G.R. No.

L-12859 November 18, 1959

CEBU UNITED ENTERPRISES, plaintiff-appellee,

vs.
JOSE GALLOFIN, Collector of Customs, Cebu Port, defendant-appellant.

REYES, J.B.L., J.:

This suit for mandatory injunction was instituted in the Court of First Instance of Cebu United
Enterprise to compel Jose Gallofin, as collector of Customs, Cebu Port, to release and deliver
to the plaintiff two imported shipments of 7,834 bales of over issue newspapers purchased by
the latter from the United States. As ancillary relief during the pendency of the action, the plaintiff
prayed for the issuance of a writ of preliminary mandatory injunction, which was granted by the
court after the plaintiff posted a bond in the amount of P60,000.00 in favor of the defendant.
Thereafter, the goods were released to the plaintiff, it appearing further that the advance sales
tax due on the same had been duly paid upon arrival of the merchandise at port.

The importation of the aforesaid shipments was made under and by virtue of an Import
Control Commission License No. 1225, issued by the defunct Import Control Commission. Under
the terms of the license, the plaintiff could import, on a no-dollar remittance basis, over issue
newspapers up to the amount or value of $118,000.00.

The refusal of the defendant to deliver the imported items is premised on his contention that
while the five bills of lading covering the two shipments of the over issue newspapers were all dated
at Los Angeles, U.S.A. December 17, 1953, or one day before the expiration of the import
license in question, the vessels M/S VENTURA and M/S BATAAN, carrying on board the said
merchandise, actually left the ports of embarkation, Los Angeles, and San Francisco, on January 12
and January 16, 1954 respectively. Hence, according to the defendant, the importation must be
considered as having been made without a valid import license, because under the regulations
issued by the Central Bank and the Monetary Board, "all shipments that left the port of origin after
June 30, 1953, and are covered by ICC licenses, may be released by the Bureau of Customs
without the need of a Central Bank release certificate; provided they left the port of origin within
the period of validity of the licenses". No Central Bank certificate for the release of the goods
having been shown or presented to the defendant, the latter refused to make the delivery.

The lower court was thus conformed with the issue of determining whether the valid period of the
license in question should be counted up to the time when the vessels carrying the imported
items left the ports of origin on January 12 and January 16, 1954, or when the corresponding bills of
lading were dated, or December 17, 1953. The court chose the latter date, and held:

In view therefore, this Court pronounces judgment making writ of preliminary mandatory
injunction issued against defendant permanent, with orders for the cancellation of
plaintiff's bond, this after whatever advance sales tax or any taxes, surcharges and so forth
might be due on the goods shall have been paid, without costs.

The defendant appealed to the Court of Appeals. The question raised, however, being purely one
of law, the appeal was certified to us pursuant to a resolution of said court dated July 19, 1957. The
appeal has no merit.
The authority of the appellee to import was contained in the Import Control Commission
License No. 17225, validated on June 18, 1953, and under Resolution 70 of the Commission
(adopted March 27, 1952), the same had a six-month period of validity counted from the said date
June 18, 1953. This license states, among other conditions, that —

Commodities covered by this license must be shipped from the country of origin
before the expiry date of the license, and are subject to sec. 13 of Republic Act. No. 650.

Although Republic Act No. 650, creating the Import Control Commission, expired on July 31, 1953, it
is to be conceded that its duly executed acts can have valid effects even beyond the life span
of said governmental agency.

What is important to consider only is the legal connotation of the word "shipped" as the term was
used in the license. Defendant maintains that it is when the vessel leaves the port of embarkation,
while plaintiff holds that it is the dates of the bills of lading, which are usually issued after the cargo is
placed on board the vessel. The date of the shipment is the date when the goods for dispatch are
loaded on board the vessel, and not necessarily when the ship puts to sea, is clearly implied from
our ruling in the case of U.S Tobacco Corporation vs. Rufino Luna, et al., (87 Phil., 4), wherein we
said:

By section 6 of Act No. 426, all goods including leaf tobacco have been placed under control.
Petitioner's merchandise left the port of departure before the passage of that Act but arrived
in Manila after its approval. For the purpose of enforcing or applying said section 6, there can
only be one date of importation. Which was the date? The date the goods were ordered, the
date they were put on board vessel, or the date they reached the port of destination? We are
of the opinion that the date of importation is the date of shipment and not the date of
Arrival in Manila. (Emphasis supplied)

The issuance of the bill of lading, furthermore, presupposes or carries the presumption that the
goods were delivered to the carrier for immediate shipment (13 C.J.S. sec. 123 (2), p. 235, and
cases cited therein). It does not appear here that the bill of lading specified any designated day on
which the vessel were to lift anchor, nor was it shown that plaintiff had any knowledge that the vessel
M/S VENTURA and M/S BATAAN were not to depart soon after he placed his cargo on board and
the corresponding bills of lading issued to him. From this latter time, the goods in contemplation of
law, are deemed already in transit (New Civil Code, Arts. 1531 and 1736).

It should also be considered that it is entirely outside the shipper's hands to fix the dates of
departure, route or arrival of a vessel (unless he charters the whole ship [see Art. 656, Code of
Commerce]).

Defendant's reliance upon Central Bank regulations that the shipment licensed must have "left the
port of origin within the period of validity of the "license" is not maintainable in the present case,
because the regulations came onto effect only on July 1, 1953 already after issuance of the
appellee' license and cannot be read into the same.

The Solicitor General's contention that, assuming the six months are counted up to the date the
imports goods were placed on board the vessels for shipment the period of validity had likewise
already elapsed because, legally six months mean 180 days, which in this case expired on
December 15, cannot now be entertained because the defendant-appellant, under paragraph 3 of
his answer to the Complaint, expressly admitted that the date appearing on the bills of lading
(December 17, 1953) as the date of loading on board the vessels "is one day before the expiration
of the validity of the import license". What he only questioned in the court below is the legal
connotation of the word "shipped" under the import license.

In the light of the resolution we have taken on the main issue, it becomes unnecessary for us to
dwell further upon the other questions raised by the parties.

Wherefore, the appeal should be dismissed and the judgment of the lower court affirmed. So
rendered.

G.R. No. 106296 July 5, 1996

ISABELO T. CRISOSTOMO, petitioner,

vs.
THE COURT OF APPEALS and the PEOPLE OF THE PHILIPPINES, respondents.

MENDOZA, J.:p

This is a petition to review the decision of the Court of Appeals dated July 15, 1992, the
dispositive portion of which reads:

WHEREFORE, the present petition is partially granted. The questioned Orders

and writs directing (1) "reinstatement" of respondent Isabelo T. Crisostomo to the
position of "President of the Polytechnic University of the Philippines", and (2)
payment of "salaries and benefits" which said respondent failed to receive during
his suspension insofar as such payment includes those accruing after the
abolition of the PCC and its transfer to the PUP, are hereby set aside.
Accordingly, further proceedings consistent with this decision may be taken by
the court a quo to determine the correct amounts due and payable to said
respondent by the said university.

The background of this case is as follows:

Petitioner Isabelo Crisostomo was President of the Philippine College of Commerce

(PCC), having been appointed to that position by the President of the Philippines on July
17, 1974.

During his incumbency as president of the PCC, two administrative cases were filed against
petitioner for illegal use of government vehicles, misappropriation of construction
materials belonging to the college, oppression and harassment, grave misconduct,
nepotism and dishonesty. The administrative cases, which were filed with the Office of the
President, were subsequently referred to the Office of the Solicitor General for investigation.

Charges of violations of R.A. No. 3019, §3(e) and R.A. No. 992, §§20-21 and R.A. No. 733, §14
were likewise filed against him with the Office of Tanodbayan.

On June 14, 1976, three (3) informations for violation of Sec. 3(e) of the Anti-Graft and Corrupt
Practices Act (R.A. No. 3019, as amended) were filed against him. The informations alleged
that he appropriated for himself a bahay kubo, which was intended for the College, and
construction materials worth P250,000.00, more or less. Petitioner was also accused of using a
driver of the College as his personal and family driver.1

On October 22, 1976, petitioner was preventively suspended from office pursuant to R.A.
No. 3019, §13, as amended. In his place Dr. Pablo T. Mateo, Jr. was designated as officer-
in-charge on November 10, 1976, and then as Acting President on May 13, 1977.

On April 1, 1978, P.D. No. 1341 was issued by then President Ferdinand E. Marcos,
CONVERTING THE PHILIPPINE COLLEGE OF COMMERCE INTO A POLYTECHNIC
UNIVERSITY, DEFINING ITS OBJECTIVES, ORGANIZATIONAL STRUCTURE AND
FUNCTIONS, AND EXPANDING ITS CURRICULAR OFFERINGS.

Mateo continued as the head of the new University. On April 3, 1979, he was appointed
Acting President and on March 28, 1980, as President for a term of six (6) years.

On July 11, 1980, the Circuit Criminal Court of Manila rendered judgment acquitting
petitioner of the charges against him. The dispositive portion of the decision reads:

WHEREFORE, the Court finds the accused, Isabelo T. Crisostomo, not guilty of
the violations charged in all these three cases and hereby acquits him therefrom,
with costs de officio. The bail bonds filed by said accused for his provisional
liberty are hereby cancelled and released.

Pursuant to the provisions of Section 13, R.A. No. 3019, as amended, otherwise
known as The Anti-Graft and Corrupt Practices Act, and under which the
accused has been suspended by this Court in an Order dated October 22, 1976,
said accused is hereby ordered reinstated to the position of President of
the Philippine College of Commerce, now known as the Polytechnic University
of the Philippines, from which he has been suspended. By virtue of said
reinstatement, he is entitled to receive the salaries and other benefits which
he failed to receive during suspension, unless in the meantime administrative
proceedings have been filed against him.

The bail bonds filed by the accused for his provisional liberty in these cases are
hereby cancelled and released.

SO ORDERED.

The cases filed before the Tanodbayan (now the Ombudsman) were likewise dismissed on
August 8, 1991 on the ground that they had become moot and academic. On the other hand,
the administrative cases were dismissed for failure of the complainants to prosecute them.

On February 12, 1992, petitioner filed with the Regional Trial Court a motion for execution
of the judgment, particularly the part ordering his reinstatement to the position of president
of the PUP and the payment of his salaries and other benefits during the period of
suspension.

The motion was granted and a partial writ of execution was issued by the trial court on
March 6, 1992. On March 26, 1992, however, President Corazon C. Aquino appointed Dr.
Jaime Gellor as acting president of the PUP, following the expiration of the term of office of
Dr. Nemesio Prudente, who had succeeded Dr. Mateo. Petitioner was one of the five nominees
considered by the President of the Philippines for the position.

On April 24, 1992, the Regional Trial Court, through respondent Judge Teresita Dy-Liaco
Flores, issued another order, reiterating her earlier order for the reinstatement of
petitioner to the position of PUP president. A writ of execution, ordering the sheriff to
implement the order of reinstatement, was issued.

In his return dated April 28, 1992, the sheriff stated that he had executed the writ by installing
petitioner as President of the PUP, although Dr. Gellor did not vacate the office as he wanted
to consult with the President of the Philippines first. This led to a contempt citation
against Dr. Gellor. A hearing was set on May 7, 1992. On May 5, 1992, petitioner also
moved to cite Department of Education, Culture and Sports Secretary Isidro Cariño in contempt
of court. Petitioner assumed the office of president of the PUP.

On May 18, 1992, therefore, the People of the Philippines filed a petition for certiorari and
prohibition (CA G.R. No. 27931), assailing the two orders and the writs of execution issued
by the trial court. It also asked for a temporary restraining order.

On June 25, 1992, the Court of Appeals issued a temporary restraining order, enjoining
petitioner to cease and desist from acting as president of the PUP pursuant to the
reinstatement orders of the trial court, and enjoining further proceedings in Criminal Cases Nos.
VI-2329-2331.

On July 15, 1992, the Seventh Division of the Court of Appeals rendered a decision,2 the
dispositive portion of which is set forth at the beginning of this opinion. Said decision set aside
the orders and writ of reinstatement issued by the trial court. The payment of salaries and
benefits to petitioner accruing after the conversion of the PCC to the PUP was disallowed.
Recovery of salaries and benefits was limited to those accruing from the time of petitioner's
suspension until the conversion of the PCC to the PUP. The case was remanded to the trial
court for a determination of the amounts due and payable to petitioner.

Hence this petition. Petitioner argues that P.D. No. 1341, which converted the PCC into the
PUP, did not abolish the PCC. He contends that if the law had intended the PCC to lose its
existence, it would have specified that the PCC was being "abolished" rather than
"converted" and that if the PUP was intended to be a new institution, the law would have said it
was being "created." Petitioner claims that the PUP is merely a continuation of the
existence of the PCC, and, hence, he could be reinstated to his former position as
president.

In part the contention is well taken, but, as will presently be explained, reinstatement is no
longer possible because of the promulgation of P.D. No. 1437 by the President of the
Philippines on June 10, 1978.

P.D. No. 1341 did not abolish, but only changed, the former Philippine College of Commerce
into what is now the Polytechnic University of the Philippines, in the same way that earlier in
1952, R.A. No. 778 had converted what was then the Philippine School of Commerce into the
Philippine College of Commerce. What took place was a change in academic status of the
educational institution, not in its corporate life. Hence the change in its name, the expansion
of its curricular offerings, and the changes in its structure and organization.
As petitioner correctly points out, when the purpose is to abolish a department or an
office or an organization and to replace it with another one, the lawmaking authority says so.
He cites the following examples:

E.O. No. 709:

§1. There is hereby created a Ministry of Trade and Industry, hereinafter referred
to as the Ministry. The existing Ministry of Trade established pursuant to
Presidential Decree No. 721 as amended, and the existing Ministry established
pursuant to Presidential Decree No. 488 as amended, are abolished together
with their services, bureaus and similar agencies, regional offices, and all other
entities under their supervision and control.

E.O. No. 710:

§1. There is hereby created a Ministry of Public Works and Highways, hereinafter
referred to as the Ministry. The existing Ministry of Public Works established
pursuant to Executive Order No. 546 as amended, and the existing Ministry of
Public Highways established pursuant to Presidential Decree No. 458 as
amended, are abolished together with their services, bureaus and similar
agencies, regional offices, and all other entities within their supervision and
control. . . .

R.A. No. 6975:

§13. Creation and Composition. -- A National Police Commission, hereinafter

referred to as the Commission, is hereby created for the purpose of effectively
discharging the functions prescribed in the Constitution and provided in this Act.
The Commission shall be a collegial body within the Department. It shall be
composed of a Chairman and four (4) regular commissioners, one (1) of whom
shall be designated as Vice-Chairman by the President. The Secretary of the
Department shall be the ex-officio Chairman of the Commission, while the Vice-
Chairman shall act as the executive officer of the Commission.

xxx xxx xxx

§90. Status of Present NAPOLCOM, PC-INP. - Upon the effectivity of this Act,
the present National Police Commission, and the Philippine Constabulary-
Integrated National Police shall cease to exist. The Philippine Constabulary,
which is the nucleus of the integrated Philippine Constabulary-Integrated
National Police, shall cease to be a major service of the Armed Forces of the
Philippines. The Integrated National Police, which is the civilian component of the
Philippine Constabulary-Integrated National Police, shall cease to be the national
police force and in lieu thereof, a new police force shall be established and
constituted pursuant to this Act.

In contrast, P.D. No. 1341, provides:

 §1. The present Philippine College of Commerce is hereby converted into a
university to be known as the "Polytechnic University of the Philippines,"
hereinafter referred to in this Decree as the University.

As already noted, R.A. No. 778 earlier provided:

§1. The present Philippine School of Commerce, located in the City of Manila,
Philippines, is hereby granted full college status and converted into the Philippine
College of Commerce, which will offer not only its present one-year and two-year
vocational commercial curricula, the latter leading to the titles of Associate in
Business Education and/or Associate in Commerce, but also four-year courses
leading to the degrees of Bachelor of Science in Business in Education and
Bachelor of Science in Commerce, and five-year courses leading to the degrees
of Master of Arts in Business Education and Master of Arts in Commerce,
respectively.

The appellate court ruled, however, that the PUP and the PCC are not "one and the same
institution" but "two different entities" and that since petitioner Crisostomo's term was
coterminous with the legal existence of the PCC, petitioner's term expired upon the
abolition of the PCC. In reaching this conclusion, the Court of Appeals took into account the
following:

a) After respondent Crisostomo's suspension, P.D. No. 1341 (entitled

"CONVERTING THE PHILIPPINE COLLEGE OF COMMERCE INTO A
POLYTECHNIC UNIVERSITY, DEFINING ITS OBJECTIVES,
ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND EXPANDING ITS
CURRICULAR OFFERINGS") was issued on April 1, 1978. This decree explicitly
provides that PUP's objectives and purposes cover not only PCC's offering of
programs "in the field of commerce and business administration" but also
"programs in other polytechnic areas" and "in other fields such as agriculture,
arts and trades and fisheries . . ." (section 2). Being a university, PUP was
conceived as a bigger institution absorbing, merging and integrating the
entire PCC and other "national schools" as may be "transferred" to this new state
university.

b) The manner of selection and appointment of the university head is

substantially different from that provided by the PCC Charter. The PUP President
"shall be appointed by the President of the Philippines upon recommendation of
the Secretary of Education and Culture after consultation with the University
Board of Regents" (section 4, P.D. 1341). The President of PCC, on the other
hand, was appointed "by the President of the Philippines upon
recommendation of the Board of Trustees" (Section 4, R.A. 778).

c) The composition of the new university's Board of Regents in likewise different

from that of the PCC Board of Trustees (which included the chairman of the
Senate Committee on Education and the chairman of the House Committee on
Education, the President of the PCC Alumni Association as well as the President
of the Chamber of Commerce of the Philippines). Whereas, among others, the
NEDA Director-General, the Secretary of Industry and the Secretary of Labor are
members of the PUP Board of Regents. (section 6, P.D. 1341)
 d) The decree moreover transferred to the new university all the properties
including "equipment and facilities:"

". . . owned by the Philippine College of Commerce and such

other National Schools as may be integrated . . . including
their obligations and appropriations . . ." (sec. 12; emphasis
supplied)3

But these are hardly indicia of an intent to abolish an existing institution and to create a
new one. New course offerings can be added to the curriculum of a school without affecting its
legal existence. Nor will changes in its existing structure and organization bring about its
abolition and the creation of a new one. Only an express declaration to that effect by the
lawmaking authority will.

The Court of Appeals also cites the provision of P.D. No. 1341 as allegedly implying the
abolition of the PCC and the creation of a new one - the PUP - in its stead:

§12. All parcels of land, buildings, equipment and facilities owned by the
Philippine College of Commerce and such other national schools as may be
integrated by virtue of this decree, including their obligations and appropriations
thereof, shall stand transferred to the Polytechnic University of the
Philippines, provided, however, that said national schools shall continue to
receive their corresponding shares from the special education fund of the
municipal/provincial/city government concerned as are now enjoyed by them in
accordance with existing laws and/or decrees.

The law does not state that the lands, buildings and equipment owned by the PCC were being
"transferred" to the PUP but only that they "stand transferred" to it. "Stand transferred" simply
means, for example, that lands transferred to the PCC were to be understood as transferred to
the PUP as the new name of the institution.

But the reinstatement of petitioner to the position of president of the PUP could not be ordered
by the trial court because on June 10, 1978, P.D. No. 1437 had been promulgated fixing the
term of office of presidents of state universities and colleges at six (6) years, renewable for
another term of six (6) years, and authorizing the President of the Philippines to terminate
the terms of incumbents who were not reappointed. P.D. No. 1437 provides:

§6. The head of the university or college shall be known as the President of the
university or college. He shall be qualified for the position and appointed for a
term of six (6) years by the President of the Philippines upon recommendation of
the Secretary of Education and Culture after consulting with the Board which may
be renewed for another term upon recommendation of the Secretary of
Education and Culture after consulting the Board. In case of vacancy by reason
of death, absence or resignation, the Secretary of Education and Culture shall
have the authority to designate an officer in charge of the college or university
pending the appointment of the President.

The powers and duties of the President of the university or college, in addition to
those specifically provided for in this Decree shall be those usually pertaining to
the office of the president of a university or college.
 §7. The incumbent president of a chartered state college or university whose
term may be terminated according to this Decree, shall be entitled to full
retirement benefits: provided that he has served the government for at least
twenty (20) years; and provided, further that in case the number of years served
is less than 20 years, he shall be entitled to one month pay for every year of
service.

In this case, Dr. Pablo T. Mateo Jr., who had been acting president of the university since April
3, 1979, was appointed president of PUP for a term of six (6) years on March 28, 1980, with the
result that petitioner's term was cut short. In accordance with §7 of the law, therefore, petitioner
became entitled only to retirement benefits or the payment of separation pay. Petitioner
must have recognized this fact, that is why in 1992 he asked then President Aquino to consider
him for appointment to the same position after it had become vacant in consequence of the
retirement of Dr. Prudente.

WHEREFORE, the decision of the Court of Appeals is MODIFIED by SETTING ASIDE the
questioned orders of the Regional Trial Court directing the reinstatement of the petitioner
Isabelo T. Crisostomo to the position of president of the Polytechnic University of the Philippines
and the payment to him of salaries and benefits which he failed to receive during his suspension
in so far as such payment would include salaries accruing after March 28, 1980 when petitioner
Crisostomo's term was terminated. Further proceedings in accordance with this decision may be
taken by the trial court to determine the amount due and payable to petitioner by the university
up to March 28, 1980.

SO ORDERED.

G.R. No. 115844 August 15, 1997

CESAR G. VIOLA, Chairman, Brgy. 167, Zone 15, District II, Manila, petitioner,
vs.
HON. RAFAEL M. ALUNAN III, Secretary DILG, ALEX L. DAVID, President/Secretary General,
National Liga ng mga Barangay, LEONARDO L. ANGAT, President, City of Manila, Liga ng
mga Barangay, respondents.

MENDOZA, J.:

This is a petition for prohibition challenging the validity of Art. III, §§ 1-2 of the Revised
Implementing Rules and Guidelines for the General Elections of the Liga ng mga Barangay
Officers so far as they provide for the election of first, second and third vice presidents and
for auditors for the National Liga ng mga Barangay and its chapters. The provisions in question
read:

§1. Local Liga Chapters. The Municipal, City, Metropolitan and Provincial Chapters
shall directly elect the following officers and directors to constitute their respective
Board of Directors, namely:

1.1 President
 1.2 Executive Vice-President

1.3 First Vice-President

1.4 Second Vice-President

1.5 Third Vice-President

1.6 Auditor

1.7 Five (5) Directors

§2. National Liga. The National Liga shall directly elect the following officers and
directors to constitute the National Liga Board of Directors namely:

2.1 President

2.2 Executive Vice-President

2.3 First Vice-President

2.4 Second Vice-President

2.5 Third Vice-President

2.6 Secretary General

2.7 Auditor

2.8 Five (5) Directors

Petitioner Cesar G. Viola brought this action as barangay chairman of Brgy. 167, Zone 15,
District II, Manila against then Secretary of Interior and Local Government Rafael M. Alunan III, Alex
L. David, president/secretary general of the National Liga ng mga Barangay, and Leonardo L. Angat,
president of the City of Manila Liga ng mga Barangay, to restrain them from carrying out the
elections for the questioned positions on July 3, 1994.

Petitioner's contention is that the positions in question are in excess of those provided in the
Local Government Code (R.A. No. 7160), §493 of which mentions as elective positions only those
of president, vice president, and five members of the board of directors in each chapter at the
municipal, city, provincial, metropolitan political subdivision, and national levels. Petitioner argues
that, in providing for the positions of first, second and third vice presidents and auditor for each
chapter, §§1-2 of the Implementing Rules expand the number of positions authorized in §493 of
the Local Government Code in violation of the principle that implementing rules and regulations
cannot add or detract from the provisions of the law they are designed to implement.

Although the elections are now over, the issues raised in this case are likely to arise again in future
elections of officers of the Liga ng mga Barangay. For one thing, doubt may be cast on the validity of
the acts of those elected. For another, this comes within the rule that courts will decide a question
which is otherwise moot and academic if it is "capable of repetition, yet evading review."
1
We will therefore proceed to the merits of this case.

Petitioner's contention that the additional positions in question have been created without
authority of law is untenable. To begin with, the creation of these positions was actually made
in the Constitution and By-laws of the Liga ng Mga Barangay, which was adopted by the First
Barangay National Assembly on January 11, 1994. This Constitution and By-laws provide in
pertinent parts:

ARTICLE VI

OFFICERS AND DIRECTORS

Sec. 1. Organization of Board of Directors of Local Chapters. — The chapters shall

directly elect their respective officers, namely, a president; executive vice president;
first, second, and third vice presidents; auditor; and five (5) members to constitute
the Board of Directors of their respective chapter. Thereafter, the Board shall appoint
a secretary, treasurer, and public relations officer from among the five (5) members,
with the rest serving as Directors of Board. The Board may create such other
positions as it may deem necessary for the management of the chapter. Pending
elections of the president of the municipal, city, provincial and metropolitan chapters
of the Liga, the incumbent presidents of the ABCs of the municipality, city province
and Metropolitan Manila shall continue to act as presidents of the corresponding Liga
chapters, subject to the provisions of the Local Government Code of 1991.

Sec. 2. Organization of Board of Directors of the National Liga. — The National Liga
shall be composed of the presidents of the provincial Liga chapters, highly urbanized
and independent component city chapters, and the metropolitan chapter who shall
directly elect their respective officers, namely, a president, executive vice president;
first, second, and third vice president, auditor, secretary general; and five (5)
members to constitute the Board of Directors of the National Liga. Thereafter, the
Board shall appoint a treasurer, secretary and public relations officers from among
the five (5) members with the rest serving as directors of the Board. The Board may
create such other positions as it may deem necessary for the management of the
National Liga. Pending election of Secretary-General, the incumbent president of the
Pambansang Katipunan ng mga Barangay (PKB) shall act as the Secretary-General.
The incumbent members of the Board of the PKB, headed by the Secretary-General
who continue to be presidents of the respective chapters of the Liga to which they
belong, shall constitute a committee to exercise the powers and duties of the
National Liga and with the primordial responsibility of drafting a Constitution and By-
Laws needed for the organization of the Liga as a whole pursuant to the provisions of
the Local Government Code of 1991.

The post of executive vice president is in reality that of the vice president in §493 of the LGC, so that
the only additional positions created for each chapter in the Constitution and By-laws are those of
first, second and third vice presidents and auditor. Contrary to petitioner's contention, the creation
of the additional positions is authorized by the LGC which provides as follows:

§493. Organization. The liga at the municipal, city, provincial, Metropolitan political
subdivision, and national levels directly elect a president, a vice-president, and five
(5) members of the board of directors. The board shall appoint its secretary and
treasurer and create such other positions as it may deem necessary for the
management of the chapter. A secretary-general shall be elected form among the
 members of the national liga and shall be charged with the overall operation of the
liga on the national level. The board shall coordinate the activities of the chapters of
the liga. (emphasis added)

This provision in fact requires — and not merely authorizes the board of directors to "create such
other positions as it may deem necessary for the management of the chapter" and belies
petitioner's claim that said provision (§493) limits the officers of a chapter to the president,
vice president, five members of the board of directors, secretary, and treasurer. That
Congress can delegate the power to create positions such as these has been settled by our
decisions upholding the validity of reorganization statutes authorizing the President of the Philippines
to create, abolish or merge officers in the executive department. The question is whether, in making
2

a delegation of this power to the board of directors of each chapter of the Liga ng Mga Barangay,
Congress provided a sufficient standard so that, in the phrase of Justice Cardozo, administrative
discretion may be "canalized within proper banks that keep it from overflowing." 3

Statutory provisions authorizing the President of the Philippines to make reforms and changes in
government owned or controlled corporations for the purpose of promoting "simplicity, economy and
efficiency" in their operations and empowering the Secretary of Education to prescribe minimum
4

standards of "adequate and efficient instruction" in private schools and colleges have been found to
5

be sufficient for the purpose of valid delegation. Judged by these cases, we hold that §493 of the
Local Government Code, in directing the board of directors of the liga to "create such other
positions as may be deemed necessary for the management of the chapter[s]," embodies a
fairly intelligible standard. There is no undue delegation of power by Congress.

Justice Davide contends in dissent, however, that "only the Board of Directors — and not any
other body — is vested with the power to create other positions as may be necessary for the
management of the chapter" and that, in any case, there is no showing that the Barangay
National Assembly was authorized to draft the Constitution and By-laws because he is
unable to find any creating it. The Barangay National Assembly is actually the Pambansang
Katipunan ng mga Barangay (PKB) referred to in Art. 210(f)(2)(3) of the Rules and Regulations
Implementing the Local Government Code of 1991, which Justice Davide's dissent cites. It will be
helpful to quote these provisions:

(2) A secretary-general shall be elected from among the members of the national liga
who shall be responsible for the overall operation of the liga. Pending election of a
secretary-general under this rule, the incumbent president of the pambansang
katipunan ng mga barangay shall act as the secretary-general. The incumbent
members of the board of the pambansang katipunan ng mga barangay, headed by
the secretary-general, who continue to be presidents of the respective chapters of
the liga to which they belong, shall constitute a committee to exercise the powers
and duties of the national liga and draft or amend the constitution and by-laws of the
national liga to conform to the provisions of this Rule.

(3) The board of directors shall coordinate the activities of the various chapters of the
liga.

(Emphasis added)

Pursuant to these provisions, pending the organization of the Liga ng mga Barangay, the board of
directors of the PKB was constituted into a committee, headed by the PKB president, who acted as
secretary general, with a two-fold mandate: "[I] exercise the powers and duties of the national
liga and [2] draft or amend the constitution and by-laws of the national liga to conform to the
provisions of this Rule." The board of directors of the PKB, functioning in place of the board of
directors of the National Liga ng mga Barangay, exercised one of these powers of the National Liga
board, namely, to create additional positions which it deemed necessary for the management of a
chapter. There is therefore no basis for the claim that because the power to create additional
positions in the Liga on its chapters is vested only in the board of directors the exercise of
this power by the Barangay National Assembly is unauthorized and illegal and positions
created are void. The Barangay National Assembly was actually the Pambansang Katipunan ng
mga Barangay or PKB. Pending the organization of the Liga ng mga Barangay, it served as the Liga.
But it is contended in the dissent that "Section 493 of the LGC . . . vests the power to create
additional positions in the Board of Directors of the chapter." The implication seems to be that
the board of the directors at the national level did not have that power. It is necessary to consider the
organizational structure of the Liga ng mga Barangay as provided in the LGC, as follows:

§492. Representation, Chapters, National Liga. — Every barangay shall be

represented in said liga by the punong barangay, or in his absence or incapacity, by
a sangguniang member duly elected for the purpose among its members, who shall
attend all meetings or deliberations called by the different chapters of the liga.

The liga shall have chapters at the municipal, city, provincial and metropolitan
political subdivision levels.

The municipal and city chapters of the liga shall be composed of the barangay
representatives of municipal and city barangays, respectively. The duly elected
presidents of component municipal and city chapters shall constitute the provincial
chapter or the metropolitan political subdivision chapter. The duly elected presidents
of highly-urbanized cities, provincial chapters, the Metropolitan Manila chapter and
metropolitan political subdivision chapters shall constitute the National Liga ng mga
Barangay.

§493. Organization. — The liga at the municipal, city, provincial, metropolitan

political subdivision, and national levels directly elect a president, a vice-president,
and five (5) members of the board of directors. The board shall appoint its secretary
and treasurer and create such other positions as it may deem necessary for the
management of the chapter. A secretary-general shall be elected from among the
members of the national liga and shall be charged with the overall operation of the
liga on the national level. The board shall coordinate the activities of the chapters of
the liga.

(Emphasis added)

While the board of directors of a local chapter can create additional positions to provide for the
needs of the chapter, the board of directors of the National Liga must be deemed to have the
power to create additional positions not only for its management but also for that of all the
chapters at the municipal, city, provincial and metropolitan political subdivision levels. Otherwise the
National Liga would be no different from the local chapters. There would then be only so many
local chapters without a national one, when what is contemplated in the above-quoted
provisions of the LGC is that there should be one Liga ng mga Barangay with local chapters
at all levels of local government units. The dissent, by denying to the board of directors at the
National Liga the power to create additional positions in the local chapters, would reduce
such board to a board of a local chapter. The fact is that §493 grants the power to create
positions not only to the boards of the local chapters but to the board of the Liga at the national level
as well.
Indeed what was done in the Constitution and By-laws of their liga was to create additional
positions in each chapters, whether national or local, without however precluding the boards of
directors of the chapters as well as that of the national liga from creating other positions for their
peculiar needs. The creation by the board of the National Liga of the positions of first, second and
third vice presidents, auditors and public relations officers was intended to provide uniform officers
for the various chapters in line with the mandate in Art. 210(g)(2) of the Rules and Regulations
Implementing the Local Government Code of 1991 to the Barangay National Assembly to
"formulate uniform constitution and by-laws applicable to the national liga and all local chapters."
The various chapters could have different minor officers depending on their local needs, but they
must have the same major elective officers, meaning to say, the additional vice-presidents and
auditors.

The dissent further argues that, following the rule of ejusdem generis, what may be created as
additional positions can only be appointive ones because the positions of secretary and treasurer
are appointive positions. The rule might apply if what is involved is the appointment of other officers.
But what we are dealing with in this case is the creation of additional positions. Section 493 actually
gives the board the power to "[1] appoint its secretary and treasurer and [2] create such other
positions as it may deem necessary for the management of the chapter." The additional positions
to be created need not therefore be appointive positions.

Nor is it correct to say that §493, in providing that additional positions to be created must be those
which are "deemed necessary for the management of the chapter," contemplates only appointive
positions. Management positions are not necessarily limited to appointive positions. Elective officers,
such as the president and vice-president, can be expected to be involved in the general
administration or management of the chapter. Hence, the creation of other elective positions which
may be deemed necessary for the management of the chapter is within the purview of §493.

WHEREFORE, the petition for prohibition is DISMISSED for lack of merit.

SO ORDERED.

G.R. No. 102976 October 25, 1995

IRON AND STEEL AUTHORITY, petitioner,

vs.
THE COURT OF APPEALS and MARIA CRISTINA FERTILIZER CORPORATION, respondents.

FELICIANO, J.:

Petitioner Iron and Steel Authority ("ISA") was created by Presidential Decree (P.D.) No. 272
dated 9 August 1973 in order, generally, to develop and promote the iron and steel industry in
the Philippines. The objectives of the ISA are spelled out in the following terms:

Sec. 2. Objectives — The Authority shall have the following objectives:

(a) to strengthen the iron and steel industry of the Philippines and to expand the
domestic and export markets for the products of the industry;
 (b) to promote the consolidation, integration and rationalization of the industry in
order to increase industry capability and viability to service the domestic market and
to compete in international markets;

(c) to rationalize the marketing and distribution of steel products in order to achieve a
balance between demand and supply of iron and steel products for the country and
to ensure that industry prices and profits are at levels that provide a fair balance
between the interests of investors, consumers suppliers, and the public at large;

(d) to promote full utilization of the existing capacity of the industry, to discourage
investment in excess capacity, and in coordination, with appropriate government
agencies to encourage capital investment in priority areas of the industry;

(e) to assist the industry in securing adequate and low-cost supplies of raw materials
and to reduce the excessive dependence of the country on imports of iron and steel.

The list of powers and functions of the ISA included the following:

Sec. 4. Powers and Functions. — The authority shall have the following powers and
functions:

xxx xxx xxx

(j) to initiate expropriation of land required for basic iron and steel facilities for
subsequent resale and/or lease to the companies involved if it is shown that such
use of the State's power is necessary to implement the construction of capacity
which is needed for the attainment of the objectives of the Authority;

xxx xxx xxx

(Emphasis supplied)

P.D. No. 272 initially created petitioner ISA for a term of five (5) years counting from 9 August
1973. When ISA's original term expired on 10 October 1978, its term was extended for another ten
1

(10) years by Executive Order No. 555 dated 31 August 1979.

The National Steel Corporation ("NSC") then a wholly owned subsidiary of the National
Development Corporation which is itself an entity wholly owned by the National Government,
embarked on an expansion program embracing, among other things, the construction of an
integrated steel mill in Iligan City. The construction of such a steel mill was considered a priority
and major industrial project of the Government. Pursuant to the expansion program of the NSC,
Proclamation No. 2239 was issued by the President of the Philippines on 16 November 1982
withdrawing from sale or settlement a large tract of public land (totalling about 30.25 hectares in
area) located in Iligan City, and reserving that land for the use and immediate occupancy of NSC.

Since certain portions of the public land subject matter Proclamation No. 2239 were occupied
by a non-operational chemical fertilizer plant and related facilities owned by private respondent
Maria Cristina Fertilizer Corporation ("MCFC"), Letter of Instruction (LOI), No. 1277, also dated
16 November 1982, was issued directing the NSC to "negotiate with the owners of MCFC, for
and on behalf of the Government, for the compensation of MCFC's present occupancy rights on the
subject land." LOI No. 1277 also directed that should NSC and private respondent MCFC fail to
reach an agreement within a period of sixty (60) days from the date of LOI No. 1277, petitioner ISA
was to exercise its power of eminent domain under P.D. No. 272 and to initiate expropriation
proceedings in respect of occupancy rights of private respondent MCFC relating to the subject
public land as well as the plant itself and related facilities and to cede the same to the NSC.
2

Negotiations between NSC and private respondent MCFC did fail. Accordingly, on 18 August
1983, petitioner ISA commenced eminent domain proceedings against private respondent
MCFC in the Regional Trial Court, Branch 1, of Iligan City, praying that it (ISA) be places in
possession of the property involved upon depositing in court the amount of P1,760,789.69
representing ten percent (10%) of the declared market values of that property. The Philippine
National Bank, as mortgagee of the plant facilities and improvements involved in the expropriation
proceedings, was also impleaded as party-defendant.

On 17 September 1983, a writ of possession was issued by the trial court in favor of ISA. ISA
in turn placed NSC in possession and control of the land occupied by MCFC's fertilizer plant
installation.

The case proceeded to trial. While the trial was ongoing, however, the statutory existence of
petitioner ISA expired on 11 August 1988. MCFC then filed a motion to dismiss, contending
that no valid judgment could be rendered against ISA which had ceased to be a juridical
person. Petitioner ISA filed its opposition to this motion.

In an Order dated 9 November 1988, the trial court granted MCFC's motion to dismiss and did
dismiss the case. The dismissal was anchored on the provision of the Rules of Court stating that
"only natural or juridical persons or entities authorized by law may be parties in a civil
case." The trial court also referred to non-compliance by petitioner ISA with the requirements of
3

Section 16, Rule 3 of the Rules of Court.4

Petitioner ISA moved for reconsideration of the trial court's Order, contending that despite the
expiration of its term, its juridical existence continued until the winding up of its affairs could
be completed. In the alternative, petitioner ISA urged that the Republic of the Philippines, being
the real party-in-interest, should be allowed to be substituted for petitioner ISA. In this
connection, ISA referred to a letter from the Office of the President dated 28 September 1988 which
especially directed the Solicitor General to continue the expropriation case.

The trial court denied the motion for reconsideration, stating, among other things that:

The property to be expropriated is not for public use or benefit [__] but for the
use and benefit [__] of NSC, a government controlled private corporation engaged in
private business and for profit, specially now that the government, according to
newspaper reports, is offering for sale to the public its [shares of stock] in the
National Steel Corporation in line with the pronounced policy of the present
administration to disengage the government from its private business
ventures. (Brackets supplied)
5

Petitioner went on appeal to the Court of Appeals. In a Decision dated 8 October 1991, the Court of
Appeals affirmed the order of dismissal of the trial court. The Court of Appeals held that
petitioner ISA, "a government regulatory agency exercising sovereign functions," did not have the
same rights as an ordinary corporation and that the ISA, unlike corporations organized under the
Corporation Code, was not entitled to a period for winding up its affairs after expiration of its
legally mandated term, with the result that upon expiration of its term on 11 August 1987, ISA was
"abolished and [had] no more legal authority to perform governmental functions." The Court
of Appeals went on to say that the action for expropriation could not prosper because the basis for
the proceedings, the ISA's exercise of its delegated authority to expropriate, had become
ineffective as a result of the delegate's dissolution, and could not be continued in the name of
Republic of the Philippines, represented by the Solicitor General:

It is our considered opinion that under the law, the complaint cannot prosper, and
therefore, has to be dismissed without prejudice to the refiling of a new complaint for
expropriation if the Congress sees it fit." (Emphases supplied)

At the same time, however, the Court of Appeals held that it was premature for the trial court
to have ruled that the expropriation suit was not for a public purpose, considering that the
parties had not yet rested their respective cases.

In this Petition for Review, the Solicitor General argues that since ISA initiated and prosecuted the
action for expropriation in its capacity as agent of the Republic of the Philippines, the Republic, as
principal of ISA, is entitled to be substituted and to be made a party-plaintiff after the agent
ISA's term had expired.

Private respondent MCFC, upon the other hand, argues that the failure of Congress to enact a law
further extending the term of ISA after 11 August 1988 evinced a "clear legislative intent to
terminate the juridical existence of ISA," and that the authorization issued by the Office of the
President to the Solicitor General for continued prosecution of the expropriation suit could not prevail
over such negative intent. It is also contended that the exercise of the eminent domain by ISA or the
Republic is improper, since that power would be exercised "not on behalf of the National
Government but for the benefit of NSC."

The principal issue which we must address in this case is whether or not the Republic of the
Philippines is entitled to be substituted for ISA in view of the expiration of ISA's term. As will be made
clear below, this is really the only issue which we must resolve at this time.

Rule 3, Section 1 of the Rules of Court specifies who may be parties to a civil action:

Sec. 1. Who May Be Parties. — Only natural or juridical persons or entities

authorized by law may be parties in a civil action.

Under the above quoted provision, it will be seen that those who can be parties to a civil
action may be broadly categorized into two (2) groups:

(a) those who are recognized as persons under the law whether natural, i.e.,
biological persons, on the one hand, or juridical person such as corporations, on the
other hand; and

(b) entities authorized by law to institute actions.

Examination of the statute which created petitioner ISA shows that ISA falls under category (b)
above. P.D. No. 272, as already noted, contains express authorization to ISA to commence
expropriation proceedings like those here involved:
 Sec. 4. Powers and Functions. — The Authority shall have the following powers and
functions:

xxx xxx xxx

(j) to initiate expropriation of land required for basic iron and steel facilities for
subsequent resale and/or lease to the companies involved if it is shown that such
use of the State's power is necessary to implement the construction of capacity
which is needed for the attainment of the objectives of the Authority;

xxx xxx xxx

(Emphasis supplied)

It should also be noted that the enabling statute of ISA expressly authorized it to enter into
certain kinds of contracts "for and in behalf of the Government" in the following terms:

xxx xxx xxx

(i) to negotiate, and when necessary, to enter into contracts for and in behalf of the
government, for the bulk purchase of materials, supplies or services for any sectors
in the industry, and to maintain inventories of such materials in order to insure a
continuous and adequate supply thereof and thereby reduce operating costs of such
sector;

xxx xxx xxx

(Emphasis supplied)

Clearly, ISA was vested with some of the powers or attributes normally associated with juridical
personality. There is, however, no provision in P.D. No. 272 recognizing ISA as possessing general
or comprehensive juridical personality separate and distinct from that of the Government. The ISA in
fact appears to the Court to be a non-incorporated agency or instrumentality of the Republic of the
Philippines, or more precisely of the Government of the Republic of the Philippines. It is common
knowledge that other agencies or instrumentalities of the Government of the Republic are cast
in corporate form, that is to say, are incorporated agencies or instrumentalities, sometimes with and
at other times without capital stock, and accordingly vested with a juridical personality distinct from
the personality of the Republic. Among such incorporated agencies or instrumentalities are: National
Power Corporation; Philippine Ports Authority; National Housing Authority; Philippine National Oil
6 7 8

Company; Philippine National Railways; Public Estates Authority; Philippine Virginia Tobacco
9 10 11

Administration, and so forth. It is worth noting that the term "Authority" has been used to designate
12

both incorporated and non-incorporated agencies or instrumentalities of the Government.

We consider that the ISA is properly regarded as an agent or delegate of the Republic of the
Philippines. The Republic itself is a body corporate and juridical person vested with the full panoply
of powers and attributes which are compendiously described as "legal personality." The relevant
definitions are found in the Administrative Code of 1987:

Sec. 2. General Terms Defined. — Unless the specific words of the text, or the
context as a whole, or a particular statute, require a different meaning:
 (1) Government of the Republic of the Philippines refers to the corporate
governmental entity through which the functions of government are exercised
throughout the Philippines, including, save as the contrary appears from the context,
the various arms through which political authority is made effective in the Philippines,
whether pertaining to the autonomous regions, the provincial, city, municipal or
barangay subdivisions or other forms of local government.

xxx xxx xxx

(4) Agency of the Government refers to any of the various units of the Government,
including a department, bureau, office, instrumentality, or government-owned or
controlled corporation, or a local government or a distinct unit therein.

xxx xxx xxx

(10) Instrumentality refers to any agency of the National Government, not integrated
within the department framework, vested with special functions or jurisdiction by
law, endowed with some if not all corporate powers, administering special funds, and
enjoying operational autonomy, usually through a charter. This term includes
regulatory agencies, chartered institutions and government-owned or controlled
corporations.

xxx xxx xxx

(Emphases supplied)

When the statutory term of a non-incorporated agency expires, the powers, duties and
functions as well as the assets and liabilities of that agency revert back to, and are re-
assumed by, the Republic of the Philippines, in the absence of special provisions of law
specifying some other disposition thereof such as, e.g., devolution or transmission of such powers,
duties, functions, etc. to some other identified successor agency or instrumentality of the Republic of
the Philippines. When the expiring agency is an incorporated one, the consequences of such expiry
must be looked for, in the first instance, in the charter of that agency and, by way of
supplementation, in the provisions of the Corporation Code. Since, in the instant case, ISA is a non-
incorporated agency or instrumentality of the Republic, its powers, duties, functions, assets and
liabilities are properly regarded as folded back into the Government of the Republic of the
Philippines and hence assumed once again by the Republic, no special statutory provision
having been shown to have mandated succession thereto by some other entity or agency of the
Republic.

The procedural implications of the relationship between an agent or delegate of the Republic of the
Philippines and the Republic itself are, at least in part, spelled out in the Rules of Court. The general
rule is, of course, that an action must be prosecuted and defended in the name of the real party in
interest. (Rule 3, Section 2) Petitioner ISA was, at the commencement of the expropriation
proceedings, a real party in interest, having been explicitly authorized by its enabling statute to
institute expropriation proceedings. The Rules of Court at the same time expressly recognize the
role of representative parties:

Sec. 3. Representative Parties. — A trustee of an expressed trust, a guardian, an

executor or administrator, or a party authorized by statute may sue or be sued
without joining the party for whose benefit the action is presented or defended; but
 the court may, at any stage of the proceedings, order such beneficiary to be made a
party. . . . . (Emphasis supplied)

In the instant case, ISA instituted the expropriation proceedings in its capacity as an agent or
delegate or representative of the Republic of the Philippines pursuant to its authority under P.D.
No. 272. The present expropriation suit was brought on behalf of and for the benefit of the Republic
as the principal of ISA. Paragraph 7 of the complaint stated:

7. The Government, thru the plaintiff ISA, urgently needs the subject parcels of land
for the construction and installation of iron and steel manufacturing facilities that are
indispensable to the integration of the iron and steel making industry which is vital to
the promotion of public interest and welfare. (Emphasis supplied)

The principal or the real party in interest is thus the Republic of the Philippines and not
the National Steel Corporation, even though the latter may be an ultimate user of the
properties involved should the condemnation suit be eventually successful.

From the foregoing premises, it follows that the Republic of the Philippines is entitled to be
substituted in the expropriation proceedings as party-plaintiff in lieu of ISA, the statutory term
of ISA having expired. Put a little differently, the expiration of ISA's statutory term did not by itself
require or justify the dismissal of the eminent domain proceedings.

It is also relevant to note that the non-joinder of the Republic which occurred upon the expiration of
ISA's statutory term, was not a ground for dismissal of such proceedings since a party may be
dropped or added by order of the court, on motion of any party or on the court's own initiative at any
stage of the action and on such terms as are just. In the instant case, the Republic has precisely
13

moved to take over the proceedings as party-plaintiff.

In E.B. Marcha Transport Company, Inc. v. Intermediate Appellate Court, the Court recognized that
14

the Republic may initiate or participate in actions involving its agents. There the Republic of the
Philippines was held to be a proper party to sue for recovery of possession of property although the
"real" or registered owner of the property was the Philippine Ports Authority, a government agency
vested with a separate juridical personality. The Court said:

It can be said that in suing for the recovery of the rentals, the Republic of the
Philippines acted as principal of the Philippine Ports Authority, directly exercising the
commission it had earlier conferred on the latter as its agent. . . . (Emphasis
15

supplied)

In E.B. Marcha, the Court also stressed that to require the Republic to commence all over
again another proceeding, as the trial court and Court of Appeals had required, was to
generate unwarranted delay and create needless repetition of proceedings:

More importantly, as we see it, dismissing the complaint on the ground that the
Republic of the Philippines is not the proper party would result in needless delay in
the settlement of this matter and also in derogation of the policy against multiplicity
of suits. Such a decision would require the Philippine Ports Authority to refile the very
same complaint already proved by the Republic of the Philippines and bring back as
it were to square one. (Emphasis supplied)
16
As noted earlier, the Court of Appeals declined to permit the substitution of the Republic of the
Philippines for the ISA upon the ground that the action for expropriation could not prosper because
the basis for the proceedings, the ISA's exercise of its delegated authority to expropriate, had
become legally ineffective by reason of the expiration of the statutory term of the agent or
delegated i.e., ISA. Since, as we have held above, the powers and functions of ISA have
reverted to the Republic of the Philippines upon the termination of the statutory term of ISA ,
the question should be addressed whether fresh legislative authority is necessary before the
Republic of the Philippines may continue the expropriation proceedings initiated by its own delegate
or agent.

While the power of eminent domain is, in principle, vested primarily in the legislative department of
the government, we believe and so hold that no new legislative act is necessary should the Republic
decide, upon being substituted for ISA, in fact to continue to prosecute the expropriation
proceedings. For the legislative authority, a long time ago, enacted a continuing or standing
delegation of authority to the President of the Philippines to exercise, or cause the exercise of, the
power of eminent domain on behalf of the Government of the Republic of the Philippines. The 1917
Revised Administrative Code, which was in effect at the time of the commencement of the present
expropriation proceedings before the Iligan Regional Trial Court, provided that:

Sec. 64. Particular powers and duties of the President of the Philippines. — In
addition to his general supervisory authority, the President of the Philippines shall
have such other specific powers and duties as are expressly conferred or imposed
on him by law, and also, in particular, the powers and duties set forth in this Chapter.

Among such special powers and duties shall be:

xxx xxx xxx

(h) To determine when it is necessary or advantageous to exercise the right of

eminent domain in behalf of the Government of the Philippines; and to direct the
Secretary of Justice, where such act is deemed advisable, to cause the
condemnation proceedings to be begun in the court having proper jurisdiction.
(Emphasis supplied)

The Revised Administrative Code of 1987 currently in force has substantially reproduced the
foregoing provision in the following terms:

Sec. 12. Power of eminent domain. — The President shall determine when it is
necessary or advantageous to exercise the power of eminent domain in behalf of the
National Government, and direct the Solicitor General, whenever he deems the
action advisable, to institute expopriation proceedings in the proper court. (Emphasis
supplied)

In the present case, the President, exercising the power duly delegated under both the 1917
and 1987 Revised Administrative Codes in effect made a determination that it was necessary
and advantageous to exercise the power of eminent domain in behalf of the Government of
the Republic and accordingly directed the Solicitor General to proceed with the suit. 17

It is argued by private respondent MCFC that, because Congress after becoming once more the
depository of primary legislative power, had not enacted a statute extending the term of ISA, such
non-enactment must be deemed a manifestation of a legislative design to discontinue or abort the
present expropriation suit. We find this argument much too speculative; it rests too much upon
simple silence on the part of Congress and casually disregards the existence of Section 12 of the
1987 Administrative Code already quoted above.

Other contentions are made by private respondent MCFC, such as, that the constitutional
requirement of "public use" or "public purpose" is not present in the instant case, and that the
indispensable element of just compensation is also absent. We agree with the Court of Appeals in
this connection that these contentions, which were adopted and set out by the Regional Trial Court
in its order of dismissal, are premature and are appropriately addressed in the proceedings before
the trial court. Those proceedings have yet to produce a decision on the merits, since trial was still
on going at the time the Regional Trial Court precipitously dismissed the expropriation proceedings.
Moreover, as a pragmatic matter, the Republic is, by such substitution as party-plaintiff, accorded an
opportunity to determine whether or not, or to what extent, the proceedings should be continued in
view of all the subsequent developments in the iron and steel sector of the country including, though
not limited to, the partial privatization of the NSC.

WHEREFORE, for all the foregoing, the Decision of the Court of Appeals dated 8 October 1991 to
the extent that it affirmed the trial court's order dismissing the expropriation proceedings, is hereby
REVERSED and SET ASIDE and the case is REMANDED to the court a quo which shall allow
the substitution of the Republic of the Philippines for petitioner Iron and Steel Authority and for
further proceedings consistent with this Decision. No pronouncement as to costs.

SO ORDERED.

G.R. No. 1051 May 19, 1903

THE UNITED STATES, complainant-appellee,

vs.
FRED L. DORR, ET AL., defendants-appellants.

LADD, J.:

The defendants have been convicted upon a complaint charging them with the offense of
writing, publishing, and circulating a scurrilous libel against the Government of the United
States and the Insular Government of the Philippine Islands. The complaint is based upon section
8 of Act No. 292 of the Commission, which is as follows:

Every person who shall utter seditious words or speeches, write, publish, or circulate
scurrilous libels against the Government of the United States or the Insular Government of
the Philippine Islands, or which tend to disturb or obstruct any lawful officer in
executing his office, or which tend to instigate others to cabal or meet together for
unlawful purposes, or which suggest or incite rebellious conspiracies or riots, or which
tend to stir up the people against the lawful authorities, or to disturb the peace of the
community, the safety and order of the Government, or who shall knowingly conceal such
evil practices, shall be punished by a fine not exceeding two thousand dollars or by
imprisonment not exceeding two years, or both, in the discretion of the court.
The alleged libel was published as an editorial in the issue of the "Manila Freedom " of April 6,
1902, under the caption of "A few hard facts."

The Attorney-General in his brief indicates the following passages of the article as those upon which
he relies to sustain the conviction:

Sidney Adamson, in a late letter in "Leslie's Weekly," has the following to say of the action of
the Civil Commission in appointing rascally natives to important Government positions:

"It is a strong thing to say, but nevertheless true, that the Civil Commission, through
its ex-insurgent office holders, and by its continual disregard for the records of
natives obtained during the military rule of the Islands, has, in its distribution of
offices, constituted a protectorate over a set of men who should be in jail or deported.
. . . [Reference is then made to the appointment of one Tecson as justice of the
peace.] This is the kind of foolish work that the Commission is doing all over the
Islands, reinstating insurgents and rogues and turning down the men who have
during the struggle, at the risk of their lives, aided the Americans."

xxx xxx xxx

There is no doubt but that the Filipino office holders of the Islands are in a good many
instances rascals.

xxx xxx xxx

The commission has exalted to the highest positions in the Islands Filipinos who are alleged
to be notoriously corrupt and rascally, and men of no personal character.

xxx xxx xxx

Editor Valdez, of "Miau," made serious charges against two of the native Commissioners — charges
against Trinidad H. Pardo de Tavera, which, if true, would brand the man as a coward and a rascal,
and with what result? . . . [Reference is then made to the prosecution and conviction of Valdez for
libel "under a law which specifies that the greater the truth the greater the libel."] Is it the desire of
the people of the United States that the natives against whom these charges have been made
(which, if true, absolutely vilify their personal characters) be permitted to retain their seats on the
Civil Commission, the executive body of the Philippine Government, without an investigation?

xxx xxx xxx

It is a notorious fact that many branches of the Government organized by the Civil
Commission are rotten and corrupt. The fiscal system, upon which life, liberty, and justice
depends, is admitted by the Attorney-General himself to be most unsatisfactory. It is a fact
that the Philippine judiciary is far from being what it should. Neither fiscals nor judges can be
persuaded to convict insurgents when they wish to protect them.

xxx xxx xxx

Now we hear all sorts of reports as to rottenness existing in the province [of Tayabas], and
especially the northern end of it; it is said that it is impossible to secure the conviction of
lawbreakers and outlaws by the native justices, or a prosecution by the native fiscals.
xxx xxx xxx

The long and short of it is that Americans will not stand for an arbitrary government,
especially when evidences of carpetbagging and rumors of graft are too thick to be pleasant.

We do not understand that it is claimed that the defendants succeeded in establishing at the trial the
truth of any of the foregoing statements. The only question which we have considered is whether
their publication constitutes an offense under section 8 of Act No. 292, above cited.

Several allied offenses or modes of committing the same offense are defined in that section, viz: (1)
The uttering of seditious words or speeches; (2) the writing, publishing, or circulating of scurrilous
libels against the Government of the United States or the Insular Government of the Philippine
Islands; (3) the writing, publishing, or circulating of libels which tend to disturb or obstruct any lawful
officer in executing his office; (4) or which tend to instigate others to cabal or meet together for
unlawful purposes; (5) or which suggest or incite rebellious conspiracies or riots; (6) or which tend to
stir up the people against the lawful authorities or to disturb the peace of the community, the safety
and order of the Government; (7) knowingly concealing such evil practices.

The complaint appears to be framed upon the theory that a writing, in order to be punishable as a
libel under this section, must be of a scurrilous nature and directed against the Government of
the United States or the Insular Government of the Philippine Islands, and must, in addition,
tend to some one of the results enumerated in the section. The article in question is described in the
complaint as "a scurrilous libel against the Government of the United States and the Insular
Government of the Philippine Islands, which tends to obstruct the lawful officers of the United
States and the Insular Government of the Philippine Islands in the execution of their offices,
and which tends to instigate others to cabal and meet together for unlawful purposes, and which
suggests and incites rebellious conspiracies, and which tends to stir up the people against the lawful
authorities, and which disturbs the safety and order of the Government of the United States and the
Insular Government of the Philippine Islands." But it is "a well-settled rule in considering indictments
that where an offense may be committed in any of several different modes, and the offense, in any
particular instance, is alleged to have been committed in two or more modes specified, it is
sufficient to prove the offense committed in any one of them, provided that it be such as to constitute
the substantive offense" (Com. vs. Kneeland, 20 Pick., Mass., 206, 215), and the defendants may,
therefore, be convicted if any one of the substantive charges into which the complaint may
be separated has been made out.

We are all, however, agreed upon the proposition that the article in question has no appreciable
tendency to "disturb or obstruct any lawful officer in executing his office," or to "instigate"
any person or class of persons "to cabal or meet together for unlawful purposes," or to
"suggest or incite rebellious conspiracies or riots," or to "stir up the people against the lawful
authorities or to disturb the peace of the community, the safety and order of the Government." All
these various tendencies, which are described in section 8 of Act No. 292, each one of which is
made an element of a certain form of libel, may be characterized in general terms as seditious
tendencies. This is recognized in the description of the offenses punished by this section, which is
found in the title of the act, where they are defined as the crimes of the "seditious utterances,
whether written or spoken."

Excluding from consideration the offense of publishing "scurrilous libels against the Government of
the United States or the Insular Government of the Philippine Islands," which may conceivably stand
on a somewhat different footing, the offenses punished by this section all consist in inciting,
orally or in writing, to acts of disloyalty or disobedience to the lawfully constituted authorities
in these Islands. And while the article in question, which is, in the main, a virulent attack against
the policy of the Civil Commission in appointing natives to office, may have had the effect of
exciting among certain classes dissatisfaction with the Commission and its measures, we are unable
to discover anything in it which can be regarded as having a tendency to produce anything like what
may be called disaffection, or, in other words, a state of feeling incompatible with a disposition to
remain loyal to the Government and obedient to the laws. There can be no conviction, therefore,
for any of the offenses described in the section on which the complaint is based , unless it is
for the offense of publishing a scurrilous libel against the Government of the of the United
States or the Insular Government of the Philippine Islands.

Can the article be regarded as embraced within the description of "scurrilous libels against the
Government of the United States or the Insular Government of the Philippine Islands?" In the
determination of this question we have encountered great difficulty, by reason of the almost entire
lack of American precedents which might serve as a guide in the construction of the law. There are,
indeed, numerous English decisions, most of them of the eighteenth century, on the subject of
libelous attacks upon the "Government, the constitution, or the law generally," attacks upon the
Houses of Parliament, the Cabinet, the Established Church, and other governmental organisms, but
these decisions are not now accessible to us, and, if they were, they were made under such different
conditions from those which prevail at the present day, and are founded upon theories of
government so foreign to those which have inspired the legislation of which the enactment in
question forms a part, that they would probably afford but little light in the present inquiry. In
England, in the latter part of the eighteenth century, any "written censure upon public men for their
conduct as such," as well as any written censure "upon the laws or upon the institutions of the
country," would probably have been regarded as a libel upon the Government. (2 Stephen, History of
the Criminal Law of England, 348.) This has ceased to be the law in England, and it is doubtful
whether it was ever the common law of any American State. "It is true that there are ancient dicta to
the effect that any publication tending to "possess the people with an ill opinion of the Government"
is a seditious libel ( per Holt, C. J., in R. vs. Tuchin, 1704, 5 St. Tr., 532, and Ellenborough, C. J., in
R. vs. Cobbett, 1804, 29 How. St. Tr., 49), but no one would accept that doctrine now. Unless the
words used directly tend to foment riot or rebellion or otherwise to disturb the peace and tranquility of
the Kingdom, the utmost latitude is allowed in the discussion of all public affairs." (11 Enc. of the
Laws of England, 450.) Judge Cooley says (Const. Lim., 528): "The English common law rule which
made libels on the constitution or the government indictable, as it was administered by the courts,
seems to us unsuited to the condition and circumstances of the people of America, and therefore
never to have been adopted in the several States."

We find no decisions construing the Tennessee statute (Code, sec. 6663), which is apparently the
only existing American statute of a similar character to that in question, and from which much of the
phraseology of then latter appears to have been taken, though with some essential modifications.

The important question is to determine what is meant in section 8 of Act No. 292 by the
expression "the Insular Government of the Philippine Islands." Does it mean in a general and
abstract sense the existing laws and institutions of the Islands, or does it mean the aggregate of the
individuals by whom the government of the Islands is, for the time being, administered? Either sense
would doubtless be admissible.

We understand, in modern political science, . . . by the term government, that institution or aggregate
of institutions by which an independent society makes and carries out those rules of action which are
unnecessary to enable men to live in a social state, or which are imposed upon the people forming
that society by those who possess the power or authority of prescribing them. Government is the
aggregate of authorities which rule a society. By "administration, again, we understand in
modern times, and especially in more or less free countries, the aggregate of those persons in
whose hands the reins of government are for the time being (the chief ministers or heads of
departments)." (Bouvier, Law Dictionary, 891.) But the writer adds that the terms "government"
and "administration" are not always used in their strictness, and that "government" is often
used for "administration."

In the act of Congress of July 14, 1798, commonly known as the "Sedition Act," it is made an offense
to "write, print, utter, or published," or to "knowingly and willingly assist or aid in writing, printing,
uttering, or publishing any false, scandalous, and malicious writing or writings against the
Government of the United States, or either House of the Congress of the United States, or the
President of the United States, with intent to defame the said Government, or either House of the
said Congress, or the said President, or to bring them, or either of them, into contempt or disrepute,
or to excite against them or either or any of them the hatred of the good people of the United States,"
etc. The term "government" would appear to be used here in the abstract sense of the existing
political system, as distinguished from the concrete organisms of the Government — the Houses of
Congress and the Executive — which are also specially mentioned.

Upon the whole, we are of the opinion that this is the sense in which the term is used in the
enactment under consideration.

It may be said that there can be no such thing as a scurrilous libel, or any sort of a libel, upon an
abstraction like the Government in the sense of the laws and institutions of a country, but we think
an answer to this suggestion is that the expression "scurrilous libel" is not used in section 8 of Act
No. 292 in the sense in which it is used in the general libel law (Act No. 277) — that is, in the sense
of written defamation of individuals — but in the wider sense, in which it is applied in the common
law to blasphemous, obscene, or seditious publications in which there may be no element of
defamation whatever. "The word 'libel' as popularly used, seems to mean only defamatory
words; but words written, if obscene, blasphemous, or seditious, are technically called libels,
and the publication of them is, by the law of England, an indictable offense."
(Bradlaugh vs. The Queen, 3 Q. B. D., 607, 627, per Bramwell L. J. See Com. vs. Kneeland, 20
Pick., 206, 211.)

While libels upon forms of government, unconnected with defamation of individuals, must in the
nature of things be of uncommon occurrence, the offense is by no means an imaginary one. An
instance of a prosecution for an offense essentially of this nature is Republica vs. Dennie, 4 Yeates
(Pa.), 267, where the defendant was indicted "as a factious and seditious person of a wicked mind
and unquiet and turbulent disposition and conversation, seditiously, maliciously, and willfully
intending, as much as in him lay, to bring into contempt and hatred the independence of the United
States, the constitution of this Commonwealth and of the United States, to excite popular discontent
and dissatisfaction against the scheme of polity instituted, and upon trial in the said United States
and in the said Commonwealth, to molest, disturb, and destroy the peace and tranquility of the said
United States and of the said Commonwealth, to condemn the principles of the Revolution, and
revile, depreciate, and scandalize the characters of the Revolutionary patriots and statesmen, to
endanger, subvert, and totally destroy the republican constitutions and free governments of the said
United States and this Commonwealth, to involve the said United States and this Commonwealth in
civil war, desolation, and anarchy, and to procure by art and force a radical change and alteration in
the principles and forms of the said constitutions and governments, without the free will, wish, and
concurrence of the people of the said United States and this Commonwealth, respectively," the
charge being that "to fulfill, perfect, and bring to effect his wicked, seditious, and detestable
intentions aforesaid he . . . falsely, maliciously, factiously, and seditiously did make, compose, write,
and publish the following libel, to wit; 'A democracy is scarcely tolerable at any period of national
history. Its omens are always sinister and its powers are unpropitious. With all the lights or
experience blazing before our eyes, it is impossible not to discover the futility of this form of
government. It was weak and wicked at Athens, it was bad in Sparta, and worse in Rome. It has
been tried in France and terminated in despotism. it was tried in England and rejected with the
utmost loathing and abhorrence. It is on its trial here and its issue will be civil war, desolation, and
anarchy. No wise man but discerns its imperfections; no good man but shudders at its miseries; no
honest man but proclaims its fraud, and no brave man but draws his sword against its force. The
institution of a scheme of polity so radically contemptible and vicious is a memorable example of
what the villainy of some men can devise, the folly of others receive, and both establish, in despite of
reason, reflection, and sensation.'"

An attack upon the lawfully established system of civil government in the Philippine Islands, like that
which Dennie was accused of making upon the republican form of government lawfully established
in the United States and in the State of Pennsylvania would, we think, if couched in scandalous
language, constitute the precise offense described in section 8 of Act No. 292 as a scurrilous libel
against the Insular Government of the Philippine Islands.

Defamation of individuals, whether holding official positions or not, and whether directed to
their public conduct or to their private life, may always be adequately punished under the
general libel law. Defamation of the Civil Commission as an aggregation, it being "a body of
persons definite and small enough for its individual members to be recognized as such" (Stephen,
Digest of the Criminal Law, art. 277), as well as defamation of any of the individual members of the
Commission or of the Civil Governor, either in his public capacity or as a private individual, may be
so punished. The general libel law enacted by the Commission was in force when Act No. 292, was
passed. There was no occasion for any further legislation on the subject of libels against the
individuals by whom the Insular Government is administered — against the Insular Government in
the sense of the aggregate of such individuals. There was occasion for stringent legislation against
seditious words or libels, and that is the main if not the sole purpose of the section under
consideration. It is not unreasonable to suppose that the Commission, in enacting this section, may
have conceived of attacks of a malignant or scurrilous nature upon the existing political system of
the United States, or the political system established in these Islands by the authority of the United
States, as necessarily of a seditious tendency, but it is not so reasonable to suppose that they
conceived of attacks upon the personnel of the government as necessarily tending to sedition. Had
this been their view it seems probable that they would, like the framers of the Sedition Act of 1798,
have expressly and specifically mentioned the various public officials and collegiate governmental
bodies defamation of which they meant to punish as sedition.

The article in question contains no attack upon the governmental system of the United
States, and it is quite apparent that, though grossly abusive as respects both the Commission
as a body and some of its individual members, it contains no attack upon the governmental
system by which the authority of the United States is enforced in these Islands . The form of
government by a Civil Commission and a Civil Governor is not assailed. It is the character of the
men who are intrusted with the administration of the government that the writer is seeking to
bring into disrepute by impugning the purity of their motives, their public integrity, and their
private morals, and the wisdom of their policy. The publication of the article, therefore, no
seditious tendency being apparent, constitutes no offense under Act No. 292, section 8.

The judgment of conviction is reversed and the defendants are acquitted, with costs de oficio.

G.R. No. 115863 March 31, 1995

AIDA D. EUGENIO, petitioner,

vs.
CIVIL SERVICE COMMISSION, HON. TEOFISTO T. GUINGONA, JR. & HON. SALVADOR
ENRIQUEZ, JR., respondents.

PUNO, J.:

The power of the Civil Service Commission to abolish the Career Executive Service Board is
challenged in this petition for certiorari and prohibition.

First the facts. Petitioner is the Deputy Director of the Philippine Nuclear Research Institute.
She applied for a Career Executive Service (CES) Eligibility and a CESO rank on August 2,
1993, she was given a CES eligibility. On September 15, 1993, she was recommended to the
President for a CESO rank by the Career Executive Service Board. 1

All was not to turn well for petitioner. On October 1, 1993, respondent Civil Service
Commission passed Resolution No. 93-4359, viz:
2

RESOLUTION NO. 93-4359

WHEREAS, Section 1(1) of Article IX-B provides that Civil Service shall be
administered by the Civil Service Commission, . . .;

WHEREAS, Section 3, Article IX-B of the 1987 Philippine Constitution provides that
"The Civil Service Commission, as the central personnel agency of the government,
is mandated to establish a career service and adopt measures to promote morale,
efficiency, integrity, responsiveness, progresiveness and courtesy in the civil service,
. . .";

WHEREAS, Section 12 (1), Title I, Subtitle A, Book V of the Administrative Code of

1987 grants the Commission the power, among others, to administer and enforce the
constitutional and statutory provisions on the merit system for all levels and ranks in
the Civil Service;

WHEREAS, Section 7, Title I, Subtitle A, Book V of the Administrative Code of 1987

Provides, among others, that The Career Service shall be characterized by (1)
entrance based on merit and fitness to be determined as far as practicable by
competitive examination, or based highly technical qualifications; (2) opportunity
for advancement to higher career positions; and (3) security of tenure;

WHEREAS, Section 8 (c), Title I, Subtitle A, Book V of the administrative Code of

1987 provides that "The third level shall cover Positions in the Career Executive
Service";

WHEREAS, the Commission recognizes the imperative need to consolidate,

integrate and unify the administration of all levels of positions in the career service.

WHEREAS, the provisions of Section 17, Title I, Subtitle A. Book V of the

Administrative Code of 1987 confers on the Commission the power and authority to
effect changes in its organization as the need arises.

WHEREAS, Section 5, Article IX-A of the Constitution provides that the Civil Service
Commission shall enjoy fiscal autonomy and the necessary implications thereof;
 NOW THEREFORE, foregoing premises considered, the Civil Service Commission
hereby resolves to streamline reorganize and effect changes in its
organizational structure. Pursuant thereto, the Career Executive Service Board,
shall now be known as the Office for Career Executive Service of the Civil
Service Commission. Accordingly, the existing personnel, budget, properties and
equipment of the Career Executive Service Board shall now form part of the Office
for Career Executive Service.

The above resolution became an impediment to the appointment of petitioner as Civil Service
Officer, Rank IV. In a letter to petitioner, dated June 7, 1994, the Honorable Antonio T. Carpio,
Chief Presidential legal Counsel, stated:

xxx xxx xxx

On 1 October 1993 the Civil Service Commission issued CSC Resolution No. 93-
4359 which abolished the Career Executive Service Board.

Several legal issues have arisen as a result of the issuance of CSC Resolution No.
93-4359, including whether the Civil Service Commission has authority to abolish the
Career Executive Service Board. Because these issues remain unresolved, the
Office of the President has refrained from considering appointments of career service
eligibles to career executive ranks.

xxx xxx xxx

You may, however, bring a case before the appropriate court to settle the legal
issues arising from issuance by the Civil Service Commission of CSC Resolution No.
93-4359, for guidance of all concerned.

Thank You.

Finding herself bereft of further administrative relief as the Career Executive Service Board which
recommended her CESO Rank IV has been abolished, petitioner filed the petition at bench to
annul, among others, resolution No. 93-4359. The petition is anchored on the following arguments:

A.

IN VIOLATION OF THE CONSTITUTION, RESPONDENT COMMISSION

USURPED THE LEGISLATIVE FUNCTIONS OF CONGRESS WHEN IT
ABOLISHED THE CESB, AN OFFICE CREATED BY LAW, THROUGH THE
ISSUANCE OF CSC: RESOLUTION NO. 93-4359;

B.

ALSO IN VIOLATION OF THE CONSTITUTION, RESPONDENT CSC USURPED

THE LEGISLATIVE FUNCTIONS OF CONGRESS WHEN IT ILLEGALLY
AUTHORIZED THE TRANSFER OF PUBLIC MONEY, THROUGH THE ISSUANCE
OF CSC RESOLUTION NO. 93-4359.

Required to file its Comment, the Solicitor General agreed with the contentions of petitioner.
Respondent Commission, however, chose to defend its ground. It posited the following position:
 ARGUMENTS FOR PUBLIC RESPONDENT-CSC

I. THE INSTANT PETITION STATES NO CAUSE OF ACTION AGAINST THE

PUBLIC RESPONDENT-CSC.

II. THE RECOMMENDATION SUBMITTED TO THE PRESIDENT FOR

APPOINTMENT TO A CESO RANK OF PETITIONER EUGENIO WAS A VALID
ACT OF THE CAREER EXECUTIVE SERVICE BOARD OF THE CIVIL SERVICE
COMMISSION AND IT DOES NOT HAVE ANY DEFECT.

III. THE OFFICE OF THE PRESIDENT IS ESTOPPED FROM QUESTIONING THE

VALIDITY OF THE RECOMMENDATION OF THE CESB IN FAVOR OF
PETITIONER EUGENIO SINCE THE PRESIDENT HAS PREVIOUSLY APPOINTED
TO CESO RANK FOUR (4) OFFICIALS SIMILARLY SITUATED AS SAID
PETITIONER. FURTHERMORE, LACK OF MEMBERS TO CONSTITUTE A
QUORUM. ASSUMING THERE WAS NO QUORUM, IS NOT THE FAULT OF
PUBLIC RESPONDENT CIVIL SERVICE COMMISSION BUT OF THE PRESIDENT
WHO HAS THE POWER TO APPOINT THE OTHER MEMBERS OF THE CESB.

IV. THE INTEGRATION OF THE CESB INTO THE COMMISSION IS AUTHORIZED

BY LAW (Sec. 12 (1), Title I, Subtitle A, Book V of the Administrative Code of the
1987). THIS PARTICULAR ISSUE HAD ALREADY BEEN SETTLED WHEN THE
HONORABLE COURT DISMISSED THE PETITION FILED BY THE HONORABLE
MEMBERS OF THE HOUSE OF REPRESENTATIVES, NAMELY: SIMEON A.
DATUMANONG, FELICIANO R. BELMONTE, JR., RENATO V. DIAZ, AND
MANUEL M. GARCIA IN G.R. NO. 114380. THE AFOREMENTIONED
PETITIONERS ALSO QUESTIONED THE INTEGRATION OF THE CESB WITH
THE COMMISSION.

We find merit in the petition. 3

The controlling fact is that the Career Executive Service Board (CESB) was created in the
Presidential Decree (P.D.) No. 1 on September 1, 1974 which adopted the Integrated Plan. Article
4

IV, Chapter I, Part of the III of the said Plan provides:

Article IV — Career Executive Service

1. A Career Executive Service is created to form a continuing pool of well-selected

and development oriented career administrators who shall provide competent and
faithful service.

2. A Career Executive Service hereinafter referred to in this Chapter as the

Board, is created to serve as the governing body of the Career Executive
Service. The Board shall consist of the Chairman of the Civil Service Commission as
presiding officer, the Executive Secretary and the Commissioner of the Budget
as ex-officio members and two other members from the private sector and/or the
academic community who are familiar with the principles and methods of personnel
administration.

xxx xxx xxx

 5. The Board shall promulgate rules, standards and procedures on the selection,
classification, compensation and career development of members of the Career
Executive Service. The Board shall set up the organization and operation of the
service. (Emphasis supplied)

It cannot be disputed, therefore, that as the CESB was created by law, it can only be abolished
by the legislature. This follows an unbroken stream of rulings that the creation and abolition of
public offices is primarily a legislative function. As aptly summed up in AM JUR 2d on Public
Officers and
Employees, viz:
5

Except for such offices as are created by the Constitution, the creation of public
offices is primarily a legislative function. In so far as the legislative power in this
respect is not restricted by constitutional provisions, it supreme, and the legislature
may decide for itself what offices are suitable, necessary, or convenient. When in the
exigencies of government it is necessary to create and define duties, the legislative
department has the discretion to determine whether additional offices shall be
created, or whether these duties shall be attached to and become ex-officio duties of
existing offices. An office created by the legislature is wholly within the power of that
body, and it may prescribe the mode of filling the office and the powers and duties of
the incumbent, and if it sees fit, abolish the office.

In the petition at bench, the legislature has not enacted any law authorizing the abolition of the
CESB. On the contrary, in all the General Appropriations Acts from 1975 to 1993, the legislature has
set aside funds for the operation of CESB. Respondent Commission, however, invokes Section 17,
Chapter 3, Subtitle A. Title I, Book V of the Administrative Code of 1987 as the source of its power to
abolish the CESB. Section 17 provides:

Sec. 17. Organizational Structure. — Each office of the Commission shall be headed
by a Director with at least one Assistant Director, and may have such divisions as are
necessary independent constitutional body, the Commission may effect changes in
the organization as the need arises.

But as well pointed out by petitioner and the Solicitor General, Section 17 must be read together with
Section 16 of the said Code which enumerates the offices under the respondent Commission, viz:

Sec. 16. Offices in the Commission. — The Commission shall have the following
offices:

(1) The Office of the Executive Director headed by an Executive Director, with a
Deputy Executive Director shall implement policies, standards, rules and regulations
promulgated by the Commission; coordinate the programs of the offices of the
Commission and render periodic reports on their operations, and perform such other
functions as may be assigned by the Commission.

(2) The Merit System Protection Board composed of a Chairman and two (2)
members shall have the following functions:

xxx xxx xxx

(3) The Office of Legal Affairs shall provide the Chairman with legal advice and
assistance; render counselling services; undertake legal studies and researches;
prepare opinions and ruling in the interpretation and application of the Civil Service
law, rules and regulations; prosecute violations of such law, rules and regulations;
and represent the Commission before any court or tribunal.

(4) The Office of Planning and Management shall formulate development plans,
programs and projects; undertake research and studies on the different aspects of
public personnel management; administer management improvement programs; and
provide fiscal and budgetary services.

(5) The Central Administrative Office shall provide the Commission with personnel,
financial, logistics and other basic support services.

(6) The Office of Central Personnel Records shall formulate and implement policies,
standards, rules and regulations pertaining to personnel records maintenance,
security, control and disposal; provide storage and extension services; and provide
and maintain library services.

(7) The Office of Position Classification and Compensation shall formulate and
implement policies, standards, rules and regulations relative to the administration of
position classification and compensation.

(8) The Office of Recruitment, Examination and Placement shall provide leadership
and assistance in developing and implementing the overall Commission programs
relating to recruitment, execution and placement, and formulate policies, standards,
rules and regulations for the proper implementation of the Commission's examination
and placement programs.

(9) The Office of Career Systems and Standards shall provide leadership and
assistance in the formulation and evaluation of personnel systems and standards
relative to performance appraisal, merit promotion, and employee incentive benefit
and awards.

(10) The Office of Human Resource Development shall provide leadership and
assistance in the development and retention of qualified and efficient work force in
the Civil Service; formulate standards for training and staff development; administer
service-wide scholarship programs; develop training literature and materials;
coordinate and integrate all training activities and evaluate training programs.

(11) The Office of Personnel Inspection and Audit shall develop policies, standards,
rules and regulations for the effective conduct or inspection and audit personnel and
personnel management programs and the exercise of delegated authority; provide
technical and advisory services to Civil Service Regional Offices and government
agencies in the implementation of their personnel programs and evaluation systems.

(12) The Office of Personnel Relations shall provide leadership and assistance in the
development and implementation of policies, standards, rules and regulations in the
accreditation of employee associations or organizations and in the adjustment and
settlement of employee grievances and management of employee disputes.
 (13) The Office of Corporate Affairs shall formulate and implement policies,
standards, rules and regulations governing corporate officials and employees in the
areas of recruitment, examination, placement, career development, merit and awards
systems, position classification and compensation, performing appraisal, employee
welfare and benefit, discipline and other aspects of personnel management on the
basis of comparable industry practices.

(14) The Office of Retirement Administration shall be responsible for the

enforcement of the constitutional and statutory provisions, relative to retirement and
the regulation for the effective implementation of the retirement of government
officials and employees.

(15) The Regional and Field Offices. — The Commission shall have not less than
thirteen (13) Regional offices each to be headed by a Director, and such field offices
as may be needed, each to be headed by an official with at least the rank of an
Assistant Director.

As read together, the inescapable conclusion is that respondent Commission's power

to reorganize is limited to offices under its control as enumerated in Section 16 , supra.
From its inception, the CESB was intended to be an autonomous entity, albeit
administratively attached to respondent Commission. As conceptualized by the
Reorganization Committee "the CESB shall be autonomous. It is expected to view the
problem of building up executive manpower in the government with a broad and positive
outlook." The essential autonomous character of the CESB is not negated by its attachment
6

to respondent Commission. By said attachment, CESB was not made to fall within the
control of respondent Commission. Under the Administrative Code of 1987, the purpose of
attaching one functionally inter-related government agency to another is to attain "policy and
program coordination." This is clearly etched out in Section 38(3), Chapter 7, Book IV of the
aforecited Code, to wit:

(3) Attachment. — (a) This refers to the lateral relationship between the department
or its equivalent and attached agency or corporation for purposes of policy and
program coordination. The coordination may be accomplished by having the
department represented in the governing board of the attached agency or
corporation, either as chairman or as a member, with or without voting rights, if this is
permitted by the charter; having the attached corporation or agency comply with a
system of periodic reporting which shall reflect the progress of programs and
projects; and having the department or its equivalent provide general policies through
its representative in the board, which shall serve as the framework for the internal
policies of the attached corporation or agency.

Respondent Commission also relies on the case of Datumanong, et al., vs. Civil Service
Commission, G. R. No. 114380 where the petition assailing the abolition of the CESB was dismissed
for lack of cause of action. Suffice to state that the reliance is misplaced considering that the cited
case was dismissed for lack of standing of the petitioner, hence, the lack of cause of action.

IN VIEW WHEREOF, the petition is granted and Resolution No. 93-4359 of the respondent
Commission is hereby annulled and set aside. No costs.

G.R. No. L-57883 March 12, 1982

GUALBERTO J. DE LA LLANA Presiding Judge, Branch II of the City Court of Olongapo,
ESTANISLAO L. CESA, JR., FIDELA Y. VARGAS, BENJAMIN C. ESCOLANGO, JUANITO C.
ATIENZA, MANUEL REYES ROSAPAPAN, JR., VIRGILIO E. ACIERTO, and PORFIRIO
AGUILLON AGUILA, petitioners,
vs.
MANUEL ALBA, Minister of Budget, FRANCISCO TANTUICO, Chairman, Commission on
Audit, and RICARDO PUNO, Minister of Justice, Respondents.

FERNANDO, C.J.:

This Court, pursuant to its grave responsibility of passing upon the validity of any executive or
legislative act in an appropriate cases, has to resolve the crucial issue of the
constitutionality of Batas Pambansa Blg. 129, entitled "An act reorganizing the Judiciary,
Appropriating Funds Therefor and for Other Purposes." The task of judicial review, aptly
characterized as exacting and delicate, is never more so than when a conceded legislative
power, that of judicial reorganization, 1 may possibly collide with the time-honored principle of
the independence of the judiciary 2 as protected and safeguarded by this constitutional
provision:

"The Members of the Supreme Court and judges of inferior courts shall hold office during
good behavior until they reach the age of seventy years or become incapacitated to
discharge the duties of their office.

The Supreme Court shall have the power to discipline judges of inferior courts and, by a vote of
at least eight Members, order their dismissal." 3 For the assailed legislation mandates that
Justices and judges of inferior courts from the Court of Appeals to municipal circuit courts,
except the occupants of the Sandiganbayan and the Court of Tax Appeals, unless appointed to
the inferior courts established by such Act, would be considered separated from the judiciary. It
is the termination of their incumbency that for petitioners justifies a suit of this character,
it being alleged that thereby the security of tenure provision of the Constitution has been
ignored and disregarded,

That is the fundamental issue raised in this proceeding, erroneously entitled Petition for
Declaratory Relief and/or for Prohibition 4 considered by this Court as an action for prohibited
petition, seeking to enjoin respondent Minister of the Budget, respondent Chairman of the
Commission on Audit, and respondent Minister of Justice from taking any action
implementing Batas Pambansa Blg. 129. Petitioners 5 sought to bolster their claim by
imputing lack of good faith in its enactment and characterizing as an undue delegation of
legislative power to the President his authority to fix the compensation and allowances
of the Justices and judges thereafter appointed and the determination of the date when the
reorganization shall be deemed completed. In the very comprehensive and scholarly Answer of
Solicitor General Estelito P. Mendoza, 6 it was pointed out that there is no valid justification
for the attack on the constitutionality of this statute, it being a legitimate exercise of the
power vested in the Batasang Pambansa to reorganize the judiciary, the allegations of
absence of good faith as well as the attack on the independence of the judiciary being
unwarranted and devoid of any support in law. A Supplemental Answer was likewise filed on
October 8, 1981, followed by a Reply of petitioners on October 13. After the hearing in the
morning and afternoon of October 15, in which not only petitioners and respondents were heard
through counsel but also the amici curiae, 7 and thereafter submission of the minutes of the
proceeding on the debate on Batas Pambansa Blg. 129, this petition was deemed submitted for
decision.
The importance of the crucial question raised called for intensive and rigorous study of all the
legal aspects of the case. After such exhaustive deliberation in several sessions, the exchange
of views being supplemented by memoranda from the members of the Court, it is our opinion
and so hold that Batas Pambansa Blg. 129 is not unconstitutional.

1. The argument as to the lack of standing of petitioners is easily resolved. As far as Judge de la
Llana is concerned, he certainly falls within the principle set forth in Justice Laurel's opinion
in People v. Vera. 8 Thus: "The unchallenged rule is that the person who impugns the
validity of a statute must have a personal and substantial interest in the case such that he
has sustained, or will sustain, direct injury as a result of its enforcement." 9 The other petitioners
as members of the bar and officers of the court cannot be considered as devoid of "any
personal and substantial interest" on the matter. There is relevance to this excerpt from a
separate opinion in Aquino, Jr. v. Commission on Elections: 10 "Then there is the attack on the
standing of petitioners, as vindicating at most what they consider a public right and not
protecting their rights as individuals. This is to conjure the specter of the public right dogma as
an inhibition to parties intent on keeping public officials staying on the path of constitutionalism.
As was so well put by Jaffe: 'The protection of private rights is an essential constituent of public
interest and, conversely, without a well-ordered state there could be no enforcement of private
rights. Private and public interests are, both in substantive and procedural sense, aspects of the
totality of the legal order.' Moreover, petitioners have convincingly shown that in their
capacity as taxpayers, their standing to sue has been amply demonstrated. There would
be a retreat from the liberal approach followed in Pascual v. Secretary of Public
Works, foreshadowed by the very decision of People v. Vera where the doctrine was first fully
discussed, if we act differently now. I do not think we are prepared to take that step.
Respondents, however, would hark back to the American Supreme Court doctrine in Mellon v.
Frothingham with their claim that what petitioners possess 'is an interest which is shared in
common by other people and is comparatively so minute and indeterminate as to afford any
basis and assurance that the judicial process can act on it.' That is to speak in the language of a
bygone era even in the United States. For as Chief Justice Warren clearly pointed out in the
later case of Flast v. Cohen, the barrier thus set up if not breached has definitely been
lowered." 11

2. The imputation of arbitrariness to the legislative body in the enactment of Batas Pambansa
Blg. 129 to demonstrate lack of good faith does manifest violence to the facts. Petitioners
should have exercised greater care in informing themselves as to its antecedents. They had laid
themselves open to the accusation of reckless disregard for the truth, On August 7, 1980, a
Presidential Committee on Judicial Reorganization was organized. 12 This Executive Order was
later amended by Executive Order No. 619-A., dated September 5 of that year. It clearly
specified the task assigned to it: "1. The Committee shall formulate plans on the reorganization
of the Judiciary which shall be submitted within seventy (70) days from August 7, 1980 to
provide the President sufficient options for the reorganization of the entire Judiciary
which shall embrace all lower courts, including the Court of Appeals, the Courts of First
Instance, the City and Municipal Courts, and all Special Courts, but excluding the Sandigan
Bayan." 13 On October 17, 1980, a Report was submitted by such Committee on Judicial
Reorganization. It began with this paragraph: "The Committee on Judicial Reorganization has
the honor to submit the following Report.

It expresses at the outset its appreciation for the opportunity accorded it to study ways and
means for what today is a basic and urgent need, nothing less than the restructuring of the
judicial system. There are problems, both grave and pressing, that call for remedial measures.
The felt necessities of the time, to borrow a phrase from Holmes, admit of no delay, for if no
step be taken and at the earliest opportunity, it is not too much to say that the people's faith in
the administration of justice could be shaken. It is imperative that there be a greater efficiency in
the disposition of cases and that litigants, especially those of modest means — much more so,
the poorest and the humblest — can vindicate their rights in an expeditious and inexpensive
manner. The rectitude and the fairness in the way the courts operate must be manifest to all
members of the community and particularly to those whose interests are affected by the
exercise of their functions. It is to that task that the Committee addresses itself and hopes that
the plans submitted could be a starting point for an institutional reform in the Philippine judiciary.

The experience of the Supreme Court, which since 1973 has been empowered to supervise
inferior courts, from the Court of Appeals to the municipal courts, has proven that reliance on
improved court management as well as training of judges for more efficient administration does
not suffice. I hence, to repeat, there is need for a major reform in the judicial so stem it is worth
noting that it will be the first of its kind since the Judiciary Act became effective on June 16,
1901." 14 I t went to say: "I t does not admit of doubt that the last two decades of this century are
likely to be attended with problems of even greater complexity and delicacy. New social
interests are pressing for recognition in the courts. Groups long inarticulate, primarily those
economically underprivileged, have found legal spokesmen and are asserting grievances
previously ignored. Fortunately, the judicially has not proved inattentive. Its task has thus
become even more formidable. For so much grist is added to the mills of justice. Moreover, they
are likewise to be quite novel.

The need for an innovative approach is thus apparent. The national leadership, as is well-
known, has been constantly on the search for solutions that will prove to be both acceptable and
satisfactory. Only thus may there be continued national progress." 15 After which comes: "To be
less abstract, the thrust is on development. That has been repeatedly stressed — and rightly so.
All efforts are geared to its realization. Nor, unlike in the past, was it to b "considered as simply
the movement towards economic progress and growth measured in terms of sustained
increases in per capita income and Gross National Product (GNP). 16 For the New Society, its
implication goes further than economic advance, extending to "the sharing, or more
appropriately, the democratization of social and economic opportunities, the substantiation of
the true meaning of social justice." 17 This process of modernization and change compels the
government to extend its field of activity and its scope of operations. The efforts towards
reducing the gap between the wealthy and the poor elements in the nation call for more
regulatory legislation. That way the social justice and protection to labor mandates of the
Constitution could be effectively implemented." 18 There is likelihood then "that some measures
deemed inimical by interests adversely affected would be challenged in court on grounds of
validity. Even if the question does not go that far, suits may be filed concerning their
interpretation and application. ... There could be pleas for injunction or restraining orders. Lack
of success of such moves would not, even so, result in their prompt final disposition. Thus delay
in the execution of the policies embodied in law could thus be reasonably expected. That is not
conducive to progress in development." 19 For, as mentioned in such Report, equally of vital
concern is the problem of clogged dockets, which "as is well known, is one of the utmost gravity.
Notwithstanding the most determined efforts exerted by the Supreme Court, through the
leadership of both retired Chief Justice Querube Makalintal and the late Chief Justice Fred Ruiz
Castro, from the time supervision of the courts was vested in it under the 1973 Constitution, the
trend towards more and more cases has continued." 20 It is understandable why. With the
accelerated economic development, the growth of population, the increasing urbanization, and
other similar factors, the judiciary is called upon much oftener to resolve controversies. Thus
confronted with what appears to be a crisis situation that calls for a remedy, the Batasang
Pambansa had no choice. It had to act, before the ailment became even worse. Time was of the
essence, and yet it did not hesitate to be duly mindful, as it ought to be, of the extent of its
coverage before enacting Batas Pambansa Blg. 129.

3. There is no denying, therefore, the need for "institutional reforms," characterized in the
Report as "both pressing and urgent." 21 It is worth noting, likewise, as therein pointed out, that a
major reorganization of such scope, if it were to take place, would be the most thorough after
four generations. 22 The reference was to the basic Judiciary Act generations . enacted in June
of 1901, 23 amended in a significant way, only twice previous to the Commonwealth. There was,
of course, the creation of the Court of Appeals in 1935, originally composed "of a Presiding
Judge and ten appellate Judges, who shall be appointed by the President of the Philippines,
with the consent of the Commission on Appointments of the National Assembly, 24 It could "sit
en banc, but it may sit in two divisions, one of six and another of five Judges, to transact
business, and the two divisions may sit at the same time." 25 Two years after the establishment
of independence of the Republic of the Philippines, the Judiciary Act of 1948 26 was passed. It
continued the existing system of regular inferior courts, namely, the Court of Appeals, Courts of
First Instance, 27 the Municipal Courts, at present the City Courts, and the Justice of the Peace
Courts, now the Municipal Circuit Courts and Municipal Courts. The membership of the Court of
Appeals has been continuously increased. 28 Under a 1978 Presidential Decree, there would be
forty-five members, a Presiding Justice and forty-four Associate Justices, with fifteen
divisions. 29 Special courts were likewise created. The first was the Court of Tax Appeals in
1954, 30 next came the Court of Agrarian Relations in 1955, 31 and then in the same year a Court
of the Juvenile and Domestic Relations for Manila in 1955, 32 subsequently followed by the
creation of two other such courts for Iloilo and Quezon City in 1966. 33 In 1967, Circuit Criminal
Courts were established, with the Judges having the same qualifications, rank, compensation,
and privileges as judges of Courts of First Instance. 34

4. After the submission of such Report, Cabinet Bill No. 42, which later became the basis of
Batas Pambansa Blg. 129, was introduced. After setting forth the background as above
narrated, its Explanatory Note continues: "Pursuant to the President's instructions, this
proposed legislation has been drafted in accordance with the guidelines of that report
with particular attention to certain objectives of the reorganization, to wit, the attainment
of more efficiency in disposal of cases, a reallocation of jurisdiction, and a revision of
procedures which do not tend to the proper meeting out of justice. In consultation with,
and upon a consensus of, the governmental and parliamentary leadership, however, it was felt
that some options set forth in the Report be not availed of. Instead of the proposal to confine the
jurisdiction of the intermediate appellate court merely to appellate adjudication, the preference
has been opted to increase rather than diminish its jurisdiction in order to enable it to effectively
assist the Supreme Court. This preference has been translated into one of the innovations in the
proposed Bill." 35 In accordance with the parliamentary procedure, the Bill was sponsored by the
Chairman of the Committee on Justice, Human Rights and Good Government to which it was
referred. Thereafter, Committee Report No. 225 was submitted by such Committee to the
Batasang Pambansa recommending the approval with some amendments. In the sponsorship
speech of Minister Ricardo C. Puno, there was reference to the Presidential Committee on
Judicial Reorganization. Thus: "On October 17, 1980, the Presidential Committee on Judicial
Reorganization submitted its report to the President which contained the 'Proposed Guidelines
for Judicial Reorganization.' Cabinet Bill No. 42 was drafted substantially in accordance with the
options presented by these guidelines. Some options set forth in the aforesaid report were not
availed of upon consultation with and upon consensus of the government and parliamentary
leadership. Moreover, some amendments to the bill were adopted by the Committee on Justice,
Human Rights and Good Government, to which The bill was referred, following the public
hearings on the bill held in December of 1980.

The hearings consisted of dialogues with the distinguished members of the bench and the bar
who had submitted written proposals, suggestions, and position papers on the bill upon the
invitation of the Committee on Justice, Human Rights and Good Government." 36 Stress was laid
by the sponsor that the enactment of such Cabinet Bill would, firstly, result in the attainment of
more efficiency in the disposal of cases. Secondly, the improvement in the quality of
justice dispensed by the courts is expected as a necessary consequence of the easing of the
court's dockets. Thirdly, the structural changes introduced in the bill, together with the
reallocation of jurisdiction and the revision of the rules of procedure, are designated to
suit the court system to the exigencies of the present day Philippine society, and hopefully, of
the foreseeable future." 37 it may be observed that the volume containing the minutes of the
proceedings of the Batasang Pambansa show that 590 pages were devoted to its discussion. It
is quite obvious that it took considerable time and effort as well as exhaustive study before the
act was signed by the President on August 14, 1981. With such a background, it becomes quite
manifest how lacking in factual basis is the allegation that its enactment is tainted by the vice of
arbitrariness. What appears undoubted and undeniable is the good faith that characterized its
enactment from its inception to the affixing of the Presidential signature.

5. Nothing is better settled in our law than that the abolition of an office within the competence of
a legitimate body if done in good faith suffers from no infirmity. The ponencia of Justice
J.B.L. Reyes in Cruz v. Primicias, Jr. 38 reiterated such a doctrine: "We find this point urged by
respondents, to be without merit. No removal or separation of petitioners from the service is
here involved, but the validity of the abolition of their offices. This is a legal issue that is for the
Courts to decide. It is well-known rule also that valid abolition of offices is neither removal nor
separation of the incumbents. ... And, of course, if the abolition is void, the incumbent is deemed
never to have ceased to hold office. The preliminary question laid at rest, we pass to the merits
of the case. As well-settled as the rule that the abolition of an office does not amount to an
illegal removal of its incumbent is the principle that, in order to be valid, the abolition must be
made in good faith." 39 The above excerpt was quoted with approval in Bendanillo, Sr. v.
Provincial Governor, 40 two earlier cases enunciating a similar doctrine having preceded it. 41 As
with the offices in the other branches of the government, so it is with the judiciary. The test
remains whether the abolition is in good faith. As that element is conspicuously present in
the enactment of Batas Pambansa Blg. 129, then the lack of merit of this petition becomes even
more apparent. The concurring opinion of Justice Laurel in Zandueta v. De la Costa 42 cannot
be any clearer. This is a quo warranto proceeding filed by petitioner, claiming that he, and not
respondent, was entitled to he office of judge of the Fifth Branch of the Court of First Instance of
Manila.

There was a Judicial Reorganization Act in 1936, 43 a year after the inauguration of the
Commonwealth, amending the Administrative Code to organize courts of original jurisdiction
known as the Courts of First Instance Prior to such statute, petitioner was the incumbent of such
branch. Thereafter, he received an ad interim appointment, this time to the Fourth Judicial
District, under the new legislation. Unfortunately for him, the Commission on Appointments of
then National Assembly disapproved the same, with respondent being appointed in his place.
He contested the validity of the Act insofar as it resulted in his being forced to vacate his
position This Court did not rule squarely on the matter. His petition was dismissed on the
ground of estoppel. Nonetheless, the separate concurrence of Justice Laurel in the result
reached, to repeat, reaffirms in no uncertain terms the standard of good faith to preclude any
doubt as to the abolition of an inferior court, with due recognition of the security of tenure
guarantee.

Thus: " I am of the opinion that Commonwealth Act No. 145 in so far as it reorganizes, among
other judicial districts, the Ninth Judicial District, and establishes an entirely new district
comprising Manila and the provinces of Rizal and Palawan, is valid and constitutional. This
conclusion flows from the fundamental proposition that the legislature may abolish courts
inferior to the Supreme Court and therefore may reorganize them territorially or
otherwise thereby necessitating new appointments and commissions. Section 2, Article
VIII of the Constitution vests in the National Assembly the power to define, prescribe and
apportion the jurisdiction of the various courts, subject to certain limitations in the case of
the Supreme Court. It is admitted that section 9 of the same article of the Constitution provides
for the security of tenure of all the judges. The principles embodied in these two sections of the
same article of the Constitution must be coordinated and harmonized. A mere enunciation of a
principle will not decide actual cases and controversies of every sort. (Justice Holmes in
Lochner vs. New York, 198 U.S., 45; 49 Law. ed; 937)" 44 justice Laurel continued: "I am not
insensible to the argument that the National Assembly may abuse its power and move
deliberately to defeat the constitutional provision guaranteeing security of tenure to all judges,
But, is this the case? One need not share the view of Story, Miller and Tucker on the one hand,
or the opinion of Cooley, Watson and Baldwin on the other, to realize that the application of a
legal or constitutional principle is necessarily factual and circumstantial and that fixity of principle
is the rigidity of the dead and the unprogressive. I do say, and emphatically, however, that
cases may arise where the violation of the constitutional provision regarding security of tenure is
palpable and plain, and that legislative power of reorganization may be sought to cloak an
unconstitutional and evil purpose.

When a case of that kind arises, it will be the time to make the hammer fall and heavily. But not
until then. I am satisfied that, as to the particular point here discussed, the purpose was the
fulfillment of what was considered a great public need by the legislative department and that
Commonwealth Act No. 145 was not enacted purposely to affect adversely the tenure of judges
or of any particular judge. Under these circumstances, I am for sustaining the power of the
legislative department under the Constitution. To be sure, there was greater necessity for
reorganization consequent upon the establishment of the new government than at the time Acts
Nos. 2347 and 4007 were approved by the defunct Philippine Legislature, and although in the
case of these two Acts there was an express provision providing for the vacation by the judges
of their offices whereas in the case of Commonwealth Act No. 145 doubt is engendered by its
silence, this doubt should be resolved in favor of the valid exercise of the legislative power." 45

6. A few more words on the question of abolition. In the above-cited opinion of Justice Laurel in
Zandueta, reference was made to Act No. 2347 46 on the reorganization of the Courts of First
Instance and to Act No. 4007 47 on the reorganization of all branches of the government,
including the courts of first instance. In both of them, the then Courts of First Instance were
replaced by new courts with the same appellation. As Justice Laurel pointed out, there was no
question as to the fact of abolition. He was equally categorical as to Commonwealth Act No.
145, where also the system of the courts of first instance was provided for expressly. It was
pointed out by Justice Laurel that the mere creation of an entirely new district of the same court
is valid and constitutional. such conclusion flowing "from the fundamental proposition that the
legislature may abolish courts inferior to the Supreme Court and therefore may reorganize them
territorially or otherwise thereby necessitating new appointments and commissions." 48 The
challenged statute creates an intermediate appellate court, 49 regional trial
courts, 50 metropolitan trial courts of the national capital region, 51 and other metropolitan trial
courts, 52 municipal trial courts in cities, 53 as well as in municipalities, 54 and municipal circuit trial
courts. 55 There is even less reason then to doubt the fact that existing inferior courts were
abolished.

For the Batasang Pambansa, the establishment of such new inferior courts was the appropriate
response to the grave and urgent problems that pressed for solution. Certainly, there could be
differences of opinion as to the appropriate remedy. The choice, however, was for the Batasan
to make, not for this Court, which deals only with the question of power. It bears mentioning that
in Brillo v. Eñage 56 this Court, in an unanimous opinion penned by the late Justice Diokno,
citing Zandueta v. De la Costa, ruled: "La segunda question que el recurrrido plantea es que la
Carta de Tacloban ha abolido el puesto. Si efectivamente ha sido abolido el cargo, entonces ha
quedado extinguido el derecho de recurente a ocuparlo y a cobrar el salario correspodiente. Mc
Culley vs. State, 46 LRA, 567. El derecho de un juez de desempenarlo hasta los 70 años de
edad o se incapacite no priva al Congreso de su facultad de abolir, fusionar o reorganizar
juzgados no constitucionales." 57 Nonetheless, such well-established principle was not held
applicable to the situation there obtaining, the Charter of Tacloban City creating a city court in
place of the former justice of the peace court. Thus: "Pero en el caso de autos el Juzgado de
Tacloban no ha sido abolido. Solo se le ha cambiado el nombre con el cambio de forma del
gobierno local." 58 The present case is anything but that. Petitioners did not and could not prove
that the challenged statute was not within the bounds of legislative authority.

7. This opinion then could very well stop at this point. The implementation of Batas
Pambansa Blg. 129, concededly a task incumbent on the Executive, may give rise,
however, to questions affecting a judiciary that should be kept independent. The all-
embracing scope of the assailed legislation as far as all inferior courts from the Courts of
Appeals to municipal courts are concerned, with the exception solely of the Sandiganbayan and
the Court of Tax Appeals 59 gave rise, and understandably so, to misgivings as to its effect on
such cherished Ideal. The first paragraph of the section on the transitory provision reads: "The
provisions of this Act shall be immediately carried out in accordance with an Executive
Order to be issued by the President. The Court of Appeals, the Courts of First Instance, the
Circuit Criminal Courts, the Juvenile and Domestic Relations Courts, the Courts of Agrarian
Relations, the City Courts, the Municipal Courts, and the Municipal Circuit Courts shall continue
to function as presently constituted and organized, until the completion of the reorganization
provided in this Act as declared by the President. Upon such declaration, the said courts shall
be deemed automatically abolished and the incumbents thereof shall cease to hold the
office." 60 There is all the more reason then why this Court has no choice but to inquire further
into the allegation by petitioners that the security of tenure provision, an assurance of a judiciary
free from extraneous influences, is thereby reduced to a barren form of words.

The amended Constitution adheres even more clearly to the long-established tradition of a
strong executive that antedated the 1935 Charter. As noted in the work of former Vice-Governor
Hayden, a noted political scientist, President Claro M. Recto of the 1934 Convention, in his
closing address, in stressing such a concept, categorically spoke of providing "an executive
power which, subject to the fiscalization of the Assembly, and of public opinion, will not only
know how to govern, but will actually govern, with a firm and steady hand, unembarrassed by
vexatious interferences by other departments, or by unholy alliances with this and that social
group." 61
The above excerpt was cited with approval by Justice Laurel in Planas v. Gil. 62 Moreover, under
the 1981 Amendments, it may be affirmed that once again the principle of separation of powers,
to quote from the same jurist as ponente in Angara v. Electoral Commission, 63 "obtains not
through express provision but by actual division." 64 The president, under Article VII, shall be the
head of state and chief executive of the Republic of the Philippines." 65 Moreover, it is equally
therein expressly provided that all the powers he possessed under the 1935 Constitution are
once again vested in him unless the Batasang Pambansa provides otherwise." 66 Article VII of
the 1935 Constitution speaks categorically: "The Executive power shall be vested in a President
of the Philippines." 67 As originally framed, the 1973 Constitution created the position of
President as the "symbolic head of state." 68 In addition, there was a provision for a Prime
Minister as the head of government exercising the executive power with the assistance of the
Cabinet 69 Clearly, a modified parliamentary system was established. In the light of the 1981
amendments though, this Court in Free Telephone Workers Union v. Minister of Labor 70 could
state: "The adoption of certain aspects of a parliamentary system in the amended Constitution
does not alter its essentially presidential character." 71 The retention, however, of the position of
the Prime Minister with the Cabinet, a majority of the members of which shall come from the
regional representatives of the Batasang Pambansa and the creation of an Executive
Committee composed of the Prime Minister as Chairman and not more than fourteen other
members at least half of whom shall be members of the Batasang Pambansa, clearly indicate
the evolving nature of the system of government that is now operative. 72 What is equally
apparent is that the strongest ties bind the executive and legislative departments. It is likewise
undeniable that the Batasang Pambansa retains its full authority to enact whatever legislation
may be necessary to carry out national policy as usually formulated in a caucus of the majority
party. It is understandable then why in Fortun v. Labang 73 it was stressed that with the provision
transferring to the Supreme Court administrative supervision over the Judiciary, there is a
greater need "to preserve unimpaired the independence of the judiciary, especially so at
present, where to all intents and purposes, there is a fusion between the executive and the
legislative branches." 74

8. To be more specific, petitioners contend that the abolition of the existing inferior courts
collides with the security of tenure enjoyed by incumbent Justices and judges under Article X,
Section 7 of the Constitution. There was a similar provision in the 1935 Constitution. It did not,
however, go as far as conferring on this Tribunal the power to supervise administratively inferior
courts. 75 Moreover, this Court is em powered "to discipline judges of inferior courts and, by a
vote of at least eight members, order their dismissal." 76 Thus it possesses the competence to
remove judges. Under the Judiciary Act, it was the President who was vested with such
power. 77 Removal is, of course, to be distinguished from termination by virtue of the abolition of
the office. There can be no tenure to a non-existent office. After the abolition, there is in law no
occupant. In case of removal, there is an office with an occupant who would thereby lose his
position. It is in that sense that from the standpoint of strict law, the question of any impairment
of security of tenure does not arise. Nonetheless, for the incumbents of inferior courts abolished,
the effect is one of separation. As to its effect, no distinction exists between removal and the
abolition of the office. Realistically, it is devoid of significance. He ceases to be a member of the
judiciary. In the implementation of the assailed legislation, therefore, it would be in accordance
with accepted principles of constitutional construction that as far as incumbent justices and
judges are concerned, this Court be consulted and that its view be accorded the fullest
consideration. No fear need be entertained that there is a failure to accord respect to the basic
principle that this Court does not render advisory opinions. No question of law is involved. If
such were the case, certainly this Court could not have its say prior to the action taken by either
of the two departments. Even then, it could do so but only by way of deciding a case where the
matter has been put in issue. Neither is there any intrusion into who shall be appointed to the
vacant positions created by the reorganization. That remains in the hands of the Executive to
whom it properly belongs. There is no departure therefore from the tried and tested ways of
judicial power, Rather what is sought to be achieved by this liberal interpretation is to preclude
any plausibility to the charge that in the exercise of the conceded power of reorganizing tulle
inferior courts, the power of removal of the present incumbents vested in this Tribunal is ignored
or disregarded. The challenged Act would thus be free from any unconstitutional taint, even one
not readily discernidble except to those predisposed to view it with distrust. Moreover, such a
construction would be in accordance with the basic principle that in the choice of alternatives
between one which would save and another which would invalidate a statute, the former is to be
preferred. 78 There is an obvious way to do so. The principle that the Constitution enters into and
forms part of every act to avoid any constitutional taint must be applied Nuñez v.
Sandiganbayan, 79 promulgated last January, has this relevant excerpt: "It is true that other
Sections of the Decree could have been so worded as to avoid any constitutional objection. As
of now, however, no ruling is called for. The view is given expression in the concurring and
dissenting opinion of Justice Makasiar that in such a case to save the Decree from the direct
fate of invalidity, they must be construed in such a way as to preclude any possible erosion on
the powers vested in this Court by the Constitution. That is a proposition too plain to be
committed. It commends itself for approval." 80 Nor would such a step be unprecedented. The
Presidential Decree constituting Municipal Courts into Municipal Circuit Courts, specifically
provides: "The Supreme Court shall carry out the provisions of this Decree through
implementing orders, on a province-to-province basis." 81 It is true there is no such provision in
this Act, but the spirit that informs it should not be ignored in the Executive Order contemplated
under its Section 44. 82 Thus Batas Pambansa Blg. 129 could stand the most rigorous test of
constitutionality. 83

9. Nor is there anything novel in the concept that this Court is called upon to reconcile or
harmonize constitutional provisions. To be specific, the Batasang Pambansa is expressly vested
with the authority to reorganize inferior courts and in the process to abolish existing ones. As
noted in the preceding paragraph, the termination of office of their occupants, as a necessary
consequence of such abolition, is hardly distinguishable from the practical standpoint from
removal, a power that is now vested in this Tribunal. It is of the essence of constitutionalism to
assure that neither agency is precluded from acting within the boundaries of its conceded
competence. That is why it has long been well-settled under the constitutional system we have
adopted that this Court cannot, whenever appropriate, avoid the task of reconciliation. As
Justice Laurel put it so well in the previously cited Angara decision, while in the main, "the
Constitution has blocked out with deft strokes and in bold lines, allotment of power to the
executive, the legislative and the judicial departments of the government, the overlapping and
interlacing of functions and duties between the several departments, however, sometimes
makes it hard to say just where the one leaves off and the other begins." 84 It is well to recall
another classic utterance from the same jurist, even more emphatic in its affirmation of such a
view, moreover buttressed by one of those insights for which Holmes was so famous "The
classical separation of government powers, whether viewed in the light of the political
philosophy of Aristotle, Locke, or Motesquieu or of the postulations of Mabini, Madison, or
Jefferson, is a relative theory of government. There is more truism and actuality in
interdependence than in independence and separation of powers, for as observed by Justice
Holmes in a case of Philippine origin, we cannot lay down 'with mathematical precision and
divide the branches into water-tight compartments' not only because 'the great ordinances of the
Constitution do not establish and divide fields of black and white but also because 'even the
more specific of them are found to terminate in a penumbra shading gradually from one extreme
to the other.'" 85 This too from Justice Tuazon, likewise expressing with force and clarity why the
need for reconciliation or balancing is well-nigh unavodiable under the fundamental principle of
separation of powers: "The constitutional structure is a complicated system, and overlappings of
governmental functions are recognized, unavoidable, and inherent necessities of governmental
coordination." 86 In the same way that the academe has noted the existence in constitutional
litigation of right versus right, there are instances, and this is one of them, where, without this
attempt at harmonizing the provisions in question, there could be a case of power against
power. That we should avoid.

10. There are other objections raised but they pose no difficulty. Petitioners would characterize
as an undue delegation of legislative power to the President the grant of authority to fix the
compensation and the allowances of the Justices and judges thereafter appointed. A more
careful reading of the challenged Batas Pambansa Blg. 129 ought to have cautioned them
against raising such an issue. The language of the statute is quite clear. The questioned
provisions reads as follows: "Intermediate Appellate Justices, Regional Trial Judges,
Metropolitan Trial Judges, municipal Trial Judges, and Municipal Circuit Trial Judges shall
receive such receive such compensation and allowances as may be authorized by the President
along the guidelines set forth in Letter of Implementation No. 93 pursuant to Presidential Decree
No. 985, as amended by Presidential Decree No. 1597." 87 The existence of a standard is thus
clear. The basic postulate that underlies the doctrine of non-delegation is that it is the legislative
body which is entrusted with the competence to make laws and to alter and repeal them, the
test being the completeness of the statue in all its terms and provisions when enacted. As
pointed out in Edu v. Ericta: 88 "To avoid the taint of unlawful delegation, there must be a
standard, which implies at the very least that the legislature itself determines matters of principle
and lays down fundamental policy. Otherwise, the charge of complete abdication may be hard
to repel. A standard thus defines legislative policy, marks its limits, maps out its boundaries and
specifies the public agency to apply it. It indicates the circumstances under which the legislative
command is to be effected. It is the criterion by which legislative purpose may be carried out.
Thereafter, the executive or administrative office designated may in pursuance of the above
guidelines promulgate supplemental rules and regulations. The standard may be either express
or implied. If the former, the non-delegation objection is easily met. The standard though does
not have to be spelled out specifically. It could be implied from the policy and purpose of the act
considered as a whole." 89 The undeniably strong links that bind the executive and legislative
departments under the amended Constitution assure that the framing of policies as well as their
implementation can be accomplished with unity, promptitude, and efficiency. There is accuracy,
therefore, to this observation in the Free Telephone Workers Union decision: "There is
accordingly more receptivity to laws leaving to administrative and executive agencies the
adoption of such means as may be necessary to effectuate a valid legislative purpose. It is
worth noting that a highly-respected legal scholar, Professor Jaffe, as early as 1947, could
speak of delegation as the 'dynamo of modern government.'" 90 He warned against a "restrictive
approach" which could be "a deterrent factor to much-needed legislation." 91 Further on this
point from the same opinion" "The spectre of the non-delegation concept need not haunt,
therefore, party caucuses, cabinet sessions or legislative chambers." 92 Another objection based
on the absence in the statue of what petitioners refer to as a "definite time frame limitation" is
equally bereft of merit. They ignore the categorical language of this provision: "The Supreme
Court shall submit to the President, within thirty (30) days from the date of the effectivity of this
act, a staffing pattern for all courts constituted pursuant to this Act which shall be the basis of
the implementing order to be issued by the President in accordance with the immediately
succeeding section." 93 The first sentence of the next section is even more categorical: "The
provisions of this Act shall be immediately carried out in accordance with an Executive Order to
be issued by the President." 94 Certainly petitioners cannot be heard to argue that the President
is insensible to his constitutional duty to take care that the laws be faithfully executed. 95 In the
meanwhile, the existing inferior courts affected continue functioning as before, "until the
completion of the reorganization provided in this Act as declared by the President. Upon such
declaration, the said courts shall be deemed automatically abolished and the incumbents
thereof shall cease to hold office." 96 There is no ambiguity. The incumbents of the courts thus
automatically abolished "shall cease to hold office." No fear need be entertained by incumbents
whose length of service, quality of performance, and clean record justify their being named
anew, 97 in legal contemplation without any interruption in the continuity of their service. 98 It is
equally reasonable to assume that from the ranks of lawyers, either in the government service,
private practice, or law professors will come the new appointees. In the event that in certain
cases a little more time is necessary in the appraisal of whether or not certain incumbents
deserve reappointment, it is not from their standpoint undesirable. Rather, it would be a
reaffirmation of the good faith that will characterize its implementation by the Executive. There is
pertinence to this observation of Justice Holmes that even acceptance of the generalization that
courts ordinarily should not supply omissions in a law, a generalization qualified as earlier
shown by the principle that to save a statute that could be done, "there is no canon against
using common sense in construing laws as saying what they obviously mean." 99 Where then is
the unconstitutional flaw

11. On the morning of the hearing of this petition on September 8, 1981, petitioners sought to
have the writer of this opinion and Justices Ramon C. Aquino and Ameurfina Melencio-Herrera
disqualified because the first-named was the chairman and the other two, members of the
Committee on Judicial Reorganization. At the hearing, the motion was denied. It was made
clear then and there that not one of the three members of the Court had any hand in the framing
or in the discussion of Batas Pambansa Blg. 129. They were not consulted. They did not testify.
The challenged legislation is entirely the product of the efforts of the legislative body. 100 Their
work was limited, as set forth in the Executive Order, to submitting alternative plan for
reorganization. That is more in the nature of scholarly studies.

That the undertook. There could be no possible objection to such activity. Ever since 1973, this
Tribunal has had administrative supervision over interior courts. It has had the opportunity to
inform itself as to the way judicial business is conducted and how it may be improved. Even
prior to the 1973 Constitution, it is the recollection of the writer of this opinion that either the then
Chairman or members of the Committee on Justice of the then Senate of the
Philippines 101 consulted members of the Court in drafting proposed legislation affecting the
judiciary. It is not inappropriate to cite this excerpt from an article in the 1975 Supreme Court
Review: "In the twentieth century the Chief Justice of the United States has played a leading
part in judicial reform. A variety of conditions have been responsible for the development of this
role, and foremost among them has been the creation of explicit institutional structures designed
to facilitate reform." 102 Also: "Thus the Chief Justice cannot avoid exposure to and direct
involvement in judicial reform at the federal level and, to the extent issues of judicial federalism
arise, at the state level as well." 103

12. It is a cardinal article of faith of our constitutional regime that it is the people who are
endowed with rights, to secure which a government is instituted. Acting as it does through public
officials, it has to grant them either expressly or impliedly certain powers. Those they exercise
not for their own benefit but for the body politic. The Constitution does not speak in the language
of ambiguity: "A public office is a public trust." 104 That is more than a moral adjuration It is a
legal imperative. The law may vest in a public official certain rights. It does so to enable them to
perform his functions and fulfill his responsibilities more efficiently. It is from that standpoint that
the security of tenure provision to assure judicial independence is to be viewed. It is an added
guarantee that justices and judges can administer justice undeterred by any fear of reprisal or
untoward consequence. Their judgments then are even more likely to be inspired solely by their
knowledge of the law and the dictates of their conscience, free from the corrupting influence of
base or unworthy motives. The independence of which they are assured is impressed with a
significance transcending that of a purely personal right. As thus viewed, it is not solely for their
welfare. The challenged legislation Thus subject d to the most rigorous scrutiny by this Tribunal,
lest by lack of due care and circumspection, it allow the erosion of that Ideal so firmly embedded
in the national consciousness There is this farther thought to consider. independence in thought
and action necessarily is rooted in one's mind and heart. As emphasized by former Chief
Justice Paras in Ocampo v. Secretary of Justice, 105 there is no surer guarantee of judicial
independence than the God-given character and fitness of those appointed to the Bench.

The judges may be guaranteed a fixed tenure of office during good behavior, but if they are of
such stuff as allows them to be subservient to one administration after another, or to cater to the
wishes of one litigant after another, the independence of the judiciary will be nothing more than
a myth or an empty Ideal. Our judges, we are confident, can be of the type of Lord Coke,
regardless or in spite of the power of Congress — we do not say unlimited but as herein
exercised — to reorganize inferior courts." 106 That is to recall one of the greatest Common Law
jurists, who at the cost of his office made clear that he would not just blindly obey the King's
order but "will do what becomes [him] as a judge." So it was pointed out in the first leading case
stressing the independence of the judiciary, Borromeo v. Mariano, 107 The ponencia of Justice
Malcolm Identified good judges with "men who have a mastery of the principles of law, who
discharge their duties in accordance with law, who are permitted to perform the duties of the
office undeterred by outside influence, and who are independent and self-respecting human
units in a judicial system equal and coordinate to the other two departments of
government." 108 There is no reason to assume that the failure of this suit to annul Batas
Pambansa Blg. 129 would be attended with deleterious consequences to the administration of
justice. It does not follow that the abolition in good faith of the existing inferior courts except the
Sandiganbayan and the Court of Tax Appeals and the creation of new ones will result in a
judiciary unable or unwilling to discharge with independence its solemn duty or one recreant to
the trust reposed in it.

Nor should there be any fear that less than good faith will attend the exercise be of the
appointing power vested in the Executive. It cannot be denied that an independent and
efficient judiciary is something to the credit of any administration. Well and truly has it been said
that the fundamental principle of separation of powers assumes, and justifiably so, that the three
departments are as one in their determination to pursue the Ideals and aspirations and to
fulfilling the hopes of the sovereign people as expressed in the Constitution. There is wisdom as
well as validity to this pronouncement of Justice Malcolm in Manila Electric Co. v. Pasay
Transportation Company, 109 a decision promulgated almost half a century ago: "Just as the
Supreme Court, as the guardian of constitutional rights, should not sanction usurpations by any
other department or the government, so should it as strictly confine its own sphere of influence
to the powers expressly or by implication conferred on it by the Organic Act." 110 To that basic
postulate underlying our constitutional system, this Court remains committed.

WHEREFORE, the unconstitutionality of Batas Pambansa Blg. 129 not having been
shown, this petition is dismissed. No costs.

G.R. No. 90482 August 5, 1991

REPUBLIC OF THE PHILIPPINES, acting through the SUGAR REGULATORY
ADMINISTRATION, and REPUBLIC PLANTERS BANK, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, 15th Division, THE HONORABLE CORONA IBAY-
SOMERA, in her official capacity as Presiding Judge of the Regional Trial Court, National
Capital Region, Branch 26, Manila, JORGE C. VICTORINO and JAIME K. DEL ROSARIO, in
their official capacities as RTC Deputy Sheriffs of Manila, ROGER Z. REYES, ERNESTO L.
TREYES, JR., and EUTIQUIO M. FUDOLIN, respondents.

DAVIDE, JR., J.:

This is an appeal by certiorari under Rule 45 of the Revised Rules of Court, with prayer for a
temporary restraining order or writ of preliminary injunction, filed on 25 October 1989 by the Office of
the Government Corporate Counsel (OGCC) in behalf of the Republic of the Philippines "acting
through the Sugar Regulatory Administration" (SRA) and the Republic Planters Bank (RPB) seeking
the review of the 13 October 1989 Decision of the Court of Appeals (15th Division) in CAGR No.
17188.

The assailed decision dismissed the petition for certiorari filed by Petitioners against herein public
1

respondents Judge and deputy sheriffs and private respondents for the nullification of the Orders of
respondent Judge of 13 March 1989, 21 March 1989 and 27 March 1989 in Civil Case No. 86-35880
of Branch 26 of the Regional Trial Court of Manila on the following grounds: (a) the funds upon
which the attorney's fees are sought to be executed now belong to the Republic of the Philippines
due to legal subrogation, (b) execution is not proper against the Republic which is not a party to the
case, (c) the issuance of a writ of execution would violate the Constitution since according to it no
money shall be paid out of the treasury except in pursuance to an appropriations made by law, and
(d) execution for attomey's fees is unwarranted.

Respondent Court of Appeals dismissed the petition for lack of merit principally because

(a) Under the compromise agreement petitioner (RPB) accepted the designation/appointment as
Trustee whose obligation is to pay; it received benefits by way of trustee's fees; it may not question
the right of private respondents to attorney's fees;

(b) Petitioner (SRA) may not lawfully bring an action on behalf of the Republic of the
Philippines since under Section 13 of Executive Order No. 18 dated 28 May 1986, which created it,
it simply was to take over the functions of the defunct PHILSUCOM; however, the latter was to
remain a judicial entity for three more years for the purpose of prosecuting and defending suits
against it; hence it is PHILSUCOM, being a party to the compromise agreement, which may properly
contest the right of private respondents to attomey's fees;

(c) The petition should have been filed through the Office of the Solicitor General OSG and not
through the (OGCC); neither the latter nor the (SRA) may lawfully represent the Government of the
Philippines in any suit or proceeding such as the present petition for administrative agencies may
only perform such powers and functions as may be authorized by the laws which created or gave
them existence; and

(d) The respondent judge did not commit any error of jurisdiction in issuing the questioned orders;
hence, the remedy should be appeal.

The facts which gave rise to said petition are summarized by the Court of Appeals as follows:
On May 16,1986, Republic Planters Bank (hereafter referred to as RPB), Zosimo Maravilla,
Rosendo de la Rama, Bibiano Sabino, Roberto Mascufiana and Ernesto Kramer "for
themselves and in representation of other sugar producers" filed a Complaint with the
respondent court, RTC Branch 26, docketed as C.C. 86-35880 "For Sum of Money
and/or Delivery of Personal Property with Restraining Order and/or Preliminary
Injunction" against the Philippine Sugar Commission (PHILSUCOM) and the National
Sugar Trading Corporation (NASUTRA) with the prayer:

WHEREFORE PREMISES CONSIDERED, it is respectfully prayed of this Honorable

Court that, after due hearing and trial, judgment be rendered in favor of Plaintiffs and
against Defendants ordering them to do the following:

1. To render a correct and faithful account of whatever amount of United States

dollar accounts/deposits in different banks, domestic and foreign, being held in
agents and/or representatives.

2. To render a correct and faithful inventory of all the physical sugar stocks for crop
year 1984-85 presently remaining in the warehouses of the different sugar mills all
over the country.

3. To deliver or remit to the Plaintiffs any and all United States dollar
accounts/deposits in various banks, domestic or foreign, held in the name of
Defendants, their subsidiaries, conducts (sic), agents and/or representatives.

4. To deliver the entire remaining physical sugar stocks corresponding to crop year
1984-85 presently remaining in the warehouses of the different sugar mills all over
the country in favor of Plaintiffs who were unlawfully deprived of their possession and
control by Defendants, to be applied and deducted from Defendant's liability to
Plaintiffs for the unaccounted sugar for crop year 1984-85.

5. To jointly and severally pay Plaintiffs-Producers all interests and penalties

imposed by Assignee-banks/creditors for accounts covered by unpaid sugar quedans
for crop year 1984-85.

6. To jointly and severally pay Plaintiffs claims for moral, compensatory and
exemplary damages in such accounts to be determined in the course of the trial.

7. To jointly and severally pay for the attorney's fees of twenty percent (20%) based
on the total amount that may be recovered.

8. To jointly and severally pay for the costs and litigation expenses incurred by the
Plaintiffs.

Plaintiffs likewise pray that, in order to prevent grave and irreparable injury, this Honorable
Court shall issue a writ of preliminary injunction enjoining and/or prohibiting the
Defendants, their officers and/or agents from transferring, releasing or in any manner
disposing of all U.S. dollar deposits/accounts held in the name of Defendants , its
subsidiaries, conduits agents and/or representatives in the different banks, domestic and
foreign, including the physical sugar corresponding to crop year 1984-85 presently remaining
in the warehouses of the different sugar mills all over the country after requiring the Plaintiffs
to post a bond that may be determined by the Honorable Court to answer for the damages in
 the event judgment will be rendered in Defendant's favor. Furthermore, Plaintiffs pray that a
Restraining Order be immediately issued for the purpose of enjoining the Defendants from
committing and/or proceeding with the foregoing acts, pending hearing of the application for
a writ of preliminary injunction.

Plaintiffs further pray for such other reliefs and remedies, just and equitable under the
premises.

Before PHILSUCOM and NASUTRA could answer, a Compromise Agreement dated May
23, 1986 was submitted by the parties which the lower court approved and based on it,
the Judgment dated June 2,1986 (Annex "B", Petition, Id., pp. 22-36) was issued. A motion
for the issuance of writ of execution was filed (Annex "C", Petition, Id., pp, 37-50).
PHILSUCOM and NASUTRA filed their "Comment and Opposition (To Motion for Issuance
of Writ of Execution)" (Annex D Petition, Id., pp. 51- 62). A Reply was filed by the plaintiffs
(Annex "E", Id., pp. 63- 72) and a Rejoinder was also filed by the defendants (Annex "E",
Petition, Id., pp. 73-78). The lower court issued the Order dated March 13, 1989 which
dismissed the separate petitions for relief from judgment filed by Franklin Fuentebella,
George Lacson, Fernando Ballesteros, and Antonio Lopez in one petition; Romeo Guanzon
as sugar producer and president of National Federation of Sugar Cane Planters; PASSI
(Iloilo) Sugar Central, Inc., represented by Romeo Villavicencio; the Independent Sugar
Planters represented by Corazon Sagimalet (In a Motion for Intervention which substituted
as a Petition for Relief from Judgment); and Zosimo Maravilla, Rosendo dela Rama and
Bibiano Sabino (Annex "G", Petition, Id., pp. 79-98). This Order dated March 13, 1989
(which as aforesaid, dismissed the petitions for relief from judgment) is the first of the orders
now being assailed.

On March 21, 1989, the lower court issued the second of the assailed orders which
granted a second motion to resolve a pending motion for issuance of a writ of
execution and allowed the issuance of an alias writ of execution in words, thus:

Let an alias writ of execution be issued for the final implementation of the
Judgment on Compromise Agreement, dated June 2, 1986, the only remaining
provision of said judgment is the 10% attorney's fees of counsels for the plaintiffs
(Paragraph 12 sub-section Annex "H", Petition, Id., pp. 99-100).

Correspondingly, on that same date March 21, 1989, RTC Mala Deputy Sheriff Jaime K. del
Rosario issued a "Notice of Delivery of Money" asking the RPB to "pay in cash the 10%
of P45,293,552.60 to Attys. Roger Reyes, Ernesto Treyes, Jr. and Eutiquio Fudolin, Jr. ...
immediately upon receipt of this notice" (Annex "I", Petition, Id., p. 101).

And on March 27, 1989, the third of the questioned orders was issued by the lower court, in
response to the "Ex-Parte Motion to Require Officers of Trustee Republic Planters Bank to
Deliver Amount Subject of Alias Writ of Execution", requiring the officers of the RPB
named therein to "appear before the Court on March 29,1989 at 10:30 in the morning
to explain why they should not be cited for contempt of court for defying ... the alias writ
of execution." (Annex "J", Petition, Id. pp. 102-103).

The instant petition was filed in this court on March 29, 1989, ...

Parenthetically, it may also be added that, as stated in paragraph 15 of the instant petition, the
producers and producer organizations who filed various petitions for relief from the judgment based
on the compromise agreement have appealed to the Court of Appeals the Order of 13 March 1989
denying their petitions. 2

In the instant petition petitioners limit their grounds to only two errors allegedly committed by
respondent Court of Appeals, namely: (a) it erred in holding that neither the OGCC nor the SRA can
represent the Government of the Philippines in the action before it and (b) it deviated from the
decision of the Ninth Division of said court in CAGR SP No. 11046 (Kramer, et al. vs. Hon. Doroteo,
Cañeba, et al. promulgated on 16 March 1987), which declared that there was no valid class suit
and the controversial compromise agreement did not extend to the 40,000 unnamed sugar
producers. 3

In the resolution of 26 October 1989 We required respondents to comment on the petition and
issued a temporary restraining order directing respondent Judge to desist and refrain from
further proceeding in Civil Case No. 86-35880, entitled Republic Planters Bank, et al. vs. Philippine
Sugar Commission, et al. 4

On 23 November 1989 petitioners filed a manifestation informing this Court that at 9:30 a.m. on
26 October 1989, private respondents, accompanied by respondents sheriff and a squad of
police Special Action Force, swooped upon RPB's Bacolod Branch and divested a teller of
money from her booth allegedly because the branch manager had instructed the bank personnel to
close the bank vault while the enforcement of the court order was being verified - with the head
office in Manila; the amount taken was P179,955.31; these acts were allegedly done by virtue of,
among others, the orders dated October 24 and 25, 1989 of respondent judge ordering the
implementation of an alias Writ of Execution dated 21 March 1989 and the Writ of Execution dated
21 March 1986; and claiming that what was enforced was an expired writ. 5

In Our resolution of 5 December 1989 respondents were required to comment on this manifestation. 6

After motions for extension of time to file their Comments on the petition, separately filed by the
private respondents and the Solicitor General for the public respondents, were granted, the former
ultimately filed their Comment on 20 December 1989. The Solicitor General filed his Comment on 4
7

January 1990. 8

In his Comment the Solicitor General maintains that the SRA has no legal personality to file
the instant petition in the name of the Republic of the Philippines for under its charter,
Executive Order No. 18, the SRA is not vested with legal capacity to sue. He further argues that
the SRA was not a party to the court-approved compromise agreement in Civil Case No.
8635880 which provided for the questioned 10% attorney's fees; PHILSUCOM and NASUTRA,
which were parties thereto, did not file any action to annul the compromise agreement; that
while Executive Order No. 18 abolished the PHILSUCOM, the latter's juridical personality was to
continue for three (3) years, during which period it may prosecute and defend suits against it; and
that, finally, even if SRA has the capacity to sue, it cannot still bring any action on behalf of the
Republic of the Philippines as this can be done only by the Office of the Solicitor General per Section
1 of P.D. No. 478.

The Solicitor General likewise stresses that the interest of the national government in this case is
confined only to the amount remaining in RPB subject to legal subrogation; the judgment on the
compromise agreement had long become final and executory; and that no reversible error was
committed by respondent judge and respondent Court of Appeals.

Private respondents assert that the SRA and RPB do not have the legal authority to sue for and in
behalf of the Republic of the Philippines. In respect to the former, their conclusion is supported by
almost the same arguments as that asserted by the Solicitor General. As regards the RPB, they
maintain that it "is a government-controlled corporation engaged in the banking business with
corporate powers vested in a Board of Directors," hence, it is "legally untenable for such a
banking institution, even assuming that it is government-controlled, to initiate suits for and in
behalf of the Republic of the Philippines." p.171, Rollo). They further argued that petitioners have
no legal personality to initiate the instant petition for (a) SRA is not a party in the case before the trial
court; the only reason why it became involved was because of the contempt proceedings initiated by
private respondents against SRA's Arsenio Yulo, Carlos Ledesma and Bibiano Sabino for issuing
Sugar Orders No. 9 and 14; and that neither can it be presumed that SRA had substituted
defendants PHILSUCOM and the NASUTRA in the case as both continue to legally exist for the
purpose of prosecuting and defending suits in liquidation of its affairs; both did not file any petition for
relief from judgment questioning the validity of the judgment of the trial court approving the
compromise agreement; and that, moreover, RPB was a signatory to the Compromise Agreement as
a Trustee and, as such, it regarded itself as only a nominal party and in a series of pleadings it
recognized the final and executory nature of the decision approving the compromise agreement.

As to the second assigned error, private respondents pointed out that the Ninth Division of the Court
of Appeals did not rule in C.A.-G.R. No. 11046 that Civil Case No. 86-35880 before the trial court
was not a class suit, and whether or not it was a class suit was not an issue therein.

On 15 January 1990 petitioners filed a motion for leave to file consolidated reply, which We granted
in the resolution of 18 January 1990. 9

On 18 January 1990 petitioners filed a Manifestation and Motion "wherein they informed the Court
10

that despite the temporary restraining order issued on 26 October 1989, respondent Judge, to whom
the Order was addressed, continued to hear the case, particularly on the whereabouts of 177,087.14
piculs of sugar for the crop year 1984-1985 allegedly stored in the different warehouses throughout
the country".

In the resolution of 30 January 1990 We required respondent judge to show cause why no
11

disciplinary action should be taken against her for failure to comply with the resolution of 26 October
1989 ordering her to refrain from further proceeding with Civil Case No. 86-35880 and to answer
why she should not be cited for contempt of court for such failure, within ten (10) days from notice.

On 8 March 1990 petitioners filed their Consolidated Reply to the Comment with Motion to Dismiss
filed by private respondents and the Comment of the Solicitor General. 12

On 5 April 1990 private respondents filed a Rejoinder to the Consolidated Reply. 13

On 16 April 1990 respondent judge, through the OSG, filed her Compliance as required by the
Resolution of 30 January 1990. She claims that she did not defy the temporary restraining order
14

issued by this Court on 26 October 1989 because the petitioners sought for the issuance of the
temporary restraining order to stop the enforcement of the decision of the respondent Court of
Appeals in CA GR No. 17188 dated October 13, 1989; hence, the temporary restraining order that
this Court issued "actually orders herein respondent judge to desist from enforcing the Decision of
the respondent Court of Appeals in CAGR No. 17188 which is the subject of the instant petition for
review". Consequently, she stresses, her 15 December 1989 order was not issued in defiance of the
restraining resolution; said order pertains exclusively to the whereabouts of the 177,087.14 piculs of
physical sugar for the crop year 1984-1985 and did not in any way attempt to enforce the questioned
decisions of the court a quo and the Court of Appeals to the prejudice of petitioner's right to appeal.
In Our resolution of 15 May 1990 We resolved to consider the comments of respondents as
15

Answers to the petition, give due course to the petition, require the parties to submit their
respective memoranda within thirty days from notice, and to note the compliance of respondent
judge.

Petitioners filed their memorandum on 28 June 1990. Private respondents sent theirs by registered
16

mail on 22 August 1990 which this Court actually received on 8 September 1990. We shall now
17

take up the assigned errors.

I.

The Court of Appeals correctly ruled that petitioner Sugar Regulatory Administration may not
lawfully bring an action on behalf of the Republic of the Philippines and that the Office of the
Government Corporate Counsel does not have the authority to represent said petitioner in this case.

Executive Order No. 18, enacted on 28 May 1986 and which took effect immediately, abolished
the Philippine Sugar Commission (PHILSUCOM) and created the Sugar Regulatory
Administration (SRA) which shall be under the Office of the President. However, under the third
paragraph of Section 13 thereof, the PHILSUCOM was allowed to continue as a juridical entity
for three (3) years for the purpose of prosecuting and defending suits by or against it and enabling it
to settle and close its affairs, to dispose of and convey its property and to distribute its assets, but
not for the purpose of continuing the functions for which it was established, under the
supervision of the SRA.

Section 3 of said Executive Order enumerates the powers and functions of the SRA; but it does not
specifically include the power to represent the Republic of the Philippines in suits filed by or against
it, nor the power to sue and be sued although it has the power to "enter, make and execute routinary
contracts as may be necessary for or incidental to the attainment of its purposes between any
persons, firms, public or private, and the Government of the Philippines" and "[t]o do all such other
things, transact such other businesses and perform such functions directly or indirectly incidental or
conducive to the attainment of the purposes of the Sugar Regulatory Administration." 18

Section 4 thereof provides for the governing board of the Administration, known as the Sugar Board,
which shall exercise "[a]ll the corporate powers" of the SRA. Its specific functions are enumerated in
Section 6; however, the enumeration does not include the power to represent the Republic of the
Philippines, although among such functions is "[t]o enter into contracts, transactions, or undertakings
of whatever nature which are necessary or incidental to its functions and objectives with any natural
or juridical persons and with any foreign government institutions, private corporations, partnership or
private individuals.
19

It is apparent that its charter does not grant the SRA the power to represent the Republic of
the Philippines in suits filed by or against the latter.

It is a fundamental rule that an administrative agency has only such powers as are expressly
granted to it by law and those that are necessarily implied in the exercise thereof. (Guerzon vs
Court of Appeals, et al., 77707, August 8, 1988, 164 SCRA 182,189, citing Makati Stock Exchange,
Inc. vs. SEC, 14 SCRA 620, and Sy vs. Central Bank, 70 SCRA 570.) 20

The SRA no doubt, is an administrative agency or body. An administrative agency is defined as "[a]
government body charged with administering and implementing particular legislation. Examples are
workers' compensation commissions ... and the like. ... The term 'agency' includes any department,
independent establishment, commission, administration, authority board or bureau ... 21
The power to represent the Republic of the Philippines in any suit by or against it having been
withheld from SRA, it following that the latter cannot institute the instant petition and the petition
in C.A.-G.R. No. 17188 on behalf of the Republic of the Philippines.

This conclusion does not, however, mean that the SRA cannot sued and be sued. This power can
be implied from its powers to make and execute routinary contracts as may be necessary for or
incidental to the attainment of its purposes between any persons, firms public or private, and the
Government of the Philippines and to do all such other things, transact such other businesses and
perform such other functions directly or indirectly incidental or conducive to the attainment of the
purposes of the SRA and the powers of its governing board to enter into contracts, transactions, or
undertaking of whatever nature which are necessary or incidental to its functions and objectives with
any natural or juridical persons and with any foreign government institutions, private corporations,
partnership or private individuals.

The Court of Appeals also correctly ruled that the OGCC can represent neither the SRA nor the
Republic of the Philippines. We do not, however, share the view that only the Office of the
Solicitor General can represent the SRA.

The entry of appearance by the OGCC for the SRA was precipitated by the sudden turn-about of the
Office of the Solicitor General. Records show that the OSG eventually represented the
PHILSUCOM, NASUTRA and SRA in the trial court. However, on 29 January 1988 it filed a
Manifestation dated January 27, 1988 informing the court that its appearance in the case "is
limited to the issues relating only to the contempt proceedings against the public respondents
and is not concerned with the other issues raised by various parties in their petitions for relief". By
22

reason thereof, the Chairman/Administrator of SRA, Mr. Arsenio Yulo, Jr., sent a letter dated 6 April
23

1988 to the Solicitor General, informing him that since the appearance of the OSG is limited and that
it has taken a different position, SRA's only alternative is to seek another representative and
that much to its regret, it is constrained to terminate OSG's services. He further informed the
Solicitor General that the case is being indorsed to the Office of the Government Corporate Counsel
for appropriate legal action pursuant to P.D. No. 478. There is, however, no showing that the OSG
withdrew its appearance for PHILSUCOM, NASUTRA or the SRA in the trial court. On the contrary,
per its Manifestation dated 8 February 1990, and filed with this Court on 12 February 1990, it "has
24

retained its appearance" "on behalf of the Republic of the Philippines to recover whatever amount
may be owing to the National Treasury by virtue of legal subrogation."

Also on April 6,1988, SRA sent a letter to OGCC to engage its legal services to represent SRA as
25

successor agency of the PHILSUCOM in the case pending before the trial court.

The OGCC, availing of P.D. No. 1415, the law creating it, particularly Section 1 which, as quoted
by it on page 16 of the Petition, reads:
26

SECTION 1. The Office of the Government Corporate Counsel shall be the principal law
office of all government-owned and controlled corporations, including their
subsidiaries except as may otherwise be provided by their respective charters or authorized
by the President (Emphasis supplied).

sent a letter to the Office of the President, "in essence, requesting for authority for OGCC to
represent SRA in the case before the trial court," This was favorably acted by Executive Secretary
Catalino Macaraig, Jr.27
Indeed, under Section 35, Chapter 12, Title III of Book IV of the Administrative Code of 1987
(Executive Order No. 292) the Solicitor General is the lawyer of the government, its agencies and
instrumentalities, and its officials or agents. Said Section reads as follows:

SECTION 35. Functions and Organization. — The Office of the Solicitor General shall
represent the Government of the Philippines, its agencies and instrumentalities and its
officials and agents in any litigation, proceeding, investigation or matter requiring the
services of lawyers. When authorized by the President or head of the office concerned, it
shall also represent government-owned and controlled corporations. The Office of the
Solicitor General shall constitute the law office of the Government and, as such, shall
discharge duties requiring the services of lawyers. ... .

This is similar to subsection (1) of Section 1 of P.D. No. 478.

In Republic, et al. vs. Partisala et al. (G.R. No. 61997, 15 November 1982, 118 SCRA 370, 373), We
ruled that only the Solicitor General can bring or defend actions on behalf of the Republic of the
Philippines and that, henceforth, actions filed in the name of the Republic if not initiated by the
Solicitor General will be summarily dismissed.

However, in Secretary Oscar Orbos vs. Civil Service Commission, et al., G.R. No. 92561, 12
September 1990, We stated:
28

In the discharge of this task, the Solicitor General must see to it that the best interest of the
government is upheld within the limits set by law. When confronted with a situation where
one government office takes an adverse position against another government agency, as in
this case, the Solicitor General should not refrain from performing his duty as the lawyer of
the government. It is incumbent upon him to present to the court what he considers should
legally uphold the best interest of the government although it may run counter to a client's
position. In such an instance the government office adversely affected by the position taken
by the Solicitor General, if it still believes in the merit of its case, may appear in its own
behalf through its legal personnel or representative.

Consequently, the SRA need not be represented by the Office of the Solicitor General. It may
appear in its own behalf through its legal personnel or representative.

The question that logically crops up then is: May it be represented by the OGCC? Respondents
hold the negative view. Petitioners maintain otherwise, for the reason that pursuant to Section 1 of
the charter of the OGCC (P.D. No. 1415), as they quoted, the Office of the President, through the
Executive Secretary, has authorized it to represent the SRA. The specific basis for such authority is
the alleged portion of the exceptionary clause therein, reading "... or authorized by the President."

The words or authorized by the President are not found in the law. We are not aware of any
law, decree or executive order which amended Section 1 of P.D. No. 1415 by inserting therein said
words. Besides, even granting for the sake of argument that such words are written into the law,
such exception cannot confer upon the OGCC authority to represent the SRA. The exception
simply means that although the OGCC is the principal law office of all government-owned and
controlled corporations including their subsidiaries, the President may not allow it to act as lawyer
for a specified government-owned or controlled corporation or a subsidiary thereof. It will be
noted that under Section 1 of P.D. No. 478 the President may authorize the OSG to represent
government-owned or controlled corporations. In short, the exception limits, rather than expands, the
authority of the OGCC. Thus, the so-called approval by the Executive Secretary of the request of
OGCC to represent the SRA is based on an erroneous interpretation of the law.
In any case, even if we grant that there was such an exception, as well construed in the manner
urged by petitioners, it must be deemed, nevertheless, to have been repealed by the
Administrative Code of 1987. Section 10, Chapter 3, Title III, Book IV thereof on the Office of the
Government Corporate counsel does not contain the purported exception. It reads:

SECTION 10. Office of the Government Corporate Counsel. —The Office of the Government
Corporate Counsel (OGCC) shall act as the principal law office of all government-owned or
controlled corporations, their subsidiaries, other corporate offsprings and government
acquired asset corporations and shall exercise control and supervision over all legal
departments or divisions maintained separately and such powers and functions as are now
or may hereafter be provided by law. In the exercise of such control or suspension, the
Government Corporate Counsel shall promulgate rules and regulations to effectively
implement the objectives of the Office. ...

Since the SRA is neither a government-owned or controlled corporation nor a subsidiary

thereof, OGCC does not have the authority to represent it. As to who may represent it,
the Orbos case provides the answer.
29

The case of the RPB is, however, different. It is admitted to be a government-owned corporation.
The OGCC can, therefore, legally represent RPB in actions filed by or against it. Unfortunately, this
issue was not categorically and expressly addressed by the Court of Appeals and has not been
raised in the petition. Anyway, even if We have to rule that OGCC's appearance for the RPB in the
petition before the Court of Appeals in CAGR No. 17188 was proper, the result would be the same
dismissal of the petition. As also correctly pointed out by the Court of Appeals, having received
benefits by way of trustee's fees, the RPB may not question the right of private respondents to
attorney's fees; its only obligation under the judgment based on compromise was to pay the
attorney's fees from out of the funds it held in trust.

II.

The second assigned error is without merit. Petitioners have misread the decision of the Court of
Appeals in CAGR SP No. 11046 (Ernesto Kramer, et al. vs. Hon. Doroteo Caneba et al. promulgated
on 16 March 1987). The case was a petition for certiorari and mandamus with a prayer for
30

preliminary injunction wherein petitioners principally prayed the Court to declare null and void the
order of respondent judge of 16 December 1986 and to order him to issue the writ of execution of
the judgment of 2 June 1986, require respondent NASUTRA to account and turn over to petitioners
any and all sales proceeds of 1984-1985 sugar from 2 June 1986 up to the present in favor of
respondent Trustee Bank RPB for proper distribution to petitioners, issue an order requiring
respondent Trustee Bank to distribute without delay all the sales proceeds of the 1984-1985 sugar in
its possession in accordance with the judgment of respondent court, and issue a restraining
order/preliminary injunction enjoining the SRA, its agents/representatives from implementing Sugar
Order No. 9 dated 25 September 1986. Although in the body of the opinion a discussion was made
on the matter of the sufficiency of representation to make Civil Case No. 86-35880 a class suit, the
resolution of the petition was not in any way based thereon or influenced by it. As a matter of fact,
the Court categorically stated that it was premature to rule on that issue because of the pendency of
the petition for relief from judgment and interventions. The full disquisition of the Court of Appeals on
this point reads:

xxx xxx xxx

At the outset, let it be stated that the incidents which arose from the class suit before the
respondent court are predominantly related to the ten percent (10%) attorney's fees
stipulated in the compromise agreement approved by the respondent court in its June 2,
1986 judgment in favor of petitioner's counsels Atty. Roger Z. Reyes, Ernesto L. Treyes, Jr.
and Eutiquio M. Fudolin, Jr.

In the said class suit, only the five original plaintiffs and producers Zosimo Maravilla, for
himself and in representation of Rosendo dela Rama, Roberto Mascurafia and Bibiano
Sabino per Special Power of Attorney, and Ernesto Kramer represented by Atty. Roger Z.
Reyes per Special Power of Attorney, have authorized said Attys. Reyes, Treyes, Jr. and
Fudolin, Jr. to represent them as counsel.

On page 18 of the instant petition, petitioners allege that there is no necessity to secure
Special Powers of Attorney from the unnamed parties in a class suit, and the failure of
petitioners' counsel to do so does not constitute fraud, the named parties having contest over
the class suit.' By such statement, petitioners and their counsels admit their lack of authority
from the rest of the alleged 40,000 sugar producers to file the class suit and enter into the
compromise agreement.

Section 12, Rule 3, Revised Rules of Court provides that in order that one or more may sue
for the benefit of others as a class suit, it is necessary that 'the court shall make sure that the
parties actually before it are sufficiently numerous and representative so that all interests are
fully protected. (Dimayuga, et al. vs. CIR, et al., G.R. No. L-1 0213, May 27, 1957).

For that matter, in the case below, therein plaintiffs Zosimo Maravilla, Rosendo dela Rama
and Bibiano Sabino filed with the respondent court a motion to partially annul decision and/or
petition for relief against the said ten (10%) percent attorney's fees on the allegation that they
were deceived into signing the compromise agreement believing, as was agreed upon during
the negotiations, that the ten (10%) percent of whatever would be collected would go to a
trust fund for the benefit of the sugar farmers and producers and not as attorney's fees. Also,
petition, for relief was filed by thirteen other alleged sugar producers principally on the
ground that the compromise agreement entered into was without their express authority by
way of Special Power of Attorney and that the class suit was unnecessary. Some of these
sugar producers are the Association de Agricultores de la Region Oesta de Batangas, Inc.
(AAROB) with 742 members; the Samahang Mag-aasukal sa Kanluran Batangas (SABA)
with 4,000 members and Independent Sugar Farmers, Inc. with 200 members.

Here is a situation, as pointed out by respondent NASUTRA and SRA, where petitioners in
filing the class suit claim to represent 40,000 sugar producers all over the country and yet
when some of these producers filed petition for relief and interventions, petitioners 'disowned'
them, stating that the other sugar producers have no personality to intervene, not having
been named parties to the class suit.

It should not be overlooked that the said sugar producers, although not named parties in the
class suit, are the very alleged persons represented in the class suit. They certainly have
interests in the subject matter of the controversy; in the contents of the compromise
agreement.

The filing of petitions for relief from judgment has not been prohibited by B.P. 129. The
remedy of petitions for relief from judgment is still available when a judgment is rendered by
an inferior court in a case, and a party thereto, by fraud, accident, mistake or excusable
negligence, has been unjustly deprived of a hearing therein, or has been prevented from
taking an appeal. Section 9, paragraph 2 of BP 129 placing the original exclusive jurisdiction
on the Court of Appeals to annul judgments of Regional Trial Courts has no relation to (sic)
 all to the petition for relief provided for in Rule 38 because these two are completely different
remedies.

The petitions for relief from judgment and interventions are still pending action by respondent
court. In view thereof, it would be premature for this Court to resolve the issue of estoppel
1âwphi1

on the part of the said sugar producers to question the pertinent portion of the judgment of
compromise, and fraud on the part of the counsels for petitioners therein. (Emphasis
supplied).

IV.

Having disposed of the main issues, We shall now consider the motion of petitioners of 16 January
1990 to hold in contempt respondent Judge Corona Ibay-Somera for violating/defying the Temporary
Restraining Order issued by Us on 26 October 1989. They allegedly "continued to hear the case
particularly on the whereabouts of 177,087.14 piculs of sugar for the crop year 1984-1985 allegedly
stored in different warehouses throughout the country," and that she even further reset the hearing
of the case on January 19, 1990 notwithstanding the cautionary manifestation filed by petitioners
during the 15 December 1989 hearing that said continued hearing would be a violation of the TRO.
In the resolution of 26 October 1989, this Court specifically ordered respondent Judge to desist and
refrain from further proceeding in Civil Case No. 86-35880, entitled Republic Planters Bank, et al. vs.
Philippine Sugar Commission, et al.

In her Compliance, respondent judge explained that the TRO in question actually ordered her to
desist from enforcing the Decision of the respondent Court of Appeals in CAGR No. 17188, which is
the subject of the instant petition, and that her "only honest motivation "in making the inquiry is to
see to it that while the instant petition is pending ... , whatever funds may be owing to the Republic of
the Philippines is duly preserved and protected."

We find the explanation to be satisfactory. No malice attended the commission of the challenged act.
We accord to respondent judge good faith in her claimed desire to preserve and protect public funds.
Moreover, petitioners failed to show that the act in question caused any injury or damage to their
rights or interest.

IN VIEW OF ALL THE FOREGOING, the Petition is DENIED for lack of merit. Costs against
petitioners.

G.R. No. 141949 October 14, 2002

CEFERINO PADUA, petitioner,

vs.
HON. SANTIAGO RANADA, PRESIDING JUDGE OF MAKATI, RTC, BRANCH 137,
PHILIPPINE NATIONAL CONSTRUCTION CORP.,
TOLL REGULATORY BOARD,
DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, and
REPUBLIC OF THE PHILIPPINES, respondents.

-----------------------------

G.R. No. 151108 October 14, 2002

EDUARDO C. ZIALCITA, petitioner,
vs.
TOLL REGULATORY BOARD AND CITRA METRO MANILA TOLLWAYS
CORPORATION, respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:

The focal point upon which these two consolidated cases converge is whether Resolution No.
2001-89 issued by the Toll Regulatory Board (TRB) is valid.

A brief narration of the factual backdrop is imperative, thus:

On November 9, 2001, the TRB issued Resolution No. 2001-89 authorizing provisional toll rate
adjustments at the Metro Manila Skyway, effective January 1, 2002,[1] thus:

"NOW THEREFORE, it is RESOLVED, as it is hereby RESOLVED:

1. That in view of urgent public interest, the Board hereby GRANTS to the Metro Manila
Skyway Project, Provisional Relief in accordance with Rule 10, Section 3 of the Rules of
Practice and Procedure Governing Hearing before the Toll Regulatory Board which states,
among others "that the Board may grant (provisional relief)…in its own initiative…
without prejudice to the final decision after completion of the hearing…;"

2. That the Provisional Relief shall be in form of an interim toll rate adjustment in accordance
with Section 7.04(3) of the Supplemental Toll Operation Agreement, dated November 27,
1995, referring to Interim Adjustments in Toll Rates upon the occurrence of a significant
currency devaluation:

"Be APPROVED, as it is hereby APPROVED.

"RESOLVED FURTHER, as it is hereby RESOLVED:

"That the ProvisionalToll Rates, which are not to exceed the following:

Toll Rates for Implementation

Unrounded
Section
Toll Rates CLASS CLASS CLASS
1 2 3

Elevated Portion 75.00 75.00 150.00 225.00

At-Grade Portion

Magallanes to
19.35 19.50 38.50 58.00
Bicutan

Bicutan to Sucat 11.21 11.00 22.50 34.00

Sucat to Alabang 10.99 11.00 21.00 32.50

* includes C5 entry/exit and Merville exit.

"For implementation starting January 1, 2002 after its publication once a week for three (3)
consecutive weeks in a newspaper of general circulation and that said Provisional Toll Rate Increase
shall remain in effect until such time that the TRB Board has determined otherwise:

"Be APPROVED as it is hereby APPROVED.

"RESOLVED FURTHERMORE, as it is hereby RESOLVED that the Provisional Toll Rates be

implemented in two (2) stages in accordance with the following schedule:

Unrounded Toll Rates for Implementation For Class 1 as

Toll Rates as Reference
Section
Maximum for JANUARY 1, 2002 to JUNE 30, 2002 to
One (1) Year JULY 1, 2002 DECEMBER 31, 2002

Elevated
75.00 65.00 75.00
Portion

At-Grade
Portion

Magallanes
19.35 15.00 20.00
to Bicutan

Bicutan to
11.21 9.00 11.00
Sucat

Sucat to
10.99 9.00 11.00
Alabang

"PROVIDED that the recovery of the sum from the interim rate adjustment shall be applied starting
the year 2003.

"APPROVED as it is hereby APPROVED."

On December 17, 24 and 31, 2001, the above Resolution approving provisional toll rate adjustments
was published in the newspapers of general circulation.[2]

Tracing back the events that led to the issuance of the said Resolution, it appears that on February
27, 2001 the Citra Metro Manila Tollways Corporation (CITRA) filed with the TRB an
application for an interim adjustment of the toll rates at the Metro Manila Skyway Project –
Stage 1.[3] CITRA moored its petition on the provisions of the "Supplemental Toll Operation
Agreement" (STOA),[4] authorizing it, as the investor, to apply for and if warranted, to be granted an
interim adjustment of toll rates in the event of a "significant currency devaluation." The relevant
portions of the STOA read:

a. The Investor and/or the Operator shall be entitled to apply for and if warranted, to be granted an
interim adjustment of Toll Rates upon the occurrence of any of the following events:

xxx xxx
(ii) a significant currency devaluation

xxx xxx

(i) A currency devaluation shall be deemed "significant" if it results in a depreciation of the

value of the Philippine peso relative to the US dollar by at least 10%. For purposes hereof the
exchange rate between the Philippine peso and the US dollar which shall be applicable shall be the
exchange rate between the above mentioned currencies in effect as of the date of approval of the
prevailing preceding Toll Rate.

(ii) The Investor’s right to apply for an interim Toll Rate adjustment under section 7.04 (3) (a) (ii) shall
be effective only while any Financing is outstanding and have not yet been paid in full.

xxx xxx

(iv) An interim adjustment in Toll Rate shall be considered such amount as may be required to
provide interim relief to the Investor from a substantial increase in debt-service burden resulting from
the devaluation."[5]

Claiming that the peso exchange rate to a U.S. dollar had devaluated from P26.1671 in 1995 to
P48.00 in 2000, CITRA alleged that there was a compelling need for the increase of the toll
rates to meet the loan obligations of the Project and the substantial increase in debt-service burden.

Due to heavy opposition, CITRA’s petition remained unresolved. This prompted CITRA to file on
October 9, 2001 an "Urgent Motion for Provisional Approval,"[6] this time, invoking Section 3,
Rule 10 of the "Rules of Practice and Procedure Governing Hearing Before the Toll Regulatory
Board" (TRB Rules of Procedure) which provides:

"SECTION 3. Provisional Relief. – Upon the filing of an application or petition for the approval of the
initial toll rate or toll rate adjustment, or at any stage, thereafter, the Board may grant on motion of
the pleader or in its own initiative, the relief prayed for without prejudice to a final decision after
completion of the hearing should the Board find that the pleading, together with the affidavits and
supporting documents attached thereto and such additional evidence as may have been requested
and presented, substantially support the provisional order; Provided: That the Board may, motu
proprio, continue to issue orders or grant relief in the exercise of its powers of general supervision
under existing laws. Provided: Finally, that pending finality of the decision, the Board may require the
Petitioner to deposit in whole or in part in escrow the provisionally approved adjustment or initial toll
rates." (Emphasis supplied)

On October 30, 2001, CITRA moved to withdraw[7] its "Urgent Motion for Provisional Approval"
without prejudice to its right to seek or be granted provisional relief under the above-quoted
provisions of the TRB Rules of Procedure, obviously, referring to the power of the Board to act on its
own initiative.

On November 7, 2001, CITRA wrote a letter[8] to TRB expressing its concern over the undue
delay in the proceeding, stressing that any further setback would bring the Project’s financial
condition, as well as the Philippine banking system, to a total collapse. CITRA recounted that
out of the US$354 million funding from creditors, two-thirds (2/3) thereof came from the Philippine
banks and financial institutions, such as the Landbank of the Philippines and the Government
Service Insurance Services. Thus, CITRA requested TRB to find a timely solution to its predicament.
On November 9, 2001, TRB granted CITRA’s motion to withdraw[9] the Urgent Motion for
Provisional Approval and, at the same time, issued Resolution No. 2001-89,[10] earlier quoted.

Hence, petitioners Ceferino Padua and Eduardo Zialcita assail before this Court the validity
and legality of TRB Resolution No. 2001-89.

Petitioner Ceferino Padua, as a toll payer, filed an "Urgent Motion for a Temporary Restraining
Order to Stop Arbitrary Toll Fee Increases"[11] in G.R. No. 141949,[12] a petition for mandamus
earlier filed by him. In that petition, Padua seeks to compel respondent Judge Santiago Ranada
of the Regional Trial Court, Branch 137, Makati City, to issue a writ of execution for the
enforcement of the Court of Appeals’ Decision dated August 4, 1989 in CA-G.R. SP No. 13235.
In its Decision, the Court of Appeals ordered the exclusion of certain portions of the
expressways (from Villamor Air Base to Alabang in the South, and from Balintawak to Tabang in
the North) from the franchise of the PNCC.

In his urgent motion, petitioner Padua claims that: (1) Resolution No. 2001-89 was issued without
the required publication and in violation of due process; (2) alone, TRB Executive Director Jaime S.
Dumlao, Jr., could not authorize the provisional toll rate adjustments because the TRB is a collegial
body; and (3) CITRA has no standing to apply for a toll fee increase since it is an "investor" and
not a "franchisee-operator."

On January 4, 2002, petitioner Padua filed a "Supplemental Urgent Motion for a TRO against Toll
Fee Increases,"[13] arguing further that: (1) Resolution 2001-89 refers exclusively to the Metro
Manila Skyway Project, hence, there is no legal basis for the imposition of the increased rate at the
at-grade portions; (2) Resolution No. 2001-89 was issued without basis considering that while it was
signed by three (3) of the five members of the TRB, none of them actually attended the hearing; and
3) the computation of the rate adjustment under the STOA is inconsistent with the rate adjustment
formula under Presidential Decree No. 1894.[14]

On January 10, 2002, the Office of the Solicitor General (OSG) filed, in behalf of public respondent
TRB, Philippine National Construction Corporation (PNCC), Department of Public Works and
Highways (DPWH) and Judge Ranada, a "Consolidated Comment"[15] contending that: (1) the
TRB has the exclusive jurisdiction over all matters relating to toll rates; (2) Resolution No.
2001-89 covers both the Skyway and the at-grade level of the South Luzon Expressway as provided
under the STOA; (3) that while Resolution No. 2001-89 does not mention any factual basis to justify
its issuance, however, it does not mean that TRB's finding of facts is not supported by evidence; and
(4) petitioner Padua cannot assail the validity of the STOA because he is not a party thereto.

Upon the other hand, on January 9, 2002, petitioner Eduardo Zialcita, as a taxpayer and as
Congressman of Parañaque City, filed the present petition for prohibition[16] with prayer for a
temporary restraining order and/or writ of preliminary injunction against TRB and CITRA, docketed
as G.R. No. 151108, impugning the same Resolution No. 2001-89.

Petitioner Zialcita asserts that the provisional toll rate adjustments are exorbitant and that the TRB
violated its own Charter, Presidential Decree No. 1112,[17] when it promulgated Resolution No.
2001-89 without the benefit of any public hearing. He also maintains that the TRB violated the
Constitution when it did not express clearly and distinctly the facts and the law on which Resolution
No. 2001-89 was based. And lastly, he claims that Section 3, Rule 10 of the TRB Rules of Procedure
is not sanctioned by P.D. No. 1112.

Private respondent CITRA, in its comment[18] on Congressman Zialcita’s petition, counters that: (1)
the TRB has primary administrative jurisdiction over all matters relating to toll rates; (2) prohibition is
an inappropriate remedy because its function is to restrain acts about to be done and not acts
already accomplished; (3) Resolution No. 2001-89 was issued in accordance with law; (4) Section 3,
Rule 10 of the TRB Rules is constitutional; and (5) private respondent and the Republic of the
Philippines would suffer more irreparable damages than petitioner.

The TRB, through the OSG, filed a separate comment[19] reiterating the same arguments raised by
private respondent CITRA.

On January 11, 2002, this Court resolved to consolidate the instant petitions, G.R. No. 141949 and
G.R. No. 151108.[20]

We rule for the respondents.

In assailing Resolution No. 2001-89, petitioners came to us via two unconventional remedies – one
is an urgent motion for a TRO to stop arbitrary toll fee increases; and the other is a petition for
prohibition. Unfortunately, both are procedurally impermissible.

Petitioner Padua’s motion is a leap to a legal contest of different dimension. As previously stated,
G.R. No. 141949 is a petition for mandamus seeking to compel respondent Judge Ranada to issue a
writ of execution for the enforcement of the Court of Appeal’s Decision dated August 4, 1989 in CA-
G.R. SP No. 13235. The issue therein is whether the application for a writ of execution should be by
a mere motion or by an action for revival of judgment. Thus, for petitioner Padua to suddenly
interject in the same petition the issue of whether Resolution No. 2001-89 is valid is to drag this
Court to his web of legal convolution. Courts cannot, as a case progresses, resolve the intrinsic merit
of every issue that comes along its way, particularly those which bear no relevance to the resolution
of the case.

Certainly, petitioner Padua’s recourse in challenging the validity of TRB Resolution No. 2001-89
should have been to institute an action, separate and independent from G.R. No. 141949.

II

The remedy of prohibition initiated by petitioner Zialcita in G.R. No. 151108 also suffers several
infirmities. Initially, it violates the twin doctrine of primary administrative jurisdiction and non-
exhaustion of administrative remedies.

P.D. No. 1112 explicitly provides that "the decisions of the TRB on petitions for the increase of
toll rate shall be appealable to the Office of the President within ten (10) days from the
promulgation thereof."[21] P.D. No. 1894 reiterates this instruction and further provides:

"SECTION 9. The GRANTEE shall have the right and authority to adjust any existing toll being
charged the users of the Expressways under the following guidelines:

xxx xxx

c) Any interested Expressways user shall have the right to file, within a period of ninety (90) days
after the date of publication of the adjusted toll rate (s), a petition with the Toll Regulatory Board for a
review of the adjusted toll rate (s); provided, however, that notwithstanding the filing of such petition
and the pendency of the resolution thereof, the adjusted toll shall be enforceable and collectible by
the GRANTEE effective on the first day of January in accordance with the immediately preceding
paragraph.

xxx xxx

e) Decisions of the Toll Regulatory Board on petitions for review of adjusted toll shall be appealable
to the Office of the President within ten (10) days from the promulgation thereof."

These same provisions are incorporated in the TRB Rules of Procedure, particularly in Section 6,
Rule 5 and Section 1, Rule 12 thereof.[22]

Obviously, the laws and the TRB Rules of Procedure have provided the remedies of an interested
Expressways user.[23] The initial proper recourse is to file a petition for review of the adjusted toll
rates with the TRB. The need for a prior resort to this body is with reason. The TRB, as the agency
assigned to supervise the collection of toll fees and the operation of toll facilities, has the necessary
expertise, training and skills to judiciously decide matters of this kind. As may be gleaned from the
petition, the main thrust of petitioner Zialcita’s argument is that the provisional toll rate adjustments
are exorbitant, oppressive, onerous and unconscionable. This is obviously a question of fact
requiring knowledge of the formula used and the factors considered in determining the assailed
rates. Definitely, this task is within the province of the TRB.

We take cognizance of the wealth of jurisprudence on the doctrine of primary administrative

jurisdiction and exhaustion of administrative remedies. In this era of clogged court dockets, the
need for specialized administrative boards or commissions with the special knowledge, experience
and capability to hear and determine promptly disputes on technical matters or intricate questions of
facts, subject to judicial review in case of grave abuse of discretion, is indispensable. Between the
power lodged in an administrative body and a court, the unmistakable trend is to refer it to the
former."[24] In Industrial Enterprises, Inc. vs. Court of Appeals,[25] we ruled:

"x x x, if the case is such that its determination requires the expertise, specialized skills and
knowledge of the proper administrative bodies because technical matters or intricate questions of
facts are involved, then relief must first be obtained in an administrative proceeding before a remedy
will be supplied by the courts even though the matter is within the proper jurisdiction of a court."

Moreover, petitioner Zialcita’s resort to prohibition is intrinsically inappropriate. It bears stressing that
the office of this remedy is not to correct errors of judgment but to prevent or restrain usurpation of
jurisdiction or authority by inferior tribunals and to compel them to observe the limitation of their
jurisdictions. G.R. No. 151108, while designated as a petition for prohibition, has for its object the
setting aside of Resolution No. 2001-89 on the ground that it was issued without prior notice, hearing
and publication and that the provisional toll rate adjustments are exorbitant. This is not the proper
subject of prohibition because as long as the inferior court, tribunal or board has jurisdiction over the
person and subject matter of the controversy, the writ will not lie to correct errors and irregularities in
procedure, or to prevent an erroneous decision or an enforcement of an erroneous judgment. And
even in cases of encroachment, usurpation, and improper assumption of jurisdiction, the writ will not
issue where an adequate and applicable remedy by appeal, writ or error, certiorari, or other
prescribed methods of review are available.[26] In this case, petitioner Zialcita should have sought a
review of the assailed Resolution before the TRB.

III

Even granting that petitioners’ recourse to the instant remedies is in order, still, we cannot rule in
their favor.
For one, it is not true that the provisional toll rate adjustments were not published prior to its
implementation on January 1, 2002. Records show that they were published on December 17, 24
and 31, 2001[27] in three newspapers of general circulation, particularly the Philippine Star,
Philippine Daily Inquirer and The Manila Bulletin. Surely, such publications sufficiently complied with
Section 5 of P.D. No. 1112 which mandates that "no new rates shall be collected unless published in
a newspaper of general publication at least once a week for three consecutive weeks." At any rate, it
must be pointed out that under Letter of Instruction No. 1334-A,[28] the TRB may grant and issue
ex-parte to any petitioner, without need of notice, publication or hearing, provisional authority to
collect, pending hearing and decision on the merits of the petition, the increase in rates prayed for or
such lesser amount as the TRB may in its discretion provisionally grant. That LOI No. 1334-A has
the force and effect of law finds support in a catena of cases decreeing that "all proclamations,
orders, decrees, instructions, and acts promulgated, issued, or done by the former President
(Ferdinand E. Marcos) are part of the law of the land, and shall remain valid, legal, binding, and
effective, unless modified, revoked or superseded by subsequent proclamations, orders, decrees,
instructions, or other acts of the President."[29] In Association of Small Landowners in the
Philippines, Inc. vs. Secretary of Agrarian Reform,[30] this Court held:

"The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever
name it was called, had the force and effect of law because it came from President Marcos. Such
are the ways of despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744, that LOI
474 could not have repealed P.D. No. 27 because the former was only a letter of instruction. The
important thing is that it was issued by President Marcos, whose word was law during that time."
(Emphasis supplied)

For another, it is not true that it was TRB Executive Director Dumlao, Jr. alone who issued
Resolution No. 2001-89. The Resolution itself contains the signature of the four TRB Directors,
namely, Simeon A. Datumanong, Emmanuel P. Bonoan, Ruben S. Reinoso, Jr. and Mario K.
Espinosa.[31] Petitioner Padua would argue that while these Directors signed the Resolution, none
of them personally attended the hearing. This argument is misplaced. Under our jurisprudence, an
administrative agency may employ other persons, such as a hearing officer, examiner or
investigator, to receive evidence, conduct hearing and make reports, on the basis of which the
agency shall render its decision. Such a procedure is a practical necessity.[32] Thus, in Mollaneda
vs. Umacob,[33] we ruled:

" x x x At any rate, it cannot be gainsaid that the term "administrative body or agency" includes the
subordinate officials upon whose hand the body or agency delegates a portion of its authority.
Included therein are the hearing officers through whose eyes and ears the administrative body or
agency observes the demeanor, conduct and attitude of the witnesses and listens to their
testimonies.

"It must be emphasized that the appointment of competent officers to hear and receive evidence is
commonly resorted to by administrative bodies or agencies in the interest of an orderly and efficient
disposition of administrative cases. x x x

"x x x Corollarily, in a catena of cases, this Court laid down the cardinal requirements of due process
in administrative proceedings, one of which is that "the tribunal or body or any of its judges must act
on its or his own independent consideration of the law and facts of the controversy, and not simply
accept the views of a subordinate." Thus, it is logical to say that this mandate was rendered
precisely to ensure that in cases where the hearing or reception of evidence is assigned to a
subordinate, the body or agency shall not merely rely on his recommendation but instead shall
personally weigh and assess the evidence which the said subordinate has gathered."
Be that as it may, we must stress that the TRB’s authority to grant provisional toll rate
adjustments does not require the conduct of a hearing. Pertinent laws and jurisprudence
support this conclusion.

It may be recalled that Former President Ferdinand E. Marcos promulgated P.D. No. 1112 creating
the TRB on March 31, 1977. The end in view was to authorize the collection of toll fees for the
use of certain public improvements in order to attract private sector investment in the
government infrastructure projects. The TRB was tasked to supervise the collection of toll fees
and the operation of toll facilities. One of its powers is to "issue, modify and promulgate from time to
time the rates of toll that will be charged the direct users of toll facilities and upon notice and hearing,
to approve or disapprove petitions for the increase thereof."[34]

To clarify the intent of P.D. No. 1112 as to the extent of the TRB’s power,[35] Former President
Marcos further issued LOI No. 1334-A expressly allowing the TRB to grant ex-parte provisional
or temporary increase in toll rates, thus:

"NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by

virtue of the powers vested in me by the Constitution, do hereby direct, order and instruct the Toll
Regulatory Board to grant and issue ex-parte to any petitioner, without need of notice, publication or
hearing, provisional authority to collect, pending hearing of and decision on the merits of such
petition, the increase in rates prayed for or such lesser amount as the Board may in its discretion
provisionally grant, upon (a) a finding that the said petition is sufficient in form and substance, (b) the
submission of an affidavit by the petitioner showing that the increase in rates substantially conforms
to the formula, if any stipulated in the franchise or toll operation agreement/certificate of the
petitioner and that failure to immediately impose and collect the increase in rates would result in
outright delay or stoppage of urgently needed improvements, expansion or repairs of toll facilities
and/or in great irreparable injury to the petitioner, and (c) the submission by the petitioner to the
Board of a bond, in such amount and from such surety or sureties and under such terms and
conditions as the Board shall fix, to guarantee the refund of the increase in rates to the affected toll
payers in case it is finally determined, after notice and hearing, that the petitioner is not entitled, in
whole or in part, to the same. Any provisional toll rate increases shall be effective immediately upon
approval without need of publication."

Thereafter, the TRB promulgated as part of its Rules of Procedure, the following provision:

"RULE 5

PROCEDURE FOR APPROVAL OF TOLL RATE

"Section 2. Provisional Relief – Upon initial findings of the Board that the Petition for the approval of
initial toll rate or the petition for toll rate adjustment is in accordance with Sections 1 and 2 of Rule 2,
Section 2 of Rule 3 and Section 1 of Rule 4 hereof, the Board within a reasonable time after the filing
of the Petition, may in an en banc decision provisionally approve the initial toll rate or toll rate
adjustment, without the necessity of any notice and hearing."

From the foregoing, it is clear that a hearing is not necessary for the grant of provisional toll
rate adjustment. The language of LOI No. 1334-A is not susceptible of equivocation. It "directs,
orders and instructs" the TRB to issue provisional toll rates adjustment ex-parte without the need of
notice, hearing and publication. All that is necessary is that it be issued upon (1) a finding that the
main petition is sufficient in form and substance; (2) the submission of an affidavit showing that the
increase in rates substantially conforms to the formula, if any is stipulated in the franchise or toll
operation agreement, and that failure to immediately impose and collect the increase in rates would
result in great irreparable injury to the petitioner; and (3) the submission of a bond. Again, whether or
not CITRA complied with these requirements is an issue that must be addressed to the TRB.

The practice is not something peculiar. We have ruled in a number of cases that an administrative
agency may be empowered to approve provisionally, when demanded by urgent public need, rates
of public utilities without a hearing. The reason is easily discerned from the fact that provisional rates
are by their nature temporary and subject to adjustment in conformity with the definitive rates
approved after final hearing.[36] In Maceda vs. Energy Regulatory Board,[37] we ruled that while the
ERB is not precluded from conducting a hearing on the grant of provisional authority –which is of
course, the better procedure – however, it can not be stigmatized if it failed to conduct one. Citing
Citizens’ Alliance for Consumer Protection vs. Energy Regulatory Board,[38] this Court held:

In the light of Section 8 quoted above, public respondent Board need not even have conducted
formal hearings in these cases prior to issuance of its Order of 14 August 1987 granting a
provisional increase of prices. The Board, upon its own discretion and on the basis of
documents and evidence submitted by private respondents, could have issued an order
granting provisional relief immediately upon filing by private respondents of their respective
applications. In this respect, the Court considers the evidence presented by private respondents in
support of their applications -–.i.e., evidence showing that importation costs of petroleum products
had gone up; that the peso had depreciated in value; and that the Oil Price Stabilization Fund
(OPSF) had been depleted – as substantial and hence constitutive of at least prima facie basis for
issuance by the Board of a provisional relief order granting an increase in the prices of petroleum
products.

Anent petitioner Padua’s contention that CITRA has no standing to apply for a toll fee increase,
suffice it to say that CITRA’s right stems from the STOA which was entered into by no less than the
Republic of the Philippines and by the PNCC. Section 7.04 of the STOA provides that the Investor,
CITRA, and/or the Operator, PNCC, shall be entitled to apply for and if warranted, to be granted an
interim adjustment of toll rates in case of force majeure and a significant currency valuation.[39]
Now, unless set aside through proper action, the STOA has the force and effect of law between the
contracting parties, and is entitled to recognition by this Court. [40] On the same breath, we cannot
sustain Padua’s contention that the term "Metro Manila Skyway" Project excludes the at-grade
portions of the South Luzon Expressway considering that under the same STOA the "Metro Manila
Skyway" includes: "(a) the South Metro Manila Skyway, coupled with the rehabilitated at-grade
portion of the South Luzon Expressway, from Alabang to Quirino Avenue; (b) the Central Metro
Manila Skyway, from Quirino Avenue to A. Bonifacio Avenue; x x x."[41]

Petitioner Zialcita faults the TRB for not stating the facts and the law on which Resolution No. 2001-
89 is based. Petitioner is wrong. Suffice it to state that while Section 14, Article VIII of the 1987
Constitution provides that "no decision shall be rendered by any court without expressing therein
clearly and distinctly the facts and the law on which it is based," this rule applies only to a decision of
a court of justice, not TRB.[42]

At this point, let it be stressed that we are not passing upon the reasonableness of the provisional
toll rate adjustments. As we have earlier mentioned, this matter is best addressed to the TRB.

IV

In fine, as what we intimated in Philippine National Construction Corp. vs. Court of Appeals,[43] we
commend petitioners for devoting their time and effort on a matter so imbued with public interest as
in this case. But we can do no better than to brush aside their chief objections to the provisional toll
rate adjustments, for a different approach would lead this Court astray into the field of factual conflict
where its pronouncements would not rest on solid grounds. Time and again, we have impressed that
this Court is not a trier of facts, more so, in the consideration of an extraordinary remedy of
prohibition where only questions of lack or excess of jurisdiction or grave abuse of discretion is to be
entertained.

And to accord the main petition for mandamus in G.R. No. 141949 the full deliberation it deserves,
we deem it appropriate to discuss its merit on another occasion. Anyway, G.R. No. 141949 was
consolidated with G.R. No. 151108 only by reason of petitioner Padua’s deviant motion assailing
Resolution 2001-89. As we have previously said, the main petition in G.R. No. 141949 presents an
entirely different issue and is set on a different factual landscape.

WHEREFORE, petitioner Padua’s "Urgent Motion for Temporary Restraining Order to Stop Arbitrary
Toll Fee Increases" is DENIED and petitioner Zialcita’s "Petition for Prohibition" is DISMISSED.

SO ORDERED.