Re: COA Opinion on the Computation of the Appraised Value of the Properties Purchased by the Retired

Chief/Associate Justices of the Supreme Court.

A.M. No. 11-7-10-SC / July 31, 2012
Per Curiam

SUBJECT MATTER: The Judicial Department > Fiscal Autonomy

CASE SUMMARY: This administrative matter stemmed from the 2 memoranda submitted by Atty. Candelaria
(Deputy Clerk of Court) in relation to a COA Opinion about the underpayment of retired SC justices in purchasing
the judiciarys properties assigned to them during their incumbency. COA attributed the underpayment to the use of
Constitutional Fiscal Autonomy Group (CFAG) formula when what should have been applied was the formula
found in COA Memorandum No. 98-569-A dated August 5, 1998.
Atty. Candeleria recommended that the SC advise COA to respect the in-house computation based on the
CFAG formula. SC confirmed that the use of the CFAG formula is legal and valid, holding that the use of the
CFAG formula is part of the Courts discretionary authority as guaranteed by the Courts fiscal autonomy and
judicial independence.

DOCTRINES:
1. Real fiscal autonomy covers the grant to the Judiciary of the authority to use and dispose of its funds and
properties at will, free from any outside control or interference (Bengzon vs Drilon).
2. Thus, under the guarantees of the Judiciarys fiscal autonomy and its independence, the Chief Justice and
the Court En Banc determine and decide the who, what, where, when and how of the privileges and
benefits they extend to justices, judges, court officials and court personnel within the parameters of the
Courts granted power; they determine the terms, conditions and restrictions of the grant as grantor.
3. One of the most important aspects of judicial independence is the constitutional grant of fiscal autonomy.
Just as the Executive may not prevent a judge from discharging his or her judicial duty (for example, by
physically preventing a court from holding its hearings) and just as the Legislature may not enact laws
removing all jurisdiction from courts, the courts may not be obstructed from their freedom to use or
dispose of their funds for purposes germane to judicial functions

FACTS: This is an administrative matter that stemmed from 2 memoranda submitted by Atty. Eden T. Candelaria
(Deputy Clerk of Court & Chief Administrative Officer, Officer of Administrative Services) to the office of the
Chief Justice.
Memoranda asked the Court to determine the proper formula to be used in computing the appraisal value
that justices have to pay to acquire government properties that they used during their tenure.
COA:
COA issued an opinion in June 2010 which found the underpayment amounting to Php 221,021.50 that
resulted when 5 retired SC justices purchased from SC the personal properties assigned to them during their
incumbency.
Items purchased include cars of various models (Toyota Camry and Toyota Grandia) and a Sony TV Set.
Justices involved: CJ Panganiban; Assoc. Justices Reyes, Gutierrez, Azcuna, & Austria-Martinez.
The COA attributed this underpayment to the use of (formula) Constitutional Fiscal Autonomy Group
(CFAG) when it should have applied the formula found in COA Memorandum No. 98-569-A dated August
5, 1998.
Office of the Administrative Services:
Atty. Candelaria recommended that the Court advise the COA to respect the in-house computation based
on the CFAG formula, because even COA upheld CFAG in 2 previous instances.
More importantly, the Constitution itself grants the Judiciary fiscal autonomy in the handling of its budget
and resources. Full autonomy, among others, contemplates the guarantee of full flexibility in the allocation
and utilization of the Judiciarys resources, based on its own determination of what it needs.
To allow the COA to substitute the Courts policy in the disposal of its property would be tantamount to an
encroachment into this judicial prerogative.

ISSUE: WON the use of the CFAG formula (despite COAs opinion in the negative) is legal and valid (YES)
HOLDING:
The Court stated that COAs authority to conduct post-audit examinations on constitutional bodies granted
fiscal autonomy (Section 2(1), Article IX-D of Consti) must be read not only in light of SCs fiscal
autonomy [related to topic so point B below is more important] but also in relation with the constitutional
provisions on judicial independence (and separation of powers).
A. Separation of powers & judicial independence
o In Angara v. Electoral Commission, the Court explained the principle of separation of powers. It
held that the separation of powers is a fundamental principle in our government and is obtained not
through express provision but by actual division in our Constitution.
o SC: The Judiciary has unique circumstances and its judicial independence can be broken down into
two distinct concepts:
a. Decisional independence - refers to a judges ability to render decisions free from political
or popular influence based solely on the individual facts and applicable law.
b. Institutional independence - describes the separation of the judicial branch from the
executive and legislative branches of government (collective independence of the judiciary
as a body).
o A truly independent judiciary is possible only when both concepts of independence are preserved.
o The Constitution expressly prohibits Congress from depriving SC of its jurisdiction (Section 5
Article VII).

B. [Related to topic] SCs fiscal autonomy (Section 3, Article VIII)

o The Constitution also mandates that the judiciary shall enjoy fiscal autonomy, and grants the
Supreme Court administrative supervision over all courts and judicial personnel. Jurisprudence has
characterized administrative supervision as exclusive, noting that only the Supreme Court can
oversee the judges and court personnel's compliance with all laws, rules and regulations. No other
branch of government may intrude into this power, without running afoul of the doctrine of
separation of powers. #powerful
o Any form of interference by the Legislative or the Executive on the Judiciarys fiscal
autonomy amounts to an improper check on a co-equal branch of government.
o In Bengzon vs. Drilon, the scope and extent of fiscal autonomy was defined as:
- As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, xxx
contemplates a guarantee of full flexibility to allocate and utilize their resources with the
wisdom and dispatch that their needs require.
- Fiscal autonomy means freedom from outside control.
- Real fiscal autonomy covers the grant to the Judiciary of the authority to use and dispose of its
funds and properties at will, free from any outside control or interference.
o The Judiciarys fiscal autonomy is realized through the actions of the Chief Justice, as its head, and
of the Supreme Court En Banc, in the exercise of administrative control and supervision of the
courts and its personnel.
o In this case, the Court En Bancs Resolution (dated March 23, 2004) in A.M. No. 03-12-01 reflects
that the fiscal autonomy of the judiciary served as the basis in allowing the sale of the Judiciarys
properties to the retiring Justices. (So it is valid.)
o Thus, under the guarantees of the Judiciarys fiscal autonomy and its independence, the Chief
Justice and the Court En Banc determine and decide the who, what, where, when and how of the
privileges and benefits they extend to justices, judges, court officials and court personnel within the
parameters of the Courts granted power; they determine the terms, conditions and restrictions of
the grant as grantor.
o The decision to use of the CFAG formula is part of the Courts discretionary authority. Any
interference encroaches on the constitutional duty and privilege of the Court.
o The Chief Justice possesses FULL & SOLE AUTHORITY to divest and dispose of properties and
assets of the judiciary (the Government Accounting and Auditing Manual (GAAM), Volume 1,
particularly, Section 501 of Title 7, Chapter 3)

DISPOSITIVE: The in-house computation of the appraisal value made by the Property Division (Office of
Administrative Services) based on CFAG is CONFIRMED to be legal and valid.