August 31, 2016

G.R. No. 174379

E.I DUPONT DE NEMOURS AND CO., (assignee of inventors Carino, Duncia and
Wong), Petitioner
vs.
DIRECTOR EMMA C. FRANCISCO (in ger capacity as DIRECTOR GENERAL OF THE
INTELLECTUAL PROPERTY OFFICE), DIRECTOR EPIFANIO M. VELASCO (in his
capacity as the DIRECTOR OF THE BUREAU OF PATENTS, and THERAPHARMA, INC.,
Respondents

DECISION

LEONEN, J.:

A patent is granted to provide rights and protection to the inventor after an invention is
disclosed to the public. It also seeks to restrain and prevent unauthorized persons from
unjustly profiting from a protected invention. However, ideas not covered by a patent are free
for the public to use and exploit. Thus, there are procedural rules on the application and
grant of patents established to protect against any infringement. To balance the public
interests involved, failure to comply with strict procedural rules will result in the failure to
obtain a patent.

This resolves a Petition for Review on Certiorari   assailing the Court of Appeals Amended
1

Decision  dated August 30, 2006, which denied the revival of Philippine Patent Application
2

No. 35526, and the Court of Appeals Resolution  dated January 31, 2006, which granted the
3

intervention of Therapharma, Inc. in the revival proceedings.

E.I. Dupont Nemours and Company (E.I. Dupont Nemours) is an American corporation
organized under the laws of the State of Delaware.   It is the assignee of inv~ntors David
4

John Carini, John Jonas Vytautas Duncia, and Pancras Chor Bun Wong, all citizens of the
United States of America. 5

On July 10, 1987, E.I. Dupont Nemours filed Philippine Patent Application No. 35526 before
the Bureau of Patents, Trademarks, and Technology Transfer.  The application was for
6

Angiotensin II Receptor Blocking Imidazole (losartan), an invention related to the treatment

of hypertension and congestive heart failure.  The product was produced and marketed by
7

Merck, Sharpe, and Dohme Corporation (Merck), E.I. Dupont Nemours' licensee, under the
brand names Cozaar and Hyzaar. 8

The patent application was handled by Atty. Nicanor D. Mapili (Atty. Mapili), a local resident
agent who handled a majority of E.I. Dupont Nemours' patent applications in the Philippines
from 1972 to 1996. 9

On December 19, 2000, E.I. Dupont Nemours' new counsel, Ortega, Del Castillo, Bacorro,
Odulio, Calma, and Carbonell,  sent the Intellectual Property Office  a letter requesting that
10 11

an office action be issued on Philippine Patent Application No. 35526.  12

In response, Patent Examiner Precila O. Bulihan of Intellectual Property Office sent an office
action marked Paper No. 2 on January 30, 2002,  which stated:
13
The appointed attorney on record was the late Atty. Nicanor D. Mapili. The reconstituted
documents provided no documents that will show that the authority to prosecute the instant
application is now transferred to the present counsel. No official revocation on record is
available.

Therefore, an official revocation of the Power of Attorney of the former counsel and the
appointment of the present by the applicant is therefore required before further action can be
undertaken.

....

1. Contrary to what was alleged, the Chemical Examining Division's (CED) record will show
that as far as the said division is concern[ ed], it did not fail to issue the proper and timely
action on the instant application. CED record shows that the subject application was
assigned to the examiner on June 7, 1988. A month after that was July 19, 1988, the first
Office Action was mailed but was declared abandoned as of September 20, 1988 for
applicant's failure to respond within the period as prescribed under Rule 112. Since then, no
other official transactions were recorded. Tlris record is complemented by the Examiner-in-
charge's own record ....

....

2. It was noted that it took thirteen (13) long years for the applicant to request for such Office
Action. This is not expected of the applicant since it is an acceptable fact that almost all
inventors/ applicants wish for the early disposition for their applications.14

On May 29, 2002, E.I. Dupont Nemours replied to the office action by submitting a Power of
Attorney executed by Miriam Meconnahey, authorizing Ortega, Castillo, Del Castillo,
Bacorro, Odulio, Calma, and Carbonell to prosecute and handle its patent applications.   On 15

the same day, it also filed a Petition for Revival with Cost of Philippine Patent Application No.
35526.  16

In its Petition for Revival, E.I. Dupont Nemours argued that its former counsel, Atty. Mapili,
did not inform it about the abandonment of the application, and it was not aware that Atty.
Mapili had already died.   It argued that it discovered Atty. Mapili's death when its senior-
17

level patent attorney visited the Philippines in 1996.   It argued that it only had actual notice
18

of the abandonment on January 30, 2002, the date of Paper No. 2.   Thus, it argued that its
19

Petition for Revival was properly filed under Section 113 of the 1962 Revised Rules of
Practice before the Philippines Patent Office in Patent Cases (1962 Revised Rules of
Practice). 20

On April 18, 2002, the Director of Patents denied the Petition for Revival for having been filed
out of time.  The Resolution  stated:
21 22

Propriety dictates that the well-settled rule on agency should be applied to this case to
maintain the objectivity and discipline of the Office. Therefore, for cases such as the instant
case, let the Office maintain its position that mistakes of the counsel bind the client,'
regardless of the degree of negligence committed by the former counsel. Although it appears
that the former counsel, Atty. Nicanor Mapili was remiss in his obligations as counsel for the
applicants, the Office cannot revive the abandoned application because of the limitations
provided in Rule 115. Clearly, the Petition for Revival was filed beyond the reglementary
period. Since the law and rules do not give the Director of Patents the discretion to stretch
the period for revival, the Office is constrained to apply Rule 115 to the instant case.

In view of the foregoing considerations, applicants' petition to revive the subject application is
hereby denied.

SO ORDERED. 23

E.I. Dupont Nemours appealed the denial to the Director-General of the Intellectual Property
Office on August 26, 2002.  In the Decision  dated October 22, 2003, Director-General
24 25

Emma C. Francisco denied the appeal and affirmed the Resolution of the Director of Patents.

On November 21, 2003, petitioner filed before the Court of Appeals a Petition for Review
seeking to set aside the Intellectual Property Office's Decision dated October 22, 2003.  26

On August 31, 2004, the Court of Appeals granted the Petition for Review.   In allowing the
27

Petition for Revival, the Court of Appeals stated:

After an exhaustive examination of the records of this case, this Court believes that there is
sufficient justification to relax the application of the above-cited doctrine in this case, and to
afford petitioner some relief from the gross negligence committed by its former lawyer, Atty.
Nicanor D. Mapili[.] 28

The Office of the Solicitor General, on behalf of the Intellectual Property Office, moved for
reconsideration of this Decision on September 22, 2004.  29

In the interim, Therapharma, Inc. moved for leave to intervene and admit the Attached
Motion for Reconsideration dated October 11, 2004  and argued that the Court of Appeals'
30

August 31, 2004 Decision directly affects its "vested" rights to sell its own product.  31

Therapharma, Inc. alleged that on January 4, 2003, it filed before the Bureau of Food and
Drugs its own application for a losartan product "Lifezar," a medication for hypertension,
which the Bureau granted.  It argued that it made a search of existing patent applications for
32

similar products before its application, and that no existing patent registration was found
since E.I. Dupont Nemours' application for its losartan product was considered abandoned
by the Bureau of Patents, Trademarks, and Technology Transfer.  It alleged that sometime
33

in 2003 to 2004, there was an exchange of correspondence between Therapharma, Inc. and
Merck. In this exchange, Merck informed Therapharma, Inc. that it was pursuing a patent on
the losartan products in the Philippines and that it would pursue any legal action necessary
to protect its product. 34

On January 31, 2006, the Court of Appeals issued the Resolution  granting the Motion· for
35

Leave to Intervene. According to the Court of Appeals, Therapharma, Inc. had an interest in
the revival of E.I. Dupont Nemours' patent application since it was the local competitor for the
losartan product.   It stated hat even if the Petition for Review was premised on the revival of
36

the patent application, Therapharma, Inc.' s intervention was not premature since E.I. Dupont
Nemours, through Merck, already threatened Therapharma, Inc. with legal action if it
continued to market its losartan product. 37

E.I. Dupont Nemours moved for reconsideration on February 22, 2006, assailing the Court of
Appeals' January 31, 2006 Resolution. 38
On August 30,. 2006, the Court of Appeals resolved both Motions for Reconsideration and
rendered the Amended Decision  reversing its August 31, 2004 Decision.
39

The Court of Appeals ruled that the public interest would be prejudiced by the revival of E.I.
Dupont Nemours' application.  It found that losartan was used to treat hypertension, "a
40

chronic ailment afflicting an estimated 12.6 million Filipinos,"  and noted that the presence of
41

competition lowered the price for losartan products.   It also found that the revival of the
42

application prejudiced Therapharma, Inc.' s interest, in that it had already invested more than
P20,000,000.00 to develop its own losartan product and that it acted in good faith when it
marketed its product. 43

The Court of Appeals likewise found that it erroneously based its August 31, 2004 Decision
on E.I Dupont Nemours' allegation that it took seven (7) to 13 years for the Intellectual
Property Office to act on a patent application.   It stated that while it might have taken that
44

long to issue the patent, it did not take that long for the Intellectual Property Office to act on
application.  Citing Schuartz v. Court of Appeals,  it found that both E.I. Dupont Nemours
45 46

and Atty. Mapili were inexcusably negligent in

prosecuting the patent application. 47

On October 19, 2006, petitioner E.I. Dupont Nemours filed before this Court this Petition for
Review on Certiorari.  Both respondents Intellectual Property Office and Therapharma, Inc.
48

were directed to comment on the comment on the Petition.  Upon submission of their
49

respective Comments,  petitioner was directed to file its Consolidated Reply.   Thereafter,
50 51

the parties were directed to file their respective memoranda.  52

The arguments of the parties present several issues for this Court's resolution, as follows:

First, whether the Petition for Review on Certiorari complied with Rule 45, Section 4 of the
Rules of Court when petitioner failed to attach certain documents to support the allegations
in the complaint;

Second, whether petitioner should have filed a petition for certiorari under Rule 65 of the
Rules of Court;

Third, whether the Petition for Review on Certiorari raises questions of fact;

Fourth, whether the Court of Appeals erred in allowing the intervention of respondent
Therapharma, Inc. in petitioner's appeal;

Fifth, whether the Court of Appeals erred in denying petitioner's appeal for the revival of its
patent application on the grounds that (a) petitioner committed inexcusable negligence in the
prosecution of its patent application; and (b) third-party rights and the public interest would
be prejudiced by the appeal;

Sixth, whether Schuartz applies to this case in that the negligence of a patent applicant's
counsel binds the applicant; and

Lastly, whether the invention has already become part of public domain.

I
The question of whether the Court of Appeals may resolve a motion for intervention is a
question that assails an interlocutory order and requests a review of a lower court's exercise
of discretion. Generally, a petition for certiorari under Rule 65 of the Rules of Court will lie to
raise this issue in a limited manner. There must be a clear showing of grave abuse of
discretion for writ of certiorari to be issued.

However, when the Court of Appeals has already resolved the question of intervention and
the merits of the case, an appeal through a petition for review on certiorari under Rule 45 of
the Rules of Court is the proper remedy.

Respondent Therapharma, Inc. argues that the Petition should be dismissed outright for
being the wrong mode of appeal.  It argues that petitioner should have filed a petition
53

for certiorari under Rule 65 since petitioner was assailing an act done by the Court of
Appeals in the exercise of its discretion.   It argues that petitions under Rule 45 are limited to
54

questions of law, and petitioner raised findings of fact that have already been affirmed by the
Court of Appeals.   Petitioner, on the other hand, argues that Rule 65 is only available when
55

there is no appeal or any plain, speedy remedy in the ordinary course of law. Since a petition
for review under Rule 45 was still available to it, it argues that it correctly availed itself of this
remedy.   Petitioner also argues that there are exceptions to the general rule on the
56

conclusiveness of the Court of Appeals' findings of fact.   It argues that it was necessary for
57

it to discuss relevant facts in order for it to show that the Court of Appeals made a
misapprehension of facts.  58

The special civil action of certiorari under Rule 65 is intended to correct errors of

jurisdiction.   Courts lose competence in relation to an order if it acts in grave abuse of
59

discretion amounting to lack or excess of jurisdiction.  A petition for review under Rule 45, on
60

the other hand, is a mode of appeal intended to correct errors of judgment.  Errors of
61

judgment are errors committed by a court within its jurisdiction.  This includes a review of the
62

conclusions of law  of the lower court and, in appropriate cases, evaluation of the
63

admissibility, weight, and inference from the evidence presented.

Intervention results in an interlocutory order ancillary to a principal action.  Its grant or denial
64

is subject to the sound discretion of the court.  Interlocutory orders, or orders that do not
65

make a final disposition of the merits of the main controversy or cause of action,  are 66

generally not reviewable.  The only exception is a limited one, in that when there is no plain,
67

speedy, and adequate remedy, and where it can be shown that the court acted without, in
excess, or with such grave abuse of discretion that such action ousts it of jurisdiction.

Judicial economy, or the goal to have cases prosecuted with the least cost to the
parties,  requires that unnecessary or frivolous reviews of orders by the trial court, which
68

facilitate the resolution of the main merits of the case, be reviewed together with the main
merits of the case. After all, it would be more efficient for an appellate court to review a case
in its entire context when the case is finally disposed.

The question of whether intervention is proper is a question of law. Settled is the distinction
between a question of law and a question of fact. A question of fact arises when there is
doubt as to the truth or falsity of certain facts.  A question of law, on the other hand, arises
69

when "the appeal raises doubt as to the applicable law on a certain set of facts."   The test
70

often used by this Court to determine whether there is a question of fact or a question of law
"is not the appellation given to such question by the party raising the same; rather, it is
whether the appellate court can determine the issue raised without reviewing or evaluating
the evidence, in which case, it is a question of law; otherwise it is a question of fact." 71
Petitioner raises the question of whether Republic Act No. 165 allows the Court of Appeals to
grant a motion for intervention. This necessarily requires a determination of whether Rule 19
of the Rules of Court   applies in appeals of cases filed under Republic Act No. 165. The
72

determination of this question does not require a review of re-evaluation of the evidence. It
requires a determination of the applicable law.

II

If a petition fails to attach material portions of the record, it may still be given due course if it
falls under certain exceptions. Although Rule 45, Section 4 of the Rules of Court requires
that the petition "be accompanied by ... such material portions of the record as would support
the petition," the failure to do so will not necessarily warrant the outright dismissal of the
complaint.  73

Respondent Therapharma, Inc. argues that the Petition should have been outright dismissed
since it failed to attach certain documents to support its factual allegations and legal
arguments, particularly: the annexes of the Petition for Review it had filed before the Court of
Appeals and the annexes in the Motion for Leave to Intervene it had filed.   It argues that
74

petitioner's failure to attach the documents violates Rule 45, Section 4, which requires the
submission of material portions of the record.  75

On the other hand, petitioner argues that it was able to attach the Court of Appeals Decision
dated August 31, 2004, the Resolution dated January 31, 2006, and the Amended Decision
dated August 30, 2006, all of which were sufficient for this Court to give due course to its
Petition. 
76

In Magsino v. De Ocampo,   this Court applied the procedural guideposts in Galvez v. Court
77

of Appeals   in determining whether the Court of Appeals correctly dismissed a petition for
78

review under Rule 42 for failure to attach relevant portions of the record. Thus:

In Galvez v. Court of Appeals, a case that involved the dismissal of a petition for certiorari to
assail an unfavorable ruling brought about by the failure to attach copies of all pleadings
submitted and other material portions of the record in the trial court (like the complaint,
answer and position paper) as would support the allegations of the petition, the Court
recognized three guideposts for the CA to consider in determining whether or not the rules of
procedures should be relaxed, as follows:

First, not all pleadings and parts of case records are required to be attached to the petition.
Only those which are relevant and pertinent must accompany it. The test of relevancy is
whether the document in question will support the material allegations in the petition,
whether said document will make out a prima facie case of grave abuse of discretion as to
convince the court to give due course to the petition.

Second, even if a document is relevant and pertinent to the petition, it need not be appended
if it is shown that the contents thereof can also [sic] found in another document already
attached to the petition. Thus, if the material allegations in a position paper are summarized
in a questioned judgment, it will suffice that only a certified true copy of the judgment is
attached.

Third, a petition lacking an essential pleading or part of the case record may still be given
due course or reinstated (if earlier dismissed) upon showing that petitioner later submitted
the documents required, or that it will serve the higher interest of justice that the case be
decided on the merits. 79

Although Magsino referred to a petition for review under Rule 42 before the Court of
Appeals, the procedural guideposts cited in Mafilsino may apply to this case since the
contents of a pleading under Rule 42  are substantially the same as the contents of a
80

pleading under Rule 45,  in that both procedural rules require the submission of "material
81

portions of the record as would support the allegations of the petition." 82

In support of its Petition for Review on Certiorari, petitioner attached the Court of Appeals
Decision dated August 31, 2004,   the Resolution dated January 31, 2006,  and the
83 84

Amended Decision dated August 30, 2006.  The Court of Appeals Resolution and Amended
85

Decision quoted extensive portions of its rollo in support of its rulings.   These conclusions
86

were sufficient to convince this Court not to outright dismiss the Petition but to require
respondents to first comment on the Petition, in satisfaction of the first and second
procedural guideposts in Magsino.

Upon filing of its Consolidated Reply,  petitioner was able to attach the following additional
87

documents:

(1) Petition for Review filed before the Court of Appeals; 88

(2) Letters dated July 18, 1995, December 12, 1995, and December 29, 1995; 89

(3) Declaration of Ms. Miriam Meconnahey dated June 25, 2002; 90

(4) Spreadsheet of petitioner's patent applications handled by Atty. Mapili; 91

(5) Power of Attorney and Appointment of Resident Agent dated September 26,
1996; 92

(6) Letter dated December 19, 2000 requesting an Office Action on Patent
Application No. 35526; 93

(7) Paper No. 2 dated January 30, 2002; 94

(8) Petition for Revival dated January 30, 2002 with attached Power of Attorney and
Appointment of Resident Agent; 95

(9) Resolution dated July 24, 2002 by Director of the Bureau of Patents;  and 96

(10) Notice of and Memorandum on Appeal before the DirectorGeneral of the

Intellectual Property Office. 97

The third procedural guidepost in Magsino was complied with upon the submission of these
documents. Petitioner, therefore, has substantially complied with Rule 45, Section 4 of the
Rules of Court.

III
Appeal is not a right but a mere privilege granted by statute.  It may only be exercised in
98

accordance with the law that grants it.

Accordingly, the Court of Appeals is not bound by the rules of procedure in administrative
agencies. The procedural rules of an administrative agency only govern proceedings within
the agency. Once the Court of Appeals has given due course to an appeal from a ruling of
an administrative agency, the proceedings before it are governed by the Rules of Court.

However, petitioner argues that intervention should not have been allowed on appeal  since99

the revival of a patent application is ex parte and is "strictly a contest between the examiner
and the applicant"  under Sections 78  and 79  of the 1962 Revised Rules of Practice.   It
100 101 102 103

argues that the disallowance of any intervention is to ensure the confidentiality of the
proceedings under Sections 13 and 14 of the 1962 Revised Rules of Practice.  104

Respondents argue that the 1962 Revised Rules of Practice is only applicable before the
Intellectual Property Office.   In particular, respondent Therapharma, Inc. argues that the
105

issue before the Court of Appeals was beyond the realm of patent examination proceedings
since it did not involve the patentability of petitioner's invention.   It further argues that its
106

intervention did not violate the confidentiality of the patent application proceedings since
petitioner was not required to divulge confidential information regarding its patent
application. 
107

In the 1962 Revised Rules of Practice, final decisions of the Director of Patents are appealed
to this Court and governed by Republic Act No. 165. In particular:

PARTX
PETITION AND APPEALS

....

CHAPTER IV
APPEALS TO THE SUPREME COURT FROM FINAL ORDERS OR
DECISIONS OF THE DIRECTOR OF PATENTS IN EX PARTE AND
INTER PARTES PROCEEDINGS

265. Appeals to the Supreme Court in ex parte and inter partes proceedings.-Any person
who is dissatisfied with the final decision of the Director of Patents, (affirming that of a
Principal Examiner) denying him a patent for an invention, industrial design or utility model;
any person who is dissatisfied with any final decision of the Director of Patents (affirming that
of the Executive Examiner) in any proceeding; and any party who is dissatisfied with any final
decision of the Director of Patents in an inter partes proceeding, may appeal such final
decision to the Supreme Court within thirty days from the date he receives a copy of such
decision. (Republic Act No. 165, section 16, as amended by section 3, Republic Act No.
864.)

266. Procedure on appeal to the Supreme Court.-For the procedure on appeal to the
Supreme Court, from the final decisions of the Director of Patents, see sections 63 to 73,
inclusive, of Republic Act No. 165 (patent law).

Particularly instructive is Section 73 of Republic Act No. 165, which provides:

Section 73. Rules of Court applicable. - In all other matters not herein provided, the
applicable provisions of the Rules of Court shall govern.

Republic Act No. 165 has since been amended by Republic Act No. 8293, otherwise known
as the Intellectual Property Code of the Philippines (Intellectual Property Code), in 1997. This
is the applicable law with regard to the revival of petitioner's patent application. Section 7
(7.1 )(a) of the Intellectual Property Code states:

SECTION 7. The Director General and Deputies Director General. -

7 .1. Functions. - The Director General shall exercise the following powers and functions:

....

b. Exercise exclusive appellate jurisdiction over all decisions rendered by the Director of
Legal Affairs, the Director of Patents, the Director of Trademarks, and the Director of the
Documentation, Information and Technology Transfer Bureau. The decisions of the Director
General in the exercise of his appellate jurisdiction in respect of the decisions of the Director
of Patents, and the Director of Trademarks shall be appealable to the Court of Appeals in
accordance with the Rules of Court; and those in respect of the decisions of the Director of
Documentation, Information and Technology Transfer Bureau shall be appealable to the
Secretary of Trade and Industry[.] (Emphasis supplied)

Thus, it is the Rules of Court, not the 1962 Revised Rules of Practice, which governs the
Court of Appeals' proceedings in appeals from the decisions of the Director-General of the
Intellectual Property Office regarding the revival of patent applications.

Rule 19 of the Rules of Court provides that a court has the discretion to determine whether to
give due course to an intervention. Rule 19, Section 1 states:

RULE 19
INTERVENTION

SECTION 1. Who may intervene. -A person who has a legal interest in the matter in
litigation, or in the success of either of the parties, or an interest against both, or is so
situated as to be adversely affected by a distribution or other disposition of property in the
custody of the court or of an officer thereof may, with leave of court, be allowed to intervene
in the action. The court shall consider whether or not the intervention will unduly delay or
prejudice the adjudication of the rights of the original parties, and whether or not the
intervenor's rights may be fully protected in a separate proceeding.

The only questions the court need to consider in a motion to intervene are whether the
intervenor has standing to intervene, whether the motion will / unduly delay the proceedings
or prejudice rights already established, and whether the intervenor's rights may be protected
in a separate action.108

If an administrative agency's procedural rules expressly prohibit an intervention by third

parties, the prohibition is limited only to the proceedings before the administrative agency.
Once the matter is brought before the Court of Appeals in a petition for review, any prior
prohibition on intervention does not apply since the only question to be determined is
whether the intervenor has established a right to intervene under the Rules of Court.
In this case, respondent Therapharma, Inc. filed its Motion for Leave to Intervene   before109

the Court of Appeals, not before the Intellectual Property Office. In assessing whether to
grant the intervention, the Court of Appeals considered respondent Therapharma, Inc.' s
legal interest in the case and its other options for the protection of its interests.   This was
110

within the discretion of the Court of Appeals under the Rules of Court.

Respondent Therapharma, Inc. was able to show that it had legal interest to intervene in the
appeal of petitioner's revival of its patent application. While its intervention may have been
premature as no patent has been granted yet, petitioner's own actions gave rise to
respondent Therapharma, Inc.' s right to protect its losartan product.

Respondent Therapharma, Inc. filed an application for product registration before the Bureau
of Food and Drugs on June 4, 2003 and was granted a Certificate of Product Registration on
January 27, 2004.   It conducted patent searches from October 15, 1995 and found that no
111

patent application for losartan had been filed either before the Bureau of Patents,
Trademarks, and Technology Transfer or before the Intellectual Property Office. 112

As early as December 11, 2003, petitioner through Merck was already sending
communications threatening legal action if respondent Therapharma, Inc. continued to
develop and market losartan in the Philippines. The letter stated:

Merck is strongly committed to the protection of its valuable intellectual property rights,
including the subject losartan patents. While fair competition by sale of pharmaceutical
products which are domestically produced legally is always welcomed by Merck and MSD
Philippines, Merck will vigorously pursue all available legal remedies against any
unauthorized manufacturer, distributor or supplier of losartan in countries where its patents
are in force and where such activity is prohibited by law. Thus, Merck is committed to
preventing the distribution of losartan in the Philippines if it originates from, or travels
through, a country in which Merck holds patent rights.   (Emphasis supplied)
113

This letter was presented before the Court of Appeals, which eventually granted the revival
of the patent application in its August 31, 2004 Decision. Petitioner had no pending patent
application for its losartan product when it threatened respondent Therapharma, Inc. with
legal action.
114

Respondent Therapharma, Inc. expressed its willingness to enter into a Non-Use and
Confidentiality Contract if there was a pending patent application.   After several
115

negotiations on the clauses of the contract,   the parties were unable to come to an
116

agreement. In its letter dated May 24, 2004,   respondent Therapharma, Inc. expressed its
117

frustration on petitioner's refusal to give a clear answer on whether it had a pending patent
application:

For easy reference, we have reproduced below paragraph 5 of the Confidentiality and Non-
Use Agreement ("Confidentiality Agreement"), underscoring your proposed amendment:

"THERAPHARMA agrees that upon receipt of Specifications and Claims of Application No.
35526 or at any time thereafter, before it becomes part of the public domain, through no fault
of THERAPHARMA, it will not, either directly or indirectly, alone, or through, on behalf of, or
in conjunction with any other person or entity, make use of any information contained
therein, particularly the product covered by its claims and the equivalents thereof, in any
manner whatsoever."
We find your proposed insertion odd. What may be confidential, and which we agree you
have every right to protect by way of the Confidentiality Agreement, are the Specifications
and Claims in the patent application, not the product per se. The product has been in the
market for years. Hence, how can it be confidential? Or is the ambiguity intended to create a
legal handle because you have no cause of action against us should we launch our own
version of the losartan product?

....

Finally, the questions we posed in our previous letters are plain and simple - Is the
Philippine Patent Application No. 35526 still pending before the IPO, i.e., it has neither
been withdrawn by your licensor nor denied registration by the IPO for any reason
whatsoever? When did your licensor file said application with the IPO? These
questions are easy to answer, unless there is an intention to mislead. You are also

aware that the IPO is the only government agency that can grant letters patent. This is why
we find disturbing your statement that the pendency of the patent application before the IPO
is "not relevant". Hence, unless we receive unequivocal answers to the questions above, we
regret that we cannot agree to execute the Confidentiality Agreement; otherwise, we may be
acknowledging by contract a right that you do not have, and never will have, by
law.   (Emphasis and underscoring in the original)
118

The threat of legal action against respondent Therapharma, Inc. was real and imminent. If
respondent Therapharma, Inc. waited until petitioner was granted a patent application so it
could file a petition for compulsory licensing and petition for cancellation of patent under
Section 240  and Section 247   of the 1962 Revised Rules of Practice,   its continued
119 120 121

marketing of Lifezar would be considered as an infringement of petitioner's patent.

Even assuming that the Intellectual Property Office granted the revival of Philippine Patent
Application No. 35526 back in 2000, petitioner's claim of absolute confidentiality in patent
proceedings is inaccurate.

In the 1962 Revised Rules of Practice, the Bureau of Patents, Trademarks, and Technology
Transfer previously required secrecy in pending patent applications. Section 13 states:

13. Pending applications are preserved in secrecy.-No information will be given to anyone

respecting the filing by any particular person of any application for a patent, the pendency of
any particular case before the Office, or the subject matter of any particular application,
unless the same is authorized by the applicant in writing, and unless it shall be necessary, in
the opinion of the Director of Patents for the proper conduct of business before the Office.

The Intellectual Property Code, however, changed numerous aspects of the old patent law.
The Intellectual Property Code was enacted not only to amend certain provisions of existing
laws on trademark, patent, and copyright, but also to honor the country's commitments under
the World Trade Organization - Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS Agreement), a treaty that entered force in the Philippines on January 1,
1995. 122

The mandatory disclosure requirement in the TRIPS Agreement  precipitated the shift from
123

a first-to-invent system to a first-to-file system. The first-to-file system required citizens of

foreign countries to register their patents in the Philippines before they can sue for
infringement.  124
Lawmakers, however, expressed their concern over the extension of the period of protection
for registered patents.   Under Section 21   of Republic Act No. 165, a patent had a term of
125 126

17 years. The Intellectual Property Code extended the period to 20 years.  127

During the interpellations before the House of Representatives, then Representative Neptali
Gonzales II (Gonzales) explained that under the Intellectual Property Code, the period of
protection would have been shortened because of the publication requirement:

MR. TANADA. Under the proposed measure, Your Honor, what is the period of protection
that is given to the holder of the patent registered?

MR. GONZALES. Seventeen years from grant of patent, Mr. Speaker. Unlike before ...

MR. TANADA. Under the present law, Mr. Speaker.

MR. GONZALES. I mean 17 years from filing, Mr. Speaker, unlike before which is 20 years
from grant. Okay.

I am sorry, Mr. Speaker. Seventeen years from filing under the existing law, 20 years from
grant under the proposed measure. It would appear, Mr. Speaker, that the proposed
measure seeks to extend the grant of the patent.

MR. TA.NADA. But you have made the period of protection longer, Mr. Speaker.

MR. GONZALES. On the contrary, Mr. Speaker, when a similar question was previously
propounded before, actually Mr. Speaker, it may decrease in fact the period of protection,
Mr. Speaker. Because unlike before 17 years from grant, Mr. Speaker, now 20 years from
application or from filing but actually, Mr. Speaker, it normally takes three to four years
before a patent is actually granted even under the proposed measure. Because as you can
see[,] publication in the BPTTT Gazette would even taken place after 18 months from filing.
In other words, the procedure itself is such a manner that normally takes a period of about
three years to finally grant the patent. So even if 20 years is given from the time of filing
actually in essence it will be the same, Mr. Speaker, because under the existing law 17 years
from grant. But even under our existing law from the time that a patent application is filed it
also takes about three to four years, Mr. Speaker, to grant the same.

Now, why from filing, Mr. Speaker? Because the patent holder applicant is now required to
publish in a manner easily understood by a person trained or with the same skill as that of a
patent holder. And from that time this is published, this process covered by the patent is
already made available. In fact, from the time that it is published, any interested person may
even examine and go over the records as filed with the BPTTT and, therefore, this new
technology or new invention is now made available to persons equipped or possessed with
the same skills as that of the patent holder. And that is the reason why the patent is - the
time of the patent is now tacked from the time it is filed because as a compromise it is now
mandatory to publish the said patent together with its description - the description of the
process and even would, at times demand the deposit of sample of the industrial design, Mr.
Speaker. 128

Gonzales further clarified that the publication requirements of the Intellectual Property Code
would necessarily shorten the period for confidentiality of patent applications:
MR. MONFORT. Now, another question is, (another is) you know, the time from the filing of
the date up to publication which is the period of pendency or confidentiality, may I know how
many years will it take, that confidentiality period, variability.

MR. GONZALES. Eighteen months, Mr. Speaker.

MR. MONFORT. How many?

MR. GONZALES. Eighteen months.

MR. MONFORT. I do not think it is 18 months.

MR. GONZALES. It is provided for in the law, Mr. Speaker, because prior to the publication,
naturally, the records become confidential because the essence of a patent, trademark, or
copyright is to give the author or the inventor exclusive right to work on his own invention.
And that is his invention, and naturally, it is but right that he should have the exclusive right
over his invention.

On the other hand, the law requires that after 18 months, it should now be published. When
it is now published, naturally, it ceases to be confidential in character because it is now ready
for examination. It is now ready for possible copying of any interested person because the
application, as we have repeatedly said on the floor, would require the filing of a description
of the invention that can be carried out by a Eerson similarly trained in the arts and sciences
as that of the patent holder.129

Thus, the absolute secrecy required by the 1962 Revised Rules of Practice would not be
applicable to a patent application before the Intellectual Property Office. Section 13 of the
1962 Revised Rules of Practice does not appear in the Intellectual Property Code,   in the
130

Rules and Regulations on Inventions,   or in the Revised Implementing Rules and
131

Regulations for Patents, Utility Models and Industrial Design.   The Intellectual Property
132

Code now states that all patent applications must be published in the Intellectual Property
Office Gazette and that any interested party may inspect all documents submitted to the
Intellectual Property Office. The patent application is only confidential before its publication.
Sections 44 and 45 of the Intellectual Property Code provide:

SECTION 44. Publication of Patent Application. -

44.1. The patent application shall be published in the IPO Gazette together with a search
document established by or on behalf of the Office citing any documents that reflect prior art,
after the expiration of eighteen (18) months from the filing date or priority date.

44.2. After publication of a patent application, any interested party may inspect the
application documents filed with the Office.

44.3. The Director General, subject to the approval of the Secretary of Trade and Industry,
may prohibit or restrict the publication of an application, if in his opinion, to do so would be
prejudicial to the national security and interests of the Republic of the Philippines. (n)

SECTION 45. Confidentiality Before Publication. -A patent application, which has not yet
been published, and all related documents, shall not be made available for inspection
without the consent of the applicant.
It was inaccurate, therefore, for petitioner to argue that secrecy in patent applications
prevents any intervention from interested parties. The confidentiality in patent applications
under the Intellectual Property Code is not absolute since a party may already intervene after
the publication of application.

IV

An abandoned patent application may only be revived within four (4) months from the date of
abandonment. No extension of this period is provided by the 1962 Revised Rules of
Practice. Section 113 states:

113. Revival of abandoned application.-An application abandoned for failure to prosecute

may be revived as a pending application if it is shown to the satisfaction of the Director that
the delay was unavoidable. An abandoned application may be revived as a pending
application within four months from the date of abandonment upon good cause shown and
upon the payment of the required fee of ₱25. An application not revived within the specified
period shall be deemed forfeited.

Petitioner argues that it was not negligent in the prosecution of its patent application  since it
133

was Atty. Mapili or his heirs who failed to inform it of crucial developments with regard to its
patent application.   It argues that as a client in a foreign country, it does not have
134

immediate supervision over its local counsel so it should not be bound by its counsel's
negligence.   In any case, it complied with all the requirements for the revival of an
135

abandoned application under Rule 113 of the 1962 Revised Rules of Practice.  136

Respondents, on the other hand, argue that petitioner was inexcusably and grossly negligent
in the prosecution of its patent application since it allowed eight (8) years to pass before
asking for a status update on its application.   Respondent Intellectual Property Office
137

argues that petitioner's inaction for eight (8) years constitutes actual abandonment.   It also
138

points out that from the time petitioner submitted its new Special Power of Attorney on
September 29, 1996, it took them another four (4) years to request a status update on its
application. 139

Under Chapter VII, Section 1 ll(a) of the 1962 Revised Rules of Practice, a patent application
is deemed abandoned if the applicant fails to prosecute the application within four months
from the date of the mailing of J the notice of the last action by the Bureau of Patents,
Trademarks, and Technology Transfer, and not from applicant's actual notice. Section 11 l(a)

states:

Chapter VII

TIME FOR RESPONSE BY APPLICANT; ABANDONMENT OF APPLICATION

111. Abandonment for failure to respond within the time limit.-

(a) If an applicant fails to prosecute his application within four months after the date when the
last official notice of action by the Office was mailed to him, or within such time as may be
fixed (rule 112), the application will become abandoned.
According to the records of the Bureau of Patents, Trademarks, and Technology Transfer
Chemical Examining Division, petitioner filed Philippine Patent Application No. 35526 on July
10, 1987. It was assigned to an examiner on June 7, 1988. An Office Action was mailed to
petitioner's agent, Atty. Mapili, on July 19, 1988. Because petitioner failed to respond within
the allowable period, the application was deemed abandoned on September 20,
1988.  Under Section 113, petitioner had until January 20, 1989 to file for a revival of the
140

patent application. Its Petition for Revival, however, was filed on May 30, 2002,   13 years
141

after the date of abandonment.

Section 113 has since been superseded by Section 133.4 of the Intellectual Property Code,
Rule 930 of the Rules and Regulations on Inventions, and Rule 929 of the Revised
Implementing Rules and Regulations for Patents, Utility Models and Industrial Design. The
period of four (4) months from the date of abandonment, however, remains unchanged. The
Intellectual Property Code even provides for a shorter period of three (3) months within
which to file for revival:

SECTION 133. Examination and Publication. –

....

133.4. An abandoned application may be revived as a pending application within three (3)
months from the date of abandonment, upon good cause shown and the payment of the
required fee.

Rule 930 of the Rules and Regulations on Inventions provides:

Rule 930. Revival of application. - An application deemed withdrawn for failure to prosecute
may be revived as a pending application within a

period of four (4) months from the mailing date of the notice of withdrawal if it is shown to the
satisfaction of the Director that the failure was due to fraud, accident, mistake or excusable
negligence.

A petition to revive an application deemed withdrawn must be accompanied by (1) a showing

of the cause of the failure to prosecute, (2) a complete proposed response, and (3) the
required fee.

An application not revived in accordance with this rule shall be deemed forfeited.

Rule 929 of the Revised Implementing Rules and Regulations for Patents, Utility Models and
Industrial Design provides:

Rule 929. Revival of Application. - An application deemed withdrawn for failure to prosecute

may be revived as a pending application within a period of four (4) months from the mailing
date of the notice of withdrawal if it is shown to the satisfaction of the Director that the failure
was due to fraud, accident, mistake, or excusable negligence. A petition to revive an
application deemed withdrawn shall be accompanied by:

(a) A showing of a justifiable reason for the failure to prosecute;

(b) A complete proposed response; and

(c) Full payment of the required fee.

No revival shall be granted to an application that has been previously revived with cost.

An application not revived in accordance with this Rule shall be deemed forfeited.

Even if the delay was unavoidable, or the failure to prosecute was due to fraud, accident,
mistake, or excusable negligence, or the Petition was accompanied by a complete proposed
response, or all fees were paid, the Petition would still be denied since these regulations only
provide a four (4 )- month period within which to file for the revival of the application. The
rules do not provide any exception that could extend this four (4)-month period to 13 years.

Petitioner’s patent application, therefore, should not be revived since it was filed beyond the
allowable period.

Even assuming that the four (4)-month period could be extended, petitioner was
inexcussably negligent in the prosecution of its patent application.

Negligence is inexcusable if its commission could have been avoided through ordinary
diligence and prudence.   It is also settled that negligence of counsel binds the client as this
142

"ensures against the resulting uncertainty and tentativeness of proceedings if clients were
allowed to merely disown.   their counsels' conduct."
143

Petitioner's resident agent, Atty. Mapili, was undoubtedly negligent in failing to respond to the
Office Action sent by the Bureau of Patents, Trademarks, and Technology Transfer on June
19, 1988. Because of his negligence, petitioner's patent application was declared
abandoned. He was again negligent when he failed to revive the abandoned application
within four (4) months from the date of abandonment.

Petitioner tries to disown Atty. Mapili 's conduct by arguing that it was not informed of the
abandonment of its patent application or of Atty. Mapili's death. By its own evidence,
however, petitioner requested a status update from Atty. Mapili only on July 18, 1995, eight
(8) years after the filing of its application.   It alleged that it only found out about Atty. Mapili
144

's death sometime in March 1996, as a result of its senior patent attorney's visit to the
Philippines.   Although it was in petitioner's discretion as a foreign client to put its complete
145

trust and confidence on its local resident agent, there was a correlative duty on its part to be
diligent in keeping itself updated on the progress of its patent applications. Its failure to be
informed of the abandonment of its patent application was caused by its own lack of
prudence.

In Bernardo v. Court of Appeals,   "[n]o prudent party will leave the fate of his case entirely
146

to his lawyer .... It is the duty of a party-litigant to be in contact with his counsel from time to
time in order to be informed of the progress of his case."  147

Even if Atty. Mapili's death prevented petitioner from submitting a petition for revival on time,
it was clearly negligent when it subsequently failed to immediately apprise itself of the status
of its patent application.
Upon learning of Atty. Mapili’s death, petitioner issued a Power of Attorney and Appointment
of Resident Agent in favor of Bito, Lozada, Ortega & Castillo on March 25, 1996.   Despite
148

the immediate action in the substitution of its resident agent, it only requested a status
update of Philippine Patent Application No. 35526 from the Intellectual Property Office on
December 14, 2000,   or four (4) years after it learned of Atty. Mapili' s death.
149

Petitioner attempts to explain that it took them four (4) years to request a status update
because the Bureau of Patents, Trademarks, and Technology Transfer failed to take any
action when it submitted its Power of Attorney and Appointment of Resident Agent in favor of
Bito, Lozada, Ortega & Castillo.  The Power of Attorney, however, shows that it was only to
150

inform the Bureau that all notices relating to its pending patent applications should be sent to
it. Philippine Patent Application No. 35526 was declared abandoned on September 20, 1988.
As far as the Bureau was concerned, it was a forfeited application that had already been
archived. It was not the Bureau's duty to resurrect previous notices of forfeited and
abandoned applications to be sent to new resident agents unless a specific status update
was requested. Considering that petitioner only requested a status update on December 14,
2000, it was only then that the Intellectual Property Office would start sending notices to it.

Contrary to the posturing of petitioner, Schuartz is applicable.

In Schuartz, several foreign inventors seeking to file patent applications in the Philippines
hired the law firm Siguion Reyna, Montecillo and Ongsiako to process their
applications.   The Bureau of Patents, Trademarks, and Technology Transfer mailed the law
151

firm several notices of abandonment on its patent applications from June 1987 to September
1987. The law firm only found out about this in December 1987, after it dismissed two (2) of
its employees in charge of handling correspondences from the Bureau. 1  The law firm filed
52

petitions for revival of its patent applications from March 1988, all of which were denied by
the Director of the Bureau of Patents for being filed out of time.   An appeal was
153

subsequently filed before the Court of Appeals but was dismissed for being filed beyond the
reglementary period.  154

This Court found that although the Court of Appeals may have erred in counting the period
for appeal, it could not grant the Petition. This Court stated:

[P]etitioners lost sight of the fact that the petition could not be granted because of laches.
Prior to the filing of the petition for revival of the patent application with the Bureau of
Patents, an unreasonable period of time had lapsed due to the negligence of petitioners'
counsel. By such inaction, petitioners were deemed to have forfeited their right to revive their
applications for patent.

Facts show that the patent attorneys appointed to follow up the applications for patent
registration had been negligent in complying with the rules of practice prescribed by the
Bureau of Patents.  The firm had been notified about the abandonment as early as June
1âwphi1

1987, but it was only after December 7, 1987, when their employees Bangkas and Rosas
had been dismissed, that they came to know about it. This clearly showed that petitioners'
counsel had been remiss in the handling of their clients' applications.

"A lawyer's fidelity to the cause of his client requires him to be ever mindful of the
responsibilities that should be expected of him. A lawyer shall not neglect a legal matter
entrusted to him." In the instant case, petitioners' patent attorneys not only failed to take
notice of the notices of abandonment, but they failed to revive the application within the four-
month period, as provided in the rules of practice in patent cases. These applications are
deemed forfeited upon the lapse of such period.   (Emphasis supplied)
155

Petitioner attempts to distinguish itself from Schuartz by arguing that the petitioners in
Schuartz had actual notice of abandonment while petitioner here was only able to have
actual notice when it received Paper No. 2.

The four (4 )-month period in Section 111  of the 1962 Revised Rules of Practice, however,
156

is not counted from actual notice of abandonment but from mailing of the notice. Since it
appears from the Intellectual Property Office's records that a notice of abandonment was
mailed to petitioner's resident agent on July 19, 1988,  the time for taking action is counted
157

from this period. Petitioner's patent application cannot be revived simply because the period
for revival has already lapsed and no extension of this period is provided for by the 1962
Revised Rules of Practice.

VI

The right of priority given to a patent applicant is only relevant when there are two or more
conflicting patent applications on the same invention. Because a right of priority does not
automatically grant letters patent to an applicant, possession of a right of priority does not
confer any property rights on the applicant in the absence of an actual patent.

Petitioner argues that its patent application was filed on July 10, 1987, within 12 months from
the prior filing of a U.S. patent application on July 11, 1986.  It argues that it is protected
158

from becoming part of the public domain because of convention priority under the Paris
Convention for the Protection of Industrial Property and Section 9 of Republic Act No. 165.  159

Respondent Therapharma, Inc., on the other hand, argues that a mere patent application
does not vest any right in the applicant before the issuance of the patent.  It argues that the
160

"priority date" argued by petitioner is only relevant in determining who has a better right to
the patent among the other applicants who subsequently apply for the same invention.  161

Under Section 31 of the Intellectual Property Code, a right of priority is given to any patent
applicant who has previously applied for a patent in a country that grants the same privilege
to Filipinos. Section 31 states:

SECTION 31. Right of Priority. - An application for patent filed by any person who has
previously applied for the same invention in another country which by treaty, convention, or
law affords similar privileges to Filipino citizens, shall be considered as filed as of the date of
filing the foreign application: Provided, That:

a. the local application expressly claims priority;

b. it is filed within twelve (12) months from the date the earliest foreign application was filed;
and

c. a certified copy of the foreign application together with an English translation is filed within
six (6) months from the date of filing in the Philippines.
A patent applicant with the right of priority is given preference in the grant of a patent when
there are two or more applicants for the same invention. Section 29 of the Intellectual
Property Code provides:

SECTION 29. First to File Rule. - If two (2) or more persons have made the invention
separately and independently of each other, the right to the patent shall belong to the person
who filed an application for such invention, or where two or more applications are filed for the
same invention, to the applicant who has the earliest filing date or, the earliest priority date.

Since both the United States  and the Philippines  are signatories to the Paris Convention
162 163

for the Protection of Industrial Property, an applicant who has filed a patent application in the
United States may have a right of priority over the same invention in a patent application in
the Philippines.  However, this right of priority does not immediately entitle a patent
164

applicant the grant of a patent. A right of priority is not equivalent to a patent. Otherwise, a
patent holder of any member-state of the Paris Convention need not apply for patents in
other countries where it wishes to exercise its patent.

It was, therefore, inaccurate for petitioner to argue that its prior patent application in the
United States removed the invention from the public domain in the Philippines. This
argument is only relevant if respondent Therapharma, Inc. had a conflicting patent
application with the Intellectual Property Office. A right of priority has no bearing in a case for
revival of an abandoned patent application.

VII

The grant of a patent is to provide protection to any inventor from any patent
infringement.   Once an invention is disclosed to the public, only the patent holder has the
165

exclusive right to manufacture, utilize, and market the invention.  In Creser Precision
166

Systems v. Court of Appeals: 167

Under American jurisprudence, an inventor has no common-law right to a monopoly of his

invention. He has the right to make, use and vend his own invention, but if he voluntarily
discloses it, such as by offering it for sale, the world is free to copy and use it with impunity.
A patent, however, gives the inventor the right to exclude all others. As a patentee, he has
the exclusive right of making, using or selling the invention.  168

Under the Intellectual Property Code, a patent holder has the right to "to restrain, prohibit
and prevent"   any unauthorized person or entity from manufacturing, selling, or importing
169

any product derived from the patent. However, after a patent is granted and published in the
Intellectual Property Office Gazette,   any interested third party "may inspect the complete
170

description, claims, and drawings of the patent."  171

The grant of a patent provides protection to the patent holder from the indiscriminate use of
the invention. However, its mandatory publication also has the correlative effect of bringing
new ideas into the public consciousness. After the publication of the patent, any person may
examine the invention and develop it into something further than what the original patent
holder may have envisioned. After the lapse of 20 years,   the invention becomes part of the
172

public domain and is free for the public to use. In Pearl and Dean v. Shoemart, Inc.:  173

To be able to effectively and legally preclude others from copying and profiting from the
invention, a patent is a primordial requirement. No patent, no protection. The ultimate goal of
a patent system is to bring new designs and technologies into the public domain through
disclosure. Ideas, once disclosed to the public without the protection of a valid patent, are
subject to appropriation without significant restraint.

On one side of the coin is the public which will benefit from new ideas; on the other are the
inventors who must be protected. As held in Bauer & Cie vs. O'Donnell, "The act secured to
the inventor the exclusive right to make use, and vend the thing patented, and consequently
to prevent others from exercising like privileges without the consent of the patentee. It was
passed for the purpose of encouraging useful invention and promoting new and useful
inventions by the protection and stimulation new and useful inventions by the protection and
stimulation given to inventive genius, and was intended to secure to the public, after the
lapse of the exclusive privileges granted the benefit of such inventions and improvements."

The law attempts to strike an ideal balance between the interests:

"(The p)atent system thus embodies a carefully varafted bargain for encouraging the creation
and disclosure of new useful and non-obvious advances in technology and design, in return
for the exclusive right to practice the invention for a number of years. The inventor may keep
his invention secret and reap its fruits indefinitely. In consideration of its disclosure and the
consequent benefit to the community, the patent is granted. An exclusive enjoyment is
guaranteed him for 17 years, but upon the expiration of that period, the knowledge of the
invention inures to the people, who are thus enabled to practice it and profit by its use."

The patent law has a three-fold purpose: "first, patent law seeks to foster and reward
invention; second, it promotes disclosures of inventions to stimulate further innovation and to
permit the public to practice the invention once the patent expires; third, the stringent
requirements for patent protection. seek to ensure that ideas in the public domain remain
there for the free use of the public."

It is only after an exhaustive examination by the patent office that a patent is issued. Such an
in-depth investigation is required because "in rewarding a useful invention, the rights and
welfare of the community must be fairly dealt with and effectively guarded. To that end, the
prerequisites to obtaining a patent are strictly observed and when a patent is issued, the
limitations on its exercise are equally strictly enforced. To begin with, a genuine invention or
discovery must be demonstrated lest in the constant demand for new appliances, the heavy
hand of tribute be laid on each slight technological advance in art."  (Emphasis supplied)
174

In addition, a patent holder of inventions relating to food or medicine does not enjoy absolute
monopoly over the patent. Both Republic Act No. 165 and the Intellectual Property Code
provide for compulsory licensing. Compulsory licensing is defined in the Intellectual Property
Code as the "grant a license to exploit a patented invention, even without the agreement of
the patent owner." 175

Under Republic Act No. 165, a compulsory license may be granted to any applicant three (3)
years after the grant of a patent if the invention relates to food or medicine necessary for
public health or safety.   In Smith Kline & French Laboratories, Ltd. vs. Court of Appeals: 
176 177

Section 34 of R.A. No. 165, even if the Act was enacted prior to the Philippines' adhesion to
the [Paris] Convention, fits well within the aforequoted provisions of Article 5 of the Paris
Convention. In the explanatory note of Bill No. 1156 which eventually became R.A. No. 165,
the legislative intent in the grant of a compulsory license was not only to afford others an
opportunity to provide the public with the quantity of the patented product, but also to prevent
the growth of monopolies. Certainly, the growth of monopolies was among the abuses which
 Section A, Article 5 of the Convention foresaw, and which our Congress likewise wished to
prevent in enacting R.A. No. 165.  178

The patent holder’s proprietary right over the patent only lasts for three (3) years from the
grant of the patent, after which any person may be allowed to manufacture, use or sell the
invention subject to the payment of royalties:

The right to exclude others from the manufacturing, using or vending an invention relating to
food or medicine should be conditioned to allowing any person to manufacture, use or vend
the same after a period of three years from the date of the grant of the letters patent. After
all, the patentee is not entirely deprived of any proprietary right. In fact, he has been given
the period of three years of complete monopoly over the patent. Compulsory licensing of a
patent on food or medicine without regard to the other conditions imposed in Section 34 is
not an undue deprivation of proprietary interests over a patent right because the law sees to
it that even after three years of complete monopoly something is awarded to the inventor in
the form of a bilateral and workable licensing agreement and a reasonable royalty to be
agreed upon by the parties and in default of such agreement, the Director of Patent may fix
the terms and conditions of the license. 179

A patent is a monopoly granted only for specific purposes and objectives. Thus, its
procedures must be complied with to attain its social objective. Any request for leniency in its
procedures should be taken in this context. Petitioner, however, has failed to convince this
court that the revival of its patent application would have a significant impact on the
pharmaceutical industry.

Hypertension, or high blood pressure, is considered a "major risk factor for cardiovascular
disease"   such as "heart disease, stroke, kidney failure and blindness."   In a study
180 181

conducted by the World Health Organization, 25% of adults aged 21 years and older in the
Philippines suffer from high blood pressure.   According to the Department of Health, heart
182

disease remains the leading cause of mortality in the Philippines.   Angiotensin II Receptor
183

Blocking Imidazole or "losartan" is one of the medications used for the treatment
ofhypertension.  184

In a study conducted by the Philippine Institute for Development Studies, "affordability of

drugs remains a serious problem"   in the Philippines. It found that because of the cost of
185

drugs, accessibility to drugs become prohibitive for the lowest-earning households and are
"even more prohibitive for the u:nemployed and indigent."   Several measures have been
186

enacted by the government to address the high costs of medicine, among them, parallel drug
importation  and the passage of Republic Act No. 9502, otherwise known as the Universally
187

Accessible Cheaper and Quality Medicines Act of 2008.   Figures submitted by respondent
188

Therapharma, Inc., however, also show that the presence of competition in the local
pharmaceutical market may ensure the public access to cheaper medicines.

According to respondent Therapharma, Inc., the retail price of petitioner's losartan product,
Cozaar, decreased within one (1) month of respondent Therapharma, Inc.' s entry into the
market: 189

BRAND TRADER RETAIL PRICE RETAIL PRICE Within one

As of Lifezar's first entry into month from Lifezar's entry or
the market on June 4, 2004 by July 4, 2004
LIFEZAR Therapharma 50 mg - P20.20 50 mg - P20.20

COZAAR Merck 50 mg - P39.50 50 mg - P39.50

100 mg - P55.00 100 -P44.00

Respondent Therapharma, Inc. also presented figures showing that there was a 44%
increase in the number of losartan units sold within five (5) months of its entry into the
market.   More Filipinos are able to purchase losartan products when there are two (2)
190

different players providing competitive prices in the market.

Lifezar, and another of respondent Therapharma, Inc.'s products, Combizar, have also been
recommended as cheaper alternative losartan medication, since they were priced "50
percent less than foreign brands."  191

Public interest will be prejudiced if, despite petitioner's inexcusable negligence, its Petition
for Revival is granted.  Even without a pending patent application and the absence of any
1awp++i1

exception to extend the period for revival, petitioner was already threatening to pursue legal
action against respondent Therapharma, Inc. if it continued to develop and market its
losartan product, Lifezar.   Once petitioner is granted a patent for its losartan products,
192

Cozaar and Hyzaar, the loss of competition in the market for losartan products may result in
higher prices. For the protection of public interest, Philippine Patent Application No. 35526
should be considered a forfeited patent application.

WHEREFORE, the Petition is DENIED. The Resolution dated January 31, 2006 and the
Amended Decision dated August 30, 2006 of the Court of Appeals are AFFIRMED.

SO ORDERED.

G.R. No. 89557 August 20, 1990

PHILIPPINE NATIONAL CONSTRUCTION CORPORATION (PNCC), petitioner,

vs.
REPUBLIC OF THE PHILIPPINES. HONORABLE COURT OF APPEALS, FEDERATION
OF PARANAQUE HOMEOWNERS' ASSOCIATION, CEFERINO P. PADUA, AMELITO
MUTUC AND FERNANDO A. GAITE, respondents.

The Governmert Corporate Counsel for petitioner.

Ceferino Padua for private respondents.

GANCAYCO, J.:

The center of controversy in this case is the toll fees at the North and South Luzon Expressways.

In May, 1987,. public respondent Republic of the Philippines filed an action

for quo warranto in the Regional Trial Court of Makati with prayer for the issuance of a writ of
preliminary injunction and restraining order docketed as Civil Case No. 16699 against the
petitioner Philippine National Construction Corporation (PNCC). The public respondent filed
the action in order to exclude from the franchise of PNCC under Presidential Decree No.
1113 the following portions of the expressways: (a) Balintawak, Caloocan City to Tabang,
Bulacan in the North; and (b) Villamor Air Base, Pasay City to Alabang, Rizal in the South,
on the ground that PNCC had long fully recovered its investments and expenses in their
construction.

In an order dated May 28, 1987, the trial court denied the application for the issuance of a
writ of preliminary prohibitory injunction, the dispositive part of which reads as follows:

WHEREFORE, the application for the issuance of a writ of preliminary

prohibitory injunction is hereby denied, and the restraining order issued on
May 8, 1987 and all orders subsequently issued supplementary thereto or in
implementation thereof are hereby set aside.

However, to assure that the affected toll payers would be reimbursed in case
judgment is subsequently rendered in accordance with the reliefs prayed for
in the Petition filed in this case, the respondent PNCC and its authorized
officers are hereby directed to cause all toll fees collections received from the
use of the Villamor Air Base, Pasay City, to Alabang, Muntinlupa, in the
South, and Balintawak, Caloocan City to Tabang, Bulacan, in the North,
portions of the Expressways, to be deposited in a trust fund with the
Philippine National Bank, effective May 29, 1987 and until further orders, and
to submit to the Court a monthly statement of the collections made and the
amounts deposited.  1

A motion for reconsideration filed by the public respondent of said order was denied on July
29, 1987.

Not satisfied therewith the public respondent filed a petition for certiorari, prohibition and
injunction with prayer for preliminary prohibitory injunction and/or temporary restraining order
in the Court of Appeals, seeking to declare null and void the said orders dated May 28, 1987
and July 29, 1987 in Civil Case No. 16699.

The petitions for the intervention of the Federation of Paranaque Homeowners' Association,
Ceferino P. Padua, Amelito Mutuc, and Fernando A. Gaite were allowed by the appellate
court.

In due course a decision was rendered by the Court of Appeals on August 4, 1989, the
dispositive part of which reads as follows:

WHEREFORE, the writ is granted. The Expressways from Balintawak to

Tabang in the North and from Villamor Air Base to Alabang, in the South
shall be excluded from the franchise of PNCC and the PNCC be permanently
enjoined to collect toll fees. The Bureau of Public Highways is hereby
ordered to take over the maintenance of the said portion. The questioned
orders of Judge Guerrero dated May 28, 1987 and July 29, 1987 are hereby
declared annulled.  2
Hence, the herein petition for certiorari and prohibition with application for the issuance of a
writ of preliminary injunction and/or temporary restraining order, wherein petitioner raised the
following grounds for the allowance of the petition:

GROUNDS FOR THE ALLOWANCE OF THE PETITION

(A) RESPONDENT HONORABLE COURT OF APPEALS GRAVELY

ABUSED ITS DISCRETION AND/OR EXCEEDED ITS JURISDICTION IN
GRANTING A FINAL RELIEF WHEN WHAT WAS PRAYED FOR WAS
MERELY A PROVISIONAL REMEDY;

(B) RESPONDENT HONORABLE COURT OF APPEALS GRAVELY

ABUSED ITS DISCRETION AND/OR EXCEEDED ITS JURISDICTION
WHEN IT DEPRIVED PETITIONER PNCC OF ITS CONSTITUTIONAL
RIGHT TO DUE PROCESS;

(C) RESPONDENT HONORABLE COURT OF APPEALS GRAVELY

ABUSED ITS DISCRETION AND/OR EXCEEDED ITS JURISDICTION
WHEN IT AMENDED THE FRANCHISE UNDER P.D. 1113 OF
PETITIONER PNCC BY EXCLUDING FROM SAID FRANCHISE THE
EXPRESSWAYS FROM BALINTAWAK TO TABANG IN THE NORTH AND
FROM VILLAMOR AIR BASE TO ALABANG IN THE SOUTH;

(D) RESPONDENT HONORABLE COURT OF APPEALS HAS NO

JURISDICTION OVER THE PETITION INSTITUTED BY THE SOLICITOR
GENERAL ON BEHALF OF THE GOVERNMENT; AND

(E) RESPONDENT HONORABLE COURT OF APPEALS GRAVELY

ABUSED ITS DISCRETION IN TAKING COGNIZANCE OF THE PETITION
WHICH FAILED TO COMPLY WITH THE REQUIREMENT OF THE RULES
OF COURT ON QUO WARRANTO.  3

As required by the Court, the public respondent and private respondents filed their
comments on the petition except private respondent Fernando A. Gaite who filed a motion to
dismiss the petition alleging there are still pending incidents in the appellate court.

On February 16, 1990 the parties filed a motion for judgment based on the compromise
agreement that reads as follows:

MOTION FOR JUDGMENT

BASED ON COMPROMISE
AGREEMENT

Petitioner Philippine National Construction Corporation (PNCC). public

respondent Republic of the Philippines, private respondent Federation of
Paranaque Homeowners Association, Ceferino P. Padua and Ex-
Ambassador Amelito R. Mutuc, duly assisted by their respective counsel, to
this Honorable Court most respectfully submit the following:

COMPROMISE AGREEMENT
1. This compromise agreement is hereby entered into and executed by the
aforementioned parties in settlement of the present case and the following
cases, to wit:

a. Civil Case No. 16699, Republic of the Philippines vs. Philippine National
Construction Corporation, et al., Regional Trial Court, Branch 137, Makati,
Metro Manila:

b. CA-G.R. SP No. 13235, Republic of the Philippines vs. Honorable Jesus F.

Guerrero, et al., Court of Appeals;

c. TRB Case No. 83-1, now O.P. Case No. 3465 of the Office of the
President.

so that this Honorable Court no less can terminate all these cases/
controversy which have been pending for more than ten (10) years.

2. The aforenamed parties in the above-cited cases have mutually agreed to

settle their differences, terminate the cases between them that are pending in
the different courts, and avoid future litigations by binding themselves to the
following conditions:

a. Effective April 11, 1990, PNCC shall operate the questioned segments of
the North Luzon Tollways (Balintawak to Tabang and the South Luzon
Tollways (Nichols to Alabang), under the following charges for Class "1"
vehicles the collections of which PNCC shall devote and utilize exclusively for
the maintenance and upkeep of said segments, to wit:

EXISTING MAIN- TOLL FEES TENANCE SEGMENT

(CLASS "1" FEES VEHICLE)

Nichols-Alabang P2.50 P1.50 Nichols-Sucat 2.00 1.00 Nichols-Bicutan 1.00

0.50

Balintawak-Tabang 5.00 3.50 Balintawak-Bocaue 3.50 2.50 Balintawak-

Meycauayan 2.00 1.50 Balintawak-Malinta 1.00 0.50

b. The construction of additional facilities, operation and maintenance of the

questioned portions of the North and South Expressways by the PNCC shall
be under the supervision, approval and control of the Department of Public
Works and Highways through the Toll Regulatory Board in coordination with
the PNCC.

c. Upon approval of the compromise agreement by the Court, PNCC shall be

allowed to withdraw/encash and to receive the proceeds of the special time
deposit with the Philippine National Bank, including the earnings and/or
interest thereon, as well as all moneys deposited by PNCC under escrow
pursuant to the May 28, 1987 Order of the Regional Trial Court Metro Manila,
provided that said funds shall be used exclusively for the installation of (i)
tollways lights equivalent to daytime lighting at the interchange and along the
center of the Nichols-Alabang and Balintawak Tabang expressways,
pursuant to internationally accepted expressways lighting standard and (ii)
emergency call boxes every two kilometers throughout the length of the
aforementioned segments at the average of one (1) callbox per two (2)
kilometers and that PNCC shall complete the installations of (i) and (ii) within
a non-extendible period of nine (9) months from approval by this Honorable
Court of this Agreement.

d. PNCC shall publish in a newspaper of general circulation a regular

quarterly accounting on how the deposited amount has been expended for
purposes set forth in paragraph 2 (c) hereof.

e. In the implementation of paragraph 2, (b) and (c) above, PNB Buendia

Branch shall release and/or pay the proceeds of the special time deposit with
the Philippine National Bank to PNCC through its incumbent Treasurer only.

f. All the aforenamed parties to the instant case agree to the dismissal with
prejudice of the present case and the cases enumerated in paragraph 1 of
this compromise agreement.

g. All aforenamed parties hereby waive and abandon any and all claims and
counterclaims which they may have against each other.

h. This agreement shall be binding not only on the aforenamed parties but
also on their respective assigns and successors-in-interest, including the
aforenamed intervenors private respondents.

i. Should PNCC fail to comply with any of its commitments under this
Compromise Agreement set forth in paragraph 2 (c) hereof, the Court of
Appeals Decision dated August 4, 1989 in CA G.R. SP No. 13235, entitled
"Republic of the Philippines versus Hon. Jesus Guerrero, RTC Br. 148,
Makati, Metro Manila, and Philippine National Construction Corporation
(PNCC) formerly CDCP; Federation of Paranaque Homeowners Associations
and Ceferino P. Padua, Intervenors; Amelito Mutuc, Intervenor; Fernando A.
Gaite, Intervenor" shall become immediately final and executory. This
sanction becomes without force and effect upon PNCC's compliance with
such commitments except its other commitments under this Agreement and
the maintenance of the questioned portions of the expressways which PNCC
shall continue pursuant to paragraph 2 (b) hereof.

j. The parties hereby undertake to discharge their commitments hereunder in

utmost good faith and diligence, and shall not do any act that would render
nugatory the terms and conditions of this agreement.

k. This compromise Agreement shall take effect upon approval thereof by this
Honorable Court.

WHEREFORE, it is respectfully prayed of this Honorable Court that this

Compromise Agreement be approved and a decision rendered based
thereon. Makati, Metro Manila, February 15,1990.
 REPUBLIC OF THE PHILIPPINES PHILIPPINE NATIONAL
Respondent CONSTRUCTION CORPORATION Petitioner
By: By:

(sgd) FRANCISCO I. CHAVEZ (sgd)RAMONCITO Z.ABAD Solicitor General

President

IBP # 289417 - 2-6-90

Attested by:

(sgd) MARIANO M. MARTINEZ (sgd) ARIEL F. AGUIRRE Assistant Solicitor

General Government Corporate
IBP # 200230 - 6-30-86 Counsel IBP # 251278-8-5-88

(sgd) ENRIQUE M. REYES (sgd) VIRGILIO C ABEJO Solicitor Deputy

Government Corporate IBP # 267128 3-2-89 Counsel 134 Amorsolo St.
Legaspi IBP # 249710 -3-22-88 Village, Makati M.M. Office of the
Government Corporate Counsel Government Corporate Counsel Centre
1203 A. Mabini Cor. Arquiza Street, Ermita, Manila

FEDERATION OF PARANAQUE HOMEOWNERS ASSOCIATION

Respondent

By:

(sgd) CEFERINO P. PADUA Counsel

(sgd) AMELITO MUTUC . Respondent & Counselin his behalf TOLL

REGULATORY BOARD

By:

(sgd) JOSE VALDECANAS Chairman.  4

On February 16, 1990, Atty. P.M. Castillo filed a petition for intervention alleging that his real,
actual, bona fide and unpaid contingent claim for attorney's fees is equivalent to 35% of the
judgment rendered on May 7, 1986 in Civil Case No. 43049 entitled "PCIB vs. TFC" et
al., that the said judgment was unilaterally settled out of court by his clients without his
knowledge, intervention and consent and without any provision for attorney's fees; that he is
the joint account nominee appointed by the Honorable Judge Jesus F. Guerrero in his order
dated August 14, 1987 over the daily collections from the contested portion of the North and
South Expressways which were directly involved in Civil Case No. 16699 entitled "Republic
of the Philippines vs. PNCC", and which were enjoined to be deposited in the trust fund to be
kept and maintained by the PNB, Paseo de Roxas Branch subject to certain terms and
conditions specified in said order of the court; that the daily collections under deposit with
said bank is in the amount of P60,355,290.06 as of June 21, 1989, while the unaccounted
collections of the contested portions of the North and South Expressways which are not
reflected in the trust funds is estimated to be P300 Million more or less; that the said missing
funds were allegedly spent by PNCC officials for bloated salaries, bonuses, car plans, travel
abroad and other questionable expenditures for construction and improvements of the
expressway; that the officials of the PNCC and PNB-Paseo de Roxas Branch fraudulently
pegged the interest rate of the trust funds at the rate of an ordinary savings bank deposit
which precipitated the intervenors to file a case for Anti-Graft and Corrupt Practices with the
Ombudsman-OMB Case No. 0-89-0733 entitled "Atty. P.M. Castillo vs. Edgardo Espiritu et
al. that the said officials of the PNCC and PNB avoided the accounting and the turn over of
the amount of P300M which they fraudulently misused and maliciously misappropriated by
not depositing the same with the trust funds with the PNB; that he exercised his right to a
retaining lien over the aforesaid funds of the PNCC with the PNB Paseo de Roxas Branch by
issuing said notice in accordance with Section 37 of Rule 138 of the Rules of Court; that his
intervention to take his unpaid contingent claim is sanctioned by the doctrine in the Quasha
Asperilla Ancheta Valmonte Pena & Marcos vs. Juan case;   that the compromise agreement
5

may frustrate criminal prosecution of certain officials of the PNCC and PNB, defeat the lawful
processes and orders of the court and the unpaid contingent claim of attorney's fees of
intervenor. While intervenor-claimant has no objection to the approval of the compromise
agreement, he asked that it should not be incompatible and derogatory to his notice of
retaining lien.

On March 1, 1990, an opposition to the motion for judgment based on the compromise
agreement was filed by respondent Gaite alleging that the said compromise agreement is
illegal and unconstitutional; and that the subject matter of the compromise agreement are
existing roads (highways) and trust funds; and that the parties in the compromise agreement
acted in bad faith in deliberately excluding him.

An opposition to the petition for intervention was filed by the petitioner on March 19, 1990 to
which a reply was filed by intervenor-claimant. A rejoinder was likewise filed by the petitioner
to the reply of the intervenor-claimant.

On March 5, 1990, the Court required the parties to comment on the petition for intervention
and the opposition to the motion for judgment based on the compromise agreement.

Private respondents filed a consolidated comment on the intervention asking that the latter
be denied, as well as a reply to the opposition to the motion for judgment based on the
compromise agreement.

On March 4, 1990, petitioner also filed its consolidated comment while respondent Republic
of the Philippines likewise filed its consolidated comment on June 15, 1990.

In turn intervenor-claimant filed his consolidated reply on June 27, 1990.

After a careful examination of the records of the case, the Court finds and so holds that the
petition for intervention filed by Atty. P.M. Castillo should be as it is hereby denied.

Section 2 (a), Rule 12 of the Rules of Court provides as follows:

SEC. 2. Intervention. — A person, may before or during a trial be permitted

by the court, in its discretion, to intervene in an action, if he has legal interest
in the matter in litigation, or in the success of either of the parties, or an
interest against both, or when he is so situated as to be adversely affected by
a distribution or other disposition of property in the custody of the court or of
an officer thereof.
 (a) Motion for intervention. A person desiring to intervene shall file a motion
for leave of court with notice upon all the parties to the action.

From the foregoing, it is clear that before a person may intervene in any proceeding, he
should first file a motion for leave of court with notice upon all the parties to the action. In this
case intervenor- claimant without so much as asking for the leave of court, immediately filed
the petition for intervention. He did not even pray for leave of court to file said petition.

No doubt as the intervention was unauthorized and without leave of court, the same should
be stricken from the records.

Moreover, the question of allowing an intervention is addressed to the sound discretion of

the court by considering whether or not the intervention will unduly delay or prejudice the
adjudication of the rights of the original parties and whether or not the intervenor's rights may
he frilly protected in a separate proceeding.  6

A compromise agreement had been duly executed by all the parties in this case. Intervenor-
claimant now proposes to unduly delay or prejudice the adjudication of the rights of the
original parties to this case by his intervention.

He claims to be entitled to attorney's fees out of the trust fund of the PNCC on deposit with
the PNB Paseo de Roxas Branch and head office. What the records show is that he is not
seeking to collect attorney's fees in this instance. What he is claiming are his fees as joint
account nominee appointed by Judge Guerrero in an order dated August 14,1987 over the
daily collections from the contested portions of the North and South Expressways which
were involved in Civil Case No. 16699 entitled "Republic of the Philippines vs. PNCC and
which collections were deposited as trust funds in the PNB-Paseo de Roxas branch. Thus he
cannot justify his claim for attorney's lien under Section 37, Rule 138 of the Rules of Court
which provides:

SEC. 37. Attorneys' liens. — An attorney shall have a lien upon the funds,
documents and papers of his client which have lawfully come into his
possession and may retain the same until his lawful fees and disbursements
have been paid, and may apply such funds to the satisfaction thereof. He
shall also have a lien to the same extent upon all judgments for the payment
of money, and executions issued in pursuance of such judgments, which he
has secured in a litigation of his client, from and after the time when he shall
have caused a statement of his claim of such lien to be entered upon the
records of the court rendering such judgment, or issuing such execution, and
shall have caused written notice thereof to be delivered to his client and to
the adverse party; and he shall have the same right and power over such
judgments and executions as his client would have to enforce his lien and
secure the payment of his just fees and disbursements.

He is not the counsel for any of the parties in this case. None of the toll collections came into
his possession by virtue of an attorney- client relationship.

Indeed, Atty. Castillo has no legal interest in this litigation or in the success of either of the
parties or an interest against or both and he is not so situated as to be adversely affected by
the compromise agreement.  Whatever award for attorney's fees he may have obtained
7

under Civil Case No. 43049 entitled "PCIB vs. TFC" et al." before Branch 160 of the
Regional Trial Court in Pasig has no bearing on this case which originated from Civil Case
No. 16699 of the Regional Trial Court in Makati.

Furthermore, the alleged claim for attorney's fees of intervenor-claimant is still pending
resolution in Civil Case No. 43049. And even before a decision on the matter can be had,
intervenor-claimant filed another case entitled "P.M. Castillo vs, Mabanta, et al." docketed as
Civil Case No. 56637 raffled to Branch 165, of the Regional Trial Court in Pasig, for the same
purpose. He also filed a complaint for alleged violation of the Anti-Graft and Corrupt
Practices Act before the Office of the Ombudsman against high officials of the PNCC and the
PNB. He served on the PNB a notice of retaining lien.

Clearly, the rights of intervenor-claimant, if any, are adequately protected in the aforestated
proceedings. His intervention in this case should, therefore, be denied.

Now to the opposition of respondent Gaite. Contrary to his claim that the said compromise
agreement amends, alters or modifies the franchise of the Construction and Development
Corporation of the Philippines (now PNCC) under Presidential Decree No. 1113 and that
only Congress has the power to do so, the Court finds that the said compromise agreement
merely limits the use of the maintenance fees to be collected from motorists using the
contested portions of the expressways and the trust funds deposited in the PNB pursuant to
the order of Judge Guerrero dated May 28, 1987 in Civil Case No. 16699.

Section 1, P.D. 1113, provides:

Section 1. — Any provision of law to the contrary not with standing there is
hereby granted to the Construction and Development Corporation of the
Philippines (CDCP), a corporation duly organized and registered under the
laws of the Philippines, hereinafter called the GRANTEE, for a period of thirty
(30) years from May 1, 1977 the right, privilege and authority to construct,
operate and maintain toll facilities covering the expressways from Balintawak
(Station 9 + 563) to Carmen, Rosales, Pangasinan and from Nichols, Pasay
City (Station 10 + 540) to Lucena, Quezon, hereinafter referred to collectively
as North Luzon Expressway and South Luzon Expressway, respectively.

The franchise herein granted shall include the right to collect toll fees at such
rates as may be fixed and/or authorized by the Toll Regulatory Board
hereinafter referred to as the Board created under Presidential Decree No.
1112 for the use of the expressways above-mentioned.

From the foregoing, PNCC is granted the following:

a) For a period of thirty (30) years from May 1, 1977, the right, privilege and
authority to construct, operate and maintain toll facilities covering the
expressways from Balintawak to Carmen, Resales, Pangasinan and from
Nichols, Pasay City to Lucena, Quezon; and

b) The right to collect toll fees for the use of the expressways
aforementioned.
A careful examination of the aforesaid compromise agreement shows that it does not in any
way alter, modify or amend, much less repeal the franchise of PNCC under P.D. No. 1113.
Its terms and conditions implement the rights of PNCC under the said decree.

Moreover, any doubts raised by private respondent Gaite have been settled under Section 3
of the said decree, viz:

Section 3. This franchise is granted subject to such conditions as may be

imposed by the Board in an appropriate contract to be executed for this
purpose, and with the understanding and upon the condition that it shall be
subject to antendant, alteration or repeal when public interest so requires.
(Emphasis supplied)

The further stipulation in the compromise agreement vesting in the DPWH the supervision,
approval and control of the construction of additional facilities, operation and maintenance of
the questioned segments of the expressways, which stipulation bears the approval of the
Ton Regulatory Board through Chairman Jose Valdecañas, is in full accord with P.D. No.
1113.

The claim of private respondent Gaite that the compromise agreement condones the PNCC
although it violated its franchise is belied by its terms and conditions. As a matter fact, the
compromise agreement imposed restrictions upon the PNCC.

Thus, it is stipulated

a. Effective April 1, 1990, PNCC shall operate the questioned segments of

the North Luzon Tollways (Balintawak to Tabang and the South Luzon
Tollways (Nichols to Alabang), under the following charges for Class "1"
vehicles, the collections of which PNCC shall devote and utilize exclusively
for the maintenance and upkeep of said segments, to wit:

SEGMENT EXISTING TOLL MAINTE FEES (CLASS NANCE "1" VEHICLE)

FEES

Nichols-Alabang P2.50 P1.50 Nichols-Sucat 2.00 1.00

Nichols-Bicutan 1.00 0.50

Balintawak-Tabang 5.00 3.50 Balintawak-Bocaue 3.50 2.50

Balintawak-Meycauayan 2.50 1.50 Balintawak-Malinta 1.00
0.50

b. The construction of additional facilities, operation and maintenance of the

questioned portions of the North and South Expressways by the PNCC shall
be under the supervision, approval and control of the Department of Public
Works and Highways through the Toll Regulatory Board in coordination with
the PNCC.

c. Upon approval of the compromise agreement by the court, PNCC shall be

allowed to withdraw/encash and to receive the proceeds of the special time
deposit with the Philippine National Bank, including the earnings and/or
interest thereon, as well as all moneys deposited by PNCC under escrow
 pursuant to the May 28, 1987 Order of the Regional Trial Court Metro Manila,
provided, that said funds shall be used exclusively for the installation of (i)
tollways lights equivalent to daytime lighting at the interchange and along the
center of the Nichols-Alabang and Balintawak-Tabang expressways,
pursuant to internationally accepted expressway lighting standard and

(ii) emergency call boxes every two kilometers throughout the

length of the aforementioned segments at the average of one
(1) callbox per two (2) kilometers and that PNCC shall
complete the installations of (i) and (ii) within a non-
extendible period of nine (9) months from approval by this
Honorable Court of this agreement.

xxx xxx xxx

i. Should PNCC fail to comply with any of its commitments under this
Compromise Agreement set forth in paragraph 2(c) hereof, the Court of
appeals Decision dated August 4, 1989 in CA G.R. SP No. 13235, entitled
"Republic of the Philippines versus Hon. Jesus Guerrero, RTC Br. 148,
Makati, Metro Manila, and Philippine National Construction Corporation
(PNCC) formerly CDCP, Federation of Paranaque Homeowners'
Associations and- Ceferino P. Padua, Intervenors; Amelito Mutuc, Intervenor,
Fernando A. Gaite, Intervenor" shall become immediately final and
executory. This sanction becomes without force and effect upon PNCC's
compliance with such commitments except its other commitments under this
Agreement and the maintenance of the questioned portions of the
expressways which PNCC shall continue pursuant to paragraph 2 (b) hereof.

xxx xxx xxx

j. The parties hereby undertake to discharge their commitments hereunder in

utmost good faith and diligence, and shall not do any act that would render
nugatory the terms and conditions of this agreement. (Emphasis supplied).

The PNCC is authorized to collect the maintenance fees in reduced amount. It shall no
longer exercise supervision and control of the construction of additional facilities, as well as
the operation of subject portion of the expressways which is transferred to the DPWH
through the Toll Regulatory Board, in coordination with the PNCC.

The maintenance fees to be collected from the motorists using the questioned portions of the
expressway does not require public hearings before the Toll Regulatory Board pursuant to
Section 3(d) of Presidential Decree No. 1112 creating the Toll Regulatory Board, to wit:

Sec. 3. Powers and Duties of the Board. The Board shall have in addition to
its general powers of administration the following powers and duties:

xxx xxx xxx

d. Issue, modify and promulgate from time to time the rates of toll that will be
charged the direct users of toll facilities and upon notice and hearing, to
approve or disapprove petitions for the increase thereof .Decisions of the
 Board on petitions for the increase of toll rate shall be appealable to the
Office of the President within ten (10) days from the promulgation thereof
Such appeal shall not suspend the imposition of the new rates, provided
however, that pending the resolution of the appeal, the petition for increased
rates in such case shall deposit in a trust fund such amounts as may be
necessary to reimburse toll payers affected in case of a reversal of the
decision. (Emphasis supplied)

A public hearing is mandatory only in cases of petitions for increases in toll rates the purpose
of which is to give users of the expressway who will be adversely affected an opportunity to
contest the validity of such an increase. Indeed, no affected toll payer shall be prejudiced
where the collectible rates were reduced as in this case.

As to the contention that the North and South Luzon expressways cannot be the subject of
the compromise agreement because they are properties of public dominion, suffice it to say
that the agreement does not cover the expressways but refers only to the collection of
maintenance fees thereon and the supervision, approval and control by the DPWH of the
constructed additional facilities on, and operation and maintenance of, the questioned
portions of the expressways.

The funds deposited in the PNB are held in escrow. It is impossible to Identify the affected
toll payers to whom reimbursement should be made. Thus, under the compromise
agreement, it will be used for — a) tollways lights equivalent to daylight lighting at the
interchange and along the center of the Nichols-Alabang and Balintawak-Tabang segments
of the expressways, pursuant to internationally accepted expressways light standards; (b)
emergency call boxes every two (2) kilometers throughout the length of the aforementioned
segments at the average of one (1) callbox per two (2) kilometers. Clearly then, the money in
escrow will be disposed of for the benefit of the users of the affected portions of the
expressways.

Finally, the claim of respondent Gaite that the parties to the compromise agreement acted in
bad faith in its execution inasmuch as he had no notice thereof is without basis. He attended
one of the numerous meetings scheduled by the parties and in one meeting he manifested
that he was against the compromise agreement. Henceforth, he did not attend the scheduled
meetings.

Indeed, in the meeting he attended, some of his suggestions were accepted by the lawyers
of the parties. He was given due notice and an opportunity to be heard. He has not shown
that the compromise agreement was prejudicial to his rights.

WHEREFORE, inasmuch as the compromise agreement of the parties dated February 15,
1990 is not contrary to law, morals, public order, good customs or public policy, the same is
hereby APPROVED and the parties are hereby enjoined to faithfully comply with the terms
and conditions of the same.

SO ORDERED.

June 21, 2017

G.R. No. 189100

OFFICE OF THE OMBUDSMAN, Petitioner
vs.
LETICIA BARBARA B. GUTIERREZ, Respondent

DECISION

VELASCO, JR., J.:

Nature of the Case

This treats of the Petition for Review on Certiorari filed by the Office of the Ombudsman that
seeks the reversal of the June 16, 2009 Decision   and July 23, 2009 Resolution of the Court
1

of Appeals (CA) in CA-G.R. SP No. 107551. The adverted rulings absolved respondent
Leticia Barbara B. Gutierrez (Gutierrez) from the charge of grave misconduct and denied
petitioner's motion for intervention and reconsideration of the setting aside of respondent's
dismissal from service.

The Facts

On October 25, 2002, the Bureau of Food and Drugs (BFAD), through its Bids and Awards
Committee (BAC) composed of chairperson Christina dela Cruz and members Ma. Theresa
Icabales, Rosemarie Juafio, Corazon Bartolome, and Ma. Florita Gabuna, issued an
Invitation to Bid for the procurement of a Liquid Crystal Display (LCD) Projector. The said
bidding was declared a failure because the price offered by the two (2) bidders, Advance
Solutions and Gakken Phils. (Gakken), were higher than the recommended price of the
Department of Budget and Management (DBM). Thus, on November 2, 2002, a second
round of bidding was conducted, which was participated in by Linkworth International, Inc.
(Linkworth). But again, the bidding was declared a failure because the price offered by
Linkworth exceeded the DBM's recommended amount.  2

Due to the failure of the biddings, the BF AD decided to enter into negotiated contracts by
way of canvas and based on the end-users' preference. Thereafter, Linkworth and Gakken
submitted their respective quotations and conducted product demonstrations before the
BAC, the BF AD Secretariat, and the end-users: the Supply Section and the Office of the
Deputy Director, National Drug Policy (NDP).   Upon conclusion of the demonstrations, the
3

Deputy Director of the NDP allegedly informed the BAC that it preferred the product offered
by Gakken. On January 15, 2003, a new BAC was formed, composed of Jesusa Joyce N.
Cinmay (Cinmay) as chairperson, and Leonida M. Castillo, Marle B. Koffa, Nemia T. Getes,
and Emilio L. Polig, Jr. as members.   Then, on July 16, 2003, the BFAD, through Gutierrez,
4

then Director of the BF AD, issued a Notice of Award to Linkworth for three (3) units of LCD
Projectors for the aggregate amount of P297 ,000, which notice the supplier received
through facsimile. Further, the notice required Linkworth to signify its conformity and to post
a performance bond equivalent to 5 of the total price. However, when the representative
from Linkworth tried to tender the required bond in the amount of ₱14,850 on July 25, 2003,
the agency refused to accept the same. Linkworth, thus, wrote to respondent asking for an
explanation. 5

Despite having acknowledged receiving the letter from Linkworth on July 31, 2003, no written
response was given by respondent. Gutierrez merely informed Linkworth that the agency will
investigate the matter. Linkworth then sought the assistance of a law firm to look into the
anomaly, and it was only then when it found out that it was allegedly awarded the
procurement project by mistake. According to respondent, it was Gakken that actually won
the award for the supply as shown by the July 10, 2003 Resolution of the BAC, unanimously
approved by the new BAC composition. Linkworth was then advised by Gutierrez to
disregard the Notice of Award earlier made in its favor.   This led to the filing of administrative
6

charges against respondent and the members of the two BAC’s for grave misconduct.

In her defense, respondent averred that she did not collude, as she could not have colluded,
with Gakken for the supply contract since she had no participation in selecting the winning
supplier. The award in favor of Gakken was due to the fact that the end-users preferred its
product over that of Linkworth. And since the purchase was through negotiated contract, the
product specifications and other terms and conditions of the bidding were rendered
ineffective, making the end-user preference the primary selection criterion.   Additionally,
7

respondent countered that affixing her signature in the Notice of Award was only a ministerial
function.

Gutierrez likewise averred that the error in the procurement process was only discovered
when a representative from Linkworth presented a copy of the Notice of Award and offered
to post a performance bond. She then ordered the investigation of the incident, following
Linkworth's complaint. As borne by the investigation, one Johnny Gutierrez was ordered to
prepare the Notice of Award, but he mistakenly instructed Danilo Asuncion, the typist at the
Supply Section, to address the said notice to Linkworth instead of Gakken. And when Danilo
Asuncion gave Johnny Gutierrez the Notice of Award that he had prepared, the latter
brought it to Cirunay, the chairperson of the second BAC, for her initials. Before affixing her
initials, Cirunay asked Johnny Gutierrez if the latter cross-checked the notice of award with
the July 10, 2003 Resolution, which he answered in the affirmative. The Notice of Award was
then forwarded to and initialled in turn by the Officer-in- Charge of the Administrative Division
before it reached respondent's desk. Relying in good faith on the initials of her subordinates,
particularly the members of the BAC, respondent claims that she could not be held
administratively liable for grave misconduct.  8

Ruling of the Ombudsman

On February 27, 2006, the Office of the Ombudsman rendered a Decision finding
respondent guilty of Grave Misconduct in the following wise:  9

PREMISES CONSIDERED, pursuant to Section 52 (A-3) Rule IV of the Uniform Rules on

Administrative Cases (CSC Resolution No. 991936), dated August 31, 1999, respondents
JESUSA JOYCE N. CIRUNAY, LEONIDA M. CASTILLO, MARLE B. KOFFA, NEMIA T.
GETES, EMILIO L. POLIG, JR. and LETICIA-BARBARA B. GUTIERREZ are hereby found
guilty of GRAVE MISCONDUCT and [are] meted the corresponding penalty of DISMISSAL
FROM THE SERVICE with cancellation of eligibility, forfeiture of retirement benefits, and
perpetual disqualification for reemployment in the government service.

On the other hand, respondents CHRISTINA A. DELA CRUZ, MA. THERESA ICABALES,
ROSEMARIE JUANO, CORAZON BARTOLOME, MA. FLORITA GABUNA, and MA. ELENA
FRANCISCO are ABSOLVED of the charges hurled against them.

SO ORDERED.

In so ruling, the Ombudsman did not give credence to the defense that the Notice of Award
in favor of Linkworth was vitiated by error or mistake. It deemed improbable, if not
impossible, that everyone who prepared, initialled, and signed the Notice of Award would
make the same mistake despite the presence or availability of the attached July 10, 2003
Resolution that allegedly declares Gakken as the awardee of the negotiated purchase.   The10

Ombudsman also found it suspicious that when a representative from Linkworth attempted to
post the required performance bond on July 25, 2003, a copy of the July 10, 2003 Resolution
was not presented to him right then and there.  11

Respondent, along with the members of the second BAC, moved for reconsideration from
the judgment of dismissal, but to no avail. On September 30, 2008, the Ombudsman issued
an Order, denying the recourses for lack of merit. Hence, the aggrieved parties filed their
separate petitions for review before the appellate court. Respondent's appeal was docketed
as CA-G.R. SP No. 107551, entitled "Leticia Barbara B. Gutierrez vs. Linkworth
International, Inc., represented by Tador L. Efann. " Petitioner was personally served a copy
of respondent's petition for review.

Ruling of the Court of Appeals

Insofar as respondent is concerned, the CA, on June 16, 2009, reversed the findings of the
Ombudsman, thusly:  12

WHEREFORE, premises considered, the instant Petition for Review is hereby GRANTED
and the Decision dated February 27, 2006 of the Office of the Ombudsman finding petitioner
Leticia Barbara B. Gutierrez guilty of grave misconduct is REVERSED and SET ASIDE.
Accordingly, the administrative complaint against her is dismissed.

SO ORDERED.

Justifying the reversal, the appellate court noted that Linkworth failed to file its comment on
the petition despite due notice;   that there was no showing that respondent conspired with
13

her co-respondents; that she neither acted irregularly nor did she perform an act outside of
her official functions; and that there appears to be no deliberate or conscious act on her part
showing bad faith or intent to give undue advantage to Gakken.  14

Additionally, the CA ratiocinated that as head of office, respondent is saddled with numerous
documents and other papers that routinely pass her office for signature. It is, thus, not
humanly possible for her to examine each and every detail in the transaction or probe every
single matter, but had to rely to a reasonable extent on the good faith of her subordinates
who prepare the documents.   Citing Arias v. Sandiganbayan (Arias),   the CA held that
15 16

reliance in good faith by the head of office on his or her subordinates, upon whom the
primary responsibility rests, absent clear proof of conspiracy, absolves the former from any
liability. In this case, respondent relied on the initials of the BAC chairperson and the acting
head of the administrative division when she signed the Notice of Award, and no conspiracy
among them was established. Johnny Gutierrez and Danilo Asuncion even admitted to
committing the mistake in the preparation of the Notice of Award.

Linkworth did not move for reconsideration of the above ruling.

Meanwhile, petitioner Ombudsman received a copy of the assailed CA Decision on June 22,
2009. Thereafter, it filed an Omnibus Motion for Intervention and for Admission of Attached
Motion for Reconsideration (Omnibus Motion). Petitioner argued that under the 1997
Constitution and Republic Act No. 6770, otherwise known as the Ombudsman Act, the
Ombudsman, as the mandated disciplining body with quasi-judicial authority to resolve
administrative cases against public officials, has legal standing to explain, if not defend, its
decisions in disciplinary cases,   consistent with the Court's pronouncement in Philippine
17
National Bank v. Garcia,   Civil Service Commission v. Dacoycoy,   and Office of the
18 19

Ombudsman v. Samaniego.  20

Unfortunately for petitioner, the Omnibus Motion was denied on July 23, 2009 for having
been filed out of time. The pertinent portion of the CA Resolution reads:

Considering that the time for intervention has already passed with the rendition by the Court
of its decision on June 16, 2009 (Sec. 2, Rule 19, 1997 Revised Rules of Civil Procedure),
the Omnibus Motion for Intervention and for Admission of Attached Motion for
Reconsideration filed by the Office of the Ombudsman is DENIED.

Thus, the instant recourse.

Grounds for the Allowance of the Petition

Petitioner invokes the following grounds for the reinstatement of its

February 27, 2006 Decision:

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT TAKING

COGNIZANCE OF AND NOT GRANTING THE OFFICE OF THE OMBUDSMAN'S
MOTIONS FOR INTERVENTION AND RECONSIDERATION

II.

THE OFFICE OF THE OMBUDSMAN'S DECISION DATED 27 FEBRUARY 2006 FINDING

RESPONDENT ADMINISTRATIVELY LIABLE FOR GRAVE MISCONDUCT AND THE
ORDER DATED 30 SEPTEMBER 2008 DENYING RESPONDENT'S MOTION FOR
RECONSIDERATION ARE IN ACCORDANCE WITH LAW AND ARE SUPPORTED BY
SUBSTANTIAL EVIDENCE.  21

Primarily, petitioner bases its motion to intervene on the catena of cases it cited in its
Omnibus Motion. It reiterates that as the constitutionally mandated disciplining body, it has
the authority to defend its rulings on appeal, and that it had been allowed to do so via
intervention before judicial authorities. As a party directly affected by the ruling rendered by
the CA, it has sufficient legal interest to intervene, so the Ombudsman claims.  22

More importantly, petitioner argues that its rulings were supported by substantial evidence
on record. Conspiracy, according to petitioner, does not require direct evidence to be
proven.   Here, respondent's role as a coconspirator was established through her signature
23

in the Notice of Award. The Arias doctrine could not exonerate respondent from liability, in
view of the difference in factual milieu compared with the case at bar. The presumption that
official duty has been regularly performed had been overturned since there is evidence to the
contrary.  24

In her Comment, respondent prays that the Court sustain the ruling of the CA. She discussed
that the denial of the Omnibus Motion is consistent with Section 2, Rule 19 of the Rules of
Court; that petitioner has no legal standing to intervene in this case in accordance with the
Court's ruling in Office of the Ombudsman v. Magno,   National Police Commission v.
25

Mamauag,  Mathay, Jr. v. Court of Appeals,  and Pleyto v. Philippine National Police

26 27

Criminal Investigation and Detection Group;  that there is no valid reason to liberally apply
28
the rules on intervention; and that even assuming arguendo that belated intervention is
proper, the petition should still be denied for it failed to show any reversible error on the part
of the CA.

Petitioner would reinforce its position in its Reply.

The Issue

Succinctly stated, the issue that the Court is confronted with is whether or not the appellate
court erred in denying petitioner's Omnibus Motion.

The Court's Ruling

The petition is devoid of merit.

The Ombudsman has legal standing to intervene on appeal in administrative cases

that it has resolved

Preliminarily, the Court rules that petitioner has legal standing to intervene. Based on the
citations by both parties, it would appear that jurisprudence on this point has been replete,
but erratic. A survey of the Court's pertinent rulings must then be made to shed light on this
conundrum.

In earlier years, an exoneration from an administrative case is akin to an acquittal in a

criminal action-both results are not subject to appeal. This is brought about not by the
existence of a bar in administrative cases similar to double jeopardy; rather, this is based on
the basic premise that appeal is not a statutory right, but a privilege. Of relevance are Secs.
37 and 39 of Presidential Decree No. 807,   which then provided:
29

Section 37. Disciplinary Jurisdiction.

(a) The Commission shall decide upon appeal all administrative disciplinary cases involving
the imposition of a penalty of suspension for more than thirty days, or fine in an amount
exceeding thirty days' salary, demotion in rank or salary or transfer, removal or dismissal
from Office. x x x

xxxx

Section 39. Appeals. Appeals, where allowable, shall be made by the party adversely

affected by the decision within fifteen days from receipt of the decision unless a petition for
reconsideration is seasonably filed, which petition shall be decided within fifteen days. x x x
(emphasis added)

In Paredes v. Civil Service Commission,  Mendez v. Civil Service Commission,   Magpale v.

30 31

Civil Service Commission,  Navarro v. Civil Service Commission and Export Processing
32

Zone Authority,   and Del Castillo v. Civil Service Commission,   the Court has been uniform
33 34

in its ruling that a decision exonerating a respondent of administrative liability is

unappealable, neither by the private complainant nor by the disciplining authority. As
explained in Paredes:  35
Based on the above provisions of law, appeal to the Civil Service Commission in an
administrative case is extended to the party adversely affected by the decision, that is, the
person or the respondent employee who has been meted out the penalty of suspension for
more than thirty days; or fine in an amount exceeding thirty days salary demotion in rank or
salary or transfer, removal or dismissal from office. The decision of the disciplining authority
is even final and not appealable to the Civil Service Commission in cases where the penalty
imposed is suspension for not more than thirty days or fine in an amount not exceeding thirty
days salary. Appeal in cases allowed by law must be filed within fifteen days from receipt of
the decision.

Here the MSPB after hearing and the submission of memoranda exonerated private
respondent Amor of all charges except for habitual tardiness. The penalty was only a
reprimand so that even private respondent Amor, the party adversely affected by the
decision, cannot even interpose an appeal to the Civil Service Commission.

As correctly ruled by private respondent, petitioner Paredes the complainant is not the party
adversely affected by the decision so that she has no legal personality to interpose an
appeal to the Civil Service Commission. In an administrative case, the complainant is a mere
witness. Even if she is the Head of the Administrative Services Department of the HSRC as
a complainant she is merely a witness for the government in an administrative case. No
private interest is involved in an administrative case as the offense is committed against the
government. (emphasis added)

It will not be until the Court En Banc' s landmark ruling in the 1999 case of Civil Service
Commission v. Dacoycoy (Dacoycoy), wherein the above pronouncement will be expressly
overturned:

At this point, we have necessarily to resolve the question of the party adversely affected who
may take an appeal from an adverse decision of the appellate court in an administrative civil
service disciplinary case. There is no question that respondent Dacoycoy may appeal to the
Court of Appeals from the decision of the Civil Service Commission adverse to him. He was
the respondent official meted out the penalty of dismissal from the service. On appeal to the
Court of Appeals, the court required the petitioner therein, here respondent Dacoycoy, to
implead the Civil Service Commission as public respondent as the government agency
tasked with the duty to enforce the constitutional and statutory provisions on the civil service.

Subsequently, the Court of Appeals reversed the decision of the Civil Service Commission
and held respondent not guilty of nepotism. Who now may appeal the decision of the Court
of Appeals to the Supreme Court? Certainly not the respondent, who was declared not guilty
of the charge. Nor the complainant George P. Suan, who was merely a witness for the
government. Consequently, the Civil Service Commission has become the party adversely
affected by such ruling, which seriously prejudices the civil service system. Hence, as an
aggrieved party, it may appeal the decision of the Court of Appeals to the Supreme Court. By
this ruling, we now expressly abandon and overrule extant jurisprudence that the phrase
party adversely affected by the decision refers to the government employee against whom
the administrative case is filed for the purpose of disciplinary action which may take the form
of suspension, demotion in rank or salary, transfer, removal or dismissal from office and not
included are cases where the penalty imposed is suspension for not more than thirty (30)
days or fine in an amount not exceeding thirty days salary or when the respondent is
exonerated of the charges, there is no occasion for appeal.   (emphasis added)
36
Apparently, Dacoycoy broadened the scope of "party adversely affected" so as to include the
disciplining authority whose ruling is in question within its definition. However, this
development introduced in Dacoycoy would be short-lived. In the same year
that Dacoycoy was decided, the Court En Banc would render judgment in Mathay, Jr. v.
Court of Appeals (Mathay) in the following wise:

We are aware of our pronouncements in the recent case of Civil Service Commission v.
Pedro Dacoycoy which overturned our rulings in Paredes vs. Civil Service Commission,
Mendez vs. Civil Service Commission and Magpale vs. Civil Service
Commission. In Dacoycoy, we affirmed the right of the Civil Service Commission to bring an
appeal as the aggrieved party affected by a ruling which may seriously prejudice the civil
service system.

The aforementioned case, however, is different from the case at bar. Dacoycoy was an

administrative case involving nepotism whose deleterious effect on government cannot be
overemphasized. The subject of the present case, on the other hand, is reinstatement.

We fail to see how the present petition, involving as it does the reinstatement or non-
reinstatement of one obviously reluctant to litigate, can impair the effectiveness of
government. Accordingly, the ruling in Dacoycoy does not apply.  37

It would then appear that in not all administrative cases would the doctrine in Dacoycoy find
application. On the other hand, Mathay, one of the cases relied upon by respondents, would
pave the way for the Court's rulings in National Police Commission v. Mamauag
(Mamauag)  and Pleyto v. Philippine National Police Criminal Investigation and Detection
38

Group (Pleyto )  that would clarify the Dacoycoy doctrine, specifying that the government
39

party appealing must not be the quasi-judicial body that meted out the administrative
sanction, but the prosecuting body in the administrative case.

In the 2005 case of Mamauag, the Court held that:  40

x x x [T]he government party that can appeal is not the disciplining authority or tribunal which
previously heard the case and imposed the penalty of demotion or dismissal from the
service. The government party appealing must be one that is prosecuting the administrative
case against the respondent. Otherwise, an anomalous situation will result where the
disciplining authority or tribunal hearing the case, instead of being impartial and detached,
becomes an active participant in prosecuting the respondent. Thus, in Mathay, Jr. v. Court of
Appeals, decided after Dacoycoy, the Court declared:

To be sure, when the resolutions of the Civil Service Commission were brought before the
Court of Appeals, the Civil Service Commission was included only as a nominal party. As a
quasi-judicial body, the Civil Service Commission can be likened to a judge who should
detach himself from cases where his decision is appealed to a higher court for review.

In instituting G.R. No. 126354, the Civil Service Commission dangerously departed from its
role as adjudicator and became an advocate. Its mandated function is to hear and decide
administrative cases instituted by or brought before it directly or on appeal, including
contested appointments and to review decisions and actions of its offices and agencies, not
to litigate.

And in the 2007 ruling in Pleyto:  41

The court or the quasi-judicial agency must be detached and impartial, not only when
hearing and resolving the case before it, but even when its judgment is brought on appeal
before a higher court. The judge of a court or the officer of a quasi-judicial agency must keep
in mind that he is an adjudicator who must settle the controversies between parties in
accordance with the evidence and the applicable laws, regulations, and/or jurisprudence. His
judgment should already clearly and completely state his findings of fact and law. There must
be no more need for him to justify further his judgment when it is appealed before appellate
courts. When the court judge or the quasi-judicial officer intervenes as a party in the
appealed case, he inevitably forsakes his detachment and impartiality, and his interest in the
case becomes personal since his objective now is no longer only to settle the controversy
between the original parties (which he had already accomplished by rendering his judgment),
but more significantly, to refute the appellants assignment of errors, defend his judgment,
and prevent it from being overturned on appeal.

Later, in the 2008 case of Office of the Ombudsman v. Samaniego (Samaniego ,  the 42

Court En Banc rendered judgment covering the decisions of the Ombudsman in

administrative cases that is in tune with both Dacoycoy and Mathay. The Court ratiocinated
in Samaniego that aside from the Ombudsman being the disciplining authority whose
decision is being assailed, its mandate under the Constitution also bestows it wide
disciplinary authority that includes prosecutorial powers. Hence, it has the legal interest to
appeal a decision reversing its ruling, satisfying both the requirements
of Dacoycoy and Mathay. As elucidated in the case:  43

The Office of the Ombudsman sufficiently alleged its legal interest in the subject matter of
litigation. Paragraph 2 of its motion for intervention and to admit the attached motion to recall
writ of preliminary injunction averred:

2. As a competent disciplining body, the Ombudsman has the right to seek redress on the
apparently erroneous issuance by this Honorable Court of the Writ of Preliminary Injunction
enjoining the implementation of the Ombudsman's Joint Decision imposing upon petitioner
the penalty of suspension for one (I) year, consistent with the doctrine laid down by the
Supreme Court in PNB [vs]. Garcia x x x and CSC [vs]. Dacoycoy x x x; (citations omitted;
emphasis in the original)

In asserting that it was a "competent disciplining body," the Office of the Ombudsman
correctly summed up its legal interest in the matter in controversy. In support of its claim, it
invoked its role as a constitutionally mandated "protector of the people," a disciplinary
authority vested with quasi-judicial function to resolve administrative disciplinary cases
against public officials. To hold otherwise would have been tantamount to abdicating its
salutary functions as the guardian of public trust and accountability.

Moreover, the Office of the Ombudsman had a clear legal interest in the inquiry into whether
respondent committed acts constituting grave misconduct, an offense punishable under the
Uniform Rules in Administrative Cases in the Civil Service. It was in keeping with its duty to
act as a champion of the people and preserve the integrity of public service that petitioner
had to be given the opportunity to act fully within the parameters of its authority.

xxxx

Both the CA and respondent likened the Office of the Ombudsman to a judge whose
decision was in question. This was a tad too simplistic (or perhaps even rather disdainful) of
the power, duties and functions of the Office of the Ombudsman. The Office of the
Ombudsman cannot be detached, disinterested and neutral specially when defending its
decisions. Moreover, in administrative cases against government personnel, the offense is
committed against the government and public interest. What further proof of a direct
constitutional and legal interest in the accountability of public officers is necessary?

Despite the En Banc' s clear pronouncement in Samaniego, seeming departures from the

doctrine may be observed in the later rulings of Office of the Ombudsman v. Magno
(Magno) (2008),   Office of the Ombudsman v. Sison (Sison) (2010),   and Office of the
44 45

Ombudsman v. Liggayu (Liggayu) (2012).   Intervention by the Ombudsman was denied in

46

these cases, citing Mathay, Mamauag, and Pleyto as precedents. Nevertheless, the Court

would cement its position on the issue and would uphold Samaniego in Office of the
Ombudsman v. de Chavez (2013)   and Office of the Ombudsman v. Ouimbo
47

(Ouimbo) (2015).   As the Court ruled in Quimbo:

48

The issue of whether or not the Ombudsman possesses the requisite legal interest to
intervene in the proceedings where its decision is at risk of being inappropriately impaired
has been laid to rest in Ombudsman vs. De Chavez. In the said case, the Court conclusively
ruled that even if the Ombudsman was not impleaded as a party in the proceedings, part of
its broad powers include def ending its decisions before the CA. And pursuant to Section 1 of
Rule 19 of the Rules of Court, the Ombudsman may validly intervene in the said proceedings
as its legal interest on the matter is beyond cavil.   (emphasis added)
49

The period for filing a motion to intervene had already lapsed

Jurisprudence describes intervention as a remedy by which a third party, not originally

impleaded in the proceedings, becomes a litigant therein to enable him, her, or it to protect
or preserve a right or interest which may be affected by such proceedings.   However,
50

intervention is not a matter of right, but is instead addressed to the sound discretion of the
courts.   It may be permitted only when the statutory conditions for the right to intervene are
51

shown. Otherwise stated, the status of the Ombudsman as a party adversely affected by the
CA's assailed Decision does not automatically translate to a grant of its motion to intervene.
Procedural rules must still be observed before its intervention may be allowed.

Rule 19 of the Rules of Court prescribes the manner by which intervention may be sought,
viz:

Section 1. Who may intervene. - A person who has a legal interest in the matter in litigation,
or in the success of either of the parties, or an interest against both, or is so situated as to be
adversely affected by a distribution or other disposition of property in the custody of the court
or of an officer thereof may, with leave of court, be allowed to intervene in the action. The
court shall consider whether or not the intervention will unduly delay or prejudice the
adjudication of the rights of the original parties, and whether or not the intervenor's rights
may be fully protected in a separate proceeding.

Section 2. Time to intervene. - The motion to intervene may be filed at any time before
rendition of judgment by the trial court. A copy of the pleading-in-intervention shall be
attached to the motion and served on the original parties.

Verily, aside from (1) having legal interest in the matter in litigation; (2) having legal interest
in the success of any of the parties; (3) having an interest against both parties; (4) or being
so situated as to be adversely affected by a distribution or disposition of property in the
custody of the court or an officer thereof, the movant must also be able to interpose the
motion before rendition of judgment, pursuant to Sec. 2 of Rule 19.

The period requirement is premised on the fact that intervention is not an independent
action, but is ancillary and supplemental to an existing litigation.   Thus, when the case is
52

resolved or is otherwise terminated, the right to intervene likewise expires. The raison

d'etre for imposing the period was discussed in Ongco v. Dalisay in the following manner:

There is wisdom in strictly enforcing the period set by Rule 19 of the Rules of Court for the
filing of a motion for intervention. Otherwise, undue delay would result from many belated
filings of motions for intervention after judgment has already been rendered, because a
reassessment of claims would have to be done. Thus, those who slept on their lawfully
granted privilege to intervene will be rewarded, while the original parties will be unduly
prejudiced.  53

It is this requirement of timeliness that petitioner failed to satisfy, prompting the appellate
court to issue the July 23, 2009 Resolution denying the Omnibus Motion. This course of
action by the CA finds jurisprudential basis in Magno, Sison, and Liggayu. It may be that in
these cases that seemingly deviated from Samaniego, the Court erred in holding that the
Ombudsman does not have legal interest to intervene in the cases. However, it would be too
much of a stretch to conclude that the Court likewise erred in denying the Ombudsman's
motions to intervene. A review of these cases would show that the Ombudsman prayed for
the admission of its pleadingin- intervention after the CA has already rendered judgment,
and despite the Ombudsman's knowledge of the pendency of the case, in clear
contravention of Sec. 2, Rule 19. This substantial distinction from the cases earlier discussed
justifies the denial of the motions to intervene in Magno, Sison, andLiggayu. As held in
Magno:  54

In the instant case, the Ombudsman moved to intervene in CAG. R. SP No. 91080 only after
the Court of Appeals had rendered its decision therein. It did not offer any worthy explanation
for its belated attempt at intervention, and merely offered the feeble excuse that it was not
ordered by the Court of Appeals to file a Comment on Magno's Petition. Even then, as the
Court has already pointed out, the records disclose that the Ombudsman was served with
copies of the petition and pleadings filed by Magno in CA-G.R. SP No. 91080, yet it chose
not to immediately act thereon.

And in Sison:  55

Furthermore, the Rules provides explicitly that a motion to intervene may be filed at any time
before rendition of judgment by the trial court.  In the instant case, the Omnibus Motion for
1âwphi1

Intervention was filed only on July 22, 2008, after the Decision of the CA was promulgated
on June 26, 2008.

In support of its position, petitioner cites Office of the Ombudsman v. Samaniego. That case,

however, is not applicable here, since the Office of the Ombudsman filed the motion for
intervention during the pendency of the proceedings before the CA.

It should be noted that the Office of the Ombudsman was aware of the appeal filed by Sison.
The Rules of Court provides that the appeal shall be taken by filing a verified petition for
review with the CA, with proof of service of a copy on the court or agency a quo. Clearly, the
Office of the Ombudsman had sufficient time within which to file a motion to intervene. As
such, its failure to do so should not now be countenanced. The Office of the Ombudsman is
expected to be an activist watchman, not merely a passive onlooker. 1âwphi1

Likewise, in Liggayu, the Office of the Ombudsman only filed its Omnibus Motion for
Intervention and Reconsideration after the CA promulgated its decision.

Thus, in the three cases that seemingly strayed from Samaniego, it can be said that under
the circumstances obtaining therein, the appellate court had a valid reason for disallowing
the Ombudsman to participate in those cases because the latter only moved for intervention
after the CA already rendered judgment. By that time, intervention is no longer warranted.

In the same vein, there is no cogent reason for the Court to disturb the ruling of the CA in
CA-G.R. SP No. 107551. The appellate court did not abuse its discretion and neither did it
commit reversible error when it denied the Office of the Ombudsman's Omnibus Motion,
having been filed after the appellate court promulgated the assailed Decision. Resultantly,
the instant petition must be denied, without the necessity of delving into the merits of the
substantive arguments raised.

WHEREFORE, premises considered, the instant Petition for Review on Certiorari is hereby
DENIED for lack of merit. The June 16, 2009 Decision and July 23, 2009 Resolution of the
Court of Appeals in CA-G.R. SP No. 107 5 51 are hereby AFFIRMED.

SO ORDERED.

PRESBITERO J. VELASCO, JR.

G.R. No. 160791             February 13, 2007

PATRICIO E. SALES, ROGER R. SARIMOS, AL B. BUSICO, MARIMEL S. SAGARIO,

CAMILA B. BAGCOR, JONAS C. SALON, LILIBETH O. OBERES, NOEL E. MAWILI,
MARIO C. PAUSAL, JAMES D. TUGAHAN, MARIBETH C. DANGCALAN, CAMILO P.
RECAMARA, ANDRO H. AGDA, GERALDINE S. CARIN, MYRNA G. SAGARIO, OSCAR
E. MONCOPA, LOURDIRICO E. GUDMALIN, EUFEMIO A. MONTEDERAMOS, JR.,
CORNELIO E. JUMAWAN, JR., ELBA R. CASALANG, MERLA E. CAIDIC, RESTY C.
SOCOBOS, JOSE DARRY O. SAGARION, MARIA LUZ S. SIENES, BOB C. HAYAG,
RONIE L. LABISIG, FRANNIE M. ANTIVO, RONILO B. RUIZ, ANASTACIA A. PAILAGA,
LERNIE S. FREJOLES, ROMILO D. BAJAS, ISIDRA T. GALLEPOSO, LEAH S. AUSTER,
JOIEVELYNN E. HERRERA, JOELYALLUZ C. DOSIDOS, GLADYS M. ADAZA,
NICARATA A. GALLEPOSO, MARIA LIEZEL S. CUARESMA, ARLO B. CAGATAN,
JOSEPHINE S. CABILIN, LEA C. ALAG, PILAR A. JAMOLOD, and BENJAMIN M.
SUMALPONG, Petitioners,
vs.
HON. RODOLFO H. CARREON, JR., and THE CITY GOVERNMENT OF DAPITAN CITY,
represented by its Mayor, Hon. RODOLFO H. CARREON, JR., Respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:
For our resolution is the instant Petition for Review on Certiorari assailing the Decision1 of the
Court of Appeals dated September 16, 2003 in CA-G.R. SP No. 75515.

During the May 2001 elections, then Mayor Joseph Cedrick O. Ruiz of Dapitan City, running
for re-election, was defeated by respondent Rodolfo H. Carreon, Jr.

On June 1, 18 and 27, 2001, his last month in office, then Dapitan City Mayor Ruiz issued 83
appointments, including those of herein petitioners.

On July 1, 2001, the newly elected Mayor, Rodolfo H. Carreon, Jr., herein respondent,
assumed office.

On July 2, 2001, respondent issued Memorandum Orders Nos. 1 and 2 revoking the 83
appointments signed by his predecessor on the ground that the latter violated Civil Service
Commission (CSC) Resolution No. 01-988 in relation to CSC Memorandum Circular No. 7,
Series of 2001, imposing a ban on issuing appointments in the civil service during the
election period. Thereupon, respondent prohibited the release of the salaries and benefits of
the 83 appointees.

On July 10, 2001, Patricio Sales, one of herein petitioners, in his capacity as president of the
Dapitan City Government Employees Association, wrote the CSC Regional Office No. IX
requesting its ruling on the matter.

On July 16 and August 3, 2001, respondent sent the said Office a position paper justifying
his action, contending that the questioned appointments were not only "issued in bulk" but
that there was no urgent need to fill those positions.

On August 17, 2001, the CSC Regional Office No. IX issued an Omnibus Order, the
dispositive portion of which reads:

WHEREFORE, all premises considered:

1. The eighty-three (83) appointments issued by then Mayor Joseph Cedrick O. Ruiz,
including those issued by the herein requesting parties, are, therefore not considered
"mass appointments," as defined under CSC Resolution No. 01-0988 and are thus,
VALID and EFFECTIVE.

2. Memorandum Orders Nos. 1 and 2, Series of 2001, issued by Mayor Rodolfo H.

Carreon, Jr., are hereby declared NULL and VOID, and accordingly,

3. The LGU-Dapitan is hereby directed to pay the salaries and other emoluments to
which the 83 appointments are entitled to pursuant to the appointments issued to
them.

On appeal by respondent, the CSC En Banc, on June 17, 2002, issued Resolution No.
020828 reversing the assailed Omnibus Order of the CSC Regional Office No. IX, thus:

WHEREFORE, premises considered, the Omnibus Order dated August 17, 2001of the Civil
Service Commission Regional Office No. IX is

REVERSED and SET ASIDE. The Commission hereby rules, as follows:

 1. The approval of all 83 appointments issued by then Mayor J. Cedrick O. Ruiz is
revoked for being violative of Republic Act No. 7041, CSC Memorandum Circular No.
18 s. 1988, as amended, CSC Resolution No. 963332 on its accreditation and CSC
Resolution No. 01-0988. 1awphi1.net

2. All promoted employees are reverted to their previous position; and

3. Memorandum Order No. 1 and Memorandum Order No. 2 issued by incumbent

Mayor Rodolfo H. Carreon, Jr. are hereby declared null and void.

The CSC En Banc held that the positions in question were published and declared vacant
prior to the existence of any vacancy.

Petitioners filed a motion for reconsideration but it was denied in Resolution No. 030049
dated January 16, 2003 by the CSC En Banc.

On February 13, 2003, petitioners filed with the Court of Appeals a petition for review. On
September 16, 2003, the appellate court rendered its Decision dismissing the petition,
sustaining the CSC’s finding that the positions to which the petitioners were appointed were
already reported and published even before they had been declared vacant, in violation of
Sections 2 and 3 of Republic Act (R.A.) No. 7041;2 and that there was no first level
representative to the Personnel Section Board who should have participated in the screening
of candidates for vacancy in the first level.

Petitioners filed a motion for reconsideration, but this was denied by the Court of Appeals in
its Resolution dated November 17, 2003.

Hence, the instant petition.

This case is a typical example of the practice of outgoing local chief executives to issue
"midnight" appointments, especially after their successors have been proclaimed. It does not
only cause animosities between the outgoing and the incoming officials, but also affects
efficiency in local governance. Those appointed tend to devote their time and energy in
defending their appointments instead of attending to their functions. However, not all
"midnight" appointments are invalid.3 Each appointment must be judged on the basis of the
nature, character, and merits of the individual appointment and the circumstances
surrounding the same.4 It is only when the appointments were made en masse by the
outgoing administration and shown to have been made through hurried maneuvers and
under circumstances departing from good faith, morality, and propriety that this Court has
struck down "midnight" appointments.5

It is State policy that "opportunities for government employment shall be open to all qualified
citizens" and "employees shall be selected on the basis of fitness to perform the duties and
assume the responsibilities of the positions."6 It was precisely in order to ensure
transparency and equal opportunity in the recruitment and hiring of government personnel,
that Republic Act No. 7041 was enacted. Section 2 provides:

SEC. 2. Duty of Personnel Officers. – It shall be the duty of all Chief Personnel or
Administrative Officers of all branches, subdivisions, instrumentalities and agencies of the
Government, including government-owned or controlled corporations with original charters,
and local government units, to post in three (3) conspicuous places of their offices for a
period ten (10) days a complete list of all existing vacant positions in their respective offices
which are authorized to be filled, and to transmit a copy of such list and the corresponding
qualification standards to the Civil Service Commission not later than the tenth day of every
month. Vacant positions shall not be filled until after publication: Provided, however,
that vacant and unfilled positions that are:

a) primarily confidential;

b) policy-determining;

c) highly technical;

d) co-terminous with that of the appointing authority; or

e) limited to the duration of a particular project, shall be excluded from the list
required by law.

SEC. 3. Publication of Vacancies. – The Chairman and members of the Civil Service
Commission shall publish once every quarter a complete list of all the existing vacant
positions in the Government throughout the country, including the qualification standards
required for each position and, thereafter, certify under oath to the completion of publication.
Copies of such publication shall be sold at cost to the public and distributed free of charge to
the various personnel office of the government where they shall be available for inspection
by the public: Provided, That said publication shall be posted by the Chief Personnel or
Administrative Officer of all local government units in at least three (3) public and
conspicuous places in their respective municipalities and provinces: Provided, further, That
any vacant position published therein shall be open to any qualified person who does not
necessarily belong to the same office with the vacancy or who occupies a position next-in-
rank to the vacancy: Provided, finally, That the Civil Service Commission shall not act on
any appointment to fill up a vacant position unless the same has been reported to and
published by the Commission.

The foregoing provisions are clear and need no interpretation. The CSC is required to
publish the lists of vacant positions and such publication shall be posted by the chief
personnel or administrative officer of all local government units in the designated places. The
vacant positions may only be filled by the appointing authority after they have been reported
to the CSC as vacant and only after publication.

Here, the publication of vacancies was made even before the positions involved actually
became vacant. Clearly, respondent’s action violated Section 2 of R.A. No. 7041 cited
earlier.

Moreover, the CSC found that there was no first-level representative appointed to the
Personnel Selection Board, which deliberated on the appointments to first-level positions.

CSC Memorandum Circular No. 18, series of 1988, as amended, provides that the Personnel
Selection Board shall be composed of the following:

a. Official of department/agency directly responsible for personnel management;

b. Representative of management;
 c. Representative of organizational unit which may be an office, department, or
division where the vacancy is;

d. Representative of rank-and-file employees, one (1) for the first-level and one

(1) for the second-level, who shall both be chosen by duly registered/accredited
employees’ association in the department or agency. The former shall sit during
the screening of candidates for vacancy in the first-level, while the latter shall
participate in the screening of candidates for vacancy in the second level. In case
where there is no employees’ association in the department or agency, the
representative shall be chosen at large by the employees through a general election
to be called for the purpose.

Petitioners admitted that after the retirement on April 22, 2000 of Beltran Faconete, the first-
level representative to the Personnel Selection Board, no other first-level representative to
replace him was chosen by the Dapitan City Government Employees Association. Yet, the
city government Personnel Selection Board proceeded to deliberate and recommend the
appointments of applicants to the 43 first-level positions. Petitioners contend, however, that
although there was no such representative, the action of the Board is still valid.

Petitioners’ contention lacks merit.

Section 20, Rule VI of the Omnibus Rules Implementing Book V-A of the Administrative
Code of 1987 (also known as the Civil Service Law), provides:

SEC. 20. Notwithstanding the initial approval of an appointment, the same may be recalled
on any of the following grounds:

a) non-compliance with the procedures/criteria provided in the agency’s Merit

Promotion Plan;

b) failure to pass through the agency’s Selection/Promotion Board;

c) violation of the existing collective bargaining agreement between management

and employees relative to promotion; or

d) violation of other existing civil service laws, rules and regulations.

Verily, in deliberating and recommending to former Mayor Ruiz the appointments of herein
petitioners to the vacant positions sans the required representation, the Board violated the
above CSC Rules. Hence, the appointments he issued are not valid. They may be recalled.
In Mathay, Jr. v. Civil Service Commission,7 this Court upheld the authority of the CSC to
take appropriate action on all appointments, including its authority to recall appointments
made in disregard of the applicable provisions of Civil Service Law and regulations.

In sum, for being in violation of Section 2, R.A. No. 7041, CSC Memorandum Circular No.
18, as amended, and Section 20, Rule VI of the Omnibus Rules Implementing Book V-A of
the Administrative Code of 1987, the appointments of the above-named petitioners are
declared void.

WHEREFORE, the Court DENIES the petition and AFFIRMS the assailed Decision of the

Court of Appeals in CA-G.R. SP No. 755151.
SO ORDERED.

G.R. No. 181367               April 24, 2012

LA CARLOTA CITY, NEGROS OCCIDENTAL, represented by its Mayor, HON. JEFFREY

P. FERRER,* and the SANGGUNIANG PANLUNGSOD OF LA CARLOTA CITY, NEGROS
OCCIDENTAL, represented by its Vice-Mayor, HON. DEMIE JOHN C.
HONRADO,** Petitioners,
vs.
ATTY. REX G. ROJO, Respondent.

DECISION

CARPIO, J.:

This petition for review assails the 14 September 2007 Decision and the 18 January 2008
1 

Resolution of the Court of Appeals in CA-G.R. CEB-SP No. 01377. The Court of Appeals
2 

affirmed Resolution Nos. 050654 and 051646 of the Civil Service Commission, which
3  4 

affirmed the Decision dated 20 September 2004 of the Civil Service Commission Regional
Office (CSCRO) No. VI, Iloilo City, approving the appointment of respondent Atty. Rex G.
Rojo (respondent) as Sangguniang Panlungsod Secretary under a permanent status.

The Facts

The facts as found by the Court of Appeals are as follows:

On March 18, 2004, [the] then Vice-Mayor Rex R. Jalandoon of La Carlota City, Negros
Occidental appointed Atty. Rex G. Rojo (or Rojo) who had just tendered his resignation as
member of the Sangguniang Panlungsod the day preceding such appointment, as
Sangguniang Panlungsod Secretary. The status of the appointment was permanent. The
next day, March 19, 2004, the Vice-Mayor submitted Rojo’s appointment papers to the Civil
Service Commission Negros Occidental Field Office (CSCFO-Negros Occidental) for
attestation. In a Letter dated March 24, 2004, the said CSCFO wrote Jalandoon to inform
him of the infirmities the office found on the appointment documents, i.e. the Chairman of the
Personnel Selection Board and the Human Resource Management Officer did not sign the
certifications, the latter relative to the completeness of the documents as well as to the
publication requirement. In view of the failure of the appointing authority to comply with the
directive, the said CSCFO considered the appointment of Rojo permanently recalled or
withdrawn, in a subsequent Letter to Jalandoon dated April 14, 2004.

Jalandoon deemed the recall a disapproval of the appointment, hence, he brought the matter
to the CSC Regional Office No. 6 in Iloilo City, by way of an appeal. He averred that the
Human Resource Management Officer of La Carlota City refused to affix his signature on
Rojo’s appointment documents but nonetheless transmitted them to the CSCFO. Such
transmittal, according to Jalandoon, should be construed that the appointment was complete
and regular and that it complied with the pertinent requirements of a valid appointment.
Before the said CSC Regional Office No. 6 [could resolve the appeal], the City of La Carlota
represented by the newly elected mayor, Hon. Jeffrey P. Ferrer and the Sangguniang
Panlungsod represented by the newly elected Vice-Mayor, Hon. Demie John C. Honrado,
collectively, the petitioners herein, intervened. They argued that Jalandoon is not the real
party in interest in the appeal but Rojo who, by his inaction, should be considered to have
waived his right to appeal from the disapproval of his appointment; that the appointment was
made within the period of the election ban prior to the May 14, 2004 national and local
elections, and finally, that the resignation of Rojo as member of the Sangguniang
Panlungsod is ineffective having not complied with the provision on quorum under Section
82(d) of R.A. No. 7160.

In a Decision dated September 20, 2004, the CSC Regional Office No. 6 reversed and set
aside the CSCFO’s earlier ruling. On the argument of the intervenors that the former Vice-
Mayor lacked legal personality to elevate the case on appeal, the regional office cited settled
jurisprudence that the disapproval of an appointment affects the discretionary authority of the
appointing authority. Hence, he alone may request for reconsideration of or appeal the
disapproval of an appointment. The regional office likewise ruled that Rojo’s appointment on
March 18, 2004 was made outside the period of the election ban from March 26 to May 9,
2004, and that his resignation from the Sangguniang Panlungsod was valid having been
tendered with the majority of the council members in attendance (seven (7) out of the
thirteen councilors were present). Considering that the appointment of Rojo sufficiently
complied with the publication requirement, deliberation by the Personnel Selection Board,
certification that it was issued in accordance with the limitations provided for under Section
325 of R.A. 7160 and that appropriations or funds are available for said position, the regional
office approved the same. x x x

Mayor Ferrer and Vice-Mayor Honrado appealed the foregoing Decision of the CSC
Regional Office No. 6 to the Civil Service Commission (or Commission). On May 17, 2005,
the Commission dismissed said appeal on the ground that the appellants were not the
appointing authority and were therefore improper parties to the appeal. Despite its ruling of
dismissal, the Commission went on to reiterate CSC Regional Office’s discussion on the
appointing authority’s compliance with the certification and deliberation requirements, as well
as the validity of appointee’s tender of resignation. x x x

It likewise denied the motion for reconsideration thereafter filed by the petitioners in a
Resolution dated November 8, 2005. 5

Petitioners filed a petition for review with the Court of Appeals. On 14 September 2007, the
Court of Appeals denied the petition, and affirmed Resolution Nos. 050654 and 051646 of
the Civil Service Commission, dated 17 May 2005 and 8 November 2005, respectively.
Petitioners filed a Motion for Reconsideration, which the Court of Appeals denied in its
Resolution dated 18 January 2008.

Hence, this petition for review.

The Ruling of the Court of Appeals

Citing Section 9(h), Article V of Presidential Decree No. 807 or the Civil Service Decree, the
6 

Court of Appeals held that "in the attestation of an appointment made by a head of agency,
the duty of the Civil Service Commission does not go beyond ascertaining whether the
appointee possesses the appropriate civil service eligibility and the minimum statutory
qualifications." In this case, the Court of Appeals found that respondent met the minimum
7 

qualifications for the position of Secretary of the Sanggunian, as enumerated under Section

469(b), Article I, Title V of the Local Government Code. In fact, the Court of Appeals held
8 

that respondent is more than qualified for the position considering that respondent is a
lawyer and an active member of the bar. Furthermore, the requirements for the appointment
of respondent have been substantially complied with: (a) publication; (b) Personnel Selection
Board deliberation; and (c) certification from the appropriate offices that appropriations or
funds are available for the position. Thus, the Court of Appeals ruled that there was no
sufficient reason for the Commission to disapprove respondent’s appointment.

On the issue of the lack of signature of the Human Resource Management Officer of La
Carlota City on respondent’s appointment papers, the Court of Appeals held that such
refusal of the officer to affix his signature should not affect the validity of the appointment.
Otherwise, "it would be tantamount to putting the appointing power under the mercy of a
department head who may without reason refuse to perform a ministerial function, as what
happened in the instant case." 9

The Court of Appeals also found that the appointment of respondent on 18 March 2004 did
not violate the election ban period which was from 26 March to 9 May 2004. Furthermore,
there was no substantial evidence to show that the appointment was a "midnight
appointment."

Thus, the Court of Appeals concluded that since respondent possessed the minimum
qualifications for the position of Sangguniang Panlungsod Secretary, and the appointing
authority has adequately complied with the other requirements for a valid appointment, then
the Civil Service Commission’s approval of the appointment was only proper.

The Issues

Petitioners raise the following issues:

1. WHETHER THE APPOINTMENT OF RESPONDENT AS SANGGUNIANG

PANLUNGSOD SECRETARY VIOLATED THE CONSTITUTIONAL
PROSCRIPTION AGAINST ELIGIBILITY OF AN ELECTIVE OFFICIAL FOR
APPOINTMENT DURING HIS TENURE; and

2. WHETHER RESPONDENT’S APPOINTMENT AS SANGGUNIANG

PANLUNGSOD SECRETARY WAS ISSUED CONTRARY TO EXISTING CIVIL
SERVICE RULES AND REGULATIONS. 10

The Ruling of the Court

Petitioners allege that respondent’s appointment as Sangguniang Panlungsod Secretary is

void. Petitioners maintain that respondent’s irrevocable resignation as a Sangguniang
Panlungsod member was not deemed accepted when it was presented on 17 March 2004
during the scheduled regular session of the Sangguniang Panlungsod of La Carlota City,
Negros Occidental for lack of quorum. Consequently, respondent was still an incumbent
regular Sangguniang Panlungsod member when then Vice Mayor Jalandoon appointed him
as Sangguniang Panlungsod Secretary on 18 March 2004, which contravenes Section 7,
Article IX-B of the Constitution.
11

The resolution of this case requires the application and interpretation of certain provisions of
Republic Act No. 7160 (RA 7160), otherwise known as the Local Government Code of 1991.
The pertinent provisions read:

Section 82. Resignation of Elective Local Officials. (a) Resignations by elective local

officials shall be deemed effective only upon acceptance by the following authorities:
 (1) The President, in the case of governors, vice-governors, and mayors and vice-
mayors of highly urbanized cities and independent component cities;

(2) The governor, in the case of municipal mayors, municipal vice-mayors, city
mayors and city vice-mayors of component cities;

(3) The sanggunian concerned, in case of sanggunian members; and

(4) The city or municipal mayor, in the case of barangay officials.

(b) Copies of the resignation letters of elective local officials, together with the
action taken by the aforesaid authorities, shall be furnished the Department
of Interior and Local Government.

(c) The resignation shall be deemed accepted if not acted upon by the
authority concerned within fifteen (15) working days from receipt thereof.

(d) Irrevocable resignations by sanggunian members shall be deemed

accepted upon presentation before an open session of the sanggunian
concerned and duly entered in its records: Provided, however,That this
subsection does not apply to sanggunian members who are subject to recall
elections or to cases where existing laws prescribe the manner of acting
upon such resignations.

Section 49. Presiding Officer. (a) The vice-governor shall be the presiding officer of the
sangguniang panlalawigan; the city vice-mayor, of the sangguniang panlungsod; the
municipal vice-mayor, of the sangguniang bayan; and the punong barangay, of the
sangguniang barangay. The presiding officer shall vote only to break a tie.

(b) In the event of the inability of the regular presiding officer to preside at a
sanggunian session, the members present and consisting a quorum shall elect from
among themselves a temporary presiding officer. He shall certify within ten (10) days
from the passage of ordinances enacted and resolutions adopted by the sanggunian
in the session over which he temporarily presided.

Section 52. Sessions. (a) On the first day of the session immediately following the election of
its members, the sanggunian shall, by resolution, fix the day, time, and place of its regular
sessions. The minimum number of regular sessions shall be once a week for the
sangguniang panlalawigan, sangguniang panlungsod, and sangguniang bayan, and twice a
month for the sangguniang barangay.

(b) When public interest so demands, special session may be called by the local
chief executive or by a majority of the members of the sanggunian.

(c) All sanggunian sessions shall be open to the public unless a closed-door session
is ordered by an affirmative vote of a majority of the members present, there being a
quorum, in the public interest or for reasons of security, decency, or morality. No two
(2) sessions, regular or special, may be held in a single day.

(d) In the case of special sessions of the sanggunian, a written notice to the
members shall be served personally at the member’s usual place of residence at
 least twenty-four (24) hours before the special session is held. Unless otherwise
concurred in by two-thirds (2/3) vote of the sanggunian members present, there
being a quorum, no other matters may be considered at a special session except
those stated in the notice.

(e) Each sanggunian shall keep a journal and record of its proceedings which may be
published upon resolution of the sanggunian concerned.

Section 53. Quorum. (a) A majority of all the members of the sanggunian who have
been elected and qualified shall constitute a quorum to transact official
business. Should a question of quorum be raised during a session, the presiding officer
shall immediately proceed to call the roll of the members and thereafter announce the
results.

(b) Where there is no quorum, the presiding officer may declare a recess until such
time as a quorum is constituted, or a majority of the members present may adjourn
from day to day and may compel the immediate attendance of any member absent
without justifiable cause by designating a member of the sanggunian, to be assisted
by a member or members of the police force assigned in the territorial jurisdiction of
the local government unit concerned, to arrest the absent member and present him
at the session.

(c) If there is still no quorum despite the enforcement of the immediately preceding
subsection, no business shall be transacted. The presiding officer, upon proper
motion duly approved by the members present, shall then declare the session
adjourned for lack of quorum.

Section 457. Composition. (a) The sangguniang panlungsod, the legislative body of the

city, shall be composed of the city vice-mayor as presiding officer, the regular
sanggunian members, the president of the city chapter of the liga ng mga barangay,
the president of the panlungsod na pederasyon ng mga sangguniang kabataan, and
the sectoral representatives, as members.

(b) In addition thereto, there shall be three (3) sectoral representatives: one (1) from
the women; and as shall be determined by the sanggunian concerned within ninety
(90) days prior to the holding of the local elections, one (1) from the agricultural or
industrial workers; and one (1) from the other sectors, including the urban poor,
indigenous cultural communities, or disabled persons.

(c) The regular members of the sangguniang panlungsod and the sectoral
representatives shall be elected in the manner as may be provided for by law.
(Boldfacing supplied)

Petitioners insist that the vice-mayor, as presiding officer of the Sangguniang Panlungsod,

should not be counted in determining whether a quorum exists. Excluding the vice-mayor,
there were only six (6) out of the twelve (12) members of the Sangguniang Panlungsod who
were present on 17 March 2004. Since the required majority of seven (7) was not reached to
constitute a quorum, then no business could have validly been transacted on that day
including the acceptance of respondent’s irrevocable resignation.

On the other hand, respondent maintains that in this case, the Sangguniang

Panlungsod consists of the presiding officer, ten (10) regular members, and two (2) ex-officio
members, or a total of thirteen (13) members. Citing the Department of Interior and Local
Government (DILG) Opinion No. 28, s. 2000, dated 17 April 2000, respondent asserts that
12 

the vice-mayor, as presiding officer, should be included in determining the existence of a

quorum. Thus, since there were six (6) members plus the presiding officer, or a total of seven
(7) who were present on the 17 March 2004 regular session of the Sangguniang
Panlungsod, clearly there was a quorum such that the irrevocable resignation of respondent
was validly accepted.

The 1987 Constitution mandates Congress to enact a local government code which
provides, among others, the powers, functions and duties of local officials and all other
matters relating to the organization and operation of the local government units. Section 3,
Article X of the 1987 Constitution states:

Section 3. The Congress shall enact a local government code which shall provide for a more
responsive and accountable local government structure instituted through a system of
decentralization with effective mechanism of recall, initiative, and referendum, allocate
among the different local government units their powers, responsibilities, and resources, and
provide for the qualifications, election, appointment and removal, term, salaries, powers and
functions and duties of local officials, and all other matters relating to the organization
and operation of the local units. (Emphasis supplied)

Thus, the Local Government Code "shall x x x provide for the x x x powers and functions and
duties of local officials, and all other matters relating to the organization and operation of the
local units." In short, whether a vice-mayor has the power, function or duty of a
member of the Sangguniang Panlungsod is determined by the Local Government
Code.

On 10 October 1991, the Congress approved RA 7160 or the Local Government

Code.  Under RA 7160, the city vice-mayor, as presiding officer, is a member of
1âwphi1

the Sangguniang Panlungsod, thus:

Section 49. Presiding Officer. (a) The vice-governor shall be the presiding officer of the
sangguniang panlalawigan; the city vice-mayor, of the sangguniang panlungsod; the
municipal vice-mayor, of the sangguniang bayan; and the punong barangay, of the
sangguniang barangay. The presiding officer shall vote only to break a tie.

(b) In the event of the inability of the regular presiding officer to preside at a
sanggunian session, the members present and consisting a quorum shall elect from
among themselves a temporary presiding officer. He shall certify within ten (10) days
from the passage of ordinances enacted and resolutions adopted by the sanggunian
in the session over which he temporarily presided.

Section 457. Composition. (a) The sangguniang panlungsod, the legislative body of the

city, shall be composed of the city vice-mayor as presiding officer, the regular
sanggunian members, the president of the city chapter of the liga ng mga barangay,
the president of the panlungsod na pederasyon ng mga sangguniang kabataan, and
the sectoral representatives, as members.

(b) In addition thereto, there shall be three (3) sectoral representatives: one (1) from
the women; and as shall be determined by the sanggunian concerned within ninety
(90) days prior to the holding of the local elections, one (1) from the agricultural or
 industrial workers; and one (1) from the other sectors, including the urban poor,
indigenous cultural communities, or disabled persons.

(c) The regular members of the sangguniang panlungsod and the sectoral
representatives shall be elected in the manner as may be provided for by law.
(Boldfacing and underscoring supplied)

RA 7160 clearly states that the Sangguniang Panlungsod "shall be composed of the city

vice-mayor as presiding officer, the regular sanggunian members, the president of the city
chapter of the liga ng mga barangay, the president of the panlungsod na pederasyon ng mga
sangguniang kabataan, and the sectoral representatives, as members." Black’s Law
Dictionary defines "composed of" as "formed of" or "consisting of." As the presiding officer,
the vice-mayor can vote only to break a tie. In effect, the presiding officer votes when it
matters the most, that is, to break a deadlock in the votes. Clearly, the vice-mayor, as
presiding officer, is a "member" of the Sangguniang Panlungsod considering that he is
mandated under Section 49 of RA 7160 to vote to break a tie. To construe otherwise would
create an anomalous and absurd situation where the presiding officer who votes to break a
tie during a Sanggunian session is not considered a "member" of the Sanggunian.

The Senate deliberations on Senate Bill No. 155 (Local Government Code) show the intent
of the Legislature to treat the vice-mayor not only as the presiding officer of the Sangguniang
Panlungsod but also as a member of the Sangguniang Panlungsod. The pertinent portions of
the deliberations read:

Senator Pimentel. Before Senator Rasul and Senator Lina take the floor, Mr. President, may
I reiterate this observation, that changes in the presiding officership of the local sanggunians
are embodied for the municipality where the vice-mayor will now be the presiding officer of
the sanggunian and the province where the vice-governor will now be the presiding officer.
We did not make any change in the city because the city vice-mayor is already the presiding
officer.

The President. All right.

Senator Rasul, Senator Lina, and Senator Gonzales.

Senator Gonzales. May I just add something to that statement of Senator Pimentel?

The President. All right.

Senator Gonzales. Reading this bill, there is also a fundamental change in the sense
that the provincial governor, the city mayor, the municipal mayor, as well as, the
punong barangay are no longer members of their respective sanggunian; they are no
longer members. Unlike before, when they were members of their respective
sanggunian, now they are not only the presiding officers also, they are not members
of their respective sanggunian.

Senator Pimentel. May I thank Senator Gonzales for that observation. (Boldfacing supplied)

During the deliberations, Senator Pimentel, the principal author of the the Local Government
Code of 1991, clearly agrees with Senator Gonzales that the provincial governor, the city
mayor, and the municipal mayor who were previously the presiding officers of their
respective sanggunian are no longer the presiding officers under the proposed Local
Government Code, and thus, they ceased to be members of their respective sanggunian. In 13 

the same manner that under the Local Government Code of 1991, the vice-governor, the city
vice-mayor, and the municipal vice-mayor, as presiding officers of the Sangguniang
Panlalawigan, Sangguniang Panlungsod, Sangguniang Bayan, respectively, are members of
their respective sanggunian.

In the 2004 case of Zamora v. Governor Caballero, the Court interpreted Section 53 of RA
14 

7160 to mean that the entire membership must be taken into account in computing the
quorum of the sangguniang panlalawigan. The Court held:

"Quorum" is defined as that number of members of a body which, when legally assembled in
their proper places, will enable the body to transact its proper business or that number which
makes a lawful body and gives it power to pass upon a law or ordinance or do any valid act.
"Majority," when required to constitute a quorum, means the number greater than half or
more than half of any total. In fine, the entire membership must be taken into account in
computing the quorum of the sangguniang panlalawigan, for while the constitution merely
states that "majority of each House shall constitute a quorum," Section 53 of the LGC is
more exacting as it requires that the "majority of all members of the sanggunian . . . elected
and qualified" shall constitute a quorum.

The trial court should thus have based its determination of the existence of a quorum on the
total number of members of the Sanggunian without regard to the filing of a leave of absence
by Board Member Sotto. The fear that a majority may, for reasons of political affiliation, file
leaves of absence in order to cripple the functioning of the sanggunian is already addressed
by the grant of coercive power to a mere majority of sanggunian members present when
there is no quorum.

A sanggunian is a collegial body. Legislation, which is the principal function and duty of
the sanggunian, requires the participation of all its members so that they may not only
represent the interests of their respective constituents but also help in the making of
decisions by voting upon every question put upon the body. The acts of only a part of the
Sanggunian done outside the parameters of the legal provisions aforementioned are legally
infirm, highly questionable and are, more importantly, null and void. And all such acts cannot
be given binding force and effect for they are considered unofficial acts done during an
unauthorized session. 15

In stating that there were fourteen (14) members of the Sanggunian, the Court
16 

in Zamora clearly included the Vice-Governor, as presiding officer, as part of the entire

membership of the Sangguniang Panlalawigan which must be taken into account in
computing the quorum.

DILG Opinions, which directly ruled on the issue of whether the presiding officer should be
included to determine the quorum of the sanggunian, have consistently conformed to the
Court’s ruling in Zamora.

In DILG Opinion No. 46, s. 2007, the Undersecretary for Local Government clearly stated
that the vice-mayor is included in the determination of a quorum in the sanggunian. The
DILG Opinion reads:

DILG Opinion No. 46, s. 2007

02 July 2007

MESSRS. JAMES L. ENGLE,

FEDERICO O. DIMPAS, JR.,
MARIFE G. RONDINA,
PORFERIO D. DELA CRUZ, and
WINSTON B. MENZON
Sangguniang Bayan Membership
Babatngon, Leyte

Dear Gentlemen and Lady:

This has reference to your earlier letter asking our opinion on several issues, which we
quoted herein in toto:

"(1) What is the number that would determine the quorum of our sanggunian that has
a total membership of eleven (11) including the vice-mayor?

(2) Are the resolutions adopted by a sanggunian without quorum valid?

In reply to your first query, may we invite your attention to Section 446 (a) of the Local
Government Code of 1991 (RA 7160) which provides and we quote:

"SECTION 446. Composition. – (a) The Sangguniang bayan, the legislative body of the
municipality, shall be composed of the municipal vice-mayor as the presiding officer, the
regular sangguniang members, the president of the municipal chapter of the liga ng mga
barangay, the president of the pambayang pederasyon ng mga sangguniang kabataan, and
the sectoral representatives, as members."

Based on the aforequoted provision, the Sangguniang Bayan is composed of eight (8)

regular members, the Liga ng mga Barangay President, the SK Federation President,
the Vice-Mayor as Presiding Officer and the sectoral representatives.

Under the old Local Government Code (Batas Pambansa Blg. 337), the Presiding
Officer then of the sanggunian was the Mayor. Thus, there was a dilemma as to
whether or not the Vice-Mayor, as Presiding Officer, is to be included in the
determination of quorum in the Sangguniang Bayan. This issue was, however,
resolved with the advent of the new Local Government Code of 1991 (RA 7160)
providing the aforequoted provision. Hence, the vice-mayor is included in the
determination of a quorum in the sanggunian.

Based on the aforequoted provision, sectoral representatives are also included in the
determination of quorum in the sangguniang bayan. Let it be noted however that sectoral
representatives in the local sanggunian are, pursuant to Section 41 (c) of RA 7160 and
Section 10 (b) of RA 9264, to be elected "in a manner as may be provided for by
law." Meantime however, Congress has yet to enact a law providing for the manner of
electing sectoral representatives at the local sanggunians. Such being the case, sectoral
representatives are not, in the meantime, included in the determination of quorum in the local
sanggunians.
In view of the foregoing, the Sangguniang Bayan is composed of the 8 regular
members, the Liga ng mga Barangay President and the SK Federation President as
ex-officio members, and the Vice-Mayor as Presiding Officer. The total membership in
that sanggunian, therefore, is eleven (11). Relative thereto, Section 53 of the Local
Government Code of 1991 provides that a majority of all the members of the sanggunian
who have been elected and qualified shall constitute a quorum to transact official
business. "Majority" has been defined in Santiago vs. Guingona, et al. (G.R. No. 134577, 18
November 1998) as that which is greater than half of the membership of the body. Following
the said ruling, since the total membership of the sanggunian being 11, 11 divided by 2 will
give us a quotient of 5.5. Let it be noted however that a fraction cannot be considered as one
whole vote, since it is physically and legally impossible to divide a person or even his vote
into a fractional part. Accordingly, we have to go up to the next whole number which is 6. In
this regard, 6 is more than 5.5 and therefore, more than one-half of the total membership of
the sangguniang bayan in conformity with the jurisprudential definition of the term majority.
Thus, the presence of 6 members shall already constitute a quorum in the sangguniang
bayan for it to conduct official sessions.

xxxx

Very truly yours,

(signed)
AUSTERE A. PANADERO
OIC, OUSLG 17

In another DILG Opinion dated 9 February 2010, the Undersecretary for Local Government
opined that the Vice-Governor, as a Presiding Officer of the Sangguniang Panlalawigan, is a
composite member thereof and is included in the determination of the quorum. DILG Opinion
No. 13, s. 2010 reads:

DILG Opinion No. 13, s. 2010

09 February 2010

GOVERNOR JESUS N. SACDALAN

VICE-GOVERNOR EMMANUEL F. PIÑOL
Provincial Capitol Building
Province of Cotabato

Gentlemen:

This has reference to your earlier separate letters, which we herein consolidated,
considering that they both pertain to one subject matter.

Per your letters, the Sangguniang Panlalawigan held its regular session on 12 January 2010
where the August Body embarked upon the approval of the Annual Budget. According to
you, all fourteen (14) members of the Sangguniang Panlalawigan attended said session,
namely: ten (10) regular Sangguniang Panlalawigan Members, three (3) ex-officio
Sangguniang Panlalawigan Members and the Vice-Governor as the Presiding Officer. You
further represented that when said approval of the Annual Budget was submitted for votation
of said August Body, the result was: seven (7) members voted for the approval of the Annual
Budget and six (6) voted against.

Specifically, you want us to shed light on the following issues:

"1) Whether or not the august body has reached the required majority of all
the members of the Sangguniang Panlalawigan as provided for in Sections
53 and 54 of the Local Government Code and in relation to Article 107 (g) of
its Implementing Rules and Regulations?

2) Whether or not the vice governor as the presiding officer is included

in the count in determining the majority of all the members of the
sangguniang panlalawigan to validly pass an appropriation ordinance.

3) Whether or not the board member who signed the Committee Report
endorsing the 2010 Proposed Annual Performance Budget may withdraw
without just and valid cause his signature thereon and vote against the
approval thereof?

4) In the event that the Province operates under a re-enacted budget, what
are those expenditures included in the term "essential operating expenses"
that may be incurred by the Province?"

xxxx

For the sanggunian to officially transact business, there should be a quorum. A quorum is
defined by Section 53 of the Local Government Code of 1991 as referring to the presence of
the majority of all the members of the sanggunian who have been duly elected and qualified.
Relative thereto, generally, ordinary measures require for its enactment only the approval of
a simple majority of the sanggunian members present, there being a quorum. These pertain
to the normal transactions of the sanggunian which are approved by the sanggunian through
a vote of simple majority of those present. On the other hand, there are certain measures
where the Local Government Code requires for its approval the vote of majority of all the
members who were duly elected and qualified. This is what we call approval by the qualified
majority of the sanggunian. In this case, the approval is to be voted not just by the majority of
those present in a session there being a quorum but by the majority of all the members of
the sanggunian duly elected and qualified regardless of whether all of them were present or
not in a particular session, there being a quorum.

xxxx

In determining a quorum, Section 53 of the Local Government Code of 1991 provides

that a majority of all the members of the sanggunian who have been elected and
qualified shall constitute a quorum. Along this line, it bears to emphasize that per
Section 467 (a) of the Local Government Code of 1991, the Sangguniang Panlalawigan
is a composite body where the Vice-Governor as Presiding Officer is a composite
member thereof. As a composite member in the sangguniang panlalawigan, he is
therefore included in the determination of a quorum.

"Majority" has been defined by the Supreme Court in Santiago vs. Guingona, et al. (G.R. No.
134577, 18 November 1998) as that which is greater than half of the membership of the
body or that number which is 50% + 1 of the entire membership. We note, however, that
using either formula will give us the same result. To illustrate, using the 50% +1 formula, the
50% of a sanggunian composed of 14 members is 7. Hence 7 + 1 will give us a sum of 8. On
the other hand, if we use the second formula which is that number greater than half, then 8,
in relation to 7, is definitely greater than the latter. The simple majority of the sangguniang
panlalawigan with fourteen (14) members where all of them were present in that particular
session is therefore 8.

xxxx

Very truly yours,

(signed)
AUSTERE A. PANADERO
Undersecretary 18

In the same manner, a quorum of the Sangguniang Panlungsod should be computed based

on the total composition of the Sangguniang Panlungsod. In this case, the Sangguniang
Panlungsod of La Carlota City, Negros Occidental is composed of the presiding officer, ten
(10) regular members, and two (2) ex-officio members, or a total of thirteen (13) members. A
majority of the 13 "members" of the Sangguniang Panlungsod, or at least seven (7)
members, is needed to constitute a quorum to transact official business. Since seven (7)
members (including the presiding officer) were present on the 17 March 2004 regular
session of the Sangguniang Panlungsod, clearly there was a quorum such that the
irrevocable resignation of respondent was validly accepted.

The Perez case cited in the Dissenting Opinion was decided in 1969 prior to the 1987
19 

Constitution, and prior to the enactment of RA 7160 or the Local Government Code of 1991.
In fact, the Perez case was decided even prior to the old Local Government Code which was
enacted in 1983. In ruling that the vice-mayor is not a constituent member of the municipal
board, the Court in the Perez case relied mainly on the provisions of Republic Act No. 305
(RA 305) creating the City of Naga and the amendatory provisions of Republic Act No.
2259 (RA 2259) making the vice-mayor the presiding officer of the municipal board. Under
20 

RA 2259, the vice-mayor was the presiding officer of the City Council or Municipal Board in
chartered cities. However, RA 305 and 2259 were silent on whether as presiding officer
the vice-mayor could vote. Thus, the applicable laws in Perez are no longer the applicable
laws in the present case.

On the other hand, the 2004 case of Zamora v. Governor Caballero, in which the Court
21 

interpreted Section 53 of RA 7160 to mean that the entire membership must be taken into
22 

account in computing the quorum of the Sangguniang Panlalawigan, was decided under the
1987 Constitution and after the enactment of the Local Government Code of 1991. In stating
that there were fourteen (14) members of the Sangguniang Panlalawigan of Compostela
Valley, the Court in Zamora clearly included the Vice- Governor, as presiding officer, as part
23 

of the entire membership of the Sangguniang Panlalawigan which must be taken into

account in computing the quorum.

On the issue that respondent’s appointment was issued during the effectivity of the election
ban, the Court agrees with the finding of the Court of Appeals and the Civil Service
Commission that since the respondent’s appointment was validly issued on 18 March 2004,
then the appointment did not violate the election ban period which was from 26 March to 9
May 2004. Indeed, the Civil Service Commission found that despite the lack of signature and
certification of the Human Resource Management Officer of La Carlota City on respondent’s
appointment papers, respondent’s appointment is deemed effective as of 18 March 2004
considering that there was substantial compliance with the appointment requirements, thus:

Records show that Atty. Rojo’s appointment was transmitted to the CSC Negros Occidental
Field Office on March 19, 2004 by the office of Gelongo without his certification and
signature at the back of the appointment. Nonetheless, records show that the position to
which Atty. Rojo was appointed was published on January 6, 2004. The qualifications of Atty.
Rojo were deliberated upon by the Personnel Selection Board on March 5, 2004, attended
by Vice Mayor Jalandoon as Chairman and Jose Leofric F. De Paola, SP member and Sonia
P. Delgado, Records Officer, as members. Records likewise show that a certification was
issued by Vice Mayor Jalandoon, as appointing authority, that the appointment was issued in
accordance with the limitations provided for under Section 325 of RA 7160 and the said
appointment was reviewed and found in order pursuant to Section 5, Rule V of the Omnibus
Rules Implementing Executive Order No. 292. Further, certifications were issued by the City
Budget Officer, Acting City Accountant, City Treasurer and City Vice Mayor that
appropriations or funds are available for said position. Apparently, all the requirements
prescribed in Section 1, Rule VIII in CSC Memorandum Circular No. 15, series of 1999, were
complied with.24

Clearly, the appointment of respondent on 18 March 2004 was validly issued considering
that: (1) he was considered resigned as Sangguniang Panlungsod member effective 17
March 2004; (2) he was fully qualified for the position of Sanggunian Secretary; and (3) there
was substantial compliance with the appointment requirements.

WHEREFORE, we DENY the petition. We AFFIRM the 14 September 2007 Decision and the

18 January 2008 Resolution of the Court of Appeals in CA-G.R. CEB-SP No. 01377.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice

TERESITA J. LEONARDO-DE
PRESBITERO J. VELASCO, JR.
CASTRO
Associate Justice
Associate Justice

ARTURO D. BRION DIOSDADO M. PERALTA

Associate Justice Associate Justice

LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO

Associate Justice Associate Justice
 ROBERTO A. ABAD MARTIN S. VILLARAMA, JR.
Associate Justice Associate Justice

JOSE PORTUGAL PEREZ MARIA LOURDES P. A. SERENO

Associate Justice Associate Justice

JOSE C. MENDOZA BIENVENIDO L. REYES

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the
above Decision had been reached in consultation before the case was assigned to the writer
of the opinion of the Court.

RENATO C. CORONA
Chief Justice

Footnotes

*Now the Representative of the 4th District of Negros Occidental. See footnote 1 of
the Petition for Review, rollo, p. 12.

**Now the Mayor of La Carlota City, Negros Occidental. See page 1 of the Petition
for Review, id.

Penned by Associate Justice Agustin S. Dizon, with Associate Justices Francisco P.

1 

Acosta and Stephen C. Cruz, concurring; id at 64-70.

Penned by Associate Justice Francisco P. Acosta, with Associate Justices Pampio

2 

A. Abarintos and Amy C. Lazaro-Javier, concurring; id. at 72-73.

Id. at 48-55.
3 

Id. at 58-62.
4 

CA Decision, pp. 1-4; id. at 64-67.

5 

Section 9(h), Article V of PD 807 reads:

6 
 Section 9. Powers and Functions of the Commission. The Commission shall
administer the Civil Service and shall have the following powers and
functions:

xxxx

(h) Approve all appointments, whether original or promotional, to positions in

the civil service, except those of presidential appointees, members of the
Armed Forces of the Philippines, police forces, firemen, and jailguards, and
disapprove those where the appointees do not possess the appropriate
eligibility or required qualifications. x x x

Rollo, p. 68.
7 

Under Section 469(b), "[n]o person shall be appointed secretary to the sanggunian
8 

unless he is a citizen of the Philippines, a resident of the local government unit

concerned, of good moral character, a holder of a college degree preferably in law,
commerce or public administration from a recognized college or university, and a first
grade civil service eligible or its equivalent."

Rollo, p. 69.
9 

10 
Petitioners’ Memorandum dated 7 November 2008, pp. 5-6; id. at 132-133.

Section 7, Article IX-B of the Constitution provides that "[n]o elective official shall be
11 

eligible for appointment or designation in any capacity to any public office or position
during his tenure."

12 
Rollo, p.179. The DILG Opinion No.28, s. 2000, dated 17 April 2000 reads:

Opinion No.28, s. 2000

17 April 2000

Councilors JUVY M.MAGSINO, REUEL P.

LAYGO, SOLOMON J. LUMALANG, JR.
WILSON A. VIRAY, and JAIME C.
GUTIERREZ, JR.
Sangguniang Bayan of Naujan
Oriental Mindoro

Dear Councilors:

This refers to your query on how many members of the Sangguniang Bayan
of Naujan, composed of eight (8) regular and two (2) ex-officio members and
the vice mayor as presiding officer, must be present before the sanggunian
can declare the presence of a quorum to legally transact official business.

In reply thereto, please be apprised that, for quorum to exist, the

Sangguniang Bayan of Naujan must have the presence of at least six (6) of
 its members including the vice-mayor, which is the majority of eleven (11), in
order to legally transact official business.

It must be emphasized that Section 53 of the Local Government Code of

1991 (RA7160) mandates that a majority of all the members of the
sanggunian who have been duly elected and have qualified shall constitute a
quorum. With the phrase "majority of all the members of the sanggunian", it is
thus evident therefrom that the reckoning point should be the entire
composition of the [of] the sangguniang bayan. In that regard, Section 446(a)
of the Code enumerates the membership of the sangguniang bayan,
consisting of "the municipal vice-mayor as presiding officer, the regular
(elective) sanggunian members, the president of the municipal chapter of the
liga ng mga barangay, the president of the pambayang pederasyon ng mga
sangguniang kabataan, and the sectoral representatives, as members."
Clearly then, the vice-mayor, as presiding officer , is also a member of the
sangguniang bayan and should, therefore,be included in determining the
existence of a quorum since he is included in the enumeration as to who
composes the said legislative body. As a matter of fact, in the case of
GAMBOA VS. AGUIRRE AND ARANETA (G.R. No 134213, July 20, 1999),
the Supreme Court recognized the membership of the vice-governor (vice-
mayor) in the sangguniang panlalawigan (sangguniang bayan). Accordingly,
since the Sangguniang Bayan of Naujan is composed of a total [of] eleven
(11) member who have been duly elected and have qualified, at least six (6)
of its members, including the vice-mayor, must be present during any session
to be able to be able to muster a quorum and to legally transact official
business.

Hoping that we have clarified the matter accordingly.

Very truly yours,

ALFREDO S. LIM
Secretary

Prior to the enactment of RA 7160, there was already in existence a local

13 

government code enacted under Batas Pambansa Blg. 337, which was approved on
10 February 1983 by the Batasang Pambansa. The pertinent provisions read:

Title Two – The Municipality

CHAPTER 3. – OFFICIALS AND OFFICES COMMON

TO ALL MUNICIPALITIES

Sec. 141. Powers and Duties [Municipal Mayor]. – (1) The mayor shall be the
chief executive of the municipal government and shall exercise such powers,
duties and functions as provided in this Code and other laws.

(2) He shall:

xxx
(e) Preside over the meetings of the sangguniang bayan with the right to vote
only to break a tie;

xxx

Sec. 145. Functions[Municipal Vice Mayor]. – (1) The vice-mayor shall be

an ex-officio member of the sangguniang bayan with all the rights and duties
of any other member.

(2) He shall:

xxx

(c) Act as temporary presiding officer of the sangguniang bayan in the event

of disability of the mayor to preside over a regular or special session on
account of a trip on official business, absence on leave, sickness or any
temporary incapacity; and

xxx

Sec. 146. Composition [The Sangguniang Bayan]. – (1) The sangguniang

bayan shall be the legislative body of the municipality and shall be composed
of the municipal mayor, who shall be the presiding officer, the vice-mayor,
who shall be the presiding officer pro tempore, eight members elected at
large, and the members appointive by the President consisting of the
president of the katipunang bayan and the president of the kabataang
barangay municipal federation.

(2) In addition thereto, there shall be one representative each from the
agricultural and industrial labor sectors who shall be appointed by the
President of the Philippines whenever, as determined by the sangguniang
bayan, said sectors are of sufficient number in the municipality to warrant
representation, after consultation with associations and persons belonging to
the sector concerned.

Sec. 147. Session. – (1) The sangguniang bayan shall hold at least two

regular sessions a month on the days which shall be fixed by resolution.
Special sessions may be called by the mayor or a majority of the members of
the sangguniang bayan as often as necessary. Not two sessions shall be
held in one day.

(2) In the event of inability of the vice-mayor to act as temporary presiding

officer on account of a trip on official business, absence on leave, sickness,
or any temporary incapacity, the members constituting a quorum shall
choose from among themselves the temporary presiding officer.

(3) The temporary presiding officer shall not vote even in case of a tie but he
shall certify within ten days to all ordinances and resolutions enacted or
adopted. If within said period the ordinances and resolutions were not signed
by the temporary presiding officer,said ordinances and resolutions shall be
deemed to have been signed and the municipal secretary shall forward them
to the mayor for such action as may be authorized by law.

xxxx

Sec. 148. Quorum. – A majority of all the members of the sangguniang

bayan shall constitute a quorum for the transaction of business. A smaller
number may adjourn from day to day but may compel the immediate
attendance of any member absent without good cause by issuing to the
Integrated National Police assigned in the area an order for his arrest and
production at the session, or impose a fine upon him in such amount as shall
have been previously prescribed by ordinance.

Title Three. – The City

CHAPTER 3. – OFFICIALS AND OFFICES COMMON

TO ALL MUNICIPALITIES

Sec. 172. Functions and Compensation [The Vice-Mayor]. – The vice-mayor

shall:

(a) Be the presiding officer of the sangguniang panglungsod;

xxxx

Sec. 173. Composition and Compensation [The Sangguniang Panglungsod].

– The sangguniang panglungsod, as the legislative body of the city, shall be
composed of the vice-mayor, as presiding officer, the elected sangguniang
panglungsod members, and the members who may be appointed by the
President of the Philippines consisting of the presidents of the katipunang
panlungsod ng mga barangay and the kabataang barangay city federation.

Sec. 175. The Presiding Officer of the Sangguniang Panglungsod. – (1) The

vice-mayor, as presiding officer of the sangguniang panglungsod, shall not
vote except in case of a tie. He shall sign within ten days from their adoption
all ordinances, resolutions and motions enacted or adopted by the
said sanggunian. If after the period of ten days an ordinance or resolution is
not signed by the presiding officer, the city secretary shall forward the same
to the city mayor for appropriate action.

(2) If the vice-mayor cannot preside over a regular or special session, the
members present and constituting a quorum shall elect from among
themselves a temporary presiding officer.

Sec. 176. Quorum. – A majority of all the members of the sangguniang

panglungsod shall constitute a quorum for the transaction of business, but a
smaller number may adjourn from day to day and compel the immediate
attendance of any member who is absent without good cause by issuing to
the Integrated National Police assigned in the area an order for his arrest and
production at the session, subject to penalties prescribed by law.
 Title Four. – The Province

CHAPTER 3. – OFFICIALS AND OFFICES COMMON

TO ALL PROVINCES

Sec. 203. Provincial Governor as Chief Executive of the Province; Powers

and Duties. – (1) The governor shall be the chief executive of the provincial
government and shall exercise such powers and duties as provided in this
Code and other laws.

xxx

Sec. 204. Powers, Duties and Privileges [The Vice-Governor]. – (1) The vice-

governor shall be an ex-officio member of the sangguniang
panlalawigan with all the rights, duties and privileges of any member thereof.

(2) He shall:

xxx

(c) Act as temporary presiding officer of the sangguniang panlalawigan in the

event of inability of the governor to preside over a regular or special session
on account of a trip on official business, absence on leave, sickness or any
other temporary incapacity;

xxx

Sec. 205. Composition. – (1) Each provincial government shall have a

provincial legislature hereinafter known as the sangguniang panlalawigan,
upon which shall be vested the provincial legislative power.

(2) The sangguniang panlalawigan shall be composed of the governor, the

vice-governor, elective members of the said sanggunian, and the presidents
of the katipunang panlalawigan and the kabataang barangay provincial
federation who shall be appointed by the President of the Philippines.

xxx

Sec. 206. Sessions. – x x x

(3) The governor, who shall be the presiding officer of the sangguniang

panlalawigan, shall not be entitled to vote except in case of a tie.

xxx

Sec. 207. Quorum. – A majority of all the members of the sangguniang

panlalawigan shall constitute a quorum for the transaction of business. A
smaller number may adjourn from day to day but may compel the immediate
attendance of any member absent without good cause by issuing to the
Integrated National Police of the city or municipality where the provincial
 capital is situated, an order for his arrest and appearance at the session hall
under pain of penalty as prescribed by ordinance.

14 
464 Phil. 471 (2004).

15 
Id. at 488-490.

Aside from the presiding officer, there were thirteen (13) other members of
16 

the Sangguniang Panlalawigan of Compostela Valley, making a total of fourteen (14)

members.

DILG
17 

Website, www.dilg.gov.ph/PDF_File/issuances/legal_opinions/LO046S2007.pdf (visit
ed 18 November 2011). (Boldfacing supplied)

DILG Website, www.dilg.gov.ph/PDF_File/issuances/legal_opinions/DILG-
18 

Legal_Opinions-2011318-92df7c2541.pdf (visited 18 November 2011). (Boldfacing

supplied)

19 
137 Phil. 393 (1969).

An Act Making Elective the Offices of Mayor, Vice-Mayor and Councilors in

20 

Chartered Cities, Regulating the Election in Such Cities and Fixing the Salaries and
Tenure in Such Offices. Approved, 19 June 1959.

21 
Supra note 14.

Section 53. Quorum. (a) A majority of all the members of the sanggunian who
22 

have been elected and qualified shall constitute a quorum to transact official
business. Should a question of quorum be raised during a session, the presiding
officer shall immediately proceed to call the roll of the members and thereafter
announce the results.

(b) Where there is no quorum, the presiding officer may declare a recess until
such time as a quorum is constituted, or a majority of the members present
may adjourn from day to day and may compel the immediate attendance of
any member absent without justifiable cause by designating a member of the
sanggunian, to be assisted by a member or members of the police force
assigned in the territorial jurisdiction of the local government unit concerned,
to arrest the absent member and present him at the session.

(c) If there is still no quorum despite the enforcement of the immediately

preceding subsection, no business shall be transacted. The presiding officer,
upon proper motion duly approved by the members present, shall then
declare the session adjourned for lack of quorum.

Aside from the presiding officer, there were thirteen (13) other members of
23 

the Sangguniang Panlalawigan of Compostela Valley, making a total of fourteen (14)

members.

24 
Civil Service Commission (Regional Office No. 6) Decision, pp. 3-4; rollo, pp. 46-47.
The Lawphil Project - Arellano Law Foundation

CONCURRING OPINION
(In the Result)

BRION, J.:

The constitutional issue before us is whether Atty. Rex Rojo’s (Rojo) appointment violated
the constitutional ban on appointment.1 The answer to this question depends on the
resolution of the prior and underlying question of whether petitioner Rojo effectively resigned
from his post as sanggunian member before he was appointed as sanggunian secretary.
This question, in turn, hinges on the much prior issue of the number of sanggunian members
needed to validly act on Rojo’s tender of resignation.

While I concur with the conclusion reached by the ponencia, I wish to emphasize that the
Vice-Mayor as presiding officer is considered a member of the sanggunian for purposes of
quorum determination only. In particular, the majority’s ruling should by no means be
interpreted as including the Vice-Mayor (as presiding officer) as sanggunian member, where
the Local Government Code (LGC) itself prescribes a specific voting requirement that makes
quorum determination irrelevant.

Brief Factual Antecedents

On March 10, 1994, Rojo, a member of the Sanggunian Panlungsod (SP) of La Carlota City,
applied for the vacant position of SP Secretary. On the March 17, 2004 session of the SP,
Rojo tendered his irrevocable resignation as SP Member. At that time, Vice-Mayor Rex
Jalandoon (Jalandoon), as presiding officer, and six members of a twelve-member
sanggunian were present.

On March 18, 2004, Jalandoon appointed Rojo as SP Secretary and the latter immediately
took his oath of office. On March 26, 2004, the appointment ban for the May 2004 elections
took effect. On April 27, 2004, the Civil Service Commission (CSC) Field-Office disapproved
Rojo’s appointment due to incomplete requirements. Jalandoon appealed the disapproval to
the CSC Regional Office.

The 2004 elections resulted in changes in the La Carlota local government. The newly
elected Mayor and Vice-Mayor of La Carlota City sought to affirm the disapproval of Rojo’s
appointment, alleging that there had been no quorum when Rojo tendered his resignation
before the SP. Since Rojo’s resignation could not have been validly accepted for lack of
quorum, it was argued that Rojo continued to be an elective official who was ineligible for
appointment to a public office under the Constitution.2

Core Issue

I submit that the quorum issue in this case can be decided by approaching the problem from
the point of the question: to whom does the LGC vests the power to accept the resignation of
a member of the sanggunian?
 My Position

Article 82 of the LGC reads:

Section 82. Resignation of Elective Officials. – (a) Resignations by elective local officials
shall be deemed effective only upon acceptance by the following authorities:

(1) The President, in case of governors, vice-governors, and mayors and vice-
mayors of highly urbanized cities and independent component cities:

(2) The governor, in case of municipal mayors, municipal vice-mayors, city mayors
and city vice-mayors of component cities:

(3) The sanggunian concerned, in the case of sanggunian members; and

(4) The city or municipal mayor, in case of barangay officials.

xxxx

(d) Irrevocable resignations by sanggunian members shall be deemed accepted upon

presentation before an open session of the sanggunian concerned and duly entered in its
records: Provided, however, that this subsection does not apply to sanggunian members
who are subject to recall elections or to cases where existing laws prescribe the manner of
acting upon such resignations.

This Article lays down the rule on resignations and identifies the authorities with the power to
accept the resignation of particular local government officials. In the case of sanggunian
members, that authority is the local legislative body – the sanggunian concerned of which the
resignee is a member.

Before determining what the law exactly means in making reference to the "sanggunian
concerned," Section 53 of the LGC prescribes a quorum requirement before the sanggunian
can validly transact its regular official business.

Section 53. Quorum. -

(a) A majority of all the members of the sanggunian who have been elected and qualified
shall constitute a quorum to transact official business. Should a question of quorum be
raised during a session, the presiding officer shall immediately proceed to call the roll of the
members and thereafter announce the results.

xxxx

On the other hand, Article 457 of the LGC identifies the composition of the sanggunian for
the purpose of determining the "sanggunian concerned" authorized to accept the resignation
of its member. Article 457 reads:

Section 457. Composition. – (a) The Sanggunian Panlungsod, the legislative body of the City
shall be composed of the city vice-mayor as presiding officer, the regular sanggunian
members, the president of the city chapter of the liga ng mga barangay, the president of the
panlungsod na pederasyon ng mga sangguniang kabataan, and the sectoral representatives
as members.

Based on these provisions, I believe that it is absurd not to include the presiding officer in
determining whether a quorum exists since (i) the law includes him as part of the body
authorized to accept an elective local official’s resignation and (ii) this body - the "sanggunian
concerned" - can validly act only if there is a quorum.

Moreover, while the Vice-Mayor as presiding officer cannot vote except in case of tie,3 the
determination of the quorum for purpose of accepting a resignation of a sanggunian member
does not require an active participation on the part of any member of the sanggunian.

Under the LGC, the only express prohibition against the resignation of an elective local
official is when he is the subject of an on-going recall process.4 Under the Anti-Graft and
Corrupt Practices Act, a public officer who is the subject of a pending investigation
(administrative or criminal) or prosecution5 is likewise prohibited from resigning. This
prohibition, however, is for the sole purpose of preventing him from frustrating the ongoing
investigation or prosecution, i.e., in order to be consistent with an individual’s constitutional
right against involuntary servitude,6 a public official may resign from the service but his act
will not cause the dismissal of the on-going proceeding against him.7 In other words, in
accepting a resignation, the sanggunian, as a body, simply takes a passive stance on a
matter that relates to the administrative duties of the Vice-Mayor himself.

The dichotomy (i.e., the counting of the Presiding Officer for purpose of quorum but without
giving him the right to vote except in case of a tie) can be better appreciated if it is
considered that, unlike in the old LGC, the presiding officer is empowered, as a rule, to
appoint all officials and employees of the sanggunian.8 In the present case, at issue is
petitioner Rojo’s resignation as a sanggunian member for the express purpose of applying
for the position of sanggunian secretary whom the Vice-Mayor can appoint. In other words,
woven into the question of resignation is the function of appointment that the law expressly
assigned to the Vice-Mayor. These circumstances add to the reasons justifying the
conclusion that the Vice-Mayor’s presence in accepting the resignation is material.

Refutation of the dissent’s reliance on Perez

Justice Del Castillo’s Dissent relies on the 1969 case of Perez v. Hon. Dela Cruz.9 The use of
the Perez ruling, in my view, is misplaced.

In Perez, the Naga Vice-mayor Virginia Perez wanted to vote in the selection of (i) the
secretary of the municipal board of Naga and (ii) the chairmen of the board’s various
standing committees. The Court held that Perez does not possess any voting right
considering that she was not a member of the municipal board.

In order to fully appreciate Perez, proper consideration of its legal setting is critical. The
pertinent laws then were:

a. Republic Act (RA) 305 (the Charter of Naga). This law did not provide for the
position of Vice-Mayor; and

b. RA No. 2259 (An Act Making Effective the Offices of Mayor, Vice-Mayor and
Councilors in Chartered Cities xxx). This law created the position of vice-mayor in
 Naga, among others. Section 3 of this law, however, simply provides that "the Vice-
Mayor shall be the presiding officer of the City Council or Municipal Board in all
chartered cities."

Based on these laws, Perez noted that "[RA 2259] does not decree that the vice-mayor is a
member of the city council or municipal board." Necessarily, not being a member, she could
not have any direct and active participation in filling the local appointive positions in Naga.

First, RA No. 2259, the applicable law at that time, did not provide for a similar provision
under the LGC on the composition of the sanggunian, aside from stating that the Vice-Mayor
shall be the presiding officer of the city council or municipal board of chartered cities. In fact,
under RA No. 2259, the powers of the Vice-Mayor clearly show that – aside from being the
presiding officer of the city council – he was merely a "spare tire"10 who could assume the
powers of the Mayor only in case of the latter’s inability:11

Section 3. x x x

The Vice-Mayor shall perform the duties and exercise the powers of the mayor in the event
of the latter’s inability to discharge the powers and duties of his office. In the event of a
permanent vacancy in the office of mayor, the vice-mayor shall become mayor for the
completion of the unexpired term. x x x

Second, Perez resolved the question of whether the presiding officer could vote in the
selection of local appointive officials. In order to resolve this issue, the Court had to
determine whether the presiding officer was also a member of the municipal board/city
council. As previously discussed, the present case does not involve the active role of the
sanggunian as a body, exercising discretion whether to favorably vote or not; only the
sanggunian’s passive role in accepting the resignation of a sanggunian member is involved.
Recall in this regard that under Section 82 of the LGC, the authority to accept a resignation
resides in the "sanggunian concerned," and that under Article 457, the Vice-Mayor is part of
the composition of the sanggunian. These distinctions can only lead to the conclusion that
the Dissent cannot draw strength from Perez in determining whether there was quorum for
the purpose of acting on petitioner Rojo’s resignation.

Contrary to the Dissent’s posture, we are not here giving additional role and prerogative to a
presiding officer. Nor does our interpretation purport to give an active role to a presiding
officer aside from what inheres to his position. We only resolve the issue of whether he
should be counted for purposes of quorum on an administrative matter which relates to his
duties and inheres to his position – a passive participation in the affairs of the body over
which he actually presides and which he presumably influences for the common good.

The case of Zamora v. Caballero

In Zamora v. Caballero,12 the Court was confronted with the question of whether a regular
sanggunian member, who filed a leave of absence and whose alleged departure overseas
was not proved, should be considered in determining whether there was quorum at the time
the sanggunian transacted official business. The Court ruled in the affirmative, holding that -

In fine, the entire membership must be taken into account in computing the quorum of the
sangguniang panlalawigan, for while the constitution merely states that "majority of each
House shall constitute a quorum," Section 53 of the LGC is more exacting as it requires that
the "majority of all members of the sanggunian…elected and qualified" shall constitute a
quorum.

The difference in the wordings of the Constitution and the LGC is not merely "a matter of
style and writing" as respondents would argue, but is actually a matter of "meaning and
intention." The qualification in the LGC that the majority be based on "those elected and
qualified" was meant to allow sanggunians to function even when not all members thereof
have been proclaimed. And, while the intent of the legislature in qualifying the quorum
requirement was to allow sanggunians to function even when not all members thereof have
been proclaimed and have assumed office, the provision necessarily applies when, after all
the members of the sanggunian have assumed office, one or some of its members file for
leave. What should be important then is the concurrence of election to and qualification for
the office. And election to, and qualification as member of, a local legislative body are not
altered by the simple expedient of filing a leave of absence.

Read in light of Zamora, the fact that the Vice-Mayor is "elected" and, by virtue of his
position, "qualifies" as the sanggunian’s presiding officer assumes added significance.

I submit, however, that the force of Zamora should not go beyond what the Court decreed in
that case. The legality of the Vice-Mayor’s (as presiding officer) inclusion as member of the
sanggunian did not confront Zamora, which simply assumed that the presiding officer was
included in the determination of the number of members required to constitute a quorum. For
emphasis, Zamora resolved the issue of whether an absent regular member should be
included in quorum determination; it did not rule on the inclusion of the Vice-Mayor, as
presiding officer, in the sanggunian membership. The latter issue is what the Court now
resolves.

The sanggunian is a collegial body performing several legislative and non-legislative

functions.13 Under the LGC, the voting requirement for an affirmative action on the part of the
sanggunian varies depending on the particular power to be exercised or the measure to be
adopted. The voting requirement could be (i) two-thirds (2/3) of all its members;14 or (ii) two-
thirds (2/3) vote of the members present, there being quorum;15 or (iii) three-fourths (3/4) of
all its members;16 or (iv) majority vote of all the members;17 or (vi) simply concurrence of the
sanggunian concerned;18 or (vii) affirmative vote of a majority of the members present, there
being a quorum;19 or (viii) unanimous vote of the sanggunian concerned.20

If the voting level required would engage the entirety of the sanggunian as a collegial body,
making the quorum requirement least significant, there is no rhyme or reason to include the
presiding officer’s personality at all. The possibility of that one instance where he may be
allowed to vote is nil. To include him in sanggunian membership without this qualification
would adversely affect the statutory rule that generally prohibits him from voting.

To illustrate, in disciplining members of the sanggunian where the penalty involved is

suspension or expulsion, the LGC requires the concurrence of two-thirds (2/3) of all the
members of the sanggunian.21 If the Sanggunian has thirteen (13) regular members
(excluding the presiding officer), the votes needed to impose either of the penalty is eight.
However, should the presiding officer be also included, therefore raising the membership to
fourteen (14), – on the premise that he is also sanggunian member – even if he cannot vote
in this instance, an additional one vote is required – i.e., nine votes are required – before the
penalty is imposed. The presiding officer’s innocuous inclusion as sanggunian member
negatively impacts on the prohibition against him from voting since his mere inclusion affects
the numerical value of the required voting level on a matter where generally and by law he
has no concern.

For the foregoing reasons and qualifications, I vote to DISMISS the petition and join the
result of Justice Carpio’s ponencia.