• CTA rendered a decision declaring the compromise
Philippine National Oil Company v. CA
GR No. 109976/112800, 26 April 2005
LEGAL DOCTRINE:
• The discretionary power of the BIR Commissioner to enter
into compromises cannot be superior over the power of judicial
review by the courts, his authority to compromise granted to the BIR
Commissioner is never meant to be absolute, uncontrolled and
unrestrained.
FACTS:
• In a sworn statement by private respondent Tirso
Savellano to the BIR, Savellano informed BIR that PNB had failed to
withhold the 15% final tax on interest earnings and/or yields from
the money placements of PNOC with the said bank in violation of PD
1931, which withdrew all tax exemptions of GOCCs.
• Thereafter, BIR requested to PNOC to settle its liability for
taxes on the interests earned by its money placements with PNB and
which PNB did not withhold.
• PNOC wrote to the BIR and made an offer to compromise
its tax liability. It proposed to set-off its tax liability against a claim
for tax refund/credit of NAPOCOR, then pending with the BIR. The
amount of the claim for tax refund/credit was supposedly a
receivable amount of PNOC from NAPOCOR.
• Soonafter, BIR sent a demand letter to PNB, as withholding
agent, for the payment of the final tax on the interest earnings
and/or yields from PNOC’s money placements with the bank, PNOC
was informed of said demand letter to PNB.
• Hence, in another letter, PNOC reiterated its proposal to
settle its tax liability through the set-off earlier suggested, to which
the BIR replied that the proposal for set off was premature since
NAPOCOR’s claim was still under process.
• PNOC made another offer to the BIR to compromise its tax
liability by paying 30% of the basic tax due in accordance with E0 44.
BIR accepted the compromise.
• Privant respondent Savellano received an informer’s
reward from the BIR in installments. Thereafter, Savellano
demanded the payment of the remaining balance of his reward, but
the BIR contended that it already fully paid the informer’s reward,
which is equivalent to 15% of the amount of tax actually collected by
the BIR pursuant to the compromise agreement with PNOC.
• Savellano submitted another letter to the BIR questioning
the legality of the compromise agreement it entered into with
PNOC, and claimed that the tax liability should have been collected
in full. When this was denied by the BIR, he filed a motion for
reconsideration.
• Thereafter, while his MR was pending, Savellano filed a
petition for review with the CTA alleging that BIR Commissioner Tan
acted “with grave abuse of discretion and/or whimsical exercise of
jurisdiction” in entering into a compromise agreement that resulted
in “a gross and unconscionable diminution” of his reward.
• Years after, the new BIR commissioner demanded that
PNB pay the deficiency withholding tax on PNOC’s money
placements. With this, Savellano filed a motion to withdraw his
motion for suspension of the proceeding since the BIR already
resolved his MR.
agreement between BIR, PNOC and PNB to be without force and
effect, and directed the BIR to enforce the tax assessment it issued
against PNB.
• On appeal, the CA affirmed the decision of the CTA. Hence,
this petition.
ISSUE:
Whether the Court of Tax Appeals had jurisdiction to question the
compromise agreement entered into by the Commissioner of
International Revenue. YES, the CTA had jurisdiction to question the
compromise agreement.
RATIO
• It is generally true that purely administrative and
discretionary functions may not be interfered with by the courts; but
when the exercise of such functions by the administrative officer is
tainted by a failure to abide by the command of the law, then it is
incumbent on the courts to set matters right, with this Court having
the last say on the matter. The manner by which BIR Commissioner
Tan exercised his discretionary power to enter into a compromise
was brought under the scrutiny of the CTA amidst allegations of
“grave abuse of discretion and/or whimsical exercise of jurisdiction.”
The discretionary power of the BIR Commissioner to enter into
compromises cannot be superior over the power of judicial review
by the courts. The discretionary authority to compromise granted to
the BIR Commissioner is never meant to be absolute, uncontrolled
and unrestrained. No such unlimited power may be validly granted
to any officer of the government, except perhaps in cases of national
emergency.
• In this case, the BIR Commissioner’s authority to
compromise, whether under E.O. No. 44 or Section 246 of the NIRC
of 1977, as amended, can only be exercised under certain
circumstances specifically identified in said statutes. The BIR
Commissioner would have to exercise his discretion within the
parameters set by the law, and in case he abuses his discretion, the
CTA may correct such abuse if the matter is appealed to them.
• Although the general rule is that compromises are to be
favored, and that compromises entered into in good faith cannot be
set aside, this rule is not without qualification. A court may still
reject a compromise or settlement when it is repugnant to law,
morals, good customs, public order, or public policy. The
compromise agreement between the BIR and PNOC was contrary to
law having been entered into by BIR Commissioner Tan in excess or
in abuse of the authority granted to him by legislation. E.O. No. 44
and the NIRC of 1977, as amended, had identified the situations
wherein the BIR Commissioner may compromise tax liabilities, and
none of these situations existed in this case.
• In the case at bar, the compromise was contrary to public
policy. The primary duty of the BIR is to collect taxes since taxes are
the lifeblood of the Government and their prompt and certain
availability are imperious needs. In the present case, however, BIR
Commissioner Tan, by entering into the compromise agreement that
was bereft of any legal basis, would have caused the Government to
lose almost P300 million in tax revenues and would have deprived
the Government of much needed monetary resources. Allegations of
good faith and previous execution of the terms of the compromise
agreement on the part of PNOC would not be enough for this Court
to disregard the demands of law and public policy. Compromise may
be the favored method to settle disputes, but when it involves taxes,
it may be subject to closer scrutiny by the courts. A compromise
agreement involving taxes would affect not just the taxpayer and the
BIR, but also the whole nation, the ultimate beneficiary of the tax
revenues collected.
Douglas Cagas VS COMELEC
G.R. No. 194139
January 24, 2012
Facts: The petitioner and respondent Claude P. Bautista were
candidate for Governor of the Province of Davao del Sur in the May
10, 2010 automated national and local elections. On may 14, 2010,
canvassing of votes were cast in favor of the petitioner.
Alleging anomalies in the conduct of the election, Bautista filed an
electoral protest on May 24, 2010. In his answer the petitioner
averred as his special affirmative defenses that Bautista did not
make the requisite cash deposit on time; and that Bautista did not
render a detailed specification of the acts or omissions complained
of. The COMELEC First Division issued the first order denying the
special affirmative defenses of the petitioner. The petitioner moved
to reconsider on the ground that the order did not discuss whether
the protest specified the alleged irregularities. Bautista countered
that the assailed orders, being merely interlocutory, could not be
elevated to the COMELEC en banc. the COMELEC First Division
issued its second order, denying the petitioner’s motion for
reconsideration for failing to show that the first order was contrary
to law. Hence, petitioner commenced the present special civil action.
Issue: whether or not Supreme Court can take cognizance of the
petition for certiorari.
Held: No. Though Section 7, Article IX of the 1987 Constitution
grants SC the power to review any decision, order or ruling of
COMELEC, this however is limited only to a final decision or
resolution of the COMELEC en banc, and does not extend to an
interlocutory order issued by a Division of the COMELEC. Otherwise
stated, the Court has no power to review on certiorari an
interlocutory order or even a final resolution issued by a Division of
the COMELEC.
PHILIPPINE AMUSEMENT AND GAMING CORPORATION v. RICHARD
SYHONGPAN
500 SCRA 198 (2006)
A government officer or employee may be dismissed for dishonesty
even if the latter was not committed in the performance of duty.
Philippine Amusement and Gaming Corporation’s (PAGCOR) Casino
Filipino-Heritage, Manila opened its expanded VIP Gaming Area.
Richard Syhongpan, the Branch Manager of Casino Filipino-Davao,
attended the event during which he played in the casino area with
other officers of the casino and players until the next day. The
incident prompted PAGCOR to mobilize its Corporate Investigation
Unit (CIU) to investigate the matter since the action of Syhongpan
was prohibited. Generally, PAGCOR employees are prohibited from
playing in the casino. On special occasions, however, officers may be
authorized by the Chairman of the Board of Directors to play,
provided that they play only at the small tables, limit their bets to
P5,000 per deal, and cease playing by 6:00 a.m. of the following day.
After investigations and deliberations, Syhongpan was charged guilty
of grave misconduct and dishonesty. The same became a basis for
his dismissal by the PAGCOR. Syhongpan appealed to the Civil
Service Commission which affirmed the dismissal.
On appeal before the Court of Appeals, it held that Syhongpan could
not be found guilty of grave misconduct and dishonesty for the
offense charged does not have direct relation to, or is not connected
with the performance of his official duties. It noted that the incident
did not occur in Syhongpan’s office in Davao, but in Manila. A
Motion for Reconsideration was denied. Hence, this petition.
ISSUE:
Whether or not the Court of Appeals erred in dismissing the case on
the ground that the offense charge does not have a direct relation
and connection to the performance of official duties
HELD:
Dishonesty, to warrant dismissal, need not be committed in the
performance of duty of the employee charged. In Remolona v. Civil
Service Commission, the therein petitioner, a Postmaster at the
Postal Office Service in Infanta, Quezon, was dismissed by the CSC
for dishonesty – acquiring fake eligibility for his wife who was an
elementary school teacher. Posed as main issue was whether a civil
service employee can be dismissed from the government service for
an offense which is not work-related or which is not connected with
the performance of his official duty. The Court upholds the legality of
the dismissal. Under Section 23, Rule XIV of the Rules Implementing
Book V of Executive Order No. 292, the rule is that dishonesty, in
order to warrant dismissal, need not be committed in the course of
the performance of duty by the person charged. The rationale for
the rule is that if a government officer or employee is dishonest or is
guilty of oppression or grave misconduct, even if said defects of
character are not connected with his office, they affect his right to
continue in office.
Syhongpan did indeed commit serious violations of casino rules and
regulations and his duties as Branch Manager of Casino Filipino-
Davao. By his own admission, he formed a ―corporation‖ composed
of persons who agreed to pool together their resources and play at
the gaming tables and share in the profits or losses, thereby
advancing his personal interest over that of the corporation which
he was duty bound to protect, being a high officer of the
corporation. Such admission, together with his other admissions
detailed above which are against his interest, clearly merit his
dismissal.
Commissioner of Internal Revenue v. Court of Tax Appeals and
Petron Corporation, G.R. No. 207843, July 15, 2015

DOCTRINE: The CTA has no jurisdiction to determine the validity of a
ruling issued by the CIR or the COC in the exercise of their quasi-
legislative powers to interpret tax laws. The phrase "other matters
arising under this Code," as stated in the second paragraph of
Section 4 of the NIRC, should be understood as pertaining to those
matters directly related to the preceding phrase "disputed
assessments, refunds of internal revenue taxes, fees or other
charges, penalties imposed in relation thereto". It cannot extend to
evaluating the soundness of the interpretation of tax laws by the
CIR.
FACTS: (Short Version) Petron imports alkylate as a raw material for
the manufacture of motor gasoline. It claims that its importation of
akylate is exempt from excise tax. A Customs Memorandum Circular
(CMC) was issued stating that Alkylate is subject to excise tax under
Section 148( e) of the NIRC. CIR then issued assessment to Petron for
deficiency tax. Petron filed before the CTA a petition for review
raising the issue of whether its importation of alkylate is subject to
excise tax as contemplated under Section 148 (e) of the NIRC. CIR
filed a motion to dismiss on the grounds of lack of jurisdiction and
prematurity. CTA ruled in favor of Petron, stating that (a) the
controversy was not essentially for the determination of the
constitutionality, legality or validity of a law, rule or regulation but a
question on the propriety or soundness of the CIR's interpretation of
Section 148 (e) of the NIRC which falls within the exclusive
jurisdiction of the CTA under Section 4 thereof, particularly under
the phrase "other matters arising under [the NIRC]";17 and (b) there
are attending circumstances that exempt the case from the rule on
non-exhaustion of administrative remedies, such as the great
irreparable damage that may be suffered by Petron from the CIR's
final assessment of excise tax on its importation. CIR is now alleging
that the CTA committed grave abuse of discretion because it does
not have jurisdiction to take cognizance of the case. (Long Version)
Petron, which is engaged in the manufacture and marketing of
petroleum products, imports alkylate as a raw material or blending
component for the manufacture of ethanol-blended motor
gasoline.For the period January 2009 to August 2011, as well as for
the month of April 2012, Petron transacted an aggregate of 22
separate importations for which petitioner the Commissioner of
Internal Revenue (CIR) issued Authorities to Release Imported Goods
(ATRIGs), categorically stating that Petron's importation of alkylate is
exempt from the payment of the excise tax. In June 2012, Petron
imported 12,802,660 liters of alkylate and paid value-added tax
(VAT) in the total amount of 41,657,533.00 as evidenced by Import
Entry and Internal Revenue Declaration (IEIRD) No. SN 122406532.
Based on the Final Computation, said importation was subjected by
the Collector of Customs of Port Limay, Bataan, upon instructions of
the Commissioner of Customs (COC), to excise taxes of P4.35 per
liter, or in the aggregate amount of P55,691,571.00, and
consequently, to an additional VAT of 12% on the imposed excise tax
in the amount of P6,682,989.00. The imposition of the excise tax was
supposedly premised on Customs Memorandum Circular (CMC) No.
164-2012 dated July 18, 2012, implementing the Letter dated June
29, 2012 issued by the CIR, which states that: [A]lkylate which is a
product of distillation similar to that of naphta, is subject to excise
tax under Section 148( e) of the National Internal Revenue Code
(NIRC) of 1997. In view of the CIR's assessment, Petron filed before
the CTA a petition for review, docketed as CTA Case No. 8544,
raising the issue of whether its importation of alkylate as a blending
component is subject to excise tax as contemplated under Section
148 (e) of the NIRC. CIR filed a motion to dismiss on the grounds of
lack of jurisdiction and prematurity. CTA gave due course to Petron's
petition, finding that: (a) the controversy was not essentially for the
determination of the constitutionality, legality or validity of a law,
rule or regulation but a question on the propriety or soundness of
the CIR's interpretation of Section 148 (e) of the NIRC which falls
within the exclusive jurisdiction of the CTA under Section 4 thereof,
particularly under the phrase "other matters arising under [the
NIRC]";17 and (b) there are attending circumstances that exempt the
case from the rule on non-exhaustion of administrative remedies,
such as the great irreparable damage that may be suffered by Petron
from the CIR's final assessment of excise tax on its importation. CIR
sought immediate recourse to the Court, through the instant
petition, alleging that the CTA committed grave abuse of discretion
when it assumed authority to take cognizance of the case despite its
lack of jurisdiction to do so
ISSUE/S: WON CTA had jurisdiction - NO
HELD: NO. The case does not fall within the jurisdiction of the CTA
because the phrase "other matters arising under this Code," as
stated in the second paragraph of Section 4 of the NIRC, should be
understood as pertaining to those matters directly related to the
preceding phrase "disputed assessments, refunds of internal
revenue taxes, fees or other charges, penalties imposed in relation
thereto". It cannot extend to evaluating the soundness of the
interpretation of tax laws by the CIR. Moreover, Section 4 of the
NIRC confers upon the CIR both: (a) the power to interpret tax laws
in the exercise of her quasi-legislative function; and (b) the power to
decide tax cases in the exercise of her quasi-judicial function. It also
delineates the jurisdictional authority to review the validity of the
CIR's exercise of the said powers, thus: SEC. 4. Power of the
Commissioner to Interpret Tax Laws and to Decide Tax Cases. - The
power to interpret the provisions of this Code and other tax laws
shall be under the exclusive and original jurisdiction of the
Commissioner, subject to review by the Secretary of Finance. The
power to decide disputed assessments, refunds of internal revenue
taxes, fees or other charges, penalties imposed in relation thereto,
or other matters arising under this Code or other laws or portions
thereof administered by the Bureau of Internal Revenue is vested in
the Commissioner, subject to the exclusive appellate jurisdiction of
the Court of Tax Appeals. The CTA is a court of special jurisdiction,
with power to review by appeal decisions involving tax disputes
rendered by either the CIR or the COC. Conversely, [the CTA] has no
jurisdiction to determine the validity of a ruling issued by the CIR or
the COC in the exercise of their quasilegislative powers to interpret
tax laws. In this case, Petron's tax liability was premised on the COC's
issuance of CMC No. 164-2012, which gave effect to the CIR's June
29, 2012 Letter interpreting Section 148 (e) of the NIRC as to include
alkylate among the articles subject to customs duties, hence,
Petron's petition before the CTA ultimately challenging the legality
and constitutionality of the CIR's aforesaid interpretation of a tax
provision. In line with the foregoing discussion, however, the CIR
correctly argues that the CTA had no jurisdiction to take cognizance
of the petition as its resolution would necessarily involve a
declaration of the validity or constitutionality of the CIR's
interpretation of Section 148 (e) of the NIRC, which is subject to the
exclusive review by the Secretary of Finance and ultimately by the
regular courts. Hence, as the CIR's interpretation of a tax provision
involves an exercise of her quasi-legislative functions, the proper
recourse against the subject tax ruling expressed in CMC No. 164-
2012 is a review by the Secretary of Finance and ultimately the
regular courts. There being no protest ruling by the customs
collector that was appealed to the COC, the filing of the petition
before the CTA was premature as there was nothing yet to review.
Verily, the fact that there is no decision by the COC to appeal from
highlights Petron's failure to exhaust administrative remedies
prescribed by law. Before a party is allowed to seek the intervention
of the courts, it is a pre-condition that he avail of all administrative
processes afforded him, such that if a remedy within the
administrative machinery can be resorted to by giving the
administrative officer every opportunity to decide on a matter that
comes within his jurisdiction, then such remedy must be exhausted
first before the court's power of judicial review can be sought,
otherwise, the premature resort to the court is fatal to one's cause
of action. DISPOSITIVE: WHEREFORE, the petition is GRANTED. The
Resolutions dated February 13, 2013 and May 8, 2013 of the Court
of Tax Appeals (CTA), Second Division in CTA Case No. 8544 are
hereby REVERSED and SET ASIDE. The petition for review filed by
private respondent Petron Corporation before the CTA is DISMISSED
for lack of jurisdiction and prematurity.
Bureau of Customs vs. Devanadera
G.R. No. 193253 | September 8, 2015
J. Peralta
TOPIC: Appellate Jurisdiction of the CTA
FACTS:
BOC Commissioner Morales issued Audit Notification Letter
informing the President of OILINK that the BOC will be conducting a
compliance audit, including the examination, inspection, verification
and/or investigation of all pertinent records of OILINK's import
transactions for the past three (3)-year period counted from the said
date. OILINK failed to submit the remaining pertinent documents.
Upon recommendation, Commissioner Morales approved the filing
of an administrative case against OILINK for failure to comply with
the requirements of Customs Administrative Order. The Legal
Service of the BOC rendered a Decision finding that OILINK violated
Section IV.A.2 (c) and (e) of CAO 4-2004 when it refused to furnish
the Audit Team copies of the required documents, despite repeated
demands. Consequently, OILINK failed to settle the administrative
fine; hence, a Hold Order was issued by the District Collector against
all shipments of OILINK for failure to settle its outstanding account
with the BOC and to protect the interest of the government.
UNIOIL, on the other hand, requested the District Collector to allow
it to withdraw the base oils from OILINK's temporarily closed
Terminal, citing the Terminalling Agreement with OILINK.
Commissioner Morales granted the request of UNIOIL.
In a complaint-affidavit, Atty. Balmyrson M. Valdez, a member of the
petitioner BOC's Anti-Oil Smuggling Coordinating Committee that
investigated the illegal withdrawal by UNIOIL of oil products
consigned to OILINK accused the private respondents of violation of
Sections 3601 and 3602, in relation to Sections 2503 and 2530,
paragraphs f and l (3), (4) and (5), of the TCCP.|| The State
Prosecutor of the DOJ recommended the dismissal of the complaint-
affidavit for lack of probable cause. The Resolution was approved by
the Assistant Chief State Prosecutors. On automatic review, the
Resolution was affirmed by then Secretary of Justice Raul M.
Gonzales.
Dissatisfied, the BOC filed a motion for reconsideration which was
denied by the the Acting Secretary of Justice Agnes VST Devanadera.
The BOC filed a petition for certiorari with the CA. The CA dismissed
the petition as well as the motion for reconsideration for the non-
submission of the certification against forum shopping.
ISSUE:
Whether or not the CTA has the jurisdiction over the petition for
certiorari assailing the DOJ resolution in a preliminary investigation
involving tax and tariff offenses.
RULING:
Yes, the CTA has jurisdiction over petition for certiorari of
DOJ resolutions. HOWEVER, by reason of justice, the mistake in the
filing in the CA may be excused.
Under R.A. No. 9282, amending R.A. No. 1125, it expanded the
jurisdiction of the CTA, enlarging its membership and elevating its
rank to the level of a collegiate court with special jurisdiction. It is no
longer clear which between the CA and the CTA has jurisdiction to
review through a petition for certiorari the DOJ resolution in
preliminary investigations involving tax and tariff offenses. In City of
Manila v. Hon. Grecia-Cuerdo, the Court ruled that the CTA has
jurisdiction over a special civil action for certiorari via express
constitutional mandate and for being inherent in the exercise of its
appellate jurisdiction, it can also be reasonably concluded based on
the same premise that the CTA has original jurisdiction over a
petition for certiorari assailing the DOJ resolution in a preliminary
investigation involving tax and tariff offenses. Furthermore, Section
6, Rule 135 of the present Rules of Court provides that when by law,
jurisdiction is conferred on a court or judicial officer, all auxiliary
writs, processes and other means necessary to carry it into effect
may be employed by such court or officer.
As the CA dismissed the petition for certiorari solely due to a
procedural defect (non-submission of the certification against forum
shopping) without resolving the issue of whether or not the Acting
Secretary of Justice gravely abused her discretion in affirming the
dismissal of the BOC's complaint-affidavit for lack of probable cause,
the Court ought to reinstate the petition and refer it to the CTA for
proper disposition. For one, as a highly specialized court specifically
created for the purpose of reviewing tax and customs cases, the CTA
is dedicated exclusively to the study and consideration of revenue-
related problems, and has necessarily developed an expertise on the
subject.For another, the referral of the petition to the CTA is in line
with the policy of hierarchy of courts in order to prevent inordinate
demands upon the Court's time and attention which are better
devoted to those matters within its exclusive jurisdiction, and to
prevent further overcrowding of its docket.
Be that as it may, the Court stressed in The Diocese of Bacolod v.
Commission on Elections that the doctrine of hierarchy of courts is
not an iron-clad rule, and that it has full discretionary power to
take cognizance and assume jurisdiction over special civil actions
for certiorari filed directly with it for exceptionally compelling
reasons or if warranted by the nature of the issues clearly and
specifically raised in the petition. One of the recognized exceptions
to the said is when the petition includes questions that are dictated
by public welfare and the advancement of public policy, or
demanded by the broader interest of justice, or the orders
complained of were found to be patent nullities, or the appeal was
considered as clearly an inappropriate remedy. Since the present
case includes questions that are dictated by public welfare and the
advancement of public policy, or demanded by the broader interest
of justice, as well as to avoid multiplicity of suits and further delay in
its disposition, the Court shall directly resolve the petition for
certiorari, instead of referring it to the CTA.
Pilipinas Total Gas, Inc. vs Commissioner of Internal Revenue. G.R.
No. 207112. December 8, 2015.
FACTS:
Total Gas filed its Amended Quarterly VAT Returns. Total claims that
they incurred unused input VAT credits.
On May 15, 2008, Total filed an administrative claim for the refund.
On August 28, 2008, Total submitted to the BIR additional
documents. On January 23, 2009, Total elevated the case to the CTA.
The CTA dismissed the case citing that the case was prematurely
filed as the neccesary documents were incomplete; that the 120 day
period allowed to the CIR to decide on the claim under Section 112
of the NRC has not started to run.
With the CTA en banc, the case was again dismissed reiterating the
decision of the Division. The en banc also stated that the reckoning
point of the 120 day period was on May 2008 thus the petition filed
on January 2009 was considered belatedly filed.
ISSUE: Whether the claim has prescribed.
RULING:
NO.
The SC held that Total timely filed its judicial claim on January 2009.
The NIRC provides that the CIR has 120 days from the date of
submission of complete documents to decide on the claim for tax
credits. Upon inaction of the BIR after 120 days, the taxpayer may,
within 30 days, appeal on the CTA.
The BIR did not give notice to Total with regard to the documents
submitted on August 2008. Thus the counting of the 120 day period
should start from August 2008 or when Total made its submission of
complete documents to support its application. The BIR had until
December 2008 to decide. Because of the BIR's inaction, Total had
until January 25, 2009 to file their judicial claim.
STANDARD CHARTERED BANK v. STANDARD CHARTERED BANK
EMPLOYEES UNION, GR No. 165550, 2008-10-08
Facts: On August 25, 1998, petitioner Standard Chartered Bank
entered into a Collective Bargaining Agreement[6] (CBA) with
respondent Standard Chartered Bank Employees Union (SCBEU), w...
hich provided, among others, for medical benefits.
Article XI, Section 1... of the CBA, petitioner committed to "continue
to cover all its employees with a group hospitalization and major
surgical insurance plan including maternity benefits."[7]... fter the
signing of the CBA, petitioner changed its insurance provider from
Philamlife to Maxicare, a Health Maintenance Organization, to
allegedly provide its employees with improved medical bene... o
Maxicare, a Health Maintenance Organization, to allegedly provide
its employees with improved medical benefits under the... he CBA.
Subsequently, respondent charged petitioner with unfair labor
practice before the DOLE for alleged gross violation of the economic
provisions of the CBA and diminution or removal of benefit... s.
Respondent contested, among others, the exclusion of the
outpatient medicine... reimbursements of the employees and the
maternity benefits granted to the spouses of the male employees of
petitioner in the new insurance policy provided by Maxicare.
dule L Respondent also cited Schedule
CBA and affidavits of employees to prove that the spouses of the
male employees of petitioner were entitled to maternity benefits.
ule L of the CBA
Petitioner, in turn, argued that there was no diminution of benefits
as the insurance policy issued by Maxicare contained similar benefits
to those contained in the pre... vious Philamlife policy.
In a Decision dated May 31, 2001, the DOLE gave credit to the claims
of respondent. It ruled that the "outpatient benefit [had] been a
regular feature of the [petitioner's] medical coverage and as a
regular feature, c... annot be withdrawn unilaterally."[9
The DOLE also held that the spouses of the male employees of
petitioner were entitled to maternity benefits as a matter of
practice.
Petitioner elevated this case before the appellate court through a
special civil action for certiorari under Rule 65 of the Rules of Court.
The said court dismissed the petition and affirmed the assailed
Orders dated March 11, 2002 and April 29, 2002 of the DOLE and
held... that the basis for the grant of the subject maternity benefits
was Schedule L of the CBA of the parties. The appellate court
likewise denied petitioner's motion for reconsideration thereto for
lack of merit.
petitioner claims that the spouses of its male employees are not
entitled to maternity benefits as these are exclusively intended for
its female employees. It is petitioner's view tha
L of the CBA obligates... the CA erred in finding that Schedule L of
the CBA obligates it to pay... maternity benefits to spouses of its
male employees, despite ruling that there is no company practice
granting maternity benefits to such persons.
Petitioner points out Section 1 of Article XI of the CBA and claims
that this provision shows that the maternity benefits provided in
Schedule L extend only to its employees, thus, the spouses of its
male employees are not entitled to these benefits. Petitioner asserts
that the CBA would have stated expressly that spouses of male
employees are entitled to the said benefit had this been the
intention of the parties, similar to the provision granting of advances
and medicine allowances to the employees and their dependents.
Moreover, the CA allegedly... erred in applying Article 4 of the Labor
Code in interpreting Schedule L of the CBA instead of Articles 1370-
1379 of the Civil Code.
Petitioner adds that its previous medical insurance policy which was
provided by Philamlife granted insurance benefits only to its
"regular, full-time employees" and that there is nothing in the said
policy granting maternity benefits to the spouses of its male
employees. Hence,... petitioner asserts that the CA, having correctly
ruled that petitioner had no company practice of extending such
benefits to the spouses of its male employees, should not have
granted such benefits on the basis of Schedule L of the CBA.
Anent the second issue, petitioner claims that the appellate court
erred in ruling that its employees are entitled to "outpatient
medicine reimbursements" distinct and separate from the "medicine
allowances" granted in the CBA. This would allegedly result in the
unjust... enrichment of the employees at the expense of petitioner.
In its Reply, petitioner claims that "when the facts are undisputed,
then the question of whether or not the conclusion drawn
therefrom by the Court of Appeals is correct is a question of law."
[12] The issues before this Court are thus questions of... law because
petitioner seeks the review of the "evidence on record and the
conclusion drawn by the app... ellate court."
Issues:
Whether or not, on the basis of evidence on record, the appellate
court is correct in ruling that spouses of male employees are entitled
to maternity benefits despite its own finding that there was no
established company practice of granting maternity benefits to
male... employees' spouses; and
Whether or not, on the basis of the evidence on record, the
appellate court is correct in ruling that there is an established
company practice of g... ranting outpatient medicine
reimbursements to petitioner's employees.
Ruling:
The Court finds that the element of consistency in the alleged
practice of giving maternity benefits to spouses of petitioner's male
employees is lacking in this case.
Nonetheless, the Court still sustains the grant of maternity benefits
to spouses of male employees on the basis of Schedule L of the
1998-2000 CBA, explicitly providing the coverage of the "Group
Hospitalization Benefits" (which include maternity benefit), to
include married... staff and spouses and eligible children.
In its pleadings, petitioner conveniently omits the second sentence
of the foregoing quote but this Court is not misled by such
dissembling tactic. It is undeniable from the full text of petitioner's
explanation of maternity benefits that the dependent of an insured
employee... can claim maternity benefits subject only to the
condition that she has been continuously insured for a period of nine
months. This booklet appears to be a publication solely of petitioner
and it is clear evidence that petitioner itself interprets Philamlife
Group Policy No.
P-1620 as authorizing the grant of maternity benefits to dependents
of its employees. Having knowingly and voluntarily incorporated by
refer... ence the provisions of its Philamlife group hospitalization
insurance plan in the CBA (as can be seen in Article XI, Section 1
thereof in... relation to Schedule L), petitioner cannot now assert
that it never intended to extend maternity benefits to the spouses of
its male employees under the CBA.
Insofar as the outpatient benefit is concerned, it must be stressed
that this Office directed the Bank to continue with the outpatient
benefit under the old insurance plan and to carry it over to the new
health care plan. This means that the components of the old
health... insurance scheme on this particular benefit should be the
same component under the new health plan. In the Decision dated
31 May 2001, this Office made particular mention of the claims for
reimbursement appearing as Annex "O" of the Union's Position
Paper as basis for its... directive to the Bank to continue with the
outpatient benefits. These claims refer not only to x-ray services but
also to reimbursement of prescription drugs. The existence of these
benefits were further buttressed in the Union's "Reply to SCB's
Motion for
Reconsideration" (dated 11 July 2001) where the Union submitted
copies of claims for doctor's fees, prescription drugs and laboratory
fees processed, approved and paid. These should provide ample
guidance to the parties in the grant of outpatient benefits, which...
includes medicine reimbursements as earlier practised [sic].
We see no reversible error in the CA's adoption of said findings of
the DOLE. It is elementary that factual findings of labor officials, who
are deemed to have acquired expertise in matters within their
jurisdiction, are accorded not only respect but finality.[23] In a
recent case, it was similarly held that where the factual findings of
the labor tribunals or agencies conform to, and are affirmed by, the
CA, the same are accorded respect and finality, and are binding upon
this Court.[24]
Principles:
With respect to the procedural issue, we agree with respondent that
the issues raised by the bank are essentially questions of fact that
cannot be the subject of this petition for review on certiorari.
Section 1 of Rule 45 of the Rules of Court provides that only...
questions of law may be raised on appeal by certiorari. Well-settled
in our jurisprudence is the principle that this Court is not a trier of
facts and that it is neither the function of this Court to analyze or
weigh the evidence of the parties all over again.[14] The ruling in
Microsoft Corporation v. Maxicorp, Inc.[15] elucidates the...
istinction of a question of law and a question of fact as f... follows:
A question of law exists when the doubt or difference centers on
what the law is on a certain state of facts. A question of fact exists if
the doubt centers on the truth or falsity of the alleged fac... facts.
There is a question of law if the issue raised is capable of being
resolved without need of reviewing the probative value of the
evidence. The resolution of the issue must rest solely on what the
law provides on the given set of circumstances. Once it is clear that
the issue... i... nvites a review of the evidence presented,... f f... ct.
Fabian v. Desierto, G.R. No. 129742, 16 September 1998
FACTS: Petitioner Teresita G. Fabian was the major stockholder and
president of PROMAT Construction Development Corporation
(PROMAT) which participated in the bidding for government
construction projects including those under the First Manila
Engineering District (FMED), and private respondent Nestor V.
Agustin, incumbent District Engineer, reportedly taking advantage of
his official position, inveigled petitioner into an amorous
relationship. After misunderstandings and unpleasant incidents,
Fabian eventually filed the aforementioned administrative case
against Agustin in a letter-complaint. The Graft Investigator of the
Ombudsman issued a resolution finding private respondent guilty of
grave misconduct and ordering his dismissal from the service with
forfeiture of all benefits under the law. On a motion for
reconsideration, Agustin was exonerated of the administrative
charges.
In the present appeal, petitioner argues that Section 27 of Republic
Act No. 6770 (Ombudsman Act of 1989) pertinently provides that —
In all administrative disciplinary cases, orders, directives or decisions
of the Office of the Ombudsman may be appealed to the Supreme
Court by filing a petition for certiorari within ten (10) days from
receipt of the written notice of the order, directive or decision or
denial of the motion for reconsideration in accordance with Rule 45
of the Rules of Court (Emphasis supplied)
ISSUE#1: Can the Court resolve the constitutionality of Section 27 of
Republic Act No. 6770 not raised in the trial?
HELD#1: YES.
Constitutional questions, not raised in the regular and orderly
procedure in the trial are ordinarily rejected unless the jurisdiction
of the court below or that of the appellate court is involved in which
case it may be raised at any time or on the court’s own motion. The
Court ex mero motu may take cognizance of lack of jurisdiction at
any point in the case where that fact is developed. The court has a
clearly recognized right to determine its own jurisdiction in any
proceeding.
ISSUE#2: Is Section 27 of Republic Act No. 6770 unconstitutional?
HELD#2: YES.
Section 27 of Republic Act No. 6770 cannot validly authorize an
appeal to this Court from decisions of the Office of the Ombudsman
in administrative disciplinary cases. It consequently violates the
proscription in Section 30, Article VI of the Constitution against a law
which increases the appellate jurisdiction of this Court. No
countervailing argument has been cogently presented to justify such
disregard of the constitutional prohibition which, as correctly
explained in First Lepanto Ceramics, Inc. vs. The Court of Appeals, et
al. was intended to give this Court a measure of control over cases
placed under its appellate jurisdiction. Otherwise, the indiscriminate
enactment of legislation enlarging its appellate jurisdiction would
unnecessarily burden the Court.
As a consequence of our ratiocination that Section 27 of Republic
Act No. 6770 should be struck down as unconstitutional, and in line
with the regulatory philosophy adopted in appeals from quasi-
judicial agencies in the 1997 Revised Rules of Civil Procedure,
appeals from decisions of the Office of the Ombudsman in
administrative disciplinary cases should be taken to the Court of
Appeals under the provisions of Rule 43.
CONCHITA CARPIO MORALES v. CA, GR Nos. 217126-27, 2015-11-10
Facts:
On July 22, 2014, a complaint/affidavit[10] was filed by Atty. Renato
L. Bondal and Nicolas "Ching" Enciso VI before the Office of the
Ombudsman against Binay, Jr. and other public officers and
employees of the City Government of Makati (Binay, Jr., et... al),
accusing them of Plunder[11] and violation of Republic Act No. (RA)
3019,[12] otherwise known as "The Anti-Graft and Corrupt Practices
Act," in connection with the five (5) phases of the procurement and
construction of the
Makati City Hall Parking Building (Makati Parking Building).[13]
On even date,[58] Binay, Jr. filed a petition for certiorari[59] before
the CA, docketed as CA-G.R. SP No. 139453, seeking the nullification
of the preventive suspension order, and praying for the issuance of a
TRO and/or
WPI to enjoin its implementation.
a) Phases I and
II were undertaken before he was elected Mayor of Makati in 2010
Phases III to V transpired during his first term and that his re-election
as City Mayor of Makati for a second term effectively condoned his
administrative liability therefor, if any, thus... rendering the
administrative cases against him moot and academic.
Prior to the hearing of the oral arguments before the CA, or on
March 25, 2015, the Ombudsman filed the present petition before
this Court, assailing the CA's March 16, 2015 Resolution, which
granted Binay, Jr.'s prayer for TRO
The Ombudsman claims that: (a) the CA had no jurisdiction to grant
Binay, Jr.'s prayer for a TRO, citing Section 14 of RA 6770,[82] or
"The Ombudsman Act of 1989," which states that no injunctive writ
could be issued to delay the Ombudsman's investigation unless
there is prima facie evidence that the subject matter thereof is
outside the latter's jurisdiction... and
(b) the CA's directive for the Ombudsman to comment on Binay, Jr.'s
petition for contempt is illegal and improper, considering that the
Ombudsman is an impeachable officer, and therefore, cannot be
subjected to contempt proceedings.
Binay, Jr. argues that Section 1, Article VIII of the 1987 Constitution
specifically grants the CA judicial power to review acts of any branch
or instrumentality of government, including the Office of the
Ombudsman, in case of grave abuse of discretion amounting to lack
or excess of jurisdiction, which he asserts was committed in this case
when said office issued the preventive suspension order against him.
Binay, Jr. maintains that... the CA correctly enjoined the
implementation of the preventive suspension order given his clear
and unmistakable right to public office, and that it is clear that he
could not be held administratively liable for any of the charges
against him since his subsequent re-election in
2013 operated as a condonation of any administrative offenses he
may have committed during his previous term.
Binay, Jr. submits that while the Ombudsman is indeed an...
impeachable officer and, hence, cannot be removed from office
except by way of impeachment, an action for contempt imposes the
penalty of fine and imprisonment, without necessarily resulting in
removal from office. Thus, the fact that the Ombudsman is an
impeachable officer... should not deprive the CA of its inherent
power to punish contempt.
the CA issued a Resolution... which further enjoined the
implementation of the preventive... suspension order.
In so ruling, the CA found that Binay, Jr. has an ostensible right to
the final relief prayed for, namely, the nullification of the preventive
suspension order, in view of the condonation doctrine, citing
Aguinaldo v. Santos.
the Ombudsman has been adamant that the CA has no jurisdiction
to issue any provisional injunctive writ against her office to enjoin its
preventive suspension orders. As basis, she invokes the first
paragraph of Section 14, RA 6770... in conjunction with her office's
independence under the 1987 Constitution. She advances the idea
that "[i]n order to further ensure [her office's] independence, [RA
6770] likewise insulated it from judicial intervention,"[157]
particularly, "from injunctive... reliefs traditionally obtainable from
the courts,"[158] claiming that said writs may work "just as
effectively as direct harassment or political pressure would."
Issues:
Whether or not the CA has subject matter jurisdiction to issue a TRO
and/or WPI enjoining the implementation of a preventive
suspension order issued by the Ombudsman;
Whether or not the CA gravely abused its discretion in issuing the
TRO and eventually, the WPI in CA-G.R. SP No. 139453 enjoining the
implementation of the preventive suspension order against Binay, Jr.
based on the condonation doctrine
Ruling:
The Ombudsman's argument against the CA's lack of subject matter
jurisdiction over the main petition, and her corollary prayer for its
dismissal, is based on her interpretation of Section 14, RA 6770, or
the Ombudsman Act
The first paragraph of Section 14, RA 6770 is a prohibition against
any court (except the Supreme Court[119]) from issuing a writ of
injunction to delay an investigation being conducted by the Office of
the Ombudsman.
As a general rule, the second paragraph of Section 14, RA 6770 bans
the whole range of remedies against issuances of the Ombudsman
The subject provision, however, crafts an exception to the foregoing
general rule. While the specific procedural vehicle is not explicit
from its text, it is fairly deducible that the second paragraph of
Section 14, RA 6770 excepts, as the only allowable remedy... against
"the decision or findings of the Ombudsman," a Rule 45 appeal, for
the reason that it is the only remedy taken to the Supreme Court on
"pure questions of law," whether under the 1964 Rules of Court or
the 1997 Rules of Civil Procedure:
Section 5, Article XI of the 1987 Constitution guarantees the
independence of the Office of the Ombudsman
As may be deduced from the various discourses in Gonzales III, the
concept of Ombudsman's independence covers three (3) things:
First: creation by the Constitution, which means that the office
cannot be abolished, nor its constitutionally specified functions and
privileges, be removed, altered, or modified by law, unless the
Constitution itself allows, or an amendment thereto is made;
Second: fiscal autonomy, which means that the office "may not be
obstructed from [its] freedom to use or dispose of [its] funds for
purposes germane to [its] functions;[168] hence, its budget cannot
be... strategically decreased by officials of the political branches of
government so as to impair said functions; and
Third: insulation from executive supervision and control, which
means that those within the ranks of the office can only be
disciplined by an internal authority.
Evidently, all three aspects of independence intend to protect the
Office of the Ombudsman from political harassment and pressure, so
as to free it from the "insidious tentacles of politics."[169]
That being the case, the concept of Ombudsman independence
cannot be invoked as basis to insulate the Ombudsman from judicial
power constitutionally vested unto the courts. Courts are apolitical
bodies, which are ordained to act as impartial tribunals and apply
even justice to... all. Hence, the Ombudsman's notion that it can be
exempt from an incident of judicial power - that is, a provisional writ
of injunction against a preventive suspension order - clearly strays
from the concept's rationale of insulating the office from political
harassment or... pressure.
The Ombudsman's erroneous abstraction of her office's
independence notwithstanding, it remains that the first paragraph of
Section 14, RA 6770 textually prohibits courts from extending
provisional injunctive relief to delay any investigation conducted by
her office. Despite the... usage of the general phrase "[n]o writ of
injunction shall be issued by any court," the Ombudsman herself
concedes that the prohibition does not cover the Supreme Court.
Hence, with Congress interfering with matters of procedure (through
passing the first paragraph of Section 14, RA 6770) without the
Court's consent thereto, it remains that the CA had the authority to
issue the questioned injunctive writs enjoining the implementation
of the... preventive suspension order against Binay, Jr. At the risk of
belaboring the point, these issuances were merely ancillary to the
exercise of the CA's certiorari jurisdiction conferred to it under
Section 9 (1), Chapter I of BP 129, as amended, and which it had
already... acquired over the main CA-G.R. SP No. 139453 case.
The condonation doctrine - which connotes this same sense of
complete extinguishment of liability as will be herein elaborated
upon - is not based on statutory law. It is a jurisprudential creation
that originated from the 1959 case of Pascual v. Hon.
Provincial Board ofNueva Ecija,[247] (Pascual), which was therefore
decided under the 1935 Constitution.
As there was no legal precedent on the issue at that time, the Court,
in Pascual, resorted to American authorities and "found that cases
on the matter are conflicting due in part, probably, to differences in
statutes and constitutional provisions, and also,... in part, to a
divergence of views with respect to the question of whether the
subsequent election or appointment condones the prior misconduct
The conclusion is at once problematic since this Court has now
uncovered that there is really no established weight of authority in
the United States (US) favoring the doctrine of condonation, which,
in the words of Pascual, theorizes that an official's re-election denies
the... right to remove him from office due to a misconduct during a
prior term. In fact, as pointed out during the oral arguments of this
case, at least seventeen (17) states in the US have abandoned the
condonation doctrine.[250] The Ombudsman aptly cites several...
rulings of various US State courts, as well as literature published on
the matter, to demonstrate the fact that the doctrine is not
uniformly applied across all state jurisdictions
At any rate, these US cases are only of persuasive value in the
process of this Court's decision-making. "[They] are not relied upon
as precedents, but as guides of interpretation."[267] Therefore, the
ultimate analysis is on whether or not the condonation... doctrine, as
espoused in Pascual, and carried over in numerous cases after, can
be held up against prevailing legal norms. Note that the doctrine of
stare decisis does not preclude this Court from revisiting existing
doctrine. As adjudged in the case of
Belgica, the stare decisis rule should not operate when there are
powerful countervailing considerations against its application.[268]
In other words, stare decisis becomes an intractable rule only when
circumstances exist to preclude reversal... of standing precedent.
[269] As the Ombudsman correctly points out, jurisprudence, after
all, is not a rigid, atemporal abstraction; it is an organic creature that
develops and devolves along with the society within which it thrives.
[270] In the words of a recent US Supreme Court Decision, "[w]hat
we can decide, we can undecide."[271]
In this case, the Court agrees with the Ombudsman that since the
time Pascual was decided, the legal landscape has radically shifted.
Again, Pascual was a 1959 case decided under the 1935 Constitution,
which dated provisions do not reflect the experience of the
Filipino People under the 1973 and 1987 Constitutions. Therefore,
the plain difference in setting, including, of course, the sheer impact
of the condonation doctrine on public accountability, calls for
Pascual's judicious re-examination.
What remains apparent from the text of these cases is that the basis
for condonation, as jurisprudential doctrine, was - and still remains -
the... above-cited postulates of Pascual, which was lifted from
rulings of US courts where condonation was amply supported by
their own state laws. With respect to its applicability to
administrative cases, the core premise of condonation - that is, an
elective official's... re-election cuts qff the right to remove him for an
administrative offense committed during a prior term - was adopted
hook, line, and sinker in our jurisprudence largely because the
legality of that doctrine was never tested against existing legal
norms. As in the US, the... propriety of condonation is - as it should
be -dependent on the legal foundation of the adjudicating
jurisdiction. Hence, the Court undertakes an examination of our
current laws in order to determine if there is legal basis for the
continued application of the doctrine of... condonation.
The foundation of our entire legal system is the Constitution. It is the
supreme law of the land;[284] thus, the unbending rule is that every
statute should be read in light of the Constitution.[285] Likewise, the
Constitution is a... framework of a workable government; hence, its
interpretation must take into account the complexities, realities, and
politics attendant to the operation of the political branches of
government.
As earlier intimated, Pascual was a decision promulgated in 1959.
Therefore, it was decided within the context of the 1935
Constitution which was silent with respect to public accountability,
or of the nature of public office being a public trust. The provision in
the
1935 Constitution that comes closest in dealing with public office is
Section 2, Article II which states that "[t]he defense of the State is a
prime duty of government, and in the fulfillment of this duty all
citizens may be required by law to render personal military or civil...
service."[287] Perhaps owing to the 1935 Constitution's silence on
public accountability, and considering the dearth of jurisprudential
rulings on the matter, as well as the variance in the policy
considerations, there was no glaring objection confronting... the
Pascual Court in adopting the condonation doctrine that originated
from select US cases existing at that time.
After the turbulent decades of Martial Law rule, the Filipino People
have framed and adopted the 1987 Constitution, which sets forth in
the Declaration of Principles and State Policies in Article II that "[t]he
State shall maintain honesty and integrity in the public service... and
take positive and effective measures against graft and
corruption."[288] Learning how unbridled power could corrupt
public servants under the regime of a dictator, the Framers put
primacy on the integrity of the public service by declaring it as a...
constitutional principle and a State policy. More significantly, the
1987 Constitution strengthened and solidified what has been first
proclaimed in the 1973 Constitution by commanding public officers
to be accountable to the people at all times:
To begin with, the concept of public office is a public trust and the
corollary requirement of accountability to the people at all times, as
mandated under the 1987 Constitution, is plainly inconsistent with
the idea that an elective local official's... administrative liability for a
misconduct committed during a prior term can be wiped off by the
fact that he was elected to a second term of office, or even another
elective post. Election is not a mode of condoning an administrative
offense, and there is simply no... constitutional or statutory basis in
our jurisdiction to support the notion that an official elected for a
different term is fully absolved of any administrative liability arising
from an offense done during a prior term. In this jurisdiction, liability
arising from... administrative offenses may be condoned bv the
President in light of Section 19, Article VII of the 1987 Constitution
which was interpreted in Llamas v. Orbos[293] to apply to
administrative offenses:
powers upon which... the entire fabric of our constitutional system is
based";[164] and
(3) "[T]he constitutional deliberations explain the Constitutional
Commissions' need for independence. In the deliberations of the
1973 Constitution, the delegates amended the 1935 Constitution by
providing for a constitutionally-created Civil Service Commission,...
instead of one created by law, on the premise that the effectivity of
this body is dependent on its freedom from the tentacles of politics.
In a similar manner, the deliberations of the 1987 Constitution on
the Commission on Audit highlighted the developments in the past
Constitutions geared towards insulating the Commission on Audit
from political pressure."[165]
At bottom, the decisive ruling in Gonzales III, however, was that the
independence of the Office of the Ombudsman, as well as that of the
foregoing independent bodies, meant freedom from control or
supervision of the Executive Department

That being said, this Court simply finds no legal authority to sustain
the condonation doctrine in this jurisdiction. As can be seen from
this discourse, it was a doctrine adopted from one class of US rulings
way back in 1959 and thus, out of touch from - and now rendered...
obsolete by - the current legal regime. In consequence, it is high
time for this Court to abandon the condonation doctrine that
originated from Pascual, and affirmed in the cases following the
same, such as Aguinaldo, Salalima, Mayor Garcia, and Governor
Garcia,... Jr. which were all relied upon by the CA.

It should, however, be clarified that this Court's abandonment of the

condonation doctrine should be prospective in application for the
reason that judicial decisions applying or interpreting the laws or the
Constitution, until reversed, shall form part of the legal... system of
the Philippines

Principles:

Gonzales III is the first case which grappled with the meaning of the
Ombudsman's independence vis-a-vis the independence of the other
constitutional bodies. Pertinently, the Court observed:

(1) "[T]he independence enjoyed by the Office of the Ombudsman

and by the Constitutional Commissions shares certain characteristics
- they do not owe their existence to any act of Congress, but are
created by the Constitution itself; additionally, they all... enjoy fiscal
autonomy. In general terms, the framers of the Constitution
intended that these 'independent' bodies be insulated from political
pressure to the extent that the absence of 'independence' would
result in the impairment of their core... functions"[163];

(2) "[T]he Judiciary, the Constitutional Commissions, and the

Ombudsman must have the independence and flexibility needed in
the discharge of their constitutional duties. The imposition of
restrictions and constraints on the manner the independent
constitutional... offices allocate and utilize the funds appropriated
for their operations is anathema to fiscal autonomy and violative not
only [of] the express mandate of the Constitution, but especially as
regards the Supreme Court, of the independence and separation of