Republic of the Philippines
SUPREME COURT hereby reversed and set aside. In lieu thereof,
Manila
SECOND DIVISION
G.R. No. L-38736 May 21, 1984
FELIPE G. TAC-AN, petitioner,
vs.
HONORABLE COURT OF APPEALS and ELEUTERIO
ACOPIADO, MAXIMINO ACOPIADO, the SPOUSES JESUS
PAGHASIAN and PILAR LIBETARIO, respondents.
Liliano B. Neri for petitioner.
Vic T. Lacaya for private respondents.
ABAD SANTOS, J.:
The petitioner, Felipe G. Tac-An, is a lawyer whose services were
engaged by the brothers Eleuterio Acopiado and Maximino
Acopiado who were accused of frustrated murder and theft of large
cattle before the Municipal Court of New Piñan, Zamboanga del
Norte in March, 1960.
On April 4, 1960, Tac-An caused a document entitled, "Deed of
Quitclaim" to be thumb-marked by the Acopiado brothers whereby
for the sum of P1,200.00 representing his fees as their lawyer in
the criminal cases, they conveyed to him a parcel of land with an
area of three hectares. The document was acknowledged before
Notary Public Pacifico Cimafranca on the same date who
explained its contents to the Acopiados.
On April 6, 1960, or two days after the execution of the deed, the
Acopiados told Tac-An that they were terminating his services
because their wives and parents did not agree that the land be
given to pay for his services. They also said that they had hired
another lawyer, a relative, to defend them. But Tac-An continued
to represent them.
In the case for frustrated murder, the Acopiados were acquitted.
The cases for theft of large cattle were dismissed due to the
desistance of the complainants.
On April 2, 1961, Eleuterio sold his share of the land previously
conveyed to Tac-An to Jesus Paghasian and Pilar Libetario but the
latter did not take possession thereof.
In June, 1964, Tac-An appointed Irineo Villejo, a barrio captain, as
his overseer in the land. On July 2, 1964, Tac-An also secured the
approval of the Provincial Governor of Zamboanga del Norte to the
Deed of Quitclaim. And on October 7, 1964, Tac-An filed a
complaint against the Acopiado brothers, Paghasian and Libetario
in the CFI of Zamboanga del Norte. He prayed that he be declared
the owner of the land; that the sale made in favor of Paghasian
and owner Libetario be annulled; and that he be paid damages,
attorney's fees, etc.
The Court of First Instance decided in favor of Tac-An whereupon
the Acopiados, et al. appealed to the Court of Appeals.
The Court of Appeals voided the transfer of the land to Tac-An but
held that for his services in the criminal cases he was entitled to
the agreed upon amount of P1,200.00. The judgment of the Court
of Appeals reads as follows:
WHEREFORE, the judgment appealed from is
another one is rendered ordering the
defendants Acopiados to pay the plaintiff the
sum of P1,200.00 with interest at a legal rate
from the date of the finality of this judgment until
full payment thereof. No pronouncement as to
costs. (Rollo, pp. 40-41.)
Petitioner Tac-An prays that the decision of the Court of Appeals
be set aside and that the decision of the Court of First Instance be
upheld instead.
The petition is not impressed with merit.
The Court of Appeals found as a fact that the Acopiado brothers
fully understood the tenor of the Deed of Quitclaim which they
executed. But the Court of Appeals also found as a fact that the
Acopiado brothers are Non-Christians, more specifically
Subanons, and that each is married to a Subanon. And because
they are Non-Christians, the Court of Appeals applied Section 145
of the Administrative Code of Mindanao and Sulu which reads as
follows:
Sec. 145. Contracts with Non-Christians requisites. -- Save
and except contracts of sale or barter of personal property
and contracts of personal service comprehended in chapter
seventeen hereof no contract or agreement shall be made
in the Department by any person with any Moro or other
non-Christian tribe or portion thereof the Department or with
any individual Moro or other non-Christian inhabitants of the
same for the payment or delivery of money or other things
of value in present or in prospective, or in the manner
affecting or relating to any real property, unless such
contract or agreement be executed and approved as
follows:
xxx xxx xxx
(b) It shall be executed before a judge of a court of record,
justice or auxilliary justice of the peace, or notary public,
and shall bear the approval of the provincial governor
wherein the same was executed or his representative duly
authorized in writing for such purpose, indorsed upon it.
It should be stated that under Section 146 of the same Code,
contracts or agreements made in violation of Sec. 145 shall be
"null and void."
It should be recalled that on July 2, 1964, Tac-An secured the
approval of the Provincial Governor of Zamboanga del Norte to the
Deed of Quitclaim and that should have satisfied the requirement
of Sec. 145 of the Administrative Code for Mindanao and Sulu. But
it appears that on April 12, 1965, while Tac-An's suit was pending
in the trial court, the Governor of Zamboanga del Norte revoked
his approval for the reasons stated therein.
The petitioner now asserts that the revocation of the approval
which had been given by the Provincial Governor has no legal
effect and cannot affect his right to the land which had already
vested. But as Justice Conrado M. Vasquez, with Justices Mateo
Canonoy and Ameurfina M. Herrera concurring, said:
The approval by Provincial Governor Felipe Azcuna
appearing on the face of the Deed of Quitclaim (Exh. "E ")
made on July 2, 1964 may no longer be relied upon by the
plaintiff in view of the revocation thereof by the same official
on April 12, 1965 (Exh. 4). The revocation was based on
the ground that the signature of Governor Azcuna was
obtained thru a false representation to the effect that the
 alleged transaction was legal and voluntary when in truth
and in fact, as found out later, the said parcel of land was
the subject matter of a court litigation; and, moreover, the
non-Christian vendors were not brought before him for
interrogation, confirmation or ratification of the alleged deed
of quitclaim. The fact that the revocation was made after the
filing of instant action on October 10, 1964 does not vitiate
the aforesaid action of the Provincial Governor.
Significantly, no attempt was made to disprove the truth of
the reasons stated in the certificate of revocation (Exh. 4).
(Rollo, p. 37.)
The petitioner also argues that the Administrative Code of
Mindanao and Sulu was repealed on June 19, 1965 by Republic
Act No, 4252, hence the approval of the Provincial Governor
became unnecessary. Suffice it to say that at times material to the
case, i.e. when the Deed of Quitclaim was executed, when the
approval by the Provincial Governor was given and when the
approval was revoked, Sections 145 and 146 of the Administrative
Code of Mindanao and Sulu were in full force and effect and since
they were substantive in nature the repealing statute cannot be
given retroactive effect. It should also be stated that the land in
question must be presumed to be conjugal in nature and since the
spouses of the Acopiado brothers did not consent to its transfer to
the petitioner, the transaction was at least voidable.
WHEREFORE finding the petition to be lacking in merit, the same
is hereby dismissed with costs against the petitioner.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-31711 September 30, 1971
ANTONIO J. VILLEGAS as Mayor of the City of Manila and
MANUEL D. LAPID, petitioners-appellants,
vs.
ABELARDO SUBIDO as Civil Service Commissioner,
EDUARDO Z. ROMUALDEZ as Secretary of Finance, JOSE R.
GLORIA as Acting Asst. City Treasurer of Manila, and HON.
CONRADO M. VASQUEZ as Presiding Judge of Branch V,
Court of First Instance of Manila, respondents-appellees.
Gregorio A. Ejercito and Restituto R. Villanueva for petitioners-
appellants.
Office of the Solicitor General Felix Q. Antonio, Acting Assistant
Solicitor General Hector C. Fule and Solicitor Santiago M.
Kapunan for respondents-appellees.
FERNANDO, J.:
Petitioner Antonio J. Villegas, in this appeal from a decision of the
lower court dismissing a special civil action for prohibition, quo
warranto and mandamus would lay claim as the Mayor of the City
of Manila to the power of appointment of the Assistant City
Treasurer to which office the other petitioner, Manuel D. Lapid,
was by him named even if under its Charter1 such a prerogative is
expressly vested in the President of the Philippines. 2 He would
invoke a provision in the Decentralization Act to the effect that all
"other employees, except teachers, paid out of provincial, city or
municipal general funds, and other local funds shall, subject to civil
service law, rules and regulations, be appointed by the provincial
governor, city or municipal mayor upon recommendation of the
office head concerned."3 He is not deterred by the rather general
and in explicit character of such statutory language as he contends
for a construction rather generous, if not latitudinarian, in scope
purportedly in consonance with the avowed purpose of the Act of
enlarging boundaries of local autonomy. Respondent Abelardo
Subido, who was proceeded against as Commissioner of the Civil
Service,4 takes a stand diametrically opposite not only because
there is no legal basis for such a claim in the light of what is
expressly ordained in the City Charter but also because such an
interpretation of the provision related upon would disregard the
well-settled doctrine that implied repeals are not favored. The
lower court, in a well-written decision by the Honorable Conrado
M. Vasquez, accepted such a view. After a careful study of the
matter, we cannot discern any error. We affirm.
The facts as found by the lower court follows: "In a letter dated
June 3, 1968, respondent Eduardo Z. Romualdez, Secretary of
Finance, authorized respondent Jose R. Gloria of the Office of the
City Treasurer of Manila to assume the duties of Assistant City
Treasurer effective June 1, 1968, vice Felino Fineza who retired
from the government service on May 31, 1968. In administrative
Order No. 40, series of 1968, dated June 17, 1968, petitioner
Antonio J. Villegas, Mayor of the City of Manila, directed
respondent Gloria to desist and refrain from exercising the duties
and functions of the Assistant City Treasurer,' on the ground that
respondent Romualdez "is not empowered to make such
designation." On January 1, 1969, Mayor Villegas, appointed
petitioner Manuel D. Lapid, chief of the cash division of the Office
of the City Treasurer of Manila, as Assistant City Treasurer. In a
1st endorsement dated February 14, 1969, respondent Abelardo
Subido, Commissioner of Civil Service disapproved the
appointment of Lapid, basing his action, on an opinion of the
Secretary of Justice dated September 19, 1968 to the effect that
the appointment of Assistant Provincial Treasurers is still governed
by Section 2088 (A) of the Revised Administrative Code, and not
by Section 4 of the Decentralization Law, Republic Act No. 5185." 5
Thereafter on February 25, 1969, to quote anew from the appealed
decision: "Mayor Villegas and Manuel D. Lapid filed the instant
petition for prohibition, quo warranto and mandamus, with
application for writ of preliminary injunction, praying that judgment
be rendered to declare illegal and void ab initio the authorization
given by respondent Romualdez to respondent Gloria to assume
the duties of assistant city treasurer of Manila, and that a writ of
mandamus be issued to respondent Commissioner of Civil Service
Subido commanding him to approve the appointment of petitioner
Lapid to the said office in accordance with the civil Service
Rules."6 It was not until the filing of the petition that respondent
Jose R. Gloria was nominated by the President of the Philippines
to the position of Assistant City treasurer of Manila and thereafter
duly confirmed. After the case was submitted for judgment on the
pleadings and the documentary exhibits stipulated by the parties,
the court rendered its decision on August 4, 1969 dismissing the
petition. Hence this appeal by way of certiorari.
With this Tribunal, as with the court below, the decisive question
is the applicable law. The Charter of the City of Manila, enacted in
1949, in express terms did confer on the President of the
Philippines, with the consent of the Commission on Appointments,
the power to appoint the Assistant City Treasurer. 7 On the other
hand, support for the petition is premised on the expansive
interpretation that would be accorded the general provisions found
in the Decentralization Act of 1967 to the effect that it is a city
mayor who has the power to appoint all other employees paid out
of city or local funds subject to civil service law, rules and
regulations.8
It is understandable why the choice for the lower court was not
difficult to make. What has been so clearly ordained in the Charter
is controlling. It survives in the face of the assertion that the
additional power granted local officials to appoint employees paid
out of local funds would suffice to transfer such authority to
petitioner Mayor. A perusal of the words of the statute, even if far
from searching would not justify such an interpretation. This is all
more evident, considering the fidelity manifested by this Court to
the doctrine that looks with less than favor on implied appeals. The
decision now on appeal, to repeat, must be affirmed.
1. The inherent weakness of the contention of petitioner Mayor that
would seize upon the vesting of the appointing power of all other
"employees" except teachers paid out of local funds to justify his
choice of petitioner Manuel D. Lapid as Assistant City Treasurer is
readily disclosed. The Revised Administrative Code distinguishes
one in that category from an "officer" to designate those "whose
duties, not being of a clerical or manual nature, may be considered
to involve the exercise of discretion in the performance of the
function of government, whether such duties are precisely defined
by law or not."9 Clearly, the Assistant and City Treasurer is an
officer, not an employee. Then, too, Section 4 of the
Decentralization Act relied upon by petitioner City Mayor
specifically enumerates, the officials and their assistants whom he
can appoint, specifically excluding therefrom city treasurers.10 The
expansive interpretation contended for is thus unwarranted.
Nor is the case strengthened for petitioner City Mayor by the
invocation of Pineda v. Claudio.11 It is not to be denied that in the
opinion of the Court, penned by Justice Castro, undue interference
with the power and prerogatives of a local executive is sought to
be avoided, considering his primary responsibility for efficient
governmental administration. What is not to be ignored though is
that such a principle was announced in connection with the
appointment of a department head, the chief of police, who
necessarily must enjoy the fullest confidence of the local
executive, one moreover whose appointment is expressly vested
in the city mayor. The principle therein announced does not extend
as far as the choice of an assistant city treasurer whose functions
do not require that much degree of confidence, not to mention the
specific grant of such authority to the President. Equally unavailing
then is Villegas v. Subido,12 where this Court, through the then
Justice Capistrano, recognized that the choice of who the city legal
officer should be rests solely on the city mayor, such an office
requiring as it does the highest degree of confidence. It bears
repeating that the situation in the case before us is of a different
category. The decision appealed from, then, is not to be impugned
as a failure to abide by controlling pronouncements of this
Tribunal.
2. Much less is reversal of the lower court decision justified on the
plea that the aforesaid provision in the Decentralization Act had
the effect of repealing what is specifically ordained in the city
charter. It has been the constant holding of this Court that repeals
by duplication are not favored and will not be so declared unless it
be manifest that the legislature so intended. Such a doctrine goes
as far back as United States v. Reyes, a 1908 decision. 13 It is
necessary then before such a repeal is deemed to exist that it be
shown that the statutes or statutory provisions deal with the same
subject matter and that the latter be inconsistent with the
former.14 There must be a showing of repugnancy clear and
convincing in character. The language used in the latter statute
must be such as to render it irreconcilable with what had been
formerly enacted. An inconsistency that falls short of that standard
does not suffice. What is needed is a manifest indication of the
legislative purpose to repeal. 15
More specifically, a subsequent statute, general in character as to
its terms and application, is not to be construed as repealing a
special or specific enactment, unless the legislative purpose to do
so is manifest. This is so even if the provisions of the latter are
sufficiently comprehensive to include what was set forth in the
special act. This principle has likewise been consistently applied
in decisions of this Court from Manila Railroad Co. v.
Rafferty,16decided as far back as 1919. A citation from an opinion
of Justice Tuason is illuminating. Thus: "From another angle the
presumption against repeal is stronger. A special law is not
regarded as having been amended or repealed by a general law
unless the intent to repeal or alter is manifest. Generalia
specialibus non derogant. And this is true although the terms of
the general act are broad enough to include the matter in the
special statute. ... At any rate, in the event harmony between
provisions of this type in the same law or in two laws is impossible,
the specific provision controls unless the statute, considered in its
entirety, indicates a contrary intention upon the part of the
legislature. ... A general law is one which embraces a class of
subjects or places and does not omit any subject or place naturally
belonging to such class while a special act is one which relates to
particular persons or things of a class. 17
WHEREFORE, the lower court decision of August 4, 1969 is
affirmed. Without pronouncement as to costs.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 79974 December 17, 1987
ULPIANO P. SARMIENTO III AND JUANITO G.
ARCILLA, petitioners,
vs.
SALVADOR MISON, in his capacity as COMMISSIONER OF
THE BUREAU OF CUSTOMS, AND GUILLERMO CARAGUE,
in his capacity as SECRETARY OF THE DEPARTMENT OF
BUDGET, respondents, COMMISSION ON
APPOINTMENTS, intervenor.
PADILLA, J.:
Once more the Court is called upon to delineate constitutional
boundaries. In this petition for prohibition, the petitioners, who are
taxpayers, lawyers, members of the Integrated Bar of the
Philippines and professors of Constitutional Law, seek to enjoin
the respondent Salvador Mison from performing the functions of
the Office of Commissioner of the Bureau of Customs and the
respondent Guillermo Carague, as Secretary of the Department of
Budget, from effecting disbursements in payment of Mison's
salaries and emoluments, on the ground that Mison's appointment
as Commissioner of the Bureau of Customs is unconstitutional by
reason of its not having been confirmed by the Commission on
Appointments. The respondents, on the other hand, maintain the
constitutionality of respondent Mison's appointment without the
confirmation of the Commission on Appointments.
Because of the demands of public interest, including the need for
stability in the public service, the Court resolved to give due course
to the petition and decide, setting aside the finer procedural
questions of whether prohibition is the proper remedy to test
respondent Mison's right to the Office of Commissioner of the
Bureau of Customs and of whether the petitioners have a standing
to bring this suit.
By the same token, and for the same purpose, the Court allowed
the Commission on Appointments to intervene and file a petition in
intervention. Comment was required of respondents on said
petition. The comment was filed, followed by intervenor's reply
thereto. The parties were also heard in oral argument on 8
December 1987.
This case assumes added significance because, at bottom line, it
involves a conflict between two (2) great departments of
government, the Executive and Legislative Departments. It also
occurs early in the life of the 1987 Constitution.
The task of the Court is rendered lighter by the existence of
relatively clear provisions in the Constitution. In cases like this, we
follow what the Court, speaking through Mr. Justice (later, Chief
Justice) Jose Abad Santos stated in Gold Creek Mining Corp. vs.
Rodriguez, 1 that:
The fundamental principle of constitutional construction
is to give effect to the intent of the framers of the organic
law and of the people adopting it. The intention to which
force is to be given is that which is embodied and
expressed in the constitutional provisions themselves.
The Court will thus construe the applicable constitutional
provisions, not in accordance with how the executive or the
legislative department may want them construed, but in
accordance with what they say and provide.
Section 16, Article VII of the 1987 Constitution says:
The President shall nominate and, with the consent of the
Commission on Appointments, appoint the heads of the
executive departments, ambassadors, other public
ministers and consuls, or officers of the armed forces
from the rank of colonel or naval captain, and other
officers whose appointments are vested in him in this
Constitution. He shall also appoint all other officers of the
Government whose appointments are not otherwise
provided for by law, and those whom he may be
authorized by law to appoint. The Congress may, by law,
vest the appointment of other officers lower in rank in the
President alone, in the courts, or in the heads of the
departments, agencies, commissions or boards.
The President shall have the power to make
appointments during the recess of the Congress, whether
voluntary or compulsory, but such appointments shall be
effective only until disapproval by the Commission on
Appointments or until the next adjournment of the
Congress.
It is readily apparent that under the provisions of the 1987
Constitution, just quoted, there are four (4) groups of officers
whom the President shall appoint. These four (4) groups, to which
we will hereafter refer from time to time, are:
First, the heads of the executive departments,
ambassadors, other public ministers and consuls,
officers of the armed forces from the rank of colonel or
naval captain, and other officers whose appointments are
vested in him in this Constitution; 2
Second, all other officers of the Government whose
appointments are not otherwise provided for by law; 3
Third, those whom the President may be authorized by
law to appoint;
Fourth, officers lower in rank 4 whose appointments the
Congress may by law vest in the President alone.
The first group of officers is clearly appointed with the consent of
the Commission on Appointments. Appointments of such officers
are initiated by nomination and, if the nomination is confirmed by
the Commission on Appointments, the President appoints. 5
The second, third and fourth groups of officers are the present
bone of contention. Should they be appointed by the President
with or without the consent (confirmation) of the Commission on
Appointments? By following the accepted rule in constitutional and
statutory construction that an express enumeration of subjects
excludes others not enumerated, it would follow that only those
appointments to positions expressly stated in the first group
require the consent (confirmation) of the Commission on
Appointments. But we need not rely solely on this basic rule of
constitutional construction. We can refer to historical background
as well as to the records of the 1986 Constitutional Commission to
determine, with more accuracy, if not precision, the intention of the
framers of the 1987 Constitution and the people adopting it, on
whether the appointments by the President, under the second,
third and fourth groups, require the consent (confirmation) of the
Commission on Appointments. Again, in this task, the following
advice of Mr. Chief Justice J. Abad Santos in Gold Creek is
apropos:
In deciding this point, it should be borne in mind that a
constitutional provision must be presumed to have been
framed and adopted in the light and understanding of
prior and existing laws and with reference to them.
"Courts are bound to presume that the people adopting a
constitution are familiar with the previous and existing
laws upon the subjects to which its provisions relate, and
upon which they express their judgment and opinion in its
adoption." (Barry vs. Truax 13 N.D., 131; 99 N.W., 769,65
L. R. A., 762.) 6
It will be recalled that, under Sec. 10, Article VII of the 1935
Constitution, it is provided that —
xxx xxx xxx
(3) The President shall nominate and with the consent of
the Commission on Appointments, shall appoint the
heads of the executive departments and bureaus, officers
of the army from the rank of colonel, of the Navy and Air
Forces from the rank of captain or commander, and all
other officers of the Government whose appointments
are not herein otherwise provided for, and those whom
he may be authorized by law to appoint; but the Congress
may by law vest the appointment of inferior officers, in the
President alone, in the courts, or in the heads of
departments.
(4) The President shall havethe power to make
appointments during the recess of the Congress, but
such appointments shall be effective only until
disapproval by the Commission on Appointments or until
the next adjournment of the Congress.
xxx xxx xxx
(7) ..., and with the consent of the Commission on
Appointments, shall appoint ambassadors, other public
ministers and consuls ...
Upon the other hand, the 1973 Constitution provides that-
Section 10. The President shall appoint the heads of
bureaus and offices, the officers of the Armed Forces of
the Philippines from the rank of Brigadier General or
Commodore, and all other officers of The government
whose appointments are not herein otherwise provided
for, and those whom he may be authorized by law to
appoint. However, the Batasang Pambansa may by law
vest in the Prime Minister, members of the Cabinet, the
Executive Committee, Courts, Heads of Agencies,
Commissions, and Boards the power to appoint inferior
officers in their respective offices.
Thus, in the 1935 Constitution, almost all presidential
appointments required the consent (confirmation) of the
Commission on Appointments. It is now a sad part of our political
history that the power of confirmation by the Commission on
Appointments, under the 1935 Constitution, transformed that
commission, many times, into a venue of "horse-trading" and
similar malpractices.
On the other hand, the 1973 Constitution, consistent with the
authoritarian pattern in which it was molded and remolded by
successive amendments, placed the absolute power of
appointment in the President with hardly any check on the part of
the legislature.
Given the above two (2) extremes, one, in the 1935 Constitution
and the other, in the 1973 Constitution, it is not difficult for the
Court to state that the framers of the 1987 Constitution and the
people adopting it, struck a "middle ground" by requiring the
consent (confirmation) of the Commission on Appointments for the
first group of appointments and leaving to the President, without
such confirmation, the appointment of other officers, i.e., those in
the second and third groups as well as those in the fourth group,
i.e., officers of lower rank.
The proceedings in the 1986 Constitutional Commission support
this conclusion. The original text of Section 16, Article VII, as
proposed by the Committee on the Executive of the 1986
Constitutional Commission, read as follows:
Section 16. The president shall nominate and, with the
consent of a Commission on Appointment, shall appoint
the heads of the executive departments and bureaus,
ambassadors, other public ministers and consuls, or
officers of the armed forces from the rank of colonel or
naval captain and all other officers of the Government
whose appointments are not otherwise provided for by
law, and those whom he may be authorized by law to
appoint. The Congress may by law vest the appointment
of inferior officers in the President alone, in the courts, or
in the heads of departments 7 [Emphasis supplied].
The above text is almost a verbatim copy of its counterpart
provision in the 1935 Constitution. When the frames discussed on
the floor of the Commission the proposed text of Section 16, Article
VII, a feeling was manifestly expressed to make the power of the
Commission on Appointments over presidential appointments
more limited than that held by the Commission in the 1935
Constitution. Thus-
Mr. Rama: ... May I ask that Commissioner
Monsod be recognized
The President: We will call Commissioner
Davide later.
Mr. Monsod: With the Chair's indulgence, I just
want to take a few minutes of our time to lay the
basis for some of the amendments that I would
like to propose to the Committee this morning.
xxx xxx xxx
On Section 16, I would like to suggest that the power of
the Commission on Appointments be limited to the
department heads, ambassadors, generals and so on but
not to the levels of bureau heads and colonels.
xxx xxx xxx 8 (Emphasis supplied.)
In the course of the debates on the text of Section 16, there were
two (2) major changes proposed and approved by the
Commission. These were (1) the exclusion of the appointments
of heads of bureaus from the requirement of confirmation by the
Commission on Appointments; and (2) the exclusion of
appointments made under the second sentence 9 of the section
from the same requirement. The records of the deliberations of the
Constitutional Commission show the following:
MR. ROMULO: I ask that Commissioner Foz be
recognized
THE PRESIDENT: Commissioner Foz is
recognized
MR. FOZ: Madam President, my proposed
amendment is on page 7, Section 16, line 26
which is to delete the words "and bureaus," and
on line 28 of the same page, to change the
phrase 'colonel or naval captain to MAJOR
GENERAL OR REAR ADMIRAL. This last
amendment which is co-authored by
Commissioner de Castro is to put a period (.)
after the word ADMIRAL, and on line 29 of the
same page, start a new sentence with: HE
SHALL ALSO APPOINT, et cetera.
MR. REGALADO: May we have the
amendments one by one. The first proposed
amendment is to delete the words "and
bureaus" on line 26.
MR. FOZ: That is correct.
MR. REGALADO: For the benefit of the other
Commissioners, what would be the justification
of the proponent for such a deletion?
MR. FOZ: The position of bureau director is
actually quite low in the executive department,
and to require further confirmation of
presidential appointment of heads of bureaus
would subject them to political influence.
MR. REGALADO: The Commissioner's
proposed amendment by deletion also includes
regional directors as distinguished from merely
staff directors, because the regional directors
have quite a plenitude of powers within the
regions as distinguished from staff directors
who only stay in the office.
MR. FOZ: Yes, but the regional directors are
under the supervisiopn of the staff bureau
directors.
xxx xxx xxx
MR. MAAMBONG: May I direct a question to
Commissioner Foz? The Commissioner
proposed an amendment to delete 'and bureaus
on Section 16. Who will then appoint the bureau
directors if it is not the President?
MR. FOZ: It is still the President who will appoint
them but their appointment shall no longer be
subject to confirmation by the Commission on
Appointments.
MR. MAAMBONG: In other words, it is in line
with the same answer of Commissioner de
Castro?
MR. FOZ: Yes.
MR. MAAMBONG: Thank you.
THE PRESIDENT: Is this clear now? What is
the reaction of the Committee?
xxx xxx xxx
MR. REGALADO: Madam President, the
Committee feels that this matter should be
submitted to the body for a vote.
MR. DE CASTRO: Thank you.
MR. REGALADO: We will take the amendments
one by one. We will first vote on the deletion of
the phrase 'and bureaus on line 26, such that
appointments of bureau directors no longer
need confirmation by the Commission on
Appointment.
Section 16, therefore, would read: 'The President shall
nominate, and with the consent of a Commission on
Appointments, shall appoint the heads of the executive
departments, ambassadors. . . .
THE PRESIDENT: Is there any objection to
delete the phrase 'and bureaus' on page 7, line
26? (Silence) The Chair hears none; the
amendments is approved.
xxx xxx xxx
MR. ROMULO: Madam President.
THE PRESIDENT: The Acting Floor Leader is
recognized.
THE PRESIDENT: Commissioner Foz is
recognized
MR. FOZ: Madam President, this is the third
proposed amendment on page 7, line 28. 1
propose to put a period (.) after 'captain' and on
line 29, delete 'and all' and substitute it with HE
SHALL ALSO APPOINT ANY.
MR. REGALADO: Madam President, the
Committee accepts the proposed amendment
because it makes it clear that those other
officers mentioned therein do not have to be
confirmed by the Commission on Appointments.
MR. DAVIDE: Madam President.
THE PRESIDENT: Commissioner Davide is
recognized.
xxx xxx xxx
MR. DAVIDE: So would the proponent accept
an amendment to his amendment, so that after
"captain" we insert the following words: AND
OTHER OFFICERS WHOSE APPOINTMENTS
ARE VESTED IN HIM IN THIS
CONSTITUTION?
FR. BERNAS: It is a little vague.
MR. DAVIDE: In other words, there are
positions provided for in the Constitution whose
appointments are vested in the President, as a
matter of fact like those of the different
constitutional commissions.
FR. BERNAS: That is correct. This list of
officials found in Section 16 is not an exclusive
list of those appointments which constitutionally
require confirmation of the Commission on
Appointments,
MR. DAVIDE: That is the reason I seek the
incorporation of the words I proposed.
FR. BERNAS: Will Commissioner Davide
restate his proposed amendment?
MR. DAVIDE: After 'captain,' add the following:
AND OTHER OFFICERS WHOSE
APPOINTMENTS ARE VESTED IN HIM IN
THIS CONSTITUTION.
FR. BERNAS: How about:"AND OTHER
OFFICERS WHOSE APPOINTMENTS
REQUIRE CONFIRMATION UNDER THIS
CONSTITUTION"?
MR. DAVIDE: Yes, Madam President, that is
modified by the Committee.
FR. BERNAS: That will clarify things.
THE PRESIDENT: Does the Committee
accept?
MR. REGALADO: Just for the record, of course,
that excludes those officers which the
Constitution does not require confirmation by
the Commission on Appointments, like the
members of the judiciary and the Ombudsman.
MR. DAVIDE: That is correct. That is very clear
from the modification made by Commissioner
Bernas.
THE PRESIDENT: So we have now this
proposed amendment of Commissioners Foz
and Davide.
xxx xxx xxx
THE PRESIDENT: Is there any objection to this
proposed amendment of Commissioners Foz
and Davide as accepted by the Committee?
(Silence) The Chair hears none; the
amendment, as amended, is
approved 10 (Emphasis supplied).
It is, therefore, clear that appointments to the second and
third groups of officers can be made by the President
without the consent (confirmation) of the Commission on
Appointments.
It is contended by amicus curiae, Senator Neptali
Gonzales, that the second sentence of Sec. 16, Article
VII reading-
He (the President) shall also appoint all other officers of
the Government whose appointments are not otherwise
provided for by law and those whom he may be
authorized by law to appoint . . . . (Emphasis supplied)
with particular reference to the word "also," implies that the
President shall "in like manner" appoint the officers mentioned in
said second sentence. In other words, the President shall appoint
the officers mentioned in said second sentence in the same
manner as he appoints officers mentioned in the first sentence,
that is, by nomination and with the consent (confirmation) of the
Commission on Appointments.
Amicus curiae's reliance on the word "also" in said second
sentence is not necessarily supportive of the conclusion he arrives
at. For, as the Solicitor General argues, the word "also" could
mean "in addition; as well; besides, too" (Webster's International
Dictionary, p. 62, 1981 edition) which meanings could, on the
contrary, stress that the word "also" in said second sentence
means that the President, in addition to nominating and, with the
consent of the Commission on Appointments, appointing the
officers enumerated in the first sentence, can appoint (without
such consent (confirmation) the officers mentioned in the second
sentence-
Rather than limit the area of consideration to the possible
meanings of the word "also" as used in the context of said second
sentence, the Court has chosen to derive significance from the fact
that the first sentence speaks of nomination by the President and
appointment by the President with the consent of the Commission
on Appointments, whereas, the second sentence speaks only of
appointment by the President. And, this use of different language
in two (2) sentences proximate to each other underscores a
difference in message conveyed and perceptions established, in
line with Judge Learned Hand's observation that "words are not
pebbles in alien juxtaposition" but, more so, because the recorded
proceedings of the 1986 Constitutional Commission clearly and
expressly justify such differences.
As a result of the innovations introduced in Sec. 16, Article VII of
the 1987 Constitution, there are officers whose appointments
require no confirmation of the Commission on Appointments, even
if such officers may be higher in rank, compared to some officers
whose appointments have to be confirmed by the Commission on
Appointments under the first sentence of the same Sec. 16, Art.
VII. Thus, to illustrate, the appointment of the Central Bank
Governor requires no confirmation by the Commission on
Appointments, even if he is higher in rank than a colonel in the
Armed Forces of the Philippines or a consul in the Consular
Service.
But these contrasts, while initially impressive, merely underscore
the purposive intention and deliberate judgment of the framers of
the 1987 Constitution that, except as to those officers whose
appointments require the consent of the Commission on
Appointments by express mandate of the first sentence in Sec. 16,
Art. VII, appointments of other officers are left to the President
without need of confirmation by the Commission on Appointments.
This conclusion is inevitable, if we are to presume, as we must,
that the framers of the 1987 Constitution were knowledgeable of
what they were doing and of the foreseable effects thereof.
Besides, the power to appoint is fundamentally executive or
presidential in character. Limitations on or qualifications of such
power should be strictly construed against them. Such limitations
or qualifications must be clearly stated in order to be recognized.
But, it is only in the first sentence of Sec. 16, Art. VII where it is
clearly stated that appointments by the President to the positions
therein enumerated require the consent of the Commission on
Appointments.
As to the fourth group of officers whom the President can appoint,
the intervenor Commission on Appointments underscores the third
sentence in Sec. 16, Article VII of the 1987 Constitution, which
reads:
The Congress may, by law, vest the appointment of other
officers lower in rank in the President alone, in the courts,
or in the heads of departments, agencies, commissions,
or boards. [Emphasis supplied].
and argues that, since a law is needed to vest the appointment of
lower-ranked officers in the President alone, this implies that, in
the absence of such a law, lower-ranked officers have to be
appointed by the President subject to confirmation by the
Commission on Appointments; and, if this is so, as to lower-ranked
officers, it follows that higher-ranked officers should be appointed
by the President, subject also to confirmation by the Commission
on Appointments.
The respondents, on the other hand, submit that the third sentence
of Sec. 16, Article VII, abovequoted, merely declares that, as to
lower-ranked officers, the Congress may by law vest their
appointment in the President, in the courts, or in the heads of the
various departments, agencies, commissions, or boards in the
government. No reason however is submitted for the use of the
word "alone" in said third sentence.
The Court is not impressed by both arguments. It is of the
considered opinion, after a careful study of the deliberations of the
1986 Constitutional Commission, that the use of the word alone"
after the word "President" in said third sentence of Sec. 16, Article
VII is, more than anything else, a slip or lapsus in draftmanship. It
will be recalled that, in the 1935 Constitution, the following
provision appears at the end of par. 3, section 1 0, Article VII
thereof —
...; but the Congress may by law vest the appointment of
inferior officers, in the President alone, in the courts, or in
the heads of departments. [Emphasis supplied].
The above provision in the 1935 Constitution appears immediately
after the provision which makes practically all presidential
appointments subject to confirmation by the Commission on
Appointments, thus-
3. The President shall nominate and with the consent of
the Commission on Appointments, shall appoint the
heads of the executive departments and bureaus, officers
of the Army from the rank of colonel, of the Navy and Air
Forces from the rank of captain or commander, and all
other officers of the Government whose appointments
are not herein provided for, and those whom he may be
authorized by law to appoint; ...
In other words, since the 1935 Constitution subjects, as a general
rule, presidential appointments to confirmation by the Commission
on Appointments, the same 1935 Constitution saw fit, by way of
an exception to such rule, to provide that Congress may, however,
by law vest the appointment of inferior officers (equivalent to 11
officers lower in rank" referred to in the 1987 Constitution) in the
President alone, in the courts, or in the heads of departments,
In the 1987 Constitution, however, as already pointed out, the
clear and expressed intent of its framers was to exclude
presidential appointments from confirmation by the Commission
on Appointments, except appointments to offices expressly
mentioned in the first sentence of Sec. 16, Article VII.
Consequently, there was no reason to use in the third sentence of
Sec. 16, Article VII the word "alone" after the word "President" in
providing that Congress may by law vest the appointment of lower-
ranked officers in the President alone, or in the courts, or in the
heads of departments, because the power to appoint officers
whom he (the President) may be authorized by law to appoint is
already vested in the President, without need of confirmation by
the Commission on Appointments, in the second sentence of the
same Sec. 16, Article VII.
Therefore, the third sentence of Sec. 16, Article VII could have
stated merely that, in the case of lower-ranked officers, the
Congress may by law vest their appointment in the President, in
the courts, or in the heads of various departments of the
government. In short, the word "alone" in the third sentence of Sec.
16, Article VII of the 1987 Constitution, as a literal import from the
last part of par. 3, section 10, Article VII of the 1935 Constitution,
appears to be redundant in the light of the second sentence of Sec.
16, Article VII. And, this redundancy cannot prevail over the clear
and positive intent of the framers of the 1987 Constitution that
presidential appointments, except those mentioned in the first
sentence of Sec. 16, Article VII, are not subject to confirmation by
the Commission on Appointments.
Coming now to the immediate question before the Court, it is
evident that the position of Commissioner of the Bureau of
Customs (a bureau head) is not one of those within the first group
of appointments where the consent of the Commission on
Appointments is required. As a matter of fact, as already pointed
out, while the 1935 Constitution includes "heads of bureaus"
among those officers whose appointments need the consent of the
Commission on Appointments, the 1987 Constitution on the other
hand, deliberately excluded the position of "heads of bureaus"
from appointments that need the consent (confirmation) of the
Commission on Appointments.
Moreover, the President is expressly authorized by law to appoint
the Commissioner of the Bureau of Customs. The original text of
Sec. 601 of Republic Act No. 1937, otherwise known as the Tariff
and Customs Code of the Philippines, which was enacted by the
Congress of the Philippines on 22 June 1957, reads as follows:
601. Chief Officials of the Bureau.-The Bureau of
Customs shall have one chief and one assistant chief, to
be known respectively as the Commissioner (hereinafter
known as the 'Commissioner') and Assistant
Commissioner of Customs, who shall each receive an
annual compensation in accordance with the rates
prescribed by existing laws. The Assistant Commissioner
of Customs shall be appointed by the proper department
head.
Sec. 601 of Republic Act No. 1937, was amended on 27 October
1972 by Presidential Decree No. 34, amending the Tariff and
Customs Code of the Philippines. Sec. 601, as thus amended, now
reads as follows:
Sec. 601. Chief Officials of the Bureau of Customs.-The
Bureau of Customs shall have one chief and one
assistant chief, to be known respectively as the
Commissioner (hereinafter known as Commissioner) and
Deputy Commissioner of Customs, who shall each
receive an annual compensation in accordance with the
rates prescribed by existing law. The Commissioner and
the Deputy Commissioner of Customs shall be appointed
by the President of the Philippines (Emphasis supplied.)
Of course, these laws (Rep. Act No. 1937 and PD No. 34) were
approved during the effectivity of the 1935 Constitution, under
which the President may nominate and, with the consent of the
Commission on Appointments, appoint the heads of bureaus, like
the Commissioner of the Bureau of Customs.
After the effectivity of the 1987 Constitution, however, Rep. Act No.
1937 and PD No. 34 have to be read in harmony with Sec. 16, Art.
VII, with the result that, while the appointment of the Commissioner
of the Bureau of Customs is one that devolves on the President,
as an appointment he is authorizedby law to make, such
appointment, however, no longer needs the confirmation of the
Commission on Appointments.
Consequently, we rule that the President of the Philippines acted
within her constitutional authority and power in appointing
respondent Salvador Mison, Commissioner of the Bureau of
Customs, without submitting his nomination to the Commission on
Appointments for confirmation. He is thus entitled to exercise the
full authority and functions of the office and to receive all the
salaries and emoluments pertaining thereto.
WHEREFORE, the petition and petition in intervention should be,
as they are, hereby DISMISSED. Without costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-2348 February 27, 1950
GREGORIO PERFECTO, plaintiff-appellee,
vs.
BIBIANO MEER, Collector of Internal Revenue, defendant-
appellant.
First Assistant Solicitor General Roberto A. Gianzon and Solicitor
Francisco Carreon for oppositor and appellant.
Gregorio Perfecto in his own behalf.
BENGZON, J.:
In April, 1947 the Collector of Internal Revenue required Mr.
Justice Gregorio Perfecto to pay income tax upon his salary as
member of this Court during the year 1946. After paying the
amount (P802), he instituted this action in the Manila Court of First
Instance contending that the assessment was illegal, his salary not
being taxable for the reason that imposition of taxes thereon would
reduce it in violation of the Constitution.
The Manila judge upheld his contention, and required the refund
of the amount collected. The defendant appealed.
The death of Mr. Justice Perfecto has freed us from the
embarrassment of passing upon the claim of a colleague. Still, as
the outcome indirectly affects all the members of the Court,
consideration of the matter is not without its vexing feature. Yet
adjudication may not be declined, because (a) we are not legally
disqualified; (b) jurisdiction may not be renounced, ad it is the
defendant who appeals to this Court, and there is no other tribunal
to which the controversy may be referred; (c) supreme courts in
the United States have decided similar disputes relating to
themselves; (d) the question touches all the members of the
judiciary from top to bottom; and (e) the issue involves the right of
other constitutional officers whose compensation is equally
protected by the Constitution, for instance, the President, the
Auditor-General and the members of the Commission on
Elections. Anyway the subject has been thoroughly discussed in
many American lawsuits and opinions, and we shall hardly do
nothing more than to borrow therefrom and to compare their
conclusions to local conditions. There shall be little occasion to
formulate new propositions, for the situation is not unprecedented.
Our Constitution provides in its Article VIII, section 9, that the
members of the Supreme Court and all judges of inferior courts
"shall receive such compensation as may be fixed by law, which
shall not be diminished during their continuance in office." It also
provides that "until Congress shall provide otherwise, the Chief
Justice of the Supreme Court shall receive an annual
compensation of sixteen thousand pesos". When in 1945 Mr.
Justice Perfecto assumed office, Congress had not "provided
otherwise", by fixing a different salary for associate justices. He
received salary at the rate provided by the Constitution, i.e., fifteen
thousand pesos a year.
Now, does the imposition of an income tax upon this salary in 1946
amount to a diminution thereof?.
A note found at page 534 of volume 11 of the American Law
Reports answers the question in the affirmative. It says:
Where the Constitution of a state provides that the
salaries of its judicial officers shall not be dismissed
during their continuance in office, it had been held that
the state legislature cannot impose a tax upon the
compensation paid to the judges of its court. New
Orleans v. Lea (1859) 14 La. Ann. 194; Opinion of
Attorney-General if N. C. (1856) 48 N. C. (3 Jones, L.)
Appx. 1; Re Taxation of Salaries of Judges (1902) 131 N.
C. 692, 42 S. E. 970; Com. ex. rel. Hepburn v. Mann
(1843) 5 Watts & S,. (Pa.) 403 [but see to the contrary
the earlier and much criticized case of Northumberland
county v. Chapman (1829) 2 Rawle (Pa.) 73]*
A different rule prevails in Wisconsin, according to the same
annotation. Another state holding the contrary view is Missouri.
The Constitution of the United States, likes ours, forbids the
diminution of the compensation of Judges of the Supreme Court
and of inferior courts. The Federal Governments has an income
tax law. Does it embrace the salaries of federal judges? In
answering this question, we should consider four periods:
First period. No attempts was made to tax the compensation of
Federal judges up to 1862 1.
Second period. 1862-1918. In July, 1862, a statute was passed
subjecting the salaries of "civil officers of the United States" to an
income tax of three per cent. Revenue officers, construed it as
including the compensation of all judges; but Chief Justice Taney,
speaking for the judiciary, wrote to the Secretary of the Treasury a
letter of protest saying, among other things:
The act in question, as you interpret it, diminishes the
compensation of every judge 3 per cent, and if it can be
diminished to that extent by the name of a tax, it may, in
the same way, be reduced from time to time, at the
pleasure of the legislature.
The judiciary is one of the three great departments of the
government, created and established by the Constitution.
Its duties and powers are specifically set forth, and are of
a character that requires it to be perfectly independent of
the two other departments, and in order to place it beyond
the reach and above even the suspicion of any such
influence, the power to reduce their compensation is
expressly withheld from Congress, and excepted from
their powers of legislation.
Language could not be more plain than that used in the
Constitution. It is, moreover, one of its most important
and essential provisions. For the articles which limits the
powers of the legislative and executive branches of the
government, and those which provide safeguards for the
protection of the citizen in his person and property, would
be of little value without a judiciary to uphold and maintain
them, which was free from every influence, direct and
indirect, that might by possibility in times of political
excitement warp their judgments.
Upon these grounds I regard an act of Congress retaining
in the Treasury a portion of the Compensation of the
judges, as unconstitutional and void2.
The protest was unheeded, although it apparently bore the
approval of the whole Supreme Court, that ordered it printed
among its records. But in 1869 Attorney-General Hoar upon the
request of the Secretary of the Treasury rendered an opinion
agreeing with the Chief Justice. The collection of the tax was
consequently discontinued and the amounts theretofore received
were all refunded. For half a century thereafter judges' salaries
were not taxed as income.3
Third period. 1919-1938. The Federal Income Tax Act of February
24, 1919 expressly provided that taxable income shall include "the
compensation of the judges of the Supreme Court and inferior
courts of the United States". Under such Act, Walter Evans, United
States judge since 1899, paid income tax on his salary; and
maintaining that the impost reduced his compensation, he sued to
recover the money he had delivered under protest. He was upheld
in 1920 by the Supreme Court in an epoch-making decision.*,
explaining the purpose, history and meaning of the Constitutional
provision forbidding impairment of judicial salaries and the effect
of an income tax upon the salary of a judge.
With what purpose does the Constitution provide that the
compensation of the judges "shall not be diminished
during their continuance in office"? Is it primarily to benefit
the judges, or rather to promote the public weal by giving
them that independence which makes for an impartial
and courageous discharge of the judicial function? Does
the provision merely forbid direct diminution, such as
expressly reducing the compensation from a greater to a
less sum per year, and thereby leave the way open for
indirect, yet effective, diminution, such as withholding or
calling back a part as tax on the whole? Or does it mean
that the judge shall have a sure and continuing right to
the compensation, whereon he confidently may rely for
his support during his continuance in office, so that he
need have no apprehension lest his situation in this
regard may be changed to his disadvantage?
The Constitution was framed on the fundamental theory
that a larger measure of liberty and justice would be
assured by vesting the three powers — the legislative,
the executive, and the judicial — in separate
departments, each relatively independent of the others
and it was recognized that without this independence —
if it was not made both real and enduring — the
separation would fail of its purpose. all agreed that
restraints and checks must be imposed to secure the
requisite measure of independence; for otherwise the
legislative department, inherently the strongest, might
encroach on or even come to dominate the others, and
the judicial, naturally the weakest, might be dwarf or
swayed by the other two, especially by the legislative.
The particular need for making the judiciary independent
was elaborately pointed our by Alexander Hamilton in the
Federalist, No. 78, from which we excerpt the following:
xxx xxx xxx
At a later period John Marshall, whose rich experience as
lawyer, legislator, and chief justice enable him to speak
as no one else could, tersely said (debates Va. Gonv.
1829-1831, pp. 616, 619): . . . Our courts are the balance
wheel of our whole constitutional system; and our is the
only constitutional system so balanced and controlled.
Other constitutional systems lacks complete poise and
certainly of operation because they lack the support and
interpretation of authoritative, undisputable courts of law.
It is clear beyond all need of exposition that for the
definite maintenance of constitutional understandings it is
indispensable, alike for the preservation of the liberty of
the individual and for the preservation of the integrity of
the powers of the government, that there should be some
nonpolitical forum in which those understandings can be
impartially debated and determined. That forum our
courts supply. There the individual may assert his rights;
there the government must accept definition of its
authority. There the individual may challenge the legality
of governmental action and have it adjudged by the test
of fundamental principles, and that test the government
must abide; there the government can check the too
aggressive self-assertion of the individual and establish
its power upon lines which all can comprehend and heed.
The constitutional powers of the courts constitute the
ultimate safeguard alike of individual privilege and of
governmental prerogative. It is in this sense that our
judiciary is the balance wheel of our entire system; it is
meant to maintain that nice adjustment between
individual rights and governmental powers which
constitutes political liberty. Constitutional government in
the United States, pp. 17, 142.
Conscious in the nature and scope of the power being
vested in the national courts, recognizing that they would
be charge with responsibilities more delicate and
important than any ever before confide to judicial
tribunals, and appreciating that they were to be, in the
words of George Washington, "the keystone of our
political fabric", the convention with unusual accord
incorporated in the Constitution the provision that the
judges "shall hold their offices during good behavior, and
shall at stated times receive for their services a
compensation which shall not be diminished during their
continuance in office." Can there be any doubt that the
two things thus coupled in place — the clause in respect
of tenure during good behaviour and that in respect of an
undiminishable compensation-were equally coupled in
purpose? And is it not plain that their purposes was to
invest the judges with an independence in keeping with
the delicacy and importance of their task, and with the
imperative need for its impartial and fearless
performance? Mr. Hamilton said in explanation and
support of the provision (Federalist No. 79): "Next to
permanency in office, nothing can contribute more to the
independence of the judges than a fixed provision for
their support. . . . In the general course of human nature,
a power over a man's subsistence amounts to a power
over his will.
xxx xxx xxx
These considerations make it very plain, as we think, that
the primary purpose of the prohibition against diminution
was not to benefit the judges, but, like the clause in
respect of tenure, to attract good and competent men to
the bench, and to promote that independence of action
and judgment which is essential to the maintenance of
the guaranties, limitations, and pervading principles of
the constitution, and to the admiration of justice without
respect to persons, and with equal concern for the poor
and the rich.
xxx xxx xxx
But it is urged that what plaintiff was made to pay back
was an income tax, and that a like tax was exacted of
others engaged in private employment.
If the tax in respect of his compensation be prohibited, it
can find no justification in the taxation of other income as
to which there is no prohibition, for, of course, doing what
the Constitution permits gives no license to do what it
prohibits.
The prohibition is general, contains no excepting words,
and appears to be directed against all diminution,
whether for one purpose or another; and the reason for
its adoption, as publicly assigned at the time and
commonly accepted ever since, make with impelling
force for the conclusion that the fathers of the
Constitution intended to prohibit diminution by taxation as
well as otherwise, that they regarded the independence
of the judges as of far greater importance than any
revenue that could come from taxing their salaries.
(American law Reports, annotated, Vol. 11, pp. 522-25;
Evans vs. Gore, supra.)
In September 1, 1919, Samuel J. Graham assumed office as judge
of the Unites States court of claims. His salary was taxed by virtue
of the same time income tax of February 24, 1919. At the time he
qualified, a statute fixed his salary at P7,500. He filed action for
reimbursement, submitting the same theory on which Evans v.
Gore had been decided. The Supreme Court of the United States
in 1925 reaffirmed that decision. It overruled the distinction offered
by Solicitor-General Beck that Judge Graham took office after the
income tax had been levied on judicial salaries, (Evans qualified
before), and that Congress had power "to impose taxes which
should apply to the salaries of Federal judges appointed after the
enactment of the taxing statute." (The law had made no distinction
as to judges appointed before or after its passage)
Fourth period. 1939 — Foiled in their previous attempts, the
Revenue men persisted, and succeeded in inserting in the United
States Revenue Act of June, 1932 the modified proviso that "gross
income" on which taxes were payable included the compensation
"of judges of courts of the United States taking office after June 6,
1932". Joseph W. Woodrough qualified as United States circuit
judge on May 1, 1933. His salary as judge was taxed, and before
the Supreme Court of the United States the issue of decrease of
remuneration again came up. That court, however, ruled against
him, declaring (in 1939) that Congress had the power to adopt the
law. It said:
The question immediately before us is whether Congress
exceeded its constitutional power in providing that United
States judges appointed after the Revenue Act of 1932
shall not enjoy immunity from the incidence of taxation to
which everyone else within the defined classes of income
is subjected. Thereby, of course, Congress has
committed itself to the position that a non-discriminatory
tax laid generally on net income is not, when applied to
the income of federal judge, a diminution of his salary
within the prohibition of Article 3, Sec. 1 of the
Constitution. To suggest that it makes inroads upon the
independence of judges who took office after the
Congress has thus charged them with the common duties
of citizenship, by making them bear their aliquot share of
the cost of maintaining the Government, is to trivialize the
great historic experience on which the framers based the
safeguards of Article 3, Sec. 1. To subject them to a
general tax is merely to recognize that judges also are
citizens, and that their particular function in government
does not generate an immunity from sharing with their
fellow citizens the material burden of the government
whose Constitution and laws they are charged with
administering. (O'Malley vs. Woodrough, 59 S. Ct. 838,
A. L. R. 1379.)
Now, the case for the defendant-appellant Collector of Internal
Revenue is premised mainly on this decision (Note A). He claims
it holds "that federal judges are subject to the payment of income
taxes without violating the constitutional prohibition against the
reduction of their salaries during their continuance in office", and
that it "is a complete repudiation of the ratio decidenci of Evans vs.
Gore". To grasp the full import of the O'Malley precedent, we
should bear in mind that:
1. It does not entirely overturn Miles vs. Graham. "To the
extent that what the Court now says is inconsistent with what said
in Miles vs. Graham, the latter can not survive", Justice Frankfurter
announced.
2. It does not expressly touch nor amend the doctrine in Evans vs,
Gore, although it indicates that the Congressional Act in dispute
avoided in part the consequences of that case.
Carefully analyzing the three cases (Evans, Miles and O'Malley)
and piecing them together, the logical conclusion may be reached
that although Congress may validly declare by law that salaries of
judges appointed thereafter shall be taxed as income (O'Malley
vs. Woodrough) it may not tax the salaries of those judges already
in office at the time of such declaration because such taxation
would diminish their salaries (Evans vs. Gore; Miles vs. Graham).
In this manner the rationalizing principle that will harmonize the
allegedly discordant decision may be condensed.
By the way, Justice Frankfurter, writing the O'Malley decision, says
the Evans precedent met with disfavor from legal scholarship
opinion. Examining the issues of Harvard Law review at the time
of Evans vs. Gore (Frankfurter is a Harvard graduate and
professor), we found that such school publication criticized it.
Believing this to be the "inarticulate consideration that may have
influenced the grounds on which the case went off" 4, we looked
into the criticism, and discovered that it was predicated on the
position that the 16th Amendment empowered Congress "to
collect taxes on incomes from whatever source
derived" admitting of no exception. Said the Harvard Law Journal:
In the recent case of Evans vs. Gore the Supreme Court
of the United States decided that by taxing the salary of
a federal judge as a part of his income, Congress was in
effect reducing his salary and thus violating Art. III, sec.
1, of the Constitution. Admitting for the present purpose
that such a tax really is a reduction of salary, even so it
would seem that the words of the amendment giving
power to tax 'incomes, from whatever source derived',
are sufficiently strong to overrule pro tanto the provisions
of Art. III, sec. 1. But, two years ago, the court had already
suggested that the amendment in no way extended the
subjects open to federal taxation. The decision in Evans
vs. Gore affirms that view, and virtually strikes from the
amendment the words "from whatever source derived".
(Harvard law Review, vol. 34, p. 70)
The Unites States Court's shift of position5 might be attributed to
the above detraction which, without appearing on the surface, led
to Frankfurter's sweeping expression about judges being also
citizens liable to income tax. But it must be remembered that
undisclosed factor — the 16th Amendment — has no counterpart
in the Philippine legal system. Our Constitution does not repeat it.
Wherefore, as the underlying influence and the unuttered reason
has no validity in this jurisdiction, the broad generality loses much
of its force.
Anyhow the O'Malley case declares no more than that
Congress may validly enact a law taxing the salaries of judges
appointed after its passage. Here in the Philippines no such law
has been approved.
Besides, it is markworthy that, as Judge Woodrough had qualified
after the express legislative declaration taxing salaries, he could
not very well complain. The United States Supreme Court probably
had in mind what in other cases was maintained, namely, that the
tax levied on the salary in effect decreased the emoluments of the
office and therefore the judge qualified with such reduced
emoluments.6
The O'Malley ruling does not cover the situation in which judges
already in office are made to pay tax by executive interpretation,
without express legislative declaration. That state of affairs is
controlled by the administrative and judicial standards herein-
before described in the "second period" of the Federal
Government, namely, the views of Chief Justice Taney and of
Attorney-General Hoar and the constant practice from 1869 to
1938, i.e., when the Income Tax Law merely taxes "income" in
general, it does not include salaries of judges protected from
diminution.
In this connection the respondent would make capital of the
circumstance that the Act of 1932, upheld in the O'Malley case,
has subsequently been amended by making it applicable even to
judges who took office before1932. This shows, the appellant
argues, that Congress interprets the O'Malley ruling to permit
legislative taxation of the salary of judges whether appointed
before the tax or after. The answer to this is that the Federal
Supreme Court expressly withheld opinion on that amendment in
the O'Malley case. Which is significant. Anyway, and again, there
is here no congressional directive taxing judges' salaries.
Wherefore, unless and until our Legislature approves an
amendment to the Income Tax Law expressly taxing "that salaries
of judges thereafter appointed", the O'Malley case is not relevant.
As in the United States during the second period, we must hold
that salaries of judges are not included in the word "income" taxed
by the Income Tax Law. Two paramount circumstances may
additionally be indicated, to wit: First, when the Income Tax Law
was first applied to the Philippines 1913, taxable "income" did not
include salaries of judicial officers when these are protected from
diminution. That was the prevailing official belief in the United
States, which must be deemed to have been transplanted
here;7 and second, when the Philippine Constitutional Convention
approved (in 1935) the prohibition against diminution off the
judges' compensation, the Federal principle was known that
income tax on judicial salaries really impairs them. Evans vs.
Gore and Miles vs. Graham were then outstanding doctrines; and
the inference is not illogical that in restraining the impairment of
judicial compensation the Fathers of the Constitution intended to
preclude taxation of the same.8
It seems that prior to the O'Malley decision the Philippine
Government did not collect income tax on salaries of judges. This
may be gleaned from General Circular No. 449 of the Department
of Finance dated March 4, 1940, which says in part:
xxx xxx xxx
The question of whether or not the salaries of judges
should be taken into account in computing additional
residence taxes is closely linked with the liability of judges
to income tax on their salaries, in fact, whatever
resolution is adopted with respect to either of said taxes
be followed with respect to the other. The opinion of the
Supreme Court of the United States in the case
of O'Malley v. Woodrough, 59 S. Ct. 838, to which the
attention of this department has been drawn, appears to
have enunciated a new doctrine regarding the liability of
judges to income tax upon their salaries. In view of the
fact that the question is of great significance, the matter
was taken up in the Council of State, and the Honorable,
the Secretary of Justice was requested to give an opinion
on whether or not, having in mind the said decision of the
Supreme Court of the United States in the case
of O'Malley v. Woodrough, there is justification in
reversing our present ruling to the effect that judges are
not liable to tax on their salaries. After going over the
opinion of the court in the said case, the Honorable, the
Secretary of Justice, stated that although the ruling of the
Supreme Court of the United States is not binding in the
Philippines, the doctrine therein enunciated has resolved
the issue of the taxability of judges' salaries into a
question of policy. Forthwith, His Excellency the
President decided that the best policy to adopt would be
to collect income and additional residence taxes from the
President of the Philippines, the members of the
Judiciary, and the Auditor General, and the undersigned
was authorized to act accordingly.
In view of the foregoing, income and additional residence
taxes should be levied on the salaries received by the
President of the Philippines, members of the Judiciary,
and the Auditor General during the calendar year 1939
and thereafter. . . . . (Emphasis ours.)
Of course, the Secretary of Justice correctly opined that the
O'Malley decision "resolved the issue of taxability of judges'
salaries into a question of policy." But that policy must be
enunciated by Congressional enactment, as was done in the
O'Malley case, not by Executive Fiat or interpretation.
This is not proclaiming a general tax immunity for men on the
bench. These pay taxes. Upon buying gasoline, or other
commodities, they pay the corresponding duties. Owning real
property, they pay taxes thereon. And on incomes other than their
judicial salary, assessments are levied. It is only when the tax is
charged directly on their salary and the effect of the tax is to
diminish their official stipend — that the taxation must be resisted
as an infringement of the fundamental charter.
Judges would indeed be hapless guardians of the Constitution if
they did not perceive and block encroachments upon their
prerogatives in whatever form. The undiminishable character of
judicial salaries is not a mere privilege of judges — personal and
therefore waivable — but a basic limitation upon legislative or
executive action imposed in the public interest. (Evans vs. Gore)
Indeed the exemption of the judicial salary from reduction by
taxation is not really a gratuity or privilege. Let the highest court of
Maryland speak:
The exemption of the judicial compensation from
reduction is not in any true sense a gratuity, privilege or
exemption. It is essentially and primarily compensation
based upon valuable consideration. The covenant on the
part of the government is a guaranty whose fulfillment is
as much as part of the consideration agreed as is the
money salary. The undertaking has its own particular
value to the citizens in securing the independence of the
judiciary in crises; and in the establishment of the
compensation upon a permanent foundation whereby
judicial preferment may be prudently accepted by those
who are qualified by talent, knowledge, integrity and
capacity, but are not possessed of such a private fortune
as to make an assured salary an object of personal
concern. On the other hand, the members of the judiciary
relinquish their position at the bar, with all its professional
emoluments, sever their connection with their clients, and
dedicate themselves exclusively to the discharge of the
onerous duties of their high office. So, it is irrefutable that
they guaranty against a reduction of salary by the
imposition of a tax is not an exemption from taxation in
the sense of freedom from a burden or service to which
others are liable. The exemption for a public purpose or
a valid consideration is merely a nominal exemption,
since the valid and full consideration or the public
purpose promoted is received in the place of the tax.
Theory and Practice of Taxation (1900), D. A. Wells, p.
541. (Gordy vs. Dennis (Md.) 1939, 5 Atl. Rep. 2d Series,
p. 80)
It is hard to see, appellants asserts, how the imposition of the
income tax may imperil the independence of the judicial
department. The danger may be demonstrated. Suppose there is
power to tax the salary of judges, and the judiciary incurs the
displeasure of the Legislature and the Executive. In retaliation the
income tax law is amended so as to levy a 30 per cent on all
salaries of government officials on the level of judges. This
naturally reduces the salary of the judges by 30 per cent, but they
may not grumble because the tax is general on all receiving the
same amount of earning, and affects the Executive and the
Legislative branches in equal measure. However, means are
provided thereafter in other laws, for the increase of salaries of the
Executive and the Legislative branches, or their perquisites such
as allowances, per diems, quarters, etc. that actually compensate
for the 30 per cent reduction on their salaries. Result: Judges
compensation is thereby diminished during their incumbency
thanks to the income tax law. Consequence: Judges must "toe the
line" or else. Second consequence: Some few judges might falter;
the great majority will not. But knowing the frailty of human nature,
and this chink in the judicial armor, will the parties losing their
cases against the Executive or the Congress believe that the
judicature has not yielded to their pressure?
Respondent asserts in argumentation that by executive order the
President has subjected his salary to the income tax law. In our
opinion this shows obviously that, without such voluntary act of the
President, his salary would not be taxable, because of
constitutional protection against diminution. To argue from this
executive gesture that the judiciary could, and should act in like
manner is to assume that, in the matter of compensation and
power and need of security, the judiciary is on a par with the
Executive. Such assumption certainly ignores the prevailing state
of affairs.
The judgment will be affirmed. So ordered.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-6355-56 August 31, 1953
PASTOR M. ENDENCIA and FERNANDO JUGO, plaintiffs-
appellees,
vs.
SATURNINO DAVID, as Collector of Internal
Revenue, defendant-appellant.
Office of the Solicitor General Juan R. Liwag and Solicitor Jose
P. Alejandro for appellant.
Manuel O. Chan for appellees.
MONTEMAYOR, J.:
This is a joint appeal from the decision of the Court of First
Instance of Manila declaring section 13 of Republic Act No. 590
unconstitutional, and ordering the appellant Saturnino David as
Collector of Internal Revenue to re-fund to Justice Pastor M.
Endencia the sum of P1,744.45, representing the income tax
collected on his salary as Associate Justice of the Court of Appeals
in 1951, and to Justice Fernando Jugo the amount of P2,345.46,
representing the income tax collected on his salary from January
1,1950 to October 19, 1950, as Presiding Justice of the Court of
Appeals, and from October 20, 1950 to December 31,1950, as
Associate Justice of the Supreme Court, without special
pronouncement as to costs.
Because of the similarity of the two cases, involving as they do the
same question of law, they were jointly submitted for determination
in the lower court. Judge Higinio B. Macadaeg presiding, in a
rather exhaustive and well considered decision found and held that
under the doctrine laid down by this Court in the case of Perfecto
vs. Meer, 85 Phil., 552, the collection of income taxes from the
salaries of Justice Jugo and Justice Endencia was a diminution of
their compensation and therefore was in violation of the
Constitution of the Philippines, and so ordered the refund of said
taxes.
We see no profit and necessity in again discussing and
considering the proposition and the arguments pro and cons
involved in the case of Perfecto vs. Meer, supra, which are raised,
brought up and presented here. In that case, we have held despite
the ruling enunciated by the United States Federal Supreme Court
in the case of O 'Malley vs. Woodrought 307 U. S., 277, that taxing
the salary of a judicial officer in the Philippines is a diminution of
such salary and so violates the Constitution. We shall now confine
our-selves to a discussion and determination of the remaining
question of whether or not Republic Act No. 590, particularly
section 13, can justify and legalize the collection of income tax on
the salary of judicial officers.
According to the brief of the Solicitor General on behalf of appellant
Collector of Internal Revenue, our decision in the case of Perfecto
vs. Meer, supra, was not received favorably by Congress, because
immediately after its promulgation, Congress enacted Republic
Act No. 590. To bring home his point, the Solicitor General
reproduced what he considers the pertinent discussion in the
Lower House of House Bill No. 1127 which became Republic Act
No. 590.
For purposes of reference, we are reproducing section 9, Article
VIII of our Constitution:.
SEC. 9. The members of the Supreme Court and all
judges of inferior courts shall hold office during good
behavior, until they reach the age of seventy years, or
become incapacitated to discharge the duties of their
office. They shall receive such compensation as may be
fixed by law, which shall not be diminished during their
continuance in office. Until the Congress shall provide
otherwise, the Chief Justice of the Supreme Court shall
receive an annual compensation of sixteen thousand
pesos, and each Associate Justice, fifteen thousand
pesos.
As already stated construing and applying the above constitutional
provision, we held in the Perfecto case that judicial officers are
exempt from the payment of income tax on their salaries, because
the collection thereof by the Government was a decrease or
diminution of their salaries during their continuance in office, a
thing which is expressly prohibited by the Constitution. Thereafter,
according to the Solicitor General, because Congress did not
favorably receive the decision in the Perfecto case, Congress
promulgated Republic Act No. 590, if not to counteract the ruling
in that decision, at least now to authorize and legalize the
collection of income tax on the salaries of judicial officers. We
quote section 13 of Republic Act No. 590:
SEC 13. No salary wherever received by any public
officer of the Republic of the Philippines shall be
considered as exempt from the income tax, payment of
which is hereby declared not to be dimunition of his
compensation fixed by the Constitution or by law.
So we have this situation. The Supreme Court in a decision
interpreting the Constitution, particularly section 9, Article VIII, has
held that judicial officers are exempt from payment of income tax
on their salaries, because the collection thereof was a diminution
of such salaries, specifically prohibited by the Constitution. Now
comes the Legislature and in section 13, Republic Act No. 590,
says that "no salary wherever received by any public officer of the
Republic (naturally including a judicial officer) shall be considered
as exempt from the income tax," and proceeds to declare that
payment of said income tax is not a diminution of his
compensation. Can the Legislature validly do this? May the
Legislature lawfully declare the collection of income tax on the
salary of a public official, specially a judicial officer, not a decrease
of his salary, after the Supreme Court has found and decided
otherwise? To determine this question, we shall have to go back
to the fundamental principles regarding separation of powers.
Under our system of constitutional government, the Legislative
department is assigned the power to make and enact laws. The
Executive department is charged with the execution of carrying out
of the provisions of said laws. But the interpretation and application
of said laws belong exclusively to the Judicial department. And this
authority to interpret and apply the laws extends to the
Constitution. Before the courts can determine whether a law is
constitutional or not, it will have to interpret and ascertain the
meaning not only of said law, but also of the pertinent portion of
the Constitution in order to decide whether there is a conflict
between the two, because if there is, then the law will have to give
way and has to be declared invalid and unconstitutional.
Defining and interpreting the law is a judicial function and
the legislative branch may not limit or restrict the power
granted to the courts by the Constitution. (Bandy vs.
Mickelson et al., 44N. W., 2nd 341, 342.)
When it is clear that a statute transgresses the authority
vested in the legislature by the Constitution, it is the duty
of the courts to declare the act unconstitutional because
they cannot shrink from it without violating their oaths of
office. This duty of the courts to maintain the Constitution
as the fundamental law of the state is imperative and
 unceasing; and, as Chief Justice Marshall said, whenever
a statute is in violation of the fundamental law, the courts
must so adjudge and thereby give effect to the
Constitution. Any other course would lead to the
destruction of the Constitution. Since the question as to
the constitutionality of a statute is a judicial matter, the
courts will not decline the exercise of jurisdiction upon the
suggestion that action might be taken by political
agencies in disregard of the judgment of the judicial
tribunals. (11 Am. Jur., 714-715.)
Under the American system of constitutional
government, among the most important functions in
trusted to the judiciary are the interpreting of
Constitutions and, as a closely connected power, the
determination of whether laws and acts of the legislature
are or are not contrary to the provisions of the Federal
and State Constitutions. (11 Am. Jur., 905.).
By legislative fiat as enunciated in section 13, Republic Act NO.
590, Congress says that taxing the salary of a judicial officer is not
a decrease of compensation. This is a clear example of
interpretation or ascertainment of the meaning of the phrase
"which shall not be diminished during their continuance in office,"
found in section 9, Article VIII of the Constitution, referring to the
salaries of judicial officers. This act of interpreting the Constitution
or any part thereof by the Legislature is an invasion of the well-
defined and established province and jurisdiction of the Judiciary.
The rule is recognized elsewhere that the legislature
cannot pass any declaratory act, or act declaratory of
what the law was before its passage, so as to give it any
binding weight with the courts. A legislative definition of a
word as used in a statute is not conclusive of its meaning
as used elsewhere; otherwise, the legislature would be
usurping a judicial function in defining a term. (11 Am.
Jur., 914, emphasis supplied)
The legislature cannot, upon passing a law which violates
a constitutional provision, validate it so as to prevent an
attack thereon in the courts, by a declaration that it shall
be so construed as not to violate the constitutional
inhibition. (11 Am. Jur., 919, emphasis supplied)
We have already said that the Legislature under our form of
government is assigned the task and the power to make and enact
laws, but not to interpret them. This is more true with regard to the
interpretation of the basic law, the Constitution, which is not within
the sphere of the Legislative department. If the Legislature may
declare what a law means, or what a specific portion of the
Constitution means, especially after the courts have in actual case
ascertain its meaning by interpretation and applied it in a decision,
this would surely cause confusion and instability in judicial
processes and court decisions. Under such a system, a final court
determination of a case based on a judicial interpretation of the
law of the Constitution may be undermined or even annulled by a
subsequent and different interpretation of the law or of the
Constitution by the Legislative department. That would be neither
wise nor desirable, besides being clearly violative of the
fundamental, principles of our constitutional system of
government, particularly those governing the separation of
powers.
So much for the constitutional aspect of the case. Considering the
practical side thereof, we believe that the collection of income tax
on a salary is an actual and evident diminution thereof. Under the
old system where the in-come tax was paid at the end of the year
or sometime thereafter, the decrease may not be so apparent and
clear. All that the official who had previously received his full salary
was called upon to do, was to fulfill his obligation and to exercise
his privilege of paying his income tax on his salary. His salary fixed
by law was received by him in the amount of said tax comes from
his other sources of income, he may not fully realize the fact that
his salary had been decreased in the amount of said income tax.
But under the present system of withholding the income tax at the
source, where the full amount of the income tax corresponding to
his salary is computed in advance and divided into equal portions
corresponding to the number of pay-days during the year and
actually deducted from his salary corresponding to each payday,
said official actually does not receive his salary in full, because the
income tax is deducted therefrom every payday, that is to say,
twice a month. Let us take the case of Justice Endencia. As
Associate Justice of the Court of Appeals, his salary is fixed at
p12,000 a year, that is to say, he should receive P1,000 a month
or P500 every payday, — fifteenth and end of month. In the
present case, the amount collected by the Collector of Internal
Revenue on said salary is P1,744.45 for one year. Divided by
twelve (months) we shall have P145.37 a month. And further
dividing it by two paydays will bring it down to P72.685, which is
the income tax deducted form the collected on his salary each half
month. So, if Justice Endencia's salary as a judicial officer were
not exempt from payment of the income tax, instead of receiving
P500 every payday, he would be actually receiving P427.31 only,
and instead of receiving P12,000 a year, he would be receiving but
P10,255.55. Is it not therefor clear that every payday, his salary is
actually decreased by P72.685 and every year is decreased by
P1,744.45?
Reading the discussion in the lower House in connection with
House Bill No. 1127, which became Republic Act No. 590, it would
seem that one of the main reasons behind the enactment of the
law was the feeling among certain legislators that members of the
Supreme Court should not enjoy any exemption and that as
citizens, out of patriotism and love for their country, they should
pay income tax on their salaries. It might be stated in this
connection that the exemption is not enjoyed by the members of
the Supreme Court alone but also by all judicial officers including
Justices of the Court of Appeals and judges of inferior courts. The
exemption also extends to other constitutional officers, like the
President of the Republic, the Auditor General, the members of the
Commission on Elections, and possibly members of the Board of
Tax Appeals, commissioners of the Public Service Commission,
and judges of the Court of Industrial Relations. Compares to the
number of all these officials, that of the Supreme Court Justices is
relatively insignificant. There are more than 990 other judicial
officers enjoying the exemption, including 15 Justices of the Court
of Appeals, about 107 Judges of First Instance, 38 Municipal
Judges and about 830 Justices of the Peace. The reason behind
the exemption in the Constitution, as interpreted by the United
States Federal Supreme Court and this Court, is to preserve the
independence of the Judiciary, not only of this High Tribunal but of
the other courts, whose present membership number more than
990 judicial officials.
The exemption was not primarily intended to benefit judicial
officers, but was grounded on public policy. As said by Justice Van
Devanter of the United States Supreme Court in the case of Evans
vs. Gore (253 U. S., 245):
The primary purpose of the prohibition against diminution
was not to benefit the judges, but, like the clause in
respect of tenure, to attract good and competent men to
the bench and to promote that independence of action
and judgment which is essential to the maintenance of
the guaranties, limitations and pervading principles of the
Constitution and to the administration of justice without
respect to person and with equal concern for the poor and
the rich. Such being its purpose, it is to be construed, not
as a private grant, but as a limitation imposed in the public
interest; in other words, not restrictively, but in accord
with its spirit and the principle on which it proceeds.
Having in mind the limited number of judicial officers in the
Philippines enjoying this exemption, especially when the great bulk
thereof are justices of the peace, many of them receiving as low
as P200 a month, and considering further the other exemptions
allowed by the income tax law, such as P3,000 for a married
person and P600 for each dependent, the amount of national
revenue to be derived from income tax on the salaries of judicial
officers, were if not for the constitutional exemption, could not be
large or substantial. But even if it were otherwise, it should not
affect, much less outweigh the purpose and the considerations
that prompted the establishment of the constitutional exemption.
In the same case of Evans vs. Gore, supra, the Federal Supreme
Court declared "that they (fathers of the Constitution) regarded the
independence of the judges as far as greater importance than any
revenue that could come from taxing their salaries.
When a judicial officer assumed office, he does not exactly ask for
exemption from payment of income tax on his salary, as a privilege
. It is already attached to his office, provided and secured by the
fundamental law, not primarily for his benefit, but based on public
interest, to secure and preserve his independence of judicial
thought and action. When we come to the members of the
Supreme Court, this excemption to them is relatively of short
duration. Because of the limited membership in this High Tribunal,
eleven, and due to the high standards of experience, practice and
training required, one generally enters its portals and comes to join
its membership quite late in life, on the aver-age, around his
sixtieth year, and being required to retire at seventy, assuming that
he does not die or become incapacitated earlier, naturally he is not
in a position to receive the benefit of exemption for long. It is rather
to the justices of the peace that the exemption can give more
benefit. They are relatively more numerous, and because of the
meager salary they receive, they can less afford to pay the income
tax on it and its diminution by the amount of the income tax if paid
would be real, substantial and onerous.
Considering exemption in the abstract, there is nothing unusual
or abhorrent in it, as long as it is based on public policy or public
interest. While all other citizens are subject to arrest when
charged with the commission of a crime, members of the Senate
and House of Representatives except in cases of treason, felony
and breach of the peace are exempt from arrest, during their
attendance in the session of the Legislature; and while all other
citizens are generally liable for any speech, remark or statement,
oral or written, tending to cause the dishonor, discredit or
contempt of a natural or juridical person or to blacken the
memory of one who is dead, Senators and Congressmen in
making such statements during their sessions are extended
immunity and exemption.
And as to tax exemption, there are not a few citizens who enjoy
this exemption. Persons, natural and juridical, are exempt from
taxes on their lands, buildings and improvements thereon when
used exclusively for educational purposes, even if they derive
income therefrom. (Art. VI, Sec. 22 [3].) Holders of government
bonds are exempted from the payment of taxes on the income or
interest they receive therefrom (sec. 29 (b) [4], National Internal
Revenue Code as amended by Republic Act No. 566). Payments
or income received by any person residing in the Philippines
under the laws of the United States administered by the United
States Veterans Administration are exempt from taxation.
(Republic Act No. 360). Funds received by officers and enlisted
men of the Philippine Army who served in the Armed Forces of
the United States, allowances earned by virtue of such services
corresponding to the taxable years 1942 to 1945, inclusive, are
exempted from income tax. (Republic Act No. 210). The payment
of wages and allowances of officers and enlisted men of the
Army Forces of the Philippines sent to Korea are also exempted
from taxation. (Republic Act No. 35). In other words, for reasons
of public policy and public interest, a citizen may justifiably by
constitutional provision or statute be exempted from his ordinary
obligation of paying taxes on his income. Under the same public
policy and perhaps for the same it not higher considerations, the
framers of the Constitution deemed it wise and necessary to
exempt judicial officers from paying taxes on their salaries so as
not to decrease their compensation, thereby insuring the
independence of the Judiciary.
In conclusion we reiterate the doctrine laid down in the case
of Perfecto vs. Meer, supra, to the effect that the collection of
income tax on the salary of a judicial officer is a diminution
thereof and so violates the Constitution. We further hold that the
interpretation and application of the Constitution and of statutes
is within the exclusive province and jurisdiction of the Judicial
department, and that in enacting a law, the Legislature may not
legally provide therein that it be interpreted in such a way that it
may not violate a Constitutional prohibition, thereby tying the
hands of the courts in their task of later interpreting said statute,
specially when the interpretation sought and provided in said
statute runs counter to a previous interpretation already given in
a case by the highest court of the land.
In the views of the foregoing considerations, the decision
appealed from is hereby affirmed, with no pronouncement as to
costs.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 78780 July 23, 1987
DAVID G. NITAFAN, WENCESLAO M. POLO, and MAXIMO A.
SAVELLANO, JR., petitioners,
vs.
COMMISSIONER OF INTERNAL REVENUE and THE
FINANCIAL OFFICER, SUPREME COURT OF THE
PHILIPPINES, respondents.
RESOLUTION
MELENCIO-HERRERA, J.:
Petitioners, the duly appointed and qualified Judges presiding over
Branches 52, 19 and 53, respectively, of the Regional Trial Court,
National Capital Judicial Region, all with stations in Manila, seek
to prohibit and/or perpetually enjoin respondents, the
Commissioner of Internal Revenue and the Financial Officer of the
Supreme Court, from making any deduction of withholding taxes
from their salaries.
In a nutshell, they submit that "any tax withheld from their
emoluments or compensation as judicial officers constitutes a
decrease or diminution of their salaries, contrary to the provision
of Section 10, Article VIII of the 1987 Constitution mandating that
"(d)uring their continuance in office, their salary shall not be
decreased," even as it is anathema to the Ideal of an independent
judiciary envisioned in and by said Constitution."
It may be pointed out that, early on, the Court had dealt with the
matter administratively in response to representations that the
Court direct its Finance Officer to discontinue the withholding of
taxes from salaries of members of the Bench. Thus, on June 4,
1987, the Court en banc had reaffirmed the Chief Justice's
directive as follows:
RE: Question of exemption from income taxation. — The
Court REAFFIRMED the Chief Justice's previous and
standing directive to the Fiscal Management and Budget
Office of this Court to continue with the deduction of the
withholding taxes from the salaries of the Justices of the
Supreme Court as well as from the salaries of all other
members of the judiciary.
That should have resolved the question. However, with the filing
of this petition, the Court has deemed it best to settle the legal
issue raised through this judicial pronouncement. As will be shown
hereinafter, the clear intent of the Constitutional Commission was
to delete the proposed express grant of exemption from payment
of income tax to members of the Judiciary, so as to "give
substance to equality among the three branches of Government"
in the words of Commissioner Rigos. In the course of the
deliberations, it was further expressly made clear, specially with
regard to Commissioner Joaquin F. Bernas' accepted amendment
to the amendment of Commissioner Rigos, that the salaries of
members of the Judiciary would be subject to the general income
tax applied to all taxpayers.
This intent was somehow and inadvertently not clearly set forth in
the final text of the Constitution as approved and ratified in
February, 1987 (infra, pp. 7-8). Although the intent may have been
obscured by the failure to include in the General Provisions a
proscription against exemption of any public officer or employee,
including constitutional officers, from payment of income tax, the
Court since then has authorized the continuation of the deduction
of the withholding tax from the salaries of the members of the
Supreme Court, as well as from the salaries of all other members
of the Judiciary. The Court hereby makes of record that it had then
discarded the ruling in Perfecto vs. Meer and Endencia vs. David,
infra, that declared the salaries of members of the Judiciary
exempt from payment of the income tax and considered such
payment as a diminution of their salaries during their continuance
in office. The Court hereby reiterates that the salaries of Justices
and Judges are properly subject to a general income tax law
applicable to all income earners and that the payment of such
income tax by Justices and Judges does not fall within the
constitutional protection against decrease of their salaries during
their continuance in office.
A comparison of the Constitutional provisions involved is called for.
The 1935 Constitution provided:
... (The members of the Supreme Court and all judges of
inferior courts) shall receive such compensation as may
be fixed by law, which shall not be diminished during their
continuance in office ... 1 (Emphasis supplied).
Under the 1973 Constitution, the same provision read:
The salary of the Chief Justice and of the Associate
Justices of the Supreme court, and of judges of inferior
courts shall be fixed by law, which shall not
be decreased during their continuance in office.
... 2 (Emphasis ours).
And in respect of income tax exemption, another provision in the
same 1973 Constitution specifically stipulated:
No salary or any form of emolument of any public officer
or employee, including constitutional officers, shall be
exempt from payment of income tax. 3
The provision in the 1987 Constitution, which petitioners rely on,
reads:
The salary of the Chief Justice and of the Associate
Justices of the Supreme Court, and of judges of lower
courts shall be fixed by law. During their continuance in
office, their salary shall not be decreased. 4(Emphasis
supplied).
The 1987 Constitution does not contain a provision similar to
Section 6, Article XV of the 1973 Constitution, for which reason,
petitioners claim that the intent of the framers is to revert to the
original concept of "non-diminution "of salaries of judicial officers.
The deliberations of the 1986 Constitutional Commission relevant
to Section 10, Article VIII, negate such contention.
The draft proposal of Section 10, Article VIII, of the 1987
Constitution read:
Section 13. The salary of the Chief Justice and the
Associate Justices of the Supreme Court and of judges
of the lower courts shall be fixed by law. During their
continuance in office, their salary shall not be diminished
nor subjected to income tax. Until the National Assembly
shall provide otherwise, the Chief Justice shall receive an
annual salary of _____________ and each Associate
Justice ______________ pesos. 5(Emphasis ours)
During the debates on the draft Article (Committee Report No. 18),
two Commissioners presented their objections to the provision on
tax exemption, thus:
MS. AQUINO. Finally, on the matter of exemption from
tax of the salary of justices, does this not violate the
principle of the uniformity of taxation and the principle of
equal protection of the law? After all, tax is levied not on
the salary but on the combined income, such that when
the judge receives a salary and it is comingled with the
other income, we tax the income, not the salary. Why do
we have to give special privileges to the salary of
justices?
MR. CONCEPCION. It is the independence of the
judiciary. We prohibit the increase or decrease of their
salary during their term. This is an indirect way of
decreasing their salary and affecting the independence
of the judges.
MS. AQUINO. I appreciate that to be in the nature of a
clause to respect tenure, but the special privilege on
taxation might, in effect, be a violation of the principle of
uniformity in taxation and the equal protection clause. 6
xxx xxx xxx
MR. OPLE. x x x
Of course, we share deeply the concern expressed by the
sponsor, Commissioner Roberto Concepcion, for whom
we have the highest respect, to surround the Supreme
Court and the judicial system as a whole with the whole
armor of defense against the executive and legislative
invasion of their independence. But in so doing, some of
the citizens outside, especially the humble government
employees, might say that in trying to erect a bastion of
justice, we might end up with the fortress of privileges, an
island of extra territoriality under the Republic of the
Philippines, because a good number of powers and rights
 accorded to the Judiciary here may not be enjoyed in the
remotest degree by other employees of the government.
An example is the exception from income tax, which is a
kind of economic immunity, which is, of course, denied to
the entire executive department and the legislative. 7
And during the period of amendments on the draft Article, on July
14, 1986, Commissioner Cirilo A. Rigos proposed that the term
"diminished" be changed to "decreased" and that the words "nor
subjected to income tax" be deleted so as to "give substance to
equality among the three branches in the government.
Commissioner Florenz D. Regalado, on behalf of the Committee
on the Judiciary, defended the original draft and referred to the
ruling of this Court in Perfecto vs. Meer 8 that "the independence
of the judges is of far greater importance than any revenue that
could come from taxing their salaries." Commissioner Rigos then
moved that the matter be put to a vote. Commissioner Joaquin G.
Bernas stood up "in support of an amendment to the amendment
with the request for a modification of the amendment," as follows:
FR. BERNAS. Yes. I am going to propose an amendment
to the amendment saying that it is not enough to drop the
phrase "shall not be subjected to income tax," because if
that is all that the Gentleman will do, then he will just fall
back on the decision in Perfecto vs. Meer and in Dencia
vs. David [should be Endencia and Jugo vs. David, etc.,
93 Phil. 696[ which excludes them from income tax, but
rather I would propose that the statement will read:
"During their continuance in office, their salary shall not
be diminished BUT MAY BE SUBJECT TO GENERAL
INCOME TAX."IN support of this position, I would say
that the argument seems to be that the justice and judges
should not be subjected to income tax because they
already gave up the income from their practice. That is
true also of Cabinet members and all other employees.
And I know right now, for instance, there are many people
who have accepted employment in the government
involving a reduction of income and yet are still subject to
income tax. So, they are not the only citizens whose
income is reduced by accepting service in government.
Commissioner Rigos accepted the proposed amendment to the
amendment. Commissioner Rustico F. de los Reyes, Jr. then
moved for a suspension of the session. Upon resumption,
Commissioner Bernas announced:
During the suspension, we came to an understanding
with the original proponent, Commissioner Rigos, that his
amendment on page 6,. line 4 would read: "During their
continuance in office, their salary shall not be
DECREASED."But this is on the understanding that there
will be a provision in the Constitution similar to Section 6
of Article XV, the General Provisions of the 1973
Constitution, which says:
No salary or any form of emolument of any
public officer or employee, including
constitutional officers, shall be exempt from
payment of income tax.
So, we put a period (.) after "DECREASED" on the
understanding that the salary of justices is subject to tax.
When queried about the specific Article in the General Provisions
on non-exemption from tax of salaries of public officers,
Commissioner Bernas replied:
FR BERNAS. Yes, I do not know if such an article will be
found in the General Provisions. But at any rate, when we
put a period (.) after "DECREASED," it is on the
understanding that the doctrine in Perfecto vs. Meer and
Dencia vs. David will not apply anymore.
The amendment to the original draft, as discussed and
understood, was finally approved without objection.
THE PRESIDING OFFICER (Mr. Bengzon). The
understanding, therefore, is that there will be a provision
under the Article on General Provisions. Could
Commissioner Rosario Braid kindly take note that the
salaries of officials of the government including
constitutional officers shall not be exempt from income
tax? The amendment proposed herein and accepted by
the Committee now reads as follows: "During their
continuance in office, their salary shall not be
DECREASED"; and the phrase "nor subjected to income
tax" is deleted.9
The debates, interpellations and opinions expressed regarding the
constitutional provision in question until it was finally approved by
the Commission disclosed that the true intent of the framers of the
1987 Constitution, in adopting it, was to make the salaries of
members of the Judiciary taxable. The ascertainment of that intent
is but in keeping with the fundamental principle of constitutional
construction that the intent of the framers of the organic law and of
the people adopting it should be given effect.10 The primary task in
constitutional construction is to ascertain and thereafter assure the
realization of the purpose of the framers and of the people in the
adoption of the Constitution.11it may also be safely assumed that
the people in ratifying the Constitution were guided mainly by the
explanation offered by the framers.12 1avvphi1
Besides, construing Section 10, Articles VIII, of the 1987
Constitution, which, for clarity, is again reproduced hereunder:
The salary of the Chief Justice and of the Associate
Justices of the Supreme Court, and of judges of lower
courts shall be fixed by law. During their continuance in
office, their salary shall not be decreased. (Emphasis
supplied).
it is plain that the Constitution authorizes Congress to pass a law
fixing another rate of compensation of Justices and Judges but
such rate must be higher than that which they are receiving at the
time of enactment, or if lower, it would be applicable only to those
appointed after its approval. It would be a strained construction to
read into the provision an exemption from taxation in the light of
the discussion in the Constitutional Commission.
With the foregoing interpretation, and as stated heretofore, the
ruling that "the imposition of income tax upon the salary of judges
is a dimunition thereof, and so violates the Constitution"
in Perfecto vs. Meer,13 as affirmed in Endencia vs. David 14 must
be declared discarded. The framers of the fundamental law, as
the alter ego of the people, have expressed in clear and
unmistakable terms the meaning and import of Section 10, Article
VIII, of the 1987 Constitution that they have adopted
Stated otherwise, we accord due respect to the intent of the
people, through the discussions and deliberations of their
representatives, in the spirit that all citizens should bear their
aliquot part of the cost of maintaining the government and should
share the burden of general income taxation equitably.
WHEREFORE, the instant petition for Prohibition is hereby
dismissed.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-45459 March 13, 1937
GREGORIO AGLIPAY, petitioner,
vs.
JUAN RUIZ, respondent.
Vicente Sotto for petitioner.
Office of the Solicitor-General Tuason for respondent.
LAUREL, J.:
The petitioner, Mons. Gregorio Aglipay, Supreme Head of the
Philippine Independent Church, seeks the issuance from this court
of a writ of prohibition to prevent the respondent Director of Posts
from issuing and selling postage stamps commemorative of the
Thirty-third International Eucharistic Congress.
In May, 1936, the Director of Posts announced in the dailies of
Manila that he would order the issues of postage stamps
commemorating the celebration in the City of Manila of the Thirty-
third international Eucharistic Congress, organized by the Roman
Catholic Church. The petitioner, in the fulfillment of what he
considers to be a civic duty, requested Vicente Sotto, Esq.,
member of the Philippine Bar, to denounce the matter to the
President of the Philippines. In spite of the protest of the
petitioner's attorney, the respondent publicly announced having
sent to the United States the designs of the postage stamps for
printing as follows:
"In the center is chalice, with grape vine and stalks of wheat as
border design. The stamps are blue, green, brown, cardinal red,
violet and orange, 1 inch by 1,094 inches. The denominations are
for 2, 6, 16, 20, 36 and 50 centavos." The said stamps were
actually issued and sold though the greater part thereof, to this
day, remains unsold. The further sale of the stamps is sought to
be prevented by the petitioner herein.
The Solicitor-General contends that the writ of prohibition is not the
proper legal remedy in the instant case, although he admits that
the writ may properly restrain ministerial functions. While,
generally, prohibition as an extraordinary legal writ will not issue to
restrain or control the performance of other than judicial or quasi-
judicial functions (50 C. J., 6580, its issuance and enforcement are
regulated by statute and in this jurisdiction may issue to . . . inferior
tribunals, corporations, boards, or persons, whether excercising
functions judicial or ministerial, which are without or in excess of
the jurisdiction of such tribunal, corporation, board, or person, . . .
." (Secs. 516 and 226, Code of Civil Procedure.) The terms
"judicial" and "ministerial" used with reference to "functions" in the
statute are undoubtedly comprehensive and include the
challenged act of the respondent Director of Posts in the present
case, which act because alleged to be violative of the Constitution
is a fortiorari "without or in excess of . . . jurisdiction." The statutory
rule, therefore, in the jurisdiction is that the writ of prohibition is not
confined exclusively to courts or tribunals to keep them within the
limits of their own jurisdiction and to prevent them from
encroaching upon the jurisdiction of other tribunals, but will issue,
in appropriate cases, to an officer or person whose acts are without
or in excess of his authority. Not infrequently, "the writ is granted,
where it is necessary for the orderly administration of justice, or to
prevent the use of the strong arm of the law in an oppressive or
vindictive manner, or a multiplicity of actions." (Dimayuga and
Fajardo vs. Fernandez [1923], 43 Phil., 304, 307.)
The more important question raised refers to the alleged violation
of the Constitution by the respondent in issuing and selling
postage stamps commemorative of the Thirty-third International
Eucharistic Congress. It is alleged that this action of the
respondent is violative of the provisions of section 23, subsection
3, Article VI, of the Constitution of the Philippines, which provides
as follows:
No public money or property shall ever be appropriated,
applied, or used, directly or indirectly, for the use, benefit,
or support of any sect, church, denomination,
secretarian, institution, or system of religion, or for the
use, benefit, or support of any priest, preacher, minister,
or other religious teacher or dignitary as such, except
when such priest, preacher, minister, or dignitary is
assigned to the armed forces or to any penal institution,
orphanage, or leprosarium.
The prohibition herein expressed is a direct corollary of the
principle of separation of church and state. Without the necessity
of adverting to the historical background of this principle in our
country, it is sufficient to say that our history, not to speak of the
history of mankind, has taught us that the union of church and state
is prejudicial to both, for ocassions might arise when the estate will
use the church, and the church the state, as a weapon in the
furtherance of their recognized this principle of separation of
church and state in the early stages of our constitutional
development; it was inserted in the Treaty of Paris between the
United States and Spain of December 10, 1898, reiterated in
President McKinley's Instructions of the Philippine Commission,
reaffirmed in the Philippine Bill of 1902 and in the autonomy Act of
August 29, 1916, and finally embodied in the constitution of the
Philippines as the supreme expression of the Filipino people. It is
almost trite to say now that in this country we enjoy both religious
and civil freedom. All the officers of the Government, from the
highest to the lowest, in taking their oath to support and defend the
constitution, bind themselves to recognize and respect the
constitutional guarantee of religious freedom, with its inherent
limitations and recognized implications. It should be stated that
what is guaranteed by our Constitution is religious liberty, not mere
religious toleration.
Religious freedom, however, as a constitutional mandate is not
inhibition of profound reverence for religion and is not denial of its
influence in human affairs. Religion as a profession of faith to an
active power that binds and elevates man to his Creator is
recognized. And, in so far as it instills into the minds the purest
principles of morality, its influence is deeply felt and highly
appreciated. When the Filipino people, in the preamble of their
Constitution, implored "the aid of Divine Providence, in order to
establish a government that shall embody their ideals, conserve
and develop the patrimony of the nation, promote the general
welfare, and secure to themselves and their posterity the blessings
of independence under a regime of justice, liberty and democracy,"
they thereby manifested reliance upon Him who guides the
destinies of men and nations. The elevating influence of religion in
human society is recognized here as elsewhere. In fact, certain
general concessions are indiscriminately accorded to religious
sects and denominations. Our Constitution and laws exempt from
taxation properties devoted exclusively to religious purposes (sec.
14, subsec. 3, Art. VI, Constitution of the Philippines and sec. 1,
subsec. 4, Ordinance appended thereto; Assessment Law, sec.
344, par. [c]. Adm. Code). Sectarian aid is not prohibited when a
priest, preacher, minister or other religious teacher or dignitary as
such is assigned to the armed forces or to any penal institution,
orphanage or leprosarium 9 sec. 13, subsec. 3, Art. VI,
Constitution of the Philippines). Optional religious instruction in the
public schools is by constitutional mandate allowed (sec. 5, Art.
XIII, Constitution of the Philippines, in relation to sec. 928, Adm.
Code). Thursday and Friday of Holy Week, Thanksgiving Day,
Christmas Day, and Sundays and made legal holidays (sec. 29,
Adm. Code) because of the secular idea that their observance is
conclusive to beneficial moral results. The law allows divorce but
punishes polygamy and bigamy; and certain crimes against
religious worship are considered crimes against the fundamental
laws of the state (see arts. 132 and 133, Revised Penal Code).
In the case at bar, it appears that the respondent Director of Posts
issued the postage stamps in question under the provisions of Act
No. 4052 of the Philippine Legislature. This Act is as follows:
No. 4052. — AN ACT APPROPRIATING THE SUM OF
SIXTY THOUSAND PESOS AND MAKING THE SAME
AVAILABLE OUT OF ANY FUNDS IN THE INSULAR
TREASURY NOT OTHERWISE APPROPRIATED FOR
THE COST OF PLATES AND PRINTING OF POSTAGE
STAMPS WITH NEW DESIGNS, AND FOR OTHER
PURPOSES.
Be it enacted by the Senate and House of
Representatives of the Philippines in Legislature
assembled and by the authority of the same:
SECTION 1. The sum of sixty thousand pesos is hereby
appropriated and made immediately available out of any funds in
the Insular Treasury not otherwise appropriated, for the costs of
plates and printing of postage stamps with new designs, and other
expenses incident thereto.
SEC. 2. The Director of Posts, with the approval of the Secretary
of Public Works and Communications, is hereby authorized to
dispose of the whole or any portion of the amount herein
appropriated in the manner indicated and as often as may be
deemed advantageous to the Government.
SEC. 3. This amount or any portion thereof not otherwise
expended shall not revert to the Treasury.
SEC. 4. This act shall take effect on its approval.
Approved, February 21, 1933.
It will be seen that the Act appropriates the sum of sixty thousand
pesos for the costs of plates and printing of postage stamps with
new designs and other expenses incident thereto, and authorizes
the Director of Posts, with the approval of the Secretary of Public
Works and Communications, to dispose of the amount
appropriated in the manner indicated and "as often as may be
deemed advantageous to the Government". The printing and
issuance of the postage stamps in question appears to have been
approved by authority of the President of the Philippines in a letter
dated September 1, 1936, made part of the respondent's
memorandum as Exhibit A. The respondent alleges that the
Government of the Philippines would suffer losses if the writ
prayed for is granted. He estimates the revenue to be derived from
the sale of the postage stamps in question at P1,618,17.10 and
states that there still remain to be sold stamps worth
P1,402,279.02.
Act No. 4052 contemplates no religious purpose in view. What it
gives the Director of Posts is the discretionary power to determine
when the issuance of special postage stamps would be
"advantageous to the Government." Of course, the phrase
"advantageous to the Government" does not authorize the
violation of the Constitution. It does not authorize the
appropriation, use or application of public money or property for
the use, benefit or support of a particular sect or church. In the
present case, however, the issuance of the postage stamps in
question by the Director of Posts and the Secretary of Public
Works and Communications was not inspired by any sectarian
denomination. The stamps were not issue and sold for the benefit
of the Roman Catholic Church. Nor were money derived from the
sale of the stamps given to that church. On the contrary, it appears
from the latter of the Director of Posts of June 5, 1936,
incorporated on page 2 of the petitioner's complaint, that the only
purpose in issuing and selling the stamps was "to advertise the
Philippines and attract more tourist to this country." The officials
concerned merely, took advantage of an event considered of
international importance "to give publicity to the Philippines and its
people" (Letter of the Undersecretary of Public Works and
Communications to the President of the Philippines, June 9, 1936;
p. 3, petitioner's complaint). It is significant to note that the stamps
as actually designed and printed (Exhibit 2), instead of showing a
Catholic Church chalice as originally planned, contains a map of
the Philippines and the location of the City of Manila, and an
inscription as follows: "Seat XXXIII International Eucharistic
Congress, Feb. 3-7,1937." What is emphasized is not the
Eucharistic Congress itself but Manila, the capital of the
Philippines, as the seat of that congress. It is obvious that while
the issuance and sale of the stamps in question may be said to be
inseparably linked with an event of a religious character, the
resulting propaganda, if any, received by the Roman Catholic
Church, was not the aim and purpose of the Government. We are
of the opinion that the Government should not be embarassed in
its activities simply because of incidental results, more or less
religious in character, if the purpose had in view is one which could
legitimately be undertaken by appropriate legislation. The main
purpose should not be frustrated by its subordinate to mere
incidental results not contemplated. (Vide Bradfield vs. Roberts,
175 U. S., 295; 20 Sup. Ct. Rep., 121; 44 Law. ed., 168.)
We are much impressed with the vehement appeal of counsel for
the petitioner to maintain inviolate the complete separation of
church and state and curb any attempt to infringe by indirection a
constitutional inhibition. Indeed, in the Philippines, once the scene
of religious intolerance and prescription, care should be taken that
at this stage of our political development nothing is done by the
Government or its officials that may lead to the belief that the
Government is taking sides or favoring a particular religious sect
or institution. But, upon very serious reflection, examination of Act
No. 4052, and scrutiny of the attending circumstances, we have
come to the conclusion that there has been no constitutional
infraction in the case at bar, Act No. 4052 grants the Director of
Posts, with the approval of the Secretary of Public Works and
Communications, discretion to misuse postage stamps with new
designs "as often as may be deemed advantageous to the
Government." Even if we were to assume that these officials made
use of a poor judgment in issuing and selling the postage stamps
in question still, the case of the petitioner would fail to take in
weight. Between the exercise of a poor judgment and the
unconstitutionality of the step taken, a gap exists which is yet to be
filled to justify the court in setting aside the official act assailed as
coming within a constitutional inhibition.
The petition for a writ of prohibition is hereby denied, without
pronouncement as to costs. So ordered.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 122156 February 3, 1997
MANILA PRINCE HOTEL petitioner,
vs.
GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA
HOTEL CORPORATION, COMMITTEE ON PRIVATIZATION
and OFFICE OF THE GOVERNMENT CORPORATE
COUNSEL, respondents.
BELLOSILLO, J.:
The FiIipino First Policy enshrined in the 1987 Constitution, i.e., in
the grant of rights, privileges, and concessions covering the
national economy and patrimony, the State shall give preference
to qualified Filipinos,1 is in oked by petitioner in its bid to acquire
51% of the shares of the Manila Hotel Corporation (MHC) which
owns the historic Manila Hotel. Opposing, respondents maintain
that the provision is not self-executing but requires an
implementing legislation for its enforcement. Corollarily, they ask
whether the 51% shares form part of the national economy and
patrimony covered by the protective mantle of the Constitution.
The controversy arose when respondent Government Service
Insurance System (GSIS), pursuant to the privatization program of
the Philippine Government under Proclamation No. 50 dated 8
December 1986, decided to sell through public bidding 30% to
51% of the issued and outstanding shares of respondent MHC.
The winning bidder, or the eventual "strategic partner," is to
provide management expertise and/or an international
marketing/reservation system, and financial support to strengthen
the profitability and performance of the Manila Hotel.2 In a close
bidding held on 18 September 1995 only two (2) bidders
participated: petitioner Manila Prince Hotel Corporation, a Filipino
corporation, which offered to buy 51% of the MHC or 15,300,000
shares at P41.58 per share, and Renong Berhad, a Malaysian
firm, with ITT-Sheraton as its hotel operator, which bid for the
same number of shares at P44.00 per share, or P2.42 more than
the bid of petitioner.
Pertinent provisions of the bidding rules prepared by respondent
GSIS state —
I. EXECUTION OF THE NECESSARY CONTRACTS
WITH GSIS/MHC —
1. The Highest Bidder must comply with the conditions set forth
below by October 23, 1995 (reset to November 3, 1995) or the
Highest Bidder will lose the right to purchase the Block of Shares
and GSIS will instead offer the Block of Shares to the other
Qualified Bidders:
a. The Highest Bidder must negotiate and execute with
the GSIS/MHC the Management Contract, International
Marketing/Reservation System Contract or other type of
contract specified by the Highest Bidder in its strategic
plan for the Manila Hotel. . . .
b. The Highest Bidder must execute the Stock Purchase
and Sale Agreement with GSIS . . . .
K. DECLARATION OF THE WINNING
BIDDER/STRATEGIC PARTNER —
The Highest Bidder will be declared the Winning Bidder/Strategic
Partner after the following conditions are met:
a. Execution of the necessary contracts with GSIS/MHC
not later than October 23, 1995 (reset to November 3,
1995); and
b. Requisite approvals from the GSIS/MHC and COP
(Committee on Privatization)/OGCC (Office of the
Government Corporate Counsel) are obtained.3
Pending the declaration of Renong Berhad as the winning
bidder/strategic partner and the execution of the necessary
contracts, petitioner in a letter to respondent GSIS dated 28
September 1995 matched the bid price of P44.00 per share
tendered by Renong Berhad.4 In a subsequent letter dated 10
October 1995 petitioner sent a manager's check issued by
Philtrust Bank for Thirty-three Million Pesos (P33.000.000.00)
as Bid Security to match the bid of the Malaysian Group,
Messrs. Renong Berhad . . .5 which respondent GSIS refused to
accept.
On 17 October 1995, perhaps apprehensive that respondent GSIS
has disregarded the tender of the matching bid and that the sale
of 51% of the MHC may be hastened by respondent GSIS and
consummated with Renong Berhad, petitioner came to this Court
on prohibition and mandamus. On 18 October 1995 the Court
issued a temporary restraining order enjoining respondents from
perfecting and consummating the sale to the Malaysian firm.
On 10 September 1996 the instant case was accepted by the
Court En Banc after it was referred to it by the First Division. The
case was then set for oral arguments with former Chief Justice
Enrique M. Fernando and Fr. Joaquin G. Bernas, S.J., as amici
curiae.
In the main, petitioner invokes Sec. 10, second par., Art. XII, of the
1987 Constitution and submits that the Manila Hotel has been
identified with the Filipino nation and has practically become a
historical monument which reflects the vibrancy of Philippine
heritage and culture. It is a proud legacy of an earlier generation
of Filipinos who believed in the nobility and sacredness of
independence and its power and capacity to release the full
potential of the Filipino people. To all intents and purposes, it has
become a part of the national patrimony.6 Petitioner also argues
that since 51% of the shares of the MHC carries with it the
ownership of the business of the hotel which is owned by
respondent GSIS, a government-owned and controlled
corporation, the hotel business of respondent GSIS being a part of
the tourism industry is unquestionably a part of the national
economy. Thus, any transaction involving 51% of the shares of
stock of the MHC is clearly covered by the term national economy,
to which Sec. 10, second par., Art. XII, 1987 Constitution, applies.7
It is also the thesis of petitioner that since Manila Hotel is part of
the national patrimony and its business also unquestionably part
of the national economy petitioner should be preferred after it has
matched the bid offer of the Malaysian firm. For the bidding rules
mandate that if for any reason, the Highest Bidder cannot be
awarded the Block of Shares, GSIS may offer this to the other
Qualified Bidders that have validly submitted bids provided that
these Qualified Bidders are willing to match the highest bid in
terms of price per share.8
Respondents except. They maintain that: First, Sec. 10, second
par., Art. XII, of the 1987 Constitution is merely a statement of
principle and policy since it is not a self-executing provision and
requires implementing legislation(s) . . . Thus, for the said
provision to Operate, there must be existing laws "to lay down
conditions under which business may be done."9
Second, granting that this provision is self-executing, Manila Hotel
does not fall under the term national patrimony which only refers
to lands of the public domain, waters, minerals, coal, petroleum
and other mineral oils, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna and all marine wealth in
its territorial sea, and exclusive marine zone as cited in the first
and second paragraphs of Sec. 2, Art. XII, 1987 Constitution.
According to respondents, while petitioner speaks of the guests
who have slept in the hotel and the events that have transpired
therein which make the hotel historic, these alone do not make the
hotel fall under the patrimony of the nation. What is more, the
mandate of the Constitution is addressed to the State, not to
respondent GSIS which possesses a personality of its own
separate and distinct from the Philippines as a State.
Third, granting that the Manila Hotel forms part of the national
patrimony, the constitutional provision invoked is still inapplicable
since what is being sold is only 51% of the outstanding shares of
the corporation, not the hotel building nor the land upon which the
building stands. Certainly, 51% of the equity of the MHC cannot be
considered part of the national patrimony. Moreover, if the
disposition of the shares of the MHC is really contrary to the
Constitution, petitioner should have questioned it right from the
beginning and not after it had lost in the bidding.
Fourth, the reliance by petitioner on par. V., subpar. J. 1., of the
bidding rules which provides that if for any reason, the Highest
Bidder cannot be awarded the Block of Shares, GSIS may offer
this to the other Qualified Bidders that have validly submitted bids
provided that these Qualified Bidders are willing to match the
highest bid in terms of price per share, is misplaced. Respondents
postulate that the privilege of submitting a matching bid has not
yet arisen since it only takes place if for any reason, the Highest
Bidder cannot be awarded the Block of Shares. Thus the
submission by petitioner of a matching bid is premature since
Renong Berhad could still very well be awarded the block of shares
and the condition giving rise to the exercise of the privilege to
submit a matching bid had not yet taken place.
Finally, the prayer for prohibition grounded on grave abuse of
discretion should fail since respondent GSIS did not exercise its
discretion in a capricious, whimsical manner, and if ever it did
abuse its discretion it was not so patent and gross as to amount to
an evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law. Similarly, the petition for mandamus should fail as
petitioner has no clear legal right to what it demands and
respondents do not have an imperative duty to perform the act
required of them by petitioner.
We now resolve. A constitution is a system of fundamental laws
for the governance and administration of a nation. It is supreme,
imperious, absolute and unalterable except by the authority from
which it emanates. It has been defined as the fundamental and
paramount law of the nation. 10 It prescribes the permanent
framework of a system of government, assigns to the different
departments their respective powers and duties, and establishes
certain fixed principles on which government is founded. The
fundamental conception in other words is that it is a supreme law
to which all other laws must conform and in accordance with which
all private rights must be determined and all public authority
administered. 11 Under the doctrine of constitutional supremacy, if
a law or contract violates any norm of the constitution that law or
contract whether promulgated by the legislative or by the executive
branch or entered into by private persons for private purposes is
null and void and without any force and effect. Thus, since the
Constitution is the fundamental, paramount and supreme law of
the nation, it is deemed written in every statute and contract.
Admittedly, some constitutions are merely declarations of policies
and principles. Their provisions command the legislature to enact
laws and carry out the purposes of the framers who merely
establish an outline of government providing for the different
departments of the governmental machinery and securing certain
fundamental and inalienable rights of citizens. 12 A provision which
lays down a general principle, such as those found in Art. II of the
1987 Constitution, is usually not self-executing. But a provision
which is complete in itself and becomes operative without the aid
of supplementary or enabling legislation, or that which supplies
sufficient rule by means of which the right it grants may be enjoyed
or protected, is self-executing. Thus a constitutional provision is
self-executing if the nature and extent of the right conferred and
the liability imposed are fixed by the constitution itself, so that they
can be determined by an examination and construction of its
terms, and there is no language indicating that the subject is
referred to the legislature for action. 13
As against constitutions of the past, modern constitutions have
been generally drafted upon a different principle and have often
become in effect extensive codes of laws intended to operate
directly upon the people in a manner similar to that of statutory
enactments, and the function of constitutional conventions has
evolved into one more like that of a legislative body. Hence, unless
it is expressly provided that a legislative act is necessary to enforce
a constitutional mandate, the presumption now is that all
provisions of the constitution are self-executing If the constitutional
provisions are treated as requiring legislation instead of self-
executing, the legislature would have the power to ignore and
practically nullify the mandate of the fundamental law. 14 This can
be cataclysmic. That is why the prevailing view is, as it has always
been, that —
. . . in case of doubt, the Constitution should be
considered self-executing rather than non-self-executing
. . . . Unless the contrary is clearly intended, the
provisions of the Constitution should be considered self-
executing, as a contrary rule would give the legislature
discretion to determine when, or whether, they shall be
effective. These provisions would be subordinated to the
will of the lawmaking body, which could make them
entirely meaningless by simply refusing to pass the
needed implementing statute. 15
Respondents argue that Sec. 10, second par., Art. XII, of the 1987
Constitution is clearly not self-executing, as they quote from
discussions on the floor of the 1986 Constitutional Commission —
MR. RODRIGO. Madam President, I am asking
this question as the Chairman of the Committee
on Style. If the wording of "PREFERENCE" is
given to QUALIFIED FILIPINOS," can it be
understood as a preference to qualified
Filipinos vis-a-vis Filipinos who are not
qualified. So, why do we not make it clear? To
qualified Filipinos as against aliens?
THE PRESIDENT. What is the question of
Commissioner Rodrigo? Is it to remove the word
"QUALIFIED?".
MR. RODRIGO. No, no, but say definitely "TO
QUALIFIED FILIPINOS" as against whom? As
against aliens or over aliens?
MR. NOLLEDO. Madam President, I think that is
understood. We use the word "QUALIFIED" because
the existing laws or prospective laws will always lay down
conditions under which business may be done. For
example, qualifications on the setting up of other financial
structures, et cetera (emphasis supplied by respondents)
MR. RODRIGO. It is just a matter of style.
MR. NOLLEDO Yes, 16
Quite apparently, Sec. 10, second par., of Art XII is couched in
such a way as not to make it appear that it is non-self-executing
but simply for purposes of style. But, certainly, the legislature is not
precluded from enacting other further laws to enforce the
constitutional provision so long as the contemplated statute
squares with the Constitution. Minor details may be left to the
legislature without impairing the self-executing nature of
constitutional provisions.
In self-executing constitutional provisions, the legislature may still
enact legislation to facilitate the exercise of powers directly
granted by the constitution, further the operation of such a
provision, prescribe a practice to be used for its enforcement,
provide a convenient remedy for the protection of the rights
secured or the determination thereof, or place reasonable
safeguards around the exercise of the right. The mere fact that
legislation may supplement and add to or prescribe a penalty for
the violation of a self-executing constitutional provision does not
render such a provision ineffective in the absence of such
legislation. The omission from a constitution of any express
provision for a remedy for enforcing a right or liability is not
necessarily an indication that it was not intended to be self-
executing. The rule is that a self-executing provision of the
constitution does not necessarily exhaust legislative power on the
subject, but any legislation must be in harmony with the
constitution, further the exercise of constitutional right and make it
more available. 17 Subsequent legislation however does not
necessarily mean that the subject constitutional provision is not,
by itself, fully enforceable.
Respondents also argue that the non-self-executing nature of Sec.
10, second par., of Art. XII is implied from the tenor of the first and
third paragraphs of the same section which undoubtedly are not
self-executing. 18 The argument is flawed. If the first and third
paragraphs are not self-executing because Congress is still to
enact measures to encourage the formation and operation of
enterprises fully owned by Filipinos, as in the first paragraph, and
the State still needs legislation to regulate and exercise authority
over foreign investments within its national jurisdiction, as in the
third paragraph, then a fortiori, by the same logic, the second
paragraph can only be self-executing as it does not by its language
require any legislation in order to give preference to qualified
Filipinos in the grant of rights, privileges and concessions covering
the national economy and patrimony. A constitutional provision
may be self-executing in one part and non-self-executing in
another. 19
Even the cases cited by respondents holding that certain
constitutional provisions are merely statements of principles and
policies, which are basically not self-executing and only placed in
the Constitution as moral incentives to legislation, not as judicially
enforceable rights — are simply not in point. Basco v. Philippine
Amusements and Gaming Corporation 20 speaks of constitutional
provisions on personal dignity, 21 the sanctity of family life, 22 the
vital role of the youth in nation-building 23 the promotion of social
justice, 24 and the values of education. 25 Tolentino v. Secretary of
Finance 26 refers to the constitutional provisions on social justice
and human rights 27 and on education. 28 Lastly, Kilosbayan,
Inc. v. Morato 29 cites provisions on the promotion of general
welfare, 30 the sanctity of family life, 31 the vital role of the youth in
nation-building 32 and the promotion of total human liberation and
development. 33A reading of these provisions indeed clearly
shows that they are not judicially enforceable constitutional rights
but merely guidelines for legislation. The very terms of the
provisions manifest that they are only principles upon which the
legislations must be based. Res ipsa loquitur.
On the other hand, Sec. 10, second par., Art. XII of the of the 1987
Constitution is a mandatory, positive command which is complete
in itself and which needs no further guidelines or implementing
laws or rules for its enforcement. From its very words the provision
does not require any legislation to put it in operation. It is per
se judicially enforceable When our Constitution mandates that [i]n
the grant of rights, privileges, and concessions covering national
economy and patrimony, the State shall give preference to
qualified Filipinos, it means just that — qualified Filipinos shall be
preferred. And when our Constitution declares that a right exists in
certain specified circumstances an action may be maintained to
enforce such right notwithstanding the absence of any legislation
on the subject; consequently, if there is no statute especially
enacted to enforce such constitutional right, such right enforces
itself by its own inherent potency and puissance, and from which
all legislations must take their bearings. Where there is a right
there is a remedy. Ubi jus ibi remedium.
As regards our national patrimony, a member of the 1986
Constitutional Commission 34 explains —
The patrimony of the Nation that should be conserved
and developed refers not only to out rich natural
resources but also to the cultural heritage of out race. It
also refers to our intelligence in arts, sciences and letters.
Therefore, we should develop not only our lands, forests,
mines and other natural resources but also the mental
ability or faculty of our people.
We agree. In its plain and ordinary meaning, the term patrimony
pertains to heritage. 35 When the Constitution speaks of national
patrimony, it refers not only to the natural resources of the
Philippines, as the Constitution could have very well used the
term natural resources, but also to the cultural heritage of the
Filipinos.
Manila Hotel has become a landmark — a living testimonial of
Philippine heritage. While it was restrictively an American hotel
when it first opened in 1912, it immediately evolved to be truly
Filipino, Formerly a concourse for the elite, it has since then
become the venue of various significant events which have
shaped Philippine history. It was called the Cultural Center of the
1930's. It was the site of the festivities during the inauguration of
the Philippine Commonwealth. Dubbed as the Official Guest
House of the Philippine Government. it plays host to dignitaries
and official visitors who are accorded the traditional Philippine
hospitality. 36
The history of the hotel has been chronicled in the book The
Manila Hotel: The Heart and Memory of a City. 37During World War
II the hotel was converted by the Japanese Military Administration
into a military headquarters. When the American forces returned
to recapture Manila the hotel was selected by the Japanese
together with Intramuros as the two (2) places fro their final stand.
Thereafter, in the 1950's and 1960's, the hotel became the center
of political activities, playing host to almost every political
convention. In 1970 the hotel reopened after a renovation and
reaped numerous international recognitions, an acknowledgment
of the Filipino talent and ingenuity. In 1986 the hotel was the site
of a failed coup d' etat where an aspirant for vice-president was
"proclaimed" President of the Philippine Republic.
For more than eight (8) decades Manila Hotel has bore mute
witness to the triumphs and failures, loves and frustrations of the
Filipinos; its existence is impressed with public interest; its own
historicity associated with our struggle for sovereignty,
independence and nationhood. Verily, Manila Hotel has become
part of our national economy and patrimony. For sure, 51% of the
equity of the MHC comes within the purview of the constitutional
shelter for it comprises the majority and controlling stock, so that
anyone who acquires or owns the 51% will have actual control and
management of the hotel. In this instance, 51% of the MHC cannot
be disassociated from the hotel and the land on which the hotel
edifice stands. Consequently, we cannot sustain respondents'
claim that the Filipino First Policy provision is not applicable since
what is being sold is only 51% of the outstanding shares of the
 corporation, not the Hotel building nor the land upon which the
building stands. 38
The argument is pure sophistry. The term qualified Filipinos as
used in Our Constitution also includes corporations at least 60%
of which is owned by Filipinos. This is very clear from the
proceedings of the 1986 Constitutional Commission
THE PRESIDENT. Commissioner Davide is recognized.
MR. DAVIDE. I would like to introduce an amendment to
the Nolledo amendment. And the amendment would
consist in substituting the words "QUALIFIED
FILIPINOS" with the following: "CITIZENS OF THE
PHILIPPINES OR CORPORATIONS OR
ASSOCIATIONS WHOSE CAPITAL OR
CONTROLLING STOCK IS WHOLLY OWNED BY
SUCH CITIZENS.
xxx xxx xxx
MR. MONSOD. Madam President, apparently the
proponent is agreeable, but we have to raise a question.
Suppose it is a corporation that is 80-percent Filipino, do
we not give it preference?
MR. DAVIDE. The Nolledo amendment would refer to an
individual Filipino. What about a corporation wholly
owned by Filipino citizens?
MR. MONSOD. At least 60 percent, Madam President.
MR. DAVIDE. Is that the intention?
MR. MONSOD. Yes, because, in fact, we would be
limiting it if we say that the preference should only be 100-
percent Filipino.
MR: DAVIDE. I want to get that meaning clear because
"QUALIFIED FILIPINOS" may refer only to individuals
and not to juridical personalities or entities.
MR. MONSOD. We agree, Madam President. 39
xxx xxx xxx
MR. RODRIGO. Before we vote, may I request that the
amendment be read again.
MR. NOLLEDO. The amendment will read: "IN THE
GRANT OF RIGHTS, PRIVILEGES AND
CONCESSIONS COVERING THE NATIONAL
ECONOMY AND PATRIMONY, THE STATE SHALL
GIVE PREFERENCE TO QUALIFIED FILIPINOS." And
the word "Filipinos" here, as intended by the proponents,
will include not only individual Filipinos but also Filipino-
controlled entities or entities fully-controlled by
Filipinos. 40
se preference to qualified Filipinos was explained thus —
MR. FOZ. Madam President, I would like to request
Commissioner Nolledo to please restate his amendment
so that I can ask a question.
MR. NOLLEDO. "IN THE GRANT OF RIGHTS,
PRIVILEGES AND CONCESSIONS COVERING THE
NATIONAL ECONOMY AND PATRIMONY, THE STATE
SHALL GIVE PREFERENCE TO QUALIFIED
FILIPINOS."
MR FOZ. In connection with that amendment, if a foreign
enterprise is qualified and a Filipino enterprise is also
qualified, will the Filipino enterprise still be given a
preference?
MR. NOLLEDO. Obviously.
MR. FOZ. If the foreigner is more qualified in some
aspects than the Filipino enterprise, will the Filipino still
be preferred?
MR. NOLLEDO. The answer is "yes."
MR. FOZ. Thank you, 41
Expounding further on the Filipino First Policy provision
Commissioner Nolledo continues —
MR. NOLLEDO. Yes, Madam President. Instead of
"MUST," it will be "SHALL — THE STATE SHALL GlVE
PREFERENCE TO QUALIFIED FILIPINOS. This
embodies the so-called "Filipino First" policy. That means
that Filipinos should be given preference in the grant of
concessions, privileges and rights covering the national
patrimony. 42
The exchange of views in the sessions of the Constitutional
Commission regarding the subject provision was still further
clarified by Commissioner Nolledo 43 —
Paragraph 2 of Section 10 explicitly mandates the "Pro-
Filipino" bias in all economic concerns. It is better known
as the FILIPINO FIRST Policy . . . This provision was
never found in previous Constitutions . . . .
The term "qualified Filipinos" simply means that
preference shall be given to those citizens who can make
a viable contribution to the common good, because of
credible competence and efficiency. It certainly does
NOT mandate the pampering and preferential treatment
to Filipino citizens or organizations that are incompetent
or inefficient, since such an indiscriminate preference
would be counter productive and inimical to the common
good.
In the granting of economic rights, privileges, and
concessions, when a choice has to be made between a
"qualified foreigner" end a "qualified Filipino," the latter
shall be chosen over the former."
Lastly, the word qualified is also determinable. Petitioner was so
considered by respondent GSIS and selected as one of
the qualified bidders. It was pre-qualified by respondent GSIS in
accordance with its own guidelines so that the sole inference here
is that petitioner has been found to be possessed of proven
management expertise in the hotel industry, or it has significant
equity ownership in another hotel company, or it has an overall
management and marketing proficiency to successfully operate
the Manila Hotel. 44
The penchant to try to whittle away the mandate of the Constitution
by arguing that the subject provision is not self-executory and
requires implementing legislation is quite disturbing. The attempt
to violate a clear constitutional provision — by the government
itself — is only too distressing. To adopt such a line of reasoning
is to renounce the duty to ensure faithfulness to the Constitution.
For, even some of the provisions of the Constitution which
evidently need implementing legislation have juridical life of their
own and can be the source of a judicial remedy. We cannot simply
afford the government a defense that arises out of the failure to
enact further enabling, implementing or guiding legislation. In fine,
the discourse of Fr. Joaquin G. Bernas, S.J., on constitutional
government is apt —
The executive department has a constitutional duty to
implement laws, including the Constitution, even before
Congress acts — provided that there are discoverable
legal standards for executive action. When the executive
acts, it must be guided by its own understanding of the
constitutional command and of applicable laws. The
responsibility for reading and understanding the
Constitution and the laws is not the sole prerogative of
Congress. If it were, the executive would have to ask
Congress, or perhaps the Court, for an interpretation
every time the executive is confronted by a constitutional
command. That is not how constitutional government
operates. 45
Respondents further argue that the constitutional provision is
addressed to the State, not to respondent GSIS which by itself
possesses a separate and distinct personality. This argument
again is at best specious. It is undisputed that the sale of 51% of
the MHC could only be carried out with the prior approval of the
State acting through respondent Committee on Privatization. As
correctly pointed out by Fr. Joaquin G. Bernas, S.J., this fact alone
makes the sale of the assets of respondents GSIS and MHC a
"state action." In constitutional jurisprudence, the acts of persons
distinct from the government are considered "state action" covered
by the Constitution (1) when the activity it engages in is a "public
function;" (2) when the government is so significantly involved with
the private actor as to make the government responsible for his
action; and, (3) when the government has approved or authorized
the action. It is evident that the act of respondent GSIS in selling
51% of its share in respondent MHC comes under the second and
third categories of "state action." Without doubt therefore the
transaction. although entered into by respondent GSIS, is in fact a
transaction of the State and therefore subject to the constitutional
command. 46
When the Constitution addresses the State it refers not only to the
people but also to the government as elements of the State. After
all, government is composed of three (3) divisions of power —
legislative, executive and judicial. Accordingly, a constitutional
mandate directed to the State is correspondingly directed to the
three(3) branches of government. It is undeniable that in this case
the subject constitutional injunction is addressed among others to
the Executive Department and respondent GSIS, a government
instrumentality deriving its authority from the State.
It should be stressed that while the Malaysian firm offered the
higher bid it is not yet the winning bidder. The bidding rules
expressly provide that the highest bidder shall only be declared the
winning bidder after it has negotiated and executed the necessary
contracts, and secured the requisite approvals. Since the "Filipino
First Policy provision of the Constitution bestows preference on
qualified Filipinos the mere tending of the highest bid is not an
assurance that the highest bidder will be declared the winning
bidder. Resultantly, respondents are not bound to make the award
yet, nor are they under obligation to enter into one with the highest
bidder. For in choosing the awardee respondents are mandated to
abide by the dictates of the 1987 Constitution the provisions of
which are presumed to be known to all the bidders and other
interested parties.
Adhering to the doctrine of constitutional supremacy, the subject
constitutional provision is, as it should be, impliedly written in the
bidding rules issued by respondent GSIS, lest the bidding rules be
nullified for being violative of the Constitution. It is a basic principle
in constitutional law that all laws and contracts must conform with
the fundamental law of the land. Those which violate the
Constitution lose their reason for being.
Paragraph V. J. 1 of the bidding rules provides that [if] for any
reason the Highest Bidder cannot be awarded the Block of Shares,
GSIS may offer this to other Qualified Bidders that have validly
submitted bids provided that these Qualified Bidders are willing to
match the highest bid in terms of price per
share. 47 Certainly, the constitutional mandate itself is reason
enough not to award the block of shares immediately to the foreign
bidder notwithstanding its submission of a higher, or even the
highest, bid. In fact, we cannot conceive of a stronger reason than
the constitutional injunction itself.
In the instant case, where a foreign firm submits the highest bid in
a public bidding concerning the grant of rights, privileges and
concessions covering the national economy and patrimony,
thereby exceeding the bid of a Filipino, there is no question that
the Filipino will have to be allowed to match the bid of the foreign
entity. And if the Filipino matches the bid of a foreign firm the award
should go to the Filipino. It must be so if we are to give life and
meaning to the Filipino First Policy provision of the 1987
Constitution. For, while this may neither be expressly stated nor
contemplated in the bidding rules, the constitutional fiat is,
omnipresent to be simply disregarded. To ignore it would be to
sanction a perilous skirting of the basic law.
This Court does not discount the apprehension that this policy may
discourage foreign investors. But the Constitution and laws of the
Philippines are understood to be always open to public scrutiny.
These are given factors which investors must consider when
venturing into business in a foreign jurisdiction. Any person
therefore desiring to do business in the Philippines or with any of
its agencies or instrumentalities is presumed to know his rights and
obligations under the Constitution and the laws of the forum.
The argument of respondents that petitioner is now estopped from
questioning the sale to Renong Berhad since petitioner was well
aware from the beginning that a foreigner could participate in the
bidding is meritless. Undoubtedly, Filipinos and foreigners alike
were invited to the bidding. But foreigners may be awarded the
sale only if no Filipino qualifies, or if the qualified Filipino fails to
match the highest bid tendered by the foreign entity. In the case
before us, while petitioner was already preferred at the inception
of the bidding because of the constitutional mandate, petitioner
had not yet matched the bid offered by Renong Berhad. Thus it did
not have the right or personality then to compel respondent GSIS
to accept its earlier bid. Rightly, only after it had matched the bid
of the foreign firm and the apparent disregard by respondent GSIS
of petitioner's matching bid did the latter have a cause of action.
Besides, there is no time frame for invoking the constitutional
safeguard unless perhaps the award has been finally made. To
insist on selling the Manila Hotel to foreigners when there is a
Filipino group willing to match the bid of the foreign group is to
insist that government be treated as any other ordinary market
player, and bound by its mistakes or gross errors of judgment,
regardless of the consequences to the Filipino people. The
miscomprehension of the Constitution is regrettable. Thus we
would rather remedy the indiscretion while there is still an
opportunity to do so than let the government develop the habit of
forgetting that the Constitution lays down the basic conditions and
parameters for its actions.
Since petitioner has already matched the bid price tendered by
Renong Berhad pursuant to the bidding rules, respondent GSIS is
left with no alternative but to award to petitioner the block of shares
of MHC and to execute the necessary agreements and documents
to effect the sale in accordance not only with the bidding guidelines
and procedures but with the Constitution as well. The refusal of
respondent GSIS to execute the corresponding documents with
petitioner as provided in the bidding rules after the latter has
matched the bid of the Malaysian firm clearly constitutes grave
abuse of discretion.
The Filipino First Policy is a product of Philippine nationalism. It is
embodied in the 1987 Constitution not merely to be used as a
guideline for future legislation but primarily to be enforced; so must
it be enforced. This Court as the ultimate guardian of the
Constitution will never shun, under any reasonable circumstance,
the duty of upholding the majesty of the Constitution which it is
tasked to defend. It is worth emphasizing that it is not the intention
of this Court to impede and diminish, much less undermine, the
influx of foreign investments. Far from it, the Court encourages and
welcomes more business opportunities but avowedly sanctions
the preference for Filipinos whenever such preference is ordained
by the Constitution. The position of the Court on this matter could
have not been more appropriately articulated by Chief Justice
Narvasa —
As scrupulously as it has tried to observe that it
is not its function to substitute its judgment for
that of the legislature or the executive about the
wisdom and feasibility of legislation economic in
nature, the Supreme Court has not been spared
criticism for decisions perceived as obstacles to
economic progress and development . . . in
connection with a temporary injunction issued
by the Court's First Division against the sale of
the Manila Hotel to a Malaysian Firm and its
partner, certain statements were published in a
major daily to the effect that injunction "again
demonstrates that the Philippine legal system
can be a major obstacle to doing business here.
Let it be stated for the record once again that
while it is no business of the Court to intervene
in contracts of the kind referred to or set itself up
as the judge of whether they are viable or
attainable, it is its bounden duty to make sure
that they do not violate the Constitution or the
laws, or are not adopted or implemented with
grave abuse of discretion amounting to lack or
excess of jurisdiction. It will never shirk that
duty, no matter how buffeted by winds of unfair
and ill-informed criticism. 48
history of the Philippines as a nation. We are talking about a hotel
where heads of states would prefer to be housed as a strong
manifestation of their desire to cloak the dignity of the highest state
function to their official visits to the Philippines. Thus the Manila
Hotel has played and continues to play a significant role as an
authentic repository of twentieth century Philippine history and
culture. In this sense, it has become truly a reflection of the Filipino
soul — a place with a history of grandeur; a most historical setting
that has played a part in the shaping of a country. 51
This Court cannot extract rhyme nor reason from the determined
efforts of respondents to sell the historical landmark — this Grand
Old Dame of hotels in Asia — to a total stranger. For, indeed, the
conveyance of this epic exponent of the Filipino psyche to alien
hands cannot be less than mephistophelian for it is, in whatever
manner viewed, a veritable alienation of a nation's soul for some
pieces of foreign silver. And so we ask: What advantage, which
cannot be equally drawn from a qualified Filipino, can be gained
by the Filipinos Manila Hotel — and all that it stands for — is sold
to a non-Filipino? How much of national pride will vanish if the
nation's cultural heritage is entrusted to a foreign entity? On the
other hand, how much dignity will be preserved and realized if the
national patrimony is safekept in the hands of a qualified, zealous
and well-meaning Filipino? This is the plain and simple meaning
of the Filipino First Policy provision of the Philippine Constitution.
And this Court, heeding the clarion call of the Constitution and
accepting the duty of being the elderly watchman of the nation, will
continue to respect and protect the sanctity of the Constitution.
WHEREFORE, respondents GOVERNMENT SERVICE
INSURANCE SYSTEM, MANILA HOTEL CORPORATION,
COMMITTEE ON PRIVATIZATION and OFFICE OF THE
GOVERNMENT CORPORATE COUNSEL are directed to CEASE
and DESIST from selling 51% of the shares of the Manila Hotel
Corporation to RENONG BERHAD, and to ACCEPT the matching
bid of petitioner MANILA PRINCE HOTEL CORPORATION to
purchase the subject 51% of the shares of the Manila Hotel
Corporation at P44.00 per share and thereafter to execute the
necessary clearances and to do such other acts and deeds as may
be necessary for purpose.
SO ORDERED.

Privatization of a business asset for purposes of enhancing its

business viability and preventing further losses, regardless of the
character of the asset, should not take precedence over non-
material values. A commercial, nay even a budgetary, objective
should not be pursued at the expense of national pride and dignity.
For the Constitution enshrines higher and nobler non-material
values. Indeed, the Court will always defer to the Constitution in
the proper governance of a free society; after all, there is nothing
so sacrosanct in any economic policy as to draw itself beyond
judicial review when the Constitution is involved. 49

Nationalism is inherent, in the very concept of the Philippines

being a democratic and republican state, with sovereignty residing
in the Filipino people and from whom all government authority
emanates. In nationalism, the happiness and welfare of the people
must be the goal. The nation-state can have no higher purpose.
Any interpretation of any constitutional provision must adhere to
such basic concept. Protection of foreign investments, while
laudible, is merely a policy. It cannot override the demands of
nationalism. 50

The Manila Hotel or, for that matter, 51% of the MHC, is not just
any commodity to be sold to the highest bidder solely for the sake
of privatization. We are not talking about an ordinary piece of
property in a commercial district. We are talking about a historic
relic that has hosted many of the most important events in the short