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EN BANC
[G.R. No. 127685. July 23, 1998]
BLAS F. OPLE, petitioner, vs. RUBEN D. TORRES, ALEXANDER
AGUIRRE, HECTOR VILLANUEVA, CIELITO HABITO,
ROBERT BARBERS, CARMENCITA REODICA, CESAR
SARINO, RENATO VALENCIA, TOMAS P. AFRICA, HEAD
OF THE NATIONAL COMPUTER
CENTER and CHAIRMAN OF THE COMMISSION ON
AUDIT, respondents.
DECISION
PUNO, J.:
The petition at bar is a commendable effort on the part of
Senator Blas F. Ople to prevent the shrinking of the right to privacy,
which the revered Mr. Justice Brandeis considered as "the most
comprehensive of rights and the right most valued by civilized
men."[1] Petitioner Ople prays that we invalidate Administrative Order
No. 308 entitled "Adoption of a National Computerized Identification
Reference System" on two important constitutional grounds, viz: one,
it is a usurpation of the power of Congress to legislate, and two, it
impermissibly intrudes on our citizenry's protected zone of
privacy. We grant the petition for the rights sought to be vindicated
by the petitioner need stronger barriers against further erosion.
A.O. No. 308 was issued by President Fidel V. Ramos on
December 12, 1996 and reads as follows:
"ADOPTION OF A NATIONAL COMPUTERIZED IDENTIFICATION
REFERENCE SYSTEM
WHEREAS, there is a need to provide Filipino citizens and foreign
residents with the facility to conveniently transact business with basic
service and social security providers and other government
instrumentalities;
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WHEREAS, this will require a computerized system to properly and
efficiently identify persons seeking basic services on social security
and reduce, if not totally eradicate, fraudulent transactions and
misrepresentations;
WHEREAS, a concerted and collaborative effort among the various
basic services and social security providing agencies and other
government instrumentalities is required to achieve such a system;
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic
of the Philippines, by virtue of the powers vested in me by law, do
hereby direct the following:
SECTION 1. Establishment of a National Computerized Identification
Reference System. A decentralized Identification Reference System
among the key basic services and social security providers is hereby
established.
SEC. 2 Inter-Agency Coordinating Committee. An Inter-Agency
Coordinating Committee (IACC) to draw-up the implementing
guidelines and oversee the implementation of the System is hereby
created, chaired by the Executive Secretary, with the following as
members:
Head, Presidential Management Staff
Secretary, National Economic Development
Authority
Secretary, Department of the Interior and
Local Government
Secretary, Department of Health
Administrator, Government Service Insurance
System,
Administrator, Social Security System,
Administrator, National Statistics Office
Managing Director, National Computer
Center.
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SEC. 3. Secretariat. The National Computer Center (NCC) is hereby
designated as secretariat to the IACC and as such shall provide
administrative and technical support to the IACC.
SEC. 4. Linkage Among Agencies. The Population Reference
Number (PRN) generated by the NSO shall serve as the common
reference number to establish a linkage among concerned
agencies. The IACC Secretariat shall coordinate with the different
Social Security and Services Agencies to establish the standards in
the use of Biometrics Technology and in computer application
designs of their respective systems.
SEC. 5. Conduct of Information Dissemination Campaign. The Office
of the Press Secretary, in coordination with the National Statistics
Office, the GSIS and SSS as lead agencies and other concerned
agencies shall undertake a massive tri-media information
dissemination campaign to educate and raise public awareness on
the importance and use of the PRN and the Social Security
Identification Reference.
SEC. 6. Funding. The funds necessary for the implementation of the
system shall be sourced from the respective budgets of the
concerned agencies.
SEC. 7. Submission of Regular Reports. The NSO, GSIS and SSS
shall submit regular reports to the Office of the President, through
the IACC, on the status of implementation of this undertaking.
SEC. 8. Effectivity. This Administrative Order shall take effect
immediately.
DONE in the City of Manila, this 12th day of December in the year of
Our Lord, Nineteen Hundred and Ninety-Six.
(SGD.)
FIDEL V. RAMOS"
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A.O. No. 308 was published in four newspapers of general
circulation on January 22, 1997 and January 23, 1997. On January
24, 1997, petitioner filed the instant petition against respondents,
then Executive Secretary Ruben Torres and the heads of the
government agencies, who as members of the Inter-Agency
Coordinating Committee, are charged with the implementation of
A.O. No. 308. On April 8, 1997, we issued a temporary restraining
order enjoining its implementation.
Petitioner contends:
"A. THE ESTABLISHMENT OF A NATIONAL COMPUTERIZED
IDENTIFICATION REFERENCE SYSTEM REQUIRES A
LEGISLATIVE ACT. THE ISSUANCE OF A.O. NO. 308 BY THE
PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES IS,
THEREFORE, AN UNCONSTITUTIONAL USURPATION OF THE
LEGISLATIVE POWERS OF THE CONGRESS OF THE REPUBLIC
OF THE PHILIPPINES.
B. THE APPROPRIATION OF PUBLIC FUNDS BY THE
PRESIDENT FOR THE IMPLEMENTATION OF A.O. NO. 308 IS AN
UNCONSTITUTIONAL USURPATION OF THE EXCLUSIVE RIGHT
OF CONGRESS TO APPROPRIATE PUBLIC FUNDS FOR
EXPENDITURE.
C. THE IMPLEMENTATION OF A.O. NO. 308 INSIDIOUSLY LAYS
THE GROUNDWORK FOR A SYSTEM WHICH WILL VIOLATE
THE BILL OF RIGHTS ENSHRINED IN THE CONSTITUTION." [2]
Respondents counter-argue:
A. THE INSTANT PETITION IS NOT A JUSTICIABLE CASE AS
WOULD WARRANT A JUDICIAL REVIEW;
B. A.O. NO. 308 [1996] WAS ISSUED WITHIN THE EXECUTIVE
AND ADMINISTRATIVE POWERS OF THE PRESIDENT WITHOUT
ENCROACHING ON THE LEGISLATIVE POWERS OF
CONGRESS;
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C. THE FUNDS NECESSARY FOR THE IMPLEMENTATION OF
THE IDENTIFICATION REFERENCE SYSTEM MAY BE SOURCED
FROM THE BUDGETS OF THE CONCERNED AGENCIES;
D. A.O. NO. 308 [1996] PROTECTS AN INDIVIDUAL'S INTEREST
IN PRIVACY.[3]
We now resolve.
I encompassing in scope, affects the life and liberty of every Filipino
As is usual in constitutional litigation, respondents raise the
threshold issues relating to the standing to sue of the petitioner and
the justiciability of the case at bar. More specifically, respondents
aver that petitioner has no legal interest to uphold and that the
implementing rules of A.O. No. 308 have yet to be promulgated.
These submissions do not deserve our sympathetic
ear. Petitioner Ople is a distinguished member of our Senate. As a
Senator, petitioner is possessed of the requisite standing to bring suit
raising the issue that the issuance of A.O. No. 308 is a usurpation of
legislative power.[4] As taxpayer and member of the Government
Service Insurance System (GSIS), petitioner can also impugn the
legality of the misalignment of public funds and the misuse of GSIS
funds to implement A.O. No. 308.[5]
The ripeness for adjudication of the petition at bar is not
affected by the fact that the implementing rules of A.O. No. 308 have
yet to be promulgated. Petitioner Ople assails A.O. No. 308 as
invalid per se and as infirmed on its face. His action is not premature
for the rules yet to be promulgated cannot cure its fatal
defects. Moreover, the respondents themselves have started the
implementation of A.O. No. 308 without waiting for the rules. As early
as January 19, 1997, respondent Social Security System (SSS)
caused the publication of a notice to bid for the manufacture of the
National Identification (ID) card.[6] Respondent Executive Secretary
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Torres has publicly announced that representatives from the GSIS
and the SSS have completed the guidelines for the national
identification system.[7] All signals from the respondents show their
unswerving will to implement A.O. No. 308 and we need not wait for
the formality of the rules to pass judgment on its constitutionality. In
this light, the dissenters insistence that we tighten the rule on
standing is not a commendable stance as its result would be to
throttle an important constitutional principle and a fundamental right.
II
We now come to the core issues. Petitioner claims that
A.O. No. 308 is not a mere administrative order but a law and
hence, beyond the power of the President to issue. He alleges
that A.O. No. 308 establishes a system of identification that is all-
citizen and foreign resident, and more particularly, violates their right
to privacy.
Petitioner's sedulous concern for the Executive not to trespass
on the lawmaking domain of Congress is understandable. The
blurring of the demarcation line between the power of the Legislature
to make laws and the power of the Executive to execute laws will
disturb their delicate balance of power and cannot be
allowed. Hence, the exercise by one branch of government of power
belonging to another will be given a stricter scrutiny by this Court.
The line that delineates Legislative and Executive power is not
indistinct. Legislative power is "the authority, under the Constitution,
to make laws, and to alter and repeal them." [8] The Constitution, as
the will of the people in their original, sovereign and unlimited
capacity, has vested this power in the Congress of the Philippines.
[9]
 The grant of legislative power to Congress is broad, general and
comprehensive.[10] The legislative body possesses plenary power for
all purposes of civil government. [11] Any power, deemed to be
legislative by usage and tradition, is necessarily possessed by
Congress, unless the Constitution has lodged it elsewhere. [12] In
fine, except as limited by the Constitution, either expressly or
impliedly, legislative power embraces all subjects and extends to
matters of general concern or common interest.[13]
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While Congress is vested with the power to enact laws, the
President executes the laws.[14] The executive power is vested in
the President.[15] It is generally defined as the power to enforce and
administer the laws.[16] It is the power of carrying the laws into
practical operation and enforcing their due observance. [17]
As head of the Executive Department, the President is the Chief
Executive. He represents the government as a whole and sees to it
that all laws are enforced by the officials and employees of his
department.[18] He has control over the executive department,
bureaus and offices. This means that he has the authority to assume
directly the functions of the executive department, bureau and office,
or interfere with the discretion of its officials. [19] Corollary to the power
of control, the President also has the duty of supervising the
enforcement of laws for the maintenance of general peace and
public order. Thus, he is granted administrative power over
bureaus and offices under his control to enable him to discharge his
duties effectively.[20]
Administrative power is concerned with the work of
applying policies and enforcing orders as determined by proper
governmental organs.[21] It enables the President to fix a uniform
standard of administrative efficiency and check the official
conduct of his agents.[22] To this end, he can issue
administrative orders, rules and regulations.
Prescinding from these precepts, we hold that A.O. No. 308
involves a subject that is not appropriate to be covered by an
administrative order. An administrative order is:
"Sec. 3. Administrative Orders.-- Acts of the President which relate to
particular aspects of governmental operation in pursuance of his
duties as administrative head shall be promulgated in administrative
orders."[23]
An administrative order is an ordinance issued by the President
which relates to specific aspects in the administrative operation of
government. It must be in harmony with the law and should be
for the sole purpose ofimplementing the law and carrying out
the legislative policy.[24] We reject the argument that A.O. No.
308 implements the legislative policy of the Administrative Code
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of 1987. The Code is a general law and "incorporates in a unified
document the major structural, functional and procedural principles
of governance"[25] and "embodies changes in administrative
structures and procedures designed to serve the people." [26] The
Code is divided into seven (7) Books: Book I deals with Sovereignty
and General Administration, Book II with the Distribution of Powers
of the three branches of Government, Book III on the Office of the
President, Book IVon the Executive Branch, Book V on the
Constitutional Commissions, Book VI on National Government
Budgeting, and Book VII on Administrative Procedure. These Books
contain provisions on the organization, powers and general
administration of the executive, legislative and judicial branches of
government, the organization and administration of departments,
bureaus and offices under the executive branch, the organization
and functions of the Constitutional Commissions and other
constitutional bodies, the rules on the national government budget,
as well as guidelines for the exercise by administrative agencies of
quasi-legislative and quasi-judicial powers. The Code covers both
the internal administration of government, i.e, internal organization,
personnel and recruitment, supervision and discipline, and the
effects of the functions performed by administrative officials on
private individuals or parties outside government.[27]
It cannot be simplistically argued that A.O. No. 308 merely
implements the Administrative Code of 1987. It establishes for the
first time a National Computerized Identification Reference
System. Such a System requires a delicate adjustment of various
contending state policies-- the primacy of national security, the
extent of privacy interest against dossier-gathering by government,
the choice of policies, etc. Indeed, the dissent of Mr. Justice
Mendoza states that the A.O. No. 308 involves the all-important
freedom of thought. As said administrative order redefines the
parameters of some basic rights of our citizenry vis-a-vis the State as
well as the line that separates the administrative power of the
President to make rules and the legislative power of Congress, it
ought to be evident that it deals with a subject that should be
covered by law.
Nor is it correct to argue as the dissenters do that A.O. No. 308
is not a law because it confers no right, imposes no duty, affords no
protection, and creates no office. Under A.O. No. 308, a citizen
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cannot transact business with government agencies delivering basic
services to the people without the contemplated identification
card. No citizen will refuse to get this identification card for no one
can avoid dealing with government. It is thus clear as daylight that
without the ID, a citizen will have difficulty exercising his rights and
enjoying his privileges. Given this reality, the contention that A.O.
No. 308 gives no right and imposes no duty cannot stand.
Again, with due respect, the dissenting opinions unduly expand
the limits of administrative legislation and consequently erodes the
plenary power of Congress to make laws. This is contrary to the
established approach defining the traditional limits of administrative
legislation. As well stated by Fisher: "x x x Many regulations
however, bear directly on the public. It is here that
administrative legislation must be restricted in its scope and
application. Regulations are not supposed to be a substitute for
the general policy-making that Congress enacts in the form of a
public law. Although administrative regulations are entitled to
respect, the authority to prescribe rules and regulations is not
an independent source of power to make laws."[28]
III
Assuming, arguendo, that A.O. No. 308 need not be the
subject of a law, still it cannot pass constitutional
muster as an administrative legislation because
facially it violates the right to privacy. The essence of privacy is
the "right to be let alone." [29] In the 1965 case of Griswold v.
Connecticut,[30] the United States Supreme Court gave more
substance to the right of privacy when it ruled that the right has a
constitutional foundation. It held that there is a right of privacy which
can be found within the penumbras of the First, Third, Fourth, Fifth
and Ninth Amendments,[31] viz:
"Specific guarantees in the Bill of Rights have penumbras formed by
emanations from these guarantees that help give them life and
substance x x x. Various guarantees create zones of privacy. The
right of association contained in the penumbra of the First
Amendment is one, as we have seen. The Third Amendment in its
prohibition against the quartering of soldiers `in any house' in time of
peace without the consent of the owner is another facet of that
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privacy. The Fourth Amendment explicitly affirms the `right of the
people to be secure in their persons, houses, papers, and effects,
against unreasonable searches and seizures.' The Fifth Amendment
in its Self-Incrimination Clause enables the citizen to create a zone of
privacy which government may not force him to surrender to his
detriment. The Ninth Amendment provides: `The enumeration in the
Constitution, of certain rights, shall not be construed to deny or
disparage others retained by the people.'"
In the 1968 case of Morfe v. Mutuc,[32] we adopted
the Griswold ruling that there is a constitutional right to
privacy. Speaking thru Mr. Justice, later Chief Justice, Enrique
Fernando, we held:
"xxx
The Griswold case invalidated a Connecticut statute which made the
use of contraceptives a criminal offense on the ground of its
amounting to an unconstitutional invasion of the right of privacy of
married persons; rightfully it stressed "a relationship lying within the
zone of privacy created by several fundamental constitutional
guarantees." It has wider implications though. The constitutional right
to privacy has come into its own.
So it is likewise in our jurisdiction. The right to privacy as such is
accorded recognition independently of its identification with liberty; in
itself, it is fully deserving of constitutional protection. The language of
Prof. Emerson is particularly apt: 'The concept of limited government
has always included the idea that governmental powers stop short of
certain intrusions into the personal life of the citizen. This is indeed
one of the basic distinctions between absolute and limited
government. Ultimate and pervasive control of the individual, in all
aspects of his life, is the hallmark of the absolute state. In contrast, a
system of limited government safeguards a private sector, which
belongs to the individual, firmly distinguishing it from the public
sector, which the state can control. Protection of this private sector--
protection, in other words, of the dignity and integrity of the
individual--has become increasingly important as modern society has
developed. All the forces of a technological age --industrialization,
urbanization, and organization-- operate to narrow the area of
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privacy and facilitate intrusion into it. In modern terms, the capacity
to maintain and support this enclave of private life marks the
difference between a democratic and a totalitarian society.'"
Indeed, if we extend our judicial gaze we will find that the
right of privacy is recognized and enshrined in several
provisions of our Constitution.[33] It is expressly recognized in
Section 3(1) of the Bill of Rights:
"Sec. 3. (1) The privacy of communication and correspondence shall
be inviolable except upon lawful order of the court, or when public
safety or order requires otherwise as prescribed by law."
Other facets of the right to privacy are protected in various provisions
of the Bill of Rights, viz:[34]
"Sec. 1. No person shall be deprived of life, liberty, or property
without due process of law, nor shall any person be denied the equal
protection of the laws.
Sec. 2. The right of the people to be secure in their persons, houses,
papers, and effects against unreasonable searches and seizures of
whatever nature and for any purpose shall be inviolable, and no
search warrant or warrant of arrest shall issue except upon probable
cause to be determined personally 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.
x x x.
Sec. 6. The liberty of abode and of changing the same within the
limits prescribed by law shall not be impaired except upon lawful
order of the court. Neither shall the right to travel be impaired except
in the interest of national security, public safety, or public health, as
may be provided by law.
x x x.
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Sec. 8. The right of the people, including those employed in the
public and private sectors, to form unions, associations, or societies
for purposes not contrary to law shall not be abridged.
Sec. 17. No person shall be compelled to be a witness against
himself."
Zones of privacy are likewise recognized and protected in
our laws. The Civil Code provides that "[e]very person shall respect
the dignity, personality, privacy and peace of mind of his neighbors
and other persons" and punishes as actionable torts several acts by
a person of meddling and prying into the privacy of another. [35] It also
holds a public officer or employee or any private individual liable for
damages for any violation of the rights and liberties of another
person,[36] and recognizes the privacy of letters and other private
communications.[37] The Revised Penal Code makes a crime the
violation of secrets by an officer,[38] the revelation of trade and
industrial secrets,[39] and trespass to dwelling.[40] Invasion of privacy is
an offense in special laws like the Anti-Wiretapping Law,[41] the
Secrecy of Bank Deposit Act[42] and the Intellectual Property Code.
[43]
 The Rules of Court on privileged communication likewise
recognize the privacy of certain information.[44]
Unlike the dissenters, we prescind from the premise that
the right to privacy is a fundamental right guaranteed by the
Constitution, hence, it is the burden of government to show that
A.O. No. 308 is justified by some compelling state interest and
that it is narrowly drawn. A.O. No. 308 is predicated on two
considerations: (1) the need to provide our citizens and foreigners
with the facility to conveniently transact business with basic service
and social security providers and other government instrumentalities
and (2) the need to reduce, if not totally eradicate, fraudulent
transactions and misrepresentations by persons seeking basic
services. It is debatable whether these interests are compelling
enough to warrant the issuance of A.O. No. 308. But what is not
arguable is the broadness, the vagueness, the overbreadth of
A.O. No. 308 which if implemented will put our people's right to
privacy in clear and present danger.
The heart of A.O. No. 308 lies in its Section 4 which provides
for a Population Reference Number (PRN) as a "common reference
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number to establish a linkage among concerned agencies" through
the use of "Biometrics Technology" and "computer application
designs."
Biometry or biometrics is "the science of the application of
statistical methods to biological facts; a mathematical analysis of
biological data."[45] The term "biometrics" has now evolved into a
broad category of technologies which provide precise
confirmation of an individual's identity through the use of the
individual's own physiological and behavioral characteristics.
[46]
 A physiological characteristic is a relatively stable physical
characteristic such as a fingerprint, retinal scan, hand geometry or
facial features. A behavioral characteristic is influenced by the
individual's personality and includes voice print, signature and
keystroke.[47] Most biometric identification systems use a card or
personal identification number (PIN) for initial identification. The
biometric measurement is used to verify that the individual holding
the card or entering the PIN is the legitimate owner of the card or
PIN.[48]
A most common form of biological encoding is finger-
scanning where technology scans a fingertip and turns the unique
pattern therein into an individual number which is called a
biocrypt. The biocrypt is stored in computer data banks[49] and
becomes a means of identifying an individual using a service. This
technology requires one's fingertip to be scanned every time service
or access is provided.[50] Another method is the retinal scan. Retinal
scan technology employs optical technology to map the capillary
pattern of the retina of the eye. This technology produces a unique
print similar to a finger print. [51] Another biometric method is known as
the "artificial nose." This device chemically analyzes the unique
combination of substances excreted from the skin of people. [52] The
latest on the list of biometric achievements is
the thermogram. Scientists have found that by taking pictures of a
face using infra-red cameras, a unique heat distribution pattern is
seen. The different densities of bone, skin, fat and blood vessels all
contribute to the individual's personal "heat signature."[53]
In the last few decades, technology has progressed at a
galloping rate. Some science fictions are now science
facts. Today, biometrics is no longer limited to the use of
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fingerprint to identify an individual. It is a new science that uses
various technologies in encoding any and all biological
characteristics of an individual for identification. It is noteworthy
that A.O. No. 308 does not state what specific biological
characteristics and what particular biometrics technology shall
be used to identify people who will seek its
coverage. Considering the banquet of options available to the
implementors of A.O. No. 308, the fear that it threatens the right
to privacy of our people is not groundless.
A.O. No. 308 should also raise our antennas for a further
look will show that it does not state whether encoding of data is
limited to biological information alone for identification
purposes. In fact, the Solicitor General claims that the adoption of
the Identification Reference System will contribute to the "generation
of population data for development planning." [54] This is an admission
that the PRN will not be used solely for identification but for the
generation of other data with remote relation to the avowed purposes
of A.O. No. 308. Clearly, the indefiniteness of A.O. No. 308 can
give the government the roving authority to store and retrieve
information for a purpose other than the identification of the
individual through his PRN.
The potential for misuse of the data to be gathered under
A.O. No. 308 cannot be underplayed as the dissenters
do. Pursuant to said administrative order, an individual must present
his PRN everytime he deals with a government agency to avail of
basic services and security. His transactions with the government
agency will necessarily be recorded-- whether it be in the computer
or in the documentary file of the agency. The individual's file may
include his transactions for loan availments, income tax returns,
statement of assets and liabilities, reimbursements for medication,
hospitalization, etc. The more frequent the use of the PRN, the
better the chance of building a huge and formidable information
base through the electronic linkage of the files. [55] The data may
be gathered for gainful and useful government purposes; but
the existence of this vast reservoir of personal information
constitutes a covert invitation to misuse, a temptation that may
be too great for some of our authorities to resist.[56]
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We can even grant, arguendo, that the computer data file will
be limited to the name, address and other basic personal information
about the individual.[57] Even that hospitable assumption will not
save A.O. No. 308 from constitutional infirmity for again said order
does not tell us in clear and categorical terms how these
information gathered shall be handled. It does not provide who
shall control and access the data, under what circumstances
and for what purpose. These factors are essential to safeguard the
privacy and guaranty the integrity of the information. [58] Well to note,
the computer linkage gives other government agencies access to the
information. Yet, there are no controls to guard against leakage
of information. When the access code of the control programs of
the particular computer system is broken, an intruder, without fear of
sanction or penalty, can make use of the data for whatever purpose,
or worse, manipulate the data stored within the system. [59]
It is plain and we hold that A.O. No. 308 falls short of assuring
that personal information which will be gathered about our people will
only be processed for unequivocally specified purposes.[60] The
lack of proper safeguards in this regard of A.O. No. 308 may
interfere with the individual's liberty of abode and travel by enabling
authorities to track down his movement; it may also enable
unscrupulous persons to access confidential information and
circumvent the right against self-incrimination; it may pave the way
for "fishing expeditions" by government authorities and evade the
right against unreasonable searches and seizures. [61] The
possibilities of abuse and misuse of the PRN, biometrics and
computer technology are accentuated when we consider
that the individual lacks control over what can be read or placed
on his ID, much less verify the correctness of the data encoded.
[62]
 They threaten the very abuses that the Bill of Rights seeks to
prevent.[63]
The ability of a sophisticated data center to generate a
comprehensive cradle-to-grave dossier on an individual and
transmit it over a national network is one of the most graphic threats
of the computer revolution.[64]The computer is capable of producing a
comprehensive dossier on individuals out of information given at
different times and for varied purposes. [65] It can continue adding to
the stored data and keeping the information up to date. Retrieval of
stored data is simple. When information of a privileged character
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finds its way into the computer, it can be extracted together with
other data on the subject. [66] Once extracted, the information is putty
in the hands of any person. The end of privacy begins.
Though A.O. No. 308 is undoubtedly not narrowly drawn, the
dissenting opinions would dismiss its danger to the right to privacy
as speculative and hypothetical. Again, we cannot countenance such
a laidback posture.The Court will not be true to its role as
the ultimate guardian of the people's liberty if it would not
immediately smother the sparks that endanger their rights but would
rather wait for the fire that could consume them.
We reject the argument of the Solicitor General that an
individual has a reasonable expectation of privacy with regard
to the National ID and the use of biometrics technology as it
stands on quicksand.The reasonableness of a person's
expectation of privacy depends on a two-part test: (1) whether by his
conduct, the individual has exhibited an expectation of privacy; and
(2) whether this expectation is one that society recognizes as
reasonable.[67] The factual circumstances of the case determines the
reasonableness of the expectation. [68] However, other factors, such
as customs, physical surroundings and practices of a particular
activity, may serve to create or diminish this expectation. [69] The use
of biometrics and computer technology in A.O. No. 308 does not
assure the individual of a reasonable expectation of privacy. [70] As
technology advances, the level of reasonably expected privacy
decreases.[71] The measure of protection granted by the reasonable
expectation diminishes as relevant technology becomes more widely
accepted.[72] The security of the computer data file depends not only
on the physical inaccessibility of the file but also on the advances in
hardware and software computer technology. A.O. No. 308 is so
widely drawn that a minimum standard for a reasonable
expectation of privacy, regardless of technology used, cannot
be inferred from its provisions.
The rules and regulations to be drawn by the IACC cannot
remedy this fatal defect. Rules and regulations merely implement
the policy of the law or order. On its face, A.O. No. 308 gives the
IACC virtually unfettered discretion to determine the metes and
bounds of the ID System.
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Nor do our present laws provide adequate safeguards for
a reasonable expectation of privacy. Commonwealth Act No. 591
penalizes the disclosure by any person of data furnished by the
individual to the NSO with imprisonment and fine. [73] Republic Act No.
1161 prohibits public disclosure of SSS employment records and
reports.[74] These laws, however, apply to records and data with the
NSO and the SSS. It is not clear whether they may be applied to
data with the other government agencies forming part of the National
ID System. The need to clarify the penal aspect of A.O. No. 308 is
another reason why its enactment should be given to Congress.
Next, the Solicitor General urges us to validate A.O. No. 308's
abridgment of the right of privacy by using the rational relationship
test.[75] He stressed that the purposes of A.O. No. 308 are: (1) to
streamline and speed
up the implementation of basic government services, (2) eradicate
fraud by avoiding duplication of services, and (3) generate population
data for development planning. He concludes that these purposes
justify the incursions into the right to privacy for the means are
rationally related to the end.[76]
We are not impressed by the argument. In Morfe v. Mutuc,
[77]
 we upheld the constitutionality of R.A. 3019, the Anti-Graft and
Corrupt Practices Act, as a valid police power measure. We declared
that the law, in compelling a public officer to make an annual report
disclosing his assets and liabilities, his sources of income and
expenses, did not infringe on the individual's right to privacy. The law
was enacted to promote morality in public administration by curtailing
and minimizing the opportunities for official corruption and
maintaining a standard of honesty in the public service. [78]
The same circumstances do not obtain in the case at bar. For
one, R.A. 3019 is a statute, not an administrative order. Secondly,
R.A. 3019 itself is sufficiently detailed. The law is clear on what
practices were prohibited and penalized, and it was narrowly drawn
to avoid abuses. In the case at bar, A.O. No. 308 may have been
impelled by a worthy purpose, but, it cannot pass constitutional
scrutiny for it is not narrowly drawn. And we now hold that when
the integrity of a fundamental right is at stake, this court will
give the challenged law, administrative order, rule or regulation
a stricter scrutiny. It will not do for the authorities to invoke the
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presumption of regularity in the performance of official
duties. Nor is it enough for the authorities to prove that their act
is not irrational for a basic right can be diminished, if not
defeated, even when the government does not act
irrationally. They must satisfactorily show the presence of
compelling state interests and that the law, rule, or regulation is
narrowly drawn to preclude abuses. This approach is demanded
by the 1987 Constitution whose entire matrix is designed to protect
human rights and to prevent authoritarianism. In case of doubt, the
least we can do is to lean towards the stance that will not put in
danger the rights protected by the Constitution.
The case of Whalen v. Roe[79] cited by the Solicitor General is
also off-line. In Whalen, the United States Supreme Court was
presented with the question of whether the State of New York could
keep a centralized computer record of the names and addresses of
all persons who obtained certain drugs pursuant to a doctor's
prescription. The New York State Controlled Substances Act of 1972
required physicians to identify patients obtaining prescription drugs
enumerated in the statute, i.e., drugs with a recognized medical use
but with a potential for abuse, so that the names and addresses of
the patients can be recorded in a centralized computer file of the
State Department of Health. The plaintiffs, who were patients and
doctors, claimed that some people might decline necessary
medication because of their fear that the computerized data may be
readily available and open to public disclosure; and that once
disclosed, it may stigmatize them as drug addicts. [80] The plaintiffs
alleged that the statute invaded a constitutionally protected zone of
privacy, i.e, the individual interest in avoiding disclosure of personal
matters, and the interest in independence in making certain kinds of
important decisions. The U.S. Supreme Court held that while an
individual's interest in avoiding disclosure of personal matters is an
aspect of the right to privacy, the statute did not pose a grievous
threat to establish a constitutional violation. The Court found that the
statute was necessary to aid in the enforcement of laws designed to
minimize the misuse of dangerous drugs. The patient-identification
requirement was a product of an orderly and rational legislative
decision made upon recommendation by a specially appointed
commission which held extensive hearings on the matter.
Moreover, the statute was narrowly drawn and contained
numerous safeguards against indiscriminate disclosure. The
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statute laid down the procedure and requirements for the gathering,
storage and retrieval of the information. It enumerated who were
authorized to access the data. It also prohibited public disclosure of
the data by imposing penalties for its violation. In view of these
safeguards, the infringement of the patients' right to privacy was
justified by a valid exercise of police power. As we discussed above,
A.O. No. 308 lacks these vital safeguards.
Even while we strike down A.O. No. 308, we spell out in
neon that the Court is not per se against the use of computers
to accumulate, store, process, retrieve and transmit data to
improve our bureaucracy. Computers work wonders to achieve the
efficiency which both government and private industry seek. Many
information systems in different countries make use of the computer
to facilitate important social objectives, such as better law
enforcement, faster delivery of public services, more efficient
management of credit and insurance programs, improvement of
telecommunications and streamlining of financial activities. [81]Used
wisely, data stored in the computer could help good administration
by making accurate and comprehensive information for those who
have to frame policy and make key decisions. [82] The benefits of the
computer hasrevolutionized information technology. It developed the
internet,[83] introduced the concept of cyberspace[84] and the
information superhighway where the individual, armed only with his
personal computer, may surf and search all kinds and classes of
information from libraries and databases connected to the net.
In no uncertain terms, we also underscore that the right to
privacy does not bar all incursions into individual privacy. The
right is not intended to stifle scientific and technological
advancements that enhance public service and the common
good. It merely requires that the law be narrowly focused [85] and a
compelling interest justify such intrusions.[86] Intrusions into the right
must be accompanied by proper safeguards and well-defined
standards to prevent unconstitutional invasions. We reiterate that
any law or order that invades individual privacy will be subjected by
this Court to strict scrutiny. The reason for this stance was laid down
in Morfe v. Mutuc, to wit:
"The concept of limited government has always included the idea
that governmental powers stop short of certain intrusions into the
20 July 2017
personal life of the citizen. This is indeed one of the basic distinctions
between absolute and limited government. Ultimate and pervasive
control of the individual, in all aspects of his life, is the hallmark of the
absolute state. In contrast, a system of limited government
safeguards a private sector, which belongs to the individual, firmly
distinguishing it from the public sector, which the state can control.
Protection of this private sector-- protection, in other words, of the
dignity and integrity of the individual-- has become increasingly
important as modern society has developed. All the forces of a
technological age-- industrialization, urbanization, and organization--
operate to narrow the area of privacy and facilitate intrusion into it. In
modern terms, the capacity to maintain and support this enclave of
private life marks the difference between a democratic and a
totalitarian society."[87]
IV
The right to privacy is one of the most threatened rights of
man living in a mass society. The threats emanate from various
sources-- governments, journalists, employers, social scientists, etc.
[88]
 In the case at bar, the threat comes from the executive branch of
government which by issuing A.O. No. 308 pressures the people to
surrender their privacy by giving information about themselves on the
pretext that it will facilitate delivery of basic services. Given the
record-keeping power of the computer, only the indifferent will
fail to perceive the danger that A.O. No. 308 gives the
government the power to compile a devastating dossier against
unsuspecting citizens. It is timely to take note of the well-worded
warning of Kalvin, Jr., "the disturbing result could be that everyone
will live burdened by an unerasable record of his past and his
limitations. In a way, the threat is that because of its record-keeping,
the society will have lost its benign capacity to forget." [89] Oblivious to
this counsel, the dissents still say we should not be too quick in
labelling the right to privacy as a fundamental right. We close with
the statement that the right to privacy was not engraved in our
Constitution for flattery.
IN VIEW WHEREOF, the petition is granted and Administrative
Order No. 308 entitled "Adoption of a National Computerized
Identification Reference System" declared null and void for being
unconstitutional.
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SO ORDERED.
 
EN BANC
[G.R. No. 109406. September 11, 1998]
REMEDIOS T. BLAQUERA vs. ALCALA
DECISION
PURISIMA, J.:
These are cases for certiorari and prohibition, challenging the
constitutionality and validity of Administrative Order Nos. 29 and 268
on various grounds.
The facts in G.R. Nos. 109406, 110642, 111494, and 112056
are undisputed, to wit:
Petitioners are officials and employees of several government
departments and agencies who were paid incentive benefits for the
year 1992, pursuant to Executive Order No. 292 [1] (EO 292),
otherwise known as the Administrative Code of 1987, and the
Omnibus Rules Implementing Book V[2]of EO 292. On January 19,
1993, then President Fidel V. Ramos (President Ramos) issued
Administrative Order No. 29 (AO 29) authorizing the grant of
productivity incentive benefits for the year 1992 in the maximum
amount of P1,000.00[3] and reiterating the prohibition[4] under Section
7[5]of Administrative Order No. 268 (AO 268), enjoining the grant of
productivity incentive benefits without prior approval of the
President.Section 4 of AO 29 directed [a]ll departments, offices and
agencies which authorized payment of CY 1992 Productivity
Incentive Bonus in excess of the amount authorized under Section 1
hereof [are hereby directed] to immediately cause the
return/refund of the excess within a period of six months to
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commence fifteen (15) days after the issuance of this Order. In
compliance therewith, the heads of the departments or agencies of
the government concerned, who are the herein respondents, caused
the deduction from petitioners salaries or allowances of the amounts
needed to cover the alleged overpayments. To prevent the
respondents from making further deductions from their salaries or
allowances, the petitioners have come before this Court to seek
relief.
In G.R. No. 119597, the facts are different but the petition poses
a common issue with the other consolidated cases. The petitioner,
Association of Dedicated Employees of the Philippine Tourism
Authority (ADEPT), is an association of employees of the Philippine
Tourism Authority (PTA) who were granted productivity incentive
bonus for calendar year 1992 pursuant to Republic Act No.
6971 (RA 6971), otherwise known as the Productivity Incentives Act
of 1990. Subject bonus was, however, disallowed by the Corporate
Auditor on the ground that it was prohibited under Administrative
Order No. 29 dated January 19, 1993.[6] The disallowance of the
bonus in question was finally brought on appeal to the Commission
on Audit (COA) which denied the appeal in its Decision [7]of March 6,
1995, ratiocinating, thus:
xxx Firstly, the provisions of RA #6971 insofar as the coverage is
concerned, refer to business enterprises including government
owned and/or controlled corporations performing proprietary
functions.
Section 1a of the Supplemental Rules Implementing RA #6971
classified such coverage as:
All business enterprises, with or without existing duly certified labor
organizations, including government owned and/or controlled
corporations performing proprietary functions which are established
solely for business or profit and accordingly excluding those created,
maintained or acquired in pursuance of a policy of the State
enunciated in the Constitution, or by law and those whose officers
and employees are covered by the Civil Service.  (underscoring
supplied)
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The PTrA is a GOCC created in pursuance of a policy of the
State. Section 9 of Presidential Decree No. 189 states that To
implement the policies and program of the Department (Dept. of
Tourism), there is hereby created a Philippine Tourism Authority,
xxx. Likewise, Section 21 of the same decree provides that All
officials and employees of the Authority, xxx, shall be subject to Civil
Service Law, rules and regulations, and the coverage of the Wage
and Position Classification Office.
Furthermore, although Supplemental Rules and Regulations
implementing R.A. #6971 was issued only on December 27, 1991,
the law itself is clear that it pertains to private business enterprises
whose employees are covered by the Labor Code of the Philippines,
as mentioned in the following provisions:
Section 5. Labor Management Committee. xxx that at the request of
any party to the negotiation, the National Wages and Productivity
Commission of the Department of Labor and Employment shall
provide the necessary studies, xxx.
Section 8. Notification. - A business enterprise which adopts a
productivity incentive program shall submit copies of the same to the
National Wages and Productivity Commission and to the Bureau of
Internal Revenue for their information and record.
Section 9. Disputes and Grievances. - Whenever disputes,
grievances, or other matters arise from the interpretation or
implementation of the productivity incentive program, xxx may seek
the assistance of the National Conciliation and Mediation Board of
the Department of Labor and Employment for such purpose. xxx
Therefore, considering the foregoing, the PTrA is within the exclusion
provision of the Implementing Rules of RA #6971 and so, it (PTrA)
does not fall within its coverage as being entitled to the productivity
incentive bonus under RA #6971.
Secondly, Administrative Order No. 29 which is the basis for the
grant of the productivity incentive bonus/benefits for CY 1992 also
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expressly provides prohibiting payments of similar benefits in future
years unless duly authorized by the President.
Thirdly, the disallowance of the Auditor, PTrA has already been
resolved when this Commission circularized thru COA Memorandum
#92-758 dated April 3, 1992 the Supplemental to Rules
Implementing RA 6971 otherwise known as the Productivity
Incentives Act of 1990. xxx
Lastly, considering the title of RA #6971, i.e. An Act to encourage
productivity and maintain industrial peace by providing incentives to
both labor and capital, and its implementing rules and regulations
prepared by the Department of Labor and Employment and the
Department of Finance, this Office concludes that said law/regulation
pertains to agencies in the private sector whose employees are
covered by the Labor Code.
With the denial of its appeal, petitioner found its way here via the
petition in G.R. No. 119597, to seek relief from the aforesaid decision
of COA.
We will first resolve the issue on the applicability of RA 6971 to
petitioner ADEPT in G.R. No. 119597 before passing upon the
constitutionality or validity of Administrative Orders 29 and 268.
Section 3 of RA 6971, reads:
SECTION 3. Coverage. This Act shall apply to all business
enterprises with or without existing and duly recognized or certified
labor organizations, including government-owned and controlled
corporations performing proprietary functions. It shall cover all
employees and workers including casual, regular, supervisory and
managerial employees. (underscoring ours)
Pursuant to Section 10[8] of RA 6971, the Secretary of Labor
and Secretary of Finance issued Supplemental Rules to Implement
the said law, as follows:
Section 1. - Paragraph (a) Section 1, Rule II of the Rules
Implementing RA 6971, shall be amended to read as follows:
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Coverage. These Rules shall apply to:
(a) All business enterprises with or without existing duly certified
labor organizations, including government-owned and controlled
corporations performing proprietary functions  which are established
solely for business or profit or gain and accordingly excluding those
created, maintained or acquired in pursuance of a policy of the state,
enunciated in the Constitution or by law, and those whose officers
and employees are covered by the Civil Service. (underscoring ours)
x x x
Petitioner contends that the PTA is a government-owned and
controlled corporation performing proprietary function, and therefore
the Secretary of Labor and Employment and Secretary of Finance
exceeded their authority in issuing the aforestated Supplemental
Rules Implementing RA 6971.
Government-owned and controlled corporations may perform
governmental or proprietary functions or both, depending on the
purpose for which they have been created. If the purpose is to obtain
special corporate benefits or earn pecuniary profit, the function is
proprietary. If it is in the interest of health, safety and for the
advancement of public good and welfare, affecting the public in
general, the function is governmental. [9] Powers classified as
proprietary are those intended for private advantage and benefit. [10]
The PTA was established by Presidential Decree No. 189, as
amended by Presidential Decree No. 564 (PD 564).
[11]
Its general purposes   are:
1. To implement the policies and programs of the
Department of Tourism (Department);
2. To develop tourist zones;
3. To assist private enterprises in undertaking tourism
projects;
4. To operate and maintain tourist facilities;
20 July 2017
5. To assure land availability for private investors in hotels
and other tourist facilities;
6. To coordinate all tourism project plans and operations.
Its specific functions and powers[12] are:
1. Planning and development of tourism projects
a. To assist the Department make a comprehensive
survey of the physical and natural tourism resources of
the Philippines; to establish the order of priority for
development of said areas; to recommend to the
President the proclamation of a tourist zone; and to
define and fix the boundaries of the zone;
b. To formulate a development plan for each zone;
c. To submit to the President through the National
Economic and Development Authority for review and
approval all development plans before the same are
enforced or implemented;
d. To submit to the President an Annual Progress
Report;
e. To assist the Department to determine the additional
capacity requirements for various tourist facilities and
services; to prepare a ten-year Tourism Priorities Plan;
to update annually the ten year Tourism Priorities Plan.
f. To gather, collate and analyze statistical data and
other pertinent information for the effective
implementation of PD 564.
2. Acquisition and disposition of lands and other assets for
tourist zone purposes
a. To acquire possession and ownership of all lands
transferred to it from other government corporations and
institutions and any land having tourism potential and
earmarked in the Tourism Priorities Plans for intensive
development into a tourist zone or as a part thereof,
subject to the approval of the President.
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b. To acquire by purchase, by negotiation or by
condemnation proceedings any private land within and
without the tourist zones for any of the following
reasons: (a) consolidation of lands for tourist zone
development purposes, (b) prevention of land
speculation in areas declared as tourist zones, (c)
acquisition of right of way to the zones, (d) protection of
water shed areas and natural assets with tourism value,
and (e) for any other purpose expressly authorized
under PD 564.
c. For the purpose of providing land acquisition
assistance to registered tourism enterprises, to sell,
subdivide, resell, lease, sublease, rent out, or
otherwise, to said registered tourism enterprises under
sufficiently soft terms for use specifically in the
development of hotels, recreational facilities, and other
tourist services.
d. To develop and/or subdivide any land in its name or
undertake condominium projects thereon, and sell
subdivision lots or condominium units to private persons
for investment purposes.
e. To take over or transfer to a registered tourism
enterprise in accordance with law any lease on
foreshore areas within a tourist zone or adjacent
thereto, in cases said areas are not being utilized in
accordance with the PTAs approved zone development
plan and wherein the lessee concerned does not agree
to conform accordingly.
f. To arrange for the reclamation of any land adjacent to
or adjoining a tourist zone in coordination with
appropriate government agencies.
3. Infrastructure development for tourist zone purposes
a. To contract, supervise and pay for infrastructure
works and civil works within a tourist zone owned and
operated by the PTA.
20 July 2017
b. To coordinate with appropriate government agencies
the development of infrastructure requirements
supporting a tourist zone.
c. To take water from any public stream, river, creek,
lake, spring, or waterfall and to alter, straighten,
obstruct or increase the flow of water in streams.
4. Zone administration and control
a. To formulate and implement zoning regulations.
b. To determine and regulate the enterprises to be
established within a tourist zone.
c. To ensure, through the proper authorities concerned,
the ecological preservation, maintenance and/or
rehabilitation of the common and the public areas within
a tourist zone and the environment thereof.
d. To identify and recommend to the President the
preservation and/or restoration of national monuments
or preserves; to arrange for the preservation and/or
restoration of the same with appropriate government
agencies or with the private sector or with the owners
themselves of said tourist attractions; and to identify
and recommend to the appropriate authorities
concerned the declaration of tourist areas and
attractions as national monuments and preserves.
5. Project and investment promotions
a. To identify, develop, invest in, own, manage and
operate such projects as it may deem to be vital for
recreation and rest but not sufficiently attractive
economically for private investment.
b. To construct hotel buildings and other tourist facilities
within a tourist zone and in turn lease such facilities to
registered tourism enterprises for operation,
management and maintenance.
c. To organize, finance, invest in, manage and operate
wholly-owned subsidiary corporations.
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6. Direct assistance to registered enterprises
a. To administer the tax and other incentives granted to
registered enterprises.
b. To evaluate, approve and register or reject any and
all tourism projects or enterprises established within the
tourist zones.
c. To grant medium and long-term loans and/or re-lend
any funds borrowed for the purpose to duly qualified
registered tourism enterprises.
d. To guarantee local and foreign borrowings of
registered enterprises.
e. To provide equity investments in the form of cash
and/or land.
f. To extend technical, management and financial
assistance to tourism projects.
g. To identify, contact and assist in negotiations of
suitable partners for both local and foreign investors
interested in investment or participation in the tourism
industry.
h. To assist registered enterprises and prospective
investors to have their papers processed with dispatch
by government offices.
7. Other powers and functions
a. To engage or retain the services of financial,
management, legal, technical, and/or project
consultants from the private or government sector.
b. To have the power to succeed by its corporate name.
c. To adopt, alter, and use a corporate seal.
d. To sue and be sued under its corporate name.
e. To enter into any contracts of any kind and
description.
20 July 2017
f. To own or possess personal and/or real property.
g. To make, adopt and enforce rules and regulations to
execute its powers, duties and functions.
h. To purchase, hold, and alienate shares of stock or
bonds of any corporation.
I. To collect fees or charges as may be imposed under
PD 564.
j. To contract indebtedness and issue bonds.
k. To fix and collect rentals for the lease, use or
occupancy of lands, buildings, or other property owned
or administered by PTA.
l. To do any and all acts and things necessary to carry
out the purposes for which the PTA is created.
Categorized in light of the foregoing provisions of law in point,
PTAs governmental functions include the first, third, fourth, and sixth
of the aforesaid general purposes. The second[13] and fifth general
purposes fall under its proprietary functions.
With respect to PTAs specific functions and powers, the first
and fourth are governmental in nature while the fifth specific
functions and powers are proprietary in character. The second, third,
sixth, and seventh specific functions and powers can be considered
partly-governmental and partly-proprietary, considering that 2(a),
2(b), 2(c), 2(d), 2(e), 3(a), 6(c), 6(d), 6(e), 7(h), 7(j), and 7(k) are
proprietary functions while 2(f), 3(b), 3(c), 6(a), 6(b), 6(f), 6(g), 6(h),
7(a), 7(b), 7(c), 7(d), 7(f), 7(g), and 7(l) are governmental
functions. The specific functions and powers treated in 7(e) and 7(i)
may be classified either as proprietary or governmental, depending
on the circumstances under which they are exercised or performed.
The aforecited powers and functions of PTA are predominantly
governmental, principally geared towards the development and
promotion of tourism in the scenic Philippine archipelago. But it is
irrefutable that PTA also performs proprietary functions, as
envisaged by its charter.
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Reliance on the above analysis of the functions and powers of
PTA does not suffice for the determination of whether or not it is
within the coverage of RA 6971. For us to resolve the issues raised
here solely on the basis of the classification of PTAs powers and
functions may lead to the rendition of judgment repugnant to the
legislative intent and to established doctrines, as well, such as on the
prohibition against government workers to strike. [14] Under RA 6971,
the workers have the right to strike.
To ascertain whether PTA is within the ambit of RA 6971, there
is need to find out the legislative intent, and to refer to other
provisions of RA 6971 and other pertinent laws, that may aid the
Court in ruling on the right of officials and employees of PTA to
receive bonuses under RA 6971.
Petitioner cites an entry in the journal of the House of
Representatives to buttress its submission that PTA is within the
coverage of RA 6971, to wit:
Chairman Veloso: The intent of including government-owned and
controlled corporations within the coverage of the Act is the
recognition of the principle that when government goes into
business, it (divests) itself of its immunity from suit and goes down to
the level of ordinary private enterprises and subjects itself to the
ordinary laws of the land just like ordinary private enterprises.  Now,
when people work therefore in government-owned or controlled
corporations, it is as if they are also, just like in the private sector,
entitled to all the benefits of all laws that apply to workers in the
private sector.  In my view, even including the right to organize,
bargain.... VELOSO (Bicameral Conference Committee on Labor
and Employment, pp. 15-16)
After a careful study, the Court is of the view, and so holds, that
contrary to petitioners interpretation, the government-owned and
controlled corporations Mr. Chairman Veloso had in mind were
government-owned and controlled corporations incorporated under
the general corporation law. This is so because only workers in
private corporations and government-owned and controlled
corporations, incorporated under the general corporation law, have
the right to bargain (collectively). Those in government corporations
with special charter, which are subject to Civil Service Laws, have no
20 July 2017
right to bargain (collectively), except where the terms and conditions
of employment are not fixed by law. [15] Their rights and duties are not
comparable with those in the private sector.
Since the terms and conditions of government employment are fixed
by law, government workers cannot use the same weapons
employed by workers in the private sector to secure concessions
from their employers. The principle behind labor unionism in private
industry is that industrial peace cannot be secured through
compulsion by law. Relations between private employers and their
employees rest on an essentially voluntary basis. Subject to the
minimum requirements of wage laws and other labor and welfare
legislation, the terms and conditions of employment in the unionized
private sector are settled through the process of collective
bargaining. In government employment, however, it is the legislature
and, where properly given delegated power, the administrative
heads of government which fix the terms and conditions of
employment. And this is effected through statutes or administrative
circulars, rules, and regulations, not through collective bargaining
agreements. (Alliance of Government Workers v. Minister of Labor
and Employment, 124 SCRA 1) (italics ours)
Government corporations may be created by special charters or
by incorporation under the general corporation law. Those created by
special charters are governed by the Civil Service Law while those
incorporated under the general corporation law are governed by the
Labor Code.[16]
The legislative intent to place only government-owned and
controlled corporations performing proprietary functions under the
coverage of RA 6971 is gleanable from the other provisions of the
law. For instance, section 2[17] of said law envisions industrial peace
and harmony and to provide corresponding incentives to both labor
and capital; section 4[18] refers to representatives of labor and
management; section 5[19] mentions of collective bargaining agent(s)
of the bargaining unit(s); section 6[20] relates to existing collective
bargaining agreements, and labor and management; section
7[21] speaks of strike or lockout; and section 9 [22] purports to seek the
assistance of the National Conciliation and Mediation Board of the
Department of Labor and Employment and include the name(s) of
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the voluntary arbitrators or panel of voluntary arbitrator. All the
aforecited provisions of law apply only to private corporations and
government-owned and controlled corporations organized under the
general corporation law. Only they have collective bargaining agents,
collective bargaining units, collective bargaining agreements, and the
right to strike or lockout.
To repeat, employees of government corporations created by
special charters have neither the right to strike nor the right to
bargain collectively, as defined in the Labor Code. The case
of Social Security System Employees Associationindicates the
following remedy of government workers not allowed to strike or
bargain collectively, to wit:
Government employees may, therefore, through their
unions or associations, either petition the Congress for the
betterment of the terms and conditions of employment
which are within the ambit of legislation or negotiate with
the appropriate government agencies for the improvement
of those which are not fixed by law. If there be any
unresolved grievances, the dispute may be referred to the
Public Sector Labor-Management Council for appropriate
action. But employees in the civil service may not resort to
strikes, walkouts and other temporary work stoppages, like
workers in the private sector, to pressure the Government
to accede to their demands. (supra, footnote 14, p. 698;
italics ours)
It is a rule in statutory construction that every part of the statute
must be interpreted with reference to the context, i.e., that every part
of the statute must be considered together with the other parts, and
kept subservient to the general intent of the whole enactment. [23] The
provisions of RA 6971, taken together, reveal the legislative intent to
include only government-owned and controlled corporations
performing proprietary functions within its coverage.
Every statute must be construed and harmonized with other
statutes as to form a uniform system of jurisprudence. [24] We
note Section 1, Rule X of the Omnibus Rules Implementing Book V
of EO 292, which reads:
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SECTION 1. -  Each department or agency of
government, whether national or local, including
bureaus and agencies, state colleges and
universities, and  government owned and controlled
corporations with original charters, shall establish its
own Department or Agency Employee Suggestions
and Incentives Award System in accordance with
these Rules and shall submit the same to the
Commission for approval. (underscoring ours)
It is thus evident that PTA, being a government-owned and
controlled corporation with original charter subject to Civil Service
Law, Rules and Regulations, [25] is already within the scope of an
incentives award system under Section 1, Rule X of the Omnibus
Rules Implementing EO 292 issued by the Civil Service
Commission (Commission). Since government-owned and controlled
corporations with original charters do have an incentive award
system, Congress enacted a law that would address the same
concern of officials and employees of government-owned and
controlled corporations incorporated under the general corporation
law.
All things studiedly considered in proper perspective, the Court
finds no reversible error in the finding by respondent Commission
that PTA is not within the purview of RA 6971. As regards the
promulgation of implementing rules and regulations, it bears
stressing that the power of administrative officials to
promulgate rules in the implementation of the statute is
necessarily limited to what is provided for in the legislative
enactment.[26] In the case under scrutiny, the Supplementary Rules
Implementing RA 6971 issued by the Secretary of Labor and
Employment and the Secretary of Finance accord with the
intendment and provisions of RA 6971. Consequently, not being
covered by RA 6971, AO 29 applies to the petitioner.
We now tackle the common issue posited by the consolidated
petitions on the constitutionality of AO 29 and AO 268.
Petitioners contend and argue, that:
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I. AO 29 AND AO 268 ARE VIOLATIVE OF THE
PROVISIONS OF EO 292 AND, HENCE, NULL AND
VOID.
II. AO 29 AND AO 268 UNLAWFULLY USURP THE
CONSTITUTIONAL AUTHORITY GRANTED SOLELY
TO THE CIVIL SERVICE COMMISSION.
III. THE FORCED REFUND OF INCENTIVE PAY IS AN
UNCONSTITUTIONAL IMPAIRMENT OF A connection with, or in relation to, their official employment.
CONTRACTUAL OBLIGATION.
IV. ASSUMING, FOR THE SAKE OF ARGUMENT ONLY,
THAT THE GRANT OF PRODUCTIVITY INCENTIVE
BENEFITS WAS INVALID, THE SAME SHOULD BE
THE PERSONAL LIABILITY OF OFFICIALS
DIRECTLY RESPONSIBLE THEREFOR IN
ACCORDANCE WITH SECTION 9 OF AO 268.
Issued by the then President Corazon Aquino (President
Aquino) on July 25, 1987 in the exercise of her legislative powers
under the 1987 Constitution, [27] EO 292, or the Administrative Code
of 1987, provided for the following incentive award system:
Sec. 31. Career and Personnel Development Plans. - Each
department or agency shall prepare a career and personnel
development plan which shall be integrated into a national
plan by the Commission.  Such career and personnel
development plans which shall include provisions on merit
promotions, performance evaluation, in-service training,
including overseas and local scholarships and training
grants, job rotation, suggestions and incentive award
systems, and such other provisions for employees health,
welfare, counseling, recreation and similar services.
Sec. 35. Employee Suggestions and Incentive Award
System. - There shall be established a government-wide
employee suggestions and incentive awards system which
shall be administered under such rules, regulations, and
standards as maybe promulgated by the Commission.
In accordance with rules, regulations, and standards
promulgated by the Commission, the President or the
20 July 2017
head of each department or agency is authorized to incur
whatever necessary expenses involved in the honorary
recognition of subordinate officers and employees of the
government who by their suggestions, inventions, superior
accomplishment, and other personal efforts contribute to
the efficiency, economy, or other improvement of
government operations, or who perform such other
extraordinary acts or services in the public interest in
Sec. 36. Personnel Relations. - (1) It shall be the concern
of the Commission to provide leadership and assistance in
developing employee relations programs in the
department or agencies.
(2) Every Secretary or head of agency shall take all proper
steps toward the creation of an atmosphere conducive to
good supervisor-employee relations and the improvement
of employee morale.
Pursuant to the provision of Section 12(2), [28] Chapter 3, Book V of
EO 292, the Commission adopted and prescribed the Omnibus
Rules Implementing Book V of EO 292 which, among others,
provide:
Sec. 1. - Each department or agency of government,
whether national or local, including bureaus and agencies,
state colleges and universities, and government owned
and controlled corporations with original charters, shall
establish its own Department or Agency Employee
Suggestions and Incentives Award System in accordance
with these Rules and shall submit the same to the
Commission for approval.
Sec. 2. - The System is designed to encourage creativity,
innovativeness, efficiency, integrity and productivity in the
public service by recognizing and rewarding officials and
employees, individually or in groups, for their suggestions,
inventions, superior accomplishments, and other personal
efforts which contribute to the efficiency, economy, or
other improvement in government operations, or for other
extraordinary acts of services in the public interest.
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x  x x
Sec. 7. - The incentive awards shall consist of, though not
limited to, the following:
x  x x
(c) Productivity Incentive which shall be given to an
employee or group of employees who has exceeded their
targets or has incurred incremental improvement over
existing targets.
On February 21, 1992, President Aquino issued AO 268 which
granted each official and employee of the government the
productivity incentive benefits in a maximum amount equivalent to
thirty percent (30%) of his one (1) month basic salary but in no case
shall such amount be less than two thousand pesos (P2,000.00),
[29]
 for those who have rendered at least one year of service as of
December 31, 1991.[30] Said AO carried the prohibition, provided in
Section 7 thereof, which reads:
SECTION 7. The productivity incentive benefits herein
authorized shall be granted only for Calendar Year
1991.  Accordingly, all heads of agencies, including the
governing boards of government-owned or -controlled
corporations and financial institutions, are hereby strictly
prohibited from authorizing/granting productivity incentive
benefits or other allowances of similar nature for Calendar
Year 1992 and future years pending the result of a
comprehensive study being undertaken by the Office of
the President  in coordination with the Civil Service
Commission and the Department of Budget and
Management on the matter.
The formulation of the necessary implementing guidelines
for Executive Order No. 486 dated 8 November 1991
establishing a performance-based incentive system for
government-owned or -controlled corporations shall
likewise be included in the comprehensive study referred
to in the preceding paragraph.
On January 19, 1993, President Ramos issued AO 29 which
granted productivity incentive benefits to government employees in
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the maximum amount of P1,000.00[31] for the calendar year 1992 but
reiterated the proscription under Section 7 of AO 268, thus:
SECTION 2.  The prohibition prescribed under Section 7 of
Administrative Order No. 268 is hereby
reiterated.  Accordingly, all heads of government
offices/agencies, including government-owned and/or
controlled corporations, as well as their respective
governing boards are hereby enjoined and prohibited from
authorizing/granting Productivity Incentive Benefits or any
and all similar forms of allowances/benefits without prior
approval and authorization via Administrative Order by the
Office of the President.  Henceforth, anyone found violating
any of the mandates in this Order, including all
officials/employees and the COA Auditor-in-Charge of
such government office/agency found to have taken part
thereof, shall be accordingly and severely dealt with in
accordance with the applicable provisions of existing penal
laws.
Consequently, all administrative authorizations to grant
any form of allowances/benefits and all forms of additional
compensation usually paid outside of the prescribed basic
salary under R.A. No. 6758, the Salary Standardization
Law, that are inconsistent with the legislated policy on the
matter or are not covered by any legislative action are
hereby revoked.
The implementation of Executive Order No. 486 dated
November 8, 1991, as amended by Executive Order No.
518 dated May 29, 1992, is hereby deferred until a more
comprehensive and equitable scheme for the grant of the
benefits that can be applied government-wide is
formulated by the Department of Budget and
Management.
Petitioners theorize that AO 29 and AO 268 violate EO 292 and
since the latter is a law, it prevails over executive
issuances. Petitioners likewise assert that AO 29 and AO 268
encroach upon the constitutional authority of the Civil Service
Commission to adopt measures to strengthen the merit and rewards
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system and to promulgate rules, regulations and standards
governing the incentive awards system of the civil service.
The Court is not impressed with petitioners submission. AO 29
and AO 268 were issued in the valid exercise of presidential control
over the executive departments.
In establishing a Civil Service Commission, the 1987
Constitution delineated its function, as follows:
The Civil Service Commission, as the central personnel
agency of the Government, shall establish a career service
and adopt measures to promote morale, efficiency,
integrity, responsiveness, progressiveness, and courtesy
in the civil service. It shall strengthen the merit and
rewards system, integrate all human resources
development programs for all levels and ranks, and
institutionalize a management climate conducive to public
accountability. It shall submit to the President and the
Congress an annual report on its personnel
programs.  (Section 3, Article IX, B, 1987 Constitution)
The Commission handles personnel matters of the government. As
the central personnel agency of the Government, it is tasked to
formulate and establish a system of incentives and rewards for
officials and employees in the public sector, alike.
The functions of the Commission have been decentralized to
the different departments, offices, and agencies of the government --
SEC. 1. Declaration of Policy. -- The State shall insure and
promote the Constitutional mandate that appointments in
the Civil Service shall be made only according to merit and
fitness; that the Civil Service Commission, as the central
personnel agency of the Government shall establish a
career service, adopt measures to promote morale,
efficiency, integrity, responsiveness, and courtesy in the
civil service, strengthen the merit and rewards system,
integrate all human resources development programs for
all levels and ranks, and institutionalize a management
climate conducive to public accountability; that public
office is a public trust and public officers and employees
20 July 2017
must at all times be accountable to the people; and that
personnel functions shall be decentralized, delegating the
corresponding authority to the departments, offices and
agencies where such functions can be effectively
performed. (Section 1, Chapter I, Subtitle A, Title I, EO
292) (underscoring ours)
Specifically, implementation of the Employee Suggestions and
Incentive Award System has been decentralized to the President or
to the head of each department or agency --
Sec. 35. Employee Suggestions and Incentive Award
System. -  There shall be established a government-wide
employee suggestions and incentive awards system which
shall be administered under such rules, regulations, and
standards as maybe promulgated by the Commission.
In accordance with rules, regulations, and standards
promulgated by the Commission,  the President or the
head of each department or agency is authorized to incur
whatever necessary expenses involved in the honorary
recognition of subordinate officers and employees of the
government who by their suggestions, inventions, superior
accomplishment, and other personal efforts contribute to
the efficiency, economy, or other improvement of
government operations, or who perform such other
extraordinary acts or services in the public interest in
connection with, or in relation to, their official
employment. (EO 292) (underscoring ours)
The President is the head of the government. Governmental
power and authority are exercised and implemented through him. His
power includes the control over executive departments --
The president shall have control of all the executive departments,
bureaus, and offices. He shall ensure that the laws be faithfully
executed. (Section 17, Article VII, 1987 Constitution)
Control means the power of an officer to alter or modify or set
aside what a subordinate officer had done in the performance of his
duties and to substitute the judgment of the former for that of the
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ATTY. BORJE
latter.[32] It has been held that [t]he President can, by virtue of his
power of control, review, modify, alter or nullify any action, or
decision, of his subordinate in the executive departments, bureaus,
or offices under him. He can exercise this power motu
proprio without need of any appeal from any party.[33]
When the President issued AO 29 limiting the amount of
incentive benefits, enjoining heads of government agencies from
granting incentive benefits without prior approval from him, and
directing the refund of the excess over the prescribed amount, the
President was just exercising his power of control over executive
departments. This is decisively clear from the WHEREAS CLAUSES
of AO 268 and AO 29, to wit:
ADMINISTRATIVE ORDER NO. 268
x x x
WHEREAS, the productivity incentive benefits granted by the
different agencies are of varying amounts, causing
dissension/demoralization on the part of those who had received
less and those who have not yet received any such benefit, thereby
defeating the purpose for which the same should be granted; and
WHEREAS, there exists the need to regulate the grant of the
productivity incentive benefits or other similar allowances in
conformity with the policy on standardization of compensation
pursuant to Republic Act No. 6758;
x x x.
ADMINISTRATIVE ORDER NO. 29
x x x
WHEREAS, the faithful implementation of statutes, including
the Administrative Code of 1987 and all laws governing all
forms of additional compensation and personnel benefits is a
Constitutional prerogative vested in the President of the
20 July 2017
Philippines under Section 17, Article VII of the 1987
Constitution;
WHEREAS, the Constitutional prerogative includes the
determination of the rates, the timing and schedule of payment,
and final authority to commit limited resources of government
for the payment of personnel incentives, cash awards,
productivity bonus, and other forms of additional compensation
and fringe benefits;
WHEREAS, some government agencies have overlooked said
Constitutional prerogative and have unilaterally granted to their
respective officials and employees incentive awards;
WHEREAS, the Office of the President issued Administrative Order
No. 268, dated February 21, 1992, strictly prohibiting the grant of
Productivity Incentive Bonus or other allowances of similar nature for
Calendar Year 1992 and future years pending the issuance of the
requisite authorization by the President;
WHEREAS, notwithstanding said prohibition some government
offices/agencies and government-owned and/or controlled
corporations and financial institutions have granted productivity
incentive benefits in varying nomenclature and amounts without the
proper authorization/coordination with the Office of the President;
WHEREAS, the unilateral and uncoordinated grant of productivity
incentive benefits gave rise to discontentment, dissatisfaction and
demoralization among government personnel who have received
less or have not received at all such benefits;
x  x x.
The President issued subject Administrative Orders to regulate the
grant of productivity incentive benefits and to prevent
discontentment, dissatisfaction and demoralization among
government personnel by committing limited resources of
government for the equal payment of incentives and awards. The
President was only exercising his power of control by modifying the
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ATTY. BORJE
acts of the respondents who granted incentive benefits to their
employees without appropriate clearance from the Office of the
President, thereby resulting in the uneven distribution of government
resources. In the view of the President, respondents did a mistake
which had to be corrected. In so acting, the President exercised a
constitutionally-protected prerogative --
The Presidents duty to execute the law is of constitutional origin. So,
too, is his control of all executive departments.  Thus it is, that
department heads are men of his confidence.  His is the power to
appoint them; his, too, is the privilege to dismiss them at
pleasure. Naturally, he controls and directs their acts. Implicit then is
his authority to go over, confirm, modify or reverse the action taken
by his department secretaries. In this context, it may not be said that
the President cannot rule on the correctness of a decision of a
department secretary. (Lacson-Magallanes Co., Inc. v. Pao,  21
SCRA 898)
Neither can it be said that the President encroached upon the
authority of the Commission on Civil Service to grant benefits to
government personnel. AO 29 and AO 268 did not revoke the
privilege of employees to receive incentive benefits. The same
merely regulated the grant and amount thereof.
Sound management and effective utilization of financial
resources of government are basically executive functions, [34] not the
Commissions. Implicit is this recognition in EO 292, which states:
Sec. 35. Employee Suggestions and Incentive Award System.
- There shall be established a government-wide employee
suggestions and incentive awards system which shall be
administered under such rules, regulations, and standards as maybe
promulgated by the Commission.
In accordance with rules, regulations, and standards promulgated by
the Commission,  the President or the head of each department or
agency is authorized  to incur whatever necessary expenses
involved in the honorary recognition of subordinate officers and
employees of the government who by their suggestions, inventions,
superior accomplishment, and other personal efforts contribute to the
20 July 2017
efficiency, economy, or other improvement of government
operations, or who perform such other extraordinary acts or services
in the public interest in connection with, or in relation to, their official
employment. (Chapter 5, Subtitle A, Book V) (underscoring ours)
Conformably, it is the President or the head of each department
or agency who is authorized to incur the necessary expenses
involved in the honorary recognition of subordinate officers and
employees of the government. It is not the duty of the Commission to
fix the amount of the incentives. Such function belongs to the
President or his duly empowered alter ego.
Anent petitioners contention that the forcible refund of incentive
benefits is an unconstitutional impairment of a contractual obligation,
suffice it to state that [n]ot all contracts entered into by the
government will operate as a waiver of its non-suability; distinction
must be made between its sovereign and proprietary acts (United
States of America v. Ruiz, 136 SCRA 487).[35] The acts involved in
this case are governmental. Besides, the Court is in agreement with
the Solicitor General that the incentive pay or benefit is in the nature
of a bonus which is not a demandable or enforceable obligation.
It is understood that the Judiciary, Civil Service Commission,
Commission on Audit, Commission on Elections, and Office of the
Ombudsman, which enjoy fiscal autonomy, are not covered by the
amount fixed by the President. As explained in Bengzon vs. Drilon
(208 SCRA 133):
As envisioned in the Constitution, the fiscal autonomy enjoyed by the
Judiciary, the Civil Service Commission, the Commission on Audit,
the Commission on Elections, and the Office of the Ombudsman
contemplates a guarantee of full flexibility to allocate and utilize their
resources with the wisdom and dispatch that their needs require. It
recognizes the power and authority to levy, assess and collect fees,
fix rates of compensation not exceeding the highest rates authorized
by law for compensation and pay plans of the government and
allocate and disburse such sums as may be provided by law or
prescribed by them in the course of the discharge of their functions.
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Fiscal autonomy means freedom from outside control. If the
Supreme Court says it needs 100 typewriters but DBM rules we
need only 10 typewriters and sends its recommendations to
Congress without even informing us, the autonomy given by the
Constitution becomes an empty and illusory platitude.
The Judiciary, the Constitutional Commissions, and the Ombudsman
must have the independence and flexibility needed in the discharge
of their constitutional duties. The imposition of restrictions and
constraints on the manner the independent constitutional offices
allocate and utilize the funds appropriated for their operations is
anathema to fiscal autonomy and violative not only of the express
mandate of the Constitution but especially as regards the Supreme
Court, of the independence and separation of powers upon which the
entire fabric of our constitutional system is based. In the interest of
comity and cooperation, the Supreme Court, Constitutional
Commissions, and the Ombudsman have so far limited their
objections to constant reminders. We now agree with the petitioners
that this grant of autonomy should cease to be a meaningless
provision.
concerned disbursed such incentive benefits in the honest belief that
the amounts given were due to the recipients and the latter accepted
the same with gratitude, confident that they richly deserve such
benefits.
WHEREFORE, the Petitions in G.R. Nos. 109406, 110642,
111494, and 112056 are hereby DISMISSED, and as above
ratiocinated, further deductions from the salaries and allowances
of petitioners are hereby ENJOINED.
In G.R. No. 119597, the assailed Decision of respondent
Commission on Audit is AFFIRMED. No pronouncement as to costs.
SO ORDERED.
Narvasa, C.J., Davide Jr., Romero, Bellosillo, Melo, Puno,
Vitug, Kapunan, Mendoza, Panganiban, Martinez and  Quisumbing,
JJ., concur.
Regalado, J.,  on official leave.

Untenable is petitioners contention that the herein respondents

be held personally liable for the refund in question. Absent a showing
of bad faith or malice, public officers are not personally liable for
damages resulting from the performance of official duties. [36]
Every public official is entitled to the presumption of good faith
in the discharge of official duties. [37] Absent any showing of bad faith
or malice, there is likewise a presumption of regularity in the
performance of official duties.[38]
In upholding the constitutionality of AO 268 and AO 29, the
Court reiterates the well-entrenched doctrine that in interpreting
statutes, that which will avoid a finding of unconstitutionality is to be
preferred.[39]
Considering, however, that all the parties here acted in good
faith, we cannot countenance the refund of subject incentive benefits
for the year 1992, which amounts the petitioners have already
received. Indeed, no indicia of bad faith can be detected under the
attendant facts and circumstances. The officials and chiefs of offices

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ATTY. BORJE

acquire disposable public agricultural lands prior to the effectivity of

the 1973 Constitution.

The Case

Before us is a petition for review on certiorari seeking the

reversal of the Decision[1] of the Court of Appeals, dated September
27, 1990, in C.A. G.R. CV No. 09062, affirming the dismissal by the
trial court of Petitioner Vicente Villaflors complaint against Private
Respondent Nasipit Lumber Co., Inc. The disposition of both the trial
and the appellate courts are quoted in the statement of facts below.

The Facts

The facts of this case, as narrated in detail by Respondent

Court of Appeals, are as follows:[2]

The evidence, testimonial and documentary, presented during the

THIRD DIVISION
[G.R. No. 95694. October 9, 1997]
VICENTE VILLLAFLOR, substituted by his
heirs, petitioner, vs. COURT OF APPEALS and NASIPIT
LUMBER CO., INC., respondents.
DECISION
PANGANIBAN  ,J.:
In this rather factually complicated case, the Court reiterates the
binding force and effect of findings of specialized administrative
agencies as well as those of trial courts when affirmed by the Court
of Appeals; rejects petitioners theory of simulation of contracts; and
passes upon the qualifications of private respondent corporation to
trial show that on January 16, 1940, Cirilo Piencenaves, in a Deed of
Absolute Sale (exh. A), sold to [petitioner], a parcel of agricultural
land containing an area of 50 hectares,[3]more or less, and
particularly described and bounded as follows:
A certain parcel of agricultural land planted to abaca with visible
concrete monuments marking the boundaries and bounded on the
NORTH by Public Land now Private Deeds on the East by Serafin
Villaflor, on the SOUTH by Public Land; and on the West by land
claimed by H. Patete, containing an area of 60 hectares more or
less, now under Tax Dec. 29451 in the (sic) of said Vicente Villaflor,
the whole parcel of which this particular parcel is only a part, is
assessed at P22,550.00 under the above said Tax Dec. Number.
This deed states:

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That the above described land was sold to the said VICENTE
VILLAFLOR, xxx on June 22, 1937, but no formal document was
then executed, and since then until the present time, the said Vicente
Villaflor has been in possession and occupation of (the same); (and)
That the above described property was before the sale, of my
exclusive property having inherited from my long dead parents and
my ownership to it and that of my [sic] lasted for more than fifty (50)
years, possessing and occupying same peacefully, publicly and
continuously without interruption for that length of time.
Also on January 16, 1940, Claudio Otero, in a Deed of Absolute Sale
(exh. C) sold to Villaflor a parcel of agricultural land, containing an
area of 24 hectares, more or less, and particularly described and
bounded as follows:
A certain land planted to corn with visible concrete measurements
marking the boundaries and bounded on the North by Public Land
and Tungao Creek; on the East by Agusan River; on the South by
Serafin Villaflor and Cirilo Piencenaves; and on the West by land of
Fermin Bacobo containing an area of 24 hectares more or less,
under Tax Declaration No. 29451 in the name already of Vicente
Villaflor, the whole parcel of which this particular land is only a part,
is assessed at P22,550.00 under the above said Tax Declaration No.
29451.
This deed states:
That the above described land was sold to the said VICENTE
VILLAFLOR, xxx on June 22, 1937, but no sound document was
then executed, however since then and until the present time, the
said Vicente Villaflor has been in open and continuous possession
and occupation of said land; (and)
That the above described land was before the sale, my own
exclusive property, being inherited from my deceased parents, and
my ownership to it and that of my predecessors lasted more than fifty
(50) years, possessing and occupying the same, peacefully, openly
and continuously without interruption for that length of time.
20 July 2017
Likewise on January 16, 1940, Hermogenes Patete, in a Deed of
Absolute Sale (exh. D), sold to Villaflor, a parcel of agricultural land,
containing an area of 20 hectares, more or less, and particularly
described and bounded as follows:
A certain parcel of agricultural land planted to abaca and corn with
visible concrete monuments marking the boundaries and bounded
on the North by Public Land area-private Road; on the East by land
claimed by Cirilo Piencenaves; on the South by Public Land
containing an area of 20 hectares more or less, now under Tax
Declaration No. 29451 in the name of Vicente Villaflor the whole
parcel of which this particular parcel, is assessed at P22,550.00 for
purposes of taxation under the above said Tax Declaration No.
29451.
This deed states:
xxx (O)n June 22, 1937 but the formal document was then executed,
and since then until the present time, the said VICENTE VILLAFLOR
has been in continuous and open possession and occupation of the
same; (and)
That the above described property was before the sale, my own and
exclusive property, being inherited from my deceased parents and
my ownership to it and that of my predecessors lasted more than fifty
(50) years, possessing and occupying same, peacefully, openly and
continuously without interruption for that length of time.
On February 15, 1940, Fermin Bocobo, in a Deed of Absolute Sale
(exh. B), sold to Villaflor, a parcel of agricultural land, containing an
area of 18 hectares, more or less, and particularly described and
bounded as follows:
A certain parcel of agricultural land planted with abaca with visible
part marking the corners and bounded on the North by the corners
and bounded on the North by Public Land; on the East by Cirilo
Piencenaves; on the South by Hermogenes Patete and West by
Public Land, containing an area of 18 hectares more or less now
under Tax Declaration No. 29451 in the name of Vicente
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Villaflor. The whole parcel of which this particular parcel is only a part
is assessed as P22,550.00 for purposes of taxation under the above
said Tax Declaration Number (Deed of Absolute Sale executed by
Fermin Bocobo date Feb. 15, 1940). This document was annotated
in Registry of Deeds on February 16, 1940).
This deed states:
That the above described property was before the sale of my own
exclusive property, being inherited from my deceased parents, and
my ownership to it and that of my predecessors lasted more than fifty
(50) years, possessing and occupying the same peacefully, openly
and continuously without interruption for that length of time.
On November 8, 1946, Villaflor, in a Lease Agreement (exh. Q),
[4]
 leased to Nasipit Lumber Co., Inc. a parcel of land, containing an
area of two (2) hectares, together with all the improvements existing
thereon, for a period of five (5) years from June 1, 1946 at a rental
of P200.00 per annum to cover the annual rental of house and
building sites for thirty three (33) houses or buildings. This
agreement also provides:[5]
3. During the term of this lease, the Lessee is authorized and
empowered to build and construct additional houses in addition to
the 33 houses or buildings mentioned in the next preceding
paragraph, provided however, that for every additional house or
building constructed the Lessee shall pay unto the Lessor an amount
of fifty centavos (50) per month for every house or building. The
Lessee is empowered and authorized by the Lessor to sublot (sic)
the premises hereby leased or assign the same or any portion of the
land hereby leased to any person, firm and corporation; (and)
4. The Lessee is hereby authorized to make any construction and/or
improvement on the premises hereby leased as he may deem
necessary and proper thereon, provided however, that any and all
such improvements shall become the property of the Lessor upon
the termination of this lease without obligation on the part of the latter
to reimburse the Lessee for expenses incurred in the construction of
the same.
20 July 2017
Villaflor claimed having discovered that after the execution of the
lease agreement, that Nasipit Lumber in bad faith x x x
surreptitiously grabbed and occupied a big portion of plaintiffs
property x x x; that after a confrontation with the corporates (sic) field
manager, the latter, in a letter dated December 3, 1973 (exh. R),
[6]
 stated recalling having made some sort of agreement for the
occupancy (of the property at Acacia, San Mateo), but I no longer
recall the details and I had forgotten whether or not we did occupy
your land. But if, as you say, we did occupy it, then (he is ) sure that
the company is obligated to pay the rental.
On July 7, 1948, in an Agreement to Sell (exh. 2), Villaflor conveyed
to Nasipit Lumber, two (2) parcels of land xxx described as follows: [7]
PARCEL ONE
Bounded on the North by Public Land and Tungao Creek; on the
East by Agusan River and Serafin Villaflor; on the South by Public
Land, on the West by Public Land. Improvements thereon consist of
abaca, fruit trees, coconuts and thirty houses of mixed materials
belonging to the Nasipit Lumber Company. Divided into Lot Nos.
5412, 5413, 5488, 5490, 5491, 5492, 5850, 5849, 5860, 5855, 5851,
5854, 5855, 5859, 5858, 5857, 5853, and 5852. Boundaries of this
parcel of land are marked by concrete monuments of the Bureau of
Lands. Containing an area of 112,000 hectares. Assessed at
P17,160.00 according to Tax Declaration No. V-315 dated April 14,
1946.
PARCEL TWO
Bounded on the North by Pagudasan Creek; on the East by Agusan
River; on the South by Tungao Creek; on the West by Public
Land. Containing an area of 48,000 hectares more or less. Divided
into Lot Nos. 5411, 5410, 5409, and 5399.Improvements 100
coconut trees, productive, and 300 cacao trees. Boundaries of said
land are marked by concrete monuments of the Bureau pf (sic)
Lands. Assessed value -- P6,290.00 according to Tax No. 317, April
14, 1946.
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This Agreement to Sell provides:
3. That beginning today, the Party of the Second Part shall continue
to occupy the property not anymore in concept of lessee but as
prospective owners, it being the sense of the parties hereto that the
Party of the Second Part shall not in any manner be under any
obligation to make any compensation to the Party of the First Part,
for the use, and occupation of the property herein before described
in such concept of prospective owner, and it likewise being the sense
of the parties hereto to terminate as they do hereby terminate,
effective on the date of this present instrument, the Contract of
Lease, otherwise known as Doc. No. 420, Page No. 36, Book No. II,
Series of 1946 of Notary Public Gabriel R. Banaag, of the Province
of Agusan.
4. That the Party of the Second Part has bound as it does hereby
bind itself, its executors and administrators, to pay unto the party of
the First Part the sum of Five Thousand Pesos (P5,000.00),
Philippine Currency, upon presentation by the latter to the former of
satisfactory evidence that:
(a) The Bureau of Lands will not have any objection to the
obtainment by the Party of the First Part of a Certificate of Torrens
Title in his favor, either thru ordinary land registration proceedings or
thru administrative means procedure.
(b) That there is no other private claimant to the properties
hereinbefore described.
5. That the Party of the First Part has bound as he does hereby bind
to undertake immediately after the execution of these presents to
secure and obtain, or cause to be secured and obtained, a
Certificate of Torrens Title in his favor over the properties described
on Page (One) hereof, and after obtainment of such Certificate of
Torrens Title, the said Party of the First Part shall execute a (D)eed
of Absolute Sale unto and in favor of the Party of the Second Part, its
executors, administrators and assigns, it being the sense of the
parties that the Party of the Second Part upon delivery to it of such
deed of absolute sale, shall pay unto the Party of the First Part in
20 July 2017
cash, the sum of Twelve Thousand (P12,000.00) Pesos in Philippine
Currency, provided, however, that the Party of the First Part, shall be
reimbursed by the Party of the Second Part with one half of the
expenses incurred by the Party of the First Part for survey and
attorneys fees; and other incidental expenses not
exceeding P300.00.
On December 2, 1948, Villaflor filed Sales Application No. V-
807[8] (exh. 1) with the Bureau of Lands, Manila, to purchase under
the provisions of Chapter V, XI or IX of Commonwealth Act. No. 141
(The Public Lands Act), as amended, the tract of public lands x x x
and described as follows: North by Public Land; East by Agusan
River and Serafin Villaflor; South by Public Land and West by public
land (Lot Nos. 5379, 5489, 5412, 5490, 5491, 5492, 5849, 5850,
5851, 5413, 5488, 5489, 5852, 5853, 5854, 5855, 5856, 5857, 5858,
5859 and 5860 x x x containing an area of 140 hectares
xxx. Paragraph 6 of the Application, states: I understand that this
application conveys no right to occupy the land prior to its approval,
and I recognized (sic) that the land covered by the same is of public
domain and any and all rights I may have with respect thereto by
virtue of continuous occupation and cultivation are hereby
relinquished to the Government.[9] (exh. 1-D)
On December 7, 1948, Villaflor and Nasipit Lumber executed an
Agreement (exh 3).[10] This contract provides:
1. That the First Party is the possessor since 1930 of two (2) parcels
of land situated in sitio Tungao, Barrio of San Mateo, Municipality of
Butuan, Province of Agusan;
2. That the first parcel of land abovementioned and described in Plan
PLS-97 filed in the office of the Bureau of Lands is made up of Lots
Nos. 5412, 5413, 5488, 5490, 5491, 5492, 5849, 5850, 5851, 5852,
5853, 5854, 5855, 5856, 5857, 5858, 5859 and 5860 and the second
parcel of land is made of Lots Nos. 5399, 5409, 5410 and 5411;
3. That on July 7, 1948, a contract of Agreement to Sell was
executed between the contracting parties herein, covering the said
two parcels of land, copy of said Agreement to Sell is hereto
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attached marked as Annex A and made an integral part of this
document. The parties hereto agree that the said Agreement to Sell
be maintained in full force and effect with all its terms and conditions
of this present agreement and in no way be considered as modified.
4. That paragraph 4 of the Contract of Agreement to Sell, marked as
annex, A stipulates as follows:
Par. 4. That the Party of the Second Part has bound as it does
hereby bind itself, its executors and administrators, to pay unto the
Party of the First Part of the sum of FIVE THOUSAND PESOS
(P5,000.00) Philippine Currency, upon presentation by the latter to
the former of satisfactory evidence that:
a) The Bureau of Lands will have any objection to the obtainment by
Party of the First Part of a favor, either thru ordinary land registration
proceedings or thru administrative means and procedure.
b) That there is no other private claimant to the properties
hereinabove described.
That the First Party has on December 2, 1948, submitted to the
Bureau of Lands, a Sales Application for the twenty-two (22) lots
comprising the two abovementioned parcels of land, the said Sales
Application was registered in the said Bureau under No. V-807;
6. That in reply to the request made by the First Party to the Bureau
of Lands, in connection with the Sales Application No. V-807, the
latter informed the former that action on his request will be
expedited, as per letter of the Chief, Public Land Division, dated
December 2, 1948, copy of which is hereto attached marked as
annex B and made an integral part of this agreement:
7. That for and in consideration of the premises above stated and the
amount of TWENTY FOUR THOUSAND (P24,000.00) PESOS that
the Second Party shall pay to the First Party, by these presents, the
First Party hereby sells, transfers and conveys unto the Second
Party, its successors and assigns, his right, interest and participation
under an(d) by virtue of the Sales Application No. V-807, which he
20 July 2017
has or may have in the lots mentioned in said Sales Application No.
V-807;
8. That the amount of TWENTY FOUR THOUSAND (P24,000.00)
PESOS, shall be paid by the Second Party to the First Party, as
follows:
a) The amount of SEVEN THOUSAND (P7,000.00) PESOS, has
already been paid by the Second Party to the First Party upon the
execution of the Agreement to Sell, on July 7, 1948;
b) The amount of FIVE THOUSAND (P5,000.00) PESOS shall be
paid upon the signing of this present agreement; and
c) The balance of TWELVE THOUSAND (P12,000.00) PESOS, shall
be paid upon the execution by the First Party of the Absolute Deed of
Sale of the two parcels of land in question in favor of the Second
Party, and upon delivery to the Second Party of the Certificate of
Ownership of the said two parcels of land.
9. It is specially understood that the mortgage constituted by the First
Party in favor of the Second Party, as stated in the said contract of
Agreement to Sell dated July 7, 1948, shall cover not only the
amount of SEVEN THOUSAND (P7,000.00) PESOS as specified in
said document, but shall also cover the amount of FIVE THOUSAND
(P5,000.00) PESOS to be paid as stipulated in paragraph 8, sub-
paragraph (b) of this present agreement, if the First Party should fail
to comply with the obligations as provided for in paragraphs 2, 4, and
5 of the Agreement to Sell;
10. It is further agreed that the First Party obligates himself to sign,
execute and deliver to and in favor of the Second Party, its
successors and assigns, at anytime upon demand by the Second
Party such other instruments as may be necessary in order to give
full effect to this present agreement;
In the Report dated December 31, 1949 by the public land inspector,
District Land Office, Bureau of Lands, in Butuan, the report contains
an Indorsement of the aforesaid District Land Officer recommending
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rejection of the Sales Application of Villaflor for having leased the
property to another even before he had acquired transmissible rights
thereto.
In a letter of Villaflor dated January 23, 1950, addressed to the
Bureau of Lands, he informed the Bureau Director that he was
already occupying the property when the Bureaus Agusan River
Valley Subdivision Project was inaugurated, that the property was
formerly claimed as private properties (sic), and that therefore, the
property was segregated or excluded from disposition because of the
claim of private ownership. In a letter of Nasipit Lumber dated
February 22, 1950 (exh. X)[11]addressed to the Director of Lands, the
corporation informed the Bureau that it recognized Villaflor as the
real owner, claimant and occupant of the land; that since June 1946,
Villaflor leased two (2) hectares inside the land to the company; that
it has no other interest on the land; and that the Sales Application of
Villaflor should be given favorable consideration.
xxx xxx xxx
On July 24, 1950, the scheduled date of auction of the property
covered by the Sales Application, Nasipit Lumber offered the highest
bid of P41.00 per hectare, but since an applicant under CA 141, is
allowed to equal the bid of the highest bidder, Villaflor tendered an
equal bid, deposited the equivalent of 10% of the bid price and then
paid the assessment in full.
xxx xxx xxx
On August 16, 1950, Villaflor executed a document, denominated as
a Deed of Relinquishment of Rights (exh. N), [12] pertinent portion of
which reads:
5. That in view of my present business in Manila, and my change in
residence from Butuan, Agusan to the City of Manila, I cannot,
therefore, develope (sic) or cultivate the land applied for as projected
before;
20 July 2017
6. That the Nasipit Lumber Company, Inc., a corporation duly
organized xxx is very much interested in acquiring the land covered
by the aforecited application xxx;
7. That I believe the said company is qualified to acquire public land,
and has the means to develop (sic) the above-mentioned land;
xxx xxx xxx
WHEREFORE, and in consideration of the amount of FIVE
THOUSAND PESOS (P5,000.00) to be reimbursed to me by the
aforementioned Nasipit Lumber Company, Inc., after its receipt of the
order of award, the said amount representing part of the purchase
price of the land aforesaid, the value of the improvements I
introduced thereon, and the expenses incurred in the publication of
the Notice of Sale, I, the applicant, Vicente J. Villaflor, hereby
voluntarily renounce and relinquish whatever rights to, and interests I
have in the land covered by my above-mentioned application in favor
of the Nasipit Lumber Company, Inc.
Also on August 16, 1950, Nasipit Lumber filed a Sales Application
over the two (2) parcels of land, covering an area of 140 hectares,
more or less. This application was also numbered V-807 (exh. Y).
On August 17, 1950 the Director of Lands issued an Order of
Award[13] in favor of Nasipit Lumber Company, Inc., pertinent portion
of which reads:
4. That at the auction sale of the land held on July 24, 1950 the
highest bid received was that of Nasipit Lumber Company, Inc. which
offered P41.00 per hectare or P5,740.00 for the whole tract, which
bid was equaled by applicant Vicente J. Villaflor, who deposited the
amount of P574.00 under Official Receipt No. B-1373826 dated July
24, 1950 which is equivalent to 10% of the bid. Subsequently, the
said xxx Villaflor paid the amount of P5,160.00 in full payment of the
purchase price of the above-mentioned land and for some reasons
stated in an instrument of relinquishment dated August 16, 1950, he
(Vicente J. Villaflor) relinquished his rights to and interest in the said
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ATTY. BORJE
land in favor of the Nasipit Lumber Company, Inc. who filed the
corresponding application therefore.
In view of the foregoing, and it appearing that the proceedings had
xxx were in accordance with law and in [sic] existing regulations, the
land covered thereby is hereby awarded to Nasipit Lumber
Company, Inc. at P41.00 per hectare or P5,740.00 for the whole
tract.
This application should be entered in the record of this Office as
Sales Entry No. V-407.
It is Villaflors claim that he only learned of the Order of Award on
January 16, 1974, or after his arrival to the Philippines, coming from
Indonesia, where he stayed for more than ten (10) years; that he
went to Butuan City in the latter part of 1973 upon the call of his
brother Serafin Villaflor, who was then sick and learned that Nasipit
Lumber (had) failed and refused to pay the agreed rentals, although
his brother was able to collect during the early years; and that
Serafin died three days after his (Vicentes) arrival, and so no
accounting of the rentals could be made; that on November 27,
1973, Villaflor wrote a letter to Mr. G.E.C. Mears of Nasipit Lumber,
reminding him of their verbal agreement in 1955 xxx that Mr. Mears
in a Reply dated December 3, 1973, appears to have referred the
matter to Mr. Noriega, the corporate general manager, but the new
set of corporate officers refused to recognize (Villaflors) claim, for Mr.
Florencio Tamesis, the general manager of Nasipit Lumber, in a
letter dated February 19, 1974, denied Villaflors itemized claim dated
January 5, 1974 (exh. V) to be without valid and legal basis. In that
5th January, 1974 letter, Villaflor claimed the total amount
of P427,000.00 x x x.
In a formal protest dated January 31, 1974 [14] which Villaflor filed with
the Bureau of Lands, he protested the Sales Application of Nasipit
Lumber, claiming that the company has not paid him P5,000.00 as
provided in the Deed of Relinquishment of Rights dated August 16,
1950.
xxx xxx xxx
20 July 2017
x x x (T)hat in a Decision dated August 8, 1977 (exh. 8), the Director
of Lands found that the payment of the amount of P5,000.00 in the
Deed xxx and the consideration in the Agreement to Sell were duly
proven, and ordered the dismissal of Villaflors protest and gave due
course to the Sales Application of Nasipit Lumber. Pertinent portion
of the Decision penned by Director of Lands, Ramon Casanova, in
the Matter of SP No. V-807 (C-V-407) xxx reads:
xxx xxx xxx
During the proceedings, Villaflor presented another claim entirely
different from his previous claim -- this time, for recovery of rentals in
arrears arising from a supposed contract of lease by Villaflor as
lessor in favor of Nasipit as lessee, and indemnity for damages
supposedly caused improvements on his other property xxx in the
staggering amount of Seventeen Million (P17,000,000.00)
Pesos. Earlier, he had also demanded from NASIPIT xxx
(P427,000.00) xxx also as indemnity for damages to improvements
supposedly caused by NASIPIT on his other real property as well as
for reimbursement of realty taxes allegedly paid by him thereon.
xxx xxx xxx
It would seem that xxx Villaflor has sought to inject so many
collaterals, if not extraneous claims, into this case. It is the
considered opinion of this Office that any claim not within the sphere
or scope of its adjudicatory authority as an administrative as well as
quasi-judicial body or any issue which seeks to delve into the merits
of incidents clearly outside of the administrative competence of this
Office to decide may not be entertained.
There is no merit in the contention of Villaflor that owing to Nasipits
failure to pay the amount of xxx (P5,000.00) xxx (assuming that
Nasipit had failed) the deed of relinquishment became null and void
for lack of consideration. xxxx.
xxx xxx xxx
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x x x The records clearly show, however, that since the execution of
the deed of relinquishment xxx Villaflor has always considered and
recognized NASIPIT as having the juridical personality to acquire
public lands for agricultural purposes.xxxx.
xxx xxx xxx
Even this Office had not failed to recognize the juridical personality of
NASIPIT to apply for the purchase of public lands xxx when it
awarded to it the land so relinquished by Villaflor (Order of Award
dated August 17, 1950) and accepted its application therefor. At any
rate, the question whether an applicant is qualified to apply for the
acquisition of public lands is a matter between the applicant and this
Office to decide and which a third party like Villaflor has no
personality to question beyond merely calling the attention of this
Office thereto.
xxx xxx xxx
Villaflor offered no evidence to support his claim of non-payment
beyond his own self-serving assertions and expressions that he had
not been paid said amount. As protestant in this case, he has the
affirmative of the issue. He is obliged to prove his allegations,
otherwise his action will fail. For, it is a well settled principle () that if
plaintiff upon whom rests the burden of proving his cause of action
fails to show in a satisfactory manner the facts upon which he bases
his claim, the defendant is under no obligation to prove his
exceptions or special defenses (Belen vs. Belen, 13 Phil. 202;
Mendoza vs. Fulgencio, 8 Phil. 243).
xxx xxx xxx
Consequently, Villaflors claim that he had not been paid must
perforce fail.
On the other hand, there are strong and compelling reasons to
presume that Villaflor had already been paid the amount of Five
Thousand (P5,000.00) Pesos.
20 July 2017
First, xxx What is surprising, however, is not so much his claims
consisting of gigantic amounts as his having forgotten to adduce
evidence to prove his claim of non-payment of the Five Thousand
(P5,000.00) Pesos during the investigation proceedings when he had
all the time and opportunity to do so. xxx The fact that he did not
adduce or even attempt to adduce evidence in support thereof
shows either that he had no evidence to offer xxx that NASIPIT had
already paid him in fact. What is worse is that Villaflor did not even
bother to command payment, orally or in writing, of the Five
Thousand (P5,000.00) Pesos which was supposed to be due him
since August 17, 1950, the date when the order of award was issued
to Nasipit, and when his cause of action to recover payment had
accrued. The fact that he only made a command (sic) for payment on
January 31, 1974, when he filed his protest or twenty-four (24) years
later is immediately nugatory of his claim for non-payment.
But Villaflor maintains that he had no knowledge or notice that the
order of award had already been issued to NASIPIT as he had gone
to Indonesia and he had been absent from the Philippines during all
those twenty-four (24) years. This of course taxes credulity. xxx.
Second, it should be understood that the condition that NASIPIT
should reimburse Villaflor the amount of Five Thousand (P5,000.00)
Pesos upon its receipt of the order of award was fulfilled as said
award was issued to NASIPIT on August 17, 1950. The said deed of
relinquishment was prepared and notarized in Manila with Villaflor
and NASIPIT signing the instrument also in Manila on August 16,
1950 (p.77, (sic)). The following day or barely a day after that, or on
August 17, 1950, the order of award was issued by this Office to
NASIPIT also in Manila. Now, considering that Villaflor is presumed
to be more assiduous in following up with the Bureau of Lands the
expeditious issuance of the order of award as the payment of the
Five Thousand (P5,000.00) Pesos (consideration) would depend on
the issuance of said order to award NASIPIT, would it not be
reasonable to believe that Villaflor was at hand when the award was
issued to NASIPIT on August 17, 1950, or barely a day which (sic)
he executed the deed of relinquishment on August 16, 1950, in
Manila? xxx.
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Third, on the other hand, NASIPIT has in his possession a sort of
order upon itself -- (the deed of relinquishment wherein he (sic)
obligated itself to reimburse or pay Villaflor the xxx consideration of
the relinquishment upon its receipt of the order of award) for the
payment of the aforesaid amount the moment the order of award is
issued to it. It is reasonable to presume that NASIPIT has paid the
Five Thousand (P5,000.00) Pesos to Villaflor.
A person in possession of an order on himself for the payment of
money, or the delivery of anything, has paid the money or delivered
the thing accordingly. (Section 5(k) B-131-Revised Rules of Court.
It should be noted that NASIPIT did not produce direct evidence as
proof of its payment of the Five Thousand (P5,000.00) Pesos to
Villaflor. Nasipits explanation on this point is found satisfactory.
x x x (I)t was virtually impossible for NASIPIT, after the lapse of the
intervening 24 years, to be able to cope up with all the records
necessary to show that the consideration for the deed of
relinquishment had been fully paid. To expect NASIPIT to keep intact
all records pertinent to the transaction for the whole quarter of a
century would be to require what even the law does not. Indeed,
even the applicable law itself (Sec. 337, National Internal Revenue
Code) requires that all records of corporations be preserved for only
a maximum of five years.
NASIPIT may well have added that at any rate while there are
transactions where the proper evidence is impossible or extremely
difficult to produce after the lapse of time xxx the law creates
presumptions of regularity in favor of such transactions (20 Am. Jur.
232) so that when the basic fact is established in an action the
existence of the presumed fact must be assumed by force of law.
(Rule 13, Uniform Rules of Evidence; 9 Wigmore, Sec. 2491).
Anent Villaflors claim that the 140-hectare land relinquished and
awarded to NASIPIT is his private property, little (need) be said. xxxx
The tracks of land referred to therein are not identical to the lands
awarded to NASIPIT. Even in the assumption that the lands
mentioned in the deeds of transfer are the same as the 140-hectare
20 July 2017
area awarded to NASIPIT, their purchase by Villaflor (or) the latters
occupation of the same did not change the character of the land from
that of public land to a private property. The provision of the law is
specific that public lands can only be acquired in the manner
provided for therein and not otherwise (Sec. 11, C.A. No. 141, as
amended). The records show that Villaflor had applied for the
purchase of the lands in question with this Office (Sales Application
No. V-807) on December 2, 1948. xxxx There is a condition in the
sales application signed by Villaflor to the effect that he recognizes
that the land covered by the same is of public domain and any and
all rights he may have with respect thereto by virtue of continuous
occupation and cultivation are relinquished to the Government
(paragraph 6, Sales Application No. V-807 xxx) of which Villaflor is
very much aware. It also appears that Villaflor had paid for the
publication fees appurtenant to the sale of the land. He participated
in the public auction where he was declared the successful
bidder. He had fully paid the purchase prive (sic) thereof (sic). It
would be a (sic) height of absurdity for Villaflor to be buying that
which is owned by him if his claim of private ownership thereof is to
be believed. The most that can be said is that his possession was
merely that of a sales applicant to when it had not been awarded
because he relinquished his interest therein in favor of NASIPIT who
(sic) filed a sales application therefor.
xxx xxx xxx
x x x During the investigation proceedings, Villaflor presented as his
Exhibit (sic) (which NASIPIT adopted as its own exhibit and had it
marked in evidence as Exhibit 1) a duly notarized agreement to Sell
dated July 7, 1948, by virtue of which Villaflor undertook to sell to
Nasipit the tracts of land mentioned therein, for a consideration of
Twenty-Four Thousand (P24,000.00) Pesos. Said tracts of land have
been verified to be identical to the parcels of land formerly applied for
by Villaflor and which the latter had relinquished in favor of NASIPIT
under a deed of relinquishment executed by him on August 16,
1950. In another document executed on December 7, 1948 xxx
Villaflor as FIRST PARTY and NASIPIT as SECOND PARTY
confirmed the Agreement to Sell of July 7, 1948, which was
maintained in full force and effect with all its terms and conditions x x
x (Exh. 38-A); and that for and in consideration of xxx TWENTY
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FOUR THOUSAND (P24,000.00) PESOS that the Second Party
shall pay to the First Party xxx the First Party hereby sells, transfers
and conveys unto the Second Party xxx his right interest and
participation under and by virtue of the Sales Application No. V-807
and, in its paragraph 8, it made stipulations as to when part of the
said consideration xxx was paid and when the balance was to be
paid, to wit:
a) the amount of SEVEN THOUSAND xxx PESOS has already
been paid by the Second Party to the First Party upon the execution
of the Agreement to Sell, on July 17, 1948;
b) the amount of FIVE THOUSAND xxx PESOS shall be paid upon
the signing of this present agreement; and
c) the amount of TWELVE THOUSAND xxx PESOS, shall be paid
upon the execution by the First Party of the Absolute Sale of the Two
parcels of land in question in favor of the Second Party of the
Certificate of Ownership of the said two parcels of land. (Exh. 38-B).
(Emphasis ours)
It is thus clear from this subsequent document marked Exhibit 38
ANALCO that of the consideration of the Agreement to Sell dated
July7, 1948, involving the 140-hectare area relinquished by Villaflor
in favor of NASIPIT, in the amount of Twenty-Four Thousand
(P24,000.00) Pesos:
(1) the amount of Seven Thousand (P7,000.00) Pesos was already
paid upon the execution of the Agreement to Sell on July 7, 1948,
receipt of which incidentally was admitted by Villaflor in the
document of December 7, 1948;
(2) the amount of Five Thousand (P5,000.00) Pesos was paid when
said document was signed by Vicente J. Villaflor as the First Party
and Nasipit thru its President, as the Second Party, on December 7,
1948; and
(3) the balance of Twelve Thousand (P12,000.00) Pesos to be paid
upon the execution by the First Party of the Absolute Deed of Sale of
20 July 2017
the two parcels of land in favor of the Second Party, and upon
delivery to the Second Party of the Certificate of Ownership of the
said two parcels of land.
Villaflor contends that NASIPIT could not have paid Villaflor the
balance of Twelve Thousand (P12,000.00) Pesos x x x consideration
in the Agreement to Sell will only be paid to applicant-assignor
(referring to Villaflor) upon obtaining a Torrens Title in his favor over
the 140-hectare of land applied for and upon execution by him of a
Deed of Absolute Sale in favor of Nasipit Lumber Company, Inc. x x
x. Inasmuch as applicant-assignor was not able to obtain a Torrens
Title over the land in question he could not execute an absolute
Deed of (sic) Nasipit Lumber Co., Inc. Hence, the Agreement to Sell
was not carried out and no Twelve Thousand (P12,000.00) Pesos
was overpaid either to the applicant-assignor, much less to Howard
J. Nell Company. (See MEMORANDUM FOR THE APPLICANT-
ASSIGNOR, dated January 5, 1977). xxx.
xxx Villaflor did not adduce evidence in support of his claim that he
had not been paid the xxx (P12,000.00) xxx consideration of the
Agreement to Sell dated July 7, 1948 (Exh. 38 NALCO) beyond his
mere uncorroborated assertions. On the other hand, there is strong
evidence to show that said Twelve Thousand (P12,000.00) Pesos
had been paid by (private respondent) to Edward J. Nell Company
by virtue of the Deed of Assignment of Credit executed by Villaflor
(Exh. 41 NALCO) for the credit of the latter.
Atty. Gabriel Banaag, resident counsel of NASIPIT who is in a
position to know the facts, testified for NASIPIT. He described that it
was he who notarized the Agreement to Sell (Exh. F); that he knew
about the execution of the document of December 7, 1948 (Exh. 38)
confirming the said Agreement to Sell having been previously
consulted thereon by Jose Fernandez, who signed said document on
behalf of NASIPIT xxx that subsequently, in January 1949, Villaflor
executed a Deed of Assignment of credit in favor of Edward J. Nell
Company (Exh. 41 NALCO) whereby Villaflor ceded to the latter his
receivable for NASIPIT corresponding to the remaining balance in
the amount of Twelve Thousand xxx Pesos of the total consideration
xxx stipulated in both the Agreement to Sell (Exh. F) and the
document dated December 7, 1948 (Exh. 39); xxx. He further
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testified that the said assignment of credit was communicated to
(private respondent) under cover letter dated January 24, 1949 (Exh.
41-A) and not long thereafter, by virtue of the said assignment of
credit, (private respondent) paid the balance of Twelve Thousand
xxx due to Villaflor to Edward J. Nell Company xxx. Atty. Banaags
aforesaid testimony stand unrebutted; hence, must be given full
weight and credit. xxx Villaflor and his counsel were present when
Atty. Banaags foregoing testimony was given. Yet, Villaflor did not
demur, nor did he rebut the same, despite having been accorded full
opportunity to do so.
xxx xxx xxx
Having found that both the Five Thousand xxx consideration of the
deed of Relinquishment xxx and that the remaining balance of xxx
(P12,000.00) to complete the Twenty-Four Thousand (P24,000.00)
Pesos consideration of both the Agreement to Sell dated July 7,
1948, and the document, dated December 7, 1948, executed by the
former in favor of the latter, have been paid Villaflor the issue on
prescription and laches becomes academic and needs no further
discussion.
But more than all the questions thus far raised and resolved is the
question whether a sales patent can be issued to NASIPIT for the
140-hectare area awarded to it in the light of Section 11, Article XIV
of the new Constitution which provides in its pertinent portion to wit:
x x x No private corporation or association may hold alienable land of
the public domain except by lease not to exceed one thousand
hectares in area xxx.
The Secretary of Justice had previous occasion to rule on this point
in his opinion No. 140, s. 1974. Said the Honorable Justice
Secretary:
On the second question, (referring to the questions when may a
public land be considered to have been acquired by purchase before
the effectivity of the new Constitution posed by the Director of Lands
in his query on the effect on pending applications for the issuance of
20 July 2017
sales patent in the light of Section 11, Art. XIV of the New
Constitution aforecited), you refer to this Offices Opinion No. 64
series of 1973 in which I stated:
On the other hand, with respect to sales applications ready for
issuance of sales patent, it is my opinion that where the applicant
had, before the Constitution took effect, fully complied with all this
obligations under the Public Land Act in order to entitle him to a
Sales patent, there would be no legal or equitable justification for
refusing to issue or release the sales patent.
With respect to the point as to when the Sales applicant has
complied with all the terms and conditions which would entitle him to
a sales patent, the herein above Secretary of Justice went on:
That as to when the applicant has complied with all the terms and
conditions which would entitle him to a patent is a questioned (sic)
fact which your office would be in the best position to
determine. However, relating this to the procedure for the processing
of applications mentioned above, I think that as the applicant has
fulfilled the construction/cultivation requirements and has fully paid
the purchase price, he should be deemed to have acquired by
purchase the particular tract of land and (sic) the area (sic) in the
provision in question of the new constitution would not apply.
From the decision of the Director of Lands, Villaflor filed a Motion for
Reconsideration which was considered as an Appeal M.N.R. Case
4341, to the Ministry of Natural Resources.
On June 6, 1979, the Minister of Natural Resources rendered a
Decision (exh. 9),[15] dismissing the appeal and affirming the decision
of the Director of Lands, pertinent portions of which reads:
After a careful study of the records and the arguments of the parties,
we believe that the appeal is not well taken.
Firstly, the area in dispute is not the private property of appellant.
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The evidence adduced by appellant to establish his claim of
ownership over the subject area consists of deeds of absolute sale
executed in his favor on January 16, and February 15, 1940, by four
(4) different persons, namely, Cirilo Piencenaves, Fermin Balobo,
Claudio Otero and Hermogenes Patete.
However, an examination of the technical descriptions of the tracts of
land subject of the deeds of sale will disclose that said parcels are
not identical to, and do not tally with, the area in controversy.
It is a basic assumption of our policy that lands of whatever
classification belong to the state. Unless alienated in accordance
with law, it retains its rights over the same as dominus, (Santiago vs.
de los Santos, L-20241, November 22, 1974, 61 SCRA 152).
For, it is well-settled that no public land can be acquired by private
persons without any grant, express or implied from the
government. It is indispensable then that there be showing of title
from the state or any other mode of acquisition recognized by
law. (Lee Hong Hok, et al. vs. David, et al., L-30389, December 27,
1972, 48 SCRA 379.)
It is well-settled that all lands remain part of the public domain unless
severed therefrom by state grant or unless alienated in accordance
with law.
We, therefore, believe that the aforesaid deeds of sale do not
constitute clear and convincing evidence to establish that the
contested area is of private ownership. Hence, the property must be
held to be public domain.
There being no evidence whatever that the property in question was
ever acquired by the applicants or their ancestors either by
composition title from the Spanish Government or by possessory
information title or by any other means for the acquisition of public
lands, the property must be held to be public domain. (Lee Hong
Hok, et al., vs. David , et al., L-30389 December 27, 1972, 48 SCRA
378-379 citing Heirs of Datu Pendatun vs. Director of Lands; see
20 July 2017
also Director of Lands vs. Reyes, L-27594, November 28, 1975, 68
SCRA 177).
Be that as it may, appellant, by filing a sales application over the
controverted land, acknowledged unequivocably [sic] that the same
is not his private property.
As such sales applicant, appellant manifestly acknowledged that he
does not own the land and that the same is a public land under the
administration of the Bureau of Lands, to which the application was
submitted, xxx All of its acts prior thereof, including its real estate tax
declarations, characterized its possessions of the land as that of a
sales applicant and consequently, as one who expects to buy it, but
has not as yet done so, and is not, therefore, its owner. (Palawan
Agricultural and Industrial Co., Inc. vs. Director of Lands, L-25914,
March 21, 1972, 44 SCRA 20, 21).
Secondly, appellants alleged failure to pay the consideration
stipulated in the deed of relinquishment neither converts said deed
into one without a cause or consideration nor ipso facto  rescinds the
same. Appellant, though, has the right to demand payment with legal
interest for the delay or to demand rescission.
xxx xxx xxx
However, appellants cause of action, either for specific performance
or rescission of contract, with damages, lies within the jurisdiction of
civil courts, not with administrative bodies.
xxx xxx xxx
Lastly, appellee has acquired a vested right to the subject area and,
therefore, is deemed not affected by the new constitutional provision
that no private corporation may hold alienable land of the public
domain except by lease.
xxx xxx xxx
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Implementing the aforesaid Opinion No. 64 of the Secretary of
Justice, the then Secretary of Agriculture and Natural Resources
issued a memorandum, dated February 18, 1974, which pertinently
reads as follows:
In the implementation of the foregoing opinion, sales application of
private individuals covering areas in excess of 24 hectares and those
of corporations, associations, or partnership which fall under any of
the following categories shall be given due course and issued
patents, to wit:
1. Sales application for fishponds and for agricultural purposes (SFA,
SA and IGPSA) wherein prior to January 17, 1973;
a. the land covered thereby was awarded;
b. cultivation requirements of law were complied with as shown by
investigation reports submitted prior to January 17, 1973;
c. land was surveyed and survey returns already submitted to the
Director of Lands for verification and approval; and
d. purchase price was fully paid.
From the records, it is evident that the aforestated requisites have
been complied with by appellee long before January 17, 1973, the
effectivity of the New Constitution. To restate, the disputed area was
awarded to appellee on August 17, 1950, the purchase price was
fully paid on July 26, 1951, the cultivation requirements were
complied with as per investigation report dated December 31, 1949,
and the land was surveyed under Pls-97.
[16]
On July 6, 1978, petitioner filed a complaint  in the trial
court for Declaration of Nullity of Contract (Deed of Relinquishment
of Rights), Recovery of Possession (of two parcels of land subject of
the contract), and Damages at about the same time that he appealed
the decision of the Minister of Natural Resources to the Office of the
President.
20 July 2017
On January 28, 1983, petitioner died. The trial court ordered his
widow, Lourdes D. Villaflor, to be substituted as petitioner. After trial
in due course, the then Court of First Instance of Agusan del Norte
and Butuan City, Branch III,[17] dismissed the complaint on the
grounds that: (1) petitioner admitted the due execution and
genuineness of the contract and was estopped from proving its
nullity, (2) the verbal lease agreements were unenforceable under
Article 1403 (2)(e) of the Civil Code, and (3) his causes of action
were barred by extinctive prescription and/or laches. It ruled that
there was prescription and/or laches because the alleged verbal
lease ended in 1966, but the action was filed only on January 6,
1978. The six-year period within which to file an action on an oral
contract per Article 1145 (1) of the Civil Code expired in 1972. The
decretal portion[18] of the trial courts decision reads:
WHEREFORE, the foregoing premises duly considered, judgment is
hereby rendered in favor of the defendant and against the
plaintiff. Consequently, this case is hereby ordered DISMISSED. The
defendant is hereby declared the lawful actual physical possessor-
occupant and having a better right of possession over the two (2)
parcels of land in litigation described in par. 1.2 of the complaint as
Parcel I and Parcel II, containing a total area of One Hundred Sixty
(160) hectares, and was then the subject of the Sales Application
No. V-807 of the plaintiff (Exhibits 1, 1-A, 1-B, pp. 421 to 421-A,
Record), and now of the Sales Application No. 807, Entry No. V-407
of the defendant Nasipit Lumber Company (Exhibit Y, pp. 357-358,
Record). The Agreements to Sell Real Rights, Exhibits 2 to 2-C, 3 to
3-B, and the Deed of Relinquishment of Rights, Exhibits N to N-1,
over the two parcels of land in litigation are hereby declared binding
between the plaintiff and the defendant, their successors and
assigns.
Double the costs against the plaintiff.
The heirs of petitioner appealed to Respondent Court of
Appeals[19] which, however, rendered judgment against petitioner via
the assailed Decision dated September 27, 1990 finding petitioners
prayers -- (1) for the declaration of nullity of the deed of
relinquishment, (2) for the eviction of private respondent from the
property and (3) for the declaration of petitioners heirs as owners to
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be without basis. The decretal portion[20] of the assailed 49-page,
single-spaced Decision curtly reads:
WHEREFORE, the Decision appealed from, is hereby AFFIRMED,
with costs against plaintiff-appellants.
Not satisfied, petitioners heirs filed the instant 57-page petition
for review dated December 7, 1990. In a Resolution dated June 23,
1991, the Court denied this petition for being late. On reconsideration
-- upon plea of counsel that petitioners were poor and that a full
decision on the merits should be rendered -- the Court reinstated the
petition and required comment from private respondent. Eventually,
the petition was granted due course and the parties thus filed their
respective memoranda.
The Issues
Petitioner, through his heirs, attributes the following errors to the
Court of Appeals:
I. Are the findings of the Court of Appeals conclusive and binding
upon the Supreme Court?
II. Are the findings of the Court of Appeals fortified by the similar
findings made by the Director of Lands and the Minister of Natural
Resources (as well as by the Office of the President)?
III. Was there forum shopping?
IV. Are the findings of facts of the Court of Appeals and the trial court
supported by the evidence and the law?
V. Are the findings of the Court of Appeals supported by the very
terms of the contracts which were under consideration by the said
court?
20 July 2017
VI. Did the Court of Appeals, in construing the subject contracts,
consider the contemporaneous and subsequent act of the parties
pursuant to article 1371 of the Civil Code?
VII. Did the Court of Appeals consider the fact and the unrefuted
claim of Villaflor that he never knew of the award in favor of Nasipit?
VIII. Did the Court of Appeals correctly apply the rules on evidence in
its findings that Villaflor was paid the P5,000.00 consideration
because Villaflor did not adduce any proof that he was not paid?
IX. Is the Court of Appeals conclusion that the contract is not
simulated or fictitious simply because it is genuine and duly executed
by the parties, supported by logic or the law?
X. May the prestations in a contract agreeing to transfer certain
rights constitute estoppel when this very contract is the subject of an
action for annulment on the ground that it is fictitious?
XI. Is the Court of Appeals conclusion that the lease agreement
between Villaflor is verbal and therefore, unenforceable supported by
the evidence and the law?
After a review of the various submissions of the parties,
particularly those of petitioner, this Court believes and holds that the
issues can be condensed into three as follows:
(1) Did the Court of Appeals err in adopting or relying on the factual
findings of the Bureau of Lands, especially those affirmed by the
Minister (now Secretary) of Natural Resources and the trial court?
(2) Did the Court of Appeals err in upholding the validity of the
contracts to sell and the deed of relinquishment? Otherwise stated,
did the Court of Appeals err in finding the deed of relinquishment of
rights and the contracts to sell valid, and not simulated or fictitious?
(3) Is the private respondent qualified to acquire title over the
disputed property?
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The Courts Ruling
The petition is bereft of merit. It basically questions the
sufficiency of the evidence relied upon by the Court of Appeals,
alleging that public respondents factual findings were based on
speculations, surmises and conjectures. Petitioner insists that a
review of those findings is in order because they were allegedly (1)
rooted, not on specific evidence, but on conclusions and inferences
of the Director of Lands which were, in turn, based on
misapprehension of the applicable law on simulated contracts; (2)
arrived at whimsically -- totally ignoring the substantial and admitted
fact that petitioner was not notified of the award in favor of private
respondent; and (3) grounded on errors and misapprehensions,
particularly those relating to the identity of the disputed area.
First Issue: Primary Jurisdiction of the Director of Lands and
Finality of Factual Findings of the Court of Appeals
Underlying the rulings of the trial and appellate courts is the
doctrine of primary jurisdiction; i.e., courts cannot and will not resolve
a controversy involving a question which is within the jurisdiction of
an administrative tribunal, especially where the question demands
the exercise of sound administrative discretion requiring the special
knowledge, experience and services of the administrative tribunal to
determine technical and intricate matters of fact.[21]
In recent years, it has been the jurisprudential trend to apply this
doctrine to cases involving matters that demand the special
competence of administrative agencies even if the question involved
is also judicial in character. It applies where a claim is originally
cognizable in the courts, and comes into play whenever enforcement
of the claim requires the resolution of issues which, under a
regulatory scheme, have been placed within the special competence
of an administrative body; in such case, the judicial process is
suspended pending referral of such issues to the administrative body
for its view.[22]
20 July 2017
In cases where the doctrine of primary jurisdiction is clearly
applicable, the court cannot arrogate unto itself the authority to
resolve a controversy, the jurisdiction over which is initially lodged
with an administrative body of special competence. [23] In Machete vs.
Court of Appeals, the Court upheld the primary jurisdiction of the
Department of Agrarian Reform Adjudicatory Board (DARAB) in an
agrarian dispute over the payment of back rentals under a leasehold
contract.[24] In Concerned Officials of the Metropolitan Waterworks
and Sewerage System vs. Vasquez, [25]  the Court recognized that the
MWSS was in the best position to evaluate and to decide which bid
for a waterworks project was compatible with its development plan.
The rationale underlying  the doctrine of primary jurisdiction
finds application in this case, since the questions on the identity of
the land in dispute and the factual qualification of private respondent
as an awardee of a sales application require a technical
determination by the Bureau of Lands as the administrative agency
with the expertise to determine such matters. Because these issues
preclude prior judicial determination, it behooves the courts to stand
aside even when they apparently have statutory power to proceed, in
recognition of the primary jurisdiction of the administrative agency. [26]
One thrust of the multiplication of administrative agencies is that the
interpretation of contracts and the determination of private rights
thereunder is no longer a uniquely judicial function, exercisable only
by our regular courts[27]
Petitioner initiated his action with a protest before the Bureau of
Lands and followed it through in the Ministry of Natural Resources
and thereafter in the Office of the President. Consistent with the
doctrine of primary jurisdiction, the trial and the appellate courts had
reason to rely on the findings of these specialized administrative
bodies.
The primary jurisdiction of the director of lands and the minister
of natural resources over the issues regarding the identity of the
disputed land and the qualification of an awardee of a sales patent is
established by Sections 3 and 4 of Commonwealth Act No. 141, also
known as the Public Land Act:
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Section 3. The Secretary of Agriculture and Commerce (now
Secretary of Natural Resources) shall be the executive officer
charged with carrying out the provisions of this Act through the
Director of Lands, who shall act under his immediate control.
Section 4. Subject to said control, the Director of Lands shall have
direct executive control of the survey, classification, lease, sale or
any other form of concession or disposition and management of the
lands of the public domain, and his decision as to questions of fact
shall be conclusive when approved by the Secretary of Agriculture
and Commerce.
Thus, the Director of Lands, in his decision, said:[28]
x x x It is merely whether or not Villaflor has been paid the Five
Thousand (P5,000.00) Pesos stipulated consideration of the deed of
relinquishment made by him without touching on the nature of the
deed of relinquishment. The administration and disposition of public
lands is primarily vested in the Director of Lands and ultimately with
the Secretary of Agriculture and Natural Resources (now Secretary
of Natural Resources), and to this end--
Our Supreme Court has recognized that the Director of Lands is a
quasi-judicial officer who passes on issues of mixed facts and law
(Ortua vs. Bingson Encarnacion, 59 Phil 440). Sections 3 and 4 of
the Public Land Law thus mean that the Secretary of Agriculture and
Natural Resources shall be the final arbiter on questions of fact in
public land conflicts (Heirs of Varela vs. Aquino, 71 Phil 69; Julian vs.
Apostol, 52 Phil 442).
The ruling of this Office in its order dated September 10, 1975, is
worth reiterating, thus:
x x x it is our opinion that in the exercise of his power of executive
control, administrative disposition and allegation of public land, the
Director of Lands should entertain the protest of Villaflor and conduct
formal investigation xxx to determine the following points: (a)
whether or not the Nasipit Lumber Company, Inc. paid or reimbursed
to Villaflor the consideration of the rights in the amount of P5,000.00
20 July 2017
and what evidence the company has to prove payment, the
relinquishment of rights being part of the administrative process in
the disposition of the land in question xxx.
xxxx Besides, the authority of the Director of Lands to pass upon and
determine questions considered inherent in or essential to the
efficient exercise of his powers like the incident at issue, i.e. ,
whether Villaflor had been paid or not, is conceded by law.
Reliance by the trial and the appellate courts on the factual
findings of the Director of Lands and the Minister of Natural
Resources is not misplaced. By reason of the special knowledge and
expertise of said administrative agencies over matters falling under
their jurisdiction, they are in a better position to pass judgment
thereon; thus, their findings of fact in that regard are generally
accorded great respect, if not finality,[29] by the courts.[30] The findings
of fact of an administrative agency must be respected as long as
they are supported by substantial evidence, even if such evidence
might not be overwhelming or even preponderant. It is not the task of
an appellate court to weigh once more the evidence submitted
before the administrative body and to substitute its own judgment for
that of the administrative agency in respect of sufficiency of
evidence.[31]
However, the rule that factual findings of an administrative
agency are accorded respect and even finality by courts admits of
exceptions. This is true also in assessing factual findings of lower
courts.[32] It is incumbent on the petitioner to show that the resolution
of the factual issues by the administrative agency and/or by the trial
court falls under any of the exceptions. Otherwise, this Court will not
disturb such findings.[33]
We mention and quote extensively from the rulings of the
Bureau of Lands and the Minister of Natural Resources because the
points, questions and issues raised by petitioner before the trial
court, the appellate court and now before this Court are basically the
same as those brought up before the aforesaid specialized
administrative agencies. As held by the Court of Appeals:[34]
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We find that the contentious points raised by appellant in this action,
are substantially the same matters he raised in BL Claim No. 873
(N). In both actions, he claimed private ownership over the land in
question, assailed the validity and effectiveness of the Deed of
Relinquishment of Rights he executed in August 16, 1950, that he
had not been paid the P5,000.00 consideration, the value of the
improvements he introduced on the land and other expenses
incurred by him.
In this instance, both the principle of primary jurisdiction of
administrative agencies and the doctrine of finality of factual findings
of the trial courts, particularly when affirmed by the Court of Appeals
as in this case, militate against petitioners cause. Indeed, petitioner
has not given us sufficient reason to deviate from them.
Land in Dispute Is Public Land
Petitioner argues that even if the technical description in the
deeds of sale and those in the sales application were not identical,
the area in dispute remains his private property. He alleges that the
deeds did not contain any technical description, as they were
executed prior to the survey conducted by the Bureau of Lands; thus,
the properties sold were merely described by reference to natural
boundaries. His private ownership thereof was also allegedly
attested to by private respondents former field manager in the latters
February 22, 1950 letter, which contained an admission that the land
leased by private respondent was covered by the sales application.
This contention is specious. The lack of technical description did
not prove that the finding of the Director of Lands lacked substantial
evidence. Here, the issue is not so much whether the subject land is
identical with the property purchased by petitioner. The issue, rather,
is whether the land covered by the sales application is private or
public land. In his sales application, petitioner expressly admitted
that said property was public land.This is formidable evidence as it
amounts to an admission against interest.
20 July 2017
In the exercise of his primary jurisdiction over the issue, Director
of Lands Casanova ruled that the land was public:[35]
x x x Even (o)n the assumption that the lands mentioned in the
deeds of transfer are the same as the 140-hectare area awarded to
Nasipit, their purchase by Villaflor (or) the latters occupation of the
same did not change the character of the land from that of public
land to a private property. The provision of the law is specific that
public lands can only be acquired in the manner provided for therein
and not otherwise (Sec. 11, C.A. No. 141, as amended). The records
show that Villaflor had applied for the purchase of lands in question
with this Office (Sales Application No. V-807) on December 2,
1948. xxx There is a condition in the sales application xxx to the
effect that he recognizes that the land covered by the same is of
public domain and any and all rights he may have with respect
thereto by virtue of continuous occupation and cultivation are
relinquished to the Government (paragraph 6, Sales Application No.
V-807 of Vicente J. Villaflor, p. 21, carpeta) of which Villaflor is very
much aware. It also appears that Villaflor had paid for the publication
fees appurtenant to the sale of the land. He participated in the public
auction where he was declared the successful bidder. He had fully
paid the purchase prive (sic) thereor (sic). It would be a (sic) height
of absurdity for Villaflor to be buying that which is owned by him if his
claim of private ownership thereof is to be believed. xxx.
This finding was affirmed by the Minister of Natural Resources:
[36]
Firstly, the area in dispute is not the private property of appellant
(herein petitioner).
The evidence adduced by (petitioner) to establish his claim of
ownership over the subject area consists of deeds of absolute sale
executed in his favor xxx.
However, an examination of the technical descriptions of the tracts of
land subject of the deeds of sale will disclose that said parcels are
not identical to, and do not tally with, the area in controversy.
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It is a basic assumption of our policy that lands of whatever
classification belong to the state. Unless alienated in accordance
with law, it retains its rights over the same as dominus. (Santiago vs.
de los Santos, L-20241, November 22, 1974, 61 SCRA 152).
For it is well-settled that no public land can be acquired by private
persons without any grant, express or implied from the
government. It is indispensable then that there be showing of title
from the state or any other mode of acquisition recognized by law.
(Lee Hong Hok, et al. vs. David, et al., L-30389, December 27, 1972,
48 SCRA 379).
xxx xxx xxx xxx
We, therefore, believe that the aforesaid deeds of sale do not
constitute clear and convincing evidence to establish that the
contested area is of private ownership. Hence, the property must be
held to be public domain.
There being no evidence whatever that the property in question was
ever acquired by the applicants or their ancestors either by
composition title from the Spanish Government or by possessory
information title or by any other means for the acquisition of public
lands, the property must be held to be public domain.
Be that as it may, [petitioner], by filing a sales application over the
controverted land, acknowledged unequivocably [sic] that the same
is not his private property.
As such sales applicant manifestly acknowledged that he does not
own the land and that the same is a public land under the
administration of the Bureau of Lands, to which the application was
submitted, xxx All of its acts prior thereof, including its real estate tax
declarations, characterized its possessions of the land as that of a
sales applicant. And consequently, as one who expects to buy it, but
has not as yet done so, and is not, therefore, its owner.(Palawan
Agricultural and Industrial Co., Inc. vs. Director of Lands, L-25914,
March 21, 1972, 44 SCRA 15).
20 July 2017
Clearly, this issue falls under the primary jurisdiction of the
Director of Lands because its resolution requires survey,
classification, xxx disposition and management of the lands of the
public domain. It follows that his rulings deserve great respect. As
petitioner failed to show that this factual finding of the Director of
Lands was unsupported by substantial evidence, it assumes
finality. Thus, both the trial and the appellate courts correctly relied
on such finding.[37] We can do no less.
Second Issue: No Simulation of Contracts Proven
Petitioner insists that contrary to Article 1371 [38] of the Civil
Code, Respondent Court erroneously ignored the contemporaneous
and subsequent acts of the parties; hence, it failed to ascertain their
true intentions.However, the rule on the interpretation of contracts
that was alluded to by petitioner is used in affirming, not negating,
their validity. Thus, Article 1373, [39] which is a conjunct of Article
1371, provides that, if the instrument is susceptible of two or more
interpretations, the interpretation which will make it valid and
effectual should be adopted. In this light, it is not difficult to
understand that the legal basis urged by petitioner does not support
his allegation that the contracts to sell and the deed of
relinquishment are simulated and fictitious. Properly understood,
such rules on interpretation even negate petitioners thesis.
But let us indulge the petitioner awhile and determine whether
the cited contemporaneous and subsequent acts of the parties
support his allegation of simulation. Petitioner asserts that the
relinquishment of rights and the agreements to sell were simulated
because, first, the language and terms of said contracts negated
private respondents acquisition of ownership of the land in issue;
and second, contemporaneous and subsequent communications
between him and private respondent allegedly showed that the latter
admitted that petitioner owned and occupied the two
parcels; i.e., that private respondent was not applying for said
parcels but was interested only in the two hectares it had leased, and
that private respondent supported petitioners application for a patent.
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Petitioner explains that the Agreement to Sell dated December
7, 1948 did not and could not transfer ownership because paragraph
8 (c) thereof stipulates that the balance of twelve thousand pesos
(P12,000.00) shall be paid upon the execution by the First Party
[petitioner] of the Absolute Deed of Sale of the two parcels of land in
question in favor of the Second Party, and upon delivery to the
Second Party [private respondent] of the Certificate of Ownership of
the said two parcels of land. The mortgage provisions in paragraphs
6 and 7 of the agreement state that the P7,000.00 and P5,000.00
were earnest money or a loan with antichresis by the free occupancy
and use given to Nasipit of the 140 hectares of land not anymore as
a lessee. If the agreement to sell transferred ownership to Nasipit,
then why was it necessary to require petitioner, in a second
agreement, to mortgage his property in the event of nonfulfillment of
the prestations in the first agreement?
True, the agreement to sell did not absolutely transfer
ownership of the land to private respondent. This fact, however, does
not show that the agreement was simulated. Petitioners delivery of
the Certificate of Ownership and execution of the deed of absolute
sale were suspensive conditions, which gave rise to a corresponding
obligation on the part of the private respondent, i.e., the payment of
the last installment of the consideration mentioned in the December
7, 1948 Agreement. Such conditions did not affect the perfection of
the contract or prove simulation. Neither did the mortgage.
Simulation occurs when an apparent contract is a declaration of
a fictitious will, deliberately made by agreement of the parties, in
order to produce, for the purpose of deception, the appearance of a
juridical act which does not exist or is different from that which was
really executed.[40] Such an intention is not apparent in the
agreements. The intent to sell, on the other hand, is as clear as
daylight.
Petitioner alleges further that the deed of relinquishment of right
did not give full effect to the two agreements to sell, because the
preliminary clauses of the deed allegedly served only to give private
respondent an interest in the property as a future owner thereof and
to enable respondent to follow up petitioners sales application.
We disagree. Such an intention is not indicated in the deed. On
the contrary, a real and factual sale is evident in paragraph 6 thereof,
20 July 2017
which states: That the Nasipit Lumber Co., Inc., xxx is very much
interested in acquiring the land covered by the aforecited application
to be used for purposes of mechanized farming and the penultimate
paragraph stating: xxx VICENTE J. VILLAFLOR, hereby voluntarily
renounce and relinquish whatever rights to, and interests I have in
the land covered by my above-mentioned application in favor of the
Nasipit Lumber Co., Inc.
We also hold that no simulation is shown either in the letter,
dated December 3, 1973, of the former field manager of private
respondent, George Mear. A pertinent portion of the letter reads:
(a)s regards your property at Acacia, San Mateo, I recall that we
made some sort of agreement for the occupancy, but I no longer
recall the details and I had forgotten whether or not we actually did
occupy your land. But if, as you say, we did occupy it, then I am sure
that the Company is obligated to pay a rental.
The letter did not contain any express admission that private
respondent was still leasing the land from petitioner as of that
date. According to Mear, he could no longer recall the details of his
agreement with petitioner.This cannot be read as evidence of the
simulation of either the deed of relinquishment or the agreements to
sell. It is evidence merely of an honest lack of recollection.
Petitioner also alleges that he continued to pay realty taxes on
the land even after the execution of said contracts. This is immaterial
because payment of realty taxes does not necessarily prove
ownership, much less simulation of said contracts.[41]
Nonpayment of the Consideration
Did Not Prove Simulation
Petitioner insists that nonpayment of the consideration in the
contracts proves their simulation. We disagree. Nonpayment, at
most, gives him only the right to sue for collection. Generally, in a
contract of sale, payment of the price is a resolutory condition and
the remedy of the seller is to exact fulfillment or, in case of a
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substantial breach, to rescind the contract under Article 1191 of the
Civil Code.[42] However, failure to pay is not even a breach, but
merely an event which prevents the vendors obligation to convey title
from acquiring binding force.[43]
Petitioner also argues that Respondent Court violated
evidentiary rules in upholding the ruling of the Director of Lands that
petitioner did not present evidence to show private respondents
failure to pay him. We disagree. Prior to the amendment of the rules
on evidence on March 14, 1989, Section 1, Rule 131, states that
each party must prove his or her own affirmative allegations. [44] Thus,
the burden of proof in any cause rested upon the party who, as
determined by the pleadings or the nature of the case, asserts the
affirmative of an issue and remains there until the termination of the
action.[45] Although nonpayment is a negative fact which need not be
proved, the party seeking payment is still required to prove the
existence of the debt and the fact that it is already due. [46]
Petitioner showed the existence of the obligation with the
presentation of the contracts, but did not present any evidence that
he demanded payment from private respondent. The demand letters
dated January 2 and 5, 1974 (Exhs. J and U), adduced in evidence
by petitioner, were for the payment of back rentals, damages to
improvements and reimbursement of acquisition costs and realty
taxes, not payment arising from the contract to sell.
Thus, we cannot fault Respondent Court for adopting the finding
of the Director of Lands that petitioner offered no evidence to support
his claim of nonpayment beyond his own self-serving assertions, as
he did not even demand payment, orally or in writing, of the five
thousand (P5,000.00) pesos which was supposed to be due him
since August 17, 1950, the date when the order of award was issued
to Nasipit, and when his cause of action to recover payment had
accrued. Nonpayment of the consideration in the contracts to sell or
the deed of relinquishment was raised for the first time in the protest
filed with the Bureau of Lands on January 31, 1974.But this protest
letter was not the demand letter required by law.
Petitioner alleges that the assignment of credit and the letter of
the former field manager of private respondent are contemporaneous
and subsequent acts revealing the nonpayment of the
consideration. He maintains that the P12,000.00 credit assigned
20 July 2017
pertains to the P5,000.00 and P7,000.00 initial payments in the
December 7, 1948 Agreement, because the balance of P12,000.00
was not yet due and accruing. This is consistent, he argues, with the
representation that private respondent was not interested in filing a
sales application over the land in issue and that Nasipit was instead
supporting petitioners application thereto in Mears letter to the
Director of Lands dated February 22, 1950 (Exh. X). [47]
This argument is too strained to be acceptable. The assignment
of credit did not establish the nondelivery of these initial payments of
the total consideration. First, the assignment of credit happened on
January 19, 1949, or a month after the signing of the December 7,
1948 Agreement and almost six months after the July 7, 1948
Agreement to Sell. Second, it does not overcome the recitation in the
Agreement of December 7, 1948:xxx a) The amount of SEVEN
THOUSAND (P7,000.00) PESOS has already been paid by the
Second Party to the First Party upon the execution of the Agreement
to Sell, on July 7, 1948; b) The amount of FIVE THOUSAND
(P5,000.00) PESOS shall be paid upon the signing of this present
agreement; xxx.
Aside from these facts, the Director of Lands found evidence of
greater weight showing that payment was actually made: [48]
x x x (T)here is strong evidence to show that said xxx (P12,000.00)
had been paid by NASIPIT to Edward J. Nell Company by virtue of
the Deed of Assignment of Credit executed by Villaflor (Exh. 41
NALCO) for the credit of the latter.
Atty. Gabriel Banaag, resident counsel of NASIPIT xxx declared that
it was he who notarized the Agreement to Sell (Exh. F); xxxx that
subsequently, in January 1949, Villaflor executed a Deed of
Assignment of credit in favor of Edward J. Nell Company (Exh. 41
NALCO) whereby Villaflor ceded to the latter his receivable for
NASIPIT corresponding to the remaining balance in the amount of
xxx (P12,000.00) xxx of the total consideration xxxx; He further
testified that the said assignment xxx was communicated to NASIPIT
under cover letter dated January 24, 1949 (Exh. 41-A) and not long
thereafter, by virtue of the said assignment of credit, NASIPIT paid
the balance xxx to Edward J. Nell Company (p. 58, bid).Atty.
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Banaags aforesaid testimony stand unrebutted; hence, must be
given full weight and credit.
xxx xxx xxx.
The Director of Lands also found that there had been payment
of the consideration in the relinquishment of rights: [49]
On the other hand, there are strong and compelling reasons to
presume that Villaflor had already been paid the amount of Five
Thousand (P5,000.00) Pesos.
First, x x x What is surprising, however, is not so much his claims
consisting of gigantic amounts as his having forgotten to adduce
evidence to prove his claim of non-payment of the Five Thousand
(P5,000.00) Pesos during the investigation proceedings when he had
all the time and opportunity to do so. xxxx The fact that he did not
adduce or even attempt to adduce evidence in support thereof
shows either that he had no evidence to offer of that NASIPIT had
already paid him in fact. What is worse is that Villaflor did not even
bother to command payment, orally or in writing, of the Five
Thousand (P5,000.00) Pesos which was supposed to be due him
since August 17, 1950, the date when the order of award was issued
to Nasipit, and when his cause of action to recover payment had
accrued. The fact that he only made a command for payment on
January 31, 1974, when he filed his protest or twenty-four (24) years
later is immediately nugatory of his claim for non-payment.
But Villaflor maintains that he had no knowledge or notice that the
order of award had already been issued to NASIPIT as he had gone
to Indonesia and he had been absent from the Philippines during all
those twenty-four (24) years. This of course taxes credulity.xxxx
x x x It is more in keeping with the ordinary course of things that he
should have acquired information as to what was transpiring in his
affairs in Manila x x x.
Second, it should be understood that the condition that NASIPIT
should reimburse Villaflor the amount of Five Thousand (P5,000.00)
20 July 2017
Pesos upon its receipt of the order of award was fulfilled as said
award was issued to NASIPIT on August 17, 1950. The said deed of
relinquishment was prepared and notarized in Manila with Villaflor
and NASIPIT signing the instrument also in Manila. Now, considering
that Villaflor is presumed to be more assiduous in following up with
the Bureau of Lands the expeditious issuance of the order of award
as the (consideration) would depend on the issuance of said order to
award NASIPIT, would it not be reasonable to believe that Villaflor
was at hand when the award was issued to NASIPIT on August 17,
1950, or barely a day which he executed the deed of relinquishment
on August 16, 1950, in Manila? xxxx.
Third, on the other hand, NASIPIT has in his possession a sort of
order upon itself -- (the deed of relinquishment wherein he(sic)
obligated itself to reimburse or pay Villaflor the xxx consideration of
the relinquishment upon its receipt of the order of award) for the
payment of the aforesaid amount the moment the order of award is
issued to it. It is reasonable to presume that NASIPIT has paid the
(consideration) to Villaflor.
xxx xxx xxx
x x x (I)t was virtually impossible for NASIPIT, after the lapse of the
intervening 24 years, to be able to cope up with all the records
necessary to show that the consideration for the deed of
relinquishment had been fully paid. To expect NASIPIT to keep intact
all records pertinent to the transaction for the whole quarter of a
century would be to require what even the law does not. Indeed,
even the applicable law itself (Sec. 337, National Internal Revenue
Code) requires that all records of corporations be preserved for only
a maximum of five years.
NASIPIT may well have added that at any rate while there are
transactions where the proper evidence is impossible or extremely
difficult to produce after the lapse of time xxx the law creates
presumptions of regularity in favor of such transactions (20 Am. Jur.
232) so that when the basic fact is established in an action the
existence of the presumed fact must be assumed by force of law.
(Rule 13, Uniform Rules of Evidence; 9 Wigmore, Sec. 2491).
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The Court also notes that Mears letter of February 22, 1950 was
sent six months prior to the execution of the deed of relinquishment
of right. At the time of its writing, private respondent had not
perfected its ownership of the land to be able to qualify as a sales
applicant. Besides, although he was a party to the July 7, 1948
Agreement to Sell, Mear was not a signatory to the Deed of
Relinquishment or to the December 7, 1948 Agreement to
Sell. Thus, he cannot be expected to know the existence of and the
amendments to the later contracts. These circumstances explain the
mistaken representations, not misrepresentations, in said letter.
Lack of Notice of the Award
Petitioner insists that private respondent suppressed evidence,
pointing to his not having been notified of the Order of Award dated
August 17, 1950.[50] At the bottom of page 2 of the order, petitioner
was not listed as one of the parties who were to be furnished a copy
by Director of Lands Jose P. Dans. Petitioner also posits that Public
Land Inspector Sulpicio A. Taeza irregularly received the copies for
both private respondent and the city treasurer of Butuan City. The
lack of notice for petitioner can be easily explained. Plainly, petitioner
was not entitled to said notice of award from the Director of Lands,
because by then, he had already relinquished his rights to the
disputed land in favor of private respondent. In the heading of the
order, he was referred to as sales applicant-assignor. In paragraph
number 4, the order stated that, on August 16, 1950, he relinquished
his rights to the land subject of the award to private
respondent. From such date, the sales application was considered to
be a matter between the Bureau of Lands and private respondent
only. Considering these facts, the failure to give petitioner a copy of
the notice of the award cannot be considered as suppression of
evidence.[51] Furthermore, this order was in fact available to petitioner
and had been referred to by him since January 31, 1974 when he
filed his protest with the Bureau of Lands.[52]
Third Issue: Private Respondent Qualified
20 July 2017
for an  Award of Public Land
Petitioner asserts that private respondent was legally
disqualified from acquiring the parcels of land in question because it
was not authorized by its charter to acquire disposable public
agricultural lands under Sections 121, 122 and 123 of the Public
Land Act, prior to its amendment by P.D. No. 763. We disagree. The
requirements for a sales application under the Public Land Act are:
(1) the possession of the qualifications required by said Act (under
Section 29) and (2) the lack of the disqualifications mentioned
therein (under Sections 121, 122, and 123). However, the transfer of
ownership via the two agreements dated July 7 and December 7,
1948 and the relinquishment of rights, being private contracts, were
binding only between petitioner and private respondent. The Public
Land Act finds no relevance because the disputed land was covered
by said Act only after the issuance of the order of award in favor of
private respondent. Thus, the possession of any disqualification by
private respondent under said Act is immaterial to the private
contracts between the parties thereto. (We are not, however,
suggesting a departure from the rule that laws are deemed written in
contracts.) Consideration of said provisions of the Act will further
show their inapplicability to these contracts. Section 121 of the Act
pertains to acquisitions of public land by a corporation from a
grantee, but petitioner never became a grantee of the disputed
land. On the other hand, private respondent itself was the direct
grantee. Sections 122 and 123 disqualify corporations, which are not
authorized by their charter, from acquiring public land; the records do
not show that private respondent was not so authorized under its
charter.
Also, the determination by the Director of Lands and the
Minister of Natural Resources of the qualification of private
respondent to become an awardee or grantee under the Act is
persuasive on Respondent Court. In Espinosa vs. Makalintal,[53] the
Court ruled that, by law, the powers of the Secretary of Agriculture
and Natural Resources regarding the disposition of public lands --
including the approval, rejection, and reinstatement of applications
are of executive and administrative nature. (Such powers, however,
do not include the judicial power to decide controversies arising from
disagreements in civil or contractual relations between the
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litigants.)Consequently, the determination of whether private
respondent is qualified to become an awardee of public land under
C.A. 141 by sales application is included therein.
All told, the only disqualification that can be imputed to private
respondent is the prohibition in the 1973 Constitution against the
holding of alienable lands of the public domain by corporations.
[54]
 However, this Court earlier settled the matter, ruling that said
constitutional prohibition had no retroactive effect and could not
prevail over a vested right to the land. In Ayog vs. Cusi, Jr.,[55] this
Court declared:
We hold that the said constitutional prohibition has no retroactive
application to the sales application of Bian Development Co., Inc.
because it had already acquired a vested right to the land applied for
at the time the 1973 Constitution took effect.
That vested right has to be respected. It could not be abrogated by
the new Constitution. Section 2, Article XIII of the 1935 Constitution
allows private corporations to purchase public agricultural lands not
exceeding one thousand and twenty-four hectares. Petitioners
prohibition action is barred by the doctrine of vested rights in
constitutional law.
A right is vested when the right to enjoyment has become the
property of some particular person or persons as a present interest.
(16 C.J.S. 1173). It is the privilege to enjoy property legally vested, to
enforce contracts, and enjoy the rights of property conferred by
existing law (12 C.J. 955, Note 46, No. 6) or some right or interest in
property which has become fixed and established and is no longer
open to doubt or controversy (Downs vs. Blount, 170 Fed. 15, 20,
cited in Balboa vs. Farrales, 51 Phil. 498, 502).
The due process clause prohibits the annihilation of vested rights. A
state may not impair vested rights by legislative enactment, by the
enactment or by the subsequent repeal of a municipal ordinance, or
by a change in the constitution of the State, except in a legitimate
exercise of the police power (16 C.J.S. 1177-78).
20 July 2017
It has been observed that, generally, the term vested right expresses
the concept of present fixed interest, which in right reason and
natural justice should be protected against arbitrary State action, or
an innately just an imperative right which an enlightened free society,
sensitive to inherent and irrefragable individual rights, cannot deny
(16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania Greyhound
Lines, Inc. vs. Rosenthal, 192 Atl. 2nd 587).
Secretary of Justice Abad Santos in his 1973 opinion ruled that
where the applicant, before the Constitution took effect, had fully
complied with all his obligations under the Public Land Act in order to
entitle him to a sales patent, there would seem to be no legal or
equitable justification for refusing to issue or release the sales patent
(p. 254, Rollo).
In Opinion No. 140, series of 1974, he held that as soon as the
applicant had fulfilled the construction or cultivation requirements
and has fully paid the purchase price, he should be deemed to have
acquired by purchase the particular tract of land and to him the area
limitation in the new Constitution would not apply.
In Opinion No. 185, series of 1976, Secretary Abad Santos held that
where the cultivation requirements were fulfilled before the new
Constitution took effect but the full payment of the price was
completed after January 17, 1973, the applicant was, nevertheless,
entitled to a sales patent (p. 256, Rollo).
Such a contemporaneous construction of the constitutional
prohibition by a high executive official carries great weight and
should be accorded much respect. It is a correct interpretation of
section 11 of Article XIV.
In the instant case, it is incontestable that prior to the effectivity of the
1973 Constitution the right of the corporation to purchase the land in
question had become fixed and established and was no longer open
to doubt or controversy.
Its compliance with the requirements of the Public Land Law for the
issuance of a patent had the effect of segregating the said land from
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ATTY. BORJE
the public domain. The corporations right to obtain a patent for that
land is protected by law. It cannot be deprived of that right without
due process (Director of Lands vs. CA, 123 Phil. 919).
The Minister of Natural Resources ruled, and we agree, that
private respondent was similarly qualified to become an awardee of
the disputed land because its rights to it vested prior to the effectivity
of the 1973 Constitution:[56]
Lastly, appellee has acquired a vested right to the subject area and,
therefore, is deemed not affected by the new constitutional provision
that no private corporation may hold alienable land of the public
domain except by lease.
It may be recalled that the Secretary of Justice in his Opinion No. 64,
series of 1973, had declared, to wit:
On the other hand, with respect to sales application ready for
issuance of sales patent, it is my opinion that where the applicant
had, before, the constitution took effect, fully complied with all his
obligations under the Public Land act in order to entitle him to sales
patent, there would seem to be not legal or equitable justification for
refusing to issue or release the sales patent.
Implementing the aforesaid Opinion No. 64 xxx, the then Secretary
of Agriculture and Natural Resources issued a memorandum, dated
February 18, 1974, which pertinently reads as follows:
In the implementation of the foregoing opinion, sales application of
private individuals covering areas in excess of 24 hectares and those
of corporations, associations, or partnership which fall under any of
the following categories shall be given due course and issued
patents, to wit:
Sales application for fishponds and for agricultural purposes (SFA,
SA and IGPSA) wherein prior to January 17, 1973,
a. the land covered thereby was awarded;
20 July 2017
b. cultivation requirements of law were complied with as shown by
investigation reports submitted prior to January 17, 1973;
c. land was surveyed and survey returns already submitted to the
Director of Lands for verification and approval; and
d. purchase price was fully paid.
From the records, it is evident that the aforestated requisites have
been complied with by appellee long before January 17, 1973, the
effectivity of the New Constitution. To restate, the disputed area was
awarded to appellee on August 17, 1950, the purchase price was
fully paid on July 26, 1951, the cultivation requirements were
complied with as per investigation report dated December 31, 1949,
and the land was surveyed under Pls-97.
The same finding was earlier made by the Director of Lands:[57]
It is further contended by Villaflor that Nasipit has no juridical
personality to apply for the purchase of public lands for agricultural
purposes. The records clearly show, however, that since the
execution of the deed of relinquishment of August 16, 1950, in favor
of Nasipit, Villaflor has always considered and recognized Nasipit as
having the juridical personality to acquire public lands for agricultural
purposes. In the deed of relinquishment xxx, it is stated:
6. That the Nasipit Lumber Co., Inc., a corporation duly organized in
accordance with the laws of the Philippines, x x x.
Even this Office had not failed to recognize the juridical personality of
Nasipit to apply for the purchase of public lands xxx when it awarded
to it the land so relinquished by Villaflor (Order of Award dated
August 17, 1950) and accepted its application therefor. At any rate,
the question whether an applicant is qualified to apply for the
acquisition of public lands is a matter between the applicant and this
Office to decide and which a third party like Villaflor has no
personality to question beyond merely calling the attention of this
Office thereto.
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Needless to say, we also agree that the November 8, 1946

Lease Agreement between petitioner and private respondent had
been terminated by the agreements to sell and the relinquishment of
rights. By the time the verbal leases were allegedly made in 1951
and 1955,[58] the disputed land had already been acquired and
awarded to private respondent. In any event, petitioners cause of
action on these alleged lease agreements prescribed long before he
filed Civil Case No. 2072-III, as correctly found by the trial and
appellate courts.[59] Thus, it is no longer important, in this case, to
pass upon the issue of whether or not amendments to a lease
contract can be proven by parol evidence. The same holds true as
regards the issue of forum-shopping. SECOND DIVISION

All in all, petitioner has not provided us sufficient reason to [G.R. No. 111107. January 10, 1997]
disturb the cogent findings of the Director of Lands, the Minister of LEONARDO A. PAAT, in his capacity as Officer-in-Charge (OIC),
Natural Resources, the trial court and the Court of Appeals. Regional Executive Director (RED), Region 2 and
WHEREFORE, the petition is hereby DISMISSED. JOVITO LAYUGAN, JR., in his capacity as Community
Environment and Natural Resources Officer (CENRO),
SO ORDERED. both of the Department of Environment and Natural
Resources (DENR), petitioners, vs. COURT OF
Narvasa, C.J., (Chairman), Romero, and  Francisco, APPEALS, HON. RICARDO A. BACULI in his capacity as
JJ., concur. Presiding Judge of Branch 2, Regional Trial Court at
Melo, J.,  no part. Tuguegarao, Cagayan, and SPOUSES BIENVENIDO and
VICTORIA DE GUZMAN, respondents.

DECISION
TORRES, JR., J.:

Without violating the principle of exhaustion of administrative

remedies, may an action for replevin prosper to recover a movable
property which is the subject matter of an administrative forfeiture
proceeding in the Department of Environment and Natural
Resources pursuant to Section 68-A of P. D. 705, as amended,
entitled The Revised Forestry Code of the Philippines?
Are the Secretary of DENR and his representatives empowered
to confiscate and forfeit conveyances used in transporting illegal
forest products in favor of the government?

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These are two fundamental questions presented before us for
our resolution.
The controversy on hand had its incipiency on May 19, 1989
when the truck of private respondent Victoria de Guzman while on its
way to Bulacan from San Jose, Baggao, Cagayan, was seized by the
Department of Environment and Natural Resources (DENR, for
brevity) personnel in Aritao, Nueva Vizcaya because the driver could
not produce the required documents for the forest products found
concealed in the truck. Petitioner Jovito Layugan, the Community
Environment and Natural Resources Officer (CENRO) in Aritao,
Cagayan, issued on May 23, 1989 an order of confiscation of the
truck and gave the owner thereof fifteen (15) days within which to
submit an explanation why the truck should not be forfeited. Private
respondents, however, failed to submit the required explanation. On
June 22, 1989,[1] Regional Executive Director Rogelio Baggayan of
DENR sustained petitioner Layugans action of confiscation
and ordered the forfeiture of the truck invoking Section 68-A of
Presidential Decree No. 705 as amended by Executive Order No.
277. Private respondents filed a letter of reconsideration dated June
28, 1989 of the June 22, 1989 order of Executive Director Baggayan,
which was, however, denied in a subsequent order of July 12, 1989.
[2]
 Subsequently, the case was brought by the petitioners to the
Secretary of DENR pursuant to private respondents statement in
their letter dated June 28, 1989 that in case their letter for
reconsideration would be denied then this letter should be
considered as an appeal to the Secretary. [3] Pending resolution
however of the appeal, a suit for replevin, docketed as Civil Case
4031, was filed by the private respondents against petitioner
Layugan and Executive Director Baggayan[4] with the Regional Trial
Court, Branch 2 of Cagayan,[5] which issued a writ ordering the return
of the truck to private respondents. [6] Petitioner Layugan and
Executive Director Baggayan filed a motion to dismiss with the trial
court contending, inter alia, that private respondents had no cause of
action for their failure to exhaust administrative remedies. The trial
court denied the motion to dismiss in an order dated December 28,
1989.[7] Their motion for reconsideration having been likewise denied,
a petition for certiorari was filed by the petitioners with the
respondent Court of Appeals which sustained the trial courts order
ruling that the question involved is purely a legal question. [8] Hence,
this present petition,[9] with prayer for temporary restraining order
20 July 2017
and/or preliminary injunction, seeking to reverse the decision of the
respondent Court of Appeals was filed by the petitioners on
September 9, 1993. By virtue of the Resolution dated September 27,
1993,[10] the prayer for the issuance of temporary restraining order of
petitioners was granted by this Court.
Invoking the doctrine of exhaustion of administrative remedies,
petitioners aver that the trial court could not legally entertain the suit
for replevin because the truck was under administrative seizure
proceedings pursuant to Section 68-A of P.D. 705, as amended by
E.O. 277. Private respondents, on the other hand, would seek to
avoid the operation of this principle asserting that the instant case
falls within the exception of the doctrine upon the justification that (1)
due process was violated because they were not given the chance to
be heard, and (2) the seizure and forfeiture was unlawful on the
grounds: (a) that the Secretary of DENR and his representatives
have no authority to confiscate and forfeit conveyances utilized in
transporting illegal forest products, and (b) that the truck as admitted
by petitioners was not used in the commission of the crime.
Upon a thorough and delicate scrutiny of the records and
relevant jurisprudence on the matter, we are of the opinion that the
plea of petitioners for reversal is in order.
This Court in a long line of cases has consistently held that
before a party is allowed to seek the intervention of the court, it is a
pre-condition that he should have availed of all the means of
administrative processes afforded him. Hence, if a remedy within the
administrative machinery can still be resorted to by giving the
administrative officer concerned every opportunity to decide on a
matter that comes within his jurisdiction then such remedy should be
exhausted first before courts judicial power can be sought. The
premature invocation of courts intervention is fatal to ones cause of
action.[11] Accordingly, absent any finding of waiver or estoppel the
case is susceptible of dismissal for lack of cause of action. [12] This
doctrine of exhaustion of administrative remedies was not without its
practical and legal reasons, for one thing, availment of administrative
remedy entails lesser expenses and provides for a speedier
disposition of controversies. It is no less true to state that the courts
of justice for reasons of comity and convenience will shy away from a
dispute until the system of administrative redress has been
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completed and complied with so as to give the administrative agency
concerned every opportunity to correct its error and to dispose of the
case. However, we are not amiss to reiterate that the principle of
exhaustion of administrative remedies as tested by a battery of
cases is not an ironclad rule. This doctrine is a relative one and its
flexibility is called upon by the peculiarity and uniqueness of the
factual and circumstantial settings of a case. Hence, it is disregarded
(1) when there is a violation of due process, [13] (2) when the issue
involved is purely a legal question, [14] (3) when the administrative
action is patently illegal amounting to lack or excess of jurisdiction,
[15]
 (4) when there is estoppel on the part of the administrative agency
concerned,[16] (5) when there is irreparable injury, [17] (6) when the
respondent is a department secretary whose acts as an alter ego of
the President bears the implied and assumed approval of the latter,
[18]
 (7) when to require exhaustion of administrative remedies would
be unreasonable,[19] (8) when it would amount to a nullification of a
claim,[20] (9) when the subject matter is a private land in land case
proceedings,[21] (10) when the rule does not provide a plain, speedy
and adequate remedy, and (11) when there are circumstances
indicating the urgency of judicial intervention.[22]
In the case at bar, there is no question that the controversy was
pending before the Secretary of DENR when it was forwarded to him
following the denial by the petitioners of the motion for
reconsideration of private respondents through the order of July 12,
1989. In their letter of reconsideration dated June 28, 1989, [23] private
respondents clearly recognize the presence of an administrative
forum to which they seek to avail, as they did avail, in the resolution
of their case. The letter, reads, thus:
xxx
If this motion for reconsideration does not merit your favorable
action, then this letter should be considered as an appeal to the
Secretary.[24]
It was easy to perceive then that the private respondents looked
up to the Secretary for the review and disposition of their case. By
appealing to him, they acknowledged the existence of an adequate
and plain remedy still available and open to them in the ordinary
20 July 2017
course of the law. Thus, they cannot now, without violating the
principle of exhaustion of administrative remedies, seek courts
intervention by filing an action for replevin for the grant of their relief
during the pendency of an administrative proceedings.
Moreover, it is important to point out that the enforcement of
forestry laws, rules and regulations and the protection, development
and management of forest lands fall within the primary and special
responsibilities of the Department of Environment and Natural
Resources. By the very nature of its function, the DENR should be
given a free hand unperturbed by judicial intrusion to determine a
controversy which is well within its jurisdiction.The assumption by the
trial court, therefore, of the replevin suit filed by private respondents
constitutes an unjustified encroachment into the domain of the
administrative agencys prerogative. The doctrine of primary
jurisdiction does not warrant a court to arrogate unto itself the
authority to resolve a controversy the jurisdiction over which is
initially lodged with an administrative body of special competence.
[25]
 In Felipe Ismael, Jr. and Co. vs. Deputy Executive Secretary,
[26]
 which was reiterated in the recent case of Concerned Officials of
MWSS vs. Vasquez,[27] this Court held:
Thus, while the administration grapples with the complex and
multifarious problems caused by unbriddled exploitation of these
resources, the judiciary will stand clear. A long line of cases establish
the basic rule that the courts will not interfere in matters which are
addressed to the sound discretion of government agencies entrusted
with the regulation of activities coming under the special technical
knowledge and training of such agencies.
To sustain the claim of private respondents would in effect bring
the instant controversy beyond the pale of the principle of exhaustion
of administrative remedies and fall within the ambit of excepted
cases heretofore stated. However, considering the circumstances
prevailing in this case, we can not but rule out these assertions of
private respondents to be without merit. First, they argued that there
was violation of due process because they did not receive the May
23, 1989 order of confiscation of petitioner Layugan. This contention
has no leg to stand on. Due process does not necessarily mean or
require a hearing, but simply an opportunity or right to be heard.
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[28]
 One may be heard , not solely by verbal presentation but also,
and perhaps many times more creditably and practicable than oral
argument, through pleadings.[29] In administrative proceedings
moreover, technical rules of procedure and evidence are not strictly
applied; administrative process cannot be fully equated with due
process in its strict judicial sense. [30] Indeed, deprivation of due
process cannot be successfully invoked where a party was given the
chance to be heard on his motion for reconsideration, [31] as in the
instant case, when private respondents were undisputedly given the
opportunity to present their side when they filed a letter of
reconsideration dated June 28, 1989 which was, however, denied in
an order of July 12, 1989 of Executive Director Baggayan. In Navarro
III vs. Damasco,[32] we ruled that :
The essence of due process is simply an opportunity to be heard, or
as applied to administrative proceedings, an opportunity to explain
ones side or an opportunity to seek a reconsideration of the action or
ruling complained of. A formal or trial type hearing is not at all times
and in all instances essential. The requirements are satisfied when
the parties are afforded fair and reasonable opportunity to explain
their side of the controversy at hand. What is frowned upon is the
absolute lack of notice or hearing.
Second, private respondents imputed the patent illegality of
seizure and forfeiture of the truck because the administrative officers
of the DENR allegedly have no power to perform these acts under
the law. They insisted that only the court is authorized to confiscate
and forfeit conveyances used in transporting illegal forest products
as can be gleaned from the second paragraph of Section 68 of P.D.
705, as amended by E.O. 277. The pertinent provision reads as
follows:
SECTION 68. xxx
xxx
The court shall further order the confiscation in favor of the
government of the timber or any forest products cut, gathered,
collected, removed, or possessed, as well as the machinery,
20 July 2017
equipments, implements and tools illegaly [sic] used in the area
where the timber or forest products are found. (Underline ours)
A reading, however, of the law persuades us not to go along
with private respondents thinking not only because the aforequoted
provision apparently does not mention nor include conveyances that
can be the subject of confiscation by the courts, but to a large extent,
due to the fact that private respondents interpretation of the subject
provision unduly restricts the clear intention of the law and inevitably
reduces the other provision of Section 68-A , which is quoted herein
below:
SECTION 68-A. Administrative Authority of the Department or His
Duly Authorized Representative To Order Confiscation.  In all cases
of violation of this Code or other forest laws, rules and regulations,
the Department Head or his duly authorized representative ,
may order the confiscation of any forest products illegally cut,
gathered, removed, or possessed or abandoned, and all
conveyances used either by land, water or air in the commission of
the offense and to dispose of the same in accordance with pertinent
laws, regulations and policies on the matter. (Underline ours)
It is, thus, clear from the foregoing provision that the Secretary
and his duly authorized representatives are given the authority to
confiscate and forfeit any conveyances utilized in violating the Code
or other forest laws, rules and regulations. The phrase to dispose of
the same is broad enough to cover the act of forfeiting conveyances
in favor of the government. The only limitation is that it should be
made in accordance with pertinent laws, regulations or policies on
the matter. In the construction of statutes, it must be read in such a
way as to give effect to the purpose projected in the statute.
[33]
 Statutes should be construed in the light of the object to be
achieved and the evil or mischief to be suppressed, and they should
be given such construction as will advance the object, suppress the
mischief, and secure the benefits intended. [34] In this wise, the
observation of the Solicitor General is significant, thus:
But precisely because of the need to make forestry laws more
responsive to present situations and realities and in view of the
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ATTY. BORJE
urgency to conserve the remaining resources of the country, that the
government opted to add Section 68-A. This amendatory provision is
an administrative remedy totally separate and distinct from criminal
proceedings. More than anything else, it is intended to supplant the
inadequacies that characterize enforcement of forestry laws through
criminal actions. The preamble of EO 277-the law that added Section
68-A to PD 705-is most revealing:
WHEREAS, there is an urgency to conserve the remaining forest
resources of the country for the benefit and welfare of the present
and future generations of Filipinos;
WHEREAS, our forest resources may be effectively conserved and
protected through the vigilant enforcement and implementation of our
forestry laws, rules and regulations;
WHEREAS, the implementation of our forestry laws suffers from
technical difficulties, due to certain inadequacies in the penal
provisions of the Revised Forestry Code of the Philippines; and
WHEREAS, to overcome this difficulties, there is a need to penalize
certain acts more responsive to present situations and realities;
It is interesting to note that Section 68-A is a new provision
authorizing the DENR to confiscate, not only conveyances, but forest
products as well. On the other hand, confiscation of forest products
by the court in a criminal action has long been provided for in Section
68. If as private respondents insist, the power on confiscation cannot
be exercised except only through the court under Section 68, then
Section 68-A would have no purpose at all. Simply put, Section 68-A
would not have provided any solution to the problem perceived in EO
277, supra.[35]
Private respondents, likewise, contend that the seizure was
illegal because the petitioners themselves admitted in the Order
dated July 12, 1989 of Executive Director Baggayan that the truck of
private respondents was not used in the commission of the crime.
This order, a copy of which was given to and received by the counsel
of private respondents, reads in part , viz. :
20 July 2017
xxx while it is true that the truck of your client was not used by her in
the commission of the crime, we uphold your claim that the truck
owner is not liable for the crime and in no case could a criminal case
be filed against her as provided under Article 309 and 310 of the
Revised Penal Code. xxx[36]
We observed that private respondents misread the content of
the aforestated order and obviously misinterpreted the intention of
petitioners. What is contemplated by the petitioners when they stated
that the truck "was not used in the commission of the crime" is that it
was not used in the commission of the crime of theft, hence, in no
case can a criminal action be filed against the owner thereof for
violation of Article 309 and 310 of the Revised Penal Code.
Petitioners did not eliminate the possibility that the truck was being
used in the commission of another crime, that is, the breach of
Section 68 of P.D.705 as amended by E.O. 277. In the same order of
July 12, 1989, petitioners pointed out:
xxx However, under Section 68 of P.D.705 as amended and further
amended by Executive Order No.277 specifically provides for the
confiscation of the conveyance used in the transport of forest
products not covered by the required legal documents. She may not
have been involved in the cutting and gathering of the product in
question but the fact that she accepted the goods for a fee or fare
the same is therefor liable. xxx[37]
Private respondents, however, contended that there is no crime
defined and punishable under Section 68 other than qualified theft,
so that, when petitioners admitted in the July 12, 1989 order that
private respondents could not be charged for theft as provided for
under Articles 309 and 310 of the Revised Penal Code, then
necessarily private respondents could not have committed an act
constituting a crime under Section 68. We disagree. For clarity, the
provision of Section 68 of P.D. 705 before its amendment by E.O.
277 and the provision of Section 1 of E.O. No.277 amending the
aforementioned Section 68 are reproduced herein, thus:
SECTION 68. Cutting, gathering and/or collecting timber or other
products without license. - Any person who shall cut , gather , collect
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ATTY. BORJE
, or remove timber or other forest products from any forest land, or
timber from alienable and disposable public lands, or from private
lands, without any authority under a license agreement, lease,
license or permit, shall be guilty of qualified theft as defined and
punished under Articles 309 and 310 of the Revised Penal Code
xxx. (Underscoring ours; Section 68, P.D.705 before its amendment
by E.O.277 )
SECTION 1. Section 68 of Presidential Decree No.705, as amended,
is hereby amended to read as follows:
Section 68. Cutting, gathering and/or collecting timber or other forest
products without license. -Any person who shall cut, gather, collect,
remove timber or other forest products from any forest land, or
timber from alienable or disposable public land, or from private land,
without any authority, or possess timber or other forest products
without the legal documents as required under existing forest laws
and regulations, shall be punished with the penalties imposed under
Articles 309 and 310 of the Revised Penal Code xxx." (Underscoring
ours; Section 1, E.O No. 277 amending Section 68, P.D. 705 as
amended)
With the introduction of Executive Order No. 277 amending
Section 68 of P.D. 705, the act of cutting, gathering, collecting,
removing, or possessing forest products without authority constitutes
a distinct offense independent now from the crime of theft under
Articles 309 and 310 of the Revised Penal Code, but the penalty to
be imposed is that provided for under Article 309 and 310 of the
Revised Penal Code. This is clear from the language of Executive
Order No. 277 when it eliminated the phrase shall be guilty of
qualified theft as defined and punished under Articles 309 and 310 of
the Revised Penal Code and inserted the words shall be punished
with the penalties imposed under Article 309 and 310 of the Revised
Penal Code . When the statute is clear and explicit, there is
hardly room for any extended court ratiocination or rationalization of
the law.[38]
From the foregoing disquisition, it is clear that a suit for replevin
can not be sustained against the petitioners for the subject truck
taken and retained by them for administrative forfeiture proceedings
20 July 2017
in pursuant to Section 68-A of the P. D. 705, as amended. Dismissal
of the replevin suit for lack of cause of action in view of the private
respondents failure to exhaust administrative remedies should have
been the proper course of action by the lower court instead of
assuming jurisdiction over the case and consequently issuing the writ
ordering the return of the truck. Exhaustion of the remedies in the
administrative forum, being a condition precedent prior to ones
recourse to the courts and more importantly, being an element of
private respondents right of action, is too significant to be waylaid by
the lower court.
It is worth stressing at this point, that a suit for replevin is
founded solely on the claim that the defendant wrongfully withholds
the property sought to be recovered. It lies to recover possession of
personal chattels that are unlawfully detained. [39] To detain is defined
as to mean to hold or keep in custody, [40] and it has been held that
there is tortuous taking whenever there is an unlawful meddling with
the property, or an exercise or claim of dominion over it, without any
pretense of authority or right; this, without manual seizing of the
property is sufficient.[41] Under the Rules of Court, it is indispensable
in replevin proceedings, that the plaintiff must show by his own
affidavit that he is entitled to the possession of property, that the
property is wrongfully detained by the defendant, alleging the cause
of detention, that the same has not been taken for tax assessment,
or seized under execution, or attachment, or if so seized, that it is
exempt from such seizure, and the actual value of the property.
[42]
 Private respondents miserably failed to convince this Court that a
wrongful detention of the subject truck obtains in the instant case. It
should be noted that the truck was seized by the petitioners because
it was transporting forest products with out the required permit of the
DENR in manifest contravention of Section 68 of P.D. 705 as
amended by E.O 277. Section 68-A of P.D. 705, as amended,
unquestionably warrants the confiscation as well as the disposition
by the Secretary of DENR or his duly authorized representatives of
the conveyances used in violating the provision of forestry laws.
Evidently, the continued possession or detention of the truck by the
petitioners for administrative forfeiture proceeding is legally
permissible, hence , no wrongful detention exists in the case at bar.
Moreover, the suit for replevin is never intended as a procedural
tool to question the orders of confiscation and forfeiture issued by the
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ATTY. BORJE

DENR in pursuance to the authority given under P.D.705, as

amended. Section 8 of the said law is explicit that actions taken by
the Director of the Bureau of Forest Development concerning the
enforcement of the provisions of the said law are subject to review by
the Secretary of DENR and that courts may not review the decisions
of the Secretary except through a special civil action for certiorari or
prohibition. It reads :

SECTION 8 . REVIEW - All actions and decisions of the Director are

subject to review, motu propio or upon appeal of any person
aggrieved thereby, by the Department Head whose decision shall be
final and executory after the lapse of thirty (30) days from the receipt
of the aggrieved party of said decision, unless appealed to the
President in accordance with Executive Order No. 19, Series of
1966. The Decision of the Department Head may not be reviewed by
the courts except through a special civil action for certiorari or
prohibition.

WHEREFORE, the Petition is GRANTED; the Decision of the THIRD DIVISION

respondent Court of Appeals dated October 16, 1991 and its
Resolution dated July 14, 1992 are hereby SET ASIDE AND [G.R. No. 120704. March 3, 1997]
REVERSED; the Restraining Order promulgated on September 27,
HON. BARTOLOME C. CARALE,
1993 is hereby made permanent; and the Secretary of DENR is
Chairman, National Labor Relations Commission (NLRC)
directed to resolve the controversy with utmost dispatch.
, HON. IRENEA A. CENIZA, Presiding Commissioner,
SO ORDERED. Fourth Division, NLRC, and HON.REYNOSO
A. BELARMINO, Executive Labor Arbiter, Regional
Regalado, (Chairman), Romero, Puno,  and Mendoza, Arbitration Branch, Region VII, petitioners,
JJ., concur. vs.  HON. PAMPIO A. ABARINTOS, Presiding Judge,
Regional Trial Court, Branch
22, Cebu City, and FERDINAND V.
PONTEJOS, respondents.

DECISION
DAVIDE, JR., J.:

Did respondent Judge Pampio A. Abarintos commit grave

abuse of discretion amounting to lack or excess of jurisdiction when
he: (1) denied the petitioners motions to dismiss the complaint filed

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by respondent Ferdinand V. Pontejos (hereinafter PONTEJOS) to
declare null and void an Administrative Order of petitioner Carale, as
Chairman of the National Labor Relations Commission (NLRC)
(hereinafter CARALE), detailing Pontejos to the Fourth Division of
the NLRC in Cebu City; and the motion to reconsider the order of
denial; and then (2) granted the application for a writ of preliminary
injunction?
This is the key issue raised in this petition.
The relevant factual antecedents summarized in the petition are
as follows:
9. Private respondent Pontejos was issued an original and
permanent appointment dated January 10, 1989 as
Labor and Employment Development Officer (RAB VII)
in the National Labor Relations Commission with a
salary of P36,864.00 per annum under Title No. 211-10
of the Appropriations Act R.A. 6642. In 1992, the
aforesaid position was reclassified as Labor Arbitration
Associate with compensation of P99,000.00 per annum
or rank at salary grade 22, retroactive to June 30,
1989. Private respondent holds this position up to the
present.
10.On 03 October 1994, petitioner Chairman of the NLRC,
issued Administrative Order No. 10-03 series of 1994,
detailing/reassigning private respondent to the NLRC,
Fourth Division, Cebu City, effective October 17,
1994. Said Order reads:
ADMINISTRATIVE ORDER NO. 10-03
(Series of 1994)
In the interest of the service, Mr. Ferdinand
Pontejos, Labor Arbitration Branch No. VII, is
hereby detailed to the Fourth Division, Cebu City,
effective October 17, 1994, until further orders
from the undersigned.
Mr. Pontejos is directed to wind up his pending
work and thereafter report to the Presiding
20 July 2017
Commissioner Irene E. Ceniza for instruction
regarding his new assignment.
Manila, October 3, 1994.
(SGD)
BARTOLOME S. CARALE
Chairman
11.Similar personnel actions, prior to and after Pontejos
reassignment to NLRC, Cebu City, were also effected
by petitioner Carale pursuant to his exercise of
administrative authority and supervision over all NLRC
officials and employees....
12.On 24 October 1994, private respondent filed a
complaint before the Regional Trial Court of Cebu City
against herein petitioners for Illegal Transfer
Tantamount To Removal Without Cause In Gross
Violation Of The Security Of Tenure Afforded Under
The Constitution And In Utter Disregard Of The Civil
Service Rules and Regulations, Republic Act 6715, with
Prayer For The Issuance Of A Writ Of Preliminary
Injunction and/or Preliminary Mandatory Injunction With
Damages. The case was docketed as Civil Case No.
CEB-16671....
13.Motions to dismiss dated November 8, 1994 and
November 15, 1994, were respectively filed by
petitioner Ceniza and Carale, arguing that it is the Civil
Service Commission which has exclusive jurisdiction
over any question concerning personnel movement....
14.A Supplemental Motion to Dismiss dated November 21,
1994 was filed by petitioner Belarmino arguing that the
questioned administrative order is in the nature of a
detail and the civil service employee who is not satisfied
with or aggrieved by such detail may appeal the matter
before the Civil Service Commission....
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ATTY. BORJE
15.On December 20, 1994, respondent judge issued the
first questioned order denying petitioners Motions to
Dismiss holding that alleged non-exhaustion of
administrative remedies before where the surrounding
circumstances of the matter before this Court indicate
an urgency of judicial intervention....
16.In the same Order, respondent judge also granted the
prayer for preliminary injunction restraining petitioners
from implementing the transfer order....
17.A motion for reconsideration dated January 9, 1995 was
filed by petitioner Belarmino which was denied in the
second questioned order dated February 7, 1995....
18.On 06 March 1995, Jeoffrey S. Joaquino, Clerk of Court
VII, pursuant to respondent judges order dated
December 20, 1994, issued a writ of injunction enjoining
herein petitioners from unduly interfering with and/or
obstructing private respondent Pontejos lawful
discharge of his duties and functions as such Labor
Arbitration Associate, until further orders from
respondent judge. The writ of injunction was received
by petitioner Carale on March 21, 1995....[1]
Pontejos complaint in Civil Case No. CEB-16671 suggested that
the uncordial relationship between himself, as president of the
Unified Employees Union of the NLRC, RAB VII, and Chairman of
the NLRC-RAB-VII Multi-Purpose Cooperative, and petitioners
Presiding Commissioner Ceniza and Executive Labor Arbiter
Belarmino, against whom the petitioner had earlier filed a petition
for certiorari with this Court and a complaint for harassment and
intimidation, respectively, had something to do with his detail to the
Fourth Division of the NLRC. Pontejos alleged as there was no
position of Labor Arbitration Associate in that Division, the detail
order was maliciously resorted to as a scheme to lure [him] away
from his permanent position, thereby violating his security of tenure;
and described it as an act of vindictiveness against him and was
patently illegal, malicious, arbitrary and an exercise of grave abuse
of discretion in excess of jurisdiction. [2] To justify his direct resort to
the court, Pontejos alleged that [t]here is no other available and
speedy remedy in order to protect [his] interest than to resort to this
20 July 2017
Honorable Court; that the urgency of judicial intervention is an
exception to the rule of exhaustion of administrative remedies, [3] not
to mention the fact that the administrative act in question is patently
illegal.[4] To support his application for a writ of preliminary injunction
and/or restraining [order], Pontejos alleged that:
11.[He] is entitled to the relief demanded and the whole or
part of such relief consists in RESTRAINING OR
PREVENTING the defendants, their agents and all
persons acting for or in their behalf, from enforcing and
implementing the questioned Administrative Order No.
10-03, Series of 1994;
12.The commission of the continuance of the acts
complained of during the litigation or the non-
performance thereof, could probably work grave
injustice to the plaintiff ... so that the defendants ... must
be enjoined by a restraining order from implementing
and/or enforcing the ... questioned Administrative Order;
13.[He] is willing to post a bond executed to he defendants
enjoined, in an amount to be fixed by the court, to the
effect that [he] will pay to such party all damages which
they [sic] may sustain by reason of the injunction if the
court should finally decide that the plaintiff is not entitled
thereto.[5]
Pontejos further asserted that the petitioners had acted with
gross and evident bad faith, and by their conduct, have violated all
forms of good human conduct and dealings and did not exhibit any
degree of good faith, honesty and propriety, as a consequence of
which he has suffered mental anxiety, sleepless nights, wounded
feelings and moral shock; and had displayed anti-social acts and
conduct, contrary to the tenents [sic] enunciated in the Preliminary
Title in Human relations found in Articles 19 and 20 of the Civil Code
of the Philippines. On account thereof, he prayed for the award
of P100,000.00 as moral damages; P50,000.00 as exemplary
damages; P30,000.00 as attorneys fees; and P5,000.00 as litigation
expenses.[6]
In the challenged order of 20 December 1994, the trial court, in
dismissing the petitioners motions to dismiss, ruled that the only
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effect of non-compliance with the rule on exhaustion of
administrative remedies is that it will deprive the complainant of a
cause of action; it does not affect the jurisdiction of the court. Since
the factual allegations of the complaint satisfactorily meet the test of
sufficiency of the complaint insofar as cause of action is concerned,
the complaint was not dismissible.
In the challenged resolution of 7 February 1995 denying the
petitioners motion to reconsider the order of 20 December 1994, the
trial court further held that the case before it fell within one of the
exceptions to the rule on exhaustion of administrative remedies,
namely, where the question to be settled is whether the controverted
act of respondent Commissioner Carale was performed with grave
abuse of discretion.[7]
In this special civil action for certiorari, the petitioners assert
that:
I damages, is in effect a suit against the State without its consent,
RESPONDENT JUDGE HAS NO JURISDICTION TO REVIEW THE
VALIDITY OF THE TRANSFER ORDER ISSUED BY PETITIONER
CHAIRMAN OF THE NATIONAL LABOR RELATIONS
COMMISSION SINCE THE CONTROVERSY IS WITHIN THE
ORIGINAL AND EXCLUSIVE JURISDICTION OF THE CIVIL
SERVICE COMMISSION.
II
THE RESPONDENT JUDGE HAS NO JURISDICTION TO TAKE
COGNIZANCE OF THE COMPLAINT FILED AGAINST
PETITIONERS AS IT CONSTITUTES A SUIT AGAINST THE
STATE WITHOUT ITS CONSENT.
III
THE PETITIONERS WERE NOT REPRESENTED IN THE TRIAL
COURT BY THEIR STATUTORY COUNSEL, THE OFFICE OF THE
SOLICITOR GENERAL, HENCE THE PROCEEDINGS HAD
THEREIN IS A NULLITY.
20 July 2017
As to the first ground, the petitioners maintain that being a
permanent civil service employee, Pontejos is subject to civil service
laws and regulations pursuant to Subsection 1(1), Section 8-B,
Article IX-A of the Constitution. His grievance concerning Carales
administrative order detailing him to the Fourth Division of the NLRC
should have been raised in an appropriate complaint before the Merit
Systems and Protection Board (MSPB) created under P.D. No. 1409,
whose functions, pursuant to Civil Service Commission (CSC)
Resolution No. 93-2387, have been transferred directly to the CSC
itself. The petitioners further claim that there is no factual or legal
basis indicative of the urgency of judicial intervention to justify the
trial courts assumption of jurisdiction over this case and to order the
issuance of the questioned writ of preliminary injunction.
Anent the second ground, the petitioners, citing Veterans
Manpower and Protective Service, Inc. v. Court of Appeals,[8] submit
that Pontejos complaint, which asked for a writ of injunction and
hence, the petitioners, who are all public officials, are immune from
such suit.
In support of the third ground, the petitioners alleged that all
throughout the proceedings before the trial court, the petitioners
were not represented by their statutory counsel, the Solicitor
General, whose authority is mandated under P.D. No. 478,
the magna carta of the Office of the Solicitor General (OSG).
[9]
 Consequently, the questioned orders and the writ of preliminary
injunction were invalid.
In the 26 July 1995 resolution, we required the respondents to
comment on the petition and issued a temporary restraining order,
effective as of the said date, which enjoined the respondents from
enforcing the orders of 20 December 1994 and 7 February 1995
issued in Civil Case No. CEB-16671.
We resolved to give due course to the petition and required the
parties to submit their respective memoranda. However, only
Pontejos complied, the Office of the Solicitor General failing to
despite two extensions of time. We denied on 20 November 1996 its
third motion for extension of time to file its Memorandum.
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We find merit in the petition, but not necessarily on strength of
the grounds raised.
The primary issue in this special civil action, as stated in the
opening paragraph of this ponencia, is whether the respondent
Judge acted with grave abuse of discretion amounting to lack of
jurisdiction when he denied the motions to dismiss and the motion for
reconsideration, and granted the application for a writ of preliminary
injunction to enjoin the petitioners from implementing or enforcing
Carales Administrative Order 10-03, Series of 1994.
I In the instant case, Pontejos did not attempt to seek
The motions to dismiss separately filed in the trial court by
petitioners Carale and Presiding Commissioner Ceniza were
principally anchored on lack of jurisdiction due to the failure of
Pontejos to exhaust administrative remedies. Obviously, the
petitioners failed to appreciate that non-exhaustion of administrative
remedies is not jurisdictional. It only renders the action
premature, i.e., the claimed cause of action is not ripe for judicial
determination and for that reason a party has no cause of action to
ventilate in court.[10] Their motions to dismiss must then be
understood to be based on: (a) lack of jurisdiction; and (b) lack of
cause of action for failure to exhaust administrative remedies.
Observance of the mandate regarding exhaustion of
administrative remedies is a sound practice and policy. It ensures an
orderly procedure which favors a preliminary sifting process,
particularly with respect to matters peculiarly within the competence
of the administrative agency, avoidance of interference with functions
of the administrative agency by withholding judicial action until the
administrative process had run its course, and prevention of attempts
to swamp the courts by a resort to them in the first instance. [11] The
underlying principle of the rule rests on the presumption that the
administrative agency, if afforded a complete chance to pass upon
the matter, will decide the same correctly. [12] There are both legal and
practical reasons for this principle. The administrative process is
intended to provide less expensive and more speedy solutions to
disputes. Where the enabling statute indicates a procedure for
administrative review, and provides a system of administrative
appeal, or reconsideration, the courts, for reasons of law, comity and
convenience, will not entertain a case unless the available
20 July 2017
administrative remedies have been resorted to and the appropriate
authorities have been given an opportunity to act and correct the
errors committed in the administrative forum.[13]
Accordingly, the party with an administrative remedy must not
merely initiate the prescribed administrative procedure to obtain
relief, but also pursue it to its appropriate conclusion before seeking
judicial intervention in order to give the administrative agency an
opportunity to decide the matter by itself correctly and prevent
unnecessary and premature resort to the court.[14]
administrative relief, which was both available and sufficient. Initially,
he could have asked for reconsideration of the detail order, failing
which, he could have gone directly to the CSC, through the MSPB,
which is empowered to:
(2) Hear and decide cases brought before it by offices and
employees who feel aggrieved by the determination of
appointing authorities involving ... transfer, detail,
reassignment and other personnel actions, as well as
complaints against any officers in the government arising
from personnel actions of these officers or from
violations of the merit system....[15]
Nothing in the complaint in Civil Case No. CEB-16671
convinces us that Pontejos ever thought of pursuing the available
administrative remedies. Neither do we find sufficient basis for his
invocation of the exception to the rule on exhaustion of
administrative remedies. What he offered were nothing but vague
and general averments that could best qualify as motherhood
statements. Further, they were unsupported by allegations of fact or
law which would prima facie bring his case within any of the
accepted exceptions to the rule, namely: (1) where the question is
purely legal, (2) where judicial intervention is urgent, (3) when its
application may cause great and irreparable damage, (4) where the
controverted acts violate due process, (5) failure of a high
government official from whom relief is sought to act on the matter,
and (6) when the issue of non-exhaustion of administrative remedies
has been rendered moot.[16]
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II
We do not likewise hesitate to rule that the respondent Judge
committed grave abuse of discretion when he granted the application
for a writ of preliminary injunction without any notice of hearing. The
rule on preliminary injunction plainly provides that it cannot be
granted without notice to the defendant. Section 5, Rule 58 of the
Rules of Court states, in part, as follows:

SEC. 5. Preliminary injunction not granted without notice. -- No

preliminary injunction shall be granted without notice to the
defendant. If it shall appear from the facts shown by affidavits or by
verified complaint that great or irreparable injury would result to the
applicant before the matter could be heard on notice, the judge to
whom the application for preliminary injunction was made, may issue
a restraining order to be effective only for a period of twenty days
from date of issuance.Within the said twenty-day period, the judge
must cause an order to be served on the defendant, requiring him to
show cause, at a specified time and place, why the injunction should
not be granted, and determine within the same period whether or not
the preliminary injunction shall be granted and shall accordingly
issue the corresponding order.... (underscoring supplied for
emphasis)

WHEREFORE, the instant petition is GRANTED. The assailed

THIRD DIVISION
orders of 20 December 1994 and 7 February 1995 in Civil Case No.
CEB-16671 of Branch 22 of the Regional Trial Court of Cebu City, [G.R. No. 143377. February 20, 2001]
entitled Ferdinand V. Pontejos v. Hon. Bartolome C. Carale, et al.,
are hereby ANNULLED and SET ASIDE and respondent Judge SHIPSIDE INCORPORATED, petitioner, vs. THE HON. COURT
Pampio A. Abarintos is hereby directed to forthwith issue an order OF APPEALS [Special Former Twelfth Division],
DISMISSING the said case. HON. REGIONAL TRIAL COURT, BRANCH 26 (San Fernando
City, La Union) & The REPUBLIC OF THE
SO ORDERED. PHILIPPINES, respondents.
Narvasa, C.J., (Chairman), Melo, Francisco, and  Panganiban,
JJ., concur. DECISION
MELO, J.:

Before the Court is a petition for certiorari filed by Shipside

Incorporated under Rule 65 of the 1997 Rules on Civil Procedure

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against the resolutions of the Court of Appeals promulgated on
November 4, 1999 and May 23, 2000, which respectively, dismissed
a petition for certiorari and prohibition and thereafter denied a motion
for reconsideration.
The antecedent facts are undisputed:
On October 29, 1958, Original Certificate of Title No. 0-381 was
issued in favor of Rafael Galvez, over four parcels of land Lot 1 with
6,571 square meters; Lot 2, with 16,777 square meters; Lot 3 with
1,583 square meters; and Lot 4, with 508 square meters.
On April 11, 1960, Lots No. 1 and 4 were conveyed by Rafael
Galvez in favor of Filipina Mamaril, Cleopatra Llana, Regina Bustos,
and Erlinda Balatbat in a deed of sale which was inscribed as Entry
No. 9115 OCT No. 0-381 on August 10, 1960. Consequently,
Transfer Certificate No. T-4304 was issued in favor of the buyers
covering Lots No. 1 and 4.
Lot No. 1 is described as:
A parcel of land (Lot 1, Plan PSU-159621, L. R. Case No. N-361; L.
R. C. Record No. N-14012, situated in the Barrio of Poro,
Municipality of San Fernando, Province of La Union, bounded on the
NE, by the Foreshore; on the SE, by Public Land and property of the
Benguet Consolidated Mining Company; on the SW, by properties of
Rafael Galvez (US Military Reservation Camp Wallace) and
Policarpio Munar; and on the NW, by an old Barrio Road. Beginning
at a point marked 1 on plan, being S. 74 deg. 11W. , 2670. 36 from
B. L. L. M. 1, San Fernando, thence
S. 66 deg. 19E., 134.95 m. to point 2; S. 14 deg. 57W., 11.79 m. to
point 3;
S. 12 deg. 45W., 27.00 m. to point 4; S. 12 deg. 45W, 6.90 m. to
point 5;
N. 69 deg., 32W., 106.00 m. to point 6; N. 52 deg., 21W., 36. 85 m.
to point 7;
20 July 2017
N. 21 deg. 31E., 42. 01 m. to the point of beginning; containing an
area of SIX THOUSAND FIVE HUNDRED AND SEVENTY-ONE
(6,571) SQUARE METERS, more or less. All points referred to are
indicated on the plan; and marked on the ground; bearings true, date
of survey, February 421, 1957.
Lot No. 4 has the following technical description:
A parcel of land (Lot 4, Plan PSU-159621, L. R. Case No. N-361 L.
R. C. Record No. N-14012), situated in the Barrio of Poro,
Municipality of San Fernando, La Union. Bounded on the SE by the
property of the Benguet Consolidated Mining Company; on the S. by
property of Pelagia Carino; and on the NW by the property of Rafael
Galvez (US Military Reservation, Camp Wallace). Beginning at a
point marked 1 on plan, being S. deg. 24W. 2591. 69 m. from B. L. L.
M. 1, San Fernando, thence S. 12 deg. 45W., 73. 03 m. to point 2; N.
79 deg. 59W., 13.92 m. to point 3; N. 23 deg. 26E. , 75.00 m. to the
point of beginning; containing an area of FIVE HUNDED AND EIGHT
(508) SQUARE METERS, more or less. All points referred to are
indicated in the plan and marked on the ground; bearings true, date
of survey, February 4-21, 1957.
On August 16, 1960, Mamaril, et al. sold Lots No. 1 and 4 to
Lepanto Consolidated Mining Company. The deed of sale covering
the aforesaid property was inscribed as Entry No. 9173 on TCT No.
T-4304. Subsequently, Transfer Certificate No. T-4314 was issued in
the name of Lepanto Consolidated Mining Company as owner of
Lots No. 1 and 4.
On February 1, 1963, unknown to Lepanto Consolidated Mining
Company, the Court of First Instance of La Union, Second Judicial
District, issued an Order in Land Registration Case No. N-361 (LRC
Record No. N-14012) entitled Rafael Galvez, Applicant, Eliza Bustos,
et al., Parties-In-Interest; Republic of the Philippines, Movant
declaring OCT No. 0-381 of the Registry of Deeds for the Province of
La Union issued in the name of Rafael Galvez, null and void, and
ordered the cancellation thereof.
The Order pertinently provided:
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Accordingly, with the foregoing, and without prejudice on the rights of
incidental parties concerned herein to institute their respective
appropriate actions compatible with whatever cause they may have,
it is hereby declared and this court so holds that both proceedings in
Land Registration Case No. N-361 and Original Certificate No. 0-381
of the Registry of Deeds for the province of La Union issued in virtue
thereof and registered in the name of Rafael Galvez, are null and
void; the Register of Deeds for the Province of La Union is hereby
ordered to cancel the said original certificate and / or such other
certificates of title issued subsequent thereto having reference to the
same parcels of land; without pronouncement as to costs.
On October 28, 1963, Lepanto Consolidated Mining Company
sold to herein petitioner Lots No. 1 and 4, with the deed being
entered in TCT NO. 4314 as entry No. 12381. Transfer Certificate of
Title No. T-5710 was thus issued in favor of the petitioner which
starting since then exercised proprietary rights over Lots No. 1 and 4.
In the meantime, Rafael Galvez filed his motion for
reconsideration against the order issued by the trial court declaring
OCT No. 0-381 null and void. The motion was denied on January 25,
1965. On appeal, the Court of Appeals ruled in favor of the Republic
of the Philippines in a Resolution promulgated on August 14, 1973 in
CA-G. R. No. 36061-R.
Thereafter, the Court of Appeals issued an Entry of Judgment,
certifying that its decision dated August 14, 1973 became final and
executory on October 23, 1973.
On April 22, 1974, the trial court in L. R. C. Case No. N-361
issued a writ of execution of the judgment which was served on the
Register of Deeds, San Fernando, La Union on April 29, 1974.
Twenty four long years thereafter, on January 14, 1999, the
Office of the Solicitor General received a letter dated January 11,
1999 from Mr. Victor G. Floresca, Vice-President, John Hay Poro
Point Development Corporation, stating that the aforementioned
orders and decision of the trial court in L. R. C. No. N-361 have not
been executed by the Register of Deeds, San Fernando, La Union
despite receipt of the writ of execution.
20 July 2017
On April 21, 1999, the Office of the Solicitor General filed a
complaint for revival of judgment and cancellation of titles before the
Regional Trial Court of the First Judicial Region (Branch 26, San
Fernando, La Union) docketed therein as Civil Case No. 6346
entitled, Republic of the Philippines, Plaintiff, versus Heirs of Rafael
Galvez, represented by Teresita Tan, Reynaldo Mamaril, Elisa
Bustos, Erlinda Balatbat, Regina Bustos, Shipside Incorporated and
the Register of Deeds of La Union, Defendants.
The evidence shows that the impleaded defendants (except the
Register of Deeds of the province of La Union) are the successors-
in-interest of Rafael Galvez (not Reynaldo Galvez as alleged by the
Solicitor General) over the property covered by OCT No. 0-381,
namely: (a) Shipside Inc. which is presently the registered owner in
fee simple of Lots No. 1 and 4 covered by TCT No. T-5710, with a
total area of 7,079 square meters; (b) Elisa Bustos, Jesusito Galvez,
and Teresita Tan who are the registered owners of Lot No. 2 of OCT
No. 0-381;and (c) Elisa Bustos, Filipina Mamaril, Regina Bustos and
Erlinda Balatbat who are the registered owners of Lot No. 3 of OCT
No. 0-381, now covered by TCT No. T-4916, with an area of 1,583
square meters.
In its complaint in Civil Case No. 6346, the Solicitor General
argued that since the trial court in LRC Case No. 361 had ruled and
declared OCT No. 0-381 to be null and void, which ruling was
subsequently affirmed by the Court of Appeals, the defendants-
successors-in-interest of Rafael Galvez have no valid title over the
property covered by OCT No. 0-381, and the subsequent Torrens
titles issued in their names should be consequently cancelled.
On July 22, 1999, petitioner Shipside, Inc. filed its Motion to
Dismiss, based on the following grounds: (1) the complaint stated no
cause of action because only final and executory judgments may be
subject of an action for revival of judgment; (2) the plaintiff is not the
real party-in-interest because the real property covered by the
Torrens titles sought to be cancelled, allegedly part of Camp Wallace
(Wallace Air Station), were under the ownership and administration
of the Bases Conversion Development Authority (BCDA) under
Republic Act No. 7227; (3) plaintiffs cause of action is barred by
prescription; (4) twenty-five years having lapsed since the issuance
of the writ of execution, no action for revival of judgment may be
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instituted because under Paragraph 3 of Article 1144 of the Civil
Code, such action may be brought only within ten (10) years from the
time the judgment had been rendered.
An opposition to the motion to dismiss was filed by the Solicitor
General on August 23, 1999, alleging among others, that: (1) the real
party-in-interest is the Republic of the Philippines;and (2) prescription
does not run against the State.
On August 31, 1999, the trial court denied petitioners motion to
dismiss and on October 14, 1999, its motion for reconsideration was
likewise turned down.
On October 21, 1999, petitioner instituted a petition
for certiorari and prohibition with the Court of Appeals, docketed
therein as CA-G.R. SP No. 55535, on the ground that the orders of
the trial court denying its motion to dismiss and its subsequent
motion for reconsideration were issued in excess of jurisdiction.
On November 4, 1999, the Court of Appeals dismissed the
petition in CA-G.R. SP No. 55535 on the ground that the verification
and certification in the petition, under the signature of Lorenzo
Balbin, Jr., was made without authority, there being no proof therein
that Balbin was authorized to institute the petition for and in behalf
and of petitioner.
On May 23, 2000, the Court of Appeals denied petitioners
motion for reconsideration on the grounds that: (1) a complaint filed
on behalf of a corporation can be made only if authorized by its
Board of Directors, and in the absence thereof, the petition cannot
prosper and be granted due course;and (2) petitioner was unable to
show that it had substantially complied with the rule requiring proof of
authority to institute an action or proceeding.
Hence, the instant petition.
In support of its petition, Shipside, Inc. asseverates that:
1. The Honorable Court of Appeals gravely abused its
discretion in dismissing the petition when it made a
conclusive legal presumption that Mr. Balbin had no
authority to sign the petition despite the clarity of laws,
jurisprudence and Secretarys certificate to the contrary;
20 July 2017
2. The Honorable Court of Appeals abused its discretion
when it dismissed the petition, in effect affirming the
grave abuse of discretion committed by the lower court
when it refused to dismiss the 1999 Complaint for
Revival of a 1973 judgment, in violation of clear laws
and jurisprudence.
Petitioner likewise adopted the arguments it raised in the
petition and comment/reply it filed with the Court of Appeals,
attached to its petition as Exhibit L and N, respectively.
In his Comment, the Solicitor General moved for the dismissal
of the instant petition based on the following considerations: (1)
Lorenzo Balbin, who signed for and in behalf of petitioner in the
verification and certification of non-forum shopping portion of the
petition, failed to show proof of his authorization to institute the
petition for certiorari and prohibition with the Court of Appeals, thus
the latter court acted correctly in dismissing the same; (2) the real
party-in-interest in the case at bar being the Republic of the
Philippines, its claims are imprescriptible.
In order to preserve the rights of herein parties, the Court issued
a temporary restraining order on June 26, 2000 enjoining the trial
court from conducting further proceedings in Civil Case No. 6346.
The issues posited in this case are: (1) whether or not an
authorization from petitioners Board of Directors is still required in
order for its resident manager to institute or commence a legal action
for and in behalf of the corporation; and (2) whether or not the
Republic of the Philippines can maintain the action for revival of
judgment herein.
We find for petitioner.
Anent the first issue:
The Court of Appeals dismissed the petition for certiorari on the
ground that Lorenzo Balbin, the resident manager for petitioner, who
was the signatory in the verification and certification on non-forum
shopping, failed to show proof that he was authorized by petitioners
board of directors to file such a petition.
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A corporation, such as petitioner, has no power except those
expressly conferred on it by the Corporation Code and those that are
implied or incidental to its existence. In turn, a corporation exercises
said powers through its board of directors and / or its duly authorized
officers and agents. Thus, it has been observed that the power of a
corporation to sue and be sued in any court is lodged with the board
of directors that exercises its corporate powers (Premium Marble
Resources, Inc. v. CA, 264 SCRA 11 [1996]). In turn, physical acts of
the corporation, like the signing of documents, can be performed
only by natural persons duly authorized for the purpose by corporate
by-laws or by a specific act of the board of directors.
It is undisputed that on October 21, 1999, the time petitioners
Resident Manager Balbin filed the petition, there was no proof
attached thereto that Balbin was authorized to sign the verification
and non-forum shopping certification therein, as a consequence of
which the petition was dismissed by the Court of Appeals. However,
subsequent to such dismissal, petitioner filed a motion for
reconsideration, attaching to said motion a certificate issued by its
board secretary stating that on October 11, 1999, or ten days prior to
the filing of the petition, Balbin had been authorized by petitioners
board of directors to file said petition.
The Court has consistently held that the requirement regarding
verification of a pleading is formal, not jurisdictional (Uy v. LandBank,
G.R. No. 136100, July 24, 2000). Such requirement is simply a
condition affecting the form of the pleading, non-compliance with
which does not necessarily render the pleading fatally
defective. Verification is simply intended to secure an assurance that
the allegations in the pleading are true and correct and not the
product of the imagination or a matter of speculation, and that the
pleading is filed in good faith. The court may order the correction of
the pleading if verification is lacking or act on the pleading although it
is not verified, if the attending circumstances are such that strict
compliance with the rules may be dispensed with in order that the
ends of justice may thereby be served.
On the other hand, the lack of certification against forum
shopping is generally not curable by the submission thereof after the
filing of the petition. Section 5, Rule 45 of the 1997 Rules of Civil
Procedure provides that the failure of the petitioner to submit the
20 July 2017
required documents that should accompany the petition, including
the certification against forum shopping, shall be sufficient ground for
the dismissal thereof. The same rule applies to certifications against
forum shopping signed by a person on behalf of a corporation which
are unaccompanied by proof that said signatory is authorized to file a
petition on behalf of the corporation.
In certain exceptional circumstances, however, the Court has
allowed the belated filing of the certification. In Loyola v. Court of
Appeals, et. al.  (245 SCRA 477 [1995]), the Court considered the
filing of the certification one day after the filing of an election protest
as substantial compliance with the requirement. In Roadway
Express, Inc. v. Court of Appeals, et. al.  (264 SCRA 696 [1996]), the
Court allowed the filing of the certification 14 days before the
dismissal of the petition. In Uy v. LandBank, supra, the Court had
dismissed Uys petition for lack of verification and certification against
non-forum shopping. However, it subsequently reinstated the petition
after Uy submitted a motion to admit certification and non-forum
shopping certification. In all these cases, there were special
circumstances or compelling reasons that justified the relaxation of
the rule requiring verification and certification on non-forum
shopping.
In the instant case, the merits of petitioners case should be
considered special circumstances or compelling reasons that justify
tempering the requirement in regard to the certificate of non-forum
shopping. Moreover, in Loyola, Roadway, and Uy, the Court
excused non-compliance with the requirement as to the certificate of
non-forum shopping. With more reason should we allow the instant
petition since petitioner herein did submit a certification on non-
forum shopping, failing only to show proof that the signatory was
authorized to do so. That petitioner subsequently submitted a
secretarys certificate attesting that Balbin was authorized to file an
action on behalf of petitioner likewise mitigates this oversight.
It must also be kept in mind that while the requirement of the
certificate of non-forum shopping is mandatory, nonetheless the
requirements must not be interpreted too literally and thus defeat the
objective of preventing the undesirable practice of forum-shopping
(Bernardo v. NLRC, 255 SCRA 108 [1996]). Lastly, technical rules of
procedure should be used to promote, not frustrate justice. While the
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swift unclogging of court dockets is a laudable objective, the granting
of substantial justice is an even more urgent ideal.
Now to the second issue:
The action instituted by the Solicitor General in the trial court is
one for revival of judgment which is governed by Article 1144(3) of
the Civil Code and Section 6, Rule 39 of the 1997 Rules on Civil
Procedure. Article 1144(3) provides that an action upon a
judgment must be brought within 10 years from the time the right of
action accrues." On the other hand, Section 6, Rule 39 provides that
a final and executory judgment or order may be executed
on motion within five (5) years from the date of its entry, but that after
the lapse of such time, and before it is barred by the statute of
limitations, a judgment may be enforced by action. Taking these two
provisions into consideration, it is plain that an action for revival of
judgment must be brought within ten years from the time said
judgment becomes final.
From the records of this case, it is clear that the judgment
sought to be revived became final on October 23, 1973. On the other
hand, the action for revival of judgment was instituted only in 1999,
or more than twenty-five (25) years after the judgment had become
final. Hence, the action is barred by extinctive prescription
considering that such an action can be instituted only within ten (10)
years from the time the cause of action accrues.
The Solicitor General, nonetheless, argues that the States
cause of action in the cancellation of the land title issued to
petitioners predecessor-in-interest is imprescriptible because it is
included in Camp Wallace, which belongs to the government.
The argument is misleading.
While it is true that prescription does not run against the State,
the same may not be invoked by the government in this case since it
is no longer interested in the subject matter. While Camp Wallace
may have belonged to the government at the time Rafael Galvezs
title was ordered cancelled in Land Registration Case No. N-361, the
same no longer holds true today.
Republic Act No. 7227, otherwise known as the Bases
Conversion and Development Act of 1992, created the Bases
20 July 2017
Conversion and Development Authority. Section 4 pertinently
provides:
Section 4. Purposes of the Conversion Authority. The Conversion
Authority shall have the following purposes:
(a) To own, hold and/or administer  the military reservations
of John Hay Air Station, Wallace Air Station, ODonnell
Transmitter Station, San Miguel Naval Communications
Station, Mt. Sta. Rita Station (Hermosa, Bataan) and
those portions of Metro Manila military camps which
may be transferred to it by the President;
Section 2 of Proclamation No. 216, issued on July 27, 1993,
also provides:
Section 2. Transfer of Wallace Air Station Areas to the Bases
Conversion and Development Authority. All areas covered by the
Wallace Air Station as embraced and defined by the 1947 Military
Bases Agreement between the Philippines and the United States of
America, as amended, excluding those covered by Presidential
Proclamations and some 25-hectare area for the radar and
communication station of the Philippine Air Force, are hereby
transferred to the Bases Conversion Development Authority
With the transfer of Camp Wallace to the BCDA, the
government no longer has a right or interest to
protect. Consequently, the Republic is not a real party in interest and
it may not institute the instant action. Nor may it raise the defense of
imprescriptibility, the same being applicable only in cases where the
government is a party in interest. Under Section 2 of Rule 3 of the
1997 Rules of Civil Procedure, every action must be prosecuted or
defended in the name of the real party in interest. To qualify a person
to be a real party in interest in whose name an action must be
prosecuted, he must appear to be the present real owner of the right
sought to enforced (Pioneer Insurance v. CA, 175 SCRA 668
[1989]). A real party in interest is the party who stands to be
benefited or injured by the judgment in the suit, or the party entitled
to the avails of the suit. And by real interest is meant a present
substantial interest, as distinguished from a mere expectancy, or a
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future, contingent, subordinate or consequential interest (Ibonilla v.
Province of Cebu, 210 SCRA 526 [1992]). Being the owner of the
areas covered by Camp Wallace, it is the Bases Conversion and
Development Authority, not the Government, which stands to be
benefited if the land covered by TCT No. T-5710 issued in the name
of petitioner is cancelled.
Nonetheless, it has been posited that the transfer of military
reservations and their extensions to the BCDA is basically for the
purpose of accelerating the sound and balanced conversion of these
military reservations into alternative productive uses and to enhance
the benefits to be derived from such property as a measure of
promoting the economic and social development, particularly of
Central Luzon and, in general, the countrys goal for enhancement
(Section 2, Republic Act No. 7227). It is contended that the transfer
of these military reservations to the Conversion Authority does not
amount to an abdication on the part of the Republic of its interests,
but simply a recognition of the need to create a body corporate which
will act as its agent for the realization of its program. It is
consequently asserted that the Republic remains to be the real party
in interest and the Conversion Authority merely its agent.
We, however, must not lose sight of the fact that the BCDA is
an entity invested with a personality separate and distinct from the
government. Section 3 of Republic Act No. 7227 reads:
Section 3. Creation of the Bases Conversion and Development
Authority. There is hereby created a body corporate to be known as
the Conversion Authority which shall have the attribute of perpetual
succession and shall be vested with the powers of a corporation.
It may not be amiss to state at this point that the functions of
government have been classified into governmental or constituent
and proprietary or ministrant. While public benefit and public welfare,
particularly, the promotion of the economic and social development
of Central Luzon, may be attributable to the operation of the BCDA,
yet it is certain that the functions performed by the BCDA are
basically proprietary in nature. The promotion of economic and social
development of Central Luzon, in particular, and the countrys goal
for enhancement, in general, do not make the BCDA equivalent to
the Government. Other corporations have been created by
20 July 2017
government to act as its agents for the realization of its programs,
the SSS, GSIS, NAWASA and the NIA, to count a few, and yet, the
Court has ruled that these entities, although performing functions
aimed at promoting public interest and public welfare, are not
government-function corporations invested with governmental
attributes. It may thus be said that the BCDA is not a mere agency of
the Government but a corporate body performing proprietary
functions.
Moreover, Section 5 of Republic Act No. 7227 provides:
Section 5. Powers of the Conversion Authority.  To carry out its
objectives under this Act, the Conversion Authority is hereby vested
with the following powers:
(a) To succeed in its corporate name, to sue and be
sued  in such corporate name and to adopt, alter and
use a corporate seal which shall be judicially noticed;
Having the capacity to sue or be sued, it should thus be the
BCDA which may file an action to cancel petitioners title, not the
Republic, the former being the real party in interest. One having no
right or interest to protect cannot invoke the jurisdiction of the court
as a party plaintiff in an action (Ralla v. Ralla,  199 SCRA 495
[1991]). A suit may be dismissed if the plaintiff or the defendant is not
a real party in interest. If the suit is not brought in the name of the
real party in interest, a motion to dismiss may be filed, as was done
by petitioner in this case, on the ground that the complaint states no
cause of action (Tanpingco v.  IAC, 207 SCRA 652 [1992]).
However, E. B. Marcha Transport Co. , Inc. v. IAC (147 SCRA
276 [1987]) is cited as authority that the Republic is the proper party
to sue for the recovery of possession of property which at the time of
the institution of the suit was no longer held by the national
government but by the Philippine Ports Authority. In E. B.  Marcha,
the Court ruled:
It can be said that in suing for the recovery of the rentals, the
Republic of the Philippines, acted as principal of the Philippine Ports
Authority, directly exercising the commission it had earlier conferred
on the latter as its agent. We may presume that, by doing so, the
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Republic of the Philippines did not intend to retain the said rentals for
its own use, considering that by its voluntary act it had transferred
the land in question to the Philippine Ports Authority effective July
11, 1974. The Republic of the Philippines had simply sought to
assist, not supplant, the Philippine Ports Authority, whose title to the
disputed property it continues to recognize. We may expect then that
the said rentals, once collected by the Republic of the Philippines,
shall be turned over by it to the Philippine Ports Authority
conformably to the purposes of P. D. No. 857.
E. B. Marcha is, however, not on all fours with the case at
bar. In the former, the Court considered the Republic a proper party
to sue since the claims of the Republic and the Philippine Ports
Authority against the petitioner therein were the same. To dismiss
the complaint in E. B. Marcha  would have brought needless delay in
the settlement of the matter since the PPA would have to refile the
case on the same claim already litigated upon. Such is not the case
here since to allow the government to sue herein enables it to raise
the issue of imprescriptibility, a claim which is not available to the
BCDA. The rule that prescription does not run against the State does
not apply to corporations or artificial bodies created by the State for
special purposes, it being said that when the title of the Republic has
been divested, its grantees, although artificial bodies of its own
creation, are in the same category as ordinary persons (Kingston v.
LeHigh Valley Coal Co.,  241 Pa 469). By raising the claim of
imprescriptibility, a claim which cannot be raised by the BCDA, the
Government not only assists the BCDA, as it did in E. B. Marcha, it
even supplants the latter, a course of action proscribed by said case.
Moreover, to recognize the Government as a proper party to
sue in this case would set a bad precedent as it would allow the
Republic to prosecute, on behalf of government-owned or controlled
corporations, causes of action which have already prescribed, on the
pretext that the Government is the real party in interest against
whom prescription does not run, said corporations having been
created merely as agents for the realization of government
programs.
Parenthetically, petitioner was not a party to the original suit for
cancellation of title commenced by the Republic twenty-seven years
20 July 2017
for which it is now being made to answer, nay, being made to suffer
financial losses.
It should also be noted that petitioner is unquestionably a buyer
in good faith and for value, having acquired the property in 1963, or 5
years after the issuance of the original certificate of title, as a third
transferee. If only not to do violence and to give some measure of
respect to the Torrens System, petitioner must be afforded some
measure of protection.
One more point.
Since the portion in dispute now forms part of the property
owned and administered by the Bases Conversion and Development
Authority, it is alienable and registerable real property.
We find it unnecessary to rule on the other matters raised by the
herein parties.
WHEREFORE, the petition is hereby granted and the orders
dated August 31, 1999 and October 4, 1999 of the Regional Trial
Court of the First National Judicial Region (Branch 26, San
Fernando, La Union) in Civil Case No. 6346 entitled Republic of the
Philippines, Plaintiff, versus Heirs of Rafael Galvez, et. al.,
Defendants as well as the resolutions promulgated on November 4,
1999 and May 23, 2000 by the Court of Appeals (Twelfth Division) in
CA-G. R. SP No.55535 entitled Shipside, Inc., Petitioner versus Hon.
Alfredo Cajigal, as Judge, RTC, San Fernando, La Union, Branch 26,
and the Republic of the Philippines, Respondents are hereby
reversed and set aside. The complaint in Civil Case No. 6346,
Regional Trial Court, Branch 26, San Fernando City, La Union
entitled Republic of the Philippines, Plaintiff, versus Heirs of Rafael
Galvez, et al." is ordered dismissed, without prejudice to the filing of
an appropriate action by the Bases Development and Conversion
Authority.
SO ORDERED.
Panganiban, Gonzaga-Reyes, and Sandoval-Gutierrez,
JJ. , concur.
Vitug, J. , Please see separate opinion.
SEPARATE OPINION
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VITUG, J.:
I find no doctrinal difficulty in adhering to the
draft ponencia written by our esteemed Chairman. Mr. Justice JARM,
insofar as it declares that an action for revival of judgment is barred
by extinctive prescription, if not brought within ten (10) years from the
time the right of action accrues, pursuant to Article 1144(3) of the
New Civil Code. It appears that the judgment in the instant case has
become final on 23 October 1973 or well more than two decades
prior to the action for its revival instituted only in 1999.
With due respect, however, I still am unable to subscribe to the
idea that prescription may not be invoked by the government in this
case upon the thesis that the transfer of Camp Wallace to the Bases
Conversion Development authority renders the Republic with no right
or interest to protect and thus unqualified under the rules of
procedure to be the real party-in-interest. While it is true that
Republic Act 7227, otherwise known as the Bases Conversion and
Development Act of 1992, authorizes the transfer of the military
reservations and their extensions to the conversion Authority, the
same, however, is basically for the purpose of accelerating the
sound and balanced conversion of these military reservations into
alternative productive uses and to enhance the benefits to be derived
from such property as a measure of promoting the economic and
social development, particularly, of Central Luzon and, in general,
the countrys goal for enhancement. [1] The transfer of these military
reservations to the Conversion Authority does not amount to an
abdication on the part of the Republic of its interests but simply a
recognition of the need to create a body corporate which will act as
its agent for the realization of its program specified in the Act. It
ought to follow that the Republic remains to be the real party-in-
interest and the Conversion authority being merely its agent.
In E. B. Marcha Transport Co. , Inc. vs. Intermediate Appellate
Court,[2] the Court succinctly resolved the issue of whether or not the
Republic of the Philippines would be a proper party to sue for the
recovery of possession of property which at time of the institution of
the suit was no longer being held by the national government but by
the Philippine Ports Authority. The Court ruled:
20 July 2017
More importantly, as we see it, dismissing the complaint on the
ground that the Republic of the Philippines is not the proper party
would result in needless delay in the settlement of this matter and
also in derogation of the policy against multiplicity of suits. Such a
decision would require the Philippine Ports Authority to refile the very
same complaint already proved by the Republic of the Philippines
and bring back the parties as it were to square one.
It can be said that in suing for the recovery of the rentals, the
Republic of the Philippines, acted as principal of the Philippine Ports
Authority, directly exercising the commission it had earlier conferred
on the latter as its agent. We may presume that, by doing so, the
republic of the Philippines did not intend to retain the said rentals for
its own use, considering that by its voluntary act it had transferred
the land in question to the Philippine Ports authority effective July 11,
1974. The Republic of the Philippines had simply sought to assist,
not supplant, the Philippine Ports Authority, whose title to the
disputed property it continues to recognize. We may expect then that
the said rentals, once collected by the Republic of the Philippines,
shall be turned over by it to the Philippine Ports Authority
conformably to the purposes of P. D. No. 857."
There would seem to be no cogent reason for ignoring that
rationale specially when taken in light of the fact that the original suit
for cancellation of title of petitioners predecessor-in-interest was
commenced by the Republic itself, and it was only in 1992 that the
subject military camp was transferred to the Conversion Authorit
FIRST DIVISION
[G.R. No. 147096. January 15, 2002]
REPUBLIC OF THE PHILIPPINES, represented by NATIONAL
TELECOMMUNICATIONS COMMISSION, petitioner,
vs. EXPRESS TELECOMMUNICATION CO., INC. and
BAYAN TELECOMMUNICATIONS CO.,
INC., respondents.
[G.R. No. 147210. January 15, 2002]
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BAYAN TELECOMMUNICATIONS (Bayantel), INC., petitioner,
vs. EXPRESS TELECOMMUNICATION CO., INC.
(Extelcom), respondent.
DECISION
YNARES-SANTIAGO, J.:
On December 29, 1992, International Communications
Corporation (now Bayan Telecommunications, Inc. or Bayantel) filed
an application with the National Telecommunications Commission
(NTC) for a Certificate of Public Convenience or Necessity (CPCN)
to install, operate and maintain a digital Cellular Mobile Telephone
System/Service (CMTS) with prayer for a Provisional Authority
(PA). The application was docketed as NTC Case No. 92-486.[1]
Shortly thereafter, or on January 22, 1993, the NTC issued
Memorandum Circular No. 4-1-93 directing all interested applicants
for nationwide or regional CMTS to file their respective applications
before the Commission on or before February 15, 1993, and
deferring the acceptance of any application filed after said date until
further orders.[2]
On May 6, 1993, and prior to the issuance of any notice of
hearing by the NTC with respect to Bayantels original
application, Bayantel filed an urgent ex-parte motion to admit an
amended application.[3] On May 17, 1993, the notice of hearing
issued by the NTC with respect to this amended application was
published in the Manila Chronicle. Copies of the application as well
as the notice of hearing were mailed to all affected
parties.Subsequently, hearings were conducted on the amended
application. But before Bayantel could complete the presentation of
its evidence, the NTC issued an Order dated December 19,
1993 stating:
In view of the recent grant of two (2) separate Provisional Authorities
in favor of ISLACOM and GMCR, Inc., which resulted in the closing
out of all available frequencies for the service being applied for by
herein applicant, and in order that this case may not remain pending
for an indefinite period of time, AS PRAYED FOR, let this case be,
as it is, hereby ordered ARCHIVED without prejudice to its
20 July 2017
reinstatement if and when the requisite frequency becomes
available.
SO ORDERED.[4]
On June 18, 1998, the NTC issued Memorandum Circular
No. 5-6-98 re-allocating five (5) megahertz (MHz) of the radio
frequency spectrum for the expansion of CMTS networks. The re-
allocated 5 MHz were taken from the following bands: 1730-1732.5 /
1825-1827.5 MHz and 1732.5-1735 / 1827.5-1830 MHz. [5]
Likewise, on March 23, 1999, Memorandum Circular No. 3-3-99
was issued by the NTC re-allocating an additional five (5) MHz
frequencies for CMTS service, namely: 1735-1737.5 / 1830-1832.5
MHz; 1737.5-1740 / 1832.5-1835 MHz; 1740-1742.5 / 1835-1837.5
MHz; and 1742.5-1745 / 1837.5-1840 MHz.[6]
On May 17, 1999, Bayantel filed an Ex-Parte Motion to Revive
Case,[7] citing the availability of new frequency bands for CMTS
operators, as provided for under Memorandum Circular No. 3-3-99.
On February 1, 2000, the NTC granted BayanTels motion to
revive the latters application and set the case for hearings on
February 9, 10, 15, 17 and 22, 2000. [8] The NTC noted that the
application was ordered archived without prejudice to its
reinstatement if and when the requisite frequency shall become
available.
Respondent Express Telecommunication Co., Inc. (Extelcom)
filed in NTC Case No. 92-486 an Opposition (With Motion to
Dismiss) praying for the dismissal of Bayantels application.
[9]
 Extelcom argued that Bayantelsmotion sought the revival of an
archived application filed almost eight (8) years ago. Thus, the
documentary evidence and the allegations of respondent Bayantel in
this application are all outdated and should no longer be used as
basis of the necessity for the proposed CMTS
service. Moreover, Extelcom alleged that there was no public need
for the service applied for by Bayantel as the present five CMTS
operators --- Extelcom, Globe Telecom, Inc., Smart Communication,
Inc., Pilipino Telephone Corporation, and Isla Communication
Corporation, Inc. --- more than adequately addressed the market
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demand, and all are in the process of enhancing and expanding their
respective networks based on recent technological developments.
Extelcom likewise contended that there were no available radio
frequencies that could accommodate a new CMTS operator as the
frequency bands allocated in NTC Memorandum Circular No. 3-3-
99 were intended for and had in fact been applied for by the existing
CMTS operators. The NTC, in its Memorandum Circular No. 4-1-93,
declared it its policy to defer the acceptance of any application for
CMTS. All the frequency bands allocated for CMTS use under
the NTCs Memorandum Circular No. 5-11-88 and Memorandum
Circular No. 2-12-92 had already been allocated to the existing
CMTS operators. Finally, Extelcom pointed out that Bayantel is its
substantial stockholder to the extent of about 46% of its outstanding
capital stock, and Bayantels application undermines the very
operations of Extelcom.
On March 13, 2000, Bayantel filed a Consolidated
Reply/Comment,[10] stating that the opposition was actually a motion
seeking a reconsideration of the NTC Order reviving the instant
application, and thus cannot dwell on the material allegations or the
merits of the case. Furthermore, Extelcom cannot claim that
frequencies were not available inasmuch as the allocation and
assignment thereof rest solely on the discretion of the NTC.
In the meantime, the NTC issued on March 9, 2000
Memorandum Circular No. 9-3-2000, re-allocating the following radio
frequency bands for assignment to existing CMTS operators and to
public telecommunication entities which shall be authorized to install,
operate and maintain CMTS networks, namely: 1745-1750MHz /
1840-1845MHz; 1750-1775MHz / 1845-1850MHz; 1765-1770MHz /
1860-1865MHz; and 1770-1775MHz / 1865-1870MHz.[11]
On May 3, 2000, the NTC issued an Order granting in favor
of Bayantel a provisional authority to operate CMTS service. [12] The
Order stated in pertinent part:
On the issue of legal capacity on the part of Bayantel, this
Commission has already taken notice of the change in name of
International Communications Corporation
to Bayan Telecommunications, Inc. Thus, in the Decision entered in
20 July 2017
NTC Case No. 93-284/94-200 dated 19 July 1999, it was recognized
that Bayan Telecommunications, Inc., was formerly named
International Communications Corp. Bayantel and ICC Telecoms,
Inc. are one and the same entity, and it necessarily follows that what
legal capacity ICC Telecoms has or has acquired is also the legal
capacity that Bayantel possesses.
On the allegation that the Commission has committed an error in
allowing the revival of the instant application, it appears that the
Order dated 14 December 1993 archiving the same was anchored
on the non-availability of frequencies for CMTS. In the same Order, it
was expressly stated that the archival hereof, shall be without
prejudice to its reinstatement if and when the requisite frequency
becomes available. Inherent in the said Order is the prerogative of
the Commission in reviving the same, subject to prevailing
conditions. The Order of 1 February 2001, cited the availability of
frequencies for CMTS, and based thereon, the Commission,
exercising its prerogative, revived and reinstated the instant
application. The fact that the motion for revival hereof was made ex-
parte by the applicant is of no moment, so long as the oppositors are
given the opportunity to be later heard and present the merits of their
respective oppositions in the proceedings.
On the allegation that the instant application is already obsolete and
overtaken by developments, the issue is whether applicant has the
legal, financial and technical capacity to undertake the proposed
project. The determination of such capacity lies solely within the
discretion of the Commission, through its applicable rules and
regulations. At any rate, the oppositors are not precluded from
showing evidence disputing such capacity in the proceedings at
hand. On the alleged non-availability of frequencies for the proposed
service in view of the pending applications for the same, the
Commission takes note that it has issued Memorandum Circular 9-3-
2000, allocating additional frequencies for CMTS. The eligibility of
existing operators who applied for additional frequencies shall be
treated and resolved in their respective applications, and are not in
issue in the case at hand.
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Accordingly, the Motions for Reconsideration filed by SMARTCOM
and GLOBE TELECOMS/ISLACOM and the Motion to Dismiss filed
by EXTELCOM are hereby DENIED for lack of merit.[13]
The grant of the provisional authority was anchored on the
following findings:
COMMENTS:
1. Due to the operational mergers between Smart
Communications, Inc. and Pilipino Telephone
Corporation (Piltel) and between Globe Telecom, Inc.
(Globe) and Isla Communications, Inc. (Islacom), free
and effective competition in the CMTS market is
threatened. The fifth operator, Extelcom, cannot provide
good competition in as much as it provides service
using the analog AMPS. The GSM system dominates
the market.
2. There are at present two applicants for the assignment
of the frequencies in the 1.7 Ghz and 1.8 Ghz allocated
to CMTS, namely Globe and Extelcom. Based on the
number of subscribers Extelcom has, there appears to
be no congestion in its network - a condition that is
necessary for an applicant to be assigned additional
frequencies. Globe has yet to prove that there is
congestion in its network considering its operational
merger with Islacom.
3. Based on the reports submitted to the Commission, 48%
of the total number of cities and municipalities are still
without telephone service despite the more than 3
million installed lines waiting to be subscribed.
CONCLUSIONS:
1. To ensure effective competition in the CMTS market
considering the operational merger of some of the
CMTS operators, new CMTS operators must be allowed
to provide the service.
20 July 2017
2. The re-allocated frequencies for CMTS of 3 blocks of
5 Mhz x 2 is sufficient for the number of applicants
should the applicants be qualified.
3. There is a need to provide service to some or all of the
remaining cities and municipalities without telephone
service.
4. The submitted documents are sufficient to determine
compliance to the technical requirements. The applicant
can be directed to submit details such as channeling
plans, exact locations of cell sites, etc. as the project
implementation progresses, actual area coverage
ascertained and traffic data are made
available. Applicant appears to be technically qualified
to undertake the proposed project and offer the
proposed service.
IN VIEW OF THE FOREGOING and considering that there is prima
facie evidence to show that Applicant is legally, technically and
financially qualified and that the proposed service is technically
feasible and economically viable, in the interest of public service, and
in order to facilitate the development of telecommunications services
in all areas of the country, as well as to ensure healthy competition
among authorized CMTS providers, let a PROVISIONAL
AUTHORITY (P.A.) be issued to Applicant BAYAN
TELECOMMUNICATIONS, INC. authorizing it to construct, install,
operate and maintain a Nationwide Cellular Mobile Telephone
Systems (CMTS), subject to the following terms and conditions
without prejudice to a final decision after completion of the hearing
which shall be called within thirty (30) days from grant of authority, in
accordance with Section 3, Rule 15, Part IV of the Commissions
Rules of Practice and Procedure. xxx.[14]
Extelcom filed with the Court of Appeals a petition
for certiorari and prohibition,[15] docketed as CA-G.R. SP No. 58893,
seeking the annulment of the Order reviving the application
of Bayantel, the Order granting Bayantel a provisional authority to
construct, install, operate and maintain a nationwide CMTS, and
Memorandum Circular No. 9-3-2000 allocating frequency bands to
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ATTY. BORJE

new public telecommunication entities which are authorized to install,
operate and maintain CMTS.
On September 13, 2000, the Court of Appeals rendered the
assailed Decision,[16] the dispositive portion of which reads:
B. Whether or not the Order dated May 3, 2000 of the petitioner
granting respondent Bayantel a provisional authority to operate a
CMTS is in substantial compliance with NTC Rules of Practice and
Procedure and Memorandum Circular No. 9-14-90 dated September
4, 1990.[22]

WHEREFORE, the writs of certiorari and prohibition prayed for Subsequently, Bayantel also filed its petition for review,
are GRANTED. The Orders of public respondent dated February 1, docketed as G.R. No. 147210, assigning the following errors:
2000 and May 3, 2000 in NTC Case No. 92-486 are
hereby ANNULLED and SET ASIDE and the Amended Application I. THE COURT OF APPEALS SERIOUSLY ERRED IN ITS
of respondent Bayantel is DISMISSED without prejudice to the filing INTERPRETATION OF THE PRINCIPLE OF
of a new CMTS application. The writ of preliminary injunction issued EXHAUSTION OF ADMINISTRATIVE REMEDIES
under our Resolution dated August 15, 2000, restraining and WHEN IT FAILED TO DISMISS HEREIN
enjoining the respondents from enforcing the Orders dated February RESPONDENTS PETITION FOR CERTIORARI
1, 2000 and May 3, 2000 in the said NTC case is hereby made DESPITE ITS FAILURE TO FILE A MOTION FOR
permanent. The Motion for Reconsideration of RECONSIDERATION.
respondent Bayantel dated August 28, 2000 is denied for lack of
merit. II. THE COURT OF APPEALS SERIOUSLY ERRED IN
ITS FINDING THAT THE REVIVAL OF NTC CASE NO.
92-486 ANCHORED ON A EX-PARTE MOTION TO
SO ORDERED.[17] REVIVE CASE WAS TANTAMOUNT TO GRAVE
ABUSE OF DISCRETION ON THE PART OF THE
Bayantel filed a motion for reconsideration of the above NTC.
decision.[18] The NTC, represented by the Office of the Solicitor
General (OSG), also filed its own motion for reconsideration. [19] On III. THE COURT OF APPEALS SERIOUSLY ERRED
the other hand, Extelcom filed a Motion for Partial Reconsideration, WHEN IT DENIED THE MANDATE OF THE NTC AS
praying that NTC Memorandum Circular No. 9-3-2000 be also THE AGENCY OF GOVERNMENT WITH THE SOLE
declared null and void.[20] DISCRETION REGARDING ALLOCATION OF
FREQUENCY BAND TO TELECOMMUNICATIONS
On February 9, 2001, the Court of Appeals issued the assailed ENTITIES.
Resolution denying all of the motions for reconsideration of the
parties for lack of merit.[21] IV. THE COURT OF APPEALS SERIOUSLY ERRED IN
ITS INTERPRETATION OF THE LEGAL PRINCIPLE
Hence, the NTC filed the instant petition for review on certiorari, THAT JURISDICTION ONCE ACQUIRED CANNOT BE
docketed as G.R. No. 147096, raising the following issues for LOST WHEN IT DECLARED THAT THE ARCHIVED
resolution of this Court: APPLICATION SHOULD BE DEEMED AS A NEW
APPLICATION IN VIEW OF THE SUBSTANTIAL
A. Whether or not the Order dated February 1, 2000 of the petitioner CHANGE IN THE CIRCUMSTANCES ALLEGED IN ITS
which revived the application of respondent Bayantel in NTC Case AMENDMENT APPLICATION.
No. 92-486 violated respondent Extelcoms right to procedural due
process of law; V. CONTRARY TO THE FINDING OF THE COURT OF
APPEALS, THE ARCHIVING OF THE BAYANTEL

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APPLICATION WAS A VALID ACT ON THE PART OF
THE NTC EVEN IN THE ABSENCE OF A SPECIFIC
RULE ON ARCHIVING OF CASES SINCE RULES OF
PROCEDURE ARE, AS A MATTER OF COURSE,
LIBERALLY CONSTRUED IN PROCEEDINGS
BEFORE ADMINISTRATIVE BODIES AND SHOULD
GIVE WAY TO THE GREATER HIERARCHY OF
PUBLIC WELFARE AND PUBLIC INTEREST.
VI. CONTRARY TO THE FINDING OF THE COURT OF
APPEALS, THE ARCHIVING OF BAYANTELS
APPLICATION WAS NOT VIOLATIVE OF THE
SUMMARY NATURE OF THE PROCEEDINGS IN
THE NTC UNDER SEC. 3, RULE 1 OF THE NTC
REVISED RULES OF PROCEDURE.
VII. THE COURT OF APPEALS SERIOUSLY ERRED IN
ITS FINDING THAT THE ARCHIVING OF
BAYANTELS APPLICATION WAS VIOLATIVE OF
THE ALLEGED DECLARED POLICY OF THE
GOVERNMENT ON THE TRANSPARENCY AND
FAIRNESS OF ADMINISTRATIVE PROCESS IN
THE NTC AS LAID DOWN IN SEC 4(1) OF R.A. NO.
7925.
VIII. THE COURT OF APPEALS SERIOUSLY ERRED IN
ITS FINDING THAT THE NTC VIOLATED THE
PROVISIONS OF THE CONSTITUTION
PERTAINING TO DUE PROCESS OF LAW.
IX. THE COURT OF APPEALS SERIOUSLY ERRED IN
DECLARING THAT THE MAY 3, 2000 ORDER
GRANTING BAYANTEL A PROVISIONAL
AUTHORITY SHOULD BE SET ASIDE AND
REVERSED.
i. Contrary to the finding of the Court of Appeals, there was
no violation of the NTC Rule that the legal, technical,
financial and economic documentations in support of
the prayer for provisional authority should first be
submitted.
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ii. Contrary to the finding of the Court of Appeals, there
was no violation of Sec. 3, Rule 15 of the NTC Rules of
Practice and Procedure that a motion must first be filed
before a provisional authority could be issued.
iii. Contrary to the finding of the Court of Appeals that a
plea for provisional authority necessitates a notice and
hearing, the very rule cited by the petitioner (Section 5,
Rule 4 of the NTC Rules of Practice and Procedure)
provides otherwise.
iv.  Contrary to the finding of the Court of Appeals, urgent
public need is not the only basis for the grant of a
provisional authority to an applicant;
v.  Contrary to the finding of the Court of Appeals, there
was no violation of the constitutional provision on the
right of the public to information when the Common
Carrier Authorization Department (CCAD) prepared its
evaluation report.[23]
Considering the identity of the matters involved, this Court
resolved to consolidate the two petitions.[24]
At the outset, it is well to discuss the nature and functions of the
NTC, and analyze its powers and authority as well as the laws, rules
and regulations that govern its existence and operations.
The NTC was created pursuant to Executive Order No. 546,
promulgated on July 23, 1979. It assumed the functions formerly
assigned to the Board of Communications and the
Telecommunications Control Bureau, which were both abolished
under the said Executive Order. Previously, the NTCs functions were
merely those of the defunct Public Service Commission (PSC),
created under Commonwealth Act No. 146, as amended, otherwise
known as the Public Service Act, considering that the Board of
Communications was the successor-in-interest of the PSC. Under
Executive Order No. 125-A, issued in April 1987, the NTC became
an attached agency of the Department of Transportation and
Communications.
In the regulatory telecommunications industry, the NTC has the
sole authority to issue Certificates of Public Convenience and
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Necessity (CPCN) for the installation, operation, and maintenance of
communications facilities and services, radio communications
systems, telephone and telegraph systems. Such power includes the
authority to determine the areas of operations of applicants for
telecommunications services. Specifically, Section 16 of the Public
Service Act authorizes the then PSC, upon notice and hearing, to
issue Certificates of Public Convenience for the operation of public
services within the Philippines whenever the Commission finds that
the operation of the public service proposed and the authorization to
do business will promote the public interests in a proper and suitable
manner.[25] The procedure governing the issuance of such
authorizations is set forth in Section 29 of the said Act, the pertinent
portion of which states:
All hearings and investigations before the Commission shall be
governed by rules adopted by the Commission, and in the conduct
thereof, the Commission shall not be bound by the technical rules of
legal evidence. xxx.
In granting Bayantel the provisional authority to operate a
CMTS, the NTC applied Rule 15, Section 3 of its 1978 Rules of
Practice and Procedure, which provides:
Sec. 3. Provisional Relief. --- Upon the filing of an application,
complaint or petition or at any stage thereafter, the Board may grant
on motion of the pleader or on its own initiative, the relief prayed for,
based on the pleading, together with the affidavits and supporting
documents attached thereto, without prejudice to a final decision
after completion of the hearing which shall be called within thirty (30)
days from grant of authority asked for. (underscoring ours)
Respondent Extelcom, however, contends that the NTC should
have applied the Revised Rules which were filed with the Office of
the National Administrative Register on February 3, 1993. These
Revised Rules deleted the phrase on its own initiative; accordingly, a
provisional authority may be issued only upon filing of the proper
motion before the Commission.
In answer to this argument, the NTC, through the Secretary of
the Commission, issued a certification to the effect that inasmuch as
20 July 2017
the 1993 Revised Rules have not been published in a newspaper of
general circulation, the NTC has been applying the 1978 Rules.
The absence of publication, coupled with the certification by the
Commissioner of the NTC stating that the NTC was still governed by
the 1978 Rules, clearly indicate that the 1993 Revised Rules have
not taken effect at the time of the grant of the provisional authority
to Bayantel. The fact that the 1993 Revised Rules were filed with the
UP Law Center on February 3, 1993 is of no moment. There is
nothing in the Administrative Code of 1987 which implies that the
filing of the rules with the UP Law Center is the operative act that
gives the rules force and effect. Book VII, Chapter 2, Section 3
thereof merely states:
Filing. --- (1) Every agency shall file with the University of
the Philippines Law Center three (3) certified copies of every rule
adopted by it. Rules in force on the date of effectivity of this Code
which are not filed within three (3) months from the date shall not
thereafter be the basis of any sanction against any party or persons.
(2) The records officer of the agency, or his equivalent functionary,
shall carry out the requirements of this section under pain or
disciplinary action.
(3) A permanent register of all rules shall be kept by the issuing
agency and shall be open to public inspection.
The National Administrative Register is merely a bulletin of
codified rules and it is furnished only to the Office of the President,
Congress, all appellate courts, the National Library, other public
offices or agencies as the Congress may select, and to other
persons at a price sufficient to cover publication and mailing or
distribution costs.[26] In a similar case, we held:
This does not imply however, that the subject Administrative Order is
a valid exercise of such quasi-legislative power. The original
Administrative Order issued on August 30, 1989, under which the
respondents filed their applications for importations, was not
published in the Official Gazette or in a newspaper of general
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circulation. The questioned Administrative Order, legally, until it is
published, is invalid within the context of Article 2 of Civil Code,
which reads:
Article 2. Laws shall take effect after fifteen days following the
completion of their publication in the Official Gazette (or in a
newspaper of general circulation in the Philippines), unless it is
otherwise provided. x x x
The fact that the amendments to Administrative Order No. SOCPEC
89-08-01 were filed with, and published by the UP Law Center in the
National Administrative Register, does not cure the defect related to
the effectivity of the Administrative Order.
This Court, in Taada  vs. Tuvera  (G.R. No. L-63915, December 29,
1986, 146 SCRA 446)  stated, thus:
We hold therefore that all statutes, including those of local
application and private laws, shall be published as a condition for
their effectivity, which shall begin fifteen days after publication unless
a different effectivity is fixed by the legislature.
Covered by this rule are presidential decrees and executive orders
promulgated by the President in the exercise of legislative power or,
at present, directly conferred by the Constitution. Administrative
Rules and Regulations must also be published if their purpose is to
enforce or implement existing law pursuant also to a valid delegation.
Interpretative regulations and those merely internal in nature, that is,
regulating only the personnel of the administrative agency and not
the public, need not be published. Neither is publication required of
the so-called letters of instructions issued by administrative superiors
concerning the rules or guidelines to be followed by their
subordinates in the performance of their duties.
x x x
20 July 2017
We agree that the publication must be in full or it is no publication at
all since its purpose is to inform the public of the contents of the
laws.
The Administrative Order under consideration is one of those
issuances which should be published for its effectivity, since its
purpose is to enforce and implement an existing law pursuant to a
valid delegation, i.e., P.D. 1071, in relation to LOI 444 and EO 133. [27]
Thus, publication in the Official Gazette or a newspaper of
general circulation is a condition sine qua non before statutes, rules
or regulations can take effect. This is explicit from Executive Order
No. 200, which repealed Article 2 of the Civil Code, and which states
that:
Laws shall take effect after fifteen days following the completion of
their publication either in the Official Gazette or in a newspaper of
general circulation in the Philippines, unless it is otherwise provided.
[28]
The Rules of Practice and Procedure of the NTC, which
implements Section 29 of the Public Service Act (C.A. 146, as
amended), fall squarely within the scope of these laws, as explicitly
mentioned in the case Taadav. Tuvera.[29]
Our pronouncement in Taada vs.  Tuvera is clear and
categorical. Administrative rules and regulations must be published if
their purpose is to enforce or implement existing law pursuant to a
valid delegation. The only exceptions are interpretative regulations,
those merely internal in nature, or those so-called letters of
instructions issued by administrative superiors concerning the rules
and guidelines to be followed by their subordinates in the
performance of their duties.[30]
Hence, the 1993 Revised Rules should be published in the
Official Gazette or in a newspaper of general circulation before it can
take effect. Even the 1993 Revised Rules itself mandates that said
Rules shall take effect only after their publication in a newspaper of
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general circulation.[31] In the absence of such publication, therefore, it
is the 1978 Rules that governs.
In any event, regardless of whether the 1978 Rules or the 1993
Revised Rules should apply, the records show that the amended
application filed by Bayantel in fact included a motion for the
issuance of a provisional authority. Hence, it cannot be said that the
NTC granted the provisional authority motu proprio. The Court of
Appeals, therefore, erred when it found that the NTC issued its Order
of May 3, 2000 on its own initiative. This much is acknowledged in
the Decision of the Court of Appeals:
As prayer, ICC asked for the immediate grant of provisional authority
to construct, install, maintain and operate the subject service and to
charge the proposed rates and after due notice and hearing, approve
the instant application and grant the corresponding certificate of
public convenience and necessity.[32]
The Court of Appeals also erred when it declared that
the NTCs Order archiving Bayantels application was null and
void. The archiving of cases is a widely accepted measure designed
to shelve cases in which no immediate action is expected but where
no grounds exist for their outright dismissal, albeit without
prejudice. It saves the petitioner or applicant from the added trouble
and expense of re-filing a dismissed case. Under this scheme, an
inactive case is kept alive but held in abeyance until the situation
obtains wherein action thereon can be taken.
In the case at bar, the said application was ordered archived
because of lack of available frequencies at the time, and made
subject to reinstatement upon availability of the requisite
frequency. To be sure, there was nothing irregular in the revival of
the application after the condition therefor was fulfilled.
While, as held by the Court of Appeals, there are no clear
provisions in the Rules of the NTC which expressly allow the
archiving of any application, this recourse may be justified under
Rule 1, Section 2 of the 1978 Rules, which states:
Sec. 2. Scope.--- These rules govern pleadings, practice and
procedure before the Board of Communications (now NTC) in all
20 July 2017
matters of hearing, investigation and proceedings within the
jurisdiction of the Board. However, in the broader interest of justice
and in order to best serve the public interest, the Board may, in any
particular matter, except it from these rules and apply such suitable
procedure to improve the service in the transaction of the public
business. (underscoring ours)
The Court of Appeals ruled that the NTC committed grave
abuse of discretion when it revived Bayantels application based on
an ex-parte motion. In this regard, the pertinent provisions of the
NTC Rules:
Sec. 5. Ex-parte  Motions. --- Except for motions for provisional
authorization of proposed services and increase of rates, ex-
parte motions shall be acted upon by the Board only upon showing
of urgent necessity therefor and the right of the opposing party is not
substantially impaired.[33]
Thus, in cases which do not involve either an application for rate
increase or an application for a provisional authority, the NTC may
entertain ex-parte motions only where there is an urgent necessity to
do so and no rights of the opposing parties are impaired.
The Court of Appeals ruled that there was a violation of the
fundamental right of Extelcom to due process when it was not
afforded the opportunity to question the motion for the revival of the
application. However, it must be noted that said Order referred to a
simple revival of the archived application of Bayantel in NTC Case
No. 92-426. At this stage, it cannot be said that Extelcoms right to
procedural due process was prejudiced. It will still have the
opportunity to be heard during the full-blown adversarial hearings
that will follow. In fact, the records show that the NTC has scheduled
several hearing dates for this purpose, at which all interested parties
shall be allowed to register their opposition. We have ruled that there
is no denial of due process where full-blown adversarial proceedings
are conducted before an administrative body.
[34]
 With Extelcom having fully participated in the proceedings, and
indeed, given the opportunity  to file its opposition to the application,
there was clearly no denial of its right to due process.
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In Zaldivar  vs. Sandiganbayan (166 SCRA 316 [1988]), we held that
the right to be heard does not only refer to the right to present verbal
arguments in court. A party may also be heard through his
pleadings. where opportunity to be heard is accorded either through
oral arguments or pleadings, there is no denial of procedural due
process. As reiterated in National Semiconductor (HK) Distribution,
Ltd. vs. NLRC (G.R. No. 123520, June 26, 1998), the essence of due
process is simply an opportunity to be heard, or as applied to
administrative proceedings, an opportunity to explain one's
side. Hence, in Navarro III vs.  Damaso (246 SCRA 260 [1995]), we
held that a formal or trial-type hearing is not at all times and not in all
instances essential. Plainly, petitioner was not denied due process.[35]
Extelcom had already entered its appearance as a party and
filed its opposition to the application. It was neither precluded nor
barred from participating in the hearings thereon. Indeed, nothing,
not even the Order reviving the application, bars or
prevents Extelcom and the other oppositors from participating in the
hearings and adducing evidence in support of their respective
oppositions. The motion to revive could not have possibly caused
prejudice to Extelcom since the motion only sought the revival of the
application. It was merely a preliminary step towards the resumption
of the hearings on the application of Bayantel. The latter will still
have to prove its capability to undertake the proposed
CMTS. Indeed, in its Order dated February 1, 2000, the NTC set
several hearing dates precisely intended for the presentation of
evidence on Bayantels capability and qualification. Notice of these
hearings were sent to all parties concerned, including Extelcom.
As regards the changes in the personal circumstances
of Bayantel, the same may be ventilated at the hearings
during Bayantels presentation of evidence. In fact, Extelcom was
able to raise its arguments on this matter in the Opposition (With
Motion to Dismiss) anent the re-opening and re-instatement of the
application of Bayantel. Extelcom was thus heard on this particular
point.
Likewise, the requirements of notice and publication of the
application is no longer necessary inasmuch as the application is a
mere revival of an application which has already been published
earlier. At any rate, the records show that all of the five (5) CMTS
20 July 2017
operators in the country were duly notified and were allowed to raise
their respective oppositions to Bayantels application through
the NTCs Order dated February 1, 2000.
It should be borne in mind that among the declared national
policies under Republic Act No. 7925, otherwise known as the Public
Telecommunications Policy Act of the Philippines, is the healthy
competition among telecommunications carriers, to wit:
A healthy competitive environment shall be fostered, one in which
telecommunications carriers are free to make business decisions
and to interact with one another in providing telecommunications
services, with the end in view of encouraging their financial viability
while maintaining affordable rates.[36]
The NTC is clothed with sufficient discretion to act on matters
solely within its competence. Clearly, the need for a healthy
competitive environment in telecommunications is sufficient impetus
for the NTC to consider all those applicants who are willing to offer
competition, develop the market and provide the environment
necessary for greater public service. This was the intention that
came to light with the issuance of Memorandum Circular 9-3-2000,
allocating new frequency bands for use of CMTS. This memorandum
circular enumerated the conditions prevailing and the reasons which
necessitated its issuance as follows:
- the international accounting rates are rapidly declining,
threatening the subsidy to the local exchange service as
mandated in EO 109 and RA 7925;
- the public telecommunications entities which were
obligated to install, operate and maintain local
exchange network have performed their obligations in
varying degrees;
- after more than three (3) years from the performance of
the obligations only 52% of the total number of cities
and municipalities are provided with local telephone
service.
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- there are mergers and consolidations among the existing
cellular mobile telephone service (CMTS) providers
threatening the efficiency of competition;
- there is a need to hasten the installation of local
exchange lines in unserved areas;
- there are existing CMTS operators which are
experiencing congestion in the network resulting to low
grade of service;
- the consumers/customers shall be given the freedom to
choose CMTS operators from which they could get the
service.[37]
Clearly spelled out is the need to provide enhanced competition
and the requirement for more landlines and telecommunications
facilities in unserved areas in the country. On both scores, therefore,
there was sufficient showing that the NTC acted well within its
jurisdiction and in pursuance of its avowed duties when it allowed the
revival of Bayantels application.
We now come to the issue of exhaustion of administrative
remedies. The rule is well-entrenched that a party must exhaust all
administrative remedies before resorting to the courts. The
premature invocation of the intervention of the court is fatal to ones
cause of action. This rule would not only give the administrative
agency an opportunity to decide the matter by itself correctly, but
would also prevent the unnecessary and premature resort to courts.
[38]
 In the case of Lopez v. City of Manila,[39] we held:
As a general rule, where the law provides for the remedies against
the action of an administrative board, body or officer, relief to courts
can be sought only after exhausting all remedies provided. The
reason rests upon the presumption that the administrative body, if
given the chance to correct its mistake or error, may amend its
decision on a given matter and decide it properly. Therefore, where a
remedy is available within the administrative machinery, this should
be resorted to before resort can be made to the courts, not only to
give the administrative agency the opportunity to decide the matter
by itself correctly, but also to prevent unnecessary and premature
resort to courts.
20 July 2017
Clearly, Extelcom violated the rule on exhaustion of
administrative remedies when it went directly to the Court of Appeals
on a petition for certiorari and prohibition from the Order of the NTC
dated May 3, 2000, without first filing a motion for reconsideration. It
is well-settled that the filing of a motion for reconsideration is a
prerequisite to the filing of a special civil action for certiorari.
The general rule is that, in order to give the lower court the
opportunity to correct itself, a motion for reconsideration is a
prerequisite to certiorari. It also basic that petitioner must exhaust all
other available remedies before resorting to certiorari.This rule,
however, is subject to certain exceptions such as any of the
following: (1) the issues raised are purely legal in nature, (2) public
interest is involved, (3) extreme urgency is obvious or (4) special
circumstances warrant immediate or more direct action.[40]
This case does not fall under any of the recognized exceptions
to this rule. Although the Order of the NTC dated May 3,
2000 granting provisional authority to Bayantel was
immediately executory, it did not preclude the filing of a motion for
reconsideration. Under the NTC Rules, a party adversely affected by
a decision, order, ruling or resolution may within fifteen (15) days file
a motion for reconsideration. That the Order of the NTC became
immediately executory does not mean that the remedy of filing a
motion for reconsideration is foreclosed to the petitioner. [41]
Furthermore, Extelcom does not enjoy the grant of any vested
interest on the right to render a public service. The Constitution is
quite emphatic that the operation of a public utility shall not be
exclusive. Thus:
No franchise, certificate, or any other form of authorization for the
operation of a public utility shall be granted to citizens of the
Philippines or to corporations organized under the laws of the
Philippines at least sixty per centum of whose capital is owned by
such citizens, nor shall such franchise, certificate or authorization be
exclusive in character or for a longer period than fifty years. Neither
shall any such franchise or right be granted except under the
condition that it shall be subject to amendment, alteration, or repeal
by the Congress when the common good so requires. xxx xxx xxx.[42]
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In Radio Communications of the  Phils., Inc. v. National
Telecommunications Commission,[43] we held:
It is well within the powers of the public respondent to authorize the
installation by the private respondent network of radio
communications systems in Catarman, Samar and San
Jose, Mindoro. Under the circumstances, the mere fact that the
petitioner possesses a franchise to put up and operate a radio
communications system in certain areas is not an insuperable
obstacle to the public respondents issuing the proper certificate to an
applicant desiring to extend the same services to those areas. The
Constitution mandates that a franchise cannot be exclusive in nature
nor can a franchise be granted except that it must be subject to
amendment, alteration, or even repeal by the legislature when the
common good so requires.(Art. XII, sec. 11 of the 1986
Constitution). There is an express provision in the petitioners
franchise which provides compliance with the above mandate (RA
2036, sec. 15).
Even in the provisional authority granted to Extelcom, it is
expressly stated that such authority is not exclusive. Thus, the Court
of Appeals erred when it gave due course to Extelcoms petition and
ruled that it constitutes an exception to the rule on exhaustion of
administrative remedies.
Also, the Court of Appeals erred in annulling the Order of the
NTC dated May 3, 2000, granting Bayantel a provisional authority to
install, operate and maintain CMTS. The general rule is that purely
administrative and discretionary functions may not be interfered with
by the courts. Thus, in Lacuesta  v. Herrera,[44] it was held:
xxx (T)he powers granted to the Secretary of Agriculture and
Commerce (natural resources) by law regarding the disposition of
public lands such as granting of licenses, permits, leases and
contracts, or approving, rejecting, reinstating, or canceling
applications, are all executive and administrative in nature. It is a well
recognized principle that purely administrative and discretionary
functions may not be interfered with by the courts. (Coloso vs. Board
of Accountancy, G.R. No. L-5750, April 20, 1953) In general, courts
have no supervising power over the proceedings and actions of the
20 July 2017
administrative departments of the government. This is generally true
with respect to acts involving the exercise of judgement or discretion
and findings of fact. (54 Am. Jur. 558-559) xxx.
The established exception to the rule is where the issuing
authority has gone beyond its statutory authority, exercised
unconstitutional powers or clearly acted arbitrarily and without regard
to his duty or with grave abuse of discretion. [45] None of these obtains
in the case at bar.
Moreover, in petitions for certiorari, evidentiary matters or
matters of fact raised in the court below are not proper grounds nor
may such be ruled upon in the proceedings. As held in National
Federation of Labor v. NLRC:[46]
At the outset, it should be noted that a petition for certiorari under
Rule 65 of the Rules of Court will prosper only if there is a showing of
grave abuse of discretion or an act without or in excess of jurisdiction
on the part of the National Labor Relations Commission. It does not
include an inquiry as to the correctness of the evaluation of evidence
which was the basis of the labor official or officer in determining his
conclusion. It is not for this Court to re-examine conflicting evidence,
re-evaluate the credibility of witnesses nor substitute the findings of
fact of an administrative tribunal which has gained expertise in its
special field. Considering that the findings of fact of the labor arbiter
and the NLRC are supported by evidence on record, the same must
be accorded due respect and finality.
This Court has consistently held that the courts will not interfere
in matters which are addressed to the sound discretion of the
government agency entrusted with the regulation of activities coming
under the special and technical training and knowledge of such
agency.[47] It has also been held that the exercise of administrative
discretion is a policy decision and a matter that can best be
discharged by the government agency concerned, and not by the
courts.[48] In Villanueva v. Court of Appeals,[49] it was held that
findings of fact which are supported by evidence and the conclusion
of experts should not be disturbed. This was reiterated in Metro
Transit Organization, Inc. v. National Labor Relations Commission,
[50]
 wherein it was ruled that factual findings of quasi-judicial bodies
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which have acquired expertise because their jurisdiction is confined
to specific matters are generally accorded not only respect but even
finality and are binding even upon the Supreme Court if they are
supported by substantial evidence.
Administrative agencies are given a wide latitude in the
evaluation of evidence and in the exercise of its adjudicative
functions. This latitude includes the authority to take judicial notice of
facts within its special competence.
In the case at bar, we find no reason to disturb the factual
findings of the NTC which formed the basis for awarding the
provisional authority to Bayantel. As found by the NTC, Bayantel has
been granted several provisional and permanent authorities before to
operate various telecommunications services.[51] Indeed, it was
established that Bayantel was the first company to comply with its
obligation to install local exchange lines pursuant to E.O. 109 and
R.A. 7925. In recognition of the same, the provisional authority
awarded in favor of Bayantel to operate Local Exchange Services
in Quezon City, Malabon, Valenzuela and the entire Bicol region was
made permanent and a CPCN for the said service was granted in its
favor. Prima facie evidence was likewise found
showing Bayantels legal, financial and technical capacity to
undertake the proposed cellular mobile telephone service.
Likewise, the May 3, 2000 Order did not violate NTC
Memorandum Circular No. 9-14-90 dated September 4, 1990,
contrary to the ruling of the Court of Appeals. The memorandum
circular sets forth the procedure for the issuance of provisional
authority thus:
EFFECTIVE THIS DATE, and as part of the Commissions drive to
streamline and fast track action on applications/petitions for
CPCN other forms of authorizations, the Commission shall be
evaluating applications/petitions for immediate issuance of
provisional authorizations, pending hearing and final authorization of
an application on its merit.
For this purpose, it is hereby directed that all applicants/petitioners
seeking for provisional authorizations, shall submit immediately to
the Commission, either together with their application or in a Motion
20 July 2017
all their legal, technical, financial, economic documentations in
support of their prayer for provisional authorizations for
evaluation. On the basis of their completeness and their having
complied with requirements, the Commission shall be issuing
provisional authorizations.
Clearly, a provisional authority may be issued even pending
hearing and final determination of an application on its merits.
Finally, this Court finds that the Manifestations
of Extelcom alleging forum shopping on the part of the NTC
and Bayantel are not impressed with merit. The divisions of the
Supreme Court are not to be considered as separate and distinct
courts. The Supreme Court remains a unit notwithstanding that it
works in divisions. Although it may have three divisions, it is but a
single court. Actions considered in any of these divisions and
decisions rendered therein are, in effect, by the same Tribunal. The
divisions of this Court are not to be considered as separate and
distinct courts but as divisions of one and the same court. [52]
Moreover, the rules on forum shopping should not be literally
interpreted. We have stated thus:
It is scarcely necessary to add that Circular No. 28-91 must be so
interpreted and applied as to achieve the purposes projected by the
Supreme Court when it promulgated that circular. Circular No. 28-91
was designed to serve as an instrument to promote and facilitate the
orderly administration of justice and should not be interpreted with
such absolute literalness as to subvert its own ultimate and
legitimate objection or the goal of all rules of procedure which is to
achieve substantial justice as expeditiously as possible.[53]
Even assuming that separate actions have been filed by two
different parties involving essentially the same subject matter, no
forum shopping was committed as the parties did not resort to
multiple judicial remedies.The Court, therefore, directed the
consolidation of the two cases because they involve essentially the
same issues. It would also prevent the absurd situation wherein two
different divisions of the same court would render altogether different
rulings in the cases at bar.
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We rule, likewise, that the NTC has legal standing to file and
initiate legal action in cases where it is clear that its inaction would
result in an impairment of its ability to execute and perform its
functions. Similarly, we have previously held in Civil Service
Commission v.  Dacoycoy[54] that the Civil Service Commission, as an
aggrieved party, may appeal the decision of the Court of Appeals to
this Court.
As correctly stated by the NTC, the rule invoked by Extelcom is
Rule 65 of the Rules of Civil Procedure, which provides that public
respondents shall not appear in or file an answer or comment to the
petition or any pleading therein. [55] The instant petition, on the other
hand, was filed under Rule 45 where no similar proscription exists.
WHEREFORE, in view of the foregoing, the consolidated
petitions are GRANTED. The Court of Appeals Decision
dated September 13, 2000 and Resolution dated February 9,
2001 are REVERSED and SET ASIDE.The permanent injunction
issued by the Court of Appeals is LIFTED. The Orders of the NTC
dated February 1, 2000 and May 3, 2000 are REINSTATED. No
pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Kapunan,  and Pardo,
JJ., concur.

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ATTY. BORJE
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-63915 April 24, 1985
LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, and
MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY
AND NATIONALISM, INC. [MABINI], petitioners,  211-213, 215-224, 226-228, 231-239, 241-245, 248,
vs.
HON. JUAN C. TUVERA, in his capacity as Executive Assistant
to the President, HON. JOAQUIN VENUS, in his capacity as
Deputy Executive Assistant to the President , MELQUIADES P.
DE LA CRUZ, in his capacity as Director, Malacañang Records
Office, and FLORENDO S. PABLO, in his capacity as Director,
Bureau of Printing, respondents.
ESCOLIN, J.:
Invoking the people's right to be informed on matters of public
concern, a right recognized in Section 6, Article IV of the 1973
Philippine Constitution, 1 as well as the principle that laws to be valid
and enforceable must be published in the Official Gazette or
otherwise effectively promulgated, petitioners seek a writ of
mandamus to compel respondent public officials to publish, and/or
cause the publication in the Official Gazette of various presidential
decrees, letters of instructions, general orders, proclamations,
executive orders, letter of implementation and administrative orders.
Specifically, the publication of the following presidential issuances is
sought:
20 July 2017
a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64,
103, 171, 179, 184, 197, 200, 234, 265, 286, 298,
303, 312, 324, 325, 326, 337, 355, 358, 359, 360,
361, 368, 404, 406, 415, 427, 429, 445, 447, 473,
486, 491, 503, 504, 521, 528, 551, 566, 573, 574,
594, 599, 644, 658, 661, 718, 731, 733, 793, 800,
802, 835, 836, 923, 935, 961, 1017-1030, 1050,
1060-1061, 1085, 1143, 1165, 1166, 1242, 1246,
1250, 1278, 1279, 1300, 1644, 1772, 1808, 1810,
1813-1817, 1819-1826, 1829-1840, 1842-1847.
b] Letter of Instructions Nos.: 10, 39, 49, 72, 107,
108, 116, 130, 136, 141, 150, 153, 155, 161, 173,
180, 187, 188, 192, 193, 199, 202, 204, 205, 209,
251, 253-261, 263-269, 271-273, 275-283, 285-289,
291, 293, 297-299, 301-303, 309, 312-315, 325,
327, 343, 346, 349, 357, 358, 362, 367, 370, 382,
385, 386, 396-397, 405, 438-440, 444- 445, 473,
486, 488, 498, 501, 399, 527, 561, 576, 587, 594,
599, 600, 602, 609, 610, 611, 612, 615, 641, 642,
665, 702, 712-713, 726, 837-839, 878-879, 881,
882, 939-940, 964,997,1149-1178,1180-1278.
c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63,
64 & 65.
d] Proclamation Nos.: 1126, 1144, 1147, 1151,
1196, 1270, 1281, 1319-1526, 1529, 1532, 1535,
1538, 1540-1547, 1550-1558, 1561-1588, 1590-
1595, 1594-1600, 1606-1609, 1612-1628, 1630-
1649, 1694-1695, 1697-1701, 1705-1723, 1731-
1734, 1737-1742, 1744, 1746-1751, 1752, 1754,
1762, 1764-1787, 1789-1795, 1797, 1800, 1802-
1804, 1806-1807, 1812-1814, 1816, 1825-1826,
1829, 1831-1832, 1835-1836, 1839-1840, 1843-
1844, 1846-1847, 1849, 1853-1858, 1860, 1866,
1868, 1870, 1876-1889, 1892, 1900, 1918, 1923,
1933, 1952, 1963, 1965-1966, 1968-1984, 1986-
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2028, 2030-2044, 2046-2145, 2147-2161, 2163-
2244.
e] Executive Orders Nos.: 411, 413, 414, 427, 429-
454, 457- 471, 474-492, 494-507, 509-510, 522,
524-528, 531-532, 536, 538, 543-544, 549, 551-553,
560, 563, 567-568, 570, 574, 593, 594, 598-604,
609, 611- 647, 649-677, 679-703, 705-707, 712-786,
788-852, 854-857.
f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22,
25-27, 39, 50, 51, 59, 76, 80-81, 92, 94, 95, 107,
120, 122, 123.
g] Administrative Orders Nos.: 347, 348, 352-354,
360- 378, 380-433, 436-439.
The respondents, through the Solicitor General, would have this
case dismissed outright on the ground that petitioners have no legal
personality or standing to bring the instant petition. The view is
submitted that in the absence of any showing that petitioners are
personally and directly affected or prejudiced by the alleged non-
publication of the presidential issuances in question 2 said petitioners
are without the requisite legal personality to institute this mandamus
proceeding, they are not being "aggrieved parties" within the
meaning of Section 3, Rule 65 of the Rules of Court, which we quote:
SEC. 3. Petition for Mandamus.—When any tribunal,
corporation, board or person unlawfully neglects the
performance of an act which the law specifically
enjoins as a duty resulting from an office, trust, or
station, or unlawfully excludes another from the use
a rd enjoyment of a right or office to which such
other is entitled, and there is no other plain, speedy
and adequate remedy in the ordinary course of law,
the person aggrieved thereby may file a verified
petition in the proper court alleging the facts with
certainty and praying that judgment be rendered
commanding the defendant, immediately or at some
20 July 2017
other specified time, to do the act required to be
done to Protect the rights of the petitioner, and to
pay the damages sustained by the petitioner by
reason of the wrongful acts of the defendant.
Upon the other hand, petitioners maintain that since the subject of
the petition concerns a public right and its object is to compel the
performance of a public duty, they need not show any specific
interest for their petition to be given due course.
The issue posed is not one of first impression. As early as the 1910
case of Severino vs. Governor General, 3 this Court held that while
the general rule is that "a writ of mandamus would be granted to a
private individual only in those cases where he has some private or
particular interest to be subserved, or some particular right to be
protected, independent of that which he holds with the public at
large," and "it is for the public officers exclusively to apply for the writ
when public rights are to be subserved [Mithchell vs. Boardmen, 79
M.e., 469]," nevertheless, "when the question is one of public right
and the object of the mandamus is to procure the enforcement of a
public duty, the people are regarded as the real party in interest and
the relator at whose instigation the proceedings are instituted need
not show that he has any legal or special interest in the result, it
being sufficient to show that he is a citizen and as such interested in
the execution of the laws [High, Extraordinary Legal Remedies, 3rd
ed., sec. 431].
Thus, in said case, this Court recognized the relator Lope Severino,
a private individual, as a proper party to the mandamus proceedings
brought to compel the Governor General to call a special election for
the position of municipal president in the town of Silay, Negros
Occidental. Speaking for this Court, Mr. Justice Grant T. Trent said:
We are therefore of the opinion that the weight of
authority supports the proposition that the relator is a
proper party to proceedings of this character when a
public right is sought to be enforced. If the general
rule in America were otherwise, we think that it
would not be applicable to the case at bar for the
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reason 'that it is always dangerous to apply a
general rule to a particular case without keeping in
mind the reason for the rule, because, if under the
particular circumstances the reason for the rule does
not exist, the rule itself is not applicable and reliance
upon the rule may well lead to error'
No reason exists in the case at bar for applying the
general rule insisted upon by counsel for the
respondent. The circumstances which surround this
case are different from those in the United States,
inasmuch as if the relator is not a proper party to
these proceedings no other person could be, as we
have seen that it is not the duty of the law officer of
the Government to appear and represent the people
in cases of this character.
The reasons given by the Court in recognizing a private citizen's
legal personality in the aforementioned case apply squarely to the
present petition. Clearly, the right sought to be enforced by
petitioners herein is a public right recognized by no less than the
fundamental law of the land. If petitioners were not allowed to
institute this proceeding, it would indeed be difficult to conceive of
any other person to initiate the same, considering that the Solicitor
General, the government officer generally empowered to represent
the people, has entered his appearance for respondents in this case.
Respondents further contend that publication in the Official Gazette
is not a sine qua non requirement for the effectivity of laws where the
laws themselves provide for their own effectivity dates. It is thus
submitted that since the presidential issuances in question contain
special provisions as to the date they are to take effect, publication in
the Official Gazette is not indispensable for their effectivity. The point
stressed is anchored on Article 2 of the Civil Code:
Art. 2. Laws shall take effect after fifteen days
following the completion of their publication in the
Official Gazette, unless it is otherwise provided, ...
20 July 2017
The interpretation given by respondent is in accord with this Court's
construction of said article. In a long line of decisions,  4 this Court has
ruled that publication in the Official Gazette is necessary in those
cases where the legislation itself does not provide for its effectivity
date-for then the date of publication is material for determining its
date of effectivity, which is the fifteenth day following its publication-
but not when the law itself provides for the date when it goes into
effect.
Respondents' argument, however, is logically correct only insofar as
it equates the effectivity of laws with the fact of publication.
Considered in the light of other statutes applicable to the issue at
hand, the conclusion is easily reached that said Article 2 does not
preclude the requirement of publication in the Official Gazette, even
if the law itself provides for the date of its effectivity. Thus, Section 1
of Commonwealth Act 638 provides as follows:
Section 1. There shall be published in the Official
Gazette [1] all important legisiative acts and
resolutions of a public nature of the, Congress of the
Philippines; [2] all executive and administrative
orders and proclamations, except such as have no
general applicability; [3] decisions or abstracts of
decisions of the Supreme Court and the Court of
Appeals as may be deemed by said courts of
sufficient importance to be so published; [4] such
documents or classes of documents as may be
required so to be published by law; and [5] such
documents or classes of documents as the
President of the Philippines shall determine from
time to time to have general applicability and legal
effect, or which he may authorize so to be published.
...
The clear object of the above-quoted provision is to give the general
public adequate notice of the various laws which are to regulate their
actions and conduct as citizens. Without such notice and publication,
there would be no basis for the application of the maxim "ignorantia
legis non excusat." It would be the height of injustice to punish or
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otherwise burden a citizen for the transgression of a law of which he
had no notice whatsoever, not even a constructive one.
Perhaps at no time since the establishment of the Philippine
Republic has the publication of laws taken so vital significance that at
this time when the people have bestowed upon the President a
power heretofore enjoyed solely by the legislature. While the people
are kept abreast by the mass media of the debates and deliberations
in the Batasan Pambansa—and for the diligent ones, ready access
to the legislative records—no such publicity accompanies the law-
making process of the President. Thus, without publication, the
people have no means of knowing what presidential decrees have
actually been promulgated, much less a definite way of informing
themselves of the specific contents and texts of such decrees. As the
Supreme Court of Spain ruled: "Bajo la denominacion generica de
leyes, se comprenden tambien los reglamentos, Reales decretos,
Instrucciones, Circulares y Reales ordines dictadas de conformidad
con las mismas por el Gobierno en uso de su potestad.  5
The very first clause of Section I of Commonwealth Act 638 reads:
"There shall be published in the Official Gazette ... ." The word "shall"
used therein imposes upon respondent officials an imperative duty.
That duty must be enforced if the Constitutional right of the people to
be informed on matters of public concern is to be given substance
and reality. The law itself makes a list of what should be published in
the Official Gazette. Such listing, to our mind, leaves respondents
with no discretion whatsoever as to what must be included or
excluded from such publication.
The publication of all presidential issuances "of a public nature" or "of
general applicability" is mandated by law. Obviously, presidential
decrees that provide for fines, forfeitures or penalties for their
violation or otherwise impose a burden or. the people, such as tax
and revenue measures, fall within this category. Other presidential
issuances which apply only to particular persons or class of persons
such as administrative and executive orders need not be published
on the assumption that they have been circularized to all
concerned. 6
20 July 2017
It is needless to add that the publication of presidential issuances "of
a public nature" or "of general applicability" is a requirement of due
process. It is a rule of law that before a person may be bound by law,
he must first be officially and specifically informed of its contents. As
Justice Claudio Teehankee said in Peralta vs. COMELEC 7:
In a time of proliferating decrees, orders and letters
of instructions which all form part of the law of the
land, the requirement of due process and the Rule of
Law demand that the Official Gazette as the official
government repository promulgate and publish the
texts of all such decrees, orders and instructions so
that the people may know where to obtain their
official and specific contents.
The Court therefore declares that presidential issuances of general
application, which have not been published, shall have no force and
effect. Some members of the Court, quite apprehensive about the
possible unsettling effect this decision might have on acts done in
reliance of the validity of those presidential decrees which were
published only during the pendency of this petition, have put the
question as to whether the Court's declaration of invalidity apply to
P.D.s which had been enforced or implemented prior to their
publication. The answer is all too familiar. In similar situations in the
past this Court had taken the pragmatic and realistic course set forth
in Chicot County Drainage District vs. Baxter Bank 8 to wit:
The courts below have proceeded on the theory that
the Act of Congress, having been found to be
unconstitutional, was not a law; that it was
inoperative, conferring no rights and imposing no
duties, and hence affording no basis for the
challenged decree. Norton v. Shelby County, 118
U.S. 425, 442; Chicago, 1. & L. Ry. Co. v. Hackett,
228 U.S. 559, 566. It is quite clear, however, that
such broad statements as to the effect of a
determination of unconstitutionality must be taken
with qualifications. The actual existence of a statute,
prior to such a determination, is an operative fact
and may have consequences which cannot justly be
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ignored. The past cannot always be erased by a new
judicial declaration. The effect of the subsequent
ruling as to invalidity may have to be considered in
various aspects-with respect to particular conduct,
private and official. Questions of rights claimed to
have become vested, of status, of prior
determinations deemed to have finality and acted
upon accordingly, of public policy in the light of the
nature both of the statute and of its previous
application, demand examination. These questions
are among the most difficult of those which have
engaged the attention of courts, state and federal
and it is manifest from numerous decisions that an
all-inclusive statement of a principle of absolute
retroactive invalidity cannot be justified.
Consistently with the above principle, this Court in Rutter vs.
Esteban  9 sustained the right of a party under the Moratorium Law,
albeit said right had accrued in his favor before said law was
declared unconstitutional by this Court.
Similarly, the implementation/enforcement of presidential decrees
prior to their publication in the Official Gazette is "an operative fact
which may have consequences which cannot be justly ignored. The
past cannot always be erased by a new judicial declaration ... that an
all-inclusive statement of a principle of absolute retroactive invalidity
cannot be justified."
From the report submitted to the Court by the Clerk of Court, it
appears that of the presidential decrees sought by petitioners to be
published in the Official Gazette, only Presidential Decrees Nos.
1019 to 1030, inclusive, 1278, and 1937 to 1939, inclusive, have not
been so published. 10 Neither the subject matters nor the texts of
these PDs can be ascertained since no copies thereof are available.
But whatever their subject matter may be, it is undisputed that none
of these unpublished PDs has ever been implemented or enforced
by the government. In Pesigan vs. Angeles, 11 the Court, through
Justice Ramon Aquino, ruled that "publication is necessary to
apprise the public of the contents of [penal] regulations and make the
said penalties binding on the persons affected thereby. " The
20 July 2017
cogency of this holding is apparently recognized by respondent
officials considering the manifestation in their comment that "the
government, as a matter of policy, refrains from prosecuting
violations of criminal laws until the same shall have been published
in the Official Gazette or in some other publication, even though
some criminal laws provide that they shall take effect immediately.
WHEREFORE, the Court hereby orders respondents to publish in
the Official Gazette all unpublished presidential issuances which are
of general application, and unless so published, they shall have no
binding force and effect.
SO ORDERED.
Relova, J., concurs., Aquino, J., took no part., Concepcion, Jr., J., is
on leave.
Separate Opinions
FERNANDO, C.J., concurring (with qualification):
There is on the whole acceptance on my part of the views expressed
in the ably written opinion of Justice Escolin. I am unable, however,
to concur insofar as it would unqualifiedly impose the requirement of
publication in the Official Gazette for unpublished "presidential
issuances" to have binding force and effect.
I shall explain why.
1. It is of course true that without the requisite publication, a due
process question would arise if made to apply adversely to a party
who is not even aware of the existence of any legislative or executive
act having the force and effect of law. My point is that such
publication required need not be confined to the Official Gazette.
From the pragmatic standpoint, there is an advantage to be gained.
It conduces to certainty. That is too be admitted. It does not follow,
however, that failure to do so would in all cases and under all
circumstances result in a statute, presidential decree or any other
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executive act of the same category being bereft of any binding force
and effect. To so hold would, for me, raise a constitutional question.
Such a pronouncement would lend itself to the interpretation that
such a legislative or presidential act is bereft of the attribute of
effectivity unless published in the Official Gazette. There is no such
requirement in the Constitution as Justice Plana so aptly pointed out.
It is true that what is decided now applies only to past "presidential
issuances". Nonetheless, this clarification is, to my mind, needed to
avoid any possible misconception as to what is required for any
statute or presidential act to be impressed with binding force or
effectivity.
2. It is quite understandable then why I concur in the separate
opinion of Justice Plana. Its first paragraph sets forth what to me is
the constitutional doctrine applicable to this case. Thus: "The
Philippine Constitution does not require the publication of laws as a
prerequisite for their effectivity, unlike some Constitutions elsewhere.
It may be said though that the guarantee of due process requires
notice of laws to affected Parties before they can be bound thereby;
but such notice is not necessarily by publication in the Official
Gazette. The due process clause is not that precise. 1 I am likewise
in agreement with its closing paragraph: "In fine, I concur in the
majority decision to the extent that it requires notice before laws
become effective, for no person should be bound by a law without
notice. This is elementary fairness. However, I beg to disagree
insofar as it holds that such notice shall be by publication in the
Official Gazette. 2
3. It suffices, as was stated by Judge Learned Hand, that law as the
command of the government "must be ascertainable in some form if
it is to be enforced at all. 3 It would indeed be to reduce it to the level
of mere futility, as pointed out by Justice Cardozo, "if it is unknown
and unknowable. 4 Publication, to repeat, is thus essential. What I
am not prepared to subscribe to is the doctrine that it must be in the
Official Gazette. To be sure once published therein there is the
ascertainable mode of determining the exact date of its effectivity.
Still for me that does not dispose of the question of what is the jural
effect of past presidential decrees or executive acts not so published.
For prior thereto, it could be that parties aware of their existence
could have conducted themselves in accordance with their
20 July 2017
provisions. If no legal consequences could attach due to lack of
publication in the Official Gazette, then serious problems could arise.
Previous transactions based on such "Presidential Issuances" could
be open to question. Matters deemed settled could still be inquired
into. I am not prepared to hold that such an effect is contemplated by
our decision. Where such presidential decree or executive act is
made the basis of a criminal prosecution, then, of course, its ex post
facto character becomes evident. 5 In civil cases though, retroactivity
as such is not conclusive on the due process aspect. There must still
be a showing of arbitrariness. Moreover, where the challenged
presidential decree or executive act was issued under the police
power, the non-impairment clause of the Constitution may not always
be successfully invoked. There must still be that process of
balancing to determine whether or not it could in such a case be
tainted by infirmity. 6 In traditional terminology, there could arise then
a question of unconstitutional application. That is as far as it goes.
4. Let me make therefore that my qualified concurrence goes no
further than to affirm that publication is essential to the effectivity of a
legislative or executive act of a general application. I am not in
agreement with the view that such publication must be in the Official
Gazette. The Civil Code itself in its Article 2 expressly recognizes
that the rule as to laws taking effect after fifteen days following the
completion of their publication in the Official Gazette is subject to this
exception, "unless it is otherwise provided." Moreover, the Civil Code
is itself only a legislative enactment, Republic Act No. 386. It does
not and cannot have the juridical force of a constitutional command.
A later legislative or executive act which has the force and effect of
law can legally provide for a different rule.
5. Nor can I agree with the rather sweeping conclusion in the opinion
of Justice Escolin that presidential decrees and executive acts not
thus previously published in the Official Gazette would be devoid of
any legal character. That would be, in my opinion, to go too far. It
may be fraught, as earlier noted, with undesirable consequences. I
find myself therefore unable to yield assent to such a
pronouncement.
I am authorized to state that Justices Makasiar, Abad Santos,
Cuevas, and Alampay concur in this separate opinion.
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Makasiar, Abad Santos, Cuevas and Alampay, JJ., concur.
TEEHANKEE, J., concurring:
I concur with the main opinion of Mr. Justice Escolin and the
concurring opinion of Mme. Justice Herrera. The Rule of Law
connotes a body of norms and laws published and ascertainable and
of equal application to all similarly circumstances and not subject to
arbitrary change but only under certain set procedures. The Court
has consistently stressed that "it is an elementary rule of fair play
and justice that a reasonable opportunity to be informed must be
afforded to the people who are commanded to obey before they can
be punished for its violation,  1 citing the settled principle based on
due process enunciated in earlier cases that "before the public is
bound by its contents, especially its penal provisions, a law,
regulation or circular must first be published and the people officially
and specially informed of said contents and its penalties.
Without official publication in the Official Gazette as required by
Article 2 of the Civil Code and the Revised Administrative Code,
there would be no basis nor justification for the corollary rule of
Article 3 of the Civil Code (based on constructive notice that the
provisions of the law are ascertainable from the public and official
repository where they are duly published) that "Ignorance of the law
excuses no one from compliance therewith.
Respondents' contention based on a misreading of Article 2 of the
Civil Code that "only laws which are silent as to their effectivity [date]
need be published in the Official Gazette for their effectivity" is
manifestly untenable. The plain text and meaning of the Civil Code is
that "laws shall take effect after fifteen days following the completion
of their publication in the Official Gazette, unless it is otherwise
provided, " i.e.  a different effectivity date is provided by the law itself.
This proviso perforce refers to a law that has been duly published
pursuant to the basic constitutional requirements of due process.
The best example of this is the Civil Code itself: the same Article 2
provides otherwise that it "shall take effect [only] one year [not 15
days] after such publication. 2 To sustain respondents' misreading
that "most laws or decrees specify the date of their effectivity and for
20 July 2017
this reason, publication in the Official Gazette is not necessary for
their effectivity 3 would be to nullify and render nugatory the Civil
Code's indispensable and essential requirement of prior publication
in the Official Gazette by the simple expedient of providing for
immediate effectivity or an earlier effectivity date in the law
itself before  the completion of 15 days following its publication which
is the period generally fixed by the Civil Code for its proper
dissemination.
MELENCIO-HERRERA, J., concurring:
I agree. There cannot be any question but that even if a decree
provides for a date of effectivity, it has to be published. What I would
like to state in connection with that proposition is that when a date of
effectivity is mentioned in the decree but the decree becomes
effective only fifteen (15) days after its publication in the Official
Gazette, it will not mean that the decree can have retroactive effect
to the date of effectivity mentioned in the decree itself. There should
be no retroactivity if the retroactivity will run counter to constitutional
rights or shall destroy vested rights.
PLANA, J., concurring (with qualification):
The Philippine Constitution does not require the publication of laws
as a prerequisite for their effectivity, unlike some Constitutions
elsewhere. * It may be said though that the guarantee of due process
requires notice of laws to affected parties before they can be bound
thereby; but such notice is not necessarily by publication in the
Official Gazette. The due process clause is not that precise. Neither
is the publication of laws in the Official Gazette required by any
statute as a prerequisite for their effectivity, if  said laws already
provide for their effectivity date.
Article 2 of the Civil Code provides that "laws shall take effect after
fifteen days following the completion of their publication in the Official
Gazette, unless it is otherwise provided  " Two things may be said of
this provision: Firstly, it obviously does not apply to a law with a built-
in provision as to when it will take effect. Secondly, it clearly
recognizes that each law may provide not only a different period for
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reckoning its effectivity date but also a different mode of notice.
Thus, a law may prescribe that it shall be published elsewhere than
in the Official Gazette.
Commonwealth Act No. 638, in my opinion, does not support the
proposition that for their effectivity,  laws must be published in the
Official Gazette. The said law is simply "An Act to Provide for the
Uniform Publication and Distribution of the Official Gazette."
Conformably therewith, it authorizes the publication of the Official
Gazette, determines its frequency, provides for its sale and
distribution, and defines the authority of the Director of Printing in
relation thereto. It also enumerates what shall be published in the
Official Gazette, among them, "important legislative acts and
resolutions of a public nature of the Congress of the Philippines" and
"all executive and administrative orders and proclamations, except
such as have no general applicability." It is noteworthy that not all
legislative acts are required to be published in the Official Gazette
but only "important" ones "of a public nature." Moreover, the said law
does not provide that publication in the Official Gazette is essential
for the effectivity of laws. This is as it should be, for all statutes are
equal and stand on the same footing. A law, especially an earlier one
of general application such as Commonwealth Act No. 638, cannot
nullify or restrict the operation of a subsequent statute that has a
provision of its own as to when and how it will take effect. Only a
higher law, which is the Constitution, can assume that role.
In fine, I concur in the majority decision to the extent that it requires
notice before laws become effective, for no person should be bound
by a law without notice. This is elementary fairness. However, I beg
to disagree insofar as it holds that such notice shall be by publication
in the Official Gazette.
Cuevas and Alampay, JJ., concur.
GUTIERREZ, Jr., J., concurring:
I concur insofar as publication is necessary but reserve my vote as to
the necessity of such publication being in the Official Gazette.
20 July 2017
DE LA FUENTE, J., concurring:
I concur insofar as the opinion declares the unpublished decrees and
issuances of a public nature or general applicability ineffective, until
due publication thereof.
Separate Opinions
FERNANDO, C.J., concurring (with qualification):
There is on the whole acceptance on my part of the views expressed
in the ably written opinion of Justice Escolin. I am unable, however,
to concur insofar as it would unqualifiedly impose the requirement of
publication in the Official Gazette for unpublished "presidential
issuances" to have binding force and effect.
I shall explain why.
1. It is of course true that without the requisite publication, a due
process question would arise if made to apply adversely to a party
who is not even aware of the existence of any legislative or executive
act having the force and effect of law. My point is that such
publication required need not be confined to the Official Gazette.
From the pragmatic standpoint, there is an advantage to be gained.
It conduces to certainty. That is too be admitted. It does not follow,
however, that failure to do so would in all cases and under all
circumstances result in a statute, presidential decree or any other
executive act of the same category being bereft of any binding force
and effect. To so hold would, for me, raise a constitutional question.
Such a pronouncement would lend itself to the interpretation that
such a legislative or presidential act is bereft of the attribute of
effectivity unless published in the Official Gazette. There is no such
requirement in the Constitution as Justice Plana so aptly pointed out.
It is true that what is decided now applies only to past "presidential
issuances". Nonetheless, this clarification is, to my mind, needed to
avoid any possible misconception as to what is required for any
statute or presidential act to be impressed with binding force or
effectivity.
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2. It is quite understandable then why I concur in the separate
opinion of Justice Plana. Its first paragraph sets forth what to me is
the constitutional doctrine applicable to this case. Thus: "The
Philippine Constitution does not require the publication of laws as a
prerequisite for their effectivity, unlike some Constitutions elsewhere.
It may be said though that the guarantee of due process requires
notice of laws to affected Parties before they can be bound thereby;
but such notice is not necessarily by publication in the Official
Gazette. The due process clause is not that precise. 1 I am likewise
in agreement with its closing paragraph: "In fine, I concur in the
majority decision to the extent that it requires notice before laws
become effective, for no person should be bound by a law without
notice. This is elementary fairness. However, I beg to disagree
insofar as it holds that such notice shall be by publication in the
Official Gazette. 2
3. It suffices, as was stated by Judge Learned Hand, that law as the
command of the government "must be ascertainable in some form if
it is to be enforced at all. 3 It would indeed be to reduce it to the level
of mere futility, as pointed out by Justice Cardozo, "if it is unknown
and unknowable. 4 Publication, to repeat, is thus essential. What I
am not prepared to subscribe to is the doctrine that it must be in the
Official Gazette. To be sure once published therein there is the
ascertainable mode of determining the exact date of its effectivity.
Still for me that does not dispose of the question of what is the jural
effect of past presidential decrees or executive acts not so published.
For prior thereto, it could be that parties aware of their existence
could have conducted themselves in accordance with their
provisions. If no legal consequences could attach due to lack of
publication in the Official Gazette, then serious problems could arise.
Previous transactions based on such "Presidential Issuances" could
be open to question. Matters deemed settled could still be inquired
into. I am not prepared to hold that such an effect is contemplated by
our decision. Where such presidential decree or executive act is
made the basis of a criminal prosecution, then, of course, its ex post
facto character becomes evident. 5 In civil cases though, retroactivity
as such is not conclusive on the due process aspect. There must still
be a showing of arbitrariness. Moreover, where the challenged
presidential decree or executive act was issued under the police
power, the non-impairment clause of the Constitution may not always
20 July 2017
be successfully invoked. There must still be that process of
balancing to determine whether or not it could in such a case be
tainted by infirmity. 6 In traditional terminology, there could arise then
a question of unconstitutional application. That is as far as it goes.
4. Let me make therefore that my qualified concurrence goes no
further than to affirm that publication is essential to the effectivity of a
legislative or executive act of a general application. I am not in
agreement with the view that such publication must be in the Official
Gazette. The Civil Code itself in its Article 2 expressly recognizes
that the rule as to laws taking effect after fifteen days following the
completion of their publication in the Official Gazette is subject to this
exception, "unless it is otherwise provided." Moreover, the Civil Code
is itself only a legislative enactment, Republic Act No. 386. It does
not and cannot have the juridical force of a constitutional command.
A later legislative or executive act which has the force and effect of
law can legally provide for a different rule.
5. Nor can I agree with the rather sweeping conclusion in the opinion
of Justice Escolin that presidential decrees and executive acts not
thus previously published in the Official Gazette would be devoid of
any legal character. That would be, in my opinion, to go too far. It
may be fraught, as earlier noted, with undesirable consequences. I
find myself therefore unable to yield assent to such a
pronouncement.
I am authorized to state that Justices Makasiar, Abad Santos,
Cuevas, and Alampay concur in this separate opinion.
Makasiar, Abad Santos, Cuevas and Alampay, JJ., concur.
TEEHANKEE, J., concurring:
I concur with the main opinion of Mr. Justice Escolin and the
concurring opinion of Mme. Justice Herrera. The Rule of Law
connotes a body of norms and laws published and ascertainable and
of equal application to all similarly circumstances and not subject to
arbitrary change but only under certain set procedures. The Court
has consistently stressed that "it is an elementary rule of fair play
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and justice that a reasonable opportunity to be informed must be
afforded to the people who are commanded to obey before they can
be punished for its violation,  1 citing the settled principle based on
due process enunciated in earlier cases that "before the public is
bound by its contents, especially its penal provisions, a law,
regulation or circular must first be published and the people officially
and specially informed of said contents and its penalties.
Without official publication in the Official Gazette as required by
Article 2 of the Civil Code and the Revised Administrative Code,
there would be no basis nor justification for the corollary rule of
Article 3 of the Civil Code (based on constructive notice that the
provisions of the law are ascertainable from the public and official
repository where they are duly published) that "Ignorance of the law
excuses no one from compliance therewith.
Respondents' contention based on a misreading of Article 2 of the
Civil Code that "only laws which are silent as to their effectivity [date]
need be published in the Official Gazette for their effectivity" is
manifestly untenable. The plain text and meaning of the Civil Code is
that "laws shall take effect after fifteen days following the completion
of their publication in the Official Gazette, unless it is otherwise
provided, " i.e.  a different effectivity date is provided by the law itself.
This proviso perforce refers to a law that has been duly published
pursuant to the basic constitutional requirements of due process.
The best example of this is the Civil Code itself: the same Article 2
provides otherwise that it "shall take effect [only] one year [not 15
days] after such publication. 2 To sustain respondents' misreading
that "most laws or decrees specify the date of their effectivity and for
this reason, publication in the Official Gazette is not necessary for
their effectivity 3 would be to nullify and render nugatory the Civil
Code's indispensable and essential requirement of prior publication
in the Official Gazette by the simple expedient of providing for
immediate effectivity or an earlier effectivity date in the law
itself before  the completion of 15 days following its publication which
is the period generally fixed by the Civil Code for its proper
dissemination.
MELENCIO-HERRERA, J., concurring:
20 July 2017
I agree. There cannot be any question but that even if a decree
provides for a date of effectivity, it has to be published. What I would
like to state in connection with that proposition is that when a date of
effectivity is mentioned in the decree but the decree becomes
effective only fifteen (15) days after its publication in the Official
Gazette, it will not mean that the decree can have retroactive effect
to the date of effectivity mentioned in the decree itself. There should
be no retroactivity if the retroactivity will run counter to constitutional
rights or shall destroy vested rights.
PLANA, J., concurring (with qualification):
The Philippine Constitution does not require the publication of laws
as a prerequisite for their effectivity, unlike some Constitutions
elsewhere. * It may be said though that the guarantee of due process
requires notice of laws to affected parties before they can be bound
thereby; but such notice is not necessarily by publication in the
Official Gazette. The due process clause is not that precise. Neither
is the publication of laws in the Official Gazette required by any
statute as a prerequisite for their effectivity, if  said laws already
provide for their effectivity date.
Article 2 of the Civil Code provides that "laws shall take effect after
fifteen days following the completion of their publication in the Official
Gazette, unless it is otherwise provided  " Two things may be said of
this provision: Firstly, it obviously does not apply to a law with a built-
in provision as to when it will take effect. Secondly, it clearly
recognizes that each law may provide not only a different period for
reckoning its effectivity date but also a different mode of notice.
Thus, a law may prescribe that it shall be published elsewhere than
in the Official Gazette.
Commonwealth Act No. 638, in my opinion, does not support the
proposition that for their effectivity,  laws must be published in the
Official Gazette. The said law is simply "An Act to Provide for the
Uniform Publication and Distribution of the Official Gazette."
Conformably therewith, it authorizes the publication of the Official
Gazette, determines its frequency, provides for its sale and
distribution, and defines the authority of the Director of Printing in
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ATTY. BORJE

relation thereto. It also enumerates what shall be published in the

Official Gazette, among them, "important legislative acts and
resolutions of a public nature of the Congress of the Philippines" and
"all executive and administrative orders and proclamations, except
such as have no general applicability." It is noteworthy that not all
legislative acts are required to be published in the Official Gazette
but only "important" ones "of a public nature." Moreover, the said law
does not provide that publication in the Official Gazette is essential
for the effectivity of laws. This is as it should be, for all statutes are
equal and stand on the same footing. A law, especially an earlier one
of general application such as Commonwealth Act No. 638, cannot
nullify or restrict the operation of a subsequent statute that has a
provision of its own as to when and how it will take effect. Only a
higher law, which is the Constitution, can assume that role.

In fine, I concur in the majority decision to the extent that it requires

notice before laws become effective, for no person should be bound
by a law without notice. This is elementary fairness. However, I beg
to disagree insofar as it holds that such notice shall be by publication
in the Official Gazette.

GUTIERREZ, Jr., J., concurring:

I concur insofar as publication is necessary but reserve my vote as to

the necessity of such publication being in the Official Gazette.

DE LA FUENTE, J., concurring:

I concur insofar as the opinion declares the unpublished decrees and

issuances of a public nature or general applicability ineffective, until
due publication thereof.

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EN BANC
[G.R. No. 135864. November 24, 1999]
AUGUSTO TOLEDO, petitioner, vs. COMMISSION ON
ELECTIONS, RESURRECCION Z. BORRA in his capacity
as Executive Director, Commission on Elections and
CIVIL SERVICE COMMISSION, respondents.
DECISION
PURISIMA, J.:
Before the Court is a petition for certiorari and prohibition under
Rule 65 of the Revised Rules of Court assailing as tainted with grave
abuse of discretion amounting to lack of or excess jurisdiction
Resolution No. 98-2768 issued on October 6, 1998 by respondent
Commission on Elections, limiting the extended service of petitioner
Augusto Toledo as Director IV, Education and Information
Department of COMELEC to October 31, 1998.
The antecedent facts that matter are as follows:
20 July 2017
On May 21, 1986, Atty. Augusto Toledo, the herein petitioner,
was appointed Manager of the Education and Information
Department by the then Chairman of the Commission on Elections,
Ramon Felipe, Jr., and assumed office, as such, on June 16,
1986. At the time of his appointment, the petitioner was 59 years old.
On January 29, 1989, the Commission on Elections revoked his
appointment and declared the same null and void for having been
issued in violation of Civil Service Commission (CSC) Memorandum
Circular No. 5, Series of 1990, which prohibits the appointment of
persons, who are 57 years old or older in the government service,
without the prior approval of the Civil Service Commission.
On appeal, the Civil Service Commission upheld the said
Resolution of the COMELEC. Upon denial of his motion for
reconsideration, petitioner elevated the matter to this Court via a
petition for certiorari dated May 7, 1990, docketed as G.R. No.
92646-47.
On October 4, 1991, this Court granted the petition, upheld the
validity of petitioners appointment, and ordered the respondent
COMELEC to reinstate petitioner to his position. [1]
On April 7, 1992, petitioner was reinstated to his former
position. However, on the following day, April 8, 1992, he was
designated Acting Provincial Election Supervisor of Basilan. Because
the said position was four salary grades lower than his original
position, petitioner refused the designation. Instead, on June 16,
1992 petitioner presented a motion to cite the COMELEC in
contempt for its failure to comply with the October 4, 1991 decision
of the Court. The said motion was initially denied, prompting
petitioner to move for reconsideration.
During the pendency of his motion for reconsideration, petitioner
reached the retirable age of sixty-five years. However, the
COMELEC, per Minute Resolution No. 92-3198 of December 8,
1992, resolved to allow petitioner Toledo to continue in the service to
complete his fifteen years of service subject to the outcome of the
administrative case to be filed against him.[2] This was confirmed in
the Memorandum issued by COMELEC Personnel Director Zenaida
S. Soriano on December 17, 1992.[3]
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On August 3, 1993, petitioners motion for reconsideration was
granted and respondent COMELEC was ordered to comply with the
October 4, 1991 decision of this Court.
On August 26, 1993, under its Minute Resolution No. 93-2052,
[4]
 COMELEC reinstated petitioner as Director IV of the Education
and Information Department. Shortly after his reinstatement, he was
detailed as Acting Director IV of the Election and Barangay Affairs
Department, notwithstanding the fact that he was already sixty five
years old.
In 1995, petitioner Toledo went on a prolonged leave of
absence, for which reason, he was given an unsatisfactory
performance rating duly concurred in by then Chairman Christian
Monsod. However, upon the assumption of Chairman Bernardo
Pardo, the said rating was changed to satisfactory.
On May 31, 1995, this Court, in the case of Rabor vs. Civil
Service Commission,[5] upheld the validity of Civil Service
Memorandum Circular No. 27, Series of 1990, which provides that
the extension of service of compulsory retirees to complete the
fifteen year service requirement for retirement shall be granted for a
period not exceeding one year.
Thus, on July 13, 1995, Chairman Pardo issued a
Memorandum[6] to Atty. Zenaida Soriano (Director, Personnel
Department), Atty. Ernesto Herrera (Director , Finance Department),
Atty. Jose Balbuena (Director, Law Department) and Atty.
Resurreccion Borra (Executive Director), informing them that the
COMELEC has not extended the services of petitioner Toledo
beyond age sixty five, and requiring petitioner Toledo to show cause
why his services should be extended.
At the same time, COMELEC sought a ruling from the Civil
Service Commission on the validity of the extension of service
petitioner Toledo in light of the ruling of this Court in the case of
Rabor.
On June 27, 1997, the Civil Service Commission replied to
COMELECs query and issued Resolution No. 97-3167, ruling that
the case of Rabor was not applicable because at the time petitioners
20 July 2017
service was extended, the Cena ruling was in effect; and disposing
thus:
WHEREFORE, the Commission rules that the extension of service of
Augusto V. Toledo beyond his 65th birthday is at the discretion of the
Chairman of the Commission on Elections.
Again, COMELEC sought a clarification of the aforesaid
Resolution and in response, the Civil Service Commission in its
Resolution No. 981075, dated May 15, 1998, resolved that since the
extension of services of Toledo was at the discretion of the
COMELEC, it is also within the prerogative of COMELEC to decide
whether or not it will now limit the period of such extension."
Petitioners performance rating for the two semesters of 1997
was unsatisfactory. Likewise for the first semester of 1998, Chairman
Pardo gave petitioner an unsatisfactory rating.
On October 6, 1998, respondent COMELEC issued the assailed
Resolution, Resolution No. 98-2768 which provides thus:
Considering the circumstances of the extension of the service of
Atty. Toledo beyond his 65th birthday and considering further his
unsatisfactory performance rating for more than two semesters,
sufficient in itself to terminate his services, and considering, finally,
that he is more than seventy one (71) years old now, in the interest
of the service and in line with the CSC Resolution No. 981075, dated
May 15, 1998, the Commission exercising its authority to extend or
limit the extension of service, RESOLVED to limit the extended
service of Atty. Toledo to October 31, 1998.
Petitioner Toledo thus filed the instant petition ascribing grave
abuse of discretion amounting to lack of or excess jurisdiction to
respondent COMELEC in issuing the aforementioned Resolution and
posing as lone issue:
Whether the Commission on Elections and Civil Service
Commission erred in limiting the extended service of the petitioner?
To buttress his position, petitioner Toledo invokes Section 11 of
Presidential Decree 1146, otherwise known as the Government
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Service Insurance System (GSIS) Act of 1977 and the cases
of Cena vs. Civil Service Commission,[7] and Gobantes vs. Civil
Service Commission[8]. It is theorized that P.D. 1146 & the cases of
Cena & Gobantes enjoin the government agency concerned to
extend, if it favorably exercises its discretion to do so, the service of
the employee to a period of not less than that which is required to
complete 15 years of service in order to qualify him for retirement
with full benefits, otherwise the beneficial intendment of P.D. 1146 as
affirmed in Cena and Gobantes would be rendered nugatory.
Petitioner argues that the Administrative Code of 1997 and the
ruling of this Court in the case of Rabor vs. Civil Service
Commission,[9] are of no moment because the Code was enacted in
1997 and Rabor was decided in 1995 or after Cena and Gobantes
which was the doctrine in effect at the time when the respondent
COMELEC allowed petitioner to continue in the service to complete
15 years, citing Civil Service Commission Resolution No. 97- 3167:
The ruling of the Supreme Court in the case of Dionisio Rabor vs.
Civil Service Commission, 244 SCRA 614 (May 31, 1995) which
overturned the Cena ruling could not yet be applied to the instant
case because it is of later application. At the time Toledos service
was extended, the Cena ruling was in effect. xxx
Petitioner also maintains that the COMELEC and/or Civil
Service Commission cannot limit petitioners extended service after it
has so been extended without violating his vested right; that by
allowing petitioner to continue in the service to complete the 15 years
of service in accordance with P.D. 1146 and in line with the
prevailing doctrine in Cena and Gobantes, he became vested with
the right to continue in the service to complete the 15 years of
service prior to retirement.
Third, it is petitioners submission that the unsatisfactory
performance rating of petitioner alleged by COMELEC may be a
cause for the termination of his services but it cannot be a ground to
limit petitioners extended service.
Petitioners contentions are untenable.
20 July 2017
Section 11 of the Revised Government Service Insurance Act of
1977 (P.D. 1146) provides the conditions for entitlement to old-age
pension. Paragraph (b) thereof reads:
xxx xxx xxx
(b) Unless the service is extended by appropriate authorities,
retirement shall be compulsory for an employee of sixty-five years of
age with at least 15 years of service: Provided, that if he has less
than fifteen years of service, he shall be allowed to complete the
fifteen years. (emphasis ours)
xxx xxx xxx
In accordance therewith, the Civil Service Commission
promulgated Memorandum Circular No. 27, Series of 1990, which
categorically states:
TO: ALL HEADS OF DEPARTMENTS, BUREAUS AND AGENCIES
OF THE NATIONAL/LOCAL GOVERNMENTS INCLUDING
GOVERNMENT-OWNED AND/OR CONTROLLED
CORPORATIONS WITH ORIGINAL CHARTERS
SUBJECT: Extension of service of compulsory retiree to complete
the fifteen years service requirement for retirement purposes
Pursuant to Civil Service Commission Resolution No. 90-454 dated
May 21, 1990, the Civil Service Commission hereby adopts and
promulgates the following policies and guidelines in the extension of
services of compulsory retirees to complete the fifteen years service
requirement for retirement purposes:
1. Any request for extension of service of compulsory retirees
to complete the fifteen (15) years service requirement for
retirement shall be allowed only to permanent appointees in the
career service who are regular members of the Government Service
Insurance System (GSIS), and shall be granted for a period not
exceeding one (1) year. (emphasis ours)
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The validity of the said Memorandum Circular has already been
pronounced in the case of Rabor vs. Civil Service
Commission[10] where this Court ruled:
xxx Civil Service Memorandum Circular No. 27, Series of 1990,
more specifically paragraph (1) thereof, is hereby declared valid
and effective. Section 11 (b) of P.D. No. 1146, must, accordingly, be
read together with Memorandum Circular No. 27. We reiterate,
however, the holding in Cea that the head of the government agency
concerned is vested with discretionary authority to allow or disallow
extension of the service of an official or employee who has reached
sixty-five (65) years of age without completing fifteen (15) years of
government service; this discretion is, nevertheless, to be exercised
conformably with the provisions of Civil Service Memorandum
Circular No. 27, Series of 1990.
In upholding the validity of CSC Memorandum Circular No. 27,
this Court declared that the limitation provided by the said Circular on
permissible extensions of service after reaching the compulsory
retirement age of sixty-five has a reasonable relationship with or is
germane to the purpose of civil service laws on retirement. And as
reiterated in the said case, the policy considerations behind the
limitation on the maximum extension of service allowable for
compulsory retirees, as summarized in the dissenting opinion of
Justice Grio-Aquino in the case of Cena, were as follows:
xxx extending the service of compulsory retirees longer than one (1)
year would: (1) Give a premium to late-comers in the government
service and in effect discriminate against those who enter the service
at a younger age (2) Delay the promotion of the letter and of next-in-
rank employees; and (3) Prejudice the chances for employment of
qualified young civil service applicants who have already passed the
various governmental examinations but must wait for jobs to be
vacated by extendees who have long passed the mandatory
retirement age but are enjoying extension of their government
service to complete 15 years so they may qualify for old age
pension.
20 July 2017
Thus, the one-year limitation on the extension of service of a
government employee who has reached the compulsory retirement
age of sixty-five imposed under Memorandum Circular No. 27 was
held valid and reasonable.
So too, in the case of Rabor, this Court expressed anxiety over
the difficulty brought about by the Cena doctrine when considered
together with the decided case of Toledo vs. CSC[11], expressing
thus:
When one combines the doctrine of Toledo with the ruling in Cena,
very strange results follow. Under these combined doctrines, a
person sixty four (64) years of age may be appointed to the
government service and one (1) year later may demand extension of
his service for the next fourteen (14) years; he would retire at age
seventy-nine (79). The net effect is thus that the general statutory
policy of compulsory retirement at sixty-five (65) years is heavily
eroded and effectively becomes unenforceable. xxx
This is now the problem posed by the instant case. Petitioners
appointment and entry into the government service at the age of fifty-
nine years has already been upheld as valid in the case of Toledo
vs. CSC[12] where the Court held that a person fifty-seven years of
age may be appointed to the Civil Service. [13] Moreover, as correctly
ruled by the Civil Service Commission under Resolution No. 97-
3167, the doctrine in the case of Rabor cannot yet be applied to the
petitioner because at the time petitioner Toledos service was
extended, it was the Cena doctrine that was still in effect. And under
such doctrine, the head of the government agency concerned is
vested with discretionary authority to allow or disallow the extension
of service of an official or employee who has reached sixty-five (65)
years of age without completing fifteen (15) years of government
service.
If these doctrines be applied to the case at bar, petitioner, who
reached the compulsory retirement age of sixty-five in 1992 and has
rendered only six years of government service, would need nine (9)
more years to complete the fifteen-year service requirement and
would finally retire at the age of seventy-five in year 2001. The
problem foreseen in the case of Rabor would then become a reality.
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Since the applicable doctrine is that enunciated in the case of
Cena, the extension of petitioners service beyond 1992 is at the
discretion of the COMELEC Chairman. Thus, the extension of
petitioners service through COMELEC Resolution No. 93-2052 on
August 26,1993 was an exercise of such discretion. And the
limitation of his extended service up to October 31, 1998 was well
within the discretion granted to the COMELEC Chairman under the
Cena ruling. Hence, the assailed COMELEC Resolution No. 98-2768
is valid and the COMELEC did not gravely abuse its discretion when
it issued the same resolution.
And, petitioner avers that his unsatisfactory performance rating
may be a cause for the termination of his services but it cannot be a
ground to limit his extended service. Such contention is untenable. In
the case of Cena, it was held that in resolving the question of
whether or not to allow a compulsory retiree to continue his/her
service to complete the 15-year service, there must be present an
essential factor before an application under Sec.11 par. (b) of P.D.
1146 may be granted by the government office concerned. In the
case of the judiciary, such factors as competence, integrity and
dedication to the public service were considered.[14] Parenthetically,
the employees work performance is also a major factor. Since
petitioners performance rating for three consecutive semesters was
all unsatisfactory, it was proper for COMELEC not to extend his
service anymore.
WHEREFORE, the petition is hereby DISMISSED for lack of
merit. No pronouncement as to costs. SO ORDERED.
THIRD DIVISION
[G.R. No. 103144. April 4, 2001]
PHILSA INTERNATIONAL PLACEMENT and SERVICES
CORPORATION, petitioner, vs.  THE HON. SECRETARY
OF LABOR AND EMPLOYMENT, VIVENCIO DE MESA,
RODRIGO MIKIN and CEDRIC LEYSON, respondents.
DECISION
GONZAGA-REYES, J.:
20 July 2017
This is a petition for certiorari from the Order dated November
25, 1991 issued by public respondent Secretary of Labor and
Employment. The November 25, 1991 Order affirmed en toto the
August 29, 1988 Order of the Philippine Overseas Employment
Administration (hereinafter the POEA) which found petitioner liable
for three (3) counts of illegal exaction, two (2) counts of contract
substitution and one count of withholding or unlawful deduction from
salaries of workers in POEA Case No. (L) 85-05-0370.
Petitioner Philsa International Placement and Services
Corporation (hereinafter referred to as Philsa) is a domestic
corporation engaged in the recruitment of workers for overseas
employment. Sometime in January 1985, private respondents, who
were recruited by petitioner for employment in Saudi Arabia, were
required to pay placement fees in the amount of P5,000.00 for
private respondent Rodrigo L. Mikin and P6,500.00 each for private
respondents Vivencio A. de Mesa and Cedric P. Leyson [1].
After the execution of their respective work contracts, private
respondents left for Saudi Arabia on January 29, 1985. They then
began work for Al-Hejailan Consultants A/E, the foreign principal of
petitioner.
While in Saudi Arabia, private respondents were allegedly made
to sign a second contract on February 4, 1985 which changed some
of the provisions of their original contract resulting in the reduction of
some of their benefits and privileges[2]. On April 1, 1985, their foreign
employer allegedly forced them to sign a third contract which
increased their work hours from 48 hours to 60 hours a week without
any corresponding increase in their basic monthly salary. When they
refused to sign this third contract, the services of private respondents
were terminated by Al-Hejailan and they were repatriated to the
Philippines[3].
Upon their arrival in the Philippines, private respondents
demanded from petitioner Philsa the return of their placement fees
and for the payment of their salaries for the unexpired portion of their
contract. When petitioner refused, they filed a case before the POEA
against petitioner Philsa and its foreign principal, Al-Hejailan., with
the following causes of action:
1. Illegal dismissal;
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2. Payment of salary differentials;
3. Illegal deduction/withholding of salaries;
4. Illegal exactions/refund of placement fees; and
5. Contract substitution.[4]
The case was docketed as POEA Case No. (L) 85-05-0370.
Under the rules of the POEA dated May 21, 1985, complaints
involving employer-employee relations arising out of or by virtue of
any law or contract involving Filipino workers for overseas
employment, including money claims, are adjudicated by the
Workers Assistance and Adjudication Office (hereinafter the WAAO)
thru the POEA Hearing Officers [5]. On the other hand, complaints
involving recruitment violations warranting suspension or
cancellation of the license of recruiting agencies are cognizable by
the POEA thru its Licensing and Recruitment Office (hereinafter the
LRO).[6] In cases where a complaint partakes of the nature of both an
employer-employee relationship case and a recruitment regulation
case, the POEA Hearing Officer shall act as representative of both
the WAAO and the LRO and both cases shall be heard
simultaneously. In such cases, the Hearing Officer shall submit two
separate recommendations for the two aspects of the case. [7]
In the case at bench, the first two causes of action were in the
nature of money claims arising from the employer-employee
relations and were properly cognizable by the WAAO. The last two
causes of action were in the nature of recruitment violations and may
be investigated by the LRO. The third cause of action, illegal
deduction/withholding of salary, is both a money claim and a
violation of recruitment regulations and is thus under the
investigatory jurisdiction of both the WAAO and the LRO.
Several hearings were conducted before the POEA Hearing
Officer on the two aspects of private respondents complaint. During
these hearings, private respondents supported their complaint with
the presentation of both documentary and testimonial evidence.
When it was its turn to present its evidence, petitioner failed to do so
and consequently, private respondents filed a motion to decide the
case on the basis of the evidence on record.[8]
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On the aspects of the case involving money claims arising from
the employer-employee relations and illegal dismissal, the POEA
rendered a decision dated August 31, 1988 [9], the dispositive portion
of which reads:
CONFORMABLY TO THE FOREGOING, judgment is hereby
rendered ordering respondent PHILSA INTERNATIONAL
PLACEMENT AND SERVICE CORPORATION to pay complainants,
jointly and severally with its principal Al-Hejailan, the following
amounts, to wit:
1. TWO THOUSAND TWO HUNDRED TWENTY FIVE SAUDI
RIYALS (SR2,225.00) to each complainant, representing the refund
of their unpaid separation pay;
2. ONE THOUSAND SAUDI RIYALS (SR1,000.00) for V.A. de Mesa
alone, representing the salary deduction from his March salary;
3. TWO THOUSAND SAUDI RIYALS (SR2,000.00) each for R.I.
Mikin and C.A.P. Leyson only, representing their differential pay for
the months of February and March, 1985; and
4. Five percent (5%) of the total awards as and by way of attorneys
fees.
All payments of the abovestated awards shall be made in Philippine
Currency equivalent to the prevailing exchange rate according to the
Central Bank at the time of payment.
All other claims of complainants as well as the counterclaims of
respondent are dismissed for lack of merit.
SO ORDERED.[10]
Under the Rules and Regulations of the POEA, the decision of
the POEA-Adjudication Office on matters involving money claims
arising from the employer-employee relationship of overseas Filipino
workers may be appealed to the National Labor Relations
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Commission (hereinafter the NLRC)[11]. Thus, as both felt aggrieved
by the said POEA Decision, petitioner and private respondents filed
separate appeals from the August 31, 1988 POEA Decision to the
NLRC.
In a decision dated July 26, 1989 [12], the NLRC modified the
appealed decision of the POEA Adjudication Office by deleting the
award of salary deductions and differentials. These awards to private
respondents were deleted by the NLRC considering that these were
not raised in the complaint filed by private respondents. The NLRC
likewise stated that there was nothing in the text of the decision
which would justify the award.
Private respondents filed a Motion for Reconsideration but the
same was denied by the NLRC in a Resolution dated October 25,
1989.
Private respondents then elevated the July 26, 1989 decision of
the NLRC to the Supreme Court in a petition for review for certiorari
where it was docketed as G.R. No. 89089. However, in a Resolution
dated October 25, 1989, the petition was dismissed outright for
insufficiency in form and substance, having failed to comply with the
Rules of Court and Circular No. 1-88 requiring submission of a
certified true copy of the questioned resolution dated August 23,
1989.[13]
Almost simultaneous with the promulgation of the August 31,
1988 decision of the POEA on private respondents money claims,
the POEA issued a separate Order dated August 29,
1988[14] resolving the recruitment violations aspect of private
respondents complaint. In this Order, the POEA found petitioner
guilty of illegal exaction, contract substitution, and unlawful
deduction. The dispositive portion of this August 29, 1988 POEA
Order reads:
WHEREFORE, premises considered, this Office finds herein
respondent PHILSA International Placement and Services
Corporation liable for three (3) counts of illegal exaction, two (2)
counts of contract substitution and one count of withholding or
unlawful deduction from salaries of workers.
20 July 2017
Accordingly, respondent is hereby ordered to refund the placement
fees in the amount of P2,500.00 to Rodrigo L. Mikin, P4,000.00,
each, to Vivencio A. de Mesa and Cedric A.P. Leyson plus restitution
of the salaries withheld in the amount of SR1,000.00 to Vivencio A.
de Mesa.
Moreover, respondents license is hereby suspended for eight (8)
months to take effect immediately and to remain as such until full
refund and restitution of the above-stated amounts have been
effected or in lieu thereof, it is fined the amount of SIXTY
THOUSAND (P60,000.00) PESOS plus restitution,
SO ORDERED.
In line with this August 29, 1988 Order, petitioner deposited the
check equivalent to the claims of private respondents and paid the
corresponding fine under protest. From the said Order, petitioner
filed a Motion for Reconsideration which was subsequently denied in
an Order dated October 10, 1989.
Under the POEA Rules and Regulations, the decision of the
POEA thru the LRO suspending or canceling a license or authority to
act as a recruitment agency may be appealed to the Ministry (now
Department) of Labor and Employment. [15] Accordingly, after the
denial of its motion for reconsideration, petitioner appealed the
August 21, 1988 Order to the Secretary of Labor and
Employment. However, in an Order dated September 13, 1991 [16],
public respondent Secretary of Labor and Employment affirmed en
toto the assailed Order. Petitioner filed a Motion for Reconsideration
but this was likewise denied in an Order dated November 25, 1991.
Hence, the instant Petition for Certiorari where petitioner raises
the following grounds for the reversal of the questioned Orders:
I.
THE PUBLIC RESPONDENT HAS ACTED WITHOUT OR IN
EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF
DISCRETION IN HOLDING PETITIONER GUILTY OF
ILLEGAL EXACTIONS. THE FINDING IS NOT SUPPORTED
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BY EVIDENCE. AND IN ANY EVENT, THE LAW ON WHICH
THE CONVICTION IS BASED IS VOID.
II.
THE PUBLIC RESPONDENT HAS ACTED WITHOUT OR IN
EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF
DISCRETION IN PENALIZING PETITIONER WITH
CONTRACT SUBSTITUTION. IN THE PREMISES, THE
CONTRACT SUBSTITUTION IS VALID AS IT IMPROVED THE
TERMS AND CONDITIONS OF PRIVATE RESPONDENTS
EMPLOYMENT.
III.
THE PUBLIC RESPONDENT HAS ACTED WITHOUT OR IN
EXCESS OF JURISDICTION, OR WITH GRAVE ABUSE OF
DISCRETION IN HOLDING PETITIONER LIABLE FOR
ILLEGAL DEDUCTIONS/WITHHOLDING OF SALARIES. FOR
THE SUPREME COURT ITSELF HAS ALREADY ABSOLVED
PETITIONER FROM THIS CHARGE.
With respect to the first ground, petitioner would want us to
overturn the findings of the POEA, subsequently affirmed by the
Secretary of the Department of Labor and Employment, that it is
guilty of illegal exaction committed by collecting placement fees in
excess of the amounts allowed by law. This issue, however, is a
question of fact which cannot be raised in a petition for certiorari
under Rule 65.[17] As we have previously held:
It should be noted, in the first place, that the instant petition is a
special civil action for certiorari under Rule 65 of the Revised Rules
of Court. An extraordinary remedy, its use is available only and
restrictively in truly exceptional cases wherein the action of an
inferior court, board or officer performing judicial or quasi-judicial acts
is challenged for being wholly void on grounds of jurisdiction. The
sole office of the writ of certiorari is the correction of errors of
jurisdiction including the commission of grave abuse of discretion
amounting to lack or excess of jurisdiction. It does not include
20 July 2017
correction of public respondent NLRC's evaluation of the evidence
and factual findings based thereon, which are generally accorded not
only great respect but even finality.[18]
The question of whether or not petitioner charged private
respondents placement fees in excess of that allowed by law is
clearly a question of fact which is for public respondent POEA, as a
trier of facts, to determine. As stated above, the settled rule is that
the factual findings of quasi-judicial agencies like the POEA, which
have acquired expertise because their jurisdiction is confined to
specific matters, are generally accorded not only respect, but at
times even finality if such findings are supported by substantial
evidence.[19]
On this point, we have carefully examined the records of the
case and it is clear that the ruling of public respondent POEA that
petitioner is guilty of illegal exaction is supported by substantial
evidence. Aside from the testimonial evidence offered by private
respondents, they also presented documentary evidence consisting
of receipts issued by a duly authorized representative of petitioner
which show the payment of amounts in excess of those allowed by
the POEA. In contrast, petitioner did not present any evidence
whatsoever to rebut the claims of private respondents despite the
many opportunities for them to do so.
Petitioner insists, however, that it cannot be held liable for illegal
exaction as POEA Memorandum Circular No. II, Series of 1983,
which enumerated the allowable fees which may be collected from
applicants, is void for lack of publication.
There is merit in the argument.
In Taada vs. Tuvera[20], the Court held, as follows:
We hold therefore that all statutes, including those of local
application and private laws, shall be published as a condition for
their effectivity, which shall begin fifteen days after publication unless
a different effectivity date is fixed by the legislature.
Covered by this rule are presidential decrees and executive orders
promulgated by the President in the exercise of legislative powers
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whenever the same are validly delegated by the legislature or, at
present, directly conferred by the Constitution.Administrative rules
and regulations must also be published if their purpose is to enforce
or implement existing law pursuant to a valid delegation.
Interpretative regulations and those merely internal in nature, that is,
regulating only the personnel of the administrative agency and the
public, need not be published. Neither is publication required of the
so-called letter of instructions issued by the administrative superiors
concerning the rules or guidelines to be followed by their
subordinates in the performance of their duties.
Applying this doctrine, we have previously declared as having
no force and effect the following administrative issuances: a) Rules
and Regulations issued by the Joint Ministry of Health-Ministry of
Labor and Employment Accreditation Committee regarding the
accreditation of hospitals, medical clinics and laboratories [21]; b)
Letter of Instruction No. 416 ordering the suspension of payments
due and payable by distressed copper mining companies to the
national government[22]; c) Memorandum Circulars issued by the
POEA regulating the recruitment of domestic helpers to Hong
Kong[23]; d) Administrative Order No. SOCPEC 89-08-01 issued by
the Philippine International Trading Corporation regulating
applications for importation from the Peoples Republic of China [24];
and e) Corporate Compensation Circular No. 10 issued by the
Department of Budget and Management discontinuing the payment
of other allowances and fringe benefits to government officials and
employees[25]. In all these cited cases, the administrative issuances
questioned therein were uniformly struck down as they were not
published or filed with the National Administrative Register as
required by the Administrative Code of 1987[26].
POEA Memorandum Circular No. 2, Series of 1983 must
likewise be declared ineffective as the same was never published or
filed with the National Administrative Register.
POEA Memorandum Order No. 2, Series of 1983 provides for
the applicable schedule of placement and documentation fees for
private employment agencies or authority holders. Under the said
Order, the maximum amount which may be collected from
prospective Filipino overseas workers is P2,500.00. The said circular
20 July 2017
was apparently issued in compliance with the provisions of Article 32
of the Labor Code which provides, as follows:
Article 32. Fees to be paid by workers. Any person applying with a
private fee-charging employment agency for employment assistance
shall not be charged any fee until he has obtained employment
through its efforts or has actually commenced employment. Such fee
shall be always covered with the approved receipt clearly showing
the amount paid. The Secretary of Labor shall promulgate a
schedule of allowable fees. (italics supplied)
It is thus clear that the administrative circular under
consideration is one of those issuances which should be published
for its effectivity, since its purpose is to enforce and implement an
existing law pursuant to a valid delegation [27].Considering that POEA
Administrative Circular No. 2, Series of 1983 has not as yet been
published or filed with the National Administrative Register, the same
is ineffective and may not be enforced.
The Office of the Solicitor General argues however that the
imposition of administrative sanctions on petitioner was based not on
the questioned administrative circular but on Article 32 and Article 34
(a)[28] of the Labor Code.
The argument is not meritorious. The said articles of the Labor
Code were never cited, much less discussed, in the body of the
questioned Orders of the POEA and Secretary of Labor and
Employment. In fact, the said Orders were consistent in mentioning
that petitioners violation of Administrative Circular No. 2, Series of
1983 was the basis for the imposition of administrative sanctions
against petitioner. Furthermore, even assuming that petitioner was
held liable under the said provisions of the Labor Code, Articles 32
and 34 (a) of the Labor Code presupposes the promulgation of a
valid schedule of fees by the Department of Labor and
Employment. Considering that, as previously discussed,
Administrative Circular No. 2, Series of 1983 embodying such a
schedule of fees never took effect, there is thus no basis for the
imposition of the administrative sanctions against
petitioner. Moreover, under Book VI, Chapter II, Section 3 of the
Administrative Code of 1987, (r)ules in force on the date of the
effectivity of this Code which are not filed within three (3) months
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from that date shall not thereafter be the basis of any sanction
against any party or persons. Considering that POEA Administrative
Circular No. 2 was never filed with the National Administrative
Register, the same cannot be used as basis for the imposition of
administrative sanctions against petitioner.
The Office of the Solicitor General likewise argues that the
questioned administrative circular is not among those requiring
publication contemplated by Taada vs. Tuvera as it is addressed
only to a specific group of persons and not to the general public.
Again, there is no merit in this argument.
The fact that the said circular is addressed only to a specified
group, namely private employment agencies or authority holders,
does not take it away from the ambit of our ruling in Taada vs.
Tuvera. In the case of Phil. Association of Service Exporters vs.
Torres[29], the administrative circulars questioned therein were
addressed to an even smaller group, namely Philippine and Hong
Kong agencies engaged in the recruitment of workers for Hong
Kong, and still the Court ruled therein that, for lack of proper
publication, the said circulars may not be enforced or implemented.
Our pronouncement in Taada vs. Tuvera is clear and
categorical. Administrative rules and regulations must be published if
their purpose is to enforce or implement existing law pursuant to a
valid delegation. The only exceptions are interpretative regulations,
those merely internal in nature, or those so-called letters of
instructions issued by administrative superiors concerning the rules
and guidelines to be followed by their subordinates in the
performance of their duties.Administrative Circular No. 2, Series of
1983 has not been shown to fall under any of these exceptions.
In this regard, the Solicitor Generals reliance on the case
of Yaokasin vs. Commissioner of Customs[30]  is misplaced. In the
said case, the validity of certain Customs Memorandum Orders were
upheld despite their lack of publication as they were addressed to a
particular class of persons, the customs collectors, who were also
the subordinates of the Commissioner of the Bureau of Customs. As
such, the said Memorandum Orders clearly fall under one of the
exceptions to the publication requirement, namely those dealing with
instructions from an administrative superior to a subordinate
20 July 2017
regarding the performance of their duties, a circumstance which
does not obtain in the case at bench.
With respect to the second ground, petitioner would want us to
review the findings of fact of the POEA regarding the two counts of
alleged contract substitution. Again, this is a question of fact which
may not be disturbed if the same is supported by substantial
evidence. A reading of the August 29, 1988 Order of the POEA
shows that, indeed, the ruling that petitioner is guilty of two (2)
counts of prohibited contract substitution is supported by substantial
evidence. Thus:
2. As admitted by respondent, there was definitely a contract of
substitution in the first count. The first contract was duly approved by
the Administration and, therefore, the parties are bound by the terms
and condition thereof until its expiration.The mere intention of
respondents to increase the number of hours of work, even if there
was a corresponding increase in wage is clear violation of the
contract as approved by the Administration, and notwithstanding the
same, the amendment is evidently contrary to law, morals, good
customs and public policy and hence, must be shunned (Art. 1306,
Civil Code of the Philippines, Book III, Title I, Chapter 1, Article 83,
Labor Code of the Philippines, as amended). Moreover, it would
appear that the proposed salary increase corresponding to the
increase in number of work bonus may just have been a ploy as
complainant were (sic) thereafter not paid at the increased rate.
As to contract substitution in the second part, a third contract was
emphatically intended by respondent to be signed by complainants
which, however, was not consummated due to the adamant refusal
of complainants to sign thereon. Mere intention of the respondent to
commit contract substitution for a second time should not be left
unpunished. It is the duty of this Office to repress such acts by
teaching agencies a lesson to avoid repetition of the same violation.
[31]
With respect to the third ground, petitioner argues that the
public respondent committed grave abuse of discretion in holding
petitioner liable for illegal deductions/withholding of salaries
considering that the Supreme Court itself has already absolved
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petitioner from this charge. Petitioner premises its argument on the
fact that the July 26, 1989 Decision of the NLRC absolving it from
private respondent de Mesas claim for salary deduction has already
attained finality by reason of the dismissal of private respondents
petition for certiorari of the said NLRC decision by the Supreme
Court.
Petitioner is correct in stating that the July 26, 1989 Decision of
the NLRC has attained finality by reason of the dismissal of the
petition for certiorari assailing the same. However, the said NLRC
Decision dealt only with the money claims of private respondents
arising from employer-employee relations and illegal dismissal and
as such, it is only for the payment of the said money claims that
petitioner is absolved. The administrative sanctions, which are
distinct and separate from the money claims of private respondents,
may still be properly imposed by the POEA. In fact, in the August 31,
1988 Decision of the POEA dealing with the money claims of private
respondents, the POEA Adjudication Office precisely declared that
respondents liability for said money claims is without prejudice to and
independent of its liabilities for the recruitment violations aspect of
the case which is the subject of a separate Order. [32]
The NLRC Decision absolving petitioner from paying private
respondent de Mesas claim for salary deduction based its ruling on a
finding that the said money claim was not raised in the
complaint[33]. While there may be questions regarding such finding of
the NLRC, the finality of the said NLRC Decision prevents us from
modifying or reviewing the same. But the fact that the claim for salary
deduction was not raised by private respondents in their complaint
will not bar the POEA from holding petitioner liable for illegal
deduction or withholding of salaries as a ground for the suspension
or cancellation of petitioners license.
Under the POEA Rules and Regulations, the POEA, on its own
initiative, may conduct the necessary proceeding for the suspension
or cancellation of the license of any private placement agency on any
of the grounds mentioned therein.[34]As such, even without a written
complaint from an aggrieved party, the POEA can initiate
proceedings against an erring private placement agency and, if the
result of its investigation so warrants, impose the corresponding
administrative sanction thereof. Moreover, the POEA, in an
20 July 2017
investigation of an employer-employee relationship case, may still
hold a respondent liable for administrative sanctions if, in the course
of its investigation, violations of recruitment regulations are
uncovered.[35] It is thus clear that even if recruitment violations were
not included in a complaint for money claims initiated by a private
complainant, the POEA, under its rules, may still take cognizance of
the same and impose administrative sanctions if the evidence so
warrants.
As such, the fact that petitioner has been absolved by final
judgment for the payment of the money claim to private respondent
de Mesa does not mean that it is likewise absolved from the
administrative sanctions which may be imposed as a result of the
unlawful deduction or withholding of private respondents salary. The
POEA thus committed no grave abuse of discretion in finding
petitioner administratively liable of one count of unlawful
deduction/withholding of salary.
To summarize, petitioner should be absolved from the three (3)
counts of illegal exaction as POEA Administrative Circular No. 2,
Series of 1983 could not be the basis of administrative sanctions
against petitioner for lack of publication.However, we affirm the ruling
of the POEA and the Secretary of Labor and Employment that
petitioner should be held administratively liable for two (2) counts of
contract substitution and one (1) count of withholding or unlawful
deduction of salary.
Under the applicable schedule of penalties imposed by the
POEA, the penalty for each count of contract substitution is
suspension of license for two (2) months or a fine of P10,000.00
while the penalty for withholding or unlawful deduction of salaries is
suspension of license for two (2) months or fine equal to the salary
withheld but not less than P10,000.00 plus restitution of the amount
in both instances[36]. Applying the said schedule on the instant case,
the license of petitioner should be suspended for six (6) months or, in
lieu thereof, it should be ordered to pay fine in the amount of
P30,000.00. Petitioner should likewise pay the amount of
SR1,000.00 to private respondent Vivencio A. de Mesa as restitution
for the amount withheld from his salary.
WHEREFORE, premises considered, the September 13, 1991
and November 25, 1991 Orders of public respondent Secretary of
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Labor and Employment are hereby MODIFIED. As modified, the
license of private respondent Philsa International Placement and
Services Corporation is hereby suspended for six (6) months or, in
lieu thereof, it is hereby ordered to pay the amount of P30,000.00 as
fine. Petitioner is likewise ordered to pay the amount of SR1,000.00
to private respondent Vivencio A. de Mesa. All other monetary
awards are deleted.
SO ORDERED.
Melo (Chairman), Vitug, Panganiban,  and Sandoval-Gutierrez,
JJ., concur.
EN BANC
[G. R. No. 151992. September 18, 2002]
COMMISSION ON ELECTIONS, COMELEC CHAIRMAN
ALFREDO L. BENIPAYO, COMELEC COMMISSIONERS
RESURRECCION Z. BORRA and FLORENTINO A.
TUASON, JR., petitioners, vs. JUDGE MA. LUISA
20 July 2017
QUIJANO-PADILLA, REGIONAL TRIAL COURT OF
QUEZON CITY, BRANCH 215 and PHOTOKINA
MARKETING CORP., respondents.
DECISION
SANDOVAL-GUTIERREZ,  J.:
The contracting prerogative of public officers is circumscribed
with a heavy burden of responsibility. They must exercise utmost
caution and observe the law in order to protect the public from
unjust and inequitable government contracts.
The case at bar provides us with another occasion to stress
that with respect to government contracts, statutes take precedence
over the public officers freedom to contract. Here, the primordial
question to be resolved is -- may a successful bidder compel a
government agency to formalize a contract with it notwithstanding
that its bid exceeds the amount appropriated by Congress for the
project?
Before us is a petition for certiorari under Rule 65 of the 1997
Rules of Civil Procedure, as amended, alleging that respondent
Judge Ma. Luisa Quijano-Padilla of the Regional Trial Court,
Branch 215, Quezon City, committed grave abuse of discretion in
issuing the (a) Resolution[1] dated December 19, 2001 granting
private respondents application for a writ of preliminary prohibitory
injunction in Special Civil Action No. Q-01-45405 [2];and (b)
Resolution[3] dated February 7, 2002 denying petitioners Omnibus
Motion to dismiss the petition and their motion for reconsideration of
the same Resolution and granting private respondent's application
for a writ of preliminary mandatory injunction.
The facts are undisputed.
In 1996, the Philippine Congress passed Republic Act No.
8189, otherwise known as the "Voter's Registration Act of
1996," providing for the modernization and computerization of the
voters' registration list and the appropriate of funds therefor "in order
to establish a clean, complete, permanent and updated list of
voters."[4]
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Pursuant thereto, the Commission on Elections (COMELEC)
promulgated Resolution No. 00-0315[5] approving in principle the
Voter's Registration and Identification System Project (VRIS)
Project for brevity). The VRIS Project envisions a computerized
database system for the May 2004 Elections. The idea is to have a
national registration of voters whereby each registrant's fingerprints
will be digitally entered into the system and upon completion of
registration, compared and matched with other entries to eliminate
double entries. A tamper-proof and counterfeit-resistant voter's
identification card will then be issues to each registrant as a visual
record of the registration.
On September 9, 1999, the COMELEC issued invitations to
pre-qualify and bid for the supply and installations of information
technology equipment and ancillary services for its VRIS Project.
[6] 
Private respondent Photokina Marketing Corporation
(PHOTOKINA) pre-qualified and was allowed to participate as one
of the bidders. After the public bidding was conducted,
PHOTOKINA's bid in the amount of P6.588 Billion Pesos garnered
the highest total weighted score and was declared the winning
bidder. Thus, on September 28, 2000, the COMELEC issued
Resolution No. 3252[7] approving the Notice of Award to
PHOTOKINA, which, in turn, immediately accepted the same. The
parties then proceeded to formalize the contract, with
Commissioner Mehol K. Sadain and Atty. Rodrigo D. Sta. Ana,
acting as negotiators for the COMELEC and PHOTOKINA,
respectively.
However, under Republic Act No. 8760[8] the budget
appropriated by Congress for the COMELECs modernization
project was only One (1) Billion Pesos and that the actual available
funds under the Certificate of Availability of Funds (CAF) issued by
the Chief Accountant of the COMELEC was only P1.2 Billion
Pesos.
In December 2000, then COMELEC Chairman Harriet O.
Demetriou issued a memorandum to the COMELEC en
banc expressing her objections to the contract. Commissioner
Sadain, for his part, submitted a draft of the contract [9] providing a
price that would not exceed the certified available appropriation but
covering only Phase I of the VRIS Project, i.e., issuance of
20 July 2017
registration cards for 1,000,000 voters in certain areas only. [10]Under
the draft, the subsequent completion of the whole project shall be
agreed upon in accordance with the Bid Documents and the annual
funds available for it. [11]
On February 2, 2001, the term of former Chairman Demetriou
and those of Commissioners Julio F. Desamito and Teresita Dy-
Liacco Flores expired. Appointed as their successors were Alfredo
L. Benipayo as Chairman and Resurreccion Z. Borra and Florentino
A. Tuason, Jr. as Commissioners.
Meanwhile, PHOTOKINA, as the winning bidder, wrote several
letters to the COMELEC requesting the formal execution of the
contract, but to no avail.[12]
Then Chairman Benipayo, through various press releases
and public statements, announced that the VRIS Project has been
scrapped, dropped, junked, or set aside. He further
announced his plan to re-engineer theentire modernization program
of the COMELEC, emphasizing his intention to replace the VRIS
Project with his own version, the Triple E Vision.[13]
On October 2, 2001, Senator Edgardo J. Angara directed the
creation of a technical working group to assist the COMELEC in
evaluating all programs for the modernization of the COMELEC
which will also consider the PHOTOKINA contract as
an alternative program and various competing programs for the
purpose.
Unsatisfied with the adverse turn of events, PHOTOKINA filed
with the Regional Trial Court, Branch 215, Quezon City a petition
for mandamus, prohibition and damages (with prayer for temporary
restraining order, preliminary prohibitory injunction and preliminary
mandatory injunction) against the COMELEC and all its
Commissioners,[14] docketed as Special Civil Action No. Q- 01-
45405. PHOTOKINA alleged three causes of
action: first,  the deliberate refusal of the COMELEC and its
Commissioners to formalize the contract rendered nugatory the
perfected contract between them; second, in announcing that
the VRIS Project has been junkedand that he has plans to re-
engineer the COMELECs entire modernization
program, Chairman Benipayo committed grave abuse of
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discretion; and third, the COMELECs failure to perform its duty
under the contract has caused PHOTOKINA to incur damages
since it has spent substantial time and resources in the preparation
of the bid and the draft contract.
In support of its application for writs of preliminary prohibitory
and mandatory injunction, PHOTOKINA adopted the evidence it
adduced during the hearing of its application for the issuance of a
temporary restraining order.
On December 19, 2001, respondent Judge Ma. Luisa Quijano-
Padilla issued the first assailed Resolution granting
PHOTOKINAs application for a writ of preliminary prohibitory
injunction, thus:
"WHEREFORE, premises considered, the Court resolves
to: (1) grant the application for the issuance of a writ of preliminary
prohibitory injunction; and (2) deny the application for the issuance
of a writ of preliminary mandatory injunction.
Accordingly, let a writ of preliminary prohibitory injunction issue
enjoining respondents, their agents, successors and assigns from
replacing the VRIS Project upon petitioners posting of a bond in the
amount of P20,000,000.00, which bond shall answer for whatever
damages which may be sustained by reason of the issuance of the
said writ, if it turns out that the plaintiffs are not entitled thereto.
SO ORDERED"[15]
Both parties filed their respective motions for
reconsideration. PHOTOKINA reiterated its plea for a writ of
preliminary mandatory injunction.[16] For their part, the COMELEC
and its Commissioners, through the Solicitor General, prayed that
the writ of preliminary prohibitory injunction be set aside and that
the petition for mandamus, prohibition and damages be dismissed.
[17]
On February 8, 2002, respondent judge issued the second
assailed Resolution denying the COMELECs Omnibus Motion and,
20 July 2017
this time, granting PHOTOKINAs application for a writ of preliminary
mandatory injunction, thus:
"WHEREFORE, premises considered, this Court resolves to: (1)
deny Respondents Omnibus Motion for the dismissal of this
case and for the reconsideration of this Courts Resolution
granting the writ of preliminary prohibitory injunction; (2) grant
Petitioners Motion dated January 2, 2002 insofar as it prays for the
issuance of a writ of preliminary mandatory injunction; (3) Grant the
prayer for the reduction of the preliminary prohibitory injunction
bond from P20,000,000.00 to P10,000,000.00; (4) Clarify its
Resolution dated December 19, 2001 to the extent that the writ of
preliminary prohibitory injunction will also enjoin Respondents, their
agents, successors and assigns from disregarding the contract for
the VRIS Project between Petitioner and Respondent
COMELEC; (5) deny Petitioners motion to declare Respondents in
default.
"Accordingly, let a writ of preliminary mandatory injunction issue
directing all respondent Commissioners to immediately resume
negotiations to formalize the execution of the contract with
Petitioner for the VRIS Project upon petitioners posting of a bond,
separate from the above bond for the writ of preliminary prohibitory
injunction, in the amount of P20,000,000.00, which bond shall
answer for whatever damages that may be sustained by reason of
the issuance of the said writ, if it turns out that Petitioner is not
entitled thereto.
"SO ORDERED."[18]
Hence, the instant petition for certiorari filed by the Office of
the Solicitor General (OSG) in behalf of then COMELEC Chairman
Alfredo L. Benipayo and Commissioners Resurreccion Z. Borra and
Florentino A. Tuason, Jr..
Petitioners contend that: (1) a petition for  mandamus and
prohibition does not lie to enforce contractual obligations, hence,
PHOTOKINAs proper recourse before the Regional Trial Court
should have been an action for specific performance; (2)
respondent judge, by issuing the injunctive writs, already assumed
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that the VRIS Project was lawfully awarded by the COMELEC to
PHOTOKINA, and that there is a valid perfected contract between
them, thus, manifesting her prejudgment; and (3) injunctive writs
should not be issued when an action for damages can adequately
compensate for the injuries. Petitioners pray that the two assailed
Resolutions be nullified and Special Civil Action No. Q-01-45405 be
dismissed outright.[19]
On February 21, 2002, the majority of the COMELEC
Commissioners -- Luzviminda G. Tancangco, Rufino S.B. Javier,
Ralph C. Lantion and Mehol K. Sadain filed with this Court a
Manifestation[20] that the Chairman and the two Commissioners who
filed the instant Petition acted without authority from the
COMELEC en banc to take such action.
PHOTOKINA filed a Comment with Motion to Dismiss, [21] the
present petition, on two procedural grounds. First, the petition
violates the doctrine of hierarchy of courts. And second, the OSG
has no authority and/or standing to file the petition considering that
the petitioners have not been authorized by the COMELEC en
banc to take such action. Without the concurrence of at least a
majority of the members of the COMELEC, neither petitioners nor
the OSG could file the petition in behalf of the COMELEC.
In refutation of petitioners arguments, PHOTOKINA contends
that mandamus is an appropriate remedy since what is involved in
Special Civil Action No. Q-01-45405 is the performance of a
ministerial duty. Citing Isada vs. Bocar,[22] PHOTOKINA maintains
that mandamus may be availed of by private parties to compel
public officers to act on a contract entered into pursuant to law. In
its Supplemental Comment,[23] PHOTOKINA invites the Courts
attention to Metropolitan Manila Development Authority vs. Jancom
Environmental Corporation[24]whereby the winning bidder was
afforded every right to seek enforcement of its perfected contract
with the government.
The petition is impressed with merit.
Initially, we must resolve the procedural roadblocks.
PHOTOKINA alleges that the OSG has no standing to file the
present petition since its legal position is contrary to that espoused
20 July 2017
by the majority of the COMELEC Commissioners. This is a leap to
a non-sequitur  conclusion. The OSG is an independent office. Its
hands are not shackled to the cause of its client agency. In the
discharge of its task, the primordial concern of the OSG is to see to
it that the best interest of the government is upheld. [25] This is
regardless of the fact that what it perceived as the best interest of
the government runs counter to its client agencys position.
[26]
 Endowed with a broad perspective that spans the legal interest
of virtually the entire government officialdom, the OSG may
transcend the parochial concerns of a particular client agency and
instead, promote and protect the public weal. [27] Our ruling in Orbos
vs. Civil Service Commission,[28] is relevant, thus:
"x x x It is incumbent upon him (Solicitor General) to present
to the court what he considers would legally uphold the best
interest of the government although it may run counter to a
clients position. x x x.
"In the present case, it appears that after the Solicitor General
studied the issues he found merit in the cause of the petitioner
based on the applicable law and jurisprudence. Thus, it is his duty
to represent the petitioner as he did by filing this petition. He
cannot be disqualified from appearing for the petitioner even if
in so doing his representation runs against the interests of the
CSC.
"This is not the first time that the Office of the Solicitor General
has taken a position adverse to his clients like the CSC, the
National Labor Relations Commission, among others, and
even the People of the Philippines. x x x(Emphasis supplied)
Hence, while petitioners stand is contrary to that of the majority
of the Commissioners, still, the OSG may represent the COMELEC
as long as in its assessment, such would be for the best interest of
the government. For, indeed, in the final analysis, the client of the
OSG is not the agency but no less than the Republic of the
Philippines in whom the plenum of sovereignty resides. [29]
Moreover, it must be emphasized that petitioners are also
public officials entitled to be represented by the OSG. Under
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Executive Order No. 292[30] and Presidential Decree No. 478,[31] the
OSG is the lawyer of the government, its agencies and
instrumentalities, and its officials or agents. Surely, this mandate
includes the three petitioners[32] who have been impleaded as
public respondents in Special Civil Action No. Q-01-45405.
Anent the alleged breach of the doctrine of hierarchy of courts,
suffice it to say that it is not an iron-clad dictum. On several
instances where this Court was confronted with cases of national
interest and of serious implications, it never hesitated to set aside
the rule and proceed with the judicial determination of the case.
[33]
 The case at bar is of similar import. It is in the interest of the
State that questions relating to government contracts be settled
without delay. This is more so when the contract, as in this case,
involves the disbursement of public funds and the modernization of
our countrys election process, a project that has long been
overdue.
We now resolve the following substantive issues:
1) Is a petition for mandamus the appropriate remedy to
enforce contractual obligations? and 2) May a successful bidder
compel a government agency to formalize a
contract with it notwithstanding that its bid exceeds the amount
appropriated by Congress for the project?
I refused where the petitioner sought to compel a city to construct a
No rule of law is better settled than that mandamus does not
lie to enforce the performance of contractual obligations. [34] As early
as 1924, Justice Street, in Quiogue vs. Romualdez,[35] already set
forth the justification of this rule, thus:
Upon the facts above stated we are of the opinion that the writ
of mandamus is not the appropriate, or even an admissible
remedy. It is manifest that whatever rights the petitioner may have,
upon the facts stated, are derived from her contract with the
city; and no rule of law is better settled than
that mandamus never lies to enforce the performance of
private contracts. x x x The petitioners remedy, if any she has,
is by an original action in the Court of First Instance to compel
20 July 2017
the city to pay the agreed price or to pay damages for the
breach of contract.
"x x x. As said in Lowe vs. Phelps (14 Bush, 642):
It must, therefore, appear upon every application for
a mandamus that it is the legal duty of the respondent to do that
which it is sought to compel him to do, and that he has upon proper
application refused to perform that duty.' (Citing numerous
authorities).
"It was not intended to aid a plaintiff in the enforcement of a
mere contract right, or to take the place of the other remedies
provided by law for the adjudication of disputed
claims. Looking at the case from the standpoint of appellant, it
involves nothing more than an ordinary breach of contract. If, as
contended, the appellant had a valid contract with the school board,
it also had an adequate remedy at law to recover damages for its
breach; and to permit the writ of mandamus to be used for the
purpose of enforcing a mere contract right would be a wide
departure from the settled practice in respect to the character
of cases in which relief by mandamus may be obtained.
"In Parrott vs. City of Bridgeport  (44 Conn., 180), the writ was
public street in a certain manner agreeably to the terms of a special
agreement between the petitioner and the city. In the course of the
opinion the court said:
"* * * The duty, therefore, if any, which rests upon the city in this
regard, is one which it owes to the petitioner as an individual, not to
the public, and the special contract is the foundation upon which it
rests. But the writ of mandamus has never been considered as
an appropriate remedy for the enforcement of contract rights
of a private and personal nature and obligations which rest
wholly upon contract and which involve no questions of public
trusts or official duty. Indeed, strictly speaking, it never lies
where the party aggrieved has adequate remedy at law, and its
aid is only to be invoked to prevent an absolute failure of
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justice in cases where ordinary legal processes furnish no
relief.(Emphasis supplied)
The passage of time has not eroded the wisdom of the
foregoing rule. Its invocation by this Court
in Province of Pangasinan  vs. Reparation  Commission,[36] Aprueba  consummation. In contrast with Isada, the alleged contract here has
vs. Ganzon,[37] City of Manila vs. Posadas,[38]Jacinto vs. Director of
Lands,[39] National Marketing Corporation vs. Cloribel,[40] Astudillo
vs. The Board of Directors of Peoples Homesite and Housing
Corporation,[41] and Sharp International Marketing vs. Court of
Appeals,[42] virtually reinforces the rule. The present case is our
latest addition to the above catena of jurisprudence. We carefully
read the pleadings filed in Special Civil Action No. Q-01-45405 and
we are convinced that what PHOTOKINA sought to enforce therein
are its rights under the accepted bid proposal. Its petition alleged
that notwithstanding the COMELECs issuance of a Notice of Award
and its (PHOTOKINAs) subsequent acceptance thereof, the
COMELEC still refused to formalize the contract. As a relief,
PHOTOKINA prayed that after trial, petitioners be directed to review
and finalize the formal contract and to implement the VRIS Project.
[43]
 Petitioners, on their part, specifically denied the existence of a
perfected contract and asserted that even if there was one, the
same is null and void for lack of proper appropriation. Petitioners
labeled the contract asillegal and against public policy.
Akin to our rulings cited above, we hold that mandamus is not
the proper recourse to enforce the COMELEC's alleged contractual
obligations with PHOTOKINA. It has other adequate remedy in
law. Moreover, worth stressing is the judicial caution
that mandamus applies as a remedy only where petitioner's right is
founded clearly in law and not when it is doubtful.[44] In varying
language, the principle echoed and reechoed is that legal rights
may be enforced by mandamus only if those rights are well-defined,
clear and certain.[45] Here, the alleged contract, relied upon by
PHOTOKINA as source of its rights which it seeks to be protected,
is being disputed, not only on the ground that it was not perfected
but also because it is illegal and against public policy.
Of course, there are cases in which the writ of mandamus has
been used to compel public officers to perform certain acts, but it
will be generally observed that in such cases, the contracts have
20 July 2017
been completely performed by the petitioner, and nothing remained
to be done except for the government to make
compensation. These exceptional cases are cited in Isada vs.
Bocar[46] where the act of the respondent public officer has the
effect of setting aside contracts already in the process of
not yet been fully performed by PHOTOKINA; and though it avers
readiness to perform, petitioners raised serious questions as to its
validity. Their posture is tenable.
II
To spare PHOTOKINA the drudgery of a fruitless pursuit, we
deem it appropriate to lay down the principles governing government
contracts and to apply them to the instant case. Meanwhile, as
PHOTOKINA will later on deduce from the discussion, the contract
subject of this controversy is one that can be slain in sight for being
patently void and unenforceable.
Enshrined in the 1987 Philippine Constitution is the mandate
that "no money shall be paid out of the Treasury except in pursuance
of an appropriation made by law."[47] Thus, in the execution of
government contracts, the precise import of this constitutional
restriction is to require the various agencies to limit their
expenditures within the appropriations made by law for each fiscal
year.
Complementary to the foregoing constitutional injunction are
pertinent provisions of law and administrative issuances that are
designed to effectuate the above mandate in a detailed manner.
[48]
 Sections 46 and 47, Chapter 8, Subtitle B, Title I, Book V
of Executive Order No. 292, otherwise known as "Administrative
Code of 1987," provide:
"SEC. 46. Appropriation Before Entering into Contract. - (1) No
contract involving the expenditure of public funds shall be entered
into unless there is an appropriation therefor, the unexpended
balance of which, free of other obligations, is sufficient to cover the
proposed expenditure; and x x x
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"SEC. 47. Certificate Showing Appropriation to Meet Contract. -
Except in the case of a contract for personal service, for supplies for
current consumption or to be carried in stock not exceeding the
estimated consumption for three (3) months, or banking transactions
of government-owned or controlled banks, no contract involving
the expenditure of public funds by any government agency
shall be entered into or authorized unless the proper
accounting official of the agency concerned shall have certified
to the officer entering into the obligation that funds have been
duly appropriated for the purpose and that the amount
necessary to cover the proposed contract for the current
calendar year is available for expenditure on account thereof,
subject to verification by the auditor concerned. The certificate
signed by the proper accounting official and the auditor who verified
it, shall be attached to and become an integral part of the proposed
contract, and the sum so certified shall not thereafter be available for
expenditure for any other purpose until the obligation of the
government agency concerned under the contract is fully
extinguished.
It is quite evident from the tenor of the language of the law
that the existence of appropriations and the availability of funds are
indispensable pre-requisites to or conditions sine qua non for the
execution of government contracts. The obvious intent is to impose
such conditions as a priori requisites to the validity of the proposed
contract.[49] Using
this as our premise, we cannot accede to PHOTOKINA's contention
that there is already a perfected contract. While we held
in Metropolitan Manila Development Authority vs. Jancom
Environmental Corporation[50] that "the effect of an unqualified
acceptance of the offer or proposal of the bidder is to perfect a
contract, upon notice of the award to the bidder," however, such
statement would be inconsequential in a government where the
acceptance referred to is yet to meet certain conditions. To hold
otherwise is to allow a public officer to execute a binding contract
that would obligate the government in an amount in excess of the
appropriations for the purpose for which the contract was attempted
to be made.[51] This is a dangerous precedent.
20 July 2017
In the case at bar, there seems to be an oversight of the legal
requirements as early as the bidding stage. The first step of a Bids
and Awards Committee (BAC) is to determine whether the bids
comply with the requirements. The BAC shall rate a bid "passed"
only if it complies with all the requirements and the submitted price
does not exceed the approved budget for the contract."[52]
Extant on the record is the fact that the VRIS Project was
awarded to PHOTOKINA on account of its bid in the amount of
P6.588 Billion Pesos. However, under Republic Act No. 8760, [53] the
only fund appropriated for the project was P1 Billion Pesos and
under the Certification of Available Funds [54] (CAF) only P1.2 Billion
Pesos was available. Clearly, the amount appropriated is insufficient
to cover the cost of the entire VRIS Project.There is no way that the
COMELEC could enter into a contract with PHOTOKINA whose
accepted bid was way beyond the amount appropriated by law for
the project. This being the case, the BAC should have rejected the
bid for being excessive[55] or should have withdrawn
the Notice of Award on the ground that in the eyes of the law, the
same is null and void.[56]
The objections of then Chairman Demetriou to the
implementation of the VRIS Project, ardently carried on by her
successor Chairman Benipayo, are therefore in order.
Even the draft contract submitted by Commissioner Sadain, that
provides for a contract price in the amount of P1.2 Billion Pesos is
unacceptable. Indeed, we share the observation of former Chairman
Demetriou that it circumvents the statutory requirements on
government contracts. While the contract price under the draft
contract[57] is only P1.2 Billion and, thus, within the certified available
funds, the same covers only Phase I of the VRIS Project, i.e., the
issuance of identification cards for only 1,000,000 voters in specified
areas.[58] In effect, the implementation of the
VRIS Project will be "segmented" or "chopped" into several
phases. Not only is such arrangement disallowed by our budgetary
laws and practices, it is also disadvantageous to the COMELEC
because of the uncertainty that will loom over its
modernization project for an indefinite period of time. Should
Congress fail to appropriate the amount necessary for the
completion of the entire project, what good will the accomplished
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Phase I serve? As expected, the project failed "to sell" with the
Department of Budget and Management. Thus, Secretary Benjamin
Diokno, per his letter of December 1, 2000, declined the
COMELEC's request for the issuance of the Notice of Cash
Availability (NCA) and a multi-year obligational authority to assume
payment of the total VRIS Project for lack of legal basis.
[59]
 Corollarily, under Section 33 of R.A. No. 8760, no agency shall
enter into a multi-year contract without a multi-year obligational
authority, thus:
"SECTION 33. Contracting Multi-Year Projects. - In the
implementation of multi-year projects, no agency shall enter into a
multi-year contract without a multi-year Obligational Authority issued
by the Department of Budget and Management for the
purpose. Notwithstanding the issuance of the multi-year Obligational
Authority, the obligation to be incurred in any given calendar year,
shall in no case exceed the amount programmed for implementation
during said calendar year."
Petitioners are justified in refusing to formalize the contract with
PHOTOKINA. Prudence dictated them not to enter into a contract not
backed up by sufficient appropriation and available funds. Definitely,
to act otherwise would be a futile exercise for the contract would
inevitably suffer the vice of nullity. In Osmea vs. Commission on
Audit,[60] this Court held:
"The Auditing Code of the Philippines (P.D. 1445) further provides
that no contract involving the expenditure of public funds shall be
entered into unless there is an appropriation therefor and the proper
accounting official of the agency concerned shall have certified to the
officer entering into the obligation that funds have been duly
appropriated for the purpose and the amount necessary to cover the
proposed contract for the current fiscal year is available for
expenditure on account thereof. Any contract entered into contrary to
the foregoing requirements shall be VOID.
"Clearly then, the contract entered into by the former Mayor Duterte
was void from the very beginning since the agreed cost for the
project (P8,368,920.00) was way beyond the appropriated amount
20 July 2017
(P5,419,180.00) as certified by the City Treasurer. Hence, the
contract was properly declared void and unenforceable in COA's 2nd
Indorsement, dated September 4, 1986. The COA declared and we
agree, that:
'The prohibition contained in Sec. 85 of PD 1445 (Government
Auditing Code) is explicit and mandatory. Fund availability is, as it
has always been, an indispensable prerequisite to the execution of
any government contract involving the expenditure of public funds by
all government agencies at all levels. Such contracts are not to be
considered as final or binding unless such a certification as to funds
availability is issued (Letter of Instruction No. 767, s. 1978).
Antecedent of advance appropriation is thus essential to government
liability on contracts (Zobel vs. City of Manila, 47 Phil. 169). This
contract being violative of the legal requirements aforequoted, the
same contravenes Sec. 85 of PD 1445 and is null and void by virtue
of Sec.87.'"
Verily, the contract, as expressly declared by law,
is inexistent and void ab initio.[61] his is to say that the proposed
contract is without force and effect from the very beginning or from
its incipiency, as if it had never been entered into, and hence,
cannot be validated either by lapse of time or ratification. [62]
Of course, we are not saying that the party who contracts with
the government has no other recourse in law. The law itself affords
him the remedy. Section 48 of E.O. No. 292 explicitly provides that
any contract entered into contrary to the above-mentioned
requirements shall be void, and the officers entering into the
contract shall be liable to the Government or other contracting party
for any consequent damage to the same as if the transaction had
been wholly between private parties."  So when the contracting
officer transcends his lawful and legitimate powers by acting in
excess of or beyond the limits of his contracting authority, the
Government is not bound under the contract. It would be as if the
contract in such case were a private one, whereupon, he binds only
himself, and thus, assumes personal liability thereunder.
[63]
 Otherwise stated, the proposed contract is unenforceable as to
the Government.
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While this is not the proceeding to determine where the
culpability lies, however, the constitutional mandate cited above
constrains us to remind all public officers that public office is a
public trust and all public officers must at all times be accountable
to the people. The authority of public officers to enter into
government contracts is circumscribed with a heavy burden of
responsibility. In the exercise of their contracting prerogative, they
should be the first judges of the legality, propriety and wisdom of
the contract they entered into. They must exercise a high degree of
caution so that the Government may not be the victim of ill-advised
or improvident action.[64]
In fine, we rule that PHOTOKINA, though the winning bidder,
cannot compel the COMELEC to formalize the contract. Since
PHOTOKINAs bid is beyond the amount appropriated by Congress
for the VRIS Project, the proposed contract is not binding upon the
COMELEC and is considered void; and that in issuing the
questioned preliminary writs of mandatory and prohibitory injunction
and in not dismissing Special Civil Action No. Q-01-45405,
respondent judge acted with grave abuse of discretion. Petitioners
cannot be compelled by a writ of mandamus  to discharge a duty
that involves the exercise of judgment and discretion, especially
where disbursement of public funds is concerned.
WHEREFORE, the petition is GRANTED. The Resolutions
dated December 19, 2001 and February 7, 2002 issued by
respondent Judge Padilla are SET ASIDE. Special Civil Action No.
Q-01-45405 is hereby ordered DISMISSED.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Mendoza, Panganiban,
Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Corona,
Carpio-Morales, and  Callejo, Sr., JJ., concur.
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Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 100150 January 5, 1994
BRIGIDO R. SIMON, JR., CARLOS QUIMPO, CARLITO
ABELARDO, AND GENEROSO OCAMPO, petitioners, 
vs.
COMMISSION ON HUMAN RIGHTS, ROQUE FERMO, AND
OTHERS AS JOHN DOES, respondents.
The City Attorney for petitioners.
The Solicitor General for public respondent.
VITUG, J.:
The extent of the authority and power of the Commission on Human
Rights ("CHR") is again placed into focus in this petition for
prohibition, with prayer for a restraining order and preliminary
injunction. The petitioners ask us to prohibit public respondent CHR
from further hearing and investigating CHR Case No. 90-1580,
entitled "Fermo, et al. vs. Quimpo, et al."
The case all started when a "Demolition Notice," dated 9 July 1990,
signed by Carlos Quimpo (one of the petitioners) in his capacity as
an Executive Officer of the Quezon City Integrated Hawkers
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Management Council under the Office of the City Mayor, was sent to,
and received by, the private respondents (being the officers and
members of the North EDSA Vendors Association, Incorporated). In
said notice, the respondents were given a grace-period of three (3)
days (up to 12 July 1990) within which to vacate the questioned
premises of North EDSA. 1Prior to their receipt of the demolition
notice, the private respondents were informed by petitioner Quimpo
that their stalls should be removed to give way to the "People's
Park". 2 On 12 July 1990, the group, led by their President Roque
Fermo, filed a letter-complaint (Pinag-samang Sinumpaang
Salaysay) with the CHR against the petitioners, asking the late CHR
Chairman Mary Concepcion Bautista for a letter to be addressed to
then Mayor Brigido Simon, Jr., of Quezon City to stop the demolition
of the private respondents' stalls, sari-sari stores,
and carinderia along North EDSA. The complaint was docketed as
CHR Case No. 90-1580. 3 On 23 July 1990, the CHR issued an
Order, directing the petitioners "to desist from demolishing the stalls
and shanties at North EDSA pending resolution of the
vendors/squatters' complaint before the Commission" and ordering
said petitioners to appear before the CHR.  4
On the basis of the sworn statements submitted by the private
respondents on 31 July 1990, as well as CHR's own ocular
inspection, and convinced that on 28 July 1990 the petitioners
carried out the demolition of private respondents' stalls, sari-
sari stores and carinderia, 5 the CHR, in its resolution of 1 August
1990, ordered the disbursement of financial assistance of not more
than P200,000.00 in favor of the private respondents to purchase
light housing materials and food under the Commission's supervision
and again directed the petitioners to "desist from further demolition,
with the warning that violation of said order would lead to a citation
for contempt and arrest." 6
A motion to dismiss,  7 dated 10 September 1990, questioned CHR's
jurisdiction. The motion also averred, among other things, that:
1. this case came about due to the alleged violation
by the (petitioners) of the Inter-Agency
Memorandum of Agreement whereby Metro-Manila
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Mayors agreed on a moratorium in the demolition of
the dwellings of poor dwellers in Metro-Manila;
xxx xxx xxx
3. . . . , a perusal of the said Agreement (revealed)
that the moratorium referred to therein refers to
moratorium in the demolition of the structures of
poor dwellers;
4. that the complainants in this case (were) not poor
dwellers but independent business entrepreneurs
even this Honorable Office admitted in its resolution
of 1 August 1990 that the complainants are indeed,
vendors;
5. that the complainants (were) occupying
government land, particularly the sidewalk of EDSA
corner North Avenue, Quezon City; . . . and
6. that the City Mayor of Quezon City (had) the sole
and exclusive discretion and authority whether or not
a certain business establishment (should) be
allowed to operate within the jurisdiction of Quezon
City, to revoke or cancel a permit, if already issued,
upon grounds clearly specified by law and
ordinance. 8
During the 12 September 1990 hearing, the petitioners moved for
postponement, arguing that the motion to dismiss set for 21
September 1990 had yet to be resolved. The petitioners likewise
manifested that they would bring the case to the courts.
On 18 September 1990 a supplemental motion to dismiss was filed
by the petitioners, stating that the Commission's authority should be
understood as being confined only to the investigation of violations of
civil and political rights, and that "the rights allegedly violated in this
case (were) not civil and political rights, (but) their privilege to
engage in business." 9
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On 21 September 1990, the motion to dismiss was heard and
submitted for resolution, along with the contempt charge that had
meantime been filed by the private respondents, albeit vigorously
objected to by petitioners (on the ground that the motion to dismiss
was still then unresolved). 10
In an Order, 11 dated 25 September 1990, the CHR cited the
petitioners in contempt for carrying out the demolition of the
stalls, sari-sari stores and carinderia despite the "order to desist",
and it imposed a fine of P500.00 on each of them.
On 1 March 1991, 12 the CHR issued an Order, denying petitioners'
motion to dismiss and supplemental motion to dismiss, in this wise:
Clearly, the Commission on Human Rights under its
constitutional mandate had jurisdiction over the
complaint filed by the squatters-vendors who
complained of the gross violations of their human
and constitutional rights. The motion to dismiss
should be and is hereby DENIED for lack of merit. 13
The CHR opined that "it was not the intention of the (Constitutional)
Commission to create only a paper tiger limited only to investigating
civil and political rights, but it (should) be (considered) a quasi-
judicial body with the power to provide appropriate legal measures
for the protection of human rights of all persons within the Philippines
. . . ." It added:
The right to earn a living is a right essential to one's
right to development, to life and to dignity. All these
brazenly and violently ignored and trampled upon by
respondents with little regard at the same time for
the basic rights of women and children, and their
health, safety and welfare. Their actions have
psychologically scarred and traumatized the
children, who were witness and exposed to such a
violent demonstration of Man's inhumanity to man.
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In an Order, 14 dated 25 April 1991, petitioners' motion for
reconsideration was denied.
Hence, this recourse.
The petition was initially dismissed in our resolution  15 of 25 June
1991; it was subsequently reinstated, however, in our resolution  16 of
18 June 1991, in which we also issued a temporary restraining order,
directing the CHR to "CEASE and DESIST from further hearing CHR
No. 90-1580." 17
The petitioners pose the following:
Whether or not the public respondent has jurisdiction:
a) to investigate the alleged violations of the "business rights" of the
private respondents whose stalls were demolished by the petitioners
at the instance and authority given by the Mayor of Quezon City;
b) to impose the fine of P500.00 each on the petitioners; and
c) to disburse the amount of P200,000.00 as financial aid to the
vendors affected by the demolition.
In the Court's resolution of 10 October 1991, the Solicitor-General
was excused from filing his comment for public respondent CHR.
The latter thus filed its own comment, 18 through Hon. Samuel
Soriano, one of its Commissioners. The Court also resolved to
dispense with the comment of private respondent Roque Fermo, who
had since failed to comply with the resolution, dated 18 July 1991,
requiring such comment.
The petition has merit.
The Commission on Human Rights was created by the 1987 
Constitution. 19 It was formally constituted by then President Corazon
Aquino via Executive Order No. 163, 20 issued on 5 May 1987, in the
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exercise of her legislative power at the time. It succeeded, but so
superseded as well, the Presidential Committee on Human Rights.  21
The powers and functions 22 of the Commission are defined by the
1987 Constitution, thus: to —
(1) Investigate, on its own or on complaint by any
party, all forms of human rights violations involving
civil and political rights;
(2) Adopt its operational guidelines and rules of
procedure, and cite for contempt for violations
thereof in accordance with the Rules of Court;
(3) Provide appropriate legal measures for the
protection of human rights of all persons within the
Philippines, as well as Filipinos residing abroad, and
provide for preventive measures and legal aid
services to the underprivileged whose human rights
have been violated or need protection;
(4) Exercise visitorial powers over jails, prisons, or
detention facilities;
(5) Establish a continuing program of research,
education, and information to enhance respect for
the primacy of human rights;
(6) Recommend to the Congress effective measures
to promote human rights and to provide for
compensation to victims of violations of human
rights, or their families;
(7) Monitor the Philippine Government's compliance
with international treaty obligations on human rights;
(8) Grant immunity from prosecution to any person
whose testimony or whose possession of documents
20 July 2017
or other evidence is necessary or convenient to
determine the truth in any investigation conducted by
it or under its authority;
(9) Request the assistance of any department,
bureau, office, or agency in the performance of its
functions;
(10) Appoint its officers and employees in
accordance with law; and
(11) Perform such other duties and functions as may
be provided by law.
In its Order of 1 March 1991, denying petitioners' motion to dismiss,
the CHR theorizes that the intention of the members of the
Constitutional Commission is to make CHR a quasi-judicial
body. 23 This view, however, has not heretofore been shared by this
Court. In Cariño v. Commission on Human Rights,  24 the Court,
through then Associate Justice, now Chief Justice Andres Narvasa,
has observed that it is "only the first of the enumerated powers and
functions that bears any resemblance to adjudication or
adjudgment," but that resemblance can in no way be synonymous to
the adjudicatory power itself. The Court explained:
. . . (T)he Commission on Human Rights . . . was not
meant by the fundamental law to be another court or
quasi-judicial agency in this country, or duplicate
much less take over the functions of the latter.
The most that may be conceded to the Commission
in the way of adjudicative power is that it may
investigate, i.e., receive evidence and make findings
of fact as regards claimed human rights violations
involving civil and political rights. But fact finding is
not adjudication, and cannot be likened to the
judicial function of a court of justice, or even a quasi-
judicial agency or official. The function of receiving
evidence and ascertaining therefrom the facts of a
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controversy is not a judicial function, properly
speaking. To be considered such, the faculty of
receiving evidence and making factual conclusions
in a controversy must be accompanied by the
authority of applying the law to those factual
conclusions to the end that the controversy may be
decided or determined authoritatively, finally and
definitively, subject to such appeals or modes of
review as may be provided by law. This function, to
repeat, the Commission does not have.
After thus laying down at the outset the above rule, we now proceed
to the other kernel of this controversy and, its is, to determine the
extent of CHR's investigative power.
It can hardly be disputed that the phrase "human rights" is so generic
a term that any attempt to define it, albeit not a few have tried, could
at best be described as inconclusive. Let us observe. In a
symposium on human rights in the Philippines, sponsored by the
University of the Philippines in 1977, one of the questions that has
been propounded is "(w)hat do you understand by "human rights?"
The participants, representing different sectors of the society, have
given the following varied answers:
Human rights are the basic rights which inhere in
man by virtue of his humanity. They are the same in
all parts of the world, whether the Philippines or
England, Kenya or the Soviet Union, the United
States or Japan, Kenya or Indonesia . . . .
Human rights include civil rights, such as the right to
life, liberty, and property; freedom of speech, of the
press, of religion, academic freedom, and the rights
of the accused to due process of law; political rights,
such as the right to elect public officials, to be
elected to public office, and to form political
associations and engage in politics; and social
rights, such as the right to an education,
employment, and social services. 25
20 July 2017
Human rights are the entitlement that inhere in the
individual person from the sheer fact of his humanity.
. . . Because they are inherent, human rights are not
granted by the State but can only be recognized and
protected by it. 26
(Human rights include all) the civil, political,
economic, social, and cultural rights defined in the
Universal Declaration of Human Rights. 27
Human rights are rights that pertain to man simply
because he is human. They are part of his natural
birth, right, innate and inalienable. 28
The Universal Declaration of Human Rights, as well as, or more
specifically, the International Covenant on Economic, Social and
Cultural Rights and International Covenant on Civil and Political
Rights, suggests that the scope of human rights can be understood
to include those that relate to an individual's social, economic,
cultural, political and civil relations. It thus seems to closely identify
the term to the universally accepted traits and attributes of an
individual, along with what is generally considered to be his inherent
and inalienable rights, encompassing almost all aspects of life.
Have these broad concepts been equally contemplated by the
framers of our 1986 Constitutional Commission in adopting the
specific provisions on human rights and in creating an independent
commission to safeguard these rights? It may of value to look back
at the country's experience under the martial law regime which may
have, in fact, impelled the inclusions of those provisions in our
fundamental law. Many voices have been heard. Among those
voices, aptly represented perhaps of the sentiments expressed by
others, comes from Mr. Justice J.B.L. Reyes, a respected jurist and
an advocate of civil liberties, who, in his paper, entitled "Present
State of Human Rights in the Philippines," 29 observes:
But while the Constitution of 1935 and that of 1973
enshrined in their Bill of Rights most of the human
rights expressed in the International Covenant, these
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rights became unavailable upon the proclamation of
Martial Law on 21 September 1972. Arbitrary action
then became the rule. Individuals by the thousands
became subject to arrest upon suspicion, and were
detained and held for indefinite periods, sometimes
for years, without charges, until ordered released by
the Commander-in-Chief or this representative. The
right to petition for the redress of grievances became
useless, since group actions were forbidden. So
were strikes. Press and other mass media were
subjected to censorship and short term licensing.
Martial law brought with it the suspension of the writ
of habeas corpus, and judges lost independence
and security of tenure, except members of the
Supreme Court. They were required to submit letters
of resignation and were dismissed upon the
acceptance thereof. Torture to extort confessions
were practiced as declared by international bodies
like Amnesty International and the International
Commission of Jurists.
Converging our attention to the records of the Constitutional
Commission, we can see the following discussions during its 26
August 1986 deliberations:
MR. GARCIA . . . , the primacy of its (CHR) task
must be made clear in view of the importance of
human rights and also because civil and political
rights have been determined by many international
covenants and human rights legislations in the
Philippines, as well as the Constitution, specifically
the Bill of Rights and subsequent legislation.
Otherwise, if we cover such a wide territory in area,
we might diffuse its impact and the precise nature of
its task, hence, its effectivity would also be curtailed.
So, it is important to delienate the parameters of its
tasks so that the commission can be most effective.
20 July 2017
MR. BENGZON. That is precisely my difficulty
because civil and political rights are very broad. The
Article on the Bill of Rights covers civil and political
rights. Every single right of an individual involves his
civil right or his political right. So, where do we draw
the line?
MR. GARCIA. Actually, these civil and political rights
have been made clear in the language of human
rights advocates, as well as in the Universal
Declaration of Human Rights which addresses a
number of articles on the right to life, the right
against torture, the right to fair and public hearing,
and so on. These are very specific rights that are
considered enshrined in many international
documents and legal instruments as constituting civil
and political rights, and these are precisely what we
want to defend here.
MR. BENGZON. So, would the commissioner say
civil and political rights as defined in the Universal
Declaration of Human Rights?
MR. GARCIA. Yes, and as I have mentioned, the
International Covenant of Civil and Political Rights
distinguished this right against torture.
MR. BENGZON. So as to distinguish this from the
other rights that we have?
MR. GARCIA. Yes, because the other rights will
encompass social and economic rights, and there
are other violations of rights of citizens which can be
addressed to the proper courts and authorities.
xxx xxx xxx
MR. BENGZON. So, we will authorize the
commission to define its functions, and, therefore, in
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doing that the commission will be authorized to take
under its wings cases which perhaps heretofore or at
this moment are under the jurisdiction of the ordinary
investigative and prosecutorial agencies of the
government. Am I correct?
MR. GARCIA. No. We have already mentioned
earlier that we would like to define the specific
parameters which cover civil and political rights as
covered by the international standards governing the
behavior of governments regarding the particular
political and civil rights of citizens, especially of
political detainees or prisoners. This particular
aspect we have experienced during martial law
which we would now like to safeguard.
MR. BENGZON. Then, I go back to that question
that I had. Therefore, what we are really trying to say
is, perhaps, at the proper time we could specify all
those rights stated in the Universal Declaration of
Human Rights and defined as human rights. Those
are the rights that we envision here?
MR. GARCIA. Yes. In fact, they are also enshrined
in the Bill of Rights of our Constitution. They are
integral parts of that.
MR. BENGZON. Therefore, is the Gentleman saying
that all the rights under the Bill of Rights covered by
human rights?
MR. GARCIA. No, only those that pertain to civil and
political rights.
xxx xxx xxx
MR. RAMA. In connection with the discussion on the
scope of human rights, I would like to state that in
the past regime, everytime we invoke the violation of
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human rights, the Marcos regime came out with the
defense that, as a matter of fact, they had defended
the rights of people to decent living, food, decent
housing and a life consistent with human dignity.
So, I think we should really limit the definition of
human rights to political rights. Is that the sense of
the committee, so as not to confuse the issue?
MR. SARMIENTO. Yes, Madam President.
MR. GARCIA. I would like to continue and respond
also to repeated points raised by the previous
speaker.
There are actually six areas where this Commission
on Human Rights could act effectively: 1) protection
of rights of political detainees; 2) treatment of
prisoners and the prevention of tortures; 3) fair and
public trials; 4) cases of disappearances; 5)
salvagings and hamletting; and 6) other crimes
committed against the religious.
xxx xxx xxx
The PRESIDENT. Commissioner Guingona is
recognized.
MR. GUINGONA. Thank You Madam President.
I would like to start by saying that I agree with
Commissioner Garcia that we should, in order to
make the proposed Commission more effective,
delimit as much as possible, without prejudice to
future expansion. The coverage of the concept and
jurisdictional area of the term  "human rights". I was
actually disturbed this morning when the reference
was made without qualification to the rights
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embodied in the universal Declaration of Human
Rights, although later on, this was qualified to refer
to civil and political rights contained therein.
If I remember correctly, Madam President,
Commissioner Garcia, after mentioning the
Universal Declaration of Human Rights of 1948,
mentioned or linked the concept of human right with
other human rights specified in other convention
which I do not remember. Am I correct?
MR. GARCIA. Is Commissioner Guingona referring
to the Declaration of Torture of 1985?
MR. GUINGONA. I do not know, but the
commissioner mentioned another.
MR. GARCIA. Madam President, the other one is
the International Convention on Civil and Political
Rights of which we are signatory.
MR. GUINGONA. I see. The only problem is that,
although I have a copy of the Universal Declaration
of Human Rights here, I do not have a copy of the
other covenant mentioned. It is quite possible that
there are rights specified in that other convention
which may not be specified here. I was wondering
whether it would be wise to link our concept of
human rights to general terms like "convention,"
rather than specify the rights contained in the
convention.
As far as the Universal Declaration of Human Rights
is concerned, the Committee, before the period of
amendments, could specify to us which of these
articles in the Declaration will fall within the concept
of civil and political rights, not for the purpose of
including these in the proposed constitutional article,
but to give the sense of the Commission as to what
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human rights would be included, without prejudice to
expansion later on, if the need arises. For example,
there was no definite reply to the question of
Commissioner Regalado as to whether the right to
marry would be considered a civil or a social right. It
is not a civil right?
MR. GARCIA. Madam President, I have to repeat
the various specific civil and political rights that we
felt must be envisioned initially by this provision —
freedom from political detention and arrest
prevention of torture, right to fair and public trials, as
well as crimes involving disappearance, salvagings,
hamlettings and collective violations.  So, it is limited
to politically related crimes precisely to protect the
civil and political rights of a specific group of
individuals, and therefore, we are not opening it up
to all of the definite areas.
MR. GUINGONA. Correct. Therefore, just for the
record, the Gentlemen is no longer linking his
concept or the concept of the Committee on Human
Rights with the so-called civil or political rights as
contained in the Universal Declaration of Human
Rights.
MR. GARCIA. When I mentioned earlier the
Universal Declaration of Human Rights, I was
referring to an international instrument.
MR. GUINGONA. I know.
MR. GARCIA. But it does not mean that we will refer
to each and every specific article therein, but only to
those that pertain to the civil and politically related,
as we understand it in this Commission on Human
Rights.
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MR. GUINGONA. Madam President, I am not even
clear as to the distinction between civil and social
rights.
MR. GARCIA. There are two international
covenants: the International Covenant and Civil and
Political Rights and the International Covenant on
Economic, Social and Cultural Rights. The second
covenant contains all the different rights-the rights of
labor to organize, the right to education, housing,
shelter, et cetera.
MR. GUINGONA. So we are just limiting at the
moment the sense of the committee to those that the
Gentlemen has specified.
MR. GARCIA. Yes, to civil and political rights.
MR. GUINGONA. Thank you.
xxx xxx xxx
SR. TAN. Madam President, from the standpoint of
the victims of human rights, I cannot stress more on
how much we need a Commission on Human
Rights. . . .
. . . human rights victims are usually penniless. They
cannot pay and very few lawyers will accept clients
who do not pay. And so, they are the ones more
abused and oppressed. Another reason is, the
cases involved are very delicate — torture,
salvaging, picking up without any warrant of arrest,
massacre — and the persons who are allegedly
guilty are people in power like politicians, men in the
military and big shots. Therefore, this Human Rights
Commission must be independent.
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I would like very much to emphasize how much we
need this commission, especially for the little
Filipino, the little individual who needs this kind of
help and cannot get it. And I think we should
concentrate only on civil and political violations
because if we open this to land, housing and health,
we will have no place to go again and we will not
receive any response. . . . 30 (emphasis supplied)
The final outcome, now written as Section 18, Article XIII, of the 1987
Constitution, is a provision empowering the Commission on Human
Rights to "investigate, on its own or on complaint by any party, all
forms of human rights violations involving civil and political rights"
(Sec. 1).
The term "civil rights," 31 has been defined as referring —
(t)o those (rights) that belong to every citizen of the
state or country, or, in wider sense, to all its
inhabitants, and are not connected with the
organization or administration of the government.
They include the rights of property, marriage, equal
protection of the laws, freedom of contract, etc. Or,
as otherwise defined civil rights are rights
appertaining to a person by virtue of his citizenship
in a state or community. Such term may also refer, in
its general sense, to rights capable of being
enforced or redressed in a civil action.
Also quite often mentioned are the guarantees against involuntary
servitude, religious persecution, unreasonable searches and
seizures, and imprisonment for debt. 32
Political rights, 33 on the other hand, are said to refer to the right to
participate, directly or indirectly, in the establishment or
administration of government, the right of suffrage, the right to hold
public office, the right of petition and, in general, the rights
appurtenant to citizenship vis-a-vis the management of
government. 34
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Recalling the deliberations of the Constitutional Commission,
aforequoted, it is readily apparent that the delegates envisioned a
Commission on Human Rights that would focus its attention to the
more severe cases of human rights violations. Delegate Garcia, for
instance, mentioned such areas as the "(1) protection of rights of
political detainees, (2) treatment of prisoners and the prevention of
tortures, (3) fair and public trials, (4) cases of disappearances, (5)
salvagings and hamletting, and (6) other crimes committed against
the religious." While the enumeration has not likely been meant to
have any preclusive effect, more than just expressing a statement of
priority, it is, nonetheless, significant for the tone it has set. In any
event, the delegates did not apparently take comfort in peremptorily
making a conclusive delineation of the CHR's scope of investigatorial
jurisdiction. They have thus seen it fit to resolve, instead, that
"Congress may provide for other cases of violations of human rights
that should fall within the authority of the Commission, taking into
account its recommendation." 35
In the particular case at hand, there is no cavil that what are sought
to be demolished are the stalls, sari-sari stores and carinderia, as
well as temporary shanties, erected by private respondents on a land
which is planned to be developed into a "People's Park". More than
that, the land adjoins the North EDSA of Quezon City which, this
Court can take judicial notice of, is a busy national highway. The
consequent danger to life and limb is not thus to be likewise simply
ignored. It is indeed paradoxical that a right which is claimed to have
been violated is one that cannot, in the first place, even be invoked, if
it is, in fact, extant. Be that as it may, looking at the standards
hereinabove discoursed vis-a-vis the circumstances obtaining in this
instance, we are not prepared to conclude that the order for the
demolition of the stalls, sari-sari stores and carinderia of the private
respondents can fall within the compartment of "human rights
violations involving civil and political rights" intended by the
Constitution.
On its contempt powers, the CHR is constitutionally authorized to
"adopt its operational guidelines and rules of procedure, and cite for
contempt for violations thereof in accordance with the Rules of
Court." Accordingly, the CHR acted within its authority in providing in
its revised rules, its power "to cite or hold any person in direct or
20 July 2017
indirect contempt, and to impose the appropriate penalties in
accordance with the procedure and sanctions provided for in the
Rules of Court." That power to cite for contempt, however, should be
understood to apply only to violations of its adopted operational
guidelines and rules of procedure essential to carry out its
investigatorial powers. To exemplify, the power to cite for contempt
could be exercised against persons who refuse to cooperate with the
said body, or who unduly withhold relevant information, or who
decline to honor summons, and the like, in pursuing its investigative
work. The "order to desist" (a semantic interplay for a restraining
order) in the instance before us, however, is not investigatorial in
character but prescinds from an adjudicative power that it does not
possess. In Export Processing Zone Authority vs. Commission on
Human Rights, 36 the Court, speaking through Madame Justice
Carolina Griño-Aquino, explained:
The constitutional provision directing the CHR to
"provide for preventive measures and legal aid
services to the underprivileged whose human rights
have been violated or need protection" may not be
construed to confer jurisdiction on the Commission
to issue a restraining order or writ of injunction for, it
that were the intention, the Constitution would have
expressly said so. "Jurisdiction is conferred only by
the Constitution or by law". It is never derived by
implication.
Evidently, the "preventive measures and legal aid
services" mentioned in the Constitution refer to
extrajudicial and judicial remedies (including a writ of
preliminary injunction) which the CHR may seek
from proper courts on behalf of the victims of human
rights violations. Not being a court of justice, the
CHR itself has no jurisdiction to issue the writ, for a
writ of preliminary injunction may only be issued "by
the judge of any court in which the action is pending
[within his district], or by a Justice of the Court of
Appeals, or of the Supreme Court. . . . A writ of
preliminary injunction is an ancillary remedy. It is
available only in a pending principal action, for the
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ATTY. BORJE
preservation or protection of the rights and interests
of a party thereto, and for no other purpose."
(footnotes omitted).
The Commission does have legal standing to indorse, for appropriate
action, its findings and recommendations to any appropriate agency
of government. 37
The challenge on the CHR's disbursement of the amount of
P200,000.00 by way of financial aid to the vendors affected by the
demolition is not an appropriate issue in the instant petition. Not only
is there lack of locus standi on the part of the petitioners to question
the disbursement but, more importantly, the matter lies with the
appropriate administrative agencies concerned to initially consider.
The public respondent explains that this petition for prohibition filed
by the petitioners has become moot and academic since the case
before it (CHR Case No. 90-1580) has already been fully heard, and
that the matter is merely awaiting final resolution. It is true that
prohibition is a preventive remedy to restrain the doing of an act
about to be done, and not intended to provide a remedy for an act
already accomplished. 38 Here, however, said Commission
admittedly has yet to promulgate its resolution in CHR Case No. 90-
1580. The instant petition has been intended, among other things, to
also prevent CHR from precisely doing that. 39
WHEREFORE, the writ prayed for in this petition is GRANTED. The
Commission on Human Rights is hereby prohibited from further
proceeding with CHR Case No. 90-1580 and from implementing the
P500.00 fine for contempt. The temporary restraining order
heretofore issued by this Court is made permanent. No costs.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Bidin, Regalado, Davide, Jr.,
Romero, Nocon, Bellosillo, Melo, Quiason and Puno, JJ., concur.
20 July 2017
Separate Opinions 
PADILLA, J.,  dissenting:
I reiterate my separate opinion in "Carino, et al. vs. The Commission
on Human rights, et al.," G.R. No. 96681, 2 December 1991, 204
SCRA 483 in relation to the resolution of 29 January 1991 and my
dissenting opinion in "Export Processing Zone Authority vs. The
Commission on Human Rights, 
et al.," G.R. No. 101476, 14 April 1992, 208 SCRA 125. I am of the
considered view that the CHR can issue a cease and desist order to
maintain a status quo pending its investigation of a case involving an
alleged human rights violation; that such cease and desist order
maybe necessary in situations involving a threatened violation of
human rights, which the CHR intents to investigate.
In the case at bench, I would consider the threatened demolition of
the stalls, sari-sari stores and carinderias as well as the temporary
shanties owned by the private respondents as posing prima facie a
case of human rights violation because it involves an impairment of
the civil rights of said private respondents, under the definition of civil
rights cited by the majority opinion (pp. 20-21) and which the CHR
has unquestioned authority to investigate (Section 18, Art. XIII, 1987
Constitution).
Human rights demand more than lip service and extend beyond
impressive displays of placards at street corners. Positive action and
results are what count. Certainly, the cause of human rights is not
enhanced when the very constitutional agency tasked to protect and
vindicate human rights is transformed by us, from the start, into a
tiger without dentures but with maimed legs to boot. I submit the
CHR should be given a wide latitude to look into and investigate
situations which may (or may not ultimately) involve human rights
violations.
ACCORDINGLY, I vote to DISMISS the petition and to remand the
case to the CHR for further proceedings.
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ATTY. BORJE

# Separate Opinions

PADILLA, J.,  dissenting:

I reiterate my separate opinion in "Carino, et al. vs. The Commission

on Human rights, et al.," G.R. No. 96681, 2 December 1991, 204
SCRA 483 in relation to the resolution of 29 January 1991 and my
dissenting opinion in "Export Processing Zone Authority vs. The
Commission on Human Rights, 
et al.," G.R. No. 101476, 14 April 1992, 208 SCRA 125. I am of the
considered view that the CHR can issue a cease and desist order to
maintain a status quo pending its investigation of a case involving an
alleged human rights violation; that such cease and desist order
maybe necessary in situations involving a threatened violation of
human rights, which the CHR intents to investigate.

In the case at bench, I would consider the threatened demolition of

the stalls, sari-sari stores and carinderias as well as the temporary
shanties owned by the private respondents as posing prima facie a
case of human rights violation because it involves an impairment of
the civil rights of said private respondents, under the definition of civil
rights cited by the majority opinion (pp. 20-21) and which the CHR
has unquestioned authority to investigate (Section 18, Art. XIII, 1987
Constitution).

Human rights demand more than lip service and extend beyond
impressive displays of placards at street corners. Positive action and
results are what count. Certainly, the cause of human rights is not
enhanced when the very constitutional agency tasked to protect and
vindicate human rights is transformed by us, from the start, into a
tiger without dentures but with maimed legs to boot. I submit the
CHR should be given a wide latitude to look into and investigate
situations which may (or may not ultimately) involve human rights
violations.

ACCORDINGLY, I vote to DISMISS the petition and to remand the

case to the CHR for further proceedings.

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