Cruz Vs Secretary of Denr Gr. No. 135385, Dec. 6, 2000
Cruz Vs Secretary of Denr Gr. No. 135385, Dec. 6, 2000
Cruz Vs Secretary of Denr Gr. No. 135385, Dec. 6, 2000
6, 2000
Natural Resources and Environmental Law; Constitutional Law; IPRA; Regalian Doctrine
FACTS:
Petitioners Isagani Cruz and Cesar Europa filed a suit for prohibition and mandamus as citizens
and taxpayers, assailing the constitutionality of certain provisions of Republic Act No. 8371,
otherwise known as the Indigenous People’s Rights Act of 1997 (IPRA) and its implementing
rules and regulations (IRR). The petitioners assail certain provisions of the IPRA and its IRR on
the ground that these amount to an unlawful deprivation of the State’s ownership over lands of
the public domain as well as minerals and other natural resources therein, in violation of the
regalian doctrine embodied in section 2, Article XII of the Constitution.
"(1) sections 51 to 53 and 59 which detail the process of delineation and recognition of
ancestral domains and which vest on the NCIP the sole authority to delineate ancestral
domains and ancestral lands;
"(2) Section 52 which provides that upon certification by the NCIP that a particular area
is an ancestral domain and upon notification to the following officials, namely, the
Secretary of Environment and Natural Resources, Secretary of Interior and Local
Governments, Secretary of Justice and Commissioner of the National Development
Corporation, the jurisdiction of said officials over said area terminates;
"(3) Section 63 which provides the customary law, traditions and practices of indigenous
peoples shall be applied first with respect to property rights, claims of ownership,
hereditary succession and settlement of land disputes, and that any doubt or ambiguity
in the interpretation thereof shall be resolved in favour of the indigenous peoples;
"(4) Section 65 which states that customary laws and practices shall be used to resolve
disputes involving indigenous peoples; and
"(5) Section 66 which vests on the NCIP the jurisdiction over all claims and disputes
involving rights of the indigenous peoples."
ISSUE:
Do the provisions of IPRA contravene the Constitution?
HELD:
No, the provisions of IPRA do not contravene the Constitution. Examining the IPRA, there is
nothing in the law that grants to the ICCs/IPs ownership over the natural resources within their
ancestral domain. Ownership over the natural resources in the ancestral domains remains with
the State and the rights granted by the IPRA to the ICCs/IPs over the natural resources in their
ancestral domains merely gives them, as owners and occupants of the land on which the
resources are found, the right to the small scale utilization of these resources, and at the same
time, a priority in their large scale development and exploitation.
Additionally, ancestral lands and ancestral domains are not part of the lands of the public
domain. They are private lands and belong to the ICCs/IPs by native title, which is a concept of
private land title that existed irrespective of any royal grant from the State. However, the right of
ownership and possession by the ICCs/IPs of their ancestral domains is a limited form of
ownership and does not include the right to alienate the same.
FACTS:
The Government Service Insurance System (GSIS), pursuant to the privatization program of the
Philippine Government under Proclamation 50 dated 8 December 1986, decided to sell through
public bidding 30% to 51% of the issued and outstanding shares of the Manila Hotel (MHC). In a
close bidding held on 18 September 1995 only two bidders participated: Manila Prince Hotel
Corporation, a Filipino corporation, which offered to buy 51% of the MHC or 15,300,000 shares
at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel
operator, which bid for the same number of shares at P44.00 per share, or P2.42 more than the
bid of petitioner. Pending the declaration of Renong Berhard as the winning bidder/strategic
partner and the execution of the necessary contracts, the Manila Prince Hotel matched the bid
price of P44.00 per share tendered by Renong Berhad in a letter to GSIS dated 28 September
1995. Manila Prince Hotel sent a manager’s check to the GSIS in a subsequent letter, but which
GSIS refused to accept. On 17 October 1995, perhaps apprehensive that GSIS has disregarded
the tender of the matching bid and that the sale of 51% of the MHC may be hastened by GSIS
and consummated with Renong Berhad, Manila Prince Hotel came to the Court on prohibition
and mandamus.
ISSUE:
Whether or not the provisions of the Constitution, particularly Article XII Section 10, are
self-executing.
RULING:
A provision which lays down a general principle, such as those found in Article II of the 1987
Constitution, is usually not self-executing. But a provision which is complete in itself and
becomes operative without the aid of supplementary or enabling legislation, or that which
supplies sufficient rule by means of which the right it grants may be enjoyed or protected, is self-
executing. Thus a constitutional provision is self-executing if the nature and extent of the right
conferred and the liability imposed are fixed by the constitution itself, so that they can be
determined by an examination and construction of its terms, and there is no language indicating
that the subject is referred to the legislature for action. In self-executing constitutional
provisions, the legislature may still enact legislation to facilitate the exercise of powers directly
granted by the constitution, further the operation of such a provision, prescribe a practice to be
used for its enforcement, provide a convenient remedy for the protection of the rights secured or
the determination thereof, or place reasonable safeguards around the exercise of the right. The
mere fact that legislation may supplement and add to or prescribe a penalty for the violation of a
self-executing constitutional provision does not render such a provision ineffective in the
absence of such legislation. The omission from a constitution of any express provision for a
remedy for enforcing a right or liability is not necessarily an indication that it was not intended
to be self-executing. The rule is that a self-executing provision of the constitution does not
necessarily exhaust legislative power on the subject, but any legislation must be in harmony with
the constitution, further the exercise of constitutional right and make it more available.
Subsequent legislation however does not necessarily mean that the subject constitutional
provision is not, by itself, fully enforceable. As against constitutions of the past, modern
constitutions have been generally drafted upon a different principle and have often become in
effect extensive codes of laws intended to operate directly upon the people in a manner similar
to that of statutory enactments, and the function of constitutional conventions has evolved into
one more like that of a legislative body. Hence, unless it is expressly provided that a legislative
act is necessary to enforce a constitutional mandate, the presumption now is that all provisions
of the constitution are self-executing. If the constitutional provisions are treated as requiring
legislation instead of self-executing, the legislature would have the power to ignore and
practically nullify the mandate of the fundamental law. In fine, Section 10, second paragraph,
Art. XII of the 1987 Constitution is a mandatory, positive command which is complete in itself
and which needs no further guidelines or implementing laws or rules for its enforcement. From
its very words the provision does not require any legislation to put it in operation.
FACTS
The Philippines joined World Trade Organization as a founding member with the goal of
improving Philippine access to foreign markets, especially its major trading partners, through the
reduction of tariffs on its exports. The President also saw in the WTO the opening of new
opportunities for the services sector, the reduction of costs and uncertainty associated with
exporting and the attraction of more investments into the country. On April 15, 1994, respondent
Navarro, then DTI Secretary, signed in Marrakesh, Morocco, the Final Act Embodying the Results
of the Uruguay Round of Multilateral Negotiations. On December 14, 1994, the Senate concurred
in the ratification of the President of the Philippines of the Agreement Establishing the WTO
which includes various agreements and associated legal instruments. On December 16, 1994, the
President signed the Instrument of Ratification.
ISSUES
1. Whether the WTO Agreement violated the mandated economic nationalism by the Constitution
2. Whether the provisions of the WTO Agreement restricts and impairs Philippine sovereignty,
specifically the legislative power vested in the Congress
3. Whether the Senate concurrence in the WTO Agreement and its annexes but not in the other
documents referred to in the Final Act is defective and insufficient and thus constitutes abuse of
discretion
RULING
1. No. The Constitution did not intend to pursue an isolationist policy. It did not shut out foreign
investments, goods and services in the development of the Philippine economy. In fact, it allows
an exchange on the basis of equality and reciprocity, frowning only on foreign competition that is
unfair. The constitutional policy of a self-reliant and independent national economy does not
necessarily rule out the entry of foreign investments, goods and services. It contemplates neither
economic seclusion nor mendicancy in the international community.
2. No. While sovereignty has traditionally been deemed absolute and all-encompassing on the
domestic level, it is however subject to restrictions and limitations voluntarily agreed to by the
Philippines, expressly or impliedly, as a member of the family of nations. Unquestionably, the
Constitution did not envision a hermit-type isolation of the country from the rest of the world. By
the doctrine of incorporation, the country is bound by generally accepted principles of
international law, which are considered to be automatically part of our laws. A treaty engagement
is not a mere moral obligation on the parties. By their inherent nature, treaties really limit or
restrict the absoluteness of sovereignty. The Philippines has effectively agreed to limit the exercise
of its sovereign powers of taxation, eminent domain and police power. The underlying
consideration in this partial sovereignty is the reciprocal commitment of the other contracting
states in granting the same privilege and immunities to the Philippines, its officials and its
citizens. The same reciprocity characterizes the same commitments under WTO-GATT. The point
is that a portion of sovereignty may be waived without violating the Constitution, based on the
rationale that the Philippines adopts the generally accepted principles of international law as
part of the law of the land and adheres to the policy of cooperation and amity with all nations.
3. No. The petitioners submit that concurrence in the WTO Agreement alone is flawed because it
is in effect a rejection of the Final Act. The Court held that a final act is an instrument which
records the winding up of the proceedings of a diplomatic conference and not the treaty itself. On
the other hand, the WTO Agreement itself expresses what multilateral agreements are deemed
included as its integral parts. It should be added that the Senate was well-aware of what it was
concurring in as shown by the member’s deliberation.
FACTS:
The case is regarding money claim against Department of Agriculture (DA) as filed and
requested by National Labor Relations Commission (NLRC).
Petitioner Department of Agriculture and Sultan Security Agency entered into a contract for
security services to be provided by the latter to the said governmental entity. Pursuant to their
arrangements, guards were deployed by Sultan Security Agency in the various premises of the
DA. Thereafter, several guards filed a complaint for underpayment of wages, non-payment of
13th month pay, uniform allowances, night shift differential pay, holiday pay, and overtime pay,
as well as for damages against the DA and the security agency.
The Labor Arbiter rendered a decision finding the DA jointly and severally liable with the
security agency for the payment of money claims of the complainant security guards. The DA
and the security agency did not appeal the decision. Thus, the decision became final and
executory. The Labor Arbiter issued a writ of execution to enforce and execute the judgment
against the property of the DA and the security agency. Thereafter, the City Sheriff levied on
execution the motor vehicles of the DA.
The petitioner charges the NLRC with grave abuse of discretion for refusing to quash the writ of
execution. The petitioner faults the NLRC for assuming jurisdiction over a money claim against
the Department, which, it claims, falls under the exclusive jurisdiction of the Commission on
Audit. More importantly, the petitioner asserts, the NLRC has disregarded the cardinal rule on
the non-suability of the State.
The private respondents, on the other hand, argue that the petitioner has impliedly waived its
immunity from suit by concluding a service contract with Sultan Security Agency.
ISSUES:
Whether or not the doctrine of non-suability of the State applies in the case.
Discussions:
Act No. 3083, aforecited, gives the consent of the State to be “sued upon any moneyed claim
involving liability arising from contract, express or implied. However, the money claim should
first be brought to the Commission on Audit. Act 3083 stands as the general law waiving the
State’s immunity from suit, subject to its general limitation expressed in Section 7 thereof that
‘no execution shall issue upon any judgment rendered by any Court against the Government of
the (Philippines), and that the conditions provided in Commonwealth Act 327 for filing money
claims against the Government must be strictly observed.
RULINGS:
No. The rule does not say that the State may not be sued under any circumstances. The State
may at times be sued. The general law waiving the immunity of the state from suit is found in
Act No. 3083, where the Philippine government “consents and submits to be sued upon any
money claims involving liability arising from contract, express or implied, which could serve as a
basis of civil action between private parties.”
In this case, The DA has not pretended to have assumed a capacity apart from its being a
governmental entity when it entered into the questioned contract; nor that it could have, in fact,
performed any act proprietary in character. But the claims of the complainant security guards
clearly constitute money claims.
FACTS:
Private respondents were allegedly awarded a "verbal contract of lease" in 1970 by the National
Parks Development Committee (NPDC)... to occupy a portion of the government park dedicated
to the national hero's memory.
Private respondents were allegedly given office and library space as well as kiosks area selling
food and drinks.
Private respondent General Assembly of the Blind, Inc. (GABI) was to remit to
NPDC, 40 percent of the profits derived from operating the kiosks... after the EDSA Revolution,
the new Chairman of the NPDC, herein petitioner, sought to clean up Rizal Park. In a written
notice dated February 23, 1988 and received by private respondents on February 29, 1988,
petitioner terminated the so-called... verbal agreement with GABI and demanded that the latter
vacate the premises and the kiosks it ran privately within the public park. In another notice
dated March 5, 1988, respondents were given until March 8, 1988 to vacate.
The latter notice was signed by private respondent Iglesias, GABI president, allegedly to indicate
his conformity to its contents.
GABI filed an action for damages and injunction in the Regional Trial Court against petitioner,
Villanueva, and "all persons acting on their behalf".
The trial court issued a temporary restraining order on the same... day.
The TRO expired on March 28, 1988. The following day, GABI was finally evicted by NPDC.
GABI's action for damages and injunction was subsequently dismissed by the RTC, ruling that
the complaint was actually directed against the State which could not be sued without its
consent.
The Court of Appeals reversed the decision
The Court of Appeals ruled that the mere allegation that a government official is being sued in
his official capacity is not enough to protect such official from liability for acts done without or
in excess of his authority.
ISSUES:
WHETHER OR NOT RESPONDENT COURT ERRED IN NOT HOLDING THAT PRIVATE
RESPONDENTS' COMPLAINT AGAINST PETITIONER, AS CHAIRMAN OF NPDC, AND HIS
CO-DEFENDANTS IN CIVIL CASE NO. 88-43887, IS IN EFFECT A SUIT AGAINST THE
STATE WHICH CANNOT BE SUED WITHOUT ITS CONSENT.
RULING:
We are convinced that petitioner is being sued not in his capacity as NPDC chairman but in his
personal capacity. The complaint filed by private respondents in the RTC merely identified
petitioner as chairman of the NPDC, but did not categorically state that he is being sued in...
That capacity. [19] Also, it is evident from paragraph 4 of said complaint that petitioner was
sued allegedly for having personal motives in ordering the ejectment of GABI from Rizal Park.
WHEREFORE, the instant petition is GRANTED.
PRINCIPLES:
The doctrine of state immunity from suit applies to complaints filed against public officials for
acts done in the performance of their duties. The rule is that the suit must be regarded as one
against the state where satisfaction of the judgment against the public official... concerned will
require the state itself to perform a positive act, such as appropriation of the amount necessary
to pay the damages awarded to the plaintiff.
The rule does not apply where the public official is charged in his official capacity for acts that
are unlawful and injurious to the rights of others. Public officials are not exempt, in their
personal capacity, from liability arising from acts... committed in bad faith.[18]
Neither does it apply where the public official is clearly being sued not in his official capacity but
in his personal capacity, although the acts complained of may have been committed while he
occupied a public position
FACTS:
The doctrines of immunity of the government from suit is expressly provided in the Constitution
under Article XVI, Section 3. It is provided that the State may not be sued without its consent.
Some instances when suit against the State is proper are: (1) When the Republic is sued by
name; (2) When the suit is against an unincorporated government agency; (3) When the
suit is, on its face, against a government officer but the case is such that ultimate
liability will belong not to the officer but to the government. W i t h r e s p e c t t o t h e
incident that happened in Mendiola on January 22, 1987 that befell
t w e l v e rallyists, the case filed against the military officers was dismissed by the
lower court. The defendants were held liable but it would not result in financial
responsibility to the government. The petitioner (CaylaoGroup) filed a suit against the
State that for them the State has waived its immunity when the Mendiola
Commission recommended the government to indemnify the victims of the Mendiola incident
and the acts and utterances of President Aquino which is sympathetic to the cause is indicative
of State's waiver of immunity and therefore, the government should also be liable
and should be compensated by the government. Thecae has been dismissed that State
has not waived its immunity. On the other hand, the Military Officer filed a petition for
certiorari to review the orders of the Regional Trial Court, Branch 9.
ISSUE:
Whether or not the State has waived its immunity from suit and therefore should the State be
liable for the incident?
HELD:
No. The recommendation made by the Mendiola Commission regarding the
indemnification of the heirs of the deceased and the victims of the incident does
not in any way mean liability automatically a t t a c h e s t o t h e S t a t e . T h e p u r p o s e
of which is to investigate of the disorders that took place and the
recommendation it makes cannot in any way bind the State. The acts and utterances of
President Aquino does not mean admission of the State of its liability. Moreover, the case does
not qualify as suit against the State. While the Republic in this case is sued by name, the
ultimate liability does not pertain to the government. The military officials are held
liable for the damages for their official functions ceased the moment they have exceeded to their
authority. They were deployed to ensure that the rally would be peaceful and orderly and should
guarantee the safety of the people. The court has made it quite clear that even a “high position in
the government does not confer a license to persecute or recklessly injure another.” The court
rules that there is n o r e v e r s i b l e e r r o r a n d n o g r a v e a b u s e o f d i s c r e t i o n
c o m m i t t e d b y t h e r e s p o n d e n t J u d g e i n i s s u i n g t h e questioned orders.
FACTS:
In 1983, the Ministry of Human Settlement (MHS), through the BLISS Development
Corporation, initiated a housing project on a government property along the east bank of
Manggahan Floodway in Pasig
The MHS entered into a Memorandum of Agreement (MOA) with Ministry of Public Works and
Highways (MPWH) where the latter undertook to develop the housing site and construct
thereon 145 housing units
By virtue of the MOA, MPWH forged individual contracts with petitioners EPG, Ciper, Septa,
Phil. Plumbing, Home Construction, World Builders, Glass World, Performance Builders, and
De Leon Araneta Construction for the construction of the housing units
Under the contracts, the scope of construction and funding covered only around "2/3 of each
housing unit"
Petitioners agreed to undertake and perform "additional constructions" for the completion of
the housing units despite the fact that there was only a verbal promise, and not a written
contract, by the MPWH Undersecretary Aber Canlas that additional funds will be available and
forthcoming
Unpaid balance for the additional constructions amounted to P5,918,315.63
Upon a demand letter from the petitioners, on November 14, 1988, DPWH Asst. Secretary
Madamba opined that payment of petitioners' money claims should be based on quantum
meruit (what one has earned) and should be forwarded to the Commission on Audit (COA)
In a Letter of the Undersecretary of Budget and Management dated December 20, 1994, the
amount of P5,819,316.00 was then released for the payment of the petitioners' money claims
under Advise of Allotment No. A4-1303-04-41-303
In an endorsement dated December 27, 1995, the COA referred anew the money claims to the
DPWH
In a letter dated August 26, 1996, respondent Secretary Gregorio Vigilar denied the subject
money claims
Petitioners filed before the RTC of QC, Branch 226 a Petition for Mandamus to order the
respondent to pay petitioners their money claims plus damages and attorney's fees.
Lower court denied the petition on February 18, 1997
ISSUE:
Whether or not the implied, verbal contracts between the petitioners and then Undersecretary
Canlas should be upheld
Whether or not the State is immune from suit
HOLDING:
Yes.
No.
RATIO:
While the court agrees with the respondent that the implied contracts are void, in view of
violation of applicable laws, auditing rules, and lack of legal requirements, it still finds merit in
the instant petition
The illegality of the implied contracts proceeds from an express declaration or prohibition by
law, not from any intrinsic illegality
"In the interest of substantial justice," petitioners-contractors' right to be compensated is
upheld, applying the principle of quantum meruit
Even the DPWH Asst. Sec. for Legal Affairs recommends their compensation; even the DPWH
Auditor did not object to the payment of the money claims
2. The respondent may not conveniently hide under the State's cloak of invincibility against suit,
considering that this principle yields to certain settled exceptions.
The State's immunity cannot serve as an instrument perpetrating injustice
Petition granted. RTC decision reversed and set aside.
FACTS:
Rosalind Ybasco Lopez was born on May 16, 1934 in Australia to a Filipino father and an
Australian mother. In 1949, at the age of fifteen, she left Australia and came to settle in the
Philippines, where she later married a Filipino and has since then participated in the electoral
process not only as a voter but as a candidate, as well. In the May 1998 elections, she ran for
governor but Valles filed a petition for her disqualification as candidate on the ground that she is
an Australian.
ISSUE:
Whether or not Rosalind is an Australian or a Filipino
HELD:
The Philippine law on citizenship adheres to the principle of jus sanguinis. Thereunder, a child
follows the nationality or citizenship of the parents regardless of the place of his/her birth, as
opposed to the doctrine of jus soli which determines nationality or citizenship on the basis of
place of birth.
Rosalind Ybasco Lopez was born a year before the 1935 Constitution took into effect and at that
time, what served as the Constitution of the Philippines were the principal organic acts by which
the United States governed the country. These were the Philippine Bill of July 1, 1902 and the
Philippine Autonomy Act of Aug. 29, 1916, also known as the Jones Law.
Under both organic acts, all inhabitants of the Philippines who were Spanish subjects on April
11, 1899 and resided therein including their children are deemed to be Philippine citizens.
Private respondent’s father, Telesforo Ybasco, was born on Jan. 5, 1879 in Daet, Camarines
Norte.... Thus, under the Philippine Bill of 1902 and the Jones Law, Telesforo Ybasco was
deemed to be a Philippine citizen. By virtue of the same laws, which were the laws in force at the
time of her birth, Telesforo’s daughter, herein private respondent Rosalind Ybasco Lopez, is
likewise a citizen of the Philippines.
The signing into law of the 1935 Philippine Constitution has established the principle of jus
sanguinis as basis for the acquisition of Philippine citizenship, xxx
So also, the principle of jus sanguinis, which confers citizenship by virtue of blood relationship,
was subsequently retained under the 1973 and 1987 Constitutions. Thus, the herein private
respondent, Rosalind Ybasco Lopez, is a Filipino citizen, having been born to a Filipino father.
The fact of her being born in Australia is not tantamount to her losing her Philippine citizenship.
If Australia follows the principle of jus soli, then at most, private respondent can also claim
Australian citizenship resulting to her possession of dual citizenship.
FACTS:
The citizenship of respondent Teodoro C. Cruz is at issue in this case, in view of the
constitutional requirement that "no person shall be a Member of the House of Representatives
unless he is a natural-born citizen. “Respondent Cruz was a natural-born citizen of the
Philippines. He was born in San Clemente,Tarlac, on April 27, 1960, of Filipino parents. The
fundamental law then applicable was the 1935Constitution.On November 5, 1985, however,
respondent Cruz enlisted in the United States Marine Corpsand, without the consent of the
Republic of the Philippines, took an oath of allegiance to the United States. As a consequence, he
lost his Filipino citizenship for under Commonwealth Act No. 63, Section1 (4), a Filipino citizen
may lose his citizenship by, among others, "rendering service to or accepting commission in the
armed forces of a foreign country. “On March 17, 1994, respondent Cruz reacquired his
Philippine citizenship through repatriation under Republic Act No. 2630.
He ran for and was elected as the Representative of the Second District of Pangasinan in the
May 11, 1998 elections. Subsequently, petitioner filed a case for Quo Warranto AdCautelam with
respondent House of Representatives Electoral Tribunal (HRET) claiming that respondent Cruz
was not qualified to become a member of the House of Representatives since he is not a natural-
born citizen as required under Article VI, Section 6 of the Constitution.
ISSUE:
Whether or not respondent Cruz, a natural-born Filipino who became an American citizen, can
still be considered a natural-born Filipino upon his reacquisition of Philippine citizenship.
HELD:
YES. Repatriation results in the recovery of the original nationality. This means that a
naturalized Filipino who lost his citizenship will be restored to his prior status as a naturalized
Filipino citizen. In respondent Cruz's case, he lost his Filipino citizenship when he rendered
service in the Armed Forces of the United States. However, he subsequently reacquired
Philippine citizenship under R.A. No. 2630.Having thus taken the required oath of allegiance to
the Republic and having registered the same in the Civil Registry of Magantarem, Pangasinan in
accordance with the aforecited provision, respondent Cruzis deemed to have recovered his
original status as a natural-born citizen, a status which he acquired atbirth as the son of a
Filipino father. It bears stressing that the act of repatriation allows him to recover, or return to,
his original status before he lost his Philippine citizenship. As respondent Cruz was not required
by law to go through naturalization proceedings in order to reacquire his citizenship, he is
perforce a natural-born Filipino. As such, he possessed all the necessary qualifications to be
elected as member of the House of Representatives. The petition is hereby DISMISSED.
FACTS:
Vicente D. Ching, legitimate son of the spouses Tat Ching, a Chinese citizen, and Prescila A.
Dulay, a Filipino, was born in Francia West, Tubao, La Union on 11 April 1964. Since his birth,
Ching has resided in the Philippines.
After having completed a Bachelor of Laws course at the St. Louis University in Baguio City,
Ching filed an application to take the 1998 Bar Examinations. In a Resolution of this Court, he
was allowed to take the Bar Examinations, subject to the condition that he must submit to the
Court proof of his Philippine citizenship. On November 1998, he submitted the important
documents in compliance with the said resolution.
During the 1998 Bar Examinations, Ching was one of the successful examinees but he was not
allowed to take the oath because of his questionable citizenship status. Pursuant to the
resolution of this Court, he was required to submit further proof of his citizenship. In the same
resolution, the Office of the Solicitor General (OSG) was required to file a comment on Ching's
petition for admission to the bar and on the documents evidencing his Philippine citizenship.
In their comment, the OSG points out that Ching has not formally elected Philippine citizenship
and, if ever he does, it would already be beyond the "reasonable time" allowed by present
jurisprudence.
Ching then filed a Manifestation, attaching therewith his Affidavit of Election of Philippine
Citizenship and his Oath of Allegiance, both dated 15 July 1999.
ISSUE:
Whether or not he has elected Philippine citizenship within a "reasonable time."
RULING:
The Court holds that Ching failed to validly elect Philippine citizenship. The span of fourteen
(14) years that lapsed from the time he reached the age of majority until he finally expressed his
intention to elect Philippine citizenship is clearly way beyond the contemplation of the
requirement of electing "upon reaching the age of majority." Moreover, Ching has offered no
reason why he delayed his election of Philippine citizenship. The prescribed procedure in
electing Philippine citizenship is certainly not a tedious and painstaking process. All that is
required of the elector is to execute an affidavit of election of Philippine citizenship and,
thereafter, file the same with the nearest civil registry. Ching's unreasonable and unexplained
delay in making his election cannot be simply glossed over.
Philippine citizenship can never be treated like a commodity that can be claimed when needed
and suppressed when convenient. One who is privileged to elect Philippine citizenship has only
an inchoate right to such citizenship. As such, he should avail of the right with fervor,
enthusiasm and promptitude. Sadly, in this case, Ching slept on his opportunity to elect
Philippine citizenship and, as a result this golden privilege slipped away from his grasp.
Therefore, the Court Resolves to DENYVicente D. Ching's application for admission to the
Philippine Bar.
FACTS:
Frivaldo, J. was elected as a Governor of the province of Sorsogon on January 22, 1988.-
On October 27, 1988 the League of Cities of Sorsogon President Salvador Estuye filed a petition
to COMELEC requesting to disqualify Frivaldo from his office on the grounds that he was a
naturalized citizen of the United States of America.-
Frivaldo was naturalized as an American citizen in January 20, 1983.-
Frivaldo admitted but said that he was only forced to do so since the time of Marcos regime he
was considered as an enemy and he went to USA seeking refuge and his naturalization is not
impressed with voluntariness as he went back after the Marcos Regime to the country to help
the restoration of democracy.-
He implies that he reacquired his Philippine citizenship by participating in the election.-
The case was approved by COMELEC and motion to dismiss filed by Frivaldo was denied to
which Frivaldo filed a motion for certiorari and prohibition to the court.
ISSUE:
Whether or not Juan G. Frivaldo was a citizen of the Philippines at the time of his electionon
January 18, 1988?
RULING:
Petition denied, Juan G. Frivaldo is not a citizen of the Philippines and disqualified from serving
as the Governor of the Province of Sorsogon, vacancy shall be filled by the elected Vice-
Governor.-
Local Government Code section 42 indicates that a candidate for local elective office must be a
citizen of the Philippines and a qualified voter of the constituency where is running.-
Omnibus Election Code section 117 states that a qualified voter, among other qualifications,
must be a citizen of the Philippines.-
The Court rules that Frivaldo was not a citizen of the Philippines at the time of his election as the
evidence shown from the certification of US District Court of North California stating that he is a
citizen of the Philippines.-
Frivaldo’s argument that
he reacquire his Philippine citizenship through the participation in the election which in his
view repatriated him to which the Court refutes that there
are proper methods to which one can reacquire citizen ship either through Direct Act ofCongress
, Naturalization or Repatriation to which Frivaldo did not access to.-
Only citizens of the Philippines which have one allegiance can run in local elective office.
ISSUE:
Whether or not the RTC has jurisdiction in deciding over repatriation case.
RULING:
No. A petition for repatriation should be filed with the Special Committee on Naturalization and
not with the RTC which has no jurisdiction. Therefore, the court's order was null and void.
RA No. 8171, which has lapsed into law on October 23 1995, is an act providing for repatriation
of Filipino women who have lost their Philippine citizenship by marriage to aliens and of
natural-born Filipinos who have lost the Philippine citizenship on account of political or
economic necessity.
Moreover, petitioner was incorrect when he initially invoked RA 965 and RA 2630, since these
laws could only apply to persons who had lost their Philippine citizenship by rendering service
to, or accepting commission in, the armed forces of an allied country or the armed forces of the
US, a factual matter not alleged in his petition. Parenthetically, under these statutes, the person
desiring to reacquire his Philippine citizenship would not even required to file a petition in
court; all he had to do is to take an Oath of Allegiance to the Republic of the Philippines and to
register the said oath with the proper civil registry.
MERCADO V. MANZANO CASE DIGEST [G.R. NO. 135083. MAY 26, 1999]
FACTS:
Petitioner Ernesto Mercado and Eduardo Manzano were both candidates for Vice-Mayor of
Makati in the May 11, 1998 elections.
Based on the results of the election, Manzano garnered the highest number of votes. However,
his proclamation was suspended due to the pending petition for disqualification filed by Ernesto
Mercado on the ground that he was not a citizen of the Philippines but of the United States.
From the facts presented, it appears that Manzano is both a Filipino and a US citizen.
The Commission on Elections declared Manzano disqualified as candidate for said elective
position.
Manzano was eventually proclaimed as the Vice-Mayor of Makati City on August 31, 1998.
RULING:
The court ruled that the phrase "dual citizenship" in R.A. 7160 Sec. 40 (d) and R.A. 7854 Sec. 20
must be understood as referring to dual allegiance. Dual citizenship is different from dual
allegiance. The former arises when, as a result of the application of the different laws of two or
more states, a person is simultaneously considered a national by the said states. Dual allegiance
on the other hand, refers to a situation in which a person simultaneously owes, by some positive
act, loyalty to two or more states. While dual citizenship is involuntary, dual allegiance is a result
of an individual's volition. Article IV Sec. 5 of the Constitution provides "Dual allegiance of
citizens is inimical to the national interest and shall be dealt with by law."
Consequently, persons with mere dual citizenship do not fall under this disqualification. Unlike
those with dual allegiance, who must, therefore, be subject to strict process with respect to the
termination of their status, for candidates with dual citizenship, it should suffice if, upon the
filing of their certificates of candidacy, they elect Philippine citizenship to terminate their status
as persons with dual citizenship considering that their condition is the unavoidable consequence
of conflicting laws of different states.
By electing Philippine citizenship, such candidates at the same time forswear allegiance to the
other country of which they are also citizens and thereby terminate their status as dual
citizens. It may be that, from the point of view of the foreign state and of its laws, such an
individual has not effectively renounced his foreign citizenship. That is of no moment.
When a person applying for citizenship by naturalization takes an oath that he renounces his
loyalty to any other country or government and solemnly declares that he owes his allegiance to
the Republic of the Philippines, the condition imposed by law is satisfied and complied
with. The determination whether such renunciation is valid or fully complies with the
provisions of our Naturalization Law lies within the province and is an exclusive prerogative of
our courts. The latter should apply the law duly enacted by the legislative department of the
Republic. No foreign law may or should interfere with its operation and application.
The court ruled that the filing of certificate of candidacy of respondent sufficed to renounce his
American citizenship, effectively removing any disqualification he might have as a dual citizen.
By declaring in his certificate of candidacy that he is a Filipino citizen; that he is not a
permanent resident or immigrant of another country; that he will defend and support the
Constitution of the Philippines and bear true faith and allegiance thereto and that he does so
without mental reservation, private respondent has, as far as the laws of this country are
concerned, effectively repudiated his American citizenship and anything which he may have said
before as a dual citizen.
On the other hand, private respondent’s oath of allegiance to the Philippines, when considered
with the fact that he has spent his youth and adulthood, received his education, practiced his
profession as an artist, and taken part in past elections in this country, leaves no doubt of his
election of Philippine citizenship.
His declarations will be taken upon the faith that he will fulfill his undertaking made under oath.
Should he betray that trust, there are enough sanctions for declaring the loss of his Philippine
citizenship through expatriation in appropriate proceedings. In Yu v. Defensor-Santiago, the
court sustained the denial of entry into the country of petitioner on the ground that, after taking
his oath as a naturalized citizen, he applied for the renewal of his Portuguese passport and
declared in commercial documents executed abroad that he was a Portuguese national. A
similar sanction can be taken against anyone who, in electing Philippine citizenship, renounces
his foreign nationality, but subsequently does some act constituting renunciation of his
Philippine citizenship.
IBP v. Hon. Ronaldo B. Zamora et al. case brief summaryG.R. No. 141284, August
15, 2000
FACTS:
President Joseph Estrada ordered the deployment of the Philippine Marines to join the
Philippine National Police (PNP) in visibility patrols around Metro Manila to stem the tide of
rising violence and crime. In response to such order, the PNP through Police Chief
Superintendent Edgar B. Aglipay issued Letter of Intent (LOI) dated 02/2000 which detailed
the joint visibility patrols called Task Force Tulungan. This was confirmed by a memorandum
Pres. Estrada issued dated 24 January 2000. On January 17, 2000, the IBP filed a petition to
annul LOI 02/2000 arguing that the deployment of the Marines is unconstitutional and is an
incursion by the military on the civilian functions of government as embodied in Article II, Sec.
3 and Art. XVI, Sec. 5(4) of the 1987 Constitution.
ISSUE:
(1) Does the IBP have legal standing in the case at bar?
(2) Is the president’s factual determination of the necessity of calling the armed forces subject to
judicial review?
(3) Is the calling of the armed forces to assist the PNP in joint visibility patrols violate
constitutional provisions on civilian supremacy over the military and the civilian character of
the PNP?
RULING:
In the first issue, the IBP has failed to provide the requisites for legal standing in the case at bar
in that it has failed to conclusively prove that such deployment would harm the IBP in any way.
It’s contention that it is fighting to uphold the rule of law and the constitution is insufficient, too
general and too vague. As to the second issue, the Court disagrees with the contention of the
Solicitor-General that the president’s act is a political question beyond the authority of the Court
to review when the grant of power is qualified or subject to limitations, the issue becomes
whether the prescribed qualifications have been met, then it becomes a question of legality and
not wisdom, so is not a political question. It is then subject to the Court’s review power. As to the
third issue, the Marines only assist the PNP, the LOI itself provides for this. In fact, the PNP
Chief is the leader of such patrols and in no way places the over-all authority in the Marines.
Petition is dismissed.
FACTS:
A taxpayer’s class suit was filed by minors Juan Antonio Oposa, et al., representing their
generation and generations yet unborn, and represented by their parents against Fulgencio
Factoran Jr., Secretary of DENR. They prayed that judgment be rendered ordering the
defendant, his agents, representatives and other persons acting in his behalf to:
1. Cancel all existing Timber Licensing Agreements (TLA) in the country;
2. Cease and desist from receiving, accepting, processing, renewing, or appraising new
TLAs;
And granting the plaintiffs “such other reliefs just and equitable under the premises.” They
alleged that they have a clear and constitutional right to a balanced and healthful ecology and
are entitled to protection by the State in its capacity as parens patriae. Furthermore, they claim
that the act of the defendant in allowing TLA holders to cut and deforest the remaining forests
constitutes a misappropriation and/or impairment of the natural resources property he holds in
trust for the benefit of the plaintiff minors and succeeding generations.
The defendant filed a motion to dismiss the complaint on the following grounds:
1. Plaintiffs have no cause of action against him;
2. The issues raised by the plaintiffs is a political question which properly pertains to
the legislative or executive branches of the government.
ISSUE:
Do the petitioner-minors have a cause of action in filing a class suit to “prevent the
misappropriation or impairment of Philippine rainforests?”
HELD:
Yes. Petitioner-minors assert that they represent their generation as well as generations to
come. The Supreme Court ruled that they can, for themselves, for others of their generation, and
for the succeeding generation, file a class suit. Their personality to sue in behalf of succeeding
generations is based on the concept of intergenerational responsibility insofar as the right to a
balanced and healthful ecology is concerned. Such a right considers the “rhythm and harmony of
nature” which indispensably include, inter alia, the judicious disposition, utilization,
management, renewal and conservation of the country’s forest, mineral, land, waters, fisheries,
wildlife, offshore areas and other natural resources to the end that their exploration,
development, and utilization be equitably accessible to the present as well as the future
generations.
Needless to say, every generation has a responsibility to the next to preserve that rhythm and
harmony for the full enjoyment of a balanced and healthful ecology. Put a little differently, the
minor’s assertion of their right to a sound environment constitutes at the same time, the
performance of their obligation to ensure the protection of that right for the generations to
come.
FACTS:
On Dec 15, 1992, the Sangguniang Panglungsod ng Puerto Princesa enacted an ordinance
banning the shipment of all live fish and lobster outside Puerto Princesa City from January 1,
1993 to January 1, 1998. Subsequently the Sangguniang Panlalawigan, Provincial Government of
Palawan enacted a resolution prohibiting the catching , gathering, possessing, buying, selling,
and shipment of a several species of live marine coral dwelling aquatic organisms for 5 years, in
and coming from Palawan waters.
Petitioners filed a special civil action for certiorari and prohibition, praying that the court
declare the said ordinances and resolutions as unconstitutional on the ground that the said
ordinances deprived them of the due process of law, their livelihood, and unduly restricted them
from the practice of their trade, in violation of Section 2, Article XII and Sections 2 and 7 of
Article XIII of the 1987 Constitution.
ISSUE:
Are the challenged ordinances unconstitutional?
HELD:
No. The Supreme Court found the petitioners contentions baseless and held that the challenged
ordinances did not suffer from any infirmity, both under the Constitution and applicable laws.
There is absolutely no showing that any of the petitioners qualifies as a subsistence or marginal
fisherman. Besides, Section 2 of Article XII aims primarily not to bestow any right to subsistence
fishermen, but to lay stress on the duty of the State to protect the nation’s marine wealth. The
so-called “preferential right” of subsistence or marginal fishermen to the use of marine
resources is not at all absolute.
In accordance with the Regalian Doctrine, marine resources belong to the state and pursuant to
the first paragraph of Section 2, Article XII of the Constitution, their “exploration, development
and utilization...shall be under the full control and supervision of the State.
In addition, one of the devolved powers of the LCG on devolution is the enforcement of fishery
laws in municipal waters including the conservation of mangroves. This necessarily includes the
enactment of ordinances to effectively carry out such fishery laws within the municipal waters.
In light of the principles of decentralization and devolution enshrined in the LGC and the
powers granted therein to LGUs which unquestionably involve the exercise of police power, the
validity of the questioned ordinances cannot be doubted.
FACTS:
The members of the editorial board of the Miriam College Foundation’s school paper were
subjected to disciplinary sanction by the College Discipline Committee after letters of complaint
were filed before the Board following the publication of the school paper that contains obscene,
vulgar, and sexually explicit contents. Prior to the disciplinary sanction to the defendants they
were required to submit a written statement to answer the complaints against them to the
Discipline Committee but the defendants, instead of doing so wrote to the Committee to transfer
the case to the DECS which they alleged to have the jurisdiction over the issue. Pushing through
with the investigation ex parte the Committee found the defendants guilty and imposed upon
them disciplinary sanctions. Defendants filed before the court for prohibition with preliminary
injunction on said decision of the Committee questioning the jurisdiction of said Discipline
Board over the defendants.
ISSUE:
WON the Discipline Board of Miriam College has jurisdiction over the defendants.
HELD:
The court resolved the issue before it by looking through the power of DECS and the
Disciplinary Committee in imposing sanctions upon the defendants. Section 5 (2), Article XIV of
the Constitution guarantees all institutions of higher learning academic freedom. This
institutional academic freedom includes the right of the school or college to decide for itself, its
aims and objectives, and how best to attain them free from outside coercion or interference save
possibly when the overriding public welfare calls for some restraint. Such duty gives the
institution the right to discipline its students and inculcate upon them good values, ideals and
attitude. The right of students to free speech in school is not always absolute. The court upheld
the right of students for the freedom of expression but it does not rule out disciplinary actions of
the school on the conduct of their students. Further, Sec. 7 of the of the Campus Journalism Act
provides that the school cannot suspend or expel a student solely on the basis of the articles
they write EXCEPT when such article materially disrupts class work of involve substantial
disorder or invasion of the rights of others. Therefore the court ruled that the power of the
school to investigate is an adjunct of its power to suspend or expel. It is a necessary corollary to
the enforcement of rules and regulations and the maintenance of a safe and orderly educational
environment conducive to learning. That power, like the power to suspend or expel, is an
inherent part of the academic freedom of institutions of higher learning guaranteed by the
Constitution. The court held that Miriam College has the authority to hear and decide the cases
filed against respondent students.
On February 11, 1974, the Government Service Insurance System (GSIS) sold to
a certain Macaria Vda. de Caiquep, a parcel of residential land.
On February 19, 1974, the Register of Deeds of Rizal issued in the name of Vda.
de Caiquep, TCT No. 436465 with the following encumbrance annotated at the back of
the title:
This Deed of Absolute Sale is subject to the conditions enumerated below which
shall be permanent encumbrances on the property, the violation of any of which shall
entitle the vendor to cancel x x x this Deed of Absolute Sale and reenter the property;
x x x the vendee shall not sell, convey, lease or sublease, or otherwise
encumber the property in favor of any other party within five (5) years from the date final and
absolute ownership thereof becomes vested in the vendee, except in cases of
hereditary succession or resale in favor of the vendor.
A day after the issuance of TCT No. 436465, Vda. de Caiquep sold the subject
lot to private respondent, Maximo Menez, Jr., as evidenced by a Deed of Absolute
Sale. For being suspected as a subversive, Menez was detained for two years and he
hid for another 4 years after his release.
In December of 1990, he discovered that the subject TCT was missing. Menez
filed a petition to replace the lost one and the same was granted by the Court.
On October 13, 1992, herein petitioner, Jesus San Agustin, received a copy of
the abovecited decision. He claimed this was the first time he became aware of the
case of her aunt, Macaria Vda. de Caiquep who, according to him, died sometime in
1974. Claiming that he was the present occupant of the property and the heir of
Macaria
ISSUE:
Whether or not the subject Deed of Absolute Sale in favor of Menez which was
executed during the five-year prohibitory period was binding upon Agustin.
YES. The Court held that the GSIS has not filed any action for the annulment of
the subject Deed of Absolute Sale, nor for the forfeiture of the lot in question. Thus, the
contract of sale remains valid between the parties, unless and until annulled in the
proper suit filed by the rightful party, the GSIS. The said contract of sale is binding upon
the heirs of Macaria Vda. de Caiquep, including petitioner who alleges to be one of her
heirs, in line with the rule that heirs are bound by contracts entered into by their
predecessors-in-interest.
UP BOARD OF REGENTS v. CA G.R. No. 134625August 31, 1999
313 SCRA 404
FACTS:
Respondent Arokiaswamy William Margaret Celine enrolled in the doctoral program in
Anthropology of the UP CSSP Diliman. She already completed the units of course work required
and finished her dissertation and was ready for oral defense.
After going over her dissertation, Dr. Medina informed CSSP Dean Paz that she committed
plagiarism. However, respondent was allowed to defend her dissertation. Four out of the five
panelists gave a passing mark except Dr. Medina.
UP held meeting against her case and some of the panels indicated disapproval. Hence, she
expressed her disappointments over the CSSP administration and warned Dean Paz. However,
Dean Paz request the exclusion of Celine’s name from the list of candidates for graduation but it
did not reach the Board of Regents on time, hence Celine graduated.
Dr. Medina formally charged private respondent with plagiarism and recommended that the
doctorate granted to her be withdrawn. Dean Paz informed private respondent of the charges
against her.
The Board sent her a letter indicating that they resolved to withdraw her Doctorate Degree
recommended by the University Council.
She sought an audience with the Board of Regents and/or the U.P. President, which request was
denied by President
Hence, Celine then filed a petition for mandamus with a prayer for a writ of preliminary
mandatory injunction and damages, alleging that petitioners had unlawfully withdrawn her
degree without justification and without affording her procedural due process.
ISSUE:
Whether or not Arokiaswamy William Margaret Celine was deprived of her right to substantive
due process.
RULING:
No. Respondent Arokiaswamy William Margaret Celine was indeed heard several times.
Several committees and meetings had been formed to investigate the charge that private
respondent had committed plagiarism and she was heard in her defense.
In administrative proceedings, the essence of due process is simply the opportunity to explain
one's side of a controversy or a chance seek reconsideration of the action or ruling complained
of. A party who has availed of the opportunity to present his position cannot tenably claim to
have been denied due process.
In the case at bar, Celine was informed in writing of the charges against her and given
opportunities to answer them. She was asked to submit her written explanation which she
submiited. She, as well, met with the U.P. chancellor and the members of the Zafaralla
committee to discuss her case. In addition, she sent several letters to the U.P. authorities
explaining her position.
It is not tenable for private respondent to argue that she was entitled to have an audience before
the Board of Regents. Due process in an administrative context does not require trial-type
proceedings similar to those in the courts of justice. It is noteworthy that the U.P. Rules do not
require the attendance of persons whose cases are included as items on the agenda of the Board
of Regents.
FACTS:
· A student, Manuelito Isabelo, Jr., filed the instant petition for mandamus with prayer for
a writ of mandamus addressed to DECS to implement its order to re-admit him as a senior
graduating student of Perpetual Help College of Rizal (PHCR)
· Manuelito was enrolled at the Perpetual Help College of Rizal for BS Criminology. He was
elected Public Relations Officer ("PRO") of the Supreme Student Council
· He was invited to attend a meeting with PHCR officials on 08 May 1991. He was asked by
the VP for Academic Affairs, Dr. Grace De Leon, to sign Resolution No. 105 that would
implement a 20% tuition fee increase for the school year 1991-1992.
· Manuelito refused to sign the resolution; instead he asked for a 2-week period to take the
matter up with fellow officers.
· Since, the administration assured that the request of the student council would be
considered favorably, the petitioner finally signed Resolution No. 105.
· PHCR announced that it will increase tuition fees in all levels. The student council filed
with the DECS a motion for reconsideration. DECS held the advised that the "collection of the
increase (should) be held in abeyance pending the resolution of (the) matter."
· The administration dropped Manuelito from PHCR's list of students because of the
following reasons:
o Noncompliance of CMT requirement as per DECS Order No. 9, S. 1990 and DECS
Memorandum No. 80, S. 1991 and PHCR Internal Memo. No. 891-007;
o No NCEE during the admission in the BS Criminology course;
o Official Admission Credential not yet submitted;
o Void declaration of CMT subjects (MS 11, 12, 21 and 22)
· He took special training during the semestral break, and he was able to pass it, but PHCR
still refused to give him that accreditation, insisting that he by then had ceased to be a student of
PHCR.
· Manuelito wrote to DECS, which in turn sent their letter to PHCR ordering that students
should be allowed to continue their classes pending the resolution. PHCR did not comply with
the directive.
· Manuelito: Real reason PHCR has voided his enrollment is his active participation in
opposing PHCR's application for tuition fee increase with the DECS.
· PHCR: invokes "academic freedom" in dropping the petitioner from its roll of students.
HE been allowed to enroll "conditionally" pending the completion of his remedial classes in
CMT, in which he failed.
ISSUE:
WON PHCR may drop Manuelito from the list of students. CASE REMANDED.
· In Garcia vs. Loyola School of Theology: admission to an institution of higher learning is
discretionary upon the school and that such an admission is a mere privilege, rather than a
right, on the part of the student.
· In Ateneo de Manila University vs. Capulon: the term "academic freedom" "the freedom to
determine on academic grounds who may teach, what may be taught (and) how it shall be
taught," but likewise "who may be admitted to study."
· However academic freedom is not an unabridged license. It is a privilege that assumes
a correlative duty to exercise it responsibly.
· In Non vs. Dames II: abandoned Alcuaz vs. PSBA, (that enrollment of a student is a
semester-to-semester contract, and that the school may not be compelled to renew the contract)
by recognizing instead the right of a student to be enrolled for the entire period in order to
complete his course. We have also stressed that the contract between the school and the student,
imbued, as it is, with public interest, is not an ordinary contract.
· Expulsion is disproportionate to his deficiencies in his CMT course. The circumstances
show that the PHCR has strongly been influenced by his participation in questioning PHCR's
application for tuition fee increase.
· However DECS should determine whether the petitioner really deserves to be in senior
class or has a number of school deficiencies to overcome, as the respondent school counters
JG SUMMIT HOLDINGS, INC., vs. COURT OF APPEALS, COMMITTEE ON
PRIVATIZATION, ASSET PRIVATIZATION TRUST and PHILYARDS HOLDINGS
G.R. No. 124293. November 20, 2000
FACTS:
National Investment and Development Corporation (NIDC) and Kawasaki Heavy Industries
entered into a Joint Venture Agreement in a shipyard business named PHILSECO, with a
shareholding of 60-40 respectively. NIDC’s interest was later transferred to the National
Government.
Pursuant to President Aquino’s Proclamation No.5, which established the Committee on
Privatization (COP) and Asset Privatization Trust (APT), and allowed for the disposition of the
government’s non-performing assets, the latter allowed Kawasaki Heavy Industries to choose a
company to which it has stockholdings, to top the winning bid of JG Summit Holdings over
PHILSECO. JG Summit protested alleging that such act would effectively increase Kawasaki’s
interest in PHILSECO—a shipyard is a public utility–and thus violate of the Constitution.
ISSUE:
Whether or not respondents’ act is valid.
HELD:
No.
A shipyard such as PHILSECO being a public utility as provided by law, the following provision
of the Article XII of the Constitution applies:
“Sec. 11. No franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to corporations or associations
organized under the laws of the Philippines at least sixty per centum of whose capital is owned
by such citizens, nor shall such franchise, certificate, or authorization be exclusive in character
or for a longer period than fifty years. Neither shall any such franchise or right be granted except
under the condition that it shall be subject to amendment, alteration, or repeal by the Congress
when the common good so requires. The State shall encourage equity participation in public
utilities by the general public. The participation of foreign investors in the governing body of any
public utility enterprise shall be limited to their proportionate share in its capital, and all the
executive and managing officers of such corporation or association shall be citizens of the
Philippines.”
Notably, paragraph 1.4 of the JVA accorded the parties the right of first refusal “under the same
terms.” This phrase implies that when either party exercises the right of first refusal under
paragraph 1.4, they can only do so to the extent allowed them by paragraphs 1.2 and 1.3 of the
JVA or under the proportion of 60%-40% of the shares of stock. Thus, should the NIDC opt to
sell its shares of stock to a third party, Kawasaki could only exercise its right of first refusal to
the extent that its total shares of stock would not exceed 40% of the entire shares of stock of SNS
or PHILSECO. The NIDC, on the other hand, may purchase even beyond 60% of the total
shares. As a government corporation and necessarily a 100% Filipino-owned corporation, there
is nothing to prevent its purchase of stocks even beyond 60% of the capitalization as the
Constitution clearly limits only foreign capitalization.