1OSE a. ANGARA, petitioner, vs. THE ELECTORAL COMMISSION, PEDRO YNSUA, MIGUEL CASTILLO, and DIONISIO C. MAYOR, respondents. This is an original action instituted in this court by the petitioner, Jose A. Angara, Ior the issuance oI a writ oI prohibition to restrain and prohibit the Electoral Commission, one oI the respondents
1OSE a. ANGARA, petitioner, vs. THE ELECTORAL COMMISSION, PEDRO YNSUA, MIGUEL CASTILLO, and DIONISIO C. MAYOR, respondents. This is an original action instituted in this court by the petitioner, Jose A. Angara, Ior the issuance oI a writ oI prohibition to restrain and prohibit the Electoral Commission, one oI the respondents
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1OSE a. ANGARA, petitioner, vs. THE ELECTORAL COMMISSION, PEDRO YNSUA, MIGUEL CASTILLO, and DIONISIO C. MAYOR, respondents. This is an original action instituted in this court by the petitioner, Jose A. Angara, Ior the issuance oI a writ oI prohibition to restrain and prohibit the Electoral Commission, one oI the respondents
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Angara vs. Electoral Commission, G.R. No. L-45081,1uly
15, 1936 Republic oI the Philippines SUPREME COURT Manila EN BANC G.R. No. L-45081 1uly 15, 1936 1OSE A. ANGARA, petitioner, vs. THE ELECTORAL COMMISSION, PEDRO YNSUA, MIGUEL CASTILLO, and DIONISIO C. MAYOR, respondents. Godofredo Reyes for petitioner. Office of the Solicitor General Hilado for respondent Electoral Commission. Pedro Ynsua in his own behalf. No appearance for other respondents. LAUREL, This is an original action instituted in this court by the petitioner, Jose A. Angara, Ior the issuance oI a writ oI prohibition to restrain and prohibit the Electoral Commission, one oI the respondents, Irom taking Iurther cognizance oI the protest Iiled by Pedro Ynsua, another respondent, against the election oI said petitioner as member oI the National Assembly Ior the Iirst assembly district oI the Province oI Tayabas. The Iacts oI this case as they appear in the petition and as admitted by the respondents are as Iollows: (1) That in the elections oI September 17, 1935, the petitioner, Jose A. Angara, and the respondents, Pedro Ynsua, Miguel Castillo and Dionisio Mayor, were candidates voted Ior the position oI member oI the National Assembly Ior the Iirst district oI the Province oI Tayabas; (2) That on October 7, 1935, the provincial board oI canvassers, proclaimed the petitioner as member-elect oI the National Assembly Ior the said district, Ior having received the most number oI votes; (3) That on November 15, 1935, the petitioner took his oath oI oIIice; (4) That on December 3, 1935, the National Assembly in session assembled, passed the Iollowing resolution: |No. 8| RESOLUCION CONFIRMANDO LAS ACTAS DE AQUELLOS DIPUTADOS CONTRA QUIENES NO SE HA PRESENTADO PROTESTA. Se resuelve. Que las actas de eleccion de los Diputados contra quienes no se hubiere presentado debidamente una protesta antes de la adopcion de la presente resolucion sean, como por la presente, son aprobadas y conIirmadas. Adoptada, 3 de diciembre, 1935. (5) That on December 8, 1935, the herein respondent Pedro Ynsua Iiled beIore the Electoral Commission a "Motion oI Protest" against the election oI the herein petitioner, Jose A. Angara, being the only protest Iiled aIter the passage oI Resolutions No. 8 aIorequoted, and praying, among other- things, that said respondent be declared elected member oI the National Assembly Ior the Iirst district oI Tayabas, or that the election oI said position be nulliIied; (6) That on December 9, 1935, the Electoral Commission adopted a resolution, paragraph 6 oI which provides: 6. La Comision no considerara ninguna protesta que no se haya presentado en o antes de este dia. (7) That on December 20, 1935, the herein petitioner, Jose A. Angara, one oI the respondents in the aIoresaid protest, Iiled beIore the Electoral Commission a "Motion to Dismiss the Protest", alleging (a) that Resolution No. 8 oI Dismiss the Protest", alleging (a) that Resolution No. 8 oI the National Assembly was adopted in the legitimate exercise oI its constitutional prerogative to prescribe the period during which protests against the election oI its members should be presented; (b) that the aIoresaid resolution has Ior its object, and is the accepted Iormula Ior, the limitation oI said period; and (c) that the protest in question was Iiled out oI the prescribed period; (8) That on December 27, 1935, the herein respondent, Pedro Ynsua, Iiled an "Answer to the Motion oI Dismissal" alleging that there is no legal or constitutional provision barring the presentation oI a protest against the election oI a member oI the National Assembly aIter conIirmation; (9) That on December 31, 1935, the herein petitioner, Jose A. Angara, Iiled a "Reply" to the aIoresaid "Answer to the Motion oI Dismissal"; (10) That the case being submitted Ior decision, the Electoral Commission promulgated a resolution on January 23, 1936, denying herein petitioner's "Motion to Dismiss the Protest." The application oI the petitioner sets Iorth the Iollowing grounds Ior the issuance oI the writ prayed Ior: (a) That the Constitution conIers exclusive jurisdiction upon the electoral Commission solely as regards the merits oI contested elections to the National Assembly; (b) That the Constitution excludes Irom said jurisdiction the power to regulate the proceedings oI said election contests, which power has been reserved to the Legislative Department oI the Government or the National Assembly; (c) That like the Supreme Court and other courts created in pursuance oI the Constitution, whose exclusive jurisdiction relates solely to deciding the merits oI controversies submitted to them Ior decision and to matters involving their internal organization, the Electoral Commission can regulate its proceedings only iI the National Assembly has not availed oI its primary power to so regulate such proceedings; (d) That Resolution No. 8 oI the National Assembly is, thereIore, valid and should be respected and obeyed; (e) That under paragraph 13 oI section 1 oI the ordinance appended to the Constitution and paragraph 6 oI article 7 oI the Tydings-McDuIIie Law (No. 127 oI the 73rd Congress oI the United States) as well as under section 1 and 3 (should be sections 1 and 2) oI article VIII oI the Constitution, this Supreme Court has jurisdiction to pass upon the Iundamental question herein raised because it involves an interpretation oI the Constitution oI the Philippines. On February 25, 1936, the Solicitor-General appeared and Iiled an answer in behalI oI the respondent Electoral Commission interposing the Iollowing special deIenses: (a) That the Electoral Commission has been created by the Constitution as an instrumentality oI the Legislative Department invested with the jurisdiction to decide "all contests relating to the election, returns, and qualiIications oI the members oI the National Assembly"; that in adopting its resolution oI December 9, 1935, Iixing this date as the last day Ior the presentation oI protests against the election oI any member oI the National Assembly, it acted within its jurisdiction and in the legitimate exercise oI the implied powers granted it by the Constitution to adopt the rules and regulations essential to carry out the power and Iunctions conIerred upon the same by the Iundamental law; that in adopting its resolution oI January 23, 1936, overruling the motion oI the petitioner to dismiss the election protest in question, and declaring itselI with jurisdiction to take cognizance oI said protest, it acted in the legitimate exercise oI its quasi-judicial Iunctions a an instrumentality oI the Legislative Department oI the Commonwealth Government, and hence said act is beyond the judicial cognizance or control oI the Supreme Court; (b) That the resolution oI the National Assembly oI December 3, 1935, conIirming the election oI the members oI the National Assembly against whom no protest had thus Iar been Iiled, could not and did not deprive the electoral Commission oI its jurisdiction to take cognizance oI election protests Iiled within the time that might be set by its own rules: (c) That the Electoral Commission is a body invested with quasi-judicial Iunctions, created by the Constitution as an instrumentality oI the Legislative Department, and is not an "inIerior tribunal, or corporation, or board, or person" within the purview oI section 226 and 516 oI the Code oI Civil Procedure, against which prohibition would lie. The respondent Pedro Ynsua, in his turn, appeared and Iiled an answer in his own behalI on March 2, 1936, setting Iorth the Iollowing as his special deIense: (a) That at the time oI the approval oI the rules oI the Electoral Commission on December 9, 1935, there was no existing law Iixing the period within which protests against the election oI members oI the National Assembly should be Iiled; that in Iixing December 9, 1935, as the last day Ior the Iiling oI protests against the election oI members oI the National Assembly, the Electoral Commission was exercising a power impliedly conIerred upon it by the Constitution, by reason oI its quasi-judicial attributes; (b) That said respondent presented his motion oI protest beIore the Electoral Commission on December 9, 1935, the last day Iixed by paragraph 6 oI the rules oI the said Electoral Commission; (c) That thereIore the Electoral Commission acquired jurisdiction over the protest Iiled by said respondent and over the parties thereto, and the resolution oI the Electoral Commission oI January 23, 1936, denying petitioner's motion to dismiss said protest was an act within the jurisdiction oI the said commission, and is not reviewable by means oI a writ oI prohibition; (d) That neither the law nor the Constitution requires conIirmation by the National Assembly oI the election oI its members, and that such conIirmation does not operate to limit the period within which protests should be Iiled as to deprive the Electoral Commission oI jurisdiction over protest Iiled subsequent thereto; (e) That the Electoral Commission is an independent entity created by the Constitution, endowed with quasi-judicial Iunctions, whose decision are Iinal and unappealable; ( f ) That the electoral Commission, as a constitutional creation, is not an inIerior tribunal, corporation, board or person, within the terms oI sections 226 and 516 oI the Code oI Civil Procedure; and that neither under the provisions oI sections 1 and 2 oI article II (should be article VIII) oI the Constitution and paragraph 13 oI section 1 oI the Ordinance appended thereto could it be subject in the exercise oI its quasi-judicial Iunctions to a writ oI prohibition Irom the Supreme Court; () That paragraph 6 oI article 7 oI the Tydings-McDuIIie Law (No. 127 oI the 73rd Congress oI the united States) has no application to the case at bar. The case was argued beIore us on March 13, 1936. BeIore it was submitted Ior decision, the petitioner prayed Ior the issuance oI a preliminary writ oI injunction against the respondent Electoral Commission which petition was denied "without passing upon the merits oI the case" by resolution oI this court oI March 21, 1936. There was no appearance Ior the other respondents. The issues to be decided in the case at bar may be reduced to the Iollowing two principal propositions: 1. Has the Supreme Court jurisdiction over the Electoral Commission and the subject matter oI the controversy upon the Ioregoing related Iacts, and in the aIIirmative, 2. Has the said Electoral Commission acted without or in excess oI its jurisdiction in assuming to the cognizance oI the protest Iiled the election oI the herein petitioner notwithstanding the previous conIirmation oI such election by resolution oI the National Assembly? We could perhaps dispose oI this case by passing directly upon the merits oI the controversy. However, the question oI jurisdiction having been presented, we do not Ieel justiIied in evading the issue. Being a case prim impressionis, it would hardly be consistent with our sense oI duty to overlook the broader aspect oI the question and leave it undecided. Neither would we be doing justice to the industry and vehemence oI counsel were we not to pass upon the question oI jurisdiction squarely presented to our consideration. The separation oI powers is a Iundamental principle in our system oI government. It obtains not through express provision but by actual division in our Constitution. Each department oI the government has exclusive cognizance oI matters within its jurisdiction, and is supreme within its own sphere. But it does not Iollow Irom the Iact that the three powers are to be kept separate and distinct that the Constitution intended them to be absolutely unrestrained and independent oI each other. The Constitution has provided Ior an elaborate system oI checks and balances to secure coordination in the workings oI the various departments oI the government. For example, the ChieI Executive under our Constitution is so Iar made a check on the legislative power that this assent is required in the enactment oI laws. This, however, is subject to the Iurther check that a bill may become a law notwithstanding the reIusal oI the President to approve it, by a vote oI two-thirds or three-Iourths, as the case may be, oI the National Assembly. The President has also the right to convene the Assembly in special session whenever he chooses. On the other hand, the National Assembly operates as a check on the Executive in the sense that its consent through its Commission on Appointments is necessary in the appointments oI certain oIIicers; and the concurrence oI a majority oI all its members is essential to the conclusion oI treaties. Furthermore, in its power to determine what courts other than the Supreme Court shall be established, to deIine their jurisdiction and to appropriate Iunds Ior their support, the National Assembly controls the judicial department to a certain extent. The Assembly also exercises the judicial power oI trying impeachments. And the judiciary in turn, with the Supreme Court as the Iinal arbiter, eIIectively checks the other departments in the exercise oI its power to determine the law, and hence to declare executive and legislative acts void iI violative oI the Constitution. But in the main, the Constitution has blocked out with deIt strokes and in bold lines, allotment oI power to the executive, the legislative and the judicial departments oI the government. The overlapping and interlacing oI Iunctions and duties between the several departments, however, sometimes makes it hard to say just where the one leaves oII and the other begins. In times oI social disquietude or political excitement, the great landmarks oI the Constitution are apt to be Iorgotten or marred, iI not entirely obliterated. In cases oI conIlict, the judicial department is the only constitutional organ which can be called upon to determine the proper allocation oI powers between the several departments and among the integral or constituent units thereoI. As any human production, our Constitution is oI course lacking perIection and perIectibility, but as much as it was within the power oI our people, acting through their delegates to so provide, that instrument which is the expression oI their sovereignty however limited, has established a republican government intended to operate and Iunction as a harmonious whole, under a system oI checks and balances, and subject to speciIic limitations and restrictions provided in the said instrument. The Constitution sets Iorth in no uncertain language the restrictions and limitations upon governmental powers and agencies. II these restrictions and limitations are transcended it would be inconceivable iI the Constitution had not provided Ior a mechanism by which to direct the course oI government along constitutional channels, Ior then the distribution oI powers would be mere verbiage, the bill oI rights mere expressions oI sentiment, and the principles oI good government mere political apothegms. Certainly, the limitation and restrictions embodied in our Constitution are real as they should be in any living constitution. In the United States where no express constitutional grant is Iound in their constitution, the possession oI this moderating power oI the courts, not to speak oI its historical origin and development there, has been set at rest by popular acquiescence Ior a period oI more than one and a halI centuries. In our case, this moderating power is granted, iI not expressly, by clear implication Irom section 2 oI article VIII oI our constitution. The Constitution is a deIinition oI the powers oI government. Who is to determine the nature, scope and extent oI such powers? The Constitution itselI has provided Ior the instrumentality oI the judiciary as the rational way. And when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in reality nulliIy or invalidate an act oI the legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to determine conIlicting claims oI authority under the Constitution and to establish Ior the parties in an actual controversy the rights which that instrument secures and guarantees to them. This is in truth all that is involved in what is termed "judicial supremacy" which properly is the power oI judicial review under the Constitution. Even then, this power oI judicial review is limited to actual cases and controversies to be exercised aIter Iull opportunity oI argument by the parties, and limited Iurther to the constitutional question raised or the very lis mota presented. Any attempt at abstraction could only lead to dialectics and barren legal questions and to sterile conclusions unrelated to actualities. Narrowed as its Iunction is in this manner, the judiciary does not pass upon questions oI wisdom, justice or expediency oI legislation. More than that, courts accord the presumption oI constitutionality to legislative enactments, not only because the legislature is presumed to abide by the Constitution but also because the judiciary in the determination oI actual cases and controversies must reIlect the wisdom and justice oI the people as expressed through their representatives in the executive and legislative departments oI the governments oI the government. But much as we might postulate on the internal checks oI power provided in our Constitution, it ought not the less to be remembered that, in the language oI James Madison, the system itselI is not "the chieI palladium oI constitutional liberty . . . the people who are authors oI this blessing must also be its guardians . . . their eyes must be ever ready to mark, their voice to pronounce . . . aggression on the authority oI their constitution." In the Last and ultimate analysis, then, must the success oI our government in the unIolding years to come be tested in the crucible oI Filipino minds and hearts than in consultation rooms and court chambers. In the case at bar, the national Assembly has by resolution (No. 8) oI December 3, 1935, conIirmed the election oI the herein petitioner to the said body. On the other hand, the Electoral Commission has by resolution adopted on December 9, 1935, Iixed said date as the last day Ior the Iiling oI protests against the election, returns and qualiIications oI members oI the National Assembly, notwithstanding the previous conIirmation made by the National Assembly as aIoresaid. II, as contended by the petitioner, the resolution oI the National Assembly has the eIIect oI cutting oII the power oI the Electoral Commission to entertain protests against the election, returns and qualiIications oI members oI the National Assembly, submitted aIter December 3, 1935, then the resolution oI the Electoral Commission oI December 9, 1935, is mere surplusage and had no eIIect. But, iI, as contended by the respondents, the Electoral Commission has the sole power oI regulating its proceedings to the exclusion oI the National Assembly, then the resolution oI December 9, 1935, by which the Electoral Commission Iixed said date as the last day Ior Iiling protests against the election, returns and qualiIications oI members oI the National Assembly, should be upheld. Here is then presented an actual controversy involving as it does a conIlict oI a grave constitutional nature between the National Assembly on the one hand, and the Electoral Commission on the other. From the very nature oI the republican government established in our country in the light oI American experience and oI our own, upon the judicial department is thrown the solemn and inescapable obligation oI interpreting the Constitution and deIining constitutional boundaries. The Electoral Commission, as we shall have occasion to reIer hereaIter, is a constitutional organ, created Ior a speciIic purpose, namely to determine all contests relating to the election, returns and qualiIications oI the members oI the National Assembly. Although the Electoral Commission may not be interIered with, when and while acting within the limits oI its authority, it does not Iollow that it is beyond the reach oI the constitutional mechanism adopted by the people and that it is not subject to constitutional restrictions. The Electoral Commission is not a separate department oI the government, and even iI it were, conIlicting claims oI authority under the Iundamental law between department powers and agencies oI the government are necessarily determined by the judiciary in justiIiable and appropriate cases. Discarding the English type and other European types oI constitutional government, the Iramers oI our constitution adopted the American type where the written constitution is interpreted and given eIIect by the judicial department. In some countries which have declined to Iollow the American example, provisions have been inserted in their constitutions prohibiting the courts Irom exercising the power to interpret the Iundamental law. This is taken as a recognition oI what otherwise would be the rule that in the absence oI direct prohibition courts are bound to assume what is logically their Iunction. For instance, the Constitution oI Poland oI 1921, expressly provides that courts shall have no power to examine the validity oI statutes (art. 81, chap. IV). The Iormer Austrian Constitution contained a similar declaration. In countries whose constitutions are silent in this respect, courts have assumed this power. This is true in Norway, Greece, Australia and South AIrica. Whereas, in Czechoslovakia (arts. 2 and 3, Preliminary Law to constitutional Charter oI the Czechoslovak Republic, February 29, 1920) and Spain (arts. 121-123, Title IX, Constitutional oI the Republic oI 1931) especial constitutional courts are established to pass upon the validity oI ordinary laws. In our case, the nature oI the present controversy shows the necessity oI a Iinal constitutional arbiter to determine the conIlict oI authority between two agencies created by the Constitution. Were we to decline to take cognizance oI the controversy, who will determine the conIlict? And iI the conIlict were leIt undecided and undetermined, would not a void be thus created in our constitutional system which may be in the long run prove destructive oI the entire Iramework? To ask these questions is to answer them. Natura vacuum abhorret, so must we avoid exhaustion in our constitutional system. Upon principle, reason and authority, we are clearly oI the opinion that upon the admitted Iacts oI the present case, this court has jurisdiction over the Electoral Commission and the subject mater oI the present controversy Ior the purpose oI determining the character, scope and extent oI the constitutional grant to the Electoral Commission as "the sole judge oI all contests relating to the election, returns and qualiIications oI the members oI the National Assembly." Having disposed oI the question oI jurisdiction, we shall now proceed to pass upon the second proposition and determine whether the Electoral Commission has acted without or in excess oI its jurisdiction in adopting its resolution oI December 9, 1935, and in assuming to take cognizance oI the protest Iiled against the election oI the herein petitioner notwithstanding the previous conIirmation thereoI by the National Assembly on December 3, 1935. As able counsel Ior the petitioner has pointed out, the issue hinges on the interpretation oI section 4 oI Article VI oI the Constitution which provides: "SEC. 4. There shall be an Electoral Commission composed oI three Justice oI the Supreme Court designated by the ChieI Justice, and oI six Members chosen by the National Assembly, three oI whom shall be nominated by the party having the largest number oI votes, and three by the party having the second largest number oI votes therein. The senior Justice in the Commission shall be its Chairman. The Electoral Commission shall be the sole judge oI all contests relating to the election, returns and qualiIications oI the members oI the National Assembly." It is imperative, thereIore, that we delve into the origin and history oI this constitutional provision and inquire into the intention oI its Iramers and the people who adopted it so that we may properly appreciate its Iull meaning, import and signiIicance. The original provision regarding this subject in the Act oI Congress oI July 1, 1902 (sec. 7, par. 5) laying down the rule that "the assembly shall be the judge oI the elections, returns, and qualiIications oI its members", was taken Irom clause 1 oI section 5, Article I oI the Constitution oI the United States providing that "Each House shall be the Judge oI the Elections, Returns, and QualiIications oI its own Members, . . . ." The Act oI Congress oI August 29, 1916 (sec. 18, par. 1) modiIied this provision by the insertion oI the word "sole" as Iollows: "That the Senate and House oI Representatives, respectively, shall be the sole judges oI the elections, returns, and qualiIications oI their elective members . . ." apparently in order to emphasize the exclusive the Legislative over the particular case s therein speciIied. This court has had occasion to characterize this grant oI power to the Philippine Senate and House oI Representatives, respectively, as "Iull, clear and complete" (Veloso vs. Boards oI Canvassers oI Leyte and Samar |1919|, 39 Phil., 886, 888.) The Iirst step towards the creation oI an independent tribunal Ior the purpose oI deciding contested elections to the legislature was taken by the sub-committee oI Iive appointed by the Committee on Constitutional Guarantees oI the Constitutional Convention, which sub-committee submitted a report on August 30, 1934, recommending the creation oI a Tribunal oI Constitutional Security empowered to hear legislature but also against the election oI executive oIIicers Ior whose election the vote oI the whole nation is required, as well as to initiate impeachment proceedings against speciIied executive and judicial oIIicer. For the purpose oI hearing legislative protests, the tribunal was to be composed oI three justices designated by the Supreme Court and six members oI the house oI the legislature to which the contest corresponds, three members to be designed by the majority party and three by the minority, to be presided over by the Senior Justice unless the ChieI Justice is also a member in which case the latter shall preside. The Ioregoing proposal was submitted by the Committee on Constitutional Guarantees to the Convention on September 15, 1934, with slight modiIications consisting in the reduction oI the legislative representation to Iour members, that is, two senators to be designated one each Irom the two major parties in the Senate and two representatives to be designated one each Irom the two major parties in the House oI Representatives, and in awarding representation to the executive department in the persons oI two representatives to be designated by the President. Meanwhile, the Committee on Legislative Power was also preparing its report. As submitted to the Convention on September 24, 1934 subsection 5, section 5, oI the proposed Article on the Legislative Department, reads as Iollows: The elections, returns and qualiIications oI the members oI either house and all cases contesting the election oI any oI their members shall be judged by an Electoral Commission, constituted, as to each House, by three members elected by the members oI the party having the largest number oI votes therein, three elected by the members oI the party having the second largest number oI votes, and as to its Chairman, one Justice oI the Supreme Court designated by the ChieI Justice. The idea oI creating a Tribunal oI Constitutional Security with comprehensive jurisdiction as proposed by the Committee on Constitutional Guarantees which was probably inspired by the Spanish plan (art. 121, Constitution oI the Spanish Republic oI 1931), was soon abandoned in Iavor oI the proposition oI the Committee on Legislative Power to create a similar body with reduced powers and with speciIic and limited jurisdiction, to be designated as a Electoral Commission. The Sponsorship Committee modiIied the proposal oI the Committee on Legislative Power with respect to the composition oI the Electoral Commission and made Iurther changes in phraseology to suit the project oI adopting a unicameral instead oI a bicameral legislature. The draIt as Iinally submitted to the Convention on October 26, 1934, reads as Iollows: (6) The elections, returns and qualiIications oI the Members oI the National Assembly and all cases contesting the election oI any oI its Members shall be judged by an Electoral Commission, composed oI three members elected by the party having the largest number oI votes in the National Assembly, three elected by the members oI the party having the second largest number oI votes, and three justices oI the Supreme Court designated by the ChieI Justice, the Commission to be presided over by one oI said justices. During the discussion oI the amendment introduced by Delegates Labrador, Abordo, and others, proposing to strike out the whole subsection oI the Ioregoing draIt and inserting in lieu thereoI the Iollowing: "The National Assembly shall be the soled and exclusive judge oI the elections, returns, and qualiIications oI the Members", the Iollowing illuminating remarks were made on the Iloor oI the Convention in its session oI December 4, 1934, as to the scope oI the said draIt: x x x x x x x x x Mr. VENTURA. Mr. President, we have a doubt here as to the scope oI the meaning oI the Iirst Iour lines, paragraph 6, page 11 oI the draIt, reading: "The elections, returns and qualiIications oI the Members oI the National Assembly and all cases contesting the election oI any oI its Members shall be judged by an Electoral Commission, . . ." I should like to ask Irom the gentleman Irom Capiz whether the election and qualiIication oI the member whose elections is not contested shall also be judged by the Electoral Commission. Mr. ROXAS. II there is no question about the election oI the members, there is nothing to be judged; that is why the word "judge" is used to indicate a controversy. II there is no question about the election oI a member, there is nothing to be submitted to the Electoral Commission and there is nothing to be determined. Mr. VENTURA. But does that carry the idea also that the Electoral Commission shall conIirm also the election oI those whose election is not contested? Mr. ROXAS. There is no need oI conIirmation. As the gentleman knows, the action oI the House oI Representatives conIirming the election oI its members is just a matter oI the rules oI the assembly. It is not constitutional. It is not necessary. AIter a man Iiles his credentials that he has been elected, that is suIIicient, unless his election is contested. Mr. VENTURA. But I do not believe that that is suIIicient, as we have observed that Ior purposes oI the auditor, in the matter oI election oI a member to a legislative body, because he will not authorize his pay. Mr. ROXAS. Well, what is the case with regards to the municipal president who is elected? What happens with regards to the councilors oI a municipality? Does anybody conIirm their election? The municipal council does this: it makes a canvass and proclaims in this case the municipal council proclaims who has been elected, and it ends there, unless there is a contest. It is the same case; there is no need on the part oI the Electoral Commission unless there is a contest. The Iirst clause reIers to the case reIerred to by the gentleman Irom Cavite where one person tries to be elected in place oI another who was declared elected. From example, in a case when the residence oI the man who has been elected is in question, or in case the citizenship oI the man who has been elected is in question. However, iI the assembly desires to annul the power oI the commission, it may do so by certain maneuvers upon its Iirst meeting when the returns are submitted to the assembly. %he purpose is to ive to the Electoral Commission all the powers exercised by the assembly referrin to the elections, returns and qualifications of the members. When there is no contest, there is nothing to be judged. Mr. VENTURA. Then it should be eliminated. Mr. ROXAS. But that is a diIIerent matter, I think Mr. Delegate. Mr. CINCO. Mr. President, I have a similar question as that propounded by the gentleman Irom Ilocos Norte when I arose a while ago. However I want to ask more questions Irom the delegate Irom Capiz. This paragraph 6 on page 11 oI the draIt cites cases contesting the election as separate Irom the Iirst part oI the sections which reIers to elections, returns and qualiIications. Mr. ROXAS. %hat is merely for the sake of clarity. In fact the cases of contested elections are already included in the phrase "the elections, returns and qualifications." %his phrase "and contested elections" was inserted merely for the sake of clarity. Mr. CINCO. Under this paragraph, may not the Electoral Commission, at its own instance, reIuse to conIirm the elections oI the members." Mr. ROXAS. I do not think so, unless there is a protest. Mr. LABRADOR. Mr. President, will the gentleman yield? THE PRESIDENT. The gentleman may yield, iI he so desires. Mr. ROXAS. Willingly. Mr. LABRADOR. Does not the gentleman Irom Capiz believe that unless this power is granted to the assembly, the assembly on its own motion does not have the right to contest the election and qualiIication oI its members? Mr. ROXAS. I have no doubt but that the gentleman is right. II this draIt is retained as it is, even iI two-thirds oI the assembly believe that a member has not the qualiIications provided by law, they cannot remove him Ior that reason. Mr. LABRADOR. So that the right to remove shall only be retained by the Electoral Commission. Mr. ROXAS. By the assembly Ior misconduct. Mr. LABRADOR. I mean with respect to the qualiIications oI the members. Mr. ROXAS. Yes, by the Electoral Commission. Mr. LABRADOR. So that under this draIt, no member oI the assembly has the right to question the eligibility oI its members? Mr. ROXAS. BeIore a member can question the eligibility, he must go to the Electoral Commission and make the question beIore the Electoral Commission. Mr. LABRADOR. So that the Electoral Commission shall decide whether the election is contested or not contested. Mr. ROXAS. Yes, sir. that is the purpose. Mr. PELAYO. Mr. President, I would like to be inIormed iI the Electoral Commission has power and authority to pass upon the qualiIications oI the members oI the National Assembly even though that question has not been raised. Mr. ROXAS. I have just said that they have no power, because they can only judge. In the same session, the Iirst clause oI the aIoresaid draIt reading "The election, returns and qualiIications oI the members oI the National Assembly and" was eliminated by the Sponsorship Committee in response to an amendment introduced by Delegates Francisco, Ventura, Vinzons, RaIols, Lim, Mumar and others. In explaining the diIIerence between the original draIt and the draIt as amended, Delegate Roxas speaking Ior the Sponsorship Committee said: x x x x x x x x x Sr. ROXAS. La diIerencia, seor Presidente, consiste solamente en obviar la objecion apuntada por varios Delegados al eIecto de que la primera clausula del draft que dice: "The elections, returns and qualiIications oI the members oI the National Assembly" parece que da a la Comision Electoral la Iacultad de determinar tambien la eleccion de los miembros que no ha sido protestados y para obviar esa diIicultad, creemos que la enmienda tien razon en ese sentido, si enmendamos el draft, de tal modo que se lea como sigue: "All cases contesting the election", de modo que los jueces de la Comision Electoral se limitaran solamente a los casos en que haya habido protesta contra las actas." BeIore the amendment oI Delegate Labrador was voted upon the Iollowing interpellation also took place: El Sr. CONEJERO. Antes de votarse la enmienda, quisiera El Sr. PRESIDENTE. Que dice el Comite? El Sr. ROXAS. Con mucho gusto. El Sr. CONEJERO. Tal como esta el draft, dando tres miembros a la mayoria, y otros tres a la minoria y tres a la Corte Suprema, no cree Su Seoria que esto equivale practicamente a dejar el asunto a los miembros del Tribunal Supremo? El Sr. ROXAS. Si y no. Creemos que si el tribunal o la Commission esta constituido en esa Iorma, tanto los miembros de la mayoria como los de la minoria asi como los miembros de la Corte Suprema consideraran la cuestion sobre la base de sus meritos, sabiendo que el partidismo no es suIiciente para dar el triunIo. El Sr. CONEJERO. Cree Su Seoria que en un caso como ese, podriamos hacer que tanto los de la mayoria como los de la minoria prescindieran del partidismo? El Sr. ROXAS. Creo que si, porque el partidismo no les daria el triunIo. x x x x x x x x x The amendment introduced by Delegates Labrador, Abordo and others seeking to restore the power to decide contests relating to the election, returns and qualiIications oI members oI the National Assembly to the National Assembly itselI, was deIeated by a vote oI ninety-eight (98) against IiIty-six (56). In the same session oI December 4, 1934, Delegate Cruz (C.) sought to amend the draIt by reducing the representation oI the minority party and the Supreme Court in the Electoral Commission to two members each, so as to accord more representation to the majority party. The Convention rejected this amendment by a vote oI seventy-six (76) against Iorty-six (46), thus maintaining the non-partisan character oI the commission. As approved on January 31, 1935, the draIt was made to read as Iollows: (6) All cases contesting the elections, returns and qualiIications oI the Members oI the National Assembly shall be judged by an Electoral Commission, composed oI three members elected by the party having the largest number oI votes in the National Assembly, three elected by the members oI the party having the second largest number oI votes, and three justices oI the Supreme Court designated by the ChieI Justice, the Commission to be presided over by one oI said justices. The Style Committee to which the draIt was submitted revised it as Iollows: SEC. 4. There shall be an Electoral Commission composed oI three Justices oI the Supreme Court designated by the ChieI Justice, and oI six Members chosen by the National Assembly, three oI whom shall be nominated by the party having the largest number oI votes, and three by the party having the second largest number oI votes therein. The senior Justice in the Commission shall be its chairman. The Electoral Commission shall be the sole judge oI the election, returns, and qualiIications oI the Members oI the National Assembly. When the Ioregoing draIt was submitted Ior approval on February 8, 1935, the Style Committee, through President Recto, to eIIectuate the original intention oI the Convention, agreed to insert the phrase "All contests relating to" between the phrase "judge oI" and the words "the elections", which was accordingly accepted by the Convention. The transIer oI the power oI determining the election, returns and qualiIications oI the members oI the legislature long lodged in the legislative body, to an independent, impartial and non-partisan tribunal, is by no means a mere experiment in the science oI government. Cushing, in his Law and Practice oI Legislative Assemblies (ninth edition, chapter VI, pages 57, 58), gives a vivid account oI the "scandalously notorious" canvassing oI votes by political parties in the disposition oI contests by the House oI Commons in the Iollowing passages which are partly quoted by the petitioner in his printed memorandum oI March 14, 1936: 153. From the time when the commons established their right to be the exclusive judges oI the elections, returns, and qualiIications oI their members, until the year 1770, two modes oI proceeding prevailed, in the determination oI controverted elections, and rights oI membership. One oI the standing committees appointed at the commencement oI each session, was denominated the committee oI privileges and elections, whose Iunctions was to hear and investigate all questions oI this description which might be reIerred to them, and to report their proceedings, with their opinion thereupon, to the house, Irom time to time. When an election petition was reIerred to this committee they heard the parties and their witnesses and other evidence, and made a report oI all the evidence, together with their opinion thereupon, in the Iorm oI resolutions, which were considered and agreed or disagreed to by the house. The other mode oI proceeding was by a hearing at the bar oI the house itselI. When this court was adopted, the case was heard and decided by the house, in substantially the same manner as by a committee. The committee oI privileges and elections although a select committee. The committee oI privileges and elections although a select committee was usually what is called an open one; that is to say, in order to constitute the committee, a quorum oI the members named was required to be present, but all the members oI the house were at liberty to attend the committee and vote iI they pleased. 154. With the growth oI political parties in parliament questions relating to the right oI membership gradually assumed a political character; so that Ior many years previous to the year 1770, controverted elections had been tried and determined by the house oI commons, as mere party questions, upon which the strength oI contending Iactions might be tested. Thus, Ior Example, in 1741, Sir Robert Walpole, aIter repeated attacks upon his government, resigned his oIIice in consequence oI an adverse vote upon the Chippenham election. Mr. Hatsell remarks, oI the trial oI election cases, as conducted under this system, that "Every principle oI decency and justice were notoriously and openly prostituted, Irom whence the younger part oI the house were insensibly, but too successIully, induced to adopt the same licentious conduct in more serious matters, and in questions oI higher importance to the public welIare." Mr. George Grenville, a distinguished member oI the house oI commons, undertook to propose a remedy Ior the evil, and, on the 7th oI March, 1770, obtained the unanimous leave oI the house to bring in a bill, "to regulate the trial oI controverted elections, or returns oI members to serve in parliament." In his speech to explain his plan, on the motion Ior leave, Mr. Grenville alluded to the existing practice in the Iollowing terms: "Instead oI trusting to the merits oI their respective causes, the principal dependence oI both parties is their private interest among us; and it is scandalously notorious that we are as earnestly canvassed to attend in Iavor oI the opposite sides, as iI we were wholly selI-elective, and not bound to act by the principles oI justice, but by the discretionary impulse oI our own inclinations; nay, it is well known, that in every contested election, many members oI this house, who are ultimately to judge in a kind oI judicial capacity between the competitors, enlist themselves as parties in the contention, and take upon themselves the partial management oI the very business, upon which they should determine with the strictest impartiality." 155. It was to put an end to the practices thus described, that Mr. Grenville brought in a bill which met with the approbation oI both houses, and received the royal assent on the 12th oI April, 1770. This was the celebrated law since known by the name oI the Grenville Act; oI which Mr. Hatsell declares, that it "was one oI the nobles works, Ior the honor oI the house oI commons, and the security oI the constitution, that was ever devised by any minister or statesman." It is probable, that the magnitude oI the evil, or the apparent success oI the remedy, may have led many oI the contemporaries oI the measure to the inIormation oI a judgement, which was not acquiesced in by some oI the leading statesmen oI the day, and has not been entirely conIirmed by subsequent experience. The bill was objected to by Lord North, Mr. De Grey, aIterwards chieI justice oI the common pleas, Mr. Ellis, Mr. Dyson, who had been clerk oI the house, and Mr. Charles James Fox, chieIly on the ground, that the introduction oI the new system was an essential alteration oI the constitution oI parliament, and a total abrogation oI one oI the most important rights and jurisdictions oI the house oI commons. As early as 1868, the House oI Commons in England solved the problem oI insuring the non-partisan settlement oI the controverted elections oI its members by abdicating its prerogative to two judges oI the King's Bench oI the High Court oI Justice selected Irom a rota in accordance with rules oI court made Ior the purpose. Having proved successIul, the practice has become imbedded in English jurisprudence (Parliamentary Elections Act, 1868 |31 & 32 Vict. c. 125| as amended by Parliamentary Elections and Corrupt Practices Act. 1879 |42 & 43 Vict. c. 75|, s. 2; Corrupt and Illegal Practices Preventions Act, 1883 |46 & 47 Vict. c. 51;, s. 70; Expiring Laws Continuance Act, 1911 |1 & 2 Geo. 5, c. 22|; Laws oI England, vol. XII, p. 408, vol. XXI, p. 787). In the Dominion oI Canada, election contests which were originally heard by the Committee oI the House oI Commons, are since 1922 tried in the courts. Likewise, in the Commonwealth oI Australia, election contests which were originally determined by each house, are since 1922 tried in the High Court. In Hungary, the organic law provides that all protests against the election oI members oI the Upper House oI the Diet are to be resolved by the Supreme Administrative Court (Law 22 oI 1916, chap. 2, art. 37, par. 6). The Constitution oI Poland oI March 17, 1921 (art. 19) and the Constitution oI the Free City oI Danzig oI May 13, 1922 (art. 10) vest the authority to decide contested elections to the Diet or National Assembly in the Supreme Court. For the purpose oI deciding legislative contests, the Constitution oI the German Reich oI July 1, 1919 (art. 31), the Constitution oI the Czechoslovak Republic oI February 29, 1920 (art. 19) and the Constitution oI the Grecian Republic oI June 2, 1927 (art. 43), all provide Ior an Electoral Commission. The creation oI an Electoral Commission whose membership is recruited both Irom the legislature and the judiciary is by no means unknown in the United States. In the presidential elections oI 1876 there was a dispute as to the number oI electoral votes received by each oI the two opposing candidates. As the Constitution made no adequate provision Ior such a contingency, Congress passed a law on January 29, 1877 (United States Statutes at Large, vol. 19, chap. 37, pp. 227-229), creating a special Electoral Commission composed oI Iive members elected by the Senate, Iive members elected by the House oI Representatives, and Iive justices oI the Supreme Court, the IiIth justice to be selected by the Iour designated in the Act. The decision oI the commission was to be binding unless rejected by the two houses voting separately. Although there is not much oI a moral lesson to be derived Irom the experience oI America in this regard, judging Irom the observations oI Justice Field, who was a member oI that body on the part oI the Supreme Court (Countryman, the Supreme Court oI the United States and its Appellate Power under the Constitution |Albany, 1913| Relentless Partisanship oI Electoral Commission, p. 25 et seq.), the experiment has at least abiding historical interest. The members oI the Constitutional Convention who Iramed our Iundamental law were in their majority men mature in years and experience. To be sure, many oI them were Iamiliar with the history and political development oI other countries oI the world. When , thereIore, they deemed it wise to create an Electoral Commission as a constitutional organ and invested it with the exclusive Iunction oI passing upon and determining the election, returns and qualiIications oI the members oI the National Assembly, they must have done so not only in the light oI their own experience but also having in view the experience oI other enlightened peoples oI the world. The creation oI the Electoral Commission was designed to remedy certain evils oI which the Iramers oI our Constitution were cognizant. Notwithstanding the vigorous opposition oI some members oI the Convention to its creation, the plan, as hereinabove stated, was approved by that body by a vote oI 98 against 58. All that can be said now is that, upon the approval oI the constitutional the creation oI the Electoral Commission is the expression oI the wisdom and "ultimate justice oI the people". (Abraham Lincoln, First Inaugural Address, March 4, 1861.) From the deliberations oI our Constitutional Convention it is evident that the purpose was to transIer in its totality all the powers previously exercised by the legislature in matters pertaining to contested elections oI its members, to an independent and impartial tribunal. It was not so much the knowledge and appreciation oI contemporary constitutional precedents, however, as the long-Ielt need oI determining legislative contests devoid oI partisan considerations which prompted the people, acting through their delegates to the Convention, to provide Ior this body known as the Electoral Commission. With this end in view, a composite body in which both the majority and minority parties are equally represented to oII-set partisan inIluence in its deliberations was created, and Iurther endowed with judicial temper by including in its membership three justices oI the Supreme Court. The Electoral Commission is a constitutional creation, invested with the necessary authority in the perIormance and execution oI the limited and speciIic Iunction assigned to it by the Constitution. Although it is not a power in our tripartite scheme oI government, it is, to all intents and purposes, when acting within the limits oI its authority, an independent organ. It is, to be sure, closer to the legislative department than to any other. The location oI the provision (section 4) creating the Electoral Commission under Article VI entitled "Legislative Department" oI our Constitution is very indicative. Its compositions is also signiIicant in that it is constituted by a majority oI members oI the legislature. But it is a body separate Irom and independent oI the legislature. The grant oI power to the Electoral Commission to judge all contests relating to the election, returns and qualiIications oI members oI the National Assembly, is intended to be as complete and unimpaired as iI it had remained originally in the legislature. The express lodging oI that power in the Electoral Commission is an implied denial oI the exercise oI that power by the National Assembly. And this is as eIIective a restriction upon the legislative power as an express prohibition in the Constitution (Ex parte Lewis, 45 Tex. Crim. Rep., 1; State vs. Whisman, 36 S.D., 260; L.R.A., 1917B, 1). II we concede the power claimed in behalI oI the National Assembly that said body may regulate the proceedings oI the Electoral Commission and cut oII the power oI the commission to lay down the period within which protests should be Iiled, the grant oI power to the commission would be ineIIective. The Electoral Commission in such case would be invested with the power to determine contested cases involving the election, returns and qualiIications oI the members oI the National Assembly but subject at all times to the regulative power oI the National Assembly. Not only would the purpose oI the Iramers oI our Constitution oI totally transIerring this authority Irom the legislative body be Irustrated, but a dual authority would be created with the resultant inevitable clash oI powers Irom time to time. A sad spectacle would then be presented oI the Electoral Commission retaining the bare authority oI taking cognizance oI cases reIerred to, but in reality without the necessary means to render that authority eIIective whenever and whenever the National Assembly has chosen to act, a situation worse than that intended to be remedied by the Iramers oI our Constitution. The power to regulate on the part oI the National Assembly in procedural matters will inevitably lead to the ultimate control by the Assembly oI the entire proceedings oI the Electoral Commission, and, by indirection, to the entire abrogation oI the constitutional grant. It is obvious that this result should not be permitted. We are not insensible to the impassioned argument or the learned counsel Ior the petitioner regarding the importance and necessity oI respecting the dignity and independence oI the national Assembly as a coordinate department oI the government and oI according validity to its acts, to avoid what he characterized would be practically an unlimited power oI the commission in the admission oI protests against members oI the National Assembly. But as we have pointed out hereinabove, the creation oI the Electoral Commission carried with it ex necesitate rei the power regulative in character to limit the time with which protests intrusted to its cognizance should be Iiled. It is a settled rule oI construction that where a general power is conIerred or duty enjoined, every particular power necessary Ior the exercise oI the one or the perIormance oI the other is also conIerred (Cooley, Constitutional Limitations, eight ed., vol. I, pp. 138, 139). In the absence oI any Iurther constitutional provision relating to the procedure to be Iollowed in Iiling protests beIore the Electoral Commission, thereIore, the incidental power to promulgate such rules necessary Ior the proper exercise oI its exclusive power to judge all contests relating to the election, returns and qualiIications oI members oI the National Assembly, must be deemed by necessary implication to have been lodged also in the Electoral Commission. It is, indeed, possible that, as suggested by counsel Ior the petitioner, the Electoral Commission may abuse its regulative authority by admitting protests beyond any reasonable time, to the disturbance oI the tranquillity and peace oI mind oI the members oI the National Assembly. But the possibility oI abuse is not argument against the concession oI the power as there is no power that is not susceptible oI abuse. In the second place, iI any mistake has been committed in the creation oI an Electoral Commission and in investing it with exclusive jurisdiction in all cases relating to the election, returns, and qualiIications oI members oI the National Assembly, the remedy is political, not judicial, and must be sought through the ordinary processes oI democracy. All the possible abuses oI the government are not intended to be corrected by the judiciary. We believe, however, that the people in creating the Electoral Commission reposed as much conIidence in this body in the exclusive determination oI the speciIied cases assigned to it, as they have given to the Supreme Court in the proper cases entrusted to it Ior decision. All the agencies oI the government were designed by the Constitution to achieve speciIic purposes, and each constitutional organ working within its own particular sphere oI discretionary action must be deemed to be animated with the same zeal and honesty in accomplishing the great ends Ior which they were created by the sovereign will. That the actuations oI these constitutional agencies might leave much to be desired in given instances, is inherent in the perIection oI human institutions. In the third place, Irom the Iact that the Electoral Commission may not be interIered with in the exercise oI its legitimate power, it does not Iollow that its acts, however illegal or unconstitutional, may not be challenge in appropriate cases over which the courts may exercise jurisdiction. But independently oI the legal and constitutional aspects oI the present case, there are considerations oI equitable character that should not be overlooked in the appreciation oI the intrinsic merits oI the controversy. The Commonwealth Government was inaugurated on November 15, 1935, on which date the Constitution, except as to the provisions mentioned in section 6 oI Article XV thereoI, went into eIIect. The new National Assembly convened on November 25th oI that year, and the resolution conIirming the election oI the petitioner, Jose A. Angara was approved by that body on December 3, 1935. The protest by the herein respondent Pedro Ynsua against the election oI the petitioner was Iiled on December 9 oI the same year. The pleadings do not show when the Electoral Commission was Iormally organized but it does appear that on December 9, 1935, the Electoral Commission met Ior the Iirst time and approved a resolution Iixing said date as the last day Ior the Iiling oI election protest. When, thereIore, the National Assembly passed its resolution oI December 3, 1935, conIirming the election oI the petitioner to the National Assembly, the Electoral Commission had not yet met; neither does it appear that said body had actually been organized. As a mater oI Iact, according to certiIied copies oI oIIicial records on Iile in the archives division oI the National Assembly attached to the record oI this case upon the petition oI the petitioner, the three justices oI the Supreme Court the six members oI the National Assembly constituting the Electoral Commission were respectively designated only on December 4 and 6, 1935. II Resolution No. 8 oI the National Assembly conIirming non-protested elections oI members oI the National Assembly had the eIIect oI limiting or tolling the time Ior the presentation oI protests, the result would be that the National Assembly on the hypothesis that it still retained the incidental power oI regulation in such cases had already barred the presentation oI protests beIore the Electoral Commission had had time to organize itselI and deliberate on the mode and method to be Iollowed in a matter entrusted to its exclusive jurisdiction by the Constitution. This result was not and could not have been contemplated, and should be avoided. From another angle, Resolution No. 8 oI the National Assembly conIirming the election oI members against whom no protests had been Iiled at the time oI its passage on December 3, 1935, can not be construed as a limitation upon the time Ior the initiation oI election contests. While there might have been good reason Ior the legislative practice oI conIirmation oI the election oI members oI the legislature at the time when the power to decide election contests was still lodged in the legislature, conIirmation alone by the legislature cannot be construed as depriving the Electoral Commission oI the authority incidental to its constitutional power to be "the sole judge oI all contest relating to the election, returns, and qualiIications oI the members oI the National Assembly", to Iix the time Ior the Iiling oI said election protests. ConIirmation by the National Assembly oI the returns oI its members against whose election no protests have been Iiled is, to all legal purposes, unnecessary. As contended by the Electoral Commission in its resolution oI January 23, 1936, overruling the motion oI the herein petitioner to dismiss the protest Iiled by the respondent Pedro Ynsua, conIirmation oI the election oI any member is not required by the Constitution beIore he can discharge his duties as such member. As a matter oI Iact, certiIication by the proper provincial board oI canvassers is suIIicient to entitle a member-elect to a seat in the national Assembly and to render him eligible to any oIIice in said body (No. 1, par. 1, Rules oI the National Assembly, adopted December 6, 1935). Under the practice prevailing both in the English House oI Commons and in the Congress oI the United States, conIirmation is neither necessary in order to entitle a member-elect to take his seat. The return oI the proper election oIIicers is suIIicient, and the member-elect presenting such return begins to enjoy the privileges oI a member Irom the time that he takes his oath oI oIIice (Laws oI England, vol. 12, pp. 331. 332; vol. 21, pp. 694, 695; U. S. C. A., Title 2, secs. 21, 25, 26). ConIirmation is in order only in cases oI contested elections where the decision is adverse to the claims oI the protestant. In England, the judges' decision or report in controverted elections is certiIied to the Speaker oI the House oI Commons, and the House, upon being inIormed oI such certiIicate or report by the Speaker, is required to enter the same upon the Journals, and to give such directions Ior conIirming or altering the return, or Ior the issue oI a writ Ior a new election, or Ior carrying into execution the determination as circumstances may require (31 & 32 Vict., c. 125, sec. 13). In the United States, it is believed, the order or decision oI the particular house itselI is generally regarded as suIIicient, without any actual alternation or amendment oI the return (Cushing, Law and Practice oI Legislative Assemblies, 9th ed., sec. 166). Under the practice prevailing when the Jones Law was still in Iorce, each house oI the Philippine Legislature Iixed the time when protests against the election oI any oI its members should be Iiled. This was expressly authorized by section 18 oI the Jones Law making each house the sole judge oI the election, return and qualiIications oI its members, as well as by a law (sec. 478, Act No. 3387) empowering each house to respectively prescribe by resolution the time and manner oI Iiling contest in the election oI member oI said bodies. As a matter oI Iormality, aIter the time Iixed by its rules Ior the Iiling oI protests had already expired, each house passed a resolution conIirming or approving the returns oI such members against whose election no protests had been Iiled within the prescribed time. This was interpreted as cutting oII the Iiling oI Iurther protests against the election oI those members not theretoIore contested (Amistad vs. Claravall |Isabela|, Second Philippine Legislature, Record First Period, p. 89; Urguello vs. Rama |Third District, Cebu|, Sixth Philippine Legislature; Fetalvero vs. Festin |Romblon|, Sixth Philippine Legislature, Record First Period, pp. 637-640; Kintanar vs. Aldanese |Fourth District, Cebu|, Sixth Philippine Legislature, Record First Period, pp. 1121, 1122; Aguilar vs. Corpus |Masbate|, Eighth Philippine Legislature, Record First Period, vol. III, No. 56, pp. 892, 893). The Constitution has repealed section 18 oI the Jones Law. Act No. 3387, section 478, must be deemed to have been impliedly abrogated also, Ior the reason that with the power to determine all contest relating to the election, returns and qualiIications oI members oI the National Assembly, is inseparably linked the authority to prescribe regulations Ior the exercise oI that power. There was thus no law nor constitutional provisions which authorized the National Assembly to Iix, as it is alleged to have Iixed on December 3, 1935, the time Ior the Iiling oI contests against the election oI its members. And what the National Assembly could not do directly, it could not do by indirection through the medium oI conIirmation. Summarizing, we conclude: (a) That the government established by the Constitution Iollows Iundamentally the theory oI separation oI power into the legislative, the executive and the judicial. (b) That the system oI checks and balances and the overlapping oI Iunctions and duties oIten makes diIIicult the delimitation oI the powers granted. (c) That in cases oI conIlict between the several departments and among the agencies thereoI, the judiciary, with the Supreme Court as the Iinal arbiter, is the only constitutional mechanism devised Iinally to resolve the conIlict and allocate constitutional boundaries. (d) That judicial supremacy is but the power oI judicial review in actual and appropriate cases and controversies, and is the power and duty to see that no one branch or agency oI the government transcends the Constitution, which is the source oI all authority. (e) That the Electoral Commission is an independent constitutional creation with speciIic powers and Iunctions to execute and perIorm, closer Ior purposes oI classiIication to the legislative than to any oI the other two departments oI the governments. (f ) That the Electoral Commission is the sole judge oI all contests relating to the election, returns and qualiIications oI members oI the National Assembly. () That under the organic law prevailing beIore the present Constitution went into eIIect, each house oI the legislature was respectively the sole judge oI the elections, returns, and qualiIications oI their elective members. (h) That the present Constitution has transIerred all the powers previously exercised by the legislature with respect to contests relating to the elections, returns and qualiIications oI its members, to the Electoral Commission. (i) That such transIer oI power Irom the legislature to the Electoral Commission was Iull, clear and complete, and carried with it ex necesitate rei the implied power inter alia to prescribe the rules and regulations as to the time and manner oI Iiling protests. ( f) That the avowed purpose in creating the Electoral Commission was to have an independent constitutional organ pass upon all contests relating to the election, returns and qualiIications oI members oI the National Assembly, devoid oI partisan inIluence or consideration, which object would be Irustrated iI the National Assembly were to retain the power to prescribe rules and regulations regarding the manner oI conducting said contests. (k) That section 4 oI article VI oI the Constitution repealed not only section 18 oI the Jones Law making each house oI the Philippine Legislature respectively the sole judge oI the elections, returns and qualiIications oI its elective members, but also section 478 oI Act No. 3387 empowering each house to prescribe by resolution the time and manner oI Iiling contests against the election oI its members, the time and manner oI notiIying the adverse party, and bond or bonds, to be required, iI any, and to Iix the costs and expenses oI contest. (l) That conIirmation by the National Assembly oI the election is contested or not, is not essential beIore such member-elect may discharge the duties and enjoy the privileges oI a member oI the National Assembly. (m) That conIirmation by the National Assembly oI the election oI any member against whom no protest had been Iiled prior to said conIirmation, does not and cannot deprive the Electoral Commission oI its incidental power to prescribe the time within which protests against the election oI any member oI the National Assembly should be Iiled. We hold, thereIore, that the Electoral Commission was acting within the legitimate exercise oI its constitutional prerogative in assuming to take cognizance oI the protest Iiled by the respondent Pedro Ynsua against the election oI the herein petitioner Jose A. Angara, and that the resolution oI the National Assembly oI December 3, 1935 can not in any manner toll the time Ior Iiling protests against the elections, returns and qualiIications oI members oI the National Assembly, nor prevent the Iiling oI a protest within such time as the rules oI the Electoral Commission might prescribe. In view oI the conclusion reached by us relative to the character oI the Electoral Commission as a constitutional creation and as to the scope and extent oI its authority under the Iacts oI the present controversy, we deem it unnecessary to determine whether the Electoral Commission is an inIerior tribunal, corporation, board or person within the purview oI sections 226 and 516 oI the Code oI Civil Procedure. The petition Ior a writ oI prohibition against the Electoral Commission is hereby denied, with costs against the petitioner. So ordered.
E HON. ASST. EXECUTIVE SECRETARY FOR LEGAL AFFAIRS OF THE OFFICE OF THE PRESIDENT OF THE PHILIPPINES, THE BOARD OF LIQUIDATORS, AND THE DIRECTOR OF LANDS, Petitioners, vs. THE HON. COURT OF APPEALS AND BASILIO MENDOZA, Respondents.
MELENCIO-HERRERA, The administrative Decisions oI the OIIice oI the President oI the Philippines, dated 13 May 1969 and 28 September 1971, respectively, set aside by respondent Court oI Appeals in its judgment, dated 28 November 1986, constitute the nucleus oI the present controversy.chanrob lesvirtualawlib rary chanrob les virtual law lib rary The antecedent proceedings may be summarized thus:chan robles virtual law librar y 1. On 15 April 1948, Jesus M. Larrabaster applied with the National Land Settlement Administration (NLSA) Ior a home lot at the Marbel Settlement District, Cotabato.chanroblesvirtualawlibrary chanr obles virtual law l ibrary 2. On 10 July 1950 Larrabaster's application was granted. Home Lot No. 336 (later known as Lot No. 355) with an area oI 1,500 square meters (hereaIter, the Disputed Property) was allocated to him on the basis oI a report oI the supervisor oI the Settlement District that the subject lot was vacant and Iree Irom any claim or conIlict.chanroblesvirtualawlib rary chanrobles vi rtual law lib rary Meanwhile, "Larrabaster leased the lot to private respondent, Basilio MENDOZA, and tolerated Jorge Geller to squat on the portion thereoI" (2nd Indorsement, February 10, 1969, OIIice oI the President, p. 1, Annex "C", Petition).chanroblesvirt ualawlibrary chanrobles virtual law libra ry 3. On 25 November 1952 the Land Settlement and Development Corporation (LASEDECO) took over the Iunctions oI the NLSA.chanroblesvirtualawlib rary chanr obles virtual law l ibrary 4. On 29 June 1956 Larrabaster and his wiIe assigned their rights and interests over the Disputed Property to Jose B. PEA. "Notwithstanding the transIer, PEA allowed Mendoza and Geller to stay on the lot." (id., p. 2).chanroblesvirtualawlibrary chan robles virtual law librar y 5. On 8 September 1956 a Supplementary Deed oI Sale was executed by the same parties deIining the boundaries oI the Disputed Property, thus: On the North by Bulok creek and a street; on the South by Bulok creek and the National Highway; on the East by a street beside the public plaza; and on the West by Bulok creek, which lot is designated as Iormerly lot No. 336 and now lot No. 355 on the new sketch plan oI the Townsite oI Marbel, South Cotabato. (2nd Indorsement, OIIice oI the President, February 10, 1969, p. 2, Annex "C", Petition). 6. On 18 June 1954 Republic Act No. 1160 transIerred the custody and administration oI the Marbel Townsite to the National Resettlement and Rehabilitation Administration (NARRA).chanroblesvirtualawl ibrary chan robles virtual law library 7. On 20 August 1956 PEA requested NARRA to approve the above- mentioned transIer oI rights but the latter did not act thereon in view oI Proclamation No. 336, series oI 1956, returning to the Bureau oI Lands the disposition oI the lots which remained unallocated by the LASEDECO at the time oI its abolition.chanroblesvirtualawlib rary chanro bles virtual law li brary 8. The Bureau oI Lands did not act on PEA's request either, prompting him to bring up the matter to the Board oI Liquidators (BOL), which was created to wind up the aIIairs oI LASEDECO.chanroblesvirtualawlib rary chanrob les virtual law lib rary Although LASEDECO bad initially denied the request, it subsequently conIirmed the sale to PEA in its Resolution No. 139, series oI 1964.chanroblesvirtualawlibrary chan robles virtual law librar y 9. PEA must have realized that the Disputed Property contained an area bigger than 1,500 sq. ms., hence, his request to BOL that the area be adjusted Irom 1,500 to 3,616.93 sq. ms. to conIorm to its actual area.chanroblesvirtualawlibra ry chanrobles vir tual law libra ry 10. In its Resolution No. 139, series oI 1964, the BOL denied the request.chanroblesvirtualawlibrary chanrobles vir tual law lib rary PEA moved Ior reconsideration stressing that the award should be Ior 3,616.93 sq. ms., but the BOL again denied the same under its Resolution No. 439, series oI 1967.chanroblesvirtualawlib rary chanro bles virtual law li brary 11. Feeling aggrieved, PEA appealed to the OIIice oI the President.chanroblesvirtualawlibrary chan robles virtual law libra ry 12. Requested by that OIIice to comment, the BOL conducted an investigation and reported (a) that Lot No. 355, as awarded to Larrabaster, contained only 1,500 sq. ms. but due to accretion, since the lot was almost surrounded by a creek, the area increased to 3,616.93 sq. ms.; and (b) since home lots had an average area oI 1,500 sq. ms. only, the Bureau oI Lands subdivided the Disputed Property into three |3| parts, namely: Lot No. 107 with an area oI 1,455 sq. ms., was allocated to Basilio Mendoza; Lot No. 108, with an area oI 1,500 sq. ms., was allocated to PEA; and Lot No. 109, with an area oI 661 sq. ms., was allocated to Arturo Roxas. The BOL then recommended that PEA be awarded Lot No. 108 instead oI the whole oI Iormer Lot No. 355.chanroblesvirtualawlibrary chanrobles virtual law libra ry 13. Excepting to the above, PEA alleged that the lot transIerred to him by Larrabaster contains 3,616.93 and not 1,500 sq. ms., this being the area embraced within the boundaries described in the Supplementary Deed oI Sale executed between him and Larrabaster on 8 September 1956.chanroblesvirtualawlibrary chanr obles virtual law l ibrary 14. On 10 February 1969 the OIIice oI the President "ordered that the area oI PEA's lot (Lot No. 108, Iormerly a part oI Lot No. 355) be maintained at 1,500 sq. ms.. xxx' on the premise that accretion belonged to the Government.chanroblesvirtualawlibrary chanrob les virtual law lib rary 15. Upon PEA's motion Ior reconsideration, the same OIIice, on 13 ay 1969, modiIied its Decision oI 10 February 1969 and held that "the award to PEA oI the original Lot No. 355 is hereby maintained" (p. 9, Annex "D", Petition). It reasoned out that the beneIits oI accretion, pursuant to Article 457 oI the Civil Code, accrue to the owner, PEA, and not to the Government. That Decision oI 13 May 1969 is the Iirst judgment assailed in this Petition.chanroblesvirtualawlibra ry chanrobles vir tual law libra ry 16. On 14 May 1969 the BOL approved Resolution No. 236, series oI 1969, directing its LASEDECO Unit to advise PEA accordingly. And on 3 September 1969 the BOL recommended to the Director oI Lands the issuance oI a patent in PEA's Iavor.chanroblesvirtualawlibrary chan robles vi rtual law lib rary 17. On 1 August 1969 private respondent MENDOZA addressed a letter-protest to the BOL, to which the latter in its Resolution No. 488, dated 6 August 1969, responded by advising MENDOZA to direct its protest to the OIIice oI the President.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary 18. MENDOZA did so and on 28 September 1971 said OIIice rendered its letter-decision (the second one challenged herein) aIIirming its previous Decision oI 13 May 1969, having Iound no cogent reason to depart thereIrom (Annex "E", Petition).chanroblesvirtualawl ibrary chan robles virtual law librar y 19. In the meantime, on 27 January 1970, and while his protest with the OIIice oI the President was still pending, MENDOZA resorted to Civil Case No. 98 Ior certiorari beIore the then Court oI First Instance oI Cotabato against the petitioners-public oIIicials and PEA.chanroblesvir tualawlibra ry chanrobles vir tual law libra ry On 23 June 1978, MENDOZA Iollowed up with a Supplemental Petition to annul the administrative Decision oI 20 September 1971 denying his protest.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary 20. On 10 May 1985 the Trial Court 1 rendered its Decision in Civil Case No. 98 dismissing MENDOZA's Petition Ior certiorari (Annex "B", Petition).chanroblesvirtualawlibra ry chanrobles vir tual law lib rary 21. On appeal, respondent Court oI Appeals reversed the Trial Court in its 28 November 1986 Decision, 2 with the Iollowing disposition: WHEREFORE, Iinding the appeal oI petitioner Basilio Mendoza to be meritorious, the Decision oI May 10, 1985 oI the Regional Trial Court, Branch 24, oI Koronadal, South Cotabato, in Special Civil Case No. 98 is SET ASIDE. The Decisions oI February 10, 1969, May 13, 1969 and September 28, 1971 oI the OIIice oI the President in the administrative case are likewise SET ASIDE, without prejudice to the reopening oI the administrative case in said OIIice as to accord all parties concerned, including petitioner, their constitutional rights to due process oI law.chanroblesvirtualawli brary chan robles virtual law l ibrary IT IS SO ORDERED. (pp. 23-31, Rollo) Hence, this Petition Ior Review on certiorari by petitioners-public oIIicials anchored on the Iollowing submissions: 1. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PRIVATE RESPONDENT BASILIO MENDOZA HAS BEEN DENIED DUE PROCESS OF LAW.chanroblesvir tualawlibra ry chanrobles vir tual law library 2. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT THE ADMINISTRATIVE DECISIONS OF THE OFFICE OF THE PRESIDENT IN QUESTION ARE NOT SUPPORTED BY SUBSTANTIAL EVIDENCE.chanroblesvirtualawlibrary chan robles virtual law library 3. THE COURT OF APPEALS GRAVELY ERRED IN SETTING ASIDE THE ASSAILED DECISIONS OF THE REGIONAL TRIAL COURT OF SOUTH COTABATO IN CIVIL CASE NO. 98 DATED MAY 10, 1985 AND OF THE OFFICE OF THE PRESIDENT DATED FEBRUARY 10, 1969, MAY 13, 1969 AND SEPTEMBER 28, 1971 AND IMPLICITLY ORDERING A REOPENING OF THE ADMINISTRATIVE CASE IN SAID OFFICE. (p. 9, Petition, p. 13, Rollo) We uphold petitioners' submissions.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary 1. In ruling that the Decisions oI the OIIice oI the President were vitiated by Iailure to accord due process oI law to MENDOZA, respondent Appellate Court relied on its observations that MENDOZA was: (1) not made a party to the administrative case; (2) not served with a copy oI the 10 February 1969 Decision; and (3) not notiIied oI proceedings beIore the 13 May 1969 Decision nor served a copy thereoI.chanroblesvirtualawlib rary chanrob les virtual law lib rary The Ioregoing observations do not justiIy the conclusion arrived at. AIter the OIIice oI the President had rendered its Decision dated 13 May 1969, MENDOZA Iiled a letter-protest on 1 August 1969 with the BOL. The latter oIIice directed him to Iile his protest with the OIIice oI the President, which he did. On 28 September 1971, MENDOZA's request Ior reconsideration was denied by said OIIice. So that, even assuming that there was absence oI notice and opportunity to be present in the administrative proceedings prior to the rendition oI the 10 February 1969 and 13 May 1969 Decisions by the OIIice oI the President, such procedural deIect was cured when MENDOZA elevated his letter protest to the OIIice oI the President, which subjected the controversy to appellate review but eventually denied reconsideration. Having thus been given a chance to be heard with respect to his protest there is suIIicient compliance with the requirements oI due process. There is no merit likeness to the point raised by petitioners that they were not inIormed by respondent Judge oI the petition by private respondent to set aside the writ oI execution. The order granting such petition was the subject oI a motion Ior reconsideration. 'The motion Ior reconsideration was thereaIter denied. Under the circumstances, the Iailure to give notice to petitioners had been cured. That is a well- settled doctrine. Their complaint was that they were not beard. They were given the opportunity to Iile a motion Ior reconsideration. So they did. That was to Iree the order Irom the alleged inIirmity. Petitioners then cannot be heard to claim that they were denied procedural due process.' (Dormitorio v. Fernandez, L-25897, August 21, 1976, 72 SCRA 388, 394-395; Montemayor vs. Araneta Univ. Foundation, L- 44251, May 31, 1977, 77 SCRA 321 |1977|; also Sumpang v. Inciong, L-50992, June 19, 1985, 137 SCRA 56 |1985|). It should also be recalled that MENDOZA Iiled his petition Ior certiorari beIore the then Court oI First Instance oI Cotabato seeking to annul the 13 May 1969 Decision. At the time it was presented on 27 January 1970, MENDOZA's request Ior reconsideration with the OIIice oI the President, involving the same Decision, was still pending. In Iact, it was only on 28 September 1971 that said OIIice denied reconsideration. Evidently, MENDOZA had abandoned his pending administrative request Ior reconsideration in Iavor oI judicial proceedings. Again, thereIore, MENDOZA cannot justiIiably claim that he was denied due process.chanroblesvirtualawlib rary chanr obles virtual law l ibrary 2. Substantial Iactual evidence support the questioned administrative rulings. The OIIice oI the President relied on the Iact-Iinding report oI the BOL made sometime in 1969 with respect to the Disputed Property to the eIIect that although the area oI Lot No. 355 awarded to Larrabaster was 1,500 sq. ms., it was Iound situated along a creek and that "it had increased in area to 3,616.93 square meters by accretion."chanrobles virtual law library The question then which conIronted the OIIice oI the President was the ownership over the increased area. In its Decision oI 10 February 1969 it initially held, Iollowing the BOL recommendation, that the accretion belonged to the government and that the excess oI 2,116.93 sq. ms. was an unallocated area which the Bureau oI Lands had authority to dispose oI so that said Bureau was not remiss in subdividing the disputed Property into three (3 lots and allocating only Lot No. 108, with an area oI 1,500 sq. ms., to PEA, Lot No. 107 to MENDOZA, and Lot No. 109 to Arturo Roxas.chanroblesvirtualawlibra ry chanrobles vir tu al law library Upon re-study, however, the OIIice oI the President modiIied its conclusions in its Decision oI 13 May 1969, and rightly so. It took into account Article 457 oI the Civil Code, which provides: To the owners oI lands adjoining the banks oI rivers belong the accretion which they gradually receive Irom the eIIects oI the current oI the waters. and opined that "creeks are included within the meaning oI this Civil Code provision" (Letter-Decision, 13 May 1969, p. 7, Annex 'D', Petition).chanroblesvirtualawlibrar y chanrobles virt ual law libra ry And as Iar as the ownership oI the accretion is concerned, the OIIice oI the President likewise correctly held that "while it may be conceded that Lot No. 355 technically belongs to the government because it was bought Irom the latter under an installment plan, it cannot be rightIully concluded that the beneIits oI accretion must still be retained by the said seller" (Letter-Decision, 13 May 1969, p. 7, Annex "D", Petition). In so ruling, that OIIice acted on the authority oI Director of Lands, et al. vs. Ricardo Ri:al, et al., 87 Phil. 806, at 810, 814 |1950|), reading in part: ... When the lot bordering on a public stream is sold on installment basis by the government, said stream is made the boundary. ... The stream may advance or recede but it will always constitute the boundary or boundaries oI the lot, and the purchaser has the right to insist that the original boundaries be preserved, and all the area inside said boundaries be considered as included in the sale.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary xxx xxx xxxchanrob les virtual law lib rary ... In the sale oI a Iriar land, lot or parcel ordering on rivers under Act. No. 1120 pending payment in Iull oI the purchase price, although the government reserves title thereto, merely Ior its protection, the beneIicial and equitable title is in the purchaser, and that any accretion by the lot even beIore payment oI the last installment belongs to the purchaser thereoI. Since the Disputed Property no longer belonged to the Government the subdivision thereoI by the Bureau oI Lands into three lots, as well as the allocation oI said lots to two other individuals, was beyond the scope oI its authority. Under Proclamation No. 336, series oI 1956, the authority oI the Bureau oI Lands to dispose oI lots was limited to "unallocated areas." As the Letter-Decision oI 28 September 1971 states: "however, it is equally true that the accretions took place aIter the land had been allocated and assigned to Larrabaster. Clearly, thereIore, when the accretion started. Larrabaster had already acquired the beneIicial and equitable title over the Lot No. 355, albeit the Government still retained the naked title thereto. Consequently, to Larrabaster and now to his assignee (Pea) belong the accretions to said lot which may no longer be allocated to others by the Government." (Letter-Decision), 28 September 1971, Annex "E", Petition). Having been thus allocated, the area within its original boundaries belong to the awardee whether the creek advances or recedes. He is entitled to all the beneIits which may accrue to the land as well as suIIer the losses that may beIall it.chanroblesvirtualawlib rary chanrob les virtual law lib rary MENDOZA's Iiling oI a Miscellaneous Sales Application over the Disputed Property with the Bureau oI Lands on 6 November 1962 must similarly be held to have been inappropriate and without any legal Iorce and eIIect since the same was no longer public land subject to disposition by the Government. Contrary to the Iinding oI respondent Appellate Court, no irregularity may be imputed to the administrative decisions by reason oI the Iact that allegedly a copy oI the investigation report oI the BOL was not among those elevated to the Trial Court or among those marked in evidence. It can be saIely assumed that the OIIice oI the President could not have relied upon said report iI the same had not been beIore it when it rendered the questioned Decisions.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary 3. Finally, invariable is the rule that in reviewing administrative decisions oI the Executive Branch oI the government, "the Iindings oI Iact made therein must be respected, as long as they are supported by substantial evidence, even iI not overwhelming or preponderant (Ang Tibay vs. Court oI Industrial Relations, 69 Phil. 635 |1940|); that it is not Ior the reviewing court to weigh the conIlicting evidence, determine the credibility oI the witnesses, or otherwise substitute its own judgment Ior that oI the administrative agency on the suIIiciency oI the evidence (Lao Tang Bun, et al. vs. Fabre, 81 Phil. 682 |1948|); that the administrative decision in matters within the executive jurisdiction can only be set aside on prooI oI gross abuse oI discretion, Iraud, or error oI law (Lovina vs. Moreno L-17821, November 29, 1963, 9 SCRA 557; Timbancaya vs. Vicente, L-19100, December 27, 1963, 9 SCRA 852), which we Iind absent herein.chanroblesvirt ualawlibrary chanrobles virt ual law libra ry To reopen the case as ordered by the Court oI Appeals would open wide the doors to a protracted litigation oI a controversy that has been pending Ior approximately nineteen (19) years now. It is high time that a Iinish to the case be written.chanroblesvirtualawlibrary chanr obles virtual law l ibrary WHEREFORE, the Decision oI 28 November 1986 oI respondent Court oI Appeals is hereby SET ASIDE and the Decision oI 10 May 1985 oI the Regional Trial Court, Branch 24, Koronadal, South Cotabato, in Civil Case No. 98, is hereby ordered REINSTATED.chanroblesvirtualawlibrary chanrobles vir tual law lib rary SO ORDERED.
public oI the Philippines SUPREME COURT Manila EN BANC G.R. No. 70054 December 11, 1991 BANCO FILIPINO SAVINGS AND MORTGAGE BANK, Petitioner, vs. THE MONETARY BOARD, CENTRAL BANK OF THE PHILIPPINES, 1OSE B. FERNANDEZ, CARLOTA P. VALENZUELA, ARNULFO B. AURELLANO and RAMON V. TIAOQUI, Respondents. G.R. No. 68878 December 11, 1991 BANCO FILIPINO SAVINGS AND MORTGAGE BANK, Petitioner, vs. HON. INTERMEDIATE APPELLATE COURT and CELESTINA S. PAHIMUNTUNG, assisted by her husband, Respondents. G.R. No. 77255-58 December 11, 1991 TOP MANAGEMENT PROGRAMS CORPORATION AND PILAR DEVELOPMENT CORPORATION, Petitioners, vs. THE COURT OF APPEALS, The Executive 1udge of the Regional Trial Court of Cavite, Ex-Officio Sheriff REGALADO E. EUSEBIO, BANCO FILIPINO SAVINGS AND MORTGAGE BANK, CARLOTA P. VALENZUELA AND SYCIP, SALAZAR, HERNANDEZ AND GATMAITAN, Respondents. G.R. No. 78766 December 11, 1991 EL GRANDE CORPORATION, Petitioner, vs. THE COURT OF APPEALS, THE EXECUTIVE 1UDGE of The Regional Trial Court and Ex-Officio Sheriff REGALADO E. EUSEBIO, BANCO FILIPINO SAVINGS AND MORTGAGE BANK, CARLOTA P. VALENZUELA AND SYCIP, SALAZAR, FELICIANO AND HERNANDEZ, Respondents. G.R. No. 78767 December 11, 1991 METROPOLIS DEVELOPMENT CORPORATION, Petitioner, vs. COURT OF APPEALS, CENTRAL BANK OF THE PHILIPPINES, 1OSE B. FERNANDEZ, 1R., CARLOTA P. VALENZUELA, ARNULFO AURELLANO AND RAMON TIAOQUI, Respondents. G.R. No. 78894 December 11, 1991 BANCO FILIPINO SAVINGS AND MORTGAGE BANK, petitioner vs. COURT OF APPEALS, THE CENTRAL BANK OF THE PHILIPPINES, 1OSE B. FERNANDEZ, 1R., CARLOTA P. VALENZUELA, ARNULFO B. AURELLANO AND RAMON TIAOQUI, Respondents. G.R. No. 81303 December 11, 1991 PILAR DEVELOPMENT CORPORATION, petitioner vs. COURT OF APPEALS, HON. MANUEL M. COSICO, in his capacity as Presiding 1udge of Branch 136 of the Regional Trial Court of Makati, CENTRAL BANK OF THE PHILIPPINES AND CARLOTA P. VALENZUELA, Respondents. G.R. No. 81304 December 11, 1991 BF HOMES DEVELOPMENT CORPORATION, Petitioner, vs. THE COURT OF APPEALS, CENTRAL BANK AND CARLOTA P. VALENZUELA, Respondents. G.R. No. 90473 December 11, 1991 EL GRANDE DEVELOPMENT CORPORATION, Petitioner, vs. THE COURT OF APPEALS, THE EXECUTIVE 1UDGE of the Regional Trial Court of Cavite, CLERK OF COURT and Ex- Officio Sheriff ADORACION VICTA, BANCO FILIPINO SAVINGS AND MORTGAGE BANK, CARLOTA P. VALENZUELA AND SYCIP, SALAZAR, HERNANDEZ AND GATMAITAN, Respondents.
MEDIALDEA, This reIers to nine (9) consolidated cases concerning the legality oI the closure and receivership oI petitioner Banco Filipino Savings and Mortgage Bank (Banco Filipino Ior brevity) pursuant to the order oI respondent Monetary Board. Six (6) oI these cases, namely, G.R. Nos. 68878, 77255-68, 78766, 81303, 81304 and 90473 involve the common issue oI whether or not the liquidator appointed by the respondent Central Bank (CB Ior brevity) has the authority to prosecute as well as to deIend suits, and to Ioreclose mortgages Ior and in behalI oI the bank while the issue on the validity oI the receivership and liquidation oI the latter is pending resolution in G.R. No. 7004. Corollary to this issue is whether the CB can be sued to IulIill Iinancial commitments oI a closed bank pursuant to Section 29 oI the Central Bank Act. On the other hand, the other three (3) cases, namely, G.R. Nos. 70054, which is the main case, 78767 and 78894 all seek to annul and set aside M.B. Resolution No. 75 issued by respondents Monetary Board and Central Bank on January 25, 1985.chanroblesvirtualawlib rary chanrobles vi rtual law lib rary chanrobles virtual law libra ry The antecedent Iacts oI each oI the nine (9) cases are as Iollows: G.R No. 68878 This is a motion Ior reconsideration, Iiled by respondent Celestina Pahimuntung, oI the decision promulgated by thisCourt on April 8, 1986, granting the petition Ior review on certiorari and reversing the questioned decision oI respondent appellate court, which annulled the writ oI possession issued by the trial court in Iavor oI petitioner.chanroblesvirtualawlibra ry chanrobles vir tual law libra ry The respondent-movant contends that the petitioner has no more personality to continue prosecuting the instant case considering that petitioner bank was placed under receivership since January 25, 1985 by the Central Bank pursuant to the resolution oI the Monetary Board. G.R. Nos. 77255-58 Petitioners Top Management Programs Corporation (Top Management Ior brevity) and Pilar Development Corporation (Pilar Development Ior brevity) are corporations engaged in the business oI developing residential subdivisions.chanroblesvirtualawlib rary chanro bles virtual law l ibrary Top Management obtained a loan oI P4,836,000 Irom Banco Filipino as evidenced by a promissory note dated January 7, 1982 payable in three years Irom date. The loan was secured by real estate mortgage in its various properties in Cavite. Likewise, Pilar Development obtained loans Irom Banco Filipino between 1982 and 1983 in the principal amounts oI P6,000,000, P7,370,000 and P5,300,000 with maturity dates on December 28, 1984, January 5, 1985 and February 16, 1984, respectively. To secure the loan, Pilar Development mortgaged to Banco Filipino various properties in Dasmarias, Cavite.chanroblesvirtualawlib rary chanrobles vi rtual law lib rary On January 25, 1985, the Monetary Board issued a resolution Iinding Banco Filipino insolvent and unable to do business without loss to its creditors and depositors. It placed Banco Filipino under receivership oI Carlota Valenzuela, Deputy Governor oI the Central Bank.chanroblesvirt ualawlibrary chanrobles virtual law libra ry On March 22, 1985, the Monetary Board issued another resolution placing the bank under liquidation and designating Valenzuela as liquidator. By virtue oI her authority as liquidator, Valenzuela appointed the law Iirm oI Sycip, Salazar, et al. to represent Banco Filipino in all litigations.chanroblesvirtualawlib rary chanro bles virtual law li brary On March 26, 1985, Banco Filipino Iiled the petition Ior certiorari in G.R. No. 70054 questioning the validity oI the resolutions issued by the Monetary Board authorizing the receivership and liquidation oI Banco Filipino.chanroblesvirtualawlib rary chanrob les virtual law lib rary In a resolution dated August 29, 1985, this Court in G.R. No. 70054 resolved to issue a temporary restraining order, eIIective during the same period oI 30 days, enjoining the respondents Irom executing Iurther acts oI liquidation oI the bank; that acts such as receiving collectibles and receivables or paying oII creditors' claims and other transactions pertaining to normal operations oI a bank are not enjoined. The Central Bank is ordered to designate a comptroller Ior Banco Filipino.chanroblesvirtualawlib rary chanrob les virtual law lib rary Subsequently, Top Management Iailed to pay its loan on the due date. Hence, the law Iirm oI Sycip, Salazar, et al. acting as counsel Ior Banco Filipino under authority oI Valenzuela as liquidator, applied Ior extra-judicial Ioreclosure oI the mortgage over Top Management's properties. Thus, the Ex-OIIicio SheriII oI the Regional Trial Court oI Cavite issued a notice oI extra-judicial Ioreclosure sale oI the properties on December 16, 1985.chanroblesvirtualawlibrary chanro bles virtual law l ibrary On December 9, 1985, Top Management Iiled a petition Ior injunction and prohibition with the respondent appellate court docketed as CA- G.R. SP No. 07892 seeking to enjoin the Regional Trial Court oI Cavite, the ex-oIIicio sheriII oI said court and Sycip, Salazar, et al. Irom proceeding with Ioreclosure sale.chanroblesvirtualawlib rary chanro bles virtual law li brary Similarly, Pilar Development deIaulted in the payment oI its loans. The law Iirm oI Sycip, Salazar, et al. Iiled separate applications with the ex-oIIicio sheriII oI the Regional Trial Court oI Cavite Ior the extra-judicial Ioreclosure oI mortgage over its properties.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary Hence, Pilar Development Iiled with the respondent appellate court a petition Ior prohibition with prayer Ior the issuance oI a writ oI preliminary injunction docketed as CA-G.R SP Nos. 08962-64 seeking to enjoin the same respondents Irom enIorcing the Ioreclosure sale oI its properties. CA-G.R. SP Nos. 07892 and 08962-64 were consolidated and jointly decided.chanroblesvi rtualawlibra ry chanrobles vir tual law lib rary On October 30, 1986, the respondent appellate court rendered a decision dismissing the aIorementioned petitions.chanrob lesvirtuala wlibrary chanro bles virtual law l ibrary Hence, this petition was Iiled by the petitioners Top Management and Pilar Development alleging that Carlota Valenzuela, who was appointed by the Monetary Board as liquidator oI Banco Filipino, has no authority to proceed with the Ioreclosure sale oI petitioners' properties on the ground that the resolution oI the issue on the validity oI the closure and liquidation oI Banco Filipino is still pending with this Court in G.R. 70054. G.R. No. 78766 Petitioner El Grande Development Corporation (El Grande Ior brevity) is engaged in the business oI developing residential subdivisions. It was extended by respondent Banco Filipino a credit accommodation to Iinance its housing program. Hence, petitioner was granted a loan in the amount oI P8,034,130.00 secured by real estate mortgages on its various estates located in Cavite.chanroblesvirt ualawlibrar y chanrobles virt ual law libra ry On January 15, 1985, the Monetary Board Iorbade Banco Filipino to do business, placed it under receivership and designated Deputy Governor Carlota Valenzuela as receiver. On March 22, 1985, the Monetary Board conIirmed Banco Filipino's insolvency and designated the receiver Carlota Valenzuela as liquidator.chanroblesvirtualawlibrary chanro bles virtual law l ibrary When petitioner El Grande Iailed to pay its indebtedness to Banco Filipino, the latter thru its liquidator, Carlota Valenzuela, initiated the Ioreclosure with the Clerk oI Court and Ex-oIIicio sheriII oI RTC Cavite. Subsequently, on March 31, 1986, the ex-oIIicio sheriII issued the notice oI extra-judicial sale oI the mortgaged properties oI El Grande scheduled on April 30, 1986.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary In order to stop the public auction sale, petitioner El Grande Iiled a petition Ior prohibition with the Court oI Appeals alleging that respondent Carlota Valenzuela could not proceed with the Ioreclosure oI its mortgaged properties on the ground that this Court in G.R. No. 70054 issued a resolution dated August 29, 1985, which restrained Carlota Valenzuela Irom acting as liquidator and allowed Banco Filipino to resume banking operations only under a Central Bank comptroller.chanroblesvirtualawlibra ry chanrobles vir tual law libra ry On March 2, 1987, the Court oI Appeals rendered a decision dismissing the petition.chanroblesvirtualawlib rary chanro bles virtual law l ibrary Hence this petition Ior review on certiorari was Iiled alleging that the respondent court erred when it held in its decision that although Carlota P. Valenzuela was restrained by this Honorable Court Irom exercising acts in liquidation oI Banco Filipino Savings & Mortgage Bank, she was not legally precluded Irom Ioreclosing the mortgage over the properties oI the petitioner through counsel retained by her Ior the purpose. G.R. No. 81303 On November 8, 1985, petitioner Pilar Development Corporation (Pilar Development Ior brevity) Iiled an action against Banco Filipino, the Central Bank and Carlota Valenzuela Ior speciIic perIormance, docketed as Civil Case No. 12191. It appears that the Iormer management oI Banco Filipino appointed Quisumbing & Associates as counsel Ior Banco Filipino. On June 12, 1986 the said law Iirm Iiled an answer Ior Banco Filipino which conIessed judgment against Banco Filipino.chanroblesvi rtualawlibra ry chanrobles vir tual law lib rary On June 17, 1986, petitioner Iiled a second amended complaint. The Central Bank and Carlota Valenzuela, thru the law Iirm Sycip, Salazar, Hernandez and Gatmaitan Iiled an answer to the complaint.chanroblesvirtualawlib rary chanro bles virtual law l ibrary On June 23, 1986, Sycip, et al., acting Ior all the deIendants including Banco Filipino moved that the answer Iiled by Quisumbing & Associates Ior deIendant Banco Filipino be expunged Irom the records. Despite opposition Irom Quisumbing & Associates, the trial court granted the motion to expunge in an order dated March 17, 1987. Petitioner Pilar Development moved to reconsider the order but the motion was denied.chanroblesvirtualawlib rary chanrob les virtual law li brary Petitioner Pilar Development Iiled with the respondent appellate court a petition Ior certiorari and mandamus to annul the order oI the trial court. The Court oI Appeals rendered a decision dismissing the petition. A petition was Iiled with this Court but was denied in a resolution dated March 22, 1988. Hence, this instant motion Ior reconsideration. G.R. No. 81304 On July 9, 1985, petitioner BF Homes Incorporated (BF Homes Ior brevity) Iiled an action with the trial court to compel the Central Bank to restore petitioner's; Iinancing Iacility with Banco Filipino.chanroblesvirtualawli brary chan robles virtual law l ibrary The Central Bank Iiled a motion to dismiss the action. Petitioner BF Homes in a supplemental complaint impleaded as deIendant Carlota Valenzuela as receiver oI Banco Filipino Savings and Mortgage Bank.chanroblesvirtualawlib rary chanrob les virtual law lib rary On April 8, 1985, petitioner Iiled a second supplemental complaint to which respondents Iiled a motion to dismiss.chanroblesvi rtualawlibra ry chanrobles vir tual law lib rary On July 9, 1985, the trial court granted the motion to dismiss the supplemental complaint on the grounds (1) that plaintiII has no contractual relation with the deIendants, and (2) that the Intermediate Appellate Court in a previous decision in AC-G.R. SP. No. 04609 had stated that Banco Filipino has been ordered closed and placed under receivership pending liquidation, and thus, the continuation oI the Iacility sued Ior by the plaintiII has become legally impossible and the suit has become moot.chanroblesvirtualawlibrary chanrob les virtual law lib rary The order oI dismissal was appealed by the petitioner to the Court oI Appeals. On November 4, 1987, the respondent appellate court dismissed the appeal and aIIirmed the order oI the trial court.chanroblesvirtualawlibrary chanro bles virtual law l ibrary Hence, this petition Ior review on certiorari was Iiled, alleging that the respondent court erred when it Iound that the private respondents should not be the ones to respond to the cause oI action asserted by the petitioner and the petitioner did not have any cause oI action against the respondents Central Bank and Carlota Valenzuela. G.R. No. 90473 Petitioner El Grande Development Corporation (El Grande Ior brevity) obtained a loan Irom Banco Filipino in the amount oI P8,034,130.00, secured by a mortgage over its Iive parcels oI land located in Cavite which were covered by TransIer CertiIicate oI Title Nos. T-82187, T- 109027, T-132897, T-148377, and T-79371 oI the Registry oI Deeds oI Cavite.chanroblesvirtualawlib rary chanrob les virtual law li brary When Banco Filipino was ordered closed and placed under receivership in 1985, the appointed liquidator oI BF, thru its counsel Sycip, Salazar, et al. applied with the ex-oIIicio sheriII oI the Regional Trial Court oI Cavite Ior the extrajudicial Ioreclosure oI the mortgage constituted over petitioner's properties. On March 24, 1986, the ex- oIIicio sheriII issued a notice oI extrajudicial Ioreclosure sale oI the properties oI petitioner.chanroblesvirt ualawlibrary chanrobles virtual law libra ry Thus, petitioner Iiled with the Court oI Appeals a petition Ior prohibition with prayer Ior writ oI preliminary injunction to enjoin the respondents Irom Ioreclosing the mortgage and to nulliIy the notice oI Ioreclosure.chanroblesvirtualawli brary chan robles virtual law l ibrary On June 16, 1989, respondent Court oI Appeals rendered a decision dismissing the petition.chanroblesvirtualawlib rary chanro bles virtual law l ibrary Not satisIied with the decision, petitioner Iiled the instant petition Ior review on certiorari. G.R. No. 70054 Banco Filipino Savings and Mortgage Bank was authorized to operate as such under M.B. Resolution No. 223 dated February 14, 1963. It commenced operations on July 9, 1964. It has eighty-nine (89) operating branches, Iorty-six (46) oI which are in Manila, with more than three (3) million depositors.chanroblesvirtualawlibra ry chanrobles vir tual law libra ry As oI July 31, 1984, the list oI stockholders showed the major stockholders to be: Metropolis Development Corporation, Apex Mortgage and Loans Corporation, Filipino Business Consultants, Tiu Family Group, LBH Inc. and Anthony Aguirre.chanroblesvirtualawlib rary chanr obles virtua l law library Petitioner Bank had an approved emergency advance oI P119.7 million under M.B. Resolution No. 839 dated June 29, 1984. This was augmented with a P3 billion credit line under M.B. Resolution No. 934 dated July 27, 1984.chanroblesvirtualawlibrary chanrob les virtual law lib rary On the same date, respondent Board issued M.B. Resolution No. 955 placing petitioner bank under conservatorship oI Basilio Estanislao. He was later replaced by Gilberto Teodoro as conservator on August 10, 1984. The latter submitted a report dated January 8, 1985 to respondent Board on the conservatorship oI petitioner bank, which report shall hereinaIter be reIerred to as the Teodoro report.chanroblesvirtualawlibrary chan robles virtual law l ibrary Subsequently, another report dated January 23, 1985 was submitted to the Monetary Board by Ramon Tiaoqui, Special Assistant to the Governor and Head, SES Department II oI the Central Bank, regarding the major Iindings oI examination on the Iinancial condition oI petitioner BF as oI July 31, 1984. The report, which shall be reIerred to herein as the Tiaoqui Report contained the Iollowing conclusion and recommendation: The examination Iindings as oI July 31, 1984, as shown earlier, indicate one oI insolvency and illiquidity and Iurther conIirms the above conclusion oI the Conservator.chanroblesvirtualawlibrary chanrobles vir tual law lib rary All the Ioregoing provides suIIicient justiIication Ior Iorbidding the bank Irom engaging in banking.chanroblesvirtualawlib rary chanrob les virtual law li brary Foregoing considered, the Iollowing are recommended: 1. Forbid the Banco Filipino Savings & Mortgage Bank to do business in the Philippines eIIective the beginning oI oIIice January 1985, pursuant to Sec. 29 oI R.A No. 265, as amended;chanr obles virtual law l ibrary 2. Designate the Head oI the Conservator Team at the bank, as Receiver oI Banco Filipino Savings & Mortgage Bank, to immediately take charge oI the assets and liabilities, as expeditiously as possible collect and gather all the assets and administer the same Ior the beneIit oI all the creditors, and exercise all the powers necessary Ior these purposes including but not limited to bringing suits and Ioreclosing mortgages in the name oI the bank.chanroblesvi rtualawlibra ry chanrobles vir tual law lib rary 3. The Board oI Directors and the principal oIIicers Irom Senior Vice Presidents, as listed in the attached Annex "A" be included in the watchlist oI the Supervision and Examination Sector until such time that they shall have cleared themselves.chanroblesvirtualawlib rary chanr obles virtual law l ibrary 4. ReIer to the Central Bank's Legal Department and OIIice oI Special Investigation the report on the Iindings on Banco Filipino Ior investigation and possible prosecution oI directors, oIIicers, and employees Ior activities which led to its insolvent position. (pp- 61-62, Rollo) On January 25, 1985, the Monetary Board issued the assailed MB Resolution No. 75 which ordered the closure oI BF and which Iurther provides: AIter considering the report dated January 8, 1985 oI the Conservator Ior Banco Filipino Savings and Mortgage Bank that the continuance in business oI the bank would involve probable loss to its depositors and creditors, and aIter discussing and Iinding to be true the statements oI the Special Assistant to the Governor and Head, Supervision and Examination Sector (SES) Department II as recited in his memorandum dated January 23, 1985, that the Banco Filipino Savings & Mortgage Bank is insolvent and that its continuance in business would involve probable loss to its depositors and creditors, and in pursuance oI Sec. 29 oI RA 265, as amended, the Board decided: 1. To Iorbid Banco Filipino Savings and Mortgage Bank and all its branches to do business in the Philippines;chanrobles vi rtual law lib rary 2. To designate Mrs. Carlota P. Valenzuela, Deputy Governor as Receiver who is hereby directly vested with jurisdiction and authority to immediately take charge oI the bank's assets and liabilities, and as expeditiously as possible collect and gather all the assets and administer the same Ior the beneIit oI its creditors, exercising all the powers necessary Ior these purposes including but not limited to, bringing suits and Ioreclosing mortgages in the name oI the bank;chan robles virtual law l ibrary 3. To designate Mr. ArnulIo B. Aurellano, Special Assistant to the Governor, and Mr. Ramon V. Tiaoqui, Special Assistant to the Governor and Head, Supervision and Examination Sector Department II, as Deputy Receivers who are likewise hereby directly vested with jurisdiction and authority to do all things necessary or proper to carry out the Iunctions entrusted to them by the Receiver and otherwise to assist the Receiver in carrying out the Iunctions vested in the Receiver by law or Monetary Board Resolutions;chanrob les virtual law lib rary 4. To direct and authorize Management to do all other things and carry out all other measures necessary or proper to implement this Resolution and to saIeguard the interests oI depositors, creditors and the general public; andchanrobles vi rtual law lib rary 5. In consequence oI the Ioregoing, to terminate the conservatorship over Banco Filipino Savings and Mortgage Bank. (pp. 10-11, Rollo, Vol. I) On February 2, 1985, petitioner BF Iiled a complaint docketed as Civil Case No. 9675 with the Regional Trial Court oI Makati to set aside the action oI the Monetary Board placing BF under receivership.chanrob lesvirtualawlibra ry chanrobles vi rtual law lib rary On February 28, 1985, petitioner Iiled with this Court the instant petition Ior certiorari and mandamus under Rule 65 oI the Rules oI Court seeking to annul the resolution oI January 25, 1985 as made without or in excess oI jurisdiction or with grave abuse oI discretion, to order respondents to Iurnish petitioner with the reports oI examination which led to its closure and to aIIord petitioner BF a hearing prior to any resolution that may be issued under Section 29 oI R.A. 265, also known as Central Bank Act.chanroblesvirtualawlibrary chanrob les virtual law lib rary On March 19, 1985, Carlota Valenzuela, as Receiver and ArnulIo Aurellano and Ramon Tiaoqui as Deputy Receivers oI Banco Filipino submitted their report on the receivership oI BF to the Monetary Board, in compliance with the mandate oI Sec. 29 oI R.A. 265 which provides that the Monetary Board shall determine within sixty (60) days Irom date oI receivership oI a bank whether such bank may be reorganized/permitted to resume business or ordered to be liquidated. The report contained the Iollowing recommendation: In view oI the Ioregoing and considering that the condition oI the banking institution continues to be one oI insolvency, i.e., its realizable assets are insuIIicient to meet all its liabilities and that the bank cannot resume business with saIety to its depositors, other creditors and the general public, it is recommended that: 1. Banco Filipino Savings & Mortgage Bank be liquidated pursuant to paragraph 3, Sec. 29 oI RA No. 265, as amended;chanrobles vir tual law library 2. The Legal Department, through the Solicitor General, be authorized to Iile in the proper court a petition Ior assistance in th liquidation oI the Bank;chanrob les virtual law lib rary 3. The Statutory Receiver be designated as the Liquidator oI said bank; andchanr obles virtual law l ibrary 4. Management be instructed to inIorm the stockholders oI Banco Filipino Savings & Mortgage Bank oI the Monetary Board's decision liquidate the Bank. (p. 167, Rollo, Vol. I) chanrobles virtual law library On July 23, 1985, petitioner Iiled a motion beIore this Court praying that a restraining order or a writ oI preliminary injunction be issued to enjoin respondents Irom causing the dismantling oI BF signs in its main oIIice and 89 branches. This Court issued a resolution on August 8, 1985 ordering the issuance oI the aIoresaid temporary restraining order.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary On August 20, 1985, the case was submitted Ior resolution.chanroblesvirt ualawlibrary chanrobles virtual law libra ry In a resolution dated August 29, 1985, this Court Resolved direct the respondents Monetary Board and Central Bank hold hearings at which the petitioner should be heard, and terminate such hearings and submit its resolution within thirty (30) days. This Court Iurther resolved to issue a temporary restraining order enjoining the respondents Irom executing Iurther acts oI liquidation oI a bank. Acts such as receiving collectibles and receivables or paying oII creditors' claims and other transactions pertaining to normal operations oI a bank were no enjoined. The Central Bank was also ordered to designate comptroller Ior the petitioner BF. This Court also ordered th consolidation oI Civil Cases Nos. 8108, 9676 and 10183 in Branch 136 oI the Regional Trial Court oI Makati.chanroblesvirt ualawlibrary chanrobles virtua l law libra ry However, on September 12, 1985, this Court in the meantime suspended the hearing it ordered in its resolution oI August 29, 1985.chanroblesvirtualawlibrary chan robles virtual law librar y On October 8, 1985, this Court submitted a resolution order ing Branch 136 oI the Regional Trial Court oI Makati the presided over by Judge Ricardo Francisco to conduct the hear ing contemplated in the resolution oI August 29, 1985 in the most expeditious manner and to submit its resolution to this Court.chanroblesvirtualawlibrary chanr obles virtual law l ibrary In the Court's resolution oI February 19, 1987, the Court stated that the hearing contemplated in the resolution oI August 29, 1985, which is to ascertain whether substantial administrative due process had been observed by the respondent Monetary Board, may be expedited by Judge Manuel Cosico who now presides the court vacated by Judge Ricardo Francisco, who was elevated to the Court oI Appeals, there being no legal impediment or justiIiable reason to bar the Iormer Irom conducting such hearing. Hence, this Court directed Judge Manuel Cosico to expedite the hearing and submit his report to this Court.chanroblesvirtualawlibrary chan robles virtual law libra ry On February 20, 1988, Judge Manuel Cosico submitted his report to this Court with the recommendation that the resolutions oI respondents Monetary Board and Central Bank authorizing the closure and liquidation oI petitioner BP be upheld.chanroblesvirtualawlib rary chanro bles virtual law l ibrary On October 21, 1988, petitioner BF Iiled an urgent motion to reopen hearing to which respondents Iiled their comment on December 16, 1988. Petitioner Iiled their reply to respondent's comment oI January 11, 1989. AIter having deliberated on the grounds raised in the pleadings, this Court in its resolution dated August 3, 1989 declared that its intention as expressed in its resolution oI August 29, 1985 had not been IaithIully adhered to by the herein petitioner and respondents. The aIorementioned resolution had ordered a healing on the reports that led respondents to order petitioner's closure and its alleged pre- planned liquidation. This Court noted that during the reIerral hearing however, a diIIerent scheme was Iollowed. Respondents merely submitted to the commissioner their Iindings on the examinations conducted on petitioner, aIIidavits oI the private respondents relative to the Iindings, their reports to the Monetary Board and several other documents in support oI their position while petitioner had merely submitted objections to the Iindings oI respondents, counter-aIIidavits oI its oIIicers and also documents to prove its claims. Although the records disclose that both parties had not waived cross-examination oI their deponents, no such cross-examination has been conducted. The reception oI evidence in the Iorm oI aIIidavits was Iollowed throughout, until the commissioner submitted his report and recommendations to the Court. This Court also held that the documents pertinent to the resolution oI the instant petition are the Teodoro Report, Tiaoqui Report, Valenzuela, Aurellano and Tiaoqui Report and the supporting documents which were made as the bases by the reporters oI their conclusions contained in their respective reports. This Court also Resolved in its resolution to re-open the reIerral hearing that was terminated aIter Judge Cosico had submitted his report and recommendation with the end in view oI allowing petitioner to complete its presentation oI evidence and also Ior respondents to adduce additional evidence, iI so minded, and Ior both parties to conduct the required cross-examination oI witnesses/deponents, to be done within a period oI three months. To obviate all doubts on Judge Cosico's impartiality, this Court designated a new hearing commissioner in the person oI Iormer Judge Consuelo Santiago oI the Regional Trial Court, Makati, Branch 149 (now Associate Justice oI the Court oI Appeals).chanroblesvirt ualawlibrary chanrobles virtual law libra ry Three motions Ior intervention were Iiled in this case as Iollows: First, in G.R. No. 70054 Iiled by Eduardo Rodriguez and Fortunate M. Dizon, stockholders oI petitioner bank Ior and on behalI oI other stockholders oI petitioner; second, in G.R. No. 78894, Iiled by the same stockholders, and, third, again in G.R. No. 70054 by BF Depositors' Association and others similarly situated. This Court, on March 1, 1990, denied the aIoresaid motions Ior intervention.chanroblesvirtualawlib rary chanro bles virtual law li brary On January 28, 1991, the hearing commissioner, Justice Consuelo Santiago oI the Court oI Appeals submitted her report and recommendation (to be hereinaIter called, "Santiago Report") on the Iollowing issues stated therein as Iollows: l) Had the Monetary Board observed the procedural requirements laid down in Sec. 29 oI R.A. 265, as amended to justiIy th closure oI the Banco Filipino Savings and Mortgage Bank?chanro bles virtual law li brary 2) On the date oI BF's closure (January 25, 1985) was its condition one oI insolvency or would its continuance in business involve probable loss to its depositors or creditors? The commissioner aIter evaluation oI the evidence presented Iound and recommended the Iollowing: 1. That the TEODORO and TIAOQUI reports did not establish in accordance with See. 29 oI the R.A. 265, as amended, BF's insolvency as oI July 31, 1984 or that its continuance in business thereaIter would involve probable loss to its depositors or creditors. On the contrary, the evidence indicates that BF was solvent on July 31, 1984 and that on January 25, 1985, the day it was closed, its insolvency was not clearly established;chanrob les virtual law li brary 2. That consequently, BF's closure on January 25, 1985, not having satisIied the requirements prescribed under Sec. 29 oI RA 265, as amended, was null and void.chanroblesvirtualawli brary chan robles virtual law library 3. That accordingly, by way oI correction, BF should be allowed to re- open subject to such laws, rules and regulations that apply to its situation. Respondents thereaIter Iiled a motion Ior leave to Iile objections to the Santiago Report. In the same motion, respondents requested that the report and recommendation be set Ior oral argument beIore the Court. On February 7, 1991, this Court denied the request Ior oral argument oI the parties.chanroblesvirtualawl ibrary chan robles virtual law librar y On February 25, 1991, respondents Iiled their objections to the Santiago Report. On March 5, 1991, respondents submitted a motion Ior oral argument alleging that this Court is conIronted with two conIlicting reports on the same subject, one upholding on all points the Monetary Board's closure oI petitioner, (Cosico Report dated February 19, 1988) and the other (Santiago Report dated January 25, 1991) holding that petitioner's closure was null and void because petitioner's insolvency was not clearly established beIore its closure; and that such a hearing on oral argrument will thereIore allow the parties to directly conIront the issues beIore this Court.chanroblesvirtualawlibrar y chanrobles virt ual law libra ry On March 12, 1991 petitioner Iiled its opposition to the motion Ior oral argument. On March 20, 1991, it Iiled its reply to respondents' objections to the Santiago Report.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary On June 18, 1991, a hearing was held where both parties were heard on oral argument beIore this Court. The parties, having submitted their respective memoranda, the case is now submitted Ior decision. G.R. No. 78767 On February 2, 1985, Banco Filipino Iiled a complaint with the trial court docketed as Civil Case No. 9675 to annul the resolution oI the Monetary Board dated January 25, 1985, which ordered the closure oI the bank and placed it under receivership.chanroblesvirtualawlib rary chanr obles virtual law l ibrary On February 14, 1985, the Central Bank and the receivers Iiled a motion to dismiss the complaint on the ground that the receivers had not authorized anyone to Iile the action. In a supplemental motion to dismiss, the Central Bank cited the resolution oI this Court dated October 15, 1985 in G.R. No. 65723 entitled, "Central Bank et al. v. Intermediate Appellate Court" whereby We held that a complaint questioning the validity oI the receivership established by the Central Bank becomes moot and academic upon the initiation oI liquidation proceedings.chanroblesvirtualawlib rary chanrob les virtual law lib rary While the motion to dismiss was pending resolution, petitioner herein Metropolis Development Corporation (Metropolis Ior brevity) Iiled a motion to intervene in the aIorestated civil case on the ground that as a stockholder and creditor oI Banco Filipino, it has an interest in the subject oI the action.chanroblesvirtualawl ibrary chan robles virtual law librar y On July 19, 1985, the trial court denied the motion to dismiss and also denied the motion Ior reconsideration oI the order later Iiled by Central Bank. On June 5, 1985, the trial court allowed the motion Ior intervention.chanroblesvirtualawlib rary chanrob les virtual law lib rary Hence, the Central Bank and the receivers oI Banco Filipino Iiled a petition Ior certiorari with the respondent appellate court alleging that the trial court committed grave abuse oI discretion in not dismissing Civil Case No. 9675.chanroblesvirtualawlibrary chanrobles vir tual law lib rary On March 17, 1986, the respondent appellate court rendered a decision annulling and setting aside the questioned orders oI the trial court, and ordering the dismissal oI the complaint Iiled by Banco Filipino with the trial court as well as the complaint in intervention oI petitioner Metropolis Development Corporation.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary Hence this petition was Iiled by Metropolis Development Corporation questioning the decision oI the respondent appellate court. G.R. No. 78894 On February 2, 1985, a complaint was Iiled with the trial court in the name oI Banco Filipino to annul the resolution o the Monetary Board dated January 25, 1985 which ordered the closure oI Banco Filipino and placed it under receivership. The receivers appointed by the Monetary Board were Carlota Valenzuela, ArnulIo Aurellano and Ramon Tiaoqui.chanroblesvi rtualawlibra ry chanrobles vi rtual law lib rary On February 14, 1985, the Central Bank and the receiver Iiled a motion to dismiss the complaint on the ground that the receiver had not authorized anyone to Iile the action.chanroblesvirtualawl ibrary chan robles virtual law librar y On March 22, 1985, the Monetary Board placed the bank under liquidation and designated Valenzuela as liquidator and Aurellano and Tiaoqui as deputy liquidators.chanroblesvirtualawlibrary chanrob les virtual law lib rary The Central Bank Iiled a supplemental motion to dismiss which was denied. Hence, the latter Iiled a petition Ior certiorari with the respondent appellate court to set aside the order oI the trial court denying the motion to dismiss. On March 17, 1986, the respondent appellate court granted the petition and dismissed the complaint oI Banco Filipino with the trial court.chanroblesvirtualawlibrary chanro bles virtual law l ibrary Thus, this petition Ior certiorari was Iiled with the petitioner contending that a bank which has been closed and placed under receivership by the Central Bank under Section 29 oI RA 265 could Iile suit in court in its name to contest such acts oI the Central Bank, without the authorization oI the CB-appointed receiver.chanroblesvirtualawlib rary chanro bles virtual law l ibrary AIter deliberating on the pleadings in the Iollowing cases: 1. In G.R. No. 68878, the respondent's motion Ior reconsideration;chanrob les virtual law lib rary 2. In G.R. Nos. 77255-58, the petition, comment, reply, rejoinder and sur- rejoinder;chan robles virtual law librar y 2. In G.R. No. 78766, the petition, comment, reply and rejoinder;chan robles virtual law library 3. In G.R. No. 81303, the petitioner's motion Ior reconsideration;chanrob les virtual law lib rary 4. In G.R.No. 81304, the petition, comment and reply; chanrobles vi rtual law lib rary 5. Finally, in G.R. No. 90473, the petition comment and reply. We Iind the motions Ior reconsideration in G.R. Nos. 68878 and 81303 and the petitions in G.R. Nos. 77255-58, 78766, 81304 and 90473 devoid oI merit.chanroblesvirtualawlibra ry chanrobles virt ual law libra ry Section 29 oI the Republic Act No. 265, as amended known as the Central Bank Act, provides that when a bank is forbidden to do business in the Philippines and placed under receivership, the person desinated as receiver shall immediately take chare of the banks assets and liabilities, as expeditiously as possible, collect and ather all the assets and administer the same for the benefit of its creditors, and represent the bank personally or throuh counsel as he may retain in all actions or proceedins for or aainst the institution, exercising all the powers necessary Ior these purposes including, but not limited to, brinin and foreclosin mortaes in the name of the bank. II the Monetary Board shall later determine and conIirm that banking institution is insolvent or cannot resume business saIety to depositors, creditors and the general public, it shall, public interest requires, order its liquidation and appoint a liquidator who shall take over and continue the functions of receiver previously appointed by onetary Board. The liquid Ior may, in the name oI the bank and with the assistance counsel as he may retain, institute such actions as may necessary in the appropriate court to collect and recover a counts and assets oI such institution or deIend any action It against the institution.chanroblesvirtualawlib rary chanr obles virtual law l ibrary When the issue on the validity oI the closure and receivership oI Banco Filipino bank was raised in G.R. No. 70054, pendency oI the case did not diminish the powers and authority oI the designated liquidator to eIIectuate and carry on the a ministration oI the bank. In Iact when We adopted a resolute on August 25, 1985 and issued a restraining order to respondents Monetary Board and Central Bank, We enjoined me Iurther acts oI liquidation. Such acts oI liquidation, as explained in Sec. 29 oI the Central Bank Act are those which constitute the conversion oI the assets oI the banking institution to money or the sale, assignment or disposition oI the s to creditors and other parties Ior the purpose oI paying debts oI such institution. We did not prohibit however acts a as receiving collectibles and receivables or paying oII credits claims and other transactions pertainin to normal operate of a bank. There is no doubt that the prosecution oI suits collection and the Ioreclosure oI mortgages against debtors the bank by the liquidator are among the usual and ordinary transactions pertaining to the administration oI a bank. their did Our order in the same resolution dated August 25, 1985 Ior the designation by the Central Bank oI a comptroller Banco Filipino alter the powers and Iunctions; oI the liquid insoIar as the management oI the assets oI the bank is concerned. The mere duty oI the comptroller is to supervise counts and Iinances undertaken by the liquidator and to d mine the propriety oI the latter's expenditures incurred behalI oI the bank. Notwithstanding this, the liquidator is empowered under the law to continue the Iunctions oI receiver is preserving and keeping intact the assets oI the bank in substitution oI its Iormer management, and to prevent the dissipation oI its assets to the detriment oI the creditors oI the bank. These powers and Iunctions oI the liquidator in directing the operations oI the bank in place oI the Iormer management or Iormer oIIicials oI the bank include the retaining oI counsel oI his choice in actions and proceedings Ior purposes oI administration.chanroblesvirtualawlib rary chanr obles virtual law l ibrary Clearly, in G.R. Nos. 68878, 77255-58, 78766 and 90473, the liquidator by himselI or through counsel has the authority to bring actions Ior Ioreclosure oI mortgages executed by debtors in Iavor oI the bank. In G.R. No. 81303, the liquidator is likewise authorized to resist or deIend suits instituted against the bank by debtors and creditors oI the bank and by other private persons. Similarly, in G.R. No. 81304, due to the aIorestated reasons, the Central Bank cannot be compelled to IulIill Iinancial transactions entered into by Banco Filipino when the operations oI the latter were suspended by reason oI its closure. The Central Bank possesses those powers and Iunctions only as provided Ior in Sec. 29 oI the Central Bank Act.chanroblesvirtualawlibrary chanro bles virtual law li brary While We recognize the actual closure oI Banco Filipino and the consequent legal eIIects thereoI on its operations, We cannot uphold the legality oI its closure and thus, Iind the petitions in G.R. Nos. 70054, 78767 and 78894 impressed with merit. We hold that the closure and receivership oI petitioner bank, which was ordered by respondent Monetary Board on January 25, 1985, is null and void.chanroblesvirtualawlib rary chanr obles virtual law l ibrary It is a well-recognized principle that administrative and discretionary Iunctions may not be interIered with by the courts. In general, courts have no supervising power over the proceedings and actions oI the administrative departments oI the government. This is generally true with respect to acts involving the exercise oI judgment or discretion, and Iindings oI Iact. But when there is a grave abuse oI discretion which is equivalent to a capricious and whimsical exercise oI judgment or where the power is exercised in an arbitrary or despotic manner, then there is a justiIication Ior the courts to set aside the administrative determination reached (Lim, Sr. v. Secretary oI Agriculture and Natural Resources, L-26990, August 31, 1970, 34 SCRA 751) chanrobles virtual law lib rary The jurisdiction oI this Court is called upon, once again, through these petitions, to undertake the delicate task oI ascertaining whether or not an administrative agency oI the government, like the Central Bank oI the Philippines and the Monetary Board, has committed grave abuse oI discretion or has acted without or in excess oI jurisdiction in issuing the assailed order. Coupled with this task is the duty oI this Court not only to strike down acts which violate constitutional protections or to nulliIy administrative decisions contrary to legal mandates but also to prevent acts in excess oI authority or jurisdiction, as well as to correct maniIest abuses oI discretion committed by the oIIicer or tribunal involved.chanroblesvirtualawl ibrary chan robles virtual law librar y The law applicable in the determination oI these issues is Section 29 oI Republic Act No. 265, as amended, also known as the Central Bank Act, which provides: SEC. 29. Proceedins upon insolvency. - Whenever, upon examination by the head oI the appropriate supervising or examining department or his examiners or agents into the condition oI any bank or non-bank Iinancial intermediary perIorming quasi-banking Iunctions, it shall be disclosed that the condition oI the same is one oI insolvency, or that its continuance in business would involve probable loss to its depositors or creditors, it shall be the duty oI the department head concerned Iorthwith, in writing, to inIorm the Monetary Board oI the Iacts. The Board may, upon Iinding the statements oI the department head to be true, Iorbid the institution to do business in the Philippines and designate an oIIicial oI the Central Bank or a person oI recognized competence in banking or Iinance, as receiver to immediately take charge oI its assets and liabilities, as expeditiously as possible collect and gather all the assets and administer the same Ior the beneIit's oI its creditors, and represent the bank personally or through counsel as he may retain in all actions or proceedings Ior or against the institution, exercising all the powers necessary Ior these purposes including, but not limited to, bringing and Ioreclosing mortgages in the name oI the bank or non-bank Iinancial intermediary perIorming quasi-banking Iunctions.chanroblesvirtualawl ibrary chan robles virtual law libra ry The Monetary Board shall thereupon determine within sixty days whether the institution may be reorganized or otherwise placed in such a condition so that it may be permitted to resume business with saIety to its depositors and creditors and the general public and shall prescribe the conditions under which such resumption oI business shall take place as well as the time Ior IulIillment oI such conditions. In such case, the expenses and Iees in the collection and administration oI the assets oI the institution shall be determined by the Board and shall be paid to the Central Bank out oI the assets oI such institution.chanroblesvirtualawlib rary chanr obles virtual law l ibrary II the Monetary Board shall determine and conIirm within the said period that the bank or non-bank Iinancial intermediary perIorming quasi-banking Iunctions is insolvent or cannot resume business with saIety to its depositors, creditors, and the general public, it shall, iI the public interest requires, order its liquidation, indicate the manner oI its liquidation and approve a liquidation plan which may, when warranted, involve disposition oI any or all assets in consideration Ior the assumption oI equivalent liabilities. The liquidator designated as hereunder provided shall, by the Solicitor General, Iile a petition in the regional trial court reciting the proceedings which have been taken and praying the assistance oI the court in the liquidation oI such institutions. The court shall have jurisdiction in the same proceedings to assist in the adjudication oI the disputed claims against the bank or non-bank Iinancial intermediary perIorming quasi-banking Iunctions and in the enIorcement oI individual liabilities oI the stockholders and do all that is necessary to preserve the assets oI such institutions and to implement the liquidation plan approved by the Monetary Board. The Monetary Board shall designate an oIIicial oI the Central bank or a person oI recognized competence in banking or Iinance, as liquidator who shall take over and continue the Iunctions oI the receiver previously appointed by the Monetary Board under this Section. The liquidator shall, with all convenient speed, convert the assets oI the banking institutions or non-bank Iinancial intermediary perIorming quasi-banking Iunction to money or sell, assign or otherwise dispose oI the same to creditors and other parties Ior the purpose oI paying the debts oI such institution and he may, in the name oI the bank or non-bank Iinancial intermediary perIorming quasi-banking Iunctions and with the assistance oI counsel as he may retain, institute such actions as may be necessary in the appropriate court to collect and recover accounts and assets oI such institution or deIend any action Iiled against the institution: Provided, However, That aIter having reasonably established all claims against the institution, the liquidator may, with the approval oI the court, eIIect partial payments oI such claims Ior assets oI the institution in accordance with their legal priority.chanroblesvirtualawl ibra ry chanrobles virtual law libra ry The assets oI an institution under receivership or liquidation shall be deemed in custodia leis in the hands oI the receiver or liquidator and shall Irom the moment oI such receivership or liquidation, be exempt Irom any order oI garnishment, levy, attachment, orexecution.chanroblesvirtualawl ibrary chan robles virtual law librar y The provisions oI any law to the contrary notwithstanding, the actions oI the Monetary Board under this Section, Section 28-A, an the second paragraph oI Section 34 oI this Act shall be Iinal an executory, and can be set aside by a court only iI there is convince prooI, aIter hearing, that the action is plainly arbitrary and made in bad Iaith: Provided, That the same is raised in an appropriate pleading Iiled by the stockholders oI record representing the majority oI th capital stock within ten (10) days Irom the date the receiver take charge oI the assets and liabilities oI the bank or non-bank Iinancial intermediary perIorming quasi-banking Iunctions or, in case oI conservatorship or liquidation, within ten (10) days Irom receipt oI notice by the said majority stockholders oI said bank or non-bank Iinancial intermediary oI the order oI its placement under conservatorship o liquidation. No restraining order or injunction shall be issued by an court enjoining the Central Bank Irom implementing its actions under this Section and the second paragraph oI Section 34 oI this Act in th absence oI any convincing prooI that the action oI the Monetary Board is plainly arbitrary and made in bad Iaith and the petitioner or plaintiII Iiles a bond, executed in Iavor oI the Central Bank, in an amount be Iixed by the court. The restraining order or injunction shall be reIused or, iI granted, shall be dissolved upon Iiling by the Central Bank oI a bond, which shall be in the Iorm oI cash or Central Bank cashier's check, in an amount twice the amount oI the bond oI th petitioner or plaintiII conditioned that it will pay the damages which the petitioner or plaintiII may suIIer by the reIusal or the dissolution oI the injunction. The provisions oI Rule 58 oI the New Rules oI Court insoIar as they are applicable and not inconsistent with the provision oI this Section shall govern the issuance and dissolution oI the re straining order or injunction contemplated in this Section. xxx xxx xxx Based on the aIorequoted provision, the Monetary Board may order the cessation oI operations oI a bank in the Philippine and place it under receivership upon a Iinding oI insolvency or when its continuance in business would involve probable loss its depositors or creditors. II the Monetary Board shall determine and conIirm within sixty (60) days that the bank is insolvent or can no longer resume business with saIety to its depositors, creditors and the general public, it shall, iI public interest will be served, order its liquidation.chanroblesvirtualawli brary chan robles virtual law l ibrary SpeciIically, the basic question to be resolved in G.R. Nos. 70054, 78767 and 78894 is whether or not the Central Bank and the Monetary Board acted arbitrarily and in bad Iaith in Iinding and thereaIter concluding that petitioner bank is insolvent, and in ordering its closure on January 25, 1985.chanroblesvirtualawlibra ry chanrobles vi rtual law lib rary As We have stated in Our resolution dated August 3, 1989, the documents pertinent to the resolution oI these petitions are the Teodoro Report, Tiaoqui Report, and the Valenzuela, Aurellano and Tiaoqui Report and the supporting documents made as bases by the supporters oI their conclusions contained in their respective reports. We will Iocus Our study and discussion however on the Tiaoqui Report and the Valenzuela, Aurellano and Tiaoqui Report. The Iormer recommended the closure and receivership oI petitioner bank while the latter report made the recommendation to eventually place the petitioner bank under liquidation. This Court shall likewise take into consideration the Iindings contained in the reports oI the two commissioners who were appointed by this Court to hold the reIerral hearings, namely the report by Judge Manuel Cosico submitted February 20, 1988 and the report submitted by Justice Consuelo Santiago on January 28, 1991.chanroblesvirtualawlibrary chan robles virtual law library There is no question that under Section 29 oI the Central Bank Act, the Iollowing are the mandatory requirements to be complied with beIore a bank Iound to be insolvent is ordered closed and Iorbidden to do business in the Philippines: Firstly, an examination shall be conducted by the head oI the appropriate supervising or examining department or his examiners or agents into the condition oI the bank; secondly, it shall be disclosed in the examination that the condition oI the bank is one oI insolvency, or that its continuance in business would involve probable loss to its depositors or creditors; thirdly, the department head concerned shall inIorm the Monetary Board in writing, oI the Iacts; and lastly, the Monetary Board shall Iind the statements oI the department head to be true.chanroblesvirtualawlibrary chan robles virtual law libra ry Anent the Iirst requirement, the Tiaoqui report, submitted on January 23, 1985, revealed that the Iinding oI insolvency oI petitioner was based on the partial list oI exceptions and Iindings on the regular examination oI the bank as oI July 31, 1984 conducted by the Supervision and Examination Sector II oI the Central Bank oI the PhilippinesCentral Bank (p. 1, Tiaoqui Report).chanroblesvirtualawlibrary chan robles virt ual law library On December 17, 1984, this list oI exceptions and Iinding was submitted to the petitioner bank (p. 6, Tiaoqui Report) This was attached to the letter dated December 17, 1984, oI examiner-in-charge Dionisio Domingo oI SES Department II oI the Central Bank to Teodoro Arcenas, president oI petitione bank, which disclosed that the examination oI the petitioner bank as to its Iinancial condition as oI July 31, 1984 was not yet completed or Iinished on December 17, 1984 when the Central Bank submitted the partial list oI Iindings oI examination to th petitioner bank. The letter reads: In connection with the regular examination oI your institution a oI July 31, 1984, we are submittin herewith a partial list of our exceptions/findins for your comments. Please be inIormed that we have not yet officially terminated our examination (tentatively scheduled last December 7, 1984) and that we are still awaitin for the unsubmitted replies to our previous letters requests. oreover, other findins/ observations are still bein summari:ed includin the classification of loans and other risk assets. These shall be submitted to you in due time (p. 810, Rollo, Vol. III; emphasis ours). It is worthy to note that a conIerence was held on January 21, 1985 at the Central Bank between the oIIicials oI the latter an oI petitioner bank. What transpired and what was agreed upon during the conIerence was explained in the Tiaoqui report. ... The discussion centered on the substantial exposure oI the bank to the various entities which would have a relationship with the bank; the manner by which some bank Iunds were made indirectly available to several entities within the group; and the unhealth Iinancial status oI these Iirms in which the bank was additionally exposed through new Iunds or reIinancing accommodation including accrued interest.chanroblesvirtualawlibrar y chanrobles virt ual law libra ry Queried in the impact oI these clean loans, on the bank solvency Mr. Dizon (BF Executive Vice President) intimated that, collectively these corporations have large undeveloped real estate properties in the suburbs which can be made answerable Ior the unsecured loans a well as the Central Bank's credit accommodations. formal reply of the bank would still be forthcomin. (pp. 58-59, Rollo, Vol. I; emphasis ours) Clearly, Tiaoqui based his report on an incomplete examination oI petitioner bank and outrightly concluded therein that the latter's Iinancial status was one oI insolvency or illiquidity. He arrived at the said conclusion Irom the Iollowing Iacts: that as oI July 31, 1984, total capital accounts consisting oI paid-in capital and other capital accounts such as surplus, surplus reserves and undivided proIits aggregated P351.8 million; that capital adjustments, however, wiped out the capital accounts and placed the bank with a capital deIiciency amounting to P334.956 million; that the biggest adjustment which contributed to the deIicit is the provision Ior estimated losses on accounts classiIied as doubtIul and loss which was computed at P600.4 million pursuant to the examination. This provision is also known as valuation reserves which was set up or deducted against the capital accounts oI the bank in arriving at the latter's Iinancial condition.chanrob lesvirtualawlib rary chanrobles vi rtual law lib rary Tiaoqui however admits the insuIIiciency and unreliability oI the Iindings oI the examiner as to the setting up oI recommended valuation reserves Irom the assets oI petitioner bank. He stated: %he recommended valuation reserves as bases for determinin the financial status of the bank would need to be discussed with the bank, consistent with standard examination procedure, for which the bank would in turn reply. lso, the examination has not been officially terminated. (p. 7. Tiaoqui report; p. 59, Rollo, Vol. I) In his testimony in the second reIerral hearing beIore Justice Santiago, Tiaoqui testiIied that on January 21, 1985, he met with oIIicers oI petitioner bank to discuss the advanced Iindings and exceptions made by Mr. Dionisio Domingo which covered 70-80 oI the bank's loan portIolio; that at that meeting, Fortunato Dizon (BF's Executive Vice President) said that as regards the unsecured loans granted to various corporations, said corporations had large undeveloped real estate properties which could be answerable Ior the said unsecured loans and that a reply Irom BF was Iorthcoming, that he (Tiaoqui) however prepared his report despite the absence oI such reply; that he believed, as in Iact it is stated in his report, that despite the meeting on January 21, 1985, there was still a need to discuss the recommended valuation reserves oI petitioner bank and; that he however, did not wait anymore Ior a discussion oI the recommended valuation reserves and instead prepared his report two days aIter January 21, 1985 (pp. 3313-3314, Rollo).chanroblesvirtualawlibrary chan robles virtual law librar y Records Iurther show that the examination oI petitioner bank was oIIicially terminated only when Central Bank Examination-charge Dionisio Domingo submitted his Iinal report oI examination on March 4,1985.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary It is evident Irom the Ioregoing circumstances that the examination contemplated in Sec. 29 oI the CB Act as a mandatory requirement was not completely and Iully complied with. Despite the existence oI the partial list oI Iindings in the examination oI the bank, there were still highly signiIicant items to be weighed and determined such as the matter oI valuation reserves, beIore these can be considered in the Iinancial condition oI the bank. It would be a drastic move to conclude prematurely that a bank is insolvent iI the basis Ior such conclusion is lacking and insuIIicient, especially iI doubt exists as to whether such bases or Iindings IaithIully represent the real Iinancial status oI the bank.chanroblesvir tualawlibrar y chanrobles virt ual law libra ry The actuation oI the Monetary Board in closing petitioner bank on January 25, 1985 barely Iour days aIter a conIerence with the latter on the examiners' partial Iindings on its Iinancial position is also violative oI what was provided in the CB Manual oI Examination Procedures. Said manual provides that only aIter the examination is concluded, should a pre-closing conIerence led by the examiner-in-charge be held with the oIIicers/representatives oI the institution on the Iindings/exception, and a copy oI the summary oI the Iindings/violations should be Iurnished the institution examined so that corrective action may be taken by them as soon as possible (Manual oI Examination Procedures, General Instruction, p. 14). It is hard to understand how a period oI Iour days aIter the conIerence could be a reasonable opportunity Ior a bank to undertake a responsive and corrective action on the partial list oI Iindings oI the examiner-in- charge.chanroblesvir tualawlibra ry chanrobles vir tual law libra ry We recognize the Iact that it is the responsibility oI the Central Bank oI the Philippines to administer the monetary, banking and credit system oI the country and that its powers and Iunctions shall be exercised by the Monetary Board pursuant to Rep. Act No. 265, known as the Central Bank Act. Consequently, the power and authority oI the Monetary Board to close banks and liquidate them thereaIter when public interest so requires is an exercise oI the police power oI the state. Police power, however, may not be done arbitratrily or unreasonably and could be set aside iI it is either capricious, discriminatory, whimsical, arbitrary, unjust or is tantamount to a denial oI due process and equal protection clauses oI the Constitution (Central Bank v. Court oI Appeals, Nos. L-50031-32, July 27, 1981, 106 SCRA 143).chanroblesvirtualawlibra ry chanrobles vir tual law libra ry In the instant case, the basic standards oI substantial due process were not observed. Time and again, We have held in several cases, that the procedure oI administrative tribunals must satisIy the Iundamentals oI Iair play and that their judgment should express a well-supported conclusion.chanroblesvirtualawlib rary chanrob les virtual law lib rary In the celebrated case oI n %ibay v. Court of Industrial Relations, 69 Phil. 635, this Court laid down several cardinal primary rights which must be respected in a proceeding beIore an administrative body.chanroblesvirtualawlib rary chanrob les virtual law lib rary However, as to the requirement oI notice and hearing, Sec. 29 oI RA 265 does not require a previous hearing beIore the Monetary Board implements the closure oI a bank, since its action is subject to judicial scrutiny as provided Ior under the same law (Rural Bank oI Bato v. IAC, G.R. No. 65642, October 15, 1984, Rural Bank v. Court oI Appeals, G.R. 61689, June 20, 1988,162 SCRA 288).chanroblesvirtualawlibrary chanrob les virtual law li brary Notwithstanding the Ioregoing, administrative due process does not mean that the other important principles may be dispensed with, namely: the decision oI the administrative body must have something to support itselI and the evidence must be substantial. Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion (Ang Tibay vs. CIR, supra). Hence, where the decision is merely based upon pieces oI documentary evidence that are not suIIiciently substantial and probative Ior the purpose and conclusion they are presented, the standard oI Iairness mandated in the due process clause is not met. In the case at bar, the conclusion arrived at by the respondent Board that the petitioner bank is in an illiquid Iinancial position on January 23, 1985, as to justiIy its closure on January 25, 1985 cannot be given weight and Iinality as the report itselI admits the inadequacy oI its basis to support its conclusion.chanroblesvirtualawlib rary chan robles virtual law l ibrary The second requirement provided in Section 29, R.A. 265 beIore a bank may be closed is that the examination should disclose that the condition oI the bank is one oI insolvency.chan roblesvirtualawl ibrary chan robles virtual law librar y As to the concept oI whether the bank is solvent or not, the respondents contend that under the Central Bank Manual oI Examination Procedures, Central Bank examiners must recommend valuation reserves, when warranted, to be set up or deducted against the corresponding asset account to determine the bank's true condition or net worth. In the case oI loan accounts, to which practically all the questioned valuation reserves reIer, the manual provides that: chanrobles virtual law library 1. For doubtIul loans, or loans the ultimate collection oI which is doubtIul and in which a substantial loss is probable but not yet deIinitely ascertainable as to extent, valuation reserves oI IiIty per cent (50) oI the accounts should be recommended to be set up.chanroblesvirtualawlibrary chanro bles virtual law l ibrary 2. For loans classiIied as loss, or loans regarded by the examiner as absolutely uncollectible or worthless, valuation reserves oI one hundred percent (100) oI the accounts should be recommended to be set up (p. 8, Objections to Santiago report).chanroblesvirtualawlibrary chanrobles virtual law libra ry The Ioregoing criteria used by respondents in determining the Iinancial condition oI the bank is based on Section 5 oI RA 337, known as the General Banking Act which states: Sec. 5. The Iollowing terms shall be held to be synonymous and interchangeable: chan robles virtual law library ... I. Unimpaired Capital and Surplus, "Combined capital accounts," and "Net worth," which terms shall mean Ior the purposes oI this Act, the total oI the "unimpaired paid-in capital, surplus, and undivided proIits net oI such valuation reserves as may be required by the Central Bank." There is no doubt that the Central Bank Act vests authority upon the Central Bank and Monetary Board to take charge and administer the monetary and banking system oI the country and this authority includes the power to examine and determine the Iinancial condition oI banks Ior purposes provided Ior by law, such as Ior the purpose oI closure on the ground oI insolvency stated in Section 29 oI the Central Bank Act. But express grants oI power to public oIIicers should be subjected to a strict interpretation, and will be construed as conIerring those powers which are expressly imposed or necessarily implied (Floyd Mechem, Treatise on the Law oI Public OIIices and OIIicers, p. 335).chanroblesvirtualawlibrary chanrob les virtual law li brary In this case, there can be no clearer explanation oI the concept oI insolvency than what the law itselI states. Sec. 29 oI the Central Bank Act provides that insolvency under the Act, shall be understood to mean that "the reali:able assets of a bank or a non-bank Iinancial intermediary perIorming quasi-banking Iunctions as determined by the Central Bank are insufficient to meet its liabilities."chanrobles virtual law libra ry Hence, the contention oI the Central Bank that a bank's true Iinancial condition is synonymous with the terms "unimpaired capital and surplus," "combined capital accounts" and net worth aIter deducting valuation reserves Irom the capital, surplus and unretained earnings, citing Sec. 5 oI RA 337 is misplaced.chanroblesvirt ualawlibrary chanrobles virtual law libra ry Firstly, it is clear Irom the law that a solvent bank is one in which its assets exceed its liabilities. It is a basic accounting principle that assets are composed oI liabilities and capital. The term "assets" includes capital and surplus" (Exley v. Harris, 267 p. 970, 973, 126 Kan., 302). On the other hand, the term "capital" includes common and preIerred stock, surplus reserves, surplus and undivided proIits. (Manual oI Examination Procedures, Report oI Examination on Department oI Commercial and Savings Banks, p. 3-C). II valuation reserves would be deducted Irom these items, the result would merely be the networth or the unimpaired capital and surplus oI the bank applying Sec. 5 oI RA 337 but not the total Iinancial condition oI the bank.chanroblesvir tualawlibrar y chanrobles virt ual law libra ry Secondly, the statement oI assets and liabilities is used in balance sheets. Banks use statements oI condition to reIlect the amounts, nature and changes in the assets and liabilities. The Central Bank Manual oI Examination Procedures provides a Iormat or checklist oI a statement oI condition to be used by examiners as guide in the examination oI banks. The Iormat enumerates the items which will compose the assets and liabilities oI a bank. Assets include cash and those due Irom banks, loans, discounts and advances, Iixed assets and other property owned or acquired and other miscellaneous assets. The amount oI loans, discounts and advances to be stated in the statement oI condition as provided Ior in the manual is computed aIter deducting valuation reserves when deemed necessary. On the other hand, liabilities are composed oI demand deposits, time and savings deposits, cashier's, manager's and certiIied checks, borrowings, due to head oIIice, branches; and agencies, other liabilities and deIerred credits (Manual oI Examination Procedure, p. 9). The amounts stated in the balance sheets or statements oI condition including the computation oI valuation reserves when justiIied, are based however, on the assumption that the bank or company will continue in business indeIinitely, and thereIore, the networth shown in the statement is in no sense an indication oI the amount that might be realized iI the bank or company were to be liquidated immediately (Prentice Hall Encyclopedic Dictionary oI Business Finance, p. 48). Further, based on respondents' submissions, the allowance Ior probable losses on loans and discounts represents the amount set up aainst current operations to provide Ior possible losses arising Irom non-collection oI loans and advances, and this account is also reIerred to as valuation reserve (p. 9, Objections to Santiago report). Clearly, the statement oI condition which contains a provision Ior recommended valuation reserves should not be used as the ultimate basis to determine the solvency oI an institution Ior the purpose oI termination oI its operations.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary Respondents acknowledge that under the said CB manual, CB examiners must recommend valuation reserves, when warranted, to be set up against the corresponding asset account (p. 8, Objections to Santiago report). Tiaoqui himselI, as author oI the report recommending the closure oI petitioner bank admits that the valuation reserves should still be discussed with the petitioner bank in compliance with standard examination procedure. Hence, Ior the Monetary Board to unilaterally deduct an uncertain amount as valuation reserves Irom the assets oI a bank and to conclude thereIrom without suIIicient basis that the bank is insolvent, would be totally unjust and unIair.chanroblesvirtualawlib rary chanr obles virtual law l ibrary The test oI insolvency laid down in Section 29 oI the Central Bank Act is measured by determining whether the realizable assets oI a bank are leas than its liabilities. Hence, a bank is solvent iI the Iair cash value oI all its assets, realizable within a reasonable time by a reasonable prudent person, would equal or exceed its total liabilities exclusive oI stock liability; but iI such Iair cash value so realizable is not suIIicient to pay such liabilities within a reasonable time, the bank is insolvent. (Gillian v. State, 194 N.E. 360, 363, 207 Ind. 661). Stated in other words, the insolvency oI a bank occurs when the actual cash market value oI its assets is insuIIicient to pay its liabilities, not considering capital stock and surplus which are not liabilities Ior such purpose (Exley v. Harris, 267 p. 970, 973,126 Kan. 302; Alexander v. Llewellyn, Mo. App., 70 S.W. 2n 115,117).chanroblesvirtualawlibrary chanrobles vir tual law lib rary In arriving at the computation oI realizable assets oI petitioner bank, respondents used its books which undoubtedly are not reIlective oI the actual cash or Iair market value oI its assets. This is not the proper procedure contemplated in Sec. 29 oI the Central Bank Act. Even the CB Manual oI Examination Procedures does not conIine examination oI a bank solely with the determination oI the books oI the bank. The latter is part oI auditing which should not be conIused with examination. Examination appraises the soundness of the institutions assets, the quality and character of manaement and determines the institutions compliance with laws, rules and reulations. Audit is a detailed inspection oI the institution's books, accounts, vouchers, ledgers, etc. to determine the recording oI all assets and liabilities. Hence, examination concerns itselI with review and appraisal, while audit concerns itselI with veriIication (CB Manual oI Examination Procedures, General Instructions, p. 5). This Court however, is not in the position to determine how much cash or market value shall be assigned to each oI the assets and liabilities oI the bank to determine their total realizable value. The proper determination oI these matters by using the actual cash value criteria belongs to the Iield oI Iact- Iinding expertise oI the Central Bank and the Monetary Board. Notwithstanding the Iact that the Iigures arrived at by the respondent Board as to assets and liabilities do not truly indicate their realizable value as they were merely based on book value, We will however, take a look at the Iigures presented by the Tiaoqui Report in concluding insolvency as oI July 31, 1984 and at the Iigures presented by the CB authorized deputy receiver and by the Valenzuela, Aurellano and Tiaoqui Report which recommended the liquidation oI the bank by reason oI insolvency as o January 25,1985.chanroblesvirtualawlibra ry chanrobles vir tual law lib rary The Tiaoqui report dated January 23, 1985, which was based on partial examination Iindings on the bank's condition as oI July 31, 1984, states that total liabilities oI P5,282.1 million exceeds total assets oI P4,947.2 million aIter deducting Irom the assets valuation reserves oI P612.2 million. Since, as We have explained in our previous discussion that valuation reserves can not be legally deducted as there was no truthIul and complete evaluation thereoI as admitted by the Tiaoqui report itselI, then an adjustment oI the Iigures win show that the liabilities oI P5,282.1 million will not exceed the total assets which will amount to P5,559.4 iI the 612.2 million allotted to valuation reserves will not be deducted Irom the assets. There can be no basis thereIore Ior both the conclusion oI insolvency and Ior the decision oI the respondent Board to close petitioner bank and place it under receivership.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary Concerning the Iinancial position oI the bank as oI January 25, 1985, the date oI the closure oI the bank, the consolidated statement oI condition thereoI as oI the aIoresaid date shown in the Valenzuela, Aurellano and Tiaoqui report on the receivership oI petitioner bank, dated March 19, 1985, indicates that total liabilities oI 4,540.84 million does not exceed the total assets oI 4,981.53 million. Likewise, the consolidated statement oI condition oI petitioner bank as oI January 25, 1985 prepared by the Central Bank Authorized Deputy Receiver Artemio Cruz shows that total assets amounting to P4,981,522,996.22 even exceeds total liabilities amounting to P4,540,836,834.15. Based on the Ioregoing, there was no valid reason Ior the Valenzuela, Aurellano and Tiaoqui report to Iinally recommend the liquidation oI petitioner bank instead oI its rehabilitation.chanroblesvirtualawlib rary chanro bles virtual law li brary We take note oI the exhaustive study and Iindings oI the Cosico report on the petitioner bank's having engaged in unsaIe, unsound and Iraudulent banking practices by the granting oI huge unsecured loans to several subsidiaries and related companies. We do not see, however, that this has any material bearing on the validity oI the closure. Section 34 oI the RA 265, Central Bank Act empowers the Monetary Board to take action under Section 29 oI the Central Bank Act when a bank "persists in carrying on its business in an unlawIul or unsaIe manner." There was no showing whatsoever that the bank had persisted in committing unlawIul banking practices and that the respondent Board had attempted to take eIIective action on the bank's alleged activities. During the period Irom July 27, 1984 up to January 25, 1985, when petitioner bank was under conservatorship no oIIicial oI the bank was ever prosecuted, suspended or removed Ior any participation in unsaIe and unsound banking practices, and neither was the entire management oI the bank replaced or substituted. In Iact, in her testimony during the second reIerral hearing, Carlota Valenzuela, CB Deputy Governor, testiIied that the reason Ior petitioner bank's closure was not unsound, unsaIe and Iraudulent banking practices but the alleged insolvency position oI the bank (TSN, August 3, 1990, p. 3316, Rollo, Vol. VIII).chanroblesvirtualawlibrary chanro bles virtual law li brary Finally, another circumstance which point to the solvency oI petitioner bank is the granting by the Monetary Board in Iavor oI the Iormer a credit line in the amount oI P3 billion along with the placing oI petitioner bank under conservatorship by virtue oI M.B. Resolution No. 955 dated July 27, 1984. This paved the way Ior the reopening oI the bank on August 1, 1984 aIter a selI-imposed bank holiday on July 23, 1984.chanroblesvirtualawlibrary chan robles virtual law librar y On emergency loans and advances, Section 90 oI RA 265 provides two types oI emergency loans that can be granted by the Central Bank to a Iinancially distressed bank: Sec. 90. ... In periods of emerency or of imminent financial panic which directly threaten monetary and banking stability, the Central Bank may grant banking institutions extraordinary advances secured by any assets which are deIined as acceptable by by a concurrent vote oI at least Iive members oI the Monetary Board. While such advances are outstanding, the debtor institution may not expand the total volume oI its loans or investments without the prior authorization oI the Monetary Board.chanroblesvirtualawlibrary chan robles virtual law librar y The Central Bank may, at its discretion, likewise grant advances to banking institutions, even during normal periods, Ior the purpose oI assisting a bank in a precarious Iinancial condition or under serious Iinancial pressures brought about by unIoreseen events, or events which, though Ioreseeable, could not be prevented by the bank concerned. Provided, however, That the Monetary Board has ascertained that the bank is not insolvent and has clearly realizable assets to secure the advances. Provided, Iurther, That a concurrent vote oI at least Iive members oI the Monetary Board is obtained. (Emphasis ours) The Iirst paragraph oI the aIorequoted provision contemplates a situation where the whole banking community is conIronted with Iinancial and economic crisis giving rise to serious and widespread conIusion among the public, which may eventually threaten and gravely prejudice the stability oI the banking system. Here, the emergency or Iinancial conIusion involves the whole banking community and not one bank or institution only. The second situation on the other hand, provides Ior a situation where the Central Bank grants a loan to a bank with uncertain Iinancial condition but not insolvent.chanroblesvirtualawlibra ry chanrobles vir tual law lib rary As alleged by the respondents, the Iollowing are the reasons oI the Central Bank in approving the resolution granting the P3 billion loan to petitioner bank and the latter's reopening aIter a brieI selI-imposed banking holiday: WHEREAS, the closure by Banco Filipino Savings and Mortgage Bank oI its Banking oIIices on its own initiative has worked serious hardships on its depositors and has aIIected conIidence levels in the banking system resulting in a Ieeling oI apprehension among depositors and unnecessary deposit withdrawals; chanrobles vir tual law lib rar y WHEREAS, the Central Bank is charged with the Iunction oI administering the banking system;chanrobles virt ual law libra ry WHEREAS, the reopening oI Banco Filipino would require additional credit resources Irom the Central Bank as well as an independent management acceptable to the Central Bank;chanrob les virtual law li brary WHEREAS, it is the desire oI the Central Bank to rapidly diIIuse the uncertainty that presently exists;chanrob les virtual law lib rary ... (M.B. Min. No. 35 dated July 27, 1984 cited in Respondents' Objections to Santiago Report, p. 26; p. 3387, Rollo, Vol. IX; Emphasis ours). A perusal oI the Ioregoing "Whereas" clauses unmistakably show that the clear reason Ior the decision to grant the emergency loan to petitioner bank was that the latter was suIIering Irom Iinancial distress and severe bank "run" as a result oI which it closed on July 23, 1984 and that the release oI the said amount is in accordance with the Central Bank's Iull support to meet Banco Filipino's depositors' withdrawal requirements (Excerpts oI minutes oI meeting on MB Min. No. 35, p. 25, Rollo, Vol. IX). Nothing therein shows that an extraordinary emergency situation exists aIIecting most banks, not only as regards petitioner bank. This Court thereby Iinds that the grant oI the said emergency loan was intended Irom the beginning to Iall under the second paragraph oI Section 90 oI the Central Bank Act, which could not have occurred iI the petitioner bank was not solvent. Where notwithstanding knowledge oI the irregularities and unsaIe banking practices allegedly committed by the petitioner bank, the Central Bank even granted Iinancial support to the latter and placed it under conservatorship, such actuation means that petitioner bank could still be saved Irom its Iinancial distress by adequate aid and management reIorm, which was required by Central Bank's duty to maintain the stability oI the banking system and the preservation oI public conIidence in it (Ramos v. Central Bank, No. L-29352, October 4, 1971, 41 SCRA 565).chanroblesvirtualawlibrar y chanrobles virt ual law libra ry In view oI the Ioregoing premises, We believe that the closure oI the petitioner bank was arbitrary and committed with grave abuse oI discretion. Granting in ratia arumenti that the closure was based on justiIied grounds to protect the public, the Iact that petitioner bank was suIIering Irom serious Iinancial problems should not automatically lead to its liquidation. Section 29 oI the Central Bank provides that a closed bank may be reorganized or otherwise placed in such a condition that it may be permitted to resume business with saIety to its depositors, creditors and the general public.chanroblesvirtualawlib rary chanro bles virtual law l ibrary We are aware oI the Central Bank's concern Ior the saIety oI Banco Filipino's depositors as well as its creditors including itselI which had granted substantial Iinancial assistance up to the time oI the latter's closure. But there are alternatives to permanent closure and liquidation to saIeguard those interests as well as those oI the general public Ior the Iailure oI Banco Filipino or any bank Ior that matter may be viewed as an irreversible decline oI the country's entire banking system and ultimately, it may reIlect on the Central Bank's own viability. For one thing, the Central Bank and the Monetary Board should exercise strict supervision over Banco Filipino. They should take all the necessary steps not violative oI the laws that will Iully secure the repayment oI the total Iinancial assistance that the Central Bank had already granted or would grant in the Iuture.chanroblesvirtualawlibrary chan robles virtual law l ibrary ACCORDINGLY, decision is hereby rendered as Iollows: chan robles virtual law l ibrary 1. The motion Ior reconsideration in G.R. Nos. 68878 and 81303, and the petitions in G.R. Nos. 77255-58, 78766, 81304 and 90473 are DENIED;chanrobles virtual law lib rary 2. The petitions in G.R. No. 70054, 78767 and 78894 are GRANTED and the assailed order oI the Central Bank and the Monetary Board dated January 25, 1985 is hereby ANNULLED AND SET ASIDE. The Central Bank and the Monetary Board are ordered to reorganize petitioner Banco Filipino Savings and Mortgage Bank and allow the latter to resume business in the Philippines under the comptrollership oI both the Central Bank and the Monetary Board and under such conditions as may be prescribed by the latter in connection with its reorganization until such time that petitioner bank can continue in business with saIety to its creditors, depositors and the general public.chanroblesvirtualawl ibrary chan robles virtual law librar y SO ORDERED. Narvasa, C.J., Gutierre:, Jr., Cru:, Bidin and Realado, JJ., concur.chanroblesvirtualawlibrary chanrobles virtual law library Paras, Feliciano, Padilla, Davide, Jr. and Nocon, JJ., took no part. chanrobles virtual law libra ry
Separate Opinions
MELENCIO-HERRERA, dissenting: chanrobles virt ual law libra ry I join Mme. Justice Carolina G. Aquino in her dissent and vote to deny the prayer, in G.R. No. 70054, to annul Monetary Board Resolution No. 75 placing Banco Filipino (BF) under receivership.chanroblesvi rtualawlibra ry chanrobles vir tual law lib rary Even assuming that the BF was not, as alleged, in a literal state oI insolvency at the time oI the passage oI said Resolution, there was a Iinding in the Teodoro report that, based on that Bank's illiquidity, to have allowed it to continue in operation would have meant probable loss to depositors and creditors. That is also a ground Ior placing the bank under receivership, as a Iirst step, pursuant to Section 29 oI the Central Bank Act (Rep. Act No. 265, as amended). The closure oI BF, thereIore, can not be said to have been arbitrary or made in bad Iaith. There was suIIicient justiIication, considering its inability to meet the heavy withdrawals by its depositors and to pay its liabilities as they Iell due, to Iorbid the bank Irom Iurther engaging in banking.chanroblesvirtualawlib rary chanrob les virtual law lib rary The matter oI reopening, reorganization or rehabilitation oI BF is not within the competence oI this Court to ordain but is better addressed to the Monetary Board and the Central Bank considering the latter's enormous inIusion oI capital into BF to the tune oI approximately P3.5 Billion in total accommodations, aIter a thorough assessment oI whether or not BF is, indeed, possessed, as it stoutly contends, oI suIIicient assets and capabilities with which to repay such huge indebtedness, and can operate without loss to its many depositors and creditors.chanroblesvirtualawlibrary chan robles virtual law library
GRIO-AQUINO, dissenting: chanrobles vir tual law lib rary Although these nine (9) Banco Filipino (BF) cases have been consolidated under one ponencia, all oI them except one, raise issues unrelated to the receivership and liquidation oI said bank. In Iact, two oI these cases (G.R. No. 68878 and 81303) have already been decided by this Court and are only awaiting the resolution oI the motions Ior reconsideration Iiled therein. Only G.R. No. 70054 "Banco Filipino Savings and Mortgage Bank (BF) vs. the Monetary Board (MB), Central Bank oI the Philippines (CB), et al.," is an original action Ior mandamus and certiorari Iiled in this Court by Iormer oIIicials oI BF to annul the Monetary Board Resolution No. 75 dated January 25, 1985 (ordering the closure oI Banco Filipino |BF| and appointing Carlota Valenzuela as receiver oI the bank) on the ground that the resolution was issued "without aIIording BF a hearing on the reports" on which the Monetary Board based its decision to close the bank, hence, without "administrative due process.", The prayer oI the petition reads: WHEREFORE, petitioner respectIully prays that a writ oI mandamus be issued commanding respondents immediately to Iurnish it copies oI the reports oI examination oI BF employed by respondent Monetary Board to support its Resolution oI January 25, 1985 and thereaIter to aIIord it a hearing prior to any resolution that may be issued under Section 29 oI R.A. 265, meanwhile annulling said Resolution oI January 25, 1985 by writ oI certiorari as made without or in excess oIjurisdiction or with grave abuse oI discretion.chanroblesvirtualawlib rary chanrobles vi rt ual law library So as to expedite proceedings, petitioner prays that the assessment oI the damages respondents should pay it be deIerred and reIerred to commissioners.chanroblesvirtualawlib rary chanrob les virtual law li brary Petitioner prays Ior such other remedy as the Court may deem just and equitable in the premises.chanroblesvirtualawlib rary chanrob les virtual law lib rary Quezon City Ior Manila, February 28, 1985. (p. 8, Rollo I-) and the prayer oI the Supplement to Petition reads: WHEREFORE, in addition to its prayer Ior mandamus and certiorari contained in its original petition, petitioner respectIully prays that Sections 28-A and 29 oI the Central Bank charter (R.A. 265) including its amendatory Presidential Decrees Nos. 72, 1771, 1827 and 1937 be annulled as unconstitutional.chan roblesvirtualawlib rary chanr obles virtual law l ibrary Quezon City Ior Manila, March 4, 1985. (p. 11-G, Rollo I.) The other eight (8) cases merely involve transactions oI BF with third persons and certain "related" corporations which had deIaulted on their loans and sought to prohibit the extrajudicial Ioreclosure oI the mortgages on their properties by the receiver oI BF. These eight (8) cases are: chanrob les virtual law lib rary 1. G.R. No. 68878 "BF vs. Intermediate ppellate Court and Celestina Pahimutan" involves the repossession by BF oI a house and lot which the buyer (Pahimutang) claimed to have completely paid Ior on the installment plan. The appellate court's judgment Ior the buyer was reversed by this Court. The buyer's motion Ior reconsideration is awaiting resolution by this Court;chanrobles virtual law li brary 2. G.R. Nos. 77255-58, "%op anaement Prorams Corporation and Pilar Development Corporation vs. Court of appeals, et al." (CA-G.R. SP No. 07892) and "Pilar Development Corporation vs. Executive Jude, R%C, Cavite" (CA-G.R. SP Nos. 0896264) is a consolidated petition Ior review oI the Court oI Appeals' joint decision dismissing the petitions Ior prohibition in which the petitioners seek to prevent the receiver/liquidator oI BF Irom extrajudicially Ioreclosing the P4.8 million mortgage on Top Management's properties and the P18-67 million mortgage on Pilar Development properties. The Court oI Appeals dismissed the petitions on October 30, 1986 on the ground that "the Iunctions oI the liquidator, as receiver under Section 29 (R.A. 265), include taking charge oI the insolvent's assets and administering the same Ior the beneIit oI its creditors and oI bringing suits and Ioreclosing mortgages in the name oI the bank;"chanrob les virtual law li brary 3. G.R. No. 78766, "El Grande Corporation vs. Court of ppeals, et al.," is an appeal Irom the Court oI Appeals' decision in CA-G.R. SP No. 08809 dismissing El Grande's petition Ior prohibition to prevent the Ioreclosure oI BF's P8 million mortgage on El Grande's properties; chanrobles virtual law lib rary 4. G.R. No. 78894, "Banco Filipino Savins and ortae Bank vs. Court of ppeals, et al." is an appeal oI BFs old management (using the name oI BF) Irom the decision oI the Court oI Appeals in CA-G.R. SP No. 07503 entitled, "Central Bank, et al. vs. Judge Zoilo Aguinaldo, et al" dismissing the complaint oI "BF" to annul the receivership, Ior no suit may be brought or deIended in the name oI the bank except by its receiver;chanrobles vir tual law lib rary 5. G.R. No. 87867, "etropolis Development Corporation vs. Court of ppeals" (Iormerly AC-G.R. No. 07503, "Central Bank, et al. vs. Honorable Zoilo Aguinaldo, et al.') is an appeal oI the intervenor (Metropolis) Irom the same Court oI Appeals' decision subject oI G.R. No. 78894, which also dismissed Metropolis' complaint in intervention on the ground that a stockholder (Metropolis) may not bring suit in the name oI BF while the latter is under receivership, without the authority oI the receiver;chanrobles virt ual law libra ry 6. G.R. No. 81303, "Pilar Development Corporation vs. Court of ppeals, et al." is an appeal Irom the decision dated October 22, 1987 oI the Court oI Appeals in CA-G.R. SP No. 12368, "Pilar Development Corporation, et al. vs. Honorable Manuel Cosico, et al.," dismissing the petition Ior certiorari against Judge Manuel Cosico, Br. 136, RTC, Makati, who dismissed the complaint Iiled by Pilar Development Corporation against BF, Ior speciIic perIormance oI certain developer contracts. An answer Iiled by Norberto Quisumbing and Associates, as BF's supposed counsel, virtually conIessed judgment in Iavor oI Pilar Development. On motion oI the receiver, the answer was expunged and the complaint was dismissed. On a petition Ior certiorari in this Court, we held that: "As liquidator oI BF by virtue oI a valid appointment Irom the Central Bank, private respondent Carlota Valenzuela has the authority to direct the operation oI the bank in substitution oI the Iormer management, which authority includes the retainer oI counsel to represent it in bringing or resisting suits in connection with such liquidation and, in the case at bar, to take the proper steps to prevent collusion, to the prejudice oI the legitimate creditors, between BF and the petitioners herein which appear to be owned and controlled by the same interest controlling BF" (p. 49, Rollo). The petitioners' motion Ior reconsideration oI that decision is pending resolution.chanroblesvirtualawlib rary chanrobles vi rtual law lib rary 7. G.R. No. 81304, "BF Homes Development Corporation vs. Court of ppeals, et al." is an appeal Irom the decision dated November 4, 1987 oI the Court oI Appeals in CA-G.R. CV No. 08565 aIIirming the trial court's order dismissing BF Homes' action to compel the Central Bank to restore the Iinancing Iacilities oI BF, because the plaintiII (BF Homes) has no cause oI action against the CB.chanroblesvirtualawlibrary chan robles virtual law libra ry 8. G.R. No. 90473, "El Grande Development Corporation vs. Court of ppeals, et al.," is a petition to review the decision dated June 6, 1989 in CA-G.R. SP No. 08676 dismissing El Grande's petition Ior prohibition to stop Ioreclosure proceedings against it by the receiver oI BF.chanroblesvirt ualawlibrar y chanrobles virt ual law libra ry As previously stated, G.R. No. 70054 "BF vs. onetary Board, et al.," is an original special civil action Ior certiorari and mandamus Iiled in this Court by the old management oI BF, through their counsel, N.J. Quisumbing & Associates, using the name oI the bank and praying Ior the annulment oI MB Resolution No. 75 which ordered the closure oI BF and placed it under receivership. It is a "Iorum-shopping" case because it was Iiled here on February 28, 1985 three weeks aIter they had Iiled on February 2, 1985 Civil Case No. 9675 "Banco Filipino vs. Monetary Board, et al." in the Regional Trial Court oI Makati, Br. 143 (presided over by Judge Zoilo Aguinaldo) Ior the same purpose oI securing a declaration oI the nullity oI MB Resolution No. 75 dated January 25, 1985.chanroblesvirtualawlibrary chan robles virtual law librar y On August 25, 1985, this Court ordered the transIer and consolidation oI Civil Case No. 9676 (to annul the receivership) Irom Br. 143 to Br. 136 (Judge Manuel Cosico) oI the Makati Regional Trial Court where Civil Case No. 8108 (to annul the conservatorship) and Civil Case No. 10183 (to annul the liquidation) oI BF were and are still pending. All these three (3) cases were archived on June 30, 1988 by Judge Cosico pending the resolution oI G.R. No. 70054 by this Court.chanroblesvirtualawlibrary chan robles virtual law library Because oI my previous participation, as a Iormer member oI the Court oI Appeals, in the disposition oI AC-G.R. No. 02617 (now G.R. No. 68878) and AC-G.R. SP No. 07503 (now G.R. Nos. 78767 and 78894), I am taking no part in G.R. Nos. 68878, 78767 and 78894. It may be mentioned in this connection that neither in AC-G.R. SP No. 02617, nor in AC-G.R. SP No. 07503, did the Court oI Appeals rule on the constitutionality oI Sections 28-A and 29 oI Republic Act 265 (Central Bank Act), as amended, and the validity oI MB Resolution No. 75, Ior those issues were not raised in the Court oI Appeals.chanroblesvirtualawl ibrary chan robles virtual law librar y I concur with the ponencia insoIar as it denies the motion Ior reconsideration in G.R. No. 81303, and dismisses the petitions Ior review in G.R. Nos. 77255-58, 78766, 81304, and 90473.chanroblesvirtualawlibrary chan robles virtual law librar y I respectIully dissent Irom the majority opinion in G.R. No. 70054 annulling and setting aside MB Resolution No. 75 and ordering the respondents, Central Bank oI the Philippines and the Monetary Board - to reorganize petitioner Banco Filipino Savings and Mortgage Bank, and allow the latter to resume business in the Philippines under the comptrollership oI both the Central Bank and the Monetary Board and under such conditions as may be prescribed by the latter until such time that petitioner bank can continue in business with saIety to its creditors, depositors and the general public. Ior I believe that this Court has neither the authority nor the competence to determine whether or not, and under what conditions, BF should be reorganized and reopened. That decision should be made by the Central Bank and the Monetary Board, not by this Court.chanroblesvirtualawlibrary chanrobles virtual law libra ry All that we may determine in this case is whether the actions oI the Central Bank and the Monetary Board in closing BF and placing it under receivership were "plainly arbitrary and made in bad Iaith.chanroblesvi rtualawlibra ry chanrobles vir tual law lib rary Section 29 oI Republic Act No. 265 provides: Section 29. Proceedings upon insolvency. - Whenever, upon examination by the head of the appropriate supervisin and examinin department or his examiners or aents into the condition of any bankin institution, it shall be disclosed that the condition of the same is one of insolvency, or that its continuance in business would involve probable loss to its depositors or creditors, it shall be the duty oI the department head concerned Iorthwith, in writing, to inIorm the Monetary Board oI the Iacts, and the Board may, upon Iinding the statements oI the department head to be true, Iorbid the institution to do business in the Philippines and shall designate an oIIicial oI the Central Bank as receiver to immediately take charge oI its assets and liabilities, as expeditiously as possible collect and gather all the assets and administer the same Ior the beneIit oI its creditors, exercising all the powers necessary Ior these purposes including, but not limited to, bringing suits and Ioreclosing mortgages in the name oI the banking institution.chanroblesvirtualawlib rary chanr obles virtual law l ibrary The Monetary Board shall thereupon determine within sixty days whether the institution may be reorganized or otherwise placed in such a condition so that it may be permitted to resume business with saIety to its depositors and creditors and the eneral public and shall prescribe the conditions under which such resumption oI business shall take place as well as the time Ior IulIillment oI such conditions. In such case, the expenses and Iees in the collection and administration oI the assets oI the institution shall be determined by the Board and shall be paid to the Central Bank out oI the assets oI such banking institution.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary II the Monetary Board shall determine and conIirm within the said period that the banking institution is insolvent or cannot resume business with saIety to its depositors, creditors and the general public, it shall, iI the public interest requires, order its liquidation, indicate the manner oI its liquidation and approve a liquidation plan. The Central Bank shall, by the Solicitor General, Iile a petition in the Court oI First Instance, reciting the proceedings which have been taken and praying the assistance oI the court in the liquidation oI the banking institutions. The court shall have jurisdiction in the same proceedings to adjudicate disputed claims against the bank and enIorce individual liabilities oI the stockholders and do all that is necessary to preserve the assets oI the banking institution and to implement the liquidation plan approved by the Monetary Board. The Monetary Board shall designate an oIIicial oI the Central Bank as liquidator who shall take over the Iunctions oI the receiver previously appointed by the Monetary Board under this section. The liquidator shall, with all convenient speed, convert the assets oI the banking institution to money or sell, assign or otherwise dispose oI the same to creditors and other parties Ior the purpose oI paying the debts oI such bank and he may, in the name oI the banking institution, institute such actions as may be necessary in the appropriate court to collect and recover accounts and assets oI the banking institution.chanroblesvirtualawlib rary chanr obles virtual law l ibrary The provisions oI any law to the contrary notwithstanding, the actions of the onetary Board under this section and the second paragraph oI Section 34 oI this Act shall be final and executory, and can be set aside by the court only if there is convincin proof that theaction is plainly arbitrary and made in bad faith. No restraining order or injunction shall be issued by the court enjoining the Central Bank Irom implementing its actions under this section and the second paragraph oI Section 34 oI this Act, unless there is convincing prooI that the action oI the Monetary Board is plainly arbitrary and made in bad Iaith and the petitioner or plaintiII Iiles with the clerk or judge oI the court in which the action is pending a bond executed in Iavor oI the Central Bank, in an amount to be Iixed by the court. The restraining order or injunction shall be reIused or, iI granted, shall be dissolved upon Iiling by the Central Bank oI a bond, which shall be in the Iorm oI cash or Central Bank cashier's check, in an amount twice the amount oI the bond oI the petitioner or plaintiII, conditioned that it will paythe which the petitioner or plaintiII may suIIer by the reIusalor the dissolution oI the injunction. The provisions oI Rule 58 oI the new Rules oI Court insoIar as they are applicable and not inconsistent with the provisions oI this section shall govern the issuance and dissolution oI the restraining order or injunction contemplated in this section. Insolvency, under this ct, shall be understood to mean the inability of a bankin institution to pay its liabilities as they fall due in the usual and ordinary course of business, provided, however, that this shall not include the inability to pay oI an otherwise non-insolvent bank caused by extra-ordinary demands induced by Iinancial panic commonly evidenced by a run on the banks in the banking community. The determinative Iactor in the closure, receivership, and liquidation oI a bank is the Iinding, upon examination by the SES oI the Central Bank, that its condition "is one oI insolvency, or that its continuance in business would involve probable loss to its depositors and creditors." (Sec. 29, R.A. 265.) It should be pointed out that insolvency is not the only statutory ground Ior the closure oI a bank. The other ground is when "its continuance in business would involve probable loss to its depositors and creditors.chanroblesvirtualawlibrary chanrob les virtual law lib rary Was BF insolvent i.e., unable to pay its liabilities as they Iell due in the usual and ordinary course oI business, on and Ior some time beIore January 25, 1985 when the Monetary Board issued Resolution No. 75 closing the bank and placing it under receivership? Would its continued operation involve probable loss to its depositors and creditors?chanro bles virtual law l ibrary The answer to both questions is yes. Both the conservator Gilberts Teodoro and the head oI the SES (Supervision and Examination Sector) Ramon V. Tiaoqui opined that BF's continuance in business would cause probable loss to depositors and creditors. Tiaoqui Iurther categorically Iound that BF was insolvent. Why was this so?chanrobles virt ual law libra ry The Teodoro and Tiaoqui reports as well as the report oI the receivers, Carlota Valenzuela, ArnulIo B. Aurellano and Ramon V. Tiaoqui, showed that since the end oI November 1983 BF had already been incurring "chronic reserve deIiciencies' and experiencing severe liquidity problems. So much so, that it had become "a substantial borrower in the call loans market" and in June 1984 it obtained a P30 million emergency loan Irom the Central Bank. (p. 2, Receiver's Report.) Additional emergencyt loans (a total oI P119.7 millions) were extended by the Central Bank to BF that month (MB Res. No. 839 dated June 29,1984). On July 12, 1984, BFs chairman, Anthony Aguirre, oIIered to "turn over the administration oI the aIIairs oI the bank" to the Central Bank (Aguirre's letter to Governor Jose Fernandez, Annex 7 oI ManiIestation dated May 3,1991). On July 23,1984, unable to meet heavy deposit withdrawals, BF's management motu proprio, without obtaining the conIormity oI the Central Bank, closed the bank and declared a bank holiday. On July 27, 1984, the CB, responding to BFs pleas Ior additional Iinancial assistance, granted BF a P3 billion credit line (MB Res. No. 934 oI July 27, 1984) to enable it to reopen and resume business on August 1, 1984. P2.3601 billions oI the credit line were availed oI by the end oI 1984 exclusive oI an overdraIt oI P932.4 millions (p. 2, Tiaoqui Report). Total accommodations granted to BF amounted to P3.4122 billions (p. 19, Cosico Report).chanroblesvirtualawlibrary chanrobles virtual law libra ry Presumably to assure that the Iinancial assistance would be properly used, the MB appointed Basilio Estanislao as conservator oI the bank. A conservatorship team oI 78 examiners and accountants was assigned at the bank to keep track oI its activities and ascertain its Iinancial condition (p. 8, Tiaoqui Report).chanroblesvirtualawlibrary chanro bles virtual law li brary Estanislao resigned aIter two weeks Ior health reasons. He was succeeded by Gilberto Teodoro as conservator in August, 1984 up to January 8, 1985.chanroblesvirtualawlibrary chan robles virtual law librar y Besides the conservatorship team, Teodoro hired Iinancial consultants Messrs. Tirso G. Santillan, Jr. and Plorido P. Casuela to make an analysis oI BF's Iinancial condition. Teodoro also engaged the accounting Iirm oI Sycip, Gorres, Velayo and Company to make an asset evaluation. The Philippine Appraisal Company (PAC) appraised BFs real estate properties, acquired assets, and collaterals held. On January 9, 1985, Teodoro submitted his Report. Three weeks later, on January 23, 1985, Tiaoqui also submitted his Report. Both reports showedthat, in violation oI Section 37 oI the General Banking Act (R.A.337): 2 1. BF had been continually deIicient in liquidity reserves (Teodoro Report). The bank had been experiencing a severe drop in liquidity levels. %he ratio of liquid assets to deposits and borrowins pluned from about 20 at end-1983, to about 8.6 by end-ay 1984, much below the statutory requirements oI 24 Ior demand deposits/deposit substitutes and 14 Ior savings and time deposits. (p. 2, Tiaoqui Report.) chanrobles virtual law library 2. DeIiciencies in average daily legal reserves rose Irom P63.0 million during the week oI November 21-25, 1983 to a high oI P435.9 million during the week oI June 11-15, 1984 (pp. 2-3, Tiaoqui Report). Accumulated penalties on reserve deIiciencies amounted to P37.4 million by July 31, and rose to P48 million by the end oI 1984. (Tiaoqui Report.) chanrobles virtual law library 3. Deposit levels, which were at P3,845 million at end-May l984 (its last "normal" month), dropped to P935 million at the end oI November 1984 or a loss oI P2,910 million. This represented an average monthly loss oI P485 million vs. an average monthly gain oI P26 million during the Iirst 5 months oI 1984. (pp. 2-3, Tiaoqui Report.) chanrobles virtual law library 4. Deposits had declined at the rate oI P20 million during the month oI December 1984, but expenses oI about P17 million per month were required to maintain the bank's operation. (p. 6, Teodoro Report.) chanrobles virtual law library 5. Based on the projected outlook, the Bank's average yield on assets oI 16.3 p.a., was insuIIicient to meet the average cost oI Iunds oI 19.5 p.a. and operating expenses oI 4.8 p.a. (p. 5 Teodoro Report.) chanrobles virtual law library 6. An imprudently large proportion oI assets were locked into long-term applications. (Teodoro Report.) chanrobles virtual law library 7. BF overextended itselI in lending to the real estate industry, committing as much as 52 oI its peso deposits to its aIIiliates or "related accounts" to which it continued lending even when it was already suIIering Irom liquidity stresses. (Teodoro Report.) This was done in violation oI Section 38 oI the General Banking Act (R.A. 337). 3 8. During the period oI marked decline in liquidity levels the loan portIolio rew by P417.3 million in the Iirst Iive months oI 1984 - and by another P105.l million in the next two months. (pp. 2-3, Tiaoqui Report.) chanrobles virtual law library 9. The loan portIolio stood at P3.679 billion at the end oI July 1984, 56.2 oI it channeled to companies whose stockholders, directors and oIIicers were related to the oIIicers, directors, and some stockholders oI BF. (p. 8, Tiaoqui Report.) Here again BF violated the General Banking Act (R.A. 337). 4 10. Some oI the loans were used to acquire preIerred stocks oI BF. Between September 17, 1983 and February 10, 1984, P49.9 million oI preIerred non- convertible stocks were issued. About 85 or P42.4 million was paid out oI the proceeds oI loans to stockholders/ borrowers with relationship to the bank (Annex D). Around P18.8 million were issued in the name oI an entity other than the purchaser oI the stocks. (Tiaoqui Report.) chanrobles virtual law library 11. Loans amounting to some P69.3 million were granted simply to pay-oII old loans including accrued interest, as an accommodation Ior the direct maturing loans oI some Iirms and as a way oI paying-oII loans oI other borrower Iirms which have their own credit lines with the bank. These helped to make otherwise delinquent loans appear "current" and deceptively "improved" the quality oI the loan portIolio. (Tiaoqui Report.) chanrobles virtual law library 12. Examination oI the collaterals Ior the loan accounts oI 63 major borrowers and 32 other selected borrowers as oI July 31, 1984, showed that: (a) 2,658 TCT's which BF evaluated to be worth P1,487 million were appraised by PAC to be worth only P1,196 million, hence, deIicient by P291 million.chanroblesvir tualawlibra ry chanrobles vir tual law libra ry (b) Other properties (collaterals) supposedly worth P711 million could not be evaluated by PAC because the details submitted by the bank were insuIIicient;chanr obles virtual law l ibrary (c) While P674 million in loans were supposedly guaranteed by the Home Financing Corporation (HFIC), the latter conIirmed only P427 million. P247 million in loans were not guaranteed by HFC. (Teodoro Report.) chanrobles virtual law library (d) Per SGV's report, loans totalling P1.882 million including accrued interest, were secured by collateral worth only Pl.54 billion. Hence, BFs unsecured exposure amounted to P586.2 million. BF Homes, Inc., a related company which has Iiled with the SEC a petition Ior suspension oI payments, owes P502 million to BF. 13. BF had been suIIering heavy losses. - a) For the eleven (11) months ended November 30, 1984, the estimated net loss was P372.6 illion;chanrobles virtual law li brary b) For the twelve (12) months Irom November 1984, the projected net loss would be P390.7 illion and would continue unabated; (p. 2, Teodoro Report) chanrobles virtual law libra ry c) Around 71.7 oI the total accommodations oI P2.0677 billions to the related/linked entities were adversely classiIied. Close to 33.7 or P697.1 millions were clean loans or against PNs (promissory notes) oI these entities. OI the latter, 52.6 were classiIied as loss." (P. 5, Tiaoqui Report.) chanrobles virtual law library d) %he banks financial condition as of date of examination, aIter setting up the additional valuation reserves oI P612.2 millions and accumulated net loss oI P48.2 millions, indicates one of insolvency. Total liabilities oI P5,282.1 million exceeds total assets oI P4,947.2 million by 6.8. Total capital account oI P334.9 million) is deIicient by P322.7 million against the minimum capital required oI P657.6 million (Annex F). Capital to risk assets ratio is negative 10.38.chanroblesvirtualawlibrar y chanrobles virt ual law libra ry e) Total loans and investment portIolio amounted to P3,914.3 millions (gross), oI which P194.0 millions or 5.0 were past due and P1,657.1 millions or 42.3 were adversely classiIied (Substandard - P1,011.4 millions; DoubtIul - P274.6 millions and Loss - P371.1 millions). Accounts adversely classiIied included unmatured loan oI Pl,482.0 million to entities related with each other and to the bank, several oI which showed distressed conditions. (p. 7, Tiaoqui Report.) Teodoro's conclusion was that "the continuance oI the bank in business would involve probable loss to its depositors and creditors." He recommended "that the Monetary Board take a more eIIective and responsible action to protect the depositors and creditors ... in the light oI the bank's worsening condition." (p. 5, Teodoro Report.) chanrobles virtual law library On January 23, 1985, Tiaoqui submitted his report to the Monetary Board, Like Teodoro, Tiaoqui believed that the principal cause oI the bank's Iailure was that in violation oI the General Banking Law and CB rules and regulations, BF's major stockholders, directors and oIIicers, through their "related" companies: (i.e. companies owned or controlled by them oI their relatives) had been "borrowing" huge chunks oI the money oI the depositors. His Conclusion and Recommendations were: The Conservator, in his report to the Monetary Board dated January 8, 1985, has stated that the continuance of the bank in business would involve probable loss to its depositors and creditors. It has recommended that a more eIIective action be taken to protect depositors and creditors.chanroblesvirtualawlibrary chan robles virtual law library The examination Iindings as oI July 31, 1984 as shown earlier, indicate one oI insolvency and illiquidity and Iurther conIirms the above conclusion oI the Conservator. ll the foreoin provides sufficient fustification for forbiddin the bank from further enain in bankin.chanroblesvirtualawlibrary chan robles virtual law libra ry Foregoing considered, the Iollowing are recommended: 1. Forbid the Banco Filipino Savings & Mortgage Bank to do business in the Philippines eIIective the beginning oI oIIice on January, 1985, pursuant to Sec. 29 oI R.A. No. 265, as amended;chan robles virtual law libra ry 2. Designate the Head oI the Conservator Team at the bank, as Receiver oI Banco Filipino Savings & Mortgage Bank, to immediately take charge oI the assets and liabilities, as expeditiously as possible collect and gather all the assets and administer the same Ior the beneIit oI all the creditors, and exercise all the powers necessary Ior these purposes including but not limited to bringing suits and Ioreclosing mortgages in the name oI the bank.chanroblesvir tualawlibra ry chanrobles vir tual law library 3. The Board oI directors and the principal oIIicers Irom Senior Vice President, as listed in the attached Annex "A" be included in the watchlist oI the Supervision and Examination Sector until such time that they shall have cleared themselves.chanroblesvirt ualawlibrar y chanrobles virt ual law libra ry 4. ReIer to the Central Banles Legal Department and OIIice oI Special Investigation the report on the Iindings on Banco Filipino Ior investigation and possible prosecution oI directors, oIIicers and employees Ior activities which led to its insolvent position." (pp. 9-10, Tiaoqui Report.) On January 25, 1985 or two days aIter the submission oI Tiaoqui's Report, and three weeks aIter it received Teodoro's Report, the Monetary Board, then composed oI: Chairman: Jose B. Fernandez, Jr. CB Governor Members: 1. Cesar E.A. Virata, Prime Minister & Concurrently Minister oI Financechanrobles virt ual law libra ry 2. Roberto V. Ongpin, Minister oI Trade & Industry & Chairman oI Board oI Investment chanrobles virtual law l ibrary 3. Vicente B. Valdepeas, Jr., Minister oI Economic Planning & Director General oI NEDAchanrobles vir tual law lib rary 4. Cesar A. Buenaventura, President oI Filipinas Shell Petroleum Corp. (p. 37, Annual Report 1985) issued Resolution No. 75 closing BF and placing it under receivership. The MB Resolution reads as Iollows: AIter considering the report dated January 8, 1985 oI the Conservator Ior Banco Filipino Savings and Mortgage Bank that the continuance in business oI the bank would involve probable loss to its depositors and creditors, and aIter discussing and Iinding to be true the statements oI the Special Assistant to the Governor and Head, Supervision and Examination Sector (SES) Department II, as recited in his memorandum dated January 23, 1985. that the Banco Filipino Savings and Mortgage Bank is insolvent and that its continuance in business would involve probable loss to its depositors and creditors, and in pursuance oI Section 29 oI R.A. No. 265, as amended, the Board decided: 1. To Iorbid Banco Filipino Savings and Mortgage Bank and all its branches to do business in the Philippines;chan robles virtual law libra ry 2. To designate Mrs. Carlota P. Valenzuela, Deputy Governor, as Receiver who is hereby directly vested with jurisdiction and authority to immediately take charge oI the bank's assets and liabilities, and as expeditiously as possible collect and gather all the assets and administer the same Ior the beneIit oI its creditors, exercising all the- powers necessary Ior these purposes including, but not limited to, bringing suits and Ioreclosing mortgages in the name oI the bank;chanro bles virtual law l ibrary 3. To designate Mr. ArnulIo B. Aurellano, Special Assistant to the Governor, and Mr. Ramon V. Tiaoqui, Special Assistant to the Governor and Head, Supervision and Examination Sector Department II. as Deputy Receivers who are likewise hereby directly vested with jurisdiction and authority to do all things necessary or proper to carry out the Iunctions entrusted to them by the Receiver and otherwise to assist the Receiver in carrying out the Iunctions vested in the Receiver by law or Monetary Board resolutions;chan robles virtual law library 4. To direct and authorize Management to do all other things and carry out all other measures necessary or proper to implement this Resolution and to saIeguard the interests oI depositors/credition and the general public; andchanrobles vir tual law lib rary 5. In consequence oI the Ioregoing, to terminate the conservatorship over Banco Filipino Savings and Mortgage Bank. (pp. 126-127, Rollo I.) On March 19,1985, the receiver, Carlota Valenzuela, and the deputy receivers, ArnulIo B. Aurellano and Ramon V. Tiaoqui, submitted a report to the Monetary Board as required in Section 29, 2nd paragraph oI R.A. 265 which provides that within sixty (60) days Irom date oI the receivership, the Monetary Board shall determine whether the bank may be reorganized and permitted to resume business, or be liquidated. The receivers recommended that BF be placed under litigation. For, among other things, they Iound that: chanrobles virtual law libra ry 1. BF had been suIIering a capital deIiciency oI P336.5 million as oI July 31, 1984 (pp. 2 and 4, Receivers' Report).chanroblesvirtualawlibrary chanrobles vi rtual law lib ra ry 2. The bank's weekly reserve deIiciencies averaged P146.67 million Irom November 25, 1983 up to March 16, 1984, rising to a peak oI P338.09 million until July 27, 1984. Its reserve deIiciencies against deposits and deposit substitutes began on the week ending June 15, 1984 up to December 7, 1984, with average daily reserve deIiciencies oI P2.98 million.chanroblesvi rtualawlibra ry chanrobles vi rtual law lib rary 3. Estimated losses or "unhooked valuation reserves" Ior loans to entities with relationships to certain stockholder/directors and oIIicers oI the bank amounted to P600.5 million. Combined with other adjustments in the amount oI P73.2 million, they will entirely wipe out the bank's entire capital account and leave a capital deIiciency oI P336.5 million. The bank was already insolvent on July 31, 1984. The capital deIiciency increased to P908.4 million as oI January 26, 1985 on account oI unhooked penalties Ior deIiciencies in legal reserves (P49.07 million), unhooked interest on overdrawings, emergency advance oI P569.49 million Irom Central Bank, and additional valuation reserves oI P124.5 million. (pp. 3-4, Receivers' Report.) chanrobles virtual law library The Receivers Iurther noted that - AIter BF was closed as oI January 25, 1985, there were no collections Irom loans granted to Iirms related to each other and to BF classiIied as "doubtIul" or "loss," there were no substantial improvements on other loans classiIied "doubtIul"or "loss;" there was no Iurther increase in the value oI assets owned/acquired supported by new appraisals and there was no inIusion oI additional capital such that the estimated realizable assets oI BF remained at P3,909.23, (millions) while the total liabilities amounted to P5,159.44 (millions). Thus, BF remains insolvent with estimated deIiciency to creditors oI Pl,250.21 (millions).chanroblesvirtualawlibra ry chanrobles vir tual law lib rary Moreover, there were no eIIorts on the part oI the stockholders oI the bank to improve its Iinancial condition and the possibility oI rehabilitation has become more remote. (P. 8, Receivers' Report.) In the light oI the results oI the examination oI BF by the Teodoro and Tiaoqui teams, I do not Iind that the CB's Resolution No. 75 ordering BF to cease banking operations and placing it under receivership was "plainly arbitrary and made in bad Iaith." The receivership was justiIied because BF was insolvent and its continuance in business would cause loss to its depositors and creditors. Insolvency, as deIined in Rep. Act 265, means 'the inability oI a banking institution to pay its liabilities as they Iall due in the usual and ordinary course oI business. Since June 1984, BF had been unable to meet the heavy cash withdrawals oI its depositors and pay its liabilities to its creditors, the biggest oI them being the Central Bank, hence, the Monetary Board correctly Iound its condition to be one oI insolvency.chan roblesvirtualawl ibrary chan robles virtual law librar y All the discussion in the Santiago Report concerning the bank's assets and liabilities as determinants oI BF's solvency or insolvency is irrelevant and inconsequential, Ior under Section 29 oI Rep. Act. 265, a bank's insolvency is not determined by its excess oI liabilities over assets, but by its "inability to pay its liabilities as they Iall due in the ordinary course oI business" and it was abundantly shown that BF was unable to pay its liabilities to depositors Ior over a six-month-period beIore it was placed under receivership.chanroblesvir tualawlibra ry chanrobles vir tual law libra ry Even iI assets and liabilities were to be Iactored into a Iormula Ior determining whether or not BF was already insolvent on or beIore January 25, 1985, the result would be no diIIerent. The bank's assets as oI the end oI 1984 amounted to P4.891 billions (not P6 billions) according to the Report signed and submitted to the CB by BF's own president, and its total liabilities were P4.478 billions (p. 58, Cosico Report). While Aguirre's Report showed BF ahead with a net worth oI P412.961 millions, said report did not make any provision Ior estimated valuation reserves amounting to P600.5 millions, (50 oI Iace value oI doubtful loans and 100 oI Iace value oI loss accounts) which BF had granted to its related/linked companies. The estimated valuation reserves oI P600.5 millions plus BF's admitted liabilities oI P4.478 billions, put together, would wipe out BFs realizable assets oI P4.891 billions and conIirm its insolvent condition to the tune oI P187.538 millions.chanroblesvirtualawlib rary chanro bles virtual law li brary BF's and Judge (now CA Justice) Consuelo Y. Santiago's argument that valuation reserves should not be considered because the matter was not discussed by Tiaoqui with BF oIIicials is not well taken Ior: chanrobles virtual law lib rary (1) The records oI the deIaulting debtors were in the possession oI BF.chanroblesvirt ualawlibrar y chanrobles virt ual law libra ry (2) The "adversely classiIied" loans were in Iact included in the List oI Exceptions and Findings (oI irregularities and violations oI laws and CB rules and regulations) prepared by the SES, a copy oI which was Iurnished BF on December 1 7, 1984; chanrobles virtual law library (3) A conIerence on the matter washeld on January 2l, 1985 with senior oIIicials oI BF headed by EVP F. Dizon,. (pp. 14-15, Cosico Report.) BF did not Iormally protest against the CBs estimate oI valuation reserves. The CB could not wait Iorever Ior BF to respond Ior the CB had to act with reasonable promptness to protect the depositors and creditors oI BF because the bank continued to operate.chanroblesvirtualawlibrary chanrobles virtual law libra ry (4) Subsequent events proved correct the SES classiIication oI the loan accounts as "doubtIul" or "loss' because as oI January 25, 1985 none oI the loans, except three, had been paid either partially or in Iull, even iI they had already matured (p. 53, Cosico Report).chanroblesvirtualawlibrary chanrobles virtual law lib rary The recommended provision Ior valuation reserves oI P600.5 millions Ior "doubtIul" and "loss" accounts was a proper Iactor to consider in the capital adjustments oI BF and was in accordance with accounting rules. For, iI the uncollectible loan accounts would be entered in the assets column as "receivables," without a corresponding entry in the liabilities column Ior estimated losses or valuation reserves arising Irom their uncollectability, the result would be a gravely distorted picture oI the Iinancial condition oI BF.chanroblesvirtualawl ibrary chan robles virtual law libra ry BF's strange argument that it was not insolvent Ior otherwise the CB would not have given it Iinancial assistance does not merit serious consideration Ior precisely BF needed Iinancial assistance because it was insolvent.chanroblesvirtualawlibrary chanrob les virtual law lib rary Tiaoqui's admission that the examination oI BF had "not yet been oIIicially terminated" when he submitted his report on January 23, 1985 did not make the action oI the Monetary Board oI closing the bank and appointing receivers Ior it, 'plainly arbitrary and in bad Iaith." For what had been examined by the SES was more than enough to warrant a Iinding that the bank was "insolvent and could not continue in business without probable loss to its depositors or creditors," and what had not been examined was negligible and would not have materially altered the result. In any event, the oIIicial termination oI the examination with the submission by the ChieI Examiner oI his report to the Monetary Board in March 1985, did not contradict, but in Iact conIirmed, the Iindings in the Tiaoqui Report.chanroblesvirtualawlibrary chanrobles virtual law lib rary The responsibility oI administering the Philippine monetary and banking systems is vested by law in the Central Bank whose duty it is to use the powers granted to it under the law to achieve the objective, among others, oI maintaining monetary stability in the country (Sec. 2, Rep. Act 265). I do not think it would be proper and advisable Ior this Court to interIere with the CB's exercise oI its prerogative and duty to discipline banks which have persistently engaged in illegal, unsaIe, unsound and Iraudulent banking practices causing tremendous losses and unimaginable anxiety and prejudice to depositors and creditors and generating widespread distrust and loss oI conIidence in the banking system. The damage to the banking system and to the depositing public is bigger when the bank, like Banco Filipino, is big. With 89 branches nationwide, 46 oI them in Metro Manila alone, pumping the hard-earned savings oI 3 million depositors into the bank, BF had no reason to go bankrupt iI it were properly managed. The Central Bank had to inIuse almost P3.5 billions into the bank in its endeavor to save it. But even this Iinancial assistance was misused, Ior instead oI satisIying the depositors' demands Ior the withdrawal oI their money, BF channeled and diverted a substantial portion oI the Iinds into the coIIers oI its related/linked companies. Up to this time, its oIIicers, directors and major stockholders have neither repaid the Central Bank's P3.6 billion Iinancial assistance, nor put up adequate collaterals thereIor, nor submitted a credible plan Ior the rehabilitation oI the bank. What authority has this Court to require the Central Bank to reopen and rehabilitate the bank, and in eIIect risk more oI the Government's money in the moribund bank? I respectIully submit that decision is Ior the Central Bank, not Ior this Court, to make.chanroblesvirt ualawlibrar y chanrobles virt ual law libra ry WHEREFORE, I vote to dismiss the petition Ior certiorari and mandamus in G.R. No. 70054 Ior lack oI merit. Romero, J., concurs.
Republic oI the Philipppines SUPREME COURT Manila EN BANC [G.R. No. 127838. January 21, 1999] CIVIL SERVICE COMMISSION, Petitioner, vs. JOSE J. LUCAS, respondent. D E C I S I O N PARDO, J.: chanroblesvirtualawlibrary The petition Ior review on certiorari beIore the Court assails the decision oI the Court oI Appeals|1| which set aside the resolution oI the Civil Service Commission|2| and reinstated that oI the Board oI Personnel Inquiry (BOPI Ior brevity), OIIice oI the Secretary, Department oI Agriculture,|3| suspending respondent Ior one month, Ior simple misconduct. chanroblesvirtualawlibrary To provide a Iactual backdrop oI the case, a recital oI the Iacts is necessary. chanroblesvirtualawlib rary On May 26, 1992, Raquel P. Linatok, an assistant inIormation oIIicer at the Agricultural InIormation Division, Department oI Agriculture (DA Ior brevity), Iiled with the oIIice oI the Secretary, DA, an aIIidavit-complaint against respondent Jose J. Lucas, a photographer oI the same agency, Ior misconduct. chanroblesvirtualawlibrary Raquel described the incident in the Iollowing manner: chanroblesvirtualawlib rary While standing beIore a mirror, near the oIIice door oI Jose J. Lucas, Raquel noticed a chair at her right side which Mr. Jose Lucas, at that very instant used to sit upon. ThereaIter, Mr. Lucas bent to reach Ior his shoe. At that moment she Ielt Mr. Lucas hand touching her thigh and running down his palm up to her ankle. She was shocked and suddenly Iaced Mr. Lucas and admonished him not to do it again or she will kick him. But Lucas touched her again and so she hit Mr. Lucas. Suddenly Mr. Lucas shouted at her saying lumabas ka na at huwag na huwag ka nang papasok dito kahit kailan A verbal exchange then ensued and respondent Lucas grabbed Raquel by the arm and shoved her towards the door causing her to stumble, her both hands protected her Iace Irom smashing upon the door.chanroblesvirtualawlibrary Mr. Lucas, bent on literally throwing the aIIiant out oI the oIIice, grabbed her the second time while she attempted to regain her posture aIter being pushed the Iirst time. x x x while doing all this, Mr. Lucas shouted at the aIIiant, saying, labas, huwag ka nang papasok dito kahit kailan.|4| chanroblesvirtualawlibrary On June 8, 1992, the Board oI Personnel Inquiry, DA, issued a summons requiring respondent to answer the complaint, not to Iile a motion to dismiss, within Iive (5) days Irom receipt. On June 17, 1992, respondent Lucas submitted a letter to Jose P. Nitullano, assistant head, BOPI, denying the charges. According to Lucas, he did not touch the thigh oI complainant Linatok, that what transpired was that he accidentally brushed Linatoks leg when he reached Ior his shoes and that the same was merely accidental and he did not intend nor was there malice when his hand got in contact with Linatoks leg. chanroblesvirtualawlib rary On May 31, 1993, aIter a Iormal investigation by the BOPI, DA, the board issued a resolution Iinding respondent guilty oI simple misconduct|5| and recommending a penalty oI suspension Ior one (1) month and one (1) day. The Secretary oI Agriculture approved the recommendation. chanroblesvirtualawlibra ry In due time, respondent appealed the decision to the Civil Service Commission (CSC). On July 7, 1994, the CSC issued a resolution Iinding respondent guilty oI grave misconduct and imposing on him the penalty oI dismissal Irom the service.|6| Respondent moved Ior reconsideration but the CSC denied the motion. chanroblesvirtualawlibrary Then, respondent appealed to the Court oI Appeals. On October 29, 1996, the Court oI Appeals promulgated its decision setting aside the resolution oI the CSC and reinstating the resolution oI the BOPI, DA, stating thus: It is true that the Civil Service Act does not deIine grave and simple misconduct. There is, however, no question that these oIIenses Iall under diIIerent categories. This is clear Irom a perusal oI memorandum circular No. 49-89 dated August 3, 1989 (also known as the guidelines in the application oI penalties in administrative cases) itselI which classiIies administrative oIIenses into three: grave, less grave and light oIIenses. The charge oI grave misconduct Ialls under the classiIication oI grave oIIenses while simple misconduct is classiIied as a less grave oIIense. The Iormer is punishable by dismissal while the latter is punishable either by suspension (one month and one day to six months), iI it is the Iirst oIIense; or by dismissal, iI it is the second. Thus, they should be treated as separate and distinct oIIenses.|7| chanroblesvirtualawlibrary The Court oI Appeals Iurther ruled that a basic requirement oI due process on the other hand is that a person must be duly inIormed oI the charges against him (Felicito Sajonas vs. National Labor Relations Commission, 183 SCRA 182). In the instant case however, Lucas came to know oI the modiIication oI the charge against him only when he received notice oI the resolution dismissing him Irom the service.|8| chanroblesvirtualawlib rary Hence, this petition. chanroblesvirtualawlib rary The issues are (a) whether respondent Lucas was denied due process when the CSC Iound him guilty oI grave misconduct on a charge oI simple misconduct, and (b) whether the act complained oI constitutes grave misconduct. chanroblesvirtualawlibrary Petitioner anchors its position on the view that the Iormal charge against a respondent in an administrative case need not be draIted with the precision oI an inIormation in a criminal prosecution. It is suIIicient that he is apprised oI the substance oI the charge against him; what is controlling is the allegation oI the acts complained oI, and not the designation oI the oIIense.|9| chanroblesvirtualawlibrary We deny the petition. chanroblesvirtualawlibra ry As well stated by the Court oI Appeals, there is an existing guideline oI the CSC distinguishing simple and grave misconduct. In the case oI Landrito vs. Civil Service Commission, we held that in grave misconduct as distinguished Irom simple misconduct, the elements oI corruption, clear intent to violate the law or Ilagrant disregard oI established rule, must be maniIest,|10| which is obviously lacking in respondents case. Respondent maintains that as he was charged with simple misconduct, the CSC deprived him oI his right to due process by convicting him oI grave misconduct. chanroblesvirtualawlibrary We sustain the ruling oI the Court oI Appeals|11| that: (a) a basic requirement oI due process is that a person must be duly inIormed oI the charges against him|12| and that (b) a person can not be convicted oI a crime with which he was not charged.|13| chanroblesvirtualawlibrary Administrative proceedings are not exempt Irom basic and Iundamental procedural principles, such as the right to due process in investigations and hearings.|14| chanroblesvirtualawlibrary The right to substantive and procedural due process is applicable in administrative proceedings.|15| chanroblesvirtualawlibrary OI course, we do not in any way condone respondents act. Even in jest, he had no right to touch complainants leg. However, under the circumstances, such act is not constitutive oI grave misconduct, in the absence oI prooI that respondent was maliciously motivated. We note that respondent has been in the service Ior twenty (20) years and this is his Iirst oIIense. chanroblesvirtualawlib rary IN VIEW WHEREOF, the Court hereby DENIES the petition Ior review on certiorari and AFFIRMS the decision oI the Court oI Appeals in CA-G. R. SP No. 37137. chanroblesvirtualawlibrary No costs. chanroblesvirtualawlibrary SO ORDERED. chanroblesvirtualawlibrary avide r C Romero Bellosillo Melo Puno Jitug Kapunan Mendoza Panganiban Martinez Quisumbing Purisima Buena and Conzaga-Reyes concur Republic oI the Philipppines SUPREME COURT Manila FIRST DIVISION G.R. No. 145389. 1uly 31, 2001] Ombudsman ANIANO A. DESIERTO, Customs Commissioner RENATO A. AMPIL and Captain DOMINGO S. DOCTOR, 1R., petitioners vs. RONNIE C. SILVESTRE, respondent. D E C I S I O N PARDO, .: The Case chanroblesvirtuallawlibrary The petition is one Ior review on certiorari |1| seeking to set aside (a) the decision oI the Court oI Appeals |2| nulliIying the preventive suspension order issued by petitioner Ombudsman; and (b) the resolution |3| denying petitioners motion Ior reconsideration. chanroblesvirtuallawlibrary The Ombudsman issued an order oI preventive suspension |4| in connection with the administrative charges Ior grave misconduct, dishonesty and conduct prejudicial to the best interest oI the service that Task Force Aduana Iiled with the OIIice oI the Ombudsman against respondent Ronnie C. Silvestre and Atty. Redempto Somera. chanroblesvirtuallawlibrary On February 14, 2000, respondent Iiled with the Ombudsman a motion Ior the liIting oI the order oI preventive suspension. However, on April 03, 2000, the Ombudsman denied the motion. chanroblesvirtuallawlibrary On May 31, 2000, respondent Iiled with the Court oI Appeals |5| a petition Ior certiorari and prohibition with temporary restraining order and writ oI preliminary injunction questioning the order oI preventive suspension issued by petitioner Ombudsman. chanroblesvirtuallawlibrary AIter due proceedings, on August 14, 2000, the Court oI Appeals promulgated its decision |6| annulling and setting aside the order oI preventive suspension against respondent Ior having been issued by the Ombudsman in grave abuse oI discretion. chanroblesvirtuallawlibrary On October 06, 2000, the Court oI Appeals denied a motion Ior reconsideration Iiled by the Solicitor General. chanroblesvirtuallawlibrary Hence, this petition. |7| The Facts chanroblesvirtuallawlibrary On January 26, 2000, elements oI Task Force Aduana headed by petitioner Doctor conducted an entrapment operation in a case oI bribery involving Atty. Redempto C. Somera, Hearing OIIicer, Law Division, Bureau oI Customs, Manila, and Indian nationals who had pending cases oI seizure with the Iormer. chanroblesvirtuallawlibrary AIter the pay-oII materialized, petitioner Doctor announced the entrapment and then arrested Atty. Somera and two (2) Indian nationals, namely, Murli Tejoomal Mohrani and Kumar Rupchand Khiatani, Ior violation oI Article 210 oI the Revised Penal Code. As a consequence, the Task Force Iiled with the Regional Trial Court, Manila, charges oI bribery, violation oI R. A. No. 3019, and corruption oI public oIIicials against them. chanroblesvirtuallawlibrary Likewise, the Task Force Iiled with the Ombudsman administrative charges Ior grave misconduct, dishonesty and conduct prejudicial to the best interest oI the service against respondent Ronnie C. Silvestre and Atty. Somera. The Issue chanroblesvirtuallawlibrary The issue is whether the Ombudsman has authority to suspend Irom oIIice respondent Ronnie C. Silvestre indeIinitely on the basis oI the administrative complaint Iiled with his oIIice showing that evidence oI guilt is strong. The Courts Ruling chanroblesvirtuallawlibrary We need not resolve the issue presented. We dismiss the petition. It has become moot. chanroblesvirtuallawlibrary On February 14, 2001, the Ombudsman dismissed the administrative charges against respondent. In dismissing the charges, the Ombudsman categorically ruled as Iollows: chanroblesvirtuallawlibrary It is another story, however, as regards respondent SILVESTRE. In implicating respondent SILVESTRE in the instant case, Atty. DOCTOR stated in his AFFIDAVIT OF ARREST AND COMPLAINT, the Iollowing:chanroblesvirtuallawlibrary 6. That aIter the hearing oI the case (S.I. No. 00-005) on January 20, 2000, ATTY. SOMERA approached me and invited me to the room oI ATTY. RONNIE SILVESTRE (herein petitioner), Head oI the Law Department oI the Port oI Manila wherein the duo convinced me to cooperate with them in the withdrawal oI the complaint and its eventual dismissal;chanroblesvirtuallawlibrary 7. That I did not commit myselI to their proposition to drop the case but I just continued talking with them with the plan in mind to report the same to LT. GEN. JOSE T. CALIMLIM, Task Force Commander oI Presidential Anti-Smuggling Task Force ADUANA;chanroblesvirtuallawlibrary Except this bare allegation oI the complainant, however, practically no other evidence was ever presented to substantiate the charge against respondent SILVESTRE. At this point, it may be noted that well settled is the rule that within the Iield oI administrative law, while strict rules oI evidence are not applicable to quasi-judicial proceedings, nevertheless, in adducing evidence constitutive oI substantial evidence, the basic rule that mere allegation is not evidence cannot be disregarded.chanroblesvirtuallawlibrary We are, thereIore inclined to believe the deIense oI respondent SILVESTRE, that what was discussed between him, respondent SOMERA and Atty. DOCTOR on January 20, 2000, was the legal issue on the continued detention oI some kitchen wares which were not covered by the Warrant oI Seizure and Detention (WSD). This, in light oI subsequent Order oI the District Collector oI the Port oI Manila dated March 2, 2000, releasing the said kitchen wares which were indeed, not covered by the Warrant oI Seizure and Detention (WSD) x x xchanroblesvirtuallawlibrary Worthy oI note also is the DECISION oI the Court oI Appeals in CA- G. R. SP No. 58958 dated August 14, 2000 entitled RONNIE C. SILVESTRE vs. OMBUDSMAN ANIANO A. DESIERTO, (pages 253 to 254, Records) where in granting the petition Ior certiorari and prohibition involving the preventive suspension order on respondent SILVESTRE, the said appellate court stated, thus: xxx xxx xxx chanroblesvirtuallawlibrary While the above DECISION may not necessarily be controlling in the resolution oI the merits oI the instant case insoIar as it pertains to respondent SILVESTRE, we cannot help but note its relevancy inasmuch as practically no other evidence was presented by the complainant, other than his AFFIDAVIT OF ARREST AND COMPLAINT to support the charge against respondent SILVESTRE. Needless to state, this is also the very same and only evidence presented beIore the Court oI Appeals which rendered the aIorequoted DECISION.chanroblesvirtuallawlibrary WHEREFORE, the Court hereby DISMISSES the petition Ior mootness. chanroblesvirtuallawlibrary No costs. chanroblesvirtuallawlibrary SO ORDERED. chanroblesvirtuallawlibrary Puno Kapunan and Ynares-Santiago concur chanroblesvirtuallawlibrary avide r C (Chairman) on official business
SECOND DIVISION LAND BANK OF THE PHILIPPINES, Petitioner, - versus - CONRADO O. COLARINA, Respondent. G.R. No. 176410 Present: CARPIO, J., Chairperson, NACHURA, BERSAMIN,* ABAD, and MENDOZA, JJ. Promulgated: September 1, 2010 x--------------------------------------------------------- x
DECISION NACHURA, J.: Before us is a petition for review on certiorari assailing the Decision of the Court of Appeals (CA) in CA-G.R. CV No. 68476,[1] which affirmed the decision of the Regional Trial Court (RTC), Branch 3, Legazpi City, Albay, sitting as a Special Agrarian Court (SAC) in Agrarian Case No. 95-01.[2] The facts are simple. Respondent Conrado O. Colarina is the registered owner of three (3) parcels of agricultural land which he acquired from their former owner, Damiana Arcega. The parcels of land have a total area of 972,047 square meters with the following description: TRANSFER CERTIFICATE OF TITLE (TCT) No. AREA (hectares) LOCATION T-86402 12.5718 Herrera, Ligao, Albay T-86448 48.3062 Herrera, Ligao, Albay T-86449 36.3267 Amtic, Ligao, Albay Upon acquisition thereof, respondent manifested his voluntary offer to sell the properties to the Department of Agrarian Reform (DAR) for coverage under Republic Act (R.A.) No. 6657, the Comprehensive Agrarian Reform Law (CARL). Respondents assessment value of the properties was P45,000.00 per hectare. The DAR, through petitioner Land Bank of the Philippines (LBP), assessed the properties and offered to purchase only 57.2047 hectares out of the 97.2047 hectares voluntarily offered for sale by respondent. The excluded area (40 hectares) fell under the exemptions and exclusions provided in Section 10[3] of the CARL, i.e., all lands with eighteen percent (18%) slope and over. In addition, the LBP assigned the following values to the properties: TCT No. Covered Area Excluded Area Value T-86402 6.5718 6 P 46,045.60 T-86448 28.3062 20 P 208,144.33 T-86449 22.3267 14 P 154,394.22 As the LBPs assessment and valuation of the properties was unacceptable to, and rejected by, respondent, he elevated the determination of just compensation of the properties to the Provincial Agrarian Reform Adjudicator (PARAD). Unfortunately for respondent, the PARAD affirmed the valuation set forth by the LBP. Disappointed with the low valuation by petitioner and the DAR, respondent filed a Complaint[4] before the RTC, Branch 3, Legazpi, Albay, for the judicial determination of just compensation. In refutation, petitioner filed its Answer,[5] denied the material allegations in the Complaint, and alleged that it had correctly assessed and valuated the subject properties consistent with R.A. No. 6657 and DAR Administrative Order (AO) No. 6, Series of 1992. During pre-trial, LBP manifested that the subject properties may be reassessed and revaluated based on the new guidelines set forth in DAR A.O. No. 11, Series of 1994. Intent on finding a common ground between petitioner and respondent and to amicably settle the case, the SAC ordered the revaluation. The new valuations of the LBP were: TCT No. Old Valuation New Valuation T-86402 P 46,045.60 P51,762.90 at P7,876.5178/ha. T-86448 P208,144.33 P259,525.41 at P9,168.50/ha. T-86449 P154,394.22 P217,223.60 at P9,729.3196/ha.[6] The foregoing valuation was still rejected by respondent. Hence, trial ensued. To support his Complaint and valuation of the subject properties, respondent presented in evidence his own testimony and that of Carlito M. Oliva (Oliva), then Assistant Provincial Assessor of Camarines Sur and President of the Camarines Chapter of the National Real Estate Association. As for petitioner, it presented the testimonies of Armel Alcantara (Alcantara), Chief of the Landowners Assistance Division of the LBP, and Melchor Balmaceda, officer of LBP, Sipocot Branch. The SAC summarized the testimonies of the witnesses as follows: Second witness Carlito M. Oliva, x x x testified that in several instances, he was deputized by the Honorable Court under RTC BR. 26 to chair the commission in the determination of the fair market value of properties subject for payment by the government. That the properties involved in this case is composed of three parcels. [T-86402] is situated at Barangay Herrera, Ligao, Albay which contains an area of 12.5718 has.; [T-86449] is also situated in the same Barangay with an area of 36.3267 has.; [a]nd [T-86448] is situated at Barangay Amtic, Ligao, Albay with an area of 48.3062 has or a total of 97.2047 has. Upon Mr. Colarinas request, he conducted an investigation and ocular inspection on the subject properties and made a narrative report relative thereto. That his recommendation as the reasonable market value of the properties is at P49,201.148/ha or a total of P4,788,415.20 using the productivity approach since the subject property is mostly agricultural. That the actual area planted to coconuts is about 43.84%; banana plants is 7.79%; corn land is 1.14%; homelots is 0.50% and 4.97% cogonal, while 5% is non-arable. x x x x Armel Alcantara testified that x x x before, he was the Division Chief of the Claim, Processing and Payment Division (CPPD) [of the LBP]. As such, he conducts review of claim folders covered by P.D. No. 27, E.O. No. 228 and R.A. No. 6657, most specifically the claim folders under voluntary offer to sell and compulsory acquisition claim folders. That he valued the subject lands owned by [respondent] based on AO No. 11 S. of 1996. Pursuant to the Hon. Courts order dated November 14, 1996. For TCT No. 86448, the area covered is 28.3062 has. [o]ut of 48.3062 has. Because some portion of the property is hilly and mountainous and underdeveloped which exceeded the 18% limit set forth under Sec. 10 of RA 6657. This lot is planted to corn, peanut and cogonal. The corn land is 13 has., peanut land is .25 has., cogonal is 15.0562 has.; the excluded portion which is mountainous and about 25% slope totals 20 has. The factor considered by Land Bank is under Formula No. 2 which is the Capitalized Net Income (CNI) x 90% and the market value per Tax declaration wherein they get the remaining 10%. The CNI was taken from the average gross production based on the field investigation report multiplied by the selling price from the Department of Agriculture municipal data, arriving at a total CNI of P10,291.67 per ha. The market value per Tax declaration was based on the third classification as furnished to Land Bank by the Municipal Assessors office. The total MVPT as computed by Land Bank is P14,193.22, so, 10% of which is P1,419.32. After computing the CNI and the MVPT, he applied the applicable formula which is CNI x 90% and the MVPT x 10%. The CNI total is P9,262.5 and the MV is P1,419.32. Summing up the total amount of the two factors, the value per ha. Arrived at for corn land is P10,681.82 per ha. Multiply it by 13 has. For corn land, the total amount is P3,535.66. For peanut land, the total amount is P3,535.66 and for cogonal where they used the market value per tax declaration multiplied by 2. the total is P117,126.09. Therefore, the total valuation of this 28.3062 has. portion of the property acquired by the government is P259,525.41. For Title No. 86449, 22.3267 has. out of 36.3267 has. [i]s carpable. The 14 has. [w]as excluded because this falls under the hilly and mountainous portion which is about 18% slope. Applying the same rules and regulations, the total valuation for this property is P217,223.60. For Title No. 86402, the area covered is 6.5718 has. [o]ut of 12.5718 has. The area of 6 has. is excluded for it falls above 18% slope. Applying again the same rules and regulations, the total valuation for the 6.5718 has. [a]cquired by the government is P51,762.90. That there are several valuations/formulas provided for under RA 6657 and the Land Bank follows the applicable formula as reflected in the field investigation report. Therefore, their basis in determining which factors will be applied are the result of the field investigation report. After determining the existence of the property, the DAR, Land Bank and the other agencies concerned conducted an ocular inspection of the property being offered for sale under CARP or covered by the CARP. The data in-put were gathered in the field including the number of fruit bearing trees also determined. The production data was also taken and a survey was being conducted in the field on adjacent properties. Said data were compared with the record of the Municipal agriculturist and other officers. That the valuation of the property was based under AO No. 11 existing at the time of the valuation of the property as of November 19, 1996. Melchor Balmaceda testified that at present he is an officer of Land Bank of the Philippines, Sipocot Branch but before, he was connected with Land Bank VO, Legazpi City Branch as Agrarian Affairs Specialist. As such, he conducts ocular inspection on the properties covered by the CARP, and gathers information relative to land valuation. That sometime in 1991, he together with DAR personnel and BARC Chairman and caretakers of the property conducted an ocular inspection in question in the name of Damian Arcega, the former owner of the property, which property consisted of 3 parcels. That in connection thereto, they made a written report that the property is generally mountainous and majority is planted to coconut. A portion is planted to corn and minimal portion is planted to peanut and there is also a portion which is cogonal where there is no product. That all the areas are carpable. That they gather data information from government agencies and they compute the net income of the properties based on the produce.[7]
Thereafter, the SAC rendered a decision reconciling the conflicting evidence of the parties. The SAC followed the formula of the LBP and its land use classification of the subject properties; the appraisal report on the valuation thereof. It disposed of the case, to wit: To reconcile the conflicting figures both prayed for by [respondent] and [petitioner] Land Bank as the computation of the value of the properties to be paid to the [respondent], taking into account all the factors in determining just compensation and considering that the taking of private agricultural properties under Agrarian Reform Law is a special kind of eminent domain which is revolutionary in character, the primary goal of which is to grant land to the landless and the need for high production, the just compensation for the lots subject matter of this case, using the value in the [respondents] appraisal report and the land use of the properties as classified by the Land Bank, are as follows:
1) TCT No. T-86448 - carpable area - 28.3062 has. Land Use: A) Corn land Area = 13.0000 has. Value/Ha = P52,700/has (Per Appraisal Report) Computation: P52,700/ha x 13.0000 has = P685,100.00 B) Peanut Area = .2500 Value/Ha = P60,000/has (Per Appraisal Report) Computation: P60,000.00/has x .2500 has = P15,000.00 C) Cogonal Area = 15.0562 has. Value/Ha = P5,270 (Per Appraisal Report) Computation: P5,270.00/has x 15.0562 has = P79,346.17 Total: Corn land - P685,100.00 Peanut - 15,000.00 Cogonal - 79,346.17 P779,446.17 2) TCT No. T-86449 - carpable area - 22.3267 has. Land Use: A) Corn land Value/Ha = P52,700.00/ha (Per Appraisal Report) Area = 15.000 has Computation: P52,700.00/has. x 15.0000 has = P790,500.00 B) Cogon: Value/ha = P5,270/ha (Per Appraisal Report) Area = 7.3267 has Computation: P5,270/ha x 7.3267 has = P38,611.7 Total: Corn land - P790,500.00 Cogon - 38,611.70 P829,111.70 3) TCT No. T-86402 - carpable area - 6.5718 has Land Use: A) Corn land Value/ha = P52,700/ha (Per Appraisal Report) Area = 3.0000 has Computation: P52,700/has x 3.0000 has = P158,100 B) Cogonal Value/ha = P5,270/ha (Per Appraisal Report) Area = 3.5718 has Computation: P5,270/ha x 3.5718 has = P18,823.28 Total: Corn land = P158,100.00 Cogonal = 18,823.38 Total = P176,923.38 Based on the foregoing computation, the just compensation for 1) TCT No. T-86448 with a carpable area of 28.3062 has. is fixed at P779,446.17; 2) TCT No. T-86449 with a carpable area of 22.3267 has. is fixed at P829,111.70; and for 3) TCT No. T-86402 with a carpable area of 6.5718 has. is fixed at P18,823.38. Thus, the overall valuation of the property is as follows: TCT No. T-86648 P 779,446.17 TCT No. T-86649 829,111.70 TCT No. T-86402 176,923.38 TOTAL P1,785,481.25 =========== WHEREFORE, [petitioner LBP] is ordered to pay [respondent] Conrado Colarina the total sum of ONE MILLION SEVEN HUNDRED EIGHTY FIVE THOUSAND FOUR HUNDRED EIGHTY ONE PESOS AND TWENTY FIVE CENTAVOS (P1,785,481.25) in case or in bond or in any other mode of payment under Section 18 of RA 6657 otherwise known as the Comprehensive Agrarian Reform Law, at the option of the landowner. SO ORDERED.[8]
Still dissatisfied with the valuation of just compensation for the subject properties, both parties appealed to the CA. The appellate court affirmed the ruling of the SAC, to wit: HEREFORE, premises considered, the August 7, 2000 Decision of the Regional Trial Court of Lega[z]pi City, Albay, Branch 3, in Agrarian Case No. 95-01, is hereby AFFIRMED.
SO ORDERED.[9]
Adamant on the accuracy of its computation, petitioner appeals to this Court, positing the following issues: THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERRORS OF LAW IN THE FOLLOWING INSTANCES: I. WHEN IT AFFIRMED THE REGIONAL TRIAL COURT OF LEGA[Z]PI CITY, BRANCH 3 DECISION DATED AUGUST 7, 2000 WHICH AWARDED P1,785,481.25 AS JUST COMPENSATION FOR THE FIFTY-SEVEN-HECTARE PROPERTY, AS THE SAID DECISION FAILED TO CONFORM TO THIS HONORABLE COURTS RULING IN "LAND BANK OF THE PHILIPPINES V. SPOUSES VICENTE BANAL AND LEONIDES ARENAS-BANAL (G.R. NO. 143276). II. WHEN IT TREATED THE TAKING OF AGRICULTURAL LANDS FOR AGRARIAN REFORM PURPOSES AS AN ORDINARY EXPROPRIATION OF PRIVATE PROPERTY FOR PUBLIC USE.[10] We impale the foregoing into the singular issue of whether the lower courts computation of just compensation for the subject properties is correct. We answer in the negative and find the petition impressed with merit. As pointed out by petitioner, our ruling in and Bank of the Philippines v. Sps. Banal[11] is definitive on the factors to be considered, and the formula utilized, for the determination of just compensation: To begin with, under Section 1 of Executive Order No. 405 (1990), the Landbank is charged "primarily with "the determination of the land valuation and compensation for all private lands suitable for agriculture under the Voluntary Offer to Sell or Compulsory Acquisition arrangement. For its part, the DAR relies on the determination of the land valuation and compensation by the Landbank. x x x x A party who disagrees with the decision of the DAR adjudicator may bring the matter to the RTC designated as a Special Agrarian Court "for final determination of just compensation. In the proceedings before the RTC, it is mandated to apply the Rules of Court and, on its own initiative or at the instance of any of the parties, "appoint one or more commissioners to examine, investigate and ascertain facts relevant to the dispute, including the valuation of properties, and to file a written report thereof x x x. In determining just compensation, the RTC is required to consider several factors enumerated in Section 17 of R.A. 6657, as amended, thus: "Sec. 17. etermination of Just Compensation. - In determining just compensation, the cost of acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the assessment made by government assessors shall be considered. The social and economic benefits contributed by the farmers and the farmworkers and by the Government to the property, as well as the non-payment of taxes or loans secured from any government financing institution on the said land, shall be considered as additional factors to determine its valuation. These factors have been translated into a basic formula in DAR Administrative Order No. 6, Series of 1992, as amended by DAR Administrative Order No. 11, Series of 1994, issued pursuant to the DARs rule-making power to carry out the object and purposes of R.A. 6657, as amended.
Subsequent rulings of the Court uniformly parleyed that Section 17 of R.A. No. 6657 has been translated into a formula by the DAR through A.O. No. 6, Series of 1992, as amended by A.O. No. 11, Series of 1994:[12] A. There shall be one basic formula for the valuation of lands covered by [Voluntary Offer to Sell] or [Compulsory Acquisition] regardless of the date of offer or coverage of the claim: LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1) Where: LV = Land Value CNI = Capitalized Net Income CS = Comparable Sales MV = Market Value per Tax Declaration The above formula shall be used if all the three factors are present, relevant, and applicable. A.1 When the CS factor is not present and CNI and MV are applicable, the formula shall be: LV = (CNI x 0.9) + (MV x 0.1) A.2 When the CNI factor is not present, and CS and MV are applicable, the formula shall be: LV = (CS x 0.9) + (MV x 0.1) A.3 When both the CS and CNI are not present and only MV is applicable, the formula shall be: LV = MV x 2 In no case shall the value of the land using the formula MV x 2 exceed the lowest value of land within the same estate under consideration or within the same -arangay or municipality (in that order) approved by LBP within one (1) year from receipt of claimfolder. x x x x A.6 The basic formula in the grossing-up of valuation inputs such as LOs Offer, Sales Transaction (ST), Acquisition Cost (AC), Market Value Based on Mortgage (MVM) and Market Value per Tax Declaration (MV) shall be: Grossed-up = Valuation input x Valuation Input Regional Consumer Price Index (RCPI) Adjustment Factor The RCPI Adjustment Factor shall refer to the ratio of RCPI for the month issued by the National Statistics Office as of the date when the claimfolder (CF) was received by LBP from DAR for processing or, in its absence, the most recent available RCPI for the month issued prior to the date of receipt of CF from DAR and the RCPI for the month as of the date/effectivity/registration of the valuation input. Expressed in equation form: RCPI for the Month as of the Date of Receipt of Claimfolder by LBP from DAR or the Most recent RCPI for the Month Issued Prior to the Date of RCPI Receipt of CF Adjustment = -------------- Factor RCPI for the Month Issued as of the Date/Effectivity/Registration of the Valuation Input B. Capitalized Net Income (CNI) - This shall refer to the difference between the gross sales (AGP x SP) and total cost of operations (CO) capitalized at 12%. Expressed in equation form: CNI = (AGP x SP) - CO --------- .12 Where: CNI = Capitalized Net Income AGP = Latest available 12-month's gross production immediately preceding the date of offer in case of VOS or date of notice of coverage in case of CA. SP = The average of the latest available 12- months selling prices prior to the date of receipt of the claimfolder by LBP for processing, such prices to be secured from the Department of Agriculture (DA) and other appropriate regulatory bodies or, in their absence, from the Bureau of Agricultural Statistics. If possible, SP data shall be gathered from the -arangay or municipality where the property is located. In the absence thereof, SP may be secured within the province or region. CO = Cost of Operations Whenever the cost of operations could not be obtained or verified, an assumed net income rate (NIR) of 20% shall be used. Landholdings planted to coconut which are productive at the time of offer/coverage shall continue to use the 70% NIR. DAR and LBP shall continue to conduct joint industry studies to establish the applicable NIR for each crop covered under CARP. .12 = Capitalization Rate x x x x C. CS shall refer to any one or the average of all the applicable sub-factors, namely, ST, AC and MVM: Where: ST = Sales Transactions as defined under Item C.2 AC = Acquisition Cost as defined under Item C.3 MVM = Market Value Based on Mortgage as defined under Item C.4 x x x x D. In the computation of Market Value per Tax Declaration (MV), the most recent Tax Declaration (TD) and Schedule of Unit Market Value (SMV) issued prior to receipt of claimfolder by LBP shall be considered. The Unit Market Value (UMV) shall be grossed up from the date of its effectivity up to the date of receipt of claimfolder by LBP from DAR for processing, in accordance with item II.A.A.6. In and Bank of the Philippines v. Celada,[13] we declared: While SAC is required to consider the acquisition cost of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declaration and the assessments made by the government assessors to determine just compensation, it is equally true that these factors have -een translated into a -asic formula -y the # pursuant to its rule-making power under Section 49 of RA No. 6657. As the government agency principally tasked to implement the agrarian reform program, it is the DARs duty to issue rules and regulations to carry out the object of the law. DAR AO No. 5, s. of 1998 precisely "filled in the details of Section 17, RA No. 6657 by providing a basic formula by which the factors mentioned therein may be taken into account. The SAC was at no liberty to disregard the formula which was devised to implement the said provision. It is elementary that rules and regulations issued by administrative bodies to interpret the law which they are entrusted to enforce, have the force of law, and are entitled to great respect. Administrative issuances partake of the nature of a statute and have in their favor a presumption of legality. As such, courts cannot ignore administrative issuances especially when, as in this case, its validity was not put in issue. Unless an administrative order is declared invalid, courts have no option but to apply the same. In the same vein, and Bank of the Philippines v. im[14] did not depart from the previous rulings and explicitly affirmed the mandatory nature of Section 17 of RA No. 6657 and DAR A.O. No. 6092, as amended by DAR A.O. No. 11-94: In and Bank of the Philippines v. Spouses Banal, this Court underscored the mandatory nature of Section 17 of RA 6657 and DAR AO 6-92, as amended by DAR AO 11-94, viz.: "In determining just compensation, the #%C is required to consider several factors enumerated in Section 17 of #.. 6657, as amended, thus: "Sec. 17. etermination of Just Compensation. - In determining just compensation, the cost of acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the assessment made by government assessors shall be considered. The social and economic benefits contributed by the farmers and the farmworkers and by the Government to the property, as well as the non- payment of taxes or loans secured from any government financing institution on the said land, shall be considered as additional factors to determine its valuation. %hese factors have -een translated into a -asic formula in [# 6-92], as amended -y [# 11-94], issued pursuant to the DARs rule-making power to carry out the object and purposes of R.A. 6657, as amended. %he formula stated in [DAR AO 6-92], as amended, is as follows: "LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1) LV = Land Value CNI = Capitalized Net Income CS = Comparable Sales MV = Market Value per Tax Declaration The above formula shall be used if all the three factors are present, relevant and applicable. A.1 When the CS factor is not present and CNI and MV are applicable, the formula shall be: LV = (CNI x 0.9) + (MV x 0.1) x x x x While the determination of just compensation involves the exercise of judicial discretion, however, such discretion must -e discharged within the -ounds of the law. Here, the RTC wantonly disregarded R.A. 6657, as amended, and its implementing rules and regulations. ([DAR AO 6-92], as amended by [DAR AO 11-94]). x x x x WHEREFORE, x x x. Civil Case No. 6806 is REMANDED to the RTC x x x. %he trial judge is directed to observe strictly the procedures specified above in determining the proper valuation of the subject property. The recent case of eirs of orenzo and Carmen Vidad and gvid Construction Co., Inc. v. and Bank of the Philippines[15] is most propinquity on the same point: LBPs valuation of lands covered by the CARP Law is considered only as an initial determination, which is not conclusive, as it is the RTC, sitting as a SAC, that could make the final determination of just compensation, taking into consideration the factors enumerated in Section 17 of RA 6657 and the applicable DAR regulations. LBPs valuation has to be substantiated during an appropriate hearing before it could be considered sufficient in accordance with Section 17 of RA 6657 and the DAR regulations. In and Bank of the Philippines v. Celada, the Court ruled that the factors enumerated under Section 17 of RA 6657 had already been translated into a basic formula by the DAR pursuant to its rule-making power under Section 49 of RA 6657. Thus, the Court held that the formula outlined in DAR AO No. 5, series of 1998, should be applied in computing just compensation. DAR AO No. 5, series of 1998, provides: A. There shall be one basic formula for the valuation of lands covered by VOS or CA: LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where: LV = Land Value CNI = Capitalized Net Income CS = Comparable Sales MV = Market Value per Tax Declaration The above formula shall be used if all three factors are present, relevant and applicable. A1. When the CS factor is not present and CNI and MV are applicable, the formula shall be: LV = (CNI x 0.9) + (MV x 0.1) A2. When the CNI factor is not present, and CS and MV are applicable, the formula shall be: LV = (CS x 0.9) + (MV x 0.1) A3. When both the CS and CNI are not present and only MV is applicable, the formula shall be: LV = MV x 2 In no case shall the value of idle land using the formula MV x 2 exceed the lowest value of land within the same estate under consideration or within the same barangay or municipality (in that order) approved by LBP within one (1) year from receipt of claimfolder. In and Bank of the Philippines v. Spouses Banal, we remanded the case to the SAC for further reception of evidence because the trial court based its valuation upon a different formula and did not conduct any hearing for the reception of evidence.
The mandatory application of the aforementioned guidelines in determining just compensation has been reiterated recently in and Bank of the Philippines v. im and and Bank of the Philippines v. Heirs of Eleuterio Cruz, where we also ordered the remand of the cases to the SAC for the determination of just compensation strictly in accordance with the applicable DAR regulations. [16] The factors for the determination of just compensation in Section 17 of R.A. No. 6657, and consequently converted into a formula in A.O. No. 6, Series of 1992, as amended by A.O. No. 11, Series of 1994, is mandatory. and Bank of the Philippines v. Sps. Banal,[17] as affirmed by our subsequent rulings, did not equivocate. We note that A.O. No. 6, Series of 1992 (as amended by A.O. No. 11, Series of 1994) has been superseded by A.O. No. 5, Series of 1998. However, A.O. No. 5, Series of 1998, is not applicable to the present case as the subject properties were assessed and valued prior to its effectivity. A perusal of the records of this case readily reveals the Claims Valuation and Processing Form[18] accomplished by petitioner when it reassessed and revaluated the subject properties. The document follows the required formula for valuation of properties under A.O. No. 6, Series of 1992, as amended by A.O. No. 11, Series of 1994. In fact, even the RTC used the formula of petitioner to compute just compensation based on petitioners findings on land use of the subject properties. However, the RTC, as well as the CA, was gravely mistaken in using respondents valuation of the properties contained in Olivas appraisal report, i.e., P52,700.00/ha. We note that Olivas appraisal report did not attach pertinent documents thereto, considering that, as he had testified, he used the productivity approach: Q Mr. Witness [Oliva] you said that you gave the valuation of the coconut land in that property of Mr. Colarina. What is your valuation to the coconut land per hectare? WITNESS: A For the coconut land, the valuation I arrived at for the coconut land is the amount of P45,300.00 per hectare. That is the market value of the 4 th class coconut land and the improvements already, sir. Q What about the banana lands? A The valuation is P70,800.00 per hectare, that is the valuation of the land, 4 th class banana land including already the improvements. Q Why did you conclude this high valuation of banana lands? A Considering that I have compressed all these banana in every hectare, I have a reason to believe that it is a 4 th class banana land. And in a 4 th class banana land, the price per kilo is only P15.00 to P30.00 per kilo. The effective number of bananas per hectare is only 600 clusters considering that this is the productivity for a 4 th class banana land. The produce annually of 4,000 kilos is very minimal. So at P15.00 per kilo, I arrived at a valuation of P60,000.00 per hectare. The appraisal, on the other hand, for taxation purposes, we just state there the area actually being planted to bananas not considering the clusters of bananas in one hectare. Banana plantation with this kind of clusters will cost more than this if it will be properly fertilized by the owner. So this banana land is only a 4 th class banana land and is about 7.5764 hectares of the subject property with only 4,000 to 8,000 kilos of banana fruits annually. [Counsel of defendant DAR] Q What about the corn land area? A I valued it at P52,700.00 per hectare, sir. Q What is your basis? A I have also here on page 5 of my report. I have classified the subject portion as a second class corn land. With a production of 101 to 150 cavans per hectare per year and the price of corn which is P420.00 per cavan, I arrived at a valuation of P52,700 per hectare, sir. x x x x Q But that is not the data established by the [DAR]? A That is why I made a separate actual investigation. I made personal interviews with the farmers and so we arrived at this production. Q So your basis is the information which you gathered from the farmers? A Considering the kind of soil of the property planted by the farmers to corn, we will have to arrive at this productivity, sir. Q Did you inquire about the government support price of corn per kilo? A The government support price is at P7.00 or P8.00 per kilo, sir. Q Did you get that from the National Food Authority? A I got this from the [C]hinese traders because I want to arrive at the open market valuation. I am not prone to adopt the government price as I was deputized by Mr. Colarina [respondent] to appraise his property independently, not as an assessor but as a private appraiser from the open market. And I know that this is still subject for review by the honorable court. x x x x Q So do you have the data where you based the valuation? A That was the result of my actual interview with the farmers and traders. x x x x Q How much is the valuation you gave to this rootcrops area? A The subject portion was classified by me as a 3 rd
class rootcrop land and so I valued it at P60,000.00 per hectare, sir. Q Do you mean to tell this honorable court that this rootcrops land, the banana land and corn land are distinct areas separate from each other? A I apprised this honorable court that I appraised this property not exactly on what is being produced in the area. I considered the land itself, the classification of the land, the boundaries there but some are "ogacon" (lazy) to cultivate this property. Because I am also an agriculturist and I also have a lot which is planted to this kind of plants and I know what will be the actual produce of the CROPS [inserted in the TSN] with a certain kind of land. If we consider the actual produce, it is very low. Because we are "ogacon" (lazy). hat I am very much concerned is the kind of the land and then I asked them if we will have to cultivate the property properly, how much are we going to expect. Q Do you mean to impress to us that while you conducted the ocular inspection, there were area which were not cultivated? A When I conducted the ocular inspection, I was able to classify an area of around 4.8 hectares which has no value at all, sir. x x x x Q So you had the ocular inspection without anybody from the government or from the barangay going with you? A Nobody but I told the barangay captain of the place that we will be going there for an ocular inspection and from the barangay captain, we have learned that that there is a subdivision for sale which is adjoining the subject properties for that much amount also. x x x x [On questioning by the SAC] A (Perusing the report submitted by the Land Bank of the Philippines). This is a very low valuation, your honor. Q Why? A Considering that I did not take into consideration the valuation that was done by the Assessors Office to the schedule of value because as an assessor, in gathering data, we have to base the valuation of every kind of property. It takes us a hard time to consolidate all these things because, first of all, one, the comparative sales approach, for example, your honor, we seldom find the consideration in a certain sale that is the true and actual selling price perhaps because of the implementation of the capital gains tax of the Bureau of Internal Revenue. Most of them are under valued. Now, that is why I based my valuation from the actual procedure. First of all I considered the kind of land thereon and thereby considered also the different kinds of perennial trees or plants and based on the actual interviews I conducted with the farmers, I arrived at the actual produce where I based my computation not really considering the assessors value because it is only for taxation purposes. Nowhere in the Philippines that the government assessments are reliable.[19] In stark contrast is the valuation made by witness Alcantara: Q Mr. Witness, what rule is followed by Land Bank in arriving at the valuation as contained in this exhibit? A The guidelines followed by Land Bank: properties valued under Administrative Order No. 11 Series of 1996 based on the Honorable Courts Order dated November 14, 1996. Q In Exh. "1, how many hectares were valued for the contemplated acquisition of the property? A The area for acquisition under Title No. 86448 is 28.3062 hectares. Q x x x Will you please explain why only a total of 28.3062 [hectares] was computed in the valuation of the property? A Some portion of the property is hilly and mountainous which exceeded the 18% limit set forth under Section 10 of R.A. 6657. Said portions of land were mountainous and undeveloped and therefore excluded from acquisition under existing guidelines. Q What is the basis of said exclusion from coverage? A Section 10 of R.A. 6657. Q Will you please explain to us the character, land use and condition of this particular land as described in Exh. "1? A The property which contains an area of 48.3062 hectares per title is planted to corn, peanut and a large portion is cogonal. The corn land is 13 hectares, peanut land is .25 hectares and the cogonal is 15.0562 hectares. A hilly portion which is about 18% slope and a mountainous portion which is about 25% slope totals 20 hectares. This portion is the excluded one. Q Will you please tell this Honorable Court what factors were considered by Land Bank in arriving at the valuation of the property? A The factor considered by Land Bank is under Formula No. 2 which is the capitalized net income (CNI) x 90% and the market value per tax declaration wherein we get the remaining 10%. Q There appears a computation for the CNI. Will you please explain how the total value was arrived at? A CNI for corn was taken from the average gross production based on the field investigation report multiplied by the selling price from the Department of Agriculture municipal data, arriving at a total CNI of P10,291.67 per hectare. Q What about the computation for the market value per tax declaration (MVPT)? Will you explain how the total valuation for the MVPT was arrived at? A The market value per tax declaration was based on the third classification as furnished to Land Bank by the Municipal Assessors Office. The total MVPT as computed by Land Bank is P14,193.22, so, 10% of which is P1,419.32. Q Now, after computing the CNI and the MVPT, what steps did you undertake to arrive at the total valuation of the property? A We applied the applicable formula which is the CNI x 90% and the MVPT x 10%. The CNI total is P9,262.5 and the market value is P1,419.32. Summing up the total amount of the two factors, the value per hectare arrived at for corn land is P10,681.82 per hectare. So, if we will apply the amount arrived at for the value per hectare of corn, P10,681.82 x 13 has. for corn land, the total is P138,863.66. The for peanut land, the total amount is P3,535.66 and for the cogonal land where we used the market value per tax declaration multiplied by 2, the total is P117,126.09. Therefore, the total valuation of this 28.3062 portion of the property acquired by the government is P259,525.41. x x x x A The total area acquired for Title No. 86449 is 22.3267 hectares out of 36.267 hectares per title. Q What is the basis of your exclusion of the 14 hectares? A This 14 hectares fall also under the hilly and mountainous portion which is about 18% slope. Q x x x [D]id you apply the same rules and regulations covered by such valuation? Did you apply the same factors? A Yes. Q What is the total? A The total valuation for this property [TCT No. 86449] is P217,223.60. x x x x
Q Lastly, in Exh. "3, will you please tell us what is the area acquired for coverage under CARP? A The area acquired is 6.5718 hectares out of 12.5718 has. Q What is the area excluded for valuation? A The area excluded for valuation falling above 18% slope is 6 hectares. Q x x x [D]id you still adopt the same rules and regulations in computing the valuation? A The same. Q What is the total valuation [for TCT No. 86402]? A The total valuation for Title No. 86402 for the 6.5718 hectares acquired by the government is P51,762.90. x x x x Q Are there any guidelines under the law which limits or defines what can be used in the valuation of the property under the CARP? A There are several valuations/formulas provided for under R.A. 6657 and Land Bank follows the applicable formula as reflected in the field investigation report. Therefore, our basis in determining which factors will be applied are the result of the field investigation report. Q Will you please tell this Honorable Court what particular activities are to be taken for the purpose of being able to value the property? A After determining the existence of the property, the DAR, Land Bank and other agencies concerned conduct an ocular inspection of the property being offered for sale under CARP or covered by the CARP. The data in-put were gathered in the field including the number of fruit bearing trees, they were also determined. The production data is also taken and a survey is being conducted in the field on adjacent properties. Said data were being compared with the record of the Municipal agriculturist and other officers. Q Last question Mr. Witness, the total valuation of the subject property is as of what point of time? A The valuation of the property was based under Administrative Order No. 11 existing at the time of the valuation of the property. x x x x COURT: When was that? WINTNESS: November 19, 1996.[20] Clearly from the foregoing, the valuation of the subject properties by petitioner was based on data gathered by DAR and contained in its Field Investigation Report.[21] The data correctly reflected actual use and produce of the subject properties and did not factor in potential use as what respondents appraiser did. In fact, we note that the data obtained by Oliva was based on his unofficial surveys of farmers and Chinese traders. Oliva readily dismisses government valuation as unreliable without proffering evidence to support his statement. This explains the big discrepancy in Olivas Appraisal Report and petitioners valuation. While we commend respondent in readily participating in the governments agrarian reform program, our previous rulings preclude us from validating the valuation of the subject properties proffered to, and affirmed by, the SAC. The government cannot be forced to purchase land which it finds no need for, regardless of Olivas unschooled opinion. Considering respondents belief that the properties are worth more than the valuation made by the DAR, he can proceed to develop the land excluded by the DAR from expropriation into its potential use as assessed by Oliva. Thus, replacing the valuation of the subject properties pursuant to the determination of petitioner where the LV was pegged using the formula {CNI x 90%} + {MV x 2}, we arrive at a different amount: 1) TCT No. T-86448 - carpable area - 28.3062 has. Land Use: A) Corn land Area = 13.0000 has. Value/Ha = P10,681.82/ha Computation: P10,681.82/ha x 13.0000 has = P138,863.66 B) Peanut Area = .2500 Value/Ha = P14,142.65/ha Computation: P14,142.65/ha x .2500 has = P3,535.66 C) Cogonal Area = 15.0562 has. Value/Ha = P7,779.26/ha Computation: P7,779.26/ha x 15.0562 has = P117,126.09 Total: Corn land - P138,863.66 Peanut - 3,535.66 Cogonal - 117,126.09 P259,525.41 2) TCT No. T-86449 - carpable area - 22.3267 has. Land Use: A) Corn land Value/Ha = P10,681.82/ha Area = 15.00 has Computation: P10,681.82/ha x 15.0000 has = P160,227.30 B) Cogon: Value/ha = P7,779.26/ha Area = 7.3267 has Computation: P7,779.26/ha x 7.3267 has = P56,996.30 Total: Corn land - P160,227.30 Cogon - 56,996.30 P217,223.60 3) TCT No. T-86402 - carpable area - 6.5718 has Land Use: A) Corn land Value/ha = P7,992.31/ha Area = 3.0000 has Computation P7,992.31/ha x 3.0000 has = P23,976.94 B) Cogonal Value/ha = P7,779.26/ha Area = 3.5718 has Computation: P7,779.26/ha x 3.5718 has = P27,785.96 Total: Corn land = P 23,976.94 Cogonal = 27,785.96 Total = P 51,762.90 TCT No. T-86448 - P259,525.41 TCT No. T-86449 217,223.60 TCT No. T-86402 51,762.90 TOTAL P528,511.91 =========== HEREFORE, the petition is hereby GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 68476 and the decision of the Regional Trial Court, Branch 3, Legazpi City, Albay, in Agrarian Case No. 95- 01 are REVERSED and SET ASIDE. Petitioner Land Bank of the Philippines is hereby ordered to pay respondent Conrado O. Colarina the following amounts: 1. P259,525.41 for 28.3062 hectares of TCT No. 86448; 2. P217,223.60 for 22.3267 hectares of TCT No. 86449; and 3. P51,762.90 for 6.5718 hectares of TCT No. 86402. Petitioner shall pay twelve percent (12%) interest per annum from finality of this judgment until complete satisfaction thereof. SO ORDERED.
ublic oI the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-67784 February 28, 1986 MABUHAY TEXTILE MILLS CORPORATION, Petitioner, vs. MINISTER ROBERTO V. ONGPIN, ALFREDO PIO DE RODA, 1R., EDGARDO L. TORDESILLAS, RAMON 1. FAROLAN, GARMENTS AND TEXTILE EXPORT BOARD AND THE INTERMEDIATE APPELLATE COURT, Respondents.chanrobles virtual law lib rary
GUTIERREZ, 1R., chanrobles virtual law library This petition Ior certiorari seeks to annul the decision oI the Intermediate Appellate Court dated January 6, 1984 which upheld the cancellation oI petitioner's export quota allocations and the suspension oI its oIIicers even as it set aside the basis oI such cancellation and suspension on the ground oI violation oI due process.chanroblesvirtualawl ibrary chan robles virtual law library Petitioner Mabuhay Textile Mills Corporation (Mabuhay) is a corporation engaged in the garments and textile import business Ior the last twenty-seven years. Among the government requirements Ior engaging in this type oI business are the export quota allocations issued by the respondent Garments and Textile Export Board.chanroblesvirtualawlibrar y chanrobles virt ual law libra ry Sometime in 1982, the Board granted export quota allocations Ior 1983 to the petitioner. These export quotas have been granted annually to the petitioner since 1976. They are automatically renewed every year provided the grantee has utilized its quotas during the previous years.chanrob lesvirtualawlib rary chanrobles vi rtual law lib rary On March 2, 1983, the petitioner received a letter Irom the Board inIorming it that its 1983 export quota allocations were revoked eIIective February, 1983. Furthermore, its major stockholders and oIIicers were also distinguished Irom engaging in business activities involving garment and textile exports. The decision oI the Board was based on the Iollowing initial Iindings oI the Bureau oI Customs, to wit: 1. Two 40-Iooter containers declared to consist oI 210 bales oI acrylic staple Iiber weighing 48.211 kgs. with a value (including taxes and duties) oI P1,240,857.00 arrived Irom Kobe, Japan on 12 February 1983 on board the S/S Breadeverette.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary 2. Examination oI the shipment reveals the Iollowing - a. About 100 bales oI acrylic staple Iibers were Iound in the Iirst halI oI the containers; andchanrob les virtual law li brary b. Assorted textile piece goods Ior blouses, shirts and dresses were Iound midway through the containers. 3. The estimated value oI the actual contents oI the 2 containers is P2.5 Million. The Bureau oI Customs conducted an investigation pursuant to the above initial Iindings. On July 25, 1983, it rendered a decision absolving the petitioner Irom any irregularity relative to the subject shipment in the initial Iindings. It ruled: xxx xxx xxxchanrob les virtual law lib rary During the hearing, it was shown that Mr. James Dy, Executive Vice-President oI Mabuhay contacted the shipper in Japan, Daiwa Trading Co., Ltd. demanding explanation Ior the textile contents oI the shipment and the shipper answered that those (sic) was an interchange in the loading oI the materials destined Ior Manila and another shipment destined Ior Indonesia (Exh. "O" and Stipulation No. 9).chanroblesvirtualawlibrary chanrob les virtual law li brary Subsequently, Mr. Dy wrote another letter to the ChieI, CIID (Exh. "P") enclosing therewith two letters Irom Daiwa Trading Co., Ltd. dated February 21, 1983 and February 25, 1983 explaining the supposed interchanging oI the materials destined Ior Manila and that destined Ior Indonesia (Exhs. "P-1" and "P-2"); a copy oI a Bill oI Lading oI Samudera Indonesia Shipping Line Ior the S/S 'OCEAN PRIMA' purportedly covering 150 crate piece goods consigned to 'P.T. GADING AJU DJAZA JL 'oI Jakarta (Exhs. "P.3" & "J-A"); a photo oI an invoice addressed to 'P.T. GADING AJU DJAZA JL' containing a detailed description oI assorted design/color oI the Iabrics and their corresponding values (Exh, " P-4 " and " 5-B ") and a photocopy oI a Packing List (Exh. "P-5" also "5- C") containing the description and yardage oI the Iabrics mentioned in the aIorementioned invoice. The aIorementioned photocopies oI the shipping documents were sent by DAIWA TRADING CO., LTD., to Mabuhay Ior purposes oI explaining the alleged interchanging oI the materials in the two shipments and which Mabuhay, through its Executive Vice-Presidents, submitted to the CIID.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary ThereaIter, through a series oI communications with customs authorities in Jakarta and a personal inspection in Jakarta by the Commissioner oI Customs, while he was there, it was discovered that no such containers with Nos. ICSU-4868538 and ICSU-5219207 containing 110 bales oI acrylic staple Iiber was on board the 'OCEAN PRIMA' and that Bill oI Lading No. CJ-4 covers a shipment oI steel sheets (Exh. "O-4 "; Exhs. "R" to "R-2") thus debunking the claim oI interchanged shipments by DAIWA TRADING CO., LTD.chanroblesvirtualawlibrar y chanrobles virt ual law libra ry The claimant, on the other hand, showed during the hearing that it opened a letter oI credit Ior the importation oI 42,000 kilos oI Acryhc Staple Fiber C8 3D V64 at US$1.6 per kilo (Exh. "1") based on a Pro Forma Invoice oI Daiwa Trading Co., Ltd. (Exh. "l-A"). Upon receipt oI the shipping documents, i.e., the Invoice (Exh. "D"); the Packing List (Exh. "C") and the Bill oI Lading (Exh. "B" also Exh. "1") wherein it is indicated that the shipment was Shipper's Load & Count' (Exh. "1-A"), the same were given to its broker in line with its used business practice, Ior the purpose oI Iiling the import entry.chanroblesvirtualawl ibrary chan robles virtual law libra ry When the claimant received inIormation that the shipment contained Iabrics which it did not import, an explanation was required Irom the shipper, DAIWA TRADING CORPORATION, LTD. The latter, in two letters addressed to the claimant (Exhs. "P1" and "P-2" also Exhs. "4" & "5") alleged that there was an inter change oI materials in the shipment to the claimant and another shipment consigned to a customer in Indonesia. Also sent to the claimant by Daiwa were photocopies oI a Bill oI Lading (Exh. "P-3"); and Invoice (Exh. "P-4") and a packing list (Exh. "P-5") supposedly covering a shipment oI piece goods consigned to 'P.T. GADING AJU DJAZA JL' which the claimant Iorthwith submitted to the CIID. Later, in the letter dated March 14, 1983, addressed to the Claimant, the shipper admitted its culpability in claimant interchanging the shipments (Exh. "8"). ThereaIter, the Claimant Iiled a suit against the shipper Ior the damages caused to it by the latter's action and petitioned Ior the issuance oI a Writ oI Preliminary Attachment (Exh. "7" to "7-6").chanroblesvirtualawlibrary chanrob les virtual law library A careIul scrutiny oI the Iacts and the circumstances attendant to the case show that the Mabuhay Textile Mills have no participation in the irregularity relative to the subject shipment. The same was exported to the Philippines under a 'Shipper's Load and Count Bill oI Lading (Exh. " l-A") which means that it was the shipper who was responsible Ior putting the contents inside the container. The spurious documents (Exhs. "P- 3", "P-4" and "P-5") came Irom the shipper, Daiwa Trading Co., Ltd. and were Iorwarded by Mabuhay to the Bureau oI Customs Ior checking and evaluation. Lastly, and most important, Daiwa Trading Co., Ltd., in a letter to Mabuhay dated March 14, 1983 (Exh. "l") admitted that its staII was responsible Ior the story about the supposed mix-up with the alleged shipment to Indonesia.chanroblesvi rtualawlibra ry chanrobles virtual law l ibrary However, good Iaith should not be isolated alone on the part oI importer/consignee, but it should be proven also on the part oI the supplier/exporter. It should be reckoned that in matter oI importation there are two primary personalities involved, the supplier and the importer. The supplier in order to maintain his credibility to his client/importer, should exercise an utmost care and extreme caution in shipping orders oI his importer otherwise there is always the risk oI losing huge amount oI investment capital by his importers which ultimately produce tremendous damages on the part oI the importer similar to the instant case. He must maintain his honest relationship to his importers. Within the contemplation oI the Customs Code, the deIense oI the importer oI good Iaith must be mutually tie up with the supplier. A good Iaith oI the importer does not in anyway oIIset the damage committed by the supplier/exporter Ior it is crystal clear on the provision oI Section 2530 (1) 3, 4 oI the TariII and Customs Code, the liability oI the exporter is explicit, thus: chanrobles virtual law libra ry xxx xxx xxxchanrob les virtual law lib rary (3) On the strength oI a Ialse documents or aIIidavit executed by the owner, importer, exporter or consignee concerning the importation oI such articles; chanrobles vi rtual law lib rary (4) On the strength oI a Ialse invoice or other documents executed by the owner, importer, exporter or consignee concerning the importation or exportation oI such articles; chanrobles virtual law lib rary II Mabuhay is prejudiced by such actions, its recourse is against the exporter by way oI damages and other remedies provided by law, as in Iact, Mabuhay have so done by Iilling oI the corresponding complaint against the exporter and petitioning Ior the issuance oI the necessary Writ oI Attachment.chanroblesvirtualawlibra ry chanrobles virtual law l ibrary xxx xxx xxx On the basis oI such decision, the petitioner, on August 10, 1983, moved to reconsider the revocation oI its export quota allocations and the disqualiIication oI its oIIicers Irom the export business. As the Board Iailed to reply to such a request, two similar letters were sent by the petitioner on September 13, and 23, 1983 respectively. Again, the Board did not reply.chanroblesvirt ualawlibrar y chanrobles virtual law lib rary Finally on September 26 and 29, 1983, two letters were respectively sent by the Board to the petitioner inIorming the latter that it had reIerred petitioner's letters to the Commissioner oI Customs Ior comment.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary On October 14, 1983, the Commissioner oI Customs responded through a letter-comment addressed to the Board stating the Iollowing: xxx xxx xxxchanrob les virtual law lib rary Kindly be inIormed that seizure proceedings are proceedings instituted against the articles or goods. Whenever a decision is rendered in a seizure proceeding, it is Iinal and conclusive as to the goods but not as to the persons involved therein where another proceeding is necessary. Hence, any Iindings made in a seizure proceeding, with respect to the culpability or non-culpability oI the persons involved, cannot be considered binding as to aIIect the judgment that may be rendered in another. Seizure proceedings cannot make a Iinal and conclusive pronouncement as to the guilt or innocence oI persons. On October 19, 1983, petitioner Iiled an action Ior prohibition and injunction with preliminary injunction and restraining order against the Board. On October 24, 1983, the trial court issued a restraining order directing the Board and its oIIicials to desist and to stop Irom implementing the decision revoking the petitioner's export quota allocations and Irom disqualiIying its principal stockholder and oIIicers Irom engaging in the textile and garment export business.chanrob lesvirtualawlib rary chanrobles virtual law library The Board moved to reconsider but the same was denied. On November 14, 1983, the lower court issued a writ oI preliminary injunction. This, notwithstanding, the next day, the Board denied petitioner's request Ior reinstatement "on the basis oI the above letter (the letter oI the Commissioner oI Customs dated October 14, 1983) and Ior the reason that no new issues had been presented to warrant the reinstatement. "chanrobles virtual law lib rary AIter hearing, the trial court rendered judgment in Iavor oI the petitioner, and among others directed the Board to issue to the petitioner within two days Irom service oI the writ, %extile Export Clearances Nos. 23292, 22583 and 14321, and to issue the pertinent clearances with respect to the textile export shipments oI the petitioner aIter Iiling oI the required papers and documents. In its decision, the trial court stated: The summary revocation oI the export quotas and export authorizations issued in Iavor oI the petitioner without hearing violates not only the above-mentioned provisions oI the Rules and Regulations oI the respondent board but also the 'due process oI law' clause oI the Constitution oI the Philippines to the eIIect that 'no person shall be deprived oI liIe, liberty, or property without due process oI law, nor shall any person be denied equal protection oI the laws.' (Article IV, Sec. 1, New Constitution). According to Daniel Webster in the Dartmouth College case, due process is the equivalent oI the law; a law which hears beIore it condemns, which proceeds upon inquiry and renders judgment only aIter trial. The meaning is that every citizen shall hold his liIe, liberty, property, and immunities under the protection oI the general rules which govern society. (cited in Philippine Constitutional Law, p. 168 by Neptali Gonzales, 1975 ed.) chanrobles virtual law library Administrative due process requires that there be an impartial tribunal constituted to determine the right involved; that due notice and opportunity to be heard be given; that the procedure at the hearing be consistent with the essentials oI a Iair trial; and that the proceedings be conducted in such a way that there will be opportunity Ior a court to determine whether the applicable rules oI law and procedure were observed. (42 Am. Jur. p. 451, cited by Neptali Gonzales, p. 183, Philippine Constitutional Law). The Board appealed the decision to the Intermediate Appellate Court.chanroblesvirtualawlibrary chanrobles vir tual law lib rary On January 4, 1984, the appellate court modiIied the trial court's decision. It aIIirmed all the Iindings oI Iact oI the court and held that the petitioner was denied due process by the Board when it cancelled the export quota allocations. It set aside the letters oI the Board dated March 2, 1983 and November 14, 1983. However, the appellate court ordered the Board to give the petitioner and its oIIicers due hearing to determine whether or not any oI its rules and regulations had been violated as to warrant the imposition oI any penalty against them. Until such hearings were held, the petitioner's export quota allocations were to remain cancelled and its oIIicers suspended. This modiIication is now the subject oI this petition.chanroblesvirtualawli brary chanrobles vir tual law lib rary The petitioner contends that the appellate court committed grave abuse oI discretion when it ordered a new hearing to be conducted unnecessarily since even without controverting evidence, the evidence on record relied upon by the Board Iailed miserably to measure up to the requisite oI "substantial evidence. "chanrobles virtual law l ibrary This contention has no merit.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary Executive Order No. 823 provides, among others: The GTEB shall have the Iollowing powers and Iunctions: chanrobles virtual law libra ry h. In case oI violations oI its rules and regulations, cancel or suspend quota allocations, export authorizations and licences Ior the operation oI bonded garment manuIacturing warehouses. (Sec. 2|h| Exec. Order No. 823 amended Sec. 3|h| oI Exec. Order No. 537). Likewise, under its Rules and Regulations, said Executive Order provides: Rules and Reulations. Section III. Penalties.- Any act or misrepresentation or violation oI these Rules and Regulations shall, aIter due hearing, constitute suIIicient ground Ior the imposition oI a Iine oI not more than ten per cent (10) oI the gross FOB value oI the goods exported or Ior a total or partial IorIeiture oI the oIIender's Export Quota, Export Authorization and Export License and permit or temporary disqualiIication Irom enjoying the privilege to export under all Agreements on textiles, without prejudice to any liabilities under other applicable laws. (Sec. III, Part 111, Rules and Regulations). It is clear Irom the above provisions that the respondent Board is the body charged with the Iunction oI granting export quota allocations, issuing licenses to operate bonded warehouses and revoking or cancelling the same. Correspondingly, it is also authorized to conduct hearings to determine whether or not violations have been committed by the grantee .The Board acted arbitrarily when, aIter acting solely upon the initial Iindings oI the Bureau oI Customs, it issued the questioned order but once the basis Ior its action proved non-existent, it reIused to liIt its erroneous and unIounded order.chanroblesvirtualawlib rary chanrobles virtual law libra ry However, since the Board has reason to believe that the petitioner might have violated its rules and regulations in connection with the importation oI materials Ior the petitioner's garment industry then it has the discretion to conduct a proper hearing to determine the petitioner's culpability or non-culpability. It does not have to rely on the Iindings oI other agencies to discharge this Iunction.chanroblesvirtualawl ibrary chanrobles vi rtual law lib rary In its second assignment oI error, the petitioner maintains that the appellate court erred in allowing the implementation oI the orders oI the respondent Board when such orders were set aside Ior having been issued without a hearing.chanroblesvir tualawlibra ry chanrobles virtual law l ibrary There is merit in this contention.chanroblesvirtualawl ibrary chanrobles vi rtual law lib rary The appellate court should have reversed and set aside the cancellation oI petitioner's export quota allocations and the suspension oI its oIIicers since the very bases oI these measures were set aside because oI lack oI due process. As the trial court correctly pointed out: It is worthwhile to note that the basis oI the revocation oI the export quotas and export authorizations issued in Iavor oI the petitioner was based on the initial Iindings oI the Bureau oI Customs regarding certain shipments but subsequently the acting collector oI customs oI the port oI Manila, Mr. Bienvenido P. Alano, Jr., cleared the petitioner oI any wrongdoing and declared that it had no participation in the irregularities relative to the subject shipments. (Decision dated July 25, 1983, Exhibit "A"). The decision oI the acting collector oI customs oI the port oI Manila became Iinal on August 18, 1983. The basis oI the revocation has, thereIore, become ineIIective and unenIorceable so that the revocation has no more leg to stand on.chanroblesvirtualawlibra ry chanrobles virtual law l ibrary The petitioner has shown by its evidence and the allegations oI its veriIied petition that it is entitled to the relieIs demanded and the whole or part oI such relieIs consists in restraining the commission or continuance oI the acts complained oI and that great or irreparable injury would result to the petitioner beIore the trial or termination oI this case. It has been shown by the evidence presented during the hearing Ior the issuance oI the writs oI preliminary injunction prayed Ior by the petitioner that Ioreign companies with whom the petitioner have entered into contracts regarding its export business like Itoman (U.S.A.) Inc., New York, N.Y., and the C. ITOH and Co., Ltd. Tokyo, Japan, have threatened to cancel their contracts with the petitioner and to sue the latter Ior damages iI it cannot comply with its commitments to them (Exhs. "I" and "J"), thereby showing that the petitioner would suIIer great and irreparable injury iI the injunctions prayed Ior will not be granted. Aside Irom this, the 700 employees and workers oI the petitioner will be practically jobless and they and their Iamilies will suIIer greatly Ior the duration oI this case iI the injuctions will not be granted. To hold that there was a violation oI petitioner's right to due process but at the same time sustain the end results oI such violation would be tantamount to denying the right to due process just the same. Indeed, the importance oI this right which is guaranteed by the Constitution cannot be stressed strongly enough. In the case oI Bacus v. Ople, (132 SCRA 690, 704), we ruled: The principle oI due process Iurnishes a standard to which governmental action should conIorm in order to impress it with the stamp oI validity. Fidelity to such standard must oI necessity be the overriding concern oI government agencies exercising quasi-judicial Iunctions. Although a speedy administration oI action implies a speedy trial, speed is not the chieI objective oI a trial. Respect Ior the rights oI all parties and the requirements oI procedural due process equally apply in proceedings beIore administrative agencies with quasi- judicial perspective in administrative decision making and Ior maintaining the vision which led to the creation oI the administrative oIIice. (Citing Amberto V. Court oI Appeals, 89 SCRA 240 and Baguio Country Club Corporation v. National Labor Relations Commission, 118 SCRA 557). Equally important are the requisites oI due process in administrative proceedings reiterated in the case oI Halili v. Court of Industrial Relations, (136 SCRA 112, 131): xxx xxx xxxchanrob les virtual law lib rary . . . It is a settled rule that in administrative proceedings, or cases coming beIore administrative tribunals exercising quasi-judicial powers, due process requires not only notice and hearing, but also the consideration by the administrative tribunal oI the evidence presented; the existence oI evidence to support the decision; its substantiality; a decision based thereon or at least contained in the record and disclosed to the parties, such decision by the administrative tribunal resting on its own independent consideration oI the law and Iacts oI the controversy; and such decision acquainting the parties with the various issues involved and the reasons thereIor (Ang Tibay v. Court, 69 Phil. 635, cited on p. 84, Philippine Constitutional Law, Fernando, 1984 ed.) In the case at bar, the petitioner was never given the chance to present its side beIore its export quota allocations were revoked and its oIIicers suspended. While it is true that such allocations as alleged by the Board are mere privileges which it can revoke and cancel as it may deem Iit, these privileges have been accorded to petitioner Ior so long that they have become impressed with property rights especially since not only do these privileges determine the continued existence oI the petitioner with assets oI over P80,000,000.00 but also the livelihood oI some 700 workers who are employed by the petitioner and their Iamilies. As the appellate court correctly pointed out: xxx xxx xxxchanrob les virtual law lib rary . . . This reliance on the 'right privilege' dichotomy has long been denigrated by leading lights in administrative law as 'too crude Ior consistent application' by courts. Indeed, considering the total topography oI this case, the resort to the right-privilege distinction is too Ieeble a reIutation oI the Iact that there has been a disregard oI the due process requirement oI the Constitution by the petitioner Board. For the irreIutable Iact is that the private respondent has long been granted its export allocations on their basis, valuable contracts calling Ior textile export shipments have been concluded between the private respondent and Ioreign corporation. Stated otherwise, these export allocations can not anymore be categorized as mere 'privilege' but are already impressed with property rights oI the private respondent, They cannot be arbitrarily revoked without causing a collision with the constitutional call that there must be due process beIore anybody can be denied his right to property. Neither can the petitioner's request Ior reinstatement be considered as substantial compliance with the due process requirement so much so that any deIect in the initial cancellation oI the export quota allocations by the Board is deemed to have been cured by petitioner's request Ior reinstatement; an action which is alleged by the Board as being tantamount to a motion Ior reconsideration.chanroblesvirtualawlib rary chanrobles virtual law libra ry It should be noted that no reply was given by the Board when petitioner requested Ior reinstatement oI its allocations until an action Ior injunction was Iiled by petitioner. Only then did the Board deny petitioner's request on the basis oI the letter oI the Commissioner oI Customs that his Iindings were not conclusive as to the persons involved therein and on the ground that no new issues were presented by herein petitioner.chanroblesvirtualawlib rary chanrobles virtual law librar y How can petitioner present any "new issues" when it was never given the chance by the Board? Furthermore, the only reason the petitioner knew why its export quota allocations had been cancelled was the initial Iindings oI the Bureau oI Customs which were made the sole basis by the Board Ior such cancellation. It is only but logical that petitioner would only touch on this issue and nothing else. Thus, such request Ior reinstatement and the subsequent denial by the Board can hardly be considered a motion Ior reconsideration that "cured" the non-observance oI due process. Again, as pointed out by the appellate court: Nor are We persuaded by the proposition that the subsequent requests Ior restoration oI its export allocations made by the private respondent cured the due process deIiciency on the part oI the Board. The requests Ior restoration rest on the allegation oI the private respondent and its principal oIIicers that they had no hand in the illicit importation oI the apprehended shipment. The allegation is buttressed by the decision itselI oI the Acting Collector oI Customs oI the Port oI Manila holding that '. . . a careIul scrutiny oI the Iacts and the circumstance attendant to the case show that the Mabuhay Textile Mills have no participation in the irregularity relative to the subject shipment.' It may be technically true that this statement does not settle the criminal culpability oI the private respondent and its oIIicers Ior as pointed out by petitioner Brig. Gen. Ramon Farolan, Acting Commissioner oI Customs, a decision in a seizure proceedings is'. . Iinal and conclusive as to the oods but not as to the persons involved therein where another proceeding is necessary.' But this all the more sharpens the need Ior a real hearing where the private respondent and its oIIicers should be given a Iair opportunity to establish their innocence-a Iactual issue that cannot be resolved by mere resolution oI its requests Ior reinstatement on the basis oI in. Iormation known to the Board but unknown to the private respondent such as the exchange oI communications between petitioner Farolan and the Director General oI Customs oI Indonesia. Indeed even in judicial proceedings, the irreducible rule is that the dismissal oI an action upon a motion to dismiss constitutes a denial oI due process oI law iI Irom a consideration oI the pleadings it appears that there are issues of fact which cannot be decided without a trial oI the case on the merits. In quasi-judicial proceedings, the counterpart rule is that where an adfudicative fact is at issue, a trial- type hearing ought to be held. (Londoner v. Denver, 210 US 373, 386, 28 S. Ct. 708, 714, 52 L. ed. 1103 119081). While there is no controlling and precise deIinition oI due process, the guidelines laid down in the n %ibay v. Court case, supra, and all subsequent cases reiterating the same Iurnish an unavoidable standard to which government action must conIorm in order that any deprivation oI liIe, liberty, and property, in each appropriate case, may be valid. (See Eastern Broadcasting Corporation v. Dans, Jr., 137 SCRA 628).chanroblesvirtualawlibrary chanrobles virt ual law libra ry WHEREFORE, IN VIEW OF THE FOREGOING, the petition is GRANTED and the decision oI the appellate court dated January 6, 1984 and its order oI June 6, 1984 are SET ASIDE. The respondent Board is hereby ordered to conduct a hearing where the petitioner is accorded due process to determine whether or not the petitioner has violated any oI its rules and regulations. Pending such hearing, and to maintain the status quo ante oI the parties, the Board is directed to issue Textile Export Clearances in Iavor oI the petitioner without prejudice to the revocation oI the same iI the petitioner is Iound to be guilty oI any such violation. No costs.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary SO ORDERED.
EN BANC
G.R. No. 175573, September 11, 2008]
OFFICE OF THE OMBUDSMAN, PETITIONER, VS. 1OEL S. SAMANIEGO, 1] RESPONDENT.
D E C I S I O N
CORONA, 1.:
This is a petition Ior review under Rule 45 oI the Rules oI Court assailing the resolutions |2| oI the Court oI Appeals (CA) dated September 11, 2006 and November 21, 2006 in CA-G.R. SP No. 89999 captioned Joel S. Samanieo v. Commission on udit, Provincial uditors Office of lbay, Leaspi City, lbay.
The Iacts Iollow.
Respondent Joel S. Samaniego was the City Treasurer oI Ligao City, Albay. On separate dates, the Commission on Audit (COA) through its Regional Cluster Director Atty. Francisco R. Velasco |3| Iiled two administrative complaints against Samaniego, docketed as OMB-L-A- 03-1060-K |4| and OMB-L-A-03-1061-K, |5| Ior dishonesty and grave misconduct.
In these administrative complaints, the COA alleged that respondent incurred shortages in his accountabilities Ior two separate periods. |6|
Respondent received letters oI demand requiring him to explain his side and settle his accountabilities.
In his counter-aIIidavit, respondent averred, among others, that OMB- L-A-03-1060-K was bereIt oI Iactual basis. He likewise averred that the alleged amount oI his accountability in OMB-L-A-03-1061-K was the same amount cited in OMB-L-A-03-1060-K. He also pleaded the deIense oI restitution oI his alleged accountabilities.
In a joint decision dated April 11, 2005, the OIIice oI the Deputy Ombudsman Ior Luzon Iound respondent liable Ior grave misconduct |7| because he Iailed to explain his side and settle his accountabilities in OMB-L-A-03-1060-K. He was meted the penalty oI one year suspension Irom oIIice. In the same decision, however, OMB-L-A-03-1061-K was dismissed in view oI respondent's restitution oI his accountability. |8|
Via a petition Ior review on certiorari under Rule 43 with a motion Ior the issuance oI a writ oI preliminary injunction in the CA, respondent assailed the April 11, 2005 joint decision oI the OIIice oI the Ombudsman insoIar as it Iound him liable in OMB-L-A-03-1060-K. This petition was captioned Joel Samanieo versus Commission on udit, Provincial uditors Office, Leaspi City, lbay and docketed as CA - G.R. SP No. 89999. His prayer Ior the issuance oI a writ oI preliminary injunction was granted.
Since it was not impleaded as a respondent in CA- G.R. SP No. 89999, the OIIice oI the Ombudsman Iiled a motion Ior intervention and to admit the attached motion to recall the writ oI preliminary injunction. The motions were denied.
The OIIice oI the Ombudsman now claims that the CA erred in denying its right to intervene, considering that its joint decision was the subject oI the appeal. It also asserts that the writ oI preliminary injunction should be recalled.
We rule Ior the OIIice oI the Ombudsman. |9|
MANDATE OF THE OFFICE OF THE OMBUDSMAN
Section 27, Article II oI the Constitution reads: The State shall maintain honesty and integrity in the public service and take positive and eIIective measures against graIt and corruption. To implement this, the Constitution established the OIIice oI the Ombudsman, composed oI the Ombudsman, one overall deputy and at least one Deputy each Ior Luzon, Visayas and Mindanao. |10| It was the intention oI the Constitution to make the Ombudsman independent.
The purpose oI the OIIice oI the Ombudsman is enunciated in Section 12, Article XI oI the Constitution: The Ombudsman and his Deputies, as protectors oI the people, shall act promptly on complaints Iiled in any Iorm or manner against public oIIicials or employees oI the government, or any subdivision, agency or instrumentality thereoI, including government-owned or controlled corporations, and shall, in appropriate cases, notiIy the complainants oI the action taken and the result thereoI. The OIIice oI the Ombudsman is a unique position in the 1987 Constitution. |11| The Ombudsman and his deputies Iunction essentially as a complaints and action bureau. |12| Congress enacted Republic Act (RA) 6770 |13| providing broad powers, |14| as well as a Iunctional and structural organization, to the OIIice oI the Ombudsman to enable it to perIorm its constitutionally-mandated Iunctions.
RA 6770 states the mandate oI the Ombudsman: SEC. 13. Mandate. - The Ombudsman and his deputies, as protectors oI the people, shall act promptly on complaints Iiled in any Iorm or manner against oIIicers or employees oI the Government, or oI any subdivision, agency or instrumentality thereoI, including government- owned or controlled corporations, and enIorce their administrative, civil and criminal liability in every case where the evidence warrants in order to promote eIIicient service by the Government to the people. To aid the Ombudsman in carrying out its tasks, it was vested with disciplinary authority over government oIIicials. |15| The scope oI this authority was discussed in Office of the Ombudsman v. C: |16|
|The OIIice oI the Ombudsman| is vested with "Iull administrative disciplinary authority" including the power to "determine the appropriate penalty imposable on erring public oIIicers or employees as warranted by the evidence, and necessarily, impose the said penalty." Thus, the provisions in |RA| 6770 taken together reveal the maniIest intent oI the lawmakers to bestow on the OIIice oI the Ombudsman full administrative disciplinary authority. These provisions cover the entire gamut of administrative adjudication which entails the authority to, inter alia, receive complaints, conduct investigations, hold hearings in accordance with its rules of procedure, summon witnesses and require the production of documents, place under preventive suspension public officers and employees pending an investigation, determine the appropriate penalty imposable on erring public officers or employees as warranted by the evidence and necessarily, impose the said penalty.xxx (emphasis supplied) Full disciplinary authority is one oI the broad powers granted to it by the Constitution and RA 6770. These broad powers, Iunctions and duties are generally categorized into: investigatory power, prosecutory power, public assistance Iunctions, authority to inquire and obtain inIormation, and the Iunction to adopt, institute and implement preventive measures. |17|
Actions oI the Ombudsman that do not Iall squarely under any oI these general headings are not to be construed outright as illegal. The avowed purpose oI preserving public trust and accountability must be considered. So long as the Ombudsman's actions are reasonably in line with its oIIicial Iunctions and are not contrary to law and the Constitution, they should be upheld. DeIending its decisions in the CA is one such power.
The Ombudsman is expected to be an "activist watchman," not merely a passive onlooker. |18| A statute granting powers to an agency created by the Constitution t such as RA 6770 t should be liberally construed to advance the objectives Ior which it was created. |19| In Buenaseda v. Flavier, |20| we held that any interpretation oI RA 6770 that hampers the work oI the Ombudsman should be avoided.
Taking all this into consideration, the Ombudsman is in a league oI its own. It is diIIerent Irom other investigatory and prosecutory agencies oI the government because the people under its jurisdiction are public oIIicials who, through pressure and inIluence, can quash, delay or dismiss investigations directed against them. |21| Its Iunction is critical because public interest (in the accountability oI public oIIicers and employees) is at stake.
The Ombudsman concept originated in Sweden and other
Scandinavian countries. |22| Its original and classic notion was that oI an independent and politically neutral oIIice which merely received and processed the people's complaints against corrupt and abusive government personnel. |23| The Philippine Ombudsman deviated Irom the classic model. It retained the characteristic independence and political neutrality but the range oI its Iunctions and powers was enlarged.
Given the Ioregoing premises, we cannot limit the powers oI the Ombudsman iI its acts are not contrary to law or the Constitution.
INTERVENTION BY THE OMBUDSMAN IN CASES IN WHICH ITS DECISION IS ASSAILED Section 1, Rule 19 oI the Rules oI Court provides:
Section 1. Who may intervene. - A person who has a legal interest in the matter in litigation, or in the success oI either parties, or an interest against both, or is so situated as to be adversely aIIected by a distribution or other disposition oI property in the disposition oI the court or oI an oIIicer thereoI may, with leave oI court be allowed to intervene in the action. xxx Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes a litigant therein to enable him to protect or preserve a right or interest which may be aIIected by such proceeding. |24| Its purpose is to settle in one action and by a single judgment the whole controversy (among) the persons involved. |25|
Intervention is not an absolute right |26| as it can be secured only in accordance with the terms oI the applicable statute or rule. In claiming the right to intervene, the intervenor must comply with the requirements laid down by Rule 19 oI the Rules oI Court which provides that the intervenor must have a legal interest in any oI the Iollowing: (a) the matter in controversy; (b) the success oI either oI the parties; (c) against both parties or (d) be so situated as to be adversely aIIected by a distribution or other disposition oI property in the disposition oI the court or oI an oIIicer thereoI. |27|
Intervention must not unduly delay or prejudice the adjudication oI rights oI the original parties. |28| Moreover, it must be shown that the intervenor's rights may not be Iully protected in a separate proceeding. |29|
The legal interest must be actual and material, direct and immediate. |30|
In asaysay-Labrador v. C, |31| the interest which entitles a person to intervene in a suit: |m|ust be on the matter in litigation and oI such direct and immediate character that the intervenor will either gain or lose by the direct legal operation and eIIect oI the judgment. The words "an interest in the subject" mean a direct interest in the cause oI action as pleaded and which would put the intervenor in a legal position to litigate a Iact alleged in the complaint, without the establishment oI which plaintiII could not recover. The CA denied petitioner's motion Ior intervention Ior lack oI basis, reasoning that: In the instant case, the Ombudsman's intervention is not proper considering that, other than its objection to the issuance oI the injunctive writ, no legal interest in the matter subject oI litigation has been alleged by the Ombudsman in the motion Ior intervention. xxx We disagree.
The OIIice oI the Ombudsman suIIiciently alleged its legal interest in the subject matter oI litigation. Paragraph 2 oI its motion Ior intervention and to admit the attached motion to recall writ oI preliminary injunction averred: 2. As a competent disciplining body, the Ombudsman has the right to seek redress on the apparently erroneous issuance by this Honorable Court oI the Writ oI Preliminary Injunction enjoining the implementation oI the Ombudsman's Joint Decision imposing upon petitioner the penalty oI suspension Ior one (1) year, consistent with the doctrine laid down by the Supreme Court in PNB vs]. Garcia, xxx and CSC vs]. Dacoycoy, xxx; (citations omitted; emphasis in the original) In asserting that it was a "competent disciplining body," the OIIice oI the Ombudsman correctly summed up its legal interest in the matter in controversy. In support oI its claim, it invoked its role as a constitutionally mandated "protector oI the people," a disciplinary authority vested with quasi-judicial Iunction to resolve administrative disciplinary cases against public oIIicials. |32| To hold otherwise would have been tantamount to abdicating its salutary Iunctions as the guardian oI public trust and accountability. |33|
Moreover, the OIIice oI the Ombudsman had a clear legal interest in the inquiry into whether respondent committed acts constituting grave misconduct, |34| an oIIense punishable under the UniIorm Rules in Administrative Cases in the Civil Service. |35| It was in keeping with its duty to act as a champion oI the people and preserve the integrity oI public service |36| that petitioner had to be given the opportunity to act Iully within the parameters oI its authority.
It is true that under our rule on intervention, the allowance or disallowance oI a motion to intervene is leIt to the sound discretion oI the court |37| aIter a consideration oI the appropriate circumstances. |38|
However, such discretion is not without limitations. |39| One oI the limits in the exercise oI such discretion is that it must not be exercised in disregard oI law and the Constitution. The CA should have considered the nature oI the Ombudsman's powers as provided in the Constitution and RA 6770.
Moreover, the rule on intervention is a rule oI procedure whose object is to make the powers oI the court Iully and completely available Ior justice, not to hinder or delay it. |40|
Both the CA |41| and respondent likened the OIIice oI the Ombudsman to a judge whose decision was in question. |42| This was a tad too simplistic (or perhaps even rather disdainIul) oI the power, duties and Iunctions oI the OIIice oI the Ombudsman. The OIIice oI the Ombudsman cannot be detached, disinterested and neutral specially when deIending its decisions. Moreover, in administrative cases against government personnel, the oIIense is committed against the government and public interest. What Iurther prooI oI a direct constitutional and legal interest in the accountability oI public oIIicers is necessary?
PROPRIETY AND NECESSITY OF IN1UNCTION IN APPEALS OF THE DECISIONS OF THE OMBUDSMAN
The CA anchored its denial oI the motion to recall the writ oI preliminary injunction on its lack oI authority over the case. (The OIIice oI the Ombudsman's motion Ior intervention was allegedly improper). But the OIIice oI the Ombudsman could properly intervene in the appeal Iiled by respondent and thereIore, the CA could determine whether a recall oI the injunctive writ was proper.
In the interest oI justice and practicality, we will rule on the propriety oI the issuance oI the injunctive writ.
The applicable provision oI law is Section 7, Rule III oI the Rules oI Procedure oI the Ombudsman, as amended: |43|
Section 7. Finality and execution oI decision. - xxx where the penalty imposed is public censure or reprimand, suspension oI not more than one month, or a Iine equivalent to one month salary, the decision shall be Iinal, executory and unappealable. In all other cases, the decision may be appealed to the Court oI Appeals xxx.
An appeal shall not stop the decision Irom being executory. xxx. A literal reading oI this rule shows that the mere Iiling oI an appeal does not prevent the decision oI the Ombudsman Irom becoming executory. However, we clariIied this rule in Office of the Ombudsman v. Lafa: |44|
|O|nly orders, directives or decisions oI the OIIice oI the Ombudsman in administrative cases imposing the penalty oI public censure, reprimand, or suspension oI not more than one month, or a Iine not equivalent to one month salary shall be Iinal and unappealable hence, immediately executory. In all other disciplinary cases where the penalty imposed is other than public censure, reprimand, or suspension of not more than one month, or a fine not equivalent to one month salary, the law gives the respondent the right to appeal. In these cases, the order, directive or decision becomes final and executory only after the lapse of the period to appeal if no appeal is perfected, or after the denial of the appeal from the said order, directive or decision. It is only then that execution shall perIorce issue as a matter oI right. The fact that the Ombudsman Act gives parties the right to appeal from its decisions should generally carry with it the stay of these decisions pending appeal. Otherwise, the essential nature oI these judgments as being appealable would be rendered nugatory. (emphasis in the original). The penalty meted out to respondent was suspension Ior one year without pay. He Iiled an appeal oI the Ombudsman's joint decision on time. In his appeal, he included a prayer Ior the issuance oI a writ oI preliminary injunction in order to stay the execution oI the decision against him. Following Office of the Ombudsman v. Lafa, we hold that the mere Iiling by respondent oI an appeal suIIiced to stay the execution oI the joint decision against him. Respondent's prayer Ior the issuance oI a writ oI preliminary injunction (Ior purposes oI staying the execution oI the decision against him) was thereIore a superIluity. The execution oI petitioner's joint decision against respondent should be stayed during the pendency oI CA-G.R. SP No. 89999.
WHEREFORE, the petition is hereby GRANTED. The resolutions oI the Court oI Appeals dated September 11, 2006 and November 21, 2006 are hereby REVERSED and SET ASIDE. Accordingly, the Court oI Appeals is ordered to allow the intervention oI the OIIice oI the Ombudsman in CA-G.R. SP No. 89999. The writ oI preliminary injunction is hereby LIFTED as the execution oI the decision in OMB-L-A-03-1060-K was (and still is) stayed by the Iiling and pendency oI CA-G.R. SP No. 89999.
G.R. No. 109703 1uly 5, 1994 REALTY EXCHANGE VENTURE CORPORATION AND/OR MAGDIWANG, REALTY CORPORATION, Petitioner, vs. LUCINA S. SENDINO and the OFFICE OF THE EXECUTIVE SECRETARY, Office of the President, Malacaang, Manila, Respondents. KAPUNAN, chanrobles virtual law library Private respondent Lucina C. Sendino entered into a reservation agreement with Realty Exchange Venture, Inc. (REVI) Ior a 120- square meter lot in Raymondville Subdivision in Sucat, Paranaque Ior P307,800.00 as its purchase price. 1 She paid P1,000.00 as partial reservation Iee on January 15, 1989 and completed payment oI this Iee on January 20, 1989 by paying P4,000.00. 2 chanrobles virtual law libra ry On July 18, 1989, private respondent paid REVI P16,600.00 as Iull downpayment on the purchase price. 3 However, she was advised by REVI to change her co-maker, which she agreed, asking Ior an extension oI one month to do so.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary For alleged non-compliance with the requirement oI submission oI the appropriate documents under the terms oI the original agreement, 4
REVI, through its Vice-President Ior Marketing, inIormed respondent oI the cancellation oI the contract on the 31st oI July 1989. 5 chanrobles virtual law li brary On April 20, 1990, private respondent Iiled a complaint Ior SpeciIic PerIormance against REVI with the oIIice oI Appeals, Adjudication and Legal AIIairs (OAALA) oI the Housing and Land Use Regulatory Board (HLURB) asking that respondent be ordered: 1. To comply and continue with the sale oI the house and lot, Block 4, Lot 17 at the Raymondville Subdivision, Sucat Road, Paranaque, Metro Manila;chanro bles virtual law li brary 2. To pay complainant actual, nominal and moral damages, the amount oI which will be proved in the hearing;chanrobles vi rtual law lib rary 3. To pay complainant attorney's Iee in the sum oI P10,000.00;chanrobles virtual law lib rary 4. To pay complainant exemplary damages in the sum oI P10,000.00 to set an example and to avoid a repetition oI such illegal and unsound business practices oI the respondent. 6 chanrobles virtual law library This petition was amended on August 17, 1990 by impleading petitioners Magdiwang Realty Corporation (MRC) which appeared to be the registered owner oI the subject lot as per TCT No. 76023.chanroblesvirtualawlibrary chanrobles virtual law libra ry On April 3, 1991 the HLURB, whose authority to hear and decide the complaint was challenged by REVI in its answer, 7 rendered its judgment in Iavor oI private respondent and ordered petitioners to continue with the sale oI the house and lot and to pay private respondent P5,000 as moral damages, P5,000 as exemplary damages and P6,000 as attorney's Iees and costs oI the suit. 8 An appeal Irom this decision was taken to the HLURB OAALA Arbiter, which aIIirmed the Board's decision. The decision oI the OAALA Arbiter was appealed to the OIIice oI the President, herein public respondent.chanroblesvirtualawlibra ry chanrobles vir tual law lib rary On January 7, 1993, the public respondent rendered its decision dismissing the petitioners' appeal. Motion Ior reconsideration oI the decision was denied by the public respondent on January 26, 1993. Consequently petitioners come beIore this Court, in this petition, which the Court resolves to treat as a petition Ior certiorari, raising the Iollowing issues: I chanrobles virtual law lib rary PUBLIC RESPONDENT COMMITTED SERIOUS ERROR IN DECLARING THAT THE HOUSING AND LAND USE REGULATORY BOARD HAS QUSI-JUDICIL FUNCTIONS, NOTWITHSTANDING ABSENCE OF EXPRESS GRANT BY EXECUTIVE ORDER NO. 90 OF DECEMBER 17, 1986 WHICH CREATED IT. AND EVEN IF THE HLURB HAS QUASI-JUDICIAL FUNCTIONS, PUBLIC RESPONDENT LIKEWISE SERIOUSLY ERRED IN DECLARING THAT THE BOARD OF COMMISSIONERS IS ALLOWED TO SIT IN A DECISION TO RENDER JUDGMENT AND TO DELEGATE ITS QUASI-JUDICIAL AUTHORITY TO A SUBORDINATE OFFICE. II chanrobles virtual law librar y PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION IN DECLARING THAT THE LOT SUBJECT OF THE CONTRACT SOUGHT TO BE ENFORCED IS PARAPHERNAL DESPITE ADMISSION OF ITS CONJUGAL NATURE. III chanrobles virtual law library PUBLIC RESPONDENT GRAVELY ABUSED ITS DISCRETION IN DECLARING THAT ONLY NOTARIAL NOTICE OF RESCISSION MAY VALIDLY CANCEL A RESERVATION AGREEMENT PURSUANT TO REPUBLIC ACT NO. 6552. As the Iirst and third issues raised by the petitioners strike at the core oI the case at bench, this Court deems it appropriate to initially dispose oI the issue oI private respondent's capacity to bring her complaint beIore the HLURB-OAALA.chanroblesvirtualawlib rary chanr obles virtual law l ibrary It is settled that rules oI procedure are as a matter oI course construed liberally in proceedings beIore administrative bodies. 9 In the instant case, the original suit Ior speciIic perIormance and damages was Iiled by the private respondent with the HLURB-OAALA, an administrative body not hamstrung by the strict procedural technicalities oI the Rules oI Court. Under the circumstances, it was certainly appropriate Ior the HLURB-OAALA to have acted on the substantive questions relating to the validity oI petitioners' unilateral rescission oI the contract without unduly concerning itselI with a mere procedural slip, the non-joinder oI private petitioner's husband in the original complaint beIore the HLURB. Moreover, since petitioners participated in the administrative proceedings without objecting to or raising the procedural inIirmity, they were certainly estopped Irom raising it on appeal beIore the OIIice oI the President and beIore this Court.chanroblesvirtualawlibrary chan robles virtual law library Proceeding to the principal issues raised by the petitioner, while E.O. 85 dated 12 December 1986 abolished the Ministry oI Human Settlements (MHS), it is patently clear Irom a reading oI its provisions that the said executive order did not abolish the Human Settlements Regulatory Commission (HSRC) which continued to exercise its powers and Iunctions even aIter the Ministry oI Human Settlements ceased to exist. In spite oI the Aquino Government's stated intention oI eradicating what it considered the vestiges oI the previous regime, it was not its intention to create a vacuum by abolishing those juridical entities, agencies, corporations, etc., attached to or supervised by the MHS, which perIormed vital administrative Iunctions. Pertinently, Section 3 oI E.O. 85 mandates that: . . . The Iinal disposition and Iinal organizational alignment or attachment oI the juridical entities, agencies, corporations and councils attached to, or under the administrative supervision oI the MHS including their respective existing projects, appropriations and other assets shall be subject to subsequent enactments by the President. Pursuant to this provision thereIore, the President subsequently issued Executive Order No. 90, series oI 1986, recognizing the Human Settlements Regulatory Commission (renamed the HLURB) as one oI the principal housing agencies oI the government. Prior to this, Executive Order No. 648 in 1981 transIerred all the Iunctions oI the National Housing Authority (pursuant to Presidential Decrees Nos. 957, 1216 and 1344) to the Human Settlements Regulatory Commission (HSRC) consolidating all regulatory Iunctions relating to land use and housing development in a single entity. 10 Being the sole reulatory body Ior housing and land development, the renamed body, the HLURB, 11 would have been reduced to a Iunctionally sterile entity iI, as the petitioner contends, it lacked the powers exercised by its predecessor which included the power to settle disputes concerning land use and housing development and acquisition. Moreover, this Court has had the occasion to deIinitively rule on the question as to whether or not the Housing and Land Use Regulatory Board could exercise the same quantum oI judicial or quasi-judicial powers possessed by the HSRC under the Ministry oI Human Settlements in the exercise oI its regulatory Iunctions when it held, in United Housin Corporation vs. Hon. Dayrit 12 that: As explicitly provided by law, jurisdiction over actions Ior speciIic perIormance oI contractual and statutory obligations Iiled by buyers oI subdivision lot or condominium unit against the owner or developer, is vested exclusively in the HSRC, Section 1 oI PD 1344, in no uncertain terms, provides: chanrobles virtual law libra ry Sec. 1. In the exercise oI its Iunctions to regulate real estate trade and business and in addition to its powers provided Ior in Presidential Decree No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and decide cases oI the Iollowing nature: A. Unsound real estate business practices;chanrobles virt ual law libra ry B. Claims involving reIund and any other claims Iiled by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman; andchanrob les virtual law lib rary C. Cases involving specific performance of contractual and statutory obliations filed by buyers of subdivision lot or condominium unit aainst the owner, developer, dealer, broker or salesman. (Emphasis Ours) This is reinIorced by section 8 oI EO 648 (otherwise known as the Charter oI the Human Settlements Regulatory Commission) which took eIIect on February 7, 1981, thus: chanrobles virtual law l ibrary Sec. 8. %ransfer of Functions. - The Regulatory Iunctions oI the National Housing Authority pursuant to Presidential Decree Nos. 957, 1216, 1344 and other related laws are hereby transIerred to the Human Settlements Regulatory Commission. . . . Among the regulatory Iunctions are . . . (11) Hear and decide cases oI unsound real estate business practices, claims involving reIund Iiled against project owners, developers, dealers, brokers, or salesmen and cases oI specific performance (Emphasis Ours).chanroblesvirtualawlib rary chanrob les virtual law lib rary Private respondents reliance, thereIore, on sections 1 and 8 oI the Judiciary Reorganization Act oI 1980 is untenable. Thus, as correctly pointed out by petitioner, section 19, paragraph 6 oI said law is material to the issue oI where jurisdiction lies, and We quote: Sec. 19. . . .chanroblesvirtualawlibrar y chanrobles virt ual law libra ry (6) In all other cases not within the exclusive furisdiction of any court, tribunal, persons or body exercising judicial or quasi-judicial Iunctions. xxx xxx xxxchanrob les virtual law lib rary Neither can We accede to private respondents' claim that resort to the courts is justiIied under section 41 oI PD 957 speciIically under the phrase "legal remedies that may be available to aggrieved subdivision lot buyers." There is no question that a statute may vest exclusive original jurisdiction in an administrative agency over certain disputes and controversies Ialling within the agency's special expertise. The constitutionality oI such grant oI exclusive jurisdiction to the National Housing Authority (now Housing and Land Use Regulatory Board) over cases involving the sale oI lots in commercial subdivisions was upheld in %ropical Homes Inc. v. National Housin uthority (152 SCRA 540 |1987|) and again sustained in a later decision in ntipolo Realty Corporation v. National Housin uthority (153 SCRA 399 |1987|) where We restated that the National Housing Authority (now HLURB) shall have exclusive jurisdiction to regulate the real estate trade and business in accordance with the terms oI PD No. 957 which deIines the quantum oI judicial or quasi-fudicial powers oI said agency. 13 chanrobles virtual law l ibrary Clearly, thereIore, the HLURB properly exercised its jurisdiction over the case Iiled by the petitioners with its adjudicative body, the OAALA, in ordering petitioners to comply with their obligations arising Irom the Reservation Agreement. In general, the quantum oI judicial or quasi-judicial powers which an administrative agency may exercise is deIined in the agency's enabling act. In view oI the Court's pronouncement in United Housin Corporation vs. Hon. Dayrit, supra, recognizing the HLURB as the successor agency oI the HSRC's powers and Iunctions, it thereIore Iollows that the transIer oI such Iunctions Irom the NHA to the HRSC eIIected by Section 8 oI E.O. 648, series oI 1981, thereby resulted in the acquisition by the HLURB oI adjudicatory powers which included the power to "(h)ear and decide cases oI unsound real estate business practices . . . and cases oI speciIic perIormance." 14 Obviously, in the exercise oI its powers and Iunctions, the HLURB must interpret and apply contracts, determine the rights oI the parties under these contracts, and award damages whenever appropriate. 15 We Iail to see how the HSRC - which possessed jurisdiction over the actions Ior speciIic perIormance Ior contractual and statutory obligations Iiled by buyers oI subdivision lots against developers - had suddenly lots its adjudicatory powers by the mere Iiat oI a change in name through E.O. 90. One thrust oI the multiplication oI administrative agencies is that the interpretation oI such contracts and agreements and the determination oI private rights under these agreements is no longer a uniquely judicial Iunction. 16
The absence oI any provision, express or implied, in E.O. 90, repealing those quasi-judicial powers inherited by the HSRC Irom the National Housing Authority, Iurthermore militates against petitioners' position on the question.chanrob lesvirtualawlib rary chanrobles vi rtual law lib rary Going to petitioners' contention that the decision oI the OAALA should have been rendered by the Board oI Commissioners sitting en banc, we Iind ample authority - both in the statutes and in jurisprudence-justiIying the Board's act oI dividing itselI into divisions oI three. Under Section 5 oI E.O. 648 which deIines the powers and duties oI the Commission, the Board is speciIically mandated to "(a)dopt rules oI procedure Ior the conduct oI its business" and perIorm such Iunctions necessary Ior the eIIective accomplishment oI (its) above mentioned Iunctions." Since nothing in the provisions oI either E.O. 90 or E.O. 648 denies or withholds the power or authority to delegate adjudicatory Iunctions to a division, we cannot see how the Board, Ior the purpose oI eIIectively carrying out its administrative responsibilities and quasi-judicial powers as a regulatory body should be denied the power, as a matter oI practical administrative procedure, to constitute its adjudicatory boards into various divisions. AIter all, the power conIerred upon an administrative agency to issue rules and regulations necessary to carry out its Iunctions has been held "to be an adequate source oI authority to delegate a particular Iunction, unless by express provision oI the Act or by implication it has been withheld." 17 The practical necessity oI establishing a procedure whereby cases are decided by three (3) Commissioners Iurthermore assumes greater signiIicance when one notes that the HLURB, as constituted, only has Iour (4) Iull time commissioners and Iive (5) part time commissioners to deal with all the Iunctions, administrative, adjudicatory, or otherwise, entrusted to it. 18 As the OIIice oI the President noted in its February 26, 1993 Resolution denying petitioners' Motion Ior Reconsideration, "it is impossible and very impractical to gather the Iour (4) Iull time and Iive (5) part time commissioners (together) just to decide a case." Considering that its part time commissioners act merely in an ex- officio capacity, requiring a majority oI the Board to sit en banc on each and every case brought beIore it would result in an administrative nightmare. 19 chanrobles virtual law library Finally, petitioners' assertion that RA 6552 is inapplicable in the instant case because the said law does not apply to cases oI reservation agreements Iinds no merit in the case at bench in view oI Section 24 oI P.D. 957 which provides: Sec. 24. Failure to Pay Installments - The rights oI the buyer in the event oI his Iailure to pay the installments due Ior reasons other than the Iailure oI the owner or developer to develop the project shall be governed by Republic Act No. 6552. As the Solicitor General correctly pointed out, RA 6552 makes no distinction between "option" and "sale" 20 which, under P.D. 957 also includes "an exchange or attempt to sell, an option oI sale or purchase, a solicitation oI a sale or an oIIer to sell directly." 21 This all- embracing deIinition virtually includes all transactions concerning land and housing acquisition, including reservation agreements. Since R.A. 6552 mandates cancellation by notarial act - among other requirements - beIore any cancellation oI a contract may be eIIected, petitioners' precipitate cancellation oI its contract with private respondent without observing the conditions imposed by the said law was invalid and improper.chanroblesvirtualawlibrary chanr obles virtual law l ibrary In Iine, the HLURB-OAALA acted within the scope oI its authority in ordering petitioners to comply and continue with the sale oI the house and lot subject oI the contract between the original parties. It cannot be gainsaid that the quasi-judicial Iunctions exercised by the body are necessary incidents to the proper exercise oI its powers and Iunctions under E.O. 90 and the laws enacted delineating the scope oI authority oI its Board oI Commissioners. Denying the body those Iunctions so necessary in carrying out its power to regulate housing and land use results in its eIIective emasculation as an important regulatory body in an area vital to the national economy.chanrob lesvirtualawlib rary chanrobles vi rtual law lib rary The acute housing shortage problem has prompted thousands oI middle and lower class buyers oI houses and lots and condominium units to enter into all sorts oI agreements with private housing developers involving all manner oI installment schemes under contracts drawn exclusively by these developers. Many oI these virtual contracts oI adhesion entrap innocent buyers by requiring cash deposits under reservation agreements which include, sometimes in the Iine print, deIault clauses guaranteeing huge monetary windIalls Ior the developers in the event that their buyers (oItentimes Ior the Ilimsiest oI reasons) deIault by Iailing to come up with certain requirements. While the Court can take judicial notice oI this pernicious practice, it can only hope that Iuture legislation would address the need to protect the innocent middle or lower class home purchaser. In the case oI the individual victim, this Court can only go to the extent oI awarding such damages as may be proper under the peculiar circumstances oI the cases brought beIore it.chanroblesvirtualawlib rary chanr obles virtual law l ibrary WHEREFORE, premises considered, the petition is hereby DISMISSED Ior lack oI merit. Costs against petitioners.chanroblesvirtualawlibra ry chanrobles vir tual law lib rary SO ORDERED. Cru:, Davide, Jr., Bellosillo and Quiason, JJ., concur.
EN BANC G.R. No. L-25024 March 30, 1970 TEODORO C. SANTIAGO, 1R. Minor, Represented by his Mother, Mrs. Angelita C. Santiago, petitioner-appellant, -versus- MISS 1UANITA BAUTISTA, ROSALINDA ALPAS, REBECCA MATUGAS, MILKITA INAMAC, ROMEO AGUSTIN, AIDA CAMINO, LUNA SARMAGO, AURORA LORENA, SOLEDAD FRANCISCO and MR. FLOR MARCELO, respondents-appellees. %eodoro . Santiao for petitioner-appellant. Ramon C. Cara for respondent-apellees.
BARREDO, Appeal Irom the order oI the Court oI First Instance oI Cotabato dismissing, on a motion to dismiss, its Civil Case No. 2012 Ior certiorari, injunction and damages on the ground that the complaint therein states no cause oI action, and Irom the subsequent order oI the court a quo denying the motion Ior the reconsideration oI the said order oI dismissal. The record shows that at the time Civil Case No. 2012 was commenced in the court below, appellant Teodoro Santiago, Jr. was a pupil in Grade Six at the public school named Sero Elementary School in Cotabato City. As the school year 1964-1965 was then about to end, the "Committee On The Rating OI Students For Honor" was constituted by the teachers concerned at said school Ior the purpose oI selecting the "honor students" oI its graduating class. With the school Principal, Mrs. Aurora Lorena, as chairman, and Juanita Bautista, Rosalinda Alpas, Rebecca Matugas, Milkita Inamac, Romeo Agustin, Aida Camino and Luna Sarmago, as members, the above-named committee deliberated and Iinally adjudged Socorro Medina, Patricia Ligat and Teodoro C. Santiago, Jr. as Iirst, second and third honors, respectively. The school's graduation exercises were thereaIter set Ior May 21, 1965; but three days beIore that date, the "third placer" Teodoro Santiago, Jr., represented by his mother, and with his Iather as counsel, sought the invalidation oI the "ranking oI honor students" thus made, by instituting the above-mentioned civil case in the Court oI First Instance oI Cotabato, against the above-named committee members along with the District Supervisor and the Academic Supervisor oI the place. The corresponding complaint Iiled alleged, inter alia: that plaintiII- petitioner Teodoro C. Santiago, Jr. is a sixth grader at the Sero Elementary School in Cotabato City scheduled to be graduated on May 21st, 1965 with the honor rank of third place, which is disputed; that the teachers oI the school had been made respondents as they compose the "Committee on the Rating oI Student Ior Honor", whose grave abuse oI oIIicial discretion is the subject oI suit, while the other deIendants were included as Principal, District Supervisor and Academic Supervisor oI the school; that Teodoro Santiago, Jr. had been a consistent honor pupil Irom Grade I to Grade V oI the Sero Elementary School, while Patricia Ligat (second placer in the disputed ranking in Grade VI) had never been a close rival oI petitioner beIore, except in Grade V wherein she ranked third; that Santiago, Jr. had been prejudiced, while his closest rival had been so much beneIited, by the circumstance that the latter, Socorro Medina, was coached and tutored during the summer vacation oI 1964 by Mrs. Alpas who became the teacher oI both pupils in English in Grade VI, resulting in the Iar lead Medina obtained over the other pupil; that the committee reIerred to in this case had been illegally constituted as the same was composed oI all the Grade VI teachers only, in violation oI the Service Manual Ior Teachers oI the Bureau oI Public Schools which provides that the committee to select the honor students should be composed oI all teachers in Grades V and VI; that there are direct and circumstantial matters, which shall be proven during the trial, wherein respondents have exercised grave abuse oI discretion and irregularities, such as the changing oI the Iinal ratings on the grading sheets oI Socorro Medina and Patricia Ligat Irom 80 to 85, and some teachers giving petitioner a starting grade oI 75 in Grade VI, which proves that there has already an intention to pull him to a much lower rank at the end oI the school year; that several district examinations outside oI teachers' daily units and other than periodical tests were given, ratings in which were heavily considered in the determination oI periodical ratings, whereas according to the Academic Supervisor and Acting Division Superintendent oI schools oI the place such district examinations were not advisable; that there was a unanimous agreement and understanding among the respondent teachers to insult and prejudice the second and third honors by rating Socorro Medina with a perIect score, which is very unnatural; that the words "Iirst place" in petitioner's certiIicate in Grade I was erased and replaced with the words "second place", which is an instance oI the unjust and discriminating abuses committed by the respondent teachers in the disputed selection oI honor pupils they made; that petitioner personally appealed the matter to the School Principal, to the District Supervisor, and to the Academic Supervisor, but said oIIicials "passed the buck to each other" to delay his grievances, and as to appeal to higher authorities will be too late, there is no other speedy and adequate remedy under the circumstances; and, that petitioner and his parents suIIered mental and moral damages in the amount oI P10,000.00. They prayed the court, among others, to set aside the Iinal list oI honor students in Grade VI oI the Sero Elementary School Ior that school year 1964-1965, and, during the pendency oI the suit, to enjoin the respondent teachers Irom oIIicially and Iormally publishing and proclaiming the said honor pupils in Grade VI in the graduation exercises the school was scheduled to hold on the 21st oI May oI that year 1965. The injunction prayed Ior was denied by the lower court in its order oI May 20, 1965, the said court reasoning out that the graduation exercises were then already set on the Iollowing day, May 21, 1965, and the restraining oI the same would be shocking to the school authorities, parents, and the community who had eagerly looked Iorward to the coming oI that yearly happy event. As scheduled, the graduation exercises oI the Sero Elementary School Ior the school year 1964-1965 was held on May 21, with the same protested list oI honor students. Having been required by the above-mentioned order to answer the petition within ten (10) days, respondents moved Ior the dismissal oI the case instead. Under date oI May 24, 1965, they Iiled a motion to dismiss, on the grounds (1) that the action Ior certiorari was improper, and (2) that even assuming the propriety oI the action, the question brought beIore the court had already become academic. This was opposed by petitioner. In an order dated June 4, 1965, the motion to dismiss oI respondents was granted, the court reasoning thus: The respondents now move to dismiss the petition Ior being improper and Ior being academic. In order to resolve the motion to dismiss, the Court has careIully examined the petition to determine the suIIiciency oI the alleged cause oI action constituting the special civil action oI certiorari. The pertinent portions oI the petition alleging 'grave abuse oI discretion' are Iound in paragraphs 3, 4, 5, 6, 7, 8, 9 and 10. These allegations may be substantially summarized as Iollows: Paragraph 3 alleges that since grades one to six, the students closely contending Ior class honors were Socorro Medina, Teodoro Santiago, Jr., Dolores Dalican and Patricia Ligat. Socorro Medina obtained Iirst honor thrice (grades I, V and VI); once second honor (grade IV), and twice third place (grades II and III). Teodoro Santiago, Jr. obtained Iirst place once (grade IV); Iour times second place (grades I, II, III, and V) and once third place (grade VI). Dolores Dalican obtained twice Iirst place (grades II, III); once third place (grade I). Patricia Ligat once third place (grade V); and once second place (grade VI). That as now ranked in the graduation Ligat is given second place while Teodoro Santiago, Jr., is given the third place only. This is the ranking now disputed by petitioner, Teodoro Santiago, Jr. Paragraph 4 alleges that Socorro Medina was tutored in the summer oI 1964 by Mrs. Rosalinda Alpas who became her English teacher in the sixth grade; that as such, Mrs. Alpas unjustly Iavored Socorro against her rivals. Paragraph 5 alleges that the teachers who composed the committee on honor students are all grade six teachers while the Service Manual For Teachers provides that the committee shall be composed oI the teachers Irom the IiIth and sixth grades. Paragraph 6 alleges that there are direct and circumstantial evidence showing the change oI ratings oI Socorro Medina and Patricia Ligat Irom 80 to 85 and the intention to junk petitioner to a lower rank. Paragraph 7 alleges that the giving oI district examinations upon which ratings were partly based were not advisable. Paragraph 8 alleges that the teachers rated Socorro Medina a perIect pupil which is unnatural. Paragraph 9 alleges that on the Iirst grade certiIicate oI the petitioner the word "First Place" was erased and changed to "Second Place". Paragraph 10 alleges that petitioner personally appealed to the school authorities but they only 'passed the buck to each other.' SECOND PARAGRAPH VIOLATED Rule 65, Section 1 oI the Rules oI Court provides: 'Section 1. Petition Ior certiorari. When any tribunal, board, or oIIicer exercising judicial Iunctions, has acted without or in excess oI its or his jurisdiction, or with grave abuse oI discretion and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course oI law, a person aggrieved thereby may Iile a veriIied petition in the proper court alleging the Iacts with certainty and praying that judgment be rendered annulling or modiIying the proceedings, as the law requires, oI such tribunal, board or oIIicer.' 'The petition shall be accompanied by a certiIied true copy oI the judgment or order subject thereoI, together with copies oI all pleadings and documents relevant and pertinent thereto.' It is striking, indeed, that this petition has not been accompanied by a certiIied true copy oI the judgment or order complained oI, together with all pleadings and documents which are relevant thereto, as required by the second, paragraph oI the aIorequoted rule. This violation renders the petition extremely indeIinite and uncertain. There is no written Iormal judgment or order oI respondents that is submitted Ior revision or correction oI this Court. This violation is Iatal to the petition. ADMINISTRATIVE REMEDIES NEGLECTED All that the petition alleges is that the petitioner personally appealed to the school authorities who only 'passed the buck to each other.' This allegation does not show that petitioner Iormally availed oI and exhausted the administrative remedies oI the Department oI Education. The petition implies that this is the Iirst Iormal complaint oI petitioner against his teachers. The administrative agencies oI the Department oI Education could have investigated the grievances oI the petitioner with dispatch and give eIIective remedies, but petitioner negligently abandoned them. Petitioner cannot now claim that he lacked any plain, speedy and adequate remedy. NO GRAVE ABUSE OF DISCRETION Allegations relating to the alleged 'grave abuse oI discretion' on the part oI teachers reIer to errors, mistakes, or irregularities rather than to real grave abuse oI discretion that would amount to lack oI jurisdiction. Mere commission oI errors in the exercise oI jurisdiction may not be corrected by means oI certiorari. In view oI the Ioregoing, the Court is oI the opinion, and so holds, that the petition states no cause oI action and should be, as it is hereby dismissed. Upon receipt oI a copy oI the above-quoted order, the petitioner moved Ior the reconsideration thereoI, but the same proved to be Iutile, hence, this appeal. Appellant here assails the holding oI the lower court that his petition states no cause oI action on the grounds discussed by the court a quo in the appealed order above-quoted (1) that the petition does not comply with the second paragraph oI Sec. 1 oI Rule 65 because it has not been accompanied by a certiIied true copy oI the judgment or order subject thereoI, together with copies oI all pleadings and documents relevant and pertinent thereto; (2) that administrative remedies were not Iirst exhausted; and (3) that there was no grave abuse oI discretion on the part oI the teachers who constituted the committee reIerred to. On the other hand, appellees maintain that the court below did not err in dismissing the case on said grounds. Further, they argue in Iavor oI the questioned order oI dismissal upon the additional ground that the "committee on the ratings oI students Ior honor" whose actions are here condemned by appellant is not the "tribunal, board or oIIicer exercising judicial Iunctions" against which an action Ior certiorari may lie under Section 1 oI Rule 65. The last point raised by appellees deserves Iirst consideration, Ior iI really the said committee oI teachers does not Iall within the category oI the tribunal, board, or officer exercisin fudicial functions contemplated by Rule 65, Iurther discussion oI the issues raised by appellant may no longer be necessary. To resolve this problem the Iollowing tests may be employed: In this jurisdiction certiorari is a special civil action instituted against 'any tribunal, board, or oIIicer exercising judicial Iunctions.' (Section 1, Rule 67.) A judicial Iunction is an act perIormed by virtue oI judicial powers; the exercise oI a judicial Iunction is the doing oI something in the nature oI the action oI the court (34 C.J. 1182). In order that a special civil action oI certiorari may be invoked in this jurisdiction the Iollowing circumstances must exist: (1) that there must be a speciIic controversy involving rights oI persons or property and said controversy is brought beIore a tribunal, board or oIIicer Ior hearing and determination oI their respective rights and obligations. 'Judicial action is an adjudication upon the rights oI parties who in general appear or are brought beIore the tribunal by notice or process, and upon whose claims some decision or judgment is rendered. It implies impartiality, disinterestedness, a weighing oI adverse claims, and is inconsistent with discretion on the one hand Ior the tribunal must decide according to law and the rights oI the parties or with dictation on the other; Ior in the Iirst instance it must exercise its own judgment under the law, and not act under a mandate Irom another power. ... The character oI its action in a given case must decide whether that action is judicial, ministerial, or legislative, or whether it be simply that oI a public agent oI the country or State, as in its varied jurisdictions it may by turns be each.' (In Re Saline County Subscription, 100 Am. Dec. 337, 338, cited in Southeastern Greyhound Lines v. Georgia Public Service Commission, 181 S. E. 836-837.) 'It may be said generally that the exercise oI judicial Iunction is to determine what the law is, and what the legal rights oI parties are, with respect to a matter in controversy; and whenever an oIIicer is clothed with that authority, and undertakes to determine those questions, he acts judicially.' (State ex rel. Board oI Commissioners oI St. Louis County, et al. v. Dunn, 90 N. W. 772- 773.) (2) the tribunal, board or oIIicer beIore whom the controversy is brought must have the power and authority to pronounce judgment and render a decision on the controversy construing and applying the laws to that end. 'The phrase "judicial power" is not capable oI a precise deIinition which would be applicable to all cases. The term has been variously deIined as the authority to determine the rights oI persons or property by arbitrating between adversaries in speciIic controversies at the instance oI a party thereto; the authority exercised by that department oI government which is charged with the declaration oI what the law is and its construction so Iar as it is written law; the authority or power vested in the judges or in the courts; the authority vested in some court, oIIicer, or persons to hear and determine when the rights oI persons or property or the propriety oI doing an act is the subject matter oI adjudication; the power belonging to or emanating Irom a judge as such; the power conIerred upon a public oIIicer, involving the exercise oI judgment and discretion in the determination oI questions oI right in speciIic cases aIIecting the interest oI persons or property, as distinguished Irom ministerial power or authority to carry out the mandates oI judicial power or the law; the power exercised by courts in hearing and determining cases beIore them, or some matter incidental thereto, and oI which they have jurisdiction; the power oI a court to decide and pronounce a judgment; the power which adjudicates upon and protects the rights and interests oI individual citizens, and to that end construes and applies the law. "Judicial power" implies the construction oI laws and the adjudication oI legal rights. It includes the power to hear and determine but not everyone who may hear and determine has judicial power. The term "judicial power" does not necessarily include the power to hear and determine a matter that is not in the nature oI a suit or action between the parties.' (34 C.J. 1183-1184.) . (3) the tribunal, board or oIIicer must pertain to that branch oI the sovereign power which belongs to the judiciary, or at least, which does not belong to the legislative or executive department. ... the distinction between legislative or ministerial Iunctions and judicial Iunctions is diIIicult to point out. What is a judicial Iunction does not depend solely upon the mental operation by which it is perIormed or the importance oI the act. In solving this question, due regard must be had to the organic law oI the state and the division oI power oI government. In the discharge oI executive and legislative duties, the exercise oI discretion and judgment oI the highest order is necessary, and matters oI the greatest weight and importance are dealt with. It is not enough to make a Iunction judicial that it requires discretion, deliberation, thought, and judgment. It must be the exercise of discretion and fudment within that subdivision of the soverein power which belons to the fudiciary, or, at least, which does not belon to the leislative or executive department. II the matter, in respect to which it is exercised, belongs to either oI the two last-named departments oI government, it is not judicial. As to what is judicial and what is not seems to be better indicated by the nature oI a thing, than its deIinition.' (Whealing & Elm Grove Railroad Co. Appt. v. Town oI Triadelphia, et al., 4 L.R.A. (N. S.) pp. 321, 328-329.) |Emphasis supplied| 1
'WHAT ARE JUDICIAL OR QUASI JUDICIAL ACTS. It is diIIicult, iI not impossible, precisely to deIine what are judicial or quasi judicial acts, and there is considerable conIlict in the decisions in regard thereto, in connection with the law as to the right to the writ oI certiorari. It is clear, however, that it is the nature of the act to be performed, rather than of the office, board, or body which performs it, that determines whether or not it is the dischare of a fudicial or quasi-fudicial function. It is not essential that the proceedings should be strictly and technically judicial, in the sense in which that word is used when applied to the courts oI justice, but it is suIIicient iI they are quasi judicial. It is enough iI the oIIicers act judicially in making their decision, whatever may be their public character. ...' "In State ex rel. Board of Commrs. vs. Dunn (86 Minn. 301, 304), the Iollowing statements were made: 'The precise line oI demarkation between what are judicial and what are administrative or ministerial Iunctions is oIten diIIicult to determine. The exercise oI judicial Iunctions may involve the perIormance oI legislative or administrative duties, and the perIormance oI administrative or ministerial duties, may, in a measure, involve the exercise oI judicial Iunctions. It may be said generally that the exercise oI judicial Iunctions is to determine what the law is, and what the legal rights oI parties are, with respect to a matter in controversy; and whenever an oIIicer is clothed with that authority, and undertakes to determine those questions, he acts judicially.' 2
It is evident, upon the Ioregoing authorities, that the so called committee on the rating oI students Ior honor whose actions are questioned in this case exercised neither judicial nor quasi judicial Iunctions in the perIormance oI its assigned task. From the above- quoted portions oI the decision cited, it will be gleaned that beIore tribunal board, or oIIicer may exercise judicial or quasi judicial acts, it is necessary that there be a law that give rise to some speciIic rights oI persons or property under which adverse claims to such rights are made, and the controversy ensuing thereIrom is brought, in turn, beIore the tribunal, board or oIIicer clothed with power and authority to determine what that law is and thereupon adjudicate the respective rights oI the contending parties. As pointed out by appellees, 3
however, there is nothing on record about any rule oI law that provides that when teachers sit down to assess the individual merits oI their pupils Ior purposes oI rating them Ior honors, such Iunction involves the determination oI what the law is and that they are thereIore automatically vested with judicial or quasi judicial Iunctions. Worse still, this Court has not even been appraised by appellant oI the pertinent provisions oI the Service Manual oI Teachers Ior Public Schools appellees allegedly violated in the composition oI the committee they constituted thereunder, and, in the perIormance oI that committee's duties. At any rate, the situation brought beIore Us in this case, the seemingly one oI Iirst impression, is not without substantial parallel. In the case oI Felipe vs. Leuterio, etc., et al., 4 the issue presented Ior determination was whether or not the courts have the authority to reverse the award oI the board oI judges oI an oratorical contest, and this Court declared that the judiciary has no power to reverse the award oI the board oI judges oI that contest and, Ior that matter, it would not interIere in literary contests, beauty contests and similar competitions. It was reasoned out thus: For more than thirty years oratorical tilts have been held periodically by schools and colleges in this islands. Inter-collegiate oratorical competitions are oI more recent origin. Members oI this court have taken part in them either as contestants in their school days (In the College oI Law, U.P. annual oratorical contest, Iirst prize was awarded to Justice Montemayor in 1914 and to Justice Labrador in 1916), or as members oI the board oI judges aIterwards. They know some Iew verdicts did not reIlect the audience's preIerence and that errors have sometimes been ascribed to the award oI the judges. Yet no party ever presumed to invoke judicial intervention; Ior it is unwritten law in such contests that the board's decision is Iinal and unappealable. Like the ancient tournaments oI the Sword, these tournaments oI the Word apply the highest tenets oI sportsmanship: Iinality oI reIeree's verdict. No alibis, no murmurs oI protest. The participants are supposed to join the competition to contribute to its success by striving their utmost: the prizes are secondary. No rights to the prizes may be asserted by the contestants, because theirs was merely the privilege to compete Ior the prize, and that privilege did not ripen into a demandable right unless and until they were proclaimed winners oI the competition by the appointed arbiters or reIerees or judges. Incidentally, these school activities have been imported Irom the United States. We Iound in American jurisprudence no litigation questioning the determination oI the board oI judges. Now, the Iact that a particular action has had no precedent during a long period aIIords some reason Ior doubting the existence oI the right sought to be enIorced, especially where occasion Ior its assertion must have oIten arisen; and courts are cautious beIore allowing it, being loath to establish a new legal principle not in harmony with the generally accepted views thereon. (See C.J.S. Vol. 1, p. 1012.) We observe that in assuming jurisdiction over the matter, the respondent judge reasoned out that where there is a wrong there is a remedy and that courts oI Iirst instance are courts oI general jurisdiction. The Ilaw in his reasoning lies in the assumption that Imperial suIIered some wron at the hands oI the board oI judges. II at all, there was error on the part oI one judge, at most. Error and wrong do not mean the same thing. 'Wrong' as used in the aIoresaid principle is the deprivation or violation oI a right. As stated beIore, a contestant has no riht to the prize unless and until he or she is declared winner by the board oI reIerees or judges. Granting that Imperial suIIered some loss or injury, yet in law there are instances oI damnum absque infuria. This is one oI them. II Iraud or malice had been proven, it would be a diIIerent proposition. But then her action should be directed against the individual judge or judges who Iraudulently or maliciously injured her. Not against the other judges. But even were We to assume Ior the moment, as the court below apparently did, that judicial intervention might be sought in cases oI this nature, still, We are inclined to sustain the order oI dismissal appealed Irom Ior Iailure on the part oI appellant to comply with the requirements oI Section 1 oI Rule 65. To be sure, the lower court's holding that appellant's Iailure to accompany his petition with a copy oI the judgment or order subject thereoI together with copies oI all pleadings and documents relevant and pertinent thereto "is Iatal to his cause" is supported not only by the provision oI that Rule but by precedents as well. In the case oI lafar, et al. vs. Court of Industrial Relations, 5 where it was claimed by therein petitioners that the respondent court had acted with grave abuse oI discretion in estimating certain rice harvests involved in the case in terms oI cavans instead oI cans, allegedly in complete disregard oI the decision oI the Court oI First Instance oI Batangas in Expropriation Proceedings No. 84 and oI this Court in G.R. No. L-6191, 6 and in ordering thereaIter the division oI the said rice harvests on the ratio oI 70-30 in Iavor oI the tenants, this Court denied the petition Ior certiorari on the ground, among others, oI Iailure on the part oI said petitioners to attach to their petition copies oI the decisions allegedly violated. Speaking thru Mr. Justice J.B.L. Reyes then, this Court held: The petition is patently without merit. In the Iirst place, it is not even suIIicient in Iorm and substance to justiIy the issuance oI the writ oI certiorari prayed Ior. It charges that the Court oI Industrial Relations abused its discretion in disregarding the decision oI the Court oI First Instance oI Batangas in Expropriation Proceedings No. 84 and oI this Court in G.R. No. L-6191; yet it does not attach to the petition the decisions allegedly violated by the Court below and point out which particular portion or portions thereoI have been disregarded by the respondent Court. The same principle was applied in the more recent case oI NS vs. unicipality of Libmanan, et al., 7 wherein this Court dismissed (by Resolution) the petition Ior certiorari and mandamus Iiled by the National Waterworks and Sewerage Authority against the Court oI First Instance oI Camarines Sur, and the municipality oI Libmanan. In the Iollowing language, this Court emphasized the importance oI complying with the said requirement oI Rule 65: While paragraph 3 oI the petition speaks oI the complaint Iiled by the respondent municipality with the respondent court Ior recovery oI property with damages (Civil Case No. L-161) no copy thereoI is attached to the petition. Similarly, paragraph 4 oI the petition mentions the decision rendered by the respondent court on December 10, 1965, but no copy thereoI is attached to the petition. Again, paragraph 5 oI the petition speaks oI the order oI deIault entered by the respondent court and oI the motion Ior reconsideration Iiled by petitioner in the case above-mentioned, but no copy oI the order oI deIault is attached to its petition. Bearing in mind that the petition under consideration was Iiled Ior the purpose oI enjoining the respondent court Irom executing the decision rendered in Civil Case No. L-161, the importance oI the missing pleadings is obvious. Moreover, the petition is also Ior the purpose oI securing an order commanding the respondent court to approve either the original or the amended record on appeal Iiled petition, but no copy oI either is attached to its petition. In view oI the Ioregoing, the petition under consideration is dismissed. It might be true, as pointed out by appellant, that he received a copy oI the programme oI the graduation exercises held by the Sero Elementary School in the morning oI the very day oI that graduation exercises, implying that he could not have attached then a copy thereoI (to show the decision oI the committee oI teachers in the ranking oI students complained oI) to his petition. The stubborn Iact remains, however, that appellant had known oI such decision oI the said committee oI teachers much earlier, as shown by the circumstance that according to him, even beIore the Iiling oI his petition with the lower court on the 19th oI May, 1965, he had personally appealed the said committee's decision with various higher authorities oI the above- named school, who merely passed the buck to each other. Moreover, appellant mentions in his petition various other documents or papers as the Service Manual Ior Teachers allegedly violated by appellees in the constitution oI their committee; altered grading sheets; and erasures in his Grade I certiIicate which appellant never bothered to attach to his petition. There could be no doubt then that he miserably Iailed to comply with the requirement oI Rule 65 above-mentioned. With this conclusion, it is no longer necessary to pass upon the other two errors assigned by appellant. FOR THE FOREGOING CONSIDERATIONS, the judgment appealed Irom is aIIirmed, with costs against appellant. Concepcion, C.J., Reyes, J.B.L., Di:on, akalintal, Zaldivar, Castro, Fernando, %eehankee and Jillamor, JJ., conc
G.R. No. 182707 : September 1, 2010 SPOUSES ERNESTO LIM and ZENAIDA LIM, Petitioner, vs. RUBY SHELTER BUILDERS AND REALTY DEVELOPMENT CORPORATION, Respondent. D E C I S I O N ABAD, This case is about the jurisdiction oI the Housing and Land Use Regulatory Board (HLURB) over an action to compel a land developer to deliver a promised title over one-Iourth oI a subdivided lot. The Facts and the Case Sometime in May 2001 petitioners Ernesto and Zenaida Lim (the Lims) bought Ior P190,000.00 a 318-square meter lot that then Iormed part oI a bigger lot 1 cralaw in Barangay Triangulo, Naga City. Respondent Ruby Shelter Builders and Realty Development Corporation (Ruby Shelter), the seller and owner, undertook to subdivide the lot and, upon approval by the Bureau oI Lands, execute a deed oI absolute sale in Iavor oI the Lims. In December 2001 Ruby Shelter delivered the deed oI sale to the spouses with a promise to give them the title to the lot as soon as the subdivision plan had been approved. Ruby Shelter then caused the approval oI a subdivision plan Ior its lot, dividing it into Iour, including the one sold to the Lims, identiIied as Lot 9-E-2-B. But, despite repeated demands, Ruby Shelter did not deliver the Lims' title. Consequently, the latter Iiled an action against it Ior delivery oI title with damages beIore the HLURB. On March 1, 2004 the HLURB Legal Services Group (LSG) rendered a decision Ior the Lims, which decision the HLURB Board oI Commissioners aIIirmed. On September 5, 2005, acting on Ruby Shelter's appeal, the OIIice oI the President (OP) upheld the HLURB decision, a copy oI which Ruby Shelter got on September 20, 2005. On October 11, 2005 the latter Iiled a motion Ior leave to be allowed to Iile an attached belated motion Ior reconsideration. The OP denied the motion. On December 29, 2005 it Iurther issued an Order declaring its September 5, 2005 decision Iinal and executory. Notwithstanding the OP's above Order, on January 31, 2006 Ruby Shelter Iiled a motion Ior extension oI time to Iile a petition Ior review with the Court oI Appeals (CA).nad On October 23, 2006 the Lims moved Ior the issuance oI a writ oI execution, which the HLURB LSG granted. Meanwhile, the CA gave due course to Ruby Shelter's petition Ior review and on December 6, 2007 rendered a decision granting the same and setting aside the OP's rulings. The CA ruled that the HLURB had no jurisdiction over the claim oI the spouses, thus, this petition. The Issue Presented The sole issue presented in this case is whether or not the Lims' action Ialls within the jurisdiction oI the HLURB. The Ruling of the Court The jurisdiction oI a court or a quasi-judicial body over the subject matter oI the action is determined by the nature oI the action pleaded as appearing in the allegations oI the complaint. 2 cralaw But where the actual issues are evident Irom the records oI the case, then jurisdiction over the subject matter need not depend upon the literal assertions in the complaint, but on the law as applied to established Iacts based on the evidence that the parties presented in due course. 3 cralaw Section 1 oI Presidential Decree 1344 4 cralaw vests in the National Housing Authority (now HLURB) exclusive jurisdiction to hear and decide the Iollowing cases: (a) unsound real estate business practices; (b) claims involving reIund and any other claims Iiled by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman; and (c) cases involving speciIic perIormance oI contractual and statutory obligations Iiled by buyers oI subdivision lot or condominium unit against the owner, developer, dealer, broker or salesman. This provision must be read in the light oI the law's preamble, which explains the reasons Ior enactment oI the law or the contextual basis Ior its interpretation. The law's introductory clause states that the HLURB exercises regulatory authority over cases oI swindling and Iraudulent manipulations perpetrated by unscrupulous subdivision sellers and operators, such as Iailure to deliver titles to the buyers or titles Iree Irom liens and encumbrances. 5 cralaw To determine iI the HLURB has jurisdiction over the complaint oI the spouses, the law must be interpreted as applied to the Iacts. Here, Ruby Shelter never oIIered any excuse in reIusing to deliver the title to the spouses other than the alleged lack oI jurisdiction oI that body over the action. It did not deny the sale and its obligation to deliver the title oI the land to the spouses. The plain Iact is that the Lims bought a Iourth oI a parcel oI land Irom Ruby Shelter Ior P190,000.00. The parties agreed that Ruby Shelter shall cause the subdivision oI the lot and upon approval by the Bureau oI Lands, execute the deed oI sale. Subsequently, Ruby Shelter gave that deed to the Lims with a promise to give the title once its subdivision plan had been approved. Ruby Shelter later delivered a copy oI the approved plan to the Lims showing the segregation oI the portion they bought Irom the rest oI the original lot. But Ruby Shelter Iailed on its promise to deliver the title to the Lims, despite repeated demands. These circumstances clearly present a case Ior speciIic perIormance that the subdivision lot buyers brought against Ruby Shelter, a matter properly cognizable by the HLURB. Ruby Shelter oI course claims that the transaction did not relate to a land developer's contractual and statutory obligations to a buyer oI a subdivision lot since the lot that the Lims bought Irom it did not Iorm part oI a subdivision development, the size oI a community. It merely subdivided a lot into Iour and sold one portion to the Lims. But the controlling Iact is not the size oI the original lot that Ruby Shelter had subdivided but the Iact that the Lims bought their portion oI that lot Irom a licensed land developer whose dealings on properties are regulated by the HLURB. The Lims bought their lot relying on the belieI that Ruby Shelter, as licensed land developer, shall abide by its duties and obligations under its contract and the laws. Lastly, the CA committed a grave error in giving due course to Ruby Shelter's petition when the OP's Decision dated September 5, 2005 had already attained Iinality and had become executory. WHEREFORE, the Court GRANTS the petition, REVERSES and SETS ASIDE the Decision oI the Court oI Appeals in CA-G.R. SP 93138 dated December 6, 2007 and its Resolution dated April 25, 2008, and REINSTATES the Decision oI the OIIice oI the President dated September 5, 2005 and its Order dated December 29, 2005. SO ORDERED.
ECOND DIVISION
G.R. No. L-39655 March 21, 1975 ARROW TRANSPORTATION CORPORATION, petitioner, -versus- BOARD OF TRANSPORTATION and SULTAN RENT-A-CAR, INC., respondents. anuel Imbon for petitioner. Office of the Solicitor General Estelito P. endo:a and ssistant Solicitor General Reynato S. Puno for respondent Board. Pastor C. Bacani and Ernesto Ganiban for private respondent.
FERNANDO, It must have been the realization that a challenge to a provisional permit issued by respondent Board oI Transportation 1 based on the absence oI a hearing is not likely to be attended with success that prompted petitioner to rely on another aspect oI procedural due process, the inIirmity alleged being traceable to what it considered lack oI jurisdiction. 2 There is the invocation oI Philippine Lon Distance %elephone Company v. edina 3 with its mention oI both competitors and the public being notiIied. It does not suIIice. Something more, which more, is necessary. The reliance is misplaced. Its applicability is by no means obvious. As was pointed out in the answer oI respondent Board oI Transportation, such a claim is hardly persuasive with the procedure set Iorth in Presidential Decree No. 101 being Iollowed and the provisional authority to operate being based on an urgent public need. Such a contention merits the approval oI the Court. The petition cannot prosper. Both petitioner and private respondent Sultan Rent-a-Car are domestic corporations. 4 The Iormer has in his Iavor a certiIicate oI public convenience to operate a public utility bus air-conditioned-auto-truck service Irom Cebu City to Mactan International Airport and vice-versa with the use oI twenty (20) units. 5 Private respondent on September 12, 1974 Iiled a petition with the respondent Board Ior the issuance oI a certiIicate oI public convenience to operate a similar service on the same line. 6 Eight days later, without the required publication, the Board issued an order granting it provisional permit to operate such auto-truck service on the line applied Ior. 7 There was a motion Ior reconsideration and Ior the cancellation oI such provisional permit Iiled on October 21, 1974, 8 but without awaiting Iinal action thereon, this petition was Iiled. 9 This is the explanation: "That petitioner has not waited Ior the resolution oI his Motion Ior Reconsideration beIore going to this Court considering that the question involved herein is purely a legal one, aside Irom the Iact that the issuance oI the Order without the Board having acquired jurisdiction oI the case yet, is patently illegal or was perIormed without jurisdiction." 10
So it was set Iorth in the petition Iiled on November 16, 1974. As a preliminary injunction was likewise sought, a hearing was scheduled Ior November 29, 1974. It was cancelled, this Court issuing a resolution instead, requiring respondents to Iile an answer not later than December 6, 1974 and setting the hearing on the merits oI the case on Wednesday, December 11, 1974. In the answer submitted the Iacts alleged were substantially admitted. 11 It denied the allegation that there must be a publication beIore a provisional permit can be issued, reIerence being made, as noted, to Presidential Decree No. 101, which authorized respondent Board to grant provisional permits when warranted by compelling circumstances and to proceed promptly along the method oI legislative inquiry. 12 The case was then argued on December 11, 1974, Attorney Manuel Imbong appearing Ior petitioner and Assistant Solicitor General Reynato S. Puno appearing Ior respondent Board oI Transportation. 13 ThereaIter, the parties were given twenty days to Iile their respective memoranda and an additional ten-day period to submit replies thereto iI so minded. In time all the pleadings were submitted, and the case was ready Ior decision. The petition, to repeat, cannot prosper. 1. It is to be, admitted that the claim Ior relieI on the asserted constitutional deIiciency based on procedural due process, not Irom the standpoint oI the absence oI a hearing but Irom the lack oI jurisdiction without the required publication having been made, was argued vigorously and developed exhaustively in the memoranda oI petitioner. The arguments set Iorth, while impressed with plausibility, do not suIIice to justiIy the grant oI certiorari. Moreover, the doctrine announced in the Philippine Long Distance Telephone Company decision, heavily leaned on by petitioner is, at the most, a Irail and insubstantial support and gives way to decisions oI this Court that have an even more speciIic bearing on this litigation. 2. A barrier to petitioner's pretension, not only Iormidable but also insurmountable, is the well-settled doctrine that Ior a provisional permit, an ex parte hearing suIIices. 14 The decisive consideration is the existence oI the public need. 15 That was shown in this case, respondent Board, on the basis oI demonstrable data, being satisIied oI the pressing necessity Ior the grant oI the provisional permit sought. There is no warrant Ior the nulliIication oI what was ordered by it. It must have been, as already noted, this state oI the law that did lead petitioner to harp on its interpretation oI what Ior it is the teaching oI the Philippine Long Distance Telephone Company decision. 16 There was therein stated that one oI the compelling reasons that led this Court to hold that the deIunct Public Service Commission did not acquire jurisdiction was that no provision was made Ior bringing in as parties thereto the competitors oI the Philippine Long Distance Telephone Company. 17 That is the basis Ior the objection on procedural due process ground. While no doubt such a holding was necessary Ior the decision oI that case which dealt with a petition Ior the reexamination oI a decision that was held to be Iinal and executory, it Iinds no application to this controversy dealing with a provisional permit. This is made clear by this portion oI the opinion oI Justice Sanchez: "Araneta seeks reexamination oI the rates approved by the Commission. Araneta avers that PLDT can carry out its improvement and expansion program at less onerous terms to the subscribers. But Araneta |University| was not a party to the rate-Iixing case or to any oI the other proceedings below. These rate-Iixing and allied cases terminated with the Iinal judgment oI January 9, 1964. Not being a party, it could not have moved to reconsider said decision. Nor could it have appealed Irom that decision it had no standing in that case. Even iI we treat Araneta's reexamination petition as one Ior reconsideration, the time thereIor has long passed. 18 It was then stated: The reexamination herein sought by Araneta, perIorce seeks the Iixing oI new and diIIerent rates. 19 Further: Araneta in eIIect, institutes a fresh petition Ior new rates diIIerent Irom those already established. Such petition is a proceeding separate and distinct Irom those concluded by the Iinal judgment oI PSC oI January 9, 1964. 20 The conclusion, thereIore, necessarily Iollows:" We hold that the Public Service Commission may not reduce or increase rates established in a judgment that has become Iinal, without proper notice; and that a Commission order reducing or increasing said rates without such notice is void." 21 Under the Iacts oI that case, the procedural due process inIirmity amounting to lack oI jurisdiction is quite apparent. The opposite is true with this present petition which deals with a grant oI provisional permit. It would be to liIt out oI context the reIerence made in the aIoresaid opinion with reIerence to notiIication to the competitors to give a color oI applicability to the situation beIore us. Clearly then, the allegation oI a Iailure to Iollow the command oI the due process guarantee is bereIt oI any legal Ioundation. 3. The question oI whether the controversy is ripe Ior judicial determination was likewise argued by the parties. For it is undeniable that at the time the petition was Iiled. there was pending with the respondent Board a motion Ior reconsideration. Ordinarily, its resolution should be awaited. Prior thereto, an objection grounded on prematurity can be raised. Nonetheless, counsel Ior petitioner would stress that certiorari lies as the Iailure to observe procedural due process ousted respondent Board oI whatever jurisdiction it could have had in the premises. This Court was impelled to go into the merits oI the controversy at this stage, not only because oI the importance oI the issue raised but also because oI the strong public interest in having the matter settled. As was set Iorth in Executive Order No. 101 which prescribes the procedure to be Iollowed by respondent Board, it is the policy oI the State, as swiItly as possible, to improve the deplorable condition oI vehicular traIIic, obtain maximum utilization oI existing public motor vehicles and eradicate the harmIul and unlawIul trade oI clandestine operators, as well as update the standard oI those carrying such business, making it "imperative to provide, among other urgently needed measures, more expeditious methods in prescribing, redeIining, or modiIying the lines and mode oI operation oI public utility motor vehicles that now or thereaIter, may operate in this country. 22 It is essential then both Irom the standpoint oI the Iirms engaged as well as oI the riding public to ascertain whether or not the procedure Iollowed in this case and very likely in others oI a similar nature satisIies the procedural due process requirement. Thus its ripeness Ior adjudication becomes apparent. To paraphrase what was said in Edu v. Ericta 23 where the validity oI a legislation was passed upon in a certiorari proceeding to annul and set aside a writ oI preliminary injunction, to so act would be to conserve both time and eIIort. Those desiring to engage in public utility business as well as the public are both vitally concerned with the Iinal determination oI the standards to be Iollowed in the procedure that must be observed. There is, to repeat, a great public interest in a deIinitive outcome oI the crucial issue involved. One oI the most noted authorities on Administrative Law, proIessor Kenneth Culp Davis, discussing the ripeness concept, is oI the view that the resolution oI what could be a debilitating uncertainty with the conceded ability oI the judiciary to work out a solution oI the problem posed is a potent argument Ior minimizing the emphasis laid on its technical aspect. 24
WHEREFORE, the petition Ior certiorari is dismissed. No costs. akalintal, C.J., Barredo, ntonio and Fernande:, JJ., concur.
FIRST DIVISION
G.R. No. 160876, 1anuary 18, 2008]
AZUCENA MAGALLANES, EVELYN BACOLOD and HEIRS OF 1UDITH COTECSON, Petitioners, vs. SUN YAT SEN ELEMENTARY SCHOOL, PAZ GO, ELENA CUBILLAN, WILLY ANG GAN TENG, BENITO ANG, and TEOTIMO TAN, Respondents.
D E C I S I O N
SANDOVAL-GUTIERREZ, 1.:
For our resolution is the instant Petition Ior Review on Certiorari seeking to reverse the Resolution oI the Court oI Appeals (Seventh Division) dated October 29, 2001 in CA-G.R. SP No. 67068; its Resolution oI May 8, 2003 denying the motion Ior reconsideration; and its Resolution oI October 10, 2003, denying the motion Ior reconsideration oI the Resolution oI May 8, 2003.
The Iacts oI the case are:
Azucena Magallanes, Evelyn Bacolod, Judith Cotecson (represented by her heirs), petitioners, Grace Gonzales, and Bella Gonzales were all employed as teachers in the Sun Yat Sen Elementary School in Surigao City.
Paz Go and Elena Cubillan are principals oI the said school. Willy Ang Gan Teng and Benito Ang are its directors, while Teotimo Tan is the school treasurer. They are all respondents herein.
On May 22, 1994, respondents terminated the services oI petitioners. Thus, on August 3, 1994, they Iiled with the Sub-Regional Arbitration Branch No. X, National Labor Relations Commission (NLRC), Butuan City, complaints against respondents Ior illegal dismissal, underpayment oI wages, payment oI backwages, 13th month pay, ECOLA, separation pay, moral damages, and attorneyts Iees. Likewise, on August 22, 1994, petitioner Cotecson Iiled a separate complaint praying Ior the same relieIs.
On June 3, 1995, Labor Arbiter Rogelio P. Legaspi rendered a Decision declaring that petitioners were illegally dismissed Irom the service and ordering respondents to reinstate them to their Iormer or equivalent positions without loss oI seniority rights, and to pay them their backwages, salary diIIerential, 13th month pay diIIerential, and service incentive leave beneIits toas oI June 20, 1995.t Respondents were likewise directed to pay petitioners moral and exemplary damages.
On appeal by respondents, the NLRC, in its Decision dated February 20, 1996, reversed the Arbiterts judgment, holding that petitioners are contractual employees and that respondents merely allowed their contracts to lapse.
Petitioners timely Iiled a motion Ior reconsideration, but it was denied by the NLRC in its Resolution dated April 17, 1996.
Petitioners then Iiled with the Court oI Appeals a petition Ior certiorari, docketed as CA-G.R. SP No. 50531.
On October 28, 1999, the Court oI Appeals (Special Sixteenth Division) rendered its Decision, |1| the dispositive portion oI which reads: WHEREFORE, the instant petition is GRANTED with respect to petitioners Cotecson, Bacolod, and Magallanes, the questioned Resolutions oI the NLRC dated February 20 and April 1996 are hereby REVERSED and SET ASIDE as to them.
The Decision dated July 3, 1995 oI the Labor Arbiter is hereby REINSTATED as to the said petitioners except as to the award oI moral and exemplary damages which is hereby DELETED.
SO ORDERED. The Court oI Appeals (Special Sixteenth Division) ruled that in lieu oI reinstatement, petitioners Cotecson, Bacolod, and Magallanes toshall be entitled to separation pay equivalent to one month salary and backwages computed Irom the time oI their illegal dismissal up to the time oI the promulgation oI its Decision.t With respect to Bella Gonzales and Grace Gonzales, the Court oI Appeals Iound that that they have not acquired the status oI regular employees having rendered only two years oI service. Consequently, their dismissal Irom the service is valid. Under the Manual oI Regulations Ior Private Schools, only Iull-time teachers who have rendered three (3) years oI consecutive service shall be considered permanent.
Respondents Iiled a motion Ior reconsideration but it was denied by the appellate court in its Resolution dated January 13, 2000.
Respondents then Iiled with this Court a petition Ior certiorari, docketed as G.R. No. 142270. However, it was dismissed Ior lack oI merit in a Minute Resolution dated April 12, 2000. Their motion Ior reconsideration was denied with Iinality by this Court on July 19, 2000.
Meanwhile, on October 4, 2000, petitioners Iiled with the Labor Arbiter a motion Ior execution oI his Decision as modiIied by the Court oI Appeals.
In an Order dated January 8, 2001, the Labor Arbiter computed the petitionerst monetary awards reckoned Irom the time oI their illegal dismissal in June 1994 up to October 29, 1999, pursuant to the Decision oI the Court oI Appeals (Special Sixteenth Division) in CA- G.R. SP No. 50531. Respondents interposed an appeal to the NLRC (docketed as NLRC Case No. M-006176-2001), contending that the computation should only be up to June 20, 1995 (the date indicated in the Labor Arbiterts Decision).
In an Order dated March 30, 2001, the NLRC modiIied the Labor Arbiterts computation and ruled that the monetary awards due to petitioners should be computed Irom June 1994 up to June 20, 1995.
Petitioners then Iiled a petition Ior certiorari with the Court oI Appeals, docketed as CA-G.R. SP No. 67068, raIIled oII to the Seventh Division. However, in its Resolution oI October 29, 2001, the petition was dismissed outright Ior their Iailure to attach to their petition copies oI the pleadings Iiled with the Labor Arbiter, thus: No copies oI the pleadings Iiled beIore the Labor Arbiter appear to have been attached to the petition in violation oI the provisions oI Section 1, Rule 65 and Section 3, Rule 46 oI the 1997 Rules oI Civil Procedure, as amended, which requires that the petition: x x x shall be accompanied by a clearly legible duplicate original or certiIied true copy oI the judgment, order, resolution or ruling subject thereoI, such material portions oI the record as are reIerred to therein and other documents relevant or pertinent thereto x x x WHEREFORE, the instant petition is DISMISSED OUTRIGHT pursuant to Section 3, Rule 46 oI the 1997 Rules oI Civil Procedure.
SO ORDERED. Petitioners Iiled a motion Ior reconsideration, but they erroneously indicated therein the case number as CA-G.R. SP No. 50531, instead oI CA-G.R. SP No. 67068. Their error was compounded by stating that the petition was with the Special Sixteenth Division, instead oI the Seventh Division. As a result, the Special Sixteenth Division issued a Minute Resolution dated April 22, 2002 which merely noted the motion, thus:
The petitionerst motion Ior reconsideration dated November 22, 2001 and Iiled by registered mail on November 26, 2001 is merely noted since there was no October 29, 2001 resolution that was issued in this case which the motion Ior reconsideration seeks to be reconsidered.
On realizing their mistake, petitioners then Iiled with the Seventh Division a Motion to TransIer The Case to it.
In a Resolution promulgated on May 8, 2003, the Seventh Division denied petitionerst Motion To TransIer The Case on the ground, among others, that the motion is tonon-existentt since it does not bear the correct case number, hence, could not be attached to the records oI CA-G.R. SP No. 67068.
UnIazed, petitioners Iiled a motion Ior reconsideration, but it was denied by the Seventh Division in its Resolution oI October 10, 2003.
At Iirst glance, the petition beIore us appears to be a Iutile attempt to revive an extinct motion denied by the appellate court (Seventh Division) by reason oI technicality. But in the interest oI speedy administration oI justice, we should not only delve in technicalities. We shall then address these two issues: (1) whether the Court oI Appeals (Seventh Division) erred in holding that aIIixing a wrong docket number on a motion renders it tonon-existent;t and (2) whether the issuance by the NLRC oI the Order dated March 30, 2001, amending the amounts oI separation pay and backwages, awarded by the Court oI Appeals (Sixteenth Division) to petitioners and computed by the Labor Arbiter, is tantamount to grave abuse oI discretion amounting to lack or excess oI jurisdiction.
On the first issue, the Court oI Appeals (Seventh Division) is correct when it ruled that petitionerst motion Ior reconsideration oI its Resolution dated October 29, 2001 in CA-G.R. SP No. 67068 is tonon-existent.t Petitionerst counsel placed a wrong case number in their motion, indicating CA-G.R. SP No. 50531 (Special Sixteenth Division) instead oI CA-G.R. SP No. 50531 (Seventh Division), the correct case number. In Llantero v. Court of ppeals, |2|
we ruled that where a pleading bears an erroneous docket number and thus tocould not be attached to the correct case,t the said pleading is, Ior all intents and purposes, tonon-existent.t As aptly stated by the Special Sixteenth Division, it has neither the duty nor the obligation to correct the error or to transIer the case to the Seventh Division. In ea Land Resources and Development Corporation v. C-E Construction Corporation, |3| which likewise involves a wrong docket number in a motion, we ruled that the duty to correct the mistake Ialls solely on the party litigant whose Iault caused the anomaly. To hold otherwise would be to impose upon appellate courts the burden oI being nannies to appellants, ensuring the absence oI pitIalls that hinder the perIection oI petitions and appeals. Strictly speaking, it is a dogma that the mistake or negligence oI counsel binds the clients |4| and appellate courts have no share in that burden.
However, we opt Ior liberality in the application oI the rules to the instant case in light oI the Iollowing considerations. First, the rule that negligence oI counsel binds the client may be relaxed where adherence thereto would result in outright deprivation oI the clientts liberty or property or where the interests oI justice so require. |5| Second, this Court is not a slave oI technical rules, shorn oI judicial discretion t' in rendering justice, it is guided by the norm that on the balance, technicalities take a backseat against substantive rights. Thus, iI the application oI the rules would tend to Irustrate rather than promote justice, it is always within this Courtts power to suspend the rules or except a particular case Irom its application. |6|
This case involving a labor dispute has dragged on Ior over a decade now. Petitioners have waited too long Ior what is due them under the law. One oI the original petitioners, Judith Cotecson, died last September 28, 2003 and has been substituted by her heirs. It is time to write Iinis to this controversy. The Labor Code was promulgated to promote the welIare and well-being oI the working man. Its spirit and intent mandate the speedy administration oI justice, with least attention to technicalities but without sacriIicing the Iundamental requisites oI due process. |7|
We recall that in CA-G.R. SP No. 50531, the Court oI Appeals (Special Sixteenth Division) held that petitioners Cotecson, Bacolod, and Magallanes toshall be entitled to separation pay equivalent to one month salary and backwages computed from the time of their illegal dismissal up to the time of the promulgation of this decision.t This Decision was promulgated on October 28, 1999. The respondentst motion Ior reconsideration was denied by the Court oI Appeals (Former Special Sixteenth Division) on January 13, 2000. On April 12, 2000, this Court dismissed respondentst petition Ior certiorari, docketed as G.R. No. 142270, and denied their motion Ior reconsideration with Iinality as early as July 19, 2000.
Clearly, the Decision in CA-G.R. SP No. 50531 had long become Iinal and executory. The Labor Arbiter computed the monetary awards due to petitioners corresponding to the period Irom June 1994 to October 28, 1999, in accordance with the Decision oI the Court oI Appeals (Special Sixteenth Division). The award Ior backwages and money claims is in the total sum oI P912,086.15.
It does not escape our attention that upon respondentst appeal Irom the Labor Arbiterts Order computing the beneIits due to petitioners, the NLRC modified the final and executory Decision of the Court of Appeals (Special Sixteenth Division) when it decreed that the monetary award due to petitioners should be computed up to 1une 20, 1995 only (not October 28, 1999), thus, amounting to a lesser amount oI P147,673.16.
We sustain petitionerst contention that the NLRC, in modiIying the award oI the Court oI Appeals, committed grave abuse oI discretion amounting to lack or excess oI jurisdiction. Quasi-judicial agencies have neither business nor power to modify or amend the final and executory Decisions of the appellate courts. Under the principle oI immutability oI judgments, any alteration or amendment which substantially aIIects a Iinal and executory judgment is void Ior lack oI jurisdiction. |8| We thus rule that the Order dated March 30, 2001 oI the NLRC directing that the monetary award should be computed Irom June 1994, the date petitioners were dismissed Irom the service, up to June 20, 1995 only, is void.
WHEREFORE, we GRANT the petition. The challenged Resolutions dated October 29, 2001, May 8, 2003, and October 10, 2003 in CA-G.R. SP No. 67068 are REVERSED. The Order oI the NLRC dated March 30, 2001 in NLRC Case No. M-006176-2001 is SET ASIDE. The Order oI the Labor Arbiter dated January 8, 2001 is REINSTATED.
SO ORDERED.
Puno, C.J. (Chairperson), Corona, :cuna and Leonardo-De Cas
EN BANC G.R. No. 142801-802. 1uly 10, 2001] BUKLOD NG KAWANING EIIB, CESAR POSADA, REMEDIOS G. PRINCESA, BEN1AMIN KHO, BENIGNO MANGA, LULU MENDOZA, petitioners vs. HON. EXECUTIVE SECRETARY RONALDO B. ZAMORA, HON. SECRETARY 1OSE PARDO, DEPARTMENT OF FINANCE, HON. SECRETARY BEN1AMIN DIOKNO, DEPARTMENT OF BUDGET AND MANAGEMENT, HON. SECRETARY ARTEMIO TUQUERO, DEPARTMENT OF 1USTICE, Respondents. D E C I S I O N SANDOVAL-GUTIERREZ, .: chanroblesvirtuallawlibrary In this petition Ior certiorari, prohibition and mandamus, petitioners Buklod Ng Kawaning EIIB, Cesar Posada, Remedios Princesa, Benjamin Kho, Benigno Manga and Lulu Mendoza, Ior themselves and in behalI oI others with whom they share a common or general interest, seek the nulliIication oI ecutive Order Ao 191 |1| and ecutive Order Ao 223 |2| on the ground that they were issued by the OIIice oI the President with grave abuse oI discretion and in violation oI their constitutional right to security oI tenure. chanroblesvirtuallawlibrary The Iacts are undisputed: chanroblesvirtuallawlibrary On June 30, 1987, Iormer President Corazon C. Aquino, issued Executive Order No. 127 |3| establishing the Economic Intelligence and Investigation Bureau (EIIB) as part oI the structural organization oI the Ministry oI Finance. |4| The EIIB was designated to perIorm the Iollowing Iunctions: chanroblesvirtuallawlibrary (a) Receive, gather and evaluate intelligence reports and inIormation and evidence on the nature, modes and extent oI illegal activities aIIecting the national economy, such as, but not limited to, economic sabotage, smuggling, tax evasion, and dollar- salting, investigate the same and aid in the prosecution oI cases;chanroblesvirtuallawlibrary (b) Coordinate with external agencies in monitoring the Iinancial and economic activities oI persons or entities, whether domestic or Ioreign, which may adversely aIIect national Iinancial interest with the goal oI regulating, controlling or preventing said activities;chanroblesvirtuallawlibrary (c) Provide all intelligence units oI operating Bureaus or OIIices under the Ministry with the general Iramework and guidelines in the conduct oI intelligence and investigating works;chanroblesvirtuallawlibrary (d) Supervise, monitor and coordinate all the intelligence and investigation operations oI the operating Bureaus and OIIices under the Ministry;chanroblesvirtuallawlibrary (e) Investigate, hear and Iile, upon clearance by the Minister, anti- graIt and corruption cases against personnel oI the Ministry and its constituents units;chanroblesvirtuallawlibrary (f) PerIorm such other appropriate Iunctions as may be assigned by the Minister or his deputies.|5| chanroblesvirtuallawlibrary In a desire to achieve harmony oI eIIorts and to prevent possible conIlicts among agencies in the course oI their anti-smuggling operations, President Aquino issued Memorandum Order No. 225 on March 17, 1989, providing, among others, that the EIIB shall be the aency of primary responsibility for anti-smulin operations in all land areas and inland waters and waterways outside the areas of sole furisdiction of the Bureau of Customs. |6| chanroblesvirtuallawlibrary Eleven years aIter, or on January 7, 2000, President Joseph Estrada issued Executive Order No. 191 entitled Deactivation of the Economic Intellience and Investiation Bureau. |7| Motivated by the Iact that the designated Iunctions oI the EIIB are also being perIormed by the other existing agencies oI the government and that there is a need to constantly monitor the overlapping oI Iunctions among these agencies, Iormer President Estrada ordered the deactivation oI EIIB and the transIer oI its Iunctions to the Bureau oI Customs and the National Bureau oI Investigation. chanroblesvirtuallawlibrary Meanwhile, President Estrada issued Executive Order No. 196 |8| creating the Presidential Anti-Smuggling Task Force duana. |9| chanroblesvirtuallawlibrary Then the day Ieared by the EIIB employees came. On March 29, 2000, President Estrada issued Executive Order No. 223 |10| providing that all EIIB personnel occupying positions speciIied therein shall be deemed separated Irom the service eIIective April 30, 2000, pursuant to a bona fide reorganization resulting to abolition, redundancy, merger, division, or consolidation oI positions. |11| chanroblesvirtuallawlibrary Agonizing over the loss oI their employment, petitioners now come beIore this Court invoking our power oI judicial review oI Executive Order Nos. 191 and 223. They anchor their petition on the Iollowing arguments: Achanroblesvirtuallawlibrary Executive Order Nos. 191 and 223 should be annulled as they are unconstitutional for being violative of Section 2(3), Article IX-B of the Philippine Constitution and/or for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction. B.chanroblesvirtuallawlibrary The abolition of the EIIB is a hoax. Similarly, if Executive Order Nos. 191 and 223 are considered to effect a reorganization of the EIIB, such reorganization was made in bad faith. C.chanroblesvirtuallawlibrary The President has no authority to abolish the EIIB.chanroblesvirtuallawlibrary Petitioners contend that the issuance oI the aIore-mentioned executive orders is: (a) a violation oI their right to security oI tenure; (b) tainted with bad Iaith as they were not actually intended to make the bureaucracy more eIIicient but to give way to Task Force Aduana, the Iunctions oI which are essentially and substantially the same as that oI EIIB; and (c) a usurpation oI the power oI Congress to decide whether or not to abolish the EIIB. chanroblesvirtuallawlibrary Arguing in behalI oI respondents, the Solicitor General maintains that: (a) the President enjoys the totality oI the executive power provided under Sections 1 and 7, Article VII oI the Constitution, thus, he has the authority to issue Executive Order Nos. 191 and 223; (b) the said executive orders were issued in the interest oI national economy, to avoid duplicity oI work and to streamline the Iunctions oI the bureaucracy; and (c) the EIIB was not abolished, it was only deactivated. chanroblesvirtuallawlibrary The petition is bereIt oI merit. chanroblesvirtuallawlibrary Despite the presence oI some procedural Ilaws in the instant petition, such as, petitioners disregard oI the hierarchy oI courts and the non- exhaustion oI administrative remedies, we deem it necessary to address the issues. It is in the interest oI the State that questions relating to the status and existence oI a public oIIice be settled without delay. We are not without precedent. In Dario v. ison, |12| we liberally decreed: chanroblesvirtuallawlibrary The Court disregards the questions raised as to procedure, Iailure to exhaust administrative remedies, the standing oI certain parties to sue, Ior two reasons, +b]ecause of the demands of public interest, including the need for stability in the public service,' and because oI the serious implications oI these cases on the administration oI the Philippine civil service and the rights oI public servants.chanroblesvirtuallawlibrary At Iirst glance, it seems that the resolution oI this case hinges on the question - Does the deactivation of EIIB constitute abolition of an office? However, aIter coming to terms with the prevailing law and jurisprudence, we are certain that the ultimate queries should be a) Does the President have the authority to reorani:e the executive department? and, b) How should the reorani:ation be carried out? chanroblesvirtuallawlibrary Surely, there exists a distinction between the words deactivate and abolish. To deactivate means to render inactive or ineIIective or to break up by discharging or reassigning personnel, |13| while to abolish means to do away with, to annul, abrogate or destroy completely. |14| In essence, abolition denotes an intention to do away with the oIIice wholly and permanently. |15| Thus, while in abolition, the oIIice ceases to exist, the same is not true in deactivation where the oIIice continues to exist, albeit remaining dormant or inoperative. Be that as it may, deactivation and abolition are both reorganization measures. chanroblesvirtuallawlibrary The Solicitor General only invokes the above distinctions on the mistaken assumption that the President has no power to abolish an oIIice. chanroblesvirtuallawlibrary The general rule has always been that the power to abolish a public oIIice is lodged with the legislature. |16| This proceeds Irom the legal precept that the power to create includes the power to destroy. A public oIIice is either created by the Constitution, by statute, or by authority oI law. |17| Thus, except where the oIIice was created by the Constitution itselI, it may be abolished by the same legislature that brought it into existence. |18| chanroblesvirtuallawlibrary The exception, however, is that as Iar as bureaus, agencies or oIIices in the executive department are concerned, the Presidents power oI control may justiIy him to inactivate the Iunctions oI a particular oIIice, |19| or certain laws may grant him the broad authority to carry out reorganization measures. |20| The case in point is Larin v. Executive Secretary. |21| In this case, it was argued that there is no law which empowers the President to reorganize the BIR. In decreeing otherwise, this Court sustained the Iollowing legal basis, thus: chanroblesvirtuallawlibrary Initially, it is argued that there is no law yet which empowers the President to issue E.O. No. 132 or to reorganize the BIR.chanroblesvirtuallawlibrary We do not agree. x x x x x x chanroblesvirtuallawlibrary Section 48 oI R.A. 7645 provides that:chanroblesvirtuallawlibrary Sec. 48. Scalin Down and Phase Out of ctivities of encies ithin the Executive Branch. The heads oI departments, bureaus and oIIices and agencies are hereby directed to identiIy their respective activities which are no longer essential in the delivery oI public services and which may be scaled down, phased out or abolished, subject to civil service rules and regulations. X x x. ctual scalin down, phasin out or abolition oI the activities shall be eIIected pursuant to Circulars or Orders issued Ior the purpose by the OIIice oI the President.chanroblesvirtuallawlibrary Said provision clearly mentions the acts oI scaling down, phasing out and abolition oI oIIices only and does not cover the creation oI oIIices or transIer oI Iunctions. Nevertheless, the act oI creating and decentralizing is included in the subsequent provision oI Section 62 which provides that:chanroblesvirtuallawlibrary Sec. 62. Unauthori:ed orani:ational chares.- Unless otherwise created by law or directed by the President oI the Philippines, no organizational unit or changes in key positions in any department or agency shall be authorized in their respective organization structures and be Iunded Irom appropriations by this Act. (italics ours)chanroblesvirtuallawlibrary The foregoing provision evidently shows that the President is authorized to effect organizational changes including the creation of offices in the department or agency concerned. x x x x x x chanroblesvirtuallawlibrary Another legal basis oI E.O. No. 132 is Section 20, Book III oI E.O. No. 292 which states:chanroblesvirtuallawlibrary Sec. 20. Residual Powers. Unless Congress provides otherwise, the President shall exercise such other powers and functions vested in the President which are provided for under the laws and which are not speciIically enumerated above or which are not delegated by the President in accordance with law. (italic ours)chanroblesvirtuallawlibrary This provision speaks of such other powers vested in the President under the law. What law then gives him the power to reorganize? It is Presidential Decree No. 1772 which amended Presidential Decree No. 1416. These decrees expressly grant the President of the Philippines the continuing authority to reorganize the national government, which includes the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities and to standardize salaries and materials. The validity oI these two decrees are unquestionable. The 1987 Constitution clearly provides that all laws, decrees, executive orders, proclamations, letters oI instructions and other executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed or revoked. So Iar, there is yet no law amending or repealing said decrees. (Emphasis supplied)chanroblesvirtuallawlibrary Now, let us take a look at the assailed executive order. chanroblesvirtuallawlibrary In the whereas clause oI E.O. No. 191, Iormer President Estrada anchored his authority to deactivate EIIB on Section 77 oI Republic Act 8745 (FY 1999 General ppropriations ct), a provision similar to Section 62 oI R.A. 7645 quoted in Larin, thus; chanroblesvirtuallawlibrary Sec. 77. Orani:ed Chanes. Unless otherwise provided by law or directed by the President of the Philippines, no changes in key positions or organizational units in any department or agency shall be authorized in their respective organizational structures and Iunded Irom appropriations provided by this Act.chanroblesvirtuallawlibrary We adhere to the precedent or ruling in Larin that this provision recognizes the authority oI the President to eIIect organizational changes in the department or agency under the executive structure. Such a ruling Iurther Iinds support in Section 78 oI Republic Act No. 8760. |22| Under this law, the heads oI departments, bureaus, oIIices and agencies and other entities in the Executive Branch are directed (a) to conduct a comprehensive review oI their respective mandates, missions, objectives, Iunctions, programs, projects, activities and systems and procedures; (b) identiIy activities which are no longer essential in the delivery oI public services and which may be scaled down, phased-out or abolished; and (c) adopt measures that will result in the streamlined organization and improved overall perIormance oI their respective agencies. |23| Section 78 ends up with the mandate that the actual streamlinin and productivity improvement in aency orani:ation and operation shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President. |24| The law has spoken clearly. We are leIt only with the duty to sustain. chanroblesvirtuallawlibrary But oI course, the list oI legal basis authorizing the President to reorganize any department or agency in the executive branch does not have to end here. We must not lose sight oI the very source oI the power that which constitutes an express grant oI power. Under Section 31, Book III oI Executive Order No. 292 (otherwise known as the dministrative Code of 1987), the President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have the continuing authority to reorganize the administrative structure of the Office of the President. For this purpose, he may transIer the Iunctions oI other Departments or Agencies to the OIIice oI the President. In Canoni:ado v. uirre, |25| we ruled that reorganization involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions. It takes place when there is an alteration oI the existing structure oI government oIIices or units therein, including the lines oI control, authority and responsibility between them. The EIIB is a bureau attached to the Department oI Finance. |26| It Ialls under the OIIice oI the President. Hence, it is subject to the Presidents continuing authority to reorganize. chanroblesvirtuallawlibrary It having been duly established that the President has the authority to carry out reorganization in any branch or agency oI the executive department, what is then leIt Ior us to resolve is whether or not the reorganization is valid. In this jurisdiction, reorganizations have been regarded as valid provided they are pursued in good Iaith. Reorganization is carried out in good Iaith iI it is Ior the purpose oI economy or to make bureaucracy more eIIicient. |27| Pertinently, Republic Act No. 6656 |28| provides Ior the circumstances which may be considered as evidence oI bad Iaith in the removal oI civil service employees made as a result oI reorganization, to wit: (a) where there is a signiIicant increase in the number oI positions in the new staIIing pattern oI the department or agency concerned; (b) where an oIIice is abolished and another perIorming substantially the same Iunctions is created; (c) where incumbents are replaced by those less qualiIied in terms oI status oI appointment, perIormance and merit; (d) where there is a classiIication oI oIIices in the department or agency concerned and the reclassiIied oIIices perIorm substantially the same Iunctions as the original oIIices, and (e) where the removal violates the order oI separation. |29| chanroblesvirtuallawlibrary Petitioners claim that the deactivation oI EIIB was done in bad Iaith because Iour days aIter its deactivation, President Estrada created the Task Force duana. chanroblesvirtuallawlibrary We are not convinced. chanroblesvirtuallawlibrary An examination oI the pertinent Executive Orders |30| shows that the deactivation oI EIIB and the creation oI Task Force Aduana were done in good Iaith. It was not Ior the purpose oI removing the EIIB employees, but to achieve the ultimate purpose oI E.O. No. 191, which is economy. While Task Force Aduana was created to take the place oI EIIB, its creation does not entail expense to the government. chanroblesvirtuallawlibrary Firstly , there is no employment of new personnel to man the Task Force. E.O. No. 196 provides that the technical, administrative and special staffs of EIIB are to be composed of people who are already in the public service, they being employees of other existing agencies. Their tenure with the Task Force would only be temporary, i.e., only when the agency where they belong is called upon to assist the Task Force. Since their employment with the Task force is only by way of detail or assignment they retain their employment with the existing agencies. And should the need for them cease, they would be sent back to the agency concerned. chanroblesvirtuallawlibrary Secondly , the thrust oI E.O. No. 196 is to have a small group oI military men under the direct control and supervision oI the President as base oI the governments anti-smuggling campaign. Such a smaller base has the necessary powers 1) to enlist the assistance oI any department, bureau, or oIIice and to use their respective personnel, Iacilities and resources; and 2) to select and recruit personnel Irom within the PSG and ISAFP Ior assinment to the Task Force. Obviously, the idea is to encourage the utilization of personnel, facilities and resources of the already existing departments, agencies, bureaus, etc., instead of maintaining an independent office with a whole set of personnel and facilities. The EIIB had proven itselI burdensome Ior the government because it maintained separate oIIices in every region in the Philippines. chanroblesvirtuallawlibrary And thirdly, it is evident Irom the yearly budget appropriation oI the government that the creation oI the Task Force Aduana was especially intended to lessen EIIBs expenses. Tracing Irom the yearly General Appropriations Act, it appears that the allotted amount Ior the EIIBs general administration, support, and operations Ior the year 1995, was P128,031,000; |31| Ior 1996, P182,156,000; |32| Ior 1998, P219,889,000; |33| and, Ior 1999, P238,743,000. |34| These amounts were Iar above the P50,000,000 |35| allocation to the Task Force duana Ior the year 2000. chanroblesvirtuallawlibrary While basically, the Iunctions oI the EIIB have devolved upon the Task Force Aduana, we Iind the latter to have additional new powers. The Task Force Aduana, being composed oI elements Irom the Presidential Security Group (PSG) and Intelligence Service Armed Forces oI the Philippines (ISAFP), |36| has the essential power to effect searches, sei:ures and arrests. The EIIB did not have this power. The Task Force Aduana has the power to enlist the assistance oI any department, bureau, oIIice, or instrumentality oI the government, including government-owned or controlled corporations; and to use their personnel, Iacilities and resources. Again, the EIIB did not have this power. And, the Task Force Aduana has the additional authority to conduct investigation oI cases involving ill-gotten wealth. This was not expressly granted to the EIIB. chanroblesvirtuallawlibrary Consequently, it cannot be said that there is a Ieigned reorganization. In Blaquera v. Civil Sevice Commission, |37| we ruled that a reorganization in good Iaith is one designed to trim the Iat oII the bureaucracy and institute economy and greater eIIiciency in its operation. chanroblesvirtuallawlibrary Lastly, we hold that petitioners right to security oI tenure is not violated. Nothing is better settled in our law than that the abolition oI an oIIice within the competence oI a legitimate body iI done in good Iaith suIIers Irom no inIirmity. Valid abolition oI oIIices is neither removal nor separation oI the incumbents. |38| In the instructive words laid down by this Court in Dario v. ison, |39| through Justice Abraham F. Sarmiento: chanroblesvirtuallawlibrary Reorganizations in this jurisdiction have been regarded as valid provided they are pursued in good Iaith. As a general rule, a reorganization is carried out in good Iaith iI it is Ior the purpose oI economy or to make bureaucracy more eIIicient. In that event, no dismissal (in case of dismissal) or separation actually occurs because the position itself ceases to exist. And in that case, security of tenure would not be a Chinese wall. Be that as it may, iI the abolition, which is nothing else but a separation or removal, is done Ior political reasons or purposely to deIeat security oI tenure, otherwise not in good Iaith, no valid abolition takes and whatever abolition is done, is void ab initio. There is an invalid abolition as where there is merely a change oI nomenclature oI positions, or where claims oI economy are belied by the existence oI ample Iunds.chanroblesvirtuallawlibrary Indeed, there is no such thing as an absolute right to hold oIIice. Except constitutional oIIices which provide Ior special immunity as regards salary and tenure, no one can be said to have any vested right in an oIIice or its salary. |40| chanroblesvirtuallawlibrary While we cast a commiserating look upon the plight oI all the EIIB employees whose lives perhaps are now torn with uncertainties, we cannot ignore the unIortunate reality that our government is also battling the impact oI a plummeting economy. Unless the government is given the chance to recuperate by instituting economy and eIIiciency in its system, the EIIB will not be the last agency to suIIer the impact. We cannot Irustrate valid measures which are designed to rebuild the executive department. chanroblesvirtuallawlibrary WHEREFORE, the petition is hereby DENIED. No costs. chanroblesvirtuallawlibrary SO ORDERED. chanroblesvirtuallawlibrary avide r C Bellosillo Melo Puno Jitug Kapunan Mendoza Pardo BuenaYnares-Santiago and e Leon r concur chanroblesvirtuallawlibrary Panganiban and Quisumbing in the result chanroblesvirtuallawlibrary Conzaga-Reyes on leave
G.R. No. 96409 February 14, 1992 CITIZEN 1. ANTONIO M. CARPIO, Petitioner, vs. THE EXECUTIVE SECRETARY, THE SECRETARY OF LOCAL GOVERNMENTS, THE SECRETARY OF NATIONAL DEFENSE and THE NATIONAL TREASURER, Respondents.chanrobles virtual law library
PARAS, chanrobles virtual law library At the very outset, it should be well to set Iorth the constitutional provision that is at the core oI the controversy now conIronting us, thus: Article XVI, Section 6: chanrobles virtual law libra ry The State shall establish and maintain one police Iorce, which stall be national in scope and civilian in character, to be administered and controlled by a national police commission. The authority oI local executives over the police units in their jurisdiction shall be provided by law. 1 chanrobles virtual law l ibrary With the aIorequoted provision in mind, Congress passed Republic Act No. 6975 entitled "AN ACT ESTABLISHING THE PHILIPPINE NATIONAL POLICE UNDER A REORGANIZED DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, AND FOR OTHER PURPOSES" as the consolidated version oI House Bill No. 23614 and Senate Bill No. 463.chanroblesvirtualawlibrary chanrob les virtual law lib rary Following the said Act's approval by President Corazon C. Aquino on December 13, 1990, it was published on December 17, 1990. 2 chanrobles virtual law library Presently, however, petitioner as citizen, taxpayer and member oI the Philippine Bar sworn to deIend the Constitution, Iiled the petition now at bar on December 20, 1990, seeking this Court's declaration oI unconstitutionality oI RA 6975 with prayer Ior temporary restraining order.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary But in an en banc resolution dated December 27, 1990, We simply required the public respondents to Iile their Comment, without however giving due course to the petition and the prayer therein. Hence, the Act took eIIect aIter IiIteen days Iollowing its publication, or on January 1, 1991. 3 chanrobles virtual law library BeIore we settle down on the merits oI the petition, it would likewise be well to discuss albeit brieIly the history oI our police Iorce and the reasons Ior the ordination oI Section 6, Article XVI in our present Constitution.chanroblesvir tualawlibra ry chanrobles vir tual law libra ry During the Commonwealth period, we had the Philippine Constabulary as the nucleus oI the Philippine Ground Force (PGF), now the Armed Forces oI the Philippines (AFP). The PC was made part oI the PGF but its administrative, supervisory and directional control was handled by the then Department oI the Interior. AIter the war, it remained as the "National Police" under the Department oI National DeIense, as a major service component oI the AFP. 4 chanrobles virtual law libra ry Later, the Integration Act oI 1975 5 created the Integrated National Police (INP) under the OIIice oI the President, with the PC as the nucleus, and the local police Iorces as the civilian components. The PC-INP was headed by the PC ChieI who, as concurrent Director- General oI the INP, exercised command Iunctions over the INP. 6 chanrobles virtual law library The National Police Commission (NAPOLCOM) 7 exercised administrative control and supervision while the local executives exercised operational supervision and direction over the INP units assigned within their respective localities. 8 The set-up whereby the INP was placed under the command oI the military component, which is the PC, severely eroded the INP's civilian character and the multiplicity in the governance oI the PC-INP resulted in ineIIicient police service. 9 Moreover, the integration oI the national police Iorces with the PC also resulted in inequities since the military component had superior beneIits and privileges. 10 chanrobles virtual law library The Constitutional Commission oI 1986 was Iully aware oI the structural errors that beset the system. Thus, Com. Teodulo C. Natividad explained that: xxx xxx xxx MR. NATIVIDAD. . . . The basic tenet oI a modern police organization is to remove it Irom the military. 11
xxx xxx xxxchanrob les virtual law lib rary Here in our draIt Constitution, we have already made a constitutional postulate that the military cannot occupy any civil service position |in Section 6 oI the Article on the Civil Service 12 | ThereIore, in keeping with this and because oI the universal acceptance that a police Iorce is a civilian Iunction, a public service, and should not be perIormed by military Iorce, one oI the basic reIorms we are presenting here is that it should be separated Irom the military Iorce which is the PC. 13
xxx xxx xxxchanrob les virtual law lib rary Furthermore: xxx xxx xxxchanrob les virtual law lib rary . . . the civilian police cannot blossom into Iull proIession because most oI the key positions are being occupied by the military So, it is up to this Commission to remove the police Irom such a situation so that it can develop into a truly proIessional civilian police. . . . 14 chanrobles virtual law library Hence, the "one police Iorce, national in scope, and civilian in character" provision that is now Article XVI, Section 6 oI the 1987 Constitution.chanroblesvir tualawlibra ry chanrobles vir tual law libra ry And so we now come to the merits oI the petition at hand.chanroblesvirtualawlib rary chanrob les virtual law lib rary In the main, petitioner herein respectIully advances the view that RA 6975 emasculated the National Police Commission by limiting its power "to administrative control" over the Philippine National Police (PNP), thus, "control" remained with the Department Secretary under whom both the National Police Commission and the PNP were placed. 15 chanrobles virtual law librar y We do not share this view.chanroblesvirtualawlib rary chanrob les virtual law li brary To begin with, one need only reIer to the Iundamentally accepted principle in Constitutional Law that the President has control oI all executive departments, bureaus, and oIIices to lay at rest petitioner's contention on the matter.chanroblesvirtualawlibrary chanrobles vir tual law lib rary This presidential power oI control over the executive branch oI government extends over all executive oIIicers Irom Cabinet Secretary to the lowliest clerk 17 and has been held by us, in the landmark case oI ondano vs. Silvosa, 18 to mean "the power oI |the President| to alter or modiIy or nulliIy or set aside what a subordinate oIIicer had done in the perIormance oI his duties and to substitute the judgment oI the Iormer with that oI the latter." It is said to be at the very "heart oI the meaning oI ChieI Executive." 19 chanrobles virtual law lib rary Equally well accepted, as a corollary rule to the control powers oI the President, is the "Doctrine oI QualiIied Political Agency". As the President cannot be expected to exercise his control powers all at the same time and in person, 20 he will have to delegate some oI them to his Cabinet members.chanroblesvirtualaw library chan robles virtual law libra ry Under this doctrine, which recognizes the establishment oI a single executive, 21 "all executive and administrative organizations are adjuncts oI the Executive Department, the heads oI the various executive departments are assistants and agents oI the ChieI Executive, and, except in cases where the ChieI Executive is required by the Constitution or law to act in person on the exigencies oI the situation demand that he act personally, the multiIarious executive and administrative Iunctions oI the ChieI Executive are perIormed by and through the executive departments, and the acts of the Secretaries of such departments, performed and promulated in the reular course of business, unless disapproved or reprobated by the Chief Executive presumptively the acts of the Chief Executive." 22 (emphasis ours) chanrobles virtual law librar y Thus, and in short, "the President's power oI control is directly exercised by him over the members oI the Cabinet who, in turn, and by his authority, control the bureaus and other oIIices under their respective jurisdictions in the executive department." 23 chanrobles virtual law lib rary Additionally, the circumstance that the NAPOLCOM and the PNP are placed under the reorganized Department oI Interior and Local Government is merely an administrative realignment that would bolster a system oI coordination and cooperation among the citizenry, local executives and the integrated law enIorcement agencies and public saIety agencies created under the assailed Act, 24 the Iunding oI the PNP being in large part subsidized by the national government.chanroblesvirtualawlibra ry chanrobles vir tual law library Such organizational set-up does not detract Irom the mandate oI the Constitution that the national police Iorce shall be administered and controlled by a national police commission as at any rate, and in Iact, the Act in question adequately provides Ior administration and control at the commission level, as shown in the Iollowing provisions, to wit: Sec. 14. Powers and Functions of the Commission. - The Commission shall exercise the Iollowing powers and Iunctions: xxx xxx xxxchanrob les virtual law lib rary (i) Approve or modiIy plans and programs on education and training, logistical requirements, communications, records, inIormation systems, crime laboratory, crime prevention and crime reporting;chan robles virtual law libra ry (j) AIIirm, reverse or modiIy, through the National Appellate Board, personnel disciplinary actions involving demotion or dismissal Irom the service imposed upon members oI the Philippine National Police by the ChieI oI the PNP;chanrobles virtual law libra ry (k) Exercise appellate jurisdiction through .the regional. appellate boards over administrative cases against policemen and over decisions on claims Ior police beneIits; xxx xxx xxxchanrob les virtual law lib rary Sec. 26. The Command and direction oI the PNP shall be vested in the ChieI oI the PNP . . . Such command and direction oI the ChieI oI the PNP may be delegated to subordinate oIIicials with respect to the units under their respective commands, in accordance with the rules and regulations prescribed by the Commission. . . . xxx xxx xxxchanrob les virtual law lib rary Sec. 35. . . . To enhance police operational eIIiciency and eIIectiveness, the ChieI oI the PNP may constitute such other support units as may be necessary subject to the approval oI the Commission. . . . xxx xxx xxxchanrob les virtual law lib rary Sec. 37. . . . There shall be established a perIormance evaluation system which shall be administered in accordance with the rules, regulations and standards; and a code oI conduct promulgated by the Commission Ior members oI the PNP. . . . xxx xxx xxx Petitioner Iurther asserts that in maniIest derogation oI the power oI control oI the NAPOLCOM over the PNP, RA 6975 vested the power to choose the PNP Provincial Director and the ChieIs oI Police in the Governors and Mayors, respectively; the power oI "operational supervision and control" over police units in city and municipal mayors; in the Civil Service Commission, participation in appointments to the positions oI Senior Superintendent to Deputy Director-General as well as the administration oI qualiIying entrance examinations; disciplinary powers over PNP members in the "People's Law EnIorcement Boards" and in city and municipal mayors. 25 chanrobles virtual law library Once more, we Iind no real controversy upon the Ioregoing assertions.chanroblesvirt ualawlibrar y chanrobles virt ual law libra ry It is true that when the Constitutional Commissioners oI 1986 provided that the authority oI local executives over the police units in their jurisdiction shall be provided by law, they intended that the day-to-day Iunctions oI police work like crime, investigation, crime prevention activities, traIIic control, etc., would be under the operational control oI the local executives as it would not be advisable to give Iull control oI the police to the local executives. 26 chanrobles virtual law library They reasoned that in the past, this gave rise to warlordism, bossism, and sanctuaries Ior vices and abuses. 27 chanrobles virtual law libra ry It would appear then that by vesting in the local executives the power to choose the oIIicers in question, the Act went beyond the bounds oI the Constitution's intent.chanroblesvirtualawlibrary chanrob les virtual law lib rary Not so. We Iind light in the principle oI constitutional construction that every presumption should be indulged in Iavor oI constitutionality and the court in considering the validity oI the statute in question should give it such reasonable construction as can be reached to bring it within the Iundamental law. 28 chanrobles virtual law libra ry Under the questioned provisions, which read as Iollows: D. PARTICIPATION OF LOCAL EXECUTIVES IN THE ADMINISTRATION OF THE PNP.chanroblesvirtualawlibrar y chanrobles virt ual law libra ry Sec. 51. Powers of Local Government Officials over the PNP Units or Forces.chanroblesvirtualawlib rary chanrob les virtual law lib rary Governors and mayors shall be deputi:ed as representatives oI the Commission in their respective territorial jurisdictions. s such, the local executives shall discharge the Iollowing Iunctions: chan robles virtual law libra ry a.) Provincial Governor - (1) . . .chanroblesvirtualawlibrary chanr obles virtual law l ibrary The provincial governor shall choose the provincial director Irom a list oI three (3) eligibles recommended by the PNP Regional Director.chanroblesvirtualawlibrary chanr obles virtual law l ibrary 4) . . . City and municipal mayors shall have the Iollowing authority over the PNP units in their respective jurisdictions: chanr obles virtual law l ibrary i.) Authority to choose the chieI oI police Irom a list oI Iive (5) eligibles recommended by the Provincial Police Director. . . . (Emphasis ours) Iull control remains with the National Police Commission.chanroblesvirtualawlib rary chanrob les virtual law lib rary We agree, and so hold, with the view oI the Solicitor General that "there is no usurpation oI the power oI control oI the NAPOLCOM under Section 51 because under this very same provision, it is clear that the local executives are only acting as representatives oI the NAPOLCOM. . . . As such deputies, they are answerable to the NAPOLCOM Ior their actions in the exercise oI their Iunctions under that section. Thus, unless countermanded by the NAPOLCOM, their acts are valid and binding as acts oI the NAPOLCOM." 29 It is signiIicant to note that the local oIIicials, as NAPOLCOM representatives, will choose the oIIicers concerned Irom a list oI eligibles (those who meet the general qualiIications Ior appointment to the PNP) 30 to be recommended by PNP oIIicials.chanrob lesvirtuala wlibrary chanro bles virtual law l ibrary The same holding is true with respect to the contention on the operational supervision and control exercised by the local oIIicials. Those oIIicials would simply be acting as representatives oI the Commission.chanroblesvirtualawlib rary chanr obles virtual law l ibrary As regards the assertion involving the Civil Service Commission, suIIice it to say that the questioned provisions, which read: Sec. 31. ppointment of PNP Officers and embers. - The Appointment oI the oIIicers and members oI the PNP shall be eIIected in the Iollowing manner: chanrob les virtual law lib rary a.) Police OIIicer I to Senior Police OIIicer IV. - Appointed by the PNP regional director Ior regional personnel or by the ChieI oI the PNP Ior national headquarters personnel and attested by the Civil Service Commission;chanrobles vir tual law lib rary b.) Inspector to Superintendent. - Appointed by the ChieI oI the PNP, as recommended by their immediate superiors, and attested by the Civil Service Commission;chanrobles vir tual law lib rary c.) Senior Superintendent to Deputy Director-General. - Appointed by the President upon recommendation oI the ChieI oI the PNP, with proper endorsement by the Chairman oI the Civil Service Commission . . .chanroblesvirtualawlibrary chanrobles vir tual law lib rary Sec. 32. Examinations for Policemen. - The Civil Service Commission shall administer the qualiIying entrance examinations Ior policemen on the basis oI the standards set by the NAPOLCOM. precisely underscore the civilian character oI the national police Iorce, and will undoubtedly proIessionalize the same.chanroblesvirtualawlib rary chanr obles virtual la w library The grant oI disciplinary powers over PNP members to the "People's Law EnIorcement Boards" (or the PLEB) and city and municipal mayors is also not in derogation oI the commission's power oI control over the PNP.chanroblesvirtualawlibrary chanrob les virtual law lib rary Pursuant to the Act, the Commission exercises appellate jurisdiction, thru the regional appellate boards, over decisions oI both the PLEB and the said mayors. This is so under Section 20(c). Furthermore, it is the Commission which shall issue the implementing guidelines and procedures to be adopted by the PLEB Ior in the conduct oI its hearings, and it may assign NAPOLCOM hearing oIIicers to act as legal consultants oI the PLEBs (Section 43-d4, d5).chanroblesvirtualawlibrary chan robles virtual law libra ry As a disciplinary board primarily created to hear and decide citizen's complaints against erring oIIicers and members oI the PNP, the establishment oI PLEBs in every city, and municipality would all the more help proIessionalize the police Iorce.chanroblesvirtualawlibrary chanr obles virtual law l ibrary Petitioner would likewise have this Court imagine that Section 12 oI the questioned Act, the pertinent portion oI which reads: Sec. 12. Relationship of the Department with the Department of National Defense. - During a period oI twenty- Iour (24) months Irom the eIIectivity oI this Act, the Armed Forces oI the Philippines (AFP) shall continue its present role oI preserving the internal and external security oI the State: Provided, that said period may be extended by the President, iI he Iinds it justiIiable, Ior another period not exceeding twenty- Iour (24) months, aIter which, the Department shall automatically take over Irom the AFP the primary role oI preserving internal security, leaving to the AFP its primary role oI preserving external security. xxx xxx xxx constitutes an "encroachment upon, interIerence with, and an abdication by the President oI, executive control and commander-in- chieI powers."chanrobles vir tual law lib rary That We are not disposed to do Ior such is not the case at all here. A rejection thus oI petitioner's submission anent Section 12 oI the Act should be in order in the light oI the Iollowing exchanges during the CONCOM deliberations oI Wednesday, October 1, 1986: xxx xxx xxxchanrob les virtual law lib rary MR. RODRIGO. Just a Iew questions. The President oI the Philippines is the Commander-in-ChieI oI all the armed Iorces.chanroblesvirtualawlib rary chanrob les virtual law lib rary MR. NATIVIDAD. Yes, Madam President.chanroblesvirtualawlibra ry chanrobles vir tual law lib rary MR. RODRIGO. Since the national police is not integrated with the armed Iorces, I do not suppose they come under the Commander-in-ChieI powers oI the President oI the Philippines.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary MR. NATIVIDAD. They do, Madam President. By law they are under the supervision and control oI the President oI the Philippines.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary MR. RODRIGO. Yes, but the President is not the Commander-in-ChieI oI the national police.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary MR. NATIVIDAD. He is the President.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary MR. RODRIGO. Yes, the Executive. But they do not come under that speciIic provision that the President is Commander-in-ChieI oI all the armed Iorces.chanroblesvirtualawlib rary chanrob les virtual law lib rary MR. NATIVIDAD. No, not under the Commander-in- ChieI provision.chanroblesvi rtualawlibra ry chanrobles vi rtual law lib rary MR. RODRIGO. There are two other powers oI the President. The President has control over departments, bureaus and oIIices, and supervision over local governments. Under which does the police Iall, under control or under supervision?chan robles virtual law library MR. NATIVIDAD. Both, Madam President.chanroblesvirtualawlibrary chanro bles virtual law l ibrary MR. RODRIGO. Control and Supervision.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary MR. NATIVIDAD. Yes, in Iact, the National Police Commission is under the OIIice oI the President. (CONCOM RECORDS, Vol. 5, p. 296) It thus becomes all too apparent then that the provision herein assailed precisely gives muscle to and enIorces the proposition that the national police Iorce does not Iall under the Commander-in-ChieI powers oI the President. This is necessarily so since the police Iorce, not being integrated with the military, is not a part oI the Armed Forces oI the Philippines. As a civilian agency oI the government, it properly comes within, and is subject to, the exercise by the President oI the power oI executive control.chanroblesvirtualawlib rary chanrob les virtual law li brary Consequently, Section 12 does not constitute abdication oI commander-in-chieI powers. It simply provides Ior the transition period or process during which the national police would gradually assume the civilian Iunction oI saIeguarding the internal security oI the State. Under this instance, the President, to repeat, abdicates nothing oI his war powers. It would bear to here state, in reiteration oI the preponderant view, that the President, as Commander-in-ChieI, is not a member oI the Armed Forces. He remains a civilian whose duties under the Commander-in-ChieI provision "represent only a part oI the organic duties imposed upon him. All his other Iunctions are clearly civil in nature." 31 His position as a civilian Commander-in-ChieI is consistent with, and a testament to, the constitutional principle that "civilian authority is, at all times, supreme over the military." (Article II, Section 3, 1987 Constitution) chanrobles virtual law l ibrary Finally, petitioner submits that the creation oI a "Special Oversight Committee" under Section 84 oI the Act, especially the inclusion therein oI some legislators as members (namely: the respective Chairmen oI the Committee on Local Government and the Committee on National DeIense and Security in the Senate, and the respective Chairmen oI the Committee on Public Order and Security and the Committee on National DeIense in the House oI Representatives) is an "unconstitutional encroachment upon and a diminution oI, the President's power oI control over all executive departments, bureaus and oIIices."chanrobles vir tual law libra ry But there is not the least interIerence with the President's power oI control under Section 84. The Special Oversight Committee is simply an ad hoc or transitory body, established and tasked solely with planning and overseeing the immediate "transIer, merger and/or absorption" into the Department oI the Interior and Local Governments oI the "involved agencies." This it will undertake in accordance with the phases oI implementation already laid down in Section 85 oI the Act and once this is carried out, its Iunctions as well as the committee itselI would cease altogether. 32 As an ad hoc body, its creation and the Iunctions it exercises, decidedly do not constitute an encroachment and in diminution oI the power oI control which properly belongs to the President. What is more, no executive department, bureau or oIIice is placed under the control or authority, oI the committee. 33 chanrobles virtual law library As a last word, it would not be amiss to point out here that under the Constitution, there are the so-called independent Constitutional Commissions, namely: The Civil Service Commission, Commission on Audit, and the Commission on Elections. (Article IX-A, Section 1) chanrobles virtual law lib rary As these Commissions perIorm vital governmental Iunctions, they have to be protected Irom external inIluences and political pressures. Hence, they were made constitutional bodies, independent oI and not under any department oI the government. 34 Certainly, they are not under the control oI the President.chanroblesvirtualawlibrary chanr obles virtual law l ibrary The Constitution also created an independent oIIice called the "Commission on Human Rights." (Article XIII, Section 17|1|).However, this Commission is not on the same level as the Constitutional Commissions under Article IX, although it is independent like the latter Commissions. 35 It still had to be constituted thru Executive Order No. 163 (dated May 5, 1987).chanroblesvirtualawlibrary chan robles virtual law libra ry In contrast, Article XVI, Section 6 thereoI, merely mandates the statutory creation oI a national police commission that will administer and control the national police Iorce to be established thereunder.chanroblesvirtualawlibra ry chanrobles vi rtual law lib rary This commission is, Ior obvious reasons, not in the same category as the independent Constitutional Commissions oI Article IX and the other constitutionally created independent OIIice, namely, the Commission on Human Rights.chanroblesvirtualawlibrary chan robles virtual law libra ry By way oI resume, the three Constitutional Commissions (Civil Service, Audit, Elections) and the additional commission created by the Constitution (Human Rights) are all independent oI the Executive; but the National Police Commission is not. 36 In Iact, it was stressed during the CONCOM deliberations that this commission would be under the President, and hence may be controlled by the President, thru his or her alter eo, the Secretary oI the Interior and Local Government.chanroblesvirtualawlibrary chan robles virtual law library WHEREFORE, having in view all oI the Ioregoing holdings, the instant petition is hereby DISMISSED Ior lack oI merit.chanroblesvirtualawlib rary chanrobles vi rtual law lib rary SO ORDERED. Narvasa, C.J., elencio-Herrera, Gutierre:, Jr., Cru:, Feliciano, Padilla, Bidin, Grio-quino, edialdea, Realado, Davide, Jr., Romero and Nocon, JJ., concur.
epublic oI the Philippines SUPREME COURT Manila EN BANC
G.R. No. L-27887 February 22, 1971 FRANCISCO M. CUCHARO, petitioner-appellant, vs. HON. ABELARDO SUBIDO, Commissioner of Civil Service, HON. VITALIANO BERNARDINO, Director of Public Schools and MR. PEDRO SAN VICENTE, Division Superintendent of Schools, Davao City, respondents-appellees. MAKASIAR, chanrobles virtual law library This petition Ior certiorari and prohibition with the prayer Ior the issuance oI a writ oI preliminary mandatory injunction was Iiled by petitioner-appellant Francisco M. Cucharo by way oI appeal (p. 144, rec.) Irom the order dated July 20, 1966 respectively dismissing the petition as well as denying appellant's motion Ior summary judgment and Irom the order oI August 4, 1966 denying the motion Ior reconsideration oI the order oI July 20, 1966 (pp. 128, 142., rec.).chanroblesvirtualawlibrary chanrob les virtual law li brary It is undisputed that petitioner-appellant Francisco M. Cucharo was Iormerly the principal oI Calinan Elementary School, Calinan District, Davao City. On January 28, 1956, a senior teacher (regular) examination was given by the Civil Service Commission. When he was promoted as District Supervisor sometime in 1960 by virtue oI his junior teacher eligibility, he gave as additional qualiIication has senior teacher (promotional) eligibility, claiming that he received on March 28, 1958 Irom the Civil Service Commissioner a report oI his rating showing that he obtained a passing mark oI 81.78 in the senior teacher examination. Because he actually Iailed in the said senior teacher examination, in a third indorsement dated August 27, 1962, the Commissioner oI Civil Service required him to explain why "the notice oI rating dated March 28, 1958 purporting to show that he obtained a rating oI 81.78 in the senior teacher (promotional) examination ... contains certain unauthorized erasures and insertions" which make it diIIerent Irom the notice as originally issued.chanrob lesvirtualawlib rary chanrobles vi rtual law lib rary AIter a Iormal investigation at which he denied making the alleged erasures and insertions, petitioner-appellant was Iound guilty oI serious misconduct consisting oI IalsiIication oI a civil service rating card in Administrative Case No. R-24579 oI the Civil Service Commission and was accordingly dismissed Irom the service by the Civil Service Commissioner eIIective on the last day oI duty with pay in a decision dated August 6, 1965. In the same decision, the Civil Service Commission likewise directed that the said decision be executed immediately in the public interest (Annex A, petition, pp. 12- 14, rec.).chanroblesvirtualawlibrar y chanrobles virt ual law libra ry The Civil Service Commissioner coursed the aIoresaid decision through the respondent Director oI Public Schools, who in turn transmitted the same to the respondent superintendent oI city schools oI Davao City in a letter dated September 30, 1965, directing that the decision oI the Civil Service Commissioner be executed immediately "but not beyond ten days Irom receipt thereoI" and requesting that three copies oI the special order covering the dismissal oI petitioner- appellant Irom the service together with the advice oI the date he acknowledges receipt oI the decision be Iurnished his oIIice (Director oI Public Schools) by return indorsement thereoI (Annex B oI the petition, p. 14, rec.).chanroblesvirtualawlibrary chan robles virtual law library Pursuant to the aIoresaid instructions oI the Director oI Public Schools, the respondent superintendent oI city schools oI Davao City issued Division Order No. 677, s. 1965, dated December 1, 1965 making oI record the separation oI the petitioner-appellant Irom the service pursuant to the order oI dismissal by the Commissioner oI Civil Service eIIective that day, December 1, 1965 (Annex C oI the petition or Exh. 2 - Motion, pp. 15, 173, rec.); and transmitted the said Division Order No. 677 together with his Iirst indorsement dated December 1, 1965 to petitioner-appellant inviting attention to the basic communication oI the Director oI Public Schools and to the enclosed decision oI the Commissioner oI Civil Service, and requesting that petitioner-appellant acknowledges receipt oI the enclosed decision oI the Civil Service Commissioner by return indorsement (Exh. 1, Opposition, p. 172, rec.).chanroblesvirtualawlibrary chanrobles vir tual law lib rary In his second indorsement dated December 1, 1965, petitioner- appellant acknowledged receipt at 3 o'clock in the aIternoon oI that day, December 1, 1965, "the said order oI dismissal entitled Division Order No. 677, series oI 1965, together with a copy oI the letter oI the Director oI Public Schools, dated September 30, 1965, to the Division Superintendent oI Schools, Davao City, to execute immediately the alleged decision oI the Commissioner oI Civil Service in Administrative Case No. R-24579, a copy oI which is attached to the said letter," expressly stating therein that he is receiving the same "UNDER PROTEST because the said copy oI the decision is ordered executed beIore he could receive it and beIore he could have the opportunity to read it, thereby arbitrarily denying and prevailing him Irom Iiling a motion Ior its reconsideration or appealing the same ..." (Annex D, petition or Exh. T, Motion, p. 16, rec.).chanroblesvirtualawlib rary chanrobles vi rtual law lib rary In another letter also dated December 1, 1965 addressed to Mr. Primitivo Raquel, Principal oI Calinan Central Elementary School, Davao City, the respondent-appellee superintendent oI city schools designated the Iormer "as Principal in Charge oI Calinan District vice Mr. Francisco Cucharo, separated, eIIective immediately" and instructed him to receive all money and property responsibility Irom Mr. Cucharo, herein petitioner-appellant (Exh. Q, Motion, p. 168, rec.).chanroblesvirtualawlibrar y chanrobles virt ual law libra ry In his letter-circular dated December 6, 1965, addressed to all principals/head teachers, Principal In Charge Primitivo R. Raquel quoted verbatim the letter oI respondent-appellee superintendent oI city schools dated December 1, 1965 Ior their inIormation and guidance (Exh. R - Motion, p. 169, rec.); and on the same day as such principal-in-charge, he issued another letter circular to all principals/ head teachers and teacher-in-charge in the Calinan District inIorming them that there will be a meeting on December 8, 1965 at 7:30 in the morning (Exh. S, Motion, p. 170, rec.).chanroblesvirtualawlibrary chanrobles vir tual law lib rary Not satisIied with the decision, petitioner-appellant Iiled on December 2, 1965 the present petition Ior certiorari and prohibition with writ oI preliminary mandatory injunction in the Court oI First Instance oI Davao: (1) to declare the Civil Service Commissioner with having acted with grave abuse oI discretion and without authority oI law in ordering his immediate dismissal; (2) to declare null and void the decision oI the Civil Service Commissioner dismissing him Irom the service; (3) to declare the respondent superintendent oI city schools as without authority oI law in issuing Division Order No. 677, series oI 1965, as well as to declare said order null and void; and (4) to declare respondent-appellee Director oI Public Schools as having acted with grave abuse oI discretion and without authority oI law in amending the decision oI the Civil Service Commission with respect to the execution thereoI (pp. 1-21, rec.).chanroblesvirtualawlibrary chanrobles vi rtual law lib rary On December 4, 1965, the lower court issued ex parte a writ oI preliminary injunction directing the respondents-appellees to reIrain Irom executing the decision in Administrative Case No. R-24579 and to reIrain Irom replacing petitioner-appellant (p. 22-23, 26-27, rec.).chanroblesvirtualawlibrary chanrobles virtual law lib rary On December 27, 1965, petitioner-appellant Iiled a motion to declare respondent division superintendent oI city schools in contempt oI court Ior having designated the principal teacher oI Calinan Elementary School to assume the duties oI District Supervisor oI Calinan District in violation oI the preliminary injunction, claiming that he never vacated the position, much less turned over the same to the one designated to perIorm its duties (pp. 30-41, rec.).chanroblesvirtualawlibrar y chanrobles virtual law li brary On December 27, 1965, the Civil Service Commission received petitioner-appellant's motion Ior reconsideration on the decision oI the Civil Service Commissioner dated August 6, 1965, which motion was reIerred to the Director oI Public Schools by the Iirst indorsement dated January 17, 1966 Ior comment and recommendation (par. 2|b| oI respondent's Answer dated January 21, 1966, pp. 83-84 rec.).chanroblesvirtualawlibrary chanrobles vir tual law lib rary On December 31, 1965, respondent superintendent oI city schools Iiled a motion to quash preliminary writ oI injunction and an opposition to the motion to declare him in contempt oI court (pp. 45- 47, rec.).chanroblesvirtualawlibrar y chanrobles virt ual law libra ry On January 3, 1966, petitioner-appellant Iiled a motion to declare respondent superintendent oI city schools in deIault (p. 42, rec.).chanroblesvirtualawlibrar y chanrobles virt ual law libra ry On January 5, 1966, the trial court, aIter hearing, issued an order dissolving the writ oI preliminary injunction issued on December 4, 1965 and denied the motion to declare respondent superintendent oI city schools in contempt oI court on the ground that respondent superintendent oI city schools had already accomplished the acts sought to be restrained (p. 49, rec.). In another order issued on the same day, the lower court denied the motion to declare respondent superintendent oI city schools in deIault (p. 44, rec.).chanroblesvirtualawlibrar y chanrobles virt ual law libra ry On January 11, 1966, petitioner-appellant Iiled an urgent motion Ior reconsideration oI the two orders dated January 5, 1966 dissolving the writ oI preliminary injunction and denying the motion to declare respondent superintendent oI city schools in deIault (pp. 50-59, 60-62, rec.).chanroblesvirtualawlibrar y chanrobles virt ual law libra ry On July 1, 1966, the date set Ior pre-trial, the lower court issued an order granting respondent superintendent oI city schools Iive days within which to Iile a motion to dismiss the petition and petitioner- appellant was given a similar period to Iile an opposition (p. 107, rec). On July 6, l966, a motion to dismiss was Iiled (pp. 109-111, rec.) and on July 8, 1966, petitioner-appellant Iiled his opposition thereto with a counter-motion Ior summary judgment (pp. 112-121, rec.).chanroblesvirtualawlibrar y chanrobles virt ual law libra ry On July 20, 1966, the lower court issued an order dismissing the petition and denied is without merit petitioner-appellant's motion Ior summary oI judgement. (p. 128, rec.).chanroblesvirtualawlibrary chanrob les virtual law lib rary Hence, this appeal (p. 144, rec.).chanroblesvirtualawlibrar y chanrobles virt ual law libra ry Petitioner-appellant claims that the lower court erred: (1) in not resolving his urgent motion Ior reconsideration oI the order dated January 5,1966 particularly the portion dissolving the writ oI preliminary injunction, and the motion Ior reconsideration oI order dated January 5, 1966 denying his motion to declare respondent superintendent oI city schools in deIault beIore setting the pre-trial on July 1, 1966; (2) in dismissing the petition; and (3) in not granting the motion Ior summary judgment.chanroblesvirtualawlibra ry chanrobles vir tual law lib rary The three errors assigned by petitioner-appellant shall be discussed jointly.chanrob lesvirtualawlib rary chanrob les virtual law lib rary As a major premise, it has been the repeated pronouncement oI this Supreme Tribunal that the Civil Service Commissioner has the discretion to order the immediate execution in the public interest oI his decision separating petitioner-appellant Irom the service, always subject however to the rule that, in the event the Civil Service Board oI Appeals or the proper court determines that his dismissal is illegal, he should be paid the salary corresponding to the period oI his separation Irom the service until his reinstatement. 1 chanrobles virtual law library As elucidated by Mr. Justice Arsenio Dizon in the Cabigao case, "although the decision oI the Commissioner oI Civil Service adverse to the government employee under investigation is appealable to the Civil Service Board oI Appeals, the Commissioner has discretion to enIorce it and make it eIIective pending appeal, to protect public interest. However, the removal or the continued suspension oI the employee eIIected through the execution oI the appealed decision shall be considered as unjustiIied should said decision be reversed by the Civil Service Board oI Appeals and, in such case, as provided Ior in Section 35 oI the Civil Service Act oI 1959, the employee 'shall be restored to his position with Iull pay Ior the period oI suspension'." 2 chanrobles virtual law libra ry Petitioner-appellant is indulging in euphemism when he states that the decision dismissing him Irom the service cannot be executed immediately beIore he could receive it and beIore he could have the opportunity to read the same, thereby arbitrarily preventing him Irom Iiling a motion Ior reconsideration or appealing the same; because he actually received the copy oI the decision consisting only oI two pages (see Annex A to the petition, pp. 12-13, rec.) which will not take him Iive minutes to read and comprehend its contents.chanroblesvirtualawlibrary chanrob les virtual law lib rary While he received only a copy oI the decision, he does not impugn its correctness or accuracy. At any rate, he was Iortunate Ior the decision dated August 6, 1965, was executed only on December 1, 1965 or over three months thereaIter.chanroblesvirtualawlibrary chanrob les virtual law lib rary That the Commissioner oI Civil Service concluded that "the Iacts oI this case engender reasonable belieI that respondent is guilty oI the charge" is only one way oI expressing the idea that the Iacts support the reasonable conclusion that petitioner-appellant is guilty oI the charge against him. As to the intrinsic merits oI the Iindings oI Iacts oI the Civil Service Commissioner, the same would still depend on the appreciation thereoI by the Civil Service Board oI Appeals. As heretoIore stated, should he be exonerated by the Civil Service Board oI Appeals or my the Civil Service Commissioner himselI acting on his motion Ior reconsideration, petitioner-appellant would be entitled to recover back salaries.chanroblesvirtualawlib rary chanrob les virtual law lib rary The basic ground that the petition states no cause oI action, upon which respondent superintendent oI city schools predicates his motion to dismiss beIore the lower court, which is also alleged as a special deIense in the Answer Iiled by the Solicitor General (p. 85, rec.), is predicated on the Iact that petitioner-appellant has not exhausted administrative remedies by Iiling a motion Ior reconsideration oI the decision Iiled with the Civil Service Commissioner (which he subsequently Iiled on December 27, 1965) and an appeal to the Civil Service Board oI Appeals, beIore he can seek any remedy Irom the court. There is nothing in the record indicating the status oI his motion Ior reconsideration oI the decision oI the Civil Service Commissioner or whether he has Iiled an appeal with the Civil Service Board oI Appeals. Such an omission to exhaust all administrative remedies open to him under the law is Iatal to his petition, Ior it signiIies lack oI a cause oI action. 3 chanrobles virtual law librar y Because the order oI the trial court dated August 6, 1966 dismissing the petition and denying his motion Ior summary judgment, aIter considering the grounds invoked in the motion to dismiss as well as the reasons advanced by petitioner-appellant in opposition thereto and to support his counter-motion Ior summary judgment, is proper and legal, there was no need Ior the lower court to resolve petitioner- appellant's motion Ior reconsideration oI the order dated January 5, 1966 quashing the writ oI preliminary injunction and the order dated January 5, 1966 denying his motion to declare respondent superintendent oI city schools in deIault, which would merely be an exercise in Iutility.chanr oblesvirtualawlib rary chanro bles virtual law l ibrary While it is true that exhausting oI administrative remedies is a general rule, the case oI the petitioner-appellant does not Iall under anyone oI the recognized exceptions thereto as enunciated by this Tribunal, some oI which are re-stated in Escalante vs. Subido, supra.chanroblesvirtualawlib rary chanrobles vi rtual law lib rary Petitioner-appellant will not suIIer irreparable injury or damage by awaiting a Iinal administrative action in his case;" because he can collect back salaries should his dismissal be adjudged illegal. 5 The issues involved in the decision the Civil Service Commissioner separating him Irom the service are not purely illegal questions. 6 The act oI the Commissioner oI Civil Service is not patently devoid oI any color oI authority or maniIestly illegal; neither did the Civil Service Commissioner act without or in excess oI his jurisdiction nor commit a grave abuse oI discretion amounting to lack oI jurisdiction. 7 chanrobles virtual law l ibrary The case oI Guisadio vs. Jillalu:, et al. 8 does not apply to the case at bar. In the Guisadio case, the execution oI the decision was enjoined by the trial court; because in a case, which the decision oI the Commissioner oI Civil Service "considered Guisadio resigned Irom the service eIIective on (his) last day oI service with pay," it did not expressly direct that the said decision is immediately executory in the public interest. It was the respondent District Supervisor therein who wanted its immediate execution, Ior he directed Guisadio to turn over all his (Guisado's ) property accountabilities beIore Guisadio received a copy oI the decision itselI, which immediate implementation was joined by trial court therein. In the instant case, the decision oI the Civil Service Commissioner expressly directs its immediate execution in public interest. We ruled in the Guisadio case that based "on the Iacts presented to the trial judge," the trial judge "adopted the proper view" and "did not err" in enjoining the immediate execution oI the decision oI the Civil Service Commissioner. 9 chanrobles virtual law lib rary However that may be, the case oI Yarcia vs. City of Bauio, %rocio vs. Subido, ustria vs. uditor General and Cabiao v. Del Rosario, which were decided subsequently to the Guisadio case, should be decisive oI the case at bar since the relevant Iacts oI the aIoresaid cases and oI the instant case are analogous.chanroblesvirtualawlibrary chan robles virtual law librar y Neither can petitioner-appellant properly invoke the case oI baya vs. Jilleas, et al. 10 In the instant case, the decision oI the Civil Service Commissioner was promulgated aIter an administrative investigation oI the charges against appellant. In said Abaya case, the petitioner therein was ordered dismissed Irom the service without prior investigation or hearing. In the Abaya case, only a purely legal question was involved, and the order oI dismissal therein was patently illegal by reason oI the Iact that the petitioner therein was denied due process, which issues removed the Abaya case Irom being governed by the doctrine oI exhaustion oI administrative remedies. 11 As heretoIore stated, such exceptions do not obtain here.chanroblesvirtualawlibrary chan robles virtual law l ibrary We are thereIore constrained to dismiss as We hereby dismiss the appeal. With costs against petitioner-appellant.
LEJANDFO V. DONATO, JF. C.F. No. 165788 Pciiiioncr, Prcscni.
Dcforc iIc Couri is iIc Pciiiion for Fcvicw on Cctou filcd ly Alcjandro V. Donaio, Jr. wIicI sccls io rcvcrsc and sci asidc iIc Dccision daicd Ociolcr 11, 2004 of iIc Couri of Acals in CA-C.F. SP No. 73854. TIc assailcd dccision affirmcd Fcsoluiion No. 020348 daicd MarcI 7, 2002 and Fcsoluiion No. 021423 daicd Ociolcr 23, 2002 of iIc Civil Scrvicc Commission (CSC} wIicI Iad, in iurn, affirmcd iIc dccision of iIc Civil Scrvicc Commission Fcgional Officc No. 1 (CSCFO 1} finding ciiiioncr Donaio, Jr. guiliy of disIoncsiy and falsificaiion of official documcni and ordcring Iis dismissal from iIc scrvicc.
TIc casc arosc from iIc following facis.
Donaio, Jr. was a sccondary scIool icacIcr ai iIc San Pcdro Aariado Naiional HigI ScIool in Alcala, Pangasinan wIilc Cil C. Arcc Icld iIc osiiion of Asscssmcni Clcrl II ai iIc Officc of iIc Municial Trcasurcr of iIc said municialiiy. On Ociolcr 5, 1998, iIc Managcmcni Informaiion Officc of iIc CSC in Diliman, Quczon Ciiy rcccivcd an anonymous lciicr- comlaini rcqucsiing an invcsiigaiion on iIc allcgcd disIoncsi aci commiiicd ly Donaio, Jr. Ii was allcgcd iIai Donaio, Jr., falscly rcrcscniing Iimsclf as Arcc during iIc Carccr Scrvicc Sul-Profcssional Eaminaiion Icld in 1995, iool iIc said caminaiion in lcIalf of iIc laiicr. TIc anonymous comlaini siaicd in ari.
I Iavc iIc Ionor io rcqucsi your good Officc io invcsiigaic iIc disIoncsiy commiiicd ly Mr. Alcjandro V. Donaio, Jr. wIo imcrsonaicd Mr. Cil C. Arcc during iIc Sul-Profcssional Eaminaiion ialcn in 1995. TIcy arc worling in San Pcdro Aariado Naiional HigI ScIool, Alcala, Pangasinan and in iIc Municialiiy of Alcala, rcscciivcly.
TIcy arc cIcaiing iIc govcrnmcni and as far as rumors iIis is noi only iIc caminaiion anomaly Ic commiiicd.
AiiacIcd iIcrcio was a IoiograI of Donaio, Jr. TIc lciicr-comlaini was immcdiaicly forwardcd io iIc CSCFO 1, Ciiy of San Fcrnando, La Union, wIicI rcquircd Donaio, Jr. and Arcc io sulmii iIcir rcscciivc answcrs iIcrcio. In Iis Answcr daicd May 19, 1999, Arcc vcIcmcnily dcnicd commiiiing sucI aci of disIoncsiy. Hc claimcd iIai Ic was iIc samc crson wIo iool iIc said caminaiion and iIrougI |Iis| own mcrii succcssfully asscd iIc samc." In suori iIcrcof, Ic aiiacIcd iIc joini-affidavii of Ccrry Calrcra and David Arcc aiicsiing iIai, on Augusi 5, 1990, iIcy all, including Arcc, iool iIc Carccr Scrvicc Sul-Profcssional Eaminaiion givcn ly iIc CSC ai iIc Dinmalcy CaiIolic HigI ScIool, Dinmalcy, Pangasinan.
Donaio, Jr., for Iis ari, avcrrcd in Iis Answcr daicd May 24, 1999 iIai. I was grcaily iroullcd iIai my iciurc acarcd in iIc Scai Plan. TIc acarancc of my iciurc would sulsianiiaic iIc allcgaiion of iIc anonymous comlaini, wIocvcr Ic/sIc is.
TIc iruiI is iIai Mr. Arcc aslcd mc oncc io ialc iIc icsi for Iim, lui I vcIcmcnily rcfuscd iIc offcr lnowing iIai iIis would |lc| ianiamouni io cIcaiing, and iIai ii would ui mc in Ioi waicrs.
Mr. Arcc iold mc iIai Ic Iad ialcn iIc caminaiion, lui did noi malc ii. Ii was iIcn iIai Ic aslcd mc io ialc iIc caminaiion for Iim, of wIicI I rcfuscd lnowing iIai iIc Honorallc Commission Ias somc criincni rccords of mysclf sucI as coics of my Aoinimcni Pacrs, PDS, PDET, and oiIcr similar documcnis.
TIc faci is, I adviscd Iim io iry again, wIicI Ic did. Hc cvcn aslcd mc io accomany Iim in Dinmalcy io Icl Iim locaic Iis icsiing room. Aficr wc Iad found Iis icsiing room, I immcdiaicly lcfi Iim lnowing iIai iIcrc was noiIing clsc I could do. I rocccdcd io Lingaycn io visii my moiIcr.
Aficr somc iimc, Mr. Arcc announccd io mc iIai Ic asscd iIc icsi wiiI a vcry IigI raiing.
How my iciurc was uscd, I Iavc no idca. All I lnow is iIai I uscd iIai iciurc wIcn I iool my PDET in Novcmlcr 1998 in Daguan Ciiy. I Iad oiIcr coics of iIai iciurc, iwo of wIicI I sulmiiicd io Mrs. Erlinda C. Tadco, my formcr rincial, for loan uroscs. As for iIc rcsi, I could no longcr locaic iIcm lccausc I ciiIcr mislaccd iIcm or losi iIcm.
I suscci iIai my iciurc was uscd for crsonal vcndciia againsi mc, io Iarass mc in ordcr iIai I dcsisi from furiIcring my casc filcd lcforc iIc Honorallc Commission againsi my formcr rincial.
I, iIcrcforc, vcIcmcnily dcny iIc allcgaiion of iIc Honorallc Anonymous Comlaini, wIocvcr Ic/sIc is.
TIc Piciurc Scai Plan (PSP} of Eaminaiion Foom No. 24 in Dinmalcy CaiIolic HigI ScIool for iIc Augusi 5, 1990 Carccr Scrvicc Sul-Profcssional Eaminaiion (wIcrc iIc namc Cil Arcc acarcd} sIowcd iIai iIc idcniificaiion (ID} iciurc asicd alovc iIc namc Cil Arcc was iIai of Donaio, Jr. Ii was also olscrvcd iIai iIc signaiurc acaring iIcrcon was diffcrcni from iIc signaiurc of Arcc in Iis Answcr.
Taling inio considcraiion iIc forcgoing, a Formal CIargc daicd Ociolcr 12, 1999 was filcd ly Fomco C. Dc Lcon, Dirccior IV of CSCFO 1, againsi Donaio, Jr. and Arcc for disIoncsiy and falsificaiion of official documcni. TIc casc was doclcicd as Adminisiraiivc Casc No. 99- 27. Donaio, Jr. and Arcc wcrc, accordingly, rcquircd io filc iIcir rcscciivc answcrs io iIc said formal cIargc.
In Iis Answcr daicd Dcccmlcr 14, 1999, Arcc lasically adoicd iIc allcgaiions in Iis rcvious answcr. In addiiion iIcrcio, Ic claimcd iIai cvcr sincc Ic was a cIild, ii was Iis Ialii io lcc IoiograIs of mcmlcrs of Iis family and fricnds in Iis wallci, including iIai of Donaio, Jr. According io Arcc, during iIc said caminaiion, Ic may Iavc misialcnly sulmiiicd iIc ID iciurc of Donaio, Jr. WiiI rcscci io iIc signaiurc, Arcc mainiaincd iIai iIc signaiurc on iIc PSP was onc of Iis signaiurcs and iIai iIc onc iIai acarcd on Iis answcr was wIai Ic was using ai iIc iimc.
In Iis Answcr daicd Dcccmlcr 24, 1999, Donaio, Jr. adoicd iIc avcrmcnis in Iis rcvious answcr. Addiiionally, Ic Iarcd on iIc aarcni discrcancy in iIc daics considcring iIai iIc anonymous lciicr- comlaini siaicd iIai iIc daic of caminaiion was in 1995 wIilc in iIc formal cIargc, iwo diffcrcni daics wcrc mcniioncd. Augusi 5, 1990 and Augusi 5, 1999. TIc discrcancy in iIc daics allcgcdly rcndcrcd Iim incaallc of addrcssing Icad-on iIc cIargcs againsi Iim. Hc vigorously dcnicd iIai Ic misrcrcscnicd Iimsclf as Arcc and iIai Ic iool iIc said govcrnmcni caminaiion in iIc laiicr's sicad. Hc claimcd iIai Ic was ai Iis rcsidcncc in Pollacion Easi, Alcala, Pangasinan iIc wIolc day of Augusi 5, 1990 and, in faci, Ic rcccivcd somc visiiors iIcrcai. Hc sulmiiicd iIc affidaviis of Diosdado Tamayo and Daldomino Daiuan aiicsiing iIai iIcy wcni io scc Iim ai Iis Iousc on iIc said daic.
Sulscqucnily, a irial-iyc Icaring was conducicd wIcrc iIc ariics, ariicularly Donaio, Jr. and Arcc, wcrc givcn iIc ooriuniiy io roffcr documcniary and icsiimonial cvidcncc. TIcrcaficr, iIc CSCFO 1, iIrougI Lorcnzo S. Daniog, Dirccior IV, rcndcrcd Dccision No. 2001-113 daicd May 30, 2001 in Adminisiraiivc Casc No. 99-27, dismissing Donaio, Jr. and Arcc from iIc scrvicc for disIoncsiy and falsificaiion of official documcni.
Donaio, Jr. and Arcc sougIi rcconsidcraiion of iIc said dccision and/or ncw irial lui iIcir rcscciivc moiions wcrc dcnicd ly iIc CSCFO 1 for lacl of mcrii. Dy way of acal, iIcy clcvaicd iIc casc io iIc CSC.
Aficr duc considcraiion of iIc lcadings, iIc CSC romulgaicd Fcsoluiion No. 020348 daicd MarcI 7, 2002, affirming iIc carlicr dccision of iIc CSCFO 1. TIc CSC rulcd iIai iIcrc was sulsianiial cvidcncc io Iold loiI Donaio, Jr. and Arcc guiliy of iIc cIargcs of disIoncsiy and falsificaiion of official documcni. Sccifically, iIc ID iciurc of Donaio, Jr. asicd on iIc PSP during iIc Augusi 5, 1990 Carccr Scrvicc Sul- Profcssional Eaminaiion alovc Arcc's namc and iIc marlcd dissimilariiy lciwccn Arcc's uroricd signaiurc iIcrcon and Iis signaiurc as acaring in Iis answcr wcrc ialcn ly iIc CSC as indicaiivc of iIc faci iIai ii was Donaio, Jr. wIo aciually iool iIc said caminaiion in lcIalf of Arcc.
TIc disosiiivc oriion of CSC Fcsoluiion No. 020348 rcads.
WHEFEFOFE, iIc acal of Cil Arcc and Alcjandro Donaio, Jr. is Icrcly DISMISSED. Accordingly, iIc Dccision daicd May 30, 2001 of iIc Civil Scrvicc Commission Fcgional Officc (CSCFO} No. 1, San Fcrnando Ciiy, La Union, finding iIcm guiliy of DisIoncsiy and Falsificaiion of Official Documcni and dismissing iIcm from iIc scrvicc siands.
IFMO and CSCFO 1 arc dirccicd io cffcci iIc rcvocaiion of iIc civil scrvicc cligililiiics of Cil Arcc and Alcjandro Donaio, Jr. in iIc imlcmcniaiion of iIis rcsoluiion.
A moiion for rcconsidcraiion iIcrcof was filcd ly Donaio, Jr. and Arcc lui ii was dcnicd ly iIc CSC in iis Fcsoluiion No. 021423 daicd Ociolcr 23, 2002. In iIis rcsoluiion, iIc CSC sircsscd iIai iIc guili of Arcc and Donaio, Jr. was sufficicnily rovcn ly sulsianiial cvidcncc; Icncc, iIcrc is no cogcni rcason io warrani iIc rcvcrsal or modificaiion of CSC Fcsoluiion No. 020348 daicd MarcI 7, 2002."
Donaio, Jr. and Arcc foriIwiiI filcd wiiI iIc Couri of Acals (CA} a ciiiion for rcvicw assailing iIc aforcsaid rcsoluiions of iIc CSC. TIc CA, Iowcvcr, in iIc assailcd Dccision daicd Ociolcr 11, 2004, affirmcd CSC Fcsoluiion Nos. 020348 and 021423.
TIc CA did noi givc crcdcncc io iIcir insisicncc iIai iIc lciicr-comlaini sIould Iavc lccn dismisscd ouirigIi for non-comliancc wiiI Scciion 8, Fulc II of iIc Uniform Fulcs on Adminisiraiivc Cascs in iIc Civil Scrvicc. In ariicular, ii was Donaio, Jr. and Arcc's conicniion iIai iIc CSC sIould Iavc dismisscd ouirigIi iIc anonymous lciicr-comlaini. Addrcssing iIis argumcni, iIc CA, ccIoing iIc rcasoning of iIc CSC, oinicd oui iIai iIc lasis for iIc formal invcsiigaiion againsi iIcm was noi iIc anonymous comlaini lui iIc finding of a 5nu ucc casc againsi iIcm aficr a faci- finding invcsiigaiion.
TIc CA, lilcwisc, considcrcd as ucrilc Donaio, Jr. and Arcc's claim iIai iIc documcniary cvidcncc againsi iIcm Iad no rolaiivc valuc as iIc ullic officials wIo wcrc in cusiody of iIcsc documcnis wcrc noi rcscnicd. TIc CA rcasoncd iIai iIc documcniary cvidcncc againsi Donaio, Jr. and Arcc arc ullic documcnis and iIc rolaiivc wcigIi accordcd iIcsc documcnis is cnunciaicd in Scciion 23, Fulc 132 of iIc Fcviscd Fulcs on Evidcncc, io wii.
SEC. 23. !uIc docuncnts us cudcncc. Documcnis consisiing of cnirics in ullic rccords madc in iIc crformancc of a duiy ly a ullic officcr arc 5nu ucc cvidcncc of iIc facis iIcrcin siaicd. All oiIcr ullic documcnis arc cvidcncc, cvcn againsi a iIird crson, of iIc faci wIicI gavc risc io iIcir cccuiion and of iIc daic of iIc laiicr.
Sccifically, iIc cvidcniiary valuc of iIc PSP for Eaminaiion Foom No. 24 of iIc Dinmalcy CaiIolic HigI ScIool in wIicI iIc ID iciurc of Donaio, Jr. was asicd alovc Arcc's namc was, according io iIc CA, corrccily givcn cvidcniiary wcigIi ly iIc CSC in consonancc wiiI iIc alovc-quoicd rovision, and csccially wIcn vicwcd in iIc conici of Arcc's asscriion iIai Ic may Iavc misialcnly sulmiiicd Donaio Jr.'s ID iciurc wIcn Ic iool iIc said govcrnmcni caminaiion. Lacling a saiisfaciory clanaiion for Donaio, Jr.'s ID iciurc on iIc said PSP and iIc variancc lciwccn Arcc's uroricd signaiurc iIcrcon and iIai on iIc answcr iIai Ic filcd wiiI iIc CSCFO 1, iIc CA Icld iIai Donaio, Jr. and Arcc wcrc corrccily found liallc for disIoncsiy and falsificaiion of official documcni.
Donaio, Jr. and Arcc's claim of violaiion of iIcir rigIi io duc roccss wIcn iIcy wcrc found adminisiraiivcly liallc, allcgcdly dcsiic iIc alscncc of wiincsscs againsi iIcm, was givcn sIori sIrifi ly iIc CA. Ii oinicd oui iIai iIc rccords clcarly sIowcd iIai iIcy wcrc accordcd iIc ooriuniiy io rcscni iIcir sidc and, in faci, iIcy sulmiiicd cvidcncc io conirovcri iIc cIargcs againsi iIcm. TIc CA rulcd iIai undcr iIc circumsianccs iIc rcquircmcnis of duc roccss Iad lccn sufficicnily mci.
TIc disosiiivc oriion of iIc assailcd CA dccision rcads.
WHEFEFOFE, iIc ciiiion for rcvicw is DENIED for lacl of mcrii and rcsondcni's assailcd Fcsoluiion Nos. 020348 and 021423 arc AFFIFMED n toto.
SO OFDEFED.
Only Donaio, Jr. (iIc ciiiioncr} filcd iIc rcscni ciiiion for rcvicw sccling io rcvcrsc and sci asidc iIc Dccision daicd Ociolcr 11, 2004 of iIc CA. Hc raiscs iIc following issucs for iIc Couri's rcsoluiion.
I
WHETHEF OF NOT THE PFOCEEDINCS, UNDEFTAKEN DY THE FESPONDENT, THE FOFUM OF OFICIN, AFE TAINTED WITH IFFECULAFITY, INCLUDINC DENIAL TO PETITIONEF OF THE FICHT OF CONFFONTATION, SUCH THAT THEFE IS NOT A SINCLE PIECE OF EVIDENCE ADDUCED ACAINST PETITIONEF;
II
WHETHEF OF NOT THE FOFUM OF OFICIN AND THE SUDSEQUENT FOFA IN WHICH THIS CASE PASSED THFOUCH ON APPEAL AFE COFFECT IN CONCLUDINC THAT PETITIONEF IMPEFSONATED CIL C. AFCE DECAUSE OF THE PFESENCE OF THE FOFMEF'S PICTUFE IN THE SPACE INTENDED FOF THE PICTUFE OF THE LATTEF IN THE PICTUFE SEAT PLAN (EXHIDIT C"} OF THE AUCUST 5, 1990 CIVIL SEFVICE EXAMINATION AT FOOM 24, DINMALEY CATHOLIC HICH SCHOOL, DINMALEY, PANCASINAN.
TIc ciiiioncr mainly assails iIc rcliancc ly iIc CSCFO 1, iIc CSC and iIc CA on iIc Piciurc Scai Plan (marlcd as EIilii C"}, wIicI coniaincd Iis ID iciurc alovc iIc namc of Arcc, in finding iIcm loiI guiliy of iIc adminisiraiivc cIargcs of disIoncsiy and falsificaiion of official documcni. Ii is Iis conicniion iIai iIc PSP was crroncously considcrcd as cvidcncc wIcn wIai was rcscnicd during iIc rocccdings conducicd ly iIc CSCFO 1 was only a Ioiocoy iIcrcof. Uon iIc ciiiioncr's dcmand, ai iIc Icaring of Augusi 8, 2000, iIc counscl of CSCFO 1 roduccd a documcni wIicI Ic claimcd was an original coy of iIc PSP. Howcvcr, iIc ciiiioncr oljccicd io iIc manncr of rcscniaiion lccausc iIc counscl was noi allcgcdly iIc cusiodian of iIc said documcni. Morcovcr, Ic was noi ui on iIc wiincss siand and, conscqucnily, was noi suljccicd io cross- caminaiion. TIc ciiiioncr cmIasizcs iIai iIc PSP was noi idcniificd and formally offcrcd in cvidcncc.
TIc ciiiioncr claims violaiion of Iis rigIi io duc roccss lccausc Ic was noi allc io confroni iIc crson wIo rcarcd, and wIo was in cusiody of, iIc PSP. Hc mainiains iIai iIc rcscncc of Iis ID iciurc alovc Arcc's namc could lc madc ly any crson ly simly asiing ii ovcr anoiIcr ID iciurc for an cvil urosc. In iIis conncciion, Ic accuscs Iis formcr rincial, Mrs. Erlinda Tadco, as iIc onc rcsonsillc iIcrcfor lccausc Ic (iIc ciiiioncr}, iogciIcr wiiI Iis co-icacIcrs, filcd an adminisiraiivc casc againsi Icr, for wIicI sIc was mcicd a finc cquivalcni io Icr si moniIs salary.
TIc ciiiion is lcrcfi of mcrii.
Ii musi lc siaicd, ai iIc ouisci, iIai iIc CSCFO 1, iIc CSC and iIc CA uniformly found iIc ciiiioncr liallc for iIc cIargcs of disIoncsiy and falsificaiion of official documcni. In so doing, iIc PSP, on wIicI iIc ID iciurc of iIc ciiiioncr acarcd alovc iIc namc of Arcc, was givcn crcdcncc ly iIc CSCFO 1, iIc CSC and iIc CA io suori iIc adminisiraiivc cIargcs againsi iIc ciiiioncr and Arcc.
No rulc is morc cnircncIcd in iIis jurisdiciion iIan iIai iIc findings of facis of adminisiraiivc lodics, if lascd on sulsianiial cvidcncc, arc conirolling on iIc rcvicwing auiIoriiy. Siaicd in anoiIcr manncr, as a gcncral rulc, faciual findings of adminisiraiivc agcncics, sucI as iIc CSC, iIai arc affirmcd ly iIc CA, arc conclusivc uon and gcncrally noi rcvicwallc ly iIis Couri.
To lc surc, iIcrc arc rccognizcd ccciions io iIis rulc, io wii. (1} wIcn iIc findings arc groundcd cniircly on scculaiion, surmiscs, or conjcciurcs; (2} wIcn iIc infcrcncc madc is manifcsily misialcn, alsurd, or imossillc; (3} wIcn iIcrc is gravc alusc of discrciion; (4} wIcn iIc judgmcni is lascd on a misarcIcnsion of facis; (5} wIcn iIc findings of facis arc confliciing; (6} wIcn in maling iis findings, iIc CA wcni lcyond iIc issucs of iIc casc, or iis findings arc conirary io iIc admissions of loiI iIc acllani and iIc acllcc; (7} wIcn iIc findings arc conirary io iIosc of iIc irial couri; (8} wIcn iIc findings arc conclusions wiiIoui ciiaiion of sccific cvidcncc on wIicI iIcy arc lascd; (9} wIcn iIc facis sci foriI in iIc ciiiion as wcll as in iIc ciiiioncr's main and rcly lricfs arc noi disuicd ly iIc rcsondcni; (10} wIcn iIc findings of facis arc rcmiscd on iIc suoscd alscncc of cvidcncc and coniradicicd ly iIc cvidcncc on rccord; and (11} wIcn iIc CA manifcsily ovcrloolcd ccriain rclcvani facis noi disuicd ly iIc ariics, wIicI, if rocrly considcrcd, would jusiify a diffcrcni conclusion. Nonc of iIcsc ccciions Ias lccn sIown io lc aiicndani in iIc rcscni casc.
On iIc oiIcr Iand, ciiiioncr would lilc iIis Couri io rc-caminc iIc cvidcncc againsi Iim as Ic imugns, in ariicular, iIc PSP wIicI coniaincd Iis ID iciurc alovc Arcc's namc. Howcvcr, ii is noi iIc funciion of iIis Couri io analyzc or wcigI all ovcr again iIc cvidcncc and crcdililiiy of wiincsscs rcscnicd lcforc iIc lowcr couri, irilunal or officc. TIis flows from iIc lasic rincilc iIai iIc Surcmc Couri is noi a iricr of facis. Iis jurisdiciion is limiicd io rcvicwing and rcvising crrors of law imuicd io iIc lowcr couri, iIc laiicr's findings of faci lcing conclusivc and noi rcvicwallc ly iIis Couri.
TIc ciiiioncr's conicniion iIai Iis rigIi io duc roccss was violaicd lccausc Ic was noi allc io cross- caminc iIc crson wIo Iad cusiody of iIc PSP is unavailing. In anoiIcr casc, iIc Couri addrcsscd a similar conicniion ly siaiing iIai iIc ciiiioncr iIcrcin could noi arguc iIai sIc Iad lccn dcrivcd of duc roccss mcrcly lccausc no cross-caminaiion iool lacc. Indccd, in adminisiraiivc rocccdings, duc roccss is saiisficd wIcn iIc ariics arc affordcd fair and rcasonallc ooriuniiy io clain iIcir sidc of iIc conirovcrsy or givcn ooriuniiy io movc for a rcconsidcraiion of iIc aciion or ruling comlaincd of. SucI minimum rcquircmcnis Iavc lccn saiisficd in iIis casc for, in faci, Icarings wcrc conducicd ly iIc CSCFO 1 and iIc ciiiioncr and Arcc aciivcly ariiciaicd iIcrcin and cvcn sulmiiicd iIcir rcscciivc cvidcncc. Morcovcr, iIcy wcrc allc io sccl rcconsidcraiion of iIc dccision of iIc CSCFO 1 and, sulscqucnily, io clcvaic iIc casc for rcvicw io iIc CSC and iIc CA.
Lilcwisc unavailing is iIc ciiiioncr's roicsiaiion iIai iIc PSP was noi idcniificd and formally offcrcd in cvidcncc. TIc CSC, including iIc CSCFO 1 in iIis casc, lcing an adminisiraiivc lody wiiI quasi-judicial owcrs, is noi lound ly iccInical rulcs of roccdurc and cvidcncc in iIc adjudicaiion of cascs, suljcci only io limiiaiions imoscd ly lasic rcquircmcnis of duc roccss. As carlicr oincd, iIcsc lasic rcquircmcnis of duc roccss Iavc lccn comlicd wiiI ly iIc CSC, including iIc CSCFO 1.
Ii is wcll, ai iIis oini, io quoic wiiI aroval iIc following raiiocinaiion madc ly iIc CSC.
TIc iciurc of Donaio asicd ovcr iIc namc of Cil Arcc in iIc PSP during iIc Carccr Scrvicc Sul-rofcsssional Eaminaiion on Augusi 5, 1990 is indicaiivc of iIc faci iIai rcsondcni Arcc did noi crsonally ialc iIc said caminaiion lui Donaio in Iis lcIalf. TIis is so lccausc as a maiicr of roccdurc, iIc room camincrs assigncd io sucrvisc iIc conduci of caminaiion closcly caminc iIc iciurcs sulmiiicd ly iIc caminccs. An camincc is noi allowcd ly iIc camincrs io ialc iIc caminaiion if Ic docs noi lool lilc iIc crson in iIc iciurc Ic sulmiiicd and afficd in iIc PSP (CSC Fcsoluiion No. 95- 3694 daicd Junc 20, 1995 ciicd in CSC Fcsoluiion No. 97-0217 daicd January 14, 1997}. Olviously, iIc crson wIosc iciurc is asicd on iIc PSP was iIc onc wIo iool iIc caminaiion for and in lcIalf of Arcc. In iIc offcnsc of imcrsonaiion, iIcrc arc always iwo crsons involvcd. TIc offcnsc cannoi roscr wiiIoui iIc aciivc ariiciaiion of loiI crsons (CSC Fcsoluiion No. 94-6582}. FuriIcr, ly cngaging or colluding wiiI anoiIcr crson io ialc iIc icsi in Iis lcIalf and iIcrcaficr ly claiming iIc rcsuliani assing raic as Iis, clincIcs iIc casc againsi Iim. In cascs of imcrsonaiion, iIc Commission Ias consisicnily rcjccicd claims of good faiiI, for t s contu to Iunun nutuc tIut u 5cson u do (n5csonuton) utIout tIc conscnt o tIc 5cson Icng n5csonutcd." (CSC rcsoluiion No. 94-0826}
Ii Ias lccn a sciilcd rulc in iIis jurisdiciion iIai iIc duly accomlisIcd form of iIc Civil Scrvicc is an official documcni of iIc Commission, wIicI, ly iis vcry naiurc is considcrcd in iIc samc caicgory as iIai of a ullic documcni, admissillc in cvidcncc wiiIoui nccd of furiIcr roof. As official documcni, iIc conicnis/cnirics iIcrcin madc in iIc coursc of official duiy arc 5nu ucc cvidcncc of iIc facis siaicd iIcrcin (Muudu us. CSC, CA-C.F. SP No. 40764 daicd Scicmlcr 27, 1996}. Addiiionally, iIc ciiiioncr's roosiiion iIai iIc maiicr could lc iIc Iandiworl of Iis formcr rincial, wIo Iad an ac io grind againsi Iim, is uiicrly rcosicrous. TIis larc and graiuiious allcgaiion cannoi siand againsi iIc ruinous cvidcncc againsi Iim and Arcc. TIosc govcrnmcni cmloyccs wIo rcarcd iIc PSP and wIo sucrviscd iIc conduci of iIc Carccr Scrvicc Sul- Profcssional Eaminaiion on Augusi 5, 1990, cnjoy iIc rcsumiion iIai iIcy rcgularly crformcd iIcir duiics and iIis rcsumiion cannoi lc disuicd ly mcrc conjcciurcs and scculaiions. In finc, iIc CA commiiicd no rcvcrsillc crror wIcn ii affirmcd iIc rcsoluiions of iIc CSC finding iIc ciiiioncr guiliy of disIoncsiy and falsificaiion of official documcni. TIc ciiiioncr Ias miscrally failcd io rcscni any cogcni rcason for iIc Couri io dcviaic from iIc saluiary rulc iIai faciual findings of adminisiraiivc agcncics, csccially wIcn affirmcd ly iIc CA, arc gcncrally Icld io lc linding and final so long as iIcy arc suoricd ly sulsianiial cvidcncc in iIc rccord of iIc casc.
WHEFEFOFE, rcmiscs considcrcd, iIc ciiiion is DENIED for lacl of mcrii. TIc Dccision daicd Ociolcr 11, 2004 of iIc Couri of Acals in CA-C.F. SP No. 73854 is AFFIFMED n toto.
SO OFDEFED.
.R. No. 88550 April 18, 1990 INDUSTRIAL ENTERPRISES, INC., Petitioner, vs. THE HON. COURT OF APPEALS, MARINDUQUE MINING & INDUSTRIAL CORPORATION, THE HON. GERONIMO VELASCO in his capacity as Minister of Energy and PHILIPPINE NATIONAL BANK, Respondents. MELENCIO-HERRERA, This petition seeks the review and reversal oI the Decision oI respondent Court oI Appeals in CA-G.R. CV No. 12660, 1 which ruled adversely against petitioner herein.chanroblesvirt ualawlibrar y chanrobles virt ual law libra ry Petitioner Industrial Enterprises Inc. (IEI) was granted a coal operating contract by the Government through the Bureau oI Energy Development (BED) Ior the exploration oI two coal blocks in Eastern Samar. Subsequently, IEI also applied with the then Ministry oI Energy Ior another coal operating contract Ior the exploration oI three additional coal blocks which, together with the original two blocks, comprised the so-called "Giporlos Area."chanr obles virtual law l ibrary IEI was later on advised that in line with the objective oI rationalizing the country's over-all coal supply-demand balance . . . the logical coal operator in the area should be the Marinduque Mining and Industrial Corporation (MMIC), which was already developing the coal deposit in another area (Bagacay Area) and that the Bagacay and Giporlos Areas should be awarded to MMIC (Rollo, p. 37). Thus, IEI and MMIC executed a Memorandum oI Agreement whereby IEI assigned and transIerred to MMIC all its rights and interests in the two coal blocks which are the subject oI IEI's coal operating contract.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary Subsequently, however, IEI Iiled an action Ior rescission oI the Memorandum oI Agreement with damages against MMIC and the then Minister oI Energy Geronimo Velasco beIore the Regional Trial Court oI Makati, Branch 150, 2 alleging that MMIC took possession oI the subject coal blocks even beIore the Memorandum oI Agreement was Iinalized and approved by the BED; that MMIC discontinued work thereon; that MMIC Iailed to apply Ior a coal operating contract Ior the adjacent coal blocks; and that MMIC Iailed and reIused to pay the reimbursements agreed upon and to assume IEI's loan obligation as provided in the Memorandum oI Agreement (Rollo, p. 38). IEI also prayed that the Energy Minister be ordered to approve the return oI the coal operating contract Irom MMIC to petitioner, with a written conIirmation that said contract is valid and eIIective, and, in due course, to convert said contract Irom an exploration agreement to a development/production or exploitation contract in IEI's Iavor.chanroblesvirtualawlibrary chanr obles virtual law l ibrary Respondent, Philippine National Bank (PNB), was later impleaded as co-deIendant in an Amended Complaint when the latter with the Development Bank oI the Philippines eIIected extra-judicial Ioreclosures on certain mortgages, particularly the Mortgage Trust Agreement, dated 13 July 1981, constituted in its Iavor by MMIC aIter the latter deIaulted in its obligation totalling around P22 million as oI 15 July 1984. The Court oI Appeals eventually dismissed the case against the PNB (Resolution, 21 September 1989).chanroblesvirtualawlibra ry chanrobles vir tual law lib rary Strangely enough, Mr. Jesus S. Cabarrus is the President oI both IEI and MMIC.chanroblesvirtualawlib rary chanrob les virtual law lib rary In a summary judgment, the Trial Court ordered the rescission oI the Memorandum oI Agreement, declared the continued eIIicacy oI the coal operating contract in Iavor oI IEI; ordered the reversion oI the two coal blocks covered by the coal operating contract; ordered BED to issue its written aIIirmation oI the coal operating contract and to expeditiously cause the conversion thereoI Irom exploration to development in Iavor oI IEI; directed BED to give due course to IEI's application Ior a coal operating contract; directed BED to give due course to IEI's application Ior three more coal blocks; and ordered the payment oI damages and rehabilitation expenses (Rollo, pp. 9-10).chanroblesvirtualawlibrary chanrob les virtual law lib rary In reversing the Trial Court, the Court oI Appeals held that the rendition oI the summary judgment was not proper since there were genuine issues in controversy between the parties, and more importantly, that the Trial Court had no jurisdiction over the action considering that, under Presidential Decree No. 1206, it is the BED that has the power to decide controversies relative to the exploration, exploitation and development oI coal blocks (Rollo, pp. 43-44).chanroblesvirtualawlibrary chanrobles vir tual law lib rary Hence, this petition, to which we resolved to give due course and to decide.chanrob lesvirtualawlib rary chanrobles vi rtual law lib rary Incidentally, the records disclose that during the pendency oI the appeal beIore the Appellate Court, the suit against the then Minister oI Energy was dismissed and that, in the meantime, IEI had applied with the BED Ior the development oI certain coal blocks.chanroblesvirtualawlib rary chanrobles vi rtual law lib rary The decisive issue in this case is whether or not the civil court has jurisdiction to hear and decide the suit Ior rescission oI the Memorandum oI Agreement concerning a coal operating contract over coal blocks. A corollary question is whether or not respondent Court oI Appeals erred in holding that it is the Bureau oI Energy Development (BED) which has jurisdiction over said action and not the civil court.chanroblesvirtualawlibrary chanro bles virtual law l ibrary While the action Iiled by IEI sought the rescission oI what appears to be an ordinary civil contract cognizable by a civil court, the Iact is that the Memorandum oI Agreement sought to be rescinded is derived Irom a coal-operating contract and is inextricably tied up with the right to develop coal-bearing lands and the determination oI whether or not the reversion oI the coal operating contract over the subject coal blocks to IEI would be in line with the integrated national program Ior coal- development and with the objective oI rationalizing the country's over- all coal-supply-demand balance, IEI's cause oI action was not merely the rescission oI a contract but the reversion or return to it oI the operation oI the coal blocks. Thus it was that in its Decision ordering the rescission oI the Agreement, the Trial Court, inter alia, declared the continued eIIicacy oI the coal-operating contract in IEI's Iavor and directed the BED to give due course to IEI's application Ior three (3) IEI more coal blocks. These are matters properly Ialling within the domain oI the BED.chanroblesvirtualawlibrar y chanrobles virt ual law libra ry For the BED, as the successor to the Energy Development Board (abolished by Sec. 11, P.D. No. 1206, dated 6 October 1977) is tasked with the Iunction oI establishing a comprehensive and integrated national program Ior the exploration, exploitation, and development and extraction oI Iossil Iuels, such as the country's coal resources; adopting a coal development program; regulating all activities relative thereto; and undertaking by itselI or through service contracts such exploitation and development, all in the interest oI an eIIective and coordinated development oI extracted resources.chanroblesvirtualawlibrary cha nrobles virtual law l ibrary Thus, the pertinent sections oI P.D. No. 1206 provide: Sec. 6. Bureau of Enery Development. There is created in the Department a Bureau oI Energy Development, hereinaIter reIerred to in this Section as the Bureau, which shall have the Iollowing powers and Iunctions, among others: chanrobles vir tual law lib rary a. Administer a national proram Ior the encouragement, guidance, and whenever necessary, regulation oI such business activity relative to the exploration, exploitation, development, and extraction of fossil fuels such as petroleum, coal, . . .chanroblesvirtualawlibra ry chanrobles vir tual law libra ry The decisions, orders, resolutions or actions oI the Bureau may be appealed to the Secretary whose decisions are Iinal and executory unless appealed to the President. (Emphasis supplied.) That law Iurther provides that the powers and Iunctions oI the deIunct Energy Development Board relative to the implementation oI P.D. No. 972 on coal exploration and development have been transIerred to the BED, provided that coal operating contracts including the transIer or assignment oI interest in said contracts, shall require the approval oI the Secretary (Minister) oI Energy (Sec. 12, P.D. No. 1206). Sec. 12. . . . the powers and Iunctions transIerred to the Bureau oI Energy Development are: xxx xxx xxxchanrob les virtual law lib rary ii. The Iollowing powers and Iunctions oI the Energy Development Board under PD No. 910 . . .chanroblesvirtualawlibrary chanr obles virtual law l ibrary (1) Undertake by itself or throuh other arranements, such as service contracts, the active exploration, exploitation, development, and extraction of enery resources . . .chanroblesvirtualawlibrary chan robles virtual law library (2) Reulate all activities relative to the exploration, exploitation, development, and extraction of fossil and nuclear fuels . . .chanroblesvirtualawlibrary chanrobles virtua l law libra ry (P.D. No. 1206) (Emphasis supplied.) P.D. No. 972 also provides: Sec. 8. Each coal operating contract herein authorized shall . . . be executed by the Energy Development Board. Considering the Ioregoing statutory provisions, the jurisdiction oI the BED, in the Iirst instance, to pass upon any question involving the Memorandum oI Agreement between IEI and MMIC, revolving as its does around a coal operating contract, should be sustained.chanroblesvirtualawlib rary chanrob les virtual law lib rary In recent years, it has been the jurisprudential trend to apply the doctrine oI primary jurisdiction in many cases involving matters that demand the special competence oI administrative agencies. It may occur that the Court has jurisdiction to take cognizance oI a particular case, which means that the matter involved is also judicial in character. However, iI the case is such that its determination requires the expertise, specialized skills and knowledge oI the proper administrative bodies because technical matters or intricate questions oI Iacts are involved, then relieI must Iirst be obtained in an administrative proceeding beIore a remedy will be supplied by the courts even though the matter is within the proper jurisdiction oI a court. This is the doctrine oI primary jurisdiction. It applies "where a claim is oriinally coni:able in the courts, and comes into play whenever enIorcement oI the claim requires the resolution oI issues which, under a regulatory scheme, have been placed within the special competence oI an administrative body, in such case the fudicial process is suspended pendin referral of such issues to the administrative body for its view" (United States v. Western PaciIic Railroad Co., 352 U.S. 59, Emphasis supplied).chanroblesvirtualawlibra ry chanrobles vir tu al law library Clearly, the doctrine oI primary jurisdiction Iinds application in this case since the question oI what coal areas should be exploited and developed and which entity should be granted coal operating contracts over said areas involves a technical determination by the BED as the administrative agency in possession oI the specialized expertise to act on the matter. The Trial Court does not have the competence to decide matters concerning activities relative to the exploration, exploitation, development and extraction oI mineral resources like coal. These issues preclude an initial judicial determination. It behooves the courts to stand aside even when apparently they have statutory power to proceed in recognition oI the primary jurisdiction oI an administrative agency. One thrust oI the multiplication oI administrative agencies is that the interpretation oI contracts and the determination oI private rights thereunder is no longer a uniquely judicial Iunction, exercisable only by our regular courts (Antipolo Realty Corp. vs. National Housing Authority, 153 SCRA 399, at 407). The application oI the doctrine oI primary jurisdiction, however, does not call Ior the dismissal oI the case below. It need only be suspended until aIter the matters within the competence oI the BED are threshed out and determined. Thereby, the principal purpose behind the doctrine oI primary jurisdiction is salutarily served. UniIormity and consistency in the regulation oI business entrusted to an administrative agency are secured, and the limited Iunction oI review by the judiciary are more rationally exercised, by preliminary resort, Ior ascertaining and interpreting the circumstances underlying legal issues, to agencies that are better equipped than courts by specialization, by insight gained through experience, and by more Ilexible procedure (Far East ConIerence v. United States, 342 U.S. 570). With the Ioregoing conclusion arrived at, the question as to the propriety oI the summary judgment rendered by the Trial Court becomes unnecessary to resolve.chanroblesvirtualawl ibrary chan robles virtual law librar y WHEREFORE, the Court Resolved to DENY the petition. No costs.chanroblesvirtualawlibrary chanrobles virtual law lib rary SO ORDERED. Paras, Padilla, Sarmiento and Realado, JJ., concur. chanrobles virtual law library
ublic oI the Philippines SUPREME COURT Manila EN BANC
G.R. No. 118910 November 16, 1995 KILOSBAYAN, INCORPORATED, 1OVITO R. SALONGA, CIRILO A. RIGOS, ERME CAMBA, EMILIO C. CAPULONG, 1R., 1OSE T. APOLO, EPHRAIM TENDERO, FERNANDO SANTIAGO, 1OSE ABCEDE, CHRISTINE TAN, RAFAEL G. FERNANDO, RAOUL V. VICTORINO, 1OSE CUNANAN, QUINTIN S. DOROMAL, SEN. FREDDIE WEBB, SEN. WIGBERTO TAADA, REP. 1OKER P. ARROYO, Petitioners, vs. MANUEL L. MORATO, in his capacity as Chairman of the Philippine Charity Sweepstakes Office, and the PHILIPPINE GAMING MANAGEMENT CORPORATION, Respondents. R E S O L U T I O N
MENDOZA, chanrobles virtual law library Petitioners seek reconsideration oI our decision in this case. They insist that the decision in the Iirst case has already settled (1) whether petitioner Kilosbayan, Inc. has a standing to sue and (2) whether under its charter (R.A. No. 1169, as amended) the Philippine Charity Sweepstakes OIIice can enter into any Iorm oI association or collaboration with any party in operating an on-line lottery. Consequently, petitioners contend, these questions can no longer be reopened.chanroblesvirtualawlibrar y chanrobles virt ual law libra ry Because two members oI the Court did not consider themselves bound by the decision in the Iirst case, petitioners suggest that the two, in joining the dissenters in the Iirst case in reexamining the questions in the present case, acted otherwise than according to law. They cite the Iollowing statement in the opinion oI the Court: The voting on petitioners' standing in the previous case was a narrow one, with seven (7) members sustaining petitioners' standing and six (6) denying petitioners' right to bring the suit. The majority was thus a tenuous one that is not likely to be maintained in any subsequent litigation. In addition, there have been changes in the membership oI the Court, with the retirement oI Justices Cruz and Bidin and the appointment oI the writer oI this opinion and Justice Francisco. Given this Iact it is hardly tenable to insist on the maintenance oI the ruling as to petitioners' standing. Petitioners claim that this statement "conveys a none too subtle suggestion, perhaps a Freudian slip, that the two new appointees, regardless oI the merit oI the Decision in the Iirst Kilosbayan case against the lotto (Kilosbayan, et al. v. Guingona, 232 SCRA 110 (1994)) must oI necessity align themselves with all the Ramos appointees who were dissenters in the Iirst case and constitute the new majority in the second lotto case." And petitioners ask, "why should it be so?" Petitioners ask a question to which they have made up an answer. Their attempt at psychoanalysis, detecting a Freudian slip where none exists, may be more revealing oI their own unexpressed wish to Iind motives where there are none which they can impute to some members oI the Court.chanroblesvirtualawlibrary chanrob les virtual law lib rary For the truth is that the statement is no more than an eIIort to explain - rather than to fustify - the majority's decision to overrule the ruling in the previous case. It is simply meant to explain that because the Iive members oI the Court who dissented in the Iirst case (Melo, Quiason, Puno, Vitug and Kapunan, JJ.) and the two new members (Mendoza and Francisco, JJ.) thought the previous ruling to be erroneous and its reexamination not to be barred by stare decisis, res fudicata or conclusiveness oI judgment, or law oI the case, it was hardly tenable Ior petitioners to insist on the Iirst ruling.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary Consequently to petitioners' question "hat is the lue that holds them toether," implying some ulterior motives on the part oI the new majority in reexamining the two questions, the answer is: None, except a conviction on the part oI the Iive, who had been members oI the Court at the time they dissented in the Iirst case, and the two new members that the previous ruling was erroneous. The eighth Justice (Padilla, J.) on the other hand agrees with the seven Justices that the ELA is in a real sense a lease agreement and thereIore does not violate R.A. No. 1169.chanroblesvirtualawlibrary chan robles virtual law libra ry The decision in the Iirst case was a split decision: 7-6. With the retirement oI one oI the original majority (Cruz, J.) and one oI the dissenters (Bidin, J.) it was not surprising that the Iirst decision in the Iirst case was later reversed.chanroblesvirtualawlibra ry chanrobles vi rtual law lib rary It is argued that, in any case, a reexamination oI the two questions is barred because the PCSO and the Philippine Gaming Management Corporation made a " formal commitment not to ask Ior a reconsideration oI the Decision in the Iirst lotto case and instead submit a new agreement that would be in conIormity with the PCSO Charter (R.A. No. 1169, as amended) and with the Decision oI the Supreme Court in the Iirst Kilosbayan case against on-line, hi-tech lotto."chanrobles virtual law libra ry To be sure, a new contract was entered into which the majority oI the Court Iinds has been purged oI the Ieatures which made the Iirst contract objectionable. Moreover, what the PCSO said in its maniIestation in the Iirst case was the Iollowing: 1. They are no longer Iiling a motion Ior reconsideration oI the Decision oI this Honorable Court dated May 5, 1994, a copy oI which was received on May 6, 1994.chanroblesvirtualawlibrary chanrobles virtual law libra ry 2. Respondents PCSO and PGMC are presently negotiating a new lease agreement consistent with the authority oI PCSO under its charter (R.A. No. 1169, as amended by B.P. Blg. 42) and conIormable with the pronouncements oI this Honorable Court in its Decision oI May 5, 1995. The PGMC made substantially the same maniIestation as the PCSO. There was thus no "Iormal commitment" - but only a manifestation - that the parties were not Iiling a motion Ior reconsideration. Even iI the parties made a "Iormal commitment," the six (6) dissenting Justices certainly could not be bound thereby not to insist on their contrary view on the question oI standing. Much less were the two new members bound by any "Iormal commitment" made by the parties. They believed that the ruling in the Iirst case was erroneous. Since in their view reexamination was not barred by the doctrine oI stare decisis, res fudicata or conclusiveness oI judgment or law oI the case, they voted the way they did with the remaining Iive (5) dissenters in the Iirst case to Iorm a new majority oI eight.chanroblesvirtualawlibrary chanrobles virtual law libra ry Petitioners ask, "hy should this be so?" Because, as explained in the decision, the Iirst decision was erroneous and no legal doctrine stood in the way oI its reexamination. It can, thereIore, be asked "with equal candor": "Why should this not be so?"chanrobles virt ual law libra ry Nor is this the Iirst time a split decision was tested, iI not reversed, in a subsequent case because oI change in the membership oI a court. In 1957, this Court, voting 6-5, held in Feliciano v. quinas, G.R. No. L- 10201, Sept. 23, 1957 that the phrase "at the time oI the election" in 2174 oI the Revised Administrative Code oI 1917 meant that a candidate Ior municipal elective position must be at least 23 years oI age on the date of the election. On the other hand, the dissenters argued that it was enough iI he attained that age on the day he assumed oIIice.chanroblesvirtualawlib rary chanrob les virtual law lib rary Less than three years later, the same question was beIore the Court again, as a candidate Ior municipal councilor stated under oath in her certiIicate oI candidacy that she was eligible Ior that position although she attained the requisite age (23 years) only when she assumed oIIice. The question was whether she could be prosecuted Ior IalsiIication. In People v. Yan, 107 Phi. 888 (1960), the Court ruled she could not. Justice, later ChieI Justice, Benison, who dissented in the Iirst case, Feliciano v. quinas, supra, wrote the opinion oI the Court, holding that while the statement that the accused was eligible was "inexact or erroneous, according to the majority in the Feliciano case," the accused could not be held liable Ior IalsiIication, because the question |whether the law really required candidates to have the required age on the day oI the election or whether it was suIIicient that they attained it at the beginning oI the term oI oIIice| has not been discussed anew, despite the presence of new members; we simply assume Ior the purpose oI this decision that the doctrine stands. Thus because in the meantime there had been a change in the membership oI the Court with the retirement oI two members (Recess and Flex, JJ.) who had taken part in the decision in the Iirst case and their replacement by new members (Barrera and Gutierrez-David, JJ.) and the Iact that the vote in the Iirst case was a narrow one (6 to 5), the Court allowed that the continuing validity oI its ruling in the Iirst case might well be doubted. For this reason it gave the accused the beneIit oI the doubt that she had acted in the good Iaith belieI that it was suIIicient that she was 23 years oI age when she assumed oIIice.chanroblesvirtualawlib rary chanrob les virtual law lib rary In that case, the change in the membership oI the Court and the possibility oI change in the ruling were noted without anyone - much less would-be psychoanalysts - Iinding in the statement oI the Court any Freudian slip. The possibility oI change in the rule as a result oI change in membership was accepted as a suIIicient reason Ior Iinding good Iaith and lack oI criminal intent on the part oI the accused.chanroblesvirtualawl ibrary chan robles virtual law librar y Indeed, a change in the composition oI the Court could prove the means oI undoing an erroneous decision. This was the lesson oI Knox v. Lee, 12 Wall. 457 (1871). The Legal Tender Acts, which were passed during the Civil War, made U.S. notes (greenbacks) legal tender Ior the payment oI debts, public or private, with certain exceptions. The validity oI the acts, as applied to preexisting debts, was challenged in Hepburn v. Griswold, 8 Wall. 603 (1869). The Court was then composed oI only eight (8) Justices because oI Congressional eIIort to limit the appointing power oI President Johnson. Voting 5-3, the Court declared the acts void. ChieI Justice Chase wrote the opinion oI the Court in which Iour others, including Justice Grier, concurred. Justices Miller, Swayne and Davis dissented. A private memorandum leIt by the dissenting Justices described how an eIIort was made "to convince an aged and inIirm member oI the court |Justice Grier| that he had not understood the question on which he voted," with the result that what was originally a 4-4 vote was converted into a majority (5-3) Ior holding the acts invalid.chanroblesvi rtualawlibra ry chanrobles vir tual law lib rary On the day the decision was announced, President Grant nominated to the Court William Strong and Joseph P. Bradley to Iill the vacancy caused by the resignation oI Justice Grier and to restore the membership oI the Court to nine. In 1871, Hepburn v. Griswold was overruled in the Legal Tender Cases, as Knox v. Lee came to be known, in an opinion by Justice Strong, with a dissenting opinion by ChieI Justice Chase and the three other surviving members oI the Iormer majority. There were allegations that the new Justices were appointed Ior their known views on the validity oI the Legal Tender Acts, just as there were others who deIended the character and independence oI the new Justices. History has vindicated the overruling oI the Hepburn case by the new majority. The Legal Tender Cases proved to be the Court's means oI salvation Irom what ChieI Justice Hughes later described as one oI the Court's "selI-inIlicted wounds." 1
We now consider the speciIic grounds Ior petitioners' motion Ior reconsideration.chanroblesvirt ualawlibrar y chanrobles virt ual law libra ry I. We have held that because there are no genuine issues oI constitutionality in this case, the rule concerning real party in interest, applicable to private litigation rather than the more liberal rule on standin, applies to petitioners. Two objections are made against that ruling: (1) that the constitutional policies and principles invoked by petitioners, while not supplying the basis Ior aIIirmative relieI Irom the courts, may nonetheless be resorted to Ior striking down laws or oIIicial actions which are inconsistent with them and (2) that the Constitution, by guaranteeing to independent people's organizations "eIIective and reasonable participation at all levels oI social, political and economic decision-making" (Art. XIII, 16), grants them standing to sue on constitutional grounds.chanroblesvirtualawlib rary chanrob les virtual law li brary The policies and principles oI the Constitution invoked by petitioner read: Art. II, 5. The maintenance oI peace and order, the protection liIe, liberty, and property, and the promotion of the eneral welfare are essential Ior the enjoyment by all the people oI the blessings oI democracy. Id., 12. The natural and primary right and duty oI parents in the rearing oI the youth Ior civic eIIiciency and the development of moral character shall receive the support oI the Government. Id., 13. The State recognizes the vital role oI the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-bein. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic aIIairs. Id., 17. The State shall give priority to education, science and technology, arts, culture, and sports to Ioster patriotism and nationalism, accelerate social progress, and promote total human liberation and development. As already stated, however, these provisions are not selI-executing. They do not conIer rights which can be enIorced in the courts but only provide uidelines for leislative or executive action. By authorizing the holding oI lottery Ior charity, Congress has in eIIect determined that consistently with these policies and principles oI the Constitution, the PCSO may be given this authority. That is why we said with respect to the opening by the PAGCOR oI a casino in Cagayan de Oro, "the morality oI gambling is not a justiciable issue. Gambling is not illegal per se. . . . It is left to Conress to deal with the activity as it sees fit." (Magtajas v. Pryce Properties Corp., Inc., 234 SCRA 255, 268 |1994|).chanroblesvirtualawlibrary chanrobles vi rtual law lib rary It is noteworthy that petitioners do not question the validity oI the law allowing lotteries. It is the contract entered into by the PCSO and the PGMC which they are assailing. This case, thereIore, does not raise issues oI constitutionality but only oI contract law, which petitioners, not being privies to the agreement, cannot raise.chanroblesvirtualawlib rary chanr obles virtual law lib rary Nor does Kilosbayan's status as a people's organization give it the requisite personality to question the validity oI the contract in this case. The Constitution provides that "the State shall respect the role oI independent people's organizations to enable the people to pursue and protect, within the democratic Iramework, their legitimate and collective interests and aspirations through peaceIul and lawIul means," that their right to "eIIective and reasonable participation at all levels oI social, political, and economic decision-making shall not be abridged." (Art. XIII, 15-16) chanrobles virtual law libra ry These provisions have not changed the traditional rule that only real parties in interest or those with standin, as the case may be, may invoke the judicial power. The jurisdiction oI this Court, even in cases involving constitutional questions, is limited by the "case and controversy" requirement oI Art. VIII, 5. This requirement lies at the very heart oI the judicial Iunction. It is what diIIerentiates decision-making in the courts Irom decision-making in the political departments oI the government and bars the bringing oI suits by just any party.chanroblesvi rtualawlibra ry chanrobles vi rtual law lib rary Petitioners quote extensively Irom the speech oI Commissioner Garcia beIore the Constitutional Commission, explaining the provisions on independent people's organizations. There is nothing in the speech, however, which supports their claim oI standing. On the contrary, the speech points the way to the legislative and executive branches oI the government, rather than to the courts, as the appropriate Iora Ior the advocacy oI petitioners' views. 2 Indeed, the provisions on independent people's organizations may most useIully be read in connection with the provision on initiative and reIerendum as a means whereby the people may propose or enact laws or reject any oI those passed by Congress. For the Iact is that petitioners' opposition to the contract in question is nothing more than an opposition to the government policy on lotteries.chanroblesvirtualawlib rary chanrob les virtual law lib rary It is nevertheless insisted that this Court has in the past accorded standing to taxpayers and concerned citizens in cases involving "paramount public interest." Taxpayers, voters, concerned citizens and legislators have indeed been allowed to sue but then only (1) in cases involvin constitutional issues and (2) under certain conditions. Petitioners do not meet these requirements on standing. %axpayers are allowed to sue, Ior example, where there is a claim oI illegal disbursement oI public Iunds. (Pascual v. Secretary oI Public Works, 110 Phi. 331 (1960); Sanidad v. Comelec, 73 SCRA 333 (1976); Bugnay Const. & Dev. v. Laron, 176 SCRA 240 (1989); City Council oI Cebu v. Cuizon, 47 SCRA 325 |1972|) or where a tax measure is assailed as unconstitutional. (VAT Cases |Tolentino v. Secretary oI Finance|, 235 SCRA 630 |1994|) Joters are allowed to question the validity oI election laws because oI their obvious interest in the validity oI such laws. (Gonzales v. Comelec, 21 SCRA 774 |1967|) Concerned citi:ens can bring suits iI the constitutional question they raise is oI "transcendental importance" which must be settled early. (Emergency Powers Cases |Araneta v. Dinglasan|, 84 Phi. 368 (1949); Iloilo Palay and Corn Planters Ass'n v. Feliciano, 121 Phi. 358 (1965); Philconsa v. Gimenez, 122 Phi. 894 (1965); CLU v. Executive Secretary, 194 SCRA 317 |1991|) Leislators are allowed to sue to question the validity oI any oIIicial action which they claim inIringes their prerogatives qua legislators. (Philconsa v. Enriquez, 235 506 (1994); Guingona v. PCGG, 207 SCRA 659 (1992); Gonzales v. Macaraig, 191 SCRA 452 (1990); Tolentino v. Comelec, 41 SCRA 702 (1971); Tatad v. Garcia, G.R. No. 114222, April 16, 1995 (Mendoza, J., concurring)) chanrobles virtual law l ibrary Petitioners do not have the same kind oI interest that these various litigants have. Petitioners assert an interest as taxpayers, but they do not meet the standing requirement Ior bringing taxpayer's suits as set Iorth in Dumlao v. Comelec, 95 SCRA 392, 403 (1980), to wit: While, concededly, the elections to be held involve the expenditure oI public moneys, nowhere in their Petition do said petitioners allee that their tax money is "bein extracted and spent in violation of specific constitutional protections aainst abuses of leislative power" (Flast v. Cohen, 392 U.S., 83 |1960|), or that there is a misapplication oI such Iunds by respondent COMELEC (see Pascual vs. Secretary oI Public Works, 110 Phil. 331 |1960|), or that public money is being deIlected to any improper purpose. Neither do petitioners seek to restrain respondent Irom wasting public Iunds through the enIorcement oI an invalid or unconstitutional law. (Philippine Constitution Association vs. Mathay, 18 SCRA 300 |1966|), citin Philippine Constitution Association vs. Gimenez, 15 SCRA 479 |1965|). Besides, the institution of a taxpayers suit, per se, is no assurance of fudicial review. As held by this Court in Tan vs. Macapagal (43 SCRA 677 |1972|), speaking through our present ChieI Justice, this Court is vested with discretion as to whether or not a taxpayer's suit should be entertained. (Emphasis added) Petitioners' suit does not Iall under any oI these categories oI taxpayers' suits. Neither do the other cases cited by petitioners support their contention that taxpayers have standing to question government contracts regardless oI whether public Iunds are involved or not. In Gon:ales v. National Housin, Corp., 94 SCRA 786 (1979), petitioner Iiled a taxpayer's suit seeking the annulment oI a contract between the NHC and a Ioreign corporation. The case was dismissed by the trial court. The dismissal was aIIirmed by this Court on the grounds oI res fudicata and pendency oI a prejudicial question, thus avoiding the question oI petitioner's standing.chanroblesvirtualawl ibrary chan robles virtual law librar y On the other hand, in Gon:ales v. Raqui:a, 180 SCRA 254 (1989), petitioner sought the annulment oI a contract made by the government with a Ioreign corporation Ior the purchase oI road construction equipment. The question oI standing was not discussed, but even iI it was, petitioner's standing could be sustained because he was a minority stockholder oI the Philippine National Bank, which was one oI the deIendants in the case.chanroblesvirtualawlib rary chanro bles virtual law l ibrary In the other case cited by petitioners, City Council oI Cebu v. Cui:on, 47 SCRA 325 (1972), members oI the city council were allowed to sue to question the validity oI a contract entered into by the city government Ior the purchase oI road construction equipment because their contention was that the contract had been made without their authority. In addition, as taxpayers they had an interest in seeing to it that public Iunds were spent pursuant to an appropriation made by law.chanroblesvir tualawlibrar y chanrobles virt ual law libra ry But, in the case at bar, there is an allegation that public Iunds are being misapplied or misappropriated. The controlling doctrine is that oI Gon:ales v. arcos, 65 SCRA 624 (1975) where it was held that Iunds raised Irom contributions Ior the beneIit oI the Cultural Center oI the Philippines were not public Iunds and petitioner had no standing to bring a taxpayer's suit to question their disbursement by the President oI the Philippines.chanroblesvirtualawlib rary chanro bles virtual law l ibrary Thus, petitioners' right to sue as taxpayers cannot be sustained. Nor as concerned citi:ens can they bring this suit because no speciIic injury suIIered by them is alleged. As Ior the petitioners, who are members oI Congress, their right to sue as leislators cannot be invoked because they do not complain oI any inIringement oI their rights as legislators.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary Finally, in Jalmonte v. PCSO, G.R. No. 78716, September 22, 1987, we threw out a petition questioning another Iorm oI lottery conducted by the PCSO on the ground that petitioner, who claimed to be a "citizen, lawyer, taxpayer and Iather oI three minor children," had no direct and personal interest in the lottery. We said: "He must be able to show, not only that the law is invalid, but also that he has sustained or is in immediate danger oI sustaining some direct injury as a result oI its enIorcement, and not merely that he suIIers thereby in some indeIinite way. It must appear that the person complainin has been or is about to be denied some riht or privilee to which he is lawfully entitled or that he is about to be subfected to some burdens or penalties by reason of the statute complained of." In the case at bar, petitioners have not shown why, unlike petitioner in the Valmonte case, they should be accorded standing to bring this suit.chanroblesvirtualawlibrar y chanrobles virt ual law libra ry The case oI Oposa v. Factoran, Jr. 224 SCRA 792 (1993) is diIIerent. Citizens' standing to bring a suit seeking the cancellation oI timber licenses was sustained in that case because the Court considered Art. II, 16 a right-conIerring provision which can be enIorced in the courts. That provision states: The State shall protect and advance the riht of the people to a balanced and healthIul ecology in accord with the rhythm and harmony oI nature. (Emphasis) In contrast, the policies and principles invoked by petitioners in this case do not permit oI such categorization. Indeed, as already stated, petitioners' opposition is not really to the validity oI the ELA but to lotteries which they regard to be immoral. This is not, however, a legal issue, but a policy matter Ior Congress to decide and Congress has permitted lotteries Ior charity.chanroblesvi rtualawlibra ry chanrobles vi rtual law lib rary Nevertheless, although we have concluded that petitioners do not have standing, we have not stopped there and dismissed their case. For in the view we take, whether a party has a cause oI action and, thereIore, is a real party in interest or one with standing to raise a constitutional question must turn on whether he has a right which has been violated. For this reason the Court has not ducked the substantive issues raised by petitioners.chanroblesvirtualawlib rary chanrob les virtual law lib rary II. R.A. No. 1169, as amended by B.P No . 42, states: 1. The Philippine Charity Sweepstakes OIIice. - The Philippine Charity Sweepstakes OIIice, hereinaIter designated the OIIice, shall be the principal government agency Ior raising and providing Ior Iunds Ior health programs, medical assistance and services and charities oI national character, and as such shall have the general powers conIerred in section thirteen oI Act Numbered One Thousand Four Hundred FiIty-Nine, as amended, and shall have the authority: chanrobles virtual law libra ry A. To hold and conduct charity sweepstakes races, lotteries and other similar activities, in such Irequency and manner, as shall be determined, and subject to such rules and regulations as shall be promulgated by the Board oI Directors.chanroblesvirtualawlibrary chanr obles virtual law l ibrary B. Subject to the approval oI the Minister oI Human Settlements, to engage in health and welIare-related investments, programs, projects and activities which may be proIit-oriented, by itselI or in collaboration, association or joint venture with any person, association, company or entity, whether domestic or Ioreign, except Ior the activities mentioned in the preceding paragraph (A), Ior the purpose oI providing Ior permanent and continuing sources oI Iunds Ior health programs, including the expansion oI existing ones, medical assistance and services, and/or charitable grants: Provided, That such investments will not compete with the private sector in areas where investments are adequate as may be determined by the National Economic and Development Authority. Petitioners insist on the ruling in the previous case that the PCSO cannot hold and conduct charity sweepstakes, lotteries and other similar activities in collaboration, association or joint venture with any other party because oI the clause "except Ior the activities mentioned in the preceding paragraph (A)" in paragraph (B) oI 1. Petitioners contend that the ruling is the law oI this case because the parties are the same and the case involves the same issue, i.e., the meaning oI this statutory provision.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary The "law oI the case" doctrine is inapplicable, because this case is not a continuation oI the Iirst one. Petitioners also say that inquiry into the same question as to the meaning oI the statutory provision is barred by the doctrine oI res fudicata. The general rule on the "conclusiveness oI judgment," however, is subject to the exception that a question may be reopened if it is a leal question and the two actions involve substantially different claims. This is generally accepted in American law Irom which our Rules oI Court was adopted. (Montana v. United States, 440 U.S. 59 L.Ed.2d 147, 210 (1979); RESTATEMENT OF THE LAW 2d, ON JUDGMENTS, 28; P. BATOR, D. MELTZER, P. MISHKIN AND D. SHAPIRO, THE FEDERAL COURTS AND THE FEDERAL SYSTEM 1058, n.2 |3rd Ed., 1988|) There is nothing in the record oI this case to suggest that this exception is inapplicable in this jurisdiction.chanroblesvirtualawli brary chan robles virtual law l ibrary Indeed, the questions raised in this case are legal questions and the claims involved are substantially diIIerent Irom those involved in the prior case between the parties. As already stated, the ELA is substantially diIIerent Irom the Contract oI Lease declared void in the Iirst case.chanroblesvirtualawlibrary chan robles virtual law libra ry Borrowing Irom the dissenting opinion oI Justice Feliciano, petitioners argue that the phrase "by itselI or in collaboration, association or joint venture with any other party" qualiIies not only 1 (B) but also 1 (A), because the exception clause ("except Ior the activities mentioned in the preceding paragraph |A|") "operates, as it were, as a renvoi clause which reIers back to Section 1(A) and in this manner avoids the necessity oI simultaneously amending the text oI Section 1(A)."chanrob les virtual law lib rary This interpretation, however, Iails to take into account not only the location oI the phrase in paragraph (B), when it should be in paragraph (A) had that been the intention oI the lawmaking authority, but also the phrase "by itselI." In other words, under paragraph (B), the PCSO is prohibited Irom "engag|ing| in . . . investments, programs, projects and activities" iI these involve sweepstakes races, lotteries and other similar activities not only "in collaboration, association or joint venture" with any other party but also "by itselI." Obviously, this prohibition cannot apply when the PCSO conducts these activities itselI. Otherwise, what paragraph (A) authorizes the PCSO to do, paragraph (B) would prohibit.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary The Iact is that the phrase in question does not qualiIy the authority oI the PCSO under paragraph (A), but rather the authority granted to it by paragraph (B). The amendment oI paragraph (B) by B.P. Blg. 42 was intended to enable the PCSO to engage in certain investments, programs, projects and activities Ior the purpose oI raising Iunds Ior health programs and charity. That is why the law provides that such investments by the PCSO should "not compete with the private sector in areas where investments are adequate as may be determined by the National Economic and Development Authority." Justice Davide, then an Assemblyman, made a proposal which was accepted, reIlecting the understanding that the bill they were discussing concerned the authority oI the PCSO to invest in the business oI others. The Iollowing excerpt Irom the Record oI the Batasan Pambansa shows this to be the subject oI the discussion: MR. DAVIDE. May I introduce an amendment aIter "adequate". The intention oI the amendment is not to leave the determination oI whether it is adequate or not to anybody. And my amendment is to add aIter "adequate" the words AS MAY BE DETERMINED BY THE NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY. As a mater oI Iact, it will strengthen the authority to invest in these areas, provided that the determination oI whether the private sector's activity is already adequate must be determined by the National Economic and Development Authority.chanroblesvi rtualawlibra ry chanrobles vi rtual law lib rary Mr. ZAMORA. Mr. Speaker, the committee accepts the proposed amendment.chanroblesvirtualawlibrary chan robles virtual law librar y MR. DAVIDE. Thank you, Mr. Speaker.chanroblesvirtualawlibrary chanro bles virtual law li brary (2 RECORD OF THE BATASAN PAMBANSA, Sept. 6, 1979, p. 1007) Thus what the PCSO is prohibited Irom doing is Irom investing in a business engaged in sweepstakes races, lotteries and other similar activities. It is prohibited from doin so whether "in collaboration, association or foint venture" with others or "by itself." This seems to be the only possible interpretation oI 1 (A) and (B) in light oI its text and its legislative history. That there is today no other entity engaged in sweepstakes races, lotteries and the like does not detract Irom the validity oI this interpretation.chanroblesvirtualawlibra ry chanrobles vi rtual law lib rary III. The Court noted in its decision that the provisions oI the Iirst contract, which were considered to be Ieatures oI a joint venture agreement, had been removed in the new contract. For instance, 5 oI the ELA provides that in the operation oI the on-line lottery, the PCSO must employ "its own competent and qualiIied personnel." Petitioners claim, however, that the "contemporaneous interpretation" oI PGMC oIIicials oI this provision is otherwise. They cite the testimony oI Glen Barroga oI the PGMC beIore a Senate committee to the eIIect that under the ELA the PGMC would be operating the lottery system "side by side" with PCSO personnel as part oI the transIer oI technology.chanroblesvirtualawlib rary chanrob les virtual law library Whether the transIer oI technology would result in a violation oI PCSO's Iranchise should be determined by Iacts and not by what some oIIicials oI the PGMC state by way oI opinion. In the absence oI prooI to the contrary, it must be presumed that 5 reIlects the true intention oI the parties. Thus, Art. 1370 oI the Civil Code says that "II the terms oI a contract are clear and leave no doubt upon the intention oI the contracting parties, the literal meaning oI its stipulations shall control." The intention oI the parties must be ascertained Irom their "contemporaneous and subsequent acts." (Art. 1371; Atlantic GulI Co. v. Insular Government, 10 Phil. 166 |1908|) It cannot simply be judged Irom what one oI them says. On the other hand, the claim oI third parties, like petitioners, that the clause on upgrading oI equipment would enable the parties aIter a while to change the contract and enter into something else in violation oI the law is mere speculation and cannot be a basis Ior judging the validity oI the contract.chanroblesvirtualawlibrary chan robles virtual law librar y IV. It is contended that 1 oI E.O. No. 301 covers all types oI "contract|s| Ior public services or for furnishin oI supplies, materials and equipment to the government or to any oI its branches, agencies or instrumentalities" and not only contracts oI purchase and sale. Consequently, a lease oI equipment, like the ELA, must be submitted to public bidding in order to be valid. This contention is based on two premises: (1) that 1 oI E.O. No. 301 applies to any contract whereby the government acquires title to or the use oI the equipment and (2) that the words "supplies," "materials," and "equipment" are distinct Irom each other so that when an exception in 1 speaks oI "supplies," it cannot be construed to mean "equipment."chanrobles virtual law li brary Petitioners' contention will not bear analysis. For example, the term "supplies" is used in paragraph (a), which provides that a contract Ior the Iurnishing oI "supplies" in order to meet an emergency is exempt Irom public bidding. Unless "supplies" is construed to include "equipment," however, the lease oI heavy equipment needed Ior rescue operations in case oI a calamity will have to be submitted to public bidding beIore it can be entered into by the government.chanroblesvirtualawlibrary chan robles virtual law librar y In dissent Justice Feliciano says that in such a situation the government can simply resort to expropriation, paying compensation aIterward. This is just like purchasing the equipment through negotiation when the question is whether the purchase should be by public bidding, not to mention the Iact that the power to expropriate may not be exercised when the government can very well negotiate with private owners.chanroblesvirtualawlibrary chan robles virtual law libra ry Indeed, there are Iundamental diIIiculties in simultaneously contending (1) that E.O. No. 301, 1 covers both contracts oI sale and lease agreements and (2) that the words "supplies," "materials" and "equipment" can not be interchanged. Thus, under paragraph (b) oI 1, public bidding is not required "whenever the supplies are to be used in connection with a project or activity which cannot be delayed without causing detriment to the public service." Following petitioners' theory, there should be a public bidding beIore the government can enter into a contract Ior the lease oI bulldozers and dredging equipment even iI these are urgently needed in areas ravaged by lahar because, first, lease contracts are covered by the general rule and, second, the exception to public bidding in paragraph (b) covers only "supplies" but not equipment.chanroblesvirtualawlibrary chan robles virtual law librar y To take still another example. Paragraph (d), which does away with the requirement oI public bidding "whenever the supplies under procurement have been unsuccessIully placed on bid Ior at least two consecutive times, either due to lack oI bidders or the oIIers received in each instance were exorbitant or nonconIorming to speciIications." Again, Iollowing the theory oI the petitioners, a contract Ior the lease oI equipment cannot be entered into even iI there are no bids because, Iirst, lease contracts are governed by the general rule on public bidding and, second, the exception to public bidding in paragraph (d) applies only to contracts Ior the Iurnishing oI "supplies."chan robles virtual law lib rary Other examples can be given to show the absurdity oI interpreting 1 as applicable to any contract Ior the Iurnishing oI supplies, materials and equipment and oI considering the words "supplies," "materials" and "equipment" to be not interchangeable. Our ruling that 1 oI E.O. No. 301 does not cover the lease oI equipment avoids these Iundamental diIIiculties and is supported by the text oI 1, which is entitled "Guidelines Ior Neotiated Contracts" and by the Iact that the only provisions oI E.O. No. 301 on leases, namely, 6 and 7, concern the lease oI buildings by or to the government. Thus the text oI 1 reads: 1. Guidelines for Neotiated Contracts. - Any provision oI law, decree, executive order or other issuances to the contrary notwithstanding, no contract Ior public services or Ior Iurnishing supplies, materials and equipment to the government or any oI its branches, agencies or instrumentalities shall be renewed or entered into without public bidding, except under any oI the Iollowing situations: a. Whenever the supplies are urgently needed to meet an emergency which may involve the loss oI, or danger to, liIe and/or property; chanrobles virtual law libra ry b. Whenever the supplies are to be used in connection with a project or activity which cannot be delayed without causing detriment to the public service;chanr obles virtual law library c. Whenever the materials are sold by an exclusive distributor or manuIacturer who does not have subdealers selling at lower prices and Ior which no suitable substitute can be obtained elsewhere at more advantageous terms to the government;chanrobles vir tual law lib rary d. Whenever the supplies under procurement have been unsuccessIully placed on bid Ior at least two consecutive times, either due to lack oI bidders or the oIIers received in each instance were exhorbitant or non- conIorming to speciIications;chanrobles vi rtual law lib rary e. In cases where it is apparent that the requisition oI the needed supplies throuh neotiated purchase is most advantageous to the government to be determined by the Department Head concerned; andchanrob les virtual law lib rary I. Whenever the purchase is made Irom an agency oI the government. Indeed, the purpose Ior promulgating E.O. No. 301 was merely to decentralize the system oI reviewing neotiated contracts oI purchase Ior the Iurnishing oI supplies, materials and equipment as well as lease contracts oI buildings. TheretoIore, E.O. No. 298, promulgated on August 12, 1940, required consultation with the Secretary oI Justice and the Department Head concerned and the approval oI the President oI the Philippines beIore contracts Ior the Iurnishing oI supplies, materials and equipment could be made on a negotiated basis, without public bidding. E.O. No. 301 changed this by providing as Iollows: 2. Jurisdiction over Negotiated Contracts. - In line with the principles oI decentralization and accountability, negotiated contracts Ior public services or Ior Iurnishing supplies, materials or equipment may be entered into by the department or agency head or the governing board oI the government-owned or controlled corporation concerned, without need oI prior approval by higher authorities, subject to availability oI Iunds, compliance with the standards or guidelines prescribed in Section 1 hereoI, and to the audit jurisdiction oI the commission on Audit in accordance with existing rules and regulations.chanroblesvirtualawlib rary chanro bles virtual law li brary Negotiated contracts involving P2,000,000 up to P10,000,000 shall be signed by the Secretary and two other Undersecretaries. xxx xxx xxxchanrob les virtual law lib rary 7. Jurisdiction Over Lease Contracts. - The heads oI agency intending to rent privately-owned buildings or spaces Ior their use, or to lease out government-owned buildings or spaces Ior private use, shall have authority to determine the reasonableness oI the terms oI the lease and the rental rates thereoI, and to enter into such lease contracts without need oI prior approval by higher authorities, subject to compliance with the uniIorm standards or guidelines established pursuant to Section 6 hereoI by the DPWH and to the audit jurisdiction oI COA or its duly authorized representative in accordance with existing rules and regulations. In sum, E.O. No. 301 applies only to contracts Ior the purchase oI supplies, materials and equipment, and it was merely to change the system oI administrative review oI emergency purchases, as theretoIore prescribed by E.O. No. 298, that E.O. No. 301 was issued on July 26, 1987. Part B oI this Executive Order applies to leases oI buildings, not oI equipment, and thereIore does not govern the lease contract in this case. Even iI it applies, it does not require public bidding Ior entering into it.chanroblesvirtualawlibrary chanrobles vi rtual law lib rary Our holding that E.O. No. 301, 1 applies only to contracts oI purchase and sale is conIormable to P.D. No. 526, promulgated on August 2, 1974, which is in pari materia. P.D. No. 526 requires local governments to hold public bidding in the "procurement oI supplies." By speciIying "procurement oI supplies" and excepting Irom the general rule "purchases" when made under certain circumstances, P.D. No. 526, 12 indicates quite clearly that it applies only to contracts oI purchase and sale. This provision reads: 12. Procurement without public biddin. - Procurement oI supplies may be made without the beneIit oI public bidding in the Iollowing modes:chanrobles virtual law library (1) Personal canvass oI responsible merchants;chanrob les virtual law lib rary (2) Emerency purchases;chanrobles vi rtual law lib rary (3) Direct purchases Irom manuIacturers or exclusive distributors;chanrobles vir tual law lib rary (4) Thru the Bureau oI Supply Coordination; andchanrobles vir tual law li brary (5) Purchase from other overnment entities or Ioreign governments. Sec. 3 broadly deIines the term "supplies" as including - everything except real estate, which may be needed in the transaction oI public business, or in the pursuit oI any undertaking, project, or activity, whether oI the nature oI equipment, Iurniture, stationery, materials Ior construction, or personal property oI any sort, including non-personal or contractual services such as the repair and maintenance oI equipment and Iurniture, as well as trucking, hauling, janitorial, security, and related or analogous services. Thus, the texts oI both E.O. No. 301, 1 and oI P.D. No. 526, 1 and 12, make it clear that only contracts Ior the purchase and sale oI supplies, materials and equipment are contemplated by the rule concerning public biddings.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary Finally, it is contended that equipment leases are attractive and commonly used in place oI contracts oI purchase and sale because oI "multiIarious credit and tax constraints" and thereIore could not have been leIt out Irom the requirement oI public bidding. Obviously these credit and tax constraints can have no attraction to the government when considering the advantages oI sale over lease oI equipment. The Iact that lease contracts are in common use is not a reason Ior implying that the rule on public bidding applies not only to government purchases but also to lease contracts. For the fact also is that the overnment leases equipment, such as copyin machines, personal computers and the like, without oin throuh public biddin.chanroblesvirtualawlibrary chanrobles vir tual law libra ry FOR THE FOREGOING REASONS, the motion Ior reconsideration oI petitioners is DENIED with Iinality.chan roblesvirtualawlib rary chanr obles virtual law l ibrary SO ORDERED. chanrobles virtual law library elo, Puno, Kapunan, Francisco and Hermosisima, Jr., JJ., concur.chanroblesvirtualawlibrary chanrobles virtual law library Narvasa, C.J. and Pananiban , JJ., took no part.chanroblesvirtualawlibrary chanrobles virtual law library
Republic oI the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 111107. 1anuary 10, 1997] LEONARDO A. PAAT, in his capacity as Officer-in-Charge (OIC), Regional Executive Director (RED), Region 2 and 1OVITO LAYUGAN, 1R., in his capacity as Community Environment and Natural Resources Officer (CENRO), both of the Department of Environment and Natural Resources (DENR), Petitioners vs. COURT OF APPEALS, HON. RICARDO A. BACULI in his capacity as Presiding 1udge of Branch 2, Regional Trial Court at Tuguegarao, Cagayan, and SPOUSES BIENVENIDO and VICTORIA DE GUZMAN, Respondents. D E C I S I O N TORRES, 1R., .:chanroblesvirtualawlibrary Without violating the principle oI exhaustion oI administrative remedies, may an action Ior replevin prosper to recover a movable property which is the subject matter oI an administrative IorIeiture proceeding in the Department oI Environment and Natural Resources pursuant to Section 68-A oI P. D. 705, as amended, entitled The Revised Forestry Code oI the Philippines? chanrob lesvirtualawlib rary Are the Secretary oI DENR and his representatives empowered to conIiscate and IorIeit conveyances used in transporting illegal Iorest products in Iavor oI the government?chanroblesvir tualawlibra ry These are two Iundamental questions presented beIore us Ior our resolution.chanroblesvirtualawl ibrary The controversy on hand had its incipiency on May 19, 1989 when the truck oI private respondent Victoria de Guzman while on its way to Bulacan Irom San Jose, Baggao, Cagayan, was seized by the Department oI Environment and Natural Resources (DENR, Ior brevity) personnel in Aritao, Nueva Vizcaya because the driver could not produce the required documents Ior the Iorest products Iound concealed in the truck. Petitioner Jovito Layugan, the Community Environment and Natural Resources OIIicer (CENRO) in Aritao, Cagayan, issued on May 23, 1989 an order oI conIiscation oI the truck and gave the owner thereoI IiIteen (15) days within which to submit an explanation why the truck should not be IorIeited. Private respondents, however, Iailed to submit the required explanation. On June 22, 1989,|1| Regional Executive Director Rogelio Baggayan oI DENR sustained petitioner Layugans action oI conIiscation and ordered the IorIeiture oI the truck invoking Section 68-A oI Presidential Decree No. 705 as amended by Executive Order No. 277. Private respondents Iiled a letter oI reconsideration dated June 28, 1989 oI the June 22, 1989 order oI Executive Director Baggayan, which was, however, denied in a subsequent order oI July 12, 1989.|2| Subsequently, the case was brought by the petitioners to the Secretary oI DENR pursuant to private respondents statement in their letter dated June 28, 1989 that in case their letter Ior reconsideration would be denied then this letter should be considered as an appeal to the Secretary.|3| Pending resolution however oI the appeal, a suit Ior replevin, docketed as Civil Case 4031, was Iiled by the private respondents against petitioner Layugan and Executive Director Baggayan|4| with the Regional Trial Court, Branch 2 oI Cagayan,|5| which issued a writ ordering the return oI the truck to private respondents.|6| Petitioner Layugan and Executive Director Baggayan Iiled a motion to dismiss with the trial court contending, inter alia, that private respondents had no cause oI action Ior their Iailure to exhaust administrative remedies. The trial court denied the motion to dismiss in an order dated December 28, 1989.|7| Their motion Ior reconsideration having been likewise denied, a petition Ior certiorari was Iiled by the petitioners with the respondent Court oI Appeals which sustained the trial courts order ruling that the question involved is purely a legal question.|8| Hence, this present petition,|9| with prayer Ior temporary restraining order and/or preliminary injunction, seeking to reverse the decision oI the respondent Court oI Appeals was Iiled by the petitioners on September 9, 1993. By virtue oI the Resolution dated September 27, 1993,|10| the prayer Ior the issuance oI temporary restraining order oI petitioners was granted by this Court. chanroblesvirtualawlibrar y Invoking the doctrine oI exhaustion oI administrative remedies, petitioners aver that the trial court could not legally entertain the suit Ior replevin because the truck was under administrative seizure proceedings pursuant to Section 68-A oI P.D. 705, as amended by E.O. 277. Private respondents, on the other hand, would seek to avoid the operation oI this principle asserting that the instant case Ialls within the exception oI the doctrine upon the justiIication that (1) due process was violated because they were not given the chance to be heard, and (2) the seizure and IorIeiture was unlawIul on the grounds: (a) that the Secretary oI DENR and his representatives have no authority to conIiscate and IorIeit conveyances utilized in transporting illegal Iorest products, and (b) that the truck as admitted by petitioners was not used in the commission oI the crime.chanroblesvirtualawlib rary Upon a thorough and delicate scrutiny oI the records and relevant jurisprudence on the matter, we are oI the opinion that the plea oI petitioners Ior reversal is in order.chanroblesvirtualawlibrary This Court in a long line oI cases has consistently held that beIore a party is allowed to seek the intervention oI the court, it is a pre- condition that he should have availed oI all the means oI administrative processes aIIorded him. Hence, iI a remedy within the administrative machinery can still be resorted to by giving the administrative oIIicer concerned every opportunity to decide on a matter that comes within his jurisdiction then such remedy should be exhausted Iirst beIore courts judicial power can be sought. The premature invocation oI courts intervention is Iatal to ones cause oI action.|11| Accordingly, absent any Iinding oI waiver or estoppel the case is susceptible oI dismissal Ior lack oI cause oI action.|12| This doctrine oI exhaustion oI administrative remedies was not without its practical and legal reasons, Ior one thing, availment oI administrative remedy entails lesser expenses and provides Ior a speedier disposition oI controversies. It is no less true to state that the courts oI justice Ior reasons oI comity and convenience will shy away Irom a dispute until the system oI administrative redress has been completed and complied with so as to give the administrative agency concerned every opportunity to correct its error and to dispose oI the case. However, we are not amiss to reiterate that the principle oI exhaustion oI administrative remedies as tested by a battery oI cases is not an ironclad rule. This doctrine is a relative one and its Ilexibility is called upon by the peculiarity and uniqueness oI the Iactual and circumstantial settings oI a case. Hence, it is disregarded (1) when there is a violation oI due process,|13| (2) when the issue involved is purely a legal question,|14| (3) when the administrative action is patently illegal amounting to lack or excess oI jurisdiction,|15| (4) when there is estoppel on the part oI the administrative agency concerned,|16| (5) when there is irreparable injury,|17| (6) when the respondent is a department secretary whose acts as an alter ego oI the President bears the implied and assumed approval oI the latter,|18| (7) when to require exhaustion oI administrative remedies would be unreasonable,|19| (8) when it would amount to a nulliIication oI a claim,|20| (9) when the subject matter is a private land in land case proceedings,|21| (10) when the rule does not provide a plain, speedy and adequate remedy, and (11) when there are circumstances indicating the urgency oI judicial intervention.|22| chanroblesvirtualawlibrary In the case at bar, there is no question that the controversy was pending beIore the Secretary oI DENR when it was Iorwarded to him Iollowing the denial by the petitioners oI the motion Ior reconsideration oI private respondents through the order oI July 12, 1989. In their letter oI reconsideration dated June 28, 1989,|23| private respondents clearly recognize the presence oI an administrative Iorum to which they seek to avail, as they did avail, in the resolution oI their case. The letter, reads, thus: chanroblesvirtualawlib rary xxxchanrob lesvirtualawlib rary II this motion Ior reconsideration does not merit your Iavorable action, then this letter should be considered as an appeal to the Secretary.|24| chanroblesvirtualawlib rary It was easy to perceive then that the private respondents looked up to the Secretary Ior the review and disposition oI their case. By appealing to him, they acknowledged the existence oI an adequate and plain remedy still available and open to them in the ordinary course oI the law. Thus, they cannot now, without violating the principle oI exhaustion oI administrative remedies, seek courts intervention by Iiling an action Ior replevin Ior the grant oI their relieI during the pendency oI an administrative proceedings.chanroblesvirtualawli brary Moreover, it is important to point out that the enIorcement oI Iorestry laws, rules and regulations and the protection, development and management oI Iorest lands Iall within the primary and special responsibilities oI the Department oI Environment and Natural Resources. By the very nature oI its Iunction, the DENR should be given a Iree hand unperturbed by judicial intrusion to determine a controversy which is well within its jurisdiction. The assumption by the trial court, thereIore, oI the replevin suit Iiled by private respondents constitutes an unjustiIied encroachment into the domain oI the administrative agencys prerogative. The doctrine oI primary jurisdiction does not warrant a court to arrogate unto itselI the authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body oI special competence.|25| In Felipe Ismael, Jr. and Co. vs. Deputy Executive Secretary,|26| which was reiterated in the recent case oI Concerned OIIicials oI MWSS vs. Vasquez,|27| this Court held: chanroblesvirtualawlibrary Thus, while the administration grapples with the complex and multiIarious problems caused by unbriddled exploitation oI these resources, the judiciary will stand clear. A long line oI cases establish the basic rule that the courts will not interIere in matters which are addressed to the sound discretion oI government agencies entrusted with the regulation oI activities coming under the special technical knowledge and training oI such agencies.chanroblesvirtualawli brary To sustain the claim oI private respondents would in eIIect bring the instant controversy beyond the pale oI the principle oI exhaustion oI administrative remedies and Iall within the ambit oI excepted cases heretoIore stated. However, considering the circumstances prevailing in this case, we can not but rule out these assertions oI private respondents to be without merit. First, they argued that there was violation oI due process because they did not receive the May 23, 1989 order oI conIiscation oI petitioner Layugan. This contention has no leg to stand on. Due process does not necessarily mean or require a hearing, but simply an opportunity or right to be heard.|28| One may be heard, not solely by verbal presentation but also, and perhaps many times more creditably and practicable than oral argument, through pleadings.|29| In administrative proceedings moreover, technical rules oI procedure and evidence are not strictly applied; administrative process cannot be Iully equated with due process in its strict judicial sense.|30| Indeed, deprivation oI due process cannot be successIully invoked where a party was given the chance to be heard on his motion Ior reconsideration,|31| as in the instant case, when private respondents were undisputedly given the opportunity to present their side when they Iiled a letter oI reconsideration dated June 28, 1989 which was, however, denied in an order oI July 12, 1989 oI Executive Director Baggayan. In Navarro III vs. Damasco,|32| we ruled that : chanroblesvirtualawlibrary The essence oI due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain ones side or an opportunity to seek a reconsideration oI the action or ruling complained oI. A Iormal or trial type hearing is not at all times and in all instances essential. The requirements are satisIied when the parties are aIIorded Iair and reasonable opportunity to explain their side oI the controversy at hand. What is Irowned upon is the absolute lack oI notice or hearing.chanroblesvirtualawlib rary Second, private respondents imputed the patent illegality oI seizure and IorIeiture oI the truck because the administrative oIIicers oI the DENR allegedly have no power to perIorm these acts under the law. They insisted that only the court is authorized to conIiscate and IorIeit conveyances used in transporting illegal Iorest products as can be gleaned Irom the second paragraph oI Section 68 oI P.D. 705, as amended by E.O. 277. The pertinent provision reads as Iollows: chanroblesvirtualawli brary SECTION 68. xxxchanroblesvirtualawl ibrary xxxchanrob lesvirtualawlib rary The court shall Iurther order the conIiscation in Iavor oI the government oI the timber or any Iorest products cut, gathered, collected, removed, or possessed, as well as the machinery, equipments, implements and tools illegaly |sic| used in the area where the timber or Iorest products are Iound. (Underline ours)chanroblesvirtualawlibrary A reading, however, oI the law persuades us not to go along with private respondents thinking not only because the aIorequoted provision apparently does not mention nor include conveyances that can be the subject oI conIiscation by the courts, but to a large extent, due to the Iact that private respondents interpretation oI the subject provision unduly restricts the clear intention oI the law and inevitably reduces the other provision oI Section 68-A, which is quoted herein below: chanroblesvirtualawl ibrary SECTION 68-A. dministrative uthority of the Department or His Duly uthori:ed Representative %o Order Confiscation. In all cases oI violation oI this Code or other Iorest laws, rules and regulations, the Department Head or his duly authorized representative, may order the conIiscation oI any Iorest products illegally cut, gathered, removed, or possessed or abandoned, and all conveyances used either by land, water or air in the commission oI the oIIense and to dispose oI the same in accordance with pertinent laws, regulations and policies on the matter. (Underline ours)chanroblesvirtualawlibrary It is, thus, clear Irom the Ioregoing provision that the Secretary and his duly authorized representatives are given the authority to conIiscate and IorIeit any conveyances utilized in violating the Code or other Iorest laws, rules and regulations. The phrase to dispose oI the same is broad enough to cover the act oI IorIeiting conveyances in Iavor oI the government. The only limitation is that it should be made in accordance with pertinent laws, regulations or policies on the matter. In the construction oI statutes, it must be read in such a way as to give eIIect to the purpose projected in the statute.|33| Statutes should be construed in the light oI the object to be achieved and the evil or mischieI to be suppressed, and they should be given such construction as will advance the object, suppress the mischieI, and secure the beneIits intended.|34| In this wise, the observation oI the Solicitor General is signiIicant, thus: chanroblesvirtualawlibrary But precisely because oI the need to make Iorestry laws more responsive to present situations and realities and in view oI the urgency to conserve the remaining resources oI the country, that the government opted to add Section 68-A. This amendatory provision is an administrative remedy totally separate and distinct Irom criminal proceedings. More than anything else, it is intended to supplant the inadequacies that characterize enIorcement oI Iorestry laws through criminal actions. The preamble oI EO 277-the law that added Section 68-A to PD 705-is most revealing:chanro blesvirtualawlib rary WHEREAS, there is an urgency to conserve the remaining Iorest resources oI the country Ior the beneIit and welIare oI the present and Iuture generations oI Filipinos;chanroblesvirt ualawlibrar y WHEREAS, our Iorest resources may be eIIectively conserved and protected through the vigilant enIorcement and implementation oI our Iorestry laws, rules and regulations;chanrob lesvirtualawlib rary WHEREAS, the implementation oI our Iorestry laws suIIers Irom technical diIIiculties, due to certain inadequacies in the penal provisions oI the Revised Forestry Code oI the Philippines; andchanroblesvi rtualawlibra ry WHEREAS, to overcome this diIIiculties, there is a need to penalize certain acts more responsive to present situations and realities;chanroblesvirt ualawlibrary It is interesting to note that Section 68-A is a new provision authorizing the DENR to conIiscate, not only conveyances, but Iorest products as well. On the other hand, conIiscation oI Iorest products by the court in a criminal action has long been provided Ior in Section 68. II as private respondents insist, the power on conIiscation cannot be exercised except only through the court under Section 68, then Section 68-A would have no purpose at all. Simply put, Section 68-A would not have provided any solution to the problem perceived in EO 277, supra.|35| chanroblesvirtualawlibrary Private respondents, likewise, contend that the seizure was illegal because the petitioners themselves admitted in the Order dated July 12, 1989 oI Executive Director Baggayan that the truck oI private respondents was not used in the commission oI the crime. This order, a copy oI which was given to and received by the counsel oI private respondents, reads in part, vi:. :chanroblesvirtualawlibrary xxx while it is true that the truck oI your client was not used by her in the commission oI the crime, we uphold your claim that the truck owner is not liable Ior the crime and in no case could a criminal case be Iiled against her as provided under Article 309 and 310 oI the Revised Penal Code. xxx|36|chanroblesvirtuallawlibrary chanroblesvirtualawlib rary We observed that private respondents misread the content oI the aIorestated order and obviously misinterpreted the intention oI petitioners. What is contemplated by the petitioners when they stated that the truck "was not used in the commission oI the crime" is that it was not used in the commission oI the crime oI theIt, hence, in no case can a criminal action be Iiled against the owner thereoI Ior violation oI Article 309 and 310 oI the Revised Penal Code. Petitioners did not eliminate the possibility that the truck was being used in the commission oI another crime, that is, the breach oI Section 68 oI P.D.705 as amended by E.O. 277. In the same order oI July 12, 1989, petitioners pointed out: chanroblesvirtualawlibrary xxx However, under Section 68 oI P.D.705 as amended and Iurther amended by Executive Order No.277 speciIically provides Ior the conIiscation oI the conveyance used in the transport oI Iorest products not covered by the required legal documents. She may not have been involved in the cutting and gathering oI the product in question but the Iact that she accepted the goods Ior a Iee or Iare the same is thereIor liable. xxx|37|chanroblesvirtuallawlibrary chanroblesvirtualawlib rary Private respondents, however, contended that there is no crime deIined and punishable under Section 68 other than qualiIied theIt, so that, when petitioners admitted in the July 12, 1989 order that private respondents could not be charged Ior theIt as provided Ior under Articles 309 and 310 oI the Revised Penal Code, then necessarily private respondents could not have committed an act constituting a crime under Section 68. We disagree. For clarity, the provision oI Section 68 oI P.D. 705 beIore its amendment by E.O. 277 and the provision oI Section 1 oI E.O. No.277 amending the aIorementioned Section 68 are reproduced herein, thus: chanroblesvirtualawlibrary SECTION 68. Cuttin, atherin and/or collectin timber or other products without license. - Any person who shall cut, gather, collect, or remove timber or other Iorest products Irom any Iorest land, or timber Irom alienable and disposable public lands, or Irom private lands, without any authority under a license agreement, lease, license or permit, shall be guilty oI qualiIied theIt as deIined and punished under Articles 309 and 310 oI the Revised Penal Code xxx. (Underscoring ours; Section 68, P.D.705 beIore its amendment by E.O.277 )chanroblesvirtualawlibrary SECTION 1. Section 68 oI Presidential Decree No.705, as amended, is hereby amended to read as Iollows:chan roblesvirtualawli brary Section 68. Cuttin, atherin and/or collectin timber or other forest products without license. -Any person who shall cut, gather, collect, remove timber or other Iorest products Irom any Iorest land, or timber Irom alienable or disposable public land, or Irom private land, without any authority, or possess timber or other Iorest products without the legal documents as required under existing Iorest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 oI the Revised Penal Code xxx." (Underscoring ours; Section 1, E.O No. 277 amending Section 68, P.D. 705 as amended) chanroblesvirtualawl ibrary With the introduction oI Executive Order No. 277 amending Section 68 oI P.D. 705, the act oI cutting, gathering, collecting, removing, or possessing Iorest products without authority constitutes a distinct oIIense independent now Irom the crime oI theIt under Articles 309 and 310 oI the Revised Penal Code, but the penalty to be imposed is that provided Ior under Article 309 and 310 oI the Revised Penal Code. This is clear Irom the language oI Executive Order No. 277 when it eliminated the phrase shall be guilty oI qualiIied theIt as deIined and punished under Articles 309 and 310 oI the Revised Penal Code and inserted the words shall be punished with the penalties imposed under Article 309 and 310 oI the Revised Penal Code. When the statute is clear and explicit, there is hardly room Ior any extended court ratiocination or rationalization oI the law.|38|chanroblesvirtuallawlibrary chanroblesvirtualawlib rary From the Ioregoing disquisition, it is clear that a suit Ior replevin can not be sustained against the petitioners Ior the subject truck taken and retained by them Ior administrative IorIeiture proceedings in pursuant to Section 68-A oI the P. D. 705, as amended. Dismissal oI the replevin suit Ior lack oI cause oI action in view oI the private respondents Iailure to exhaust administrative remedies should have been the proper course oI action by the lower court instead oI assuming jurisdiction over the case and consequently issuing the writ ordering the return oI the truck. Exhaustion oI the remedies in the administrative Iorum, being a condition precedent prior to ones recourse to the courts and more importantly, being an element oI private respondents right oI action, is too signiIicant to be waylaid by the lower court. chanroblesvirtualawlibrary It is worth stressing at this point, that a suit Ior replevin is Iounded solely on the claim that the deIendant wrongIully withholds the property sought to be recovered. It lies to recover possession oI personal chattels that are unlawIully detained.|39| To detain is deIined as to mean to hold or keep in custody,|40| and it has been held that there is tortuous taking whenever there is an unlawIul meddling with the property, or an exercise or claim oI dominion over it, without any pretense oI authority or right; this, without manual seizing oI the property is suIIicient.|41| Under the Rules oI Court, it is indispensable in replevin proceedings, that the plaintiII must show by his own aIIidavit that he is entitled to the possession oI property, that the property is wrongIully detained by the deIendant, alleging the cause oI detention, that the same has not been taken Ior tax assessment, or seized under execution, or attachment, or iI so seized, that it is exempt Irom such seizure, and the actual value oI the property.|42| Private respondents miserably Iailed to convince this Court that a wrongIul detention oI the subject truck obtains in the instant case. It should be noted that the truck was seized by the petitioners because it was transporting Iorest products with out the required permit oI the DENR in maniIest contravention oI Section 68 oI P.D. 705 as amended by E.O 277. Section 68-A oI P.D. 705, as amended, unquestionably warrants the conIiscation as well as the disposition by the Secretary oI DENR or his duly authorized representatives oI the conveyances used in violating the provision oI Iorestry laws. Evidently, the continued possession or detention oI the truck by the petitioners Ior administrative IorIeiture proceeding is legally permissible, hence, no wrongIul detention exists in the case at bar. chanroblesvirtualawlibrary Moreover, the suit Ior replevin is never intended as a procedural tool to question the orders oI conIiscation and IorIeiture issued by the DENR in pursuance to the authority given under P.D.705, as amended. Section 8 oI the said law is explicit that actions taken by the Director oI the Bureau oI Forest Development concerning the enIorcement oI the provisions oI the said law are subject to review by the Secretary oI DENR and that courts may not review the decisions oI the Secretary except through a special civil action Ior certiorari or prohibition. It reads : chanroblesvirtualawlibrary SECTION 8. REVIEW - All actions and decisions oI the Director are subject to review, motu propio or upon appeal oI any person aggrieved thereby, by the Department Head whose decision shall be Iinal and executory aIter the lapse oI thirty (30) days Irom the receipt oI the aggrieved party oI said decision, unless appealed to the President in accordance with Executive Order No. 19, Series oI 1966. The Decision oI the Department Head may not be reviewed by the courts except through a special civil action Ior certiorari or prohibition.chanroblesvirtualawlib rary WHEREFORE, the Petition is GRANTED; the Decision oI the respondent Court oI Appeals dated October 16, 1991 and its Resolution dated July 14, 1992 are hereby SET ASIDE AND REVERSED; the Restraining Order promulgated on September 27, 1993 is hereby made permanent; and the Secretary oI DENR is directed to resolve the controversy with utmost dispatch. chanroblesvirtualawlibrary SO ORDERED.chanroblesvirtualawlibrar y Regalado (Chairman) Romero Puno and Mendoza concur
G.R. No. 132767. 1anuary 18, 2000] chanrobles virtual law libra ry PHILIPPINE VETERANS BANK, Petitioner vs THE HON. COURT OF APPEALS, HON. SECRETARY OF THE DEPT. OF AGRARIAN REFORM, DEPT. OF AGRARIAN REFORM AD1UDICATION BOARD, DAVAO CITY and LAND BANK OF THE PHILIPPINES, Respondents. D E C I S I O N chanrobles virtual law library MENDOZA, .: chanrobles virtual law library This is a petition Ior review oI the decision oI the Court oI Appeals,|1| dated August 28, 1997, aIIirming the dismissal by the Regional Trial Court, Branch 2, Tagum, Davao, oI the petition Ior judicial determination oI the just compensation Iiled by petitioner Ior the taking oI its property under the Comprehensive Agrarian ReIorm Program. chanrobles vir tual law lib rary The Iacts are as Iollows: chanrobles vir tual law lib rary Petitioner Philippine Veterans Bank owned Iour parcels oI land in Tagum, Davao, which are covered by TransIer CertiIicates oI Title Nos. T-38666, T-38667, T-6236, and T-27591. The lands were taken by the Department oI Agrarian ReIorm Ior distribution to landless Iarmers pursuant to the Comprehensive Agrarian ReIorm Law (R.A. No. 6657). DissatisIied with the valuation oI the land made by respondents Land Bank oI the Philippines and the Department oI Agrarian ReIorm Adjudication Board (DARAB), petitioner Iiled a petition Ior a determination oI the just compensation Ior its property. The petition was Iiled on January 26, 1994 with the Regional Trial Court, Branch 2, Tagum, Davao, which on February 23, 1995, dismissed the petition on the ground that it was Iiled beyond the 15- day reglementary period Ior Iiling appeals Irom the orders oI the DARAB. Its order|2| states in pertinent parts: Since this case was Iiled only on January 26, 1994, the IiIteen-day period provided Ior under Section 51 oI Republic Act 6657 which is the Comprehensive Agrarian ReIorm Law within which to appeal, already lapsed. Section 51 oI Republic Act No. 6657 provides: Section 51. Finality oI Determination. - Any case or controversy beIore it (DAR) shall be decided within thirty (30) days aIter it is submitted Ior resolution. Only one (1) motion Ior reconsideration shall be allowed. Any order, ruling or decision shall be Iinal aIter the lapse oI IiIteen (15) days Irom receipt oI a copy thereoI. chanrobles virtual law lib rary On appeal to the Court oI Appeals, the decision was aIIirmed. It was held that: Jurisdiction over land valuation cases is lodged in the Department oI Agrarian ReIorm Adjudication Board, as is plainly provided under Rule II oI the DARAB Revised Rules oI Procedure. Jksm Section 1. Primary and Exclusive Oriinal and ppellate Jurisdiction. The Board shall have primary and exclusive jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, involving the implementation oI the Comprehensive Agrarian ReIorm Program (CARP) under Republic Act No. 6657, Executive Order Nos. 228, 229, and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing rules and regulations. SpeciIically, such jurisdiction shall include but not be limited to the Iollowing: . . . . b) The valuation oI land, and determination and payment oI just compensation, Iixing and collection oI lease rentals, disturbance compensation, amortization payments, and similar disputes concerning the Iunctions oI the Land Bank oI the Philippines. . . . . The above provision does not negate the original and exclusive jurisdiction vested in Special Agrarian Court over all petitions Ior the determination oI just compensation to landowners as provided in Section 51 oI R.A. 6657. Note, however, must be taken oI Rule XIII, Section 11 oI the DARAB Rules oI Procedure, which speciIically states that, The decision oI the Adjudicator on land valuation and preliminary determination and payment oI just compensation shall not be appealable to the Board but shall be brought directly to the Regional Trial Court designated as Special Agrarian Courts within IiIteen (15) days Irom receipt oI the notice thereoI. Any party shall be entitled to only one motion Ior reconsideration. . . . . In pursuance thereoI, it is clear that the right oI a landowner who disagrees with the valuation Iixed by the DAR to Iile a petition Ior the judicial Iixing oI just compensation beIore special agrarian courts must be exercised within the period provided in Rule XIII, Section 11. In this case, appellant neither gives inIormation regarding the date oI its receipt oI the questioned Order oI the DAR Provincial Adjudicator, nor disputes the conclusion made by the trial court that, "(s)ince this case was Iiled only on January 26, 1994, the IiIteen-day period provided Ior under Section 51 oI Republic Act 6657 which is the Comprehensive Agrarian ReIorm Law within which to appeal already lapsed". The court a quos conclusion thereIore stands. It did not commit an error in dismissing the petition Iiled by Philippine Veterans Bank Ior having been Iiled out oI time.|3| Esmsc chanrobles virtual law lib rary Petitioner Iiled a motion Ior reconsideration, but its motion was likewise denied. Hence, this petition Ior review. Petitioner raises the Iollowing issue: SHOULD A PETITION FOR THE JUDICIAL FIXING OF JUST COMPENSATION BEFORE SPECIAL AGRARIAN COURT BE |FILED| WITHIN THE PERIOD PROVIDED IN RULE XIII, SECTION 11 OF THE DARAB RULES OF PROCEDURE AND BEFORE THE DECISION OF THE DAR PROVINCIAL ADJUDICATOR BECOMES FINAL AND EXECUTORY?chanrobles vir tual law lib rary Petitioner argues that DAR adjudicators have no jurisdiction to determine the just compensation Ior the taking oI lands under the Comprehensive Agrarian ReIorm Program, because such jurisdiction is vested in Regional Trial Courts designated as Special Agrarian Courts and, thereIore, a petition Ior the Iixing oI just compensation can be Iiled beyond the 15-day period oI appeal provided Irom the decision oI the DAR adjudicator. chanrobles virtual law library On the other hand, respondents argue that actions Ior the Iixing oI just compensation must be Iiled in the appropriate courts within 15 days Irom receipt oI the decision oI the DAR adjudicator, otherwise such decision becomes Iinal and executory, pursuant to 51 oI R.A. No. 6657. chanrobles virtual law libra ry Petitioners contention has no merit. chanrobles virtual law libra ry The pertinent provisions oI R.A. No. 6657 provides: Sec. 50. Quasi-Judicial Power of the DR. - The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reIorm matters and shall have exclusive original jurisdiction over all matters involving the implementation oI agrarian reIorm, except those Ialling under the exclusive jurisdiction oI the Department oI Agriculture (DA) and the Department oI Environment and Natural Resources (DENR) . . . . Sec. 57. Special Jurisdiction. - The Special Agrarian Courts shall have original and exclusive jurisdiction over all petitions Ior the determination oI just compensation to landowners, and the prosecution oI all criminal oIIenses under this Act. The Rules oI Court shall apply to all proceedings beIore the Special Agrarian Courts, unless modiIied by this Act. The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days Irom submission oI the case Ior decision. Esmmis chan robles virtual law librar y There is nothing contradictory between the provision oI 50 granting the DAR primary jurisdiction to determine and adjudicate "agrarian reIorm matters" and exclusive original jurisdiction over "all matters involving the implementation oI agrarian reIorm," which includes the determination oI questions oI just compensation, and the provision oI 57 granting Regional Trial Courts "original and exclusive jurisdiction" over (1) all petitions Ior the determination oI just compensation to landowner, and (2) prosecutions oI criminal oIIenses under R.A. No. 6657.|4| The Iirst reIers to administrative proceedings, while the second reIers to judicial proceedings. Under R.A. No. 6657, the Land Bank oI the Philippines is charged with the preliminary determination oI the value oI lands placed under land reIorm program and the compensation to be paid Ior their taking. It initiates the acquisition oI agricultural lands by notiIying the landowner oI the governments intention to acquire his land and the valuation oI the same as determined by the Land Bank.|5| Within 30 days Irom receipt oI notice, the landowner shall inIorm the DAR oI his acceptance or rejection oI the oIIer.|6| In the event the landowner rejects the oIIer, a summary administrative proceeding is held by the provincial (PARAD), the regional (RARAD) or the central (DARAB) adjudicator, as the case may be, depending on the value oI the land, Ior the purpose oI determining the compensation Ior the land. The landowner, the Land Bank, and other interested parties are then required to submit evidence as to the just compensation Ior the land. The DAR adjudicator decides the case within 30 days aIter it is submitted Ior decision.|7| II the landowner Iinds the price unsatisIactory, he may bring the matter directly to the appropriate Regional Trial Court.|8| chanrobles virtual law libra ry To implement the provisions oI R.A. No. 6657, particularly 50 thereoI, Rule XIII, 11 oI the DARAB Rules oI Procedure provides: Land Jaluation and Preliminary Determination and Payment of Just Compensation. - The decision oI the Adjudicator on land valuation and preliminary determination and payment oI just compensation shall not be appealable to the Board but shall be brought directly to the Regional Trial Courts designated as Special Agrarian Courts within IiIteen (15) days Irom receipt oI the notice thereoI. Any party shall be entitled to only one motion Ior reconsideration. ChieI chanrobles virtual law li brary As we held in Republic v. Court of ppeals,|9| this rule is an acknowledgment by the DARAB that the power to decide just compensation cases Ior the taking oI lands under R.A. No. 6657 is vested in the courts. It is error to think that, because oI Rule XIII, 11, the original and exclusive jurisdiction given to the courts to decide petitions Ior determination oI just compensation has thereby been transIormed into an appellate jurisdiction. It only means that, in accordance with settled principles oI administrative law, primary jurisdiction is vested in the DAR as an administrative agency to determine in a preliminary manner the reasonable compensation to be paid Ior the lands taken under the Comprehensive Agrarian ReIorm Program, but such determination is subject to challenge in the courts. chanrobles virtual law library The jurisdiction oI the Regional Trial Courts is not any less "original and exclusive" because the question is Iirst passed upon by the DAR, as the judicial proceedings are not a continuation oI the administrative determination. For that matter, the law may provide that the decision oI the DAR is Iinal and unappealable. Nevertheless, resort to the courts cannot be Ioreclosed on the theory that courts are the guarantors oI the legality oI administrative action.|10| chanrobles virtual law librar y Accordingly, as the petition in the Regional Trial Court was Iiled beyond the 15-day period provided in Rule XIII, 11 oI the Rules oI Procedure oI the DARAB, the trial court correctly dismissed the case and the Court oI Appeals correctly aIIirmed the order oI dismissal. chanro bles virtual law li brary WHEREFORE, the decision oI the Court oI Appeals is AFFIRMED. chanrobles virtual law lib rary SO ORDERED. chanrobles virtual law lib rary Bellosillo, (Chairman), Quisumbin, Buena, and De Leon, Jr., JJ., concur.''
THIRD DIVISION SALVADOR A. PLEYTO, Petitioner, - versus- PHILIPPINE NATIONAL POLICE CRIMINAL INVESTIGATION AND DETECTION GROUP (PNP-CIDG), Respondent. G.R. No. 169982 Present: YNARES-SANTIAGO, J. Chairperson, AUSTRIA- MARTINEZ, CORONA,* CHICO-NAZARIO, and REYES, JJ. Promulgated: November 23, 2007 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x D E C I S I O N CHICO-NAZARIO, J.: Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court, assailing the dismissal from service of petitioner Salvador A. Pleyto after being found guilty of grave misconduct and dishonesty by the Office of the Ombudsman in its Decision,[2] dated 27 May 2004, in OMB-C-A-03-0347-I, affirmed by the Court of Appeals in its Decision,[3] dated 20 July 2005, in CA-G.R. SP No. 87086. The present Petition stems from a Complaint,[4] dated 28 July 2003, filed by respondent Philippine National Police-Criminal Investigation and Detection Group (PNP- CIDG), through its Director, Eduardo S. Matillano, with the Office of the Ombudsman, which charges petitioner and the rest of his family as follows: The undersigned Director of the PNP Criminal Investigation and Detection Group is hereby filing complaints for 'iolation of RA 1379 (An Act Declaring Forfeiture in favor of the State any property found to have been unlawfully acquired by any public officer) in relation to Section 8, RA 3019 (Anti-Graft and Corrupt Practices Act, as amended, Section 8(a) of RA 6713, (Code of Ethical Standard for Public official and employee) and Section 7 of RA 3019 (Statement of Assets and iabilities) and for violation of Article 171 para 4, RPC (Perjury/Falsification of Public Official Documents) against the following: 1. USEC SV# . PEY%- # 1 May Street, Congressional Village, Quezon City; 2. MIGUE PEY% (Wife)- # 1 May Street, Congressional Village, Quezon City; 3. SV# G. PEY%, J#.,- # 1 May Street, Congressional Village, Quezon City; 4. M#Y G#CE PE%Y- # 1 May Street, Congressional Village, Quezon City; and 5. #USSE PEY%- 64 P. Santiago Street, Sta. Maria, Bulacan.[5] The said Complaint was based on the investigation/inquiry on the alleged lavish lifestyle and nefarious activities of certain personnel of the Department of Public Works and Highways (DPWH) conducted by a team, composed of Atty. Virgilio T. Pablico (Atty. Pablico) and Crime Investigator II Dominador D. Ellazar, Jr. (Investigator Ellazar, Jr.) of the PNP-CIDG, together with investigating officers from other government agencies. Petitioner, then serving as a DPWH Undersecretary, was one of the subjects of the investigating team since he reportedly amassed unexplained wealth. Investigating officers, Atty. Pablico and Investigator Ellazar, Jr., executed a Joint Affidavit,[6] essentially stating that: (1) petitioner and the rest of his family accumulated numerous real properties in Bulacan, other than their newly renovated residence in Quezon City; (2) petitioner did not honestly fill out his Statements of Assets and Liabilities and Networth (SALNs) for the years 2001 and 2002 for he failed to declare therein all of his and his wifeCs real and personal properties, the true value thereof, and their business interests; (3) petitioner and his family also took frequent foreign trips from 1993 to 2002; and (4) the properties and foreign trips of petitioner and his family are grossly disproportionate to petitionerCs income. The Investigating Panel from the Preliminary Investigation and Administrative Adjudication Bureau A (PIAB-A) of the Office of the Ombudsman, tasked to evaluate the Complaint against petitioner and his family, issued a Report on 9 September 2003, recommending that the said Complaint be docketed as separate administrative and criminal cases. Pursuant thereto, the administrative complaint was docketed as OMB-C-A-03-0347-1, while the criminal complaint was docketed as OMB-C-C-03-05130-1. It is the administrative complaint, OMB-C-A-03-0347-1, for grave misconduct and dishonesty, which presently concerns this Court.[7] In its initial evaluation of the Cnumerous pieces of evidenceCl which were attached to the Complaint, the Office of the Ombudsman, in its Order, dated 25 September 2003,[8] found that the evidence warranted the preventive suspension of petitioner for six months without pay pending the conduct of the administrative proceedings against him. The said Preventive Suspension Order shall be deemed immediately effective and executory. The petitioner filed with the Court of Appeals CA-G.R. SP No. 79516, a Petition for Certiorari under Rule 65 of the Rules of Court, praying for the nullification of the Preventive Suspension Order issued by the Office of the Ombudsman. However, the said Preventive Suspension Order had already lapsed even before the Court of Appeals could resolve the Petition in CA-G.R. SP No. 79516, thus, rendering the same moot and academic. In the meantime, petitioner, his wife, and his children filed their respective Counter-Affidavits and Supplemental Affidavits before the Office of the Ombudsman, presenting the following defenses: (1) petitioner admits ownership of the real properties identified in the Complaint but alleges that they were acquired by way of foreclosure or dacion en pago in the course of his wifeCs lending business in Sta. Maria, Bulacan; (2) petitioner is not solely dependent on his salary since his wife has been operating several businesses in Bulacan, including lending, piggery, and pawnshop, for the last 25 years; (3) his children are not financially dependent on petitioner and his wife, but are full-fledged entrepreneurs and professionals; and (4) the computation of their travel expenses is exaggerated and inaccurate since most of petitionerCs trips were sponsored by foreign and local organizations, his wifeCs trips were promotional travel packages to Asian destinations, and his childrenCs trips were at their own expense. On 28 June 2004, the Office of the Ombudsman promulgated its Decision[9] in OMB-C-A-03-0347-I, dismissing petitioner from service. The dispositive portion of said Decision reads C" HEREFORE, premises considered, respondent SALVADOR A. PLEYTO, is hereby found guilty of GRAVE MISCONDUCT and DISHONESTY and is meted the penalty of DISMISSAL FROM THE SERVICE with cancellation oI eligibility, IorIeiture oI retirement beneIits, and the perpetual disqualiIication Ior reemployment in the government service. The Honorable Secretary, Department of Public Works and Highways, Port Area, Manila, is hereby directed to implement this Order immediately upon receipt hereof and to promptly inform this Office of compliance therewith.[10] PetitionerCs Motion for Reconsideration was denied by the Office of the Ombudsman in an Order[11] dated 12 October 2004. Petitioner then assailed before the Court of Appeals the Decision, dated 28 June 2004, and Order, dated 12 October 2004, of the Office of the Ombudsman in OMB- C-A-03-0347-I by filing a Petition for Review under Rule 43 of the Rules of Court with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction, docketed as CA-G.R. SP No. 87086. Petitioner prayed to the appellate court that: 1. Upon filing of the petition, a Temporary Restraining Order and/or rit of Preliminary Injunction be immediately issued directing the Office of the Ombudsman, its officials and agents, or persons acting for and on it [sic] behalf, including the Secretary of the Department of Public Works and Highways from implementing the assailed Decision of the Ombudsman dated 28 June 2004 and its Order dated 12 October 2004. 2. After hearing on the merits, that judgment be rendered nullifying the assailed Decision of the Ombudsman dated June 28, 2004 and Order dated October 12, 2004 in OMB-C-A-03-0347-I. Other relief and remedies just and equitable under the premises are likewise prayed for.[12] On 5 November 2004, the Court of Appeals issued a Temporary Restraining Order against the implementation of the assailed Decision of the Office of the Ombudsman dismissing petitioner from service and directed the PNP-CIDG, the named respondent in petitionerCs Petition for Review, to file its Comment thereto. The Office of the Solicitor General (OSG), on behalf of the PNP-CIDG, requested an extension of 30 days, or until 28 December 2004, within which to file its Comment on the Petition. However, even before the OSG could file its Comment, the Office of the Ombudsman filed its own Comment (with Motions to Intervene; Admit Comment; and Recall Temporary Restraining Order) on 29 December 2004. It sought leave from the Court of Appeals to adduce pertinent facts and arguments to show that it acted with due process and impartiality, and relied only on the evidence on record in adjudging petitioner guilty of grave misconduct and dishonesty. The Office of the Ombudsman insisted that it has been shown by overwhelming evidence, as well as by petitionerCs own admissions in his counter-affidavit and other pleadings before the Office of the Ombudsman and his Petition before the Court of Appeals, that petitioner committed gross dishonesty for amassing wealth grossly disproportionate to his known lawful income, and refusing to fully declare many of his other properties. Hence, the Office of the Ombudsman submits that the administrative penalty of dismissal from the service imposed on petitioner stands on solid legal and factual grounds, which should be accorded weight and respect, if not finality, by the appellate court. Petitioner promptly filed a Reply d Cautelam (To OmbudsmanCs Comment) with Supplemental Plea. In addition to opposing the intervention of the Office of the Ombudsman in CA-G.R. SP No. 87086, petitioner also addressed the arguments presented by the Office of the Ombudsman in its Comment on the propriety of his dismissal from service. He avers that he has adequately controverted by clear and convincing evidence the unsubstantiated charges against him. Petitioner thus pleads anew for the immediate and urgent grant of his prayer for a writ of preliminary injunction to enjoin the execution of the order of dismissal of the Office of the Ombudsman. On 26 January 2005, the Court of Appeals issued a Resolution admitting the Comment of the Office of the Ombudsman, again directing the OSG to file its Comment on the Petition on behalf of PNP-CIDG, and submitting for resolution petitionerCs application for the issuance of a writ of preliminary injunction. The OSG, representing the PNP-CIDG, eventually filed its Comment on 31 January 2005. Finding that the execution of the judgment of dismissal from service of petitioner pending his appeal thereof would possibly work injustice to petitioner, or tend to render the judgment on his appeal ineffectual, the Court of Appeals issued a Resolution[13] on 1 March 2005 granting the writ of preliminary injunction, thus, ordering the Office of the Ombudsman and all persons action on its behalf from implementing its assailed Decision, dated 28 June 2004, and Order, dated 12 October 2004, pending final determination of CA-G.R. SP No. 87086. The appellate court further directed the parties to submit their memoranda. Petitioner and the Office of the Ombudsman filed their respective Memoranda, while the OSG manifested that it was adopting its Comment and the Comment of the Office of the Ombudsman on the Petition as its Memorandum. On 20 July 2005, the Court of Appeals promulgated its Decision in CA-G.R. SP No. 87086, dismissing the Petition and affirming the dismissal from the service of petitioner as adjudged by the Office of the Ombudsman. It summed up its findings thus: To repeat, the administrative liabilities of the petitioner proven by substantial evidence is his failure to file a truthful and accurate SALN and possession of assets manifestly out of proportion of (sic) his legitimate income. Either one is legal basis for dismissal or removal from office. As a final recourse, the petitioner asks for the chance to correct his SALN before he should be held administratively liable. The Ombudsman ripostes that this would be a mockery of the law, saying that the SALN is not a misdeclare-first- and correct-if-caught instrument, but a full and solemn recording under oath of al (sic) the items required to be reported. Ipse dixit. IN VIEW OF THE FOREGOING, the decision appealed from is AFFIRMED, and the petition DISMISSED. The writ of preliminary injunction is LIFTED.[14] The Co
THIRD DIVISION G.R. No. 139813. 1anuary 31, 2001] 1OELBITO-ONON, Petitioner vs HON. 1UDGE NELIA YAP FERNANDEZ, R.T.C. Br. 50 Puerto Princesa City and Palawan, and ELEGIO QUE1ANO, 1R., Respondents. D E C I S I O N GONZAGA-REYES, .: chanroblesvirtuallawlibrary This Petition Ior Certiorari and Prohibition with prayer Ior the issuance oI a temporary restraining order and writ oI injunction seeks the reversal oI the Order oI the Regional Trial Court oI Palawan and Puerto Princesa City, |1| Branch 50 in SPL. PROC. NO. 1056 entitled Elegio F. Quejano, Jr., petitioner vs. Joel Bito-Onon, et. al., respondents which denied herein petitioners motion to dismiss the Petition Ior Review oI the Resolution oI the Board oI Election Supervisors dated August 25, 1997 in case number L-10-97 Iiled by herein private respondent with said court. chanroblesvirtuallawlibrary It appears Irom the records that the petitioner, Joel Bito-Onon is the duly elected Barangay Chairman oI Barangay Tacras, Narra, Palawan and is the Municipal Liga Chapter President Ior the Municipality oI Narra, Palawan. The private respondent, Elegio Quejano, Jr. on the other hand, is the duly elected Barangay Chairman oI Barangay Rizal, Magsaysay, Palawan and is the Municipal Liga Chapter President Ior the Municipality oI Magsaysay, Palawan. Both Onon and Quejano were candidates Ior the position oI Executive Vice-President in the August 23, 1997 election Ior the Liga ng Barangay Provincial Chapter oI the province oI Palawan. Onon was proclaimed the winning candidate in the said election prompting Quejano to Iile a post proclamation protest with the Board oI Election Supervisors (BES), which was decided against him on August 25, 1997. chanroblesvirtuallawlibrary Not satisIied with the decision oI the BES, Quejano Iiled a Petition Ior Review oI the decision oI the BES with the Regional Trial Court oI Palawan and Puerto Princesa City (RTC). On April 26, 1999, Onon Iiled a motion to dismiss the Petition Ior Review raising the issue oI jurisdiction. Onon claimed that the RTC had no jurisdiction to review the decisions rendered by the BES in any post proclamation electoral protest in connection with the 1997 Liga ng mga Barangay election oI oIIicers and directors. In his motion to dismiss, Onon claimed that the Supplemental Guidelines Ior the 1997 Liga ng mga Barangay election issued by the DILG on August 11, 1997 in its Memorandum Circular No. 97-193, providing Ior review oI decisions or resolutions oI the BES by the regular courts oI law is an ultra vires act and is void Ior being issued without or in excess oI jurisdiction, as its issuance is not a mere act oI supervision but rather an exercise oI control over the Ligas internal organization. chanroblesvirtuallawlibrary On June 22, 1999, the RTC denied Onons motion to dismiss. In its order, the RTC ratiocinated that the Secretary oI the Department oI Interior and Local Government |2| is vested with the power to establish and prescribe rules, regulations and other issuances and implementing laws on the general supervision oI local government units and the promotion oI local autonomy and monitor compliance thereoI by said units. |3| The RTC added that DILG Circular No. 97- 193 was issued by the DILG Secretary pursuant to his rule-making power as provided Ior under Section 7, Chapter II, Book IV oI the Administrative Code. |4| Consequently, the RTC ruled that it had jurisdiction over the petition Ior review Iiled by Quejada. |5| chanroblesvirtuallawlibrary Motion Ior reconsideration oI the aIoresaid Order was denied |6| prompting the petitioner to Iile the present petition wherein the Iollowing issues are raised: chanroblesvirtuallawlibrary A. WHETHER OR NOT THE QUESTIONED PROVISION IN MEMORANDUM CIRCULAR 97-193 WAS ISSUED BY THE DILG SECRETARY IN EXCESS OF HIS AUTHORITY.chanroblesvirtuallawlibrary B. WHETHER OR NOT THE RESPONDENT 1UDGE COMMITTED GRAVE ABUSE OF DISCRETION IN ISSUING THE QUESTIONED ORDERS.|7| chanroblesvirtuallawlibrary In support oI his petition, Onon argues that the Supplemental Guidelines Ior the 1997 Synchronized Election oI the Provincial and Metropolitan Chapters and Ior the Election oI the National Chapter oI the Liga ng mga Barangay contradicts the Implementing Rules and Guidelines Ior the 1997 General Elections oI the Liga ng mga Barangay OIIicers and Directors and is thereIore invalid. Onon alleges that the Liga ng mga Barangay (LIGA) is not a local government unit considering that a local government unit must have its own source oI income, a certain number oI population, and a speciIic land area in order to exist or be created as such. Consequently, the DILG only has a limited supervisory authority over the LIGA. Moreover, Onon argues that even iI the DILG has supervisory authority over the LIGA, the act oI the DILG in issuing Memorandum Circular No. 97-193 or the supplemental rules and guidelines Ior the conduct oI the 1997 LIGA elections had the eIIect oI modiIying, altering and nulliIying the rules prescribed by the National Liga Board. Onon posits that the issuance oI said guidelines allowing an appeal oI the decision oI the BES to the regular courts rather than to the National Liga Board is no longer an exercise oI supervision but an exercise oI control. |8| chanroblesvirtuallawlibrary In his comment to the petition, private respondent Quejano argues that the Secretary oI the DILG has competent authority to issue rules and regulations like Memorandum Circular No. 97-893. The Secretary oI DILGs rule-making power is conIerred by the Administrative Code. Considering that the Memorandum Circular was issued pursuant to his rule making power, Quejano insists that the lower court did not commit any reversible error when it denied Onons motion to dismiss. |9| chanroblesvirtuallawlibrary On the other hand, the public respondent represented herein by the Solicitor General, Iiled a separate ManiIestation and Motion in Lieu oI Comment agreeing with the position oI petitioner Onon. The Solicitor General aIIirms Onons claim that in issuing the questioned Memorandum Circular, the Secretary oI the DILG eIIectively amended the rules and guidelines promulgated by National Liga Board. This act was no longer a mere act oI supervision but one oI control. The Solicitor General submits that the RTC committed grave abuse oI discretion in not dismissing the petition Ior review oI the BES decision Iiled beIore it Ior Iailure oI the petitioner to exhaust the rightIul remedy which was to appeal to the National Liga Board. |10| chanroblesvirtuallawlibrary On October 27, 1999, this Court denied petitioner Onons motion Ior the issuance oI restraining order Ior lack oI merit. chanroblesvirtuallawlibrary AIter a careIul review oI the case, we sustain the position oI the petitioner. chanroblesvirtuallawlibrary The resolution oI the present controversy requires an examination oI the questioned provision oI Memorandum Circular No. 97-193 and the Implementing Rules and Guidelines Ior the 1997 General Elections oI the Liga ng mga Barangay OIIicers and Directors (GUIDELINES). The memorandum circular reads, insoIar as pertinent, as Iollows: chanroblesvirtuallawlibrary Any post-proclamation protest must be Iiled with the BES within twenty-Iour (24) hours Irom the closing oI the election. The BES shall decide the same within Iorty-eight (48) hours Irom receipt thereoI. The decision oI the BES shall be Iinal and immediately executory without prefudice to the filin of a Petition for Review with the reular courts of law.|11| (emphasis supplied) chanroblesvirtuallawlibrary On the other hand, the GUIDELINES provides that the BES shall have the Iollowing among its duties: chanroblesvirtuallawlibrary To resolve any post-proclamation electoral protest which must be submitted in writing to this Board within twenty-Iour (24) hours Irom the close oI election; provided said Board shall render its decision within Iorty-eight (48) hours Irom receipt hereoI; and provided Iurther that the decision must be submitted to the National Liga Headquarters within twenty-Iour (24) hours Irom the said decision. The decision oI the Board oI Election Supervisors in this respect shall be subfect to review by the National Lia Board the decision of which shall be final and executory.|12| (emphasis supplied) chanroblesvirtuallawlibrary Memorandum Circular No. 97-193 was issued by the DILG Secretary pursuant to the power oI general supervision oI the President over all local government units which was delegated to the DILG Secretary by virtue oI Administrative Order No. 267 dated February 18, 1992. |13| The Presidents power oI general supervision over local government units is conIerred upon him by the Constitution. |14| The power oI supervision is deIined as the power oI a superior oIIicer to see to it that lower oIIicers perIorm their Iunctions in accordance with law. |15| This is distinguished Irom the power oI control or the power oI an oIIicer to alter or modiIy or set aside what a subordinate oIIicer had done in the perIormance oI his duties and to substitute the judgment oI the Iormer Ior the latter. |16| chanroblesvirtuallawlibrary On many occasions in the past, this court has had the opportunity to distinguish the power oI supervision Irom the power oI control. In %aule vs. Santos, |17| we held that the ChieI Executive wielded no more authority than that oI checking whether a local government or the oIIicers thereoI perIorm their duties as provided by statutory enactments. He cannot interIere with local governments provided that the same or its oIIicers act within the scope oI their authority. Supervisory power, when contrasted with control, is the power oI mere oversight over an inIerior body; it does not include any restraining authority over such body. |18| OIIicers in control lay down the rules in the doing oI an act. II they are not Iollowed, it is discretionary on his part to order the act undone or re-done by his subordinate or he may even decide to do it himselI. Supervision does not cover such authority. Supervising oIIicers merely sees to it that the rules are Iollowed, but he himselI does not lay down such rules, nor does he have the discretion to modiIy or replace them. II the rules are not observed, he may order the work done or re-done to conIorm to the prescribed rules. He cannot prescribe his own manner Ior the doing oI the act. |19| chanroblesvirtuallawlibrary Does the Presidents power oI general supervision extend to the liga ng mga barangay, which is not a local government unit? |20| chanroblesvirtuallawlibrary We rule in the aIIirmative. In Opinion No. 41, Series oI 1995, the Department oI Justice ruled that the liga ng mga barangay is a government organization, being an association, Iederation, league or union created by law or by authority oI law, whose members are either appointed or elected government oIIicials. The Local Government Code |21| deIines the liga ng mga barangay as an organization oI all barangays Ior the primary purpose oI determining the representation oI the liga in the sanggunians, and Ior ventilating, articulating and crystallizing issues aIIecting barangay government administration and securing, through proper and legal means, solutions thereto. |22| The liga shall have chapters at the municipal, city, provincial and metropolitan political subdivision levels. The municipal and city chapters oI the liga shall be composed oI the barangay representatives oI the municipal and city barangays respectively. The duly elected presidents oI the component municipal and city chapters shall constitute the provincial chapter or the metropolitan political subdivision chapter. The duly elected presidents oI highly urbanized cities, provincial chapters, the Metropolitan Manila chapter and metropolitan political subdivision chapters shall constitute the National Liga ng mga Barangay. |23| chanroblesvirtuallawlibrary The liga at the municipal, city, provincial, metropolitan political subdivision, and national levels directly elect a president, a vice- president and Iive (5) members oI the board oI directors. The board shall appoint its secretary and treasurer and create such other positions as it may deem necessary Ior the management oI the chapter. |24| chanroblesvirtuallawlibrary The ligas are primarily governed by the provisions oI the Local Government Code. |25| However, their respective constitution and by- laws shall govern all other matters aIIecting the internal organization oI the liga not otherwise provided Ior in the Local Government Code provided that the constitution and by-laws shall be suppletory to the provisions oI Book III, Title VI oI the Local Government Code and shall always conIorm to the provisions oI the Constitution and existing laws. |26| chanroblesvirtuallawlibrary Having in mind the Ioregoing principles, we rule that Memorandum Circular No. 97-193 oI the DILG insoIar as it authorizes the Iiling a Petition Ior Review oI the decision oI the BES with the regular courts in a post proclamation electoral protest is oI doubtIul constitutionality. We agree with both the petitioner and the Solicitor General that in authorizing the Iiling oI the petition Ior review oI the decision oI the BES with the regular courts, the DILG Secretary in eIIect amended and modiIied the GUIDELINES promulgated by the National Liga Board and adopted by the LIGA which provides that the decision oI the BES shall be subject to review by the National Liga Board. The amendment oI the GUIDELINES is more than an exercise oI the power oI supervision but is an exercise oI the power oI control, which the President does not have over the LIGA. Although the DILG is given the power to prescribe rules, regulations and other issuances, the Administrative Code limits its authority to merely monitoring compliance by local government units oI such issuances. |27| To monitor means to watch, observe or check and is compatible with the power oI supervision oI the DILG Secretary over local governments, which is limited to checking whether the local government unit concerned or the oIIicers thereoI perIorm their duties as per statutory enactments. |28| Besides, any doubt as to the power oI the DILG Secretary to interIere with local aIIairs should be resolved in Iavor oI the greater autonomy oI the local government. |29| chanroblesvirtuallawlibrary The public respondent judge thereIore committed grave abuse oI discretion amounting to lack or excess oI jurisdiction in not dismissing the respondents Petition Ior Review Ior Iailure to exhaust all administrative remedies and Ior lack oI jurisdiction. chanroblesvirtuallawlibrary WHEREFORE , the instant petition is hereby GRANTED. The Order oI the Regional Trial Court dated June 22, 1999 is REVERSED and SET ASIDE. The Petition Ior Review Iiled by the private respondent docketed as SPL. PROC. NO. 1056 is DISMISSED. chanroblesvirtuallawlibrary SO ORDERED. chanroblesvirtuallawlibrary Melo (Chairman) Jitug Panganiban and Sandoval-Cutierrez concur
Republic oI the Philipppines SUPREME COURT Manila EN BANC G.R. No. 146319. October 26, 2001] BEN1AMIN E. CAWALING, 1R., petitioner, vs THE COMMISSION ON ELECTIONS, and Rep. Francis 1oseph G. Escudero, Respondents. G.R. No. 146342. October 26, 2001] BEN1AMIN E. CAWALING, 1R., petitioner, vs THE EXECUTIVE SECRETARY TO THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES, SECRETARY OF THE INTERIOR AND LOCAL GOVERNMENT, SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, SOLICITOR GENERAL, PROVINCE OF SORSOGON, MUNICIPALITY OF SORSOGON, MUNICIPALITY OF BACON, Respondents D E C I S I O N SANDOVAL-GUTIERREZ, .:chanroblesvirtuallawlibrary BeIore us are two (2) separate petitions challenging the constitutionality oI Republic Act No. 8806 which created the City oI Sorsogon and the validity oI the plebiscite conducted pursuant thereto. chanroblesvirtuallawlibrary On August 16, 2000, Iormer President Joseph E. Estrada signed into law R.A. No. 8806, an Act Creating The City OI Sorsogon By Merging The Municipalities OI Bacon And Sorsogon In The Province OI Sorsogon, And Appropriating Funds ThereIor. |1| chanroblesvirtuallawlibrary Pursuant to Section 10, Article X oI the Constitution, |2| the Commission on Elections (COMELEC), on December 16, 2000, conducted a plebiscite in the Municipalities oI Bacon and Sorsogon and submitted the matter Ior ratiIication. chanroblesvirtuallawlibrary On December 17, 2000, the Plebiscite City Board oI Canvassers (PCBC) proclaimed |3| the creation oI the City oI Sorsogon as having been ratiIied and approved by the majority oI the votes cast in the plebiscite. |4| chanroblesvirtuallawlibrary Invoking his right as a resident and taxpayer oI the Iormer Municipality oI Sorsorgon, Benjamin E. Cawaling, Jr. Iiled on January 2, 2001 the present petition Ior certiorari (G.R. No. 146319) seeking the annulment oI the plebiscite on the Iollowing grounds: chanroblesvirtuallawlibrary A. The December 16, 2000 plebiscite was conducted beyond the required 120-day period Irom the approval oI R.A. 8806, in violation oI Section 54 thereoI; andchanroblesvirtuallawlibrary B. Respondent COMELEC Iailed to observe the legal requirement oI twenty (20) day extensive inIormation campaign in the Municipalities oI Bacon and Sorsogon beIore conducting the plebiscite.chanroblesvirtuallawlibrary Two days aIter Iiling the said action, or on January 4, 2001, petitioner instituted another petition (G.R. No. 146342), this time Ior prohibition, seeking to enjoin the Iurther implementation oI R.A. No. 8806 Ior being unconstitutional, contending, in essence, that: chanroblesvirtuallawlibrary 1. The creation oI Sorsogon City by merging two municipalities violates Section 450(a) oI the Local Government Code oI 1991 (in relation to Section 10, Article X oI the Constitution) which requires that only a municipality or a cluster oI barangays may be converted into a component city; andchanroblesvirtuallawlibrary 2. R.A. No. 8806 contains two (2) subjects, namely, the (a) creation oI the City oI Sorsogon and the (b) abolition oI the Municipalities oI Bacon and Sorsogon, thereby violating the one subject-one bill rule prescribed by Section 26(1), Article VI oI the Constitution.chanroblesvirtuallawlibrary Hence, the present petitions which were later consolidated. |5| chanroblesvirtuallawlibrary SigniIicantly, during the pendency oI these cases, speciIically during the May 14, 2001 elections, the newly-created Sorsogon City had the Iirst election oI its oIIicials. Since then, the City Government oI Sorsogon has been regularly discharging its corporate and political powers pursuant to its charter, R.A. No. 8806. chanroblesvirtuallawlibrary We shall Iirst delve on petitioners constitutional challenge against R.A. No. 8806 in G.R. No. 146342. chanroblesvirtuallawlibrary Every statute has in its Iavor the presumption oI constitutionality. |6| This presumption is rooted in the doctrine oI separation oI powers which enjoins upon the three coordinate departments oI the Government a becoming courtesy Ior each others acts. |7| The theory is that every law, being the joint act oI the Legislature and the Executive, has passed careIul scrutiny to ensure that it is in accord with the Iundamental law. |8| This Court, however, may declare a law, or portions thereoI, unconstitutional, where a petitioner has shown a clear and unequivocal breach oI the Constitution, not merely a doubtIul or argumentative one. |9| In other words, the grounds Ior nullity must be beyond reasonable doubt, |10| Ior to doubt is to sustain. |11| chanroblesvirtuallawlibrary Petitioner initially rejects R.A. No. 8806 because it violates Section 10, Article X oI the Constitution which provides, inter alia: chanroblesvirtuallawlibrary Section 10. No province, city, municipality, or barangay may be created, divided, merged, abolished, or its boundary substantially altered, except in accordance with the criteria established in the local government code and subject to approval by a majority oI the votes cast in a plebiscite in the political units directly aIIected. (Emphasis ours)chanroblesvirtuallawlibrary The criteria Ior the creation oI a city is prescribed in Section 450 oI the Local Government Code oI 1991 (the Code), thus: chanroblesvirtuallawlibrary Section 450. Requisites for Creation. (a) A municipality or a cluster oI barangays may be converted into a component city iI it has an average annual income, as certiIied by the Department oI Finance, oI at least Twenty million (P20,000,000.00) Ior the last two (2) consecutive years based on 1991 constant prices, and iI it has either oI the Iollowing requisites:chanroblesvirtuallawlibrary (i) a contiguous territory oI at least one hundred (100) square kilometers, as certiIied by the Lands Management Bureau; orchanroblesvirtuallawlibrary (ii) a population oI not less than one hundred IiIty thousand (150,000) inhabitants, as certiIied by the National Statistics OIIice:chanroblesvirtuallawlibrary Provided, That, the creation thereoI shall not reduce the land area, population, and income oI the original unit or units at the time oI said creation to less than the minimum requirements prescribed herein.chanroblesvirtuallawlibrary (b) The territorial jurisdiction oI a newly-created city shall be properly identiIied by metes and bounds. The requirement on land area shall not apply where the city proposed to be created is composed oI one (1) or more islands. The territory need not be contiguous iI it comprises two (2) or more islands.chanroblesvirtuallawlibrary (c) The average annual income shall include the income accruing to the general Iund, exclusive oI speciIic Iunds, transIers, and non- recurring income. (Emphasis ours)chanroblesvirtuallawlibrary Petitioner is not concerned whether the creation oI Sorsogon City through R.A. No. 8806 complied with the criteria set by the Code as to income, population and land area. What he is assailing is its mode oI creation. He contends that under Section 450(a) oI the Code, a component city may be created only by converting a municipality or a cluster oI baranays, not by merging two municipalities, as what R.A. No. 8806 has done. chanroblesvirtuallawlibrary This contention is devoid oI merit. chanroblesvirtuallawlibrary Petitioners constricted reading oI Section 450(a) oI the Code is erroneous. The phrase A municipality or a cluster oI baranays may be converted into a component city is not a criterion but simply one oI the modes by which a city may be created. Section 10, Article X oI the Constitution, quoted earlier and which petitioner cited in support oI his posture, allows the merger oI local government units to create a province, city, municipality or baranay in accordance with the criteria established by the Code. Thus, Section 8 oI the Code distinctly provides: chanroblesvirtuallawlibrary Section 8. Division and Merger. Division and merger oI existing local government units shall comply with the same requirements herein prescribed for their creation: Provided, however, That such division shall not reduce the income, population, or land area oI the local government unit or units concerned to less than the minimum requirements prescribed in this Code: Provided, Iurther, That the income classiIication oI the original local government unit or units shall not Iall below its current income classiIication prior to such division. x x x. (Emphasis ours)chanroblesvirtuallawlibrary Verily, the creation oI an entirely new local government unit through a division or a merger oI existing local government units is recognized under the Constitution, provided that such merger or division shall comply with the requirements prescribed by the Code. chanroblesvirtuallawlibrary Petitioner Iurther submits that, in any case, there is no compelling reason Ior merging the Municipalities oI Bacon and Sorsogon in order to create the City oI Sorsogon considering that the Municipality oI Sorsogon alone already qualiIies to be upgraded to a component city. This argument goes into the wisdom oI R.A. No. 8806, a matter which we are not competent to rule. In ngara v lectoral Commission |12| this Court, through Justice Jose P. Laurel, made it clear that the judiciary does not pass upon questions oI wisdom, justice or expediency oI legislation. In the exercise oI judicial power, we are allowed only to settle actual controversies involving rights which are legally demandable and enIorceable, |13| and may not annul an act oI the political departments simply because we Ieel it is unwise or impractical. |14| chanroblesvirtuallawlibrary Next, petitioner assails R.A. No. 8806 since it contravenes the one subject-one bill rule enunciated in Section 26 (1), Article VI oI the Constitution, to wit: chanroblesvirtuallawlibrary Section 26 (1). Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof. (emphasis ours)chanroblesvirtuallawlibrary Petitioner contends that R.A. No. 8806 actually embraces two principal subjects which are: (1) the creation oI the City oI Sorsogon, and (2) the abolition oI the Municipalities oI Bacon and Sorsogon. While the title oI the Act suIIiciently inIorms the public about the creation oI Sorsogon City, petitioner claims that no such inIormation has been provided on the abolition oI the Municipalities oI Bacon and Sorsogon. chanroblesvirtuallawlibrary The argument is Iar Irom persuasive. Contrary to petitioners assertion, there is only one subject embraced in the title oI the law, that is, the creation oI the City oI Sorsogon. The abolition/cessation oI the corporate existence oI the Municipalities oI Bacon and Sorsogon due to their merger is not a subject separate and distinct Irom the creation oI Sorsogon City. Such abolition/cessation was but the logical, natural and inevitable consequence oI the merger. Otherwise put, it is the necessary means by which the City oI Sorsogon was created. Hence, the title oI the law, An Act Creating the City oI Sorsogon by Merging the Municipalities oI Bacon and Sorsogon in the Province oI Sorsogon, and Appropriating Funds ThereIor, cannot be said to exclude the incidental eIIect oI abolishing the two municipalities, nor can it be considered to have deprived the public oI Iair inIormation on this consequence. chanroblesvirtuallawlibrary It is well-settled that the one title-one subject rule does not require the Congress to employ in the title oI the enactment language oI such precision as to mirror, Iully index or catalogue all the contents and the minute details therein. |15| The rule is suIIiciently complied with iI the title is comprehensive enough as to include the general object which the statute seeks to eIIect, |16| and where, as here, the persons interested are inIormed oI the nature, scope and consequences oI the proposed law and its operation. |17| Moreover, this Court has invariably adopted a liberal rather than technical construction oI the rule so as not to cripple or impede legislation. |18| chanroblesvirtuallawlibrary Consequently, we hold that petitioner has Iailed to present clear and convincing prooI to deIeat the presumption oI constitutionality oI R.A. No. 8806. chanroblesvirtuallawlibrary We now turn to G.R. No. 146319 wherein petitioner assails the validity oI the plebiscite conducted by the COMELEC Ior the ratiIication oI the creation oI Sorsogon City. chanroblesvirtuallawlibrary Petitioner asserts that the plebiscite required by R.A. No. 8806 should be conducted within 120 days Irom the approval oI said Act per express provision oI its Section 54, viz: chanroblesvirtuallawlibrary Sec. 54. Plebiscite. The City oI Sorsogon shall acquire corporate existence upon the ratiIication oI its creation by a majority oI the votes cast by the qualiIied voters in a plebiscite to be conducted in the present municipalities oI Bacon and Sorsogon within one hundred twenty (120) days Irom the approval oI this Act. x x x. (Emphasis ours)chanroblesvirtuallawlibrary The Act was approved on August 16, 2000 by Iormer President Joseph E. Estrada. Thus, petitioner claims, the December 16, 2000 plebiscite was conducted one (1) day late Irom the expiration oI the 120-day period aIter the approval oI the Act. This 120-day period having expired without a plebiscite being conducted, the Act itselI expired and could no longer be ratiIied and approved in the plebiscite held on December 16, 2000. chanroblesvirtuallawlibrary In its comment, the COMELEC asserts that it scheduled the plebiscite on December 16, 2000 based on the date oI the eIIectivity oI the Act. Section 65 oI the Act states: chanroblesvirtuallawlibrary Sec. 65. EIIectivity. - This Act shall take eIIect upon its publication in at least two (2) newspapers oI general and local circulation.chanroblesvirtuallawlibrary The law was Iirst published in the August 25, 2000 issue oI TODAY, a newspaper oI general circulation. Then on September 01, 2000, it was published in a newspaper oI local circulation in the Province oI Sorsogon. Thus, the publication oI the law was completed on September 1, 2000 , which date, according to the COMELEC, should be the reckoning point in determining the 120-day period within which to conduct the plebiscite, not Irom the date oI its approval (August 16, 2000) when the law had not yet been published. The COMELEC argues that since publication is indispensable Ior the eIIectivity oI a law, citing the landmark case oI %aada vs %uvera, |19| it could only schedule the plebiscite aIter the Act took eIIect. Thus, the COMELEC concludes, the December 16, 2000 plebiscite was well within the 120- day period Irom the eIIectivity oI the law on September 1, 2000. chanroblesvirtuallawlibrary The COMELEC is correct. chanroblesvirtuallawlibrary In addition, Section 10 oI the Code provides: chanroblesvirtuallawlibrary Section 10. Plebiscite Requirement. No creation, division, merger, abolition, or substantial alteration oI boundaries oI local government units shall take eIIect unless approved by a majority oI the votes cast in a plebiscite called Ior the purpose in the political unit or units directly aIIected. Such plebiscite shall be conducted by the Commission on Elections within one hundred twenty (120) days Irom the date of the effectivity oI the law or ordinance aIIecting such action, unless said law or ordinance fixes another date. (Emphasis ours) chanroblesvirtuallawlibrary Quite plainly, the last sentence oI Section 10 mandates that the plebiscite shall be conducted within 120 days Irom the date oI the effectivity oI the law, not Irom its approval. While the same provision allows a law or ordinance to Iix another date Ior conducting a plebiscite, still such date must be reckoned Irom the date oI the eIIectivity oI the law. chanroblesvirtuallawlibrary Consequently, the word approval in Section 54 oI R.A. No. 8806, which should be read together with Section 65 (eIIectivity oI the Act) thereoI, could only mean eIIectivity as used and contemplated in Section 10 oI the Code. This construction is in accord with the Iundamental rule that all provisions oI the laws relating to the same subject should be read together and reconciled to avoid inconsistency or repugnancy to established jurisprudence. As we stated in %aada chanroblesvirtuallawlibrary Art. 2. Laws shall take eIIect aIter IiIteen days Iollowing the completion oI their publication in the OIIicial Gazette, unless it is otherwise provided. This Code shall take eIIect one year aIter such publication.chanroblesvirtuallawlibrary AIter a careIul study oI this provision and oI the arguments oI the parties, both on the original petition and on the instant motion, we have come to the conclusion, and so hold, that the clause unless it is otherwise provided reIers to the date oI eIIectivity and not to the requirement oI publication itselI, which cannot in any event be omitted. This clause does not mean that the legislature may make the law effective immediately upon approval, or on any other date, without its previous publication. (Emphasis supplied)chanroblesvirtuallawlibrary To give section 54 a literal and strict interpretation would in eIIect make the Act eIIective even beIore its publication, which scenario is precisely abhorred in %aada chanroblesvirtuallawlibrary Lastly, petitioner alleges that the COMELEC Iailed to conduct an extensive inIormation campaign on the proposed Sorsogon cityhood 20 days prior to the scheduled plebiscite as required by Article 11 (b.4.ii), Rule II oI the Rules and Regulations Implementing the Code. However, no prooI whatsoever was presented by petitioner to substantiate his allegation. Consequently, we sustain the presumption |20| that the COMELEC regularly perIormed or complied with its duty under the law in conducting the plebiscite. chanroblesvirtuallawlibrary WHEREFORE , the instant petitions are DISMISSED Ior lack oI merit. Costs against petitioner. chanroblesvirtuallawlibrary SO ORDERED. chanroblesvirtuallawlibrary avide r C Bellosillo Melo Puno Kapunan Mendoza Panganiban Quisumbing Pardo Buena Ynares-Santiago and e Leon r concur. chanroblesvirtuallawlibrary Jitug on official leave
epublic oI the Philippines SUPREME COURT Manila EN BANC
G.R. No. 96754 1une 22, 1995 CONGRESSMAN 1AMES L. CHIONGBIAN (Third District, South Cotobato) ADELBERT W. ANTONINO (First District, South Cotobato), WILFREDO G. CAINGLET (Third District, Zamboanga del Norte), HILARION RAMIRO, 1R. (Second Division, Misamis Occidental), ERNESTO S. AMATONG (Second District, Zamboanga del Norte), ALVIN G. DANS (Lone District, Basilan), ABDULLAH M. DIMAPORO (Second District, Lanao del Norte), and CONGRESSWOMAN MARIA CLARA A. LOBREGAT (Lone District, Zamboanga City) petitioners, vs. HON. OSCAR M. ORBOS, Executive Secretary; COMMITTEE CHAIRMAN SEC. FIDEL V. RAMOS, CABINET OFFICERS FOR REGIONAL DEVELOPMENT FOR REGIONS X AND XII, CHAIRMAN OF THE REGIONAL DEVELOPMENT COUNCIL FOR REGION X, CHAIRMAN 1ESUS V. AYALA, CABINET OFFICERS FOR REGIONAL DEVELOPMENT FOR REGIONS XI and XII, DEPARTMENT OF LOCAL GOVERNMENT, NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY SECRETARIAT, PRESIDENTIAL MANAGEMENT STAFF, HON. GUILLERMO CARAGUE, Secretary of the DEPARTMENT OF BUDGET and MANAGEMENT; and HON. ROSALINA S. CA1UCUM, OIC National Treasurer, Respondents. IMMANUEL 1ALDON, Petitioner, vs. HON. EXECUTIVE SECRETARY OSCAR M. ORBOS, HON. FIDEL RAMOS, HON. SECRETARY LUIS SANTOS, AND HON. NATIONAL TREASURER ROSALINA CA1UCOM, Respondents.chanrobles virtual law lib rary
MENDOZA, chanrobles virtual law library These suits challenge the validity oI a provision oI the Organic Act Ior the Autonomous Region in Muslim Mindanao (R.A. No. 6734), authorizing the President oI the Philippines to "merge" by administrative determination the regions remaining aIter the establishment oI the Autonomous Region, and the Executive Order issued by the President pursuant to such authority, "Providing Ior the Reorganization oI Administrative Regions in Mindanao." A temporary restraining order prayed Ior by the petitioners was issued by this Court on January 29, 1991, enjoining the respondents Irom enIorcing the Executive Order and statute in question.chanroblesvirtualawl ibrary chan robles virtual law librar y The Iacts are as Iollows: chanrobles vir tual law lib rary Pursuant to Art. X, 18 oI the 1987 Constitution, Congress passed R.A. No. 6734, the Organic Act Ior the Autonomous Region in Muslim Mindanao, calling Ior a plebiscite to be held in the provinces oI Basilan, Cotobato, Davao del Sur, Lanao del Norte, Lanao del Sur, Maguindanao, Palawan, South Cotabato, Sultan Kudarat, Sulu, Tawi- Tawi, Zamboanga del Norte, and Zamboanga del Sur, and the cities oI Cotabato, Dapitan, Dipolog, General Santos, Iligan, Marawi, Pagadian, Puerto Princesa and Zamboanga. In the ensuing plebiscite held on November 16, 1989, Iour provinces voted in Iavor oI creating an autonomous region. These are the provinces oI Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi. In accordance with the constitutional provision, these provinces became the Autonomous Region in Muslim Mindanao.chanroblesvirtualawlibrary chan robles virtual law libra ry On the other hand, with respect to provinces and cities not voting in Iavor oI the Autonomous Region, Art. XIX, 13 oI R.A. No. 6734 provides, That only the provinces and cities voting Iavorably in such plebiscites shall be included in the Autonomous Region in Muslim Mindanao. The provinces and cities which in the plebiscite do not vote Ior inclusion in the Autonomous Region shall remain in the existing administrative regions. Provided, however, that the President may, by administrative determination, merge the existing regions. Pursuant to the authority granted by this provision, then President Corazon C. Aquino issued on October 12, 1990 Executive Order No. 429, "providing Ior the Reorganization oI the Administrative Regions in Mindanao." Under this Order, as amended by E.O. No. 439 - (1) Misamis Occidental, at present part oI Region X, will become part oI Region IX.chanroblesvirtualawlibra ry chanrobles vir tual law lib rary (2) Oroquieta City, Tangub City and Ozamiz City, at present parts oI Region X will become parts oI Region IX.chanroblesvirtualawlibrary chanr obles virtual law l ibrary (3) South Cotobato, at present a part oI Region XI, will become part oI Region XII.chanroblesvirtualawlibrary chanrob les virtual law lib rary (4) General Santos City, at present part oI Region XI, will become part oI Region XII.chanroblesvirtualawlibrary chan robles virtual law library (5) Lanao del Norte, at present part oI Region XII, will become part oI Region IX.chanroblesvirtualawlibrary chan robles virtual law librar y (6) Iligan City and Marawi City, at present part oI Region XII, will become part oI Region IX. Petitioners in G.R. No. 96754 are, or at least at the time oI the Iiling oI their petition, members oI Congress representing various legislative districts in South Cotobato, Zamboanga del Norte, Basilan, Lanao del Norte and Zamboanga City. On November 12, 1990, they wrote then President Aquino protesting E.O. No. 429. They contended that There is no law which authorizes the President to pick certain provinces and cities within the existing regions - some oI which did not even take part in the plebiscite as in the case oI the province oI Misamis Occidental and the cities oI Oroquieta, Tangub and Ozamiz - and restructure them to new administrative regions. On the other hand, the law (Sec. 13, Art. XIX, R.A. 6734) is speciIic to the point, that is, that "the provinces and cities which in the plebiscite do not vote Ior inclusion in the Autonomous Region shall remain in the existing administrative regions."chanrobles virt ual law libra ry The transIer oI the provinces oI Misamis Occidental Irom Region X to Region IX; Lanao del Norte Irom Region XII to Region IX, and South Cotobato Irom Region XI to Region XII are alterations oI the existing structures oI governmental units, in other words, reorani:ation. This can be gleaned Irom Executive Order No. 429, thus Whereas, there is an urgent need to reorganize the administrative regions in Mindanao to guarantee the eIIective delivery oI Iield services oI government agencies taking into consideration the Iormation oI the Autonomous Region in Muslim Mindanao. With due respect to Her Excellency, we submit that while the authority necessarily includes the authority to merge, the authority to merge does not include the authority to reorganize. ThereIore, the President's authority under RA 6734 to "merge existing regions" cannot be construed to include the authority to reorganize them. To do so will violate the rules oI statutory construction.chanroblesvirtualawlib rary chanrob les virtual law lib rary The transIer oI regional centers under Executive Order 429 is actually a restructuring (reorganization) oI administrative regions. While this reorganization, as in Executive Order 429, does not aIIect the apportionment oI congressional representatives, the same is not valid under the penultimate paragraph oI Sec. 13, Art. XIX oI R.A. 6734 and Ordinance appended to the 1986 Constitution apportioning the seats oI the House oI Representatives oI Congress oI the Philippines to the diIIerent legislative districts in provinces and cities. 1 chanrobles virtual law libra ry As their protest went unheeded, while Inauguration Ceremonies oI the New Administrative Region IX were scheduled on January 26, 1991, petitioners brought this suit Ior certiorari and prohibition.chanroblesvirtualawlib rary chanrob les virtual law lib rary On the other hand, the petitioner in G.R. No. 96673, Immanuel Jaldon, is a resident oI Zamboanga City, who is suing in the capacity oI taxpayer and citizen oI the Republic oI the Philippines.chanroblesvirtualawlib rary chanrob les virtual law li brary Petitioners in both cases contend that Art. XIX, 13 oI R.A. No. 6734 is unconstitutional because (1) it unduly delegates legislative power to the President by authorizing him to "merge |by administrative determination| the existing regions" or at any rate provides no standard Ior the exercise oI the power delegated and (2) the power granted is not expressed in the title oI the law.chanroblesvirtua lawlibrary chanrobles virtual law libra ry In addition, petitioner in G.R. No. 96673 challenges the validity oI E.O. No. 429 on the ground that the power granted by Art. XIX, 13 to the President is only to "merge regions IX and XII" but not to reorganize the entire administrative regions in Mindanao and certainly not to transIer the regional center oI Region IX Irom Zamboanga City to Pagadian City.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary The Solicitor General deIends the reorganization oI regions in Mindanao by E.O. No. 429 as merely the exercise oI a power "traditionally lodged in the President," as held in bbas v. Comelec, 2
and as a mere incident oI his power oI general supervision over local governments and control oI executive departments, bureaus and oIIices under Art. X, 16 and Art. VII, 17, respectively, oI the Constitution.chanroblesvir tualawlibra ry chanrobles vir tual law libra ry He contends that there is no undue delegation oI legislative power but only a grant oI the power to "Iill up" or provide the details oI legislation because Congress did not have the Iacility to provide Ior them. He cites by analogy the case oI unicipality of Cardona v. unicipality of Binanonan, 3 in which the power oI the Governor- General to Iix municipal boundaries was sustained on the ground that - |such power| is simply a transIerence oI certain details with respect to provinces, municipalities, and townships, many oI them newly created, and all oI them subject to a more or less rapid change both in development and centers oI population, the proper regulation oI which might require not only prompt action but action oI such a detailed character as not to permit the legislative body, as such, to take it eIIiciently. The Solicitor General justiIies the grant to the President oI the power "to merge the existing regions" as something Iairly embraced in the title oI R.A. No. 6734, to wit, "An Act Providing Ior an Organic Act Ior the Autonomous Region in Muslim Mindanao," because it is germane to it.chanroblesvirtualawlibrary chanr obles virtual law l ibrary He argues that the power is not limited to the merger oI those regions in which the provinces and cities which took part in the plebiscite are located but that it extends to all regions in Mindanao as necessitated by the establishment oI the autonomous region.chanroblesvir tualawlibra ry chanrobles vir tual law lib rary Finally, he invokes P.D. No. 1416, as amended by P.D. No. 1772 which provides: 1. The President oI the Philippines shall have the continuing authority to reorganize the National Government. In exercising this authority, the President shall be guided by generally acceptable principles oI good government and responsive national government, including but not limited to the Iollowing guidelines Ior a more eIIicient, eIIective, economical and development-oriented governmental Iramework: (a) More eIIective planning implementation, and review Iunctions;chanrob les virtual law lib rary (b) Greater decentralization and responsiveness in decision-making process;chanrobles vi rtual law lib rary (c) Further minimization, iI not, elimination, oI duplication or overlapping oI purposes, Iunctions, activities, and programs;chanrobles vi rtual law lib rary (d) Further development oI as standardized as possible ministerial, sub- ministerial and corporate organizational structures;chanrobles virtual law library (e) Further development oI the regionalization process; andchanrobles vi rtual law lib rary (I) Further rationalization oI the Iunctions oI and administrative relationships among government entities.chanroblesvi rtualawlibra ry chanrobles vi rtual law lib rary For purposes oI this Decree, the coverage oI the continuing authority oI the President to reorganize shall be interpreted to encompass all agencies, entities, instrumentalities, and units oI the National Government, including all government owned or controlled corporations as well as the entire range oI the powers, Iunctions, authorities, administrative relationships, acid related aspects pertaining to these agencies, entities, instrumentalities, and units. 2. |T|he President may, at his discretion, take the Iollowing actions: xxx xxx xxx I. Create, abolish, group, consolidate, merge, or integrate entities, agencies, instrumentalities, and units oI the National Government, as well as expand, amend, change, or otherwise modiIy their powers, Iunctions and authorities, including, with respect to government- owned or controlled corporations, their corporate liIe, capitalization, and other relevant aspects oI their charters.chanroblesvirtualawlibrary chanr obles virtual law l ibrary g. Take such other related actions as may be necessary to carry out the purposes and objectives oI this Decree. Considering the arguments oI the parties, the issues are: chanrobles virtual law lib rary (1) whether the power to "merge" administrative regions is legislative in character, as petitioners contend, or whether it is executive in character, as respondents claim it is, and, in any event, whether Art. XIX, 13 is invalid because it contains no standard to guide the President's discretion;chanro bles virtual law li brary (2) whether the power given is Iairly expressed in the title oI the statute; andchanro bles virtual law li brary (3) whether the power granted authorizes the reorganization even oI regions the provinces and cities in which either did not take part in the plebiscite on the creation oI the Autonomous Region or did not vote in Iavor oI it; and chanrobles virtual law libra ry (4) whether the power granted to the President includes the power to transIer the regional center oI Region IX Irom Zamboanga City to Pagadian City.chan roblesvirtualawli brary chan robles virtual law library It will be useIul to recall Iirst the nature oI administrative regions and the basis and purpose Ior their creation. On September 9, 1968, R.A. No. 5435 was passed "authorizing the President oI the Philippines, with the help oI a Commission on Reorganization, to reorganize the diIIerent executive departments, bureaus, oIIices, agencies and instrumentalities oI the government, including banking or Iinancial institutions and corporations owned or controlled by it." The purpose was to promote "simplicity, economy and eIIiciency in the government." 4 The Commission on Reorganization created under the law was required to submit an integrated reorganization plan not later than December 31, 1969 to the President who was in turn required to submit the plan to Congress within Iorty days aIter the opening oI its next regular session. The law provided that any reorganization plan submitted would become eIIective only upon the approval oI Congress. 5
Accordingly, the Reorganization Commission prepared an Integrated Reorganization Plan which divided the country into eleven administrative regions. 6 By P.D. No. 1, the Plan was approved and made part oI the law oI the land on September 24, 1972. P.D. No. 1 was twice amended in 1975, Iirst by P.D. No. 742 which "restructur|ed| the regional organization oI Mindanao, Basilan, Sulu and Tawi-Tawi" and later by P.D. No. 773 which Iurther "restructur|ed| the regional organization oI Mindanao and divid|ed| Region IX into two sub-regions." In 1978, P.D. No. 1555 transIerred the regional center oI Region IX Irom Jolo to Zamboanga City.chan roblesvirtualawl ibrary chan robles virtual law librar y Thus the creation and subsequent reorganization oI administrative regions have been by the President pursuant to authority granted to him by law. In conIerring on the President the power "to merge |by administrative determination| the existing regions" Iollowing the establishment oI the Autonomous Region in Muslim Mindanao, Congress merely Iollowed the pattern set in previous legislation dating back to the initial organization oI administrative regions in 1972. The choice oI the President as delegate is logical because the division oI the country into regions is intended to Iacilitate not only the administration oI local governments but also the direction oI executive departments which the law requires should have regional oIIices. As this Court observed in bbas, "while the power to merge administrative regions is not expressly provided Ior in the Constitution, it is a power which has traditionally been lodged with the President to Iacilitate the exercise oI the power oI general supervision over local governments |see Art. X, 4 oI the Constitution|." The regions themselves are not territorial and political divisions like provinces, cities, municipalities and barangays but are "mere groupings oI contiguous provinces Ior administrative purposes." 7 The power conIerred on the President is similar to the power to adjust municipal boundaries 8 which has been described in Pelae: v. uditor General 9 or as "administrative in nature."chanrobles virtual law lib rary There is, thereIore, no abdication by Congress oI its legislative power in conIerring on the President the power to merge administrative regions. The question is whether Congress has provided a suIIicient standard by which the President is to be guided in the exercise oI the power granted and whether in any event the grant oI power to him is included in the subject expressed in the title oI the law.chanroblesvir tualawlibrar y chanrobles virt ual law libra ry First, the question oI standard. A legislative standard need not be expressed. It may simply be gathered or implied. 10 Nor need it be Iound in the law challenged because it may be embodied in other statutes on the same subject as that oI the challenged legislation. 11
With respect to the power to merge existing administrative regions, the standard is to be Iound in the same policy underlying the grant to the President in R.A. No. 5435 oI the power to reorganize the Executive Department, to wit: "to promote simplicity, economy and eIIiciency in the government to enable it to pursue programs consistent with national goals Ior accelerated social and economic development and to improve the service in the transaction oI the public business." 12
Indeed, as the original eleven administrative regions were established in accordance with this policy, it is logical to suppose that in authorizing the President to "merge |by administrative determination| the existing regions" in view oI the withdrawal Irom some oI those regions oI the provinces now constituting the Autonomous Region, the purpose oI Congress was to reconstitute the original basis Ior the organization oI administrative regions.chanroblesvirt ualawlibrar y chanrobles virt ual law libra ry Nor is Art. XIX, 13 susceptible to charge that its subject is not embraced in the title oI R.A. No. 6734. The constitutional requirement that "every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereoI" 13 has always been given a practical rather than a technical construction. The title is not required to be an index oI the content oI the bill. It is a suIIicient compliance with the constitutional requirement iI the title expresses the general subject and all provisions oI the statute are germane to that subject. 14
Certainly the reorganization oI the remaining administrative regions is germane to the general subject oI R.A. No. 6734, which is the establishment oI the Autonomous Region in Muslim Mindanao.chanroblesvirtualawlibrary chanrobles virtual law libra ry Finally, it is contended that the power granted to the President is limited to the reorganization oI administrative regions in which some oI the provinces and cities which voted in Iavor oI regional autonomy are Iound, because Art. XIX, 13 provides that those which did not vote Ior autonomy "shall remain in the existing administrative regions." More speciIically, petitioner in G.R. No. 96673 claims: The questioned Executive Order No. 429 distorted and, in Iact, contravened the clear intent oI this provision by moving out or transIerring certain political subdivisions (provinces/cities) out oI their legally designated regions. Aggravating this unacceptable or untenable situation is EO No. 429's eIIecting certain movements on areas which did not even participate in the November 19, 1989 plebiscite. The unauthorized action oI the President, as eIIected by and under the questioned EO No. 429, is shown by the Iollowing dispositions: (1) Misamis Occidental, Iormerly oI Region X and which did not even participate in the plebiscite, was moved Irom said Region X to Region IX; (2) the cities oI Ozamis, Oroquieta, and Tangub, all Iormerly belonging to Region X, which likewise did not participate in the said plebiscite, were transIerred to Region IX; (3) South Cotobato, Irom Region XI to Region XII; (4) General Santos City: Irom Region XI to Region XII; (5) Lanao del Norte, Irom Region XII to Region IX; and (6) the cities oI Marawi and Iligan Irom Region XII to Region IX. All oI the said provinces and cities voted "NO", and thereby rejected their entry into the Autonomous Region in Muslim Mindanao, as provided under RA No. 6734. 15 chanrobles virtual law library The contention has no merit. While Art. XIX, 13 provides that "The provinces and cities which do not vote Ior inclusion in the Autonomous Region shall remain in the existing administrative regions," this provision is subject to the qualiIication that "the President may by administrative determination merge the existing regions." This means that while non-assenting provinces and cities are to remain in the regions as designated upon the creation oI the Autonomous Region, they may nevertheless be regrouped with contiguous provinces Iorming other regions as the exigency oI administration may require.chanroblesvi rtualawlibra ry chanrobles vi rtual law lib rary The regrouping is done only on paper. It involves no more than are deIinition or redrawing oI the lines separating administrative regions Ior the purpose oI Iacilitating the administrative supervision oI local government units by the President and insuring the eIIicient delivery oI essential services. There will be no "transIer" oI local governments Irom one region to another except as they may thus be regrouped so that a province like Lanao del Norte, which is at present part oI Region XII, will become part oI Region IX.chanroblesvirtualawlib rary chanrob les virtual law li brary The regrouping oI contiguous provinces is not even analogous to a redistricting or to the division or merger oI local governments, which all have political consequences on the right oI people residing in those political units to vote and to be voted Ior. It cannot be overemphasized that administrative regions are mere groupings oI contiguous provinces Ior administrative purposes, not Ior political representation.chanroblesvirtualawl ibrary chan robles virtual law libra ry Petitioners nonetheless insist that only those regions, in which the provinces and cities which voted Ior inclusion in the Autonomous Region are located, can be "merged" by the President.chanroblesvirtualawlibrary chan robles virtual law libra ry To be Iundamental reason Art. XIX, 13 is not so limited. But the more Iundamental reason is that the President's power cannot be so limited without neglecting the necessities oI administration. It is noteworthy that the petitioners do not claim that the reorganization oI the regions in E.O. No. 429 is irrational. The Iact is that, as they themselves admit, the reorganization oI administrative regions in E.O. No. 429 is based on relevant criteria, to wit: (1) contiguity and geographical Ieatures; (2) transportation and communication Iacilities; (3) cultural and language groupings; (4) land area and population; (5) existing regional centers adopted by several agencies; (6) socio- economic development programs in the regions and (7) number oI provinces and cities.chanroblesvirtualawl ibrary chan robles virtual law libra ry What has been said above applies to the change oI the regional center Irom Zamboanga City to Pagadian City. Petitioners contend that the determination oI provincial capitals has always been by act oI Congress. But as, this Court said in Abbas, 16 administrative regions are mere "groupings oI contiguous provinces Ior administrative purposes, . . . |They| are not territorial and political subdivisions like provinces, cities, municipalities and barangays." There is, thereIore, no basis Ior contending that only Congress can change or determine regional centers. To the contrary, the examples oI P.D. Nos. 1, 742, 773 and 1555 suggest that the power to reorganize administrative regions carries with it the power to determine the regional center.chanroblesvirtualawlibrary chanro bles virtual law l ibrary It may be that the transIer oI the regional center in Region IX Irom Zamboanga City to Pagadian City may entail the expenditure oI large sums oI money Ior the construction oI buildings and other inIrastructure to house regional oIIices. That contention is addressed to the wisdom oI the transIer rather than to its legality and it is settled that courts are not the arbiters oI the wisdom or expediency oI legislation. In any event this is a question that we will consider only iI Iully brieIed and upon a more adequate record than that presented by petitioners.chanroblesvirtualawl ibrary chan robles virtual law libra ry WHEREFORE, the petitions Ior certiorari and prohibition are DISMISSED Ior lack oI merit.chanroblesvirtualawlib rary chanrob les virtual law lib rary SO ORDERED. Narvasa, C.J., Feliciano, Padilla, Realado, Davide, Jr., Romero, Bellosillo, elo, Quiason, Puno, Jitu, Kapunan and Francisco, JJ., concur.
Republic oI the Philipppines SUPREME COURT Manila EN BANC G.R. No. 125350. December 3, 2002] HON. RTC 1UDGES MERCEDES G. DADOLE (Executive 1udge, Branch 28), ULRIC R. CAETE (Presiding 1udge, Branch 25), AGUSTINE R. VESTIL (Presiding 1udge, Branch 56), HON. MTC 1UDGES TEMISTOCLES M. BOHOLST (Presiding 1udge, Branch 1), VICENTE C. FANILAG (1udge Designate, Branch 2), and WILFREDO A. DAGATAN (Presiding 1udge, Branch 3), all of Mandaue City, petitioners vs COMMISSION ON AUDIT, respondent. D E C I S I O N CORONA, 1.:chanroblesvirtuallawlibrary BeIore us is a petition Ior certiorari under Rule 64 to annul the decision[1] and resolution[2], dated September 21, 1995 and May 28, 1996, respectively, oI the respondent Commission on Audit (COA) aIIirming the notices oI the Mandaue City Auditor which diminished the monthly additional allowances received by the petitioner judges oI the Regional Trial Court (RTC) and Municipal Trial Court (MTC) stationed in Mandaue City. chanroblesvirtuallawlibrary The undisputed Iacts are as Iollows:chanroblesvirtuallawlibrary In 1986, the RTC and MTC judges oI Mandaue City started receiving monthly allowances oI P1,260 each through the yearly appropriation ordinance enacted by the Sangguniang Panlungsod oI the said city. In 1991, Mandaue City increased the amount to P1,500 Ior each judge. chanroblesvirtuallawlibrary On March 15, 1994, the Department oI Budget and Management (DBM) issued the disputed Local Budget Circular No. 55 (LBC 55) which provided that:chanroblesvirtuallawlibrary xxx xxx xxxchanroblesvirtuallawlibrary 2.3.2. In the light oI the authority granted to the local government units under the Local Government Code to provide Ior additional allowances and other beneIits to national government oIIicials and employees assigned in their locality, such additional allowances in the form of honorarium at rates not exceedin P1,000.00 in provinces and cities and P700.00 in municipalities may be ranted subject to the Iollowing conditions:chanroblesvirtuallawlibrary a) That the grant is not mandatory on the part oI the LGUs;chanroblesvirtuallawlibrary b) That all contractual and statutory obligations oI the LGU including the implementation oI R.A. 6758 shall have been Iully provided in the budget;chanroblesvirtuallawlibrary c) That the budgetary requirements/limitations under Section 324 and 325 oI R.A. 7160 should be satisIied and/or complied with; andchanroblesvirtuallawlibrary d) That the LGU has Iully implemented the devolution oI Iunctions/personnel in accordance with R.A. 7160.|3| (italics supplied)chanroblesvirtuallawlibrary xxx xxx xxxchanroblesvirtuallawlibrary The said circular likewise provided Ior its immediate eIIectivity without need oI publication:chanroblesvirtuallawlibrary 5.0 EFFECTIVITYchanroblesvirtuallawlibrary This Circular shall take eIIect immediately.chanroblesvirtuallawlibrary Acting on the DBM directive, the Mandaue City Auditor issued notices oI disallowance to herein petitioners, namely, Honorable RTC Judges Mercedes G. Dadole, Ulric R. Caete, Agustin R. Vestil, Honorable MTC Judges Temistocles M. Boholst, Vicente C. Fanilag and WilIredo A. Dagatan, in excess oI the amount authorized by LBC 55. Beginning October, 1994, the additional monthly allowances oI the petitioner judges were reduced to P1,000 each. They were also asked to reimburse the amount they received in excess oI P1,000 Irom April to September, 1994. chanroblesvirtuallawlibrary The petitioner judges Iiled with the OIIice oI the City Auditor a protest against the notices oI disallowance. But the City Auditor treated the protest as a motion Ior reconsideration and indorsed the same to the COA Regional OIIice No. 7. In turn, the COA Regional OIIice reIerred the motion to the head oIIice with a recommendation that the same be denied. chanroblesvirtuallawlibrary On September 21, 1995, respondent COA rendered a decision denying petitioners motion Ior reconsideration. The COA held that:chanroblesvirtuallawlibrary The issue to be resolved in the instant appeal is whether or not the City Ordinance oI Mandaue which provides a higher rate oI allowances to the appellant judges may prevail over that Iixed by the DBM under Local Budget Circular No. 55 dated March 15, 1994.chanroblesvirtuallawlibrary xxx xxx xxxchanroblesvirtuallawlibrary Applying the Ioregoing doctrine, appropriation ordinance oI local government units is subject to the organizational, budgetary and compensation policies oI budgetary authorities (COA 5 th Ind., dated March 17, 1994 re: Province oI Antique; COA letter dated May 17, 1994 re: Request oI Hon. Renato Leviste, Cong. 1 st Dist. Oriental Mindoro). In this regard, attention is invited to Administrative Order No. 42 issued on March 3, 1993 by the President oI the Philippines clariIying the role oI DBM in the compensation and classiIication oI local government positions under RA No. 7160 vis-avis the provisions oI RA No. 6758 in view oI the abolition oI the JCLGPA. Section 1 oI said Administrative Order provides that:chanroblesvirtuallawlibrary Section 1. The Department oI Budget and Management as the lead administrator oI RA No. 6758 shall, through its Compensation and Position ClassiIication Bureau, continue to have the Iollowing responsibilities in connection with the implementation oI the Local Government Code oI 1991: a) Provide guidelines on the classiIication oI local government positions and on the speciIic rates oI pay thereIore; b) Provide criteria and guidelines Ior the grant oI all allowances and additional Iorms oI compensation to local government employees; xxx. (underscoring supplied)chanroblesvirtuallawlibrary To operationalize the aIorecited presidential directive, DBM issued LBC No. 55, dated March 15, 1994, whose eIIectivity clause provides that:chanroblesvirtuallawlibrary xxx xxx xxxchanroblesvirtuallawlibrary 5.0 EFFECTIVITYchanroblesvirtuallawlibrary This Circular shall take eIIect immediately.chanroblesvirtuallawlibrary It is a well-settled rule that implementing rules and regulations promulgated by administrative or executive oIIicer in accordance with, and as authorized by law, has the Iorce and eIIect oI law or partake the nature oI a statute (Victorias Milling Co., Inc., vs. Social Security Commission, 114 Phil. 555, cited in Agpalos Statutory Construction, 2 nd Ed. P. 16; Justice Cruzs Phil. Political Law, 1984 Ed., p. 103; Espanol vs. Phil Veterans Administration, 137 SCRA 314; Antique Sawmills Inc. vs. Tayco, 17 SCRA 316).chanroblesvirtuallawlibrary xxx xxx xxxchanroblesvirtuallawlibrary There being no statutory basis to grant additional allowance to judges in excess oI P1,000.00 chargeable against the local government units where they are stationed, this Commission Iinds no substantial grounds or cogent reason to disturb the decision oI the City Auditor, Mandaue City, disallowing in audit the allowances in question. Accordingly, the above-captioned appeal oI the MTC and RTC Judges oI Mandaue City, insoIar as the same is not covered by Circular Letter No. 91-7, is hereby dismissed Ior lack oI merit.chanroblesvirtuallawlibrary xxx xxx xxx|4|chanroblesvirtuallawlibrary On November 27, 1995, Executive Judge Mercedes Gozo-Dadole, Ior and in behalI oI the petitioner judges, Iiled a motion Ior reconsideration oI the decision oI the COA. In a resolution dated May 28, 1996, the COA denied the motion. chanroblesvirtuallawlibrary Hence, this petition Ior certiorari by the petitioner judges, submitting the Iollowing questions Ior resolution: Ichanroblesvirtuallawlibrary HAS THE CITY OF MANDAUE STATUTORY AND CONSTITUTIONAL BASIS TO PROVIDE ADDITIONAL ALLOWANCES AND OTHER BENEFITS TO JUDGES STATIONED IN AND ASSIGNED TO THE CITY? IIchanroblesvirtuallawlibrary CAN AN ADMINISTRATIVE CIRCULAR OR GUIDELINE SUCH AS LOCAL BUDGET CIRCULAR NO. 55 RENDER INOPERATIVE THE POWER OF THE LEGISLATIVE BODY OF A CITY BY SETTING A LIMIT TO THE EXTENT OF THE EXERCISE OF SUCH POWER? IIIchanroblesvirtuallawlibrary HAS THE COMMISSION ON AUDIT CORRECTLY INTERPRETED LOCAL BUDGET CIRCULAR NO. 55 TO INCLUDE MEMBERS OF THE JUDICIARY IN FIXING THE CEILING OF ADDITIONAL ALLOWANCES AND BENEFITS TO BE PROVIDED TO JUDGES STATIONED IN AND ASSIGNED TO MANDAUE CITY BY THE CITY GOVERNMENT AT P1,000.00 PER MONTH NOTWITHSTANDING THAT THEY HAVE BEEN RECEIVING ALLOWANCES OF P1,500.00 MONTHLY FOR THE PAST FIVE YEARS? IVchanroblesvirtuallawlibrary IS LOCAL BUDGET CIRCULAR NO. 55 DATED MARCH 15, 1994 ISSUED BY THE DEPARTMENT OF BUDGET AND MANAGEMENT VALID AND ENFORCEABLE CONSIDERING THAT IT WAS NOT DULY PUBLISHED IN ACCODANCE WITH LAW?|5|chanroblesvirtuallawlibrary Petitioner judges argue that LBC 55 is void Ior inIringing on the local autonomy oI Mandaue City by dictating a uniIorm amount that a local government unit can disburse as additional allowances to judges stationed therein. They maintain that said circular is not supported by any law and thereIore goes beyond the supervisory powers oI the President. They Iurther allege that said circular is void Ior lack oI publication. chanroblesvirtuallawlibrary On the other hand, the yearly appropriation ordinance providing Ior additional allowances to judges is allowed by Section 458, par. (a)(1)|xi|, oI RA 7160, otherwise known as the Local Government Code oI 1991, which provides that:chanroblesvirtuallawlibrary Sec. 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body oI the city, shall enact ordinances, approve resolutions and appropriate Iunds Ior the general welIare oI the city and its inhabitants pursuant to Section 16 oI this Code and in the proper exercise oI the corporate powers oI the city as provided Ior under Section 22 oI this Code, and shall:chanroblesvirtuallawlibrary (1) Approve ordinances and pass resolutions necessary Ior an eIIicient and eIIective city government, and in this connection, shall: xxx xxx xxx (xi) hen the finances of the city overnment allow, provide for additional allowances and other benefits to fudes, prosecutors, public elementary and hih school teachers, and other national overnment officials stationed in or assined to the city, (italics supplied)chanroblesvirtuallawlibrary Instead oI Iiling a comment on behalI oI respondent COA, the Solicitor General Iiled a maniIestation supporting the position oI the petitioner judges. The Solicitor General argues that (1) DBM only enjoys the power to review and determine whether the disbursements oI Iunds were made in accordance with the ordinance passed by a local government unit while (2) the COA has no more than auditorial visitation powers over local government units pursuant to Section 348 oI RA 7160 which provides Ior the power to inspect at any time the Iinancial accounts oI local government units. chanroblesvirtuallawlibrary Moreover, the Solicitor General opines that the DBM and the respondent are only authorized under RA 7160 to promulgate a Budget Operations Manual Ior local government units, to improve and systematize methods, techniques and procedures employed in budget preparation, authorization, execution and accountability pursuant to Section 354 oI RA 7160. The Solicitor General points out that LBC 55 was not exercised under any oI the aIorementioned provisions. chanroblesvirtuallawlibrary Respondent COA, on the other hand, insists that the constitutional and statutory authority oI a city government to provide allowances to judges stationed therein is not absolute. Congress may set limitations on the exercise oI autonomy. It is Ior the President, through the DBM, to check whether these legislative limitations are being Iollowed by the local government units. chanroblesvirtuallawlibrary One such law imposing a limitation on a local government units autonomy is Section 458, par. (a) (1) |xi|, oI RA 7160, which authorizes the disbursement oI additional allowances and other beneIits to judges subfect to the condition that the finances of the city overnment should allow the same. Thus, DBM is merely enIorcing the condition oI the law when it sets a uniIorm maximum amount Ior the additional allowances that a city government can release to judges stationed therein. chanroblesvirtuallawlibrary Assuming aruendo that LBC 55 is void, respondent COA maintains that the provisions oI the yearly approved ordinance granting additional allowances to judges are still prohibited by the appropriation laws passed by Congress every year. COA argues that Mandaue City gets the Iunds Ior the said additional allowances oI judges Irom the Internal Revenue Allotment (IRA). But the General Appropriations Acts oI 1994 and 1995 do not mention the disbursement oI additional allowances to judges as one oI the allowable uses oI the IRA. Hence, the provisions oI said ordinance granting additional allowances, taken Irom the IRA, to herein petitioner judges are void Ior being contrary to law. chanroblesvirtuallawlibrary To resolve the instant petition, there are two issues that we must address: (1) whether LBC 55 oI the DBM is void Ior going beyond the supervisory powers oI the President and Ior not having been published and (2) whether the yearly appropriation ordinance enacted by the City oI Mandaue that provides Ior additional allowances to judges contravenes the annual appropriation laws enacted by Congress. chanroblesvirtuallawlibrary We rule in Iavor oI the petitioner judges.chanroblesvirtuallawlibrary On the Iirst issue, we declare LBC 55 to be null and void. chanroblesvirtuallawlibrary We recognize that, although our Constitution[6] guarantees autonomy to local government units, the exercise oI local autonomy remains subject to the power oI control by Congress and the power oI supervision by the President. Section 4 oI Article X oI the 1987 Philippine Constitution provides that:chanroblesvirtuallawlibrary Sec. 4. The President oI the Philippines shall exercise general supervision over local governments. x x xchanroblesvirtuallawlibrary In Pimentel vs. uirre[7], we deIined the supervisory power oI the President and distinguished it Irom the power oI control exercised by Congress. Thus:chanroblesvirtuallawlibrary This provision (Section 4 oI Article X oI the 1987 Philippine Constitution) has been interpreted to exclude the power oI control. In ondano v. Silvosa, |i||5| the Court contrasted the President's power oI supervision over local government oIIicials with that oI his power oI control over executive oIIicials oI the national government. It was emphasized that the two terms -- supervision and control -- diIIered in meaning and extent. The Court distinguished them as Iollows:chanroblesvirtuallawlibrary "x x x In administrative law, supervision means overseeing or the power or authority oI an oIIicer to see that subordinate oIIicers perIorm their duties. II the latter Iail or neglect to IulIill them, the Iormer may take such action or step as prescribed by law to make them perIorm their duties. Control, on the other hand, means the power oI an oIIicer to alter or modiIy or nulliIy or set aside what a subordinate oIIicer ha|s| done in the perIormance oI his duties and to substitute the judgment oI the Iormer Ior that oI the latter." |ii||6| chanroblesvirtuallawlibrary In %aule v. Santos, |iii||7| we Iurther stated that the ChieI Executive wielded no more authority than that oI checking whether local governments or their oIIicials were perIorming their duties as provided by the Iundamental law and by statutes. He cannot interIere with local governments, so long as they act within the scope oI their authority. "Supervisory power, when contrasted with control, is the power oI mere oversight over an inIerior body; it does not include any restraining authority over such body," |iv||8| we said.chanroblesvirtuallawlibrary In a more recent case, Drilon v. Lim, |v||9| the diIIerence between control and supervision was Iurther delineated. OIIicers in control lay down the rules in the perIormance or accomplishment oI an act. II these rules are not Iollowed, they may, in their discretion, order the act undone or redone by their subordinates or even decide to do it themselves. On the other hand, supervision does not cover such authority. Supervising oIIicials merely see to it that the rules are Iollowed, but they themselves do not lay down such rules, nor do they have the discretion to modiIy or replace them. II the rules are not observed, they may order the work done or redone, but only to conIorm to such rules. They may not prescribe their own manner oI execution oI the act. They have no discretion on this matter except to see to it that the rules are Iollowed.chanroblesvirtuallawlibrary Under our present system oI government, executive power is vested in the President. |vi||10| The members oI the Cabinet and other executive oIIicials are merely alter egos. As such, they are subject to the power oI control oI the President, at whose will and behest they can be removed Irom oIIice; or their actions and decisions changed, suspended or reversed. |vii||11| In contrast, the heads oI political subdivisions are elected by the people. Their sovereign powers emanate Irom the electorate, to whom they are directly accountable. By constitutional Iiat, they are subject to the Presidents supervision only, not control, so long as their acts are exercised within the sphere oI their legitimate powers. By the same token, the President may not withhold or alter any authority or power given them by the Constitution and the law.chanroblesvirtuallawlibrary Clearly then, the President can only interIere in the aIIairs and activities oI a local government unit iI he or she Iinds that the latter has acted contrary to law. This is the scope oI the Presidents supervisory powers over local government units. Hence, the President or any oI his or her alter eos cannot interIere in local aIIairs as long as the concerned local government unit acts within the parameters oI the law and the Constitution. Any directive thereIore by the President or any oI his or her alter eos seeking to alter the wisdom oI a law-conIorming judgment on local aIIairs oI a local government unit is a patent nullity because it violates the principle oI local autonomy and separation oI powers oI the executive and legislative departments in governing municipal corporations.chanroblesvirtuallawlibrary Does LBC 55 go beyond the law it seeks to implement? Yes. chanroblesvirtuallawlibrary LBC 55 provides that the additional monthly allowances to be given by a local government unit should not exceed P1,000 in provinces and cities and P700 in municipalities. Section 458, par. (a)(1)(xi), oI RA 7160, the law that supposedly serves as the legal basis oI LBC 55, allows the grant oI additional allowances to judges when the Iinances oI the city government allow. The said provision does not authorize setting a deIinite maximum limit to the additional allowances granted to judges. Thus, we need not belabor the point that the Iinances oI a city government may allow the grant oI additional allowances higher than P1,000 iI the revenues oI the said city government exceed its annual expenditures. Thus, to illustrate, a city government with locally generated annual revenues oI P40 million and expenditures oI P35 million can aIIord to grant additional allowances oI more than P1,000 each to, say, ten judges inasmuch as the Iinances oI the city can aIIord it. chanroblesvirtuallawlibrary Setting a uniIorm amount Ior the grant oI additional allowances is an inappropriate way oI enIorcing the criterion Iound in Section 458, par. (a)(1)(xi), oI RA 7160. The DBM over-stepped its power oI supervision over local government units by imposing a prohibition that did not correspond with the law it sought to implement. In other words, the prohibitory nature oI the circular had no legal basis. chanroblesvirtuallawlibrary Furthermore, LBC 55 is void on account oI its lack oI publication, in violation oI our ruling in %aada vs. %uvera[8] where we held that:chanroblesvirtuallawlibrary xxx. Administrative rules and regulations must also be published iI their purpose is to enIorce or implement existing law pursuant to a valid delegation.chanroblesvirtuallawlibrary Interpretative regulations and those merely internal in nature, that is, regulating only the personnel oI an administrative agency and the public, need not be published. Neither is publication required oI the so-called letters oI instruction issued by administrative superiors concerning the rules or guidelines to be Iollowed by their subordinates in the perIormance oI their duties. chanroblesvirtuallawlibrary Respondent COA claims that publication is not required Ior LBC 55 inasmuch as it is merely an interpretative regulation applicable to the personnel oI an LGU. We disagree. In De Jesus vs. Commission on udit[9] where we dealt with the same issue, this Court declared void, Ior lack oI publication, a DBM circular that disallowed payment oI allowances and other additional compensation to government oIIicials and employees. In reIuting respondent COAs argument that said circular was merely an internal regulation, we ruled that:chanroblesvirtuallawlibrary On the need Ior publication oI subject DBM-CCC No. 10, we rule in the aIIirmative. Following the doctrine enunciated in %aada v. %uvera, publication in the OIIicial Gazette or in a newspaper oI general circulation in the Philippines is required since DBM-CCC No. 10 is in the nature of an administrative circular the purpose of which is to enforce or implement an existing law. Stated diIIerently, to be eIIective and enIorceable, DBM-CCC No. 10 must go through the requisite publication in the OIIicial Gazette or in a newspaper oI general circulation in the Philippines. chanroblesvirtuallawlibrary In the present case under scrutiny, it is decisively clear that DBM-CCC No. 10, which completely disallows payment oI allowances and other additional compensation to government oIIicials and employees, starting November 1, 1989, is not a mere interpretative or internal regulation. It is something more than that. And why not, when it tends to deprive government workers oI their allowance and additional compensation sorely needed to keep body and soul together. At the very least, before the said circular under attack may be permitted to substantially reduce their income, the government officials and employees concerned should be apprised and alerted by the publication of subject circular in the Official Gazette or in a newspaper of general circulation in the Philippines to the end that they be given amplest opportunity to voice out whatever opposition they may have, and to ventilate their stance on the matter. This approach is more in keeping with democratic precepts and rudiments of fairness and transparency (emphasis supplied)chanroblesvirtuallawlibrary In Philippine International %radin Corporation vs. Commission on udit[10], we again declared the same circular as void, Ior lack oI publication, despite the Iact that it was re-issued and then submitted Ior publication. Emphasizing the importance oI publication to the eIIectivity oI a regulation, we therein held that:chanroblesvirtuallawlibrary It has come to our knowledge that DBM-CCC No. 10 has been re- issued in its entirety and submitted Ior publication in the OIIicial Gazette per letter to the National Printing OIIice dated March 9, 1999. Would the subsequent publication thereoI cure the deIect and retroact to the time that the above-mentioned items were disallowed in audit?chanroblesvirtuallawlibrary The answer is in the negative, precisely Ior the reason that publication is required as a condition precedent to the eIIectivity oI a law to inIorm the public oI the contents oI the law or rules and regulations beIore their rights and interests are aIIected by the same. From the time the COA disallowed the expenses in audit up to the Iiling oI herein petition the subject circular remained in legal limbo due to its non-publication. As was stated in %aada v. %uvera, prior publication oI laws beIore they become eIIective cannot be dispensed with, Ior the reason that it would deny the public knowledge oI the laws that are supposed to govern it.|11|chanroblesvirtuallawlibrary We now resolve the second issue oI whether the yearly appropriation ordinance enacted by Mandaue City providing Ior Iixed allowances Ior judges contravenes any law and should thereIore be struck down as null and void. chanroblesvirtuallawlibrary According to respondent COA, even iI LBC 55 were void, the ordinances enacted by Mandaue City granting additional allowances to the petitioner judges would still (be) bereIt oI legal basis Ior want oI a lawIul source oI Iunds considering that the IRA cannot be used for such purposes. Respondent COA showed that Mandaue Citys Iunds consisted oI locally generated revenues and the IRA. From 1989 to 1995, Mandaue Citys yearly expenditures exceeded its locally generated revenues, thus resulting in a deIicit. During all those years, it was the IRA that enabled Mandaue City to incur a surplus. Respondent avers that Mandaue City used its IRA to pay Ior said additional allowances and this violated paragraph 2 oI the Special Provisions, page 1060, oI RA 7845 (The General Appropriations Act oI 1995)[12] and paragraph 3 oI the Special Provision, page 1225, oI RA 7663 (The General Appropriations Act oI 1994)[13] which speciIically identiIied the objects oI expenditure oI the IRA. Nowhere in said provisions oI the two budgetary laws does it say that the IRA can be used Ior additional allowances oI judges. Respondent COA thus argues that the provisions in the ordinance providing Ior such disbursement are against the law, considering that the grant oI the subject allowances is not within the speciIied use allowed by the aIoresaid yearly appropriations acts. chanroblesvirtuallawlibrary We disagree.chanroblesvirtuallawlibrary Respondent COA Iailed to prove that Mandaue City used the IRA to spend Ior the additional allowances oI the judges. There was no evidence submitted by COA showing the breakdown oI the expenses oI the city government and the Iunds used Ior said expenses. All the COA presented were the amounts expended, the locally generated revenues, the deIicit, the surplus and the IRA received each year. Aside Irom these items, no data or Iigures were presented to show that Mandaue City deducted the subject allowances Irom the IRA. In other words, just because Mandaue Citys locally generated revenues were not enough to cover its expenditures, this did not mean that the additional allowances oI petitioner judges were taken Irom the IRA and not Irom the citys own revenues. chanroblesvirtuallawlibrary Moreover, the DBM neither conducted a Iormal review nor ordered a disapproval oI Mandaue Citys appropriation ordinances, in accordance with the procedure outlined by Sections 326 and 327 oI RA 7160 which provide that:chanroblesvirtuallawlibrary Section 326. Review oI Appropriation Ordinances oI Provinces, Highly Urbanized Cities, Independent Component Cities, and Municipalities within the Metropolitan Manila Area. The Department oI Budget and Management shall review ordinances authorizing the annual or supplemental appropriations oI provinces, highly-urbanized cities, independent component cities, and municipalities within the Metropolitan Manila Area in accordance with the immediately succeeding Section.chanroblesvirtuallawlibrary Section 327. Review oI Appropriation Ordinances oI Component Cities and Municipalities.- The sangguninang panlalawigan shall review the ordinance authorizing annual or supplemental appropriations oI component cities and municipalities in the same manner and within the same period prescribed Ior the review oI other ordinances. chanroblesvirtuallawlibrary If within ninety (90) days from receipt of copies of such ordinance, the sangguniang panlalawigan takes no action thereon, the same shall be deemed to have been reviewed in accordance with law and shall continue to be in full force and effect. (emphasis supplied) chanroblesvirtuallawlibrary Within 90 days Irom receipt oI the copies oI the appropriation ordinance, the DBM should have taken positive action. Otherwise, such ordinance was deemed to have been properly reviewed and deemed to have taken eIIect. Inasmuch as, in the instant case, the DBM did not Iollow the appropriate procedure Ior reviewing the subject ordinance oI Mandaue City and allowed the 90-day period to lapse, it can no longer question the legality oI the provisions in the said ordinance granting additional allowances to judges stationed in the said city. chanroblesvirtuallawlibrary WHEREFORE, the petition is hereby GRANTED, and the assailed decision and resolution, dated September 21, 1995 and May 28, 1996, respectively, oI the Commission on Audit are hereby set aside. chanroblesvirtuallawlibrary No costs. chanroblesvirtuallawlibrary SO ORDERED.chanroblesvirtuallawlibrary avide r C Bellosillo Jitug Mendoza Panganiban Quisumbing Ynares-Santiago Sandoval-Cutierrez Carpio ustria- Martinez Carpio-Morales and Callejo Sr concurchanroblesvirtuallawlibrary Puno on official businesschanroblesvirtuallawlibrary zcuna on leave
EN BANC
LEAGUE OF CITIES OF THE G.R. No. 176951 PHILIPPINES (LCP) represented by LCP National President JERRY P. TREAS, CITY OF ILOILO represented by MAYOR JERRY P. TREAS, CITY OF CALBAYOG represented by MAYOR MEL SENEN S. SARMIENTO, and JERRY P. TREAS in his personal capacity as taxpayer, Petitioners,
- versus - COMMISSION ON ELECTIONS; MUNICIPALITY OF BAYBAY, PROVINCE OF LEYTE; MUNICIPALITY OF BOGO, PROVINCE OF CEBU; MUNICIPALITY OF CATBALOGAN, PROVINCE OF WESTERN SAMAR; MUNICIPALITY OF TANDAG, PROVINCE OF SURIGAO DEL SUR; MUNICIPALITY OF BORONGAN, PROVINCE OF EASTERN SAMAR; and MUNICIPALITY OF TAYABAS, PROVINCE OF QUEZON, Respondents.
CITY OF TARLAC, CITY OF SANTIAGO, CITY OF IRIGA, CITY OF LIGAO, CITY OF LEGAZPI, CITY OF TAGAYTAY, CITY OF SURIGAO, CITY OF BAYAWAN, CITY OF SILAY, CITY OF GENERAL SANTOS, CITY OF ZAMBOANGA, CITY OF GINGOOG, CITY OF CAUAYAN, CITY OF PAGADIAN, CITY OF SAN CARLOS, CITY OF SAN FERNANDO, CITY OF TACURONG, CITY OF TANGUB, CITY OF OROQUIETA, CITY OF URDANETA, CITY OF VICTORIAS, CITY OF CALAPAN, CITY OF HIMAMAYLAN, CITY OF BATANGAS, CITY OF BAIS, CITY OF CADIZ, and CITY OF TAGUM, Petitioners-In-Intervention. x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
LEAGUE OF CITIES OF THE G.R. No. 177499 PHILIPPINES (LCP) represented by LCP National President JERRY P. TREAS, CITY OF ILOILO represented by MAYOR JERRY P. TREAS, CITY OF CALBAYOG represented by MAYOR MEL SENEN S. SARMIENTO, and JERRY P. TREAS in his personal capacity as taxpayer, Petitioners,
- versus -
COMMISSION ON ELECTIONS; MUNICIPALITY OF LAMITAN, PROVINCE OF BASILAN; MUNICIPALITY OF TABUK, PROVINCE OF KALINGA; MUNICIPALITY OF BAYUGAN, PROVINCE OF AGUSAN DEL SUR; MUNICIPALITY OF BATAC, PROVINCE OF ILOCOS NORTE; MUNICIPALITY OF MATI, PROVINCE OF DAVAO ORIENTAL; and MUNICIPALITY OF GUIHULNGAN, PROVINCE OF NEGROS ORIENTAL, Respondents.
CITY OF TARLAC, CITY OF SANTIAGO, CITY OF IRIGA, CITY OF LIGAO, CITY OF LEGAZPI, CITY OF TAGAYTAY, CITY OF SURIGAO, CITY OF BAYAWAN, CITY OF SILAY, CITY OF GENERAL SANTOS, CITY OF ZAMBOANGA, CITY OF GINGOOG, CITY OF CAUAYAN, CITY OF PAGADIAN, CITY OF SAN CARLOS, CITY OF SAN FERNANDO, CITY OF TACURONG, CITY OF TANGUB, CITY OF OROQUIETA, CITY OF URDANETA, CITY OF VICTORIAS, CITY OF CALAPAN, CITY OF HIMAMAYLAN, CITY OF BATANGAS, CITY OF BAIS, CITY OF CADIZ, and CITY OF TAGUM, Petitioners-In-Intervention. x - - - - - - - - - - - - - - - - - - - - - - - - - - --x
LEAGUE OF CITIES OF THE G.R. No. 178056 PHILIPPINES (LCP) represented by LCP National President Present: JERRY P. TREAS, CITY OF ILOILO represented by CORONA, C.J., MAYOR JERRY P. TREAS, CARPIO, CITY OF CALBAYOG CARPIO MORALES, represented by MAYOR VELASCO, JR., MEL SENEN S. SARMIENTO, NACHURA, and JERRY P. TREAS in his LEONARDO-DE CASTRO, personal capacity as taxpayer,BRION, Petitioners, PERALTA, BERSAMIN, DEL CASTILLO, - versus - ABAD, VILLARAMA, JR., PEREZ, MENDOZA, and COMMISSION ON ELECTIONS; SERENO, JJ. MUNICIPALITY OF CABADBARAN, PROVINCE OF AGUSAN DEL NORTE; MUNICIPALITY OF CARCAR, PROVINCE OF CEBU; and MUNICIPALITY OF EL SALVADOR, MISAMIS ORIENTAL, Respondents.
CITY OF TARLAC, CITY OF SANTIAGO, CITY OF IRIGA, CITY OF LIGAO, CITY OF LEGAZPI, CITY OF TAGAYTAY, CITY OF SURIGAO, CITY OF BAYAWAN, CITY OF SILAY, CITY OF GENERAL SANTOS, CITY OF ZAMBOANGA, CITY OF GINGOOG, CITY OF CAUAYAN, CITY OF PAGADIAN, CITY OF SAN CARLOS, CITY OF SAN FERNANDO, CITY OF TACURONG, CITY OF TANGUB, CITY OF OROQUIETA, CITY OF URDANETA, CITY OF VICTORIAS, CITY OF CALAPAN, CITY OF HIMAMAYLAN, CITY OF BATANGAS, CITY OF BAIS, CITY OF CADIZ, and Promulgated: CITY OF TAGUM, Petitioners-In-Intervention. August 24, 2010 x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
R E S O L U T I O N
CARPIO, .: For resolution are (1) the ad cautelam motion Ior reconsideration and (2) motion to annul the Decision oI 21 December 2009 Iiled by petitioners League oI Cities oI the Philippines, et al. and (3) the ad cautelam motion Ior reconsideration Iiled by petitioners-in-intervention Batangas City, Santiago City, Legazpi City, Iriga City, Cadiz City, and Oroquieta City. On 18 November 2008, the Supreme Court En Banc, by a majority vote, struck down the subject 16 Cityhood Laws Ior violating Section 10, Article X oI the 1987 Constitution and the equal protection clause. On 31 March 2009, the Supreme Court En Banc, again by a majority vote, denied the respondents' Iirst motion Ior reconsideration. On 28 April 2009, the Supreme Court En Banc, by a split vote, denied the respondents' second motion Ior reconsideration. Accordingly, the 18 November 2008 Decision became Iinal and executory and was recorded, in due course, in the Book oI Entries oI Judgments on 21 May 2009. However, aIter the Iinality oI the 18 November 2008 Decision and without any exceptional and compelling reason, the Court En Banc unprecedentedly reversed the 18 November 2008 Decision by upholding the constitutionality oI the Cityhood Laws in the Decision oI 21 December 2009.
Upon reexamination, the Court Iinds the motions Ior reconsideration meritorious and accordingly reinstates the 18 November 2008 Decision declaring the 16 Cityhood Laws unconstitutional.
. Jiolation of Section 10, rticle X of the Constitution Section 10, Article X oI the 1987 Constitutionprovides: No province, city, municipality, or barangay shall be created, divided, merged, abolished or its boundary substantially altered, except in accordance with the criteria established in the local government code and subject to approval by a majority oI the votes cast in a plebiscite in the political units directly aIIected. (Emphasis supplied)
The Constitution is clear. The creation oI local government units must Iollow the criteria established in the Local Government Code and not in any other law. There is only one Local Government Code. 1 The Constitution requires Congress to stipulate in the Local Government Code all the criteria necessary Ior the creation oI a city, including the conversion oI a municipality into a city. Congress cannot write such criteria in any other law, like the Cityhood Laws.
The clear intent oI the Constitution is to insure that the creation oI cities and other political units must Iollow the same uniform, non-discriminatory criteria found solely in the Local Government Code. Any derogation or deviation Irom the criteria prescribed in the Local Government Code violates Section 10, Article X oI the Constitution.
RA 9009 amended Section 450 oI the Local Government Code to increase the income requirement Irom P20 million to P100 million Ior the creation oI a city. This took effect on 30 1une 2001. Hence, from that moment theLocal Government Code required that any municipality desiring to become a city must satisfy the P100 million income requirement. Section 450 oI the Local Government Code, as amended by RA 9009, does not contain any exemption Irom this income requirement.
In enacting RA 9009, Congress did not grant any exemption to respondent municipalities, even though their cityhood bills were pending in Congress when Congress passed RA 9009. The Cityhood Laws, all enacted after the eIIectivity oI RA 9009, explicitly exempt respondent municipalities Irom the increased income requirement in Section 450 oI the Local Government Code, as amended by RA 9009. Such exemption clearly violates Section 10, Article X of the Constitution and is thus patently unconstitutional. To be valid, such exemption must be written in the Local Government Code and not in any other law, including the Cityhood Laws.
RA 9009 is not a law different from the Local Government Code. Section 1 of RA 9009 pertinently provides: "Section 450 of Republic Act No. 7160, otherwise known as the Local Government Code of 1991, is hereby amended to read as follows: x x x." RA 9009 amended Section 450 of the Local Government Code. RA 9009, by amending Section 450 of the Local Government Code, embodies the new and prevailing Section 450 of the Local Government Code. Considering the Legislature's primary intent to curtail "the mad rush of municipalities wanting to be converted into cities," RA 9009 increased the income requirement for the creation of cities. To repeat, RA 9009 is not a law different from the Local Government Code, as it expressly amended Section 450 of the Local Government Code.
The language of RA 9009 is plain, simple, and clear. Nothing is unintelligible or ambiguous; not a single word or phrase admits of two or more meanings. RA 9009 amended Section 450 of the Local Government Code of 1991 by increasing the income requirement for the creation of cities. There are no exemptions from this income requirement. Since the law is clear, plain and unambiguous that any municipality desiring to convert into a city must meet the increased income requirement, there is no reason to go beyond the letter of the law. Moreover, where the law does not make an exemption, the Court should not create one. 2 cIa
B Operative Fact octrine Under the operative fact doctrine, the law is recognized as unconstitutional but the effects of the unconstitutional law, prior to its declaration of nullity, may be left undisturbed as a matter of equity and fair play. In fact, the invocation of the operative fact doctrine is an admission that the law is unconstitutional.
However, the minority's novel theory, invoking the operative fact doctrine, is that the enactment of the Cityhood Laws and the functioning of the 16 municipalities as new cities with new sets of officials and employees operate to contitutionalize the unconstitutional Cityhood Laws. This novel theory misapplies the operative fact doctrine and sets a gravely dangerous precedent.
Under the minority's novel theory, an unconstitutional law, if already implemented prior to its declaration of unconstitutionality by the Court, can no longer be revoked and its implementation must be continued despite being unconstitutional. This view will open the floodgates to the wanton enactment of unconstitutional laws and a mad rush for their immediate implementation before the Court can declare them unconstitutional. This view is an open invitation to serially violate the Constitution, and be quick about it, lest the violation be stopped by the Court.
The operative fact doctrine is a rule of equity. As such, it must be applied as an exception to the general rule that an unconstitutional law produces no effects. It can never be invoked to validate as constitutional an unconstitutional act. In Planters Products Inc v Fertiphil Corporation, 3 cIa the Court stated:
The general rule is that an unconstitutional law is void. It produces no rights, imposes no duties and affords no protection. It has no legal effect. It is, in legal contemplation, inoperative as if it has not been passed. Being void, Fertiphil is not required to pay the levy. All levies paid should be refunded in accordance with the general civil code principle against unjust enrichment. The general rule is supported by Article 7 of the Civil Code, which provides: ART. 7. Laws are repealed only by subsequent ones, and their violation or non- observance shall not be excused by disuse or custom or practice to the contrary. When the courts declare a law to be inconsistent with the Constitution, the former shall be void and the latter shall govern. The doctrine of operative fact, as an exception to the general rule, only applies as a matter of equity and fair play. It nullifies the effects of an unconstitutional law by recognizing that the existence of a statute prior to a determination of unconstitutionality is an operative fact and may have consequences which cannot always be ignored. The past cannot always be erased by a new judicial declaration. The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those who have relied on the invalid law. Thus, it was applied to a criminal case when a declaration of unconstitutionality would put the accused in double jeopardy or would put in limbo the acts done by a municipality in reliance upon a law creating it. (mphasis supplied)
The operative fact doctrine never validates or constitutionalizes an unconstitutional law. Under the operative fact doctrine, the unconstitutional law remains unconstitutional, but the effects of the unconstitutional law, prior to its judicial declaration of nullity, may be left undisturbed as a matter of equity and fair play. In short, the operative fact doctrine affects or modifies only the effects of the unconstitutional law, not the unconstitutional law itself.
Thus, applying the operative fact doctrine to the present case, the Cityhood Laws remain unconstitutional because they violate Section 10, Article X of the Constitution. However, the effects of the implementation of the Cityhood Laws prior to the declaration of their nullity, such as the payment of salaries and supplies by the "new cities" or their issuance of licenses or execution of contracts, may be recognized as valid and effective. This does not mean that the Cityhood Laws are valid for they remain void. Only the effects of the implementation of these unconstitutional laws are left undisturbed as a matter of equity and fair play to innocent people who may have relied on the presumed validity of the Cityhood Laws prior to the Court's declaration of their unconstitutionality.
C 6ual Protection Clause
As the Court held in the 18 November 2008 Decision, there is no substantial distinction between municipalities with pending cityhood bills in the 11 th Congress and municipalities that did not have pending bills. The mere pendency of a cityhood bill in the 11 th Congress is not a material difference to distinguish one municipality from another for the purpose of the income requirement. The pendency of a cityhood bill in the 11 th Congress does not affect or determine the level of income of a municipality. Municipalities with pending cityhood bills in the 11 th
Congress might even have lower annual income than municipalities that did not have pending cityhood bills. In short, the classification criterion mere pendency of a cityhood bill in the 11 th Congress is not rationally related to the purpose of the law which is to prevent fiscally non-viable municipalities from converting into cities.
Moreover, the Iact oI pendency oI a cityhood bill in the 11 th
Congress limits the exemption to a speciIic condition existing at the time oI passage oI RA 9009. That speciIic condition will never happen again. This violates the requirement that a valid classiIication must not be limited to existing conditions only. In Iact, the minority concedes that "the conditions (pendency oI the cityhood bills) adverted to can no longer be repeated."
Further, the exemption provision in the Cityhood Laws gives the 16 municipalities a unique advantage based on an arbitrary date the Iiling oI their cityhood bills beIore the end oI the 11 th Congress - as against all other municipalities that want to convert into cities aIter the eIIectivity oI RA 9009.
In addition, limiting the exemption only to the 16 municipalities violates the requirement that the classiIication must apply to all similarly situated. Municipalities with the same income as the 16 respondent municipalities cannot convert into cities, while the 16 respondent municipalities can. Clearly, as worded, the exemption provision Iound in the Cityhood Laws, even iI it were written in Section 450 oI the Local Government Code, would still be unconstitutional Ior violation oI the equal protection clause.
%ie-Jote on a Motion for Reconsideration Section 7, Rule 56 oI the Rules oI Court provides:
SEC. 7. Procedure if opinion is equally divided. - Where the court en banc is equally divided in opinion, or the necessary majority cannot be had, the case shall again be deliberated on, and iI aIter such deliberation no decision is reached, the original action commenced in the court shall be dismissed; in appealed cases, the judgment or order appealed Irom shall stand aIIirmed; and on all incidental matters, the petition or motion shall be denied. (Emphasis supplied)
The En Banc Resolution oI 26 January 1999 in A.M. No. 99-1-09-SC, reads: A MOTION FOR THE CONSIDERATION OF A D E C I S I O N OR RESOLUTION OF THE COURT EN BNC OR OF A DIVISION MAY BE GRANTED UPON A VOTE OF A MAJORITY OF THE MEMBERS OF THE EN BNC OR OF A DIVISION, AS THE CASE MAY BE, WHO ACTUALLY TOOK PART IN THE DELIBERATION OF THE MOTION. IF THE VOTING RESULTS IN A TIE, THE MOTION FOR RECONSIDERATION IS DEEMED DENIED. (Emphasis supplied)
The clear and simple language oI the clariIicatory en banc Resolution requires no Iurther explanation. II the voting oI the Court en banc results in a tie, the motion Ior reconsideration is deemed denied. The Court's prior majority action on the main decision stands aIIirmed. 4 cIa This clariIicatory Resolution applies to all cases heard by the Court en banc, which includes not only cases involving the constitutionality oI a law, but also, as expressly stated in Section 4(2), Article VIII oI the Constitution, "all other cases which under the Rules oI Court are required to be heard en banc."
The 6-6 tie-vote by the Court en banc on the second motion Ior reconsideration necessarily resulted in the denial oI the second motion Ior reconsideration. Since the Court was evenly divided, there could be no reversal oI the 18 November 2008 Decision, for a tie-vote cannot result in any court order or directive. 5 cIa The judgment stands in Iull Iorce. 6 cIa Undeniably, the 6-6 tie-vote did not overrule the prior majority en banc Decision oI 18 November 2008, as well as the prior majority en banc Resolution oI 31 March 2009 denying reconsideration. The tie-vote on the second motion Ior reconsideration is not the same as a tie-vote on the main decision where there is no prior decision. Here, the tie-vote plainly signiIies that there is no majority to overturn the prior 18 November 2008 Decision and 31 March 2009 Resolution, and thus the second motion Ior reconsideration must be denied.
Further, the tie-vote on the second motion Ior reconsideration did not mean that the present cases were leIt undecided because there remain the Decision oI 18 November 2008 and the Resolution oI 31 March 2009 where a majority oI the Court en banc concurred in declaring the unconstitutionality oI the sixteen Cityhood Laws. In short, the 18 November 2008 Decision and the 31 March 2009 Resolution, which were both reached with the concurrence oI a majority oI the Court en banc, are not reconsidered but stand aIIirmed. 7 These prior majority actions oI the Court en banc can only be overruled by a new majority vote, not a tie-vote because a tie-vote cannot overrule a prior aIIirmative action.
The denial, by a split vote, oI the second motion Ior reconsideration inevitably rendered the 18 November 2008 Decision Iinal. In Iact, in its Resolution oI 28 April 2009, denying the second motion Ior reconsideration, the Court en banc reiterated that no Iurther pleadings shall be entertained and stated that entry oI judgment be made in due course.
The dissenting opinion stated that "a deadlocked vote oI six is not a majority and a non-majority does not constitute a rule with precedential value." 8
Indeed, a tie-vote is a non-majority - a non-majority which cannot overrule a prior aIIirmative action, that is the 18 November 2008 Decision striking down the Cityhood Laws. In short, the 18 November 2008 Decision stands aIIirmed. And assuming a non-majority lacks any precedential value, the 18 November 2008 Decision, which was unreversed as a result oI the tie-vote on the respondents' second motion Ior reconsideration, nevertheless remains binding on the parties. 9
Conclusion
Section 10, Article X oI the Constitution expressly provides that "no x x x city shall be created x x x except in accordance with the criteria established in the local government code." This provision can only be interpreted in one way, that is, all the criteria Ior the creation oI cities must be embodied exclusively in the Local Government Code. In this case, the Cityhood Laws, which are unmistakably laws other than the Local Government Code, provided an exemption Irom the increased income requirement Ior the creation oI cities under Section 450 oI the Local Government Code, as amended by RA 9009. Clearly, the Cityhood Laws contravene the letter and intent oI Section 10, Article X oI the Constitution.
Adhering to the explicit prohibition in Section 10, Article X oI the Constitution does not cripple Congress' power to make laws. In Iact, Congress is not prohibited Irom amending the Local Government Code itselI, as what Congress did by enacting RA 9009. Indisputably, the act oI amending laws comprises an integral part oI the Legislature's law-making power. The unconstitutionality oI the Cityhood Laws lies in the Iact that Congress provided an exemption contrary to the express language oI the Constitution that "|n|o x x x city x x x shall be created except in accordance with the criteria established in the local government code."In other words, Congress exceeded and abused its law-making power, rendering the challenged Cityhood Laws void Ior being violative oI the Constitution.
WHEREFORE, we GRANT the motions Ior reconsideration oI the 21 December 2009 Decision and REINSTATE the 18 November 2008 Decision declaring UNCONSTITUTIONAL the Cityhood Laws, namely: Republic Act Nos. 9389, 9390, 9391, 9392, 9393, 9394, 9398, 9404, 9405, 9407, 9408, 9409, 9434, 9435, 9436, and 9491.
We NOTE petitioners' motion to annul the Decision oI 21 December 2009.
SO ORDERED.
N BANC G.R. No. 130775.September 27, 2004] THE NATIONAL LIGA NG MGA BARANGAY, represented by ALEX L. DAVID in his capacity as National President and for his own Person, President ALEX L. DAVID, Petitioners vs HON. VICTORIA ISABEL A. PAREDES, Presiding 1udge, Regional Trial Court, Branch 124, Caloocan City, and THE DEPARTMENT OF INTERIOR and LOCAL GOVERNMENT, represented the HON. SECRETARY ROBERT Z. BARBERS and MANUEL A. RAYOS, respondents G.R. No.131939.September 27, 2004] LEANDRO YANGOT, BONIFACIO LACWASAN and BONY TACIO, Petitioners vs DILG Secretary ROBERT Z. BARBERS and DILG Undersecretary MANUEL SANCHEZ, Respondents D E C I S I O N Tinga : chanroblesvirtuallawlibrary At bottom, the present petition inquires into the essential nature of the Liga ng mga Barangay and questions the extent of the power of Secretary of the Department of Interior and Local Government (DILG), as alter ego of the President.More immediately, the petition disputes the validity of the appointment of the DILG as the interim caretaker of the Liga ng mga Barangaychanroblesvirtuallawlibrary On 11 1une 1997, private respondent Manuel A. Rayos as petitioner therein], Punong Barangay of Barangay 52, District II, Zone 5, District II, Caloocan City, filed a petition for prohibition and mandamus, with prayer for a writ of preliminary injunction and/or temporary restraining order and damages before the Regional Trial Court (RTC) of Caloocan,1] alleging that respondent therein Alex L. David now petitioner], Punong Barangay of Barangay 77, Zone 7, Caloocan City and then president of the Liga Chapter of Caloocan City and of the Liga ng mga Barangay National Chapter, committed certain irregularities in the notice, venue and conduct of the proposed synchronized Liga ng mga Barangay elections in 1997.According to the petition, the irregularities consisted of the following: (1) the publication of the notice in the Manila Bulletin but without notifying in writing the individual punong barangays of Caloocan City;2] (2) the Notice of Meeting dated 08 1une 1997 for the Liga Chapter of Caloocan City did not specify whether the meeting scheduled on 14 1une 1997 was to be held at 8:00 a.m. or 8:00 p.m., and worse, the meeting was to be held in Lingayen, Pangasinan;3] and (3) the deadline for the filing of the Certificates of Candidacy having been set at 5:00 p.m. of the third day prior to the above election day, or on 11 1une 1997,4] Rayos failed to meetsaid deadline since he was not able to obtain a certified true copy of the COMELEC Certificate of Canvas and Proclamation of Winning Candidate, which were needed to be a delegate, to vote and be voted for in the Liga election.On 13 1une 1997, the Executive 1udge issued a temporary restraining order (TRO), effective for seventy-two (72) hours, enjoining the holding of the general membership and election meeting of Liga Chapter of Caloocan City on 14 1une 1975.5]chanroblesvirtuallawlibrary However, the TRO was allegedly not properly served on herein petitioner David, and so the election for the officers of the Liga- Caloocan was held as scheduled.6] Petitioner David was proclaimed President of the Liga-Caloocan, and thereafter took his oath and assumed the position of e-officio member of the Sangguniang Panlungsod of Caloocan.chanroblesvirtuallawlibrary On 17 1uly 1997, respondent Rayos filed a second petition, this time for 6uo warranto, mandamus and prohibition, with prayer for a writ of preliminary injunction and/or temporary restraining order and damages, against David, Nancy Quimpo, Presiding Officer of the Sangguniang Panlungsod of Caloocan City, and Secretary Barbers.7] Rayos alleged that he was elected President of the Liga Caloocan Chapter in the elections held on 14 1une 1997 by the members of the Caloocan Chapter pursuant to their Resolution/Petition No. 001-97.8] On 18 1uly 1997, the presiding judge granted the TRO, enjoining therein respondents David, Quimpo and Secretary Barbers from proceeding with the synchronized elections for the Provincial and Metropolitan Chapters of the Liga scheduled on 19 1uly 1997, but only for the purpose of maintaining the status 6uo and effective for a period not exceeding seventy-two (72) hours.9]chanroblesvirtuallawlibrary Eventually, on 18 1uly 1997, at petitioner Davids instance, Special Civil Action (SCA) No. C-512 pending before Branch 126 was consolidated with SCA No. C-508 pending before Branch 124.10]chanroblesvirtuallawlibrary Before the consolidation of the cases, on 25 1uly 1997, the DILG through respondent Secretary Barbers, filed in SCA No. C-512 an &rgent Motion,11] invoking the Presidents power of general supervision over all local government units and seeking the following reliefs:chanroblesvirtuallawlibrary WHEREFORE, in the interest of the much-needed delivery of basic services to the people, the maintenance of public order and to further protect the interests of the forty-one thousand barangays all over the country, herein respondent respectfully prays:chanroblesvirtuallawlibrary a) That the Department of the Interior and Local Government (DILG), pursuant to its delegated power of general supervision, be appointed as the Interim Caretaker to manage and administer the affairs of the Liga, until such time that the new set of National Liga Officers shall have been duly elected and assumed office; ...12]chanroblesvirtuallawlibrary The prayer for injunctive reliefs was anchored on the following grounds: (1) the DILG Secretary exercises the power of general supervision over all governmentunits by virtue of Administrative Order No. 267 dated 18 February 1992; (2) the Liga ng mga Barangay is a government organization; (3) undue interference by some local elective officials during the Municipal and City Chapter electionsof the Liga ng mga Barangay; (4) improper issuance of confirmations of the elected Liga Chapter officers by petitioner David and the National Liga Board; (5) the need for the DILG to provide remedies measured in view of the confusion and chaos sweeping the Liga ng mga Barangay and the incapacity of the National Liga Board to address theproblems properly.chanroblesvirtuallawlibrary On 31 1uly 1997, petitioner David opposed the DILGs &rgent Motion, claiming that the DILG, being a respondent in the case, is not allowed to seek any sanction against a co-respondent like David, such as by filing a cross-claim, without first seeking leave of court.13] He also alleged that the DILGs request to be appointed interim caretaker constitutes undue interference in the internal affairs of the Liga, since the Liga is not subject to DILG control and supervision.14]chanroblesvirtuallawlibrary Three (3) days after filing its &rgent Motion, on 28 1uly 1997, and before it was acted upon by the lower court, the DILG through then Undersecretary Manuel Sanchez, issued Memorandum Circular No. 97-176.15] It cited the reported violations of the Liga ng mga Barangay Constitution and By-Laws by David and widespread chaos and confusion among local government officials as to who were the qualified e-officio Liga members in their respective sangunians16] Pending the appointment of the DILG as the Interim Caretaker of the Liga ng mga Barangay by the court and until the officers and board members of the national Liga Chapter have been elected and have assumed office, the Memorandum Circular directed all provincial governors, vice governors, city mayors, city vice mayors, members of the sangguniang panlalawigan and panlungsod, DILG regional directors and other concerned officers, as follows:chanroblesvirtuallawlibrary 1. All concerned are directed not to recognize and/or honor any Liga Presidents of the Provincial and Metropolitan Chapters as ex-officio members of the sanggunian concerned until further notice from the Courts or this Department;chanroblesvirtuallawlibrary 2.All concerned are directed to disregard any pronouncement and/or directive issued by Mr. Alex David on any issue or matter relating to the affairs of the Liga ng mga Barangay until further notice from the Courts or this Department.17]chanroblesvirtuallawlibrary On 04 August 1997, public respondent 1udge Victoria Isabel A. Paredes issued the assailed order,18] the pertinent portions of which read, thus:chanroblesvirtuallawlibrary The authority of the DILG to exercise general supervisory jurisdiction over local government units, including the different leagues created under the Local Government Code of 1991 (RA 7160) finds basis in Administrative Order No. 267 dated February 18, 1992.Specifically, Section 1 (a) of the said Administrative Order provides a broad premise for the supervisory power of the DILG.Administratively, the DILGs supervision has been tacitly recognized by the local barangays, municipalities, cities and provinces as shown by the evidences presented by respondent David himself (See Annexes A to C).The fact that the DILG has sought to refer the matters therein to the National Liga Board/Directorate does not ipso facto mean that it has lost jurisdiction to act directly therein.1urisdiction is conferred by law and cannot be claimed or lost through agreements or inaction by individuals.What respondent David may term as interference should caretakership be allowed, this Court would rather view as a necessary and desirable corollary to the exercise of supervision.19]chanroblesvirtuallawlibrary Political motivations must not preclude, hamper, or obstruct the delivery of basic services and the perquisites of public service.In this case, the fact of confusion arising from conflicting appointments, non-action, and uninformed or wavering decisions of the incumbent National Liga Board/Directorate, having been satisfactorily established, cannot simply be brushed aside as being politically motivated or arising therefrom.It is incumbent, therefore, that the DILG exercise a more active role in the supervision of the affairs and operations of the National Liga Board/ Directorate at least until such time that the regular National Liga Board/Directorate may have been elected, qualified and assumed office.20]chanroblesvirtuallawlibrary xxxchanroblesvirtuallawlibrary WHEREFORE, premises considered, the Urgent Motion of the DILG for appointment as interim caretaker, until such time that the regularly elected National Liga Board of Directors shall have qualified and assumed office, to manage and administer the affairs of the National Liga Board, is hereby GRANTED.21]chanroblesvirtuallawlibrary On 11 August 1997, petitioner David filed an urgent motion for the reconsideration of the assailed order and to declare respondent Secretary Barbers in contempt of Court.22] David claimed that the 04 August 1997 order divested the duly elected members of the Board of Directors of the Liga National Directorate of their positions without due process of law.He also wanted Secretary Barbers declared in contempt for having issued, through his Undersecretary, Memorandum Circular No. 97-176, even before respondent judge issued the questioned order, in mockery of the justice system.He implied that Secretary Barbers knew about respondent judges questioned order even before it was promulgated.23]chanroblesvirtuallawlibrary On 11 August 1997, the DILG issued Memorandum Circular No. 97-193,24] providing supplemental guidelines for the 1997 synchronized elections of the provincial and metropolitan chapters and for the election of the national chapter of the Liga ng mga Barangay. The Memorandum Circular set the synchronized elections for the provincial and metropolitan chapters on 23 August 1997 and for the national chapter on 06 September 1997.chanroblesvirtuallawlibrary On 12 August 1997, the DILG issued a Certificate of Appointment25] in favor of respondent Rayos as president of the Liga ng mga Barangay of Caloocan City.The appointment purportedly served as Rayoss legal basis for e-officio membership in the Sangguniang Panlungsod of Caloocan City and to qualify and participate in the forthcoming National Chapter Election of the Liga ng mga Barangay.26]chanroblesvirtuallawlibrary On 23 August 1997, the DILG conducted the synchronized elections of Provincial and Metropolitan Liga Chapters. Thereafter, on 06 September 1997, the National Liga Chapter held its election of officers and board of directors, wherein 1ames Marty L. Lim was elected as President of the National Liga.27]chanroblesvirtuallawlibrary On 01 October 1997, public respondent judge denied Davids motion for reconsideration,28] ruling that there was no factual or legal basis to reconsider the appointment of the DILG as interim caretaker of the National Liga Board and to cite Secretary Barbers in contempt of court.29]chanroblesvirtuallawlibrary On 10 October 1997, petitioners filed the instant Petition for Certiorari30] under Rule 65 of the Rules of Court, seeking to annul public respondent judges orders of 04 August 1997 and 01 October 1997.They dispute the latters opinion on the power of supervision of the President under the Constitution, through the DILG over local governments, which is the same as that of the DILGs as shown by its application of the power on the Liga ng mga Barangay.Specifically, they claim that the public respondent judgesdesignation of the DILG as interim caretaker and the acts which the DILGsought to implement pursuant to its designation as such are beyond the scope of the Chief Executives power of supervision.chanroblesvirtuallawlibrary To support the petition, petitioners argue that under Administrative Order No. 267, Series of 1992, the power of general supervision of the President over local government units does not apply to the Liga and its various chapters precisely because the Liga is not a local government unit, contrary to the stance of the respondents.31]chanroblesvirtuallawlibrary Section 507 of the Local Government Code (Republic Act No. 7160)32] provides that the Liga shall be governed by its own Constitution and By-laws.Petitioners posit that the duly elected officers and directors of the National Liga elected in 1994 had a vested right to their positions and could only be removed therefrom for cause by affirmative vote of two-thirds (2/3) of the entire membership pursuant to the Liga Constitution and By- Laws, and not by mere issuances of the DILG, even if bolstered by the dubious authorization of respondent judge.33] Thus, petitioners claim that the questioned order divested the then incumbent officers and directors of the Liga of their right to their respective offices without due process of law.chanroblesvirtuallawlibrary Assuming the Liga could be subsumed under the term local governments, over which the President, through the DILG Secretary, has the power of supervision,34] petitioners point out that still there is no legal or constitutional basis for the appointment of the DILG as interim caretaker.35] They stress that the actions contemplated by the DILG as interim caretaker go beyond supervision, as what it had sought and obtained was authority to alter, modify, nullify or set aside the actions of the Liga Board of Directorsand even to substitute its judgment over that of the latter which are all clearly one of control.36] Petitioners question the appointment of Rayos as Liga-Caloocan President since at that time petitioner David was occupying that position which was still the subject of the quo warranto proceedings Rayos himself had instituted.37] Petitioners likewise claim that DILG Memorandum Circular No. 97-193, providing supplemental guidelines for the synchronized elections of the Liga, replaced the implementing rules adopted by the Liga pursuant to its Constitution and By-laws.38] In fact, even before its appointment as interim caretaker, DILG specifically enjoined all heads of government units from recognizing petitioner David and/or honoring any of his pronouncements relating to the Liga.39]chanroblesvirtuallawlibrary Petitioners rely on decision in %aule v Santos,40] which, they claim, already passed upon the extent of authority of the then Secretary of Local Government over the katipunan ng mga barangay or the barangay councils, as it specifically ruled that the Secretary of Local Government] has no authority to pass upon the validity or regularity of the election of officers of the katipunan.41]chanroblesvirtuallawlibrary For his part, respondent Rayos avers that since the Secretary of the DILG supervises the acts of local officials by ensuring that they act within the scope of their prescribed powers and functions and since members of the various leagues, such as the Liga in this case, are themselves officials of local government units, it follows that the Liga members are subject to the power of supervision of the DILG.42] He adds that as the DILGs management and administration of the Liga affairs was limited only to the conduct of the elections, its actions were consistent with its rule-making power and power of supervision under existing laws.43] He asserts that in assailing the appointment of the DILG as interim caretaker petitioners failed to cite any provision of positive law in support of their stance. Thus, he adds, if a law is silent, obscure or insufficient, a judge may apply a rule he sees fit to resolve the issue, as long as the rule chosen is in harmony with general interest, order, morals and public policy,44] in consonance with Article 9 of the Civil Code.45]chanroblesvirtuallawlibrary On the other hand, it is quite significant that the Solicitor General has shared petitioners position.He states that the DILGs act of managing and administering the affairs of the National Liga Board are not merely acts of supervision but plain manifestations of control and direct takeover of the functions of the National Liga Board,46] going beyond the limits of the power of general supervision of the President over local governments.47] Moreover, while the Liga may be deemed a government organization, it is not strictly a local government unit over which the DILG has supervisory power.48]chanroblesvirtuallawlibrary Meanwhile, on 24 September 1998, 1ames Marty L. Lim, the newly elected President of the National Liga, filed a Motion for Leave to File Comment in Intervention,49] with his Comment in Intervention attached50] invoking the validity of the DILGs actions relative to the conduct of the Liga elections.51] In addition, he sought the dismissal of the instant petition on the following grounds: (1) the issue of validity or invalidity of the questioned order has been rendered moot and academic by the election of Liga officers; (2) the turn-over of the administration and management of Liga affairs to the Liga officers; and (3) the recognition and acceptance by the members of the Liga nationwide.52]chanroblesvirtuallawlibrary In the interim, another petition, this time for Prohibition with Prayer for a %emporary Restraining Order, 53] was filed by several presidents of Liga Chapters, praying that this Court declare the DILG Secretary and Undersecretary are not vested with any constitutional or legal power to exercise control or even supervision over the National Liga ng mga Barangay, nor to take over the functions of its officers or suspend its constitution; and declare void any and all acts committed by respondents therein in connection with their caretakership of the Liga.54] The petition was consolidated with G.R. No. 130775, but it was eventually dismissed because the petitioners failed to submit an affidavit of service and proof of service of the petition.55]chanroblesvirtuallawlibrary Meanwhile, on 01 December 1998, petitioner David died and was substituted by his legal representatives.56]chanroblesvirtuallawlibrary Petitioners have raised a number of issues.57] Integrated and simplified, these issues boil down to the question of whether or not respondent 1udge acted with grave abuse of discretion in appointing the DILG as interim caretaker to administer and manage the affairs of the National Liga Board, per its order dated 04 August 1997.58] In turn, the resolution of the question of grave abuse of discretion entails a couple of definitive issues, namely: (1)whether the Liga ng mga Barangay is a government organization that is subject to the DILG Secretarys power of supervision over local governments as the alter ego of the President, and (2) whether the respondent 1udges designation of the DILG as interim caretaker of the Liga has invested the DILG with control over the Liga and whether DILG Memorandum Circular No. 97-176, issued before it was designated as such interim caretaker, and DILG Memorandum Circular No. 97-193 and other acts which the DILG made in its capacity as interim caretaker of the Liga, involve supervision or control of the Ligachanroblesvirtuallawlibrary However, the Court should first address the question of mootness which intervenor Lim raised because, according to him, during the pendency of the present petition a general election was held; the new set of officers and directors had assumed their positions; and that supervening events the DILG had turned-over the management and administration of the Liga to new Liga officers and directors.59] Respondent Rayos has joined him in this regard.60] Forthwith, the Court declares that these supervening events have not rendered the instant petition moot, nor removed it from the jurisdiction of this Court.chanroblesvirtuallawlibrary This case transcends the elections ordered and conducted by the DILG as interim caretaker of the Liga and the Liga officers and directors who were elected to replace petitioner David and the former officers.At the core of the petition is the validity of the DILGs caretakership of the Liga and the official acts of the DILG as such caretaker which exceeded the bounds of supervision and were exercise of control.At stake in this case is the realization of the constitutionally ensconced principle of local government autonomy;61] the statutory objective to enhance the capabilities of barangays and municipalities by providing them opportunities to participate actively in the implementation of national programs and projects;62] and the promotion of the avowed aim to ensure the independence and non-partisanship of the Liga ng mga Barangay.The mantle of local autonomy would be eviscerated and remain an empty buzzword if unconstitutional, illegal and unwarranted intrusions in the affairs of the local governments are tolerated and left unchecked.chanroblesvirtuallawlibrary Indeed, it is the declared policy of the State that its territorial and political subdivisions should enjoy genuine meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals.63] In the case of e Leon v sguerra64] the Court ruled that even barangays are meant to possess genuine and meaningful local autonomy so that they may develop fully as self-reliant communities.65]chanroblesvirtuallawlibrary Furthermore, well-entrenched is the rule that courts will decide a question otherwise moot and academic if it is capable of repetition, yet evading review.66] For the question of whether the DILG may validly be appointed as interim caretaker, or assume a similar position and perform acts pursuant thereto, is likely to resurrect again, and yet the question may not be decided before the actual assumption, or the termination of said assumption even.chanroblesvirtuallawlibrary So too, dismissing the petition on the ground of mootness could lead to the wrong impression that the challenged order and issuances are valid. Verily, that does not appear to be the correct conclusion to make since by applying opposite precedents to the issues the outcome points to invalidating the assailed order and memorandum circulars.chanroblesvirtuallawlibrary The resolution of the issues of whether the Liga ng mga Barangay is subject to DILG supervision, and whether the questioned caretakership order of the respondent judge and the challenged issuances and acts of the DILG constitute control in derogation of the Constitution, necessitates a brief overview of the barangay, as the lowest LGU, and the Liga, as a vehicle of governance and coordination.chanroblesvirtuallawlibrary As the basic political unit, the barangay serves as the primary planning and implementing unit of government policies, plans, programs, projects and activities in the community, and as a forum wherein the collective views of the people may be expressed, crystallized and considered, and where disputes may be amicably settled.67]chanroblesvirtuallawlibrary On the other hand, the Liga ng mga Barangay68] is the organization of all barangays, the primary purpose of which is the determination of the representation of the Liga in the sanggunians, and the ventilation, articulation, and crystallization of issues affecting barangay government administration and securing solutions thereto, through proper and legal means.69]The Liga ng mga Barangay shall have chapters at the municipal, city and provincial and metropolitan political subdivision levels.70] The municipal and city chapters of the Liga are composed of the barangay representatives from the municipality or city concerned.The presidents of the municipal and city chapters of the Liga form the provincial or metropolitan political subdivision chapters of the Liga.The presidents of the chapters of the Liga in highly urbanized cities, provinces and the Metro Manila area and other metropolitan political subdivisions constitute the National Liga ng mga Barangay.71]chanroblesvirtuallawlibrary As conceptualized in the Local Government Code, the barangay is positioned to influence and direct the development of the entire country.This was heralded by the adoption of the bottom-to-top approach process of development which requires the development plans of the barangay to be considered in the development plans of the municipality, city or province,72] whose plans in turn are to be taken into account by the central government73] in its plans for the development of the entire country.74] The Liga is the vehicle assigned to make this new development approach materialize and produce results.chanroblesvirtuallawlibrary The presidents of the Liga at the municipal, city and provincial levels, automatically become e-officio members of the Sangguniang Bayan Sangguniang Panlungsod and Sangguniang Panlalawigan respectively.They shall serve as such only during their term of office as presidents of the Liga chapters, which in no case shall be beyond the term of office of the sanggunian concerned.75]chanroblesvirtuallawlibrary The Liga ng mga Barangay has one principal aim, namely: to promote the development of barangays and secure the general welfare of their inhabitants.76] In line with this, the Liga is granted the following functions and duties:chanroblesvirtuallawlibrary a) Give priority to programs designed for the total development of the barangays and in consonance with the policies, programs and projects of the national government;chanroblesvirtuallawlibrary b) Assist in the education of barangay residents for peoples participation in local government administration in order to promote untied and concerted action to achieve country-wide development goals;chanroblesvirtuallawlibrary c) Supplement the efforts of government in creating gainful employment within the barangay;chanroblesvirtuallawlibrary d) Adopt measures to promote the welfare of barangay officials;chanroblesvirtuallawlibrary e) Serve as forum of the barangays in order to forge linkages with government and non-governmental organizations and thereby promote the social, economic and political well-being of the barangays; andchanroblesvirtuallawlibrary f) Exercise such other powers and perform such other duties and functions which will bring about stronger ties between barangays and promote the welfare of the barangay inhabitants.77]chanroblesvirtuallawlibrary The Ligas are primarily governed by the provisions of the Local Government Code.However, they are empowered to make their own constitution and by-laws to govern their operations. Sec. 507 of the Code provides:chanroblesvirtuallawlibrary Sec. 507. Constitution and By-Laws of the Liga and the Leagues. - All other matters not herein otherwise provided for affecting the internal organization of the leagues of local government units shall be governed by their respective constitution and by-laws which are hereby made suppletory to the provision of this Chapter: Provided, That said Constitution and By-laws shall always conform to the provision of the Constitution and existing laws.chanroblesvirtuallawlibrary Pursuant to the Local Government Code, the Liga ng mga Barangay adopted its own Constitution and By-Laws. It provides that the corporate powers of the Liga expressed or implied, shall be vested in the board of directors of each level of the Liga which shall:chanroblesvirtuallawlibrary a)Have jurisdiction over all officers, directors and committees of the said Liga; including the power of appointment, assignment and delegation;chanroblesvirtuallawlibrary b)Have general management of the business, property, and funds of said Liga;chanroblesvirtuallawlibrary c)Prepare and approve a budget showing anticipated receipts and expenditures for the year, including the plans or schemes for funding purposes; andchanroblesvirtuallawlibrary d)Have the power to suspend or remove from office any officer or member of the said board on grounds cited and in the manner provided in hereinunder provisions.78]chanroblesvirtuallawlibrary The National Liga Board of Directors promulgated the rules for the conduct of its Ligas general elections.79] And, as early as 28 April 1997, the Liga National Chapter had already scheduled its general elections on 14 1une 1997.80]chanroblesvirtuallawlibrary The controlling provision on the issues at hand is Section 4, Article X of the Constitution, which reads in part:chanroblesvirtuallawlibrary Sec. The President of the Philippines shall exercise general supervision over local governments.chanroblesvirtuallawlibrary The 1935, 1973 and 1987 Constitutions uniformly differentiate the Presidents power of supervision over local governments and his power of control of the executive departments bureaus and offices.81] Similar to the counterpart provisions in the earlier Constitutions, the provision in the 1987 Constitution provision has been interpreted to exclude the power of control.82]chanroblesvirtuallawlibrary In the early case of Mondano v Silvosa et al,83] this Court defined supervision as overseeing, or the power or authority of an officer to see that subordinate officers perform their duties, and to take such action as prescribed by law to compel his subordinates to perform their duties.Control, on the other hand, means the power of an officer to alter or modify or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for that of the latter.84] In %aule v Santos,85]the Court held that the Constitution permits the President to wield no more authority than that of checking whether a local government or its officers perform their duties as provided by statutory enactments.86] Supervisory power, when contrasted with control, is the power of mere oversight over an inferior body; it does not include any restraining authority over such body.87]chanroblesvirtuallawlibrary The case of rilon v Lim88]clearly defined the extent of supervisory power, thus:chanroblesvirtuallawlibrary The supervisor or superintendent merely sees to it that the rules are followed, but he himself does not lay down such rules, nor does he have the discretion to modify or replace them.If the rules are not observed, he may order the work done or re-done but only to conform to the prescribed rules. He may not prescribe his own manner for the doing of the act.He has no judgment on this matter except to see that the rules are followed89]chanroblesvirtuallawlibrary In Section 4, Article X of the Constitution applicable to the Liga ng mga Barangay?Otherwise put, is the Liga legally susceptible to DILG suspension?chanroblesvirtuallawlibrary This question was resolved inBito-Onon v Fernandez,90] where the Court ruled that the Presidents power of the general supervision, as exercised therein by the DILG Secretary as hisalter ego, extends to theLiga ng mga Barangay.chanroblesvirtuallawlibrary Does the Presidents power of general supervision extend to the liga ng mga barangay, which is not a local government unit?chanroblesvirtuallawlibrary We rule in the affirmative.In Opinion No. 41, Series of 1995, the Department of 1ustice ruled that the liga ng mga barangay is a government organization, being an association, federation, league or union created by law or by authority of law, whose members are either appointed or elected government officials.The Local Government Code defines the liga ng mga barangay as an organization of all barangays for the primary purpose of determining the representation of the liga in the sanggunians, and for ventilating, articulating and crystallizing issues affecting barangay government administration and securing, through proper and legal means, solutions thereto.91]chanroblesvirtuallawlibrary The rationale for making the Liga subject to DILG supervision is quite evident, whether from the perspectives of logic or of practicality.The Liga is an aggroupment of barangays which are in turn represented therein by their respective punong barangaysThe representatives of the Liga sit in an e officio capacity at the municipal, city and provincial sangguniansAs such, they enjoy all the powers and discharge all the functions of regular municipal councilors, city councilors or provincial board members, as the case may be.Thus, the Liga is the vehicle through which the barangay participates in the enactment of ordinances and formulation of policies at all the legislative local levels higher than the sangguniang barangay at the same time serving as the mechanism for the bottom-to-top approach of development.chanroblesvirtuallawlibrary In the case at bar, even before the respondent 1udge designated the DILG as interim caretaker of the Liga, on 28 1uly 1997, it issued Memorandum Circular No. 97-176, directing local government officials not to recognize David as the National Liga President and his pronouncements relating to the affairs of the LigaNot only was the action premature, it even smacked of superciliousness and injudiciousness. The DILG is the topmost government agency which maintains coordination with, and exercises supervision over local government units and its multi- level leagues.As such, it should be forthright, circumspect and supportive in its dealings with the Ligas especially the Liga ng mga Barangay.The indispensable role played by the latter in the development of the barangaysand the promotion of the welfare of the inhabitants thereof deserve no less than the full support and respect of theother agencies of government.As the Court held in the case of San uan v Civil Service Commission92] our national officials should not only comply with the constitutional provisions on local autonomy but should also appreciate the spirit of liberty upon which these provisions are based.93]chanroblesvirtuallawlibrary When the respondent judge eventually appointed the DILG as interim caretaker to manage and administer the affairs of the Liga she effectively removed the management from the National Liga Board and vested control of the Liga on the DILG.Even a cursory glance at the DILGs prayer for appointment as interim caretaker of the Liga to manage and administer the affairs of the Liga until such time that the new set of National Liga officers shall have been duly elected and assumed office reveals that what the DILG wanted was to take control over the Liga. Even if said caretakership was contemplated to last for a limited time, or only until a new set of officers assume office, the fact remains that it was a conferment of control in derogation of the Constitution.chanroblesvirtuallawlibrary With his Department already appointed as interim caretaker of the Liga, Secretary Barbers nullified the results of the Liga elections and promulgated DILG Memorandum Circular No. 97- 193 dated 11 August 1997, where he laid down the supplemental guidelines for the 1997 synchronized elections of the provincial and metropolitan chapters and for the election of the national chapter of the Liga ng mga Barangay; scheduled dates for the new provincial, metropolitan and national chapter elections; and appointed respondent Rayos as president of Liga-Caloocan Chapter.chanroblesvirtuallawlibrary These acts of the DILG went beyond the sphere of general supervision and constituted direct interference with the political affairs, not only of the Liga but more importantly, of the barangay as an institution.The election of Liga officers is part of the Ligas internal organization, for which the latter has already provided guidelines. In succession, the DILG assumed stewardship and jurisdiction over the Liga affairs, issued supplemental guidelines for the election, and nullified the effects of the Liga- conducted elections.Clearly, what the DILG wielded was the power of control which even the President does not have.chanroblesvirtuallawlibrary Furthermore, the DILG assumed control when it appointed respondent Rayos as president of the Liga-Caloocan Chapter prior to the newly scheduled general Liga elections, although petitioner Davids term had not yet expired.The DILG substituted its choice, who was Rayos, over the choice of majority of the punong barangay of Caloocan, who was the incumbent President, petitioner David.The latter was elected and had in fact been sitting as an e-officio member of the sangguniang panlungsod in accordance with the Liga Constitution and By-Laws.Yet, the DILG extended the appointment to respondent Rayos although it was aware that the position was the subject of a 6uo warranto proceeding instituted by Rayos himself, thereby preempting the outcome of that case.It was bad enough that the DILG assumed the power of control, it was worse when it made use of the power with evident bias and partiality.chanroblesvirtuallawlibrary As the entity exercising supervision over the Liga ng mga Barangay, the DILGs authority over the Liga is limited to seeing to it that the rules are followed, but it cannot lay down such rules itself, nor does it have the discretion to modify or replace them.In this particular case, the most that the DILG could do was review the acts of the incumbent officers of the Liga in the conduct of the elections to determine if they committed any violation of the Ligas Constitution and By-laws and its implementing rules. If the National Liga Board and its officers had violated Liga rules, the DILG should have ordered the Liga to conduct another election in accordance with the Ligas own rules, but not in obeisance to DILG-dictated guidelines.Neither had the DILG the authority to remove the incumbent officers of the Liga and replace them, even temporarily, with unelected Liga officers.chanroblesvirtuallawlibrary Like the local government units, the Liga ng mga Barangay is not subject to control by the Chief Executive or his alter ego.chanroblesvirtuallawlibrary In theBito-Onon94] case, this Courtheld that DILG Memorandum Circular No. 97-193, insofar as it authorized the filing of a petition for review of the decision of the Board of Election Supervisors (BES) with the regular courts in a post-proclamation electoral protest, involved the exercise of control as it in effect amended the guidelines already promulgated by the LigaThe decision reads in part:chanroblesvirtuallawlibrary xxx.Officers in control, lay down the rules in the doing of an act.If they are not followed, it is discretionary on his part to order the act undone or redone by his subordinate or he may even decide to do it himself.Supervision does not cover such authority.Supervising officers merely see to it that the rules are followed, but he himself does not lay down such rules, nor does he have the discretion to modify or replace them.If the rules are not observed, he may order the work done or re-done to conform for to the prescribed rules. He cannot prescribe his own manner the doing of the act.chanroblesvirtuallawlibrary x x xchanroblesvirtuallawlibrary xxx. The amendment of the GUIDELINES is more than an exercise of the power of supervision but is an exercise of the power of control, which the President does not have over the LIGA.Although the DILG is given the power to prescribe rules, regulations and other issuances, the Administrative Code limits its authority to merely monitoring compliance by local government units of such issuances.To monitor means to watch, observe or check and is compatible with the power of supervision of the DILG Secretary over local governments, which is limited to checking whetherthe local government unit concerned or the officers thereof perform their duties as per statutory enactments.Besides, any doubt as to the power of the DILG Secretary to interfere with local affairs should be resolved in favor of the greater autonomy of the local government.95]chanroblesvirtuallawlibrary In %aule96] the Court ruled that the Secretary of Local Government had no authority to pass upon the validity or regularity of the election of officers of katipunan ng mga barangay or barangay councils. In that case, a protest was lodged before the Secretary of Local Government regarding several irregularities in, and seeking the nullification of, the election of officers of the Federation of Associations of Barangay Councils (FABC) of Catanduanes. Then Local Government Secretary Luis Santos issued a resolution nullifying the election of officers and ordered a new one to be conducted. The Court ruled:chanroblesvirtuallawlibrary Construing the constitutional limitation on the power of general supervision of the President over local governments, We hold that respondent Secretary has no authority to pass upon the validity or regularity of the officers of the katipunan To allow respondent Secretary to do so will give him more power than the law or the Constitution grants.It will in effect give him control over local government officials for it willpermit him to interfere in a purely democratic and non-partisan activity aimed at strengthening the barangay as the basic component of local governments so that the ultimate goal of fullest autonomy may be achieved.In fact, his order that the new elections to be conducted be presided by the Regional Director is a clear and direct interference by the Department with the political affairs of the barangays which is not permitted by the limitation of presidential power to general supervision over local governments.97]chanroblesvirtuallawlibrary All given, the Court is convinced that the assailed order was issued with grave abuse of discretion while the acts of the respondent Secretary, including DILG Memorandum Circulars No. 97-176 and No. 97-193, are unconstitutional and ultra vires, as they all entailed the conferment or exercise of control a power which is denied by the Constitution even to the President.chanroblesvirtuallawlibrary WHEREFORE, the Petition is GRANTED.The Order of the Regional Trial Court dated 04 August 1997 is SET ASIDE for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction. DILG Memorandum Circulars No. 97-176 and No. 97-193, are declared VOID for being unconstitutional and ultra vires. chanroblesvirtuallawlibrary No pronouncements as to costs.chanroblesvirtuallawlibrary SO ORDERED.chanroblesvirtuallawlibrary Davide, 1r., C.1., Puno, Panganiban, Quisumbing, Ynares- Santiago, Sandoval-Gutierrez, Carpio, Austria-Martine
EN BANC |G.R. No. 152774. May 27, 2004| THE PROVINCE OF BATANGAS, represented by its Governor, HERMILANDO I. MANDANAS, petitioner, vs. HON. ALBERTO G. ROMULO, Executive Secretary and Chairman oI the Oversight Committee on Devolution; HON. EMILIA BONCODIN, Secretary, Department oI Budget and Management; HON. JOSE D. LINA, JR., Secretary, Department oI Interior and Local Government, respondents. D E C I S I O N CALLEJO, SR., J.: The Province oI Batangas, represented by its Governor, Hermilando I. Mandanas, Iiled the present petition Ior certiorari, prohibition and mandamus under Rule 65 oI the Rules oI Court, as amended, to declare as unconstitutional and void certain provisos contained in the General Appropriations Acts (GAA) oI 1999, 2000 and 2001, insoIar as they uniIormly earmarked Ior each corresponding year the amount oI Iive billion pesos (P5,000,000,000.00) oI the Internal Revenue Allotment (IRA) Ior the Local Government Service Equalization Fund (LGSEF) and imposed conditions Ior the release thereoI. Named as respondents are Executive Secretary Alberto G. Romulo, in his capacity as Chairman oI the Oversight Committee on Devolution, Secretary Emilia Boncodin oI the Department oI Budget and Management (DBM) and Secretary Jose Lina oI the Department oI Interior and Local Government (DILG). Background On December 7, 1998, then President Joseph Ejercito Estrada issued Executive Order (E.O.) No. 48 entitled 'ESTABLISHING A PROGRAM FOR DEVOLUTION ADJUSTMENT AND EQUALIZATION. The program was established to 'Iacilitate the process oI enhancing the capacities oI local government units (LGUs) in the discharge oI the Iunctions and services devolved to them by the National Government Agencies concerned pursuant to the Local Government Code. The Oversight Committee (reIerred to as the Devolution Committee in E.O. No. 48) constituted under Section 533(b) oI Republic Act No. 7160 (The Local Government Code oI 1991) has been tasked to Iormulate and issue the appropriate rules and regulations necessary Ior its eIIective implementation. Further, to address the Iunding shortIalls oI Iunctions and services devolved to the LGUs and other Iunding requirements oI the program, the 'Devolution Adjustment and Equalization Fund was created. For 1998, the DBM was directed to set aside an amount to be determined by the Oversight Committee based on the devolution status appraisal surveys undertaken by the DILG. The initial Iund was to be sourced Irom the available savings oI the national government Ior CY 1998. For 1999 and the succeeding years, the corresponding amount required to sustain the program was to be incorporated in the annual GAA. The Oversight Committee has been authorized to issue the implementing rules and regulations governing the equitable allocation and distribution oI said Iund to the LGUs. %he LGSEF in the G of 1999 In Republic Act No. 8745, otherwise known as the GAA oI 1999, the program was renamed as the LOCAL GOVERNMENT SERVICE EQUALIZATION FUND (LGSEF). Under said appropriations law, the amount oI P96,780,000,000 was allotted as the share oI the LGUs in the internal revenue taxes. Item No. 1, Special Provisions, Title XXXVI A. Internal Revenue Allotment oI Rep. Act No. 8745 contained the Iollowing proviso: ... PROVIDED, That the amount oI FIVE BILLION PESOS (P5,000,000,000) shall be earmarked Ior the Local Government Service Equalization Fund Ior the Iunding requirements oI projects and activities arising Irom the Iull and eIIicient implementation oI devolved Iunctions and services oI local government units pursuant to R.A. No. 7160, otherwise known as the Local Government Code oI 1991: PROVIDED, FURTHER, That such amount shall be released to the local government units subject to the implementing rules and regulations, including such mechanisms and guidelines Ior the equitable allocations and distribution oI said Iund among local government units subject to the guidelines that may be prescribed by the Oversight Committee on Devolution as constituted pursuant to Book IV, Title III, Section 533(b) oI R.A. No. 7160. The Internal Revenue Allotment shall be released directly by the Department oI Budget and Management to the Local Government Units concerned. On July 28, 1999, the Oversight Committee (with then Executive Secretary Ronaldo B. Zamora as Chairman) passed Resolution Nos. OCD-99-003, OCD-99-005 and OCD-99-006 entitled as Iollows: OCD-99-005 RESOLUTION ADOPTING THE ALLOCATION SCHEME FOR THE PhP5 BILLION CY 1999 LOCAL GOVERNMENT SERVICE EQUALIZATION FUND (LGSEF) AND REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH EJERCITO ESTRADA TO APPROVE SAID ALLOCATION SCHEME. OCD-99-006 RESOLUTION ADOPTING THE ALLOCATION SCHEME FOR THE PhP4.0 BILLION OF THE 1999 LOCAL GOVERNMENT SERVICE EQUALIZATION FUND AND ITS CONCOMITANT GENERAL FRAMEWORK, IMPLEMENTING GUIDELINES AND MECHANICS FOR ITS IMPLEMENTATION AND RELEASE, AS PROMULGATED BY THE OVERSIGHT COMMITTEE ON DEVOLUTION. OCD-99-003 RESOLUTION REQUESTING HIS EXCELLENCY PRESIDENT JOSEPH EJERCITO ESTRADA TO APPROVE THE REQUEST OF THE OVERSIGHT COMMITTEE ON DEVOLUTION TO SET ASIDE TWENTY PERCENT (20) OF THE LOCAL GOVERNMENT SERVICE EQUALIZATION FUND (LGSEF) FOR LOCAL AFFIRMATIVE ACTION PROJECTS AND OTHER PRIORITY INITIATIVES FOR LGUs INSTITUTIONAL AND CAPABILITY BUILDING IN ACCORDANCE WITH THE IMPLEMENTING GUIDELINES AND MECHANICS AS PROMULGATED BY THE COMMITTEE. These OCD resolutions were approved by then President Estrada on October 6, 1999. Under the allocation scheme adopted pursuant to Resolution No. OCD-99-005, the Iive billion pesos LGSEF was to be allocated as Iollows: 1. The PhP4 Billion oI the LGSEF shall be allocated in accordance with the allocation scheme and implementing guidelines and mechanics promulgated and adopted by the OCD. To wit: a. The Iirst PhP2 Billion oI the LGSEF shall be allocated in accordance with the codal Iormula sharing scheme as prescribed under the 1991 Local Government Code; b. The second PhP2 Billion oI the LGSEF shall be allocated in accordance with a modiIied 1992 cost oI devolution Iund (CODEF) sharing scheme, as recommended by the respective leagues oI provinces, cities and municipalities to the OCD. The modiIied CODEF sharing Iormula is as Iollows: Province : 40 Cities : 20 Municipalities : 40 This is applied to the P2 Billion aIter the approved amounts granted to individual provinces, cities and municipalities as assistance to cover decrease in 1999 IRA share due to reduction in land area have been taken out. 2. The remaining PhP1 Billion oI the LGSEF shall be earmarked to support local aIIirmative action projects and other priority initiatives submitted by LGUs to the Oversight Committee on Devolution Ior approval in accordance with its prescribed guidelines as promulgated and adopted by the OCD. In Resolution No. OCD-99-003, the Oversight Committee set aside the one billion pesos or 20 oI the LGSEF to support Local AIIirmative Action Projects (LAAPs) oI LGUs. This remaining amount was intended to 'respond to the urgent need Ior additional Iunds assistance, otherwise not available within the parameters oI other existing Iund sources. For LGUs to be eligible Ior Iunding under the one-billion- peso portion oI the LGSEF, the OCD promulgated the Iollowing: III. CRITERIA FOR ELIGIBILITY: 1. LGUs (province, city, municipality, or barangay), individually or by group or multi-LGUs or leagues oI LGUs, especially those belonging to the 5 th and 6 th
class, may access the Iund to support any projects or activities that satisIy any oI the aIorecited purposes. A barangay may also access this Iund directly or through their respective municipality or city. 2. The proposed project/activity should be need-based, a local priority, with high development impact and are congruent with the socio-cultural, economic and development agenda oI the Estrada Administration, such as Iood security, poverty alleviation, electriIication, and peace and order, among others. 3. Eligible Ior Iunding under this Iund are projects arising Irom, but not limited to, the Iollowing areas oI concern: a. delivery oI local health and sanitation services, hospital services and other tertiary services; b. delivery oI social welIare services; c. provision oI socio-cultural services and Iacilities Ior youth and community development; d. provision oI agricultural and on-site related research; e. improvement oI community-based Iorestry projects and other local projects on environment and natural resources protection and conservation; I. improvement oI tourism Iacilities and promotion oI tourism; g. peace and order and public saIety; h. construction, repair and maintenance oI public works and inIrastructure, including public buildings and Iacilities Ior public use, especially those destroyed or damaged by man-made or natural calamities and disaster as well as Iacilities Ior water supply, Ilood control and river dikes; i. provision oI local electriIication Iacilities; j. livelihood and Iood production services, Iacilities and equipment; k. other projects that may be authorized by the OCD consistent with the aIorementioned objectives and guidelines; 4. Except on extremely meritorious cases, as may be determined by the Oversight Committee on Devolution, this portion oI the LGSEF shall not be used in expenditures Ior personal costs or beneIits under existing laws applicable to governments. Generally, this Iund shall cover the Iollowing objects oI expenditures Ior programs, projects and activities arising Irom the implementation oI devolved and regular Iunctions and services: a. acquisition/procurement oI supplies and materials critical to the Iull and eIIective implementation oI devolved programs, projects and activities; b. repair and/or improvement oI Iacilities; c. repair and/or upgrading oI equipment; d. acquisition oI basic equipment; e. construction oI additional or new Iacilities; I. counterpart contribution to joint arrangements or collective projects among groups oI municipalities, cities and/or provinces related to devolution and delivery oI basic services. 5. To be eligible Ior Iunding, an LGU or group oI LGU shall submit to the Oversight Committee on Devolution through the Department oI Interior and Local Governments, within the prescribed schedule and timeIrame, a Letter Request Ior Funding Support Irom the AIIirmative Action Program under the LGSEF, duly signed by the concerned LGU(s) and endorsed by cooperators and/or beneIiciaries, as well as the duly signed Resolution oI Endorsement by the respective Sanggunian(s) oI the LGUs concerned. The LGU- proponent shall also be required to submit the Project Request (PR), using OCD Project Request Form No. 99-02, that details the Iollowing: (a) general description or brieI oI the project; (b) objectives and justiIications Ior undertaking the project, which should highlight the beneIits to the locality and the expected impact to the local program/project arising Irom the Iull and eIIicient implementation oI social services and Iacilities, at the local levels; (c) target outputs or key result areas; (d) schedule oI activities and details oI requirements; (e) total cost requirement oI the project; (I) proponent`s counterpart Iunding share, iI any, and identiIied source(s) oI counterpart Iunds Ior the Iull implementation oI the project; (g) requested amount oI project cost to be covered by the LGSEF. Further, under the guidelines Iormulated by the Oversight Committee as contained in Attachment - Resolution No. OCD-99-003, the LGUs were required to identiIy the projects eligible Ior Iunding under the one-billion-peso portion oI the LGSEF and submit the project proposals thereoI and other documentary requirements to the DILG Ior appraisal. The project proposals that passed the DILG`s appraisal would then be submitted to the Oversight Committee Ior review, evaluation and approval. Upon its approval, the Oversight Committee would then serve notice to the DBM Ior the preparation oI the Special Allotment Release Order (SARO) and Notice oI Cash Allocation (NCA) to eIIect the release oI Iunds to the said LGUs. %he LGSEF in the G of 2000 Under Rep. Act No. 8760, otherwise known as the GAA oI 2000, the amount oI P111,778,000,000 was allotted as the share oI the LGUs in the internal revenue taxes. As in the GAA oI 1999, the GAA oI 2000 contained a proviso earmarking Iive billion pesos oI the IRA Ior the LGSEF. This proviso, Iound in Item No. 1, Special Provisions, Title XXXVII A. Internal Revenue Allotment, was similarly worded as that contained in the GAA oI 1999. The Oversight Committee, in its Resolution No. OCD-2000-023 dated June 22, 2000, adopted the Iollowing allocation scheme governing the Iive billion pesos LGSEF Ior 2000: 1. The PhP3.5 Billion oI the CY 2000 LGSEF shall be allocated to and shared by the Iour levels oI LGUs, i.e., provinces, cities, municipalities, and barangays, using the Iollowing percentage-sharing Iormula agreed upon and jointly endorsed by the various Leagues oI LGUs: For Provinces 26 or P 910,000,000 For Cities 23 or 805,000,000 For Municipalities 35 or 1,225,000,000 For Barangays 16 or 560,000,000 Provided that the respective Leagues representing the provinces, cities, municipalities and barangays shall draw up and adopt the horizontal distribution/sharing schemes among the member LGUs whereby the Leagues concerned may opt to adopt direct Iinancial assistance or project-based arrangement, such that the LGSEF allocation Ior individual LGU shall be released directly to the LGU concerned; Provided Iurther that the individual LGSEF shares to LGUs are used in accordance with the general purposes and guidelines promulgated by the OCD Ior the implementation oI the LGSEF at the local levels pursuant to Res. No. OCD-99-006 dated October 7, 1999 and pursuant to the Leagues` guidelines and mechanism as approved by the OCD; Provided Iurther that each oI the Leagues shall submit to the OCD Ior its approval their respective allocation scheme, the list oI LGUs with the corresponding LGSEF shares and the corresponding project categories iI project-based; Provided Iurther that upon approval by the OCD, the lists oI LGUs shall be endorsed to the DBM as the basis Ior the preparation oI the corresponding NCAs, SAROs, and related budget/release documents. 2. The remaining P1,500,000,000 oI the CY 2000 LGSEF shall be earmarked to support the Iollowing initiatives and local aIIirmative action projects, to be endorsed to and approved by the Oversight Committee on Devolution in accordance with the OCD agreements, guidelines, procedures and documentary requirements: On July 5, 2000, then President Estrada issued a Memorandum authorizing then Executive Secretary Zamora and the DBM to implement and release the 2.5 billion pesos LGSEF Ior 2000 in accordance with Resolution No. OCD-2000-023. ThereaIter, the Oversight Committee, now under the administration oI President Gloria Macapagal-Arroyo, promulgated Resolution No. OCD-2001-29 entitled 'ADOPTING RESOLUTION NO. OCD-2000- 023 IN THE ALLOCATION, IMPLEMENTATION AND RELEASE OF THE REMAINING P2.5 BILLION LGSEF FOR CY 2000. Under this resolution, the amount oI one billion pesos oI the LGSEF was to be released in accordance with paragraph 1 oI Resolution No. OCD-2000-23, to complete the 3.5 billion pesos allocated to the LGUs, while the amount oI 1.5 billion pesos was allocated Ior the LAAP. However, out oI the latter amount, P400,000,000 was to be allocated and released as Iollows: P50,000,000 as Iinancial assistance to the LAAPs oI LGUs; P275,360,227 as Iinancial assistance to cover the decrease in the IRA oI LGUs concerned due to reduction in land area; and P74,639,773 Ior the LGSEF Capability-Building Fund. %he LGSEF in the G of 2001 In view oI the Iailure oI Congress to enact the general appropriations law Ior 2001, the GAA oI 2000 was deemed re-enacted, together with the IRA oI the LGUs therein and the proviso earmarking Iive billion pesos thereoI Ior the LGSEF. On January 9, 2002, the Oversight Committee adopted Resolution No. OCD-2002-001 allocating the Iive billion pesos LGSEF Ior 2001 as Iollows: ModiIied Codal Formula P 3.000 billion Priority Projects 1.900 billion Capability Building Fund .100 billion P 5.000 billion RESOLVED FURTHER, that the P3.0 B oI the CY 2001 LGSEF which is to be allocated according to the modiIied codal Iormula shall be released to the Iour levels oI LGUs, i.e., provinces, cities, municipalities and barangays, as Iollows: LGUs Percentage Amount Provinces 25 P 0.750 billion Cities 25 0.750 Municipalities 35 1.050 Barangays 15 0.450 100 P 3.000 billion RESOLVED FURTHER, that the P1.9 B earmarked Ior priority projects shall be distributed according to the Iollowing criteria: 1.0 For projects oI the 4 th , 5 th and 6 th class LGUs; or 2.0 Projects in consonance with the President`s State oI the Nation Address (SONA)/summit commitments. RESOLVED FURTHER, that the remaining P100 million LGSEF capability building Iund shall be distributed in accordance with the recommendation oI the Leagues oI Provinces, Cities, Municipalities and Barangays, and approved by the OCD. Upon receipt oI a copy oI the above resolution, Gov. Mandanas wrote to the individual members oI the Oversight Committee seeking the reconsideration oI Resolution No. OCD-2002-001. He also wrote to Pres. Macapagal-Arroyo urging her to disapprove said resolution as it violates the Constitution and the Local Government Code oI 1991. On January 25, 2002, Pres. Macapagal-Arroyo approved Resolution No. OCD-2002-001. The Petitioner`s Case The petitioner now comes to this Court assailing as unconstitutional and void the provisos in the GAAs oI 1999, 2000 and 2001, relating to the LGSEF. Similarly assailed are the Oversight Committee`s Resolutions Nos. OCD-99-003, OCD-99-005, OCD-99-006, OCD- 2000-023, OCD-2001-029 and OCD-2002-001 issued pursuant thereto. The petitioner submits that the assailed provisos in the GAAs and the OCD resolutions, insoIar as they earmarked the amount oI Iive billion pesos oI the IRA oI the LGUs Ior 1999, 2000 and 2001 Ior the LGSEF and imposed conditions Ior the release thereoI, violate the Constitution and the Local Government Code oI 1991. Section 6, Article X oI the Constitution is invoked as it mandates that the 'just share oI the LGUs shall be automatically released to them. Sections 18 and 286 oI the Local Government Code oI 1991, which enjoin that the 'just share oI the LGUs shall be 'automatically and directly released to them 'without need oI Iurther action are, likewise, cited. The petitioner posits that to subject the distribution and release oI the Iive-billion-peso portion oI the IRA, classiIied as the LGSEF, to compliance by the LGUs with the implementing rules and regulations, including the mechanisms and guidelines prescribed by the Oversight Committee, contravenes the explicit directive oI the Constitution that the LGUs` share in the national taxes 'shall be automatically released to them. The petitioner maintains that the use oI the word 'shall must be given a compulsory meaning. To Iurther buttress this argument, the petitioner contends that to vest the Oversight Committee with the authority to determine the distribution and release oI the LGSEF, which is a part oI the IRA oI the LGUs, is an anathema to the principle oI local autonomy as embodied in the Constitution and the Local Government Code oI 1991. The petitioner cites as an example the experience in 2001 when the release oI the LGSEF was long delayed because the Oversight Committee was not able to convene that year and no guidelines were issued thereIor. Further, the possible disapproval by the Oversight Committee oI the project proposals oI the LGUs would result in the diminution oI the latter`s share in the IRA. Another inIringement alleged to be occasioned by the assailed OCD resolutions is the improper amendment to Section 285 oI the Local Government Code oI 1991 on the percentage sharing oI the IRA among the LGUs. Said provision allocates the IRA as Iollows: Provinces 23; Cities 23; Municipalities 34; and Barangays 20. This Iormula has been improperly amended or modiIied, with respect to the Iive-billion-peso portion oI the IRA allotted Ior the LGSEF, by the assailed OCD resolutions as they invariably provided Ior a diIIerent sharing scheme. The modiIications allegedly constitute an illegal amendment by the executive branch oI a substantive law. Moreover, the petitioner mentions that in the Letter dated December 5, 2001 oI respondent Executive Secretary Romulo addressed to respondent Secretary Boncodin, the Iormer endorsed to the latter the release oI Iunds to certain LGUs Irom the LGSEF in accordance with the handwritten instructions of President rroyo. Thus, the LGUs are at a loss as to how a portion oI the LGSEF is actually allocated. Further, there are still portions oI the LGSEF that, to date, have not been received by the petitioner; hence, resulting in damage and injury to the petitioner. The petitioner prays that the Court declare as unconstitutional and void the assailed provisos relating to the LGSEF in the GAAs oI 1999, 2000 and 2001 and the assailed OCD resolutions (Resolutions Nos. OCD-99-003, OCD-99-005, OCD-99-006, OCD-2000-023, OCD- 2001-029 and OCD-2002-001) issued by the Oversight Committee pursuant thereto. The petitioner, likewise, prays that the Court direct the respondents to rectiIy the unlawIul and illegal distribution and releases oI the LGSEF Ior the aIorementioned years and release the same in accordance with the sharing Iormula under Section 285 oI the Local Government Code oI 1991. Finally, the petitioner urges the Court to declare that the entire IRA should be released automatically without Iurther action by the LGUs as required by the Constitution and the Local Government Code oI 1991. The Respondents` Arguments The respondents, through the OIIice oI the Solicitor General, urge the Court to dismiss the petition on procedural and substantive grounds. On the latter, the respondents contend that the assailed provisos in the GAAs oI 1999, 2000 and 2001 and the assailed resolutions issued by the Oversight Committee are not constitutionally inIirm. The respondents advance the view that Section 6, Article X oI the Constitution does not speciIy that the 'just share oI the LGUs shall be determined solely by the Local Government Code oI 1991. Moreover, the phrase 'as determined by law in the same constitutional provision means that there exists no limitation on the power oI Congress to determine what is the 'just share oI the LGUs in the national taxes. In other words, Congress is the arbiter oI what should be the 'just share oI the LGUs in the national taxes. The respondents Iurther theorize that Section 285 oI the Local Government Code oI 1991, which provides Ior the percentage sharing oI the IRA among the LGUs, was not intended to be a Iixed determination oI their 'just share in the national taxes. Congress may enact other laws, including appropriations laws such as the GAAs oI 1999, 2000 and 2001, providing Ior a diIIerent sharing Iormula. Section 285 oI the Local Government Code oI 1991 was merely intended to be the 'deIault share oI the LGUs to do away with the need to determine annually by law their 'just share. However, the LGUs have no vested right in a permanent or Iixed percentage as Congress may increase or decrease the 'just share oI the LGUs in accordance with what it believes is appropriate Ior their operation. There is nothing in the Constitution which prohibits Congress Irom making such determination through the appropriations laws. II the provisions oI a particular statute, the GAA in this case, are within the constitutional power oI the legislature to enact, they should be sustained whether the courts agree or not in the wisdom oI their enactment. On procedural grounds, the respondents urge the Court to dismiss the petition outright as the same is deIective. The petition allegedly raises Iactual issues which should be properly threshed out in the lower courts, not this Court, not being a trier oI Iacts. SpeciIically, the petitioner`s allegation that there are portions oI the LGSEF that it has not, to date, received, thereby causing it (the petitioner) injury and damage, is subject to prooI and must be substantiated in the proper venue, i.e., the lower courts. Further, according to the respondents, the petition has already been rendered moot and academic as it no longer presents a justiciable controversy. The IRAs Ior the years 1999, 2000 and 2001, have already been released and the government is now operating under the 2003 budget. In support oI this, the respondents submitted certiIications issued by oIIicers oI the DBM attesting to the release oI the allocation or shares oI the petitioner in the LGSEF Ior 1999, 2000 and 2001. There is, thereIore, nothing more to prohibit. Finally, the petitioner allegedly has no legal standing to bring the suit because it has not suIIered any injury. In Iact, the petitioner`s 'just share has even increased. Pursuant to Section 285 oI the Local Government Code oI 1991, the share oI the provinces is 23. OCD Nos. 99-005, 99-006 and 99-003 gave the provinces 40 oI P2 billion oI the LGSEF. OCD Nos. 2000-023 and 2001-029 apportioned 26 oI P3.5 billion to the provinces. On the other hand, OCD No. 2001- 001 allocated 25 oI P3 billion to the provinces. Thus, the petitioner has not suIIered any injury in the implementation oI the assailed provisos in the GAAs oI 1999, 2000 and 2001 and the OCD resolutions. The Ruling oI the Court Procedural Issues BeIore resolving the petition on its merits, the Court shall Iirst rule on the Iollowing procedural issues raised by the respondents: (1) whether the petitioner has legal standing or locus standi to Iile the present suit; (2) whether the petition involves Iactual questions that are properly cognizable by the lower courts; and (3) whether the issue had been rendered moot and academic. %he petitioner has locus standi to maintain the present suit The gist oI the question oI standing is whether a party has 'alleged such a personal stake in the outcome oI the controversy as to assure that concrete adverseness which sharpens the presentation oI issues upon which the court so largely depends Ior illumination oI diIIicult constitutional questions. Accordingly, it has been held that the interest oI a party assailing the constitutionality oI a statute must be direct and personal. Such party must be able to show, not only that the law or any government act is invalid, but also that he has sustained or is in imminent danger oI sustaining some direct injury as a result oI its enIorcement, and not merely that he suIIers thereby in some indeIinite way. It must appear that the person complaining has been or is about to be denied some right or privilege to which he is lawIully entitled or that he is about to be subjected to some burdens or penalties by reason oI the statute or act complained oI. The Court holds that the petitioner possesses the requisite standing to maintain the present suit. The petitioner, a local government unit, seeks relieI in order to protect or vindicate an interest oI its own, and oI the other LGUs. This interest pertains to the LGUs` share in the national taxes or the IRA. The petitioner`s constitutional claim is, in substance, that the assailed provisos in the GAAs oI 1999, 2000 and 2001, and the OCD resolutions contravene Section 6, Article X oI the Constitution, mandating the 'automatic release to the LGUs oI their share in the national taxes. Further, the injury that the petitioner claims to suIIer is the diminution oI its share in the IRA, as provided under Section 285 oI the Local Government Code oI 1991, occasioned by the implementation oI the assailed measures. These allegations are suIIicient to grant the petitioner standing to question the validity oI the assailed provisos in the GAAs oI 1999, 2000 and 2001, and the OCD resolutions as the petitioner clearly has 'a plain, direct and adequate interest in the manner and distribution oI the IRA among the LGUs. %he petition involves a sinificant leal issue The crux oI the instant controversy is whether the assailed provisos contained in the GAAs oI 1999, 2000 and 2001, and the OCD resolutions inIringe the Constitution and the Local Government Code oI 1991. This is undoubtedly a legal question. On the other hand, the Iollowing Iacts are not disputed: 1. The earmarking oI Iive billion pesos oI the IRA Ior the LGSEF in the assailed provisos in the GAAs oI 1999, 2000 and re-enacted budget Ior 2001; 2. The promulgation oI the assailed OCD resolutions providing Ior the allocation schemes covering the said Iive billion pesos and the implementing rules and regulations thereIor; and 3. The release oI the LGSEF to the LGUs only upon their compliance with the implementing rules and regulations, including the guidelines and mechanisms, prescribed by the Oversight Committee. Considering that these Iacts, which are necessary to resolve the legal question now beIore this Court, are no longer in issue, the same need not be determined by a trial court. In any case, the rule on hierarchy oI courts will not prevent this Court Irom assuming jurisdiction over the petition. The said rule may be relaxed when the redress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justiIy availment oI a remedy within and calling Ior the exercise oI this Court`s primary jurisdiction. The crucial legal issue submitted Ior resolution oI this Court entails the proper legal interpretation oI constitutional and statutory provisions. Moreover, the 'transcendental importance oI the case, as it necessarily involves the application oI the constitutional principle on local autonomy, cannot be gainsaid. The nature oI the present controversy, thereIore, warrants the relaxation by this Court oI procedural rules in order to resolve the case Iorthwith. %he substantive issue needs to be resolved notwithstandin the supervenin events Granting aruendo that, as contended by the respondents, the resolution oI the case had already been overtaken by supervening events as the IRA, including the LGSEF, Ior 1999, 2000 and 2001, had already been released and the government is now operating under a new appropriations law, still, there is compelling reason Ior this Court to resolve the substantive issue raised by the instant petition. Supervening events, whether intended or accidental, cannot prevent the Court Irom rendering a decision iI there is a grave violation oI the Constitution. Even in cases where supervening events had made the cases moot, the Court did not hesitate to resolve the legal or constitutional issues raised to Iormulate controlling principles to guide the bench, bar and public. Another reason justiIying the resolution by this Court oI the substantive issue now beIore it is the rule that courts will decide a question otherwise moot and academic iI it is 'capable oI repetition, yet evading review. For the GAAs in the coming years may contain provisos similar to those now being sought to be invalidated, and yet, the question may not be decided beIore another GAA is enacted. It, thus, behooves this Court to make a categorical ruling on the substantive issue now. Substantive Issue As earlier intimated, the resolution oI the substantive legal issue in this case calls Ior the application oI a most important constitutional policy and principle, that oI local autonomy. In Article II oI the Constitution, the State has expressly adopted as a policy that: Section 25. The State shall ensure the autonomy oI local governments. An entire article (Article X) oI the Constitution has been devoted to guaranteeing and promoting the autonomy oI LGUs. Section 2 thereoI reiterates the State policy in this wise: Section 2. The territorial and political subdivisions shall enjoy local autonomy. Consistent with the principle oI local autonomy, the Constitution conIines the President`s power over the LGUs to one oI general supervision. This provision has been interpreted to exclude the power oI control. The distinction between the two powers was enunciated in Drilon v. Lim: An oIIicer in control lays down the rules in the doing oI an act. II they are not Iollowed, he may, in his discretion, order the act undone or re- done by his subordinate or he may even decide to do it himselI. Supervision does not cover such authority. The supervisor or superintendent merely sees to it that the rules are Iollowed, but he himselI does not lay down such rules, nor does he have the discretion to modiIy or replace them. II the rules are not observed, he may order the work done or re-done but only to conIorm to the prescribed rules. He may not prescribe his own manner Ior doing the act. He has no judgment on this matter except to see to it that the rules are Iollowed. The Local Government Code oI 1991 was enacted to Ilesh out the mandate oI the Constitution. The State policy on local autonomy is ampliIied in Section 2 thereoI: Sec. 2. Declaration of Policy. (a) It is hereby declared the policy oI the State that the territorial and political subdivisions oI the State shall enjoy genuine and meaningIul local autonomy to enable them to attain their Iullest development as selI-reliant communities and make them more eIIective partners in the attainment oI national goals. Toward this end, the State shall provide Ior a more responsive and accountable local government structure instituted through a system oI decentralization whereby local government units shall be given more powers, authority, responsibilities, and resources. The process oI decentralization shall proceed Irom the National Government to the local government units. Guided by these precepts, the Court shall now determine whether the assailed provisos in the GAAs oI 1999, 2000 and 2001, earmarking Ior each corresponding year the amount oI Iive billion pesos oI the IRA Ior the LGSEF and the OCD resolutions promulgated pursuant thereto, transgress the Constitution and the Local Government Code oI 1991. %he assailed provisos in the Gs of 1999, 2000 and 2001 and the OCD resolutions violate the constitutional precept on local autonomy Section 6, Article X oI the Constitution reads: Sec. 6. Local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them. When parsed, it would be readily seen that this provision mandates that (1) the LGUs shall have a 'just share in the national taxes; (2) the 'just share shall be determined by law; and (3) the 'just share shall be automatically released to the LGUs. The Local Government Code oI 1991, among its salient provisions, underscores the automatic release oI the LGUs` 'just share in this wise: Sec. 18. Power to Generate and pply Resources. Local government units shall have the power and authority to establish an organization that shall be responsible Ior the eIIicient and eIIective implementation oI their development plans, program objectives and priorities; to create their own sources oI revenue and to levy taxes, Iees, and charges which shall accrue exclusively Ior their use and disposition and which shall be retained by them; to have a just share in national taxes which shall be automatically and directly released to them without need oI Iurther action; ... Sec. 286. utomatic Release of Shares. (a) The share oI each local government unit shall be released, without need oI any Iurther action, directly to the provincial, city, municipal or barangay treasurer, as the case may be, on a quarterly basis within Iive (5) days aIter the end oI each quarter, and which shall not be subject to any lien or holdback that may be imposed by the national government Ior whatever purpose. (b) Nothing in this Chapter shall be understood to diminish the share oI local government units under existing laws. Webster`s Third New International Dictionary deIines 'automatic as 'involuntary either wholly or to a major extent so that any activity oI the will is largely negligible; oI a reIlex nature; without volition; mechanical; like or suggestive oI an automaton. Further, the word 'automatically is deIined as 'in an automatic manner: without thought or conscious intention. Being 'automatic, thus, connotes something mechanical, spontaneous and perIunctory. As such, the LGUs are not required to perIorm any act to receive the 'just share accruing to them Irom the national coIIers. As emphasized by the Local Government Code oI 1991, the 'just share oI the LGUs shall be released to them 'without need oI Iurther action. Construing Section 286 oI the LGC, we held in Pimentel, Jr. v. uirre, vi:: Section 4 oI AO 372 cannot, however, be upheld. A basic Ieature oI local Iiscal autonomy is the automatic release oI the shares oI LGUs in the National internal revenue. This is mandated by no less than the Constitution. The Local Government Code speciIies Iurther that the release shall be made directly to the LGU concerned within Iive (5) days aIter every quarter oI the year and 'shall not be subfect to any lien or holdback that may be imposed by the national overnment for whatever purpose. As a rule, the term 'SHALL is a word oI command that must be given a compulsory meaning. The provision is, thereIore, IMPERATIVE. Section 4 oI AO 372, however, orders the withholding, eIIective January 1, 1998, oI 10 percent oI the LGUs` IRA 'pending the assessment and evaluation by the Development Budget Coordinating Committee oI the emerging Iiscal situation in the country. Such withholding clearly contravenes the Constitution and the law. Although temporary, it is equivalent to a holdback, which means 'something held back or withheld, oIten temporarily. Hence, the 'temporary nature oI the retention by the national government does not matter. Any retention is prohibited. In sum, while Section 1 oI AO 372 may be upheld as an advisory eIIected in times oI national crisis, Section 4 thereoI has no color oI validity at all. The latter provision eIIectively encroaches on the Iiscal autonomy oI local governments. Concededly, the President was well- intentioned in issuing his Order to withhold the LGUs` IRA, but the rule oI law requires that even the best intentions must be carried out within the parameters oI the Constitution and the law. Verily, laudable purposes must be carried out by legal methods. The 'just share oI the LGUs is incorporated as the IRA in the appropriations law or GAA enacted by Congress annually. Under the assailed provisos in the GAAs oI 1999, 2000 and 2001, a portion oI the IRA in the amount oI Iive billion pesos was earmarked Ior the LGSEF, and these provisos imposed the condition that 'such amount shall be released to the local government units subject to the implementing rules and regulations, including such mechanisms and guidelines Ior the equitable allocations and distribution oI said Iund among local government units subject to the guidelines that may be prescribed by the Oversight Committee on Devolution. Pursuant thereto, the Oversight Committee, through the assailed OCD resolutions, apportioned the Iive billion pesos LGSEF such that: For 1999 P2 billion - allocated according to Sec. 285 LGC P2 billion - ModiIied Sharing Formula (Provinces 40; Cities 20; Municipalities 40) P1 billion projects (LAAP) approved by OCD. For 2000 P3.5 billion ModiIied Sharing Formula (Provinces 26; Cities 23; Municipalities 35; Barangays 16); P1.5 billion projects (LAAP) approved by the OCD. For 2001 P3 billion ModiIied Sharing Formula (Provinces 25; Cities 25; Municipalities 35; Barangays 15) P1.9 billion priority projects P100 million capability building Iund. SigniIicantly, the LGSEF could not be released to the LGUs without the Oversight Committee`s prior approval. Further, with respect to the portion oI the LGSEF allocated Ior various projects oI the LGUs (P1 billion Ior 1999; P1.5 billion Ior 2000 and P2 billion Ior 2001), the Oversight Committee, through the assailed OCD resolutions, laid down guidelines and mechanisms that the LGUs had to comply with beIore they could avail oI Iunds Irom this portion oI the LGSEF. The guidelines required (a) the LGUs to identiIy the projects eligible Ior Iunding based on the criteria laid down by the Oversight Committee; (b) the LGUs to submit their project proposals to the DILG Ior appraisal; (c) the project proposals that passed the appraisal oI the DILG to be submitted to the Oversight Committee Ior review, evaluation and approval. It was only upon approval thereoI that the Oversight Committee would direct the DBM to release the Iunds Ior the projects. To the Court`s mind, the entire process involving the distribution and release oI the LGSEF is constitutionally impermissible. The LGSEF is part oI the IRA or 'just share oI the LGUs in the national taxes. To subject its distribution and release to the vagaries oI the implementing rules and regulations, including the guidelines and mechanisms unilaterally prescribed by the Oversight Committee Irom time to time, as sanctioned by the assailed provisos in the GAAs oI 1999, 2000 and 2001 and the OCD resolutions, makes the release not automatic, a Ilagrant violation oI the constitutional and statutory mandate that the 'just share oI the LGUs 'shall be automatically released to them. The LGUs are, thus, placed at the mercy oI the Oversight Committee. Where the law, the Constitution in this case, is clear and unambiguous, it must be taken to mean exactly what it says, and courts have no choice but to see to it that the mandate is obeyed. Moreover, as correctly posited by the petitioner, the use oI the word 'shall connotes a mandatory order. Its use in a statute denotes an imperative obligation and is inconsistent with the idea oI discretion. Indeed, the Oversight Committee exercising discretion, even control, over the distribution and release oI a portion oI the IRA, the LGSEF, is an anathema to and subversive oI the principle oI local autonomy as embodied in the Constitution. Moreover, it Iinds no statutory basis at all as the Oversight Committee was created merely to Iormulate the rules and regulations Ior the eIIicient and eIIective implementation oI the Local Government Code oI 1991 to ensure 'compliance with the principles oI local autonomy as deIined under the Constitution. In Iact, its creation was placed under the title oI 'Transitory Provisions, signiIying its ad hoc character. According to Senator Aquilino Q. Pimentel, the principal author and sponsor oI the bill that eventually became Rep. Act No. 7160, the Committee`s work was supposed to be done a year Irom the approval oI the Code, or on October 10, 1992. The Oversight Committee`s authority is undoubtedly limited to the implementation oI the Local Government Code oI 1991, not to supplant or subvert the same. Neither can it exercise control over the IRA, or even a portion thereoI, oI the LGUs. That the automatic release oI the IRA was precisely intended to guarantee and promote local autonomy can be gleaned Irom the discussion below between Messrs. Jose N. Nolledo and Regalado M. Maambong, then members oI the 1986 Constitutional Commission, to wit: MR. MAAMBONG. UnIortunately, under Section 198 oI the Local Government Code, the existence oI subprovinces is still acknowledged by the law, but the statement oI the Gentleman on this point will have to be taken up probably by the Committee on Legislation. A second point, Mr. Presiding OIIicer, is that under Article 2, Section 10 oI the 1973 Constitution, we have a provision which states: The State shall guarantee and promote the autonomy oI local government units, especially the barrio, to insure their Iullest development as selI-reliant communities. This provision no longer appears in the present conIiguration; does this mean that the concept oI giving local autonomy to local governments is no longer adopted as Iar as this Article is concerned? MR. NOLLEDO. No. In the report oI the Committee on Preamble, National Territory, and Declaration oI Principles, that concept is included and widened upon the initiative oI Commissioner Bennagen. MR. MAAMBONG. Thank you Ior that. With regard to Section 6, sources oI revenue, the creation oI sources as provided by previous law was 'subject to limitations as may be provided by law, but now, we are using the term 'subject to such guidelines as may be Iixed by law. In Section 7, mention is made about the 'unique, distinct and exclusive charges and contributions, and in Section 8, we talk about 'exclusivity oI local taxes and the share in the national wealth. Incidentally, I was one oI the authors oI this provision, and I am very thankIul. Does this indicate local autonomy, or was the wording oI the law changed to give more autonomy to the local government units? MR. NOLLEDO. Yes. In eIIect, those words indicate also 'decentralization because local political units can collect taxes, Iees and charges subject merely to guidelines, as recommended by the league oI governors and city mayors, with whom I had a dialogue Ior almost two hours. They told me that limitations may be questionable in the sense that Congress may limit and in eIIect deny the right later on. MR. MAAMBONG. Also, this provision on 'automatic release oI national tax share points to more local autonomy. Is this the intention? MR. NOLLEDO. Yes, the Commissioner is perIectly right. The concept oI local autonomy was explained in Gan:on v. Court of ppeals in this wise: As the Constitution itselI declares, local autonomy means a more responsive and accountable local government structure instituted through a system oI decentralization.` The Constitution, as we observed, does nothing more than to break up the monopoly oI the national government over the aIIairs oI local governments and as put by political adherents, to 'liberate the local governments Irom the imperialism oI Manila. Autonomy, however, is not meant to end the relation oI partnership and interdependence between the central administration and local government units, or otherwise, to usher in a regime oI Iederalism. The Charter has not taken such a radical step. Local governments, under the Constitution, are subject to regulation, however limited, and Ior no other purpose than precisely, albeit paradoxically, to enhance selI-government. As we observed in one case, decentralization means devolution oI national administration but not power to the local levels. Thus: Now, autonomy is either decentralization oI administration or decentralization oI power. There is decentralization oI administration when the central government delegates administrative powers to political subdivisions in order to broaden the base oI government power and in the process to make local governments more responsive and accountable` and ensure their Iullest development as selI-reliant communities and make them more eIIective partners in the pursuit oI national development and social progress.` At the same time, it relieves the central government oI the burden oI managing local aIIairs and enables it to concentrate on national concerns. The President exercises general supervision` over them, but only to ensure that local aIIairs are administered according to law.` He has no control over their acts in the sense that he can substitute their judgments with his own. Decentralization oI power, on the other hand, involves an abdication oI political power in the |sic| Iavor oI local governments |sic| units declared to be autonomous. In that case, the autonomous government is Iree to chart its own destiny and shape its Iuture with minimum intervention Irom central authorities. According to a constitutional author, decentralization oI power amounts to selI-immolation,` since in that event, the autonomous government becomes accountable not to the central authorities but to its constituency. Local autonomy includes both administrative and Iiscal autonomy. The Iairly recent case oI Pimentel v. uirre is particularly instructive. The Court declared therein that local Iiscal autonomy includes the power oI the LGUs to, inter alia, allocate their resources in accordance with their own priorities: Under existing law, local government units, in addition to having administrative autonomy in the exercise oI their Iunctions, enjoy Iiscal autonomy as well. Fiscal autonomy means that local governments have the power to create their own sources oI revenue in addition to their equitable share in the national taxes released by the national government, as well as the power to allocate their resources in accordance with their own priorities. It extends to the preparation oI their budgets, and local oIIicials in turn have to work within the constraints thereoI. They are not Iormulated at the national level and imposed on local governments, whether they are relevant to local needs and resources or not ... Further, a basic Ieature oI local Iiscal autonomy is the constitutionally mandated automatic release oI the shares oI LGUs in the national internal revenue. Following this ratiocination, the Court in Pimentel struck down as unconstitutional Section 4 oI Administrative Order (A.O.) No. 372 which ordered the withholding, eIIective January 1, 1998, oI ten percent oI the LGUs` IRA 'pending the assessment and evaluation by the Development Budget Coordinating Committee oI the emerging Iiscal situation. In like manner, the assailed provisos in the GAAs oI 1999, 2000 and 2001, and the OCD resolutions constitute a 'withholding oI a portion oI the IRA. They put on hold the distribution and release oI the Iive billion pesos LGSEF and subject the same to the implementing rules and regulations, including the guidelines and mechanisms prescribed by the Oversight Committee Irom time to time. Like Section 4 oI A.O. 372, the assailed provisos in the GAAs oI 1999, 2000 and 2001 and the OCD resolutions eIIectively encroach on the Iiscal autonomy enjoyed by the LGUs and must be struck down. They cannot, thereIore, be upheld. %he assailed provisos in the Gs of 1999, 2000 and 2001 and the OCD resolutions cannot amend Section 285 of the Local Government Code of 1991 Section 284 oI the Local Government Code provides that, beginning the third year oI its eIIectivity, the LGUs` share in the national internal revenue taxes shall be 40. This percentage is Iixed and may not be reduced except 'in the event the national government incurs an unmanageable public sector deIicit" and only upon compliance with stringent requirements set Iorth in the same section: Sec. 284. ... Provided, That in the event that the national government incurs an unmanageable public sector deIicit, the President oI the Philippines is hereby authorized, upon recommendation oI Secretary oI Finance, Secretary oI Interior and Local Government and Secretary oI Budget and Management, and subject to consultation with the presiding oIIicers oI both Houses oI Congress and the presidents oI the liga, to make the necessary adjustments in the internal revenue allotment oI local government units but in no case shall the allotment be less than thirty percent (30) oI the collection oI the national internal revenue taxes oI the third Iiscal year preceding the current Iiscal year; Provided, further That in the Iirst year oI the eIIectivity oI this Code, the local government units shall, in addition to the thirty percent (30) internal revenue allotment which shall include the cost oI devolved Iunctions Ior essential public services, be entitled to receive the amount equivalent to the cost oI devolved personnel services. Thus, Irom the above provision, the only possible exception to the mandatory automatic release oI the LGUs` IRA is iI the national internal revenue collections Ior the current Iiscal year is less than 40 percent oI the collections oI the preceding third Iiscal year, in which case what should be automatically released shall be a proportionate amount oI the collections Ior the current Iiscal year. The adjustment may even be made on a quarterly basis depending on the actual collections oI national internal revenue taxes Ior the quarter oI the current Iiscal year. In the instant case, however, there is no allegation that the national internal revenue tax collections Ior the Iiscal years 1999, 2000 and 2001 have Iallen compared to the preceding three Iiscal years. Section 285 then speciIies how the IRA shall be allocated among the LGUs: Sec. 285. llocation to Local Government Units. The share oI local government units in the internal revenue allotment shall be allocated in the Iollowing manner: (a) Provinces Twenty-three (23) (b) Cities Twenty-three percent (23); (c) Municipalities Thirty-Iour (34); and (d) Barangays Twenty percent (20). However, this percentage sharing is not Iollowed with respect to the Iive billion pesos LGSEF as the assailed OCD resolutions, implementing the assailed provisos in the GAAs oI 1999, 2000 and 2001, provided Ior a diIIerent sharing scheme. For example, Ior 1999, P2 billion oI the LGSEF was allocated as Iollows: Provinces 40; Cities 20; Municipalities 40. For 2000, P3.5 billion oI the LGSEF was allocated in this manner: Provinces 26; Cities 23; Municipalities 35; Barangays 26. For 2001, P3 billion oI the LGSEF was allocated, thus: Provinces 25; Cities 25; Municipalities 35; Barangays 15. The respondents argue that this modiIication is allowed since the Constitution does not speciIy that the 'just share oI the LGUs shall only be determined by the Local Government Code oI 1991. That it is within the power oI Congress to enact other laws, including the GAAs, to increase or decrease the 'just share oI the LGUs. This contention is untenable. The Local Government Code oI 1991 is a substantive law. And while it is conceded that Congress may amend any oI the provisions therein, it may not do so through appropriations laws or GAAs. Any amendment to the Local Government Code oI 1991 should be done in a separate law, not in the appropriations law, because Congress cannot include in a general appropriation bill matters that should be more properly enacted in a separate legislation. A general appropriations bill is a special type oI legislation, whose content is limited to speciIied sums oI money dedicated to a speciIic purpose or a separate Iiscal unit. Any provision therein which is intended to amend another law is considered an 'inappropriate provision. The category oI 'inappropriate provisions includes unconstitutional provisions and provisions which are intended to amend other laws, because clearly these kinds oI laws have no place in an appropriations bill. Increasing or decreasing the IRA oI the LGUs or modiIying their percentage sharing therein, which are Iixed in the Local Government Code oI 1991, are matters oI general and substantive law. To permit Congress to undertake these amendments through the GAAs, as the respondents contend, would be to give Congress the unbridled authority to unduly inIringe the Iiscal autonomy oI the LGUs, and thus put the same in jeopardy every year. This, the Court cannot sanction. It is relevant to point out at this juncture that, unlike those oI 1999, 2000 and 2001, the GAAs oI 2002 and 2003 do not contain provisos similar to the herein assailed provisos. In other words, the GAAs oI 2002 and 2003 have not earmarked any amount oI the IRA Ior the LGSEF. Congress had perhaps seen Iit to discontinue the practice as it recognizes its inIirmity. Nonetheless, as earlier mentioned, this Court has deemed it necessary to make a deIinitive ruling on the matter in order to prevent its recurrence in Iuture appropriations laws and that the principles enunciated herein would serve to guide the bench, bar and public. Conclusion In closing, it is well to note that the principle oI local autonomy, while concededly expounded in greater detail in the present Constitution, dates back to the turn oI the century when President William McKinley, in his Instructions to the Second Philippine Commission dated April 7, 1900, ordered the new Government 'to devote their attention in the Iirst instance to the establishment oI municipal governments in which the natives oI the Islands, both in the cities and in the rural communities, shall be aIIorded the opportunity to manage their own aIIairs to the Iullest extent oI which they are capable, and subject to the least degree oI supervision and control in which a careIul study oI their capacities and observation oI the workings oI native control show to be consistent with the maintenance oI law, order and loyalty. While the 1935 Constitution had no speciIic article on local autonomy, nonetheless, it limited the executive power over local governments to 'general supervision ... as may be provided by law. Subsequently, the 1973 Constitution explicitly stated that '|t|he State shall guarantee and promote the autonomy oI local government units, especially the barangay to ensure their Iullest development as selI- reliant communities. An entire article on Local Government was incorporated therein. The present Constitution, as earlier opined, has broadened the principle oI local autonomy. The 14 sections in Article X thereoI markedly increased the powers oI the local governments in order to accomplish the goal oI a more meaningIul local autonomy. Indeed, the value oI local governments as institutions oI democracy is measured by the degree oI autonomy that they enjoy. As eloquently put by M. De Tocqueville, a distinguished French political writer, '|l|ocal assemblies oI citizens constitute the strength oI Iree nations. Township meetings are to liberty what primary schools are to science; they bring it within the people`s reach; they teach men how to use and enjoy it. A nation may establish a system oI Iree governments but without the spirit oI municipal institutions, it cannot have the spirit oI liberty. Our national oIIicials should not only comply with the constitutional provisions on local autonomy but should also appreciate the spirit and liberty upon which these provisions are based. WHEREFORE, the petition is GRANTED. The assailed provisos in the General Appropriations Acts oI 1999, 2000 and 2001, and the assailed OCD Resolutions, are declared UNCONSTITUTIONAL. SO ORDERED. Vitug, (Acting ChieI Justice), Panganiban, Quisumbing, Ynares- Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Co
EN BANC
chanroblesvirtuallawlibrary FRANCISCO C. ROSALES, 1R., G.R. No. 154095chanroblesvirtuallawlibrary Petitioner,chanroblesvirtuallawlibrary Present:
8efore us ls a peLlLlon for revlew on cerLlorarl of Lhe ueclslon[1] of Lhe CourL of Appeals (CA) ln CAC8 S no 33904 afflrmlng 8esoluLlon no 991208[2] of Lhe Clvll Servlce Commlsslon (CSC) granLlng Lhe appeal of Lhe respondenL hereln from Lhe Crder daLed SepLember 24 1998 dlsmlsslng Lhe respondenL as Munlclpal Lnglneer of CaLarman norLhern Samar and 8esoluLlon no 992130 denylng Lhe moLlon for reconslderaLlon Lhereof
As culled by Lhe appellaLe courL from Lhe records Lhe anLecedenLs are as follows
8elng Lhe dulyelecLed mayor of CaLarman norLhern Samar durlng Lhe 1998 local elecLlons lranclsco C 8osales !r (or peLlLloner) assumed offlce on !uly 1 1999 ShorLly LhereafLer peLlLloner summoned Lhe deparLmenL heads for a conference among whom was Lhe munlclpal englneer Mlguel P Ml[ares (or respondenL)
uurlng Lhe meeLlng peLlLloner Lold respondenL Lo reslgn under paln of abollLlon of hls poslLlon noL wlshlng Lo anLagonlze Lhe mayor respondenL lnformed hlm a week laLer LhaL he was open Lo Lhe posslblllLy of belng Lransferred or deLalled aL Lhe rovlnclal Lnglneerlng Cfflce 1hen and Lhere peLlLloner lnsLrucLed respondenL Lo prepare hls papers
Cn AugusL 3 1998 peLlLloner lndorsed respondenL Lo Lhe provlnclal governor of norLhern Samar for conslderaLlon for Lhe poslLlon of AsslsLanL rovlnclal Lnglneer
Cn AugusL 12 1998 peLlLloner wroLe Lo respondenL sLaLlng
?our requesL Lo Lransfer Lo Lhe rovlnclal Lnglneerlng Cfflce CaLarman norLhern Samar ls granLed for a perlod of LhlrLy (30) days from recelpL hereof sub[ecL Lo Lhe condlLlon lmposed by Clvll Servlce Law rules and regulaLlons
Meanwhlle respondenL conLlnued reporLlng for work aL Lhe Munlclpal Lnglneers Cfflce Powever Lhe provlnclal governor dld noL acL on peLlLloners endorsemenL
Cn SepLember 24 1998 peLlLloner agaln wroLe Lo respondenL Lhls Llme lnformlng hlm of hls separaLlon vlz
1he 30day perlod glven Lo you Lo Lransfer Lo Lhe rovlnclal Lnglneerlng Cfflce has now elapsed and ln as much as you dld noL seek an exLenslon of your permlL Lo Lransfer you are consldered reslgned from Lhls governmenL unlL as of SepLember 13 1996 pursuanL Lo MC no 38 S 1993 of Lhe Clvll Servlce Commlsslon
ln a leLLer daLed CcLober 2 1998 respondenL requesLed peLlLloner Lo wlLhdraw Lhe abovequoLed separaLlon leLLer Pe polnLed ouL LhaL slnce Lhe requesL for Lransfer Lo Lhe rovlnclal Lnglneers Cfflce was noL acLed upon Lhe same never became effecLlve and Lherefore he dld noL cease Lo be an employee of Lhe munlclpal governmenL
ln hls reply leLLer daLed CcLober 13 1998 peLlLloner explalned LhaL respondenL was noL LermlnaLed and LhaL hls separaLlon from Lhe servlce was by operaLlon of law le Clvll Servlce Commlsslon (or CSC) Memorandum Clrcular (or MC) no 38 S 1993 ln Lhe same communlcaLlon peLlLloner offered Lo relnsLaLe respondenL
Cn november 12 1998 respondenL flled a complalnL for lllegal LermlnaLlon agalnsL peLlLloner before Lhe CSC 1reaLlng Lhe complalnL as an appeal Lhe ulrecLor of CSC 8eglonal Cfflce no 8 lnsLrucLed vlcLorla L valerlano (or Ms valerlano) Pead Clvll Servlce lleld Cfflcer ln CaLarman Lo conducL a facLflndlng lnvesLlgaLlon on respondenLs case ursuanL Lo Lhe dlrecLlve Ms valerlano asked peLlLloner Lo submlL Lhe orlglnal of respondenLs requesL for Lransfer ln a leLLer daLed !anuary 11 1998 peLlLloner lnformed Ms valerlano LhaL respondenLs requesL was merely verbal
ln an order daLed Aprll 16 1999 Lhe CSC Cfflce of Legal Affalrs requlred peLlLloner Lo commenL on Lhe appeal Complylng wlLh Lhe dlrecLlve peLlLloner explalned LhaL respondenLs separaLlon was valld and legal under CSC MC no 38 S 1993 slnce Lhe laLLers permlL Lo Lransfer Lo Lhe rovlnclal Lnglneers Cfflce explred wlLhouL hls Lransfer belng effecLed ln supporL of hls defense peLlLloner appended hls documenLary evldence Lo hls commenL lncludlng Lhe legal oplnlons of Lhe CSC 8eglonal Cfflce and Lhe rovlnclal rosecuLor upholdlng Lhe valldlLy of hls acLlon
Cn !une 17 1999 Lhe CSC lssued a resoluLlon Lhe decreLal porLlon of whlch resoluLlon (slc) reads
WPL8LlC8L Lhe appeal of Mlguel P Ml[ares ls hereby granLed Accordlngly Mayor lranclsco C 8osales !r ls dlrecLed Lo lmmedlaLely relnsLaLe Ml[ares Lo hls former poslLlon of Munlclpal Lnglneer and Lo cause Lhe paymenL of all hls salarles and oLher beneflLs from Lhe daLe of hls unlawful separaLlon from Lhe servlce up Lo hls acLual relnsLaLemenL [3]
1he CSC held LhaL Lhe respondenL dld noL freely and volunLarlly seek permlsslon from Lhe peLlLloner Lo Lransfer Lo anoLher offlce and LhaL based on Lhe record Lhe supposed Lransfer of Lhe respondenL Lo Lhe Cfflce of Lhe rovlnclal Lnglneer was a shrewd machlnaLlon or clever ploy resorLed Lo by Lhe peLlLloner Lo ousL Lhe respondenL from hls poslLlon as Munlclpal Lnglneer hence such Lransfer was lllegal 1he CSC clLed Lhe rullngs of Lhls CourL ln f Mflf v lopez[4] and lvloffclf I v o 1omfs[5] 1he CSC also ruled LhaL a requesL for Lransfer under CSC Memorandum Clrcular no 9838 musL be ln wrlLlng and LhaL even assumlng LhaL a verbal requesL for Lransfer may be made Lhe peLlLloner falled Lo adduce any proof LhaL Lhe respondenL made such verbal requesL as well as Lhe daLe of Lhe effecLlvlLy of Lhe Lransfer 1he CSC clLed lLs rullng ln CSC 8esoluLlon no 991616 daLed !uly 20 1999 1he CSC declared LhaL Lhe leLLer of Lhe peLlLloner Lo Lhe respondenL daLed AugusL 12 1998 was buL a deLall of Lhe respondenL Lo Lhe Cfflce of Lhe rovlnclal Lnglneer
1he peLlLloners moLlon for a reconslderaLlon of Lhe resoluLlon was denled by Lhe CSC per lLs 8esoluLlon no 992130
1he peLlLloner LhereafLer flled a peLlLlon for revlew wlLh Lhe CA assalllng Lhe resoluLlons of Lhe CSC Cn uecember 20 2001 Lhe CA rendered a declslon dlsmlsslng Lhe peLlLlon and afflrmlng Lhe resoluLlons of Lhe CSC 1he appellaLe courL afflrmed lo oo noL only Lhe flndlng of Lhe CSC buL also lLs rullngs on Lhe lssues ralsed by Lhe peLlLloner 1he CA also held LhaL
WellseLLled ls Lhe rule LhaL ln revlewlng admlnlsLraLlve declslons Lhe flndlngs of facL made Lhereln musL be respecLed as long as Lhey are supporLed by subsLanLlal evldence (Lo vs CourL of Appeals 321 SC8A 190) We see no cogenL reason Lo deparL from sald prlnclple lL ls also noLeworLhy LhaL Lhe ground relled upon Lo [usLlfy respondenLs removal le explraLlon of hls permlL Lo Lransfer ls purely Lechnlcal and Lherefore Loo fllmsy Lo overrlde Lhe consLlLuLlonal mandaLe upholdlng an employees rlghL Lo securlLy of Lenure (ArL lx8 Sec 2 par 3 1987 ConsLlLuLlon) As held ln lvloffclf I vs o 1omfs (244 SC8A 393) Lhe guaranLee of securlLy of Lenure ls an lmporLanL ob[ecL of Lhe clvll servlce sysLem because lL affords a falLhful employee permanence of employmenL aL leasL for Lhe perlod prescrlbed by law and frees Lhe employee from Lhe fear of pollLlcal and personal pre[udlclal reprlsal[6]
1he peLlLloners moLlon for reconslderaLlon of Lhe declslon was denled by Lhe appellaLe courL
1he peLlLloner flled hls peLlLlon for revlew on cerLlorarl wlLh Lhls CourL conLendlng LhaL Lhe CA erred as follows
1he peLlLloner faulLs Lhe CSC and Lhe appellaLe courL for rullng ln favor of Lhe respondenL conLendlng LhaL as gleaned from Lhe respondenLs CcLober 2 1998 LeLLer Lhe laLLer requesLed for a Lransfer and was noL coerced nor forced Lo do so 1he peLlLloner asserLs LhaL no less Lhan Lhe respondenL declared Lhereln as well as on Lhe oLher documenLs on record LhaL he requesLed Lo be Lransferred Lo Lhe Cfflce of Lhe rovlnclal Lnglneer and LhaL he secured phoLo coples of hls servlce records and oLher documenLs from Lhe munlclpallLy ln supporL of hls wrlLLen requesL for Lransfer and hlmself submlLLed such requesL Lo Lhe Cfflce of Lhe Covernor 1he peLlLloner asserLs LhaL Lhe CcLober 28 1998 Cplnlon of CSC 8eglonal Cfflce no 8 and of Lhe rovlnclal rosecuLor daLed november 12 1998 fronLally belle Lhe flndlngs of Lhe CSC and Lhe appellaLe courL Accordlng Lo Lhe peLlLloner he should noL be faulLed by Lhe CSC for applylng Lhe leLLer and splrlL of CSC Memorandum Clrcular no 9338
1he peLlLloner furLher alleges LhaL Lhe respondenL dld noL even heave a whlmper of proLesL desplLe Lhe recelpL of Lhe LeLLer daLed SepLember 24 1998 lnformlng hlm of hls separaLlon 1he respondenL ls Lhus esLopped Lhe peLlLloner lnslsLs from assalllng Lhe LermlnaLlon of hls servlce as Munlclpal Lnglneer of CaLarman 1he peLlLloner concedes LhaL facLual flndlngs of quasl[udlclal bodles such as Lhe CSC are concluslve lf based on subsLanLlal evldence Pe however conLends LhaL ln Lhls case Lhe CSC lgnored and mlsundersLood Lhe evldence on record Lhereby commlLLlng a grave ln[usLlce
We do noL agree wlLh Lhe peLlLloner CSC Memorandum Clrcular no 9338 reads
1ransfer ls a movemenL from one poslLlon wlLhouL break ln servlce lnvolvlng Lhe lssuance of an appolnLmenL
1he Lransfer may be from one agency Lo anoLher or from one organlzaLlonal unlL Lo anoLher ln Lhe same agency An employee who seeks Lransfer Lo anoLher offlce shall flrsL secure permlsslon from Lhe head of Lhe deparLmenL or agency where he ls employed sLaLlng Lhe effecLlve daLe of Lhe Lransfer lf Lhe requesL Lo Lransfer of an employee ls noL granLed by Lhe head of Lhe agency where he ls employed lL shall be deemed approved afLer Lhe lapse of 30 days from Lhe daLe of noLlce Lo Lhe agency head
o wbfeve efsoo be employee flls o fose oo be speclleJ Jfe be sbfll be cooslJeeJ esloeJ foJ bls eemploymeo lo bls ome olce sbfll be f be Jlsceloo o bls befJ[8]
1he CSC lnLerpreLed lLs Memorandum as requlrlng a wrlLLen and noL merely a verbal requesL for an employee Lo Lransfer Lo anoLher offlce Moreover such requesL musL be express and unequlvocal and cannoL be merely lmplled or amblguous 1he requesL by an employee Lo Lransfer Lo anoLher offlce musL be such LhaL he lnLended Lo surrender hls permanenL offlce Also a Lransfer connoLes an absoluLe rellnqulshmenL of an offlce ln exchange for anoLher offlce Such requesL musL be volunLary on Lhe parL of Lhe offlcer concerned and noL vlLlaLed by force coerclon or lnLlmldaLlon or even decelL lndeed ln f Mflf v lopez[9] we held LhaL
A Lransfer LhaL resulLs ln promoLlon or demoLlon advancemenL or reducLlon or a Lransfer LhaL alms Lo lure Lhe employee away from hls permanenL poslLlon cannoL be done wlLhouL Lhe employees consenL lor LhaL would consLlLuLe removal from offlce lndeed no permanenL Lransfer can Lake place unless Lhe offlcer or employee ls flrsL removed from Lhe poslLlon held and Lhen appolnLed Lo anoLher poslLlon[10]
1he CourL also held LhaL unconsenLed Lransfer ls anaLhema Lo securlLy of Lenure[11] A Lransfer LhaL alms by lndlrecL meLhod Lo LermlnaLe servlces or Lo force reslgnaLlon consLlLuLes removal[12] An employee cannoL be Lransferred unless for causes provlded for by law and afLer due process[13] Any aLLempL Lo breach Lhe proLecLlve wall bullL around Lhe employees rlghL Lo securlLy of Lenure should be slaln on slghL 1he rlghL of employees Lo securlLy of Lenure should never be sacrlflced merely aL Lhe whlms and pleasure of some unscrupulous and hearLless pollLlclans As we held ln -emeozo v fblllfoo[14]
1here are alLogeLher Loo many cases of Lhls naLure whereln local elecLlve offlclals upon assumpLlon of offlce wleld Lhelr newfound power lndlscrlmlnaLely by replaclng employees wlLh Lhelr own proLeges regardless of Lhe laws and regulaLlons governlng Lhe clvll servlce vlcLory aL Lhe polls should noL be Laken as auLhorlLy for Lhe commlsslon of such lllegal acLs[15]
ln Lhls case Lhe peLlLloner who percelved LhaL Lhe respondenL was a well known supporLer of Lhe pollLlcal parLy opposed Lo hls candldacy coerced Lhe respondenL lnLo reslgnlng and even LhreaLened Lo have hls poslLlon as Munlclpal Lnglneer abollshed 1hls was chronlcled by Lhe respondenL ln hls leLLer Lo Lhe peLlLloner daLed CcLober 2 1998
Pon lranclsco C 8osales !r Munlclpal Mayor CaLarmannorLhern Samar
uear Mayor 8osales
ln answer Lo your leLLer of 24 SepLember 1998 LermlnaLlng my servlces as Munlclpal Lnglneer of CaLarman effecLlve SepLember 13 1998 allegedly due Lo my fallure Lo seek an exLenslon of my permlL Lo Lransfer Lo Lhe rovlnclal Lnglneerlng Cfflce please be remlnded of Lhe followlng facLs and evenLs
A few days afLer you assumed offlce as new Mayor of CaLarman or on !uly 2 1998 you called me Lo your offlce and Lold me Lo reslgn from my poslLlon as Munlclpal Lnglneer because you dld noL llke me Lo conLlnue servlng under your admlnlsLraLlon and lf l dld noL reslgn you would abollsh my poslLlon ?ou glve (slc) me one week Lo Lhlnk abouL your proposal As a permanenL employee l reallzed LhaL your proposal was pollLlcal harassmenL because l dld noL supporL you durlng Lhe lasL elecLlons[16]
1he peLlLloner denled Lhe allegaLlon ln hls leLLer Lo Lhe respondenL daLed CcLober 13 1998 LhaL Lhe CSC correcLly dlsbelleved Lhe peLlLloners bare denlal 8efore Lhe peLlLloner was elecLed Mayor of CaLarman and assumed offlce Lhere was no reason for Lhe respondenL Lo abandon hls poslLlon as Munlclpal Lnglneer and seek a Lransfer Lo anoLher offlce 1he respondenLs ordeal commenced afLer Lhe peLlLloner assumed offlce as Munlclpal Mayor and coerced Lhe respondenL lnLo reslgnlng or Lransferrlng Lo anoLher poslLlon
1he respondenL ln hls leLLer Lo Lhe peLlLloner daLed CcLober 2 1998 admlLLed LhaL durlng Lhelr second meeLlng on AugusL 10 1998 he suggesLed LhaL he was open Lo a Lransfer Lo Lhe rovlnclal Lnglneerlng Cfflce or aL leasL Lo be deLalled LhereaL ln lleu of reslgnaLlon Lo whlch Lhe peLlLloner agreed and LhaL upon Lhe peLlLloners orders Lhe respondenL accompllshed Lhe requlslLe lorm 212 secured coples of hls servlce records and submlLLed Lhe same Lo Lhe Cfflce of Lhe rovlnclal Covernor for a posslble appolnLmenL as AsslsLanL rovlnclal Lnglneer and LhaL Lhe peLlLloner endorsed and recommended Lhe same Lo Lhe rovlnclal Covernor Powever Laklng lnLo conslderaLlon Lhe enLlreLy of Lhe conLenLs of Lhe leLLer and Lhe facLs and clrcumsLances whlch lmpelled Lhe respondenL Lo wrlLe Lhe same lL cannoL Lhereby be concluded LhaL Lhe respondenL had volunLarlly and unequlvocally declded Lo Lransfer Lo Lhe Cfflce of Lhe rovlnclal Lnglneer ln llghL of Lhe demands and LhreaLs of Lhe peLlLloner Lhe respondenL had only Lhree opLlons Lo reslgn Lo agree Lo Lransfer Lo anoLher offlce or Lo remaln as Munlclpal Lnglneer wlLh Lhe LhreaL of Lhe peLlLloner Lo have hls poslLlon abollshed hanglng over hls head
AdmlLLedly raLher Lhan reslgn as demanded by Lhe peLlLloner Lhe respondenL opLed Lo make hlmself avallable for appolnLmenL by Lhe rovlnclal Covernor as AsslsLanL rovlnclal Lnglneer Powever Lhe lorm 212 submlLLed by Lhe respondenL Lo Lhe rovlnclal Covernor ls noL Lhe wrlLLen requesL envlsaged ln CSC Memorandum Clrcular no 9338 for Lhe followlng reasons (a) Lhe respondenL conLlnued reporLlng and performlng hls duLles as Munlclpal Lnglneer of CaLarman and recelvlng hls salary as such and (b) Lhe respondenL dld noL send any wrlLLen requesL Lo Lhe peLlLloner for Lransfer Lo Lhe Cfflce of Lhe rovlnclal Lnglneer
LvldenLly Lhe respondenL lnLended Lo requesL for permlsslon Lo Lransfer Lo Lhe poslLlon of AsslsLanL rovlnclal Lnglneer only afLer Lhe Covernor had agreed LhereLo 1he respondenL dld noL wanL Lo rlsk unemploymenL by maklng a wrlLLen requesL for Lransfer wlLhouL flrsL belng assured of hls appolnLmenL by Lhe rovlnclal Covernor Lo Lhe poslLlon of AsslsLanL rovlnclal Lnglneer hence he opLed Lo walL for Lhe rovlnclal Covernors approval for hls appolnLmenL before submlLLlng a wrlLLen requesL for Lransfer Lo Lhe peLlLloner As lL were Lhe Covernor falled Lo acL on Lhe respondenLs appllcaLlon ln hls obsesslon Lo do away wlLh Lhe respondenL even before Lhe Covernor could acL on hls papers Lhe peLlLloner wroLe Lhe respondenL on AugusL 12 1998 lnformlng Lhe laLLer LhaL hls requesL for Lransfer had been granLed knowlng fully well LhaL Lhe respondenL had noL yeL made such a wrlLLen requesL for Lransfer 1he leLLer of Lhe peLlLloner reads
aYa_`%%%
Mlguel P Ml[ares Munlclpal Lnglneer CaLarmannorLhern Samar
Slr
?our requesL Lo Lransfer Lo Lhe rovlnclal Lnglneerlng Cfflce CaLarman norLhern Samar ls granLed for a perlod of LhlrLy (30) days from recelpL hereof sub[ecL Lo Lhe condlLlon lmposed by Clvll Servlce Law 8ules and 8egulaLlons
very Lruly yours
Sgd l8AnClSCC C 8CSALLS !8 Munlclpal Mayor[17]
We agree wlLh Lhe rullng of Lhe CSC LhaL Lhe leLLer of Lhe peLlLloner Lo Lhe respondenL ls merely a deLall of Lhe laLLer for a perlod of LhlrLy days Lo Lhe Cfflce of Lhe rovlnclal Lnglneer
As already sLaLed ln Lhe 8esoluLlon now belng soughL Lo be reconsldered Lhe purporLed permlL Lo Lransfer daLed AugusL 12 1998 lssued by movanL unmlsLakably refers Lo a personnel acLlon oLher Lhan a Lransfer 1he sald permlL Lo Lransfer sLaLes LhaL (y)our requesL Lo Lransfer Lo Lhe rovlnclal Lnglneerlng Cfflce CaLarman norLhern Samar ls granLed for a perlod of LhlrLy (30) days from recelpL hereof 1hls sLaLemenL does noL conLemplaLe a Lransfer as deflned under Lhe Clvll Servlce Law and 8ules 8aLher such a personnel acLlon ls ln reallLy a deLall because Ml[ares ls Lo be Lemporarlly moved for a perlod of 30 days from hls employer Lhe Munlclpal CovernmenL of CaLarman Lo Lhe rovlnclal Lnglneerlng Cfflce[18]
1he deplorable machlnaLlon resorLed Lo by Lhe peLlLloner Lo remove Lhe respondenL from hls poslLlon became more evldenL when on SepLember 24 1998 he wroLe Lhe respondenL Lhus
SepLember 24 1998
Lngr Mlguel P Ml[ares Munlclpal Lnglneer CaLarmannorLhern Samar
Lngr Ml[ares
1he 30day perlod glven Lo you Lo Lransfer Lo Lhe rovlnclal Lnglneerlng Cfflce has now elapsed and ln as much as you dld noL seek an exLenslon of your permlL Lo Lransfer you are consldered reslgned from Lhls governmenL unlL as of SepLember 13 1998 pursuanL Lo MC no 38 S 1993 of Lhe Clvll Servlce Commlsslon
l8AnClSCC C 8CSALLS !8 Munlclpal Mayor[19]
8y hls SepLember 24 1998 leLLer Lo Lhe respondenL Lhe peLlLloner made lL appear LhaL he had granLed Lhe respondenL permlsslon Lo Lransfer wlLhln LhlrLy days and LhaL Lhe respondenL falled Lo effecL hls Lransfer 1hls was done by Lhe peLlLloner desplLe Lhe absence of any leLLer from Lhe respondenL requesLlng for such Lransfer 8y hls AugusL 12 1998 leLLer Lhe peLlLloner merely deLalled Lhe respondenL Lo Lhe Cfflce of Lhe rovlnclal Lnglneer lL musL be sLressed LhaL Lhe only legal effecL of a deLall of an employee upon Lhe lapse of Lhe perlod of such deLall ls for LhaL employee Lo reLurn Lo hls permanenL sLaLlon 1hus Lhe respondenL reLalned hls poslLlon as Munlclpal Lnglneer desplLe hls deLall Lo Lhe Cfflce of Lhe rovlnclal Lnglneer
1he peLlLloner capped hls chlcanery by conslderlng Lhe respondenL reslgned as of SepLember 13 1998 or afLer Lhe lapse of Lhe perlod for deLall of Lhe respondenL Lo Lhe Cfflce of Lhe rovlnclal Lnglneer
We agree wlLh Lhe rullng of Lhe appellaLe courL whlch afflrmed LhaL of Lhe CSC Lhus
1o susLaln Lhe argumenL advanced by peLlLloner would be seLLlng a dangerous precedenL 1hls wlll lead Lo a slLuaLlon where any head of an agency or local governmenL unlL who for whaLever reason wanLs Lo LermlnaLe a subordlnaLe from hls employmenL would slmply lnform Lhe laLLer LhaL hls verbal requesL Lo Lransfer was accepLed and LhereafLer exclude hls name from Lhe payroll as whaL happened ln Lhe presenL case alLhough Lhe employee never made any such requesL 1hls was never Lhe lnLenLlon of Lhe framers of sald rule as lL would make a mockery of Lhe employees rlghL Lo securlLy of Lenure
8esldes Lhe alleged requesL for Lransfer was noL freely and volunLarlly made by respondenL noL Lo menLlon LhaL peLlLloners approval of Lhe requesL ls amblguous 1hus Lhe CSC found
Lhe Commlsslon has noLed LhaL Lhe purporLed granL by Mayor 8osales of permlsslon Lo Ml[ares ls uLLerly amblguous ln hls leLLer daLed AugusL 12 1998 Mayor 8osales sLaLed LhaL %y)oo epoes o fose o be lovloclfl oloeelo Olce cffmfo -obeo fmf ls foeJ o f peloJ o bly %) Jfys om ecelp beeo 1hls slmply means LhaL Lhe supposed Lransfer of Ml[ares Lo Lhe rovlnclal Cfflce was granLed by hls sLay or servlce LhereaL ls good only for a perlod of 30 days
1he foregolng facLs and clrcumsLances duly supporLed by Lhe evldence on record convlnces Lhe Commlsslon LhaL Ml[ares dld noL freely and volunLarlly seek from Mayor 8osales permlsslon Lo Lransfer Lo anoLher offlce Cn Lhe conLrary lL ls apparenL LhaL Lhe supposed Lransfer was a shrewd machlnaLlon or clever ply (slc) resorLed Lo ousL Ml[ares from hls presenL poslLlon 1hls Lhe Commlsslon wlll never LoleraLe much less counLenance as Lhls would lnfrlnge Lhe rlghL Lo securlLy of Lenure of Ml[ares
WellseLLled ls Lhe rule LhaL ln revlewlng admlnlsLraLlve declslons Lhe flndlngs of facL made Lhereln musL be respecLed as long as Lhey are supporLed by subsLanLlal evldence (Lo vs CourL of Appeals 321 SC8A 190) We see no cogenL reason Lo deparL from sald prlnclple
lL ls also noLeworLhy LhaL Lhe ground relled upon Lo [usLlfy respondenLs removal le explraLlon of hls permlL Lo Lransfer ls purely Lechnlcal and Lherefore Loo fllmsy Lo overrlde Lhe consLlLuLlonal mandaLe upholdlng an employees rlghL Lo securlLy of Lenure (ArL lx8 Sec 2 par 3 1987 ConsLlLuLlon) As held ln lvloffclf I vs o 1omfs (244 SC8A 393) Lhe guaranLee of securlLy of Lenure ls an lmporLanL ob[ecL of Lhe clvll servlce sysLem because lL affords a falLhful employee permanence of employmenL aL leasL for Lhe perlod prescrlbed by law and frees Lhe employee from Lhe fear of pollLlcal and personal pre[udlclal reprlsal[20]
Llkewlse barren of merlL ls Lhe peLlLloners conLenLlon LhaL he was deprlved of due process because Lhe CSC falled Lo conslder Lhe effecL of Lhe oplnlon of Lhe rovlnclal rosecuLor and Lhe 8eglonal ulrecLor of Lhe CSC holdlng LhaL Lhe peLlLloner had complled wlLh CSC Memorandum Clrcular no 9338 as well as Lhe oLher documenLs appended Lo hls commenL 1he CA correcLly ruled LhaL
llnally Lhere ls no merlL ln peLlLloners lnslsLence LhaL he was denled due process because Lhe CSC dld noL conslder Lhe documenLary evldence aLLached Lo hls commenL 1he CSC ln lLs resoluLlon daLed SepLember 21 1999 sLaLed LhaL Lhe Commlsslon recelved peLlLloners commenL locloJlo fll ls fooexes on May 18 1999 and (a)fLer a careful evaluaLlon of Lhe same Lhe Commlsslon found noL a shred of evldence Lo show LhaL respondenL lndeed requesLed for hls Lransfer (lLallcs supplled)
SeLLled ls Lhe rule LhaL Lhe essence of due process ls slmply an opporLunlLy Lo be heard or as applled Lo admlnlsLraLlve proceedlngs an opporLunlLy Lo explaln ones slde or an opporLunlLy Lo seek reconslderaLlon of Lhe acLlon or rullng complalned of WhaL Lhe law prohlblLs ls absoluLe absence of Lhe opporLunlLy Lo be heard hence a parLy cannoL felgn denlal of due process where he had been afforded Lhe opporLunlLy Lo presenL hls slde (Audlon LlecLrlc Co lnc vs nL8C 308 SC8A 340)[21]
1he peLlLloner cannoL flnd solace ln Lhe CcLober 28 1998 Cplnlon of !udlLh Chlcano 8eglonal ulrecLor of 8eglon 8 of Lhe CSC and Lhe november 12 1998 leLLeroplnlon of Lhe rovlnclal rosecuLor sLaLlng LhaL Lhe peLlLloner correcLly applled CSC Memorandum Clrcular no 9338 1hls ls because (a) Lhe peLlLloner falsely represenLed Lo Lhe 8eglonal ulrecLor and rovlnclal rosecuLor LhaL Lhe respondenL had requesLed for a Lransfer Lo Lhe Cfflce of Lhe rovlnclal Lnglneer when ln LruLh and ln facL Lhe respondenL had noL done so (b) Lhe 8eglonal ulrecLor and Lhe rovlnclal rosecuLor were noL even furnlshed wlLh coples of Lhe CcLober 2 1998 LeLLer of Lhe respondenL Lo Lhe peLlLloner and (c) Lhe oplnlon of Lhe CSC 8eglonal ulrecLor and rovlnclal rosecuLor were noL concluslve on Lhe CSC as Lhe laLLer could sLlll reverse Lhe sald oplnlon on appeal
1he records negaLe Lhe conLenLlon of Lhe peLlLloner LhaL Lhe respondenL kepL a sLolc sllence even afLer recelvlng Lhe SepLember 24 1998 leLLer lnformlng hlm LhaL he was deemed reslgned as of SepLember 13 1998 1he facL of Lhe maLLer ls LhaL Lhe respondenL appealed Lhe leLLer Lo Lhe 8eglonal ulrecLor of Lhe CSC 8eglon 8 whlch Lhe respondenL Look cognlzance of and acLed upon vlf her endorsemenL of Lhe leLLer Lo Ma vlcLorla L valerlano Pead Clvll Servlce llscal Cfflcer for a facLflndlng lnvesLlgaLlon[22]
Cn Lhe conLenLlon of Lhe peLlLloner LhaL Lhe appeal of Lhe respondenL Lo Lhe CSC was made beyond Lhe perlod Lherefor under SecLlon 49(a) of Lhe CSC 8evlsed 8ules of rocedure Lhe CSC correcLly ruled LhaL
MovanL clalms LhaL Ml[ares appeal was flled way beyond Lhe reglemenLary perlod for flllng appeals Pe Lhus conLends LhaL Lhe Commlsslon should noL have glven due course Lo sald appeal
1he Commlsslon need noL delve much on Lhe daLes when Ml[ares was separaLed from Lhe servlce and when he assalled hls separaLlon Sufflce lL Lo sLaLe LhaL Lhe Commlsslon found hls appeal merlLorlous 1hls belng Lhe case procedural rules need noL be sLrlcLly observed 1hls prlnclple was explalned by ln Lhe case of Mauna vs CSC 232 SC8A 388 where Lhe Supreme CourL ruled Lo wlL
ssomlo o be sfe o fomeo bf be pellooes fppefl wfs lleJ oo o lme l ls wlblo be powe o bls coo o empe llJ oles lo fvo o sobsfolfl joslce wblle l ls Jeslfble bf be koles o coo be flbolly foJ eveo melcoloosly obseveJ coos sboolJ oo be so slc fboo poceJofl lfpses bf Jo oo eflly lmpfl be pope fJmlolsfloo o joslce be oles fe loeoJeJ o eosoe be oJely cooJoc o lllfloo l ls becfose o be blbe objeclve bey see wblcb ls be poecloo o sobsfolve lbs o be pfles s belJ by be coo lo f oombe o cfses
8ecfose bee ls oo veseJ lb lo ecbolcfllles lo meloloos cfses f llbefl oo llefl loepefloo o be oles becomes lmpeflve foJ ecbolcfllles sboolJ oo be esoeJ o lo Jeofloo o be loeo foJ popose o be oles wblcb ls be pope foJ jos Jeemlofloo o lllfloo lllfloos sboolJ fs mocb fs posslble be JeclJeJ oo bel mels foJ oo oo ecbolcflly lsmlssfl o fppefls poely oo ecbolcfl oooJs ls owoeJ opoo foJ be oles o poceJoe oob oo o be fpplleJ lo f vey llJ ecbolcfl seose o bey fe fJopeJ o belp secoe oo ovelJe sobsfolfl joslce foJ beeby Jeef bel vey flms s bfs beeo be coosfo ollos o bls coo evey pfylllfo sboolJ be foJeJ be fmples oppoooly o be pope foJ jos Jlsposlloo o bls cfose ee om be coosflos o ecbolcfllles
8esldes Ml[ares assalled hls separaLlon from Lhe servlce and asserLed hls rlghL Lo hls offlce wlLhln one (1) year from hls separaLlon 1hls belng so Lhe Commlsslon correcLly gave due course Lo hls appeal (lsberLo vs 8aqulza 67 SC8A 116) And whaL ls lronlc ls LhaL lL ls only now LhaL movanL ralsed Lhe lssue on Llmellness of flllng an appeal never dld he assall Lhls maLLer ln hls commenL[23]
1he respondenL never relenLed ln hls reslsLance Lo Lhe peLlLloners susLalned efforL Lo ousL hlm from hls poslLlon 1he records show LhaL afLer recelpL of Lhe peLlLloners SepLember 24 1998 leLLer Lhe respondenL LhereafLer requesLed for lLs wlLhdrawal ln a replyleLLer daLed CcLober 2 1998[24] ln hls leLLer daLed CcLober 13 1998 Lhe peLlLloner lnformed Lhe respondenL LhaL he was forwardlng Lhe laLLers personnel flle Lo Lhe CSC for lLs legal oplnlon on Lhe maLLer[25] 1he peLlLloner Lhrough counsel soughL Lhe oplnlon of Lhe CSC 8eglonal ulrecLor on CcLober 20 1998[26] Cn CcLober 28 1998 Lhe CSC 8eglonal ulrecLor rendered her oplnlon ln favor of Lhe peLlLloner 1he respondenL Lhen wroLe Lo Lhe 8eglonal ulrecLor on november 4 1998 anenL Lhe SepLember 24 1998 leLLer of Lhe peLlLloner 1he 8eglonal ulrecLor LreaLed Lhe sald leLLer of Lhe respondenL as an appeal ln hls commenL on Lhe appeal of Lhe respondenL Lhe peLlLloner dld noL conLesL Lhe Llmellness of Lhe sald appeal and opLed Lo delve lnLo and dlscuss Lhe merlLs of Lhe case
lL bears sLresslng LhaL Lhe case before Lhe CSC lnvolves Lhe securlLy of Lenure of a publlc offlcer sacrosancLly proLecLed by Lhe ConsLlLuLlon ubllc lnLeresL requlres a resoluLlon of Lhe merlLs of Lhe appeal lnsLead of dlsmlsslng Lhe same based on a sLralned and lnordlnaLe appllcaLlon of SecLlon 49(a) of Lhe CSC 8evlsed 8ules of rocedure[27] Cn Lhe lasL lssue we flnd LhaL Lhere ls no facLual basls for dlrecLlng Lhe peLlLloner Lo pay Lhe cosLs IN LIGn1 CI ALL 1nL ICkLGCING Lhe peLlLlon ls DLNILD for lack of merlL 1he declslon of Lhe appellaLe courL ls AIIIkMLD Powever Lhe award for cosLs ls DLLL1LD
EN BANC |G.R. No. 161414. January 17, 2005| SULTAN OSOP B. CAMID, petitioner, vs. THE OFFICE OF THE PRESIDENT, DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, AUTONOMOUS REGION IN MUSLIM MINDANAO, DEPARTMENT oI FINANCE, DEPARTMENT oI BUDGET AND MANAGEMENT, COMMISSION ON AUDIT, and the CONGRESS OF THE PHILIPPINES (HOUSE oI REPRESENTATIVES AND SENATE), respondents. D E C I S I O N TINGA, J.: This Petition for Certiorari presents this Court with the prospect oI our own Briadoon|1|the municipality oI Andong, Lanao del Surwhich like its counterpart in Iilmdom, is a town that is not supposed to exist yet is anyway insisted by some as actually alive and thriving. Yet unlike in the movies, there is nothing mystical, ghostly or anything even remotely charming about the purported existence oI Andong. The creation oI the putative municipality was declared void ab initio by this Court Iour decades ago, but the present petition insists that in spite oI this insurmountable obstacle Andong thrives on, and hence, its legal personality should be given judicial aIIirmation. We disagree. The Iactual antecedents derive Irom the promulgation oI our ruling in Pelae: v. uditor General|2| in 1965. As discussed therein, then President Diosdado Macapagal issued several Executive Orders|3| creating thirty-three (33) municipalities in Mindanao. Among them was Andong in Lanao del Sur which was created by virtue oI Executive Order No. 107.|4| These executive orders were issued aIter legislative bills Ior the creation oI municipalities involved in that case had Iailed to pass Congress.|5| President Diosdado Macapagal justiIied the creation oI these municipalities citing his powers under Section 68 oI the Revised Administrative Code. Then Vice-President Emmanuel Pelaez Iiled a special civil action Ior a writ oI prohibition, alleging in main that the Executive Orders were null and void, Section 68 having been repealed by Republic Act No. 2370,|6| and said orders constituting an undue delegation oI legislative power.|7| AIter due deliberation, the Court unanimously held that the challenged Executive Orders were null and void. A majority oI Iive justices, led by the ponente, Justice (later ChieI Justice) Roberto Concepcion, ruled that Section 68 oI the Revised Administrative Code did not meet the well-settled requirements Ior a valid delegation oI legislative power to the executive branch,|8| while three justices opined that the nullity oI the issuances was the consequence oI the enactment oI the 1935 Constitution, which reduced the power oI the ChieI Executive over local governments.|9| Pelae: was disposed in this wise: WHEREFORE, the Executive Orders in question are declared null and void ab initio and the respondent permanently restrained Irom passing in audit any expenditure oI public Iunds in implementation oI said Executive Orders or any disbursement by the municipalities above reIerred to. It is so ordered.|10| Among the Executive Orders annulled was Executive Order No. 107 which created the Municipality oI Andong. Nevertheless, the core issue presented in the present petition is the continued eIIicacy oI the judicial annulment oI the Municipality oI Andong. Petitioner Sultan Osop B. Camid (Camid) represents himselI as a current resident oI Andong,|11| suing as a private citizen and taxpayer whose locus standi 'is oI public and paramount interest especially to the people oI the Municipality oI Andong, Province oI Lanao del Sur.|12| He alleges that Andong 'has metamorphosed into a Iull-blown municipality with a complete set oI oIIicials appointed to handle essential services Ior the municipality and its constituents,|13| even though he concedes that since 1968, no person has been appointed, elected or qualiIied to serve any oI the elective local government positions oI Andong.|14| Nonetheless, the municipality oI Andong has its own high school, Bureau oI Posts, a Department oI Education, Culture and Sports oIIice, and at least seventeen (17) 'barangay units with their own respective chairmen.|15| From 1964 until 1972, according to Camid, the public oIIicials oI Andong 'have been serving their constituents through the minimal means and resources with least (sic) honorarium and recognition Irom the OIIice oI the then Iormer President Diosdado Macapagal. Since the time oI Martial Law in 1972, Andong has allegedly been getting by despite the absence oI public Iunds, with the 'Interim OIIicials serving their constituents 'in their own little ways and means.|16| In support oI his claim that Andong remains in existence, Camid presents to this Court a Certification issued by the OIIice oI the Community Environment and Natural Resources (CENRO) oI the Department oI Environment and Natural Resources (DENR) certiIying the total land area oI the Municipality oI Andong, 'created under Executive Order No. 107 issued |last| October 1, 1964.|17| He also submits a Certification issued by the Provincial Statistics OIIice oI Marawi City concerning the population oI Andong, which is pegged at Iourteen thousand IiIty nine (14,059) strong. Camid also enumerates a list oI governmental agencies and private groups that allegedly recognize Andong, and notes that other municipalities have recommended to the Speaker oI the Regional Legislative Assembly Ior the immediate implementation oI the revival or re-establishment oI Andong.|18| The petition assails a Certification dated 21 November 2003, issued by the Bureau oI Local Government Supervision oI the Department oI Interior and Local Government (DILG).|19| The Certification enumerates eighteen (18) municipalities certiIied as 'existing, per DILG records. Notably, these eighteen (18) municipalities are among the thirty-three (33), along with Andong, whose creations were voided by this Court in Pelae:. These municipalities are Midaslip, Pitogo, Naga, and Bayog in Zamboanga del Sur; Siayan and Pres. Manuel A. Roxas in Zamboanga del Norte; Magsaysay, Sta. Maria and New Corella in Davao; Badiangan and Mina in Iloilo; Maguing in Lanao del Sur; Gloria in Oriental Mindoro; Maasim in Sarangani; Kalilangan and Lantapan in Bukidnon; and Maco in Compostela Valley.|20| Camid imputes grave abuse oI discretion on the part oI the DILG 'in not classiIying |Andong| as a regular existing municipality and in not including said municipality in its records and oIIicial database as |an| existing regular municipality.|21| He characterizes such non- classiIication as unequal treatment to the detriment oI Andong, especially in light oI the current recognition given to the eighteen (18) municipalities similarly annulled by reason oI Pelae:. As appropriate relieI, Camid prays that the Court annul the DILG Certification dated 21 November 2003; direct the DILG to classiIy Andong as a 'regular existing municipality; all public respondents, to extend Iull recognition and support to Andong; the Department oI Finance and the Department oI Budget and Management, to immediately release the internal revenue allotments oI Andong; and the public respondents, particularly the DILG, to recognize the 'Interim Local OIIicials oI Andong.|22| Moreover, Camid insists on the continuing validity oI Executive Order No. 107. He argues that Pelae: has already been modiIied by supervening events consisting oI subsequent laws and jurisprudence. Particularly cited is our Decision in unicipality of San Narciso v. Hon. ende:,|23| wherein the Court aIIirmed the unique status oI the municipality oI San Andres in Quezon as a 'de facto municipal corporation.|24| Similar to Andong, the municipality oI San Andres was created by way oI executive order, precisely the manner which the Court in Pelaez had declared as unconstitutional. Moreover, San Narciso cited, as Camid does, Section 442(d) oI the Local Government Code oI 1991 as basis Ior the current recognition oI the impugned municipality. The provision reads: Section 442. Requisites for Creation. - xxx (d) Municipalities existing as oI the date oI the eIIectivity oI this Code shall continue to exist and operate as such. Existing municipal districts organized pursuant to presidential issuances or executive orders and which have their respective sets oI elective municipal oIIicials holding oIIice at the time oI the eIIectivity oI (the) Code shall henceIorth be considered as regular municipalities.|25| There are several reasons why the petition must be dismissed. These can be better discerned upon examination oI the proper scope and application oI Section 442(d), which does not sanction the recognition oI just any municipality. This point shall be Iurther explained Iurther on. Notably, as pointed out by the public respondents, through the OIIice oI the Solicitor General (OSG), the case is not a Iit subject Ior the special civil actions oI certiorari and mandamus, as it pertains to the de novo appreciation oI Iactual questions. There is indeed no way to conIirm several oI Camid`s astonishing Iactual allegations pertaining to the purported continuing operation oI Andong in the decades since it was annulled by this Court. No trial court has had the opportunity to ascertain the validity oI these Iactual claims, the appreciation oI which is beyond the Iunction oI this Court since it is not a trier oI Iacts. The importance oI proper Iactual ascertainment cannot be gainsaid, especially in light oI the legal principles governing the recognition oI de facto municipal corporations. It has been opined that municipal corporations may exist by prescription where it is shown that the community has claimed and exercised corporate Iunctions, with the knowledge and acquiescence oI the legislature, and without interruption or objection Ior period long enough to aIIord title by prescription.|26| These municipal corporations have exercised their powers Ior a long period without objection on the part oI the government that although no charter is in existence, it is presumed that they were duly incorporated in the Iirst place and that their charters had been lost.|27| They are especially common in England, which, as well-worth noting, has existed as a state Ior over a thousand years. The reason Ior the development oI that rule in England is understandable, since that country was settled long beIore the Roman conquest by nomadic Celtic tribes, which could have hardly been expected to obtain a municipal charter in the absence oI a national legal authority. In the United States, municipal corporations by prescription are less common, but it has been held that when no charter or act oI incorporation oI a town can be Iound, it may be shown to have claimed and exercised the powers oI a town with the knowledge and assent oI the legislature, and without objection or interruption Ior so long a period as to Iurnish evidence oI a prescriptive right.|28| What is clearly essential is a Iactual demonstration oI the continuous exercise by the municipal corporation oI its corporate powers, as well as the acquiescence thereto by the other instrumentalities oI the state. Camid does not have the opportunity to make an initial Iactual demonstration oI those circumstances beIore this Court. Indeed, the Iactual deIiciencies aside, Camid`s plaint should have undergone the usual administrative gauntlet and, once that was done, should have been Iiled Iirst with the Court oI Appeals, which at least would have had the power to make the necessary Iactual determinations. Camid`s seeming ignorance oI the principles oI exhaustion oI administrative remedies and hierarchy oI courts, as well as the concomitant prematurity oI the present petition, cannot be countenanced. It is also diIIicult to capture the sense and viability oI Camid`s present action. The assailed issuance is the Certification issued by the DILG. But such Certification does not pretend to bear the authority to create or revalidate a municipality. Certainly, the annulment oI the Certification will really do nothing to serve Camid`s ultimate cause the recognition oI Andong. Neither does the Certification even expressly reIute the claim that Andong still exists, as there is nothing in the document that comments on the present status oI Andong. Perhaps the Certification is assailed beIore this Court iI only to present an actual issuance, rather than a long-standing habit or pattern oI action that can be annulled through the special civil action oI certiorari. Still, the relation oI the Certification to Camid`s central argument is Iorlornly strained. These disquisitions aside, the central issue remains whether a municipality whose creation by executive Iiat was previously voided by this Court may attain recognition in the absence oI any curative or reimplementing statute. Apparently, the question has never been decided beIore, San Narciso and its kindred cases pertaining as they did to municipalities whose bases oI creation were dubious yet were never judicially nulliIied. The eIIect oI Section 442(d) oI the Local Government Code on municipalities such as Andong warrants explanation. Besides, the residents oI Andong who belabor under the impression that their town still exists, much less those who may comport themselves as the municipality`s 'Interim Government, would be well served by a rude awakening. The Court can employ a simplistic approach in resolving the substantive aspect oI the petition, merely by pointing out that the Municipality oI Andong never existed.|29| Executive Order No. 107, which established Andong, was declared 'null and void ab initio in 1965 by this Court in Pelae:, along with thirty-three (33) other executive orders. The phrase 'ab initio means 'Irom the beginning,|30| 'at Iirst,|31| 'Irom the inception.|32| Pelae: was never reversed by this Court but rather it was expressly aIIirmed in the cases oI unicipality of San Joaquin v. Siva,|33| unicipality of alaban v. Benito,|34| and unicipality of Kapalon v. oya.|35| No subsequent ruling by this Court declared Pelaez as overturned or inoperative. No subsequent legislation has been passed since 1965 creating a Municipality oI Andong. Given these Iacts, there is hardly any reason to elaborate why Andong does not exist as a duly constituted municipality. This ratiocination does not admit to patent legal errors and has the additional virtue oI blessed austerity. Still, its sweeping adoption may not be advisedly appropriate in light oI Section 442(d) oI the Local Government Code and our ruling in unicipality of San Narciso, both oI which admit to the possibility oI de facto municipal corporations. To understand the applicability oI unicipality of San Narciso and Section 442(b) oI the Local Government Code to the situation oI Andong, it is necessary again to consider the ramiIications oI our decision in Pelae:. The eminent legal doctrine enunciated in Pelae: was that the President was then, and still is, not empowered to create municipalities through executive issuances. The Court therein recognized 'that the President has, Ior many years, issued executive orders creating municipal corporations, and that the same have been organized and in actual operation . . . .|36| However, the Court ultimately nulliIied only those thirty-three (33) municipalities, including Andong, created during the period Irom 4 September to 29 October 1964 whose existence petitioner Vice-President Pelaez had speciIically assailed beIore this Court. No pronouncement was made as to the other municipalities which had been previously created by the President in the exercise oI power the Court deemed unlawIul. Two years aIter Pelae: was decided, the issue again came to Iore in unicipality of San Joaquin v. Siva.|37| The Municipality oI Lawigan was created by virtue oI Executive Order No. 436 in 1961. Lawigan was not one oI the municipalities ordered annulled in Pelae:. A petition Ior prohibition was Iiled contesting the legality oI the executive order, again on the ground that Section 68 oI the Revised Administrative Code was unconstitutional. The trial court dismissed the petition, but the Supreme Court reversed the ruling and entered a new decision declaring Executive Order No. 436 void ab initio. The Court reasoned without elaboration that the issue had already been squarely taken up and settled in Pelae: which agreed with the argument posed by the challengers to Lawigan`s validity.|38| In the 1969 case oI unicipality of alaban v. Benito,|39| what was challenged is the validity oI the constitution oI the Municipality oI Balabagan in Lanao del Sur, also created by an executive order,|40| and which, similar to Lawigan, was not one oI the municipalities annulled in Pelae:. This time, the oIIicials oI Balabagan invoked de facto status as a municipal corporation in order to dissuade the Court Irom nulliIying action. They alleged that its status as a de facto corporation cannot be collaterally attacked but should be inquired into directly in an action Ior quo warranto at the instance oI the State, and not by a private individual as it was in that case. In response, the Court conceded that an inquiry into the legal existence oI a municipality is reserved to the State in a proceeding Ior quo warranto, but only iI the municipal corporation is a de facto corporation.|41| Ultimately, the Court reIused to acknowledge Balabagan as a de facto corporation, even though it had been organized prior to the Court`s decision in Pelae:. The Court declared void the executive order creating Balabagan and restrained its municipal oIIicials Irom perIorming their oIIicial duties and Iunctions.|42| It cited conIlicting American authorities on whether a de facto corporation can exist where the statute or charter creating it is unconstitutional.|43| But the Court`s Iinal conclusion was unequivocal that Balabagan was not a de facto corporation. In the cases where a de facto municipal corporation was recognized as such despite the Iact that the statute creating it was later invalidated, the decisions could Iairly be made to rest on the consideration that there was some other valid law giving corporate vitality to the organization. Hence, in the case at bar, the mere Iact that Balabagan was organized at a time when the statute had not been invalidated cannot conceivably make it a de facto corporation, as, independently oI the Administrative Code provision in question, there is no other valid statute to give color oI authority to its creation.|44| The Court did clariIy in alaban that the previous acts done by the municipality in the exercise oI its corporate powers were not necessarily a nullity.|45| Camid devotes several pages oI his petition in citing this point,|46| yet the relevance oI the citation is unclear considering that Camid does not assert the validity oI any corporate act oI Andong prior to its judicial dissolution. Notwithstanding, the Court in alaban retained an emphatic attitude as to the unconstitutionality oI the power oI the President to create municipal corporations by way oI presidential promulgations, as authorized under Section 68 oI the Revised Administrative Code. This principle was most recently aIIirmed in 1988, in unicipality of Kapalon v. oya.|47| The municipality oI Santo Tomas, created by President Carlos P. Garcia, Iiled a complaint against another municipality, who challenged Santo Tomas`s legal personality to institute suit. Again, Santo Tomas had not been expressly nulliIied by prior judicial action, yet the Court reIused to recognize its legal existence. The blunt but simple ruling: 'Now then, as ruled in the Pelaez case supra, the President has no power to create a municipality. Since |Santo Tomas| has no legal personality, it can not be a party to any civil action..|48| Nevertheless, when the Court decided unicipality of San Narciso|49| in 1995, it indicated a shiIt in the jurisprudential treatment oI municipalities created through presidential issuances. The questioned municipality oI San Andres, Quezon was created on 20 August 1959 by Executive Order No. 353 issued by President Carlos P. Garcia. Executive Order No. 353 was not one oI the thirty-three issuances annulled by Pelae: in 1965. The legal status oI the Municipality oI San Andres was Iirst challenged only in 1989, through a petition Ior quo warranto Iiled with the Regional Trial Court oI Gumaca, Quezon, which did cite Pelae: as authority.|50| The RTC dismissed the petition Ior lack oI cause oI action, and the petitioners therein elevated the matter to this Court. In dismissing the petition, the Court delved in the merits oI the petition, iI only to resolve Iurther doubt on the legal status oI San Andres. It noted a circumstance which is not present in the case at barthat San Andres was in existence Ior nearly thirty (30) years beIore its legality was challenged. The Court did not declare the executive order creating San Andres null and void. Still, acting on the premise that the said executive order was a complete nullity, the Court noted 'peculiar circumstances that led to the conclusion that San Andres had attained the unique status oI a 'de Iacto municipal corporation.|51| It noted that Pelae: limited its nulliIicatory eIIect only to those executive orders speciIically challenged therein, despite the Iact that the Court then could have very well extended the decision to invalidate San Andres as well.|52| This statement squarely contradicts Camid`s reading oI San Narciso that the creation oI San Andres, just like Andong, had been declared a complete nullity on the same ground oI unconstitutional delegation oI legislative power Iound in Pelae:.|53| The Court also considered the applicability oI Section 442(d)|54| oI the Local Government Code oI 1991. It clariIied the implication oI the provision as Iollows: Equally signiIicant is Section 442(d) oI the Local Government Code to the eIIect that municipal districts "organized pursuant to presidential issuances or executive orders and which have their respective sets oI elective municipal oIIicials holding oIIice at the time oI the eIIectivity oI (the) Code shall henceIorth be considered as regular municipalities." No pretension oI unconstitutionality per se oI Section 442(d) oI the Local Government Code is preIerred. It is doubtIul whether such a pretext, even iI made, would succeed. The power to create political subdivisions is a function of the legislature. Congress did just that when it has incorporated Section 442(d) in the Code. Curative laws, which in essence are retrospective, and aimed at giving "validity to acts done that would have been invalid under existing laws, as iI existing laws have been complied with," are validly accepted in this jurisdiction, subject to the usual qualiIication against impairment oI vested rights. (Emphasis supplied)|55| The holding in San Narciso was subsequently aIIirmed in unicipality of Candifay v. Court of ppeals|56| and unicipality of Jimene: v. Ba:|57| In Candifay, the juridical personality oI the Municipality oI Alicia, created in a 1949 executive order, was attacked only beginning in 1984. Pelae: was again invoked in support oI the challenge, but the Court reIused to invalidate the municipality, citing San Narciso at length. The Court noted that the situation oI the Municipality oI Alicia was strikingly similar to that in San Narciso; hence, the town should likewise 'beneIit Irom the eIIects oI Section 442(d) oI the Local Government Code, and should |be| considered as a regular, de fure municipality. |58| The valid existence oI Municipality oI Sinacaban, created in a 1949 executive order, was among the issues raised in Jimene:. The Court, through Justice Mendoza, provided an expert summation oI the evolution oI the rule. The principal basis Ior the view that Sinacaban was not validly created as a municipal corporation is the ruling in Pelae: v. uditor General that the creation oI municipal corporations is essentially a legislative matter and thereIore the President was without power to create by executive order the Municipality oI Sinacaban. The ruling in this case has been reiterated in a number oI cases later decided. However, we have since held that where a municipality created as such by executive order is later impliedly recognized and its acts are accorded legal validity, its creation can no longer be questioned. In unicipality of San Narciso, Que:on v. ende:, Sr., this Court considered the Iollowing Iactors as having validated the creation oI a municipal corporation, which, like the Municipality oI Sinacaban, was created by executive order oI the President beIore the ruling in Pelae: v. uditor General: (1) the Iact that Ior nearly 30 years the validity oI the creation oI the municipality had never been challenged; (2) the Iact that Iollowing the ruling in Pelaez no quo warranto suit was Iiled to question the validity oI the executive order creating such municipality; and (3) the Iact that the municipality was later classiIied as a IiIth class municipality, organized as part oI a municipal circuit court and considered part oI a legislative district in the Constitution apportioning the seats in the House oI Representatives. Above all, it was held that whatever doubt there might be as to the de fure character oI the municipality must be deemed to have been put to rest by the Local Government Code oI 1991 (R. A. No. 7160), 442(d) oI which provides that "municipal districts organized pursuant to presidential issuances or executive orders and which have their respective sets oI elective oIIicials holding oIIice at the time oI the eIIectivity oI this Code shall henceIorth be considered as regular municipalities." Here, the same Iactors are present so as to conIer on Sinacaban the status oI at least a de Iacto municipal corporation in the sense that its legal existence has been recognized and acquiesced publicly and oIIicially. Sinacaban had been in existence Ior sixteen years when Pelae: v. uditor General was decided on December 24, 1965. Yet the validity oI E.O. No. 258 creating it had never been questioned. Created in 1949, it was only 40 years later that its existence was questioned and only because it had laid claim to an area that apparently is desired Ior its revenue. This Iact must be underscored because under Rule 66, 16 oI the Rules oI Court, a quo warranto suit against a corporation Ior IorIeiture oI its charter must be commenced within Iive (5) years Irom the time the act complained oI was done or committed. On the contrary, the State and even the Municipality oI Jimenez itselI have recognized Sinacaban's corporate existence. Under Administrative Order No. 33 dated June 13, 1978 oI this Court, as reiterated by 31 oI the Judiciary Reorganization Act oI 1980 (B. P. Blg. 129), Sinacaban is constituted part oI a municipal circuit Ior purposes oI the establishment oI Municipal Circuit Trial Courts in the country. For its part, Jimenez had earlier recognized Sinacaban in 1950 by entering into an agreement with it regarding their common boundary. The agreement was embodied in Resolution No. 77 oI the Provincial Board oI Misamis Occidental. Indeed Sinacaban has attained de fure status by virtue oI the Ordinance appended to the 1987 Constitution, apportioning legislative districts throughout the country, which considered Sinacaban part oI the Second District oI Misamis Occidental. Moreover, Iollowing the ruling in unicipality of San Narciso, Que:on v. ende:, Sr., 442(d) oI the Local Government Code oI 1991 must be deemed to have cured any deIect in the creation oI Sinacaban..|59| From this survey oI relevant jurisprudence, we can gather the applicable rules. Pelae: and its oIIspring cases ruled that the President has no power to create municipalities, yet limited its nulliIicatory eIIects to the particular municipalities challenged in actual cases beIore this Court. However, with the promulgation oI the Local Government Code in 1991, the legal cloud was liIted over the municipalities similarly created by executive order but not judicially annulled. The de facto status oI such municipalities as San Andres, Alicia and Sinacaban was recognized by this Court, and Section 442(b) oI the Local Government Code deemed curative whatever legal deIects to title these municipalities had labored under. Is Andong similarly entitled to recognition as a de facto municipal corporation? It is not. There are eminent diIIerences between Andong and municipalities such as San Andres, Alicia and Sinacaban. Most prominent is the Iact that the executive order creating Andong was expressly annulled by order oI this Court in 1965. II we were to aIIirm Andong`s de facto status by reason oI its alleged continued existence despite its nulliIication, we would in eIIect be condoning deIiance oI a valid order oI this Court. Court decisions cannot obviously lose their eIIicacy due to the sheer deIiance by the parties aggrieved. It bears noting that based on Camid`s own admissions, Andong does not meet the requisites set Iorth by Section 442(d) oI the Local Government Code. Section 442(d) requires that in order that the municipality created by executive order may receive recognition, they must 'have their respective set oI elective municipal oIIicials holding oIIice at the time oI the eIIectivity oI |the Local Government| Code. Camid admits that Andong has never elected its municipal oIIicers at all.|60| This incapacity ties in with the Iact that Andong was judicially annulled in 1965. Out oI obeisance to our ruling in Pelae:, the national government ceased to recognize the existence oI Andong, depriving it oI its share oI the public Iunds, and reIusing to conduct municipal elections Ior the void municipality. The Iailure to appropriate Iunds Ior Andong and the absence oI elections in the municipality in the last Iour decades are eloquent indicia oI the non-recognition by the State oI the existence oI the town. The certiIications relied upon by Camid, issued by the DENR-CENRO and the National Statistics OIIice, can hardly serve the purpose oI attesting to Andong`s legal eIIicacy. In Iact, both these certiIications qualiIy that they were issued upon the request oI Camid, 'to support the restoration or re-operation oI the Municipality oI Andong, Lanao del Sur,|61| thus obviously conceding that the municipality is at present inoperative. We may likewise pay attention to the Ordinance appended to the 1987 Constitution, which had also been relied upon in Jimene: and San Narciso. This Ordinance, which apportioned the seats oI the House oI Representatives to the diIIerent legislative districts in the Philippines, enumerates the various municipalities that are encompassed by the various legislative districts. Andong is not listed therein as among the municipalities oI Lanao del Sur, or oI any other province Ior that matter.|62| On the other hand, the municipalities oI San Andres, Alicia and Sinacaban are mentioned in the Ordinance as part oI Quezon,|63| Bohol,|64| and Misamis Occidental|65| respectively. How about the eighteen (18) municipalities similarly nulliIied in Pelae: but certiIied as existing in the DILG Certification presented by Camid? The petition Iails to mention that subsequent to the ruling in Pelae:, legislation was enacted to reconstitute these municipalities.|66| It is thus not surprising that the DILG certiIied the existence oI these eighteen (18) municipalities, or that these towns are among the municipalities enumerated in the Ordinance appended to the Constitution. Andong has not been similarly reestablished through statute. Clearly then, the Iact that there are valid organic statutes passed by legislation recreating these eighteen (18) municipalities is suIIicient legal basis to accord a diIIerent legal treatment to Andong as against these eighteen (18) other municipalities. We thus assert the proper purview to Section 442(d) oI the Local Government Codethat it does not serve to aIIirm or reconstitute the judicially dissolved municipalities such as Andong, which had been previously created by presidential issuances or executive orders. The provision aIIirms the legal personalities only oI those municipalities such as San Narciso, Alicia, and Sinacaban, which may have been created using the same inIirm legal basis, yet were Iortunate enough not to have been judicially annulled. On the other hand, the municipalities judicially dissolved in cases such as Pelae:, San Joaquin, and alaban, remain inexistent, unless recreated through speciIic legislative enactments, as done with the eighteen (18) municipalities certiIied by the DILG. Those municipalities derive their legal personality not Irom the presidential issuances or executive orders which originally created them or Irom Section 442(d), but Irom the respective legislative statutes which were enacted to revive them. And what now oI Andong and its residents? Certainly, neither Pelae: or this decision has obliterated Andong into a hole on the ground. The legal eIIect oI the nulliIication oI Andong in Pelae: was to revert the constituent barrios oI the voided town back into their original municipalities, namely the municipalities oI Lumbatan, Butig and Tubaran.|67| These three municipalities subsist to this day as part oI Lanao del Sur,|68| and presumably continue to exercise corporate powers over the barrios which once belonged to Andong. II there is truly a strong impulse calling Ior the reconstitution oI Andong, the solution is through the legislature and not judicial conIirmation oI void title. II indeed the residents oI Andong have, all these years, been governed not by their proper municipal governments but by a ragtag 'Interim Government, then an expedient political and legislative solution is perhaps necessary. Yet we can hardly sanction the retention oI Andong`s legal personality solely on the basis oI collective amnesia that may have allowed Andong to somehow pretend itselI into existence despite its judicial dissolution. Maybe those who insist Andong still exists preIer to remain unperturbed in their blissIul ignorance, like the inhabitants oI the cave in Plato`s Iamed allegory. But the time has come Ior the light to seep in, and Ior the petitioner and like-minded persons to awaken to legal reality. WHEREFORE, the Petition is DISMISSED Ior lack oI merit. Costs against petitioner. SO ORDERED. Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio- Morales, Callejo, Sr., Azcuna, Chico-Nazario and Garcia, JJ., concur.