition not to evade any law or judgment or any infraction thereof or for any unlawful motive but solely for the purpose of making his birth records compatible with his present sex. (emphasis supplied) Petitioner believes that after having acquired the physical features of a female, he became entitled to the civil registry changes sought. We disagree. The State has an interest in the names borne by individuals and entities for purposes of identification.11 A change of name is a privilege, not a right. 12 Petitions for change of name are controlled by statutes. 13 In this connection, Article 376 of the Civil Code provides: ART. 376. No person can change his name or surname without judicial authority. This Civil Code provision was amended by RA 9048 (Clerical Error Law). In particular, Section 1 of RA 9048 provides: SECTION 1. Authority to Correct Clerical or Typographical Error and Change of First Name or Nickname. No entry in a civil register shall be changed or corrected without a judicial order, except for clerical or typographical errors and change of first name or nickname which can be corrected or changed by the concerned city or municipal civil registrar or consul general in accordance with the provisions of this Act and its implementing rules and regulations. RA 9048 now governs the change of first name.14 It vests the power and authority to entertain petitions for change of first name to the city or municipal civil registrar or consul general concerned. Under the law, therefore, jurisdiction over applications for change of first name is now primarily lodged with the aforementioned administrative officers. The intent and effect of the law is to

exclude the change of first name from the coverage of Rules 103 (Change of Name) and 108 (Cancellation or Correction of Entries in the Civil Registry) of the Rules of Court, until and unless an administrative petition for change of name is first filed and subsequently denied.15 It likewise lays down the corresponding venue,16 form17 and procedure. In sum, the remedy and the proceedings regulating change of first name are primarily administrative in nature, not judicial. RA 9048 likewise provides the grounds for which change of first name may be allowed: SECTION 4. Grounds for Change of First Name or Nickname. The petition for change of first name or nickname may be allowed in any of the following cases: (1) The petitioner finds the first name or nickname to be ridiculous, tainted with dishonor or extremely difficult to write or pronounce; (2) The new first name or nickname has been habitually and continuously used by the petitioner and he has been publicly known by that first name or nickname in the community; or (3) The change will avoid confusion. Petitioners basis in praying for the change of his first name was his sex reassignment. He intended to make his first name compatible with the sex he thought he transformed himself into through surgery. However, a change of name does not alter ones legal capacity or civil status. 18 RA 9048 does not sanction a change of first name on the ground of sex reassignment. Rather than avoiding confusion, changing petitioners first name for his declared purpose may only create grave complications in the civil registry and the public interest. Before a person can legally change his given name, he must present proper or reasonable cause or any compelling reason justifying such change.19 In addition, he must show that he will be prejudiced by the use of his true and official name.20 In this case, he failed to show, or even allege, any prejudice that he might suffer as a result of using his true and official name. In sum, the petition in the trial court in so far as it prayed for the change of petitioners first name was not within that courts primary jurisdiction as the petition should have been filed with the local civil registrar concerned, assuming it could be legally done. It was an improper remedy because the proper remedy

was administrative, that is, that provided under RA 9048. It was also filed in the wrong venue as the proper venue was in the Office of the Civil Registrar of Manila where his birth certificate is kept. More importantly, it had no merit since the use of his true and official name does not prejudice him at all. For all these reasons, the Court of Appeals correctly dismissed petitioners petition in so far as the change of his first name was concerned. No Law Allows The Change of Entry In The Birth Certificate As To Sex On the Ground of Sex Reassignment The determination of a persons sex appearing in his birth certificate is a legal issue and the court must look to the statutes.21 In this connection, Article 412 of the Civil Code provides: ART. 412. No entry in the civil register shall be changed or corrected without a judicial order. Together with Article 376 of the Civil Code, this provision was amended by RA 9048 in so far as clerical or typographical errors are involved. The correction or change of such matters can now be made through administrative proceedings and without the need for a judicial order. In effect, RA 9048 removed from the ambit of Rule 108 of the Rules of Court the correction of such errors.22 Rule 108 now applies only to substantial changes and corrections in entries in the civil register.23 Section 2(c) of RA 9048 defines what a "clerical or typographical error" is: SECTION 2. Definition of Terms. As used in this Act, the following terms shall mean: xxx xxx xxx

(3) "Clerical or typographical error" refers to a mistake committed in the performance of clerical work in writing, copying, transcribing or typing an entry in the civil register that is harmless and innocuous, such as misspelled name or misspelled place of birth or the like, which is visible to the eyes or obvious to the understanding, and can be corrected or changed only by reference to other existing record or records: Provided, however, That no correction must involve the change of nationality, age, status or sex of the petitioner. (emphasis supplied)

Under RA 9048, a correction in the civil registry involving the change of sex is not a mere clerical or typographical error. It is a substantial change for which the applicable procedure is Rule 108 of the Rules of Court. The entries envisaged in Article 412 of the Civil Code and correctable under Rule 108 of the Rules of Court are those provided in Articles 407 and 408 of the Civil Code:24 ART. 407. Acts, events and judicial decrees concerning the civil status of persons shall be recorded in the civil register. ART. 408. The following shall be entered in the civil register: (1) Births; (2) marriages; (3) deaths; (4) legal separations; (5) annulments of marriage; (6) judgments declaring marriages void from the beginning; (7) legitimations; (8) adoptions; (9) acknowledgments of natural children; (10) naturalization; (11) loss, or (12) recovery of citizenship; (13) civil interdiction; (14) judicial determination of filiation; (15) voluntary emancipation of a minor; and (16) changes of name. The acts, events or factual errors contemplated under Article 407 of the Civil Code include even those that occur after birth.25 However, no reasonable interpretation of the provision can justify the conclusion that it covers the correction on the ground of sex reassignment. To correct simply means "to make or set aright; to remove the faults or error from" while to change means "to replace something with something else of the same kind or with something that serves as a substitute."26 The birth certificate of petitioner contained no error. All entries therein, including those corresponding to his first name and sex, were all correct. No correction is necessary.

Article 407 of the Civil Code authorizes the entry in the civil registry of certain acts (such as legitimations, acknowledgments of illegitimate children and naturalization), events (such as births, marriages, naturalization and deaths) and judicial decrees (such as legal separations, annulments of marriage, declarations of nullity of marriages, adoptions, naturalization, loss or recovery of citizenship, civil interdiction, judicial determination of filiation and changes of name). These acts, events and judicial decrees produce legal consequences that touch upon the legal capacity, status and nationality of a person. Their effects are expressly sanctioned by the laws. In contrast, sex reassignment is not among those acts or events mentioned in Article 407. Neither is it recognized nor even mentioned by any law, expressly or impliedly. "Status" refers to the circumstances affecting the legal situation (that is, the sum total of capacities and incapacities) of a person in view of his age, nationality and his family membership.27 The status of a person in law includes all his personal qualities and relations, more or less permanent in nature, not ordinarily terminable at his own will, such as his being legitimate or illegitimate, or his being married or not. The comprehensive term status include such matters as the beginning and end of legal personality, capacity to have rights in general, family relations, and its various aspects, such as birth, legitimation, adoption, emancipation, marriage, divorce, and sometimes even succession.28 (emphasis supplied) A persons sex is an essential factor in marriage and family relations. It is a part of a persons legal capacity and civil status. In this connection, Article 413 of the Civil Code provides: ART. 413. All other matters pertaining to the registration of civil status shall be governed by special laws. But there is no such special law in the Philippines governing sex reassignment and its effects. This is fatal to petitioners cause. Moreover, Section 5 of Act 3753 (the Civil Register Law) provides: SEC. 5. Registration and certification of births. The declaration of the physician or midwife in attendance at the birth or, in default thereof, the declaration of either parent of the newborn child, shall be sufficient for the registration of a birth in the civil register. Such declaration shall be exempt from documentary stamp tax and shall be sent to the local civil registrar not later

than thirty days after the birth, by the physician or midwife in attendance at the birth or by either parent of the newborn child. In such declaration, the person above mentioned shall certify to the following facts: (a) date and hour of birth; (b) sex and nationality of infant; (c) names, citizenship and religion of parents or, in case the father is not known, of the mother alone; (d) civil status of parents; (e) place where the infant was born; and (f) such other data as may be required in the regulations to be issued. xxx xxx xxx (emphasis supplied)

Neither May Entries in the Birth Certificate As to First Name or Sex Be Changed on the Ground of Equity The trial court opined that its grant of the petition was in consonance with the principles of justice and equity. It believed that allowing the petition would cause no harm, injury or prejudice to anyone. This is wrong. The changes sought by petitioner will have serious and wide-ranging legal and public policy consequences. First, even the trial court itself found that the petition was but petitioners first step towards his eventual marriage to his male fianc. However, marriage, one of the most sacred social institutions, is a special contract of permanent union between a man and a woman.37 One of its essential requisites is the legal capacity of the contracting parties who must be a male and a female.38 To grant the changes sought by petitioner will substantially reconfigure and greatly alter the laws on marriage and family relations. It will allow the union of a man with another man who has undergone sex reassignment (a male-to-female post-operative transsexual). Second, there are various laws which apply particularly to women such as the provisions of the Labor Code on employment of women,39 certain felonies under the Revised Penal Code40 and the presumption of survivorship in case of calamities under Rule 131 of the Rules of Court,41 among others. These laws underscore the public policy in relation to women which could be substantially affected if petitioners petition were to be granted. It is true that Article 9 of the Civil Code mandates that "[n]o judge or court shall decline to render judgment by reason of the silence, obscurity or insufficiency of the law." However, it is not a license for courts to engage in judicial legislation. The duty of the courts is to apply or interpret the law, not to make or amend it. In our system of government, it is for the legislature, should it choose to do so, to determine what guidelines should govern the recognition of the effects of sex reassignment. The need for legislative guidelines becomes particularly important in this case where the claims asserted are statute-based. To reiterate, the statutes define who may file petitions for change of first name and for correction or change of entries in the civil registry, where they may be filed, what grounds may be invoked, what proof must be presented and what procedures shall be observed. If the legislature intends to confer on a person who has undergone sex reassignment the privilege to change his name and sex to conform with his reassigned sex, it has to enact legislation laying down the guidelines in turn governing the conferment of that privilege.

Under the Civil Register Law, a birth certificate is a historical record of the facts as they existed at the time of birth.29 Thus, the sex of a person is determined at birth, visually done by the birth attendant (the physician or midwife) by examining the genitals of the infant. Considering that there is no law legally recognizing sex reassignment, the determination of a persons sex made at the time of his or her birth, if not attended by error,30 is immutable.31 When words are not defined in a statute they are to be given their common and ordinary meaning in the absence of a contrary legislative intent. The words "sex," "male" and "female" as used in the Civil Register Law and laws concerning the civil registry (and even all other laws) should therefore be understood in their common and ordinary usage, there being no legislative intent to the contrary. In this connection, sex is defined as "the sum of peculiarities of structure and function that distinguish a male from a female" 32 or "the distinction between male and female."33 Female is "the sex that produces ova or bears young"34 and male is "the sex that has organs to produce spermatozoa for fertilizing ova."35 Thus, the words "male" and "female" in everyday understanding do not include persons who have undergone sex reassignment. Furthermore, "words that are employed in a statute which had at the time a well-known meaning are presumed to have been used in that sense unless the context compels to the contrary."36 Since the statutory language of the Civil Register Law was enacted in the early 1900s and remains unchanged, it cannot be argued that the term "sex" as used then is something alterable through surgery or something that allows a post-operative male-to-female transsexual to be included in the category "female." For these reasons, while petitioner may have succeeded in altering his body and appearance through the intervention of modern surgery, no law authorizes the change of entry as to sex in the civil registry for that reason. Thus, there is no legal basis for his petition for the correction or change of the entries in his birth certificate.

It might be theoretically possible for this Court to write a protocol on when a person may be recognized as having successfully changed his sex. However, this Court has no authority to fashion a law on that matter, or on anything else. The Court cannot enact a law where no law exists. It can only apply or interpret the written word of its co-equal branch of government, Congress. Petitioner pleads that "[t]he unfortunates are also entitled to a life of happiness, contentment and [the] realization of their dreams." No argument about that. The Court recognizes that there are people whose preferences and orientation do not fit neatly into the commonly recognized parameters of social convention and that, at least for them, life is indeed an ordeal. However, the remedies petitioner seeks involve questions of public policy to be addressed solely by the legislature, not by the courts. WHEREFORE, the petition is hereby DENIED. Costs against petitioner. SO ORDERED.

Per curiam:* This complaint for gross misconduct against Rene de Guzman (De Guzman), Clerk, Regional Trial Court (RTC) of Guimba, Nueva Ecija, Branch 31, is an offshoot of the complaint filed by Atty. Hugo B. Sansano, Jr. (Atty. Sansano) relative to the alleged incompetence/inefficiency of the RTC of Guimba, Nueva Ecija, Branch 31, in the transmittal of the records of Criminal Case No. 1144-G2 to the Court of Appeals. In our Resolution dated September 17, 2007, we adopted the findings and recommendation of the Office of the Court Administrator (OCA) declaring as closed and terminated the administrative matter relative to the delay in the transmittal of the records of Criminal Case No. 1144-G, and exonerating De Guzman and Florencio M. Reyes (Reyes), the Officer-in-Charge of the RTC of Guimba, Nueva Ecija, Branch 31. However, in the same Resolution, we also required De Guzman to comment on the allegation that he is using illegal drugs and had been manifesting irrational and queer behavior while at work. According to Reyes, De Guzmans manifestations of absurd behavior prompted Judge Napoleon R. Sta. Romana (Judge Sta. Romana) to request the Philippine National Police Crime Laboratory to perform a drug test on De Guzman. As alleged by Reyes: x x x Mr. Rene de Guzman, the Docket Clerk, was [in] charge of the preparation and transmission of the records on appeal x x x. Nonetheless, x x x Judge Sta. Romana would x x x often x x x [remind him] about the transmittal of records of the appealed cases [for more than] a dozen times, even personally confronting Mr. Rene de Guzman about the matter, x x x though unsuccessfully x x x. Mr. De Guzman would just x x x dismiss the subject in ridicule and with the empty assurance that the task is as good as finished and what x x x need[s] to be done [is] simply retyping of the corrected indices or the like and that he would submit the same in [no] time at all. This was after a number of weeks from March 26, 2003 after Mr. De Guzman made the undersigned sign the transmittal of PP v. Manangan which he allegedly did not transmit before owing to some minor corrections in the indexing. All too often, (it seems to have been customary on his part, for this he would do to other pressing assignment) he would come to the office the next day, jubilant that the problem has been solved at last! But to no avail. This attitude seemingly bordering on the irrational if not to say that a sense of responsibility is utterly lacking may have given cue for Judge Sta. Romana to have Mr. De Guzman undergo a drug test x x x.3

A.M. No. P-08-2535 June 23, (Formerly A.M. OCA IPI No. 04- 2022-P and A.M. No. 04-434-RTC)

2010

OFFICE OF THE COURT ADMINISTRATOR, Complainant, vs. FLORENCIO M. REYES,1 Officer-in-Charge, and RENE DE GUZMAN, Clerk, Regional Trial Court, Branch 31, Guimba, Nueva Ecija, Respondents. DECISION

That Mr. De Guzman could brush aside even the personal importuning by the judge is a fete no other of our co-employees dare emulate. On the contrary, everybody is apprehensive for his well being and in his behalf. x x x On May 24, 2004, Judge Sta. Romana requested the Nueva Ecija Provincial Crime Laboratory Office to conduct a drug test on De Guzman. On May 26, 2004, De Guzman underwent a qualitative examination the results of which yielded positive for Tetrahydrocannabinol metabolites (marijuana) and Methamphetamine (shabu), both dangerous drugs. In our Resolution of September 17, 2007, we required De Guzman to submit his comment on the charge of misconduct relative to the alleged use of prohibited drugs within 10 days from notice. Notwithstanding the Courts directive, De Guzman failed to file his Comment. Thus, on January 23, 2008, we directed De Guzman to show cause why he should not be held in contempt for failure to comply with the September 17, 2007 Resolution. At the same time, we resolved to require him to submit his comment within 10 days from notice. De Guzman complied with our directive only on March 12, 2008. In his letter, De Guzman claimed that he failed to comply with the Courts directive because he lost his copy of the September 17, 2007 Resolution. Treating De Guzmans letter as his Comment, we referred the same to the OCA for evaluation, report and recommendation. The OCA submitted its Report and Recommendation on July 23, 2008 which reads in part: xxxx Noticeably, respondent de Guzman did not challenge the authenticity and validity of the chemistry report of the Nueva Ecija Provincial Crime Laboratory Office which found him positive for "marijuana" and "shabu". He did not also promptly submit another test report or other document to controvert the drug test report. His plain refutation of the charge and his willingness to submit himself now to a drug test are token attempts at candor and assertion of innocence. These perfunctory attempts cannot prevail over the solitary yet compelling evidence of misconduct for use of prohibited drugs.

Relative to respondents delay in filing his comment to the charge of misconduct, his claim that he "lost and misplaced (his) copy of said resolution, and for that (he) almost forgot about it" is neither a valid reason nor an excuse for the delay in complying with the order of the Court. His flippant attitude towards the repeated orders of the Court to explain his conduct does not merit consideration and justification for delay. It is settled that respondents "indifference to [the resolutions] requiring him to comment on the accusation(s) in the complaint thoroughly and substantially is gross misconduct, and may even be considered as outright disrespect to the Court." After all, a resolution of the Supreme Court is not a mere request and should be complied with promptly and completely. Such failure to comply accordingly betrays not only a recalcitrant streak in character, but has likewise been considered as an utter lack of interest to remain with, if not contempt of the judicial system. It should be mentioned that this is not the first instance that respondent is ordered to account for his failure to comply with a court order. Earlier, he was required to explain to the Court his failure to promptly submit a copy of the affidavit of retired court stenographer Jorge Caoile and to show cause why he should not be administratively dealt with for his failure to comply with a show cause order. For failure to overcome the charge of use of prohibited drugs and to satisfactorily explain his failure to submit promptly his compliance to the Courts show cause order, respondent may be held guilty of two counts of gross misconduct. The OCA thus submitted the following recommendations for consideration of the Court viz: 1. The instant matter be RE-DOCKETED as a regular administrative case; and 2. Respondent Rene de Guzman be found guilty of gross misconduct and accordingly be DISMISSED from the service effective immediately with forfeiture of all benefits except accrued leave credits, with prejudice to his reemployment in any branch or instrumentality of the government, including government-owned or controlled agencies, corporations and financial institutions.4 On August 27, 2008, we required De Guzman to manifest within 10 days from receipt whether he is willing to submit the case for resolution on the basis of the

pleadings/records already filed and submitted. As before, De Guzman simply ignored our directive. Consequently, on September 28, 2009, we deemed waived the filing of De Guzmans manifestation. Our Ruling We adopt the findings and recommendation of the OCA. We note that De Guzman is adept at ignoring the Courts directives. In his letter-explanation in the administrative matter relative to the delay in the transmittal of the records of Criminal Case No. 1144-G, he requested for a period of 10 days or until November 15, 2004 within which to submit the Affidavit of George Caoile (Caoile), the retired Stenographer, as part of his comment. However, despite the lapse of five months, De Guzman still failed to submit Caoiles affidavit. Subsequently, we furnished him with a copy of the April 18, 2005 Resolution wherein we mentioned that we are awaiting his submission of the affidavit of Caoile which shall be considered as part of his (De Guzmans) comment. Nine months from the time he undertook to submit the affidavit of Caoile, De Guzman has yet to comply with his undertaking. Thus, on August 10, 2005, we required De Guzman to show cause why he should not be disciplinarily dealt with or held in contempt for such failure. Unfortunately, De Guzman merely ignored our show cause order. Consequently, on November 20, 2006, we imposed upon him a fine of P1,000.00. Finally, on January 24, 2007, or after the lapse of one year and two months, De Guzman submitted the affidavit of Caoile. Similarly, we also required De Guzman to file his comment within 10 days from notice as regards the allegation that he was using prohibited drugs. However, he again ignored our directive as contained in the Resolution of September 17, 2007. Thus, on January 23, 2008, we required him to show cause why he should not be held in contempt for such failure. By way of explanation, De Guzman submitted a letter dated March 12, 2008 wherein he claimed that he failed to file his comment on the charge of miscondouct because he allegedly lost his copy of the said September 17, 2007 Resolution. Finally, on August 27, 2008, we required De Guzman to manifest whether he is willing to submit the case for resolution based on the pleadings submitted. As before, he failed to comply with the same.

As correctly observed by the OCA, De Guzman has shown his propensity to defy the directives of this Court.5 However, at this juncture, we are no longer wont to countenance such disrespectful behavior. As we have categorically declared in Office of the Court Administrator v. Clerk of Court Fe P. Ganzan, MCTC, Jasaan, Claveria, Misamis Oriental:6 x x x A resolution of the Supreme Court should not be construed as a mere request, and should be complied with promptly and completely. Such failure to comply betrays, not only a recalcitrant streak in character, but also disrespect for the lawful order and directive of the Court. Furthermore, this contumacious conduct of refusing to abide by the lawful directives issued by the Court has likewise been considered as an utter lack of interest to remain with, if not contempt of, the system. Ganzans transgression is highlighted even more by the fact that she is an employee of the Judiciary, who, more than an ordinary citizen, should be aware of her duty to obey the orders and processes of the Supreme Court without delay. x x x Anent the use of illegal drugs, we have upheld in Social Justice Society (SJS) v. Dangerous Drugs Board7 the validity and constitutionality of the mandatory but random drug testing of officers and employees of both public and private offices. As regards public officers and employees, we specifically held that: Like their counterparts in the private sector, government officials and employees also labor under reasonable supervision and restrictions imposed by the Civil Service law and other laws on public officers, all enacted to promote a high standard of ethics in the public service. And if RA 9165 passes the norm of reasonableness for private employees, the more reason that it should pass the test for civil servants, who, by constitutional demand, are required to be accountable at all times to the people and to serve them with utmost responsibility and efficiency.8 Parenthetically, in A.M. No. 06-1-01-SC9 dated January 17, 2006, the Court has adopted guidelines for a program to deter the use of dangerous drugs and institute preventive measures against drug abuse for the purpose of eliminating the hazards of drug abuse in the Judiciary, particularly in the first and second level courts. The objectives of the said program are as follows: 1. To detect the use of dangerous drugs among lower court employees, impose disciplinary sanctions, and provide administrative remedies in cases where an employee is found positive for dangerous drug use.

2. To discourage the use and abuse of dangerous drugs among first and second level court employees and enhance awareness of their adverse effects by information dissemination and periodic random drug testing. 3. To institute other measures that address the menace of drug abuse within the personnel of the Judiciary. In the instant administrative matter, De Guzman never challenged the authenticity of the Chemistry Report of the Nueva Ecija Provincial Crime Laboratory Office. Likewise, the finding that De Guzman was found positive for use of marijuana and shabu remains unrebutted. De Guzmans general denial that he is not a drug user cannot prevail over this compelling evidence. The foregoing constitutes more than substantial evidence that De Guzman was indeed found positive for use of dangerous drugs. In Dadulo v. Court of Appeals,10 we held that "(a)dministrative proceedings are governed by the substantial evidence rule. Otherwise stated, a finding of guilt in an administrative case would have to be sustained for as long as it is supported by substantial evidence that the respondent has committed acts stated in the complaint. Substantial evidence is more than a mere scintilla of evidence. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds equally reasonable might conceivably opine otherwise."11 This Court is a temple of justice. Its basic duty and responsibility is the dispensation of justice. As dispensers of justice, all members and employees of the Judiciary are expected to adhere strictly to the laws of the land, one of which is Republic Act No. 916512 which prohibits the use of dangerous drugs.13 The Court has adhered to the policy of safeguarding the welfare, efficiency, and well-being not only of all the court personnel, but also that of the general public whom it serves. The Court will not allow its front-line representatives, like De Guzman, to put at risk the integrity of the whole judiciary. As we held in Baron v. Anacan,14 "(t)he image of a court of justice is mirrored in the conduct, official and otherwise, of the personnel who work thereat. Thus, the conduct of a person serving the judiciary must, at all times, be characterized by propriety and decorum and above all else, be above suspicion so as to earn and keep the respect of the public for the judiciary. The Court would never countenance any conduct, act or omission on the part of all those in the administration of justice, which will violate the norm of public accountability and diminish or even just tend to diminish the faith of the people in the judiciary."

Article XI of the Constitution mandates that: SECTION 1. Public office is a public trust. Public officers and employees must at all times be accountable to the people and serve them with utmost responsibility, integrity, loyalty, and efficiency, act with patriotism and justice, and lead modest lives. De Guzmans use of prohibited drugs has greatly affected his efficiency in the performance of his functions. De Guzman did not refute the observation of his superior, Judge Sta. Romana, that as a criminal docket court clerk, he (De Guzman) was totally inept and incompetent. Hence, to get across his displeasure and dissatisfaction with his job performance, Judge Sta. Romana gave De Guzman an unsatisfactory rating. Moreover, De Guzmans efficiency as a custodian of court records is also totally wanting. As early as May 12, 2004, Judge Sta. Romana issued a Memorandum addressed to De Guzman relative to the "sleeping cases" inside the latters drawer. It would appear that several cases have not been proceeded upon because De Guzman hid the records of the same inside his drawer. The text of the said Memorandum reads: An examination of the records found in your drawer reveal that the following cases have not moved because you have not brought the same to the attention of the Presiding Judge, to wit: 1. Crim. Case No. 1849-C, PP v. Ruben Villanueva Order of transmittal to the Office of the Provincial Prosecutor of Nueva Ecija dated August 6, 2003 to resolve the Motion for Reconsideration. Resolution of the Provincial Prosecutor dated September 23, 2003 denying the Motion for Reconsideration and transmitting the records to the RTC, Br. 31, Guimba, Nueva Ecija received by this court on September 24, 2003; 2. Crim. Case No. 1993-G, PP vs. JOJO SUPNET Information dated October 14, 2002 received by this Court on November 18, 2002; 3. Crim. Case No. 2013-G, PP vs. Brgy. Capt. BAYANI CAMIS Information dated September 23, 2002 received by this court on January 24, 2003; 4. Crim. Case No. 2007-G, PP vs. Armando Marcos Information dated June 23, 2002; Records received on January 2, 2003.

The Presiding Judge caused the issuance of finding of probable causes and the corresponding Warrants of Arrest. You are hereby ordered to assist the OIC/Clerk of Court in sending forthwith the Warrants of Arrest to the proper agencies for implementation. In the same vein, Reyes also put forth the absurd behavioral manifestations of De Guzman. According to Reyes, Judge Sta. Romana would always remind De Guzman to prepare and transmit the complete records of the appealed cases. However, De Guzman would only make empty assurances to perform his task. Notwithstanding the reminders of his superiors, De Guzman would still fail to transmit the records. Instead, he would report the next day and jubilantly declare that the problem has been solved at last. In fine, we agree with the OCA that by his repeated and contumacious conduct of disrespecting the Courts directives, De Guzman is guilty of gross misconduct and has already forfeited his privilege of being an employee of the Court. Likewise, we can no longer countenance his manifestations of queer behavior, bordering on absurd, irrational and irresponsible, because it has greatly affected his job performance and efficiency. By using prohibited drugs, and being a front-line representative of the Judiciary, De Guzman has exposed to risk the very institution which he serves. It is only by weeding out the likes of De Guzman from the ranks that we would be able to preserve the integrity of this institution. Two justices disagree with the majority opinion. They opine that the Courts action in this case contravenes an express public policy, i.e., "imprisonment for drug dealers and pushers, rehabilitation for their victims." They also posit that De Guzmans failure to properly perform his duties and promptly respond to Court orders precisely springs from his drug addiction that requires rehabilitation. Finally, they state that the Courts real strength is not in its righteousness but in its willingness to understand that men are not perfect and that there is a time to punish and a time to give a chance for contrition and change. However, the legislative policy as embodied in Republic Act No. 9165 in deterring dangerous drug use by resort to sustainable programs of rehabilitation and treatment must be considered in light of this Courts constitutional power of administrative supervision over courts and court personnel. The legislative power imposing policies through laws is not unlimited and is subject to the substantive and constitutional limitations that set parameters both in the exercise of the power itself and the allowable subjects of legislation.15 As such, it cannot limit the Courts power to impose disciplinary

actions against erring justices, judges and court personnel. Neither should such policy be used to restrict the Courts power to preserve and maintain the Judiciarys honor, dignity and integrity and public confidence that can only be achieved by imposing strict and rigid standards of decency and propriety governing the conduct of justices, judges and court employees. Likewise, we cannot subscribe to the idea that De Guzmans irrational behavior stems solely from his being a drug user. Such queer behavior can be attributed to several factors. However, it cannot by any measure be categorically stated at this point that it can be attributed solely to his being a drug user. Finally, it must be emphasized at this juncture that De Guzmans dismissal is not grounded only on his being a drug user. His outright dismissal from the service is likewise anchored on his contumacious and repeated acts of not heeding the directives of this Court. As we have already stated, such attitude betrays not only a recalcitrant streak of character, but also disrespect for the lawful orders and directives of the Court. ACCORDINGLY, Rene de Guzman, Clerk, Regional Trial Court of Guimba, Nueva Ecija, Branch 31, is hereby DISMISSED from the service with forfeiture of all retirement benefits, except accrued leave credits, and disqualification from reinstatement or appointment to any public office, including government-owned or controlled corporations. SO ORDERED.

G.R. No. L-26379

December 27, 1969

WILLIAM C. REAGAN, ETC., petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, respondent. Quasha, Asperilla, Blanco, Zafra and Tayag for petitioner. Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Felicisimo R. Rosete, Solicitor Lolita O. Gal-lang and Special Attorney Gamaliel H. Mantolino for respondent. FERNANDO, J.: A question novel in character, the answer to which has far-reaching implications, is raised by petitioner William C. Reagan, at one time a civilian employee of an American corporation providing technical assistance to the United States Air Force in the Philippines. He would dispute the payment of the income tax assessed on him by respondent Commissioner of Internal Revenue on an amount realized by him on a sale of his automobile to a member of the United States Marine Corps, the transaction having taken place at the Clark Field Air Base at Pampanga. It is his contention, seriously and earnestly expressed, that in legal contemplation the sale was made outside Philippine territory and therefore beyond our jurisdictional power to tax. Such a plea, far-fetched and implausible, on its face betraying no kinship with reality, he would justify by invoking, mistakenly as will hereafter be more fully shown an observation to that effect in a 1951 opinion, 1 petitioner ignoring that such utterance was made purely as a flourish of rhetoric and by way of emphasizing the decision reached, that the trading firm as purchaser of army goods must respond for the sales taxes due from an importer, as the American armed forces being exempt could not be taxed as such under the National Internal Revenue Code.2 Such an assumption, inspired by the commendable aim to render unavailing any attempt at tax evasion on the part of such vendee, found expression anew in a 1962 decision,3 coupled with the reminder however, to render the truth unmistakable, that "the areas covered by the United States Military Bases are not foreign territories both in the political and geographical sense."

As thus clarified, it is manifest that such a view amounts at most to a legal fiction and is moreover obiter. It certainly cannot control the resolution of the specific question that confronts us. We declare our stand in an unequivocal manner. The sale having taken place on what indisputably is Philippine territory, petitioner's liability for the income tax due as a result thereof was unavoidable. As the Court of Tax Appeals reached a similar conclusion, we sustain its decision now before us on appeal. In the decision appealed from, the Court of Tax Appeals, after stating the nature of the case, started the recital of facts thus: "It appears that petitioner, a citizen of the United States and an employee of Bendix Radio, Division of Bendix Aviation Corporation, which provides technical assistance to the United States Air Force, was assigned at Clark Air Base, Philippines, on or about July 7, 1959 ... . Nine (9) months thereafter and before his tour of duty expired, petitioner imported on April 22, 1960 a tax-free 1960 Cadillac car with accessories valued at $6,443.83, including freight, insurance and other charges."4 Then came the following: "On July 11, 1960, more than two (2) months after the 1960 Cadillac car was imported into the Philippines, petitioner requested the Base Commander, Clark Air Base, for a permit to sell the car, which was granted provided that the sale was made to a member of the United States Armed Forces or a citizen of the United States employed in the U.S. military bases in the Philippines. On the same date, July 11, 1960, petitioner sold his car for $6,600.00 to a certain Willie Johnson, Jr. (Private first class), United States Marine Corps, Sangley Point, Cavite, Philippines, as shown by a Bill of Sale . . . executed at Clark Air Base. On the same date, Pfc. Willie (William) Johnson, Jr. sold the car to Fred Meneses for P32,000.00 as evidenced by a deed of sale executed in Manila."5 As a result of the transaction thus made, respondent Commissioner of Internal Revenue, after deducting the landed cost of the car as well as the personal exemption to which petitioner was entitled, fixed as his net taxable income arising from such transaction the amount of P17,912.34, rendering him liable for income tax in the sum of P2,979.00. After paying the sum, he sought a refund from respondent claiming that he was exempt, but pending action on his request for refund, he filed the case with the Court of Tax Appeals seeking recovery of the sum of P2,979.00 plus the legal rate of interest. As noted in the appealed decision: "The only issue submitted for our resolution is whether or not the said income tax of P2,979.00 was legally collected by respondent for petitioner."6 After discussing the legal issues raised, primarily the contention that the Clark Air Base "in legal contemplation, is a base outside

the Philippines" the sale therefore having taken place on "foreign soil", the Court of Tax Appeals found nothing objectionable in the assessment and thereafter the payment of P2,979.00 as income tax and denied the refund on the same. Hence, this appeal predicated on a legal theory we cannot accept. Petitioner cannot make out a case for reversal. 1. Resort to fundamentals is unavoidable to place things in their proper perspective, petitioner apparently feeling justified in his refusal to defer to basic postulates of constitutional and international law, induced no doubt by the weight he would accord to the observation made by this Court in the two opinions earlier referred to. To repeat, scant comfort, if at all is to be derived from such an obiter dictum, one which is likewise far from reflecting the fact as it is. Nothing is better settled than that the Philippines being independent and sovereign, its authority may be exercised over its entire domain. There is no portion thereof that is beyond its power. Within its limits, its decrees are supreme, its commands paramount. Its laws govern therein, and everyone to whom it applies must submit to its terms. That is the extent of its jurisdiction, both territorial and personal. Necessarily, likewise, it has to be exclusive. If it were not thus, there is a diminution of its sovereignty. It is to be admitted that any state may, by its consent, express or implied, submit to a restriction of its sovereign rights. There may thus be a curtailment of what otherwise is a power plenary in character. That is the concept of sovereignty as auto-limitation, which, in the succinct language of Jellinek, "is the property of a state-force due to which it has the exclusive capacity of legal self-determination and self-restriction."7 A state then, if it chooses to, may refrain from the exercise of what otherwise is illimitable competence. Its laws may as to some persons found within its territory no longer control. Nor does the matter end there. It is not precluded from allowing another power to participate in the exercise of jurisdictional right over certain portions of its territory. If it does so, it by no means follows that such areas become impressed with an alien character. They retain their status as native soil. They are still subject to its authority. Its jurisdiction may be diminished, but it does not disappear. So it is with the bases under lease to the American armed forces by virtue of the military bases agreement of 1947. They are not and cannot be foreign territory. Decisions coming from petitioner's native land, penned by jurists of repute, speak to that effect with impressive unanimity. We start with the citation from

Chief Justice Marshall, announced in the leading case of Schooner Exchange v. M'Faddon,8 an 1812 decision: "The jurisdiction of the nation within its own territory is necessarily exclusive and absolute. It is susceptible of no limitation not imposed by itself. Any restriction upon it, deriving validity from an external source, would imply a diminution of its sovereignty to the extent of the restriction, and an investment of that sovereignty to the same extent in that power which could impose such restriction." After which came this paragraph: "All exceptions, therefore, to the full and complete power of a nation within its own territories, must be traced up to the consent of the nation itself. They can flow from no other legitimate source." Chief Justice Taney, in an 1857 decision,9 affirmed the fundamental principle of everyone within the territorial domain of a state being subject to its commands: "For undoubtedly every person who is found within the limits of a government, whether the temporary purposes or as a resident, is bound by its laws." It is no exaggeration then for Justice Brewer to stress that the United States government "is one having jurisdiction over every foot of soil within its territory, and acting directly upon each [individual found therein]; . . ."10 Not too long ago, there was a reiteration of such a view, this time from the pen of Justice Van Devanter. Thus: "It now is settled in the United States and recognized elsewhere that the territory subject to its jurisdiction includes the land areas under its dominion and control the ports, harbors, bays, and other in closed arms of the sea along its coast, and a marginal belt of the sea extending from the coast line outward a marine league, or 3 geographic miles."11 He could cite moreover, in addition to many American decisions, such eminent treatisewriters as Kent, Moore, Hyde, Wilson, Westlake, Wheaton and Oppenheim. As a matter of fact, the eminent commentator Hyde in his three-volume work on International Law, as interpreted and applied by the United States, made clear that not even the embassy premises of a foreign power are to be considered outside the territorial domain of the host state. Thus: "The ground occupied by an embassy is not in fact the territory of the foreign State to which the premises belong through possession or ownership. The lawfulness or unlawfulness of acts there committed is determined by the territorial sovereign. If an attache commits an offense within the precincts of an embassy, his immunity from prosecution is not because he has not violated the local law, but rather for the reason that the individual is exempt from prosecution. If a person not so exempt, or whose immunity is waived, similarly commits a crime therein, the territorial sovereign, if it secures custody of the offender, may subject him to prosecution, even though its criminal code normally does not contemplate the

punishment of one who commits an offense outside of the national domain. It is not believed, therefore, that an ambassador himself possesses the right to exercise jurisdiction, contrary to the will of the State of his sojourn, even within his embassy with respect to acts there committed. Nor is there apparent at the present time any tendency on the part of States to acquiesce in his exercise of it."12 2. In the light of the above, the first and crucial error imputed to the Court of Tax Appeals to the effect that it should have held that the Clark Air Force is foreign soil or territory for purposes of income tax legislation is clearly without support in law. As thus correctly viewed, petitioner's hope for the reversal of the decision completely fades away. There is nothing in the Military Bases Agreement that lends support to such an assertion. It has not become foreign soil or territory. This country's jurisdictional rights therein, certainly not excluding the power to tax, have been preserved. As to certain tax matters, an appropriate exemption was provided for. Petitioner could not have been unaware that to maintain the contrary would be to defy reality and would be an affront to the law. While his first assigned error is thus worded, he would seek to impart plausibility to his claim by the ostensible invocation of the exemption clause in the Agreement by virtue of which a "national of the United States serving in or employed in the Philippines in connection with the construction, maintenance, operation or defense of the bases and residing in the Philippines only by reason of such employment" is not to be taxed on his income unless "derived from Philippine source or sources other than the United States sources."13 The reliance, to repeat, is more apparent than real for as noted at the outset of this opinion, petitioner places more faith not on the language of the provision on exemption but on a sentiment given expression in a 1951 opinion of this Court, which would be made to yield such an unwarranted interpretation at war with the controlling constitutional and international law principles. At any rate, even if such a contention were more adequately pressed and insisted upon, it is on its face devoid of merit as the source clearly was Philippine. In Saura Import and Export Co. v. Meer,14 the case above referred to, this Court affirmed a decision rendered about seven months previously,15 holding liable as an importer, within the contemplation of the National Internal Revenue Code provision, the trading firm that purchased army goods from a United States government agency in the Philippines. It is easily understandable why. If it were not thus, tax evasion would have been facilitated. The United States forces that

brought in such equipment later disposed of as surplus, when no longer needed for military purposes, was beyond the reach of our tax statutes. Justice Tuason, who spoke for the Court, adhered to such a rationale, quoting extensively from the earlier opinion. He could have stopped there. He chose not to do so. The transaction having occurred in 1946, not so long after the liberation of the Philippines, he proceeded to discuss the role of the American military contingent in the Philippines as a belligerent occupant. In the course of such a dissertion, drawing on his well-known gift for rhetoric and cognizant that he was making an as if statement, he did say: "While in army bases or installations within the Philippines those goods were in contemplation of law on foreign soil." It is thus evident that the first, and thereafter the controlling, decision as to the liability for sales taxes as an importer by the purchaser, could have been reached without any need for such expression as that given utterance by Justice Tuason. Its value then as an authoritative doctrine cannot be as much as petitioner would mistakenly attach to it. It was clearly obiter not being necessary for the resolution of the issue before this Court.16 It was an opinion "uttered by the way."17 It could not then be controlling on the question before us now, the liability of the petitioner for income tax which, as announced at the opening of this opinion, is squarely raised for the first time.18 On this point, Chief Justice Marshall could again be listened to with profit. Thus: "It is a maxim, not to be disregarded, that general expressions, in every opinion, are to be taken in connection with the case in which those expressions are used. If they go beyond the case, they may be respected, but ought not to control the judgment in a subsequent suit when the very point is presented for decision."19 Nor did the fact that such utterance of Justice Tuason was cited in Co Po v. Collector of Internal Revenue,20 a 1962 decision relied upon by petitioner, put a different complexion on the matter. Again, it was by way of pure embellishment, there being no need to repeat it, to reach the conclusion that it was the purchaser of army goods, this time from military bases, that must respond for the advance sales taxes as importer. Again, the purpose that animated the reiteration of such a view was clearly to emphasize that through the employment of such a fiction, tax evasion is precluded. What is more, how far divorced from the truth was such statement was emphasized by Justice Barrera, who penned the Co Po opinion, thus: "It is true that the areas covered by the United States Military Bases are not foreign territories both in the political and geographical sense."21

Justice Tuason moreover made explicit that rather than corresponding with reality, what was said by him was in the way of a legal fiction. Note his stress on "in contemplation of law." To lend further support to a conclusion already announced, being at that a confirmation of what had been arrived at in the earlier case, distinguished by its sound appreciation of the issue then before this Court and to preclude any tax evasion, an observation certainly not to be taken literally was thus given utterance. This is not to say that it should have been ignored altogether afterwards. It could be utilized again, as it undoubtedly was, especially so for the purpose intended, namely to stigmatize as without support in law any attempt on the part of a taxpayer to escape an obligation incumbent upon him. So it was quoted with that end in view in the Co Po case. It certainly does not justify any effort to render futile the collection of a tax legally due, as here. That was farthest from the thought of Justice Tuason. What is more, the statement on its face is, to repeat, a legal fiction. This is not to discount the uses of a fictio juris in the science of the law. It was Cardozo who pointed out its value as a device "to advance the ends of justice" although at times it could be "clumsy" and even "offensive". 22 Certainly, then, while far from objectionable as thus enunciated, this observation of Justice Tuason could be misused or misconstrued in a clumsy manner to reach an offensive result. To repeat, properly used, a legal fiction could be relied upon by the law, as Frankfurter noted, in the pursuit of legitimate ends.23 Petitioner then would be well-advised to take to heart such counsel of care and circumspection before invoking not a legal fiction that would avoid a mockery of the law by avoiding tax evasion but what clearly is a misinterpretation thereof, leading to results that would have shocked its originator. The conclusion is thus irresistible that the crucial error assigned, the only one that calls for discussion to the effect that for income tax purposes the Clark Air Force Base is outside Philippine territory, is utterly without merit. So we have said earlier. 3. To impute then to the statement of Justice Tuason the meaning that petitioner would fasten on it is, to paraphrase Frankfurter, to be guilty of succumbing to the vice of literalness. To so conclude is, whether by design or inadvertence, to misread it. It certainly is not susceptible of the mischievous consequences now sought to be fastened on it by petitioner. That it would be fraught with such peril to the enforcement of our tax statutes on the military bases under lease to the American armed forces could not have

been within the contemplation of Justice Tuason. To so attribute such a bizarre consequence is to be guilty of a grave disservice to the memory of a great jurist. For his real and genuine sentiment on the matter in consonance with the imperative mandate of controlling constitutional and international law concepts was categorically set forth by him, not as an obiter but as the rationale of the decision, in People v. Acierto24 thus: "By the [Military Bases] Agreement, it should be noted, the Philippine Government merely consents that the United States exercise jurisdiction in certain cases. The consent was given purely as a matter of comity, courtesy, or expediency over the bases as part of the Philippine territory or divested itself completely of jurisdiction over offenses committed therein." Nor did he stop there. He did stress further the full extent of our territorial jurisdiction in words that do not admit of doubt. Thus: "This provision is not and can not on principle or authority be construed as a limitation upon the rights of the Philippine Government. If anything, it is an emphatic recognition and reaffirmation of Philippine sovereignty over the bases and of the truth that all jurisdictional rights granted to the United States and not exercised by the latter are reserved by the Philippines for itself."25 It is in the same spirit that we approach the specific question confronting us in this litigation. We hold, as announced at the outset, that petitioner was liable for the income tax arising from a sale of his automobile in the Clark Field Air Base, which clearly is and cannot otherwise be other than, within our territorial jurisdiction to tax. 4. With the mist thus lifted from the situation as it truly presents itself, there is nothing that stands in the way of an affirmance of the Court of Tax Appeals decision. No useful purpose would be served by discussing the other assigned errors, petitioner himself being fully aware that if the Clark Air Force Base is to be considered, as it ought to be and as it is, Philippine soil or territory, his claim for exemption from the income tax due was distinguished only by its futility. There is further satisfaction in finding ourselves unable to indulge petitioner in his plea for reversal. We thus manifest fealty to a pronouncement made time and time again that the law does not look with favor on tax exemptions and that he who would seek to be thus privileged must justify it by words too plain to be mistaken and too categorical to be misinterpreted.26 Petitioner had not done so. Petitioner cannot do so.

WHEREFORE, the decision of the Court of Tax Appeals of May 12, 1966 denying the refund of P2,979.00 as the income tax paid by petitioner is affirmed. With costs against petitioner. Concepcion, C.J., Dizon, Teehankee, JJ., concur. Makalintal, Zaldivar, Sanchez, Castro and

Reyes, J.B.L., J., concurs in the result. Barredo, J., took no part.

G.R. No. 161414

January 17, 2005

SULTAN OSOP B. CAMID, petitioner, vs. THE OFFICE OF THE PRESIDENT, DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, AUTONOMOUS REGION IN MUSLIM MINDANAO, DEPARTMENT of FINANCE, DEPARTMENT of BUDGET AND MANAGEMENT, COMMISSION ON AUDIT, and the CONGRESS OF THE PHILIPPINES (HOUSE of REPRESENTATIVES AND SENATE), respondents. DECISION TINGA, J.: This Petition for Certiorari presents this Court with the prospect of our own Brigadoon1 the municipality of Andong, Lanao del Surwhich like its counterpart in filmdom, is a town that is not supposed to exist yet is anyway insisted by some as actually alive and thriving. Yet unlike in the movies, there is nothing mystical, ghostly or anything even remotely charming about the purported existence of Andong. The creation of the putative municipality was declared void ab initio by this Court four decades ago, but the present petition insists that in spite of this insurmountable obstacle Andong thrives on, and hence, its legal personality should be given judicial affirmation. We disagree. The factual antecedents derive from the promulgation of our ruling in Pelaez v. Auditor General2 in 1965. As discussed therein, then President Diosdado Macapagal issued several Executive Orders3 creating thirty-three (33) municipalities in Mindanao. Among them was Andong in Lanao del Sur which was created by virtue of Executive Order No. 107.4 These executive orders were issued after legislative bills for the creation of municipalities involved in that case had failed to pass Congress.5 President Diosdado Macapagal justified the creation of these municipalities citing his

powers under Section 68 of the Revised Administrative Code. Then VicePresident Emmanuel Pelaez filed a special civil action for a writ of prohibition, alleging in main that the Executive Orders were null and void, Section 68 having been repealed by Republic Act No. 2370,6 and said orders constituting an undue delegation of legislative power.7 After due deliberation, the Court unanimously held that the challenged Executive Orders were null and void. A majority of five justices, led by the ponente, Justice (later Chief Justice) Roberto Concepcion, ruled that Section 68 of the Revised Administrative Code did not meet the well-settled requirements for a valid delegation of legislative power to the executive branch,8 while three justices opined that the nullity of the issuances was the consequence of the enactment of the 1935 Constitution, which reduced the power of the Chief Executive over local governments.9 Pelaez was disposed in this wise: WHEREFORE, the Executive Orders in question are declared null and void ab initio and the respondent permanently restrained from passing in audit any expenditure of public funds in implementation of said Executive Orders or any disbursement by the municipalities above referred to. It is so ordered.10 Among the Executive Orders annulled was Executive Order No. 107 which created the Municipality of Andong. Nevertheless, the core issue presented in the present petition is the continued efficacy of the judicial annulment of the Municipality of Andong. Petitioner Sultan Osop B. Camid (Camid) represents himself as a current resident of Andong,11 suing as a private citizen and taxpayer whose locus standi "is of public and paramount interest especially to the people of the Municipality of Andong, Province of Lanao del Sur."12 He alleges that Andong "has metamorphosed into a full-blown municipality with a complete set of officials appointed to handle essential services for the municipality and its constituents,"13 even though he concedes that since 1968, no person has been appointed, elected or qualified to serve any of the elective local government positions of Andong.14 Nonetheless, the municipality of Andong has its own high school, Bureau of Posts, a Department of Education, Culture and Sports office, and at least seventeen (17) "barangay units" with their own respective chairmen.15 From 1964 until 1972, according to Camid, the public officials of Andong "have been serving their constituents through the minimal means and resources with least (sic) honorarium and recognition from the Office of the then former President Diosdado Macapagal." Since the time of Martial Law in 1972, Andong has allegedly been getting by despite the absence of public

funds, with the "Interim Officials" serving their constituents "in their own little ways and means."16 In support of his claim that Andong remains in existence, Camid presents to this Court a Certification issued by the Office of the Community Environment and Natural Resources (CENRO) of the Department of Environment and Natural Resources (DENR) certifying the total land area of the Municipality of Andong, "created under Executive Order No. 107 issued [last] October 1, 1964."17 He also submits a Certification issued by the Provincial Statistics Office of Marawi City concerning the population of Andong, which is pegged at fourteen thousand fifty nine (14,059) strong. Camid also enumerates a list of governmental agencies and private groups that allegedly recognize Andong, and notes that other municipalities have recommended to the Speaker of the Regional Legislative Assembly for the immediate implementation of the revival or re-establishment of Andong.18 The petition assails a Certification dated 21 November 2003, issued by the Bureau of Local Government Supervision of the Department of Interior and Local Government (DILG).19 The Certification enumerates eighteen (18) municipalities certified as "existing," per DILG records. Notably, these eighteen (18) municipalities are among the thirty-three (33), along with Andong, whose creations were voided by this Court in Pelaez. These municipalities are Midaslip, Pitogo, Naga, and Bayog in Zamboanga del Sur; Siayan and Pres. Manuel A. Roxas in Zamboanga del Norte; Magsaysay, Sta. Maria and New Corella in Davao; Badiangan and Mina in Iloilo; Maguing in Lanao del Sur; Gloria in Oriental Mindoro; Maasim in Sarangani; Kalilangan and Lantapan in Bukidnon; and Maco in Compostela Valley.20 Camid imputes grave abuse of discretion on the part of the DILG "in not classifying [Andong] as a regular existing municipality and in not including said municipality in its records and official database as [an] existing regular municipality."21 He characterizes such non-classification as unequal treatment to the detriment of Andong, especially in light of the current recognition given to the eighteen (18) municipalities similarly annulled by reason of Pelaez. As appropriate relief, Camid prays that the Court annul the DILG Certification dated 21 November 2003; direct the DILG to classify Andong as a "regular existing municipality;" all public respondents, to extend full recognition and support to Andong; the Department of Finance and the Department of Budget and Management, to immediately release the internal revenue allotments of Andong; and the public respondents, particularly the DILG, to recognize the "Interim Local Officials" of Andong.22

Moreover, Camid insists on the continuing validity of Executive Order No. 107. He argues that Pelaez has already been modified by supervening events consisting of subsequent laws and jurisprudence. Particularly cited is our Decision in Municipality of San Narciso v. Hon. Mendez,23 wherein the Court affirmed the unique status of the municipality of San Andres in Quezon as a "de facto municipal corporation."24 Similar to Andong, the municipality of San Andres was created by way of executive order, precisely the manner which the Court in Pelaez had declared as unconstitutional. Moreover, San Narciso cited, as Camid does, Section 442(d) of the Local Government Code of 1991 as basis for the current recognition of the impugned municipality. The provision reads: Section 442. Requisites for Creation. - xxx (d) Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as such. Existing municipal districts organized pursuant to presidential issuances or executive orders and which have their respective sets of elective municipal officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as regular municipalities.25 There are several reasons why the petition must be dismissed. These can be better discerned upon examination of the proper scope and application of Section 442(d), which does not sanction the recognition of just any municipality. This point shall be further explained further on. Notably, as pointed out by the public respondents, through the Office of the Solicitor General (OSG), the case is not a fit subject for the special civil actions of certiorari and mandamus, as it pertains to the de novo appreciation of factual questions. There is indeed no way to confirm several of Camids astonishing factual allegations pertaining to the purported continuing operation of Andong in the decades since it was annulled by this Court. No trial court has had the opportunity to ascertain the validity of these factual claims, the appreciation of which is beyond the function of this Court since it is not a trier of facts. The importance of proper factual ascertainment cannot be gainsaid, especially in light of the legal principles governing the recognition of de facto municipal corporations. It has been opined that municipal corporations may exist by prescription where it is shown that the community has claimed and exercised corporate functions, with the knowledge and acquiescence of the legislature, and without interruption or objection for period long enough to afford title by prescription.26 These municipal corporations have exercised their powers for a long period without objection on the part of the government that although no

charter is in existence, it is presumed that they were duly incorporated in the first place and that their charters had been lost.27 They are especially common in England, which, as well-worth noting, has existed as a state for over a thousand years. The reason for the development of that rule in England is understandable, since that country was settled long before the Roman conquest by nomadic Celtic tribes, which could have hardly been expected to obtain a municipal charter in the absence of a national legal authority. In the United States, municipal corporations by prescription are less common, but it has been held that when no charter or act of incorporation of a town can be found, it may be shown to have claimed and exercised the powers of a town with the knowledge and assent of the legislature, and without objection or interruption for so long a period as to furnish evidence of a prescriptive right.28 What is clearly essential is a factual demonstration of the continuous exercise by the municipal corporation of its corporate powers, as well as the acquiescence thereto by the other instrumentalities of the state. Camid does not have the opportunity to make an initial factual demonstration of those circumstances before this Court. Indeed, the factual deficiencies aside, Camids plaint should have undergone the usual administrative gauntlet and, once that was done, should have been filed first with the Court of Appeals, which at least would have had the power to make the necessary factual determinations. Camids seeming ignorance of the principles of exhaustion of administrative remedies and hierarchy of courts, as well as the concomitant prematurity of the present petition, cannot be countenanced. It is also difficult to capture the sense and viability of Camids present action. The assailed issuance is the Certification issued by the DILG. But such Certification does not pretend to bear the authority to create or revalidate a municipality. Certainly, the annulment of the Certification will really do nothing to serve Camids ultimate cause- the recognition of Andong. Neither does the Certification even expressly refute the claim that Andong still exists, as there is nothing in the document that comments on the present status of Andong. Perhaps the Certification is assailed before this Court if only to present an actual issuance, rather than a long-standing habit or pattern of action that can be annulled through the special civil action of certiorari. Still, the relation of the Certification to Camids central argument is forlornly strained. These disquisitions aside, the central issue remains whether a municipality whose creation by executive fiat was previously voided by this Court may attain recognition in the absence of any curative or reimplementing statute. Apparently, the question has never been decided before, San Narciso and its

kindred cases pertaining as they did to municipalities whose bases of creation were dubious yet were never judicially nullified. The effect of Section 442(d) of the Local Government Code on municipalities such as Andong warrants explanation. Besides, the residents of Andong who belabor under the impression that their town still exists, much less those who may comport themselves as the municipalitys "Interim Government," would be well served by a rude awakening. The Court can employ a simplistic approach in resolving the substantive aspect of the petition, merely by pointing out that the Municipality of Andong never existed.29 Executive Order No. 107, which established Andong, was declared "null and void ab initio" in 1965 by this Court in Pelaez, along with thirty-three (33) other executive orders. The phrase "ab initio" means "from the beginning,"30 "at first,"31 "from the inception."32 Pelaez was never reversed by this Court but rather it was expressly affirmed in the cases of Municipality of San Joaquin v. Siva,33 Municipality of Malabang v. Benito,34 and Municipality of Kapalong v. Moya.35 No subsequent ruling by this Court declared Pelaez as overturned or inoperative. No subsequent legislation has been passed since 1965 creating a Municipality of Andong. Given these facts, there is hardly any reason to elaborate why Andong does not exist as a duly constituted municipality. This ratiocination does not admit to patent legal errors and has the additional virtue of blessed austerity. Still, its sweeping adoption may not be advisedly appropriate in light of Section 442(d) of the Local Government Code and our ruling in Municipality of San Narciso, both of which admit to the possibility of de facto municipal corporations. To understand the applicability of Municipality of San Narciso and Section 442(b) of the Local Government Code to the situation of Andong, it is necessary again to consider the ramifications of our decision in Pelaez. The eminent legal doctrine enunciated in Pelaez was that the President was then, and still is, not empowered to create municipalities through executive issuances. The Court therein recognized "that the President has, for many years, issued executive orders creating municipal corporations, and that the same have been organized and in actual operation . . . ."36 However, the Court ultimately nullified only those thirty-three (33) municipalities, including Andong, created during the period from 4 September to 29 October 1964 whose existence petitioner Vice-President Pelaez had specifically assailed before this Court. No pronouncement was made as to the other municipalities which had

been previously created by the President in the exercise of power the Court deemed unlawful. Two years after Pelaez was decided, the issue again came to fore in Municipality of San Joaquin v. Siva.37 The Municipality of Lawigan was created by virtue of Executive Order No. 436 in 1961. Lawigan was not one of the municipalities ordered annulled in Pelaez. A petition for prohibition was filed contesting the legality of the executive order, again on the ground that Section 68 of the Revised Administrative Code was unconstitutional. The trial court dismissed the petition, but the Supreme Court reversed the ruling and entered a new decision declaring Executive Order No. 436 void ab initio. The Court reasoned without elaboration that the issue had already been squarely taken up and settled in Pelaez which agreed with the argument posed by the challengers to Lawigans validity.38 In the 1969 case of Municipality of Malabang v. Benito,39 what was challenged is the validity of the constitution of the Municipality of Balabagan in Lanao del Sur, also created by an executive order,40 and which, similar to Lawigan, was not one of the municipalities annulled in Pelaez. This time, the officials of Balabagan invoked de facto status as a municipal corporation in order to dissuade the Court from nullifying action. They alleged that its status as a de facto corporation cannot be collaterally attacked but should be inquired into directly in an action for quo warranto at the instance of the State, and not by a private individual as it was in that case. In response, the Court conceded that an inquiry into the legal existence of a municipality is reserved to the State in a proceeding for quo warranto, but only if the municipal corporation is a de facto corporation.41 Ultimately, the Court refused to acknowledge Balabagan as a de facto corporation, even though it had been organized prior to the Courts decision in Pelaez. The Court declared void the executive order creating Balabagan and restrained its municipal officials from performing their official duties and functions.42 It cited conflicting American authorities on whether a de facto corporation can exist where the statute or charter creating it is unconstitutional.43 But the Courts final conclusion was unequivocal that Balabagan was not a de facto corporation.1awphi1.nt In the cases where a de facto municipal corporation was recognized as such despite the fact that the statute creating it was later invalidated, the decisions could fairly be made to rest on the consideration that there was some other valid law giving corporate vitality to the organization. Hence, in the case at bar, the mere fact that Balabagan was organized at a time when the statute had not

been invalidated cannot conceivably make it a de facto corporation, as, independently of the Administrative Code provision in question, there is no other valid statute to give color of authority to its creation.44 The Court did clarify in Malabang that the previous acts done by the municipality in the exercise of its corporate powers were not necessarily a nullity.45 Camid devotes several pages of his petition in citing this point, 46 yet the relevance of the citation is unclear considering that Camid does not assert the validity of any corporate act of Andong prior to its judicial dissolution. Notwithstanding, the Court in Malabang retained an emphatic attitude as to the unconstitutionality of the power of the President to create municipal corporations by way of presidential promulgations, as authorized under Section 68 of the Revised Administrative Code. This principle was most recently affirmed in 1988, in Municipality of Kapalong v. Moya.47 The municipality of Santo Tomas, created by President Carlos P. Garcia, filed a complaint against another municipality, who challenged Santo Tomass legal personality to institute suit. Again, Santo Tomas had not been expressly nullified by prior judicial action, yet the Court refused to recognize its legal existence. The blunt but simple ruling: "Now then, as ruled in the Pelaez case supra, the President has no power to create a municipality. Since [Santo Tomas] has no legal personality, it can not be a party to any civil action."48 Nevertheless, when the Court decided Municipality of San Narciso49 in 1995, it indicated a shift in the jurisprudential treatment of municipalities created through presidential issuances. The questioned municipality of San Andres, Quezon was created on 20 August 1959 by Executive Order No. 353 issued by President Carlos P. Garcia. Executive Order No. 353 was not one of the thirtythree issuances annulled by Pelaez in 1965. The legal status of the Municipality of San Andres was first challenged only in 1989, through a petition for quo warranto filed with the Regional Trial Court of Gumaca, Quezon, which did cite Pelaez as authority.50 The RTC dismissed the petition for lack of cause of action, and the petitioners therein elevated the matter to this Court. In dismissing the petition, the Court delved in the merits of the petition, if only to resolve further doubt on the legal status of San Andres. It noted a circumstance which is not present in the case at barthat San Andres was in existence for nearly thirty (30) years before its legality was challenged. The Court did not declare the executive order creating San Andres null and void. Still, acting on the premise that the said executive order was a complete nullity, the Court noted "peculiar circumstances" that led to the conclusion that San Andres had attained the unique status of a "de facto municipal corporation."51 It noted that

Pelaez limited its nullificatory effect only to those executive orders specifically challenged therein, despite the fact that the Court then could have very well extended the decision to invalidate San Andres as well.52 This statement squarely contradicts Camids reading of San Narciso that the creation of San Andres, just like Andong, had been declared a complete nullity on the same ground of unconstitutional delegation of legislative power found in Pelaez.53 The Court also considered the applicability of Section 442(d)54 of the Local Government Code of 1991. It clarified the implication of the provision as follows: Equally significant is Section 442(d) of the Local Government Code to the effect that municipal districts "organized pursuant to presidential issuances or executive orders and which have their respective sets of elective municipal officials holding office at the time of the effectivity of (the) Code shall henceforth be considered as regular municipalities." No pretension of unconstitutionality per se of Section 442(d) of the Local Government Code is preferred. It is doubtful whether such a pretext, even if made, would succeed. The power to create political subdivisions is a function of the legislature. Congress did just that when it has incorporated Section 442(d) in the Code. Curative laws, which in essence are retrospective, and aimed at giving "validity to acts done that would have been invalid under existing laws, as if existing laws have been complied with," are validly accepted in this jurisdiction, subject to the usual qualification against impairment of vested rights. (Emphasis supplied)55 The holding in San Narciso was subsequently affirmed in Municipality of Candijay v. Court of Appeals56 and Municipality of Jimenez v. Baz57 In Candijay, the juridical personality of the Municipality of Alicia, created in a 1949 executive order, was attacked only beginning in 1984. Pelaez was again invoked in support of the challenge, but the Court refused to invalidate the municipality, citing San Narciso at length. The Court noted that the situation of the Municipality of Alicia was strikingly similar to that in San Narciso; hence, the town should likewise "benefit from the effects of Section 442(d) of the Local Government Code, and should [be] considered as a regular, de jure municipality." 58 The valid existence of Municipality of Sinacaban, created in a 1949 executive order, was among the issues raised in Jimenez. The Court, through Justice Mendoza, provided an expert summation of the evolution of the rule. The principal basis for the view that Sinacaban was not validly created as a municipal corporation is the ruling in Pelaez v. Auditor General that the creation

of municipal corporations is essentially a legislative matter and therefore the President was without power to create by executive order the Municipality of Sinacaban. The ruling in this case has been reiterated in a number of cases later decided. However, we have since held that where a municipality created as such by executive order is later impliedly recognized and its acts are accorded legal validity, its creation can no longer be questioned. In Municipality of San Narciso, Quezon v. Mendez, Sr., this Court considered the following factors as having validated the creation of a municipal corporation, which, like the Municipality of Sinacaban, was created by executive order of the President before the ruling in Pelaez v. Auditor General: (1) the fact that for nearly 30 years the validity of the creation of the municipality had never been challenged; (2) the fact that following the ruling in Pelaez no quo warranto suit was filed to question the validity of the executive order creating such municipality; and (3) the fact that the municipality was later classified as a fifth class municipality, organized as part of a municipal circuit court and considered part of a legislative district in the Constitution apportioning the seats in the House of Representatives. Above all, it was held that whatever doubt there might be as to the de jure character of the municipality must be deemed to have been put to rest by the Local Government Code of 1991 (R. A. No. 7160), 442(d) of which provides that "municipal districts organized pursuant to presidential issuances or executive orders and which have their respective sets of elective officials holding office at the time of the effectivity of this Code shall henceforth be considered as regular municipalities." Here, the same factors are present so as to confer on Sinacaban the status of at least a de facto municipal corporation in the sense that its legal existence has been recognized and acquiesced publicly and officially. Sinacaban had been in existence for sixteen years when Pelaez v. Auditor General was decided on December 24, 1965. Yet the validity of E.O. No. 258 creating it had never been questioned. Created in 1949, it was only 40 years later that its existence was questioned and only because it had laid claim to an area that apparently is desired for its revenue. This fact must be underscored because under Rule 66, 16 of the Rules of Court, a quo warranto suit against a corporation for forfeiture of its charter must be commenced within five (5) years from the time the act complained of was done or committed. On the contrary, the State and even the Municipality of Jimenez itself have recognized Sinacaban's corporate existence. Under Administrative Order No. 33 dated June 13, 1978 of this Court, as reiterated by 31 of the Judiciary Reorganization Act of 1980 (B. P. Blg. 129), Sinacaban is constituted part of a municipal circuit for purposes of the establishment of Municipal Circuit Trial Courts in the country. For its part, Jimenez had earlier recognized Sinacaban in

1950 by entering into an agreement with it regarding their common boundary. The agreement was embodied in Resolution No. 77 of the Provincial Board of Misamis Occidental. Indeed Sinacaban has attained de jure status by virtue of the Ordinance appended to the 1987 Constitution, apportioning legislative districts throughout the country, which considered Sinacaban part of the Second District of Misamis Occidental. Moreover, following the ruling in Municipality of San Narciso, Quezon v. Mendez, Sr., 442(d) of the Local Government Code of 1991 must be deemed to have cured any defect in the creation of Sinacaban.591awphi1.nt From this survey of relevant jurisprudence, we can gather the applicable rules. Pelaez and its offspring cases ruled that the President has no power to create municipalities, yet limited its nullificatory effects to the particular municipalities challenged in actual cases before this Court. However, with the promulgation of the Local Government Code in 1991, the legal cloud was lifted over the municipalities similarly created by executive order but not judicially annulled. The de facto status of such municipalities as San Andres, Alicia and Sinacaban was recognized by this Court, and Section 442(b) of the Local Government Code deemed curative whatever legal defects to title these municipalities had labored under. Is Andong similarly entitled to recognition as a de facto municipal corporation? It is not. There are eminent differences between Andong and municipalities such as San Andres, Alicia and Sinacaban. Most prominent is the fact that the executive order creating Andong was expressly annulled by order of this Court in 1965. If we were to affirm Andongs de facto status by reason of its alleged continued existence despite its nullification, we would in effect be condoning defiance of a valid order of this Court.l^vvphi1.net Court decisions cannot obviously lose their efficacy due to the sheer defiance by the parties aggrieved. It bears noting that based on Camids own admissions, Andong does not meet the requisites set forth by Section 442(d) of the Local Government Code. Section 442(d) requires that in order that the municipality created by executive order may receive recognition, they must "have their respective set of elective municipal officials holding office at the time of the effectivity of [the Local Government] Code." Camid admits that Andong has never elected its municipal officers at all.60 This incapacity ties in with the fact that Andong was judicially annulled in 1965. Out of obeisance to our ruling in Pelaez, the national government ceased to recognize the existence of Andong, depriving it of its share of the public funds, and refusing to conduct municipal elections for the void municipality.

The failure to appropriate funds for Andong and the absence of elections in the municipality in the last four decades are eloquent indicia of the non-recognition by the State of the existence of the town. The certifications relied upon by Camid, issued by the DENR-CENRO and the National Statistics Office, can hardly serve the purpose of attesting to Andongs legal efficacy. In fact, both these certifications qualify that they were issued upon the request of Camid, "to support the restoration or re-operation of the Municipality of Andong, Lanao del Sur,"61 thus obviously conceding that the municipality is at present inoperative.1awphi1.nt We may likewise pay attention to the Ordinance appended to the 1987 Constitution, which had also been relied upon in Jimenez and San Narciso. This Ordinance, which apportioned the seats of the House of Representatives to the different legislative districts in the Philippines, enumerates the various municipalities that are encompassed by the various legislative districts. Andong is not listed therein as among the municipalities of Lanao del Sur, or of any other province for that matter.62 On the other hand, the municipalities of San Andres, Alicia and Sinacaban are mentioned in the Ordinance as part of Quezon,63 Bohol,64 and Misamis Occidental65 respectively. How about the eighteen (18) municipalities similarly nullified in Pelaez but certified as existing in the DILG Certification presented by Camid? The petition fails to mention that subsequent to the ruling in Pelaez, legislation was enacted to reconstitute these municipalities.66 It is thus not surprising that the DILG certified the existence of these eighteen (18) municipalities, or that these towns are among the municipalities enumerated in the Ordinance appended to the Constitution. Andong has not been similarly reestablished through statute. Clearly then, the fact that there are valid organic statutes passed by legislation recreating these eighteen (18) municipalities is sufficient legal basis to accord a different legal treatment to Andong as against these eighteen (18) other municipalities. We thus assert the proper purview to Section 442(d) of the Local Government Codethat it does not serve to affirm or reconstitute the judicially dissolved municipalities such as Andong, which had been previously created by presidential issuances or executive orders. The provision affirms the legal personalities only of those municipalities such as San Narciso, Alicia, and Sinacaban, which may have been created using the same infirm legal basis, yet were fortunate enough not to have been judicially annulled. On the other hand, the municipalities judicially dissolved in cases such as Pelaez, San Joaquin, and Malabang, remain inexistent, unless recreated through specific legislative

enactments, as done with the eighteen (18) municipalities certified by the DILG. Those municipalities derive their legal personality not from the presidential issuances or executive orders which originally created them or from Section 442(d), but from the respective legislative statutes which were enacted to revive them.1a\^/phi1.net And what now of Andong and its residents? Certainly, neither Pelaez or this decision has obliterated Andong into a hole on the ground. The legal effect of the nullification of Andong in Pelaez was to revert the constituent barrios of the voided town back into their original municipalities, namely the municipalities of Lumbatan, Butig and Tubaran.67 These three municipalities subsist to this day as part of Lanao del Sur,68 and presumably continue to exercise corporate powers over the barrios which once belonged to Andong. If there is truly a strong impulse calling for the reconstitution of Andong, the solution is through the legislature and not judicial confirmation of void title. If indeed the residents of Andong have, all these years, been governed not by their proper municipal governments but by a ragtag "Interim Government," then an expedient political and legislative solution is perhaps necessary. Yet we can hardly sanction the retention of Andongs legal personality solely on the basis of collective amnesia that may have allowed Andong to somehow pretend itself into existence despite its judicial dissolution. Maybe those who insist Andong still exists prefer to remain unperturbed in their blissful ignorance, like the inhabitants of the cave in Platos famed allegory. But the time has come for the light to seep in, and for the petitioner and like-minded persons to awaken to legal reality. WHEREFORE, the Petition is DISMISSED for lack of merit. Costs against petitioner. SO ORDERED.

COMMISSION ON ELECTIONS and DIDAGEN P. DILANGALEN, Respondents. x------------------------x

PERFECTO F. MARQUEZ, Petitioner,

G.R. No. 178628

Present:

PUNO, C.J., QUISUMBING, YNARES-SANTIAGO, CARPIO, AUSTRIA-MARTINEZ, CORONA, CARPIO MORALES, - versus AZCUNA, TINGA, CHICO-NAZARIO, VELASCO, JR., NACHURA, BAI SANDRA S. A. SEMA, Petitioner, - versus G.R. No. 177597 LEONARDO-DE CASTRO, and BRION, JJ. REYES,

COMMISSION ON ELECTIONS, Respondent.

Promulgated: July 16, 2008

the Autonomous Region in Muslim Mindanao (ARMM), created under its Organic Act, Republic Act No. 6734 (RA 6734), as amended by Republic Act No. 9054 (RA 9054). Although under the Ordinance, Cotabato City forms part of Maguindanaos first legislative district, it is not part of the ARMM but of Region XII, having voted against its inclusion in the ARMM in the plebiscite held in November 1989.

x--------------------------------------------------x On 28 August 2006, the ARMMs legislature, the ARMM Regional Assembly, exercising its power to create provinces under Section 19, Article VI of RA 9054, enacted Muslim Mindanao Autonomy Act No. 201 (MMA Act 201) creating the Province of Shariff Kabunsuan composed of the eight municipalities in the first district of Maguindanao. MMA Act 201 provides:

DECISION

CARPIO, J.:

Section 1. The Municipalities of Barira, Buldon, Datu Odin Sinsuat, Kabuntalan, Matanog, Parang, Sultan Kudarat, Sultan Mastura, and Upi are hereby separated from the Province of Maguindanao and constituted into a distinct and independent province, which is hereby created, to be known as the Province of Shariff Kabunsuan.

The Case

xxxx These consolidated petitions seek to annul Resolution No. 7902, dated 10 May 2007, of the Commission on Elections (COMELEC) treating Cotabato City as part of the legislative district of the Province of Shariff Kabunsuan.

Sec. 5. The corporate existence of this province shall commence upon the appointment by the Regional Governor or election of the governor and majority of the regular members of the Sangguniang Panlalawigan.

The Facts The incumbent elective provincial officials of the Province of Maguindanao shall continue to serve their unexpired terms in the province that they will choose or where they are residents: Provided, that where an elective position in both provinces becomes vacant as a consequence of the creation of the Province of Shariff Kabunsuan, all incumbent elective provincial officials shall have preference for appointment to a higher elective vacant position and

The Ordinance appended to the 1987 Constitution apportioned two legislative districts for the Province of Maguindanao. The first legislative district consists of Cotabato City and eight municipalities. Maguindanao forms part of

for the time being be appointed by the Regional Governor, and shall hold office until their successors shall have been elected and qualified in the next local elections; Provided, further, that they shall continue to receive the salaries they are receiving at the time of the approval of this Act until the new readjustment of salaries in accordance with law. Provided, furthermore, that there shall be no diminution in the number of the members of the Sangguniang Panlalawigan of the mother province.

In answer to Cotabato Citys query, the COMELEC issued Resolution No. 07-0407 on 6 March 2007 "maintaining the status quo with Cotabato City as part of Shariff Kabunsuan in the First Legislative District of Maguindanao. Resolution No. 07-0407, which adopted the recommendation of the COMELECs Law Department under a Memorandum dated 27 February 2007, provides in pertinent parts:

Except as may be provided by national law, the existing legislative district, which includes Cotabato as a part thereof, shall remain.

Considering the foregoing, the Commission RESOLVED, as it hereby resolves, to adopt the recommendation of the Law Department that pending the enactment of the appropriate law by Congress, to maintain the status quo with Cotabato City as part of Shariff Kabunsuan in the First Legislative District of Maguindanao. (Emphasis supplied)

Later, three new municipalities were carved out of the original nine municipalities constituting Shariff Kabunsuan, bringing its total number of municipalities to 11. Thus, what was left of Maguindanao were the municipalities constituting its second legislative district. Cotabato City, although part of Maguindanaos first legislative district, is not part of the Province of Maguindanao.

However, in preparation for the 14 May 2007 elections, the COMELEC promulgated on 29 March 2007 Resolution No. 7845 stating that Maguindanaos first legislative district is composed only of Cotabato City because of the enactment of MMA Act 201.

The voters of Maguindanao ratified Shariff Kabunsuans creation in a plebiscite held on 29 October 2006.

On 10 May 2007, the COMELEC issued Resolution No. 7902, subject of these petitions, amending Resolution No. 07-0407 by renaming the legislative district in question as Shariff Kabunsuan Province with Cotabato City (formerly First District of Maguindanao with Cotabato City).

On 6 February 2007, the Sangguniang Panlungsod of Cotabato City passed Resolution No. 3999 requesting the COMELEC to clarify the status of Cotabato City in view of the conversion of the First District of Maguindanao into a regular province under MMA Act 201.

In G.R. No. 177597, Sema, who was a candidate in the 14 May 2007 elections for Representative of Shariff Kabunsuan with Cotabato City, prayed for the nullification of COMELEC Resolution No. 7902 and the exclusion from canvassing of the votes cast in Cotabato City for that office. Sema contended that Shariff Kabunsuan is entitled to one representative in Congress under Section 5 (3), Article VI of the Constitution and Section 3 of the Ordinance appended to the Constitution. Thus, Sema asserted that the COMELEC acted without or in excess of its jurisdiction in issuing Resolution No. 7902 which maintained the status quo in Maguindanaos first legislative district despite the COMELECs earlier directive in Resolution No. 7845 designating Cotabato City

as the lone component of Maguindanaos reapportioned first legislative district. Sema further claimed that in issuing Resolution No. 7902, the COMELEC usurped Congress power to create or reapportion legislative districts.

In its Comment, the COMELEC, through the Office of the Solicitor General (OSG), chose not to reach the merits of the case and merely contended that (1) Sema wrongly availed of the writ of certiorari to nullify COMELEC Resolution No. 7902 because the COMELEC issued the same in the exercise of its administrative, not quasi-judicial, power and (2) Semas prayer for the writ of prohibition in G.R. No. 177597 became moot with the proclamation of respondent Didagen P. Dilangalen (respondent Dilangalen) on 1 June 2007 as representative of the legislative district of Shariff Kabunsuan Province with Cotabato City.

In the Resolution of 4 September 2007, the Court required the parties in G.R. No. 177597 to comment on the issue of whether a province created by the ARMM Regional Assembly under Section 19, Article VI of RA 9054 is entitled to one representative in the House of Representatives without need of a national law creating a legislative district for such new province. The parties submitted their compliance as follows:

In his Comment, respondent Dilangalen countered that Sema is estopped from questioning COMELEC Resolution No. 7902 because in her certificate of candidacy filed on 29 March 2007, Sema indicated that she was seeking election as representative of Shariff Kabunsuan including Cotabato City. Respondent Dilangalen added that COMELEC Resolution No. 7902 is constitutional because it did not apportion a legislative district for Shariff Kabunsuan or reapportion the legislative districts in Maguindanao but merely renamed Maguindanaos first legislative district. Respondent Dilangalen further claimed that the COMELEC could not reapportion Maguindanaos first legislative district to make Cotabato City its sole component unit as the power to reapportion legislative districts lies exclusively with Congress, not to mention that Cotabato City does not meet the minimum population requirement under Section 5 (3), Article VI of the Constitution for the creation of a legislative district within a city.

(1) Sema answered the issue in the affirmative on the following grounds: (a) the Court in Felwa v. Salas stated that when a province is created by statute, the corresponding representative district comes into existence neither by authority of that statute which cannot provide otherwise nor by apportionment, but by operation of the Constitution, without a reapportionment; (b) Section 462 of Republic Act No. 7160 (RA 7160) affirms the apportionment of a legislative district incident to the creation of a province; and (c) Section 5 (3), Article VI of the Constitution and Section 3 of the Ordinance appended to the Constitution mandate the apportionment of a legislative district in newly created provinces.

(2) The COMELEC, again represented by the OSG, apparently abandoned its earlier stance on the propriety of issuing Resolution Nos. 07-0407 and 7902 and joined causes with Sema, contending that Section 5 (3), Article VI of the Constitution is self-executing. Thus, every new province created by the ARMM Regional Assembly is ipso facto entitled to one representative in the House of Representatives even in the absence of a national law; and

Sema filed a Consolidated Reply controverting the matters raised in respondents Comments and reiterating her claim that the COMELEC acted ultra vires in issuing Resolution No. 7902.

(3) Respondent Dilangalen answered the issue in the negative on the following grounds: (a) the province contemplated in Section 5 (3), Article VI of the Constitution is one that is created by an act of Congress taking into account the provisions in RA 7160 on the creation of provinces; (b) Section 3, Article IV of RA 9054 withheld from the ARMM Regional Assembly the power to enact measures relating to national elections, which encompasses the apportionment of legislative districts for members of the House of Representatives; (c) recognizing a legislative district in every province the ARMM Regional Assembly creates will lead to the disproportionate representation of the ARMM in the House of Representatives as the Regional Assembly can create provinces without regard to the requirements in Section 461 of RA 7160; and

(d) Cotabato City, which has a population of less than 250,000, is not entitled to a representative in the House of Representatives.

9054 to the ARMM Regional Assembly of the power to prescribe standards lower than those mandated in Section 461 of RA 7160 on the creation of provinces contravenes Section 10, Article X of the Constitution and the Equal Protection Clause; and

On 27 November 2007, the Court heard the parties in G.R. No. 177597 in oral arguments on the following issues: (1) whether Section 19, Article VI of RA 9054, delegating to the ARMM Regional Assembly the power to create provinces, is constitutional; and (2) if in the affirmative, whether a province created under Section 19, Article VI of RA 9054 is entitled to one representative in the House of Representatives without need of a national law creating a legislative district for such new province.

(3) The COMELEC, through the OSG, joined causes with respondent Dilangalen (thus effectively abandoning the position the COMELEC adopted in its Compliance with the Resolution of 4 September 2007) and contended that Section 19, Article VI of RA 9054 is unconstitutional because (a) it contravenes Section 10 and Section 6, Article X of the Constitution and (b) the power to create provinces was withheld from the autonomous regions under Section 20, Article X of the Constitution.

In compliance with the Resolution dated 27 November 2007, the parties in G.R. No. 177597 filed their respective Memoranda on the issues raised in the oral arguments. On the question of the constitutionality of Section 19, Article VI of RA 9054, the parties in G.R. No. 177597 adopted the following positions:

(1) Sema contended that Section 19, Article VI of RA 9054 is constitutional (a) as a valid delegation by Congress to the ARMM of the power to create provinces under Section 20 (9), Article X of the Constitution granting to the autonomous regions, through their organic acts, legislative powers over other matters as may be authorized by law for the promotion of the general welfare of the people of the region and (b) as an amendment to Section 6 of RA 7160. However, Sema concedes that, if taken literally, the grant in Section 19, Article VI of RA 9054 to the ARMM Regional Assembly of the power to prescribe standards lower than those mandated in RA 7160 in the creation of provinces contravenes Section 10, Article X of the Constitution. Thus, Sema proposed that Section 19 should be construed as prohibiting the Regional Assembly from prescribing standards x x x that do not comply with the minimum criteria under RA 7160.

On the question of whether a province created under Section 19, Article VI of RA 9054 is entitled to one representative in the House of Representatives without need of a national law creating a legislative district for such new province, Sema and respondent Dilangalen reiterated in their Memoranda the positions they adopted in their Compliance with the Resolution of 4 September 2007. The COMELEC deemed it unnecessary to submit its position on this issue considering its stance that Section 19, Article VI of RA 9054 is unconstitutional.

(2) Respondent Dilangalen contended that Section 19, Article VI of RA 9054 is unconstitutional on the following grounds: (a) the power to create provinces was not among those granted to the autonomous regions under Section 20, Article X of the Constitution and (b) the grant under Section 19, Article VI of RA

The pendency of the petition in G.R. No. 178628 was disclosed during the oral arguments on 27 November 2007. Thus, in the Resolution of 19 February 2008, the Court ordered G.R. No. 178628 consolidated with G.R. No. 177597. The petition in G.R. No. 178628 echoed Sema's contention that the COMELEC acted ultra vires in issuing Resolution No. 7902 depriving the voters of Cotabato City of a representative in the House of Representatives. In its Comment to the petition in G.R. No. 178628, the COMELEC, through the OSG, maintained the validity of COMELEC Resolution No. 7902 as a temporary measure pending the enactment by Congress of the appropriate law.

The Issues

II. In G.R No. 177597 and G.R No. 178628, whether COMELEC Resolution No. 7902 is valid for maintaining the status quo in the first legislative district of Maguindanao (as Shariff Kabunsuan Province with Cotabato City [formerly First District of Maguindanao with Cotabato City]), despite the creation of the Province of Shariff Kabunsuan out of such district (excluding Cotabato City).

The petitions raise the following issues:

I. In G.R. No. 177597: (A) Preliminarily (1) whether the writs of Certiorari, Prohibition, and Mandamus are proper to test the constitutionality of COMELEC Resolution No. 7902; and (2) whether the proclamation of respondent Dilangalen as representative of Shariff Kabunsuan Province with Cotabato City mooted the petition in G.R. No. 177597.

The Ruling of the Court

The petitions have no merit. We rule that (1) Section 19, Article VI of RA 9054 is unconstitutional insofar as it grants to the ARMM Regional Assembly the power to create provinces and cities; (2) MMA Act 201 creating the Province of Shariff Kabunsuan is void; and (3) COMELEC Resolution No. 7902 is valid.

On the Preliminary Matters The Writ of Prohibition is Appropriate to Test the Constitutionality of Election Laws, Rules and Regulations (B) On the merits (1) whether Section 19, Article VI of RA 9054, delegating to the ARMM Regional Assembly the power to create provinces, cities, municipalities and barangays, is constitutional; and (2) if in the affirmative, whether a province created by the ARMM Regional Assembly under MMA Act 201 pursuant to Section 19, Article VI of RA 9054 is entitled to one representative in the House of Representatives without need of a national law creating a legislative district for such province. The purpose of the writ of Certiorari is to correct grave abuse of discretion by any tribunal, board, or officer exercising judicial or quasi-judicial functions. On the other hand, the writ of Mandamus will issue to compel a tribunal, corporation, board, officer, or person to perform an act which the law specifically enjoins as a duty. True, the COMELEC did not issue Resolution No. 7902 in the exercise of its judicial or quasi-judicial functions. Nor is there a law which specifically enjoins the COMELEC to exclude from canvassing the votes cast in Cotabato City for representative of Shariff Kabunsuan Province with Cotabato City. These, however, do not justify the outright dismissal of the petition in G.R. No. 177597 because Sema also prayed for the issuance of the

writ of Prohibition and we have long recognized this writ as proper for testing the constitutionality of election laws, rules, and regulations.

The creation of local government units is governed by Section 10, Article X of the Constitution, which provides:

Respondent Dilangalens Proclamation Does Not Moot the Petition

Sec. 10. No province, city, municipality, or barangay may be created, divided, merged, abolished or its boundary substantially altered except in accordance with the criteria established in the local government code and subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected.

There is also no merit in the claim that respondent Dilangalens proclamation as winner in the 14 May 2007 elections for representative of Shariff Kabunsuan Province with Cotabato City mooted this petition. This case does not concern respondent Dilangalens election. Rather, it involves an inquiry into the validity of COMELEC Resolution No. 7902, as well as the constitutionality of MMA Act 201 and Section 19, Article VI of RA 9054. Admittedly, the outcome of this petition, one way or another, determines whether the votes cast in Cotabato City for representative of the district of Shariff Kabunsuan Province with Cotabato City will be included in the canvassing of ballots. However, this incidental consequence is no reason for us not to proceed with the resolution of the novel issues raised here. The Courts ruling in these petitions affects not only the recently concluded elections but also all the other succeeding elections for the office in question, as well as the power of the ARMM Regional Assembly to create in the future additional provinces.

Thus, the creation of any of the four local government units province, city, municipality or barangay must comply with three conditions. First, the creation of a local government unit must follow the criteria fixed in the Local Government Code. Second, such creation must not conflict with any provision of the Constitution. Third, there must be a plebiscite in the political units affected.

On the Main Issues

There is neither an express prohibition nor an express grant of authority in the Constitution for Congress to delegate to regional or local legislative bodies the power to create local government units. However, under its plenary legislative powers, Congress can delegate to local legislative bodies the power to create local government units, subject to reasonable standards and provided no conflict arises with any provision of the Constitution. In fact, Congress has delegated to provincial boards, and city and municipal councils, the power to create barangays within their jurisdiction, subject to compliance with the criteria established in the Local Government Code, and the plebiscite requirement in Section 10, Article X of the Constitution. However, under the Local Government Code, only x x x an Act of Congress can create provinces, cities or municipalities.

Whether the ARMM Regional Assembly Can Create the Province of Shariff Kabunsuan

Under Section 19, Article VI of RA 9054, Congress delegated to the ARMM Regional Assembly the power to create provinces, cities, municipalities and barangays within the ARMM. Congress made the delegation under its plenary legislative powers because the power to create local government units is not one of the express legislative powers granted by the Constitution to regional legislative bodies. In the present case, the question arises whether the

delegation to the ARMM Regional Assembly of the power to create provinces, cities, municipalities and barangays conflicts with any provision of the Constitution.

Legislative Districts are Created or Reapportioned Only by an Act of Congress

There is no provision in the Constitution that conflicts with the delegation to regional legislative bodies of the power to create municipalities and barangays, provided Section 10, Article X of the Constitution is followed. However, the creation of provinces and cities is another matter. Section 5 (3), Article VI of the Constitution provides, Each city with a population of at least two hundred fifty thousand, or each province, shall have at least one representative in the House of Representatives. Similarly, Section 3 of the Ordinance appended to the Constitution provides, Any province that may hereafter be created, or any city whose population may hereafter increase to more than two hundred fifty thousand shall be entitled in the immediately following election to at least one Member x x x.

Under the present Constitution, as well as in past Constitutions, the power to increase the allowable membership in the House of Representatives, and to reapportion legislative districts, is vested exclusively in Congress. Section 5, Article VI of the Constitution provides:

SECTION 5. (1) The House of Representatives shall be composed of not more than two hundred and fifty members, unless otherwise fixed by law, who shall be elected from legislative districts apportioned among the provinces, cities, and the Metropolitan Manila area in accordance with the number of their respective inhabitants, and on the basis of a uniform and progressive ratio, and those who, as provided by law, shall be elected through a party-list system of registered national, regional, and sectoral parties or organizations.

Clearly, a province cannot be created without a legislative district because it will violate Section 5 (3), Article VI of the Constitution as well as Section 3 of the Ordinance appended to the Constitution. For the same reason, a city with a population of 250,000 or more cannot also be created without a legislative district. Thus, the power to create a province, or a city with a population of 250,000 or more, requires also the power to create a legislative district. Even the creation of a city with a population of less than 250,000 involves the power to create a legislative district because once the citys population reaches 250,000, the city automatically becomes entitled to one representative under Section 5 (3), Article VI of the Constitution and Section 3 of the Ordinance appended to the Constitution. Thus, the power to create a province or city inherently involves the power to create a legislative district.

xxxx

(3) Each legislative district shall comprise, as far as practicable, contiguous, compact, and adjacent territory. Each city with a population of at least two hundred fifty thousand, or each province, shall have at least one representative.

(4) Within three years following the return of every census, the Congress shall make a reapportionment of legislative districts based on the standards provided in this section. (Emphasis supplied)

For Congress to delegate validly the power to create a province or city, it must also validly delegate at the same time the power to create a legislative district. The threshold issue then is, can Congress validly delegate to the ARMM Regional Assembly the power to create legislative districts for the House of Representatives? The answer is in the negative.

Section 5 (1), Article VI of the Constitution vests in Congress the power to increase, through a law, the allowable membership in the House of Representatives. Section 5 (4) empowers Congress to reapportion legislative districts. The power to reapportion legislative districts necessarily includes the power to create legislative districts out of existing ones. Congress exercises

these powers through a law that Congress itself enacts, and not through a law that regional or local legislative bodies enact. The allowable membership of the House of Representatives can be increased, and new legislative districts of Congress can be created, only through a national law passed by Congress. In Montejo v. COMELEC, we held that the power of redistricting x x x is traditionally regarded as part of the power (of Congress) to make laws, and thus is vested exclusively in Congress.

(6) (7) (8)

Economic, social, and tourism development; Educational policies; Preservation and development of the cultural heritage; and

(9) Such other matters as may be authorized by law for the promotion of the general welfare of the people of the region.

This textual commitment to Congress of the exclusive power to create or reapportion legislative districts is logical. Congress is a national legislature and any increase in its allowable membership or in its incumbent membership through the creation of legislative districts must be embodied in a national law. Only Congress can enact such a law. It would be anomalous for regional or local legislative bodies to create or reapportion legislative districts for a national legislature like Congress. An inferior legislative body, created by a superior legislative body, cannot change the membership of the superior legislative body.

Nothing in Section 20, Article X of the Constitution authorizes autonomous regions, expressly or impliedly, to create or reapportion legislative districts for Congress.

The creation of the ARMM, and the grant of legislative powers to its Regional Assembly under its organic act, did not divest Congress of its exclusive authority to create legislative districts. This is clear from the Constitution and the ARMM Organic Act, as amended. Thus, Section 20, Article X of the Constitution provides:

On the other hand, Section 3, Article IV of RA 9054 amending the ARMM Organic Act, provides, The Regional Assembly may exercise legislative power x x x except on the following matters: x x x (k) National elections. x x x. Since the ARMM Regional Assembly has no legislative power to enact laws relating to national elections, it cannot create a legislative district whose representative is elected in national elections. Whenever Congress enacts a law creating a legislative district, the first representative is always elected in the next national elections from the effectivity of the law. Indeed, the office of a legislative district representative to Congress is a national office, and its occupant, a Member of the House of Representatives, is a national official. It would be incongruous for a regional legislative body like the ARMM Regional Assembly to create a national office when its legislative powers extend only to its regional territory. The office of a district representative is maintained by national funds and the salary of its occupant is paid out of national funds. It is a self-evident inherent limitation on the legislative powers of every local or regional legislative body that it can only create local or regional offices, respectively, and it can never create a national office.

SECTION 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and national laws, the organic act of autonomous regions shall provide for legislative powers over: (1) (2) (3) (4) (5) Administrative organization; Creation of sources of revenues; Ancestral domain and natural resources; Personal, family, and property relations; Regional urban and rural planning development;

To allow the ARMM Regional Assembly to create a national office is to allow its legislative powers to operate outside the ARMMs territorial jurisdiction. This violates Section 20, Article X of the Constitution which expressly limits the coverage of the Regional Assemblys legislative powers [w]ithin its territorial jurisdiction x x x.

The ARMM Regional Assembly itself, in creating Shariff Kabunsuan, recognized the exclusive nature of Congress power to create or reapportion legislative districts by abstaining from creating a legislative district for Shariff Kabunsuan. Section 5 of MMA Act 201 provides that:

Any province that may hereafter be created, or any city whose population may hereafter increase to more than two hundred fifty thousand shall be entitled in the immediately following election to at least one Member or such number of Members as it may be entitled to on the basis of the number of its inhabitants and according to the standards set forth in paragraph (3), Section 5 of Article VI of the Constitution. The number of Members apportioned to the province out of which such new province was created or where the city, whose population has so increased, is geographically located shall be correspondingly adjusted by the Commission on Elections but such adjustment shall not be made within one hundred and twenty days before the election. (Emphasis supplied)

Except as may be provided by national law, the existing legislative district, which includes Cotabato City as a part thereof, shall remain. (Emphasis supplied)

However, a province cannot legally be created without a legislative district because the Constitution mandates that each province shall have at least one representative. Thus, the creation of the Province of Shariff Kabunsuan without a legislative district is unconstitutional.

serve as bases for the conclusion that the Province of Shariff Kabunsuan, created on 29 October 2006, is automatically entitled to one member in the House of Representatives in the 14 May 2007 elections. As further support for her stance, petitioner invokes the statement in Felwa that when a province is created by statute, the corresponding representative district comes into existence neither by authority of that statute which cannot provide otherwise nor by apportionment, but by operation of the Constitution, without a reapportionment.

The contention has no merit. Sema, petitioner in G.R. No. 177597, contends that Section 5 (3), Article VI of the Constitution, which provides:

Each legislative district shall comprise, as far as practicable, contiguous, compact, and adjacent territory. Each city with a population of at least two hundred fifty thousand, or each province, shall have at least one representative. (Emphasis supplied)

First. The issue in Felwa, among others, was whether Republic Act No. 4695 (RA 4695), creating the provinces of Benguet, Mountain Province, Ifugao, and Kalinga-Apayao and providing for congressional representation in the old and new provinces, was unconstitutional for creati[ng] congressional districts without the apportionment provided in the Constitution. The Court answered in the negative, thus:

The Constitution ordains: and Section 3 of the Ordinance appended to the Constitution, which states:

The House of Representatives shall be composed of not more than one hundred and twenty Members who shall be apportioned among the several provinces as nearly as may be according to the number of their respective inhabitants, but each province shall have at least one Member. The Congress shall by law make an apportionment within three years after the return of every enumeration, and not otherwise. Until such apportionment shall have been made, the House of Representatives shall have the same number of Members as that fixed by law for the National Assembly, who shall be elected by the qualified electors from the present Assembly districts. Each representative district shall comprise as far as practicable, contiguous and compact territory. Pursuant to this Section, a representative district may come into existence: (a) indirectly, through the creation of a province for each province shall have at least one member in the House of Representatives; or (b) by direct creation of several representative districts within a province. The requirements concerning the apportionment of representative districts and the territory thereof refer only to the second method of creation of representative districts, and do not apply to those incidental to the creation of provinces, under the first method. This is deducible, not only from the general tenor of the provision above quoted, but, also, from the fact that the apportionment therein alluded to refers to that which is made by an Act of Congress. Indeed, when a province is created by statute, the corresponding representative district, comes into existence neither by authority of that statute which cannot provide otherwise nor by apportionment, but by operation of the Constitution, without a reapportionment.

Thus, the Court sustained the constitutionality of RA 4695 because (1) it validly created legislative districts indirectly through a special law enacted by Congress creating a province and (2) the creation of the legislative districts will not result in breaching the maximum number of legislative districts provided under the 1935 Constitution. Felwa does not apply to the present case because in Felwa the new provinces were created by a national law enacted by Congress itself. Here, the new province was created merely by a regional law enacted by the ARMM Regional Assembly.

What Felwa teaches is that the creation of a legislative district by Congress does not emanate alone from Congress power to reapportion legislative districts, but also from Congress power to create provinces which cannot be created without a legislative district. Thus, when a province is created, a legislative district is created by operation of the Constitution because the Constitution provides that each province shall have at least one representative in the House of Representatives. This does not detract from the constitutional principle that the power to create legislative districts belongs exclusively to Congress. It merely prevents any other legislative body, except Congress, from creating provinces because for a legislative body to create a province such legislative body must have the power to create legislative districts. In short, only an act of Congress can trigger the creation of a legislative district by operation of the Constitution. Thus, only Congress has the power to create, or trigger the creation of, a legislative district.

There is no constitutional limitation as to the time when, territory of, or other conditions under which a province may be created, except, perhaps, if the consequence thereof were to exceed the maximum of 120 representative districts prescribed in the Constitution, which is not the effect of the legislation under consideration. As a matter of fact, provinces have been created or subdivided into other provinces, with the consequent creation of additional representative districts, without complying with the aforementioned requirements. (Emphasis supplied)

Moreover, if as Sema claims MMA Act 201 apportioned a legislative district to Shariff Kabunsuan upon its creation, this will leave Cotabato City as the lone component of the first legislative district of Maguindanao. However, Cotabato City cannot constitute a legislative district by itself because as of the census taken in 2000, it had a population of only 163,849. To constitute Cotabato City alone as the surviving first legislative district of Maguindanao will violate Section 5 (3), Article VI of the Constitution which requires that [E]ach city with a population of at least two hundred fifty thousand x x x, shall have at least one representative.

Second. Semas theory also undermines the composition and independence of the House of Representatives. Under Section 19, Article VI of RA 9054, the

ARMM Regional Assembly can create provinces and cities within the ARMM with or without regard to the criteria fixed in Section 461 of RA 7160, namely: minimum annual income of P20,000,000, and minimum contiguous territory of 2,000 square kilometers or minimum population of 250,000. The following scenarios thus become distinct possibilities:

Atty. Vistan II: Yes, Your Honor, because the Constitution allows that. Justice Carpio:

(1) An inferior legislative body like the ARMM Regional Assembly can create 100 or more provinces and thus increase the membership of a superior legislative body, the House of Representatives, beyond the maximum limit of 250 fixed in the Constitution (unless a national law provides otherwise);

So, [the] Regional Assembly of [the] ARMM can create and create x x x provinces x x x and, therefore, they can have thirty-five (35) new representatives in the House of Representatives without Congress agreeing to it, is that what you are saying? That can be done, under your theory[?]

(2) The proportional representation in the House of Representatives based on one representative for at least every 250,000 residents will be negated because the ARMM Regional Assembly need not comply with the requirement in Section 461(a)(ii) of RA 7160 that every province created must have a population of at least 250,000; and

Atty. Vistan II:

Yes, Your Honor, under the correct factual circumstances.

Justice Carpio: (3) Representatives from the ARMM provinces can become the majority in the House of Representatives through the ARMM Regional Assemblys continuous creation of provinces or cities within the ARMM. Under your theory, the ARMM legislature can create thirty-five (35) new provinces, there may be x x x [only] one hundred thousand (100,000) [population], x x x, and they will each have one representative x x x to Congress without any national law, is that what you are saying?

The following exchange during the oral arguments of the petition in G.R. No. 177597 highlights the absurdity of Semas position that the ARMM Regional Assembly can create provinces:

Atty. Vistan II:

Without law passed by Congress, yes, Your Honor, that is what we are saying.

Justice Carpio: So, you mean to say [a] Local Government can create legislative district[s] and pack Congress with their own representatives [?]

xxxx Justice Carpio:

So, they can also create one thousand (1000) new provinces, sen[d] one thousand (1000) representatives to the House of Representatives without a national law[,] that is legally possible, correct?

Atty. Vistan II:

Yes, Your Honor.

(Emphasis supplied)

It is axiomatic that organic acts of autonomous regions cannot prevail over the Constitution. Section 20, Article X of the Constitution expressly provides that the legislative powers of regional assemblies are limited [w]ithin its territorial jurisdiction and subject to the provisions of the Constitution and national laws, x x x. The Preamble of the ARMM Organic Act (RA 9054) itself states that the ARMM Government is established within the framework of the Constitution. This follows Section 15, Article X of the Constitution which mandates that the ARMM shall be created x x x within the framework of this Constitution and the national sovereignty as well as territorial integrity of the Republic of the Philippines.

Neither the framers of the 1987 Constitution in adopting the provisions in Article X on regional autonomy, nor Congress in enacting RA 9054, envisioned or intended these disastrous consequences that certainly would wreck the tribranch system of government under our Constitution. Clearly, the power to create or reapportion legislative districts cannot be delegated by Congress but must be exercised by Congress itself. Even the ARMM Regional Assembly recognizes this.

The present case involves the creation of a local government unit that necessarily involves also the creation of a legislative district. The Court will not pass upon the constitutionality of the creation of municipalities and barangays that does not comply with the criteria established in Section 461 of RA 7160, as mandated in Section 10, Article X of the Constitution, because the creation of such municipalities and barangays does not involve the creation of legislative districts. We leave the resolution of this issue to an appropriate case.

The Constitution empowered Congress to create or reapportion legislative districts, not the regional assemblies. Section 3 of the Ordinance to the Constitution which states, [A]ny province that may hereafter be created x x x shall be entitled in the immediately following election to at least one Member, refers to a province created by Congress itself through a national law. The reason is that the creation of a province increases the actual membership of the House of Representatives, an increase that only Congress can decide. Incidentally, in the present 14th Congress, there are 219 district representatives out of the maximum 250 seats in the House of Representatives. Since partylist members shall constitute 20 percent of total membership of the House, there should at least be 50 party-list seats available in every election in case 50 party-list candidates are proclaimed winners. This leaves only 200 seats for district representatives, much less than the 219 incumbent district representatives. Thus, there is a need now for Congress to increase by law the allowable membership of the House, even before Congress can create new provinces.

In summary, we rule that Section 19, Article VI of RA 9054, insofar as it grants to the ARMM Regional Assembly the power to create provinces and cities, is void for being contrary to Section 5 of Article VI and Section 20 of Article X of the Constitution, as well as Section 3 of the Ordinance appended to the Constitution. Only Congress can create provinces and cities because the creation of provinces and cities necessarily includes the creation of legislative districts, a power only Congress can exercise under Section 5, Article VI of the Constitution and Section 3 of the Ordinance appended to the Constitution. The ARMM Regional Assembly cannot create a province without a legislative district because the Constitution mandates that every province shall have a legislative district. Moreover, the ARMM Regional Assembly cannot enact a law creating a national office like the office of a district representative of Congress because the legislative powers of the ARMM Regional Assembly operate only within its territorial jurisdiction as provided in Section 20, Article X of the Constitution. Thus, we rule that MMA Act 201, enacted by the ARMM Regional Assembly and creating the Province of Shariff Kabunsuan, is void.

Resolution No. 7902 Complies with the Constitution

Let a copy of this ruling be served on the President of the Senate and the Speaker of the House of Representatives.

Consequently, we hold that COMELEC Resolution No. 7902, preserving the geographic and legislative district of the First District of Maguindanao with Cotabato City, is valid as it merely complies with Section 5 of Article VI and Section 20 of Article X of the Constitution, as well as Section 1 of the Ordinance appended to the Constitution.

SO ORDERED.

WHEREFORE, we declare Section 19, Article VI of Republic Act No. 9054 UNCONSTITUTIONAL insofar as it grants to the Regional Assembly of the Autonomous Region in Muslim Mindanao the power to create provinces and cities. Thus, we declare VOID Muslim Mindanao Autonomy Act No. 201 creating the Province of Shariff Kabunsuan. Consequently, we rule that COMELEC Resolution No. 7902 is VALID.

G.R. No. 156208

September 26, 2006

NPC DRIVERS AND MECHANICS ASSOCIATION, (NPC DAMA), represented by Its President ROGER S. SAN JUAN, SR., NPC EMPLOYEES & WORKERS UNION (NEWU) NORTHERN LUZON REGIONAL CENTER, represented by its Regional President JIMMY D. SALMAN, in their own individual capacities and in behalf of the members of the associations and all affected officers and employees of National Power Corporation (NPC), ZOL D. MEDINA, NARCISO M. MAGANTE, VICENTE B. CIRIO, JR., NECITAS B. CAMAMA, in their individual capacities as employees of National Power Corporation, petitioners, vs. THE NATIONAL POWER CORPORATION (NPC), NATIONAL POWER BOARD OF DIRECTORS (NPB), JOSE ISIDRO N. CAMACHO as Chairman of the National Power Board of Directors (NPB), ROLANDO S. QUILALA, as President Officer-in-charge/CEO of National Power Corporation and Member of National Power Board, and VINCENT S. PEREZ, JR., EMILIA T. BONCODIN, MARIUS P. CORPUS, RUBEN S. REINOSO, JR., GREGORY L. DOMINGO and NIEVES L. OSORIO, respondents. DECISION CHICO-NAZARIO, J.: Before Us is a special civil action for Injunction to enjoin public respondents from implementing the National Power Board (NPB) Resolutions No. 2002-124 and No. 2002-125, both dated 18 November 2002, directing, among other

things, the termination of all employees of the National Power Corporation (NPC) on 31 January 2003 in line with the restructuring of the NPC. On 8 June 2001, Republic Act No. 9136, otherwise known as the "Electric Power Industry Reform Act of 2001" (EPIRA Law), was approved and signed into law by President Gloria Macapagal-Arroyo, and took effect on 26 June 2001. Section 2(i) and Section 3 of the EPIRA Law states: Section 2. Declaration of Policy. It is hereby declared the policy of the State: xxxx (i) To provide for an orderly and transparent privatization of the assets and liabilities of the National Power Corporation (NPC); xxxx Section 3. Scope. This Act shall provide a framework for the restructuring of the electric power industry, including the privatization of the assets of NPC, the transition to the desired competitive structure, and the definition of the responsibilities of the various government agencies and private entities.1 Under the EPIRA Law,2 a new National Power Board of Directors was constituted composed of the Secretary of Finance as Chairman, with the Secretary of Energy, the Secretary of Budget and Management, the Secretary of Agriculture, the Director-General of the National Economic and Development Authority, the Secretary of Environment and Natural Resources, the Secretary of Interior and Local Government, the Secretary of the Department of Trade and Industry, and the President of the National Power Corporation as members. On 27 February 2002, the Secretary of the Department of Energy (DOE) promulgated the Implementing Rules and Regulations (IRR) of the EPIRA Law, pursuant to Section 773 thereof. Said IRR were approved by the Joint Congressional Power Commission on even date. Meanwhile, also in pursuant to the provisions of the EPIRA Law, the DOE created the Energy Restructuring Steering Committee (Restructuring Committee) to manage the privatization and restructuring of the NPC, the National Transmission Corporation (TRANSCO), and the Power Sector Assets and Liabilities Corporation (PSALM). To serve as the overall organizational framework for the realigned functions of the NPC mandated under the EPIRA Law, the Restructuring Committee proposed a new NPC Table of Organization which was approved by the NPB

through NPB Resolution No. 2002-53 dated 11 April 2002. Likewise, the Restructuring Committee reviewed the proposed 2002 NPC Restructuring Plan and assisted in the implementation of Phase I (Realignment) of said Plan, and thereafter recommended to the NPB for approval the adoption of measures pertaining to the separation and hiring of NPC personnel. The NPB, taking into consideration the recommendation of the Restructuring Committee, thus amended the Restructuring Plan approved under NPB Resolution No. 2002-53. On 18 November 2002, pursuant to Section 634 of the EPIRA Law and Rule 335 of the IRR, the NPB passed NPB Resolution No. 2002-124 which provided for the Guidelines on the Separation Program of the NPC and the Selection and Placement of Personnel in the NPC Table of Organization. Under said Resolution, all NPC personnel shall be legally terminated on 31 January 2003, and shall be entitled to separation benefits. On the same day, the NPB approved NPB Resolution No. 2002-125, whereby a Transition Team was constituted to manage and implement the NPC's Separation Program. In a Memorandum dated 21 November 2002, the NPC OIC-President and CEO Rolando S. Quilala circulated the assailed Resolutions and directed the concerned NPC officials to disseminate and comply with said Resolutions and implement the same within the period provided for in the timetable set in NPB Resolution No. 2002-125. As a result thereof, Mr. Paquito F. Garcia, Manager HRSD and Resources and Administration Coordinator of NPC, circulated a Memorandum dated 22 November 2002 to all NPC officials and employees providing for a checklist of the documents required for securing clearances for the processing of separation benefits of all employees who shall be terminated under the Restructuring Plan. Contending that the assailed NPB Resolutions are void and without force and effect, herein petitioners, in their individual and representative capacities, filed the present Petition for Injunction to restrain respondents from implementing NPB Resolutions No. 2002-124 and No. 2002-125. In support thereof, petitioners invoke Section 78 of the EPIRA Law, to wit: Section 78. Injunction and Restraining Order. The implementation of the provisions of this Act shall not be restrained or enjoined except by an order issued by the Supreme Court of the Philippines. In assailing the validity of NPB Resolutions No. 2002-124 and No. 2002-125, petitioners maintain that said Resolutions were not passed and issued by a majority of the members of the duly constituted Board of Directors since only three of its members, as provided under Section 486 of the EPIRA Law, were

present, namely: DOE Secretary Vincent S. Perez, Jr.; Department of Budget and Management Secretary Emilia T. Boncodin; and NPC OIC-President Rolando S. Quilala. According to petitioners, the other four members who were present at the meeting and signed the Resolutions were not the secretaries of their respective departments but were merely representatives or designated alternates of the officials who were named under the EPIRA Law to sit as members of the NPB. Petitioners claim that the acts of these representatives are violative of the well-settled principle that "delegated power cannot be further delegated." Thus, petitioners conclude that the questioned Resolutions have been illegally issued as it were not issued by a duly constituted board since no quorum existed because only three of the nine members, as provided under Section 48 of the EPIRA Law, were present and qualified to sit and vote. It is petitioners' submission that even assuming arguendo that there was no undue delegation of power to the four representatives who signed the assailed Resolutions, said Resolutions cannot still be given legal effect because the same did not comply with the mandatory requirement of endorsement by the Joint Congressional Power Commission and approval of the President of the Philippines, as provided under Section 47 of the EPIRA Law which states that: Section 47. NPC Privatization. Except for the assets of SPUG, the generation assets, real estate, and other disposable assets as well as IPP contracts of NPC shall be privatized in accordance with this Act. Within six (6) months from effectivity of this Act, the PSALM Corp. shall submit a plan for the endorsement by the Joint Congressional Power Commission and the approval of the President of the Philippines, on the total privatization of the generation assets, real estate, other disposable assets as well as existing IPP contracts of NPC and thereafter, implement the same, in accordance with the following guidelines, except as provided for in paragraph (f) herein: x x x. Petitioners insist that if ever there exists a valid wholesale abolition of their positions and their concomitant separation form the service, such a process is an integral part of "privatization" and "restructuring" as defined under the EPIRA Law and, therefore, must comply with the above-quoted provision requiring the endorsement of the Joint Congressional Power Commission and the approval of the President of the Philippines. Furthermore, petitioner highlight the fact that said Resolutions will have an adverse effect on about 5,648 employees of the NPC and will result in the displacement of some 2,370 employees, which, petitioners argue, is contrary to the mandate of the Constitution to promote full employment and security of tenure.

Respondents, on the other hand, uphold the validity of the assailed Resolutions by arguing that while it is true that four members of the National Power Board of Directors, particularly the respective Secretaries of the Department of Interior and Local Government, the Department of Trade and Industry, and the Department of Finance, as well as the Director-General of the National Economic and Development Authority, were not the actual signatories in NPB Resolutions No. 2002-124 and No. 2002-125, they were, however, ably represented by their respective alternates. Respondents claim that the validity of such administrative practice whereby an authority is exercised by persons or subordinates appointed by the responsible official has long been settled. Respondents further contend that Section 48 of the EPIRA Law does not in any way prohibit any member of the NPB from authorizing his representative to sign resolutions adopted by the Board. From the arguments put forward by herein parties, it is evident that the pivotal issue to be resolved in this Petition for Injunction is whether or not NPB Resolutions No. 2002-124 and No. 2002-125 were properly enacted. It is petitioners' contention that the failure of the four specifically identified department heads7 under Section 48 of the EPIRA Law to personally approve and sign the assailed Resolutions invalidates the adoption of said Resolutions. Petitioners maintain that there was undue delegation of delegated power when only the representatives of certain members of the NPB attended the board meetings and passed and signed the questioned Resolutions. We agree with petitioners. In enumerating under Section 48 those who shall compose the National Power Board of Directors, the legislature has vested upon these persons the power to exercise their judgment and discretion in running the affairs of the NPC. Discretion may be defined as "the act or the liberty to decide according to the principles of justice and one's ideas of what is right and proper under the circumstances, without willfulness or favor.8 Discretion, when applied to public functionaries, means a power or right conferred upon them by law of acting officially in certain circumstances, according to the dictates of their own judgment and conscience, uncontrolled by the judgment or conscience of others.9 It is to be presumed that in naming the respective department heads as members of the board of directors, the legislature chose these secretaries of the various executive departments on the basis of their personal qualifications and acumen which made them eligible to occupy their present positions as department heads. Thus, the department secretaries cannot delegate their duties as members of the NPB, much less their power to vote and approve board resolutions, because it is their personal judgment that must be exercised in the fulfillment of such responsibility.

There is no question that the enactment of the assailed Resolutions involves the exercise of discretion and not merely a ministerial act that could be validly performed by a delegate, thus, the rule enunciated in the case of Binamira v. Garrucho10 is relevant in the present controversy, to wit: An officer to whom a discretion is entrusted cannot delegate it to another, the presumption being that he was chosen because he was deemed fit and competent to exercise that judgment and discretion, and unless the power to substitute another in his place has been given to him, he cannot delegate his duties to another. In those cases in which the proper execution of the office requires, on the part of the officer, the exercise of judgment or discretion, the presumption is that he was chosen because he was deemed fit and competent to exercise that judgment and discretion, and, unless power to substitute another in his place has been given to him, he cannot delegate his duties to another. Respondents' assertion to the contrary is not tenable. The ruling in the case cited by respondents to support their contention is not applicable in the case at bar. While it is true that the Court has determined in the case of American Tobacco Company v. Director of Patents11 that a delegate may exercise his authority through persons he appoints to assist him in his functions, it must be stressed that the Court explicitly stated in the same case that said practice is permissible only when the judgment and discretion finally exercised are those of the officer authorized by law. According to the Court, the rule that requires an administrative officer to exercise his own judgment and discretion does not preclude him from utilizing, as a matter of practical administrative procedure, the aid of subordinates, so long as it is the legally authorized official who makes the final decision through the use of his own personal judgment. In the case at bar, it is not difficult to comprehend that in approving NPB Resolutions No. 2002-124 and No. 2002-125, it is the representatives of the secretaries of the different executive departments and not the secretaries themselves who exercised judgment in passing the assailed Resolution, as shown by the fact that it is the signatures of the respective representatives that are affixed to the questioned Resolutions. This, to our mind, violates the duty imposed upon the specifically enumerated department heads to employ their own sound discretion in exercising the corporate powers of the NPC. Evidently, the votes cast by these mere representatives in favor of the adoption of the said Resolutions must not be considered in determining whether or not the necessary number of votes was garnered in order that the assailed Resolutions may be validly enacted. Hence, there being only three valid votes cast out of

the nine board members, namely those of DOE Secretary Vincent S. Perez, Jr.; Department of Budget and Management Secretary Emilia T. Boncodin; and NPC OIC-President Rolando S. Quilala, NPB Resolutions No. 2002-124 and No. 2002-125 are void and are of no legal effect. Having determined that the assailed Resolutions are void as they lack the necessary number of votes for their adoption, We no longer deem it necessary to pass upon the other issues raised in the instant petition WHEREFORE, premises considered, National Power Board Resolutions No. 2002-124 and No. 2002-125 are hereby declared VOID and WITHOUT LEGAL EFFECT. The Petition for Injunction is hereby GRANTED and respondents are hereby ENJOINED from implementing said NPB Resolutions No. 2002-124 and No. 2002-125. SO ORDERED.

A.M. No. MTJ-08-1715 March 19, 2009 [Formerly A.M. OCA IPI No. 08-2037-MTJ] RODOLFO R. MAGO, Complainant, vs. JUDGE AUREA G. PEALOSA-FERMO, MTC, LABO, CAMARINES NORTE, Respondent. DECISION CARPIO MORALES, J.: Rodolfo R. Mago (complainant) filed before the Municipal Trial Court (MTC) of Labo, Camarines Norte a complaint for grave coercion against Sheriff Alex Rodolfo Angeles (of the Department of Agrarian Reform Adjudication Board [DARAB]), et al. The case was docketed as Criminal Case No. 04-7800. Sheriff Angeles filed a counter-charge for grave threats against complainant and his sons, docketed as Criminal Case No. 04-7811. Alleging that Presiding Judge of the MTC Labo, Camarines Sur Judge Aurea G. Pealosa-Fermo (respondent) committed gross ignorance of the law and bias in the disposition of his complaint and of the counter-charge against him, complainant filed the present administrative complaint, the details of which were summarized by the Office of the Court Administrator (OCA) as follows:1 Mr. Mago claims that on April 21, 2004 he filed a complaint for Grave Coercion against Department of Agrarian Reform Adjudication Board (DARAB for brevity) Sheriff Alex Roberto Angeles which was docketed as Criminal Case No. 047800. However, instead of summoning the accused for a "Preliminary Investigation", he received a complaint charging him and his two (2) sons with

Grave Threats [which was docketed as Criminal Case No. 04-7811]. He stresses the complaint against him as purely fabricated. He states that the complainant in the said case was not DARAB Sheriff Angeles. He avers that the affidavits of the witnesses in the said case could not be found in the records of the Municipal Trial Court (MTC). Complainant further declares that on July 20, 2004, he received a subpoena to attend the preliminary investigation of Criminal Case No. 04-7811. In compliance, he and his witnesses attended, and even without the assistance of counsel, they were examined through a prepared set of questions handed to them by the stenographer. The respondent judge was not present then. The complainant also states that right after the preliminary investigation, he was immediately arrested and was imprisoned for three (3) days. Thereafter, he was released after he posted bail in the amount of Php12,000 pesos. Complainant also alleges that he filed a Petition for Certiorari, Mandamus, Prohibition with Application for Preliminary Injunction and Ex-Parte Motion for Temporary Restraining Order questioning the order of respondent judge in denying his omnibus motion to quash the information, suppress evidence and produce, inspect and copy documentary evidence. He adds that despite the filing of this petition, the respondent judge continued to direct him to appear at the pre-trial/preliminary conference. He likewise avers that his arraignment was set beyond the period allowed by the Rules of Court. He also laments that he could not locate his lawyer, Atty. Lamberto Bonifacio, Jr. Finally, he alleges that the respondent judge had been biased when hearing his case.2 (Italics in the original; emphasis an underscoring supplied) By 2nd Indorsement dated July 31, 2007,3 respondent gave her side of the case as follows: Contrary to complainants allegation, the complaint in Criminal Case No. 047811 (for grave threats), and the affidavits of the therein complainant-sheriffs witnesses were attached to the record.4 Admitting complainants allegation that the court stenographer examined complainant and his witnesses during the preliminary investigation of the grave threats complaint against him with the use of prepared written set of questions, respondent explains as follows: What [complainant] claimed in his Letter-Complaint that the Court Stenographer has a prepared sheet of questions during the preliminary examination is true because after a complaint is filed, the undersigned prepares her questions for preliminary examination based on the affidavits of the complaining witnesses

and the counter affidavits of the accused. This is done to make it easy for the Stenographers to take/print the transcript of the proceedings. Some witnesses even ask to read/study the question and request that they write down their answers to the questions for the Stenographers to finalize. Also, this is convenient when more than one preliminary examination is scheduled for the day. This procedure makes it easier for the Stenographers and the witnesses, too, considering the cramped office space. After the witnesses are briefed, the [s]tenographers take over since the prepared sheets are given to them so they could propound the questions and the answers are typed directly. x x x5 (Emphasis, italics and underscoring supplied) Denying complainants allegation that he was arrested within the court premises on July 20, 2004 or right after the conduct of the preliminary examination conducted in the grave threats complaint against him, respondent alleges that the preliminary examination was conducted at 9:00 oclock in the morning of July 19, 2004; that she issued an Order6 the following day, July 20, 2004, finding probable cause and directing the issuance of a warrant of arrest7 against complainant which the warrant officer received at 4:40 p.m. on even date; and that complainant was arrested on July 21, 2004 at the Poblacion, Labo, Camarines Norte, as shown by the Warrant Officers Return of Service.8 Admitting that there was delay in scheduling the arraignment of complainant after his arrest, respondent surmises that the Clerk of Court or the clerk-incharge might have overlooked the Return of Service of the warrant officer. Respondent states, however, that when the arraignment was scheduled, complainants counsel opposed the same and filed an Omnibus Motion which resulted in the repeated resetting of the arraignment. Respondent adds that after complainant was arraigned on June 6, 2006, the preliminary conference/pre-trial was set but was not terminated due to the absence of complainant or his counsel.9 In fact, respondent goes on to allege that in complainants attempt to block his arraignment and to quash the Information against him, he filed a Petition for Certiorari, Mandamus, Prohibition with Application for Mandatory Injunction and Ex-Parte Motion for Temporary Restraining Order with the Regional Trial Court of Labo which was denied for lack of merit. 10 On the allegation of bias on her part, respondent claims that until the criminal complaints were filed, she did not know any of the parties.

By June 18, 2008 Report,11 the OCA came up with the following Evaluation: xxxx . . . [W]e hold [respondent] administratively liable for her unfamiliarity with the basic rules on preliminary investigation. There was irregularity during the preliminary investigation when the respondent judge allowed the stenographers to handle the latter part of the proceedings. xxxx . . . [R]espondent admitted that after the complaint was filed, she prepared a set of questions based on the affidavits of the complaining witnesses and counter affidavits of the accused. She further added that during the preliminary investigation and after briefing the accused and his witnesses, the stenographers took charge of the proceedings. Hence, the respondent judge violated the rules on preliminary investigation. Respondent should not have allowed her stenographer to handle the latter part of the proceedings even if she only wanted to expedite the proceedings and it was more convenient. Respondent judge should have personally taken charge of the entire proceedings since the power to conduct preliminary investigations vests only on her and not on the stenographer. x x x x12 (Emphasis and underscoring supplied) Finding respondent guilty of gross ignorance of the law or procedure, the OCA recommended that respondent be FINED in the amount of P20,000 in this wise: [W]e deem it proper to recommend the imposition upon the respondent judge of a penalty of fine in the amount of P20,000[,] this being her first offense. As regards the issue of continuous hearing of the case by the respondent judge, we opine that the respondent judge only acted in good faith and in accordance with law when she continued to direct the herein complainant to attend the pre-trial. Based on the records, the Petition for Certiorari, Mandamus, Prohibition with Application for Mandatory Injunction and Ex-Parte Motion for Temporary Restraining Order and the Motion for Reconsideration thereto filed by complainant with the Regional Trial Court, Branch 64, Labo, Camarines Norte were already denied; thus the respondent judge had the authority to proceed with the case. The postponements in the pre-trial were not attributable to the respondent judge but to the accused and his counsel.1avvphi1

Finally, on the issue of bias, complainant failed to submit any evidence showing the respondent biased or partial in hearing the case. Bias and partiality of a judge must be proved by clear and convincing evidence. Mere suspicion that a judge is bias or partial would not be enough.13 (Italics in the original; underscoring supplied) By Resolution of August 20, 2008,14 the Court, on the recommendation of the OCA, re-docketed the case and required the parties to manifest within ten days from notice whether they were willing to submit the matter for resolution on the basis of the pleadings filed and submitted. Both parties have manifested in the affirmative. The Court finds the evaluation well-taken. Prior to the amendment on October 3, 2005 of Rules 112 and 114 of the Rules of Court via A.M. No. 05-8-26-SC, Re: Amendment of Rules 112 and 114 of the Revised Rules on Criminal Procedure by Removing the Conduct of Preliminary Investigation from Judges of the First Level Courts, judges of municipal trial courts were empowered to conduct preliminary investigations in which they exercised discretion in determining whether there was probable cause to hale the respondent into court. Such being the case, they could not delegate the discretion to another. An officer to whom a discretion is entrusted cannot delegate it to another, the presumption being that he was chosen because he was deemed fit and competent to exercise that judgment and discretion, and unless the power to substitute another in his place has been given to him, he cannot delegate his duties to another. In those cases in which the proper execution of the office requires on the part of the officer, the exercise of judgment or discretion, the presumption is that he was chosen because he was deemed fit and competent to exercise that judgment and discretion, and, unless power to substitute another in his place has been given to him, he cannot delegate his duties to another. 15 (Underscoring supplied) Then, as now, a personal examination of the complainant in a criminal case and his witness/es was required. Thus, under Section 4, Rule 112 of the Revised Rules of Court before its amendment, the "investigating fiscal" was required to "certify under oath that he, or as shown by the record, an authorized officer, has personally examined the complainant and his witnesses . . . "

By respondents delegation of the examination of the sheriff-complainant in the grave threats case to the stenographer, and worse, by allowing the witnesses to "read/study the [written] question[s]" to be propounded to them and to "write their answers [thereto]" upon respondents justification that the scheme was for the convenience of the stenographers, respondent betrayed her lack of knowledge of procedure, thereby contributing to the erosion of public confidence in the judicial system. Respondent is thus guilty of gross ignorance of the law or procedure which, under Section 8, Rule 140 of the Rules of Court, is a serious charge, 16 for which Section 11 (A) of the same Rule prescribes the following penalty: SEC. 11. Sanctions. A. If the respondent is guilty of a serious charge, any of the following sanctions may be imposed: 1. Dismissal from the service, forfeiture of all or part of the benefits as the Court may determine, and disqualification from reinstatement or appointment to any public office, including government-owned and controlled corporations. Provided, however, That the forfeiture of benefits shall in no case include accrued leave credits; 2. Suspension from office without salary and other benefits for more than three (3) but not exceeding six (6) months; or 3. A fine of more than P20,000 but not exceeding P40,000.00. The Court thus finds in order the Recommendation of the OCA to impose a fine of P20,000 on respondent. The OCAs recommendation to warn respondent that a "repetition of the same act will be dealt with more severely" does not lie, however, A.M. No. 05-8-26-SC, which took effect on October 3, 2005, having removed the power of judges of the first level courts17 to conduct preliminary investigation. A warning that a commission of another infraction tantamount to gross ignorance of law or procedures shall be dealt with more severely lies, however. WHEREFORE, the Court finds respondent, Judge Aurea G. Pealosa-Fermo of the Municipal Trial Court of Labo, Camarines Norte, guilty of Gross Ignorance of the Law or Procedure. She is FINED in the amount of Twenty Thousand (P20,000) Pesos and warned that a commission of another infraction which is tantamount to the same charge shall be dealt with more severely. SO ORDERED.