AYALA CORPORATION, petitioner, vs.

ROSA-DIANA REALTY AND DEVELOPMENT CORPORATION, respondent.

December 1, 2000

FACTS:

Petitioner, Ayala Corporation, was the registered owner of a parcel of land located in Alfaro Street,
Salcedo Village, Makati City with an area of 840 square meters, more or less, and covered by
Transfer Certificate of Title (TCT) No. 233435 of the Register of Deeds of Rizal.

On April 20, 1976, Ayala sold the lot to Manuel Sy married to Vilma Po and Sy Ka Kieng married
to Rosa Chan. The Deed of Sale executed between Ayala and the buyers contained special conditions
of sale and deed restrictions. The Deed Restrictions contained the stipulation that the gross floor area
of the building to be constructed shall not be more than five (5) times the lot area and the total height
shall not exceed forty-two (42) meters. The restrictions were to expire in the year 2025.

The buyers Sy and Kieng failed to construct the building in violation of the Special Conditions of Sale.
Notwithstanding the violation, in April 1989 they were able to sell the lot to respondent Rosa-Diana
Realty and Development Corporation with Ayala’s approval and with the same special conditions and
restrictions.

In consideration for Ayala to release the Certificate of Title of the property, Rosa Diana, on July 27,
1989, executed an Undertaking promising to abide by the special conditions of sale executed by Ayala
with the original buyers. Upon submission of the Undertaking together with the building plans for a
condominium project, known as “The Peak”, Ayala released title to the lot, thereby enabling Rosa-
Diana to register the deed of sale in its favor and obtain Certificate of Title No. 165720 in its name.
The title carried as encumbrances the special conditions of sale and the deed restrictions. Rosa-
Diana’s building plans as approved by Ayala were ‘subject to strict compliance of cautionary notices
appearing on the building plans and to the restrictions encumbering the Lot regarding the use and
occupancy of the same.’

Rosa-Diana submitted to Ayala for approval envisioned a 24-meter high, seven-(7) storey
condominium project with a gross floor area of 3,968.56 square meters. It, however, submitted a
different set of building plan of “The Peak” to the building official of Makati that contemplated a
91.65-meter high, 38-storey condominium building with a gross floor area of 23,305.09 square
meters. The construction of the building ensued.

Thereafter, Ayala prayed for rescission of the sale of the subject lot to Rosa-Diana Realty. The lower
court denied Ayala’s prayer for injunctive relief, thus enabling Rosa-Diana to complete the
construction of the building. Undeterred, Ayala tried to cause the annotation of a notice of lis pendens
on Rosa-Diana’s title. The Register of Deeds of Makati, however, refused registration of the notice of
lis pendens on the ground that the case pending before the trial court, being an action for specific
performance and/or rescission, is an action in personal, which does not involve the title, use or
possession of the property. The Land Registration Authority (LRA) reversed the ruling of the Register
of Deeds saying that an action for specific performance or recession may be classified as a proceeding
of any kind in court directly affecting title to the land or the use or occupation thereof for which a
notice of lis pendens may be held proper.

The decision of the LRA, nevertheless, was overturned by the Court of Appeals citing its decision
under the doctrine of stare decisis in Ayala Corporation vs. Ray Burton Development Corporation, a
case similar to the present case. Ayala however contended that the pronouncement by the CA in its
case with Ray Burton Development Corporation is merely an obiter dictum in as much as the only
issue raised in the present case was the propriety of the lis pendens annotation on the Certificate of
Title of the subject lot.

ISSUE:

Whether or not the Court of Appeals erred in dismissing Ayala’s appeal based on its decision on Ayala
vs. Ray Burton Development Corporation under the doctrine of stare decisis.

HELD:

Yes. There is no reason how the law of the case or stare decisis can be held to be applicable in the case
at bar. If at all, the pronouncement made by the Court of Appeals that petitioner Ayala is barred from
enforcing the deed of restrictions can only be considered as an obiter dicta. As earlier mentioned, the
only issue before the Court of Appeals at the time was the propriety of the annotation of the lis
pendens. The additional pronouncement of the Court of Appeals that Ayala is estopped from
enforcing the deed of restrictions even as it recognized that the said issue is being tried before the trial
court was not necessary to dispose of the issue as to the propriety of the annotation of the lis pendens.
A dictum is an opinion of the judge, which does not embody the resolution or determination of the
court, and made without argument, or full consideration of the point, not the proffered deliberate
opinion of the judge himself. It is not necessarily limited to the issues essential to the decision but
may also include expressions or opinion, which are not necessary to support the decision reached by
the court. Mere dicta are not binding under the doctrine of stare decisis.

The appellate court’s decision in Ayala vs. Ray Burton cannot also be cited as a precedent under
the doctrine of stare decisis. It must be pointed out that the time the presently assailed decision of the
CA was rendered, the Ayala vs. Ray Burton case was on appeal to the Court. As held by the Court in
Ayala vs. Ray Burton, the CA went beyond the sole issue raised before it and made factual findings
without any basis in the record to rule inappropriately that Ayala is in estoppel and has waived its
right to enforce the subject restrictions. Thus, the assailed Decision and Resolution of the Court of
Appeals was reversed and set aside. Rosa Diana was also ordered to pay Ayala development charges
and damages.
NATURE OF THE CASE:

Petitions under Rule 65 of the Rules of Court, as amended, seeking to declare as unconstitutional
Section 14 of Republic Act No. 9006 (The Fair Election Act), insofar as it expressly repeals Section
67 of Batas Pambansa Blg. 881 (The Omnibus Election Code) which provides:

SEC. 67. Candidates holding elective office. – Any elective official, whether national or local, running for any
office other than the one which he is holding in a permanent capacity, except for President and Vice-President,
shall be considered ipso facto resigned from his office upon the filing of his certificate of candidacy.

FACTS:

The petitioners now come to the Court alleging in the main that Section 14 of Rep. Act No. 9006,
insofar as it repeals Section 67 of the Omnibus Election Code, is unconstitutional for being in violation
of Section 26(1), Article VI of the Constitution, requiring every law to have only one subject which
should be expressed in its title.

According to the petitioners, the inclusion of Section 14 repealing Section 67 of the Omnibus Election
Code in Rep. Act No. 9006 constitutes a proscribed rider.

They point out the dissimilarity in the subject matter of Rep. Act No. 9006, on the one hand, and
Section 67 of the Omnibus Election Code, on the other. Rep. Act No. 9006 primarily deals with the
lifting of the ban on the use of media for election propaganda and the elimination of unfair election
practices, while Section 67 of the Omnibus Election Code imposes a limitation on elective officials
who run for an office other than the one they are holding in a permanent capacity by considering them
as ipso facto resigned therefrom upon filing of the certificate of candidacy. The repeal of Section 67 of
the Omnibus Election Code is thus not embraced in the title, nor germane to the subject matter of
Rep. Act No. 9006.

The petitioners also assert that Section 14 of Rep. Act No. 9006 violates the equal protection clause
of the Constitution because it repeals Section 67 only of the Omnibus Election Code, leaving intact
Section 66 thereof which imposes a similar limitation to appointive officials, thus:

SEC. 66. Candidates holding appointive office or position. – Any person holding a public appointive office or
position, including active members of the Armed Forces of the Philippines, and officers and employees in
government-owned or controlled corporations, shall be considered ipso facto resigned from his office upon the
filing of his certificate of candidacy.

They contend that Section 14 of Rep. Act No. 9006 discriminates against appointive officials. By the
repeal of Section 67, an elective official who runs for office other than the one which he is holding is
no longer considered ipso facto resigned therefrom upon filing his certificate of candidacy. Elective
officials continue in public office even as they campaign for reelection or election for another elective
position. On the other hand, Section 66 has been retained; thus, the limitation on appointive officials
remains - they are still considered ipso facto resigned from their offices upon the filing of their
certificates of candidacy.

The petitioners assert that Rep. Act No. 9006 is null and void in its entirety as irregularities attended
its enactment into law. The law, not only Section 14 thereof, should be declared null and void. Even
Section 16 of the law which provides that “[t]his Act shall take effect upon its approval” is a violation of
the due process clause of the Constitution, as well as jurisprudence, which require publication of the
law before it becomes effective.

Finally, the petitioners maintain that Section 67 of the Omnibus Election Code is a good law; hence,
should not have been repealed. The petitioners cited the ruling of the Court in Dimaporo v. Mitra,
Jr.,[13] that Section 67 of the Omnibus Election Code is based on the constitutional mandate on the
“Accountability of Public Officers:”

Sec. 1. Public office is a public trust. Public officers and employees must at all times be accountable to the
people, serve them with utmost responsibility, integrity, loyalty and efficiency, act with patriotism and justice,
and lead modest lives.

Consequently, the respondents Speaker and Secretary General of the House of Representatives
acted with grave abuse of discretion amounting to excess or lack of jurisdiction for not considering
those members of the House who ran for a seat in the Senate during the May 14, 2001 elections
as ipso facto resigned therefrom, upon the filing of their respective certificates of candidacy.

ISSUES:

W/N Section 14 of Rep. Act No. 9006 Is a Rider.

W/N Section 14 of Rep. Act No. 9006 Is Violative of the Equal Protection Clause of the Constitution.

W/N Section 16 of the law which provides that “[t]his Act shall take effect upon its approval” is a violation of the due
process clause of the Constitution, as well as jurisprudence, which require publication of the law before it becomes
effective.

HELD:

To determine whether there has been compliance with the constitutional requirement that the subject
of an act shall be expressed in its title, the Court laid down the rule that –
Constitutional provisions relating to the subject matter and titles of statutes should not be so narrowly
construed as to cripple or impede the power of legislation. The requirement that the subject of an act
shall be expressed in its title should receive a reasonable and not a technical construction. It is
sufficient if the title be comprehensive enough reasonably to include the general object which a
statute seeks to effect, without expressing each and every end and means necessary or convenient
for the accomplishing of that object. Mere details need not be set forth. The title need not be an
abstract or index of the Act.
The title of Rep. Act No. 9006 reads: “An Act to Enhance the Holding of Free, Orderly, Honest,
Peaceful and Credible Elections through Fair Election Practices.”

The Court is convinced that the title and the objectives of Rep. Act No. 9006 are comprehensive
enough to include the repeal of Section 67 of the Omnibus Election Code within its contemplation. To
require that the said repeal of Section 67 of the Code be expressed in the title is to insist that the title
be a complete index of its content.

The purported dissimilarity of Section 67 of the Omnibus Election Code, which imposes a limitation on
elective officials who run for an office other than the one they are holding, to the other provisions of
Rep. Act No. 9006, which deal with the lifting of the ban on the use of media for election propaganda,
does not violate the “one subject-one title” rule. This Court has held that an act having a single
general subject, indicated in the title, may contain any number of provisions, no matter how diverse
they may be, so long as they are not inconsistent with or foreign to the general subject, and may be
considered in furtherance of such subject by providing for the method and means of carrying out the
general subject.
The legislators considered Section 67 of the Omnibus Election Code as a form of harassment or
discrimination that had to be done away with and repealed. The executive department found cause
with Congress when the President of the Philippines signed the measure into law. For sure, some
sectors of society and in government may believe that the repeal of Section 67 is bad policy as it
would encourage political adventurism. But policy matters are not the concern of the Court.
Government policy is within the exclusive dominion of the political branches of the government. It is
not for this Court to look into the wisdom or propriety of legislative determination. Indeed, whether an
enactment is wise or unwise, whether it is based on sound economic theory, whether it is the best
means to achieve the desired results, whether, in short, the legislative discretion within its prescribed
limits should be exercised in a particular manner are matters for the judgment of the legislature, and
the serious conflict of opinions does not suffice to bring them within the range of judicial
cognizance. Congress is not precluded from repealing Section 67 by the ruling of the Court
in Dimaporo v. Mitra upholding the validity of the provision and by its pronouncement in the same
case that the provision has a laudable purpose. Over time, Congress may find it imperative to repeal
the law on its belief that the election process is thereby enhanced and the paramount objective of
election laws – the fair, honest and orderly election of truly deserving members of Congress – is
achieved.

Substantial distinctions clearly exist between elective officials and appointive officials. The former
occupy their office by virtue of the mandate of the electorate. They are elected to an office for a
definite term and may be removed therefrom only upon stringent conditions. On the other hand,
appointive officials hold their office by virtue of their designation thereto by an appointing authority.
Some appointive officials hold their office in a permanent capacity and are entitled to security of
tenure while others serve at the pleasure of the appointing authority.

Finally, the “Effectivity” clause (Section 16) of Rep. Act No. 9006 which provides that it “shall take
effect immediately upon its approval,” is defective. However, the same does not render the entire law
invalid. In Tañada v. Tuvera, this Court laid down the rule:

... the clause “unless it is otherwise provided” refers to the date of effectivity and not to the requirement of
publication itself, which cannot in any event be omitted. This clause does not mean that the legislator may make
the law effective immediately upon approval, or on any other date without its previous publication.

Publication is indispensable in every case, but the legislature may in its discretion provide that the
usual fifteen-period shall be shortened or extended….

Following Article 2 of the Civil Code and the doctrine enunciated in Tañada, Rep. Act No. 9006,
notwithstanding its express statement, took effect fifteen days after its publication in the Official
Gazette or a newspaper of general circulation.

In conclusion, it bears reiterating that one of the firmly entrenched principles in constitutional law is
that the courts do not involve themselves with nor delve into the policy or wisdom of a statute. That is
the exclusive concern of the legislative branch of the government. When the validity of a statute is
challenged on constitutional grounds, the sole function of the court is to determine whether it
transcends constitutional limitations or the limits of legislative power. No such transgression has been
shown in this case.
 FARINAS v THE EXECUTIVE SECRETARY

FACTS:

A petition was filed seeking the Court to declare unconstitutional Section 14 of RA 9006 or
“The Act to Enhance the Holding of Free, Orderly, Honest, Peaceful and Credible Elections Through
Fair Election Practices” as it repealed Section 67 of the Omnibus Election Code mandating the ipso
jure resignation from public office of one who filed his certificate of candidacy, except for President
and Vice-President.
It is the petitioners’ contention that the repeal of Section 67 is a rider on the said law, the same
embracing more than one subject, inconsistent to what the constitution mandates. Further, it violated
the equal protection clause since the said law didn’t repeal provision relating to appointive officials.
Appointive officials would still be considered ipso jure resigned upon filing of their respective
certificates of candidacy.

HELD:

Section 14 is not a rider. The purported dissimilarity of Section 67 of the Omnibus Election Code,
which imposes a limitation on elective officials who run for an office other than the one they are
holding, to the other provisions of the contested law, which deal with the lifting of the ban on the use
of media for election propaganda, doesn’t violate the “one subject- one title rule”. The Court has held
that an act having a single general subject, indicated in its title, may contain any number of
provisions, no matter how diverse they may be, so long as they are not inconsistent with or foreign to
the general subject, and they may be considered in furtherance of such subject by providing for the
method and means of carrying out the general subject.
The repeal of Section 67 is not violative of the equal protection clause. Equal protection is not absolute
especially if the classification is reasonable. There is reasonable classification between
an elective official and an appointive one. The former occupy their office by virtue of the mandate of
the electorate. They are elected to an office for a definite term and may be removed therefrom only
upon stringent conditions. On the other hand, appointive officials hold their office by virtue of their
designation thereto by an appointing authority. Some appointive officials hold their office in a
permanent capacity and are entitled to security of tenure while others serve at the pleasure of the
appointing authority. Another substantial distinction is that by law, appointed officials are prohibited
from engaging in partisan political activity or take part in any election except to vote.
La Bugal-B’laan Tribal Association, Inc. Vs Ramos
Natural Resources and Environmental Laws

G.R. No. 127882; January 27, 2004

FACTS:
This petition for prohibition and mandamus challenges the constitutionality of Republic Act No. 7942
(The Philippine Mining Act of 1995), its implementing rules and regulations and the Financial and
Technical Assistance Agreement (FTAA) dated March 30, 1995 by the government with Western Mining
Corporation(Philippines) Inc. (WMCP).
Accordingly, the FTAA violated the 1987 Constitution in that it is a service contract and is antithetical to
the principle of sovereignty over our natural resources, because they allowed foreign control over the
exploitation of our natural resources, to the prejudice of the Filipino nation.

ISSUE:
What is the proper interpretation of the phrase “Agreements involving Either Technical or Financial
Assistance” contained in paragraph 4, Section 2, Article XII of the Constitution.

HELD:
The Supreme Court upheld the constitutionality of the Philippine Mining Law, its implementing rules and
regulations – insofar as they relate to financial and technical agreements as well as the subject Financial
and Technical Assistance Agreement.
Full control is not anathematic to day-to-day management by the contractor, provided that the State
retains the power to direct overall strategy; and to set aside, reverse or modify plans and actions of the
contractor. The idea of full control is similar to that which is exercised by the board of directors of a
private corporation, the performance of managerial, operational, financial, marketing and other functions
may be delegated to subordinate officers or given to contractual entities, but the board retains full residual
control of the business.
 LA BUGAL B’LAAN TRIBAL ASSOCIATION INC., et. al. v. V. O. RAMOS, Secretary
Department of Environment and Natural Resources; H. RAMOS, Director, Mines and
Geosciences Bureau (MGB-DENR); R. TORRES, Executive Secretary; and WMC
(PHILIPPINES) INC.

The constitutional provision allowing the President to enter into FTAA is a exception to the rule that
participation in the nation’s natural resources is reserved exclusively to Filipinos. Provision must be
construed strictly against their enjoyment by non-Filipinos.
RA 7942 (The Philippine Mining Act) took effect on April 9, 1995. Before the effectivity of RA 7942, or
on March 30, 1995, the President signed a Financial and Technical Assistance Agreement (FTAA)
with WMCP, a corporation organized under Philippine laws, covering close to 100,000 hectares of
land in South Cotabato, Sultan Kudarat, Davao del Sur and North Cotabato. On August 15, 1995, the
Environment Secretary Victor Ramos issued DENR Administrative Order 95-23, which was later
repealed by DENR Administrative Order 96-40, adopted on December 20, 1996.
Petitioners prayed that RA 7942, its implementing rules, and the FTAA between the government and
WMCP be declared unconstitutional on ground that they allow fully foreign owned corporations like
WMCP to exploit, explore and develop Philippine mineral resources in contravention of Article XII
Section 2 paragraphs 2 and 4 of the Charter.
In January 2001, WMC – a publicly listed Australian mining and exploration company – sold its
whole stake in WMCP to Sagittarius Mines, 60% of which is owned by Filipinos while 40% of which is
owned by Indophil Resources, an Australian company. DENR approved the transfer
and registration of the FTAA in Sagittarius‘ name but Lepanto Consolidated assailed the same. The
latter case is still pending before the Court of Appeals.
EO 279, issued by former President Aquino on July 25, 1987, authorizes the DENR to accept, consider
and evaluate proposals from foreign owned corporations or foreign investors for contracts
or agreements involving wither technical or financial assistance for large scale exploration,
development and utilization of minerals which upon appropriate recommendation of the (DENR)
Secretary, the President may execute with the foreign proponent. WMCP likewise contended that the
annulment of the FTAA would violate a treaty between the Philippines and Australia which provides
for the protection of Australian investments.

ISSUES:

1. Whether or not the Philippine Mining Act is unconstitutional for allowing fully foreign-owned
corporations to exploit the Philippine mineral resources. 2. Whether or not the FTAA between the
government and WMCP is a ―service contract that permits fully foreign owned companies to exploit
the Philippine mineral resources.

HELD:

First Issue: RA 7942 is Unconstitutional

RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for permitting fully foreign owned
corporations to exploit the Philippine natural resources.
Article XII Section 2 of the 1987 Constitution retained the Regalian Doctrine which states that ―All
lands of the public domain, waters, minerals, coal, petroleum, and other minerals, coal, petroleum,
and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State. The same section also states that, ―the
exploration and development and utilization of natural resources shall be under the full control and
supervision of the State.
Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitution authorizing the
State to grant licenses, concessions, or leases for the exploration, exploitation, development, or
utilization of natural resources. By such omission, the utilization of inalienable lands of the public
domain through license, concession or lease is no longer allowed under the 1987 Constitution.
Under the concession system, the concessionaire makes a direct equity investment for the purpose of
exploiting a particular natural resource within a given area. The concession amounts to complete
control by the concessionaire over the country‘s natural resource, for it is given exclusive and plenary
rights to exploit a particular resource at the point of extraction.
The 1987 Constitution, moreover, has deleted the phrase ―management or other forms of assistance
in the 1973 Charter. The present Constitution now allows only ―technical and financial assistance.
The management and the operation of the mining activities by foreign contractors, the primary
feature of the service contracts was precisely the evil the drafters of the 1987 Constitution sought to
avoid.
The constitutional provision allowing the President to enter into FTAAs is an exception to the rule
that participation in the nation‘s natural resources is reserved exclusively to Filipinos. Accordingly,
such provision must be construed strictly against their enjoyment by non-Filipinos. Therefore, RA
7942 is invalid insofar as the said act authorizes service contracts. Although the statute employs the
phrase ―financial and technical agreements in accordance with the 1987 Constitution, its pertinent
provisions actually treat these agreements as service contracts that grant beneficial ownership to
foreign contractors contrary to the fundamental law.
The underlying assumption in the provisions of the law is that the foreign contractor manages the
mineral resources just like the foreign contractor in a service contract. By allowing foreign contractors
to manage or operate all the aspects of the mining operation, RA 7942 has, in effect, conveyed
beneficial ownership over the nation‘s mineral resources to these contractors, leaving the State with
nothing but bare title thereto.
The same provisions, whether by design or inadvertence, permit a circumvention of the
constitutionally ordained 60-40% capitalization requirement for corporations or associations engaged
in the exploitation, development and utilization of Philippine natural resources.
When parts of a statute are so mutually dependent and connected as conditions, considerations,
inducements or compensations for each other as to warrant a belief that the legislature intended them
as a whole, then if some parts are unconstitutional, all provisions that are thus dependent, conditional
or connected, must fail with them.
Under Article XII Section 2 of the 1987 Charter, foreign owned corporations are limited only to
merely technical or financial assistance to the State for large scale exploration, development and
utilization of minerals, petroleum and other mineral oils.
Second Issue: RP Government-WMCP FTAA is a Service Contract
The FTAA between he WMCP and the Philippine government is likewise unconstitutional since the
agreement itself is a service contract.
Section 1.3 of the FTAA grants WMCP a fully foreign owned corporation, the exclusive right to
explore, exploit, utilize and dispose of all minerals and by-products that may be produced from the
contract area. Section 1.2 of the same agreement provides that EMCP shall provide all financing,
technology, management, and personnel necessary for the Mining Operations.
These contractual stipulations and related provisions in the FTAA taken together, grant WMCP
beneficial ownership over natural resources that properly belong to the State and are intended for
the benefit of its citizens. These stipulations are abhorrent to the 1987 Constitution. They are precisely
the vices that the fundamental law seeks to avoid, the evils that it aims to suppress. Consequently, the
contract from which they spring must be struck down.
TEODORA L. VDA. De Miranda and others, plaintiffs-appellants,
vs. Feliciano IMPERIAL IMPERIAL AND JUANA, defendants-appellees.

GR No. L-49090 February 28, 1947

FACTS: Defendants Feliciano and Juana Imperial barrowed from plaintiff Miranda the amount of P1,000; that
in consideration of this debt and to guarantee payment they executed verbal antichresis in favor of the latter. In
an action filed by Miranda against Imperial, the lower court in deciding based its finding in the judgment
delivered by the Court of Appeals in the case of Santa Rosa vs. Noble. Obtaining a negative judgment, appellant
has brought the present appeal claiming that the court erred in applying the case of Santa Rosa vs. Noble
alleging that cases decided by the court of appeals does not constitute precedent and hence may not be applied
in deciding cases.

ISSUE: Whether the decisions of the Court of Appeals constitute precedents.

HELD: Only the decisions of Supreme Court establish jurisprudence or doctrines in the jurisdiction. However,
this does not prevent that a conclusion or pronouncement of the Court of Appeals which covers a point of law
still undecided in our jurisprudence may serve as juridical guide to the inferior courts, and that such conclusion
or pronouncement be raised as a doctrine if, after it has been subjected to test in the crucible of analysis and
revision, this Supreme Court should find that it has merits and qualities sufficient for its consecration as a rule
of jurisprudence.