Page 5

British American Tobacco Corporation v.
Finance Secretary Camacho, BIR

Commissioner Parayno (2008)
Doctrine: Classification if rational in character is allowable. The taxing power has the
authority to make reasonable and natural classifications for purposes of taxation.
Facts:
 British American Tobacco is the distributor of Lucky Strike Cigarette in the
Philippines
 The company is questioning the constitutionality of RA 8240, entitled "An Act
Amending Sections 138, 139, 140, and 142 of the NIRC, as Amended and For
Other Purposes," which took effect on January 1, 1997
 The law provided a legislative freeze on brands of cigarettes introduced between
the period January 2, 1997 to December 31, 2003, such that said cigarettes shall
remain in the classification under which the BIR has determined them to belong
as of December 31, 2003, until revised by Congress.
 In effect: older brands or existing brands will have, in the long term, lower price
and tax rate as inflation and price appreciation were not factored in.
o Their tax rate shall remain until Congress changes it
o Hence, a legislative freeze in the class of cigarettes
Net 2005 Tax 2007 Tax 2009 Tax 2011 Tax Supreme
Retail Court
Price Classificati
(excludin on
g excise
tax and
VAT
Less P2/pack P2.23/pac P2.47/pac P2.72/pac Low-priced
than P5 k k k
per pack
Bet P5- P6.35/pac P6.74/pac P7.14/pac P7.56/pac Medium-
P6.50 k k k k priced
Bet P10.35/pa P10.88/pa P11.43/pa P12/pack High-priced
P6.50- ck ck ck
P10
Above P25/pack P26.06/pa P27.16/pa P28.30/pa Premium-
P10 ck ck ck priced
 New brands shall be classified according to current net retail price
 New brands are the ones registered after January 1, 1997
 In 2001, Lucky Strike was introduced in the market
 Lucky Strike was classified as premium-priced hence was imposed the Above
P10 tax rate
 Lucky Strike protested the P22.77M tax assessment pegged at P25/pack
FELICIANA L. MORGAN Page 1

CONSTI 2
 Lucky Strike interposes that the legislative freeze is discriminatory against new
brands and poses barrier to entry in the cigarette industry
o Legislative freeze means: existing or "old" brands shall be taxed based on
their net retail price as of October 1, 1996.
o Hence, the classification based on pricing is lower for older brands
compared to new entrants
 Lucky Strike found it unfair that Philip Morris and Marlboro are classified only as
High-priced while it is classified as Premium Priced.
WON:
1. The pertinent portions of RA 8240, as amended by RA 9334, discriminates

against new cigarette brands and favors old cigarette brands?
2. The classification freeze provision unduly favors older brands over newer
brands?
Held: In applying the rational basis test, the Court found the questioned law
Constitutional.
 A legislative classification that is reasonable does not offend the constitutional
guaranty of the equal protection of the laws.
 The classification is considered valid and reasonable provided that:
(1) it rests on substantial distinctions;
(2) it is germane to the purpose of the law;
(3) it applies, all things being equal, to both present and future conditions; and
(4) it applies equally to all those belonging to the same class.
 classification freeze provision uniformly applies to all newly introduced brands in
the market,
 Finding that the assailed law seems to derogate, to a limited extent, one of its
avowed objectives (i.e. promoting fair competition among the players in the
industry) would suggest that, by Congress’s own standards, the current excise
tax system on sin products is imperfect. But the Court cannot declare a statute
unconstitutional merely because it can be improved or that it does not tend to
achieve all of its stated objectives.

CONSTI 2
91. MANILA INTERNATIONAL AIRPORT AUTHORITY and ANTONIO P. GANA
VS.OLONGAPO MAINTENANCE SERVICES, INC. and TRIPLE CROWN SERVICES,
INC.
G.R. No, 146184-85/G.R. No. 161117, January 31, 2008
Nature of the Proceeding: Petition for Writ of Preliminary Injunction
Material Facts:
1.) OMSI and TCSI were among the five contractors of MIAA which had janitorial
and maintenance service contracts covering various areas in the Ninoy Aquino
International Airport. Before their service contracts expired on October 31, 1998,
the MIAA Board of Directors, through Antonio P. Gana, then General Manager of
MIAA, wrote OMSI and TCSI informing them that their contracts would no longer
be renewed after October 31, 1998.
2.) On September 28, 1998, TCSI, in a letter to Gana, expressed its concern over
the award of its concession area to a new service contractor through a
negotiated contract. It said that to award TCSI’s contract by mere negotiation
would violate its right to equal protection of the law. TCSI thus suggested that a
public bidding be conducted and that the effectivity of its service contract be
meanwhile extended until a winning bid is declared.
3.) In reply, MIAA wrote TCSI and OMSI reiterating its disinclination to renew the
latter’s contracts, adding that it was to the government’s advantage to instead
just negotiate with other contractors. The MIAA said that awarding a contract
through negotiation was in accordance with Section 9 of Executive Order No.
(EO) 903; Sec. 82 of Republic Act No. (RA) 8522, otherwise known as
the General Appropriations Act for 1998; and Sec. 417 of the Government
Accounting and Auditing Manual (GAAM).
4.) Consequently, OMSI and TCSI instituted civil cases against MIAA to forestall the
termination of their contracts and prevent MIAA from negotiating with other
service contractors.
Issues:
1.) Whether or not the Court of Appeals erred in declaring that respondents had
extant interests in the awarding of the service contracts
2.) Whether or not the Court of Appeals erred in holding that petitioners had no
power to award the service contracts through negotiation
Ruling: A decision is hereby rendered, ordering as follows:
1. The negotiated contract by and between the respondents and the resolution of the
MIAA Board, dated October 2, 1998, authorizing MIAA management and/or respondent
GM Gana to negotiate and award service contracts upon the expiration of the present
service contract, on October 31, 1998 are hereby declared NULL and VOID;
2. The writ of preliminary injunction is RECALLED and NULLIFIED; and

CONSTI 2
3. No pronouncement as to costs and attorney’s fees.
Ratio Decidendi:It is undisputed that the service contracts of OMSI and TCSI expired
on October 31, 1998 and were not extended by MIAA. Hence, all the rights and
obligations arising from said contracts were extinguished on the last day of the term. As
a result, OMSI and TCSI had already lost their rights to render janitorial and
maintenance services for MIAA starting November 1, 1998. The Court made clear that a
mandatory injunction is an extreme remedy and will be granted only on a showing that
(a) the invasion of the right is material and substantial; (b) the right of the complainant is
clear and unmistakable; and (c) there is an urgent and paramount necessity for the writ
to prevent serious damage. It is apparent that OMSI and TCSI have no more legal rights
under the service contracts and, therefore, they have not met the vital procedural
requirement that they must have material and substantial rights that have to be
protected by courts.
The service contracts of OMSI and TCSI may not be extended through the
instrumentality of an injunctive writ. It is a doctrine firmly settled in this jurisdiction that
courts have no power to make a contract for the parties nor can they construe contracts
in such a manner as to change the terms of the contracts not contemplated by the
parties.Verily, under Art. 1308 of the Civil Code, the contract between the parties is the
law between them; mutuality being an essential characteristic of contracts giving rise to
reciprocal obligations. And under Art. 1306 of the Code, the parties may establish
stipulations mutually acceptable to them for as long as such are not contrary to law,
morals, good customs, public order, or public policy. And where a determinate period for
a contract’s effectivity and expiration has been mutually agreed upon and duly
stipulated, the lapse of such period ends the contract’s effectivity and the parties cease
to be bound by the contract.

CONSTI 2
ANTONIO TRILLANES IV v. HON. OSCAR PIMENTEL SR. (D)
G.R. No. 179817 June 27, 2008
FACTS:
July 27, 2003, a group of more than 300 heavily armed soldiers led by junior officers of
the Armed Forces of the Philippines (AFP) stormed into the Oakwood Premier
Apartments in Makati City and publicly demanded the resignation of the President and
key national officials.
On the same day, President Gloria Macapagal Arroyo issued Proclamation No. 427 and
General Order No. 4 declaring a state of rebellion and calling out the Armed Forces to
suppress the rebellion.
Petitioner Antonio F. Trillanes IV was charged, along with his comrades, with coup
d’etat defined under Article 134-A of the Revised Penal Code before the RTC of Makati.
4 years later, petitioner, who has remained in detention, threw his hat in the political
arena and won a seat in the Senate with a 6-year term commencing at noon on June
30, 2007.
Petitioner filed with the RTC, Makati City, Branch 148, an "Omnibus Motion for Leave of
Court to be Allowed to Attend Senate Sessions and Related Requests".
The trial court denied all the requests in the Omnibus Motion.
ISSUE:
Whether or not membership in Congress exempt an accused from statutes and rules
which apply to validly incarcerated persons in general
HELD:
No, it is impractical to draw a line between convicted prisoners and pre-trial detainees
for the purpose of maintaining jail security; and while pre-trial detainees do not forfeit
their constitutional rights upon confinement, the fact of their detention makes their rights
more limited than those of the public.
When a person indicted for an offense is arrested, he is deemed placed under the
custody of the law. He is placed in actual restraint of liberty in jail so that he may be
bound to answer for the commission of the offense. He must be detained in jail during
the pendency of the case against him, unless he is authorized by the court to be
released on bail or on recognizance.
Presumption of innocence does not carry with it the full enjoyment of civil and political
rights.
Allowing accused-appellant to attend congressional sessions and committee meetings
for 5 days or more in a week will virtually make him a free man with all the privileges
appurtenant to his position. Such an aberrant situation not only elevates accused-
appellant’s status to that of a special class, it also would be a mockery of the purposes
of the correction system.

CONSTI 2
Soriano vs. La Guardia G.R. No. 164785 April 29, 2009 Freedom of Speech
JANUARY 26, 2018
FACTS:
On August 10, 2004, at around 10:00 p.m., petitioner, as host of the program Ang
Dating Daan, aired on UNTV 37, made obscene remarks against INC. Two days after,
before the MTRCB, separate but almost identical affidavit-complaints were lodged by
Jessie L. Galapon and seven other private respondents, all members of the Iglesia ni
Cristo (INC), against petitioner in connection with the above broadcast. Respondent
Michael M. Sandoval, who felt directly alluded to in petitioner’s remark, was then a
minister of INC and a regular host of the TV program Ang Tamang Daan.
ISSUE:
Are Soriano’s statements during the televised “Ang Dating Daan” part of the religious
discourse and within the protection of Section 5, Art.III?
RULING:
No. Under the circumstances obtaining in this case, therefore, and considering the
adverse effect of petitioner’s utterances on the viewers’ fundamental rights as well as
petitioner’s clear violation of his duty as a public trustee, the MTRCB properly
suspended him from appearing in Ang Dating Daan for three months.
Furthermore, it cannot be properly asserted that petitioner’s suspension was an undue

curtailment of his right to free speech either as a prior restraint or as a subsequent
punishment. Aside from the reasons given above (re the paramountcy of viewers rights,
the public trusteeship character of a broadcaster’s role and the power of the State to
regulate broadcast media), a requirement that indecent language be avoided has its
primary effect on the form, rather than the content, of serious communication. There are
few, if any, thoughts that cannot be expressed by the use of less offensive language.

CONSTI 2
League of Cities of the Philippines (LCP) v COMELEC
December 21, 2009 | Velasco, Jr.
Facts: MR of the first Decision (Nov 18, 2008). The case is a petition for prohibition
against the COMELEC seeking to enjoin it from conducting plebiscites in the 16
municipalities converted into cities by Congress thru the cityhood laws on the ground
that the cityhood laws are unconstitutional.
The Nov 18, 2008 Decision granted the original petition and nullified the cityhood laws.
The respondent LGUs moved to reconsider the Decision, raising as issue the validity of
the factual premises not contained or established in the pleadings which became the
basis of the Decision.
On March 31, 2009, the MR was denied. A second MR was filed, which was also
denied in a Resolution with a 6-6 vote on April 28, 2009. On May 14, 2009, a Motion to
Amend the Resolution was filed by the respondent which was expunged in a June 2,
2009 resolution. An MR of the June 2, 2009 Resolution was filed, the propriety of which
is subject of this case.
Issues: 1. (Procedural) WON the MR of the June 2, 2009 Resolution should be

granted? YES
2. (Substantive) WON the cityhood laws are unconstitutional? NO
a. WON the cityhood laws violate Sec. 10. Art. X of the Constitution
andthe equal protection clause. NO
Held:1. The MR of the June 2, 2009 Resolution is, in effect, a MR of the April 28, 2009
MR of the Nov 18, 2008 Decision. The Nov 18, 2008 Decision is a decision concerning
the validity of a law and the Constitution (Sec. 4(2), Art. VIII) provides that “all cases
involving the constitutionality of a law shall be heard by the Court en banc and decided
with the concurrence of a majority of the Members who actually took part in the
deliberations on the issues in the case and voted thereon.”
Since the Resolution on April 28, 2009 is, in effect, a decision concerning the
validity of the cityhood laws (because it is an MR of the Decision), then it follows that the
last decision concerning the constitutionality of a law ended in a tie of 6-6, which cannot
be had because the constitution provides that the constitutionality of a law must be
decided by a majority vote. As such, the issue remains undecided. Hence the present
MR should be granted.
2. The cityhood laws are constitutional.

They do not violate Sec. 10 Art X of the Constitution. The said section
provides
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
of the votes cast in a plebiscite in the political units directly affected.
The Court basically said that the “local government code” referred to in the
provision does not specifically refer to the LGC of 1991 or to any specific Local
Government Code whatsoever. What it refers to is (bear with me) the capacity of

CONSTI 2
Congress to enact legislation setting guidelines in the creation, division, merger,
abolition, and alteration of boundary of local government units.
The Court argues that the LGC of 1991 is just the convenient repository of the
guidelines created by Congress. Other enactments of the Congress may therefore be
considered as part of the “local government code” referred to in the Constitution. As
such, the cityhood laws may be considered part of this “local government code” as
specific enactments since the power to create cities is within the powers of the
Congress anyway. Hence, the cityhood laws are not violative of the Constitution.
The cityhood laws are also not violative of the equal protection clause.
Petitioner cannot invoke this clause because the enactment of the cityhood laws does
not result to deprivation of property. Also, it is presumptuous of the petitioners to stake a
claim on the IRA.
There is a substantial distinction for the favorable treatment of the 16
municipalities. Years before RA 9009, they already met the income criteria of P20M.
However, extraneous circumstances prevented Congress from acting upon the pending
cityhood bills before the passage of RA 9009, such as President Estrada’s
impeachment, May 2001 elections, etc. (as enumerated in Sen. Lim’s sponsorship
speech of the cityhood bills).
The classification is also germane to the law’s purpose. The exemption was meant to
reduce the inequality brought about by the passage of RA 9009 and also to insure that
fairness and justice would be accorded to the LGUs.
The common exemption clause is an application of the non-retroactive effect of
RA 9009 on the cityhood bills. It’s not a declaration of rights, but mere declaration of
prior qualification. The said clause would also apply equally to all similarly situated (the
municipalities that had pending cityhood bills before RA 9009.
Dispositive:
WHEREFORE, respondent LGUs Motion for Reconsideration dated June 2, 2009, their
Motion to Amend the Resolution of April 28, 2009 by Declaring Instead that
Respondents Motion for Reconsideration of the Resolution of March 31, 2009 and
Motion for Leave to File and to Admit Attached Second Motion for Reconsideration of
the Decision Dated November 18, 2008 Remain Unresolved and to Conduct Further
Proceedings, dated May 14, 2009, and their second Motion for Reconsideration of the
Decision dated November 18, 2008 are GRANTED. The June 2, 2009, the March 31,
2009, and April 31, 2009 Resolutions are REVERSED and SET ASIDE. The entry of
judgment made on May 21, 2009 must accordingly be RECALLED.

CONSTI 2
G.R. No. 167614 March 24, 2009
ANTONIO M. SERRANO vs. Gallant MARITIME SERVICES, INC. and MARLOW
NAVIGATION CO., INC.
FACTS:
Antonio Serrano, claims that the 5th paragraph of Section 10, Republic Act (R.A.) No.
8042 violates the OFWs' constitutional rights in that it impairs the terms of their contract,
deprives them of equal protection and denies them due process.
Section 10, Republic Act (R.A.) No. 8042 provides:Sec. 10. Money Claims. - x x x In
case of termination of overseas employment without just, valid or authorized cause as
defined by law or contract, the workers shall be entitled to the full reimbursement of his
placement fee with interest of twelve percent (12%) per annum, plus his salaries for the
unexpired portion of his employment contract or for three (3) months for every year
of the unexpired term, whichever is less. x x x x (Emphasis and underscoring
supplied)
Antonio Serrano (serrano for brevity) was a Filipino sea fairer employed as Chief Officer
by Gallant Maritime Services Inc and Marlow Navigation Co., Inc (respondents for
brevity) under a 12- month contract with Basic Monthly Salary of US$1400. However,
when he departed on March 19. 1998, Serrno was constrained to accept a downgraded
employment of Second Officer with monthly salary of US$1,000 with the assurance that
he would be made Chief Officer by the end of April 1998. However, respondents failed
to keep their promise so Serrano refused to stay as Second Oficer and was repatriated
to the Philippines, having served only 2 months and 7 days fot eh 12 month contract.
Serrano filed a complaint before the Labor arbiter for constructive dismissal and
payment of money claims (total US$26442.73), moral and exemplary damages, and
attorney’s fees.
LABOR ARBITER: Serrano was declared illegally dismissed and was awarded

monetary benefits, representing Serrano’s salary for three (3) months of the
unexpired portion of his employment contract (total USD8,770) at the exchange rate
of USD45 and attorney’s fees equivalent to 10% of total amount awarded. LA’s basis
was Serrano’s basic pay (USD1,400), fixed overtime pay (USD700), vacation leave pay
(USD490).
Serrano appealed to the NLRC, arguing that he is entitled to his salaries for the
unexpired portion of his contract pursuant to Tripe Intefrated Services Inc vs. NLRC.
NLRC: NLRC modified the monetary awards and ordered respondents to pay only
USD4669 which is equivalent to 3 months salary (USD1400 x 3); Salary differential of
USD45 and 10% attorney’s fees of USD424.5, reasoning that R.A. No. 8042 "does not
provide for the award of overtime pay, which should be proven to have been
actually performed, and for vacation leave pay. Other findings were affirmed.

CONSTI 2
Serrano questioned the constitutionality of said provision.
Court of Appeals: The CA affirmed the NLRC’s ruling on the reduction but skirted the
constitutional issue.
Respondents argue that respondent cannot belatedly question the constitutionality of

the said law on appeal.
The Sol Gen (OSG) argues that since the law preceded Serrano’s contract, it
(especially the monetary claims) is deemed incorporated therat sans stipulation. The
OSG further contends that there is a reasonable and valid basis to differentiate OFW
from local workers; and therefore the provision does not violate the equal protection
clause nor sec. 18 Art. II of the Constitution.
ISSUES:
1. Whether or not the issue of Constitutionality was timely raised by Serrano and
before the proper tribunal
2. Whether or not Section 10 of Rep. Act No. 8402 is constitutional.
3. Whether or not Serrano is entitled to salaries equivalent of three months of the

unexpired portion or salaries equivalent of the entire nine months and 23 days
left of his employment contract including overtime pay and holiday pay.
RULING:
1. The Court may exercise its power of judicial review of acts of a co-equal branch, i.e
Congress, when the following conditions are satisfied:
a. There is an actual controversy

b. The constitutional question is raised by proper party and at the earliest opportunity
c. The constitutional question is the very lis mota of the case.
In ruling that the conditions were met, the Court ruled that:
There is an actual controversy re the Labor and CA’s computation of Serrano’s

monetary claims.
The issue on Constitutionality was timely raised when Serrano raised the same before
the Court of Appeals, such court having been vested with the power of judicial review to
declare a law unconstitutional.
The constitutional issue is critical to the resolution of the monetary claim of Serrano.

CONSTI 2
2. On Violation of Non-Impairment Clause (Sec 10, Art II of the Constitution)

The provision does not violate the principle of non-impairment of contract (as the law
preceded the contract and laws operate prospectively.
On Violation of Sec 1, Art III; Sec 18, Art II; and Section 3 of Article XIII of the
Constitution
The subject clause VIOLATES the Equal Protection Clause and Right of an

individual to due Process(Sec 1, Art III), recognizing their rights as a protected
Sector (Sec 18, Art II; and Section 3 of Article XIII)
Prior to R.A. 8042, all OFWs who were illegally terminated were subjected to a uniform
rule of monetary benefits computation: basic salary times the entire unexpired portion
of their employment. However, upon the enactment of R.A. 8042, illegally dismissed
employees with unexpired portion of 1 year or more are singled out and subjected to the
disadvantageous monetary award of 3 months of their unexpired portion; as opposed to
those illegally terminated OFWs with unexpired contracts of less than one year who are
entitled to their salaries for the unexpired period; and illegally dismissed local workers
with fixed-term employment who are not subjected to the 3-cap limitation.
Filipino workers are protected and afforded certain rights under the Constitution subject
to the inherent power of Congress to incorporate a system of classification into its
legislation.
There is a valid classification if the classification is

1.) based on substantial distinction,
2.) germane to the purpose of law,
3) it is not limited to existing conditions; and
4) it applies equally to all members of the class.
There are three levels of scrutiny at which the Court reviews the constitutionality of a
classification embodied in a law:
1.) the deferential or rational basis scrutiny in which the challenged classification needs
only be shown to be rationally related to serving a legitimate state interest
2.) the middle-tier or intermediate scrutiny in which the government must show that the
challenged classification serves an important state interest and that the classification is
at least substantially related to serving that interest; and
3.)) strict judicial scrutiny in which a legislative classification which impermissibly
interferes with the exercise of a fundamental right or operates to the peculiar
disadvantage of a suspect class is presumed unconstitutional, and the burden is upon
the government to prove that the classification is necessary to achieve a compelling
state interest and that it is the least restrictive means to protect such interest

CONSTI 2
In American jurisprudence, strict scrutiny is triggered by suspect classifications based
on race or gender but not when the classification is drawn along income
categories. However, foreign decisions, although persuasive, are not per se controlling
in the Philippines. Philippine laws are to be construed in light of our lawmakers intent
and construed to serve our own public interest.
Imbued with the same sense of "obligation to afford protection to labor," the Court in the
present case also employs the standard of strict judicial scrutiny, for it perceives in the
subject clause a suspect classification prejudicial to OFWs.
In the present case, the Court dug deep into the records but found no compelling state
interest that the subject clause may possibly serve.
The Court ruled that the Government has failed to discharge its burden of proving the
existence of a compelling state interest that would justify the perpetuation of the
discrimination against OFWs under the subject clause.
The Court declared the provision unconstitutional clause VIOLATES the Equal

Protection Clause and Right of an individual to due Process(Sec 1, Art III),
recognizing their rights as a protected Sector (Sec 18, Art II; and Section 3 of
Article XIII).
Note how the Court approaches the issue applying Section 1, Art III and not solely on
the provisions re the Constitution’s state policy on labor.
This is so because Setion 3 of Article XII is not a self-executing provision and it cannot
on its own, be a source of enforceable right. What it does is recognize labor as a
protected sector; otherwise, it will lead to a broad interpretation would suggest a blanket
shield in favor of labor.
In declaring the subject clause unconstitutional, the Court reasoned that since the same
deprived Serrano of property and money benefits without an existing valid and definitive
governmental purpose, it violated not only Serrano’s right to equal protection but as well
as his right to substantive due process under (Section1, Art. III of the Constitution); thus,
entitling Serrano to his salaries for the entire unexpired period.
3. Serrano is entitled to his salaries for the entire unexpired period, not

including his overtime and leave pay because there is no evidence that he
performed work during those periods.
Salary is understood as the basic wage, exclusive of overtime, leave pay and other
bonuses; whereas overtime pay is compensation for all work "performed" in excess of
the regular eight hours, and holiday pay is compensation for any work "performed" on
designated rest days and holidays.

CONSTI 2
CHAMBER OF REAL ESTATE v. EXECUTIVE SECRETARY ALBERTO ROMULO,
GR No. 160756, 2010-03-09
Facts:
petitioner Chamber of Real Estate and Builders' Associations, Inc. is questioning the
constitutionality of Section 27 (E) of Republic Act (RA) 8424[2] and the revenue
regulations (RRs) issued by the Bureau of Internal Revenue (BIR) to implement said
provision and those involving creditable withholding taxes
Petitioner is an association of real estate developers and builders in the Philippines
Petitioner assails the validity of the imposition of minimum corporate income tax (MCIT)
on corporations and creditable withholding tax (CWT) on sales of real properties
classified as ordinary assets.
Contentions re: MCIT
Section 27(E) of RA 8424 provides for MCIT on domestic corporations
Petitioner argues that the MCIT violates the due process clause because it levies
income tax even if there is no realized gain.
Contentions re: CWT
Petitioner also seeks to nullify Sections 2.57.2(J) (as amended by RR 6-2001) and
2.58.2 of RR 2-98, and Section 4(a)(ii) and (c)(ii) of RR 7-2003, all of which prescribe
the rules and procedures for the collection of CWT on the sale of real properties
categorized as ordinary... assets... contends that these revenue regulations are contrary
to law for two reasons: first, they ignore the different treatment by RA 8424 of ordinary
assets and capital assets and second, respondent Secretary of Finance has no
authority to collect CWT,... much less, to base the CWT on the gross selling price or fair
market value of the real properties classified as ordinary assets.
Petitioner also asserts that the enumerated provisions of the subject revenue
regulations violate the due process clause because, like the MCIT, the government
collects income tax even when the net income has not yet been determined.
Under the MCIT scheme, a corporation, beginning on its fourth year of operation, is
assessed an MCIT of 2% of its gross income when such MCIT is greater than the
normal corporate income tax imposed under Section 27(A)
If the regular income tax is higher... than the MCIT, the corporation does not pay the
MCIT. Any excess of the MCIT over the normal tax shall be carried forward and credited
against the normal income tax for the three immediately succeeding taxable years.
(4)

CONSTI 2
Gross Income Defined. - For purposes of applying the [MCIT] provided under
Subsection (E) hereof, the term `gross income' shall mean gross sales less sales
returns, discounts and allowances and cost of goods sold. "Cost of goods sold" shall
include all... business expenses directly incurred to produce the merchandise to bring
them to their present location and use.
Secretary of Finance (Secretary), on the recommendation of the Commissioner of

Internal Revenue (CIR), promulgated RR 9-98 implementing Section 27(E)
The MCIT shall be imposed whenever such corporation has zero or negative taxable
income or whenever the amount of minimum corporate income tax is... greater than the
normal income tax due from such corporation.
Any excess of the [MCIT] over the normal income tax as computed under Sec. 27(A) of
the Code shall be carried forward on an annual basis and credited against the normal
income tax for the three (3) immediately succeeding taxable years.
RR 2-98 implementing certain provisions of RA 8424 involving the withholding of taxes
Under Section 2.57.2(J) of RR No. 2-98, income payments from the... sale, exchange or
transfer of real property, other than capital assets, by persons residing in the Philippines
and habitually engaged in the real estate business were subjected to CWT
Income payment subject to [CWT]
Gross selling price or total amount of consideration or its equivalent paid to the
seller/owner for the sale, exchange or transfer of. - Real property, other than capital
assets, sold by an individual, corporation, estate, trust, trust fund or pension fund and
the... seller/transferor is habitually engaged in the real estate business
Gross selling price shall mean the consideration stated in the sales document or the fair
market value determined in accordance with Section 6 (E) of the Code, as amended,
whichever is higher. In an exchange, the fair market value of the property received in
exchange, as... determined in the Income Tax Regulations shall be used.
amended by RR 6-2001
Gross selling price or total amount of consideration or its equivalent paid to the
seller/owner for the sale, exchange or transfer of real property classified as ordinary
asset. - A [CWT] based on the gross selling price/total amount of consideration or the
fair market value... determined in accordance with Section 6(E) of the Code, whichever
is higher, paid to the seller/owner for the sale, transfer or exchange of real property,
other than capital asset, shall be imposed upon the withholding agent,/buyer
Gross selling price shall remain the consideration stated in the sales document or the
fair market value determined in accordance with Section 6 (E) of the Code, as
amended, whichever is higher. In an exchange, the fair market value of the property
received in exchange... shall be considered as the consideration.

CONSTI 2
However, if the buyer is engaged in trade or business, whether a corporation or
otherwise, these rules shall apply:
(i) If the sale is a sale of property on the installment plan (that is, payments in the year
of sale do not exceed 25% of the selling price), the tax shall be deducted and withheld
by the buyer on every installment.
(ii) If, on the other hand, the sale is on a "cash basis" or is a "deferred-payment sale not
on the installment plan" (that is, payments in the year of sale exceed 25% of the selling
price), the buyer shall withhold the tax based on the gross selling price or fair market...
value of the property, whichever is higher, on the first installment.
any sale, barter or exchange subject to the CWT will not be recorded by the Registry of
Deeds until the CIR has certified that such transfers and conveyances have been
reported and the taxes thereof... have been duly paid
RR No. 7-2003[8] was promulgated, providing for the guidelines in determining whether
a particular real property is a capital or an ordinary asset for purposes of imposing the
MCIT
In the case of individual citizen (including estates and trusts), resident aliens, and non-
resident aliens engaged in trade or business in the Philippines
The sale of real property located in the Philippines, classified as ordinary assets, shall
be subject to the [CWT]... based on the gross selling price or current fair market value...
whichever is higher, and consequently, to the ordinary income tax... based on net
taxable income.
In the case of domestic corporations
The sale of land and/or building classified as ordinary asset and other real property
(other than land and/or building treated as capital asset), regardless of the classification
thereof, all of which are located in the Philippines, shall be subject to the [CWT]... and
consequently, to the ordinary income tax
In lieu of the ordinary income tax, however, domestic corporations may become subject
to the [MCIT] under Sec. 27(E) of the Code, whichever is... applicable.
Issues:
whether or not the imposition of the MCIT on domestic corporations is unconstitutional
(3)... whether or not the imposition of CWT on income from sales of real properties
classified as ordinary assets under RRs 2-98, 6-2001 and 7-2003, is unconstitutional.
Ruling:
The MCIT on domestic corporations is a new concept introduced by RA 8424 to the

Philippine taxation system. It came about as a result of the perceived inadequacy of the

CONSTI 2
self-assessment system in capturing the true income of corporations.[21] It was
devised... as a relatively simple and effective revenue-raising instrument compared to
the normal income tax which is more difficult to control and enforce. It is a means to
ensure that everyone will make some minimum contribution to the support of the public
sector.
Domestic corporations owe their corporate existence and their privilege to do business
to the government. They also benefit from the efforts of the government to improve the
financial market and to ensure a favorable business climate. It is therefore fair for the
government to... require them to make a reasonable contribution to the public expenses.
Congress intended to put a stop to the practice of corporations which, while having
large turn-overs, report minimal or negative net income resulting in minimal or zero
income taxes year in and year out, through under-declaration of income or over-
deduction of expenses otherwise... called tax shelters
The primary purpose of any legitimate business is to earn a profit. Continued and
repeated losses after operations of a corporation or consistent reports of minimal net
income render its financial statements and its tax payments suspect.
As a tax on gross income, it prevents tax evasion and minimizes tax avoidance
schemes achieved through sophisticated and artful manipulations of deductions and
other... stratagems. Since the tax base was broader, the tax rate was lowered.
the birth pangs of businesses and the reality of the need to recoup initial major capital
expenditures
MCIT commences only on the fourth taxable year... grace period allows a new business
to stabilize first and make its ventures viable
MCIT Is Not Violative of Due Process
Taxes are the lifeblood of the government.
Taxation is an inherent attribute of sovereignty.[34] It is a power that is purely

legislative.[35] Essentially, this means that in the legislature primarily lies the discretion
to determine the nature (kind), object (purpose), extent
(rate), coverage (subjects) and situs (place) of taxation... the power to tax is plenary and
unlimited in its range, acknowledging in its very nature no limits, so that the principal
check against its abuse is to be found only in the responsibility of the legislature (which
imposes the tax) to its constituency who are... to pay it.
we will not strike down a revenue measure as unconstitutional (for being... violative of
the due process clause) on the mere allegation of arbitrariness by the taxpayer.
There must be a factual foundation to such an unconstitutional taint.[42] This merely

adheres to the authoritative doctrine that, where... the due process clause is invoked,

CONSTI 2
considering that it is not a fixed rule but rather a broad standard, there is a need for
proof of such persuasive character.
Certainly, an income tax is arbitrary and confiscatory if it taxes capital because capital is
not income. In other words, it is income, not capital, which is subject to income tax.
However, the MCIT is not a tax on capital.
The MCIT is imposed on gross income which is arrived at by deducting the capital spent
by a corporation in the sale of its goods, i.e., the cost of goods[48] and other direct
expenses from gross sales. Clearly, the capital is not being taxed.
Furthermore, the MCIT is not an additional tax imposition. It is imposed in lieu of the
normal net income tax, and only if the normal income tax is suspiciously low.
there is no legal objection to a broader tax base or taxable income by eliminating all
deductible items and at the same time reducing the applicable tax rate.
Absent any other valid objection, the assignment of gross income, instead of net
income, as the tax base of the MCIT, taken with the reduction of the tax rate from 32%
to 2%, is not constitutionally objectionable.
Moreover, petitioner does not cite any actual, specific and concrete negative
experiences of its members nor does it present empirical data to show that the
implementation of the MCIT resulted in the confiscation of their property.
In sum, petitioner failed to support, by any factual or legal basis, its allegation that the
MCIT is arbitrary and confiscatory. The Court cannot strike down a law as
unconstitutional simply because of its yokes.[58] Taxation is necessarily burdensome...
because, by its nature, it adversely affects property rights.[59] The party alleging the
law's unconstitutionality has the burden to demonstrate the supposed violations in
understandable terms
Petitioner alleges that RR 9-98 is a deprivation of property without due process of law
because the MCIT is being imposed and collected even when there is actually a loss, or
a zero or negative taxable income
RR 9-98, in declaring that MCIT should be imposed whenever such corporation has
zero or negative taxable income, merely defines the coverage of Section 27(E). This
means that even if a corporation incurs a net loss in its business operations or reports
zero income after... deducting its expenses, it is still subject to an MCIT of 2% of its
gross income. This is consistent with the law which imposes the MCIT on gross income
notwithstanding the amount of the net income. But the law also states that the MCIT is
to be paid only if it is greater than... the normal net income. Obviously, it may well be the
case that the MCIT would be less than the net income of the corporation which posts a
zero or negative taxable income.
The Secretary of Finance is granted, under Section 244 of RA 8424, the authority to
promulgate the necessary rules and regulations for the effective enforcement of the

CONSTI 2
provisions of the law. Such authority is subject to the limitation that the rules and
regulations must not... override, but must remain consistent and in harmony with, the
law they seek to apply and implement.[64] It is well-settled that an administrative
agency cannot amend an act of Congress.
Respondent Secretary has the authority to require the withholding of a tax on items of
income payable to any person, national or juridical, residing in the Philippines. Such
authority is derived from Section 57(B) of RA 8424
The questioned provisions of RR 2-98, as amended, are well within the authority given
by Section 57(B) to the Secretary
Under RR 2-98, the tax base of the income tax from the sale of real property classified
as ordinary assets remains to be the entity's net income imposed under Section 24
(resident individuals) or Section 27 (domestic corporations) in relation to Section 31 of
RA 8424,... i.e. gross income less allowable deductions. The CWT is to be deducted
from the net income tax payable by the taxpayer at the end of the taxable year.
the tax base for the sale... of real property classified as ordinary assets remains to be
the net taxable income
Accordingly, at the end of the year, the taxpayer/seller shall file its income tax return
and credit the taxes withheld (by the withholding agent/buyer) against its tax due. If the
tax due is greater than the tax withheld, then the taxpayer shall pay the difference. If, on
the... other hand, the tax due is less than the tax withheld, the taxpayer will be entitled
to a refund or tax credit. Undoubtedly, the taxpayer is taxed on its net income.
The use of the GSP/FMV as basis to determine the withholding taxes is evidently for
purposes of practicality and convenience.
said withholding agent's knowledge and privity are limited only to the particular
transaction in which he is a party. In such a case, his basis can only be the GSP or FMV
as these are the only factors reasonably known or... knowable by him in connection with
the performance of his duties as a withholding agent.
The differences between the two forms of withholding tax, i.e., creditable and final, show
that ordinary assets are not treated in the same manner as capital assets. Final
withholding tax (FWT) and CWT are distinguished as follows:
FWT
CWT... a) The amount of income tax withheld by the withholding agent is constituted as
a full and final payment of the income tax due from the payee on the said income.
a) Taxes withheld on certain income payments are intended to equal or at least

approximate the tax due of the payee on said income.
b)The liability for payment of the tax rests primarily on the payor as a withholding agent.

CONSTI 2
b) Payee of income is required to report the income and/or pay the difference between
the tax withheld and the tax due on the income. The payee also has the right to ask for
a refund if the tax withheld is more than the tax due.
c) The payee is not required to file an income tax return for the particular income.[73]...
c) The income recipient is still required to file an income tax return, as prescribed in
Sec. 51 and Sec. 52 of the NIRC, as amended.
FWT
CWT... a) The amount of income tax withheld by the withholding agent is constituted as
a full and final payment of the income tax due from the payee on the said income.
a) Taxes withheld on certain income payments are intended to equal or at least

approximate the tax due of the payee on said income.
b)The liability for payment of the tax rests primarily on the payor as a withholding agent.
b) Payee of income is required to report the income and/or pay the difference between
the tax withheld and the tax due on the income. The payee also has the right to ask for
a refund if the tax withheld is more than the tax due.
c) The payee is not required to file an income tax return for the particular income.[73]...
c) The income recipient is still required to file an income tax return, as prescribed in
Sec. 51 and Sec. 52 of the NIRC, as amended
As previously stated, FWT is imposed on the sale of capital assets.
CWT is imposed on the sale of ordinary assets.
The fact that the tax is withheld at source does not automatically mean that it is treated
exactly the same way as capital gains. As aforementioned, the mechanics of the FWT
are distinct from those of the CWT. The withholding agent/buyer's act of collecting the
tax at the time... of the transaction by withholding the tax due from the income payable
is the essence of the withholding tax method of tax collection.
Section 57(A) expressly states that final tax can be imposed on certain kinds of income
and enumerates these as passive income.
It is income generated by the taxpayer's assets. These assets can be in the form of real
properties that return rental income, shares of stock in a corporation that earn dividends
or interest income received from savings.
On the other hand, Section 57(B) provides that the Secretary can require a CWT on
"income payable to natural or juridical persons, residing in the Philippines." There is no
requirement that this income be passive income. If that were the intent of Congress, it
could have easily... said so.

CONSTI 2
Section 57(A) and (B) are distinct. Section 57(A) refers to FWT while Section 57(B)
pertains to CWT. The former covers the kinds of passive income enumerated therein
and the latter encompasses any income other than those listed in 57(A). Since the law
itself makes... distinctions, it is wrong to regard 57(A) and 57(B) in the same way.
Principles:
The MCIT on domestic corporations is a new concept introduced by RA 8424 to the

Philippine taxation system. It came about as a result of the perceived inadequacy of the
self-assessment system in capturing the true income of corporations.[21] It was
devised... as a relatively simple and effective revenue-raising instrument compared to
the normal income tax which is more difficult to control and enforce. It is a means to
ensure that everyone will make some minimum contribution to the support of the public
sector.
THEORY OF FAVORABLE BUSINESS CLIMATE
Domestic corporations owe their corporate existence and their privilege to do business
to the government. They also benefit from the efforts of the government to improve the
financial market and to ensure a favorable business climate. It is therefore fair for the
government to... require them to make a reasonable contribution to the public expenses.
Congress intended to put a stop to the practice of corporations which, while having
large turn-overs, report minimal or negative net income resulting in minimal or zero
income taxes year in and year out, through under-declaration of income or over-
deduction of expenses otherwise... called tax shelters.
As a tax on gross income, it prevents tax evasion and minimizes tax avoidance
schemes achieved through sophisticated and artful manipulations of deductions and
other... stratagems. Since the tax base was broader, the tax rate was lowered.
corrective nature of the MCIT, the following safeguards were incorporated into the law:
First, recognizing the birth pangs of businesses and the reality of the need to recoup
initial major capital expenditures, the imposition of the MCIT commences only on the
fourth taxable year immediately following the year in which the corporation commenced
its... operations.[25] This grace period allows a new business to stabilize first and make
its ventures viable before it is subjected to the MCIT.[26]
Second, the law allows the carrying forward of any excess of the MCIT paid over the
normal income tax which shall be credited against the normal income tax for the three
immediately succeeding years.[27]
Third, since certain businesses may be incurring genuine repeated losses, the law
authorizes the Secretary of Finance to suspend the imposition of MCIT if a corporation
suffers losses due to prolonged labor dispute, force majeure and legitimate business...
reverses.

CONSTI 2
Income means all the wealth which flows into the taxpayer other than a mere return on
capital. Capital is a fund or property existing at one distinct point in time while income...
denotes a flow of wealth during a definite period of time.[45] Income is gain derived and
severed from capital.
For income to be taxable, the following requisites must exist:
(1) there must be gain;
(2) the gain must be realized or received and
(3) the gain must not be excluded by law or treaty from taxation
Certainly, an income tax is arbitrary and confiscatory if it taxes capital because capital is
not income. In other words, it is income, not capital, which is subject to income tax.
However, the MCIT is not a tax on capital.
The withholding tax system is a procedure through which taxes (including income taxes)
are collected.[61] Under Section 57 of RA 8424, the types of income subject to
withholding tax are divided into three categories: (a) withholding of final tax on certain...
incomes; (b) withholding of creditable tax at source and (c) tax-free covenant bonds.
The Secretary of Finance is granted, under Section 244 of RA 8424, the authority to
promulgate the necessary rules and regulations for the effective enforcement of the
provisions of the law. Such authority is subject to the limitation that the rules and
regulations must not... override, but must remain consistent and in harmony with, the
law they seek to apply and implement.[64] It is well-settled that an administrative
agency cannot amend an act of Congress.
The withholding tax system was devised for three primary reasons: first, to provide the
taxpayer a... convenient manner to meet his probable income tax liability; second, to
ensure the collection of income tax which can otherwise be lost or substantially reduced
through failure to file the corresponding returns and third, to improve the government's
cash flow.
This results in administrative savings, prompt and efficient collection of taxes,

prevention of delinquencies and reduction of governmental effort to collect taxes
through more complicated means and remedies.

CONSTI 2
LOUIS "BAROK" C. BIRAOGO v. THE PHILIPPINE TRUTH COMMISSION OF 2010.
CONSOLIDATED WITH G.R. No. 193036
FACTS:
For consideration before the Court are two consolidated cases both of which essentially
assail the validity and constitutionality of Executive Order No. 1, dated July 30, 2010,
entitled "Creating the Philippine Truth Commission of 2010."
In, G.R. No. 192935, Biraogo assails Executive Order No. 1 for being violative of the
legislative power of Congress under Section 1, Article VI of the Constitution as it usurps
the constitutional authority of the legislature to create a public office and to appropriate
funds therefor.
The second case, G.R. No. 193036, is a special civil action for certiorari and prohibition
filed by petitioners Edcel C. Lagman, Rodolfo B. Albano Jr., Simeon A. Datumanong,
and Orlando B. Fua, Sr. (petitioners-legislators) as incumbent members of the House of
Representatives.
The Philippine Truth Commission (PTC) is a mere ad hoc body formed under the Office
of the President with the primary task to investigate reports of graft and corruption
committed by third-level public officers and employees, their co-principals, accomplices
and accessories during the previous administration, and thereafter to submit its finding
and recommendations to the President, Congress and the Ombudsman. Though it has
been described as an "independent collegial body," it is essentially an entity within the
Office of the President Proper and subject to his control. Doubtless, it constitutes a
public office, as an ad hoc body is one.
To accomplish its task, the PTC shall have all the powers of an investigative body under
Section 37, Chapter 9, Book I of the Administrative Code of 1987. It is not, however, a
quasi-judicial body as it cannot adjudicate, arbitrate, resolve, settle, or render awards in
disputes between contending parties. All it can do is gather, collect and assess
evidence of graft and corruption and make recommendations. It may have subpoena
powers but it has no power to cite people in contempt, much less order their arrest.
Although it is a fact-finding body, it cannot determine from such facts if probable cause
exists as to warrant the filing of an information in our courts of law. Needless to state, it
cannot impose criminal, civil or administrative penalties or sanctions.
ISSUES: Is EO No. 1 unconstitutional?
HELD: The Court disagrees with the OSG in questioning the legal standing of the
petitioners-legislators to assail Executive Order No. 1. Evidently, their petition primarily
invokes usurpation of the power of the Congress as a body to which they belong as
members. This certainly justifies their resolve to take the cudgels for Congress as an
institution and present the complaints on the usurpation of their power and rights as
members of the legislature before the Court.

CONSTI 2
As held in Philippine Constitution Association v. Enriquez:
To the extent the powers of Congress are impaired, so is the power of each member
thereof, since his office confers a right to participate in the exercise of the powers of that
institution.
An act of the Executive which injures the institution of Congress causes a derivative but
nonetheless substantial injury, which can be questioned by a member of Congress. In
such a case, any member of Congress can have a resort to the courts.
Indeed, legislators have a legal standing to see to it that the prerogative, powers and
privileges vested by the Constitution in their office remain inviolate. Thus, they are
allowed to question the validity of any official action which, to their mind, infringes on
their prerogatives as legislators.
The question, therefore, before the Court is this: Does the creation of the PTC fall within
the ambit of the power to reorganize as expressed in Section 31 of the Revised
Administrative Code? Section 31 contemplates "reorganization" as limited by the
following functional and structural lines: (1) restructuring the internal organization of the
Office of the President Proper by abolishing, consolidating or merging units thereof or
transferring functions from one unit to another; (2) transferring any function under the
Office of the President to any other Department/Agency or vice versa; or (3) transferring
any agency under the Office of the President to any other Department/Agency or vice
versa.
Clearly, the provision refers to reduction of personnel, consolidation of offices, or

abolition thereof by reason of economy or redundancy of functions. These point to
situations where a body or an office is already existent but a modification or alteration
thereof has to be effected. The creation of an office is nowhere mentioned, much less
envisioned in said provision. Accordingly, the answer to the question is in the negative.
To say that the PTC is borne out of a restructuring of the Office of the President under
Section 31 is a misplaced supposition, even in the plainest meaning attributable to the
term "restructure" an "alteration of an existing structure." Evidently, the PTC was not
part of the structure of the Office of the President prior to the enactment of Executive
Order No. 1.
In the same vein, the creation of the PTC is not justified by the Presidents power of
control. Control is essentially the power 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 with that of the latter. Clearly, the power of control is entirely
different from the power to create public offices. The former is inherent in the Executive,
while the latter finds basis from either a valid delegation from Congress, or his inherent
duty to faithfully execute the laws.

CONSTI 2
The question is this, is there a valid delegation of power from Congress, empowering
the President to create a public office? According to the OSG, the power to create a
truth commission pursuant to the above provision finds statutory basis under P.D. 1416,
as amended by P.D. No. 1772.
The Court, however, declines to recognize P.D. No. 1416 as a justification for the
President to create a public office. Said decree is already stale, anachronistic and
inoperable. P.D. No. 1416 was a delegation to then President Marcos of the authority to
reorganize the administrative structure of the national government including the power
to create offices and transfer appropriations pursuant to one of the purposes of the
decree, embodied in its last "Whereas" clause:
WHEREAS, the transition towards the parliamentary form of government will

necessitate flexibility in the organization of the national government.
Clearly, as it was only for the purpose of providing manageability and resiliency during
the interim, P.D. No. 1416, as amended by P.D. No. 1772, became functus oficio upon
the convening of the First Congress, as expressly provided in Section 6, Article XVIII of
the 1987 Constitution.
Invoking this authority, the President constituted the PTC to primarily investigate reports
of graft and corruption and to recommend the appropriate action. As previously stated,
no quasi-judicial powers have been vested in the said body as it cannot adjudicate
rights of persons who come before it.
Contrary to petitioners apprehension, the PTC will not supplant the Ombudsman or the
DOJ or erode their respective powers. If at all, the investigative function of the
commission will complement those of the two offices. As pointed out by the Solicitor
General, the recommendation to prosecute is but a consequence of the overall task of
the commission to conduct a fact-finding investigation. The actual prosecution of
suspected offenders, much less adjudication on the merits of the charges against them,
is certainly not a function given to the commission. The phrase, "when in the course of
its investigation," under Section 2(g), highlights this fact and gives credence to a
contrary interpretation from that of the petitioners. The function of determining probable
cause for the filing of the appropriate complaints before the courts remains to be with
the DOJ and the Ombudsman.
At any rate, the Ombudsmans power to investigate under R.A. No. 6770 is not exclusive
but is shared with other similarly authorized government agencies. The same holds true
with respect to the DOJ. Its authority under Section 3 (2), Chapter 1, Title III, Book IV in
the Revised Administrative Code is by no means exclusive and, thus, can be shared
with a body likewise tasked to investigate the commission of crimes.
Although the purpose of the Truth Commission falls within the investigative power of the
President, the Court finds difficulty in upholding the constitutionality of Executive Order
No. 1 in view of its apparent transgression of the equal protection clause.

CONSTI 2
The equal protection clause is aimed at all official state actions, not just those of the
legislature. Its inhibitions cover all the departments of the government including the
political and executive departments, and extend to all actions of a state denying equal
protection of the laws, through whatever agency or whatever guise is taken.
It, however, does not require the universal application of the laws to all persons or
things without distinction. What it simply requires is equality among equals as
determined according to a valid classification. Indeed, the equal protection clause
permits classification. Such classification, however, to be valid must pass the test of
reasonableness. The test has four requisites: (1) The classification rests on substantial
distinctions; (2) It is germane to the purpose of the law; (3) It is not limited to existing
conditions only; and (4) It applies equally to all members of the same class."Superficial
differences do not make for a valid classification."
Applying these precepts to this case, Executive Order No. 1 should be struck down as
violative of the equal protection clause. The clear mandate of the envisioned truth
commission is to investigate and find out the truth "concerning the reported cases of
graft and corruption during the previous administration only. The intent to single out the
previous administration is plain, patent and manifest. Mention of it has been made in at
least three portions of the questioned executive order.
In this regard, it must be borne in mind that the Arroyo administration is but just a
member of a class, that is, a class of past administrations. It is not a class of its own.
Not to include past administrations similarly situated constitutes arbitrariness which the
equal protection clause cannot sanction. Such discriminating differentiation clearly
reverberates to label the commission as a vehicle for vindictiveness and selective
retribution.
The Philippine Supreme Court, according to Article VIII, Section 1 of the 1987
Constitution, is vested with Judicial Power that "includes the duty of the courts of justice
to settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave of abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the government."
Furthermore, in Section 4(2) thereof, it is vested with the power of judicial review which
is the power to declare a treaty, international or executive agreement, law, presidential
decree, proclamation, order, instruction, ordinance, or regulation unconstitutional. This
power also includes the duty to rule on the constitutionality of the application, or
operation of presidential decrees, proclamations, orders, instructions, ordinances, and
other regulations. These provisions, however, have been fertile grounds of conflict
between the Supreme Court, on one hand, and the two co-equal bodies of government,
on the other. Many times the Court has been accused of asserting superiority over the
other departments.

CONSTI 2
Thus, the Court, in exercising its power of judicial review, is not imposing its own will
upon a co-equal body but rather simply making sure that any act of government isdone
in consonance with the authorities and rights allocated to it by the Constitution. And, if
after said review, the Court finds no constitutional violations of any sort, then, it has no
more authority of proscribing the actions under review. Otherwise, the Court will not be
deterred to pronounce said act as void and unconstitutional. GRANTED.

CONSTI 2
LEAGUE OF CITIES VS. COMELEC 2011
During the 11th Congress, 57 bills seeking the conversion of municipalities into
component cities were filed before the House of Representatives. However, Congress
acted only on 33 bills. It did not act on bills converting 24 other municipalities into cities.
During the 12th Congress, R.A. No. 9009 became effective revising Section 450 of the
Local Government Code. It increased the income requirement to qualify for conversion
into a city from P20 million annual income to P100 million locally-generated income. In
the 13th Congress, 16 of the 24 municipalities filed, through their respective sponsors,
individual cityhood bills. Each of the cityhood bills contained a common provision
exempting the particular municipality from the 100 million income requirement imposed
by R.A. No. 9009. Are the cityhood laws converting 16 municipalities into cities
constitutional?
SUGGESTED ANSWER:
November 18, 2008 Ruling
No. The SC (voting 6-5) ruled that the exemptions in the City Laws is unconstitutional
because sec. 10, Art. X of the Constitution requires that such exemption must be written
into the LGC and not into any other laws. “The Cityhood Laws violate sec. 6, Art. X of
the Constitution because they prevent a fair and just distribution of the national taxes to
local government units.” “The criteria, as prescribed in sec. 450 of the LGC, must be
strictly followed because such criteria prescribed by law, are material in determining the
“just share” of local government units (LGUs) in national taxes.” (League of Cities of the
Philippines v. Comelec GR No. 176951, November 18, 2008)
March 31, 2009 Ruling
No. The SC denied the first Motion for Reconsideration. 7-5 vote.
April 28, 2009 Ruling
No. The SC En Banc, by a split vote (6-6), denied a second motion for reconsideration.
December 21, 2009 Ruling
Yes. The SC (voting 6-4) reversed its November 18, 2008 decision and declared as
constitutional the Cityhood Laws or Republic Acts (RAs) converting 16 municipalities
into cities. It said that based on Congress’ deliberations and clear legislative intent was
that the then pending cityhood bills would be outside the pale of the minimum income
requirement of PhP100 million that Senate Bill No. 2159 proposes; and RA 9009 would
not have any retroactive effect insofar as the cityhood bills are concerned. The
conversion of a municipality into a city will only affect its status as a political unit, but not
its property as such, it added. The Court held that the favorable treatment accorded the
sixteen municipalities by the cityhood laws rests on substantial distinction.

CONSTI 2
The Court stressed that respondent LGUs were qualified cityhood applicants before the
enactment of RA 9009. To impose on them the much higher income requirement after
what they have gone through would appear to be indeed unfair. “Thus, the imperatives
of fairness dictate that they should be given a legal remedy by which they should be
allowed to prove that they have all the necessary qualifications for city status using the
criteria set forth under the LGC of 1991 prior to its amendment by RA 9009. (GR No.
176951, League of Cities of the Philippines v. COMELEC; GR No. 177499, League of
Cities of the Philippines v. COMELEC; GR No. 178056, League of Cities of the
Philippines v. COMELEC, December 21, 2009) NOTE: The November 18, 2008 ruling
already became final and executory and was recorded in the SC’s Book of Entries of
Judgments on May 21, 2009.)
August 24, 2010 Ruling
No. The SC (voting 7-6) granted the motions for reconsideration of the League of Cities
of the Philippines (LCP), et al. and reinstated its November 18, 2008 decision declaring
unconstitutional the Cityhood Laws or Republic Acts (RAs) converting 16 municipalities
into cities. “Undeniably, the 6-6 vote did not overrule the prior majority en banc Decision
of 18 November 2008, as well as the prior majority en banc Resolution of 31 March
2009 denying reconsideration. The tie-vote on the second motion for reconsideration is
not the same as a tie-vote on the main decision where there is no prior decision,” the
Court said. In the latest resolution, the Court reiterated its November 18, 2008 ruling
that the Cityhood Laws violate sec. 10, Art. X of the Constitution which expressly
provides that “no city…shall be created…except in accordance with the criteria
established in the local government code.” It stressed that while all the criteria for the
creation of cities must be embodied exclusively in the Local Government Code, the
assailed Cityhood Laws provided an exemption from the increased income requirement
for the creation of cities under sec. 450 of the LGC. “The unconstitutionality of the
Cityhood Laws lies in the fact that Congress provided an exemption contrary to the
express language of the Constitution….Congress exceeded and abused its law-making
power, rendering the challenged Cityhood Laws void for being violative of the
Constitution,” the Court held.
The Court further held that “limiting the exemption only to the 16 municipalities violates
the requirement that the classification 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
found in the Cityhood Laws, even if it were written in Section 450 of the Local
Government Code, would still be unconstitutional for violation of the equal protection
clause.” (GR No. 176951, League of Cities of the Philippines v. Comelec; GR No.
177499, League of Cities of the Philippines v. Comelec; GR No. 178056, League of
Cities of the Philippines v. Comelec, August 24, 2010)

CONSTI 2
February 15, 2011 Ruling
Yes, the laws are constitutional. The February 15, 2011 resolution is the fourth ruling
since the High Court first resolved the Cityhood case in 2008.
April 12, 2011Ruling
Yes! It’s final. The 16 Cityhood Laws are constitutional. “We should not ever lose sight
of the fact that the 16 cities covered by the Cityhood Laws not only had conversion bills
pending during the 11th Congress, but have also complied with the requirements of the
[Local Government Code] LGC prescribed prior to its amendment by RA No. 9009.
Congress undeniably gave these cities all the considerations that justice and fair play
demanded. Hence, this Court should do no less by stamping its imprimatur to the clear
and unmistakable legislative intent and by duly recognizing the certain collective
wisdom of Congress,” the SC said.
The Court stressed that Congress clearly intended that the local government units
covered by the Cityhood Laws be exempted from the coverage of RA 9009, which
imposes a higher income requirement of PhP100 million for the creation of cities.
“The Court reiterated that while RA 9009 was being deliberated upon, the Congress
was well aware of the pendency of conversion bills of several municipalities, including
those covered by the Cityhood Laws. It pointed out that RA 9009 took effect on June 30,
2001, when the 12th Congress was incipient. By reason of the clear legislative intent to
exempt the municipalities covered by the conversion bills pending during the 11th
Congress, the House of Representatives adopted Joint Resolution No. 29 entitled Joint
Resolution to Exempt Certain Municipalities Embodied in Bills Filed in Congress before
June 30, 2001 from the coverage of Republic Act No. 9009. However, the Senate failed
to act on the said Joint Resolution. Even so, the House readopted Joint Resolution No.
29 as Joint Resolution No. 1 during the 12th Congress, and forwarded the same for
approval to the Senate, which again failed to prove it. Eventually, the conversion bills of
respondents were individually filed in the Lower House and fellesters.blogspot.com
were all unanimously and favorably voted upon. When forwarded to the Senate, the bills
were also unanimously approved. The acts of both Chambers of Congress show that
the exemption clauses ultimately incorporated in the Cityhood Laws are but the express
articulations of the clear legislative intent to exempt the respondents, without exception,
from the coverage of RA No. 9009. Thereby, RA 9009, and, by necessity, the LCG,
were amended, not by repeal but by way of the express exemptions being embodied in
the exemption clauses.”(http://sc.judiciary.gov.ph/news/courtnews
%20flash/2011/04/04141101.php)
The Court held that the imposition of the income requirement of P100 million from local
sources under RA 9009 was arbitrary. “While the Constitution mandates that the
creation of local government units must comply with the criteria laid down in the LGC, it
cannot be justified to insist that the Constitution must have to yield to every amendment

CONSTI 2
to the LGC despite such amendment imminently producing effects contrary to the
original thrusts of the LGC to promote autonomy, decentralization, countryside
development, and the concomitant national growth.” (GR No. 176951, League of City of
the Philippines v. COMELEC; GR No. 177499, League of City of the Philippines v.
COMELEC: GR No. 178056, League of City of the Philippines v. COMELEC, April 12,
2011)

CONSTI 2
GARCIA v. EXECUTIVE SECRETARY
G.R. No. 198554
July 30, 2012
677 SCRA 750
FACTS: Garcia, tried by the Special General Court Martial NR 2, was charged with and
convicted of violation of the 96th Article of War (Conduct Unbecoming an Officer and
Gentleman) and violation of the 97th Article of War (Conduct Prejudicial to Good Order
and Military Discipline) for failing to disclose all his assets in his Sworn Statement of
Assets and Liabilities and Net worth for the year 2003 as required by RA 3019, as
amended in relation to RA 6713.
Garcia, among others, argued that the confirmation issued by the OP directing his two-
year detention in a penitentiary had already been fully served following his preventive
confinement subject to Article 29 of the RPC (Revised Penal Code). He was released
on December 16, 2010 after a preventive confinement for six years and two months. He
was initially confined at his quarters at Camp General Emilio Aguinaldo before he was
transferred to the Intelligence Service of the Armed Forces of the Philippines (ISAFP)
Detention Center, and latter to the Camp Crame Custodial Detention Center.
Hence, on September 16, 2011, or a week after the OP confirmed the sentence of the
court martial against him, Garcia was arrested and detained and continues to be
detained, for 2 years, at the maximum security compound of the National Penitentiary in
Muntinlupa. The OP stated that Art 29 of the RPC is not applicable in Military Courts for
it is separate and distinct from ordinary courts.
Hence, this petition.
ISSUE: (1) Whether or not Article 29 of the RPC is applicable in Military Courts; and (2)
Whether or not the application of Article 29 of the RPC in the Articles of War is in
accordance with the Equal Protection Clause of the 1987 Constitution
RULING: (1) The Court ruled that applying the provisions of Article 29 of the Revised
Penal Code (RPC) (Period of preventive imprisonment deducted from time of
imprisonment), the time within which the petitioner was under preventive confinement
should be credited to the sentence confirmed by the Office of the President, subject to
the conditions set forth by the same law.
The Court held that “the General Court Martial is a court within the strictest sense of the
word and acts as a criminal court.” As such, certain provisions of the RPC, insofar as
those that are not provided in the Articles of War and the Manual for Courts-Martial, can
be supplementary. “[A]bsent any provision as to the application of a criminal concept in
the implementation and execution of the General Court Martial’s decision, the provisions
of the Revised Penal Code, specifically Article 29 should be applied. In fact, the
deduction of petitioner’s (Garcia) period of confinement to his sentence has been
recommended in the Staff Judge Advocate Review.”

CONSTI 2
(2) The Court further held that the application of Article 29 of the RPC in the Articles of
War is in accordance with the Equal Protection Clause of the 1987 Constitution. “The
concept of equal justice under the law requires the state to govern impartially, and it
may not draw distinctions between individuals solely on differences that are irrelevant to
a legitimate governmental objective.
It, however, does not require the universal application of the laws to all persons or
things without distinction. What it simply requires is equality among equals as
determined according to a valid classification. Indeed, the equal protection clause
permits classification,” held the Court.

CONSTI 2
Garcia vs. J. Drilon and Garcia, G. R. No. 179267, 25 June 2013
Nature of the Case: Petition for Review of Republic Act (R.A.) 9262
Facts: Private respondent Rosalie filed a petition before the RTC of Bacolod
City a Temporary Protection Order against her husband, Jesus, pursuant to R.A. 9262,
entitled “An Act Defining Violence Against Women and Their Children, Providing for
Protective Measures for Victims, Prescribing Penalties Therefor, and for Other
Purposes.” She claimed to be a victim of physical, emotional, psychological and
economic violence, being threatened of deprivation of custody of her children and of
financial support and also a victim of marital infidelity on the part of petitioner.
The TPO was granted but the petitioner failed to faithfully comply with the conditions set
forth by the said TPO, private-respondent filed another application for the issuance of a
TPO ex parte. The trial court issued a modified TPO and extended the same when
petitioner failed to comment on why the TPO should not be modified. After the given
time allowance to answer, the petitioner no longer submitted the required comment as it
would be an “axercise in futility.”
Petitioner filed before the CA a petition for prohibition with prayer for injunction and TRO
on, questioning the constitutionality of the RA 9262 for violating the due process and
equal protection clauses, and the validity of the modified TPO for being “an unwanted
product of an invalid law.”
The CA issued a TRO on the enforcement of the TPO but however, denied the petition
for failure to raise the issue of constitutionality in his pleadings before the trial court and
the petition for prohibition to annul protection orders issued by the trial court constituted
collateral attack on said law.
Petitioner filed a motion for reconsideration but was denied. Thus, this petition is filed.
Issues: WON the CA erred in dismissing the petition on the theory that the issue of
constitutionality was not raised at the earliest opportunity and that the petition
constitutes a collateral attack on the validity of the law.
WON the CA committed serious error in failing to conclude that RA 9262 is

discriminatory, unjust and violative of the equal protection clause.
WON the CA committed grave mistake in not finding that RA 9262 runs counter to the
due process clause of the Constitution
WON the CA erred in not finding that the law does violence to the policy of the state to
protect the family as a basic social institution

CONSTI 2
WON the CA seriously erredin declaring RA 9262 as invalid and unconstitutional
because it allows an undue delegation of judicial power to Brgy. Officials.
Decision: 1. Petitioner contends that the RTC has limited authority and jurisdiction,
inadequate to tackle the complex issue of constitutionality. Family Courts have authority
and jurisdiction to consider the constitutionality of a statute. The question of
constitutionality must be raised at the earliest possible time so that if not raised in the
pleadings, it may not be raised in the trial and if not raised in the trial court, it may not be
considered in appeal.
REPORT THIS AD
2. RA 9262 does not violate the guaranty of equal protection of the laws. Equal
protection simply requires that all persons or things similarly situated should be treated
alike, both as to rights conferred and responsibilities imposed. In Victoriano v. Elizalde
Rope Workerkers’ Union, the Court ruled that all that is required of a valid classification
is that it be reasonable, which means that the classification should be based on
substantial distinctions which make for real differences; that it must be germane to the
purpose of the law; not limited to existing conditions only; and apply equally to each
member of the class. Therefore, RA9262 is based on a valid classification and did not
violate the equal protection clause by favouring women over men as victims of violence
and abuse to whom the Senate extends its protection.
3. RA 9262 is not violative of the due process clause of the Constitution. The essence of
due process is in the reasonable opportunity to be heard and submit any evidence one
may have in support of one’s defense. The grant of the TPO exparte cannot be
impugned as violative of the right to due process.
4. The non-referral of a VAWC case to a mediator is justified. Petitioner’s contention

that by not allowing mediation, the law violated the policy of the State to protect and
strengthen the family as a basic autonomous social institution cannot be sustained. In a
memorandum of the Court, it ruled that the court shall not refer the case or any issue
therof to a mediator. This is so because violence is not a subject for compromise.
5. There is no undue delegation of judicial power to Barangay officials. Judicial power

includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable and to determine whether or not there
has been a grave abuse of discretion amounting to lack or excess of jurisdiction on any
part of any branch of the Government while executive power is the power to enforce
and administer the laws. The preliminary investigation conducted by the prosecutor is
an executive, not a judicial, function. The same holds true with the issuance of BPO.
Assistance by Brgy. Officials and other law enforcement agencies is consistent with
their duty executive function.
The petition for review on certiorari is denied for lack of merit.

CONSTI 2
Remman Enterprises, Inc., and Chamber of Real Estate and Builders’ Association
vs. Professional Regulatory Board of Real Estate Service and Professional
Regulation Commission
G.R. 19767
Facts:
Assailed in this petition for review under Rule 45 is the Decision1 dated July 12,
2011 of the Regional Trial Court (RTC) of Manila, Branch 42 denying the petition to
declare as unconstitutional Sections 28(a), 29 and 32 of Republic Act (R.A.) No. 9646.
R.A. No. 9646 (Real Estate Service Act of the Philippines) was signed aims to
professionalize the real estate service sector under a regulatory scheme of licensing,
registration and supervision of real estate service practitioners (real estate brokers,
appraisers, assessors, consultants and salespersons) in the country. Prior to its
enactment, real estate service practitioners were under the supervision of the
Department of Trade and Industry (DTI) through the Bureau of Trade Regulation and
Consumer Protection (BTRCP), in the exercise of its consumer regulation functions.
Such authority is now transferred to the Professional Regulation Commission (PRC)
through the Professional Regulatory Board of Real Estate Service (PRBRES) created
under the new law. The implementing rules and regulations (IRR) of R.A. No. 9646 were
promulgated by the PRC and PRBRES under Resolution No. 02, Series of 2010.
Petitioners filed a petition in the Regional Trial Court of Manila, asking the court to
declare as void and unconstitutional Sections 28 (a), 29 and 32, of R.A. 9646 that the
trial court denied thus, this petition.
Issues:
1. W/N R.A. No. 9646 is unconstitutional for violating the "one title-one subject" rule
under Section 26 , Article VIof the Philippine Constitution

CONSTI 2
Ruling:
1. NO. The Court has previously ruled that the one-subject requirement
under the Constitution is satisfied if all the parts of the statute are related,
and are germane to the subject matter expressed in the title, or as long as
they are not inconsistent with or foreign to the general subject and title. It
is also well-settled that the "one title-one subject" rule does not require the
Congress to employ in the title of the enactment language of such
precision as to mirror, fully index or catalogue all the contents and the
minute details therein. The rule is sufficiently complied with if the title is
comprehensive enough as to include the general object which the statute
seeks to effect. R.A. No. 9646 is entitled "An Act Regulating the Practice
of Real Estate Service in the Philippines, Creating for the Purpose a
Professional Regulatory Board of Real Estate Service, Appropriating
Funds Therefor and For Other Purposes." The new law extended its
coverage to real estate developers with respect to their own properties.
The inclusion of real estate developers is germane to the law’s primary
goal of developing "a corps of technically competent, responsible and
respected professional real estate service practitioners whose standards
of practice and service shall be globally competitive and will promote the
growth of the real estate industry." R.A. No. 9646 does not violate the one-
title, one-subject rule.
Decision:
Petition is DENIED.

CONSTI 2
SR Metals, Inc. v. Reyes
Facts:
Each of the petitioners was awarded a 2-year Small- Scale Mining Permit
(SSMP) by the Provincial Mining Regulatory Board of Agusan del Norte; they
were allowed to extract Nickel and Cobalt (Ni-Co) in a 20-hectare mining site in
Sitio Bugnang, Brgy. La Fraternidad, Tubay, Agusan del Norte. The EMB sent
the mining corporations a Notice of Violation informing them that they had
exceeded the allowed annual volume of 150,000 MTs combined production as
their stockpile inventory of Nickeliferous ore had already total 177,297 dry metric
tons (DMT). Then, DENR Secretary Angelo T. Reyes issued a Cease and Desist
Order (CDO) against the mining corporations suspending their operations for
their operations for the following reasons:
1. The excess in 1) annual production of SR Metals, Inc., 2) maximum

capitalization, and, 3) labor cost to equipment utilization of 1:1 is, by itself, a
violation of existing laws.
2. The ECCs issued in favor of San R Construction Corporation and Galeo
Equipment Corporation have no legal basis and [are] therefore considered null
and void from the beginning. Similarly, the small scale mining permits that were
issued by reason of such ECCs are likewise null and void.
DOJ categorically concluded that the term 'ore' should be confined only to Ni-Co,
that is, excluding soil and other materials that are of no economic value to the
mining corporations. This is considering that their ECCs explicitly specified
'50,000 MTs of Ni-Co ore.' The mining corporations then filed before the CA a
Petition for Certiorari with prayer for Temporary Restraining Order and/or
Preliminary Injunction, imputing grave abuse of discretion on the part of DENR in
issuing the CDO but was denied the mining corporations' petition, not only
because the ECCs have been mooted by their expiration, but also due to its
recognition of the power of the DENR to issue the CDO as the agency reposed
with the duty of managing and conserving the country's resources under
Executive Order 192.
Issue:
Whether or not there is a correct interpretation of the 50,000 MT limit.
Held:
No. There are two different laws governing small-scale mining: PD 1899 and RA
7076. According to Section 1 of PD 1899:
Small-scale mining refers to any single unit mining operation having an annual
production of not more than 50,000 metric tons of ore and satisfying the following
requisites:
1. The working is artisanal, whether open cast or shallow underground mining,
without the use of sophisticated mining equipment;

CONSTI 2
2. Minimal investment on infrastructures and processing plant;
3. Heavy reliance on manual labor; and
4. Owned, managed or controlled by an individual or entity qualified under
existing mining laws, rules and regulations.
While under Section 3(b) of RA 7076, small-scale mining refers to 'mining

activities which rely heavily on manual labor using simple implements and
methods and do not use explosives or heavy mining equipment.' Significantly,
this definition does not provide for annual extraction limit unlike in PD 1899.
DOJ Opinion No. 74, Series of 2006 concluded that as nothing from RA 7076
speaks of an annual production limit, Section 1 of PD 1899 should be considered
impliedly repealed by RA 7076, the later law. However, while these two laws
tackle the definition of what small-scale mining is, both have different objects
upon which the laws shall be applied to. PD 1899 applies to individuals,
partnerships and corporations while RA 7076 applies to cooperatives.
The DENR, being the agency mandated to protect the environment and the
country's natural resources, is authoritative on interpreting the 50,000- MT limit.
MAO No. MRD-41 specifies measuring the 'run-of-mine ore,' meaning the ore as
it emerges from the mine, i.e., before treatment. This definition is congruent with
RA 7942 or The Philippine Mining Act of 1995.

CONSTI 2
MARIA CAROLINA P. ARAULLO v. BENIGNO SIMEON C. AQUINO III, GR
No. 209287, 2014-07-01
Facts:
For resolution are the consolidated petitions assailing the constitutionality of the
Disbursement Acceleration Program (DAP), National Budget Circular (NBC) No.
541, and related issuances of the Department of Budget and Management
(DBM) implementing the DAP.
At the core of the controversy is Section 29(1) of Article VI of the 1987

Constitution, a provision of the fundamental law that firmly ordains that "[n]o
money shall be paid out of the Treasury except in pursuance of an appropriation
made by law."
Used constitutional powers under Sec. 25(5) as a guise to use money out of the
treasury without an appropriation made by law... indicate that the DAP
contravened this provision by allowing the Executive to allocate public money
pooled from programmed and unprogrammed funds of its various agencies in the
guise of the President exercising his... constitutional authority under Section
25(5) of the 1987 Constitution to transfer funds out of savings to augment the
appropriations of offices within the Executive Branch of the Government.
Sen. Jinggoy Ejercito Estrada... had been allotted an additional P50 Million each
as "incentive" for voting in favor of the impeachment of Chief
Justice Renato C. Corona.
Abad: Releases to Senators Part of Spending Acceleration Program,[1]

explaining that the funds released to the Senators had been part of... the DAP, a
program designed by the DBM to ramp up spending to accelerate economic
expansion.
He clarified that the funds had been released to the Senators based on their
letters of request for funding
He explained that the funds under the DAP were usually taken from (1)
unreleased appropriations under
Personnel Services;[2] (2) unprogrammed funds; (3) carry-over appropriations

unreleased from the previous year; and (4) budgets for slow-moving items or
projects that had been realigned to support faster-disbursing projects.
The DBM soon came out to claim in its website[3] that the DAP releases had
been sourced from savings generated by the Government, and from
unprogrammed funds; and that the savings had been derived from (1) the pooling
of unreleased appropriations, like... unreleased Personnel Services[4]
appropriations that would lapse at the end of the year, unreleased appropriations

CONSTI 2
of slow-moving projects and discontinued projects per zero-based budgeting
findings;[5] and (2) the withdrawal of... unobligated allotments also for slow-
moving programs and projects that had been earlier released to the agencies of
the National Government.
The DBM listed the following as the legal bases for the DAP's use of savings,[
Why DAP is legal according to DBM
(1) Section 25(5), Article VI of the 1987 Constitution, which granted to the
President the authority to augment an item for his office in the general
appropriations... law; (2) Section 49 (Authority to Use Savings for Certain
Purposes) and Section 38 (Suspension of Expenditure Appropriations), Chapter
5, Book VI of Executive Order (EO) No. 292 (Administrative Code of 1987); and
(3) the General Appropriations Acts (GAAs) of
2011, 2012 and 2013, particularly their provisions on the (a) use of savings; (b)
meanings of savings and augmentation; and (c) priority in the use of savings.
Issues:
Procedural Issue:... whether there is a controversy ripe for judicial determination,

and the standing of petitioners.
Substantive Issues:
B. Whether or not the DAP violates Sec. 29, Art. VI of the 1987 Constitution,
which provides: "No money shall be paid out of the Treasury except in pursuance
of an appropriation made by law."
Issue pertinent to Sec. 25
C. Whether or not the DAP, NBC No. 541, and all other executive issuances
allegedly implementing the DAP violate Sec. 25(5), Art. VI of the 1987
Constitution insofar as:
(a) They treat the unreleased appropriations and unobligated allotments

withdrawn from government agencies as "savings" as the term is used in Sec.
25(5), in relation to the provisions of the GAAs of 2011, 2012 and 2013;
(b) They authorize the disbursement of funds for projects or programs not
provided in the GAAs for the Executive Department; and
(c) They "augment" discretionary lump sum appropriations in the GAAs
D. Whether or not the DAP violates: (1) the Equal Protection Clause, (2) the
system of checks and balances, and (3) the principle of public accountability
enshrined in the 1987 Constitution considering that it authorizes the release of
funds upon the request of... legislators.

CONSTI 2
E. Whether or not factual and legal justification exists to issue a temporary
restraining order to restrain the implementation of the DAP, NBC No. 541, and all
other executive issuances allegedly implementing the DAP.
F. Whether or not the release of unprogrammed funds under the DAP was in
accord with the GAAs.
Ruling:
Procedural Issue:... a) The petitions under Rule 65 are... proper remedies
Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable, and
to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the... part of any branch or
instrumentality of the Government.
b) Requisites for the exercise of the power... of judicial review were complied with
(1) there must be an actual case or justiciable controversy before the Court; (2)
the question before the Court must be ripe for adjudication; (3) the person
challenging the act must be a... proper party; and (4) the issue of constitutionality
must be raised at the earliest opportunity and must be the very litis mota of the
case
Under their respective circumstances, each of the petitioners has established

sufficient interest in the outcome of the controversy as to confer locus standi on
each of them.
II.
Substantive Issues
1.
Overview of the Budget System
PAP... c. DAP was not an appropriation... measure; hence, no appropriation...

law was required to adopt or to... implement it... that no law was necessary for
the adoption and implementation of the DAP because of its being neither a fund
nor an appropriation, but a program or an administrative system of prioritizing
spending; and that the adoption of the DAP was by virtue of the... authority of the
President as the Chief Executive to ensure that laws were faithfully executed.
Main ratio under Sec. 25(5)
3.

CONSTI 2
Unreleased appropriations and withdrawn... unobligated allotments under the
DAP... were not savings, and the use of such... appropriations contravened
Section 25(5),... Article VI of the 1987 Constitution.
The management... and utilization of the public wealth inevitably demands a

most careful scrutiny of whether the Executive's implementation of the DAP was
consistent with the Constitution, the relevant GAAs and other existing laws.
a. Although executive discretion... and flexibility are necessary in... the execution
of the budget, any... transfer of appropriated funds... should conform to Section
25(5),... Article VI of the Constitution
The heads of offices, particularly the President, require flexibility in their

operations under performance budgeting to enable them to make whatever
adjustments are needed to meet established work goals under changing
conditions.
the power to transfer funds can give the President the flexibility to meet
unforeseen events that may otherwise impede the efficient implementation of the
PAPs set by Congress in the GAA.
Congress has traditionally allowed much flexibility to the President in allocating

funds pursuant to the GAAs,[129] particularly when the funds are grouped to
form lump sum accounts.
The DAP as a strategy to improve the country's economic... position was one
policy that the President decided to carry out in order to fulfill his mandate under
the GAAs.
Denying to the Executive flexibility in the expenditure process would be

counterproductive
Were Congress to control expenditures by confining administrators to narrow

statutory details, it would perhaps protect its power of... the purse but it would not
protect the purse itself. The realities and complexities of public policy require
executive discretion for the sound management of public funds.
In contrast, by allowing to the heads of offices some power to transfer funds

within their respective offices, the Constitution itself ensures the fiscal autonomy
of their offices, and at the same time maintains the separation of powers among
the three main branches of the
Government.
In the case of the President, the power to transfer funds from one item to another
within the Executive has not been the mere offshoot of established usage, but
has emanated from law itself.

CONSTI 2
The 1973 Constitution explicitly and categorically prohibited the transfer of funds
from one item to another, unless Congress enacted a law authorizing the
President, the Prime Minister, the Speaker, the Chief Justice of the Supreme
Court, and the heads of the Constitutional
Commissions to transfer funds for the purpose of augmenting any item from
savings in another item in the GAA of their respective offices.
was further constricted by the condition that the funds to be transferred should
come from... savings from another item in the appropriation of the office
PD No. 1177, providing in its Section 44
Section 44. Authority to Approve Fund Transfers. The President shall have the
authority to transfer any fund appropriated for the different departments, bureaus,
offices and agencies of the Executive Department which are included in the
General
Appropriations Act, to any program, project, or activity of any department, bureau

or office included in the General Appropriations Act or approved after its
enactment.
The President shall, likewise, have the authority to augment any appropriation of
the Executive Department in the General Appropriations Act, from savings in the
appropriations of another department, bureau, office or agency within the
Executive Branch, pursuant to the... provisions of Article VIII, Section 16 (5) of
the Constitution.
In Demetria v. Alba, however, the Court struck down the first paragraph of
Section 44 for contravening Section 16(5) of the 1973 Constitution
Paragraph 1 of Section 44 of P.D. No. 1177 unduly over-extends the privilege

granted under said Section 16. It empowers the President to indiscriminately
transfer funds from one department, bureau, office or agency of the Executive
Department to any program, project... or activity of any department, bureau or
office included in the General Appropriations Act or approved after its enactment,
without regard as to whether or not the funds to be transferred are actually
savings in the item from which the same are to be taken, or whether or not... the
transfer is for the purpose of augmenting the item to which said transfer is to be
made. It does not only completely disregard the standards set in the fundamental
law, thereby amounting to an undue delegation of legislative powers, but likewise
goes beyond the tenor... thereof. Indeed, such constitutional infirmities render the
provision in question null and void
It is significant that Demetria was promulgated 25 days after the ratification by

the people of the 1987 Constitution, whose Section 25(5) of Article VI is identical
to Section 16(5), Article VIII of the 1973 Constitution,... The foregoing history
makes it evident that the Constitutional Commission included Section 25(5),

CONSTI 2
supra, to keep a tight rein on the exercise of the power to transfer funds
appropriated by Congress by the President and the other high officials of the
Government named therein.
The only exception is found in Section 25 (5), Article VI of the Constitution, by

which the President, the President of the Senate, the Speaker of the House of
Representatives, the Chief Justice of the Supreme Court, and the heads of
Constitutional Commissions are authorized to... transfer appropriations to
augment any item in the GAA for their respective offices from the savings in other
items of their respective appropriations. The plain language of the constitutional
restriction leaves no room for the petitioner's posture, which we should now...
dispose of as untenable.
It bears emphasizing that the exception in favor of the high officials named in
Section 25(5), Article VI of the Constitution limiting the authority to transfer
savings only to augment another item in the GAA is strictly but reasonably
construed as exclusive.
Accordingly, we should interpret Section 25(5), supra, in the context of a

limitation on the President's discretion over the appropriations during the Budget
Execution Phase.
b. Requisites for the valid transfer... of appropriated funds under Section
25(5), Article VI of the 1987
Constitution... b.1. First Requisite GAAs of 2011... and 2012 lacked valid
provisions to... authorize transfers of funds under... the DAP; hence, transfers
under the
DAP were unconstitutional
Section 25(5), supra, not being a self-executing provision of the Constitution,

must have an implementing law for it to be operative.
the GAAs should expressly authorize the... transfer of funds.
Did the GAAs expressly authorize the transfer of funds?
2011 GAA... hereby... authorized to augment any item in this Act from savings in
other items of their respective appropriations.
2012 GAA... hereby... authorized to augment any item in this Act from savings in
other items of their respective appropriations
Even had a valid law authorizing the transfer of funds pursuant to Section 25(5),
supra, existed, there still remained two other requisites to be met, namely: that
the source of funds to be transferred were savings from appropriations within the

CONSTI 2
respective offices; and... that the transfer must be for the purpose of augmenting
an item of appropriation within the respective offices.
b.2. Second Requisite There were... no savings from which funds could... be
sourced for the DAP
The petitioners claim that the funds used in the DAP the unreleased
appropriations and withdrawn unobligated allotments were not actual savings
within the context of Section 25(5), supra, and the relevant provisions of the
GAAs. Belgica argues that "savings" should be... understood to refer to the
excess money after the items that needed to be funded have been funded, or
those that needed to be paid have been paid pursuant to the budget.[146] The
petitioners posit that there could be savings only when the PAPs for which the...
funds had been appropriated were actually implemented and completed, or
finally discontinued or abandoned. They insist that savings could not be realized
with certainty in the middle of the fiscal year; and that the funds for "slow-moving"
PAPs could not be considered as savings... because such PAPs had not actually
been abandoned or discontinued yet.[147] They stress that NBC No. 541, by
allowing the withdrawn funds to be reissued to the "original program or project
from which it was withdrawn," conceded that the PAPs from which the...
supposed savings were taken had not been completed, abandoned or discontinu
We partially find for the petitioners.
The first principle is that Congress wields the power of the purse. Congress
decides how the budget will be spent; what PAPs to fund; and the amounts of
money to be spent for each PAP
The... second principle is that the Executive, as the department of the

Government tasked to enforce the laws, is expected to faithfully execute the GAA
and to spend the budget in accordance with the provisions of the GAA
The third principle is that in... making the President's power to augment operative
under the GAA, Congress recognizes the need for flexibility in budget execution.
In so doing, Congress diminishes its own power of the purse, for it delegates a
fraction of its power to the Executive.
But Congress does not... thereby allow the Executive to override its authority
over the purse as to let the Executive exceed its delegated authority... fourth
principle is that savings should be actual. "Actual" denotes something that is real
or substantial, or something that exists... presently in fact, as opposed to
something that is merely theoretical, possible, potential or hypothetical.[150]
The foregoing principles caution us to construe savings strictly against expanding

the scope of the power to augment.
The three instances listed in the GAAs' aforequoted definition were a sure
indication that savings could be generated only upon the purpose of the

CONSTI 2
appropriation being fulfilled, or upon the need for the appropriation being no
longer existent.
The DBM declares that part of the savings brought under the DAP came from
"pooling of unreleased appropriations such as unreleased Personnel Services
appropriations which will lapse at the end of the year, unreleased appropriations
of slow moving projects and discontinued... projects per Zero-Based Budgeting
findings."
The declaration of the DBM by itself does not state the clear legal basis for the
treatment of unreleased or unalloted appropriations as savings.
The fact alone that the appropriations are unreleased or unalloted is a mere
description of the status of the items as unalloted or... unreleased. They have not
yet ripened into categories of items from which savings can be generated.
Appropriations remain unreleased, for instance, because of noncompliance with

documentary requirements (like the Special
Budget Request), or simply because of the unavailability of funds. But the

appropriations do not actually reach the agencies to which they were allocated
under the GAAs, and have remained with the DBM technically speaking. Ergo,
unreleased appropriations refer to... appropriations with allotments but without
disbursement authority.
For us to consider unreleased appropriations as savings, unless these met the

statutory definition of savings, would seriously undercut the congressional power
of the purse, because such appropriations had not even reached and been used
by the agency concerned vis-à-vis the PAPs... for which Congress had allocated
them.
Justice Carpio has validly observed in his Separate Concurring Opinion that
MOOE appropriations are deemed divided into twelve monthly allocations within
the fiscal year; hence, savings could be generated monthly from the excess or
unused MOOE appropriations other than the
Mandatory Expenditures and Expenditures for Business-type Activities because

of the physical impossibility to obligate and spend such funds as MOOE for a
period that already lapsed. Following this observation, MOOE for future months
are not savings and cannot be... transferred.
The petitioners accuse the respondents of forcing the generation of savings in

order to have a larger fund available for discretionary spending. They aver that
the respondents, by withdrawing unobligated allotments in the middle of the fiscal
year, in effect deprived funding for
PAPs with existing appropriations under the GAAs

CONSTI 2
We agree with the petitioners.
Contrary to the respondents' insistence, the withdrawals were upon the initiative
of the DBM itself. T
The petitioners assert that no law had authorized the withdrawal and transfer of
unobligated allotments and the pooling of unreleased appropriations; and that the
unbridled withdrawal of unobligated allotments and the retention of appropriated
funds were akin to the impoundment... of appropriations that could be allowed
only in case of "unmanageable national government budget deficit" under the
GAAs,[157] thus violating the provisions of the GAAs of 2011, 2012 and 2013
prohibiting the retention or deduction of allotments.
The assertions of the petitioners are upheld
The Executive could not circumvent this provision by declaring unreleased

appropriations and unobligated allotments as savings prior to the end of the fiscal
year.
b.3. Third Requisite No funds from... savings could be transferred under... the
DAP to augment deficient items... not provided in the GAA... an appropriation for
any PAP must first be determined to be deficient before it could be augmented
from savings. Note is taken of the fact that the 2013 GAA already made this quite
clear, thus:... lthough the OSG rightly contends that the Executive was authorized
to spend in line with its mandate to faithfully execute the laws (which included the
GAAs), such authority did not translate to unfettered discretion that allowed the
President to substitute his own will for... that of Congress.
He was still required to remain faithful to the provisions of the GAAs, given that
his power to spend pursuant to the GAAs was but a delegation to him from
Congress. Verily, the power to spend the public wealth resided in Congress, not
in the
Executive.[174] Moreover, leaving the spending power of the Executive

unrestricted would threaten to undo the principle of separation of powers. [175]...
b.4 Third Requisite Cross-border... augmentations from savings were...
prohibited by the Constitution
By providing that the President, the President of the Senate, the Speaker of the
House of Representatives, the Chief Justice of the Supreme Court, and the
Heads of the Constitutional Commissions may be authorized to augment any
item in the GAA "for their respective offices,"
Section 25(5), supra, has delineated borders between their offices, such that
funds appropriated for one office are prohibited from crossing over to another
office even in the guise of augmentation of a deficient item or items. Thus, we
call such transfers of funds... cross-border transfers or cross-border
augmentations.

CONSTI 2
To be sure, the phrase "respective offices" used in Section 25(5), supra, refers to
the entire Executive, with respect to the President; the Senate, with respect to
the Senate President; the House of Representatives, with respect to the
Speaker; the Judiciary, with... respect to the Chief Justice; the Constitutional
Commissions, with respect to their respective Chairpersons.
The respondents justified all the cross-border transfers thusly:
99. The Constitution does not prevent the President from transferring savings
of his department to another department upon the latter's request,
provided it is the recipient department that uses such funds to augment its
own appropriation. In such a case, the
President merely gives the other department access to public funds but he
cannot dictate how they shall be applied by that department whose fiscal
autonomy is guaranteed by the Constitution.
Regardless of the variant characterizations of the cross-border transfers of funds,

the plain text of Section 25(5), supra, disallowing cross-border transfers was
disobeyed. Cross-border transfers, whether as augmentation, or as aid, were
prohibited under Section
25(5), supra.
4.
Sourcing the DAP from unprogrammed... funds despite the original revenue
targets... not having been exceeded was invalid
The petitioners point out that a condition for the release of the unprogrammed
funds was that the revenue collections must exceed revenue targets; and that the
release of the unprogrammed funds was illegal because such condition was not
met.[191]
The respondents disagree, holding that the release and use of the
unprogrammed funds under the DAP were in accordance with the pertinent
provisions of the GAAs. In particular, the DBM avers that the unprogrammed
funds could be availed of when any of the following three instances... occur, to
wit: (1) the revenue collections exceeded the original revenue targets proposed
in the BESFs submitted by the President to Congress; (2) new revenues were
collected or realized from sources not originally considered in the BESFs; or (3)
newly-approved loans for... foreign-assisted projects were secured, or when
conditions were triggered for other sources of funds, such as perfected loan
agreements for foreign-assisted projects.[192] This view of the DBM was
adopted by all the respondents in their Consolidated
Comment

CONSTI 2
We cannot, therefore, subscribe to the respondents' view.
5.
Equal protection, checks and balances,... and public accountability challenges
The denial of equal protection of any law should be an issue to be raised only by
parties who supposedly suffer it, and, in these cases, such parties would be the
few legislators claimed to have been discriminated against in the... releases of
funds under the DAP. The reason for the requirement is that only such affected
legislators could properly and fully bring to the fore when and how the denial of
equal protection occurred, and explain why there was a denial in their situation.
The requirement was not... met here.
we have already held that the DAP and its implementing issuances were policies
and... acts that the Executive could properly adopt and do in the execution of the
GAAs to the extent that they sought to implement strategies to ramp up or
accelerate the economy of the country.
6.
Doctrine of operative fact was applicable
The doctrine of operative fact recognizes the existence of the law or executive
act prior to the determination of its unconstitutionality as an operative fact that
produced consequences that cannot always be erased, ignored or disregarded.
In short, it nullifies the void law or... executive act but sustains its effects. It
provides an exception to the general rule that a void or unconstitutional law
produces no effect.
In that context, as Justice Brion has clarified, the doctrine of operative fact can
apply only to the PAPs that can no longer be undone, and whose beneficiaries
relied in good faith on the validity of the DAP, but cannot apply to the authors,
proponents and implementors of the
DAP, unless there are concrete findings of good faith in their favor by the proper
tribunals determining their criminal, civil, administrative and other liabilities.
Dispositive
WHEREFORE, the Court PARTIALLY GRANTS the petitions for certiorari and
prohibition; and DECLARES the following acts and practices under the
Disbursement Acceleration Program, National Budget Circular No. 541 and
related executive issuances
UNCONSTITUTIONAL for being in violation of Section 25(5), Article VI of the

1987 Constitution and the doctrine of separation of powers, namely:

CONSTI 2
(a) The withdrawal of unobligated allotments from the implementing agencies,
and the declaration of the withdrawn unobligated allotments and unreleased
appropriations as savings prior to the end of the fiscal year and without
complying with the statutory definition of savings... contained in the General
Appropriations Acts;
(b) The cross-border transfers of the savings of the Executive to augment the
appropriations of other offices outside the Executive; and
(c) The funding of projects, activities and programs that were not covered by any
appropriation in the General Appropriations Act.
The Court further DECLARES VOID the use of unprogrammed funds despite the
absence of a certification by the National Treasurer that the revenue collections
exceeded the revenue targets for non-compliance with the conditions provided in
the relevant General Appropriations
Acts.
Principles:
1.
Overview of the Budget System
The Philippine Budget Cycle
(1) Budget Preparation; (2) Budget Legislation; (3) Budget Execution; and (4)
Accountability... c.1. Budget Preparation
The budget preparation phase is commenced through the issuance of a Budget

Call by the DBM
The Budget Call is of two kinds, namely: (1) a National Budget Call, which is
addressed to all agencies, including state universities and colleges; and (2) a
Corporate Budget Call, which... is addressed to all government-owned and
-controlled corporations (GOCCs) and government financial institutions (GFIs)...
the various departments and agencies submit their respective Agency Budget
Proposals to the DBM.
DBM bureaus thereafter review the Agency Budget Proposals and come up with
recommendations for the Executive Review Board, comprised by the DBM
Secretary and the DBM's senior officials. The discussions of the Executive
Review
Board cover the prioritization of programs and their corresponding support vis-à-
vis the priority agenda of the National Government, and their implementation.

CONSTI 2
The DBM next consolidates the recommended agency budgets into the National
Expenditure Program (NEP) and a Budget of Expenditures and Sources of
Financing (BESF).
NEP provides the details of spending for each department and agency by
program, activity... or project (PAP), and is submitted in the form of a proposed
GAA
Once the NEP and the BESF are approved by the President and the Cabinet, the
DBM prepares the budget documents for... submission to Congress.
The budget documents consist of: (1) the President's Budget Message, through
which the President explains the policy framework and budget priorities; (2) the
BESF, mandated by Section 22, Article VII of the Constitution,[68] which contains
the macroeconomic assumptions, public sector context, breakdown of the
expenditures and funding sources for the fiscal year and the two previous years;
and (3) the NEP.
Public or government expenditures are generally classified into two categories,...

(1) capital expenditures or outlays; and (2) current operating expenditures.
Capital expenditures are the expenses whose usefulness lasts for more than one
year,... and which add to the assets of the Government,... Current operating
expenditures are the purchases of goods and services in current... consumption
the benefit of which does not extend beyond the fiscal yea
The two components of current expenditures are those for personal services
(PS), and those for maintenance and other operating expense
Public expenditures
(1) economic development expenditures (i.e., expenditures on agriculture and

natural resources, transportation and communications, commerce and industry,
and other... economic development efforts);[71] (2) social services or social
development expenditures (i.e., government outlay on education, public health
and medicare, labor and welfare and others);[72] (3) general government or...
general public services expenditures (i.e., expenditures for the general
government, legislative services, the administration of justice, and for pensions
and gratuities); [73] (4) national defense expenditures (i.e., sub-divided... into
national security expenditures and expenditures for the maintenance of peace
and order);[74] and (5) public debt.
Public expenditures may further be classified according to the nature of funds,

i.e., general fund, special fund or bond fund... public revenues complement public
expenditures and cover all income or receipts of the government treasury used to
support government expenditures

CONSTI 2
In the Philippines, public revenues are generally derived from the following
sources, to wit: (1) tax revenues (i.e., compulsory contributions to finance
government activities);[80] (2) capital revenues (i.e., proceeds... from sales of
fixed capital assets or scrap thereof and public domain, and gains on such sales
like sale of public lands, buildings and other structures, equipment, and other
properties recorded as fixed assets);[81] (3) grants (i.e.,... voluntary contributions
and aids given to the Government for its operation on specific purposes in the
form of money and/or materials, and do not require any monetary commitment on
the part of the recipient);[82] (4) extra-ordinary income
(i.e., repayment of loans and advances made by government corporations and

local governments and the receipts and shares in income of the Banko Sentral
ng Pilipinas, and other receipts);[83] and (5) public borrowings (i.e., proceeds
of... repayable obligations generally with interest from domestic and foreign
creditors of the Government in general, including the National Government and
its political subdivisions).[84]... c.2. Budget Legislation
The Budget Legislation Phase covers the period commencing from the time
Congress receives the President's Budget, which is inclusive of the NEP and the
BESF, up to the President's approval of the GAA
Budget
Authorization Phase, and involves the significant participation of the Legislative

through its deliberations.
Initially, the President's Budget is assigned to the House of Representatives'

Appropriations Committee on First Reading
Appropriations Committee and its various Sub-Committees schedule and

conduct budget hearings to examine the PAPs of the... departments and
agencies.
House of Representatives drafts the General Appropriations Bill (GA
The GAB is sponsored, presented and defended by the House of

Representatives' Appropriations Committee and Sub-Committees in plenary
session. As with other laws, the GAB is approved on Third Reading before the
House of Representatives' version is transmitted... to the Senate
The Senate's Finance Committee and its
Sub-Committees may submit the proposed amendments to the GAB to the

plenary of the Senate only after the House of Representatives has formally
transmitted its version to the Senate. The Senate version of the GAB is likewise
approved on Third Readi

CONSTI 2
The House of Representatives and the Senate then constitute a panel each to sit
in the Bicameral Conference Committee for the purpose of discussing and
harmonizing the conflicting provisions of their versions of the GAB. The
"harmonized" version of the GAB is next... presented to the President for
approv... c.3. Budget Execution
The Budget Execution Phase is primarily the function of the DBM, which is
tasked to perform the following procedures, namely: (1) to issue the programs
and guidelines for the... release of funds; (2) to prepare an Allotment and Cash
Release Program; (3) to release allotments; and (4) to issue disbursement
authorities.
Thereafter, the DBM prepares an Allotment Release Program (ARP) and a Cash
Release Program (CRP). The ARP sets a limit for allotments issued in general
and to a specific agency. The CRP fixes the monthly, quarterly and annual
disbursement... levels.
Actual disbursement or spending of government funds terminates the Budget

Execution Phase and is usually accomplished through the Modified
Disbursement Scheme under wehich disbursements chargeable against the
National Treasury are coursed through the government... servicing banks.
c.4. Accountability
An agency's accountability may be examined and evaluated through (1)

performance targets and outcomes; (2) budget accountability reports; (3) review
of agency performance; and (4) audit conducted by the Commission on Audit
(COA).
2.
Nature of the DAP as a fiscal plan... a. DAP was a program designed to...
promote economic growth
Administration's "blueprint for public policy" and reflects the Government's goals
and... strategies
The Administration would thereby accelerate government spending by: (1)

streamlining the implementation process through the clustering of infrastructure
projects... of the Department of Public Works and Highways (DPWH) and the
Department of Education (DepEd), and (2) frontloading PPP-related projects[107]
due for implementation in the following year.[108]
The DAP was a government policy or strategy designed to stimulate the

economy through accelerated spending.
In the context of the DAP's adoption and implementation being a function

pertaining to the Executive as the main actor during the Budget Execution Stage

CONSTI 2
under its... constitutional mandate to faithfully execute the laws, including the
GAAs, Congress did not need to legislate to adopt or to implement the DAP.
Congress could appropriate but would have nothing more to do during the
Budget Execution Stage. Indeed, appropriation was the... act by which Congress
"designates a particular fund, or sets apart a specified portion of the public
revenue or of the money in the public treasury, to be applied to some general
object of governmental expenditure, or to some individual purchase or expense."
'"In a strict sense, appropriation has been defined 'as nothing more than the
legislative authorization prescribed by the Constitution that money may be paid
out of the Treasury,' while... appropriation made by law refers to 'the act of the
legislature setting apart or assigning to a particular use a certain sum to be used
in the payment of debt or dues from the State to its creditors.'"
On the other hand, the President, in keeping with his duty to faithfully execute the
laws, had sufficient discretion during the execution of the budget to adapt the
budget to changes in the country's economic situation.
He could adopt a plan like the
DAP for the purpose. He could pool the savings and identify the PAPs to be
funded under the DAP.
In such actions, the Executive did not usurp the power vested in Congress under
Section 29(1), Article VI of the Constitution.
It is significant that Demetria was promulgated 25 days after the ratification by

the people of the 1987 Constitution, whose Section 25(5) of Article VI is identical
to Section 16(5), Article VIII of the 1973 Constitution, to wit:
Section 25. x x x... x x x x
5. No law shall be passed authorizing any transfer of appropriations;

however, the President, the President of the Senate, the Speaker of the
House of Representatives, the Chief Justice of the Supreme Court, and
the heads of Constitutional Commissions may, by law, be authorized... to
augment any item in the general appropriations law for their respective
offices from savings in other items of their respective appropriations.
Requisites for the valid transfer... of appropriated funds under Section
25(5), Article VI of the 1987
Constitution
The transfer of appropriated funds, to be valid under Section 25(5), supra, must
be made upon a concurrence of the following requisites, namely:

CONSTI 2
(1) There is a law authorizing the President, the President of the Senate, the
Speaker of the House of Representatives, the Chief Justice of the Supreme
Court, and the heads of the Constitutional Commissions to transfer funds within
their respective offices;
(2) The funds to be transferred are savings generated from the appropriations for
their respective offices; and
(3) The purpose of the transfer is to augment an item in the general

appropriations law for their respective offices.
Appropriations have been considered "released" if there has already been an

allotment or authorization to incur obligations and disbursement authority.
According to Philippine Constitution Association v. Enriquez:[159] "Impoundment

refers to a refusal by the President, for whatever reason, to spend funds made
available by Congress. It is the failure to spend or obligate budget authority of
any... type." Impoundment under the GAA is understood to mean the retention or
deduction of appropriations. The 2011 GAA authorized impoundment only in
case of unmanageable National Government budget deficit, to wit:
Augmentation implies the existence in this Act of a program, activity, or project

with an appropriation, which upon implementation, or subsequent evaluation of
needed resources, is determined to be deficient. In no case shall a non-existent
program,... activity, or project, be funded by augmentation from savings or by the
use of appropriations otherwise authorized in this Act.
It is the President who proposes the budget but it is Congress that has the final
say on matters of appropriations.[180] For this purpose, appropriation involves
two governing principles, namely: (1) "a Principle of the Public Fisc, asserting
that all... monies received from whatever source by any part of the government
are public funds;" and (2) "a Principle of Appropriations Control, prohibiting
expenditure of any public money without legislative authorization.

CONSTI 2
JOSE J. FERRER, JR., Petitioner, v. CITY MAYOR HERBERT BAUTISTA,
CITY COUNCIL OF QUEZON CITY, CITY TREASURER OF QUEZON CITY,
AND CITY ASSESSOR OF QUEZON CITY, Respondents.
G.R. No. 210551, June 30, 2015
Facts:
Petitioner, a QC property owner, assails the constitutionality of two QC

ordinances, namely Ordinance No. SP-2095, S-2011 or the Socialized Housing
Tax of Quezon City and Ordinance No. SP-2235, S-2013 on garbage collection
fees.
Section 3 of SP-2095 provides:

SECTION 3. IMPOSITION. A special assessment equivalent to one-half percent
(0.5%) on the assessed value of land in excess of One Hundred Thousand
Pesos (Php100,000.00) shall be collected by the City Treasurer which shall
accrue to the Socialized Housing Programs of the Quezon City Government. The
special assessment shall accrue to the General Fund under a special account to
be established for the purpose (i.e., programs and projects for low-cost housing
and other mass dwellings).
c
On the other hand, Ordinance No. SP-2235, S-2013 on garbage collection

places the rates of the imposable fee dependent on the land or floor area and
whether the payee is an occupant of a lot, condominium, social housing project
or apartment.
Issues:
1. WON SP-2095, S-2011 on the Socialized Housing Tax (SHT) is valid.

a. WON the SHT is a tax which is within the QC government to
impose.
b. WON the SHT violates the rule on equality.
c. WON the SHT is confiscatory or oppressive.
2. WON SP-2235, S-2013 on Garbage Fee is valid.
a. WON the Ordinance on Garbage Fee violates the rule on double
taxation.
b. WON it violates the rule on equality.
Ruling:
1. SP-2095, S-2011 on the Socialized Housing Tax (SHT) is VALID.

CONSTI 2
a. Yes. The SHT charged by the QC Government is a tax which is within its
power to impose. Cities are allowed to exercise such other powers and
discharge such other functions and responsibilities as are necessary,
appropriate, or incidental to efficient and effective provision of the basic
services and facilities which include, among others, programs and projects
for low-cost housing and other mass dwellings. The collections made
accrue to its socialized housing programs and projects. The tax is not a
pure exercise of taxing power or merely to raise revenue; it is levied
with a regulatory purpose. The levy is primarily in the exercise of the
police power for the general welfare of the entire city. It is greatly imbued
with public interest. Removing slum areas in Quezon City is not only
beneficial to the underprivileged and homeless constituents but
advantageous to the real property owners as well. The situation will
improve the value of the their property investments, fully enjoying the
same in view of an orderly, secure, and safe community, and will enhance
the quality of life of the poor, making them law-abiding constituents and
better consumers of business products.
b. No, the SHT does NOT violate the rule on equality. For the purpose of
undertaking a comprehensive and continuing urban development and
housing program, the disparities between a real property owner and an
informal settler as two distinct classes are too obvious and need not be
discussed at length. The differentiation conforms to the practical dictates
of justice and equity and is not discriminatory within the meaning of the
Constitution. Notably, the public purpose of a tax may legally exist even if
the motive which impelled the legislature to impose the tax was to favor
one over another. It is inherent in the power to tax that a State is free to
select the subjects of taxation. Inequities which result from a singling out of
one particular class for taxation or exemption infringe no constitutional
limitation.
c. No, the SHT is NOT confiscatory nor oppressive. The reasonableness of

Ordinance No. SP-2095 cannot be disputed. It is not confiscatory or
oppressive since the tax being imposed therein is below what the UDHA
actually allows. While the law authorizes LGUs to collect SHT on lands
with an assessed value of more than P50,000.00, the questioned
ordinance only covers lands with an assessed value exceeding
P100,000.00. Even better, on certain conditions, the ordinance grants a
tax credit equivalent to the total amount of the special assessment paid
beginning in the sixth (6th) year of its effectivity. Far from being obnoxious,
the provisions of the subject ordinance are fair and just.
2. SP-2235, S-2013 on Garbage Fee is INVALID. Although it does not violate

the rule on double taxation, it nonetheless violates the rule on equality.

CONSTI 2
a. SP-2235 does NOT violate the rule on double taxation.
The fee imposed for garbage collections under Ordinance No. SP-2235 is
a charge fixed for the regulation of an activity. In Progressive
Development Corporation v. Quezon City, the Court declared that “if the
generating of revenue is the primary purpose and regulation is merely
incidental, the imposition is a tax; but if regulation is the primary purpose,
the fact that incidentally revenue is also obtained does not make the
imposition a tax.” In a U.S. case, the garbage fee was considered as a
"service charge" rather than a tax as it was actually a fee for a service
given by the city which had previously been provided at no cost to its
citizens.
Hence, not being a tax, the contention that the garbage fee under
Ordinance No. SP-2235 violates the rule on double taxation must
necessarily fail.
b. Yes, SP-2235 violates the rule on equality.
For the purpose of garbage collection, there is, in fact, no substantial

distinction between an occupant of a lot, on one hand, and an occupant of
a unit in a condominium, socialized housing project or apartment, on the
other hand. Most likely, garbage output produced by these types of
occupants is uniform and does not vary to a large degree; thus, a similar
schedule of fee is both just and equitable.
The rates being charged by the ordinance are unjust and inequitable: a
resident of a 200 sq. m. unit in a condominium or socialized housing
project has to pay twice the amount than a resident of a lot similar in size;
unlike unit occupants, all occupants of a lot with an area of 200 sq. m. and
less have to pay a fixed rate of Php100.00; and the same amount of
garbage fee is imposed regardless of whether the resident is from a
condominium or from a socialized housing project.
Indeed, the classifications under Ordinance No. S-2235 are not germane
to its declared purpose of “promoting shared responsibility with the
residents to attack their common mindless attitude in over-consuming the
present resources and in generating waste.” Instead of simplistically
categorizing the payee into land or floor occupant of a lot or unit of a
condominium, socialized housing project or apartment, respondent City
Council should have considered factors that could truly measure the
amount of wastes generated and the appropriate fee for its collection.
Factors include, among others, household age and size, accessibility to
waste collection, population density of the barangay or district, capacity to
pay, and actual occupancy of the property.

CONSTI 2
Dispositive Portion:
WHEREFORE, the petition is PARTIALLY GRANTED. The constitutionality and

legality of Ordinance No. SP-2095, S-2011, or the “Socialized Housing Tax of
Quezon City,” is SUSTAINED for being consistent with Section 43 of Republic
Act No. 7279. On the other hand, Ordinance No. SP-2235, S-2013, which
collects an annual garbage fee on all domestic households in Quezon City, is
hereby declared as UNCONSTITUTIONAL AND ILLEGAL. Respondents are
DIRECTED to REFUND with reasonable dispatch the sums of money collected
relative to its enforcement.

CONSTI 2
Moncada vs People’s Court
80 Phil 1
1/14/1948
Scope of Protection
Facts:
Petitioner stands accused of treason before the People's Court, the information
against him having been filed by Prosecutor Juan M. Ladaw on February 28,
1946.
Almost a year before, on April 4, 1945, at about 6:00 p.m., petitioner was
arrested by members of the Counter Intelligence Corps of the United States
Army at his residence at 199-A San Rafael St., Manila, without any warrant of
arrest, and taken to the Bilibid Prison at Muntinglupa, where he was detained.
On April 11, 1945, petitioner's wife, who transferred to their house at 3 Rosario
Drive, Quezon City, was approached by several CIC officers, headed by Lt.
Olives, and ordered to accompany them to the house at San Rafael to witness
the taking of documents and things belonging to petitioner. Upon hearing from
the officers that they did not have any search warrant for the purpose, she
refused to go with them, but after the officers told her that with or without her
presence they would search the house at San Rafael, Mrs. Moncado decided to
accompany them.
Upon arrival at the house, Mrs. Moncado noticed that their belongings had been
ransacked by American officers and that the trunks which she had kept in the
attic and in the garage when she left the house, had been ripped open and their
contents scattered on the floor. Lt. Olives informed Mrs. Moncado that they were
going to take a bundle of documents and things, which were separated from the
rest of the scattered things, because they proved the guilt of her husband. Mrs.
Moncado protested in vain. No receipt was issued to her.
Subsequently, after making an inventory of their belongings at San Rafael, Mrs.
Moncado found the following things missing:
"(a) Passes issued by Japanese friends for the personal safety and conduct of
the petitioners;
"(b) Correspondences of the petitioner as president of the Neighborhood
Association in Quezon City during the Japanese occupation;
"(c) Correspondence of the petitioner with certain Japanese officers;
"(d) The personal file and the love letters of Mrs. Moncado to Dr. Moncado and
vice versa;
"(e) Marriage certificate of Dr. Moncado with Mrs. Moncado issued at Reno,
Nevada;
"(f) Private correspondence and letters of Dr. Moncado to and from his Filipino
Federation of America in Hawaii and United States;
"(g) Several law books by Guevara, Albert, Francisco, Harvard Classics
(complete set), books on diplomacy, international law;
"(h) A complete collection of the 'Tribunal' compilation of the same during
occupation until the last day of its issuance;

CONSTI 2
"(i) Complete collection of American magazines, from 1940 to 1941 - Los
Angeles Examiner, San Francisco Chronicle, Los Angeles Evening Herald and
newspapers edited and owned by Dr. Moncado and published in the United
States; and National Geographic Society;
"(j) Personal letters of Dr. Moncado with several members of the United States
Senate and Congress of the United States including a picture of President
Hoover dedicated to Dr. Moncado;
"(k) Pictures with personal dedication and autograph to Dr. and Mrs. Moncado by
actors and actresses from Hollywood, including Mary Astor, Binnie Barnes,
Robert Montgomery, Clark Gable, Gary Cooper, Boris Karloff, Wallace Beery,
William and Dick Powell, Myrna Loy, Bette Davis and Ceasar Romero;
"(l) Certificate as first flighter in the Pan-American Airways and even several
stickers issued by Pan American Airways for passengers' baggage;
"(m) A promissory note of Dr. Moncado for fifty thousand pesos (P50,000) in
favor of Architect Mr. Igmidio A. Marquez of Quezon City;
"(n) Three (3) volumes of modern ballroom dancing by Arthur MacMurray of New
York, pamphlets of dancing obtained by Dr. Moncado while he was studying
dancing at Waldorf-Astoria, New York;
"(o) Two (2) volumes of rhumba, zamba and tango obtained from Mexico and
Argentina by Dr. Moncado"
On June 27, 1946, petitioner filed with the People's Court a motion praying that
the return of said documents and things be ordered. The petition was denied on
July 9, 1946.
Thereupon, petitioner filed with this Supreme Court on August 10, 1946, a
petition praying that the lower court's order of July 9, 1946, be set aside, that said
court be required to order the return of the documents and things in question to
petitioner, and that the prosecutor be restrained from using and presenting them
as evidence at the trial of the criminal case for treason.
All seized documents were not denied by the prosecution and that the said
documents are at their possession.
Respondents argue:
We followed the decision in Alvero vs. Dizon (L-342) that the seized
documents at his house at the time of arrest be admitted as competent evidence
against the crime charged.
Issue:
1.) Whether or not the petitioner can avail the constitutional inhibition against
unlawful searches and seizures and to privacy of communication and
correspondence?
2.) Whether or not the arrest, searches and seizures done were legal and
authorized by law?
3.) Whether or not the seized documents can be admitted in prosecuting the
petitioner against the crime charged?

CONSTI 2
Held:
1.) Yes, the petitioner can avail the constitutional inhibition against unlawful
searches and seizures and to privacy of communication and correspondence
because the rights are available to all persons, including aliens, whether accused
of crime or not.
2.) No. The seizure of the papers and effects in questions, having been made
without any search warrant, was and is illegal, and was effected in open violation
of the following provisions of the Constitution:
“The right of the people to be secure in their persons, houses, papers,and effects
against unreasonable searches and seizures shall not be violated, and no
warrants shall issue but upon probable cause, to be determine by the judge after
examination under oath or affirmation of the complainant and the witnesses he
may produce, and particularly describing the place to be searched, and the
persons or things to be seized. (Article III, section 1 [3] of the Constitution.)
The privacy of communication and correspondence shall be inviolable except
upon lawful order of the court or when public safety and order require otherwise.”
(Article III, section 1 [5] of the Constitution.)
The seizure was also in open violation of sections 3, 10, and 11 of Rule
122,which are as follows:
SEC. 3. Requisites for issuing search warrant.
A search warrant shall not issue but upon probable cause to be determined by
the judge or justice of the peace after examination under oath or affirmation of
the complainant and the witnesses he may produce,and particularly describing
the place to be searched, and the persons or things to be seized.SEC. 10.
Receipt for the property seized.
The officer seizing property under the warrant must give a detailed receipt for the
same to the person on whom or in whose possession it was found, or in the
absence of any person, must, in the presence of at least two witnesses, leave a
receipt in the place in which he found the seized property.SEC. 11. Delivery of
property and inventory there of to court.
The officer must forthwith deliver the property to the justice of the peace or judge
of the municipal court or of the Court of First Instance which issue the warrant,
together with a true inventory thereof duly verified by oath.
To hold that no criminal can, in any case, be arrested and searched for the
evidence and tokens of his crime without a warrant.
The fallacy of the doctrine contended for by appellant is in
assuming that the constitutional rights of the defendant are violated by using his
private papers as evidence against him, whereas it was the invasion of his
premises and the taking of his goods that constituted the offense irrespective of
what was taken or what use was made of it; and the law having declared that the

CONSTI 2
articles taken are competent and admissible evidence, notwithstanding the
unlawful search and seizure, how can the circumstance that the court erred in an
independent proceeding for the return of the property on defendant's demand
add anything to or detract from the violation of the defendant's constitutional
rights in the unlawful search and seizure?
3.) No. The argument that goods and personal properties illegally taken,
stolen, or snatched from the owner of possessor without a duly issued search
warrant can be retained by the prosecution for use as evidence in a criminal case
instituted is initiated by an original and basic flaw. The argument rests on the
assume existence or commission of a crime as its minor premise. but, under the
orderly processes of law, the assumption has yet to be proved, and it is
impossible to be proved before it can be of any use to support and clinch the
argument.
The prosecution is called upon to make the assumption that the goods and
properties in question are evidence of a crime. To be valid, the assumption has
to presuppose the commission or existence of the crime.That presupposition, in
order to be valid, must in turn stand on an authoritative pronouncement which
can only be made in a final and executory decision rendered by a court of justice.
The prosecution cannot make a conclusive pronouncement, as to the existence
or commission of a crime, the basic fact which, under the argument, will entitled
the prosecution to retain and use the goods and properties in question. The
argument assumes a fact the existence of which still remains to be proved and
continues to be enveloped in the mists of the realm of uncertainties, which fact
may lead to the disputed right of the prosecution to retain the goods and
properties illegally seized as essential evidence of the crime. The line of
reasoning the build up the argument can be restated in more abstract terms as
follows: justify the means by their necessity to attain an end by starting from the
premise that the end was accomplished. Such a reasoning process is
fundamentally subversive to logic and is incompatible with the natural workings of
the human mind.
Disposition:
The court granted the prayer of the herein petitioner.

CONSTI 2
ARNULFO v. PEOPLE, GR No. 184355, 2015-03-23
Facts:
Evidence for the prosecution established that on July 15, 1999, Police Senior
Inspector Ipil H. Dueñas (P/SInsp. Dueñas) of the now defunct Presidential Anti-
Organized Crime Task Force (PAOCTF) filed an Application for Search Warrant
before Branch 22 of the RTC, Cebu
City, to search the premises of [appellant's] residence at J. Labra St., Guadalupe,

Cebu City and seize the following items.
At about 12:45 in the morning of July 16, 1999, the search warrant was
implemented by P/S Insp. Dueñas as the team leader, SPO2 Eric Mendoza,
SPO2 Eric Abellana. PO1 Allan Jalagpas, PO3 Epifania Manila Sarte and other
members of the PAOCTF. Before reaching appellant's house, the... policemen
invited three (3) barangay tanods from Guadalupe's Barangay outpost to
accompany them to the house of the appellant.
Upon arrival to appellant's house, SPO2 Abellana served the search warrant to
appellant who was just inside the house together with his wife and other ladies.
The team proceeded to search the living room in the presence of three tanods
and the appellant himself
After an exhaustive search was done, other firearms and ammunitions were
recovered from the searched premises.
Police Officer IV Dionisio V. Sultan, Chief Clerk of the Firearms and Explosives
Division of the Philippine National Police-Visayas (FED PNP-Visayas), testified
that he prepared a certification dated April 29, 2002. Based on their office's
master, appellant is not licensed to... possess any kind of firearm or ammunition.
Issues:
Ruling:
the RTC found that the prosecution had established all the elements of the crime
charged. Petitioner was in possession of the firearm, ammunitions and other
items with intent to possess the same as they were found inside his house; and
he had no license or permit... to possess the same from any competent authority.
The RTC did not give credence to petitioner’s claim that he is not the owner of
the house but his uncle, Gabriel Arda, as the latter did not testify at all and was
not in the house at the time of the raid. It was petitioner and... his wife who were
at the house at 12:45 a.m. of July 16, 1999; and that petitioner did not protest his
arrest.
CONSTI 2
Petitioner appealed his conviction to the CA. After the respective briefs had been
filed, the case was submitted for decision.
The CA agreed with the RTC’s conclusion that the elements of the crime charged
were duly proved by the prosecution.
Anent petitioner’s claim of the alleged discrepancy in the testimony of PO3 Sarte
on the time the raid was conducted, the CA found the same to be minor and did
not... damage the essential integrity of the prosecution’s evidence in its material
whole; and that such discrepancy was explained by PO3 Sarte in her testimony.
only questions of law may be raised in a petition for review under Rule 45 of the
Rules of Court.[8] As such, we are not duty-bound to analyze and weigh all over
again the evidence already considered in the proceedings below. The findings
of... facts by a trial court, when affirmed by the Court of Appeals, are binding on
the Supreme Court.
Section 1 of PD 1866, as amended by RA 8294, provides:
Section 1. Unlawful Manufacture, Sale, Acquisition, Disposition or Possession of

Firearms or Ammunition or Instruments Used or Intended to be Used in the
Manufacture of Firearms or Ammunition. -
The essential elements in the prosecution for the crime of illegal possession of
firearms and ammunitions are: (1) the existence of subject firearm; and, (2) the
fact that the accused who possessed or owned the same does not have the
corresponding license for it.[11] The unvarying rule is that ownership is not an
essential element of illegal possession of firearms and ammunition.[12] What the
law requires is merely possession, which includes not only actual physical
possession, but also constructive... possession or the subjection of the thing to
one’s control and management.[13]
Once the prosecution evidence indubitably points to possession without the

requisite authority or license, coupled with animus possidendi or intent to
possess on the part of the accused, conviction for violation of the said law must
follow.
It was convincingly proved that petitioner had constructive possession of the gun
and the ammunitions, coupled with the intent to possess the same. Petitioner's
act of immediately rushing from the living room to the room where SPO2
Abellana found a calibre .45 and grappled with... the latter for the possession of
the gun proved that the gun was under his control and management.
Even assuming that petitioner is not the owner of the house where the items
were recovered, the ownership of the house is not an essential element of the
crime under PD 1866 as amended.

CONSTI 2
The RTC sentenced petitioner to an imprisonment of six (6) years and one (1)
day of prision mayor, as minimum, to six (6) years and eight (8) months, as
maximum, plus fine in the amount of P30,000.00.
WHEREFORE, in view of all the foregoing, the Decision of the Court of Appeals,
dated July 30, 2008, is AFFIRMED WITH MODIFICATION. Petitioner is
sentenced to suffer the indeterminate penalty of imprisonment ranging from SIX
(6) YEARS of prision correccional... in its maximum period, as minimum, to SIX
(6) YEARS, EIGHT (8) MONTHS and ONE (1) DAY of prision mayor minimum in
its medium period, as maximum, and to pay a fine of P30,000.00.
SO ORDERED.

CONSTI 2
STONEHILL V. DIOKNO - CASE DIGEST - CONSTITUTIONAL LAW
STONEHILL V. DIOKNO G.R. No. L-19550 June 19, 1967
FACTS:
Stonehill et al, herein petitioners, and the corporations they form were alleged
to have committed acts in “violation of Central Bank Laws, Tariff and Customs
Laws, Internal Revenue (Code) and Revised Penal Code.”
Respondents issued, on different dates, 42 search warrants against
petitioners personally, and/or corporations for which they are officers directing
peace officers to search the persons of petitioners and premises of their offices,
warehouses and/or residences to search for personal properties “books of
accounts, financial records, vouchers, correspondence, receipts, ledgers,
journals, portfolios, credit journals, typewriters, and other documents showing all
business transactions including disbursement receipts, balance sheets and profit
and loss statements and Bobbins(cigarette wrappers)” as the subject of the
offense for violations of Central Bank Act, Tariff and Customs Laws, Internal
Revenue Code, and Revised Penal Code.
The documents, papers, and things seized under the alleged authority of the
warrants in question may be split into (2) major groups, namely:
(a) those found and seized in the offices of the aforementioned corporations and
(b) those found seized in the residences of petitioners herein.
Petitioners averred that the warrant is null and void for being violative of the
constitution and the Rules of court by:
(1) not describing with particularity the documents, books and things to be
seized;
(2) money not mentioned in the warrants were seized;
(3) the warrants were issued to fish evidence for deportation cases filed against
the petitioner;
(4) the searches and seizures were made in an illegal manner; and
(5) the documents paper and cash money were not delivered to the issuing
courts for disposal in accordance with law.
The prosecution counters that the search warrants are valid and issued in
accordance with law; The defects of said warrants were cured by petitioners
consent; and in any event, the effects are admissible regardless of the
irregularity.
The Court granted the petition and issued the writ of preliminary injunction.
However, by a resolution, the writ was partially lifted dissolving insofar as paper
and things seized from the offices of the corporations.

CONSTI 2
ISSUE:
WON the search warrant issued is valid.
HELD:
NO the search warrant is invalid.
The SC ruled in favor of petitioners.
The constitution protects the people’s right against unreasonable search and
seizure. It provides; (1) that no warrant shall issue but upon probable cause, to
be determined by the judge in the manner set forth in said provision; and (2) that
the warrant shall particularly describe the things to be seized. In the case at bar,
none of these are met.
The warrant was issued from mere allegation that petitioners committed a
“violation of Central Bank Laws, Tariff and Customs Laws, Internal Revenue
(Code) and Revised Penal Code.”
In other words, no specific offense had been alleged in said applications. The
averments thereof with respect to the offense committed were abstract.
As a consequence, it was impossible for the judges who issued the warrants
to have found the existence of probable cause, for the same presupposes the
introduction of competent proof that the party against whom it is sought has
performed particular acts, or committed specific omissions, violating a given
provision of our criminal laws.
As a matter of fact, the applications involved in this case do not allege any
specific acts performed by herein petitioners. It would be a legal heresy, of the
highest order, to convict anybody of a “violation of Central Bank Laws, Tariff and
Customs Laws, Internal Revenue (Code) and Revised Penal Code,” — as
alleged in the aforementioned applications — without reference to any
determinate provision of said laws or codes.
The warrants authorized the search for and seizure of records pertaining to all
business transactions of petitioners regardless of whether the transactions were
legal or illegal.
Thus, openly contravening the explicit command of the Bill of Rights — that
the things to be seized be particularly described — as well as tending to defeat
its major objective: the elimination of general warrants.

CONSTI 2
However, SC emphasized that petitioners cannot assail the validity of the
search warrant issued against their corporation because petitioners are not the
proper party.
The petitioners have no cause of action to assail the legality of the contested
warrants and of the seizures made in pursuance thereof, for the simple reason
that said corporations have their respective personalities, separate and distinct
from the personality of herein petitioners, regardless of the amount of shares of
stock or of the interest of each of them in said corporations, and whatever the
offices they hold therein may be.8 Indeed, it is well settled that the legality of a
seizure can be contested only by the party whose rights have been impaired
thereby and that the objection to an unlawful search and seizure is purely
personal and cannot be availed of by third parties.

CONSTI 2
CASE DIGEST
JOSE G. LOPEZ
vs.
THE COMMISSIONER OF CUSTOMS, REPARATIONS COMMISSION,
DIRECTOR OF THE NATIONAL BUREAU OF INVESTIGATION AND/OR ANY
OF THEIR AUTHORIZED AGENTS OR REPRESENTATIVES
FACTS:
Sometime in 1964, the petitioner and Reparations Commission entered into a

conditional contract, subject to the condition that the title to and ownership of the
vessel shall remain with the Commission until full payment. Later on, petitioner
entered into a contract with one Tomas Velasco, authorizing the latter to
supervise and manage the M/V JOLO LEMA. The vessel however was however
apprehended, searched and then seized by the Collector of Customs. A Seizure
Identification proceeding was instituted against said vessel for smuggling into the
Philippines 1,408 sacks of Indonesian copra and 86 sacks of Indonesian coffee
beans, in violation of Section 2530 (a) and (k) of the Tariff and Customs Code of
the Philippines.
This appeal taken by Lopez directly to the Supreme Court, upon the ground that
only questions of law would be taken up therein.
ISSUE:
Whether or not the Court of First Instance of Manila has jurisdiction to interfere
with the Seizure Identification proceeding No. 25/66 pending before the
Commissioner of Customs, on account of the Indonesian agricultural products
smuggles into the Philippines through the use of M/V JOLO LEMA
HELD:
Lopez maintains that whatever powers the Commissioner of Customs had, prior
thereto, over seizure identification proceedings had been transferred to the
Philippine Fisheries Commission. The Supreme Court said that this pretense is
manifestly devoid of merit. Said section 5 of Republic Act No. 3512 merely
transfers to the Philippine Fisheries Commission the powers, functions and
duties of the Bureau of Customs, the Philippine Navy and the Philippine
Constabulary over fishing vessels and fishery matters. Such transfer should be
construed in the light of section 1 of said Republic Act No. 3512, reading.

CONSTI 2
It is clear that the powers transferred to the Philippine Fisheries Commission by
Republic Act No. 3512 are limited to those relating to the "development,
improvement, management and conservation of our fishery resources." All other
matters, such as those concerning smuggling, particularly of agricultural
products, into the Philippines, are absolutely foreign to the object and purpose of
said Act and could not have been and were not transferred to the aforementioned
Commission. Seizure Identification proceeding No. 25/66 for the smuggling of
Indonesian agricultural products into the Philippines is certainly beyond the
jurisdiction of the Philippine Fisheries Commission.
The M/V JOLO LEMA is not subject to forfeiture, inasmuch as Davao is a port of
entry. This is neither the time nor the place to pass upon the merits of this
contention. Suffice it to say that, if petitioner feels it is a good defense, the proper
place to set it up is in Seizure Identification proceeding No. 25/66. If the
Commissioner of Customs overrules such defense and decrees the forfeiture of
the vessel, Lopez may appeal to the Court of Tax Appeals, whose decision may,
in turn, be reviewed by the Supreme Court.
Lastly, petitioner argues that the Reparations Commission may not unilaterally
rescind its conditional contract of purchase and sale in his favor and that the
Commission must first seek a judicial declaration of rescission of said contract.
Well-settled is, however, the rule that a judicial action for the rescission of a
contract is not necessary where the contract provides that it may be revoked and
cancelled for violation of any of its terms and conditions.

CONSTI 2
THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee, vs. KAGUI
MALASUGUI, defendant-appellant.
G.R. No. L-44335
July 30, 1936
DIAZ, J.:
Facts: On March 5, 1935, Tan Why, a Chinese merchant, a resident of Cotabato,

a victim of robbery was found lying on the ground, with several wounds in the
head, on a path leading to the barrio of Carcar, Cotabato. Shortly before the
victim’s death he was able to mention the appellant’s first name, “Kagui”, when
he was asked about assailant.
Appellant was later searched by the investigating police, without opposition or

protest on his part, and it was discovered that he also had the victim’s
pocketbook, containing P92 in bills, the victim’s identification card and a
memorandum of amounts with some Chinese characters. In one of the pockets
of his pants was found some change, making the total amount of money found in
his possession P92.68. The said search was conducted after the appellant had
voluntarily produced the bracelets Exhibit A and placed them on Lieutenant
Jacaria's table, because, upon being asked if he had anything, he tremblingly
answered in the negative.
The appellant testified at the trial that Lieutenant Jacaria and Sergeant Urangut
had forcibly and through intimidation taken from him the bracelets the
pocketbook and all the money which he and that, but for the printing thereon, the
identification card found in the pocketbook then was blank and there was no
memorandum of the kind, in Tan Why's handwriting, inside the pocketbook,
thereby, insinuating that it was Lieutenant Jacaria who typed or caused to be
typewritten on the card Tan Why's name and personal data and who placed the
memorandum in the pocketbook.
Issue: WON the search and seizure conducted on the accused legal?
SC ruling: Yes. The SC held that When the search of the person detained or
arrested and the seizure of the effects found in his possession are incidental to
an arrest made in conformity with the law, they cannot be considered
unreasonable, much less unlawful. To hold that no criminal can, in any case, be
arrested and searched for the evidence and tokens of his crime without a
warrant, would be to leave society, to a large extent, at the mercy of the
shrewdest, the most expert, and the most depraved of criminals, facilitating their
escape in many instances.
The record shows that before proceeding with the trial in the lower
court, the appellant asked for the return of said effects to him on the ground
that they were unlawfully taken away from him. Leaving aside the foregoing
considerations, his testimony cannot prevail against nor is it sufficient to
counteract that of the government witnesses, Lieutenant Jacaria and

CONSTI 2
Sergeant Urangut, who testified that when Lieutenant Jacaria asked him
what other things he carried, after having voluntarily placed the two pairs of
bracelets, Exhibit A, on the table, and Sergeant Urangut felt his body, he did
not show the least opposition. It follows, therefore, that the lower court
committed no error in accepting as evidence the items taken from the
accused, not only because the appellant did not object to the taking thereof
from him when searched, but also because the effects found in his
possession of a person detained or arrested are perfectly admissible as
evidence against him, if they constitute the corpus delicti or are pertinent or
relevant thereto. It is certainly repugnant to maintain the opposite view
because it would amount to authorizing the return to the accused of the
means of conviction seized from him, notwithstanding their being eloquent
proofs of crime, for him to conceal, destroy or otherwise dispose of, in order
to assure his impunity.

CONSTI 2
People v. Damaso, G.R. No. 93516, 212 SCRA 547, August 12, 1992
FACTS:
The right against unreasonable searches and seizures is a personal right.

The constitutional immunity from unreasonable searches and seizures, being
personal one, cannot be waived by anyone except 1) the person whose rights
are invaded or 2) one who is expressly authorized to do so in his or her behalf.
 The group of Lt. Quijardo were sent to verify the presence of CPP/NPA
members in Dagupan City.
 They put under surveillance the rented apartment of Rosemarie, sister of
someone whom they earlier arrested.
 They interviewed Luzviminda Morados, a visitor of Rosemarie, who stated
that she worked with Bernie Mendoza alias Basilio Damaso, the appellant.
 Together with Morados, they reached the house of Damaso where they
saw Luz Tanciangco, a helper. Tanciangco then allowed the group to enter inside
the house.
 The group of Lt. Quijardo entered the dwelling of Damaso without a valid
warrant when the latter was absent. They requested the persons in the house to
allow them to look around. In one of the rooms, they saw subversive materials
which they confiscated. They likewise brought the persons found in the house to
the headquarters for investigation and the persons revealed that Damaso was
the lessee of the house and owned the items confiscated.
 Based on this, Damaso was charged with illegal possession of firearms.
ISSUE:
Whether the evidence is admissible? NO.
RULING:
 The Court ruled that the law enforcers failed to comply with the
requirements of a valid search and seizure. None of these exceptions for a
warrantless search is present in this case.
 Moreover, the constitutional immunity from unreasonable searches and
seizures, being personal one, cannot be waived by anyone except 1) the person
whose rights are invaded or 2) one who is expressly authorized to do so in his or
her behalf.
 In this case, the records show that Damaso was not in his house at that
time Luz, his alleged helper, allowed the authorities to enter. There was no
evidence that would establish the fact that Luz was indeed Damaso’s helper or if
it was true that she was his helper, that Damaso had given her authority to open
his house in his absence.
 Being a helper, she does not qualify as a person authorized to waive such
right in representation of her employer.

CONSTI 2
 Thus, the search being invalid for lack of warrant, the evidence obtained
thereafter is inadmissible.

CONSTI 2
People v. Marti, G.R. No. 81561, 193 SCRA 57, January 18, 1991
FACTS:
The Bill of Rights embodied in the Constitution is not meant to be invoked against
acts of private individuals.
It’s a restraint directed only against the government and its agencies tasked with
the enforcement of the law.
It could only be invoked against the State to whom the restraint is imposed.
 Andre Marti and his wife Shirley wanted to send packages to their friend in
Switzerland and contracted the services of Manila Packing and Export
Forwarders.
 When asked by the forwarder if they could examine and inspect the
packages, Marti refused, assuring that the packages simply contained books and
cigars.
 However, the proprietor opened the boxes for final inspection as part of
their SOP. Upon opening, they suspected that the contents were illegal drugs.
 The proprietor reported the incident to NBI which confirmed that the
suspected content were marijuana.
 In the presence of the NBI agents, the boxes were opened and found
dried marijuana leaves inside.
 After Marti was traced by NBI, he was charged with violation of the
Dangerous Drugs Act.
 Marti assailed the admissibility of the drugs as evidence against him,
which, according to him, is obtained in violation of his constitutional rights against
unreasonable search and seizure and privacy of communication.
ISSUE:
May an act of a private individual, allegedly in violation of appellant's
constitutional rights, be invoked against the State? NO.
RULING:
 The Court ruled that in the absence of governmental interference, the
liberties granted by the Constitution cannot be invoked against the State. The
constitutional right against unreasonable search and seizure refers to the
immunity of one's person, whether citizen or alien, from interference by
government. Its protection is directed only to governmental action.
 This right do not require exclusion of evidence obtained through a search
by a private citizen.
 In this case, the evidence was primarily discovered and obtained by a
private person, acting in a private capacity and without the intervention of State
authorities. Therefore, there is no reason why it should not be admitted to
prosecute him.
 Marti, however, alleged that the NBI agents made an illegal search and
seizure of the evidence.

CONSTI 2
 The Court pointed out that: a) It was the proprietor who made a
reasonable search of the packages in compliance with SOP AND b) the mere
presence of the NBI agents did not convert the reasonable search effected into a
warrantless search and seizure. Merely to observe and look at that which is in
plain sight is not a search.
 Marti further argued that since the Constitution expressly declares as
inadmissible any evidence obtained in violation of the constitutional prohibition
against illegal search and seizure, it matters not whether the evidence was
procured by police authorities or private individuals.
 The Court answered that the Constitution, in laying down the principles of
the government and fundamental liberties of the people, does not govern
relationships between individuals.
Additional notes:
When a private individual violates another person’s right to privacy, the evidence
obtained therefrom is admissible; however the violator could be held civilly liable
under Article 32 of the Civil Code.

CONSTI 2
People v. Mendoza
G.R. No. 191267, June 13, 2013
Arrest
Search and Seizure
See: Rule 113 Section. 5. Arrest without warrant; when lawful
Rule 126 Section 13. Search incident to lawful arrest
FACTS: PO2 dela Cruz and PO2 Sangel, both operatives of the Station Anti-
Illegal Drugs Special Operations Task Force (SAID-SOTF), PO2 dela Cruz
testified that on May 15, 2004 at about 8:15 in the evening, their confidential
informant arrrived at their office reporting that a certain alias Monica, who turned
out to be the accused, was involved in the rampant sale of illegal drugs along
PNR South Compound, Brgy. Pio del Pilar, Makati City. Their Action Officer,
SPO4 Mangulabnan formed a buy- bust team led by SPO1 Magallanes to effect
the arrest of Mendoza. A briefing was conducted regarding the anti-narcotics
operation and dela Cruz was designated as poseur-buyer. He was tasked to buy
PhP 200.00 worth of shabu from accused. Two pieces of one hundred peso bills
were provided and marked with “AMM” for use in the buy-bust operation.
Coordination with the PDEA was made. The team then proceeded to the area of
operation, at the PNR South Compound, Brgy, Pio del Pilar, Makati City to
conduct the buy- bust operation.
Dela Cruz further testified that upon arrival at the said area, the informant
accompanied him to where accused was. The rest of the team positioned
themselves strategically within the perimeter. Thereafter, the informant
introduced him to accused as a person in need of shabu. At this instance, he
conveyed his intentions of buying two hundred pesos worth of shabu to accused.
He then gave the PhP 200.00 pesos buy-bust money to accused who in turn,
gave one plastic sachet containing suspected shabu to him. The transaction
having been consummated, he then made a motion of giving a high five to
accused which was the pre-arranged signal for the rest of the back-up team.
Operations back-up Sangel then approached the area of transaction, introduced

himself as a police officer and placed Mendoza under arrest. She was apprised
of the nature of the arrest and of her constitutional rights.
Dela Cruz continued that at the area of transaction, a search conducted after the
arrest which resulted in the recovery of the buy-bust money and five other plastic
sachets containing suspected shabu. He was just very near Sangel when the
sachets of shabu were taken from accused. He accordingly marked the pieces of
evidence recovered from accused. Likewise marked was the shabu subject
matter of the sale transaction. Accused was thereafter brought to the office of the
SAID -SOTF, where she was turned over to the investigator on duty.

CONSTI 2
Afterwards, the items seized were brought to the PNOC Crime Laboratory Office
for examination. The laboratory examination on the specimens submitted yielded
positive result for the presence of a dangerous drug shabu. He maintained that
the operation was properly coordinated with the PDEA.
Sangel corroborated the testimony of dela Cruz mainly with respect to the buy-
bust operation against accused. He declared that he was about seven to ten
meters away from the place of transaction. After the pre- arranged signal was
given by dela Cruz, he, together with the team, proceeded to the accused to
arrest her.
After Mendoza was arrested, she was ordered to empty her short pants and five
pieces of plastic sachets containing shabu were found and confiscated together
with the marked money in the amount of PhP 200.00. Thereafter, dela Cruz
placed the marking on the seized items at the place of transaction. The accused
was then brought to the SAID-SOTF of the Makati Police for investigation while
the seized items were brought to the PNP Crime Laboratory Office for laboratory
examination.
Accused for her part, denied the charges against her. She denied that she was
caught selling shabu and that she was caught in possession of the same. She
maintained that on May 15, 2004 at around 4:00 o'clock in the afternoon, she
was at the back of her house at PNR Compound, P. Medina Street, Brgy. Pio del
Pilar, Makati City hanging clothes when a kid named Totoy, told her that police
officers were looking for her. Upon learning that police officers were looking for
her she went home. There she saw Sangel together with other police officers.
She knew Sangel because her live- in partner would give half of his earnings to
his dispatcher the same to be given to Sangel otherwise, the latter would not
allow them to park their vehicles for passengers. She approached Sangel and
asked if they needed something from her. Sangel told her to go with them. The
accused dressed up and went with the policemen thinking that the reason she
was asked to go with them because of the murder case of Jun Riles filed against
Jonathan Lesaca and Alfredo Lesaca before the RTC where she was a star
witness.
She was brought to the office of the Drug Enforcement Unit (DEU). At the office
of the DEU, Mangulabnan talked to her. He told her that she was stubborn as he
once told her not to meddle with the case of her friend Jun Riles or else
something will happen to her. She was then asked if she knew Edwin Kerabu
and she said she knew him because he was her neighbor. She was asked if she
knew where to find Kerabu. She told them that she usually sees this Kerabu in
front of the “binggohan.”

CONSTI 2
Afterwards she was brought to the place she was referring to. Accused was left
inside the vehicle for about thirty minutes and thereafter she saw the police
officers with Kerabu. He was brought inside the vehicle. There Kerabu was asked
if he had shabu and he replied that he did not have any. He was frisked and the
police officers were able to recover from his pocket white substance suspected to
be shabu. Accused and Kerabu were both brought back to the office of the DEU.
At the DEU, Mendoza wanted to go home but she was not permitted by the
police officers. She was made to stay and she was surprised that the DEU filed
charges against her. She was brought to a place where she underwent
drug testing. She was made to urinate in a bottle. After the drug test, she was
brought back to the office of the DEU where she was detained. She was then
brought to the fiscal's office where she learned of the charges filed against her.
At the fiscal's office she was made to sign a document.
The RTC, found the evidence of the prosecution sufficient to prove the guilt of the
accused for the crimes charged beyond reasonable doubt. She was found guilty
of the charge for the violation of Sections 5 and 11 of R.A. No. 9165, the illegal
sale and possession of dangerous drugs, and sentenced her to life
imprisonment.
Accused appealed the RTC decision to the CA, where she raised the issue of
error on the part of the RTC in admitting the evidence seized despite being
products of an unlawful arrest. The CA dismissed the appeal and affirmed in toto
the trial court's convictions. Hence, the present appeal.
ISSUE: Whether or not a warrant should have been secured first before the
accused was arrested
HELD:
No.
The Court finds the prosecutor's evidence credible and sufficient to convict the
accused of illegal sale of dangerous drugs and possession of the same in
violation of Section 5 and Section 11, of R.A. No. 9165, of the Comprehensive
Dangerous Drugs Act of 2002.
It is significant to reiterate and emphasize that the elements necessary for the
prosecution of illegal sale of drugs, like shabu, were convincingly established.
These are: (1) the identity of the buyer and the seller, the object and
consideration, and (2) the delivery of the thing sold and the payment therefor.

CONSTI 2
What is material to the prosecution for illegal sale of dangerous drugs is the proof
that the transaction or sale actually took place, coupled with the presentation in
court of evidence of corpus delicti.
After a thorough and painstaking review of evidence on record, the Court affirms
the conviction of accused. Indeed, the prosecution has presented sufficient proof
of her guilt beyond reasonable doubt.
Accused alleged that the trial court erred in appreciating the evidence presented
by the prosecution as they were seized as a result of an unlawful arrest. She
insists that a valid warrant should have been secured first before they proceeded
to arrest her.
This argument is totally faulty and is without even an iota of credibility. The
warrantless arrest conducted on accused was valid. Section 5, Rule 113 of the
Rules of Criminal Proceedure enumerates the situations when a person may xd
be arrested without a warrant, thus:
“SECTION 5. Arrest without warrant; when lawful. - A peace officer or a private
person may, without a warrant, arrest a person:
1. When, in his presence, the person to be arrested has committed, is
actually committing, or is attempting to commit an offense;
2. When an offense has just been committed and he has probable cause to
believe based on personal knowledge of facts or circumstances that the person
to be arrested has committed it;
3. When the person to be arrested is a prisoner who has escaped from a

penal establishment or place where he is serving final judgement or is
temporarily confined while his case is pending, or has escaped while being
transferred from one confinement to another.”
Paragraph (a) of Section 5, is commonly known as an in flagrante delicto arrest.

For a warrantless arrest of an accused caught in flagrante delicto to be valid, two
requisites must concur: (1) the person to be arrested must execute an overt act
indicating that he has just committed, is actually committing, or is attempting to
commit a crime; and (2) such overt act is done in the presence or within the view
of the arresting officer.
In the instant case, the prosecution completely and fully established that accused
was arrested in flagrante delicto.
At any rate, accused failed to raise any objection to the manner of her arrest
before arraignment. In fact, she participated in the trial. She even took the
witness stand and testified in her own behalf. She is now estopped from assailing
the legality of her arrest as she waived any irregularity, if any, that may have
tainted her arrest
Significantly, the proof of an in flagrante delicto arrest, removes whatever
credibility there may have been about the testimony of the accused of the alleged
circumstances that made her go with the police to the DEU unit. Her version that
she was a frame-up victim cannot stand against the testimony of the police,
supported by evidence of corpus delicti.
The Decision appealed was AFFIRMED.

CONSTI 2
RATIO: Rule 113 Section. 5. Arrest without warrant; when lawful. A peace officer
or a private person may, without a warrant, arrest a person:
1. When, in his presence, the person to be arrested has committed, is

actually committing, or is attempting to commit an offense;
2. When an offense has just been committed and he has probable cause to
believe based on personal knowledge of facts or circumstances that the person
to be arrested has committed it;
3. When the person to be arrested is a prisoner who has escaped from a

penal establishment or place where he is serving final judgment or is temporarily
confined while his case is pending, or has
escaped while being transferred from one confinement to another. In cases

falling under paragraphs (a) and (b) above, the person arrested without a warrant
shall be forthwith delivered to the nearest police station or jail and shall be
proceeded against in accordance with section 7 of Rule 112.
Rule 126 Section 13. Search incident to lawful arrest. A person lawfully arrested
may be searched for dangerous weapons or anything which may have been
used or constitute proof in the commission of an offense without a search
warrant.

CONSTI 2
THE PEOPLE OF THE PHILIPPINES
vs.
BASHER BONGCARAWAN y MACARAMBON
G.R. No. 143944, July 11, 2002
FACTS: The accused was convicted of violation of Section 16, Article III of
Republic Act No. 6425 (Dangerous Drugs Act). The antecedent facts of his
conviction are as follows:
Evidence for the prosecution shows that on March 11, 1999, an interisland
passenger ship, M/V Super Ferry 5, sailed from Manila to Iligan City. At about
3:00 a.m. on March 13, 1999, the vessel was about to dock at the port of Iligan
City when its security officer, Diesmo, received a complaint from passenger
Canoy about her missing jewelry. Canoy suspected one of her co-passengers at
cabin no. 106 as the culprit. Diesmo and four (4) other members of the vessel
security force accompanied Canoy to search for the suspect whom they later
found at the economy section. The suspect was identified as the accused,
Basher Bongcarawan. The accused was informed of the complaint and was
invited to go back to cabin no. 106. With his consent, he was bodily searched,
but no jewelry was found. He was then escorted by 2 security agents back to the
economy section to get his baggage. The accused took a Samsonite suitcase
and brought this back to the cabin. When requested by the security, the accused
opened the suitcase, revealing a brown bag and small plastic packs containing
white crystalline substance. Suspecting the substance to be “shabu,” the security
personnel immediately reported the matter to the ship captain and took pictures
of the accused beside the suitcase and its contents. They also called the
Philippine Coast Guard for assistance.
But the accused countered this by saying that the Samsonite suitcase containing
the methamphetamine hydrochloride or “shabu” was forcibly opened and
searched without his consent, and hence, in violation of his constitutional right
against unreasonable search and seizure. Any evidence acquired pursuant to
such unlawful search and seizure, he claims, is inadmissible in evidence against
him.
ISSUE: WON the conviction was valid
HELD: YES
The right against unreasonable search and seizure is a fundamental right
protected by the Constitution. Evidence acquired in violation of this right shall be
inadmissible for any purpose in any proceeding. Whenever this right is
challenged, an individual may choose between invoking the constitutional
protection or waiving his right by giving consent to the search and seizure. It
should be stressed, however, that protection is against transgression committed
by the government or its agent. The constitutional proscription against unlawful
searches and seizures applies as a restraint directed only against the
government and its agencies tasked with the enforcement of the law. Thus, it

CONSTI 2
could only be invoked against the State to whom the restraint against arbitrary
and unreasonable exercise of power is imposed.
In the case before us, the baggage of the accused-appellant was searched by
the vessel security personnel. It was only after they found “shabu” inside the
suitcase that they called the Philippine Coast Guard for assistance. The search
and seizure of the suitcase and the contraband items was therefore carried out
without government intervention, and hence, the constitutional protection against
unreasonable search and seizure does not apply.
There is no merit in the contention of the accused-appellant that the search and
seizure performed by the vessel security personnel should be considered as one
conducted by the police authorities for like the latter, the former are armed and
tasked to maintain peace and order. The vessel security officer in the case at bar
is a private employee and does not discharge any governmental function.
NOTE: In a prosecution for illegal possession of dangerous drugs, the following
facts must be proven beyond reasonable doubt, viz:
(1) that the accused is in possession of the object identified as a prohibited or a
regulated drug;
(2) that such possession is not authorized by law; and
(3) that the accused freely and consciously possessed the said drug.
The things in possession of a person are presumed by law to be owned by him.

To overcome this presumption, it is necessary to present clear and convincing
evidence to the contrary. In this case, the accused points to a certain Alican
“Alex” Macapudi as the owner of the contraband, but presented no evidence to
support his claim. No witnesses were presented to prove that there is such a
living, breathing, flesh and blood person named Alex Macap[u]di who entrusted
the Samsonite to the accused. Surely, if he does exist, he has friends, fellow
businessmen and acquaintances who could testify and support the claim of the
accused. Mere denial of ownership will not suffice especially if, as in the case at
bar, it is the keystone of the defense of the accused-appellant. Stories can easily
be fabricated. It will take more than bare-bone allegations to convince this Court
that a courier of dangerous drugs is not its owner and has no knowledge or intent
to possess the same.

CONSTI 2
SONY COMPUTER ENTERTAINMENT, INC., Petitioner,
vs.
SUPERGREEN, INCORPORATED
G.R. No. 161823 March 22, 2007
Facts:
Petitioner Sony Computer Entertainment, Inc., filed a case against respondent
Supergreen, Incorporated in violation of Republic Act No. 8293.
According to Sony, Respondent imitated the general appearance of petitioner’s
goods and that respondent sold the goods allegedly in Mandaluyong City,
Metro Manila. Furthermore, the NBI found that respondent engaged in the
reproduction and distribution of counterfeit "PlayStation" game software,
consoles and accessories in violation of Sony Computer’s intellectual property
rights.
Thus, NBI applied with the Regional Trial Court (RTC) of Manila, Branch 1 for
warrants to search respondent’s premises in Parañaque City and Cavite and
simultaneously served the search warrants on the subject premises and seized a
replicating machine and several units of counterfeit "PlayStation" consoles, joy
pads, housing, labels and game software.
Respondent assails the validity of the warrant due to wrong venue and counters
that the applications should be filed and provided the territorial limitations on
search warrants. Even granting that petitioner has compelling reasons,
respondent maintains that petitioner cannot file the application with the RTC
of Manila because Cavite belongs to another judicial region. Respondent
also argues that the doctrine on continuing crime is applicable only to the
institution of a criminal action, not to search warrant applications which is
governed by Rule 126, and in this case Section.
Issue:
Whether or not the offenses involved in the subject search warrants are
"continuing crimes" .
Held:
We agree with petitioner that this case involves a transitory or continuing offense
of unfair competition under Section 168 of Republic Act No. 8293, which
provides,
SEC. 168. Unfair Competition, Rights, Regulation and Remedies. – …
168.2. Any person who shall employ deception or any other means contrary to
good faith by which he shall pass off the goods manufactured by him or in which
he deals, or his business, or services for those of the one having established
such goodwill, or who shall commit any acts calculated to produce said result,
shall be guilty of unfair competition, and shall be subject to an action therefor.
168.3. In particular, and without in any way limiting the scope of protection
against unfair competition, the following shall be deemed guilty of unfair
competition:
(a) Any person, who is selling his goods and gives them the general appearance
of goods of another manufacturer or dealer, either as to the goods themselves or
in the wrapping of the packages in which they are contained, or the devices or
words thereon, or in any other feature of their appearance, which would be likely

CONSTI 2
to influence purchasers to believe that the goods offered are those of a
manufacturer or dealer, other than the actual manufacturer or dealer, or who
otherwise clothes the goods with such appearance as shall deceive the public
and defraud another of his legitimate trade, or any subsequent vendor of such
goods or any agent of any vendor engaged in selling such goods with a like
purpose;
(b) Any person who by any artifice, or device, or who employs any other means
calculated to induce the false belief that such person is offering the services of
another who has identified such services in the mind of the public; or
(c) Any person who shall make any false statement in the course of trade or who
shall commit any other act contrary to good faith of a nature calculated to
discredit the goods, business or services of another.
Pertinent too is Article 189 (1) of the Revised Penal Code that enumerates the
elements of unfair competition, to wit:
(a) That the offender gives his goods the general appearance of the goods of
another manufacturer or dealer;
(b) That the general appearance is shown in the (1) goods themselves, or in the
(2) wrapping of their packages, or in the (3) device or words therein, or in (4) any
other feature of their appearance;
(c) That the offender offers to sell or sells those goods or gives other persons a
chance or opportunity to do the same with a like purpose; and
(d) That there is actual intent to deceive the public or defraud a competitor.
Respondent’s imitation of the general appearance of petitioner’s goods was done
allegedly in Cavite. It sold the goods allegedly in Mandaluyong City, Metro
Manila. The alleged acts would constitute a transitory or continuing offense.
Thus, clearly, under Section 2 (b) of Rule 126, Section 168 of Rep. Act No. 8293
and Article 189 (1) of the Revised Penal Code, petitioner may apply for a search
warrant in any court where any element of the alleged offense was committed,
including any of the courts within the National Capital Region (Metro Manila).

CONSTI 2
Sps Marimlavs People
Facts: Special Investigator (SI) Ray Lagasca filed for a search warrant to search
the house of petitioners and certain premises on Maria Aquino St., Pampanga
both for violation of Section 16, Article III of RA 6425. All requisites for the
issuance of a valid search warrant were met. After searching petitioners’ house
they were able to seize various amounts of dried flowering tops and cash at
around 15,000. An information for violation of RA 6425 was filed against
Petitioners, who in turn filed a motion to quash search warrants and to suppress
evidence illegally seized.
Issues:
1. Whether or not the court had jurisdiction to issue the search warrant
2. Whether or not the application for the search warrant was defective
considering that it was not personally endorsed by the NBI Head but only by the
Deputy Director
3. Whether AM No. 99-10-09 SC enacted on Jan 25, 2000 was repealed when
the Revised Rules on Criminal Procedure took effect on December 1, 2000? And
that the latter should govern the case.
Ruling:
(1) The public prosecutor was able to point out that the search warrant issued by
Judge Mario Guaria III, the Executive Judge of the Manila Regional Trial Court, is
in order considering that AM 991009SC allows or authorizes executive judges
and vice executive judges of the Regional Trial Court of Manila and Quezon City
to issue warrants which may be served in places outside their territorial
jurisdiction in cases where the same was filed and, among others, by the NBI.
(2) Under Section 31, Chapter 6, Book IV of the Administrative Code of 1987, an
assistant head or other subordinate in every bureau may perform such duties as
may be specified by their superior or head, as long as it is not inconsistent with
law.
Director Wycocos act of delegating his task of endorsing the application for
search warrant to Deputy Director Nasol is allowed by the above quoted
provision of law unless it is shown to be inconsistent with any law. Thus, Deputy
Director Nasols endorsement had the same force and effect as an endorsement
issued by Director Wycoco himself
(3) They argue that the Revised Rules on Criminal Procedure, which took effect
on December 1, 2000, should have been applied, being the later law. Hence, the
enforcement of the search warrant in Angeles City, which was outside the
territorial jurisdiction of RTC Manila, was in violation of the law.

CONSTI 2
A.M. No. 991009SC authorizes the Executive Judge and Vice Executive Judges
of the RTCs of Manila and Quezon City to act on all applications for search
warrants involving heinous crimes, illegal gambling, dangerous drugs and illegal
possession of firearms on application filed by the PNP, NBI, PAOCTF, and
REACTTF.
Rule 126 of the Revised Rules on Criminal Procedure provides that the
application for search warrant shall be filed with: (a) any court within whose
territorial jurisdiction a crime was committed, and (b) for compelling reasons, any
court within the judicial region where the crime was committed if the place of the
commission of the crime is known, or any court within the judicial region where
the warrant shall be enforced.
A.M. No. 991009SC provides that the guidelines on the enforceability of search
warrants provided therein shall continue until further orders from this Court. In
fact, the guidelines in A.M. No. 991009SC are reiterated in A.M. No. 03802SC
entitled Guidelines On The Selection And Designation Of Executive Judges And
Defining Their Powers, Prerogatives And Duties, which explicitly stated that the
guidelines in the issuance of search warrants in special criminal cases by the
RTCs of Manila and Quezon City shall be an exception to Section 2 of Rule 126
of the Rules of Court. Petition is dismissed.

CONSTI 2

Page 5

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Page 5

Uploaded by

Copyright:

Available Formats

British American Tobacco Corporation v.

Finance Secretary Camacho, BIR

FELICIANA L. MORGAN Page 1

1. The pertinent portions of RA 8240, as amended by RA 9334, discriminates

FELICIANA L. MORGAN Page 2

Nature of the Proceeding: Petition for Writ of Preliminary Injunction

Ruling: A decision is hereby rendered, ordering as follows:

2. The writ of preliminary injunction is RECALLED and NULLIFIED; and

FELICIANA L. MORGAN Page 3

FELICIANA L. MORGAN Page 4

FELICIANA L. MORGAN Page 5

Furthermore, it cannot be properly asserted that petitioner’s suspension was an undue

FELICIANA L. MORGAN Page 6

Issues: 1. (Procedural) WON the MR of the June 2, 2009 Resolution should be

2. The cityhood laws are constitutional.

FELICIANA L. MORGAN Page 7

FELICIANA L. MORGAN Page 8

LABOR ARBITER: Serrano was declared illegally dismissed and was awarded

FELICIANA L. MORGAN Page 9

Respondents argue that respondent cannot belatedly question the constitutionality of

2. Whether or not Section 10 of Rep. Act No. 8402 is constitutional.

3. Whether or not Serrano is entitled to salaries equivalent of three months of the

a. There is an actual controversy

There is an actual controversy re the Labor and CA’s computation of Serrano’s

FELICIANA L. MORGAN Page 10

The subject clause VIOLATES the Equal Protection Clause and Right of an

There is a valid classification if the classification is

FELICIANA L. MORGAN Page 11

The Court declared the provision unconstitutional clause VIOLATES the Equal

3. Serrano is entitled to his salaries for the entire unexpired period, not

FELICIANA L. MORGAN Page 12

Petitioner is an association of real estate developers and builders in the Philippines

Contentions re: MCIT

Section 27(E) of RA 8424 provides for MCIT on domestic corporations

Contentions re: CWT

FELICIANA L. MORGAN Page 13

Secretary of Finance (Secretary), on the recommendation of the Commissioner of

RR 2-98 implementing certain provisions of RA 8424 involving the withholding of taxes

Income payment subject to [CWT]

FELICIANA L. MORGAN Page 14

In the case of domestic corporations

whether or not the imposition of the MCIT on domestic corporations is unconstitutional

The MCIT on domestic corporations is a new concept introduced by RA 8424 to the

FELICIANA L. MORGAN Page 15

MCIT Is Not Violative of Due Process

Taxes are the lifeblood of the government.

Taxation is an inherent attribute of sovereignty.[34] It is a power that is purely

There must be a factual foundation to such an unconstitutional taint.[42] This merely

FELICIANA L. MORGAN Page 16

FELICIANA L. MORGAN Page 17

a) Taxes withheld on certain income payments are intended to equal or at least

FELICIANA L. MORGAN Page 18

a) Taxes withheld on certain income payments are intended to equal or at least

As previously stated, FWT is imposed on the sale of capital assets.

CWT is imposed on the sale of ordinary assets.

FELICIANA L. MORGAN Page 19

The MCIT on domestic corporations is a new concept introduced by RA 8424 to the

THEORY OF FAVORABLE BUSINESS CLIMATE

FELICIANA L. MORGAN Page 20

For income to be taxable, the following requisites must exist:

(1) there must be gain;

(2) the gain must be realized or received and