ARTICLE XII  All lands not otherwise appearing to be within private ownership

NATIONAL ECONOMY AND PATRIMONY is presumed to belong to the State.

 Pursuant to this, classification of public land is an exclusive
Section 1. The goals of the national economy are a more equitable distribution of prerogative of the Executive.
opportunities, income, and wealth; a sustained increase in the amount of goods
and services produced by the nation for the benefit of the people;

and an expanding productivity as the key to raising the quality of life for all,
especially the underprivileged.

The State shall promote industrialization and full employment

based on sound agricultural development and agrarian reform, through
industries that make full of efficient use of human and natural resources, and
which are competitive in both domestic and foreign markets.

However, the State shall protect Filipino enterprises against unfair foreign
competition and trade practices.

In the pursuit of these goals, all sectors of the economy and all region s of the
country shall be given optimum opportunity to develop. Private enterprises,
including corporations, cooperatives, and similar collective organizations, shall
be encouraged to broaden the base of their ownership.

Goals of Section 1:
1. More equitable distribution of opportunities, income, and wealth
2. Sustained increase in amount of goods and services
produced by the nation for the benefit of the people
3. Expanding production as the key to raising the quality of life for all,
especially the underprivileged

Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State.
With the exception of agricultural lands, all other natural resources shall not be
alienated. The exploration, development, and utilization of natural resources shall be
under the full control and supervision of the State.

The State may directly undertake such activities, or it may enter into
co-production,
joint venture, or
production-sharing agreements with Filipino citizens, or
corporations or associations at least 60 per centum of whose capital is owned by such
citizens. Such agreements may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under such terms and conditions
as may provided by law. In cases of water rights for irrigation, water supply, fisheries,
or industrial uses other than the development of waterpower, beneficial use may be
the measure and limit of the grant.

The State shall protect the nations marine wealth in its archipelagic waters, territorial
sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to
Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by Filipino
citizens, as well as cooperative fish farming, with priority to subsistence fishermen and
fish workers in rivers, lakes, bays, and lagoons.

The President may enter into agreements with foreign-owned corporations involving
either technical or financial assistance for large-scale exploration, development, and
utilization of minerals, petroleum, and other mineral oils according to the general terms
and conditions provided by law, based on real contributions to the economic growth
and general welfare of the country. In such agreements, the State shall promote the
development and use of local scientific and technical resources.

The President shall notify the Congress of every contract entered into in accordance
with this provision, within thirty days from its execution.
Regalian doctrine (Jura Regalia)
 The universal feudal theory that all lands were held from the crown,
but ownership is vested in the State rather than the head.
 We adhere to this doctrine where all agricultural, timber, and
mineral lands are subject to the dominion of the State. thus,
before any land may be classified from the forest group and
converted into alienable land for agricultural or other purposes,
there must be a direct act from the government.
Imperium v. Dominium
Imperium Dominium
Government authority Capacity to own or acquire property
possessed by State in its proprietary character.
appropriately embraced in sovereignty
Alienation of natural resources
(1) Santa Rosa Mining Co. v. Leido, Jr. - 156 SCRA 1
 Santa Rosa Mining Company, Inc. is a mining corporation organized under the
laws of the Philippines.
o It is the holder of 50 mining claims situated in Jose Panganiban,
Camarines Norte, acquired under Philippine Bill of 1902.
 PD 1214 was issued, requiring holder of subsisting and valid patentable mining
claims under Philippine Bill of 1902 to file a mining lease application within 1
year from the approval of the Decrree.
 Santa Rosa Mining filed a mining lease application under protest.
o It also instituted an action claiming that PD 1214 is unconstitutional
on the ground:
 That it amounts to a deprivation of property without due
process of law; and
 That its 50 mining claims had already been declared as
its own private and exclusive property.
Issue: Whether or not PD 1214 is unconstitutional.
Ruling: PD 1214 is constitutional.
 It is a valid exercise of the sovereign power of the State, as owner, over lands of
the public domain, of which petitioner's mining claims still form a part, and over
the patrimony of the nation, of which mineral deposits are a valuable asset.
o It may be underscored, in this connection, that the Decree does not
cover all mining claims located under the Phil. Bill of 1902, but only
those claims over which their locators had failed to obtain a patent
o And even then, such locators may still avail of the renewabletwenty-
five year (25) lease prescribed by Pres. Decree No. 463, the
Mineral Development Resources Decree of 1974.
 Mere location does not mean absolute ownership over the affected land or the
mining claim.
 It merely segregates the located land or area from the public domain by barring
other would-be locators from locating the same and appropriating for themselves
the minerals found therein.
o To rule otherwise would imply that location is all that is needed to
acquire and maintain rights over a located mining claim.
 PD 1214 is in accord with Sec. 2, Art. XII (formerly Sec. 8, Art XIV of 1973
Constitution):
o Sec. 2: All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated.
The exploration, development, and utilization of natural resources
shall be under the full control and supervision of the State. The
State may directly undertake such activities, or it may enter into co-
production, joint venture, or production-sharing agreements with
Filipino citizens, or corporations or associations at least 60 per
centum of whose capital is owned by such citizens. Such
agreements may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under such
terms and conditions as may provided by law. In cases of water
rights for irrigation, water supply, fisheries, or industrial uses other
than the development of waterpower, beneficial use may be the
measure and limit of the grant.
(2) San Miguel Corporation v. Court of Appeals
SMC purchased a land from Silverio Perez in 1975 at Sto. Tomas,
Batangas then filed in 1977 claiming ownership in fee simple with CFI-
Batangas an application for registration under the Land Registration
Act. Sol Gen, appearing for RP, opposed the application for registration
contending that the ownership could no longer be availed on the basis of
a Spanish title as the period had already lapsed and that the land is
part of public domain and SMC, a private corporation, is prohibited
from holding alienable lands of public domain. Respondent court
denied the application for registration and held that there was no
evidence that the said land ceased to be public domain and that Perez
actually owned it.
SC affirmed.
Open, exclusive and und isputed possession of alienab le pub lic land for
the period prescribed by law creates the lega l fiction whereby the land,
upo n completion of the requ isite period ipso jure and withou t nee d of
judicial or other sanction, ceases to be public land and beco mes
private property. Such open, continuous, exclusive and notorious
occupation of the disputed properties for more than 30 years must,
however, be conclusively established. This quantum of proof is
necessary to avoid the erroneous validation of actually fictitious claims
of possession over the property in dispute.
Utilization of natural resources
(3) Miners Association v. Factoran, Jr. - 240 SCRA 100
Pursuant to some EOs implementing Article XII Sec 2 of the 1987
Constitution, the DENR Secretary promulgated AO Nos. 57 and 82. AO 57
unduly preterminates existing mining leases and other mining agreements and
automatically converts them into production-sharing agreements within 1
year from its effectivity date. AO 82 declares that failure to submit Letters
of Intent and Mineral Production Sharing Agreements within 2 years from
the date of effectivity shall cause the abandonment of their mining, quarry
and sand gravel permits. Miners’ Association of the Philippines questioned
these AOs contending they are invalid with respect to the rule making power of
the agency and it contravenes the constitution.
SC: VALID.
What the Constitution says is that wheneve r natural resources are
involved, particularly n the case of inalienable natural resources, the
State must always have some control of the exploration, development and
utilization even if the individual or corporation engaged is a Filipino.
Under the text of EO211, there is a reservation clause which provides
that the privileges and terms and conditions of all existing mining leases
or agreements granted after the effectivity of the Constitution, shall be
subject to any and all modifications or alterations which Congress may
adopt pursuant to Article XII Sec 2. The president validly modified or altered the
privileges granted, as well as the terms and conditions of mining leases and
agreements under EO211 after the effectivity of the Constitution by
authorizing the DENR Secretary to negotiate and conclude joint venture,
utilization of minerals. Well-settled is the rule, however, that rega rdless of the
reservation clause, mining leases or agreements granted by the State are
subject to alterations through a reasonable exercise of the police power of
the State.
The economic policy on the exploration, development and utilization of the
country's natural resources under Art XII, Sec 2 could not be any clearer.
As enunciated in Art XII Sec 1, the exploration, development and
utilization of natural resources under the new system mandated in Sec 2, is
geared towards a more equitable distribution of opportunities, income, and
wealth; a sustained increase in the amount of goods and services
produced by the nation for the benefit of the people; and an expanding
productivity as the key to raising the quality of life for all, especially the
underprivileged. The exploration, deve lopment and utilization of the
coun try's natural resources are matters vital to the pub lic interest and the
general welfare of the people. The recognition of the importance of the
country's natural resources was expressed as early as the 1984
Constitutional Convention.
Jura regala – all natural resources are owned by the State. Sec 2 of
Article XII does not apply retroactively. Lease agreements issued before the
constitution are not covered by the said E.O.
(4) La Bugal vs. DENR – December 1, 2004
Shortly before the effectivity of the Philippine Mining Act of 1995, President
Ramos entered into a financial technical assistance agreement (FTAA) with
WMCP, a foreign controlled company that is 95% owned by Western
Mining Corporation Australia. La Bugal-B’laan Tribal Association, Inc. then
petitioned the court for the nullification of the Philippine Mining Act of 1995
and the Financial or Technical Assistance Agreement (FTAA) entered into by
and between the Philippine Government and WMC (Philippines) for being
unconstitutional, alleging that the Philippine Mining Act is unconstitutional
since it allows fully foreign owned corporations to explore, develop, utilize
and exploit mineral resources in a manner contrary to Art. XII Sec 2, par.
4 of the Constitution; it allows enjoyment by foreign citizens as well as fully
foreign owned corporations of the nation’s marine wealth contrary to Section
2; it allows priority of foreign and fully foreign owned corporations in the
exploration, development and utilization of mineral resources contrary to
Article XII; it allows the inequitable sharing of wealth contrary to Sections 1
and 2.

January 27, 2004 Decision:

The SC declared all provisions concerning the FTAA and other permits
that can be granted to foreign corporations such as the exploration permits,
mineral processing permits have been nullified. The decision also declared
the FTAA of Western Mining Corporation (Philippines) as void.
Generally, it declared as uncon stitutiona l and void all provisions of the
Philippine Mining Act of 1995 , which allow the direct participation of foreign-
owned corporations in mineral resources exploration, deve lopment and
utilization in the country. FTAAs are the same as service contracts, struck out
of the 1987 version “for being antithetical to the principle of sovereignty over
our natural resources, because they allowed foreign control over the
exploitation of our natural resources, to the prejudice of the Filipino nation.”
Service contracts in the 1973 Constitution permitted exclusive management
and control of enterprise by a foreign contractor. The January 2004
Decision understood the 1987 Constitution, through Section 2, Article XII, as
“effectively banning such service contracts” to safeguard Filipino interests
from abuses and excesses that festered many such contracts executed
under previous administrations.

December 1, 2004 Decision

Going through the Constitutional Commission’s deliberations, the ruling

established that 1987 commissione rs did not effectively ban foreign service
contracts, but instead simply wanted to minimize dub ious and biased
agreements by limiting exploration, development and utilization of
natural resources to Filipino citizens. According to this new interpretation,
FTAAs are in fact service contracts and Paragraph 4 in the 198 7
constitution was inserted precisely as an exception to the 60-40 ratio norm.
The Court supports this by arguing that in reality the Philippines despite its
natural resource abundance has no capac ity to finance extraction
ope rations, which unde rscores the nece ssity of service contracts as
suppo sedly recogn ized by the framers of the constitution. As such, “The Court
believes that it is not unconstitutional to allow wide deg ree of discretion to the
Chief Executive, given the nature and complexity of such agreements, the
humongous amounts of capital and financing required for large-scale mining
operations, the complicated technology needed, and the intricacies of
international trade, coupled with the State's need to maintain flexibility in its
dealing, in order to preserve and enhance our country's competitiveness in
world markets.”

May the state enter into a service contracts with foreign owned corporations?

Yes, but subject to the strict limitation in the last two paragraphs of
Section 2. Financial and technical agreements are a form of a service contract.
Such service contracts may be entered into only with respect to minerals,
petroleum and other mineral oils. The grant of such service contracts is subject
to several safeguards, among them:
1. Crafted in accordance with a general law setting standard
or uniform terms, conditions and requirements;
2. President be the signatory for the government; and
3. President report the executed agreement to Congress within 30
days.

(5) Alvarez v. PICOP- GR Nos. 162243 and 164516
Doctrine: Forest lands cannot be alienated in favor of private entities·granting to
private entities, via a contract, a permanent, irrevocable, and exclusive possession of
and right over forest lands is tantamount to granting ownership thereof.·
Respondent PICOP filed with the DENR an application to have its Timber
License Agreement (TLA) No. 43 converted into an Integrated Forest
Management Agreement (IFMA). In the middle of the processing of its
application, however, PICOP refused to attend further meetings with the
DENR. Instead, PICOP filed before the RTC of Quezon City a Petition for
Mandamus against then DENR Secretary Heherson T. Alvarez to compel the
execution of an IFMA.
Issue: Is the contract enforceable under the Non-Impairment Clause of the
Constitution, so as to make the signing of the IFMA a ministerial duty? N O
NO. The 1969 Document is not a contract recognized under the non-
impairment clause, much less a contract specifically enjoining the DENR
Secretary to issue the IFMA. IFMAs are production-sharing agreements
concerning the deve lopment and utilization of natural resources. As such,
these agreements "may be for a period not exceed ing 25 years, renewable
for not more than 25 years, and unde r such terms and cond itions as may be
provided by law." Any superior "contract" requ iring the State to issue TLAs
and IFMAs wheneve r they expire clearly circumvents Section 2, Article XII
of the Constitution, which provides for the only permissible schemes
wherein the full control and supervision of the State are not derogated: co-
production, joint venture, or production-sharing agreements within the time
limit of twenty-five years, renewable for another twenty-five years.
The TLA was meant to expire on 26 Apr 2002, which states that: We
confirm your tenure over the area and exclusive right to cut, collect and
remove sawtimber and pulpwood on April 26, 1977; to be renewable for
another 25 years subject to compliance with constitutiona l and statutory
requirements as well as with existing policy on timber conces sions.
(6) Initiatives for Dialogue and Empowerment v. Power Sector Assets and
Liabilities Management Corporation – 682 SCRA 602- MAGSUMBOL
 It is extraction of natural resource that is limited to Filipinos or corporations
or associations at least 60% of the capital is owned by Filipinos.
 “Appropriation of water” as limited to Filipinos means the use, taking, or
diverting of water from a natural source.
 K Water would be involved in power generation, utilizing water that had
already been extracted from the natural source by NPC.
● Respondent PSALM is a GOCC created by virtue of RA 9136, or the
"Electric Power Industry Reform Act of 2001" (EPIRA).
o The EPIRA provided a framework for the restructuring of the
electric power industry, including the privatization of the
assets of the National Power Corporation (NPC), the
transition to the desired competitive structure, and the
definition of the responsibilities of the various government
agencies and private entities.
o It mandated PSALM to manage the orderly sale, disposition,
and privatization of NPC generation assets, real estate and
other disposable assets, and Independent Power Producer
(IPP) contracts with the objective of liquidating all NPC
financial obligations and stranded contract costs in an optimal
manner, which liquidation is to be completed within PSALMs
25-year term of existence.
● PSALM commenced the privatization of the 246-megawatt (MW) Angat
Hydro-Electric Power Plant (AHEPP) located in San Lorenzo, Norzagaray,
Bulacan.
o A portion of the AHEPP is owned by respondent Metropolitan
Waterworks and Sewerage System (MWSS).
● This is a petition seeking to enjoin the sale of the Angat Hydro-Electric
Power Plant (AHEPP) to Korea Water Resources Corporation (K-Waters)
which won the bidding conducted by Power Sector Assets and Liabilities
● The Angat Dam and AHEPP are utilized for power generation, irrigation,
water supply and flood control purposes.
● As to the participation in the bidding of and award of contract to K-Water
which is a foreign corporation, petitioners contend that PSALM clearly
violated the constitutional provisions on the appropriation and utilization of
water as a natural resource, as implemented by the Water Code of the
Philippines limiting water rights to Filipino citizens and corporations which
are at least 60% Filipino-owned. Further considering the importance of the
Angat Dam which is the source of 97% of Metro Manilas water supply, as
well as irrigation for farmlands in 20 municipalities and towns in
Pampanga and Bulacan, petitioners assert that PSALM should prioritize
such domestic and community use of water over that of power generation.
ISSUE: W/N there was a violation of Sec. 2, Art. XII of the Constitution?
HELD: NO. Sale of Government-Owned AHEPP to a Foreign Corporation Not
Prohibited But Only Filipino Citizens and Corporations 60% of whose capital is owned
by Filipinos May be Granted Water Rights
The core issue concerns the legal implications of the acquisition by K-Water of the
AHEPP in relation to the constitutional policy on our natural resources.
Sec. 2, Art. XII of the 1987 Constitution provides in part:
SEC.2. All lands of the public domain, waters, minerals, coal, petroleum,
and other mineral oils, all forces of potential energy, fisheries, forests or
timber, wildlife, flora and fauna, and other natural resources are owned by
the State. With the exception of agricultural lands, all other natural
resources shall not be alienated. The exploration, development, and
utilization of natural resources shall be under the full control and
supervision of the State. The State may directly undertake such activities,
or it may enter into co-production, joint venture, or production-sharing
agreements with Filipino citizens, or corporations or associations at least
sixty per centum of whose capital is owned by such citizens. Such
agreements may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under such terms and
conditions as may be provided by law. In case of water rights for irrigation,
water supply, fisheries, or industrial uses other than the development of
water power, beneficial use may be the measure and limit of the grant. xxx
The State's policy on the management of water resources is implemented through the
regulation of water rights. PD 1067, otherwise known as "The Water Code of the
Philippines". The NWRB is the chief coordinating and regulating agency for all water
resources management development activities.
It is clear that the law limits the grant of water rights only to Filipino citizens and
juridical entities duly qualified by law to exploit and develop water resources, including
private corporations with sixty percent of their capital owned by Filipinos. In the case of
Angat River, the NWRB has issued separate water permits to MWSS, NPC and NIA.
Foreign ownership of a hydropower facility is not prohibited under existing laws. The
construction, rehabilitation and development of hydropower plants are among those
infrastructure projects which even wholly-owned foreign corporations are allowed to
undertake under the Amended Build-Operate-Transfer (Amended BOT) Law (R.A. No.
7718).
With respect to foreign investors, the nationality issue had been framed in terms of the
character or nature of the power generation process itself, i.e., whether the activity
amounts to utilization of natural resources within the meaning of Sec. 2, Art. XII of the
Constitution. If so, then foreign companies cannot engage in hydropower generation
business; but if not, then government may legally allow even foreign-owned
companies to operate hydropower facilities.
Appropriation of water, as used in the Water Code refers to the "acquisition of rights
over the use of waters or the taking or diverting of waters from a natural source in the
manner and for any purpose allowed by law."
On the other hand, "water right" is defined in the Water Code as the privilege granted
by the government to appropriate and use water. Black’s Law Dictionary defined "water
rights" as "a legal right, in the nature of a corporeal hereditament, to use the water of a
natural stream or water furnished through a ditch or canal, for general or specific
purposes, such as irrigation, mining, power, or domestic use, either to its full capacity
or to a measured extent or during a defined portion of the time," or "the right to have
the water flow so that some portion of it may be reduced to possession and be made
private property of individual, and it is therefore the right to divert water from natural
stream by artificial means and apply the same to beneficial use."
As the new owner of the AHEPP, K-Water will have to utilize the waters in the Angat
Dam for hydropower generation. Consistent with the goals of the EPIRA, private
entities are allowed to undertake power generation activities and acquire NPC’s
generation assets. But since only the hydroelectric power plants and appurtenances
are being sold, the privatization scheme should enable the buyer of a hydroelectric
power plant in NPC’s multi-purpose dam complex to have beneficial use of the waters
diverted or collected in the Angat Dam for its hydropower generation activities, and at
the same time ensure that the NPC retains full supervision and control over the
extraction and diversion of waters from the Angat River.
In fine, the Court rule that while the sale of AHEPP to a foreign corporation pursuant to
the privatization mandated by RA 9136 (EPIRA), did not violate, Sec. 2 of Art. XII
(which limits the exploration, development and utilization of natural resources under
the full supervision and control of the State, or the State undertaking the same through
joint venture, etc., with Filipino corporations 60% capital of which is owned by Filipino
Citizens), the stipulation in the Asset Purchase Agreement and Operations and
Maintenance Agreement whereby National Power Corporation (NPC) consents to the
transfer of water rights to the foreign buyer, K Water,contravenes the constitutional
provision and the Water Code.
NPC shall continue to be the holder of the water permit even as operational control
and day-to-day management of AHEPP is turned over to K Water.
Furthermore, NPC and K Water shall faithfully comply with the terms and conditions of
the Memorandum of Agreement on Water Protocol, as well as with such other
regulations and issuances of the National Water Resources Board (NWRB) governing
water rights and water usage.
(7) Narra Nickel Mining & Dev. Corporation vs. Redmont Consolidated
Mines Corporation
DOCTRINE: Grandfather Rule may be Applied Cumulatively with the Control Test in
Determining the Ownership of Corporations Engaged in Nationalized Activities
Redmont is a domestic corporation interested in the mining and exploration of some
areas in Palawan.  Upon learning that those areas were covered by MPSA
applications of other three (allegedly Filipino) corporations – Narra, Tesoro, and
MacArthur, it filed a petition before the Panel of Arbitrators of DENR seeking to
deny their permits on the ground that these corporations are in reality foreign-
owned.  MBMI, a 100% Canadian corporation, owns 40% of the shares of PLMC
(which owns 5,997 shares of Narra), 40% of the shares of MMC (which owns 5,997
shares of McArthur) and 40% of the shares of SLMC (which, in turn, owns 5,997
shares of Tesoro).
Aside from the MPSA, the three corporations also applied for FTAA with the Office
of the President.  In their answer, they countered that (1) the liberal Control Test
must be used in determining the nationality of a corporation as based on Sec 3 of
the Foreign Investment Act –  which as they claimed admits of corporate layering
schemes, and that (2) the nationality question is no longer material because of their
subsequent application for FTAA.
Commercial / Political Law
Issue 1:  W/N the Grandfather Rule must be applied in this case
Yes.  It is the intention of the framers of the Constitution to apply the Grandfather
Rule in cases where corporate layering is present.
First, as a rule in statutory construction, when there is conflict between the
Constitution and a statute, the Constitution will prevail.  In this instance, specifically
pertaining to the provisions under Art. XII of the Constitution on National Economy
and Patrimony, Sec. 3 of the FIA will have no place of application.   Corporate
layering is admittedly allowed by the FIA, but if it is used to circumvent the
Constitution and other pertinent laws, then it becomes illegal.
Second, under the SEC Rule 1 and DOJ Opinion2 , the Grandfather Rule must be
applied when the 60-40 Filipino-foreign equity ownership is in doubt.  Doubt is
present in the Filipino equity ownership of Narra, Tesoro, and MacArthur since their
common investor, the 100% Canadian-owned corporation – MBMI, funded them.
Under the Grandfather Rule, it is not enough that the corporation does have the
required 60% Filipino stockholdings at face value.  To determine the percentage of
the ultimate Filipino ownership, it must first be traced to the level of the investing
corporation and added to the shares directly owned in the investee corporation.   (1) Is the Grandfather Rule applicable? YES.
Applying this rule, it turns out that the Canadian corporation owns more than 60%
of the equity interests of Narra, Tesoro and MacArthur.  Hence, the latter are
disqualified to participate in the exploration, development and utilization of the
Philippine’s natural resources.
1  DOJ Opinion No. 020 Series of 2005 (paragraph 7)
2  SEC Opinion May 13, 1990
Remedial Law
Issue 2:  W/N the case has become moot as a result of the MPSA conversion to
FTAA
No.  There are certain exceptions to “mootness” principle and the mere raising of an
issue of “mootness” will not deter the courts from trying a case when there is a valid
reason to do so.
The SC noted that a grave violation of the Constitution is being committed by a
foreign corporation through a myriad of corporate layering under different, allegedly,
Filipino corporations. The intricate corporate layering utilized by the Canadian
company, MBMI, is of exceptional character and involves paramount public interest
since it undeniably affects the exploitation of our Country’s natural resources.  The
corresponding actions of petitioners during the lifetime and existence of the instant
case raise questions as what principle is to be applied to cases with similar issues.
No definite ruling on such principle has been pronounced by the Court; hence, the
disposition of the issues or errors in the instant case will serve as a guide to the
bench, the bar and the public.  Finally, the instant case is capable of repetition yet
evading review, since the Canadian company, MBMI, can keep on utilizing dummy
Filipino corporations through various schemes of corporate layering and conversion
of applications to skirt the constitutional prohibition against foreign mining in
Philippine soil.  
OTHER DIGEST:
Issue: Whether or not the petitioner corporations are Filipino and can validly be
issued MPSA and  EP.
 
Held: No. The SEC Rules provide for the manner of calculating the Filipino interest
in a corporation for purposes, among others, of determining compliance with
nationality requirements (the ‘Investee Corporation’). Such manner of computation
is necessary since the shares in the Investee Corporation may be owned both by
individual stockholders (‘Investing Individuals’) and by corporations and
partnerships (‘Investing Corporation’). The said rules thus provide for the
determination of nationality depending on the ownership of the Investee Corporation
and, in certain instances, the Investing Corporation. 
 
Under the SEC Rules, there are two cases in determining the nationality of the
Investee Corporation. The first case is the ‘liberal rule’, later coined by the SEC as
the Control Test in its 30 May 1990 Opinion, and pertains to the portion in said
Paragraph 7 of the 1967 SEC Rules which states, ‘(s)hares belonging to
corporations or partnerships at least 60% of the capital of which is owned by
Filipino citizens shall be considered as of Philippine nationality.’ Under the liberal
Control Test, there is no need to further trace the ownership of the 60% (or more)
Filipino stockholdings of the Investing Corporation since a corporation which is at
least 60% Filipino-owned is considered as Filipino. 
 
The second case is the Strict Rule or the Grandfather Rule Proper and pertains to
the portion in said Paragraph 7 of the 1967 SEC Rules which states, “but if the
percentage of Filipino ownership in the corporation or partnership is less than 60%,
only the number of shares corresponding to such percentage shall be counted as of
Philippine nationality.” Under the Strict Rule or Grandfather Rule Proper, the
combined totals in the Investing Corporation and the Investee Corporation must be
traced (i.e., “grandfathered”) to determine the total percentage of Filipino
ownership. Moreover, the ultimate Filipino ownership of the shares must first be
traced to the level of the Investing Corporation and added to the shares directly
owned in the Investee Corporation. 
In other words, based on the said SEC Rule and DOJ Opinion, the Grandfather
Rule or the second part of the SEC Rule applies only when the 60-40 Filipino-
foreign equity ownership is in doubt (i.e., in cases where the joint venture
corporation with Filipino and foreign stockholders with less than 60% Filipino
stockholdings [or 59%] invests in other joint venture corporation which is either 60-
40% Filipino-alien or the 59% less Filipino). Stated differently, where the 60-40
Filipino- foreign equity ownership is not in doubt, the Grandfather Rule will not
apply.
OTHER DIGEST:
The instant case presents a situation which exhibits a scheme employed by
stockholders to circumvent the law, creating a cloud of doubt in the Court’s mind.
To determine, therefore, the actual participation, direct or indirect, of MBMI, the
grandfather rule must be used.
The Strict Rule or the Grandfather Rule pertains to the portion in Paragraph 7 of the
1967 SEC Rules which states, “but if the percentage of Filipino ownership in the
corporation or partnership is less than 60%, only the number of shares
corresponding to such percentage shall be counted as of Philippine nationality.”
Under the Strict Rule or Grandfather Rule Proper, the combined totals in the
Investing Corporation and the Investee Corporation must be traced (i.e.,
“grandfathered”) to determine the total percentage of Filipino ownership.
(2) Whether McArthur, Tesoro & Narra are Filipino nationals. NO.
[P]etitioners McArthur, Tesoro and Narra are not Filipino since MBMI, a 100%
Canadian corporation, owns 60% or more of their equity interests. Such conclusion
is derived from grandfathering petitioners’ corporate owners. xxx Noticeably, the
ownership of the “layered” corporations boils down to xxx group wherein MBMI has
joint venture agreements with, practically exercising majority control over the
corporations mentioned. In effect, whether looking at the capital structure or the
underlying relationships between and among the corporations, petitioners are NOT
Filipino nationals and must be considered foreign since 60% or more of their capital
stocks or equity interests are owned by MBMI.

(8) Republic v. Jabson
Doctrine: Any application for registration to title to land derived through public grant
must establish 3 things
(1) Reclassified as alienable and disposable nature – meaning it has been
removed from the scope of the Regalian Doctrine.
(2) Predecessor’s adverse possession
(3) Reckoning date
Otherwise, presumption that parcel of land is public domain not overcome.
FACTS
Respondents applied for registration of land they allegedly acquired from their
predecessors in interest who’ve been occupying the land since time immemorial
and they possessed the same for more than 30 years in open continuous and
exclusive manner.
RTC: granted for satisfactory proof of rights over land.
CA: reversed, it found that Jabson group did not present any evidence showing that
the San Jose Property had already been classified as alienable and disposable land
of public domain… a mere CENRO certification was presented.
Issue: Whether the grant of Jabson’s application for registration of title to the
subject property was proper under the law and jurisprudence?
Ruling: NO. Any application for registration of title to land derived through a public
grant must sufficiently establish 3 things: (a) the subject’s land alienable and
disposable nature; (b) his predecessor’s adverse possession thereof; and (c) the
reckoning date from which such adverse possession was under a bona fide claim of
ownership, that is, June 12, 1945 or earlier.
That land has been removed from the scope of the Regalian Doctrine and
reclassified as part of public domain’s alienable and disposable portion cannot be
assumed or implied. The applicant must establish the existence of a positive act of
the government, such as the Presidential proclamation or EO; an administrative
action; investigation reports of Bureau of Lands investigators; and a legislative act
or statute to prove the alienable and disposable nature of the land.
Here, We cannot give probative value to the DENR Certification submitted by
Jabson. First, Jabson’s belated submission of a supposed vital document tending to
prove the subject properties’ alienability is fatal to their cause.
The general rule is that an applicant must formally offer evidence supporting his
application before the trial court to duly prove the documents' genuineness and due
execution. As an exception to this rule, in Llanes v. Republic as cited by the CA, the
Court admitted in evidence a corrected CENRO certification not formally offered in
the trial court and only presented on appeal. However, Llanes is not on all fours
with the present petition. There are special circumstances justifying the Court's
ruling in Llanes that are not present in the case at bar.
What was belatedly filed in Llanas was merely a corrected or amended certification,
the unedited version of which had been earlier presented in the trial court as
evidence of the alienable and disposable nature of the land. And the correction or
amendment pertained merely to the statement of the reckoning date of adverse
possession. Unlike in this case, Jabson failed to present during trial any evidence
establishing the subject properties' alienable and disposable nature.
Second, a DENR Sr. Forest Management Specialist, was not authorized to issue
certifications as to land classification, much less order for the release of lands of the
public domain as alienable and disposable. (President and DENR Secretary is
authorized to classify lands)
Third, a certification alone is not sufficient in proving the subject land's alienable
and disposable nature. We have already ruled that a PENRO and/or CENRO
certification must be accompanied by a copy of the original classification, certified
as a true copy by the legal custodian of the official records, which: (a) released the
subject land of the public domain as alienable and disposable, and (b) was
approved by the DENR Secretary.
Fourth, even assuming arguendo that the DENR Certification dated February 19,
2009 does not suffer the aforementioned shortcomings, the same only served to
prove the land classification of one of the subject properties-Bagong Katipunan. To
recall, Jabson filed their application in relation to 2 properties, viz.: San Jose and
Bagong Katipunan properties. However, the DENR Certification dated February 19,
2009 covers the Bagong Katipunan property only.
To this day, Jabson have not established the alienable and disposable nature of the
San Jose property.
All told, from the foregoing, it is clear that Jabson did not overcome the presumption
that the parcels of land sought to be registered still formed part of the public
domain. Thus, there was absolutely no basis for the CA to approve Jabson's
application pertaining to the Bagong Katipunan property, and much less the San
Jose property.
Lands of the Public Domain
1) Agricultural
 The only alienable land of the public domain
 Foreshore land
o Land between the high and low water –
alienable.
2) Forest
 Cannot be owned privately, not registrable, and
possession, no matter how long, cannot convert it into
private land unless reclassified and considered alienable.
3) Timber
4) Mineral
5) National parks
 Private corporations
may not hold alienable
lands of public domain
except by lease.
(9) Republic v. Espinosa
Doctrine:
Since the case is one for reversion and not one for land
registration, the burden is on the State to prove that the property was classified as
timberland or forest land at the time it was decreed to Espinosa.
To allow a reversion based on a classification made at the time when the property was
already declared private property by virtue of a decree would be akin to expropriation
of land without due process of law
FACTS
State is going after land decreed to Espinosa through reversion, alleging that property
is inalienable land because it fell within a timberland area as certified by Director of
Forestry.
CA found that the State failed to prove fraud or misrepresentation on the part of
Espinosa.
Issue: Whether reversion of the land is proper? NO
Ruling: NO. Reversion is the remedy where the State, pursuant to the Regalian
doctrine, seeks to revert land back to the mass of the public domain. It is proper when
public land is fraudulently awarded and disposed of to private individuals or
corporations. There are also instances when we granted reversion on grounds other
than fraud, such as when a "person obtains a title under the Public Land Act which
includes, by oversight, lands which cannot be registered under the Torrens system, or
when the Director of Lands did not have jurisdiction over the same because it is of the
public domain."
Here, the State, through the Solicitor General, alleges neither fraud nor
misrepresentation in the cadastral proceedings and in the issuance of the title in
Espinosa's favor. The argument for the State is merely that the property was unlawfully
included in the certificate of title because it is of the public domain.
Since the case is one for reversion and not one for land registration, the burden is on
the State to prove that the property was classified as timberland or forest land at the
time it was decreed to Espinosa. To reiterate, there is no burden on Caliston to prove
that the property in question is alienable and disposable land. At this stage, it is
reasonable to presume that Espinosa, from whom Caliston derived her title, had
already established that the property is alienable and disposable land considering that
she succeeded in obtaining the OCT over it. In this reversion proceeding, the State
must prove that there was an oversight or mistake in the inclusion of the property in
Espinosa' s title because it was of public dominion. This is consistent with the rule that
the burden of proof rests on the party who, as determined by the pleadings or the
nature of the case, asserts the affirmative of an issue.

We stress that our ruling is not inconsistent with the doctrine that forest lands are
outside the commerce of man and unsusceptible of private appropriation. Neither are
we changing the rule on imprescriptibility of actions for reversion. We are merely
deciding on the facts as proved by the record. To allow a reversion based on a
classification made at the time when the property was already declared private
property by virtue of a decree would be akin to expropriation of land without due
process of law.

The result would have been different had the State proved that the property was
already classified as part of forest land at the time of the cadastral proceedings and
when title was decreed to Espinosa in 1962. However, it failed to discharge this
burden; the grant of title which carries with it the presumption that Espinosa had
already proved the alienable character of the property in the cadastral proceedings
stands. To grant the reversion based on a subsequent reclassification, more so on
lack of evidence, would amount to taking of private property without just compensation
and due process of law. This, however, is not what our Constitution envisions; fairness
and due process are paramount considerations that must still be observed.

(10) Malabanan v. Republic

Doctrine: The action for the reversion of land initiated by the State is not directed
against the judgment of the Land Registration Court but against the title. Hence,
jurisdiction is vested in the Regional Trial Court of the province or city where the land
involved is located.

Facts:
The Republic commenced a civil case against Angelo B. Malabanan, Pablo B.
Malabanan and Greenthumb Realty and Development Corporation, the registered
owners of various parcels of land covered by certificates of title derived from TCT No.
T-24268 of the Registry of Deeds of Batangas.

The Republic alleged that TCT No. T-24268 had emanated from OCT No. 0-17421 of
the Registry of Deeds of Batangas, which was purportedly issued pursuant to Decree
No. 589383 in L.R.A. Record No. 50573; that upon verification, the LRA could not find
any copy of the judgment rendered in LRC Record No. 50573; and that the tract of
land covered by TCT No. T- 24268, being within the unclassified public forest,
remained part of the public domain that pertained to the State and could not be the
subject of disposition or registration.

The petitioner moved to dismiss by arguing that the RTC had no jurisdiction over the
action because it sought the annulment of the judgment and the decree issued in LRC
Record No. 50573 by the Court of First Instance the jurisdiction over which pertained
to the Court of Appeals (CA).

The Republic opposed the motion to dismiss, insisting that its complaint did not ask
the RTC to annul a judgment because the judgment supposedly rendered in LRC
Record No. 50573 did not exist to begin with.

RTC granted the motion to dismiss. CA set aside the RTC’s order and remanded the
case.

Should Civil Case No. C-192 be considered an action to annul the judgment of the
Land Registration Court?

Ruling:
Jurisdiction of a court over the subject matter is determined from the allegations in the
complaint, the law in force at the time the complaint is filed, and the character of the
relief sought. The complaint sought as reliefs the cancellation of OCT No. 0-17421,
and the reversion to the Republic of the tract of land therein covered on the grounds
that there had been no decision of the Land Registration Court authorizing its
issuance, and that the land covered by TCT No. 24268 was within the unclassified
public forest of Batangas.
We find and declare that the complaint of the Republic was not seeking the annulment
of the judgment issued in L.R.C. Record No. 50573. the Republic alleges herein that
no judgment had ever existed.
In a reversion suit, we should emphasize, the attack is directed not against the
judgment ordering the issuance of title, but against the title that is being sought to be
cancelled either because the judgment was not validly rendered, or the title issued did
not faithfully reflect the land referred to in the judgment,[29] or because no judgment
was rendered at all.
 (11) Sangguniang Panlalawigan ng Bataan v. Garcia Abra Industrial Corp (AIC) bought a 70-hectare land and was now moving
to make the land registered. The petitioners contended that the land could
Lot Nos. 2193 and 2194 of the Bataan Cadastre, containing 1,222 square meters and not be registered because the highly mineralized parcels of land applied
10,598 sq. m., respectively, were registered in the name of the Province of Bataan. for were within the Central Cordillera Forest Reserve, which had not yet
Both lots were embraced in Original Certificate of Title (OCT) No. N-182, and occupied been released as alienable and disposable land pursuant to the Public
by the Bataan Community Colleges (BCC) and the Medina Lacson de Leon School of Land Law. AIC contends that the land is no longer part of the Cordillera
Arts and Trades (MLLSAT), both State-run schools. Forest Reserve because the communal forest had been cancelled and de-
Republic Act (R.A.) No. 8562, authored by Cong. Garcia, was enacted, converting the established by Forestry Administrative Order and also, it is no longer a
MLLSAT into a polytechnic college, to be known as the Bataan Polytechnic State forested area because it is already devoted to agriculture by the actual
College (BPSC), and integrating thereto the BCC. Pursuant to this, Cong. Garcia wrote occupants, who relinquished their rights to AIC for greater economic
to then Governor of Bataan Leonardo Roman, and the Sangguniang Panlalawigan of benefits.
Bataan (petitioner), requesting them to cause the transfer of the title of the aforesaid
lots to BPSC. No transfer was effected. Can the land be registered?
Thus, Cong. Garcia, along with the faculty members and some concerned students of
BPSC (collectively, the respondents) filed a Special Civil Action for Mandamus with the NO. Forest lands or forest reserves are incapable of private app ropriation
RTC of Balanga, Bataan against the Governor and the petitioner. and possession thereof, however long , cannot convert them into private
RTC granted the writ of mandamus. prope rties. This is pursuant to Sec. 3. The land must first be released from its
The Governor and the petitioner appealed to the CA alleging that the subject lots were classification as forest land and reclassified as agricultural land in
the patrimonial properties of the Province of Bataan, and as such they cannot be taken accordance with the certification issued by the Director of Forestry as
by the National Government without due process of law and without just provided in the Revised Administrative Code because the classification of
compensation. public lands is an exclusive prerogative of the Executive. While the Forestry
CA affirmed the RTC’s decision. Admin. Order may change the location of the forest, it does not amount to
a declassification of a forest reserve into alienable or disposable timber
Issue: Whether the subject lands are patrimonial properties of the province of Bataan and mineral lands. AIC failed to show that these are no longer part of the
which cannot be taken without due process of law and without just compensation? public domain and as such, registrable.
Ruling: NO. Local government property devoted to governmental purposes, such as
local administration, public education, and public health, as may be provided under
special laws, is classified as public.
Properties of local governments are classified as either (a) properties for public use, or
(b) patrimonial properties, and held that the capacity in which the property is held by a
local government is dependent on the use to which it is intended and for which it is
devoted. If the property is owned by the municipal corporation in its public and
governmental capacity, it is public and Congress has absolute control over it; but if the
property is owned in its private or proprietary capacity, then it is patrimonial and
Congress has no absolute control, in which case, the municipality cannot be deprived
of it without due process and payment of just compensation.
Local government property devoted to governmental purposes, such as local
administration, public education, and public health, as may be provided under special
laws, is classified as public. The classification of properties in the municipalities, other
than those for public use, as patrimonial under Article 424 of the Civil Code, is “without
prejudice to the provisions of special laws.
Property registered in the name of the municipal corporation but without proof that it
was acquired with its corporate funds is deemed held by it in trust for the State.
Here, RA 8562 was not intended to expropriate the subject lots titled in the name of
the Province of Bataan, but to confirm their character as communal land of the State
and to make them available for disposition by the National Government.
Local autonomy and decentralization do not deal directly with issues concerning
ownership, classification, use or control of properties of the public domain held by local
governments. The State retains power over property of the public domain, exercised
through Congress.
At issue in this petition is Section 24 of R.A. No. 8562, which directs that “all parcels of
land belonging to the government occupied by the MLLSAT and the BCC are hereby
declared to be the property of the BPSC and shall be titled under that name.” There is
no dispute that the Congress has expressly intended to entrust to BPSC the titles to
the subject lots. Being the sole beneficiary of Section 24 of R.A. No. 8562, BPSC is
the real party-in- interest, and is entitled to mandamus to enforce its right thereunder.

Section 3. Lands of the public domain are classified into agricultural, forest or
timber, mineral lands and national parks. Agricultural lands of the public domain
may be further classified by law according to the uses to which they may be
devoted. Alienable lands of the public domain shall be limited to agricultural lands.
Private corporations or associations may not hold such alienable lands of the public
domain except by lease, for a period not exceeding twenty-five years, renewable for
not more than twenty-five years, and not to exceed one thousand hectares in area.
Citizens of the Philippines may lease not more than five hundred hectares, or
acquire not more than twelve hectares thereof, by purchase, homestead, or grant.

Taking into account the requirements of conservation, ecology, and development,

and subject to the requirements of agrarian reform, the Congress shall determine,
by law, the size of lands of the public domain which may be acquired, developed,
held, or leased and the conditions therefor.

(12) Director of Lands v. Judge Aquino - 192 SCRA 296


(13) Republic v. Court of Appeals - 160 SCRA 228
Doctrine: Land cannot have mixed classification like partly mineral, partly agri
An application for registration of a parcel of land situated in Tuding, Itogon,
Benguet Province was filed by Jose de la Rosa on his own behalf and on
behalf of his three children, Victoria, Benjamin and Eduardo. Benguet
opposed the application on the ground that it had been in actual, continuous
and exclusive possession of the land in concept of owner, as evidenced
by its construction, affidavits of annual assessment, geological mappings,
geological samplings and trench side cuts, and payment of taxes on the land.
Atok claimed that a portion of these lands were covered by mineral claims,
recorded in the mining recorder of Baguio, which he purchased and from 1931
had been in open, continuous and exclusive possession. The Bureau of
Forestry Development also objected, arguing that the land sought to be
registered was covered by the Central Cordillera Forest Reserve, it was
not subject to alienation under the Constitutions of 1935 and 1973. TC
denied the application, holding that the applicants had failed to prove their
claim of possession and ownership of the land sought to be registered. CA
affirmed the surface rights of the de la Rosas over the land while at the
same time reserving the sub-surface rights of Benguet and Atok by virtue of
their mining claims. Benguet and Atok.
1. Can land have a mixed classification, e.g. partly mineral, partly
agricultural?
NO. The rights over the land are indivisible and that the land itself cannot
be half agriculture and half mineral. The classification must be categorical:
the land must be either completely mineral or completely agricultural. In the
instant case as already observed, the land, which was originally classified
as forestland ceased to be so and became mineral and completely
mineral, once the mining claims were perfected. As long as mining
corporations were being undertaken thereon, or underneath, it did not
cease to be so, and become agricultural, even if only partly so, because it
was enclosed with a fence and was cultivated by those who were unlawfully
occupying the surface.
2. Can the owner of agricultural land in which minerals are
discovered extract or utilize the said minerals without the permission of
the State?
NO. This is an application of the Regalian doctrine. Thus, once minerals
are discovered in the land, whatever the use to which it is being devo ted
at the time, such use may be discontinued by the State to enable it to
extract the minerals therein in the exercise of its sovereign preroga tive.
The land is thus converted to mineral land. Thus, if a person is the owner
of agricultural land in which minerals are discovered, his ownership of such
land does not give him the right to extract or utilize the said minerals
without the permission of the State to which such minerals belong.
However, Benguet and Atok have exclusive rights to the property in
question by virtue of their respective mining claims which they validly
acquired before the Constitution of 1935 prohibited the alienation of all
lands of the public domain except agricultural lands, subject to vested rights
existing at the time of its adoption.
Reclaimed Lands
(14) Dumo v. Republic
Doctrine: the classification of the land sought to be registered, and the duration and
nature of the possession and occupation
have always been, and will always be the issues in an application for land registration.
Failure of the Republic to oppose the formal offer of evidence of DUmo or raise issue
the RTC will not bar consideration of the issue.
FACTS
Dumo was claiming ownership and seeking registration of parcels of land after
Espinas’ application was denied, there was also a pending dispute on possession .
RTC held that land registration case cannot operate as a bar to the complaint for
recovery of ownership, possession and damages because the decision in the land
registration case was not definitive and conclusive as to ownership. And ultimately
ruled for Espinas’ better right to the land.
CA: Dumo failed to prove land already declared alienable and disposable
Issue: Whether the CA committed a reversible error in ruling that Dumo failed to prove
that the land applied for has already been declared alienable and disposable? NO
Ruling: CA upheld.Dumo has no registrable Title. CENRO or PENRO certifications do
not comply with admissibility of evidence.
Also, there must be express declaration of the State that the land is no longer intended
for public use.
To summarize the discussion and reiterate the guidelines set by this Court in Heirs of
Malabanan v. Republic of the Philippines, we state:
1. If the applicant or his predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of the land sought to be registered
under a bona fide claim of ownership since 12 June 1945 or earlier, the applicant must
prove that the land has been classified by the Executive department as alienable and
disposable land of the public domain. This is covered by Section 14(1) of PD No. 1529
in relation to Section 48(b) of CA No. 141.
While it is not necessary that the land has been alienable and disposable since 12
June 1945 or earlier, the applicant must prove that the President or DENR Secretary
has classified the land as alienable and disposable land of the public domain at any
time before the application was made.
2. If the occupation and possession of the land commenced at any time after 12 June
1945, the applicant may still register the land if he or his predecessors-in-interest have
complied with the requirements of acquisitive prescription under the Civil Code after
the land has been expressly declared as patrimonial property or no longer needed for
public use, public service or the development of national wealth. This is governed by
Section 14(2) of PD No. 1529 in relation to the Civil Code.
Under the Civil Code, acquisitive prescription, whether ordinary or extraordinary,
applies only to private property. Thus, the applicant must prove when the land sought
to be registered was expressly declared as patrimonial property because it is only from
this time that the period for acquisitive prescription would start to run.
Based on the foregoing, we find that the CA committed no reversible error in finding
that Dumo had no registerable title over the land she seeks to register. She failed to
prove her right under either Section 14(1) or Section 14(2) of PD No. 1529. She failed
to prove that the land she seeks to register was alienable and disposable land of the
public domain. She failed to prove her and her predecessors-in-interest's possession
and occupation since 12 June 1945 or earlier. Thus, she has no right under Section
14(1) of PD No. 1529. While she argues that she and her predecessors-in-interest
have been in possession and occupation of the land for 56 years, she failed to prove
that the land has been expressly declared as patrimonial property. Therefore, she also
has no right under Section 14(2) of PD No. 1529.
 (15) Chavez v. PEA – July 9, 2002
Doctrine: The mere reclamation of these areas by the Public Estates Authority
(PEA) does not convert these inalienable natural resources of the State into
alienable or disposable lands of the public domain. There must be a law or
presidential proclamation officially classifying these reclaimed lands as
alienable or disposable and open to disposition or concession
In 1973, the government, through the Commission of Public Highways,
signed a contract with the Construction & Devt Corp. of the PH (CDCP) to
reclaim certain foreshore and offshore areas of Manila Bay, the construction
of Manila-Cavite Coastal Road & Reclamation Project (MCCRRP), which
CDCP obligated itself to carry out in consideration of 50% of the total
reclaimed land. In 1977, Pres. Marcos issued PD 1084 creating the Public
Estates Authority (PEA), and tasked it to reclaim land, develop, and sell
other kinds of lands, and transferred to PEA the reclaimed lands under the
MCCRRP. Pres. Marcos likewise issued a memorandum directing PEA to
amend the contract with CDCP such that all future works in MCCRRP
shall be funded and owned by PEA. In 1988, Pres. Aquino issued a
Special Patent which granted and transferred to PEA the land of
MCCRRP with almost 2m sqm. RD issued TCTs in the name of PEA,
covering 3 islands known as the Freedom Islands with 1.5m sqm. In 1995,
PEA entered into a Joint-Venture Agreement (JVA) with AMARI, a private
corporation to develop the Freedom Islands, additional reclamation of 250
hectares without public bidding, approved by PEA BOD, and Pres. Ramos
through Exec. Sec Ruben Torres. Senate President Maceda delivered a
privilege speech in the Senate and denounced the JVA as the grandmother
of all scams. An investigation took place and Petitioner Frank Chaves, as
TP, filed this Petition for Mandamus with Prayer for WPI and TRO
contending that the govt stands to lose billions of pesos in the sale by PEA
to AMARI as it is a blatant violation of Sec. 3 Art. XII prohibiting the sale of
alienable lands of public domain to private corporations.
Issue: Can AMARI, a private corporation, acquire alienable lands of the
public domain, the reclaimed foreshore and submerged areas of Manila Bay?
NO. The 1987 Constitution prohibits private corporations from acquiring
alienable lands of the public domain. AMARI, being a private corporation, is
barred from such acquisition. The PEA is not an end user agency with
respect to the reclaimed lands under the amended JVA, and PEA may
simply turn around and transfer several hundreds of hectares to a single
private corporation in one transaction.
Moreove r, these reclaimed lands cannot be classified as alienab le or
disposable if the law has reserved them for some public or qua si-public use.
The Amended JVA covers not only the Freedom Islands, but also an
additional 592.15 hectares, which are still submerged and forming part of
Manila Bay. There is no legislative or Presidential act classifying these
submerged areas as alienable or disposable lands of the public domain open
to disposition. These submerged areas are not covered by any patent or
certificate of title. There can be no dispute that these submerged areas form
part of the public domain, and in their present state are inalienable and
outside the commerce of man. Until reclaimed from the sea, these
submerged areas are, under the Constitution, "waters x x x owned by the
State," forming part of the public domain and consequently inalienable. Only
when actually reclaimed from the sea can these submerged areas be
classified as public agricultural lands, which under the Constitution are the only
natural resources that the State may aliena te. Once reclaimed and transformed
into public agricultural land s, the gove rnment may then officially classify
these land s as alienab le or disposable lands ope n to disposition.
Thereafter, the gove rnment may declare these lands no longer needed for
pub lic service. Only then can these reclaimed land s be considered alienab le
or disposable land s of the public domain and within the commerce of man.
Reclaimed foreshore and submerged areas in Manila Bay are
inalienable until classified as alienable.
(16) Chavez v. National Housing Authority
Pres. Aquino issued Memorandum Order (MO) 161, approving and directing
the implementation of the waste management plan in metropo litan manila.
The Metropolitan Manila Commission, was tasked as the lead agency to
implement the plan. Later on, MO 161-A was issued containing the guidelines,
which prescribed the function of 15 various govt agencies, including the
NHA. NHA as ordered to conduct feasibility studies and develop low-cost
housing projects at the Smokey Mountain dumpsite. Pursuant to this,
NHA formulated the Smokey Mountain Devt & Reclamation Project, which
aimed to convert the dumpsite into a habitable housing project, inclusive of
the reclamation of the area across. This was approved by the Pres.
Aquino. When Pres. Ramos assumed presidency, he issued a
Proclamation affirming the project and placing under the administration
of the NHA the parcels of land covered by the project. The project continued
to be constructed until PGMA. Petitioners contend that NHA cannot validly
reclaim foreshore and submerged land because such is vested exclusively
with the PEA and even if they were given authority, they were never given
authority by the DENR. Such land cannot be reclaimed because they are
inalienable public lands beyond the commerce of man.
Do the Presidential Proclamations carry the declaration that said lands are
alienable and disposable? YES
The conveyance implicitly carried with it the declaration that said
lands are alienable and disposable. Otherwise, the NHA cannot effectively
use them in its housing and resettlement project. The requisite law categorizing
reclaimed land as alienable or disposable, RA 6957 as amended by RA
7718 provides ample authority. While RA 6957 as modified by RA 7718
does not expressly declare that the reclaimed lands have become alienable
and disposable lands and opened for disposition, how else can the land
be used as the enabling componen t for the Project if such classification is
not dee med made? Lands belong ing to the govt include foreshore and
submerged lands, which can be reclaimed to undertake hou sing projects,
as provided by RA 7297 . DENR authorization necessary, which is deemed
to have been given in this case, as directly granted by the Pres.
Right of corporations to acquire land
(17) JG Summit vs. CA – January 31, 2005 – p.383 iiiA & v
Doctrine:
a lease to an alien for a reasonable period is valid. So is an option giving an alien
the right to buy real property on condition that he is granted Philippine citizenship.
FACTS
In 1997, National Investment & Devt Corp (NIDC) entered into a JVA with
Kawasaki Heavy Industries Ltd of Kobe, Japan for the construction, operation
and mgt of the Subic Natl Shipyard (SNS), which subsequently became the
PH Shipyard & Engineering Corp (Philseco). Under the JVA, NIDC and
Kawasaki will contribute P330M for the capitalization of Philseco in the
proportion of 60-40 respectively and grants to the parties the right of first
refusal should either of them decide to sell, assign or transfer its interest in
the JVA. In 1986, NIDC transferred all its rights in Philseco to PNB, which
was subsequently transferred to the PH govt. There was also a reorganization
pursuant to Pres. Aquino’s issuances such that the PH govt’s share in
Philseco increased to 97.41% and Kawasaki reduced to 2.59%. The share of
the PH govt was declared to be sold to private entities. Kawasaki negotiated
and agreed that Kawasaki’s right of first refusal under the JVA be
exchanged for the right to top by 5% the highest bid for the shares. During
the bidding, the bidders were given a copy of the JVA, informing them of
the agreement with Kawasaki. Petitioner JG Summit won the bid and later
on expressed its protest on Kawasaki’s right to top the bid by 5%
contending that since PHILSECO is a landholding company, Kawasaki could
e xe rc i se its right of first refusal only up to 40% of the shares of
PHILSECO due to the constitutiona l prohibition on landholding by
corporations with more than 40% foreign-owned equ ity. It further argues that
since Kawasaki already held at least 40% equity in PHILSECO, the right of
first refusal was inutile and as such, could not subsequently be converted
into the right to top.
Is JG Summit correct?
NO. The court upheld the validity of the mutual rights of first refusal under
the JVA between KAWASAKI and NIDC.
 The agreement of co-shareho lders to mutually grant the right of first
refusal to each other, by itself, doe s not constitute a violation of the
provisions of the Constitution limiting land ownership to Filipinos and
Filipino corporations. If the foreign shareholdings of a landholding
corporation exceed s 40%, it is not the foreign stockholders ownership of
the shares which is adve rsely affected but the capac ity of the corporation
to own land that is, the corporation beco mes disqualified to own land . No
law disqualifies a person from purchasing shares in a landholding
corporation even if the latter will exceed the allowed foreign equity, what
the law disqualifies is the corporation from owning land. This is not a case
of transfer of ownership of land, this involves a right of first refusal over
shares of stock, there is a distinction between ownership of shares and the
corporation’s ownership of land as they are separate juridical personalities.
The agreement of co-shareholders to mutually grant this right to each other, by itself,
does not constitute a violation of the provisions of the Constitution limiting land
ownership to Filipinos and Filipino corporations. As PHILYARDS correctly puts it, if
PHILSECO still owns land, the right of first refusal can be validly assigned to a
qualified Filipino entity in order to maintain the 60%-40% ratio. This transfer, by itself,
does not amount to a violation of the Anti-Dummy Laws, absent proof of any fraudulent
intent. The transfer could be made either to a nominee or such other party which the
holder of the right of first refusal feels it can comfortably do business with.
Alternatively, PHILSECO may divest of its landholdings, in which case KAWASAKI, in
exercising its right of first refusal, can exceed 40% of PHILSECO’s equity. In fact, it
can even be said that if the foreign shareholdings of a landholding corporation
exceeds 40%, it is not the foreign stockholders’ ownership of the shares which is
adversely affected but the capacity of the corporation to own land – that is, the
corporation becomes disqualified to own land.
Section 4. The Congress shall, as soon as possible, determine, by law, the specific
limits of forest lands and national parks, marking clearly their boundaries on the
ground. Thereafter, such forest lands and national parks shall be conserved and may
not be increased nor diminished, except by law. The Congress shall provide for such
period as it may determine, measures to prohibit logging in endangered forests and
watershed areas.
Section 5. The State, subject to the provisions of this Constitution and national
development policies and programs, shall protect the rights of indigenous cultural
communities to their ancestral lands to ensure their economic, social, and cultural well-
being.
The Congress may provide for the applicability of customary laws governing property
rights or relations in determining the ownership and extent of ancestral domain.
Ancestral lands
(18) Cruz v. Secretary – December 6, 2000
Doctrine:
The phrase private but community property is merely descriptive of the indigenous
peoples concept of ownership as distinguished from that provided in the Civil Code.
Ancestral domains comprise lands, inland waters, coastal areas, and natural
resources therein and includes ancestral lands, forests, pasture, residential,
agricultural, and other lands individually owned whether alienable or not, hunting
grounds, burial grounds, worship areas, bodies of water, mineral and other natural
resources.
The inclusion of „natural resources‰ in Section 1, Part II, Rule III of the Implementing
Rules goes beyond the parameters of Section 7 (b) of the law and is contrary to
Section 2, Article XII of the 1987 Constitution
The limited rights of „management and use‰ in Section 7 (b) of the IPRA must be
taken to contemplate small-scale utilization of natural resources as distinguished from
large-scale utilization
Section 5 in relation to
Section 3(a) cannot be construed as a source of ownership rights of indigenous people
over the natural resources simply because it recognizes ancestral domains as their
„private but community property. The phrase „private but community property‰ is
merely descriptive of the indigenous peoplesÊ concept of ownership
as distinguished from that provided in the Civil Code.
Petitioners Isagani Cruz and Cesar Europa, as citizens and TPs, assail the
constitutionality of certain provisions of RA 8371 or the Indigenous Peoples
Rights Act of 1997 (IPRA), and its IRRs on the ground that they amount to an
unlawful deprivation of the State’s ownership over lands of the public
domain as well as minerals and other natural resources, in violation of the
regalian doctrine embodied in Section 2, Article XII. Petitioners also
contend that, by providing for an all-encompassing definition of “ancestral
domains” and “ancestral lands” which might even include private lands
found within said areas, Sections 3(a) and 3(b) violate the rights of
private landowners. They also question the provisions of the IPRA
defining the powers and jurisdiction of the NCIP and making customary
law applicable to the settlement of disputes involving ancestral domains
and ancestral lands on the ground that these provisions violate the due
process clause of the Constitution.
OSG: The IPRA is partly unconstitutional on the ground that it grants
ownership over natural resources to indigenous peoples and prays that the
petition be granted in part.
7 voted to dismiss the petition. Justice Kapunan filed an opinion,
which the CJ and Justices Bellosillo, Quisumbing, and Santiago joined,
sustaining the validity of the challenged provisions of RA 8371. 7 other
members of the Court voted to grant the petition. As the votes were equally
divided (7 to 7) and the necessary majority was not obtained, the case
was redeliberated upon . However, after redeliberation, the voting
remained the same. Accordingly, pursuant to Rule 56, Section 7 of the
Rules of Civil Procedure, the petition is DISMISSED.
The opinion defending the constitutionality of said law held the following:
1. Ancestral domain and ancestral lands are not part of the lands of
the public domains. They are private and belong to indigenou s
people. Art. 12(5) commands the state to protect the rights of
indigenous peop le.
2. The right of ownership granted doe s not include natural
resources. The right to negotiate terms and conditions over
natural resources covers only exploration to ensure
environmental protection. It is not a grant of exploration rights.
3. The limited right of management refers to utilization as expressly
allowed in Art. 12 (2).
4. What is given is priority right, not exclusive right. It doe s not
preclude the Sate from entering into co- produc tion, joint
venture, or produc tion sharing agreements with private entities.
Section 6. The use of property bears a social function, and all economic agents
shall contribute to the common good. Individuals and private groups, including
corporations, cooperatives, and similar collective organizations, shall have the
right to own, establish, and operate economic enterprises, subject to the duty of
the State to promote distributive justice and to intervene when the common good
so demands.
Stewardship Concept
Section 7. Save in cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations, or associations qualified to
acquire or hold lands of the public domain.
Rule: Citizenship requirement for acquisition of land is 60%.
 Even a religious corporation.
 Exceptions:
1) Hereditary succession
o Testamentary dispositions.
2) A natural born citizen of the PH who has lost
his Philippine citizenship.
o 5000sqm for urban;
o 3 hectares for rural.
3) Americans that hold valid title to private
lands before July 3, 1974 but as against
private persons only.
 The State has the right to recover through escheat proceedings
or through an action for reversion for fraudulently granted land
to private individuals.
Section 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born
citizen of the Philippines who has lost his Philippine citizenship may be a
transferee of private lands, subject to limitations provided by law.
Aliens and private lands
(19) Ramirez v. Vda. De Ramirez - 111 SCRA 704, 712

Doctrine: constitutional prohibition against aliens owning lands do not apply to
transfer by succession
FACTS
Jose Eugenio Ramirez, a Filipino national, died leaving Petitioner Maria
Luisa Palacios as his administratrix. Palacios submitted a project of partition
pursuant to the will : 1 part shall go to the Widow, respondent Marcelle Vda
de Ramirez, a French who lives in Paris. The other part shall go to his nephews
R Jorge & Roberto Ramirez. Furthermore, 1/3 of the free portion is charged
with the widow’s usufructuary rights and the remaining 2/3 to his companion,
Wanda, an Austrian who lives in Spain. Respondents oppose claiming that
the usufruct over real properties in favor of Wanda is void because it
violates the constitutional prohibition against the acquisition of lands by
aliens.
The will is valid. The constitutional prohibition does not apply to
testamentary dispositions. Usufruct is also valid. Its validity rests on the fact
that “a usufruct, albeit a real right, does not vest title to the land in
usufructuary and it is the vesting of title to the land in favor of aliens which is
proscribed by the Constitution.
(20) Republic v. Court of Appeals - 235 SCRA 567
Doctrine:
A foreign national may apply for registration of title over a parcel of land which he
acquired by purchase while still a citizen of the Philippines from a vendor who
has complied with the requirements for registration under the law.
·Even if private respondents were already Canadian citizens at the time they applied
for registration of the properties in question, said properties as discussed above were
already private lands; consequently, there could be no legal impediment
FACTS
Respondents, Sps. Lapiña, purchased 2 parcels of land in San Pablo from
Cristeta Dazo Belen, were natural- born citizens when they bought the land.
They thereafter registered the land, not as Filipinos anymore, but as Canadian
citizens. Republic opposed the registration on the ground that they were no
longer Filipino citizens and that before the issuance of the TCT, they are not
in the juridical sense the true owner. Thus, they have not acquired propriety
rights over the subject properties before they acquired Canadian citizenship.
ISSUE: Can a foreign national apply for registration of title over a
parcel of land which he acquired by purchase while still a
citizen of the Philippines, from a vendor who has complied with the requirements for
registration under the Public Land Act (CA 141)?
Registration granted
Private respondents were undoubtedly natural-born Filipino citizens at the
time of acquisition and by virtue thereof, acquired vested rights. Also, the
Constitution allows them to register the contested parcels of land, according
to Sections 7 & 8. Land no longer part of public domain as their
predecessors in interest have been in open, continuous and exclusive
possession prior to June 12, 1945 or since 1937. Also, for the purpose of
transfer or acquisition of a parcel of residential land, it is not significant
whether they are no longer Filipino citizens when they purchased the
property, what is important is that they were formerly natural-born citizens.
The Constitution allows natural-born citizens who have lost their Philippine citizenship
to acquire private lands; BP 185 governs the disposition of private lands in favor of
natural-born Filipino citizens who have lost their Philippine citizenship
(21) Cheesman v. Intermediate Appellate Court
Doctrine: Land purchased by a Filipino does not extend to the foreigner spouse,
even if the purchase was made with the latter’s money or by conjugal funds.
FACTS
Petitioner Cheesman (a foreign national) was married to a Filipina. The wife
then bought a house and lot and soon after sold it to a third person.
Petitioner contested the sale because it was made without his consent.
When husband and wife purport to buy land and the husband is alien while the
wife is Filipino, is the property conjugal such that it may not be disposed of
without the consent of the husband?
NO. The sale is valid.
To sustain such a theory would be to permit indirect controversion of the
constitutional prohibition. If the property were to be declared conjugal, this
would accord to the alien husband a not insubstantial interest and right over
land, as he would then have a decisive vote as to its transfer or
disposition. This is a right that the Constitution does not permit him to have.
Land purchased by a Filipino does not extend to the foreigne r spouse, even if
the purchase was made with the latter’s money or by conjuga l funds.
(22) Halili v. Court of Appeals - 287 SCRA 465
Doctrine: A quitclaim on rights over land in favor of an alien is unconstitutional
however a subsequent transfer to a Filipino cures this defect. Since the ban on
aliens was meant to preserve Philippine lands for future generations, which is
achieved upon transfer to a Filipino.
FACTS
Simeon, an American citizen, died leaving real properties in the
Philippines. His forced heirs were his widow, Helen, and his son, David
(both American citizens). Helen executed a deed of quitclaim conveying to
David all her rights, titles, and interests in 6 parcels of land she inherited
from Simeon. Thereafter, David sold disputed lots to Emiliano, a Filipino
citizen. Petitioners, owners of the adjoining lot, questioned the
constitutionality and validity of the 2 conveyances – between Helen and
David and David and Emiliano.
The quitclaim in favor of David violates Art. 12, (7) of the Constitution, which
limits the transfer or conveyance of private lands to those who are qualified to
acquire or hold lands of the public domain. As to the effect of a subsequent
sale by David to a Filipino, jurisprudence is consistent that if land is
invalidly transferred to an alien who subsequently becomes a citizen or
transfers it to a citizen, the flaw in the original transaction is considered
cured and the title of the transferee is rende red valid. The rationale for this
is that the ban on aliens is intended to preserve the nation’s land for
future generations of Filipinos. That aim is achieved by making lawful
the acquisition of real estate by aliens who became Filipino citizens by
naturalization.
Section 9. The Congress may establish an independent economic and
planning agency headed by the President, which shall, after consultations with
the appropriate public agencies, various private sectors, and local government
units, recommend to Congress, and implement continuing integrated and
coordinated programs and policies for national development.
Until the Congress provides otherwise, the National Economic and
Development Authority shall function as the independent planning agency of
the government.
Section 10. The Congress shall, upon recommendation of the economic and
planning agency, when the national interest dictates, reserve to citizens of the
Philippines or to corporations or associations at least sixty per centum of
whose capital is owned by such citizens, or such higher percentage as
Congress may prescribe, certain areas of investments. The Congress shall
enact measures that will encourage the formation and operation of enterprises
whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national
economy and patrimony, the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within
its national jurisdiction and in accordance with its national goals and priorities.
National Economy and Patrimony
(23) Manila Prince Hotel v. GSIS - 267 SCRA 408
Doctrine: National Patrimony is not limited to natural resources but also
properties impressed with public interest, like Manila Prince hotel in this case
which has been a “mute witness” of our countr’s triumphs and failures for over
decades.
FACTS
GSIS pursuant to the privatization program of the Philippine Government under
Proclamation No. 50 decided to sell through public bidding 30% to 51% of the
issued and outstanding shares of respondent MHC which owns the Manila
Hotel. In a close bidding only 2 bidders participated: petitioner Manila
Prince Hotel Corporation, a Filipino corporation, which offered to buy 51% of
the MHC or 15,300,000 shares at P41.58 per share, and Renong Berhad, a
Malaysian firm, with ITT Sheraton as its hotel operator, which bid for the
same number of shares at P44.00 per share or P2.42 more than the bid of
petitioner. Pending the declaration of Renong Berhard as the winning
bidder/strategic partner and the execution of the necessary contracts,
petitioner in a letter to respondent GSIS matched the bid price of P44.00
per share tendered by Renong Berhad. GSIS refused to accept. Hence this
case.
SC: self executing and Manila Hotel forms part of national patrimony
Sec 10(2) of Art. XII is mandatory, positive command which is complete
in itself and w/c needs no further guidelines or implementing laws or rules
for its enforcement. From its very words the provision does not require any
legislation to put it in operation. It is per se judicially enforceable.
When the Constitution speaks of nationa l patrimony, it refers not only to the
natural resources of the Philippines, as the Constitutional could have very well
used the term natural resources, but also the cultural heritage of the Filipinos.
For more than 8 decade s Manila Hotel has bore mute witness to the triumphs
and failures, loves and frustrations of the Filipinos, its existence is impressed
with public interest; its own historicity associated with our strugg le for
sovereignty, independenc e and nationhood. Verily, Manila Hotel has become
part of our national economy and patrimony. For sure, 51% of the equity of the
MHC come within the purview of the constitutional shelter for it comprises the
majority and controlling stock, so that anyone who acquires or owns the
51% will have actual control and management of the hotel. In this instance,
51% of the MHC cannot be dissociated from the hotel and the land on
which the hotel edifice stands. Consequently, we cannot sustain respondents
claim that the Filipino First Policy provision is not applicable since what is
being sold is only 51% of the outstanding shares of the corporation, not the
Hotel building nor the land upon which the building stands.
Section 11. No franchise, certificate, or any other form of authorization for the
operation of a public utility shall be granted except to citizens of the Philippines or to
corporations or associations 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. The State shall encourage equity participation in public
utilities by the general public. The participation of foreign investors in the governing
body of any public utility enterprise shall be limited to their proportionate share in its
capital, and all the executive and managing officers of such corporation or association
must be citizens of the Philippines.
Public utilities
 60% Filipino-owned
(24) Albano v. Reyes - 175 SCRA 264
Doctrine: Not all public utility services need legislative franchise, there are any laws
granting specified agencies of the Executive the power to issue such authorization
for certain classes of public utilities.
FACTS
A resolution was passed directing the preparation of bidding for the devt and mgt
of the Manila International Container Terminal (MICT) at the port of Manila. 7
companies submitted their bids and after their evaluation, the Philippine
Ports Authority (PPA) granted the contract to operate the to ICTSI, for
having offered the best proposal. Rep. Rodolfo Albano, as citizen, TP, and
member of the HOR, assailed the award of the MICT contract to ICTSI on
the ground that since MICT is a public utility, it needs legislative franchise
before it can legally operate as a public utility pursuant to Sec. 11.
Is Petitioner’s contention correct?
NO. PD 857 empowers the PPA to provide services within the port districts,
on its own or by contract, pursuant to EO 30, mandating it to manage and
operate the Manila Intl Port Complex. Even if it is a public utility, its operation
would not necessarily call for a franchise from Congress. Such is not
required before each and every public utility may operate. Thus, the law
has granted certain administrative agencies the power to grant licenses or
authorize operation of certain public utilities. That in Sec. 11, the issuance
of franchise or other forms of authorization for the operation of a public
utility shall be subject to amendment, alteration, or repeal by Congress
doe s not mean that only Congress has the power to grant such
authorization, there are any laws granting specified agenc ies of the Executive
the power to issue such authorization for certain classes of public utilities. By
virtue of the power granted to PPA by PD 857 , it chose to contract out the
ope ration to a private corporation. Also, since the contract was approved by the
Pres., it enjoys the legal presumption of validity and regularity of official action.
There is no evidence showing constitutional infirmity of such action.
(25) Associated Communications v. NTC
Doctrine: Congressional Franchise is a condition sine qua non in the operation
of a radio and television broadcasting system.
FACTS
Act 3846, entitled “An Act Providing for the Regu lation of Radio Stations
and Rad io Communications was enacted. It says that no person shall
operate a radio station without having first obtained a franchise from the
Congress. Pursuant to this, Villaverde was granted a franchise.
Such was transferred to Associated Communications. In 1974, PD 576-
A was enac ted terminating all franch ises granted on Dec. 31, 1981 . In
1979, EO No. 546 was issued integrating the Board of Communications
and the Telecommunications Control Bureau into the NTC. According to EO
546, NTC was given the power to issue certificate of public convenience for
the operation of radio and television system. Associated communications
continue d its operation under the permits granted by NTC.
Petitioner was contending that the subsequent PD does away with the
requirement of franchise because of the wording of Section 1: Were it the
intention of the law to do away with the requirement of a franchise after
said date, then it would have expressly said so.
Due to the confusion as to whether NTC could issue permits, DOJ
rendered an opinion saying that the vesting of the power to authorize the
operation of any radio or television station upon the NTC under Section 6
of PD No. 576-A does not necessarily imply the abrogation of the requirement
of obtaining a franchise under Sec. 1 of Act 3846, as amended. It further
added that the franchising authority was retained by the then incumbent
President as repository of legislative power under Martial Law. EO 546
however, modified the franchising agreement insofar as issue authorization
and permits to operate radio and television broadcasting system. NTC then
issued a memorandum of understanding that NTC shall continue to issue and
grant permits or authorizations to operate radio and television broadcast
stations but the same shall only be temporary permits or authorization to
operate shall be valid for 2 years within which the permittee shall be
required to file an application for legislative franchise with Congress.
Associated communication applied and was granted a temporary permit by
the NTC to operate Channel 25. It also applied for a congressional franchise
but the same was not deliberated for failure to submit documents. For failure
to get a franchise, NTC refused to issue permit to Ch. 25.
Is the congressiona l franchise a condition sine qua non in the ope ration of
a radio and television broadca sting system?
YES. The appellate court correctly ruled that a congressional franchise is
necessary for petitioner to operate television Channel 25. Even assuming
that Act 3846 applies only to radio stations and not to television stations
as petitioner adamantly insists, the subsequent PD 576-A clearly shows in
Sec. 1 that a franchise is required to operate radio as well as television
stations. As pointed out in DOJ Opinion No. 98, there is nothing in PD
576 -A that revea ls any intention to do away with the requirement of a
franch ise for the operation of radio and television stations. Section 6 of
PD 576-A merely iden tifies the regu latory agencies from whom
authorizations, in addition to the required cong ressional franch ise, must be
secured after December 31, 1981.
Thus, after Dec 31, 1981, a franch ise is still necessary to operate radio
and television stations. Were it the intention of the law to do away with
the requ irement of a franchise after said date, then it would have
expressly said so. A franchise is distinguished from a CPC in that the
former is a grant or privilege from the sovereign power, while the latter is a
form of regulation through the administrative agencies.
Our ruling in Albano that a congressional franchise is not required before
“each and every public utility may operate” should be viewed in its proper
light. Where there is a law such as PD 576-A which requires a franch ise for
the operation of radio and television stations, that law must be followed
until subsequen tly repea led. However, there is nothing in the subsequent
EO 546 which evinces an intent to dispense with the franchise
requirement. In contradistinction with the case at bar, the law applicable in
Albano did not require a franchise for the Philippine Ports Authority to take
over, manage and operate the Manila International Port Complex and
undertake the providing of cargo handling and port related services
 thereat. Similarly, in PAL v. Civil Aeronautics Board, et al., we ruled that a
legislative franchise is not necessary for the operation of domestic air transport
because “there is nothing in the law nor in the Constitution which indicates
that a legislative franchise is an indispensable requirement for an entity to
operate as a domestic air transport operator.”
(26) Tatad v. Garcia, Jr. - 243 SCRA 436
Doctrine: there is a clear distinction between the operation of a public utility and the
ownership of the facilities and equipment used to serve the public; and Right to
operate a public utility may exist
independently and separately from the ownership of the facilities
thereof.
FACTS
Build Operate Transfer Agreement was being questioned for unconstitutionality
 DOTC planned to construct a light railway transit along EDSA.
o The plan referred to as EDSA Light Rail Transit III (EDSA LRT III)
was intended to provide a mass transit system along EDSA and
alleviate the congestion and growing transportation problem in the
metropolis.
 It was approved that construction of the EDSA LRT III was to be on a Build-
Operate-Transfer (BOT) Basis.
 The project was awarded to EDSA LRT Consortium.
o EDSA LRT Consortium was composed of 10 foreign and domestic
corporation.
o It was a foreign corporation having been incorporated and existing
under the laws of Hong Kong.
 DOTC and EDSA LRT Consortium entered into an agreement where it was
stipulated that:
o EDSA LRT Consortium shall undertake and finance the entire
project required for a complete operational light rail transit system.
o Upon full or partial completion and viability thereof, EDSA LRT
Consortium shall deliver the use and possession of the completed
portion to the DOTC which shall operate the same.
o DOTC shall pay it rentals on a monthly basis through an Irrevocable
Letter of Credit.
o EDSA LRT Consortium’s capital shall be recovered from the rentals
to be paid by the DOTC which, in turn, shall come from the earnings
of the EDSA LRT III.
 Petitioners are now questioning the constitutionality of the agreement arguing
that that EDSA LRT III is a public utility and granting its ownership to EDSA LRT
Consortium (a foreign corporation) violates the constitution.
o That the ownership and operation of a public utility is limited by the
Constitution to Filipino citizens and domestic corporations.
Issue: Whether or not the BOT agreement between the DOTC and EDSA LRT
Consortium is constitutional?
Ruling: Constitutional.
 There is a distinction between the operation of a public utility and the ownership
of facilities and equipment used to serve the public.
o Ownership is defined as a relation in law by virtue of which a thing
pertaining to one person is completely subjected to his will in
everything not prohibited by law or the concurrence with the rights
of another.
o The exercise of the rights encompassed in ownership is limited by
law so that a property cannot be operated and used to serve the
public as a public utility unless the operator has a franchise.
 The operation of a rail system as a public utility
includes the transportation of passengers from one
point to another point, their loading and unloading at
designated places and the movement of the trains at
prescheduled times.
o The right to operate a public utility may exist independently and
separately from the ownership of the facilities thereof.
 One can own said facilities without operating them as a
public utility, or conversely, one may operate a public
utility without owning the facilities used to serve the
public.
 The devotion of property to serve the public may be
done by the owner or by the person in control thereof
who may not necessarily be the owner thereof.
 It is the operation of public utility that the Constitution limits to Filipino citizens
and domestic corporations.
 Sec. 11 (Art. XII): No franchise, certificate or any other
form of authorization for the operation of a public utility
shall be granted except to citizens of the Philippines or
to corporations or associations 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 xxx.
o The Constitution requires a franchise for the operation of a public
utility.
o However, it does not require a franchise before the one can own the
facilities needed to operate a public utility so long as it does not
operate them to serve the public.
 In this case, what the EDSA LRT Consortium owns are the rail tracks, rolling
stocks like the coaches, rail stations, terminals and the power plant, not a public
utility.
o While a franchise is needed to operate these facilities to serve the
public, they do not by themselves constitute a public utility.
o What constitutes a public utility is not their ownership but their use
to serve the public.
 After construction of EDSA LRT III, possession will be transferred to DOTC for
its operation.
Definition of capital
(27) Gamboa vs. Teves - G.R. No. 176579, October 9, 2012-
Doctrine: The term capital‰ in Section 11, Article XII of the Constitution refers only to
shares of stock entitled to vote in the election of directors, and thus in the present
case only to common shares, and not to the total outstanding capital stock comprising
both common and non-voting preferred shares
FACTS
 This case involves several motions for reconsideration of the 28 June
2011 Decision on the definition of the term "capital" in Section 11, Article
XII of the Constitution.
 SC opted to resolve this case for the guidance of the public and all
concerned parties.
ISSUE: WoN there was a redefinition of Capital - NO
Ruling: no redefinition of the term "capital." It has been more than 75 years since the
1935 Constitution, the Court has not interpreted or defined the term "capital" found in
various economic provisions of the 1935, 1973 and 1987 Constitutions. There has
never been a judicial precedent interpreting the term "capital" in the 1935, 1973 and
1987 Constitutions, until now.
 Hence, it is patently wrong and utterly baseless to claim that the Court in
defining the term "capital" in its 28 June 2011 Decision modified, reversed,
or set aside the purported long-standing definition of the term "capital,"
which supposedly refers to the total outstanding shares of stock, whether
voting or non-voting.
 The opinions of the SEC, as well as of the Department of Justice (DOJ),
on the definition of the term "capital" as referring to both voting and non-
voting shares (combined total of common and preferred shares) are, in the
first place, conflicting and inconsistent. There is no basis whatsoever to
the claim that the SEC and the DOJ have consistently and uniformly
adopted a definition of the term "capital" contrary to the definition that this
Court adopted in its 28 June 2011 Decision.
 Likewise, the opinions of the SEC en banc, as well as of the DOJ,
interpreting the law are neither conclusive nor controlling and thus, do not
bind the Court. It is hornbook doctrine that any interpretation of the law
that administrative or quasi-judicial agencies make is only preliminary,
never conclusive on the Court. The power to make a final interpretation of
the law, in this case the term "capital" in Section 11, Article XII of the 1987
Constitution, lies with this Court, not with any other government entity.
Section 12. The State shall promote the preferential use of Filipino labor, domestic
materials and locally produced goods, and adopt measures that help make them
competitive.
Filipino First Policy
(28) Tañada v. Angara - 272 SCRA 18
Donctrine: The ratification of the concurrence with WTO was upheld as
constitutional and not violative of Section 12. Constitution should be read and
understood in relation to Secs 1 and 13, Art. XII, which require the pursuit of a
trade policy “that serves the general welfare and utilizes all forms and
arrangements of exchange on the basis of equality and reciprocity.” The court
futher held that there are enough balancing provisions in the constitution to allow
Senate to make such ratification.
The Senate ratified the Philippines’ concurrence with the WTO. However,
this necessarily included provisions, which require the Philippines to place
nationa ls and produc ts of member-coun tries on the same footing as
Filipinos and local products. It is now contended that this is violates Sec.
19, Art. II (development of self-reliant and independent national economy),
and Secs 19 and 12, Art. XII of the Constitution.
Does the Constitution prohibit Philippine participation in worldwide trade
liberalization and economic globalization? Does it prescribe Philippine
integration into a global economy that is liberalized, deregulated and
privatized?
The ratification of the concurrence with WTO is Constitutional. These sections
of the Constitution should be read and understood in relation to Secs 1 and 13,
Art. XII, which require the pursuit of a trade policy “that serves the general
welfare and utilizes all forms and arrangements of exchange on the basis of
equality and reciprocity.” Here, the real issue is whether there are enough
balancing provisions in the Constitution to allow the Senate to make such a
ratification. This is satisfied by Secs 1 and 13 of Art XII. In other words, the
Senate may play around with a mandatory provision through a balancing of
values. Furthermore, the constitutional policy of a “self- reliant and
independent national economy” does not necessarily rule out the entry of
foreign investments, goods and services. It contemplates neither “economic
seclusion” nor “mendicancy in the international community.” The section merely
provides a bias in favor of Filipino labor, materials, and locally-produced goods.
Section 13. The State shall pursue a trade policy that serves the general welfare and
utilizes all forms and arrangements of exchange on the basis of equality and
reciprocity.
Section 14. The sustained development of a reservoir of national talents consisting of
Filipino scientists, entrepreneurs, professionals, managers, high-level technical
manpower and skilled workers and craftsmen in all fields shall be promoted by the
State. The State shall encourage appropriate technology and regulate its transfer for
the national benefit. The practice of all professions in the Philippines shall be limited to
Filipino citizens, save in cases prescribed by law.
Section 15. The Congress shall create an agency to promote the viability and growth
of cooperatives as instruments for social justice and economic development.
Section 16. The Congress shall not, except by general law, provide for the formation,
organization, or regulation of private corporations. Government-owned or controlled
corporations may be created or established by special charters in the interest of the
common good and subject to the test of economic viability.
Formation of private corporations
(29) National Development Co. v. PH Veterans Bank
Doctrine: Struck down PD 1717 as unconstitutional as it effectively creates a new
and totally private corporation and is an unlawful exercise of police power.
The Respondent PH Veterans Bank granted a loan to Agrix group of
companies, a private corporation, secured by a real estate mortgage on 3
parcels of land. Later on, Agrix went bankrupt. Later on, PD 1717 was
enacted by the President to rehabilitate Agrix, and created New Agrix. Then,
R bank filed a claim for the payments of its loan credit. Agrix and P NDC filed
a petition with the RTC for the cancellation of the mortgage, pursuant to PD
1717, which declared that all mortgages of Agrix are extinguished.
Can the president enact a decree, which effectively creates a new and
totally private corporation?
NO, PD 1717 is unconstitutional and is an unlawful exercise of police
power.
New Agrix was created by a special decree notwithstanding Sec. 16 (then
Sec 4) that Congress shall not, except by general law, form organize or
regulate private corporations unless owned or controlled by the govt. or any
SAI thereof. This new corporation is neither owned nor controlled by the
govt. NDC was merely required to extend a loan to New Agrix of not more
than 10M and pending payment thereof, would undertake management of
the New Agrix but with the obligation of making periodic reports to the
BOD of New Agrix. After payment of the loan, it can manage on its own.
Therefore, it is entirely private owned and thus, should have been organized
under the Corporation Law in accordance with Sec. 16.
The extinction of mortgage of legitimate creditors of Agrix constitutes taking
without due process. Moreover, the new corporation, being neither owned
nor controlled by the Government, should have been created only by general
and not special law. And insofar as the decree also interferes with purely
private agreements without any demonstrated connection with the public
interest, there is likewise an impairment of the obligation of the contract.
(30) Liban vs. Gordon - G.R. No. 175352, January 18, 2011
Doctrine: PNRC was declared not to be a government office. PNRC was created
through a special charter, however, the elements of gov’t ownership and
control (e.g. capital assets and operating funds from gov’t) are clearly
lacking in the PNRC. It therefore cannot be considered a GOCC. In
creating PNRC as a corporate entity, Congress was in fact creating a
private corporation, which is not exempt from constitutional prohibition
(Sec. 16 above) even as a non- profit/charitable corporation.
Petitioners Liban, et al., who were officers of the BOD of the Quezon City Red
Cross Chapter, filed with the SC a “Petition to Declare Richard J. Gordon as
Having Forfeited His Seat in the Senate” against respondent Gordon, who was
elected Chairman of the Philippine National Red Cross (PNRC) BOD during his
incumbency as Senator. Formerly, in its Decision dated July 15, 2009, the
Court, voting 7-5, held that the office of the PNRC Chairman is NOT a
gove rnment office or an office in a GOCC for purposes of the prohibition in
Sec. 13, Art. VI of the 1987 Constitution. The PNRC Chairman is elected by
the PNRC Board of Governors; he is not appointed by the President or by
any subordinate government official. Moreover, the PNRC is NOT a GOCC
because it is a privately-owned, privately-funded, and privately-run charitable
organization and because it is controlled by a Board of Governors 4/5 of
which are private sector individuals. Therefore, Gordon did not forfeit his
legislative seat when he was elected as PNRC Chairman during his
incumbency as Senator. The Court however held that the PNRC Charter, R.A.
95, as amended by PD 1264 and 1643, is void insofar as it creates the PNRC as
a private corporation since Sec. 7, Art. XIV of the 1935 Constitution provides
that the Congress shall not create private corporations by special law. The
Court thus directed the PNRC to incorporate under the Corporation Code and
register with the SEC if it wants to be a private corporation.
Is the PNRC Charter violative of the Constitutional Proscription against the
Creation of Private Corporations by Special Law?
YES. 1935 (Sec. 7 was in force when PNRC was created by special character
on March 22, 1947 ), 1973 & 1987 (Sec. 16) Constitutions provide that: The
Cong ress shall not, except by general law, provide for the formation,
organ ization, or regu lation of private corporations. GOCC s may be
created/established by special charters in the interest of the common good and
subject to the test of economic viability.
PNRC was created through a special charter, however, the elements of
gov’t ownership and control (e.g. capital assets and operating funds from
gov’t) are clearly lacking in the PNRC. It therefore cannot be considered
a GOCC. In creating PNRC as a corporate entity, Congress was in fact
creating a private corporation, which is not exempt from constitutional
prohibition (Sec. 16 above) even as a non- profit/charitable corporation.
PNRC Charter insofar as it creates the PNRC as a private corporation and
grants it corporate powers is void for being unconstitutional  Secs. 1-13 are
void. Other provisions remain valid as they can be considered as a
recognition by the State that PNRC is the local National Society of the
International Red Cross and Red Crescent Movement and thus entitled to the
benefits, exemptions and privileges set forth in the PNRC Charter. They also
implement the Phil. Government’s treaty obligations based on the Geneva
Conventions.
Judgment: Office of the PNRC Chairman declared not a government office.
Section 17. In times of national emergency, when the public interest so requires, the
State may, during the emergency and under reasonable terms prescribed by it,
temporarily take over or direct the operation of any privately-owned public utility or
business affected with public interest.
Temporary Take-Over
(31) David v. Arroyo – 489 SCRA 160
Doctrine: PP1017 was declared unconstitutional insofar as its provisions allowed
taking over of private businesses impressed with public interest which is a by
empowering GMA to “PROMULGATE DECREES” which was actually legislative
powers. Section 17 referred to Congress, not the President.
FACTS
Prior to Feb. 20, 2006, the government found out that “political opposition
have conspired with authoritarians of the extreme Left represented by the
NDF-CPP-NPA and the extreme Right, represented by military adventurists
the historical enemies of the democratic Philippine State.” Aside from this,
conspirators have repeatedly tried to bring down the President and the
claims of these elements have been recklessly magnified by certain
segments of the national media. Because of this, President Arroyo
promulgated PP 1017, commanding the AFP to maintain law and order
throughout the Philippines, prevent or suppress all forms of lawless violence
as well as any act of insurrection or rebellion and to enforce obedience to
all the laws and to all decrees, orders and regulations promulgated by me
personally or upon my direction; and as provided in Sec. 17, Art. 12 of
the Constitution do hereby declare a State of National Emergency.
Because of this, rallies were prohibited and certain people (Randy
David, Crispin Beltran, members of Anakpawis and KMU) were arrested.
Also, the Daily Tribune, Malaya and Abante were raided. The raids were
mean t to show a strong presence to tell media outlets not to conn ive or do
anything that would help the rebe ls in bringing down the government. The
PNP warned that it would take over any media organization that would not
follow standards set by the government during the state of national emergency.
Is the Proclamation valid as regards any takeover that would be implemented
based on its provisions?
NO. Under the Proclamation, President Arroyo, during the state of national
emergency under PP 1017, can call the military not only to enforce
obedience "to all the laws and to all decrees " but also to act pursuant
to the provision of Section 17, Article XII. A distinction must be drawn
between the President’s authority to declare "a state of national emergency"
and to exercise emergency powers. The exercise of emergency powers, such
as the taking over of privately owned public utility or business affected with
public interest requires a delegation from Congress. Sec. 17, Art. XII must be
understood as an aspect of the emergency powers clause. The taking over of
private business affected with pub lic interest is just ano ther facet of the
emergency powers generally reposed upon Congress. Thus, Sec. 17 refers
to Congress, not the President. Whether or not the President may exercise
such power is dependent on whether Congress may delegate it to him
pursuant to a law prescribing the reasonable terms. Thus, such Proclamation
does not authorize Arroyo during the emergency to temporarily take over or
direct the operation of any privately owned public utility or business affected
with public interest without authority from Congress.
(32) Agan v. PIATCO – January 21, 2004
Doctrine:
SC struck down contracts with PIATCO as it made a mockery of the bidding
process and offends public policy. the contracts were
substantially amended after their award to the successful bidder on terms more
beneficial to PIATCO and prejudicial
to public interest. Provisions pertaining to debt and liability management were
severely against the State’s interests. (PH assumes liability, and takes over if
PIATCO defaults)
FACTS
DOTC Secretary Arturo Enrile, and PIATCO signed a “Concession
Agreement for the BOT Arrangement of the NAIA III”. After, this agreement
was superseded by the Amended and Restated Concession Agreement (ARCA)
containing certain revisions and modifications from the original contract. In its
ARCA contract, PIATCO wanted the government to pay “reasonable cost for
the use of the Terminal and/or Terminal Complex.” This clearly obligates the
government in the exercise of its police power to compensate PIATCO.
The question now is whether PIATCO can stipulate this in its contract without
violating the Constitution.
NO. PIATCO cannot, by mere contractual stipulation, contravene Sec. 17
and obligate the government to pay in this manner. The Constitutional
provision envisions a situation wherein the exigencies of the times
necessitate the government to “temporarily take over or direct the operation
of any privately owned public utility or business affected with public interest.”
It is the welfare and interest of the public, which is of paramount consideration in
determining whether or not to temporarily take over a business.
The temporary takeover by the government extends only to the operation
of the business and not to the ownership thereof. As such, government is
not required to compensate the private entity/owner of the said business as
there is no transfer of ownership, whether permanent or temporary. The
private entity-owner affected by the temporary takeover cannot claim just
compensation for the use of said business and its properties, as the
temporary takeover by the government is in exercise of police power and not the
power of eminent domain.
Note (Bernas): Now that the state has decided to take over the operation of
the airport facility permanently, just compensation is due.
Section 18. The State may, in the interest of national welfare or defense, establish and
operate vital industries and, upon payment of just compensation, transfer to public
ownership utilities and other private enterprises to be operated by the Government.
Telephone interconnections
(33) Republic v. PLDT - 26 SCRA 620
Doctrine:
PLDT cannot be coerced to enter into any contract as such would be violative of
the freedom to stipulate and enter into contracts as protected by law. However,
recourse can be had by the Government in its exercise of eminent domain,
wherein it can compel PLDT to require interconnection of the government lines
with its own lines, public interest, as the needs of the government may require,
as long as just compensation is given to PLDT for such services and
accommodation.
FACTS
PLDT was already leasing to the Bureau of Telecommunications
several of its trunk lines in order to accommodate the Government’s
increasing requirements and use of telephone services. The Republic,
through the Bureau of Telecommunications entered into an agreement with
RCA Communications for a joint overseas telephone service whereby the
Bureau would convey radio telephone overseas calls received by RCA’s
station to and from local residents. Subsequent to this agreement, PLDT
complained against the Bureau for violation of the previous accommodation
agreement it had with PLDT, alleging that the Bureau’s using the rented trunk
lines not only for government use, but also for providing such services to the
public and to private parties. As such, PLDT gave notice to the Bureau that
it will cut off such trunk line services on the midnight of April 12 1958 if
such violations would not be stopped. Receiving no reply, PLDT then cut
off its services at the said date, thereby isolating the country from the rest
of the world, with the exception of the US. Negotiations failed so the Bureau
filed an action in court to compel PLDT to enter into a contract wherein the
latter would allow the Bureau to use its telephone facilities throughout the
country under such terms and conditions that the court might determine to be
reasonable. The trial court held that it cannot compel PLDT to enter into the
said contract, but that the use of the Bureau of several trunklines of PLDT
must be allowed to continue for their use was public in nature.
Can the Bureau has the right to compel PLDT to allow it to use the latter’s
trunklines and facilities? Y E S
YES. PLDT cannot be compelled to enter into any contract as such would
be violative of the freedom to stipulate and enter into contracts as protected
by law. However, recourse can be had by the Government in its exercise of
eminent domain, wherein it can compel PLDT to require interconnection of the
government lines with its own lines, as the needs of the government may
require, as long as just compensation is given to PLDT for such services
and accommodation.
There is great public need for such services and for such interconnection
of lines between the government system and that of PLDT. The
condemnation in this case would be proper, as long as just compensation
would be paid by the Government to PLDT for the use of the latter’s trunklines
and for the burden of such usage. Thus, a government subsidy may exercise
the sovereign power of eminent domain given that the purpose of such
corporation is for public interest and welfare.
Section 19. The State shall regulate or prohibit monopolies when the public interest so
requires. No combinations in restraint of trade or unfair competition shall be allowed.
Monopoly
 Privilege of peculiar advantage vested in 1 or more persons or
companies consisting in the exclusive right to carry on a business
or control the sale of a particular commodity – not per se
prohibited but subject to higher level of State regulation because
subject to abuses
(34) Tatad v. Secretary of Energy - 281 SCRA 330
Doctrine:
Court holds that Section 5(b) providing for tariff differential is germane to the subject of
R.A. No. 8180 which is the deregulation of the downstream oil industry. HOWEVER,
that the whole law must be struck down as a partial unconstitutionality of it would result
to favoring the big 3 oil players.
A monopoly is a privilege or peculiar advantage vested in one or more persons or
companies, consisting in the exclusive right or power to carry on a particular business
or trade, manufacture a particular article, or control the sale or the whole supply of a
particular commodity. It is a form of market structure in which one or only a few firms
dominate the total sales of a product or service.
FACTS
Consolidated petitions questioning the validity of certain provisions of RA 8180,
deregulating the downstream oil industry providing for 4% tariff differential
between crude and refined oil, 10% minimum inventory requirement and
prohibition on predatory pricing.
Previous ruling of the court: Entire law is unconstitutional.
The 4% tariff differential on crude oil and refined petroleum importation gives a
20-centavo per liter advantage to the 3 big oil companies over the new
players, which would serve as a protective shield for the big oil companies.
Its inevitable result is to exclude fair and effective competition and to
enhance the monopolists' ability to tamper with the mechanism of a free
market. This consideration is basic in anti-trust suits and cannot be eroded by
belaboring the inapplicable principle in taxation that different things can be
taxed differently. The 10% minimum requ irement is likewise uncon stitutiona l
as it entails high costs to meet the inventory requ irement and inhibits their
ope ration. As to predatory pricing, unconstitutional as in light of its loose
characterization, and its anti-competitive provisions, its cumulative effect would
be to stop the small oil players but not the big oil players from engaging in
predatory pricing. In all, these 3 provisions are anti-competition, contrary to
Sec. 19. Hence, this petition. Petitioner Garcia prays that only provisions of
RA 8180 on 4% tariff differential between crude and refined oil, predatory
pricing, and minimum inventory be declared unconstitutional. Respondents,
on the other hand, contend that these do not contravene Sec. 19 but would
even encourage new refineries.
This ruling: Petition dismissed. Entire law still unconstitutional.
The declaration of unconstitutionality of these 3 provisions would result in the
unconstitutionality of the entire law for they are the ones intended to carry out
the policy of such law. If 4% was struck down, it will revive the 10% tariff
differential, which will give a bigger advantage to the 3 big oil companies. To
decree the partial unconstitutionality of RA 8180 will bring about an absurdity — a
fully deregulated downstream oil industry where government is impotent to
regulate run away prices, where the oil oligopolists can engage in
cartelization without competition, where prospective players cannot come in,
and where new players will close shop. The court did not condemn the
economic policy of deregulation as unconstitutional, it merely held that as
crafted, it runs counter to the constitutional provision calling for fair
competition. Thus, there is no impediment in re- enacting RA 8180 minus its
provisions which are anti-competition. The Court is powerless to prevent this
return just as it is powerless to repeal the 10% tariff differential of the Tariff Code.
It is Congress that can give all these remedies. Even before this decision, bills
amending the offensive provisions of RA 8180 have already been filed in
Congress. The CE himself has urged the immediate passage of a new and better
deregulation law. As to the contention that it drives away foreign investors, the
Court held that there is need to attract foreign investment but not at any cost.
We cannot trade-in the Constitution for foreign investment. The desirability of
competition is the reason for prohibition.
(35) Eastern Assurance v. LTFRB – October 7, 2003
Doctrine: The State doesn’t prohibit monopolies outright, but it does have the
right to regulate them when public interest requires. The state of the issuance of
insurance policies to PUV operators requires government intervention
FACTS
As a result of the investigation of the LTRFB, wherein it discovered that the
accident insurance coverage of PUVs was only for P50,000 irrespective of the
size of the vehicle and of the number of passengers involved, the LTFRB
issued Memorandum Circular No. 99-011, wherein it fixed the insurance
coverage of the PUVs to P50,000 per passenger. Upon numerous complaints
in the implementation of the said memorandum, the LTRFB subsequently made
and implemented the “Two Group System” and the “Blacklist System”,
which issued guidelines in the implementation of the provisions of the
said memorandum concerning the registration of PUVs and the insurance
companies that’ll provide for the insurance policies to the PUV operators,
including the accreditation of PAMI and PAIC II as the two group s allowed to
issue insurance policies to PUVs and the blacklisting of certain insurance
companies that would not be allowed to participate in the selling of
insurance to PUVS. To such blacklisted companies Eastern Assurance was
included, thus compelling it to file for petitions for certiorari and prohibition in
court, claiming that Memorandum Circular No. 2001-001 and the
implementing Circulars had deprived it of its right to engage in the passenger
accident insurance business.
ISSUE: Does the memorandum violate the constitutional prohibitions against
monopolies, restraint in trade and unfair competition?
NO. The State doesn’t prohibit monopolies outright, but it does have the right
to regulate them when public interest requires. The state of the issuance of
insurance policies to PUV operators requires government intervention.
Intense competition has lead to insurance companies engaging in predatory
pricing, leading to the sale of insurance policies at up to 60-80% discounts
off the market rate. This leads to a huge disparity between the premiums
paid and the coverage for the insurance. Also, different people and
operators are issued policies with the same numbers. As such, claims
under these policies are delayed, and collection becomes a tedious and
time-consuming process. LTFRB found that in order to protect the interests
of the riding public and to resolve problems involving the passenger
insurance coverage of PUVs, it had to issue such memo and in
authorizing and regulating the 2 insurance monopolies, the LTFRB acted
within its prerogatives in promoting public interest and protecting the riding
public. The two groups are open to all insurance companies
including petitioner. There is no discrimination against any legitimate
insurer. As such, the public is given protection without unfair competition or
undue restraint of trade.
Section 20. The Congress shall establish an independent central monetary authority,
the members of whose governing board must be natural-born Filipino citizens, of
known probity, integrity, and patriotism, the majority of whom shall come from the
private sector. They shall also be subject to such other qualifications and disabilities as
may be prescribed by law. The authority shall provide policy direction in the areas of
money, banking, and credit. It shall have supervision over the operations of banks and
exercise such regulatory powers as may be provided by law over the operations of
finance companies and other institutions performing similar functions.
Until the Congress otherwise provides, the Central Bank of the Philippines operating
under existing laws, shall function as the central monetary authority.
Section 21. Foreign loans may only be incurred in accordance with law and the
regulation of the monetary authority. Information on foreign loans obtained or
guaranteed by the Government shall be made available to the public.
Section 22. Acts which circumvent or negate any of the provisions of this Article shall
be considered inimical to the national interest and subject to criminal and civil
sanctions, as may be provided by law.
ARTICLE XVI
GENERAL PROVISIONS
Section 1. The flag of the Philippines shall be red, white, and blue, with a sun and
three stars, as consecrated and honored by the people and recognized by law.
Section 2. The Congress may, by law, adopt a new name for the country, a national
anthem, or a national seal, which shall all be truly reflective and symbolic of the ideals,
history, and traditions of the people. Such law shall take effect only upon its ratification
by the people in a national referendum.
Section 3. The State may not be sued without its consent.
State immunity from suit
(36) Baer v. Tizon - 57 SCRA 1
Doctrine: A foreign government acting through its naval commanding officer is
immune from suit relative to the performance of an important public Junction of any
government, the defense and security of its naval base in the Philippines granted
under a treaty.
Gener filed an action to enjoin the commander of the US naval base in
Olongapo from stopping his operations. The base commander argued that he
performed the acts complained of in an official capacity and the action was in
effect a suit against the US without its consent.
ISSUE: Is the suit against the base commander a suit against the US that
therefore needs its consent?
YES. What was sought by Gener amounted to an interference with the
performance of the duties of the base commander in the base area in
accordance with his powers under the Philippine-American Military Bases
Agreement. Prosecution of a sovereign for doing an act pertaining directly
to the defense of the State as a public function of any government is likewise
an action against the State without its consent.
(37) Municipality of San Fernando v. Judge Firme
“Municipal Dump Truck Diver”
Doctrine: the municipality cannot be held liable for the torts committed by its regular
employee, who was then engaged in the discharge of governmental functions.
FACTS
A dump truck of the Municipality of San Fernando, La union, while on its
way to get sand and gravel for the repair of municipal streets, collided
with a jeepney, resulting in the death and physical injuries to several
passengers. In the complaint for damages, the driver and the Municipality
were impleaded. The Municipality contended that it could not be held liable.
ISSUE: Can the municipality of San Fernando, La Union be held liable?
NO. Municipal corporations like provinces and cities are agencies of
the State when they are engaged in governmental function and
therefore should enjoy the sovereign immunity from suit. Nevertheless,
they are subject to suit even in the performance of such functions because
their charter provided that they can sue and be sued. Suability depends on
the consent of the State to be sued; Liability depends on the applicable law
and the established facts. The fact that a State is suab le does not
nece ssarily mean that it is liable. While it can never be held liable if it
does not first consent to be sued. Liability is not conceded by the mere
fact that the State has allowed itself to be sued. When the State doe s not
waive its sovereign immunity, it is only giving the plaintiff the chanc e to
prove if the defendan t is liable, the test of liability of the municipality
depends on whether or not the driver, acting in beha lf of the
municipality, is performing governmental or proprietary functions. In the
case at bar, the driver of the dump truck of the municipality insists that he
was on his way to the Naguilian river to get a load of sand and gravel for
the repair of San Fernando's municipal streets. In the absence of any
evidence to the contrary, the regularity of the performance of official
duty is presumed pursuant to Section 3(m) of Rule 131 of the Revised
Rules of Court. Hence, we rule that the driver of the dump truck was
performing duties or tasks pertaining to his office and that the municipality
cannot be held liable for the torts comm itted by its regu lar employee,
who was then engage d in the discharge of governmental functions.
(38) Republic v. Sandoval - 220 SCRA 124
Doctrine:
Acts or utterances of President sympathetic to the cause of the petitioners, not
indicative of State's waiver of its immunity from suit nor an admission of its liability AO
making a fact-finding Commission was preliminary in nature and offers mere
recommendations.
When the Republic is sued by name, the ultimate liability does not pertain to the
government. Although the military personnel were discharging their official functions,
it ceased to be official the moment they exceeded their authority, as such it is them
that will be held liable and not the State and as such, the principle of state immunity
does not apply. The inescapable conclusion is that the State cannot be held
civilly liable for the deaths that resulted, the liability should fall on the defendants in
the lower court.
FACTS
8 days and 7 nights of encampment of members of the Kilusang
Magbubukid sa Pilipinas (KMP) at the DAR, presenting their demands for a
genuine agrarian reform by giving lands for free to farmers, zero retention
of lands of landlords, and stop amortization of land payments. During the
dialogue between KMP Pres. Tadeo with Minister of DAR Heherson Alvarez,
he merely promised to bring it to the attention of Pres. Aquino. Tension
mounted and the farmers barricaded the DAR premises preventing EEs from
going inside their offices. Minister Alvarez tried to appease and advised them to
wait for the ratification of the 1987 Constitution. Tadeo’s group decided to march
to Malacanang and in the process, talked to the press that they will proceed
to Mendiola and break through the police lines and shed blood. In anticipation
of the disturbance, disturbance control units were activated and deployed.
Intelligence reports revealed that the KMP was heavily infiltrated with NPA
elements and that San Beda and CEU would be occupied. When the
marchers arrived, around 10,000 to 15,000, a clash occurred. 12 marchers
died as a result, 39 were wounded by gunshots, and 12 sustained minor injuries,
all from the marchers. Of the police and military, 3 sustained gunshot
wounds and 20 suffered minor physical injuries. This was named the
Mendiola massacre. President Aquino then issued AO 11, which created the
Citizen’s Mendiola Commission for the purpose of conducting an investigation
for the disorders, death and casualties that took place. The most significant
recommendation of the Commission was for the deceased and other victims of
the Mendiola incident to be compensated by the government. Due to this
recommendation, petitioners filed a formal letter of demand for compensation
from the government, which remained unheeded. After almost a year, the
group instituted an action for damages against the Republic of the Philippines
together with military officers and personnel involved in the Mendiola
incident. Respondent Judge Sandoval dismissed the complaint as against
the Republic of the Philippines on the basis that there was no waiver by
the State. Petitioners contend that the recommendation of the Commission
to indemnify the heirs and victims of the Mendiola massacre and the public
address made by Pres. Aquino promising to address the grievances of the
marchers, constitute implied waiver of sovereign immunity.
ISSUE: Has the state waived its immunity from suit by virtue of the AO11?
NO, hence this petition is dismissed. Sec. 3 providing for immunity from suit
is based on the practical ground that there can be no legal right as against
the authority that makes the law on which the right depends. And based on
public policy that public service would be hindered, and the public
endangered, if the sovereign authority could be subjected to law suits of
every citizen and consequently controlled in the uses and dispositions of
the means required for the proper administration of the government. The
recommendation made by the Commission does not in any way mean that
liability automatically attaches to the State, AO 11 merely created the
Commission to investigate such that whatever may be the findings of the
Commission shall only serve as the cause of action of any party. The
commission is not the end in itself, as a fact-finding body, its
recommendation is not final and executory. The speech of the Pres. Is not
tantamount to a waiver, she has not admitted liability, much less consented
to the suit.
Also, the case is not a suit against the State. Some
instances when a suit against the State is proper:
1. When the Republic is sued by name
2. When the suit is against an unincorporated government agency
3. When the suit is on its face against a government officer but the
ultimate liability will belong not to the officer but to the
government.
When the Republic is sued by name, the ultimate liability does not pertain
to the government. Although the military personnel were discharging their
official functions, it ceased to be official the moment they exceeded their
authority, as such it is them that will be held liable and not the State and
as such, the principle of state immunity does not apply. The inescapable
conclusion is that the State cannot be held civilly liable for the deaths
 that resulted, the liability should fall on the defendants in the lower court.
(39) EPG Construction v. Vigilar – 354 SCRA 566
Doctrine: Contracts whose illegality proceeds from an express declaration or
prohibition of law, and not from any intrinsic illegality, are not illegal per se. Contracts
of petitioners and work done for the government still deserve to be compensated.
FACTS
Petitioner is suing for the payment of construction work done for the
governments low cost housing program. The suit was based on an implied
contract and the suit was for more than 5 million pesos. Because of
some technical difficulties, however, the implied contract was deemed
void. But the construction was done and funds were made available for
such. Petitioner then collected. DPWH auditor interposed no objection to
the payment and the DBM had ordered the release of the amount under a
corresponding Advise of Allotment is issued. However, the DPWH Secretary
denied the money claims of petitioner hence this case where the State
contends immunity from suit.
ISSUE: Is it immune? NO.
The doctrine of governmental immunity from suit cannot serve as an instrument for
perpetrating an injustice on a citizen. To rule otherwise would be the apex of injustice.
Although this Court agrees with respondent's postulation that the
"implied contracts", which covered the additional constructions, are void, in
view of violation of applicable laws, auditing rules and lack of legal
requirements, we nonetheless find the instant petition laden with merit and
uphold, in the interest of substantial justice, petitioners-contractors' right to be
compensated for the "additional construction" on the public works housing
project, applying the principle of quantum meruit. Under these
circumstances, respondent may not validly invoke the Royal Prerogative of
Dishonesty and conveniently hide under the State's cloak of invincibility against
suit, considering that this principle yields to certain settled exceptions.
True enough , the rule, in any case, is not absolute for it does not say that
the state may not be sued unde r any circumstance . The doctrine of
gove rnmental immunity from suit cannot serve as an instrument for
perpetrating an injustice on a citizen. It is just as important, if not more so,
that there be fidelity to legal norms on the part of officialdom if the rule
of law were to be maintained.
(40) Minucher v. Court of Appeals – February 11, 2003
Doctrine: the main yardstick in ascertaining whether a person is a diplomat entitled to
immunity is the determination of whether or not he performs duties of diplomatic
nature.
FACTS
Minucher is an Iranian national who came to study in UP in 1974 and
was appointed Labor Attache for the Iranian Embassies in Tokyo and Manila;
he continued to stay in the Philippines and heade d the Iranian National
Resistance Movement in the Philippines. A buy-bust operation was conduc ted
aga inst Minucher wherein Agent Scalzo, a special agent of the US Drugs
Enforcement Agency , acted as poseur buyer. Minucher was charged and
Agent Scalzo testified as a witness for the prosecution. Minucher was
acquitted. Later on, Minucher filed a complaint for damages on the ‘trumped-
up’ charges of drug trafficking made by Scalzo. In his complaint for
damages, he said that some of his properties were missing. He averred that
his arrest as a heroin trafficker was well publicized and that when we got
arrested, he was not given any food or water for 3 days. Scalzo asserted his
diplomatic imm unity as evidence d by a Diplomatic Note. He contended that
it was recogn ized by the US Government pursuant to the Vienna
Convention on Diplomatic Relations and the Philippine government itself
thru its Executive Depa rtment and DFA.The courts ruled in favor of Scalzo on
the ground that as a special agent of the US Drug Enforcement
Administration, he was entitled to diplomatic immunity. Hence, the
present recourse of Minucher.
ISSUE: Is Scalzo immune?
YES. Scalzo was an Assistant Attaché of the US diplomatic mission.
Vesting a person with diplomatic immunity is a prerogative of the executive
branch of the government. A foreign agent, ope rating within a territory, can
be cloaked with imm unity from suit as long as it can be established that
he is acting within the directives of the send ing state. The consent of the
host state is an indispen sable requirement of basic courtesy between the two
sovereigns. In this case, the “buy-bust operation” and other such acts are
indication that the Philippine government has given its imprimatur, if not
consent, to the activities within Philippine territory of agent Scalzo of the
United States Drug Enforcement Agency. In conducting surveillance
activities on Minucher, later acting as the poseur-buyer during the buy-bust
operation, and then becoming a principal witness in the criminal case
against Minucher, Scalzo hardly can be said to have acted beyond the scope
of his official function or duties.
(41)
Air Transportation Office (ATO) v. Spouses Ramos
Doctrine:
An unincorporated government agency without
any separate juridical personality of its own enjoys immunity from suit because it is
invested with an inherent power of sovereignty but also held that ATO was not one,
but one that performs proprietary functions which is not in pursuit of necessary
function of the government and essentially a business.
CA thereby correctly appreciated the juridical character of the ATO as an agency of
the Government not performing a purely governmental or sovereign function , but was
instead involved in the management and maintenance of the Loakan Airport, an
activity that was not the exclusive prerogative of the State in its sovereign capacity.
Hence, the ATO had no claim to the State’s immunity from suit.
FACTS
Sps. Ramous found that a portion of their land was being used as part of
the runway and running shoulder of the Loakan Airport being operated by
Petitioner ATO. After certain negotiations, they decided to convey the
affected portion in consideration of P778,150.00, which the ATO failed to
pay. Thus, they filed a collection suit. ATO contends that by virtue of
Proclamation No. 1358 by Pres. Marcos that reserved certain parcels of land
for use of the Loakan Airport including petitioners’, the RTC had no
jurisdiction to entertain the suit without the State’s consent. RTC ordered
ATO to pay, which CA affirmed.
The CA correctly appreciated the juridical character of the ATO as an
agency of the Government not performing a purely governmental or
sovereign function, but was instead involved in the management and
maintenance of the Loakan Airport, an activity that was not the exclusive
prerogative of the State in its sovereign capacity. Hence, the ATO had no
claim to the State’s immunity from suit. Distinguish between:
• Unincorporated government agency performing a
governmental function – immune because its function is
governmental
One performing proprietary function – not immune as not in
pursuit of a necessary function of government but essentially a
business
Furthermore, the doctrine of sovereign immunity canno t be successfully
invoked to defeat a valid claim for compensation arising from the taking
without just compensation and without the proper expropriation
proceedings being first resorted to of the plaintiffs’ prope rty. The doctrine of
sovereign imm unity was not an instrument for perpetrating any injustice on
a citizen. In exercising the right of eminent domain, the Court explained,
the State exercised its jus imperii, as distinguished from its proprietary rights,
or jus gestionis; yet, even in that area, where private prope rty had been
taken in expropriation withou t just compensation being paid, the defense of
imm unity from suit could not be set up by the State against an action for
payment by the owners.
Lastly, the issue of whether or not the ATO could be sued without the State’s
consent has been rendered moot by the passage of RA 949 7 or the Civil
Aviation Authority Act of 2008. RA9497 abolished the ATO. Established in
place of the ATO was the Civil Aviation Authority of the Philippines (CAAP),
which assumed all of the ATO’s powers, duties and rights, assets, real and
personal properties, funds, and revenues. Thus, the obligations that the ATO
had incurred by virtue of the deed of sale with the Ramos spouses might now be
enforced against the CAAP.
Immunity in international law
(42) Buisan v. COA
Doctrine:
DPWH cannot be sued, the complaint had a fatal defect which is the failure to allege
the existence of the consent of the State to be sued whether expressly or impliedly.
FACTS
DPWH undertook construction of a Project in Maguindanao to mitigate flooding. A
decade after, DPWH received various claims from land owners for damages allegedly
caused to their properties, crops and improvements by the premature opening or the
Project.
Issue: Whether the DPWH cannot be sued for damages allegedly caused by the
construction of the Liguasan Cut-off channel in Maguindanao without the consent of
the State? YES
Ruling: The fundamental law of the land provides that the State cannot be sued
without its consent. It is a fundamental postulate of constitutionalism flowing from the
juristic concept of sovereignty that the State, as well as its government, is immune
from suit unless it gives its consent. The rule, in any case, is not absolute for it does
not say that the State may not be sued under any circumstances. The doctrine only
conveys that "the state may not be sued without its consent; its clear import then is
that the State may at times be sued. Suits filed against government agencies may
either be against incorporated or unincorporated agencies. In case of incorporated
agencies, its suability depends upon whether its own organic act specifically provides
that it can sue and be sued in Court.
As the State's engineering and construction arm, the DPWH exercises governmental
functions that effectively insulate it from any suit, much less from any monetary
liability. The construction of the Project which was for the purpose of minimizing the
perennial problem of flood in the area of Tunggol, Montawal, Maguindanao, is well
within the powers and functions of the DPWH as mandated by the Administrative Code
of 1997.
Hence, the Doctrine of Non-Suability clothes the DPWH from being held responsible
for alleged damages it performed in consonance with its mandated duty. Nowhere
does it appear in the petition that the State has given its consent, expressly or
impliedly, to be sued before the courts. The failure to allege the existence of the
State's consent to be sued in the complaint is a fatal defect, and on this basis alone,
should cause the dismissal of the complaint.
(43) City of Bacolod v. Phuture Visions Co., Inc.
Doctrine: Consent may be expressed or implied, such as when the government
exercises its proprietary functions, or where such is embodied in a general or special
law; The Supreme Court (SC) has held that the power to issue or grant licenses and
business permits is not an exercise of the government’s proprietary function
FACTS
Respondent filed Petition for Mandamus and Damages against Bacolod Mayor, for the
closing of its Bingo outlet despite having secured the necessary permits from the
Government. The City alleges malice and bad faith.
Issue: Whether the City of Bacolod may be sued for damages?
Ruling: NO. The power to issue or grant licenses and business permits is not an
exercise of government’s proprietary function. It is an exercise of police power, ergo a
governmental act.
Here, Petitioners, in ordering the closure of respondent's bingo operations, were
exercising their duty to implement laws and ordinances which include the local
government's authority to issue licenses and permits for business operations in the
city. This authority is granted to them as a delegated exercise of the police power of
the State. It must be emphasized that the nature of bingo operations is a form of
gambling; thus, its operation is a mere privilege which could not only be regulated, but
may also very well be revoked or closed down when public interests so require.
Considering that respondent had no legal right to operate the bingo operations at the
outset, then it is not entitled to the damages which it is demanding from petitioners.
Immunity in international law
(44) Sanders v. Veridiano - 162 SCRA 88
Doctrine: The doctrine of state immunity is applicable not only to our government
but also to foreign states sought to be subjected to the jurisdiction of our courts.
FACTS
Saunders was the special services director of the US Naval Station, while
Moreau was the commanding officer of the Subic Naval Base. They advised
Rossi, a US citizen permanently residing in the Philippines that his
employment has been converted from permanent full-time to permanent
part-time. Hearing officer for grievance proceeding recommended institution
of Rossi plus backwages. Saunders and Moreau wrote the hearing officer
and provide their reasons for such action: 1) difficult to supervise; 2) tends to
alienate most co- workers and supervisors; 3) placed the records of
grievance proceedings in public. Rossi filed a case for damages against
the two in their private or personal capacities, alleging that the letter
contained libelous imputations which exposed them to ridicule and caused them
mental anguish.
Is the doctrine of state immunity applicable to foreign states?
YES. The doctrine of state immunity is applicable not only to our government
but also to foreign states sought to be subjected to the jurisdiction of our
courts. This is derived from the principle of the sovereign equality of states
wherein a contrary attitude would “unduly vex the peace of nations.” Mere
allegations that a government functionary is being sued in his personal
capacity will not automatically remove him from the protection of the law of
public officers and doctrine of state immunity. The acts for which the
Sanders and Maoreau are being called to account were performed by them in
the discharge of their official duties. Thus, the complaint canno t prosper unless
the government sough t to be held ultimately liable has given its consent to be
sued. “There can be no legal right against the authority which makes the law
on which the right depends.
The law provides for exceptions to the general rule that in no case may a
public officer be sued without the consent of the state:
1. Compel him to do an act required by law
2. Secure judgment that the officer impleaded may satisfy by himself
w/o the government itself having to do a positive act to assist him
3. Government itself has violated its own laws, aggrieved party
may directly implead the government even w/o first filing his
claim/ the COA as normally required, as the doctrine of state
immunity cannot be used as an instrument for perpetrating an
injustice
The case at bar does not fall under any of the enumerated exceptions and the
US government has not given its consent to be sued for the official acts of
their employees, therefore, complaint must be dismissed for lack of
jurisdiction.
(45) United States v. Guinto - 182 SCRA 604
Doctrine:
When the government enters into a contract, it is deemed to have descended
to the level of the other contracting party, and divested of its sovereign immunity from
suit with its implied consent Rule on waiver, not applicable when the contract entered
into involves its sovereign or governmental
capacity.
FACTS
Consolidated suits, where US moved to dismiss on the ground that they are in
effect suits against it and as such, moved to dismiss on the ground of State
immunity.
1. Private respondents, concessionaires inside Clark for many years
are suing officers of the US Air Force for
the bidding they conducted for contracts for barber services,
which they awarded to Ramon Dizon. They were questioning
the award and essentially wanted to continue their operations
pending litigation.
2. Genove was a cook in the Main Club in John Hay Air Station. He
was dismissed for pouring urine in the soup served to club
customers. He was suspended and after investigation, dismissed
him. He then filed a complaint for damages against the manager.
3. Luis Bautista, a barracks boy in the Clark Air base extension, was
arrested following a buy-bust operation of US Air Force officers.
They testified against him and as such, he was dismissed. He
then filed a complaint for damages against the officers.
While the doctrine appears to prohibit only suits against the state without
its consent, it is also applicable to complaints filed against officials of the
state for acts allegedly performed by them in the discharge of their
duties. The doctrine is sometimes derisively called "the royal prerogative of
dishonesty" because of the privilege it grants the state to defeat any
legitimate claim against it by simply invoking its non-suability. However,
the doctrine is not absolute and does not say the state may not be sued
under any circumstance. On the contrary, the rule says that it may be sued if
it consents. The consent of the state to be sued may be manifested expressly
or impliedly.
• Express consent may be embodied in a general law or a special law.
• Implied when the state enters into a contract or it itself
commences litigation. When the govt enters into a contract, it is
deemed to have descended to the level of the other contracting
party and divested of its sovereign immunity.
o Sovereign – no implied waiver as it is performing a purely
governmental function
o Proprietary – implied waiver
Based on these, the court makes a finding
1. As to Barber – commercial enterprise, remanded to determine
whether they are entitled to reliefs prayed for.
2. As to cook – the US is undertaking proprietary acts in the
management of restaurants, open to the public. As such, state
immunity cannot be invoked. By entering into the employment
contract with Genove, it impliedly divested itself of its sovereign
immunity. However, while suable, the claim must still be
dismissed as they acted with due process in dismissing him.
3. As to drug user – official functions and as such, immune.
(46) Shauf v. Court of Appeals - 191 SCRA 713
Doctrine: Doctrine will not apply and may
not be invoked where the public official is being sued in his private
and personal capacity as an ordinary citizen; It is a well-settled
principle of law that a public official may be liable in his personal
capacity for whatever damage he may have caused by his act done
with malice and in bad faith or beyond the scope of his authority
or jurisdiction.
FACTS
Petitioner Loida Shauf, a Filipino married to a US Air force member, applied for
the vacant position of Guidance Counselor in the Base Education Office at
Clark Air Base. She has a Master of Arts degree from UST, with 34
semester hours in psychology guidance and 25 quarter hours in human
behavioral science, completed all course work in human behavior and
counseling psychology for a doctoral degree, a CS eligible, and worked as
Guidance Counselor at the Clark Air base for 4 years. She was not chosen by
Persi contending that when he inquired about her, they did not find her
personnel folder and as such, had reservations on her work experience. Mr.
Isakarson was then hired, who was not eligible. She then filed an equal
employment opportunity against Private respondents for alleged discrimination
against her for her nationality and sex. Based on the examiner’s
recommendation, Shauf is highly qualified. She was later on served a
Notice of Proposed Disposition of Discrimination complaint stating that she
would be appointed to a permanent capacity in the event of a vacancy.
During that time, Private repsondents Detwiler and Persi knew that another
position of Guidance Counselor would soon be vacant as Mrs. Mary
Abalateo’s appointment was to expire on Aug 6, 1977, which Detwiler denied
her request for extension. Col. Corey represented to her that she would be
appointed to the overhire position as soon as it became vacant. However,
when Shauf consented to the Notice, Detwiler extended the appo intment of
Mrs. Abalateo. She then filed a complaint for damages against Detwiler
and Persi. They filed a MD, alleging that as officers of the US Armed forces,
they were immune from suit. RTC ordered payment of damages, which CA
reversed hence this petition.
I S S UE : W oN D ef e ns e of I m m u i n ty P r op er - N O
Defense of immunity not proper. Liable for damages.
The doctrine of immunity from suit will not apply and may not be invoked
where the public official is being sued in his private and personal capacity
as an ordinary citizen. The cloak of protection afforded the officers and
agents of the government is removed the moment they are sued in their
individual capacity. This situation usually arises where the public official acts
without authority or in excess of the powers vested in him. It is a well- settled
principle of law that a public official may be liable in his personal private
capacity for whatever damage he may have caused by his act done with
malice and in bad faith, or beyond the scope of his authority or
jurisdiction. In this case, they are held to be answerable for personal torts
in which the US is not involved. If found liable, they and they alone must
satisfy the judgment.
(47) United States v. Reyes - 219 SCRA 192
Doctrine:
Unauthorized acts of government officials
or officers are not acts of the State and an action against the officials or officers by
one whose rights have been invaded or violated by such acts for the protection of his
rights is not a suit against the State within the rule of immunity of the State from suit.
FACTS
Nelia T. Montoya is an American citizen, who was employed as an ID checker at the
US Navy Exchange (NEX) at the Joint US Military Assistance Group (JUSMAG)
headquarters in Quezon City.
 Maxine Bradford, is also an American citizen, who was the activity exchange
(store) manager at the JUSMAG headquarters.
 Jan. 22, 1987 (12:00 noon): Montoya, after work, went shopping in the retail
store of the NEX JUSMAG.
 On her way to her car, already outside the store, another ID checker
approached and informed Montoya that her bags needed to be searched, upon
instruction of the store manager (Bradford) .
 Montoya went to Bradford, who was also outside the store, and protested the
search.
o Bradford however, told her that the search is to be made on all
employees that day.
 The search proceeded in the presence of curious onlookers, and having found
nothing irregular, Montoya was allowed to leave.
 Montoya later discovered that she was the only employee subjected to the
search.
o She further found out that it is a matter of policy that customers and
NEX JUSMAG employees are not to be searched outside the store
unless there is a very strong evidence.
 Montoya filed a claim for damages against Bradford.
 Bradford, together with the US government, filed a Motion to dismiss on the
ground that:
o The suit is against the US, a foreign sovereign immune from state
without its consent; and
 That JUSMAG, composed of an Army, Navy and Air
Group, had been established under the Philippine US
States Military Assistance Agreement to implement the
US’s program of rendering assistance to the
Philippines;
 That its headquarters is considered a temporary
installation under the Agreement; and
 That it has been mutually agreed that the US shall have
the rights, power, and authority within the bases which
are necessary for the establishment, use and operation
and defense thereof, or appropriate control thereof.
o Bradford, as activity exchange manager as JUSMAG, is immune
from suit for acts done by her in the performance of her official
functions.
 That the US shall have the use of certain facilities and
areas within the bases and shall have effective
command and control over such facilities and over US
personnel, employees, equipment, and material.
Issue: Whether or not Bradford is immune from the suit? NO
Ruling: No. Not only was Bradford being sued for acts outside the scope of her
authority or in her private/ personal capacity, those acts were also committed outside
the territory where she exercises authority, having been committed outside the NEX
JUSMAG, particularly at the parking area.
 Doctrine of state immunity
o A state may not be sued without its consent (Art. XVI, Sec. 3).
o Applicable to complaints filed against officials of the state for acts
allegedly performed by them in the discharge of their duties.
 If the judgment against such officials will require the
state itself to perform an affirmative act to satisfy the
same, such as the appropriation of the amount needed
to pay the damages awarded against them, the suit
must be regarded as against the state itself although it
has not been formally impleaded.
 Exception: Where the public official is being sued in his private and personal
capacity as an ordinary citizen.
o Where the public official acts without authority or in excess of the
powers vested in him.
o A public official may be liable in his personal private capacity for
whatever damage he may have caused by his act done with malice
and in bad faith, or beyond the scope of his authority or jurisdiction.
o Inasmuch as the State authorizes only legal acts by its officers,
unauthorized acts of government officials/ officers are not acts of
the State.
o Rationale: The doctrine of state immunity cannot be used as an
instrument for perpetrating injustice.
 In this case, it is apparent from the complaint that Bradford was sued in her
private or personal capacity for acts allegedly done beyond the scope and even
beyond her place of official functions.
(48) M. H. Wylie v. Rarang - 209 SCRA 357
Doctrine:
The the grant of rights, power, and authority to the United States under the RP-US
Bases Treaty DO NOT cover immunity of its officers from crimes and Torts
FACTS
Wylie, as Asst. Admin. Officer, and Williams, commanding officer of the US
Naval Base in Subic, supervised the publication of the “Plan of the Day”,
published daily by the Naval Base, which featured important
announcements and general matters of interest. On Feb 3 1978, the action
line inquiry published that Auring consumed confiscated items from base
personnel, calling her a disgrace. Respondent Aurora Rarang was the only
identified Auring in the Base, and that she was that referred to was
conclusively proven. She then filed a complaint for damages due to the libelous
charges. Petitioners filed a MD on the ground that they acted in the performance
of their official functions and as such, immune from suit.
ISSUE: Are American Naval officers who commit a crime or tortious acts while
discharging official fucntions still covered by the immunity from suit?
NO. Killing a person in cold blood while on patrol duty, runn ing over a child
while driving with reckless imprudenc e on an official trip, or slandering a
person during office hours could not possibly be covered by the immunity
agreement. Our laws and, we presume, those of the United States do not allow
the commission of crimes in the name of official duty. We apply the same
ruling. Public officials can be held personally accountable for acts claimed to
have been performed in connection with official duties where they have acted
ultra vires or where there is showing of bad faith.
(49) Republic of Indonesia v. Vinzon – June 26, 2003
Doctrine:
immunity of the sovereign is recognized only with regard to public acts or acts jure
imperii, but not with regard to private acts or acts jure gestionis. If the act is in pursuit
of a sovereign activity, or an incident thereof, then it is an act jure imperii
FACTS
The Republic of Indonesia entered into a Maintenance Agreement with
Respondent James Vinzon, sole proprietor of Vinzon Trade & Services,
which provided that Viznzon shall maintain aircondition, generator, electrical
facilities, water heater and water motor pumps at the Embassy Main Bldg,
the Annex, and at the official residence of Petitioner Ambassador Soeratmin.
The agreement shall be effective for 4 years to be automatically renewed unless
cancelled with 30 day notice. In 2000, incoming chief of administration,
Minister Counsellor Azhari Kasim found respondent’s work unsatisfactory.
Hence, the Indonesian Embassy terminated their agreement. Respondent
claims that the termination was arbitrary and unlawful and therefore filed a
complaint. Republic of Indonesia filed a MD alleging immunity from suit.
Respondent contends that it had waived its immunity as provided in their
agreement providing that any legal action arising out of this shall be settled
accdg to the laws of the PH and by the proper court in Makati, and that
the Ambassador and the Minister Counsellor can be sued and held liable
for tortious acts done with malice and bad faith. MD was denied hence this
petition.
Does State immunity from suit also apply to foreign states?
YES. Immunity of states from suit is also a rule in international law. The
mere entering into a contract by a foreign State with a private party cannot be
construed as the ultimate test of whether it is an act jure imperii (by right of
sovereign power; in the exercise of sovereign functions) or jure gestionis
(by right of economic or business relations.) If the foreign State is not
engaged regularly in a business or commercial activity, the particular act must
then be tested by its nature. If the act is in pursuit of a sovereign activity, or
an incident thereof, then it is an act jure imperii. The establishment of a
diplomatic mission is an act jure imperii, which includes its maintenance
and upkeep. Hence, the State may enter into contracts with private entities
to maintain the premises, furnishings and equipment of the embassy and the
living quarters of its agents and officials. It is therefore clear that petitioner
Republic of Indonesia was acting in pursuit of a sovereign activity when it
entered into a contract with respondent for the upkeep or maintenance of the air
conditioning units, generator sets, electrical facilities, water heaters, and water
motor pumps of the Indonesian Embassy and the official residence of the
Indonesian ambassador. Existence alone of such paragraph is not necessarily
a waiver of sovereign immunity from suit. The provision contains language
not necessarily inconsistent with sovereign immunity. It may also be meant to
apply where the sovereign party elects to sue in the local courts, or otherwise
waives its immunity by any subsequent act. Submission of a foreign state to
local jurisdiction must be clear and unequ ivocal. It must be given explicitly or by
nece ssary implication.
Section 4. The Armed Forces of the Philippines shall be composed of a citizen armed
force which shall undergo military training and serve as may be provided by law. It
shall keep a regular force necessary for the security of the State.
Section 5.
(1) All members of the armed forces shall take an oath or affirmation to
uphold and defend this Constitution.
(2) The State shall strengthen the patriotic spirit and nationalist
consciousness of the military, and respect for people's rights in the
performance of their duty.
(3) Professionalism in the armed forces and adequate remuneration and
benefits of its members shall be a prime concern of the State. The armed
forces shall be insulated from partisan politics. No member of the military
shall engage, directly or indirectly, in any partisan political activity, except
to vote.
(4) No member of the armed forces in the active service shall, at any time, be
appointed or designated in any capacity to a civilian position in the
Government, including government-owned or controlled corporations or
any of their subsidiaries.
(5) Laws on retirement of military officers shall not allow extension of their
service.
(6) The officers and men of the regular force of the armed forces shall be
recruited proportionately from all provinces and cities as far as practicable.
(7) The tour of duty of the Chief of Staff of the armed forces shall not exceed
three years. However, in times of war or other national emergency
declared by the Congress, the President may extend such tour of duty.
Section 6. The State shall establish and maintain one police force, which shall be
national in scope and civilian in character, to be administered and controlled by a
national police commission. The authority of local executives over the police units in
their jurisdiction shall be provided by law.
National Police
(50) Quilona v. General Court Martial - 206 SCRA 821
Doctrine:
Republic Act No. 6975; Jurisdiction in criminal cases over PNP members.—Republic
Act No. 6975, creating the Philippine National Police (PNP), which took effect on 1
January 1991, provides: “SEC. 46. Jurisdiction in Criminal Cases.—Any
provision of law to the contrary notwithstanding, criminal cases
involving PNP members shall be within the exclusive jurisdiction
of the regular courts: x x x. Provided, further, that criminal cases
against PC-INP members who may have not yet been arraigned
upon the effectivity of this Act shall be transferred to the proper
city or provincial prosecutor or municipal trial court judge.”
FACTS
Petitioner Patrolman Oscar Quilona was a policeman assigned at the
Western Police District and charged before the General Court Martial with
murder 2 counts. He wrote to Pres. Aquino expressing his desire to be
tried by a civilian court and sought a waiver of military jurisdiction contending
that with the enactment of the PNP, he should now be under the jurisdiction
of a civilian court. During his arraignment, he expressed the same desire so
his arraignment was reset. On the scheduled arraignment, he filed a motion
for the court martial to inhibit itself from pursuing the arraignment and to
have his case investigated by the civilian prosecutor or at least tried by a
civilian court, which Respondent denied. He then refused to enter a plea,
and a plea of not guilty was ordered to be made for him. Hence this certiorari.
GRANTED, transferred to the prosecutor.
RA 6975, creating the PNP provides that criminal cases against PC-INP
members not yet arraigned upon the effectivity of this act shall be
transferred to the proper prosecutor or judge. Although this law was not
yet in effect when Petitioner was arraigned, Respondent knew that this act
had already been signed and approved by the President and published in 2
newspapers of general circulation. Thus, respondent acted with grave abuse
of discretion. Regular courts now have jurisdiction over criminal cases
against members of the PNP because of the civilian nature of the Police
Force
(51) Carpio v. Executive Secretary - 206 SCRA 290
Doctrine:
"Doctrine of Qualified Political Agency" - the President cannot be expected to
exercise his control powers all at the same time and in person, he will have to
delegate some of them to his Cabinet members.
FACTS
Congress passed RA 6975, establishing the PNP under the DILG. The
petitioner is questioning the constitutionality of such statute. Petitioner herein
advances the view that RA 6975 emasculated the National Police Commission
by limiting its power "to administrative control" over the PNP, thus,
"control" remained with the Department Secretary under whom both the
National Police Commission and the PNP were placed.
ISSUE: WoN Such law emasculated the Napolcom
by limiting its power to “administrative control
over PNP”-NO
SC: The circumstance that the NAPOLCOM and the PNP are placed
under the reorganized DILG is merely an administrative realignment that
would bolster a system of coordination and cooperation among the citizenry,
local executives and the integrated law enforcement agencies and public
safety agencies created under the assailed Act. Such organizational set-up
does not detract from the mandate of the Constitution that the national
police force shall be administered and controlled by a national police
commission as at any rate, and in fact, the Act in question adequately provides
for administration and control at the commission level.
"Doctrine of Qualified Political Agency" - the President cannot be expected
to exercise his control powers all at the same time and in person, he will have
to delegate some of them to his Cabinet members.
Sec. 6 merely mandates the statutory creation of a natural police commission that will
administer and control the national police force to be established thereunder. This
commission is, for obvious reasons, not in the same category as the independent
Constitutional Commissions
(52) Mendoza v. PNP – June 21, 2005
Doctrine:
PNP covered by the Civil Service law. Therefore administrative remedies must have
been exhausted before filing with regular courts/
FACTS
This case stemmed from the affidavit-complaint for illegal arrest, illegal
detention, physical injuries, and robbery filed by Teodoro V. Conti against
PO3 William M. Mendoza, now petitioner, and PO2 Angelita Ramos. On the
basis of the complaint, P/Chief Superintendent Orlando H. Macaspac, then
District Director of the PNP Southern Police District Office (SPDO) NCR,
administratively charged petitioner and PO2 Ramos with grave misconduct.
On April 15, 1993, after conducting a summary proceeding, PNP Regional
Director Oscar T. Aquino rendered a Decision finding the 2 policemen guilty as
charged and ordering their dismissal from the service. Claiming that they
were denied due process, they interposed an appeal to the Regional
Appellate Board (RAB) of the National Police Commission (NAPOLCOM),
NCR. However, the RAB affirmed the decision of the NAPOLCOM. Petitioner
then filed a petition for certiorari with the RTC of Makati, which was
dismissed due to non-exhaustion of administrative remedies.
Is the dismissal correct?
YES. The PNP falls under the civil service pursuan t to Section 2(1), Article
IX-B, also of the Constitution, thus, the Civil Service laws apply to them.
Section 47 of the Civil Service Law provides that in cases where the
decision rendered by a bureau or office is appealable to the Civil Service
Commission, the same may initially be appea led to the Department and
finally to the Comm ission. Petitioner’s failure to exhau st all administrative
remedies is fatal to his cause. He should have filed the appeal with the
secretary of the DILG first and if unsuccessful, file an appeal with the CSC
before resorting to the regular courts. It is elementary that where, as here, a
remedy is available within the administrative machinery, this should first be
resorted to.
(53) Kulayan v. Gov. Abdusakur – G.R. No. 187298
Doctrine: A local chief executive, such as the provincial governor, exercises
operational supervision over the police, and may exercise control only in day-to-
day operations
3 members from the International Committee of the Red Cross were
kidnapped in Sulu by 3 armed men who were later confirmed to be
members of the Abu Sayyaf Group (ASG). Governor Tan organized the
Civilian Emergency Force (CEF), a group of armed male civilians coming
from different municipalities, who were redeployed to surrounding areas of
Patikul. The organization of the CEF was embodied in a “Memorandum of
Understanding” entered into between 3 parties: the provincial government
of Sulu; the AFP; and the PNP. Ronaldo Puno, then Secretary of DILG,
announced to the media that government troops had cornered some 120
ASG members along with the 3 hostages. However, the ASG demanded that
the military pull its troops back from the jungle area, threatening that one of the
hostages will be beheaded, the ASG further demanded the evacuation of the
military camps and bases in the different barangays in Jolo. Governor
Tan issued Proclamation No. 1 (Proclamation 1-09), declaring a state of
emergency in the province of Sulu. In the same Proclamation, Tan called
upon the PNP and the CEF to set up checkpoints and chokepoints, conduct
general search and seizures including arrests, and other actions necessary to
ensure public safety. The petitioners were suspected ASG supporters and were
being arrested under Proclamation 1-09 who thereafter filed the present
Petition for Certiorari and Prohibition, claiming that Proclamation 1-09 was
null and void.
Does the governor have supervision over the police such that Proclamation 1-
09 is valid?
YES, to a limited extent. A local chief executive, such as the provincial
governor, exercises operational supervision over the police, and may exercise
control only in day-to-day operations. In the discussions of the
Constitutional Commission regarding Sec 6, Art XVI, it is clear that the
framers never intended for local chief executives to exercise unbridled
control over the police in emergency situations. This is without prejudice to
their authority over police units in their jurisdiction as provided by law, and
their prerogative to seek assistance from the police in day-to- day situations,
as contemplated by the Constitutional Commission. But as a civilian agency of
the government, the police, through the NAPOLCOM, properly comes within,
and is subject to, the exercise by the President of the power of executive
control.
Section 7. The State shall provide immediate and adequate care, benefits, and other
forms of assistance to war veterans and veterans of military campaigns, their
surviving spouses and orphans. Funds shall be provided therefor and due
consideration shall be given them in the disposition of agricultural lands of the public
domain and, in appropriate cases, in the utilization of natural resources.
Section 8. The State shall, from time to time, review to increase the pensions and
other benefits due to retirees of both the government and the private sectors.
Section 9. The State shall protect consumers from trade malpractices and from
substandard or hazardous products.
Section 10. The State shall provide the policy environment for the full development of
Filipino capability and the emergence of communication structures suitable to the
needs and aspirations of the nation and the balanced flow of information into, out of,
and across the country, in accordance with a policy that respects the freedom of
speech and of the press.
Section 11.
(1) The ownership and management of mass media shall be limited to
citizens of the Philippines, or to corporations, cooperatives or
associations, wholly-owned and managed by such citizens.
The Congress shall regulate or prohibit monopolies in commercial mass
media when the public interest so requires. No combinations in restraint
of trade or unfair competition therein shall be allowed.
(2) The advertising industry is impressed with public interest, and shall be
regulated by law for the protection of consumers and the promotion of
the general welfare.
Only Filipino citizens or corporations or associations at least seventy per
centum of the capital of which is owned by such citizens shall be allowed
to engage in the advertising industry.
The participation of foreign investors in the governing body of entities in
 such industry shall be limited to their proportionate share in the capital
thereof, and all the executive and managing officers of such entities
must be citizens of the Philippines.

Section 12. The Congress may create a consultative body to advise the President on
policies affecting indigenous cultural communities, the majority of the members of
which shall come from such communities.
 ARTICLE XVII
AMENDMENTS OR REVISIONS (54) Santiago v. Comelec - 270 SCRA 106
Doctrine:
On Dec 6, 1996, Private respondent Atty. Delfin filed with the Comelec a
Section 1. Any amendment to, or revision of, this Constitution may be proposed Petition to Amend the Constitution, to Lift term Limits of elective officials by
by: People’s initiative, and asked the Comelec for an order fixing the time and dates
(1) The Congress, upon a vote of three-fourths of all its Members; or for signature gathering, publications, and establishing signing stations. He
alleged that he is a founding member of the Movement for People’s Initiative,
(2) A constitutional convention.
a group that wanted to institutionalize people power and to exercise the power
to directly propose amendments to the Constitution by virtue of Sec. 2. Later on,
Section 2. Amendments to this Constitution may likewise be directly proposed by Petitioner Senator Miriam Defensor Santiago, et al filed this petition for
the people through initiative upon a petition of at least twelve per centum of the prohibition that the constitutional provision on people’s initiative to amend
total number of registered voters, of which every legislative district must be the Constitution can only be implemented by law to be passed by
represented by at least three per centum of the registered voters therein. No Congress.
amendment under this section shall be authorized within five years following the
ratification of this Constitution nor oftener than once every five years thereafter. GRANTED.
The constitutional provision on initiative and referendum is not self-
executory, and requ ires implementing legislations. Thus, RA 6735 was
The Congress shall provide for the implementation of the exercise of this right. enacted. But, the SC declared RA 6735 inadequate to cover the system of
initiative to amend the Constitution, because while Sec. 3 mentions initiative
Initiative and Referendum on the Constitution and Sec. 5 restates the constitutional requirements as to
the percentage of registered voters needed for a proposal, the law doe s not
3 Modes of amending the Constitution: provide for the contents of a petition for initiative on the Constitution;
1) Congress upon three-fourths vote of all its Members
 ¾ of Senate, ¾ of HOR. There are three systems of initiative: initiative on the Constitution
2) Constitutional Convention: which refers to a petition proposing amendments to the Constitution;
a) 2/3 of all members of the Congress; OR initiative on statutes which refers to a petition proposing to enact a national
b) Majority vote of all members of the legislation; and initiative on local legislation which refers to a petition
Congress with the question of whether to proposing to enact a regional, provincial, city, municipal or barangay law,
call a Convention to be resolved by the resolution or ordinance. Indirect Initiative is exercise of initiative by the people
people in a plebiscite. through a proposition sent to Congress or the local legislative body for action.
3) People’s initiative
 APPLIES ONLY TO AN AMENDMENT AND NOT A While there are subtitles for national and local initiatives IN RA 6735, there
REVISION. is no subtitle for initiative on the Constitution; thus, the law is incomplete,
and this inadequac y cannot be cured by empowering the Comelec to
 Petition of at least 12% of total no. of registered voters of
promulgate implementing rules and regu lations. In this case, it was also
which every legislative district must be represented by at
held that the Comelec is without jurisdiction to entertain the Delfin petition
least 3% of the registered voters therein.
because it did not contain the signatures of the required number of voters,
the petition must be signed by at least 12% of the total no. of registered voters of
Initiative
which every legislative district is represented by at least 3% of the registered
 The power of the people to propose amendments to the
voters therein.
Constitution.
(55) Lambino v. Comelec - October 25, 2006
3 Systems of Initiative:
1) Initiative on the Constitution The Lambino Group commenced gathering signatures for an initiative petition
2) Initiative on statutes to change the 1987 Constitution and then filed a petition with COMELEC to
hold a plebiscite for ratification under Sec. 5(b) and (c) and Sec. 7 of RA
 National legislation.
6735. The proposed changes under the petition will shift the present
3) Initiative on local legislation
Bicameral-Presidential system to a Unicameral-Parliamentary form of
 Regional, provincial, city, municipal or barangay law,
government. COMELEC did not give it due course for lack of an enabling law
resolution or ordinance.
governing initiative petitions to amend the Constitution, pursuant to Santiago
v. Comelec ruling.
Indirect initiative
 Exercise of initiative by the people through a proposition sent
Is such valid and compliant?
to Congress or the local legislative body for action

Procedure for conducting an initiative:
People must author and sign the entire proposal;
 No agent or representative can sign in their behalf.
2) Proposal must be embodied in the petition.
 Signee must have seen what he is signing.
NO. The Initiative petition does not comply with Sec. 2, Art. XVII on direct
proposal by people.
Sec. 2, Art. XVII is the governing provision that allows a people’s initiative to
propose amendments to the Constitution. While this provision does not
expressly state that the petition must set forth the full text of the proposed
amendments, the deliberations of the framers of our Constitution clearly
show that: (a) the framers intended to adopt relevant American jurisprudence
on people’s initiative; and (b) in particular, the people must first see the full text of
the proposed amendments before they sign, and that the people must sign on
a petition containing such full text. The essence of amend ments “directly
propo sed by the peop le throug h initiative upo n a petition” is that the entire
propo sal on its face is a petition by the peop le. This means two essential
elements must be present:
1. The people must author and thus sign the entire proposal. No
agent or representative can sign on their behalf.
2. As an initiative upon a petition, the proposal must be embodied in a
petition.

These essential elements are present only if the full text of the proposed
amendments is first shown to the people who express their assent by signing
such complete proposal in a petition. The full text of the proposed amendments
may be either written on the face of the petition, or attached to it. If so
attached, the petition must state the fact of such attachment. This is an
assurance that everyone of the several millions of signatories to the petition
had seen the full text of the proposed amendments before – not after – signing.
Also, an initiative signer must be informed at the time of signing of the nature
and effect of the proposal. Failure to so do renders the initiative void. In the
Lambino group’s petition, there is no proposal at all in the signature sheet,
neither does it state that the text of the proposed changes is attached to it.
It merely asks a question whether the people approve a shift from the
Bicameral-Presidential to the Unicameral- Parliamentary system of
government. The signature sheet does not show to the people the draft of the
proposed changes before they are asked to sign the signature sheet. This
omission is fatal.
The initiative violates Section 2, Article XVII of the Constitution disallowing
revision through initiatives. Article XVII of the Constitution speaks of 3 modes of
amending the Constitution: Congress upon three-fourths vote of all its Members,
Constitutional convention, and People’s initiative for amendments.
Sec 1 of Art XVII, referring to the first and second modes, applies to “any
amendment to, or revision of, this Constitution.” In contrast, Sec 2 of Art
XVII, referring to the third mode, applies only to “amendments to this
Constitution.” A peop le’s initiative to chang e the Constitution app lies
only to an amendment of the Constitution and not to its revision. In contrast,
Congress or a constitutional convention can propose both amendments and
revisions to the Constitution.
Amendment vs. Revision
Courts have long recognized the distinction between an amendment and a
revision of a constitution. Revision broadly implies a change that alters a basic
principle in the constitution, like altering the principle of sepa ration of powers
or the system of checks-and-balances. There is also revision if the change
alters the substantial entirety of the constitution, as when the change affects
substantial provisions of the constitution. On the other hand, amendment
broadly refers to a change that adds, reduces, or deletes without altering
the basic principle involved. Revision generally affects several provisions of the
constitution, while amendment generally affects only the specific provision
being amended.
Each specific change will have to be examined case-by-case, depending on
how it affects other provisions, as well as how it affects the structure of
government. Since a revision of a constitution affects basic principles, or
several provisions of a constitution, a deliberative body with recorded
proceedings is best suited to undertake a revision. A revision requires
harmonizing not only several provisions, but also the altered principles with those
that remain una ltered.
Tests to determine whether amendment or revision. In California, courts
have developed a two-part test: the quantitative test and the qualitative test:
1. Quantitative test – asks whether the proposed change is so
extensive in its provisions as to change directly the substantial
entirety by the deletion or alteration of numerous existing
provisions, only the number of provisions affected and does not
consider the degree
2. Qualitative test – whether the change will accomplish such far
reaching changes in the nature of our basic governmental plan
as to amount to a revision.
Under both the quantitative and qualitative tests, the Lambino Group’s initiative
is a revision and not merely an amendment. Quantitatively, the Lambino
Group’s proposed changes overhaul two articles – 6 & 7, affecting a 105
provisions. Qualitatively, the proposed changes alter substantially the basic
plan of government, from presidential to parliamentary, and from a bicameral
to a unicameral legislature.
Section 3. The Congress may, by a vote of two-thirds of all its Members, call a
constitutional convention, or by a majority vote of all its Members, submit to the
electorate the question of calling such a convention.
Proposal of amendments
(56) Del Rosario v. Comelec - 35 SCRA 367
Doctrine: The Constitutional Convention has the power to propose ANY
amendment or revision to the Constitution, except those that violate jus
cogens, or those established under international law.
 Simeon Del Rosario filed a petition questioning the constitutionality of RA
6132, calling for a Constitutional Convention.
o He argued that Congress abdicated its power as a constituent
body to propose amendments in favor of the Constitutional
Convention.
Issue: Whether or not RA 6132 is constitutional?
Ruling: RA 6132 is constitutional.
 Art. XV of the Constitution authorizes Congress sitting as a Constituent
Assembly either to propose amendments or to call a convention for the
purpose.
o The choice of either alternative is solely committed to
Congress, which cannot be inquired into nor interfered with by
this Tribunal, the same being purely a political question.
 Likewise, whether there is necessity for amending the Constitution is also
addressed to the wise judgment of Congress acting as a Constituent
Assembly, against which the Court cannot pit its own judgment.
 Finally, whether the Constitutional Convention will only propose
amendments to the Constitution or entirely overhaul the present
Constitution and propose an entirely new Constitution based on an
ideology foreign to the democratic system, is of no moment.
o The same will be submitted to the people for ratification and
once ratified by the sovereign people, there can be no debate
about the validity of the new Constitution.
o Whether the Constitution is merely amended in part or
revised or totally changed would become immaterial the
moment the same is ratified by the sovereign people.
(57) Imbong v. Comelec - 35 SCRA 28 – p. 13 no. 2
Doctrine:
while the authority to call a constitutional convention is vested by the
Constitution solely and exclusively in Congress acting as a constitutional
assembly, the power to enact the implementing details of the general law
does not exclusively pertains to Congress exercising its comprehensive
legislative power (not as a constitutional assembly), may pass the necessary
implementing law providing for the details of the constitutional conventions,
such as the number, qualification, and compensation of its members –
this is exercise of Congress’ plenary powers
Congress, acting as Constituent Assembly, passed resolution no. 2
which called for the constitutional convention to propose constitutional
amendments. After its adoption, the Congress, acting as a legislative
body, enacted RA 4914 implementing said resolution no. 2 and restating
entirely the provisions of the said resolution. Thereafter, Congress, acting
as a Constituent Assembly, passed resolution no, 4 amending the
aforesaid resolution by providing that “any other details relating to the
specific appointment of delegates, election of delegates to, and the
holding of the constitutional convention shall be embodied in an
implementing legislation.” Accordingly, Congress, acting as a legislative body,
enacted RA 6132 implementing resolutions nos. 2 and 4 and expressly
repealing RA 4914. Imbong and Gonzales, both members of the bar,
taxpayers, and interested in running as candidates in the 1971
Constitutional Convention, filed separate petitions for declaratory relief
questioning its constitutionality as it prejudices their rights as such candidates.
ISSUE: May Congress, acting as a legislative body, enact RA 6132 to
implement the resolution passed by it acting as a constituent assembly?
YES. The Court declared that while the authority to call a constitutional
convention is vested by the Constitution solely and exclusively in Congress
acting as a constitutional assembly, the power to enact the implementing
details of the general law does not exclusively pertains to Congress
exercising its comprehensive legislative power (not as a constitutional
 assembly), may pass the necessary implementing law providing for the
details of the constitutional conventions, such as the number,
qualification, and compensation of its members. In supplying such
details, however, the Congress, acting as an ordinary legislative body may
not transgress the resolution passed by the Congress acting as a constituent
assembly.
Section 4.Any amendment to, or revision of, this Constitution under Section 1 hereof
shall be valid when ratified by a majority of the votes cast in a plebiscite which shall be
held not earlier than sixty days nor later than ninety days after the approval of such
amendment or revision.
Any amendment under Section 2 hereof shall be valid when ratified by a majority of
the votes cast in a plebiscite which shall be held not earlier than sixty days nor later
than ninety days after the certification by the Commission on Elections of the
sufficiency of the petition.
Ratification
Doctrine of proper submission
 Because the Constitution prescribes the time frame within which the
plebiscite is to be held, there can be no question on whether such
is adequate
Question on amendment is subject to judicial review
(58) Planas v. Comelec - 49 SCRA 105
Doctrine: A Constitutional Convention can approve sections of a proposed
constitution as a valid exercise of powers delegated to it by the people.
In 1967, Congress passed Resoslution No. 2, amended by Resolution No. 4,
calling for a Convention to propose amendments to the Constitution. The
Constitutional Convention (ConCon) began to perform its functions in 1971.
This was implemented by RA 6132. While the ConCon was in session, Marcos
issued Proclamation No. 1081 placing the country under Martial Law, then
PD 73 submitting to the Filipinos the proposed Constitution for ratification
or rejection. Planas filed an action against the COMELEC, Treasurer and
Auditor General to enjoin the respondents from implementing PD 73
contending that the calling of the plebiscite and the incidenta matters, are
lodged exclusively in Congress and that there was no proper submission to
the people and no sufficient time to inform them. The Pres. Then suspended
the effect of P1081 for a free and open debate on the proposed Constitution.
Some petitioners contend that the ConCon exceeded its authority in
approving Sections 2, 3 Par 2, and 12 Art. 17 of the proposed Constituion.
Can the ConCon freely do this?
YES. The ConCon was legally free to postulate any amendment it may
deem fit to propose save Jus Cogens because the ConCon exercised
sovereign powers delegated thereto by the people although only as to
determination of the proposals to be made and also because the proposals
cannot be valid as part of our Fundamental Law unless and until approved
by the majority of the votes cast in an election where such proposal is
submitted to the people for their ratification.
Since the effectivity of a proposal made by a constituent assembly
depends upon the approval by the sovereign people, a constituent
assembly may propose any change in the constitution. The only possible
exception is that a constituent assembly may not propose anything that is
“inconsistent with what is known, particularly in international law, as Jus
Cogens.”
(59) Javellana v. Executive Secretary - 50 SCRA 30
Sequel of Planas case. Proclamation Nos. 2 & 4, calling a proposal to
amend the Constitution. P1102 was declared by Pres. Marcos, dispensing
with the election or plebiscite but before Citizen’s Assemblies. Josue
Javellana filed a case against the Exec. Sec, the Secretaries of National
Defense, Justice and Finance, to restrain them from implementing any of
the provisions of the proposed Constitution not found in the present
Constitution on the ground that the President had announced the
immediate implementation of the New Constitution through his Cabinet, who
are acting in excess of their jurisdiction as the Pres. Is without authority to create
Citizens Assemblies to approve the proposed Constitution, and to proclaim
the ratification by the People, and not a free election and hence null and
void. Several actions were filed by many other parties. They prayed for a
writ of preliminary mandatory injunction. This rests on the validity of the
new Constitution, which depends on W/N it has been ratified in
accordance with the 1935 Constitution.
Not ratified in accordance with the 1935 Constitution. However, not enough
votes to declare that the new Constitution is not in force.
The matter of ratification of an amendment to the Constitution should be
settled by applying the Constitution in force at the time of the alleged
ratification, or the old Constitution. Under the 1935 Constitution, there are 3
steps for its amendment:
1. Proposed either by Congress or a convention called for that
purpose by a vote of ¾ of all the members of the Congress voting
separately in a joint session assembled – satisfied
2. Amendments be submitted to the people for their ratification at an
election
The ConCon sought the submission to a plebiscite by reducing the
voting age from 21 to 18. Those below 21 cannot exercise the right of
suffrage without a previous amendment of the Constitution. Thus,
plebiscite must only be for people who are qualified to vote in an election.
Since those not qualified to vote participated in the plebiscite of the
Citizens’ Assemblies, it must be considered null and void.
3. Approved by a majority of the votes cast in said election.
(60) Mitra, Jr. v. Comelec - 104 SCRA 59
 Approved by a majority of the votes cast in said election.
Similar petition for prohibition contending that the 1973
Constitution is not in force, the Javellana ruling notwithstanding,
and praying for holding of a plebiscite so that the people may
vote on its ratification as to them, it is still in the proposal
stage contending that in the event it is rejected, the 1935
Constitution will be operative once again with the lifting of the
Martial Law.
 Dismissed.
 Approved by a majority of the votes cast in said
election. Javellana is controlling. Aside from the
referendum that led to the ratification of the present
Constitution, a 2nd one was held in 1973, and
another in 1975, and another in 1977. The fact that
the people went to the polls is indicative of their
acquiescence in the present Constitution.
In essence, this petition for mandamus and prohibition is not dissimilar from the
prohibition proceedings just dismissed filed respectively by former delegates Samuel
C. Occena and Ramon A. Gonzales. All three suits proceed on the assumption that
the present Constitution is not in force and effect. There is this variation. In the last two
paragraphs of this petition, the plea is made for the holding of a plebiscite so that the
people may vote on the ratification of the Constitution, now in force, but as to them, it
is still in the stage of proposal. In the event it is rejected, so their thinking goes, then
the 1935 Constitution, which in the view of petitioners was suspended by the
establishment of an authoritarian regime by the Commander-in-Chief of the Armed
Forces after the proclamation of martial law, could be once more operative with the
lifting of martial law on January 17, 1981. As in the Occena and Gonzales petitions,
there is what was therein referred to as a "rather unorthodox aspect" in "the assertion
that the 1973 Constitution is not the fundamental law, the Javellana ruling to the
contrary notwithstanding."
ISSUE: W/N a new Constitution can come into force despite the absence of a valid
ratification?
HELD: YES.
Controlling Jurisprudence:
● Javellana v Executive Secretary
○ In this case, the SC assumed jurisdiction and voted (8/10) for the
operative character of the 1973 Constitution
■ There is no affront to logic, it would seem, for us to
dismiss the petitions and accordingly rule that "there is
no further judicial obstacle to the new Constitution
being considered in force and effect."
 ○ Both the statements of "there being no further judicial obstacle" as
well as the negative form in which mention is made of there being
"not enough votes to declare that the new Constitution" is not in
force reflect the traditional mode in which constitutional issues are
passed upon in accordance with the American concept of judicial
review
○ Separate Opinion:
■ "Independently of the lack of validity of the ratification of
the new Constitution, if it be accepted by the people, in
whom sovereignty resides according to the
Constitution, then this Court cannot refuse to yield
assent to such a political decision of the utmost gravity,
conclusive in its effect. Such a fundamental principle is
meaningless if it does not imply, to follow Laski, that the
nation as a whole constitutes the "single center of
ultimate reference, necessarily the possessor of that
'power that is able to resolve disputes by saying the last
word."
Other Jurisprudence
● Angara v Electoral Commission
○ reflects the adoption of the American type of constitutional
government "where the written constitution is interpreted and given
effect by the judicial department.”
● Villena v. Secretary of Interior
○ "Familiarity with the essential background of the type of government
established under our Constitution, in the light of certain well-known
principles and practices that go with the system, should offer the
necessary explanation."
■ One of such practices is the manner in which the
dispositive portion of a decision in a suit contesting the
validity of a legislative or executive act is worded. It was
noted that Justice Holmes had a penchant for the
double negative. A favorite phrase of his was that the
statute "was not unconstitutional." That is of the
essence of judicial review. For one of its basic
postulates is the presumption of validity. The burden of
proof is thus on the person assailing the action taken
by a coordinate branch. There is no need therefore of
an affirmative finding as to its being constitutional. It
suffices that it has not been shown to be otherwise. It is
likewise by virtue of such presumption that Justice
Malcolm correctly asserted: "To doubt is to sustain."
■ Scholars in the field of constitutional law have even
gone further. They maintain that when the Supreme
Court or some members thereof whose votes are
crucial deem the question raised as a political and not
judicial resulting in the dismissal of the action, there
was, even then, a manifestation of the power of judicial
review at work. The Court, by ruling that it was without
jurisdiction, allowed the political branches to have their
way.
There can be no justification then for the reckless assertion that upon the
proclamation of martial law and while it was in force, constitutionalism, in terms of the
exercise of the power of judicial review and respect for individual rights, no longer
held sway in the Philippines. It was Justice Lionel Keith Murphy, of the High Court of
Australia, whose advocacy of a written bill of rights for his country has won him an
international reputation as a devoted and eloquent champion of human rights who
was the Second Comparative Law Lecturer of the Integrated Bar of the Philippines.
In that lecture, he appraised the role of this Court during martial law thus: "The
judicial system in the Philippines had undergone difficult times, and much stress has
been placed on it by the necessity to resolve great issues arising in a series of cases:
The Anti-Subversion, The Plebiscite, The Ratification, The Martial Law. The
Referendum, The Right, to Counsel and The Military Tribunal Cases."
(61) Gonzales v. Comelec - 21 SCRA 774
On March 16, 1967, the Senate and the House of
Representatives passed the following resolutions:
1. Resolution of Both Houses (RBH) No. 1, proposing that Sec. 5,
Art VI, of the Constitution, be amended so as to increase the
membership of the House of Representatives from a maximum
of 120, as provided in the present Constitution, to a maximum of
180
2. RBH No. 2, calling a convention to propose amendments, to be
composed of 2 elective delegates from each representative
district, to be "elected in the general elections on 2nd Tuesday of
Nov 1971
3. RBH No. 3, proposing that Sec 16, Art VI be amended so as to
authorize Senators and members of the HOR to become
delegates to the aforementioned constitutional convention, without
forfeiting their respective seats in Congress
Subsequently, Congress enacted RA4913, providing that the amendments
to the Constitution proposed in the aforementioned Resolutions No. 1 and
3 be submitted, for approval by the people, at the general elections which
shall be held on Nov 14, 1967.
Ramon A. Gonzales instituted the case as a class unit, for and in behalf
of all citizens, taxpayers, and voters
similarly situated and PHILCONSA, a civic, non-profit and non-partisan
organization the objective of which is to uphold the rule of law in the
Philippines and to defend its Constitution, are asking the court to restrain
COMELEC from enforcing RA4913 as the same was unconstitutional and
void.
1. Does Congress (through ordinary legislative process) have the
power to amend or propose amendment to the constitution?
NO. The power to amend the Constitution or to propose amendments is
not intended in the general grant of legislative powers to Congress. It is part
of the inherent powers of the people as the repository of sovereignty in the
republican state, such as ours, to make and hence, to amend their own
fundamental law. Congress may propose amendments to the Constitution
merely because the same explicitly grants such power. Hence, when exercising
the same, it is said that Senators and Members of the House of Congress
derive their authority from the Constitution, unlike the people when performing
the same function, for the authority of the people does not manage from the
Constitution as they are the very source of all powers of government,
including the Constitution itself.
The proposed constitutional amendments may be submitted at a plebiscite
scheduled on the same day as the regular elections as the 1935 Constitution
does not indicate that the election therein referred to is a special not a
general election. Ideally, amendments should be presented in a special
election in order that it can command the undivided attention of the
electorate. However, it is not required by the Constitution that a plebiscite
should be done in a special election. The decision whether amendments
or revision should be proposed is a wisdom left to the discretion of
Congress. The same as the conditions under which proposed amendments
shall be submitted to the people.
(62) Tolentino v. Comelec - 41 SCRA 702
The Constitutional Convention of 1971 convened for the purpose of
proposing amendments to the 1935 Constitution pursuant to resolutions 2
and 4 of the joint sessions of the Congress and by virtue of the
implementing legislation RA 6432. Constitutional Convention then
approved the organic resolution no. 1 proposing the amendments of
lowering the voting age of 21 to 18. The said resolution scheduled the
approval of the amendment in a plebiscite to coincide with the local elections
in November 1971 without prejudice to other amendments that will be
proposed in the future by the 1971 Constitutional Convention on other
portions of the Constitution. Petitioner now comes before the court to
prohibit and restrain the COMELEC from undertaking to hold a plebiscite
because the aforesaid Convention resolutions are null and void being violative
of the Constitution.
May the Constitutional Convention validly call for an advance plebiscite on
the sole amendment contained in the organic resolution no. 1 before the
rest of the constitution then under revision had been approved?
NO. The issue is essentially justiciable not political and hence, subject to
judicial review. The members of the Congress when proposing, as a
constituent assembly, amendments to the Constitution, derive their authority
from the fundamental law that it necessarily follows that they do not have the
final say on whether or not their acts are within or beyond constitutional limits.
Otherwise, they could brush aside and set the same at naught, contrary to
the basic tenet that ours is a government of laws, not of men, and to the
rigid nature of our Constitution.
In the languag e of the 193 5 Constitution, the use of the word “election” in
the singu lar mean t that the entire Constitution must be submitted for
ratification at one plebiscite only; furthermore, the people have to be given a
“prope r frame of reference” in arriving at their decision. Thus, submission for
ratification of piece-meal amend ments by the Constitutional Conven tion (which
is tasked to revise the Constitution) was disallowed since the people had, at
that time, no idea yet of what the rest of the revised Constitution would be. The
proposed amendment should be submitted to them not separately from but
together with all the other amendments to be proposed by this present
convention.
ARTICLE XVIII
TRANSITORY PROVISIONS
Section 1. The first elections of Members of the Congress under this Constitution shall
be held on the second Monday of May, 1987.
The first local elections shall be held on a date to be determined by the President,
which may be simultaneous with the election of the Members of the Congress. It shall
include the election of all Members of the city or municipal councils in the Metropolitan
Manila area.
Section 2. The Senators, Members of the House of Representatives, and the local
officials first elected under this Constitution shall serve until noon of June 30, 1992.
Of the Senators elected in the elections in 1992, the first twelve obtaining the highest
number of votes shall serve for six years and the remaining twelve for three years.
Section 3. All existing laws, decrees, executive orders, proclamations, letters of
instructions, and other executive issuances not inconsistent with this Constitution shall
remain operative until amended, repealed, or revoked.
Section 4. All existing treaties or international agreements which have not been ratified
shall not be renewed or extended without the concurrence of at least two-thirds of all
the Members of the Senate.
Section 5. The six-year term of the incumbent President and Vice-President elected in
the February 7, 1986 election is, for purposes of synchronization of elections, hereby
extended to noon of June 30, 1992.
The first regular elections for the President and Vice-President under this Constitution
shall be held on the second Monday of May, 1992.
Section 6. The incumbent President shall continue to exercise legislative powers until
the first Congress is convened.
Section 7. Until a law is passed, the President may fill by appointment from a list of
nominees by the respective sectors, the seats reserved for sectoral representation in
paragraph (2), Section 5 of Article V1 of this Constitution.
Section 8. Until otherwise provided by the Congress, the President may constitute the
Metropolitan Manila Authority to be composed of the heads of all local government
units comprising the Metropolitan Manila area.
Section 9. A sub-province shall continue to exist and operate until it is converted into a
regular province or until its component municipalities are reverted to the mother
province.
Section 10. All courts existing at the time of the ratification of this Constitution shall
continue to exercise their jurisdiction, until otherwise provided by law. The provisions
of the existing Rules of Court, judiciary acts, and procedural laws not inconsistent with
this Constitution shall remain operative unless amended or repealed by the Supreme
Court or the Congress.
Section 11. The incumbent Members of the Judiciary shall continue in office until they
reach the age of seventy years or become incapacitated to discharge the duties of
their office or are removed for cause.
Section 12. The Supreme Court shall, within one year after the ratification of this
Constitution, adopt a systematic plan to expedite the decision or resolution of cases or
matters pending in the Supreme Court or the lower courts prior to the effectivity of this
Constitution. A similar plan shall be adopted for all special courts and quasi-judicial
bodies.
Section 13. The legal effect of the lapse, before the ratification of this Constitution, of
the applicable period for the decision or resolution of the cases or matters submitted
for adjudication by the courts, shall be determined by the Supreme Court as soon as
practicable.
Section 14. The provisions of paragraphs (3) and (4), Section 15 of Article VIII of this
Constitution shall apply to cases or matters filed before the ratification of this
Constitution, when the applicable period lapses after such ratification.
Section 15. The incumbent Members of the Civil Service Commission, the
Commission on Elections, and the Commission on Audit shall continue in office for one
year after the ratification of this Constitution, unless they are sooner removed for
cause or become incapacitated to discharge the duties of their office or appointed to a
new term thereunder. In no case shall any Member serve longer than seven years
including service before the ratification of this Constitution.
(63) Gaminde v. COA - 347 SCRA 655
Pres. Ramos appointed Petitioner Thelma Gaminde, ad interim, CSC
Commissioner and assumed office on June 1993. Her appointment was
confirmed by the Commission on Appointment but the appointment provides
that her term would end on Feb 2, 1999. She then sought clarification as to the
expiry of her term, to which the Chief Presidential Legal Counsel replied that
her term would expire on 2000. Relying on such response, she remained in
office. On Feb 4, 1999, Chairman Corazon de Leon wrote the COA,
requesting an opinion whether the Gaminde and her co-terminous staff may
be paid their salaries considering that their appointments had expired on
Feb 2, 1999. COA General Conusel issued an opinion that their term had expired
and as such, CSC Resident Felipe issued a notice of disallowance of audit the
salaries and emoluments of Gaminde and her staff.
Until 1999 only but should be granted salaries until 2000
Sec. 15 Art. 18 contemplates TENURE, not term of the incumbent Chairmen
and members of the Constitutional Commissions, who shall continue in office
for 1 year after the ratification of this Constitution unless sooner removed.
Term means the time during which the officer may claim to hold office as a
matter of right, and fixes the interval after which the several incumbents
shall succeed one another. The tenure represents the term during which the
incumbent actually holds the office. The term of office is not affected by the
hold-over. The tenure may be shorter than the term for reasons within or
beyond the power of the incumbent.
Tenure may be cut short by:
1. Removal from office for cause
2. Becoming incapacitated to discharge the duties of their office, or
3. Appointment to a new term, all of which events may occur before
the end of the 1 year period after the effectivity of the
Constitution.
However, this does not affect the term of office fixed in Art. 9 providing
for a 7-5-3 year rotational interval. As such, Gaminde accepted the
appointment to expire on Feb 2, 1999. She is bound by the term of
appointment she accepted. The letter of Deputy Exec. Sec Renato Corona
clarifying that her term would expire in 2000 is error for what was submitted
to the Commission on Appointment was a nomination for a term expiring on
1999.
Section 16. Career civil service employees separated from the service not for cause
but as a result of the reorganization pursuant to Proclamation No. 3 dated March 25,
1986 and the reorganization following the ratification of this Constitution shall be
entitled to appropriate separation pay and to retirement and other benefits accruing to
them under the laws of general application in force at the time of their separation. In
lieu thereof, at the option of the employees, they may be considered for employment in
the Government or in any of its subdivisions, instrumentalities, or agencies, including
government-owned or controlled corporations and their subsidiaries. This provision
also applies to career officers whose resignation, tendered in line with the existing
policy, had been accepted.
Security of tenure
(64) Dario v. Mison - 176 SCRA 84 - 81954
PP 1 declaring as policy the reorganization of govt and PP 3, providing
for the adoption of a provisional Constitution and an orderly transition to a
govt under a new Constitution. Pursuant to these PPs, several EOs were
issued by Pres. Aquino reorganizing the govt. Among other offices, EO
127 reorganized the BOC and pursuant to this, Commissioner of Customs
Salvador Mison, issued a memorandum providing for guidelines and procedure
in the personnel replacement and sent several notices to 310 Customs
officials that they are now performing their duties in a hold-over capacity and
those not re-appointed shall be deemed separated from service. Also, 394
officials and employees were given individual notices of separation. CSC ordered
their reinstatement. Commissioner Mison, instituted this certiorari.
Is Sec. 16, in so far as it mentions removals not for cause, a grant of a
license upon the Government to remove career public officials and to
remove them without rhyme or reason?
NO. There is no question that the administration may validly carry out a government
reorganization — insofar as these cases are concerned, the reorganization of the
Bureau of Customs — by mandate not only of the Provisional Constitution, supra, but
also of the various Executive Orders decreed by the Chief Executive in her capacity
as sole lawmaking authority under the 1986-1987 revolutionary government. It should
also be noted that under the present Constitution, there is a recognition, albeit
implied, that a government reorganization may be legitimately undertaken, subject to
certain conditions. Thus, removal arising from abolition of office as a result of
reorganization carried out by reason of economy – no need to prove anything
because the Constitution allows it. For removal for redundancy of functions –
good faith must be proven. as
Also, RA 6656 is constitutional, which provides for reinstatement of EEs
separated without a valid cause after and after due notice and hearing, is
not contrary to Sec. 16. Although Sec. 16 mentions separations “not for
cause”, such must nevertheless be on account of a valid reorganization
and not automatically. Otherwise, security of tenure may be invoked. Since
it has safeguards, it is constitutional.
(65) Mendoza v. Quisumbing - 186 SCRA 108
 After the February 1986 revolution, President Corazon Aquino issued
Proclamation No. 1 declaring as policy the reorganization of the
government.
 Proclamation No. 3 was then issued to implement  the reorganization.
o The reorganization aimed to promote economy, efficiency,
and the eradication of graft and corruption.
o It provided that all elective and appointive officials and
employees under the 1973 Constitution shall continue in
office until otherwise provided by proclamation or executive
order or upon the appointment and qualification of their
successors.
 Consistent with the proclamation, several Executive Orders were issued
reorganizing government departments, including DECS, DOST, DOTC,
DA, and DOH.
o Incumbent government officials/ employees were considered
to be in holdover status , continued to hold their positions until
their successors were appointed.
o Many government employees were separated from service as
a result even after the 1987 Constitution became effective. .
 Petitioners are among those employees that have been separated from
service and filed the present petitions claiming that their right to security of
tenure has been violated.
 The government defended the reorganization on the ground of Sec. 16,
Art. XVIII (Transitory Provisions), which explicitly authorize the removal of
career civil service employees not for cause but as a result of the
reorganization pursuant to Proclamation No. 3.
o Sec. 16: Career civil service employees separated from the
service not for cause but as a result of the reorganization
pursuant to Proclamation No. 3 dated March 25, 1986 and the
reorganization following the ratification of this Constitution
shall be entitled to appropriate separation pay and to
retirement and other benefits accruing to them under the laws
of general application in force at the time of their separation.
In lieu thereof, at the option of the employees, they may be
considered for employment in the Government or in any of its
subdivisions, instrumentalities, or agencies, including
government-owned or controlled corporations and their
subsidiaries. This provision also applies to career officers
whose resignation, tendered in line with the existing policy,
had been accepted.
Issue: Whether or not the Petitioners’ separation from service were valid?
Ruling: No. When the 1987 Constitution became effective, security of tenure governed.
 The occupancy of a position in hold-over capacity was conceived to
facilitate reorganization and would have lapsed on Feb. 25, 1987 (under
the Provisional Constitution), but advanced to Feb. 2, 1987 when the 1987
Constitution became effective.
 There is no dispute over the power to reorganize—whether traditional,
progressive, or whatever adjective is appended to it.
o However, the essence of constitutional government is
adherence to basic rules.
o The rule of law requires that no government official should
feel free to do as he pleases using only his avowedly sincere
intentions and conscience to guide him.
o The fundamental standards of fairness embodied in the bona
fide rule cannot be disregarded.
o More particularly, the auto-limita-tions imposed by the
President when she proclaimed the Provisional Constitution
and issued executive orders as sole law maker and the
standards and restrictions prescribed by the present
Constitution and the Congress established under it, must be
obeyed.
 Security of tenure, together with the merit and fitness rule, is a basic
feature of the civil service scheme we have adopted in the Philippines.
o If established principles protecting security of tenure are to be
disregarded or waived, this can be done only on the basis of
clear constitutional grounds.
 It is significant that in the charters or legislative authority for the exercise
of power—the Provisional Constitution of 1986, Executive Order No. 17,
and Republic Act No. 6656—any reorganization in Government must
follow the bona-fide rule.
o There is no basis in the above laws for indiscriminate
dismissals. The executive implementors of policy are required
to abide by the intent and purpose stated in the grant of
power, to follow the guidelines set out for them and, in the
words of the President “ensure that only those found corrupt,
inefficient, and undeserving are separated from the
government service.
Section 17. Until the Congress provides otherwise, the President shall receive an
annual salary of three hundred thousand pesos; the Vice-President, the President of
the Senate, the Speaker of the House of Representatives, and the Chief Justice of the
Supreme Court, two hundred forty thousand pesos each; the Senators, the Members
of the House of Representatives, the Associate Justices of the Supreme Court, and
the Chairmen of the Constitutional Commissions, two hundred four thousand pesos
each; and the Members of the Constitutional Commissions, one hundred eighty
thousand pesos each.
Section 18. At the earliest possible time, the Government shall increase the salary
scales of the other officials and employees of the National Government.
Section 19. All properties, records, equipment, buildings, facilities, and other assets of
any office or body abolished or reorganized under Proclamation No. 3 dated March 25,
1986 or this Constitution shall be transferred to the office or body to which its powers,
functions, and responsibilities substantially pertain.
Section 20. The first Congress shall give priority to the determination of the period for
the full implementation of free public secondary education.
Section 21. The Congress shall provide efficacious procedures and adequate
remedies for the reversion to the State of all lands of the public domain and real rights
connected therewith which were acquired in violation of the Constitution or the public
land laws, or through corrupt practices. No transfer or disposition of such lands or real
rights shall be allowed until after the lapse of one year from the ratification of this
Constitution.
Section 22. At the earliest possible time, the Government shall expropriate idle or
abandoned agricultural lands as may be defined by law, for distribution to the
beneficiaries of the agrarian reform program.
Section 23. Advertising entities affected by paragraph (2), Section 11 of Article XV1 of
this Constitution shall have five years from its ratification to comply on a graduated and
proportionate basis with the minimum Filipino ownership requirement therein.
Section 24. Private armies and other armed groups not recognized by duly constituted
authority shall be dismantled. All paramilitary forces including Civilian Home Defense
Forces not consistent with the citizen armed force established in this Constitution, shall
be dissolved or, where appropriate, converted into the regular force.
Section 25. After the expiration in 1991 of the Agreement between the Republic of the
Philippines and the United States of America concerning military bases, foreign
military bases, troops, or facilities shall not be allowed in the Philippines except under
a treaty duly concurred in by the Senate and, when the Congress so requires, ratified
by a majority of the votes cast by the people in a national referendum held for that
purpose, and recognized as a treaty by the other contracting State.
(66) Bayan v. Executive Secretary - 342 SCRA 449
PH & US forged a Military Bases Agreement, which formalized the use of
installation in the PH by US military personnel. In view of the impending
expiration of the RP-US Military Bases Agreement in 1991, PH and US
negotiated for a possible extension but the PH Senate rejected the proposed RP-
US Treaty of Friendship, Cooperation and Security, which would have extended
the presence of US military bases in the PH. Later on, IS and PH exchanged
notes on possibility of a Visiting Forces Agreement (VFA), which was later on
approved and signed by the parties. Pres. Estrada ratified this VFA and transmitted
to the Senate the Instrument of Ratification, which was approved by Senate by
a 2/3 vote of its members. VFA provides for the mechanism for regulating the
circumstances and conditions under which the US Armed forces and defense
personnel may be present in the PH. Petitioners question the constitutionality of
the VFA contending that Sec. 25 applies considering that the VFA has for its
subject the presence of foreign military troops in the PH and as such, US must
adopt it as a treaty as well.
PETITION DISMISSED, compliant with the Constitutional mandate.
Section 21, Article VII Section 25, Article XVIII
Treatise or international agreements Applies to treaties which involve
in general, which requires 2/3 of all the presence of foreign military
members of the Senate, including all bases in the PH and concurrence
treaties, international agreements of Senate is only 1 of the requisites to
entered into by the PH regardless of render compliance with the
the subject matter. constitutional requirements. It must
also be ratified by a majority of the
votes cast in a national referendum.
Both require concurrence of Senate, both requiring 2/3 of all members as
provided by Sec. 21 which also applies to Section 25.
This case should fall under Sec. 25 as it involves foreign military bases. As
to the contention that it is inapplicable as there is no permanent placing of
structure for the establishment of a military base, the Constitution makes no
distinction between transient and permanent. Sec. 25 disallows foreign
military bases unless the following conditions are met:
1. It must be under a treaty
2. Treaty must be duly concurred in by the Senate and when
so required by Congress, ratified by a majority of the votes
cast by the people in a national referendum
3. Recognized as a treaty by the other contracting state
First 2 are complied with. As to 3rd, the Court is of the firm view that the
phrase “recognized as treaty” means acceptance or acknowledgment the
agreement as a treaty. To require the other state to submit it to the US
Senate for concurrence is to accord strict meaning to the phrase. It is
immaterial whether the US merely treats the VFA as an executive
agreement as under international law, an executive agreement is as
binding as a treaty. Also, US stated that it is fully committed to living up
to the terms of the VFA. As long as it accepts or acknowledges the VFA
as a treaty and binds itself to comply with its obligations, there is a marked
compliance with the Consitution.
Section 26. The authority to issue sequestration or freeze orders under
Proclamation No. 3 dated March 25, 1986 in relation to the recovery of ill-gotten
wealth shall remain operative for not more than eighteen months after the
ratification of this Constitution. However, in the national interest, as certified by the
President, the Congress may extend such period.
A sequestration or freeze order shall be issued only upon showing of a prima facie
case. The order and the list of the sequestered or frozen properties shall forthwith
be registered with the proper court. For orders issued before the ratification of this
Constitution, the corresponding judicial action or proceeding shall be filed within six
months from its ratification. For those issued after such ratification, the judicial
action or proceeding shall be commenced within six months from the issuance
thereof.
The sequestration or freeze order is deemed automatically lifted if no judicial action
or proceeding is commenced as herein provided.
Extent of PCGG's power
 Writ of sequestration may be issued only upon authority of at least
2 PCGG Commissioners.
 Lifting of the sequestration orders does not ipso facto mean that
the sequestered property i s not ill gotten.
 It only means that the role of government as
conservator is terminated.
 Sandiganbayan can review the validity of sequestration orders.
 PCGG has authority to enter into compromise agreements
involving ill- gotten wealth and to grant immunity in civil and
criminal cases without need of prior Congressional approval.
 A mere allegation in the complaint that the accused is a
relative of Pres. Marcos will not suffice to enable the PCGG to
take cognizance of the case. There must also be a showing that
the accused has unlawfully accumulated wealth by virtue of such
close relation.
 In order that the SB’s exclusive jurisdiction may be invoked, the
PCGG must be a party to the suit.
(67) Cojuangco, Jr. v. Roxas et. al - 195 SCRA 797
On April 18, 1989, the annual meeting of stockholders of SMC was held.
Because PCGG sequestered shares they were included in the election.
Other members contend that the shares are not under sequestration and
even if they are, PCGG had no right to vote the same. They were
overruled so PCGG was allowed to vote. Petitioners allege that the votes of
PCGG were illegally cast and should be counted in their favor.
Is the right to vote sequestered shares of stock vested in the actual
shareholders of in the PCGG?
Actual shareholders and as such, the election of the officers wherein PCGG
participated must be set aside but remains de facto officers until a new set of
officers is elected
PCGG:
1. May not exercise acts of ownership,
2. Has only powers of administration.
The PCGG cannot perform acts of strict ownership of sequestered property. It is a
mere conservator. It may not vote the shares in a corporation and elect the members
of the board of directors. The only conceivable exception is in a case of a takeover of a
business belonging to the government or whose capitalization comes from public
funds, but which landed in private hands as in BASECO.
Sequestered shares of stock is minority Sequestered shares of stock is majority of
of voting shares voting shares
Registered owners would in any case Registered owners are to elect a majority
be able to vote in only a minority of of the Board of Directors.
Board of Directors.
PCGG, to perform its functions as Safeguards:
conservator of sequestered shares 1) An independent comptroller
pending final determination by the must be appointed by the denied the PCGG under ordinary circumstances. However, when Mr.
courts whether they are ill-gotten, must: Board of Directors upon a Marcos took possession and control of total ownership thereof which he
1) Be represented in the nomination of the PCGG, could not have acquired out of his lawfully gotten wealth, the PCGG was
Board of Directors and of its which cannot be removed allowed by the Court to vote the sequestered shares. This is justified
majority-owned subsidiaries without its consent; because the former officers were just tools of Pres. Marcos and were no
and in the Executive 2) Corporate Secretary must be longer owners of any stock in the firm. However, PCGG nominees must
Committee; acceptable to PCGG; never forget that they are conservators, not owners, they are fiduciaries,
2) Right of full access to and 3) External auditors must be trustees, of whom the highest degree of diligence and rectitude is, in the
inspection of books, independent and acceptable premises, required.
records, etc. and the right to PCGG;
to receive copies of reports 4) PCGG must be represented (69) Republic v. Sandiganbayan - 192 SCRA 743
to Board of Directors; in the Board of Directors and
3) Observe and monitor the in the Executive Committee In this case the PCGG sequestered a jet plane not belonging to a
carrying out of the business with the right to vote; sequestered company. PCGG asked the Sandiganbayan for authority to sell.
and discover in a timely 5) All disbursements of The Sandiganbayan did not grant the authority. The PCGG sold the plane
manner any move to corporate funds in excess of claiming that it was necessary for the preservation of the property and that its
conceal, waste, and P5 Million must have prior request from the Sandiganbayan was merely out of courtesy.
dissipate the assets of the approval of PCGG;
corporation or the 6) Incurring debt in excess of P5 Can the PCGG exercise prerogatives of ownership such as sale over
sequestered shares, and Million requires prior approval such sequestered property?
seasonably bring such as well;
move to the attention of the 7) Disposition of substantial part NO
Sandiganbayan. of assets in excess of P5 The SC held that the power over sequestered property is administrative power,
Million requires prior not dominical power. It may not be exercised without court permission.
approval. Moreover, for the validity of a sequestration, prima facie evidence is
needed. On that basis a sequestration may be challenged before the
Sandiganbayan. Rightly the Sandiganbayan refused to recognize the
sequestration absent evidence to justify it.
(68) BASECO v. PCGG - 155 SCRA 60
The only qualifying requirement in the Constitution is that the action or
Baseco questions EOs 1 & 2 and the sequestration, takeover and other acts proceeding be filed “for” orders of sequestration, freezing or provisional
done of the PCGG in accordance with said EOs. Commissioner Ramon Diaz take-over. What is apparently contemplated is that the action or
decreed the provisional takeover by the PCGG of Baseco, pursuant proceeding must concern or involve the matter of sequestration, freezing or
to EO1 and removed its officers. Evidence supports the conclusion that Pres. provisional take-over of specific property – and should have, as objective, the
Marcos not only controls Baseco, it owns 100% of its outstanding stock and demonstration by competent evidence, that the property is indeed “ill- gotten
its stockholders and directors are mere dummies or alter egos of Pres. wealth” over which the government has a legitimate claim for recovery and other
Marcos. relief. Thus, where the PCGG had filed complaints against named defendants
and had attached to the complainant a list of other corporations alleged to be
Are the acts of the PCGG valid? dummies of the defendant, such listing was found sufficient to prevent the
lifting of the sequestration of listed corporations even if they themselves had not
YES been impleaded.
The govt’s plan to recover ill-gotten wealth is valid. However, it is
subject to the fundamental rights of private property and free enterprise,
(70) Disini v. Sandiganbayan, GR No. 180564
as pillars of a free society. The law has prescribed 3 provisional
remedies:
1. Sequestration – to place in its possession or control property and This case involved an immunity agreement between petitioner and the
records, businesses to prevent their destruction, concealment, or State whereby petitioner agreed to testify for, and provide information and
dissipation until final determination documents to, the State in two cases involving the contract for the
construction of the Bataan Nuclear Power Plant, believed to have been brokered
2. Freeze order – prohibits the person having
by one of his second cousin’s companies and attended by anomalies. Under
possession of property alleged to be ill gotten
the same agreement, petitioner would not be compelled to testify in any
from transferring, conveying, concealing or
other case which the state may bring against his said cousin. Eighteen
depleting
years after the immunity agreement was forged, and after petitioner
3. Provisional takeover – assumption of control over operations only
complied with his undertaking, the State, through the PCGG, revoked its
to businesses taken over by the govt of the Marcos Administration
guarantee not to compel petitioner to testify against his second cousin.
or by entities or persons close for Pres. Marcos

These remedies may be resorted to only for a particular exigency: to prevent
in the public interest the disappearance or dissipation of property or
business, and conserve it pending adjudgment in appropriate proceedings of
the primary issue of whether or not the acquisition of title or other right
thereto by the apparent owner was attended by some vitiating anomaly.
None of the remedies is meant to deprive the owner or possessor of his title
or any right to the property sequestered, frozen or taken over and vest it in
the sequestering agency, the Government or other person. This can be done
only for the causes and by the processes laid down by law. Also, they are
provisional, temporary, and always subject to the control of the issuing court
or agency.
In this case however, the provisional takeover is valid as Baseco was
proven to be owned and controlled by Pres. Marcos, which is the
requirement for a provisional takeover. Since it is present, the takeover is
valid. However, PCGG cannot exercise acts of dominion over property
sequestered. It may not vote sequestered shares of stock or elect the
members of the board of directors of the corporation concerned, it may not
exercise acts of ownership and is limited to powers of administration. The
removal and election of members of the BOD are clear acts of ownership
on the part of the shareholders of the corporation, a right that should be
Is petitioner immune?
YES. PCGG’s revocation of the questioned immunity and Sandiganbayan’s
denial of Disini’s motion to quash the subpoena were both annulled.
A contract is the law between the parties. It cannot be withdrawn except by
their mutual consent. This applies with more reason in this case where
petitioner had already complied with the terms and conditions of the
Immunity Agreement. To allow the Republic to revoke the Agreement at this
late stage will run afoul of the rule that a party to a compromise cannot ask
for a rescission after it had enjoyed its benefits. The Court should not allow
the Republic, to put it bluntly, to double cross Disini. The Immunity
Agreement was the result of a long drawn out process of negotiations with
each party trying to get the best concessions out of it. The Republic did not
have to enter into that agreement; it was free not to. But when it did, it
needed to fulfill its obligations honorably as Disini did. More than anyone, the
government should be fair.
Section 27. This Constitution shall take effect immediately upon its ratification by
a majority of the votes cast in a plebiscite held for the purpose and shall
supersede all previous Constitutions.

The foregoing proposed Constitution of the Republic of the Philippines was

approved by the Constitutional Commission of 1986 on the twelfth day of
October, Nineteen hundred and eighty-six, and accordingly signed on the
fifteenth day of October, Nineteen hundred and eighty-six at the Plenary Hall,
National Government Center, Quezon City, by the Commissioners whose
signatures are hereunder affixed.

Date of effectivity of the Constitution

(71) De Leon v. Esguerra - 153 SCRA 602

Doctrine:
In the 1982 barangay elections, Petitioner Alfredo de Leon was elected
barangay captain and the other petitioners as Brgy councilmen of Brgy
Dolores, Taytay, Rizal. In 1987, De Leon received a Memorandum
antedated Dec 1, 1986 but signed by OIC Governor Esguerra on Feb 8, 1987
designating Magno as Barangay Captain. The designation made by the OIC
was “by authority of the Minister of Local Government.” Petitioners pray that
the Memoranda of Feb 8, 1987 be declared null and void and prohibit the
respondents from taking over their positions on the ground that with the
ratification of the 1987 Constitution, the governor no longer has authority to
replace them and designate their successors. Petitioners, as elective
officials under the 1973 Constitution, may continue in office but should
vacate upon proclamation or EO providing for such or a designation or
appointment and qualification of their successors. There is no proclamation
or EO terminating them. The question now is whether the designation of
respondents was made within the 1yr period which ended on Feb 25, 1987.

PETITION GRANTED, while within the deadline, superseded by the

Constitution. They were designated on Feb 8, which is ostensibly within
the deadly. However, the provisional Constitution must be deemed to have
been overtaken by Sec. 27. The 1987 Constitution was ratified in a plebiscite
on Feb 2, 1987. The day of ratification, that is, the day on which the
votes of the people were cast to signify their acceptance of the draft. By
that date, therefore, the Provisional Constitution must be deemed to have
been superseded. Having become inoperative, respondent OIC Governor
could no longer rely on the Provisional Constitution to designate
respondents to the elective positions occupied by petitioners.