Consti - Chapter 12 Part 1

JUDICIARY (Chapter 12)
Daabay v. Coca-Cola Bottlers Phils., Inc., 704 SCRA 350
FIRST DIVISION
G.R. No. 199890 August 19, 2013
JEROME M. DAABAY, PETITIONER,

vs.
COCA-COLA BOTTLERS PHILS., INC., RESPONDENT.
DECISION
REYES, J.:
This resolves petitioner Jerome M. Daabay’s (Daabay) Verified Petition for Review 1 , which assails
the Decision2dated June 24, 2011 and Resolution3 dated December 9, 2011 of the Court of Appeals
(CA) in CA-G.R. SP No. 03369-MIN.
The case stems from a complaint for illegal dismissal, illegal suspension, unfair labor practice and
monetary claims filed by Daabay against respondent Coca-Cola Bottlers Phils., Inc. (Coca-Cola) and
three officers of the company.4 The records indicate that the employment of Daabay with Coca-Cola
as Sales Logistics Checker was terminated by the company in June 2005,5 following receipt of
information from one Cesar Sorin (Sorin) that Daabay was part of a conspiracy that allowed the
pilferage of company property.6
The allegations of Sorin were embodied in an affidavit which he executed on April 16, 2005. 7 The
losses to the company were also confirmed by an inventory and audit conducted by Coca-Cola’s
Territory Finance Head, Silvia Ang. Such losses comprised of cases of assorted softdrinks, empty
bottles, missing shells and missing pallets valued at P20,860,913.00.8
Coca-Cola then served upon Daabay a Notice to Explain with Preventive Suspension, which
required him to explain in writing his participation in the scheme that was reported to involve logistics
checkers and gate guards. In compliance therewith, Daabay submitted an Explanation dated April
19, 2005 wherein he denied any participation in the reported pilferage.9
A formal investigation on the matter ensued. Eventually, Coca-Cola served upon Daabay a Notice of
Termination that cited pilferage, serious misconduct and loss of trust and confidence as grounds. At
the time of his dismissal, Daabay had been a regular employee of Coca-Cola for eight years, and
was receiving a monthly pay ofP20,861.00, exclusive of other benefits.10
Daabay then filed the subject labor complaint against Coca-Cola and Roberto Huang (Huang),
Raymund Salvador (Salvador) and Alvin Garcia (Garcia), who were the President and Plant
Logistics Managers, respectively, of Coca-Cola at the time of the dispute. 11 On April 18, 2008,
Executive Labor Arbiter Noel Augusto S. Magbanua (ELA Magbanua) rendered his Decision 12 in
favor of Daabay. He ruled that Daabay was illegally dismissed because his participation in the
alleged conspiracy was not proved by substantial evidence. In lieu of reinstatement and considering
the already strained relations between the parties, ELA Magbanua ordered the payment to Daabay
of backwages and separation pay or retirement benefits, as may be applicable. The dispositive
portion of ELA Magbanua’s Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of
complainant Jerome Daabay as illegal, and ordering respondents to pay complainant his backwages
in the amount of [P]750,996.00.
Additionally, respondents are hereby ordered to pay complainant his separation pay at one (1)
month for every year of service, or his retirement benefits based on the latest Collective Bargaining
Agreement prior to his suspension/termination.
Other claims are hereby ordered dismissed for failure to substantiate.
SO ORDERED.13
Dissatisfied, Coca-Cola, Huang, Salvador and Garcia, appealed from ELA Magbanua’s Decision to
the National Labor Relations Commission (NLRC). Daabay filed a separate appeal to ask for his
reinstatement without loss of seniority rights, the payment of backwages instead of separation pay or
retirement benefits, and an award of litigation expenses, moral and exemplary damages and
attorney’s fees.
The NLRC reversed the finding of illegal dismissal. In a Resolution14 dated August 27, 2009, the
NLRC held that there was "reasonable and well-founded basis to dismiss [Daabay], not only for
serious misconduct, but also for breach of trust or loss of confidence arising from such company
losses."15 Daabay’s participation in the conspiracy was sufficiently established. Several documents
such as checkers receipts and sales invoices that made the fraudulent scheme possible were signed
by Daabay.16 The NLRC also found fault in Daabay for his failure to detect the pilferage, considering
that the "timely recording and monitoring as security control for the outgoing [sic] of company
products are necessarily connected with the functions, duties and responsibilities reposed in him as
Sales Logistics Checker."17 Notwithstanding its ruling on the legality of the dismissal, the NLRC
awarded retirement benefits in favor of Daabay. The dispositive portion of its Resolution reads:
WHEREFORE, premises considered, the appeal of complainant is DENIED for lack of merit, while
that of respondent Coca-Cola Bottlers Philippines, Inc. is GRANTED.
Accordingly, the assailed 18 April 2008 Decision of the Executive Labor Arbiter is hereby
REVERSED and SET ASIDE, and a new judgment is entered DISMISSING the present complaint
for want of evidence.
Let, however, this case be REMANDED to the Executive Labor Arbiter or the Regional Arbitration
Branch of origin for the computation of complainant’s retirement benefits in accordance with the
latest Collective Bargaining Agreement prior to his termination.
SO ORDERED.18
Coca-Cola’s partial motion for reconsideration to assail the award of retirement benefits was denied
by the NLRC in a Resolution19 dated October 30, 2009. The NLRC explained that there was a need
"to humanize the severe effects of dismissal"20 and "tilt the scales of justice in favor of labor as a
measure of equity and compassionate social justice."21 Daabay also moved to reconsider, but his
motion remained unresolved by the NLRC.22Undaunted, Coca-Cola appealed to the CA.
The CA agreed with Coca-Cola that the award of retirement benefits lacked basis considering that
Daabay was dismissed for just cause. It explained:
We are not oblivious of the instances where the Court awarded financial assistance to dismissed
employees, even though they were terminated for just causes. Equity and social justice was the
vague justification. Quickly realizing the unjustness of these [s]o-called equitable awards, the
Supreme Court took the opportunity to curb and rationalize the grant of financial assistance to legally
dismissed employees. Thus, in Philippine Long Distance Telephone Company v. National Labor
Relations Commission, the Supreme Court recognized the harsh realities faced by employees that
forced them, despite their good intentions, to violate company policies, for which the employer can
rightfully terminate their employment. For these instances, the award of financial assistance was
allowed. But, in clear and unmistakable language, the Supreme Court also held that the award of
financial assistance should not be given to validly terminated employees, whose offenses are
iniquitous or reflective of some depravity in their moral character. x x x. 23 (Citation omitted)
Thus, the dispositive portion of its Decision dated June 24, 2011 reads:
FOR THESE REASONS, the writ of certiorari is GRANTED; the portion of the Resolution
promulgated on 27 August 2009 remanding of the case to the Executive Labor Arbiter or the
Regional Arbitration Branch of origin for computation of retirement benefits is DELETED.
SO ORDERED.24
Daabay’s motion for reconsideration was denied in a Resolution25 dated December 9, 2011; hence,
this petition.
It bears stressing that although the assailed CA decision and resolution are confined to the issue of
Daabay’s entitlement to retirement benefits, Daabay attempts to revive through the present petition
the issue of whether or not his dismissal had factual and legal bases. Thus, instead of confining itself
to the issue of whether or not Daabay should be entitled to the retirement benefits that were
awarded by the NLRC, the petition includes a plea upon the Court to affirm ELA Magbanua’s
Decision, with the modification to include: (a) his allowances and other benefits or their monetary
equivalent in the computation of his backwages; (b) his actual reinstatement; and (c) damages,
attorney’s fees and litigation expenses.
We deny the petition.
We emphasize that the appeal to the CA was brought not by Daabay but by Coca-Cola, and was
limited to the issue of whether or not the award of retirement benefits in favor of Daabay was proper.
Insofar as CA-G.R. SP No. 03369-MIN was concerned, the correctness of the NLRC’s
pronouncement on the legality of Daabay’s dismissal was no longer an issue, even beyond the
appellate court’s authority to modify. In Andaya v. NLRC,26 the Court emphasized that a party who
has not appealed from a decision may not obtain any affirmative relief from the appellate court other
than what he had obtained from the lower court, if any, whose decision is brought up on
appeal.27 Further, we explained in Yano v. Sanchez,28 that the entrenched procedural rule in this
jurisdiction is that a party who did not appeal cannot assign such errors as are designed to have the
judgment modified. All that he can do is to make a counter-assignment of errors or to argue on
issues raised below only for the purpose of sustaining the judgment in his favor. 29 Due process
prevents the grant of additional awards to parties who did not appeal.30 Considering that Daabay had
not yet appealed from the NLRC’s Resolution to the CA, his plea for the modification of the NLRC’s
findings was then misplaced. For the Court to review all matters that are raised in the petition would
be tolerant of what Daabay was barred to do before the appellate court.
Before the CA and this Court, Daabay attempts to justify his plea for relief by stressing that he had
filed his own motion for reconsideration of the NLRC’s Resolution dated August 27, 2009 but the
same remained unacted upon by the NLRC. Such bare allegation, however, is insufficient to allow
the issue to be disturbed through this petition. We take note of Daabay’s failure to attach to his
petition a copy of the motion which he allegedly filed with the NLRC. It is also quite baffling why
Daabay does not appear to have undertaken steps to seek the NLRC’s resolution on the motion,
even after it remained unresolved for more than two years from its supposed filing.
Granting that such motion to reconsider was filed with the NLRC, the labor tribunal shall first be
given the opportunity to review its findings and rulings on the issue of the legality of Daabay’s
dismissal, and then correct them should it find that it erred in its disposition. The Court cannot, by
this petition, pre-empt the action which the NLRC, and the CA in case of an appeal, may take on the
matter.
Even as we limit our present review to the lone issue that was involved in the assailed CA decision
and resolution, the Court finds no cogent reason to reverse the ruling of the CA.
Daabay was declared by the NLRC to have been lawfully dismissed by Coca-Cola on the grounds of
serious misconduct, breach of trust and loss of confidence. Our pronouncement in Philippine
Airlines, Inc. v. NLRC31 on the issue of whether an employee who is dismissed for just cause may
still claim retirement benefits equally applies to this case. We held:
At the risk of stating the obvious, private respondent was not separated from petitioner’s employ due
to mandatory or optional retirement but, rather, by termination of employment for a just cause. Thus,
any retirement pay provided by PAL’s "Special Retirement & Separation Program" dated February
15, 1988 or, in the absence or legal inadequacy thereof, by Article 287 of the Labor Code does not
operate nor can be made to operate for the benefit of private respondent. Even private respondent’s
assertion that, at the time of her lawful dismissal, she was already qualified for retirement does not
aid her case because the fact remains that private respondent was already terminated for cause
thereby rendering nugatory any entitlement to mandatory or optional retirement pay that she might
have previously possessed.32 (Citation omitted and emphasis ours)
In ruling against the grant of the retirement benefits, we also take note of the NLRC’s lone
justification for the award, to wit:
Where from the facts obtaining, as in this case, there is a need to humanize the severe effects of
dismissal and where complainant’s entitlement to retirement benefits are even admitted in [Coca-
Cola’s] motion to reduce bond, [w]e can do no less but tilt the scales of justice in favor of labor as a
measure of equity and compassionate social justice, taking into consideration the circumstances
obtaining in this case.33 (Emphasis ours)
Being intended as a mere measure of equity and social justice, the NLRC’s award was then akin to a
financial assistance or separation pay that is granted to a dismissed employee notwithstanding the
legality of his dismissal. Jurisprudence on such financial assistance and separation pay then equally
apply to this case. The Court has ruled, time and again, that financial assistance, or whatever name
it is called, as a measure of social justice is allowed only in instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting on his moral character. 34 We
explained in Philippine Long Distance Telephone Company v. NLRC35:
[S]eparation pay shall be allowed as a measure of social justice only in those instances where the
employee is validly dismissed for causes other than serious misconduct or those reflecting on his
moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an
offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the
employer may not be required to give the dismissed employee separation pay, or financial
assistance, or whatever other name it is called, on the ground of social justice.
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than
punishing the erring employee for his offense. And we do not agree that the punishment is his
dismissal only and that the separation pay has nothing to do with the wrong he has committed. Of
course it has. Indeed, if the employee who steals from the company is granted separation pay even
as he is validly dismissed, it is not unlikely that he will commit a similar offense in his next
employment because he thinks he can expect a like leniency if he is again found out. This kind of
misplaced compassion is not going to do labor in general any good as it will encourage the
infiltration of its ranks by those who do not deserve the protection and concern of the
Constitution.36 (Emphasis ours)
Clearly, considering that Daabay was dismissed on the grounds of serious misconduct, breach of
trust and loss of confidence, the award based on equity was unwarranted. 1âwphi1
Even the NLRC’s reliance on the alleged admission by Coca-Cola in its motion to reduce bond that
Daabay is entitled to retirement benefits is misplaced. Apparently, the supposed admission by Coca-
Cola was based on the following:
In support of its motion to reduce bond, Coca-cola seeks leniency for its failure to include in the
posting of the bond the monetary award for [Daabay’s] retirement benefits which, as directed by the
Executive Labor Arbiter, should be computed in accordance with the latest Collective Bargaining
Agreement prior to his termination. Coca-Cola explains that the amount of the retirement benefits
has not been determined and there is a need to compute the same on appeal. x x x. 37
It is patent that the statements made by Coca-Cola were in light of ELA Magbanua’s ruling that
Daabay was illegally dismissed. Furthermore, any admission was only for the purpose of explaining
the non-inclusion of the amount of retirement benefits in the computation of the appeal bond posted
with the NLRC. Coca-Cola’s statements should be taken in such context, and could not be deemed
to bind the company even after the NLRC had reversed the finding of illegal dismissal. And although
retirement benefits, where not mandated by law, may still be granted by agreement of the
employees and their employer or as a voluntary act of the employer,38 there is no proof that any of
these incidents attends the instant case.
WHEREFORE, the petition is DENIED. The Decision dated June 24, 2011 and Resolution dated
December 9, 2011 of the Court of Appeals in CA-G.R. SP No. 03369-MIN are AFFIRMED.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice
WE CONCUR:
MARIA LOURDES P. A. SERENO

Chief Justice
Chairperson
TERESITA J. LEONARDO-DE CASTRO LUCAS P. BERSAMIN

Associate Justice Associate Justice
JOSE CATRAL MENDOZA*
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion
of the Court's Division.

Chief Justice
Footnotes
*
Acting Member per Special Order No. 1502 dated August 8, 2013.
1
Rollo, pp. 3-38.
2
Penned by Associate Justice Edgardo A. Camello, with Associate Justices Abraham B.
Borreta and Melchor Quirino C. Sadang, concurring; id. at 39-48.
3
Id. at 49-53.
4
Id. at 41.
5
Id. at 81.
6
Id. at 40.
7
Id.
8
Id. at 40, 54.
9
Id. at 40-41.
10
Id.
11
Id. at 81.
12
Id. at 54-79.
13
Id. at 79.
14
Id. at 80-91.
15
Id. at 89-90.
16
Id. at 86-87.
17
Id. at 88.
18
Id. at 91.
19
Id. at 92-94.
20
Id. at 93.
21
Id.
22
Id. at 11, 42.
23
Id. at 46.
24
Id. at 48.
25
Id. at 49-53.
26
502 Phil. 151 (2005).
27
Id. at 159, citing Policarpio v. CA, 336 Phil. 329, 341 (1997).
28
G.R. No. 186640, February 11, 2010, 612 SCRA 347.
29
Id. at 358.
30
Unilever Philippines, Inc. v. Maria Ruby M. Rivera, G.R. No. 201701, June 3, 2013.
31
G.R. No. 123294, October 20, 2010, 634 SCRA 18.
32
Id. at 44-46; See also Aquino v. NLRC, 283 Phil. 118 (1992).
33
Rollo, p. 93.
Eastern Shipping Lines, Inc., and/or Chiongbian v. Sedan, 521 Phil. 61, 71 (2006); San
34
Miguel Corporation v. Lao, 433 Phil. 890, 898-899 (2002); Eastern Paper Mills, Inc. v. NLRC,
252 Phil. 618, 620 (1989).
35
247 Phil. 641 (1988).
36
Id. at 649.
37
Rollo, pp. 83-84.
38
Aquino v. NLRC, G.R. No. 87653, February 11, 1992, 206 SCRA 118.
Applied Food Ingredients Company, Inc. v. Commissioner of Internal Revenue, 709 SCRA 164
FIRST DIVISION
G.R. No. 184266 November 11, 2013
APPLIED FOOD INGREDIENTS COMPANY, INC., Petitioner,

vs.
COMMISSIONER OF INTERNAL REVENUE, Respondent.
DECISION
SERENO, CJ:
This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure filed
1
by Applied Food Ingredients, Company, Inc. (petitioner). The Petition assails the Decision dated 4
2
June 2008 and Resolution dated 26 August 2008 of the Court of Tax Appeals En Bane (CTA En
3
Bane in C.TA. EB No. 359. The assailed Decision and Resolution affirmed the Decision dated 13
4
June 2007 and Resolution dated 16 January 2008 rendered by the CTA First Division in C.TA. Case
5
No. 6513 which denied petitioner's claim for the issuance of a tax credit Decision 2 G.R. No. 184266
certificate representing its alleged excess input taxes attributable to zero-rated sales for the period 1
April 2000 to 31 December 2000.
THE FACTS
Considering that there are no factual issues in this case, we adopt the findings of fact of the CTA En
Banc, as follows:
Petitioner is registered with the Regional District Office (RDO) No. 43 of the BIR in Pasig City (BIR-
Pasig) as, among others, a Value-Added Tax (VAT) taxpayer engaged in the importation and
exportation business, as a pure buy-sell trader.
Petitioner alleged that from September 1998 to December 31, 2000, it paid an aggregate sum of
input taxes ofP9,528,565.85 for its importation of food ingredients, as reported in its Quarterly Vat
Return.
Subsequently, these imported food ingredients were exported between the periods of April 1, 2000
to December 31, 2000, from which the petitioner was able to generate export sales amounting
to P114,577,937.24. The proceeds thereof were inwardly remitted to petitioner's dollar accounts with
Equitable Bank Corporation and with Australia New Zealand Bank-Philippine Branch.
Petitioner further claimed that the aforestated export sales which transpired from April 1, 2000 to
December 31, 2000 were "zero-rated" sales, pursuant to Section 106(A (2)(a)(1) of the N1RC of
1997.
Petitioner alleged that the accumulated input taxes of P9,528,565.85 for the period of September 1,
1998 to December 31, 2000 have not been applied against any output tax.
On March 26, 2002 and June 28, 2002, petitioner filed two separate applications for the issuance of
tax credit certificates in the amounts of P5,385, 208.32 and P4,143,357.53, respectively.
On July 24, 2002, in view of respondent's inaction, petitioner elevated the case before this Court by
way of a Petition for Review, docketed as C.T.A. Case No. 6513.
In his Answer filed on August 28, 2002, respondent alleged by way of special and affirmative
defenses that the request for tax credit certificate is still under examination by respondent's
examiners; that taxes paid and collected are presumed to have been made in accordance with law
and regulations, hence not refundable; petitioner's allegation that it erroneously and excessively paid
the tax during the year under review does not ipso facto warrant the refund/credit or the issuance of
a certificate thereto; petitioner must prove that it has complied with the governing rules with
reference to tax recovery or refund, which are found in Sections 204(C) and 229 of the Tax Code, as
amended. 6
Trial ensued and the CTA First Division rendered a Decision on 13 June 2007. It denied petitioner’s
claim for failure to comply with the invoicing requirements prescribed under Section 113 in relation to
Section 237 of the National Internal Revenue Code (NIRC) of 1997 and Section 4.108-1 of Revenue
Regulations No. 7-95.
On appeal, the CTA En Banc likewise denied the claim of petitioner on the same ground and ruled
that the latter’s sales for the subject period could not qualify for VAT zero-rating, as the export sales
invoices did not bear the following: 1) the imprinted word "zero-rated;" 2) "TIN-VAT;" and 3) BIR’s
permit number, all in violation of the invoicing requirements.
THE ISSUES
Petitioner raises this sole issue for the consideration of this Court:
WHETHER OR NOT THE PETITIONER IS ENTITLED TO THE ISSUANCE OF A TAX CREDIT

CERTIFICATE OR REFUND OF THE AMOUNT OF P9,528,565.85 REPRESENTING CREDITABLE
INPUT TAXES INCURRED FOR THE PERIOD OF SEPTEMBER 1, 1998 TO DECEMBER 31, 2000
WHICH ARE ATTRIBUTABLE TO ZERO-RATED SALES FOR THE PERIOD OF APRIL 1, 2000 TO
DECEMBER 31, 2000. 7
THE COURT’S RULING
The Petition has no merit.
Our VAT Law provides for a mechanism that would allow VAT-registered persons to recover the
excess input taxes over the output taxes they had paid in relation to their sales.
In Panasonic Communications Imaging Corporation of the Philippines v. Commissioner of Internal

Revenue, this Court explained that "the VAT is a tax on consumption, an indirect tax that the
8
provider of goods or services may pass on to his customers. Under the VAT method of taxation,
which is invoice-based, an entity can subtract from the VAT charged on its sales or outputs the VAT
it paid on its purchases, inputs and imports."
For zero-rated or effectively zero-rated sales, although the sellers in these transactions charge no
output tax, they can claim a refund of the VAT that their suppliers charged them. 9
At the outset, bearing in mind that tax refunds or credits − just like tax exemptions − are strictly
construed against taxpayers, the latter have the burden to prove strict compliance with the
10
conditions for the grant of the tax refund or credit.

Section 112 of the NIRC of 1997 laid down the manner in which the refund or credit of input tax may
be made, to wit:
SEC. 112. Refunds or Tax Credits of Input Tax. –
(A) Zero-rated or Effectively Zero-rated Sales. - Any VAT-registered person, whose sales are zero-
rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when
the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax
due or paid attributable to such sales, except transitional input tax, to the extent that such input tax
has not been applied against output tax: Provided, however, That in the case of zero-rated sales
under Section 106(A)(2)(a)(1), (2) and (B) and Section 108(B)(1) and (2), the acceptable foreign
currency exchange proceeds thereof had been duly accounted for in accordance with the rules and
regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is
engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods of
properties or services, and the amount of creditable input tax due or paid cannot be directly and
entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of
the volume of sales.
xxxx
(D) Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the
Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within
one hundred twenty (120) days from the date of submission of complete documents in support of the
application filed in accordance with Subsections (A) and (B) hereof.
In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the
Commissioner to act on the application within the period prescribed above, the taxpayer affected
may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration
of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax
Appeals.
This Court finds it appropriate to first determine the timeliness of petitioner’s claim in accordance
with the above provision.
Well-settled is the rule that the issue of jurisdiction over the subject matter may, at any time, be
raised by the parties or considered by the Court motu proprio. Therefore, the jurisdiction of the CTA
11
over petitioner’s appeal may still be considered and determined by this Court.
Although the ponente in this case expressed a different view on the mandatory application of the
120+30 day period as prescribed in the above provision, with the advent, however, of this Court’s
pronouncement on the consolidated tax cases of Commissioner of Internal Revenue v. San Roque
Power Corporation, Taganito Mining Corporation v. Commissioner of Internal Revenue, and Philex
Mining Corporation v. Commissioner of Internal Revenue (hereby collectively referred as San
12
Roque), we are constrained to apply the dispositions therein to similar facts as those in the present
case.
To begin with, Section 112(A) provides for a two-year prescriptive period after the close of the
taxable quarter when the sales were made, within which a VAT-registered person whose sales are
zero-rated or effectively zero-rated may apply for the issuance of a tax credit certificate or refund of
creditable input tax.
In this case, petitioner claims that from April 2000 to December 2000 it had zero-rated sales to which
it attributed the accumulated input taxes it had incurred from September 1998 to December 2000.
Applying Section 112(A), petitioner had until 30 June 2002, 30 September 2002 and 31 December
2002 − or the close of the taxable quarter when the zero-rated sales were made − within which to file
its administrative claim for refund. Thus, we find sufficient compliance with the two-year prescriptive
period when petitioner filed its claim on 26 March 2002 and 28 June 2002 covering its zero-rated
13 14
sales for the period April to September 2000 and October to December 2000, respectively.
The Commissioner of Internal Revenue (CIR) had one hundred twenty (120) days from the date of
submission of complete documents in support of the application within which to decide on the
administrative claim.
In relation thereto, absent any evidence to the contrary and bearing in mind that the burden to prove
entitlement to a tax refund is on the taxpayer, it is presumed that in order to discharge its burden,
petitioner had attached complete supporting documents necessary to prove its entitlement to a
refund in its application filed on 26 March 2002 and 28 June 2002. Therefore, the CIR’s 120-day
period to decide on petitioner’s administrative claim commenced to run on 26 March 2002 and 28
June 2002, respectively.
Counting 120 days from 26 March 2002, the CIR had until 24 July 2002 within which to decide on
the claim of petitioner for an input VAT refund attributable to the its zero-rated sales for the period
April to September 2000.
On the other hand, the CIR had until 26 October 2002 within which to decide on petitioner’s claim for
refund filed on 28 June 2002, or for the period covering October to December 2000.
Records, however, show that the judicial claim of petitioner was filed on 24 July 2002. Petitioner
15
clearly failed to observe the mandatory 120-day waiting period. Consequently, the premature filing of
its claim for refund/credit of input VAT before the CTA warranted a dismissal, inasmuch as no
jurisdiction was acquired by the CTA. 16
In San Roque, this Court, held thus: "Failure to comply with the 120-day waiting period violates a
mandatory provision of law. It violates the doctrine of exhaustion of administrative remedies and
renders the petition premature and thus without a cause of action, with the effect that the CTA does
not acquire jurisdiction over the taxpayer’s petition. Philippine jurisprudence is replete with cases
upholding and reiterating these doctrinal principles."17
Furthermore, the CTA, being a court of special jurisdiction, can take cognizance only of matters that
are clearly within its jurisdiction. Section 7 of R.A. 1125, as amended by R.A. 9282, specifically
18 19 20
provides:
SEC. 7. Jurisdiction. — The CTA shall exercise:
(a) Exclusive appellate jurisdiction to review by appeal, as herein provided:
(1) Decisions of the Commissioner of Internal Revenue in cases involving disputed

assessments, refunds of internal revenue taxes, fees or other charges, penalties in
relation thereto, or other matters arising under the National Internal Revenue Code or
other laws administered by the Bureau of Internal Revenue;
(2) Inaction by the Commissioner of Internal Revenue in cases involving disputed
assessments, refunds of internal revenue taxes, fees or other charges, penalties in
relation thereto, or other matters arising under the National Internal Revenue Code or
other laws administered by the Bureau of Internal Revenue, where the National
Internal Revenue Code provides a specific period of action, in which case the
inaction shall be deemed a denial; x x x.(Emphases supplied)
"Inaction by the CIR" in cases involving the refund of creditable input tax, arises only after the lapse
of 120 days. Thus, prior thereto and without a decision of the CIR, the CTA, as a court of special
jurisdiction, has no jurisdiction to entertain claims for the refund or credit of creditable input tax. "The
charter of the CTA also expressly provides that if the Commissioner fails to decide within "a specific
period" required by law, such "inaction shall be deemed a denial" of the application for tax refund or
credit. It is the Commissioner’s decision, or inaction "deemed a denial," that the taxpayer can take to
the CTA for review. Without a decision or an "inaction x x x deemed a denial" of the Commissioner,
the CTA has no jurisdiction over a petition for review." 21
Considering further that the 30-day period to appeal to the CTA is dependent on the 120-day period,
both periods are hereby rendered jurisdictional. Failure to observe 120 days prior to the filing of a
judicial claim is not a mere non-exhaustion of administrative remedies, but is likewise considered
jurisdictional. The period of 120 days is a prerequisite for the commencement of the 30-day period to
appeal to the CTA. In both instances, whether the CIR renders a decision (which must be made
within 120 days) or there was inaction, the period of 120 days is material.
This Court further ruled:
The old rule that the taxpayer may file the judicial claim, without waiting for the Commissioner’s
decision if the two-year prescriptive period is about to expire, cannot apply because that rule was
adopted before the enactment of the 30-day period. The 30-day period was adopted precisely to do
away with the old rule, so that under the VAT System the taxpayer will always have 30 days to file
the judicial claim even if the Commissioner acts only on the 120th day, or does not act at all during
the 120-day period. With the 30-day period always available to the taxpayer, the taxpayer can no
longer file a judicial claim for refund or credit of input VAT without waiting for the Commissioner to
decide until the expiration of the 120-day period.
To repeat, a claim for tax refund or credit, like a claim for tax exemption, is construed strictly against
the taxpayer. One of the conditions for a judicial claim of refund or credit under the VAT System is
1âwphi1
with the 120+ 30 day mandatory and jurisdictional periods. Thus, strict compliance with the 120+30
day periods is necessary for such a claim to prosper, whether before, during, or after the effectivity
of the Atlas doctrine, except for the period from the issuance of BIR Ruling No DA-489-03 on 10
December 2003 to 6 October 2010 when the Aichi doctrine was adopted, which again reinstated the
120+ 30 day periods as mandatory and jurisdictional. (Emphasis supplied)
22
In accordance with San Roque and considering that petitioner s judicial claim was filed on 24 July
2002, when the 120+30 day mandatory periods were already in the law and BIR Ruling No. DA-489-
03 had not yet been issued, petitioner does not have an excuse for not observing the 120+ 30 day
period. Failure of petitioner to observe the mandatory 120-day period is fatal to its claim and
rendered the CT A devoid of jurisdiction over the judicial claim.
The Court finds, in view of the absence of jurisdiction of the Court of the Tax Appeals over the
judicial claim of petitioner, that there is no need to discuss the other issues raised.
WHEREFORE, premises considered, the instant Petition is DENIED.

SO ORDERED.

Chief Justice, Chairperson
WE CONCUR:
TERESITA J. LEONARDO-DE CASTRO

Associate Justice
LUCAS P. BERSAMIN MARTIN S. VILLARAMA, JR.

BIENVENIDO L. REYES
Associate Justice
CERTIFICATION
Pursuant to Section 13 Article VIII of the Constitution, I certify that the conclusions in the above
of the Court’s Division.

Chief Justice
Footnotes
1
Rollo, pp. 41-71.
2
Id. at 8-26; penned by Associate Justice Olga Palanca-Enriquez, and concurred in by
Associate Justices Juanito C. Castafieda Jr., Lovell R. Bautista, Erlinda P. Uy and Caesar A.
Casanova, with Presiding Justice Emesto D. Acosta dissenting.
3
Id. at 139 140.
4
Id. at 75-1 09; penned by Associate Justice Lovell R. Bautista, and concurred in by
Associate Justice Caesar A. Casanova, with Presiding Justice Ernesto D. Acosta dissenting.
5
Id. at 100-109.
6
Id. at 113-115.
7
Id. at 46.
8
G.R. No. 178090, 8 February, 2010, 612 SCRA 28, 33, citing Commissioner of Internal
Revenue v. Seagate Technology (Philippines), 491 Phil. 317, 332 (2005).
9
Id at 34.
10
Commissioner of Internal Revenue v. Bank of the Philippine Islands, G.R. No. 178490, 7
July 2009, 592 SCRA 219; Commissioner of Internal Revenue v. Rio Tuba Nickel Mining
Corp., G.R. Nos. 83583-84, 25 March 1992, 207 SCRA 549; La Carlota Sugar Central v.
Jimenez, 112 Phil. 232 (1961).
Namuhe v. Ombudsman, 358 Phil. 782 (1998), citing Section 1, Rule 9, 1997 Rules of Civil
11
Procedure (formerly Section 2, Rule 9); Fabian v. Desierto, 356 Phil. 787 (1998).
12
G.R. Nos. 187485, 196113, 197156, 12 February 2013.
13
CTA rollo, pp. 28-29, Annex H.
14
Id. at 31-32, Annex I.
15
Id. at 1-7, Petition for Review.
Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc., G.R. No.
16
184823, 6 October 2010, 632 SCRA 422.
17
Supra note 11.
Rizal Commercial Banking Corporation v. Commissioner of Internal Revenue, G.R. No.

18
168498, 24 April 2007, 522 SCRA 144, 150.
19
"An Act Creating the Court of Tax Appeals."
20
"An Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating Its Rank to
the Level of a Collegiate Court with Special Jurisdiction and Enlarging Its Membership,
Amending for the Purpose Certain Sections or Republic Act No. 1125, as amended,
otherwise known as ‘The Law Creating the Court of Tax Appeals,’ and for other purposes."
21
Supra note 11.
22
Id.
CE Casecnan Water and Energy Company, Inc. v. Nueva Ecija, 759 SCRA 180
SECOND DIVISION
G.R. No. 196278 June 17, 2015
CE CASECNAN WATER and ENERGY COMPANY, INC., Petitioner,

vs.
THE PROVINCE OF NUEVA ECIJA, THEOFFICEOFTHEPROVINCIAL ASSESSOR OF NUEVA
ECIJA, and THEOFFICEOFTHEPROVINCIAL TREASURER OF NUEVA ECIJA, as represented
by HON. AURELIO UMALI, HON. FLORANTE FAJARDO and HON. EDILBERTO PANCHO,
respectively, or their lawful successors,Respondents,
NATIONAL IRRIGATION ADMINISTRATION and DEPARTMENT OF FINANCE, As Necessary
Parties.
DECISION
DEL CASTILLO, J.:
The Court of Tax Appeals (CTA) has exclusive jurisdiction over a special civil action for certiorari
assailing an interlocutory order issued by the Regional Trial Court (RTC) in a local tax case.
This Petition for Review on Certiorari assails the November 2, 2010 Decision of the Court of
1 2
Appeals (CA) in CA-GR SP No. 108441 which dismissed for lack of jurisdiction the Petition for
Certiorari of petitioner CE Casecnan Water and Energy Company, Inc.(petitioner) against the
Province of Nueva Ecija, the Office of the Provincial Assessor of Nueva Ecija (Office of the
Provincial Assessor) and the Office of the Provincial Treasurer of Nueva Ecija (Office of the
Provincial Treasurer) (respondents). Also assailed is the March 24, 2011 Resolution of the CA
3
denying petitioner’s Motion for Reconsideration. 4
Factual Antecedents
On June 26, 1995, petitioner and the National Irrigation Administration (NIA) entered into a build-
operate-transfer (BOT) contract known as the "Amended and Restated Casecnan Project
Agreement" (Casecnan Contract) relative to the construction and development of the Casecnan
5
Multi-Purpose Irrigation and Power Project (Casecnan Project) in Pantabangan, Nueva Ecija and
Alfonso Castaneda, Nueva Vizcaya. The Casecnan Project is a combined irrigation and
hydroelectric power generation facility using the Pantabangan Dam in Nueva Ecija. On September
29, 2003, petitioner and NIA executed a Supplemental Agreement amending Article II of the
6
Casecnan Contract which pertains to payment of taxes. Article 2.2 thereof states that NIA must
reimburse petitioner for real property taxes (RPT) provided the same was paid upon NIA’s directive
and with the concurrence of the Department of Finance.
On September 6, 2005, petitioner received from the Office of the Provincial Assessor a Notice of
Assessment of Real Property dated August 2, 2005, which indicates that for the years 2002 to 2005,
its RPT due was 248,676,349.60. Petitioner assailed the assessment with the Nueva Ecija Local
Board of Assessment Appeals (Nueva Ecija LBAA) which dismissed it on January 26, 2006.
Undeterred, petitioner filed a Notice of Appeal with the Nueva Ecija Central Board of Assessment
Appeals (Nueva Ecija CBAA). During the pendency thereof, respondents collected from petitioner
the RPT due under the said assessment as well as those pertaining to the years 2006 up to the
second quarter of 2008, totalling P363,703,606.88. Petitioner paid the assessed RPT under protest;
it also initiated proceedings questioning the validity of the collection with respect to the years 2006
up to the second quarter of 2008. Thereafter, petitioner received a letter dated July 9, 2008 from the
7
Office of the Provincial Treasurer stating that it has RPT in arrears for the years 2002 up to the
second quarter of 2008 amounting to P1,277,474,342.10. Petitioner received another letter dated
8
August 29, 2008 from the same office clarifying that its arrearages in RPT actually amounted
to P1,279,997,722.70 (2008 RPT Reassessment). Again, petitioner questioned this assessment
through an appeal before the Nueva Ecija LBAA. While the same was pending, petitioner received
from respondents a letter dated September 10, 2008 demanding payment for its alleged RPT
arrearages.
Hence, on September 23, 2008, petitioner filed with the RTC of San Jose City, Nueva Ecija a
Complaint for injunction and damages with application for temporary restraining order (TRO) and
9
preliminary injunction praying to restrain the collection of the 2008 RPT Reassessment. Petitioner
10
emphasized, among others, that it was not the one which should pay the taxes but NIA.
Ruling of the Regional Trial Court
On September 24, 2008, the RTC denied petitioner’s application for a 72-hour TRO. Meanwhile,
11
petitioner received from the Office of the Provincial Treasurer a letter dated September 22, 2008
further demanding payment for RPT covering the third quarter of 2008 (2008-3Q Assessment).
Thus, petitioner filed on September 29, 2008 an Amended Complaint asking the RTC to likewise
12
enjoin respondents from collecting RPT based on the 2008-3Q Assessment in the amount
of P53,346,755.18.
On October 2, 2008, the RTC issued a 20-day TRO enjoining respondents from collecting from
13
petitioner the RPT covered by the 2008 RPT Reassessment amounting to P1,279,997,722.70,
including surcharges and penalties.
Subsequently, however, the RTC denied petitioner’s application for writ of preliminary injunction in its
Order of October 24, 2008.It also denied petitioner’s Motion for Reconsideration thereof in an
14
Order dated January 30, 2009.

15
On April 24, 2009, petitioner filed with the CA a Petition for Certiorari under Rule 65 of the Rules of
16
Court seeking to annul and set aside the aforementioned October 24, 2008 and January 30, 2009
RTC Orders.
Ruling of the Court of Appeals
In its November 2, 2010 Decision, the CA observed that the Petition for Certiorari before it was
17
actually an offshoot of the 2008 RPT Reassessment. And since in resolving the issue of whether the
RTC committed grave abuse of discretion in denying petitioner’s application for a writ of preliminary
injunction, the issue of the validity of the assessment and the collection of the RPT against petitioner
must also be resolved, thus jurisdiction over the case lies within the Court of Tax Appeals
(CTA).Hence, the CA ruled:
WHEREFORE, premises considered, the Petition for Certiorari is hereby DENIED DUE COURSE
and accordingly, DISMISSED for lack of jurisdiction.
SO ORDERED. 18
Petitioner sought reconsideration; however, it was denied in a Resolution dated March 24, 2011.
19
Undaunted, petitioner filed this Petition imputing upon the CA grave error in:
x x x ruling that it is the Court of Tax Appeals (and not the Court of Appeals) which has jurisdiction
over the CA Injunction Case. 20
Petitioner’s Arguments
In its Petition and Reply, petitioner argues that it is the CA, not the CTA, which has jurisdiction over
21 22
the subject matter of its Petition for Certiorari. Petitioner maintains that its petition relates to an
ordinary civil action for injunction and not to a local tax case. It insists that in both the RTC injunction
case and the Petition for Certiorari before the CA, petitioner was not protesting respondents’
assessment of RPT against it; what it was seeking was respondents’ enjoinment from committing or
continuing to commit acts that would probably violate its right. In particular, petitioner points out that
the RTC injunction case was intended to enjoin respondents from collecting payment during the
pendency of the case with the LBAA challenging the validity of the 2008 RPT Reassessment.
Petitioner explains that the said injunction case was filed with the RTC because the LBAA has no
injunctive power.
Respondents’ Arguments
In their Comment, respondents argue that in resolving the issue on the propriety of issuing a writ of
23
injunction, the CA will have to inevitably pass upon the propriety of the assessment of RPT on the
Casecnan Project, a local tax matter which is within the jurisdiction of the CTA. Respondents also
echo the CA pronouncement that petitioner failed to exhaust administrative remedies with respect to
the assessment and collection of RPT.
Our Ruling
There is no merit in the Petition.
It is the CTA which has the power to rule

on a Petition for Certiorari assailing an
interlocutory order of the RTC relating
to a local tax case.
Jurisdiction over the subject matter is required for a court to act on any controversy. It is conferred
by law and not by the consent or waiver upon a court. As such, if a court lacks jurisdiction over an
action, it cannot decide the case on the merits and must dismiss it. 24
With respect to the CTA, its jurisdiction was expanded and its rank elevated to that of a collegiate
court with special jurisdiction by virtue of Republic Act No. 9282. This expanded jurisdiction of the
25
CTA includes its exclusive appellate jurisdiction to review by appeal the decisions, orders or
resolutions of the RTC in local tax cases originally decided or resolved by the RTC in the exercise of
its original or appellate jurisdiction.
26
In the recent case of City of Manila v. Grecia-Cuerdo, the Court ruled that the CTA likewise has the
27
jurisdiction to issue writs of certiorari or to determine whether there has been grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the RTC in issuing an
interlocutory order in cases falling within the CTA’s exclusive appellate jurisdiction, thus:
The foregoing notwithstanding, while there is no express grant of such power, with respect to the
CTA, Section 1, Article VIII of the 1987 Constitution provides, nonetheless, that judicial power shall
be vested in one Supreme Court and in such lower courts as may be established by law and that
judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.
On the strength of the above constitutional provisions, it can be fairly interpreted that the power of
the CTA includes that of determining whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the RTC in issuing an interlocutory order in
cases falling within the exclusive appellate jurisdiction of the tax court. It, thus, follows that the CTA,
by constitutional mandate, is vested with jurisdiction to issue writs of certiorari in these
cases. (Citations omitted and emphasis supplied)
28
Further, the Court in City of Manila, citing J. M. Tuason & Co., Inc. v. Jaramillo, De Jesus v. Court of
29
Appeals, as well as the more recent cases of Galang, Jr. v. Hon. Judge Geronimo and Bulilis v.
30 31
Nuez, held that:

32
Consistent with the above pronouncement, this Court has held as early as the case of J.M. Tuason
& Co., Inc. v. Jaramillo, et al. that ‘if a case may be appealed to a particular court or judicial tribunal
or body, then said court or judicial tribunal or body has jurisdiction to issue the extraordinary writ of
certiorari, in aid of its appellate jurisdiction.’ This principle was affirmed in De Jesus v. Court of
Appeals, where the Court stated that ‘a court may issue a writ of certiorari in aid of its appellate
jurisdiction if said court has jurisdiction to review, by appeal or writ of error, the final orders or
decisions of the lower court.’ The rulings in J.M. Tuason and De Jesus were reiterated in the more
recent cases of Galang, Jr. v. Geronimo and Bulilis v. Nuez.
Furthermore, Section 6, Rule 135 of the present Rules of Court provides that when by law,
jurisdiction is conferred on a court or judicial officer, all auxiliary writs, processes and other means
necessary to carry it into effect may be employed by such court or officer. (Citations omitted)
33
Anent petitioner’s contention that it is the CA which has jurisdiction over a certiorari petition assailing
an interlocutory order issued by the RTC in a local tax case, the Court had this to say: If this Court
were to sustain petitioners’ contention that jurisdiction over their certiorari petition lies with the CA,
this Court would be confirming the exercise by two judicial bodies, the CA and the CTA, of
jurisdiction over basically the same subject matter – precisely the split-jurisdiction situation which is
anathema to the orderly administration of justice. The Court cannot accept that such was the
legislative motive, especially considering that the law expressly confers on the CTA, the tribunal with
the specialized competence over tax and tariff matters, the role of judicial review over local tax cases
without mention of any other court that may exercise such power. Thus, the Court agrees with the
ruling of the CA that since appellate jurisdiction over private respondents’ complaint for tax refund is
vested in the CTA, it follows that a petition for certiorari seeking nullification of an interlocutory order
issued in the said case should, likewise, be filed with the same court. To rule otherwise would lead to
an absurd situation where one court decides an appeal in the main case while another court rules on
an incident in the very same case.
xxxx
A grant of appellate jurisdiction implies that there is included in it the power necessary to exercise it
effectively, to make all orders that will preserve the subject of the action, and to give effect to the
final determination of the appeal. It carries with it the power to protect that jurisdiction and to make
the decisions of the court thereunder effective. The court, in aid of its appellate jurisdiction, has
authority to control all auxiliary and incidental matters necessary to the efficient and proper exercise
of that jurisdiction. For this purpose, it may, when necessary, prohibit or restrain the performance of
any act which might interfere with the proper exercise of its rightful jurisdiction in cases pending
before it. (Citations omitted and emphasis supplied) Given these, it is settled that it is the CTA
34
which has exclusive jurisdiction over a special civil action for certiorari assailing an interlocutory
order issued by the RTC in a local tax case.
The RTC injunction case is a local tax >case.
In maintaining that it is the CA that has jurisdiction over petitioner’s certiorari petition, the latter
argues that the injunction case it filed with the RTC is not a local tax case but an ordinary civil action.
It insists that it is not protesting the assessment of RPT against it but only prays that respondents be
enjoined from collecting the same.
The Court finds, however, that in praying to restrain the collection of RPT, petitioner also implicitly
questions the propriety of the assessment of such RPT. This is because in ruling as to whether to
1awp++i1
restrain the collection, the RTC must first necessarily rule on the propriety of the assessment. In
other words, in filing an action for injunction to restrain collection, petitioner was in effect also
challenging the validity of the RPT assessment. As aptly discussed by the CA:
x x x [T]he original action filed with the RTC is one for Injunction, with an application for Temporary
Restraining Order and a Writ of Preliminary Injunction to enjoin the province of Nueva Ecija from
further collecting the alleged real property tax liability assessed against it. Simply because the action
is an application for injunctive relief does not necessarily mean that it may no longer be considered
as a local tax case. The subject matter and the issues, not the name or designation of the remedy,
should control. While an ancillary action for injunction may not be a main case, the court [still has] to
determine, even in a preliminary matter, the applicable tax laws, rules and jurisprudence. x x x 35
Moreover, in National Power Corporation v. Municipal Government of Navotas, as well as in City of

36
Lapu-Lapu v. Philippine Economic Zone Authority, this Court already held that local tax cases
37
include RPT.
No doubt, the injunction case before the RTC is a local tax case. And as earlier discussed, a
certiorari petition questioning an interlocutory order issued in a local tax case falls under the
jurisdiction of the CT A. Thus, the CA correctly dismissed the Petition for Certiorari before it for lack
of jurisdiction.
WHEREFORE, the Petition is DENIED. The November 2, 2010 Decision and March 24, 2011
Resolution of the Court of Appeals in CA-G.R. SP No.108441 are AFFIRMED.
SO ORDERED.
MARIANO C. DEL CASTILLO

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION JOSE CATRAL MENDOZA

BIENVENIDO L. REYES *
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court's Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I
certify that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court's Division.
MARIA LOURDES P.A. SERENO

Chief Justice
Footnotes
*
Per Special Order No. 2056-A dated June 10, 2015.
1
Rollo, pp. 64-97.
2
CA rollo, Vol. II, pp. 1304-1320; penned by Associate Justice Juan Q. Enriquez, Jr. and
concurred in by Associate Justices Noel G. Tijam and Ramon M. Bato, Jr.; Associate
Justices Fiorito S. Macalino and Samuel H. Gaerlan, dissented.
3
Id. at 1467-1468.
4
Id. at 1347-1376.
5
Id., Vol. I. at 102-175.
6
Id. at 176-194.
7
Id. at 452.
8
Id. at 471.
9
Rollo, pp. 155-203.
10
Raffled to Branch 39 and docketed as Civil Case No. (08)-189-P.
11
Rollo, pp. 204-206.
12
Id. at 207-267.
13
Id. at 268-276.
14
Id. at 277-282; penned by Judge Cynthia Martinez Florendo.
15
Id. at 321-322.
16
CA rollo, Vol. I, pp. 2-93.
17
Id., Vol. II at 1304-1320.
18
Id. at 1319.
19
Id. at 1467-1468.
20
Rollo, p. 70.
21
Id. at 64-97.
22
Id. at 795-805.
23
Id. at 769-774.
Nippon Express (Philippines) Corporation v. Commissioner of Internal Revenue, G.R. No.

24
185666, February 4, 2015.
25
An Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating Its Rank to
the Level of a Collegiate Court with Special Jurisdiction and Enlarging Its Membership,
Amending for the Purpose Certain Sections of Republic Act No. 1125, As Amended,
Otherwise Known as the Law Creating the Court of Tax Appeals, and for Other Purposes.
26
REPUBLIC ACT NO. 9282, Sec. 7(3).
27
28
Id. at 202.
29
118 Phil. 1022 (1963).
30
G.R. No. 101630, August 24, 1992, 212 SCRA 823.
31
659 Phil. 65 (2011).
32
670 Phil. 665 (2011).
33
City of Manila v. Grecia-Cuerdo, supra note 27 at 202-203.
34
Id. at 203-205.
35
CA rollo, Vol. II, p. 1315.
36
G.R. No. 192300, November24, 2014.
37
G.R. Nos. 184203 and 187583, November 26, 2014.
Mitsubishi Motor Philippines v. Bureau of Customs, GR No. 209830, 17 June 2015
FIRST DIVISION
G.R. No. 209830 June 17, 2015
MITSUBISHI MOTORS PHILIPPINES CORPORATION, Petitioner,

vs.
BUREAU OF CUSTOMS, Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari are the Resolutions dated June 7, 2013 and
1 2
November 4, 2013 of the Court of Appeals (CA) in CA-G.R. CV No. 99594, which referred the
3
records of the instant case to the Court of Tax Appeals (CTA) for proper disposition of the appeal
taken by respondent Bureau of Customs (respondent).
The Facts
The instant case arose from a collection suit for unpaid taxes and customs duties in the aggregate
4
amount ofP46,844,385.00 filed by respondent against petitioner Mitsubishi Motors Philippines

Corporation (petitioner) before the Regional Trial Court of Manila, Branch 17 (RTC),
docketed as Civil Case No. 02-103763 (collection case).
Respondent alleged that from 1997 to1998, petitioner was able to secure tax credit certificates
(TCCs) from various transportation companies; after which, it made several importations and utilized
said TCCs for the payment of various customs duties and taxes in the aggregate amount
of P46,844,385.00. Believing the authenticity of the TCCs, respondent allowed petitioner to use the
5
same for the settlement of such customs duties and taxes. However, a post-audit investigation of the
Department of Finance revealed that the TCCs were fraudulently secured with the use of fake
commercial and bank documents, and thus, respondent deemed that petitioner never settled its
taxes and customs duties pertaining to the aforesaid importations. Thereafter, respondent
6
demanded that petitioner pay its unsettled tax and customs duties, but to no avail. Hence, it was
constrained to file the instant complaint. 7
In its defense, petitioner maintained, inter alia, that it acquired the TCCs from their original holders
8
in good faith and that they were authentic, and thus, their remittance to respondent should be
considered as proper settlement of the taxes and customs duties it incurred in connection with the
aforementioned importations. 9
Initially, the RTC dismissed the collection case due to the continuous absences of respondent’s
10
counsel during trial. On appeal to the CA, and eventually the Court, the said case was reinstated
11 12 13
and trial on the merits continued before the RTC. 14
After respondent’s presentation of evidence, petitioner filed a Demurrer to Plaintiff’s Evidence on

15
February 10, 2012, essentially contending that respondent failed to prove by clear and convincing
evidence that the TCCs were fraudulently procured, and thus, prayed for the dismissal of the
16
complaint. In turn, respondent filed an Opposition dated March 7, 2012 refuting petitioner’s
17 18
contentions.
The RTC Ruling
In an Order dated April 10, 2012, the RTC granted petitioner’s Demurrer to Plaintiff’s Evidence, and
19
accordingly, dismissed respondent’s collection case on the ground of insufficiency of evidence. It 20
found that respondent had not shown any proof or substantial evidence of fraud or conspiracy on the
part of petitioner in the procurement of the TCCs. In this connection, the RTC opined that fraud is
21
never presumed and must be established by clear and convincing evidence, which petitioner failed
to do, thus, necessitating the dismissal of the complaint. 22
Respondent moved for reconsideration, which was, however, denied in an Order dated August 3,
23 24
2012. Dissatisfied, it appealed to the CA.

25
The CA Ruling
In a Resolution 26dated June 7, 2013, the CA referred the records of the collection case to the CTA
for proper disposition of the appeal taken by respondent. While the CA admitted that it had no
1âwphi1
jurisdiction to take cognizance of respondent’s appeal, as jurisdiction is properly lodged with the
CTA, it nevertheless opted to relax procedural rules in not dismissing the appeal outright. Instead, 27
the CA deemed it appropriate to simply refer the matter to the CTA, considering that the government
stands to lose the amount of P46,844,385.00 in taxes and customs duties which can then be used
for various public works and projects.28
Aggrieved, petitioner filed a motion for reconsideration on June 23, 2013, arguing that since the CA
29
does not have jurisdiction over respondent’s appeal, it cannot perform any action on it except to
order its dismissal. The said motion was, however, denied in a Resolution dated November 4,
30 31
2013, hence, this petition.
The Issue Before the Court
The core issue for the Court’s resolution is whether or not the CA correctly referred the records of
the collection case to the CTA for proper disposition of the appeal taken by respondent.
The Court's Ruling
The petition is meritorious.
Jurisdiction is defined as the power and authority of a court to hear, try, and decide a case. In order 32
for the court or an adjudicative body to have authority to dispose of the case on the merits, it must
acquire, among others, jurisdiction over the subject matter. It is axiomatic that jurisdiction over the
33
subject matter is the power to hear and determine the general class to which the proceedings in
question belong; it is conferred by law and not by the consent or acquiescence of any or all of the
parties or by erroneous belief of the court that it exists. Thus, when a court has no jurisdiction over
34
the subject matter, the only power it has is to dismiss the action. 35
Guided by the foregoing considerations and as will be explained hereunder, the Court finds that the
CA erred in referring the records of the collection case to the CTA for proper disposition of the
appeal taken by respondent.
Section 7 of Republic Act No. (RA) 1125, as amended by RA 9282, reads:
36 37
Sec. 7. Jurisdiction. – The CTA shall exercise:
xxxx
c. Jurisdiction over tax collection cases as herein provided:
xxxx
2. Exclusive appellate jurisdiction in tax collection cases:
a. Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax
collection cases originally decided by them in their respective territorial jurisdiction.
xxxx
Similarly, Section 3, Rule 4 of the Revised Rules of the Court of Tax Appeals, as amended, states:
38
Sec. 3. Cases within the jurisdiction of the Court in Divisions. – The Court in Divisions shall exercise:
xxxx
c. Exclusive jurisdiction over tax collections cases, to wit:
xxxx
2. Appellate jurisdiction over appeals from the judgments, resolutions or orders of the Regional Trial
Courts in tax collection cases originally decided by them within their respective territorial jurisdiction.
Verily, the foregoing provisions explicitly provide that the CTA has exclusive appellate jurisdiction
over tax collection cases originally decided by the RTC.
In the instant case, the CA has no jurisdiction over respondent’s appeal; hence, it cannot perform
any action on the same except to order its dismissal pursuant to Section 2, Rule 50 of the Rules of
39
Court. Therefore, the act of the CA in referring respondent’s wrongful appeal before it to the CTA
under the guise of furthering the interests of substantial justice is blatantly erroneous, and thus,
stands to be corrected. In Anderson v. Ho, the Court held that the invocation of substantial justice is
40
not a magic wand that would readily dispel the application of procedural rules, viz.:
41
x x x procedural rules are designed to facilitate the adjudication of cases. Courts and litigants alike
are enjoined to abide strictly by the rules. While in certain instances, we allow a relaxation in the
1âwphi1
application of the rules, we never intend to forge a weapon for erring litigants to violate the rules with
impunity. The liberal interpretation and application of rules apply only in proper cases of
demonstrable merit and under justifiable causes and circumstances. While it is true that litigation is
not a game of technicalities, it is equally true that every case must be prosecuted in accordance with
the prescribed procedure to ensure an orderly and speedy administration of justice. Party litigants
and their counsels are well advised to abide by rather than flaunt, procedural rules for these rules
illumine the path of the law and rationalize the pursuit of justice. (Emphasis and underscoring
42
supplied)
Finally, in view of respondent’s availment of a wrong mode of appeal via notice of appeal stating that
it was elevating the case to the CA – instead of appealing by way of a petition for review to the CTA
within thirty (30) days from receipt of a copy of the RTC’s August 3, 2012 Order, as required by
Section 11 of RA 1125, as amended by Section 9 of RA 9282 – the Court is constrained to deem
43
the RTC's dismissal of respondent's collection case against petitioner final and executory. It is
settled that the perfection of an appeal in the manner and within the period set by law is not only
mandatory, but jurisdictional as well, and that failure to perfect an appeal within the period fixed by
law renders the judgment appealed from final and executory. The Court's pronouncement in Team
44
Pacific Corporation v. Daza is instructive on this matter, to wit:

45 46
Although appeal is an essential part of our judicial process, it has been held, time and again, that the
right thereto is not a natural right or a part of due process but is merely a statutory privilege. Thus,
the perfection of an appeal in the manner and within the period prescribed by law is not only
mandatory but also jurisdictional and failure of a party to conform to the rules regarding appeal will
render the judgment final and executory. Once a decision attains finality, it becomes the law of the
case irrespective of whether the decision is erroneous or not and no court - not even the Supreme
Court - has the power to revise, review, change or alter the same. The basic rule of finality of
judgment is grounded on the fundamental principle of public policy and sound practice that, at the
risk of occasional error, the judgment of courts and the award of quasi-judicial agencies must
become final at some definite date fixed by law.
WHEREFORE, the petition is GRANTED. Accordingly, the Resolutions dated June 7, 2013 and
November 4, 2013 of the Court of Appeals (CA) in CA-G.R. CV No. 99594 are hereby REVERSED
and SET ASIDE. Accordingly, a new one is entered DISMISSING the appeal of respondent Bureau
of Customs to the Court of Appeals.
SO ORDERED.
ESTELA M. PERLAS-BERNABE
Associate Justice
WE CONCUR:

Chief Justice
Chairperson
TERESITA J. LEONARDO-DE CASTRO LUCAS P. BERSAMIN

JOSE PORTUGAL PEREZ

Associate Justice
CERTIFICATION
of the Court's Division.

Chief Justice
Footnotes
1
Rollo (G.R. No. 209830), pp. 10-51.
2
Id. at 58-61. Penned by Associate Justice Priscilla J. Baltazar-Padilla with Associate
Justices Rosalinda Asuncion-Vicente and Agnes Reyes-Carpio concurring.
3
Id. at 62-68.
4
See Complaint for Collection of Money with Damages filed on June 7, 2002; id. at 87-90.
5
Id. at 87-88.
6
Id. at 88.
7
See id. at 375-376.
8
See Answer with Compulsory Counterclaims filed on November 11, 2002; id. at 96-111.
9
Id. at 107-108.
10
See Order dated May 17, 2005 penned by Judge Eduardo B. Peralta, Jr.; id. at 253.
11
See id. at 16.
12
Respondent elevated the collection case before the CA, which was docketed as CA-G.R.
SP No. 97301 entitled "Republic of the Philippines, represented by the Bureau of Customs v.
Hon. Eduardo Peralta, Jr., in his capacity as Presiding Judge of the Regional Trial Court,
National Capital Judicial Regional, Branch 17, Manila and Mitsubishi Motors Corporation." In
a Decision dated June 27, 2008, the CA granted its petition and ordered the reinstatement of
the collection case (see id. at 173-186. Penned by Associate Justice Rebecca De Guia-
Salvador with Associate Justices Vicente S.E. Veloso and Apolinario D. Bruselas, Jr.
concurring).
13
Petitioner filed a petition before the Court challenging the June 27, 2008 CA Decision,
which was docketed as G.R. No. 186106 entitled "Mitsubishi Motors Corporation v. Court of
Appeals, former Eleventh Division, and Republic of the Philippines, represented by the
Bureau of Customs. In a Resolution dated February 23, 2009, the Court, however, dismissed
the petition (see rollo [G.R. No. 186106], p. 120).
14
See rollo (G.R. No. 209830), pp. 19-20.
15
Id. at 321-347.
16
Id. at 324.
17
Id. at 346.
18
Id. at 348-353.
Id. at 403-407. Penned by Acting Presiding Judge Ma. Theresa Dolores C. Gomez-
19
Estoesta.
20
Id. at 407.
21
Id. at 406.
22
Id. at 406-407.
23
See motion for reconsideration dated May 7, 2012; id. at 354-359.
24
Id. at 408-409. Penned by Presiding Judge Felicitas O. Laron-Cacanindin.
25
See Notice of Appeal dated August 28, 2012; id. at 69-70.
26
Id. at 58-61.
27
Id. at 60.
28
Id. at 60-61.
29
Dated June 21, 2013. Id. at 71-84.
30
Id. at 81.
31
Id. at 62-68.
Spouses Genato v. Viola, 625 Phil. 514, 527 (2010), citing Zamora v. CA, 262 Phil. 298,
32
304 (1990).
See id. at 527-528, citing Perkin Elmer Singapore Pte Ltd. v. Dakila Trading Corp., 556
33
Phil. 822, 836 (2007).
See Philippine Coconut Producers Federation, Inc. v. Republic, G.R. Nos. 177857-58,
34
January 24, 2012, 663 SCRA 514, 569, citing Allied Domecq Philippines, Inc. v. Villon, 482
Phil. 894, 900 (2004).
Katon v. Palanca, Jr., 481 Phil. 168, 182 (2004), citing Zamora v. CA, supra note 31, at
35
305-306.
36
Entitled "AN ACT CREATING THE COURT OF TAX APPEALS" (June 16, 1954)
37
Entitled "AN ACT EXPANDING THE JURISDICTION OF THE COURT OF TAX APPEALS
(CTA), ELEVATING ITS RANK TO THE LEVEL OF A COLLEGIATE COURT WITH
SPECIAL JURISDICTION AND ENLARGING ITS MEMBERSHIP, AMENDING FOR THE
PURPOSE CERTAIN SECTIONS OF REPUBLIC ACT NO. 1125,AS
AMENDED,OTHERWISE KNOWN AS THE LAW CREATING THE COURT OF TAX
APPEALS,AND FOR OTHER PURPOSES" (approved on March 30, 2004).
A.M. No. 05-11-07-CTA, as amended per Supreme Court Resolution dated September 16,
38
2008, which took effect on October 15, 2008.
39
Section 2, Rule 50 of the Rules of Court reads:
Sec. 2. Dismissal of improper appeal to the Court of Appeals. – An appeal under

Rule 41 taken from the Regional Trial Court to the Court of Appeals raising only
questions of law shall be dismissed, issues purely of law not being reviewable by
said court. Similarly, an appeal by notice of appeal instead of by petition for review
from the appellate judgment of a Regional Trial Court shall be dismissed.
An appeal erroneously taken to the Court of Appeals shall not be transferred to the
appropriate court but shall be dismissed outright. (Emphasis and underscoring
supplied)
40
G.R. No. 172590, January 7, 2013, 688 SCRA 8.
41
Ramirez v. People, G.R. No. 197832, October 2, 2013, 706 SCRA 667, 673.
Anderson v. Ho, supra note 39, at 21, citing Land Bank of the Philippines v. Hon. Natividad,
42
497 Phil. 738, 744-745 (2005).
43
The pertinent parts of Section 11 of RA 1125 as amended by Section 9 of RA 9282 read:
Sec. 11. Who May Appeal; Mode of Appeal; Effect of Appeal. – Any party adversely
affected by a decision, ruling or inaction of the Commissioner of Internal Revenue,
the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and
Industry or the Secretary of Agriculture or the Central Board of Assessment Appeals
or the Regional Trial Courts may file an appeal with the CTA within thirty (30) days
after the receipt of such decision or ruling or after the expiration of the period fixed by
law for action as referred to in Section 7(a) (2) herein.
Appeal shall be made by filing a petition for review under a procedure analogous to
that provided for under Rule 42 of the 1997 Rules of Civil Procedure with the CTA
within thirty (30) days from the receipt of the decision or ruling or in the case of
inaction as herein provided, from the expiration of the period fixed by law to act
thereon. A Division of the CTA shall hear the appeal: Provided, however, That with
respect to decisions or rulings of the Central Board of Assessment Appeals and the
Regional Trial Court in the exercise of its appellate jurisdiction appeal shall be made
by filing a petition for review under a procedure analogous to that provided for under
Rule 43 of the 1997 Rules of Civil Procedure with the CTA, which shall hear the case
en banc.
x x x x (Emphases and underscoring supplied)
44
See Securities and Exchange Commission v. PICO? Resources, Inc., 588 Phil. 136, 154
(2008), citing land Bank of the Philippines v. Ascot Holdings and Equities, Inc., 562 Phil. 974,
983-984 (2007).
45
G.R. No. 167732, July 11, 2012, 676 SCRA 82.
Id. at 95, citing Zamboanga Forest Managers Corp. v. New Pacific Timber & Supply Co.,
46
647 Phil. 403, 415 (2010).
Commissioner of Internal Revenue v. Court of Tax Appeals, 763 SCRA 123
Cawad v. Abad, 764 SCRA 1
EN BANC
G.R. No. 207145, July 28, 2015
GIL G. CAWAD, MARIO BENEDICT P. GALON, DOMINGO E. LUSAYA, JEAN V. APOLINARES, MA.
LUISA S. OREZCA, JULIO R. GARCIA, NESTOR M. INTIA, RUBEN C. CALIWATAN, ADOLFO Q.
ROSALES, MA. LUISA NAVARRO, AND THE PHILIPPINE PUBLIC HEALTH ASSOCIATION,
INC.,Petitioners, v. FLORENCIO B. ABAD, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT
OF BUDGET AND MANAGEMENT (DBM); ENRIQUE T. ONA, IN HIS CAPACITY AS SECRETARY OF
THE DEPARTMENT OF HEALTH (DOH); AND FRANCISCO T. DUQUE III, IN HIS CAPACITY AS
CHAIRMAN OF THE CIVIL SERVICE COMMISSION (CSC), Respondents.
DECISION
PERALTA, J.:
Before the Court is a petition for certiorari and prohibition under Rule 65 of the Rules of Court filed by the
officers and members of the Philippine Public Health Association, Inc. (PPHAI) assailing the validity of Joint
Circular No. 11 dated November 29, 2012 of the Department of Budget and Management (DBM) and the
Department of Health (DOH) as well as Item 6.5 of the Joint Circular2 dated September 3, 2012 of the DBM
and the Civil Service Commission (CSC).
The antecedent facts are as follows:
On March 26, 1992, Republic Act (RA) No. 7305, otherwise known as The Magna Carta of Public Health
Workers was signed into law in order to promote the social and economic well-being of health workers, their
living and working conditions and terms of employment, to develop their skills and capabilities to be better
equipped to deliver health projects and programs, and to encourage those with proper qualifications and
excellent abilities to join and remain in government service.3Accordingly, public health workers (PHWs) were
granted the following allowances and benefits, among others:
chanRoblesvirtualLawlibrary
Section 20. Additional Compensation. - Notwithstanding Section 12 of Republic Act No. 6758, public health
workers shall receive the following allowances: hazard allowance, subsistence allowance, longevity pay,
laundry allowance and remote assignment allowance.
Section 21. Hazard Allowance. - Public health workers in hospitals, sanitaria, rural health units, main
health centers, health infirmaries, barangay health stations, clinics and other health-related establishments
located in difficult areas, strife-torn or embattled areas, distressed or isolated stations, prisons camps,
mental hospitals, radiation-exposed clinics, laboratories or disease-infested areas or in areas declared under
state of calamity or emergency for the duration thereof which expose them to great danger, contagion,
radiation, volcanic activity/eruption, occupational risks or perils to life as determined by the Secretary of
Health or the Head of the unit with the approval of the Secretary of Health, shall be compensated hazard
allowances equivalent to at least twenty-five percent (25%) of the monthly basic salary of health
workers receiving salary grade 19 and below, and five percent (5%) for health workers withsalary
grade 20 and above.
Section 22. Subsistence Allowance. - Public health workers who are required to render service within the
premises of hospitals, sanitaria, health infirmaries, main health centers, rural health units and barangay
health stations, or clinics, and other health-related establishments in order to make their services available
at any and all times, shall be entitled to full subsistence allowance of three (3) meals which may be
computed in accordance with prevailing circumstances as determined by the Secretary of
Health in consultation with the Management-Health Worker's Consultative Councils, as established under
Section 33 of this Act: Provided, That representation and travel allowance shall be given to rural health
physicians as enjoyed by municipal agriculturists, municipal planning and development officers and budget
officers.
Section 23. Longevity Pay. - A monthly longevity pay equivalent to five percent (5%)of the monthly
basic pay shall be paid to a health worker for every five (5) years of continuous, efficient and
meritorious services rendered as certified by the chief of office concerned, commencing with the service
after the approval of this Act.4
chanroblesvirtuallawlibrary
Pursuant to Section 355 of the Magna Carta, the Secretary of Health promulgated its Implementing Rules
and Regulations (IRR) in July 1992. Thereafter, in November 1999, the DOH, in collaboration with various
government agencies and health workers’ organizations, promulgated a Revised IRR consolidating all
additional and clarificatory rules issued by the former Secretaries of Health dating back from the effectivity
of the Magna Carta. The pertinent provisions of said Revised IRR provide:
6.3. Longevity Pay. — A monthly longevity pay equivalent to five percent (5%) of the present monthly
basic pay shall be paid to public health workers for every five (5) years of continuous, efficient and
meritorious services rendered as certified by the Head of Agency/Local Chief Executives commencing after
the approval of the Act. (April 17, 1992)
xxxx
7.1.1. Eligibility to Receive Hazard Pay. — All public health workers covered under RA 7305 are eligible to
receive hazard pay when the nature of their work exposes them to high risk/low risk hazards for at
least fifty percent (50%) of their working hours as determined and approved by the Secretary of
Health or his authorized representatives.
xxxx
7.2.1. Eligibility for Subsistence Allowance
a. All public health workers covered under RA 7305 are eligible to receive full subsistence allowance as long
as they render actual duty.
b. Public Health Workers shall be entitled to full Subsistence Allowance of three (3) meals which may be
computed in accordance with prevailing circumstances as determined by the Secretary of
Health in consultation with the Management-Health Workers Consultative Council, as established under
Section 33 of the Act.
c. Those public health workers who are out of station shall be entitled to per diems in place of Subsistence
Allowance. Subsistence Allowance may also be commuted.
xxxx
7.2.3 Rates of Subsistence Allowance
a. Subsistence allowance shall be implemented at not less than PhP50.00 per day or PhP1,500.00 per
month as certified by head of agency.
xxxx
d. Part-time public health workers/consultants are entitled to one-half (1/2) of the prescribed rates
received by full-time public health workers.6
On July 28, 2008, the Fourteenth Congress issued Joint Resolution No. 4, entitled Joint Resolution
Authorizing the President of the Philippines to Modify the Compensation and Position Classification System of
Civilian Personnel and the Base Pay Schedule of Military and Uniformed Personnel in the Government, and
for other Purposes, approved by then President Gloria Macapagal-Arroyo on June 17, 2009, which provided
for certain amendments in the Magna Carta and its IRR.
On September 3, 2012, respondents DBM and CSC issued one of the two assailed issuances, DBM-CSC Joint
Circular No. 1, Series of 2012, to prescribe the rules on the grant of Step Increments due to meritorious
performance and Step Increment due to length of service.7 Specifically, it provided that “an official or
employee authorized to be granted Longevity Pay under an existing law is not eligible for the grant of Step
Increment due to length of service.”8 ChanRoblesVirtualawlibrary
Shortly thereafter, on November 29, 2012, respondents DBM and DOH then circulated the other assailed
issuance, DBM-DOH Joint Circular No. 1, Series of 2012, the relevant provisions of which state:
7.0. Hazard Pay. – Hazard pay is an additional compensation for performing hazardous duties and for
enduring physical hardships in the course of performance of duties.
As a general compensation policy, and in line with Section 21 of R. A. No. 7305, Hazard Pay may be granted
to PHWs only if the nature of the duties and responsibilities of their positions, their actual
services, and location of work expose them to great danger, occupational risks, perils of life, and
physical hardships; and only during periods of actual exposure to hazards and hardships.
xxxx
8.3 The Subsistence Allowance shall be P50 for each day of actual full-time service, or P25 for each day
of actual part-time service.
xxxx
9.0 Longevity Pay (LP)
9.1 Pursuant to Section 23 of R. A. No. 7305, a PHW may be granted LP at 5% of his/her current monthly
basic salary, in recognition of every 5 years of continuous, efficient, and meritorious services rendered as
PHW. The grant thereof is based on the following criteria:
9.1.1 The PHW holds a position in the agency plantilla of regular positions; and
9.1.2 He/She has rendered at least satisfactory performance and has not been found guilty of any
administrative or criminal case within all rating periods covered by the 5-year period.
In a letter9 dated January 23, 2013 addressed to respondents Secretary of Budget and Management and
Secretary of Health, petitioners expressed their opposition to the Joint Circular cited above on the ground
that the same diminishes the benefits granted by the Magna Carta to PHWs.
Unsatisfied, petitioners, on May 30, 2013, filed the instant petition raising the following issues:
I.
WHETHER RESPONDENTS ENRIQUE T. ONA AND FLORENCIO B. ABAD ACTED WITH GRAVE ABUSE OF
DISCRETION AND VIOLATED SUBSTANTIVE DUE PROCESS WHEN THEY ISSUED DBM-DOH JOINT CIRCULAR
NO. 1, S. 2012 WHICH:
A) MADE THE PAYMENT OF HAZARD PAY DEPENDENT ON THE ACTUAL

DAYS OF EXPOSURE TO THE RISK INVOLVED;
B) ALLOWED PAYMENT OF SUBSISTENCE ALLOWANCE AT P50 FOR EACH
DAY OF ACTUAL FULL-TIME SERVICE OR P25 FOR EACH DAY OF ACTUAL
PART-TIME SERVICE WITHOUT CONSIDERATION OF THE PREVAILING
CIRCUMSTANCES AS DETERMINED BY THE SECRETARY OF HEALTH IN
CONSULTATION WITH THE MANAGEMENT HEALTH WORKERS’
CONSULTATIVE COUNCILS;
C) REQUIRED THAT LONGEVITY PAY BE GRANTED ONLY TO PHWs WHO
HOLD PLANTILLA AND REGULAR POSITIONS; AND
D) MADE THE JOINT CIRCULAR EFFECTIVE ON JANUARY 1, 2013, BARELY
THREE (3) DAYS AFTER IT WAS PUBLISHED IN A NEWSPAPER OF
GENERAL CIRCULATION ON DECEMBER 29, 2012, IN VIOLATION OF THE
RULES ON PUBLICATION.
II.
WHETHER RESPONDENTS FRANCISCO T. DUQUE AND FLORENCIO B. ABAD ACTED WITH GRAVE ABUSE OF
DISCRETION WHEN THEY ISSUED DBM-CSC JOINT CIRCULAR NO. 1, S. 2012 DATED SEPTEMBER 2, 2012
WHICH PROVIDED THAT AN OFFICIAL OR EMPLOYEE ENTITLED TO LONGEVITY PAY UNDER EXISTING LAW
SHALL NO LONGER BE GRANTED STEP INCREMENT DUE TO LENGTH OF SERVICE.
III.
WHETHER RESPONDENTS’ ISSUANCE OF DBM-DOH JOINT CIRCULAR NO. 1, S. 2012 IS NULL AND VOID
FOR BEING AN UNDUE EXERCISE OF LEGISLATIVE POWER BY ADMINISTRATIVE BODIES WHEN
RESPONDENT ONA ALLOWED RESPONDENT ABAD TO SIGNIFICANTLY SHARE THE POWER TO FORMULATE
AND PREPARE THE NECESSARY RULES AND REGULATIONS TO IMPLEMENT THE PROVISIONS OF THE
MAGNA CARTA.
IV.
WHETHER RESPONDENT ONA WAS REMISS IN IMPLEMENTING THE MANDATE OF THE MAGNA CARTA WHEN
HE DID NOT INCLUDE THE MAGNA CARTA BENEFITS IN THE DEPARTMENT’S YEARLY BUDGET.
V.
WHETHER RESPONDENTS’ ISSUANCE OF DBM-DOH JOINT CIRCULAR NO. 1, S. 2012 IS NULL AND VOID
FOR BEING AN UNDUE EXERCISE OF LEGISLATIVE POWER BY ADMINISTRATIVE BODIES WHEN THE SAME
WAS ISSUED SANS CONSULTATION WITH PROFESSIONAL AND HEALTH WORKERS’ ORGANZATIONS AND
UNIONS.
Petitioners contend that respondents acted with grave abuse of discretion when they issued DBM-DOH Joint
Circular No. 1, Series of 2012 and DBM-CSC Joint Circular No. 1, Series of 2012 which prescribe certain
requirements on the grant of benefits that are not otherwise required by RA No. 7305. Specifically,
petitioners assert that the DBM-DOH Joint Circular grants the payment of Hazard Pay only if the nature of
the PHWs’ duties expose them to danger when RA No. 7305 does not make any qualification. They likewise
claim that said circular unduly fixes Subsistence Allowance at P50 for each day of full-time service and P25
for part-time service which are not in accordance with prevailing circumstances determined by the Secretary
of Health as required by RA No. 7305. Moreover, petitioners fault respondents for the premature effectivity
of the DBM-DOH Joint Circular which they believe should have been on January 29, 2012 and not on January
1, 2012. As to the grant of Longevity Pay, petitioners posit that the same was wrongfully granted only to
PHWs holding regular plantilla positions. Petitioners likewise criticize the DBM-CSC Joint Circular insofar as it
withheld the Step Increment due to length of service from those who are already being granted Longevity
Pay. As a result, petitioners claim that the subject circulars are void for being an undue exercise of
legislative power by administrative bodies.
In their Comment, respondents, through the Solicitor General, refute petitioners’ allegations in stating that
the assailed circulars were issued within the scope of their authority, and are therefore valid and binding.
They also assert the authority of Joint Resolution No. 4, Series of 2009, approved by the President, in
accordance with the prescribed procedure. Moreover, respondents question the remedies of Certiorari and
Prohibition used by petitioners for the assailed circulars were done in the exercise of their quasi-legislative,
and not of their judicial or quasi-judicial functions.
The petition is partly meritorious.
At the outset, the petition for certiorari and prohibition filed by petitioners is not the appropriate remedy to
assail the validity of respondents’ circulars. Sections 1 and 2 of Rule 65 of the Rules of Court provide:
RULE 65
CERTIORARI, PROHIBITION AND MANDAMUS
Section 1. Petition for certiorari. - When any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate
remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper
court, alleging the facts with certainty and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and
justice may require.
xxxx
Sec. 2. Petition for Prohibition. - When the proceedings of any tribunal, corporation, board, officer or
person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess
of its jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is
no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty
and praying that judgment be rendered commanding the respondent to desist from further
proceedings in the action or matter specified therein, or otherwise granting such incidental reliefs as
law and justice may require.10
Thus, on the one hand, certiorari as a special civil action is available only if: (1) it is directed against a
tribunal, board, or officer exercising judicial or quasi-judicial functions; (2) the tribunal, board, or officer
acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal nor any plain, speedy, and adequate remedy in the ordinary course
of law.11 ChanRoblesVirtualawlibrary
On the other hand, prohibition is available only if: (1) it is directed against a tribunal, corporation, board,
officer, or person exercising functions, judicial, quasi-judicial, or ministerial; (2) the tribunal, corporation,
board or person acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction; and (3) there is no appeal or any other plain, speedy, and adequate remedy in
the ordinary course of law.12 Based on the foregoing, this Court has consistently reiterated that petitions
for certiorari and prohibition may be invoked only against tribunals, corporations, boards, officers, or
persons exercising judicial, quasi-judicial or ministerial functions, and not against their exercise of legislative
or quasi-legislative functions.13 ChanRoblesVirtualawlibrary
Judicial functions involve the power to determine what the law is and what the legal rights of the parties are,
and then undertaking to determine these questions and adjudicate upon the rights of the parties.14 Quasi-
judicial functions apply to the actions and discretion of public administrative officers or bodies required to
investigate facts, hold hearings, and draw conclusions from them as a basis for their official action, in their
exercise of discretion of a judicial nature.15 Ministerial functions are those which an officer or tribunal
performs in the context of a given set of facts, in a prescribed manner and without regard to the exercise of
his own judgment upon the propriety or impropriety of the act done.16 ChanRoblesVirtualawlibrary
Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there be a
law that gives rise to some specific rights under which adverse claims are made, and the controversy
ensuing therefrom is brought before a tribunal, board, or officer clothed with authority to determine the law
and adjudicate the respective rights of the contending parties.17 ChanRoblesVirtualawlibrary
In this case, respondents did not act in any judicial, quasi-judicial, or ministerial capacity in their issuance of
the assailed joint circulars. In issuing and implementing the subject circulars, respondents were not called
upon to adjudicate the rights of contending parties to exercise, in any manner, discretion of a judicial
nature. The issuance and enforcement by the Secretaries of the DBM, CSC and DOH of the questioned joint
circulars were done in the exercise of their quasi-legislative and administrative functions. It was in the
nature of subordinate legislation, promulgated by them in their exercise of delegated power. Quasi-
legislative power is exercised by administrative agencies through the promulgation of rules and regulations
within the confines of the granting statute and the doctrine of non-delegation of powers from the separation
of the branches of the government.18 ChanRoblesVirtualawlibrary
Based on the foregoing, certiorari and prohibition do not lie against herein respondents’ issuances. It is
beyond the province of certiorari to declare the aforesaid administrative issuances illegal because petitions
for certiorari seek solely to correct defects in jurisdiction, and not to correct just any error committed by a
court, board, or officer exercising judicial or quasi-judicial functions unless such court, board, or officer
thereby acts without or in excess of jurisdiction or with such grave abuse of discretion amounting to lack of
jurisdiction.19 ChanRoblesVirtualawlibrary
It is likewise beyond the territory of a writ of prohibition since generally, the purpose of the same is to keep
a lower court within the limits of its jurisdiction in order to maintain the administration of justice in orderly
channels. It affords relief against usurpation of jurisdiction by an inferior court, or when, in the exercise of
jurisdiction, the inferior court transgresses the bounds prescribed by the law, or where there is no adequate
remedy available in the ordinary course of law.20 ChanRoblesVirtualawlibrary
Be that as it may, We proceed to discuss the substantive issues raised in the petition in order to finally
resolve the doubt over the Joint Circulars’ validity. For proper guidance, the pressing issue of whether or not
the joint circulars regulating the salaries and benefits relied upon by public health workers were tainted with
grave abuse of discretion rightly deserves its prompt resolution.
With respect to the infirmities of the DBM-DOH Joint Circular raised in the petition, they cannot be said to
have been issued with grave abuse of discretion for not only are they reasonable, they were likewise issued
well within the scope of authority granted to the respondents. In fact, as may be gathered from prior
issuances on the matter, the circular did not make any substantial deviation therefrom, but actually
remained consistent with, and germane to, the purposes of the law.
First, the qualification imposed by the DBM-DOH Joint Circular granting the payment of Hazard Pay only if
the nature of PHWs’ duties expose them to danger and depending on whether the risk involved is high or
low was merely derived from Section 7.1.1 of the Revised IRR of RA No. 7305, duly promulgated by the
DOH in collaboration with various government health agencies and health workers’ organizations in
November 1999, to wit:
SECTION 7.1.1. Eligibility to Receive Hazard Pay. — All public health workers covered under RA 7305 are
eligible to receive hazard pay when the nature of their work exposes them to high risk/low risk
hazards for at least fifty percent (50%) of their working hours as determined and approved by the
Secretary of Health or his authorized representatives.21
Second, fixing the Subsistence Allowance at P50 for each day of full-time service and P25 for part-time
service was also merely a reiteration of the limits prescribed by the Revised IRR, validly issued by the
Secretary of Health pursuant to Section 3522 of RA No. 7305, the pertinent portions of which states:
Section 7.2.3 Rates of Subsistence Allowance
a. Subsistence allowance shall be implemented at not less than PhP50.00 per day or PhP1,500.00 per
month as certified by head of agency.
xxxx
d. Part-time public health workers/consultants are entitled to one-half (1/2) of the prescribed rates
received by full-time public health workers.
Third, the condition imposed by the DBM-DOH Joint Circular granting longevity pay only to those PHWs
holding regular plantilla positions merely implements the qualification imposed by the Revised IRR which
provides:
6.3. Longevity Pay. — A monthly longevity pay equivalent to five percent (5%) of the present monthly basic
pay shall be paid to public health workers for every five (5) years of continuous, efficient and
meritorious services rendered as certified by the Head of Agency/Local Chief Executives commencing after
the approval of the Act. (April 17, 1992)
6.3.1. Criteria for Efficient and Meritorious Service A Public Worker shall have:
a. At least a satisfactory performance rating within the rating period.
b. Not been found guilty of any administrative or criminal case within the rating period.
As can be gleaned from the aforequoted provision, petitioners failed to show any real inconsistency in
granting longevity pay to PHWs holding regular plantilla positions. Not only are they based on the same
premise, but the intent of longevity pay, which is paid to workers for every five (5) years of continuous,
efficient and meritorious services, necessarily coincides with that of regularization. Thus, the assailed
circular cannot be invalidated for its issuance is consistent with, and germane to, the purposes of the law.
Anent petitioners’ contention that the DBM-DOH Joint Circular is null and void for its failure to comply with
Section 3523 of RA No. 7305 providing that its implementing rules shall take effect thirty (30) days after
publication in a newspaper of general circulation, as well as its failure to file a copy of the same with the
University of the Philippines Law Center-Office of the National Administrative Register (UP Law Center-
ONAR), jurisprudence as well as the circumstances of this case dictate otherwise.
Indeed, publication, as a basic postulate of procedural due process, is required by law in order for
administrative rules and regulations to be effective.24 There are, however, several exceptions, one of which
are interpretative regulations which “need nothing further than their bare issuance for they give no real
consequence more than what the law itself has already prescribed.”25 These regulations need not be
published for they add nothing to the law and do not affect substantial rights of any person.26ChanRoblesVirtualawlibrary
Thus, in Association of Southern Tagalog Electric Cooperatives, et. al. v. Energy Regulatory Commission
(ERC),27 wherein several orders issued by the ERC were sought to be invalidated for lack of publication and
non-submission of copies thereof to the UP Law Center - ONAR, it has been held that since they merely
interpret RA No. 7832 and its IRR, particularly on the computation of the cost of purchased power, without
modifying, amending or supplanting the same, they cannot be rendered ineffective, to wit:
When the policy guidelines of the ERC directed the exclusion of discounts extended by power suppliers in the
computation of the cost of purchased power, the guidelines merely affirmed the plain and
unambiguous meaning of "cost" in Section 5, Rule IX of the IRR of R.A. No. 7832. "Cost" is an item
of outlay, and must therefore exclude discounts since these are "not amounts paid or charged for the sale of
electricity, but are reductions in rates.
xxxx
Thus, the policy guidelines of the ERC on the treatment of discounts extended by power suppliers
"give no real consequence more than what the law itself has already prescribed." Publication is
not necessary for the effectivity of the policy guidelines.
As interpretative regulations, the policy guidelines of the ERC on the treatment of discounts
extended by power suppliers are also not required to be filed with the U.P. Law Center in order to
be effective. Section 4, Chapter 2, Book VII of the Administrative Code of 1987 requires every rule adopted
by an agency to be filed with the U.P. Law Center to be effective. However, in Board of Trustees of the
Government Service Insurance System v. Velasco, this Court pronounced that "not all rules and
regulations adopted by every government agency are to be filed with the UP Law Center."
Interpretative regulations and those merely internal in nature are not required to be filed with
the U.P. Law Center. Paragraph 9 (a) of the Guidelines for Receiving and Publication of Rules and
Regulations Filed with the U.P. Law Center states:
9. Rules and Regulations which need not be filed with the U.P. Law Center, shall, among others, include but
not be limited to, the following:
a. Those which are interpretative regulations and those merely internal in nature, that is, regulating only the
personnel of the Administrative agency and not the public.
xxxx
Furthermore, the policy guidelines of the ERC did not create a new obligation and impose a new
duty, nor did it attach a new disability. As previously discussed, the policy guidelines merely
interpret R.A. No. 7832 and its IRR, particularly on the computation of the cost of purchased
power. The policy guidelines did not modify, amend or supplant the IRR.
Similarly, in Republic v. Drugmaker’s Laboratories, Inc.,28 the validity of circulars issued by the Food and
Drug Administration (FDA) was upheld in spite of the non-compliance with the publication, prior hearing,
and consultation requirements for they merely implemented the provisions of Administrative Order No. 67,
entitled “Revised Rules and Regulations on Registration of Pharmaceutical Products” issued by the DOH, in
the following wise:
A careful scrutiny of the foregoing issuances would reveal that AO 67, s. 1989 is actually the rule
that originally introduced the BA/BE testing requirement as a component of applications for the
issuance of CPRs covering certain pharmaceutical products. As such, it is considered an
administrative regulation – a legislative rule to be exact – issued by the Secretary of Health in consonance
with the express authority granted to him by RA 3720 to implement the statutory mandate that all drugs
and devices should first be registered with the FDA prior to their manufacture and sale. Considering that
neither party contested the validity of its issuance, the Court deems that AO 67, s. 1989 complied with the
requirements of prior hearing, notice, and publication pursuant to the presumption of regularity accorded to
the government in the exercise of its official duties.42
On the other hand, Circular Nos. 1 and 8, s. 1997 cannot be considered as administrative
regulations because they do not: (a) implement a primary legislation by providing the details
thereof; (b) interpret, clarify, or explain existing statutory regulations under which the FDA
operates; and/or (c) ascertain the existence of certain facts or things upon which the
enforcement of RA 3720 depends. In fact, the only purpose of these circulars is for the FDA to
administer and supervise the implementation of the provisions of AO 67, s. 1989, including those
covering the BA/BE testing requirement, consistent with and pursuant to RA 3720.43 Therefore,
the FDA has sufficient authority to issue the said circulars and since they would not affect the
substantive rights of the parties that they seek to govern – as they are not, strictly speaking,
administrative regulations in the first place – no prior hearing, consultation, and publication are
needed for their validity.
In this case, the DBM-DOH Joint Circular in question gives no real consequence more than what the law
itself had already prescribed. As previously discussed, the qualification of actual exposure to danger for the
PHW’s entitlement to hazard pay, the rates of P50 and P25 subsistence allowance, and the entitlement to
longevity pay on the basis of PHW’s status in the plantilla of regular positions were already prescribed and
authorized by pre-existing law. There is really no new obligation or duty imposed by the subject circular for
it merely reiterated those embodied in RA No. 7305 and its Revised IRR. The Joint Circular did not modify,
amend nor supplant the Revised IRR, the validity of which is undisputed. Consequently, whether it was duly
published and filed with the UP Law Center – ONAR is necessarily immaterial to its validity because in view
of the pronouncements above, interpretative regulations, such as the DBM-DOH circular herein, need not be
published nor filed with the UP Law Center – ONAR in order to be effective. Neither is prior hearing or
consultation mandatory.
Nevertheless, it bears stressing that in spite of the immateriality of the publication requirement in this case,
and even assuming the necessity of the same, its basic objective in informing the public of the contents of
the law was sufficiently accomplished when the DBM-DOH Joint Circular was published in the Philippine Star,
a newspaper of general circulation, on December 29, 2012.29 ChanRoblesVirtualawlibrary
As to petitioners’ allegation of grave abuse of discretion on the part of respondent DOH Secretary in failing
to include the Magna Carta benefits in his department’s yearly budget, the same is belied by the fact that
petitioners themselves specifically provided in their petition an account of the amounts allocated for the
same in the years 2012 and 2013.30 ChanRoblesVirtualawlibrary
Based on the foregoing, it must be recalled that administrative regulations, such as the DBM-DOH Joint
Circular herein, enacted by administrative agencies to implement and interpret the law they are entrusted to
enforce are entitled to great respect.31 They partake of the nature of a statute and are just as binding as if
they have been written in the statute itself. As such, administrative regulations have the force and effect of
law and enjoy the presumption of legality. Unless and until they are overcome by sufficient evidence
showing that they exceeded the bounds of the law,32 their validity and legality must be upheld.
Thus, notwithstanding the contention that the Joint Resolution No. 4 promulgated by Congress cannot be a
proper source of delegated power, the subject Circular was nevertheless issued well within the scope of
authority granted to the respondents. The issue in this case is not whether the Joint Resolution No. 4 can
become law and, consequently, authorize the issuance of the regulation in question, but whether the circular
can be struck down as invalid for being tainted with grave abuse of discretion. Regardless, therefore, of the
validity or invalidity of Joint Resolution No. 4, the DBM-DOH Joint Circular assailed herein cannot be said to
have been arbitrarily or capriciously issued for being consistent with prior issuances duly promulgated
pursuant to valid and binding law.
Distinction must be made, however, with respect to the DBM-CSC Joint Circular, the contested provision of
which states:
6.5 An official or employee authorized to be granted Longevity Pay under an existing law is not
eligible for the grant of Step Increment Due to Length of Service.
A review of RA No. 7305 and its Revised IRR reveals that the law does not similarly impose such condition
on the grant of longevity pay to PHWs in the government service. As such, the DBM-CSC Joint Circular
effectively created a new imposition which was not otherwise stipulated in the law it sought to interpret.
Consequently, the same exception granted to the DBM-DOH Joint Circular cannot be applied to the DBM-
CSC Joint Circular insofar as the requirements on publication and submission with the UP Law Center –
ONAR are concerned. Thus, while it was well within the authority of the respondents to issue rules regulating
the grant of step increments as provided by RA No. 6758, otherwise known as the Compensation and
Position Classification Act of 1989, which pertinently states:
Section 13. Pay Adjustments. - Paragraphs (b) and (c), Section 15 of Presidential Decree No. 985 are
hereby amended to read as follows:
xxxx
(c) Step Increments - Effective January 1, 1990 step increments shall be granted based on merit and/or
length of service in accordance with rules and regulations that will be promulgated jointly by the
DBM and the Civil Service Commission,
and while it was duly published in the Philippine Star, a newspaper of general circulation, on September 15,
2012,33 the DBM-CSC Joint Circular remains unenforceable for the failure of respondents to file the same
with the UP Law Center – ONAR.34 Moreover, insofar as the DBM-DOH Joint Circular similarly withholds the
Step Increment due to length of service from those who are already being granted Longevity Pay, the same
must likewise be declared unenforceable.35 ChanRoblesVirtualawlibrary
Note also that the DBM-DOH Joint Circular must further be invalidated insofar as it lowers the hazard pay at
rates below the minimum prescribed by Section 21 of RA No. 7305 and Section 7.1.5 (a) of its Revised IRR
as follows:
SEC. 21. Hazard Allowance. - Public health worker in hospitals, sanitaria, rural health units, main centers,
health infirmaries, barangay health stations, clinics and other health-related establishments located in
difficult areas, strife-torn or embattled areas, distresses or isolated stations, prisons camps, mental
hospitals, radiation-exposed clinics, laboratories or disease-infested areas or in areas declared under state of
calamity or emergency for the duration thereof which expose them to great danger, contagion, radiation,
volcanic activity/eruption occupational risks or perils to life as determined by the Secretary of Health or the
Head of the unit with the approval of the Secretary of Health, shall be compensated hazard allowance
equivalent to at leasttwenty-five percent (25%) of the monthly basic salary of health workers receiving
salary grade 19 and below, and five percent (5%) for health workers with salary grade 20 and above.
xxxx
7.1.5. Rates of Hazard Pay
a. Public health workers shall be compensated hazard allowances equivalent to at leasttwenty

five (25%) of the monthly basic salary of health workers, receiving salary grade 19 and below, and five
percent (5%) for health workers with salary grade 20 and above. This may be granted on a monthly,
quarterly or annual basis.
It is evident from the foregoing provisions that the rates of hazard pay must be at least 25% of the basic
monthly salary of PWHs receiving salary grade 19 and below, and 5% receiving salary grade 20 and above.
As such, RA No. 7305 and its implementing rules noticeably prescribe the minimum rates of hazard pay due
all PHWs in the government, as is clear in the self-explanatory phrase "at least" used in both the law and the
rules.36 Thus, the following rates embodied in Section 7.2 of DBM-DOH Joint Circular must be struck down as
invalid for being contrary to the mandate of RA No. 7305 and its Revised IRR:
7.2.1 For PHWs whose positions are at SG-19 and below, Hazard Pay shall be based on the degree of
exposure to high risk or low risk hazards, as specified in sub-items 7.1.1 and 7.1.2 above, and the number
of workdays of actual exposure over 22 workdays in a month, at rates not to exceed 25% of monthly basic
salary. In case of exposure to both high risk and low risk hazards, the Hazard Pay for the month shall be
based on only one risk level, whichever is more advantageous to the PHW.
7.2.2 PHWs whose positions are at SG-20 and above may be entitled to Hazard Pay at 5% of their monthly
basic salaries for all days of exposure to high risk and/or low risk hazards. However, those exposed to high
risk hazards for 12 or more days in a month may be entitled to a fixed amount of P4,989.75 per month.
Rates of Hazard Pay

Actual Exposure/Level
High Risk Low Risk
of Risk
14% of monthly
12 or more days 25% of monthly basic salary
basic salary
14% of monthly basic 8% of monthly
6 to 11 days
salary basic salary
5% of monthly
Less than 6 days 8% of monthly basic salary
basic salary
WHEREFORE, premises considered, the instant petition is PARTLY GRANTED. The DBM-DOH Joint
Circular, insofar as it lowers the hazard pay at rates below the minimum prescribed by Section 21 of RA No.
7305 and Section 7.1.5 (a) of its Revised IRR, is declared INVALID. The DBM-CSC Joint Circular, insofar as
it provides that an official or employee authorized to be granted Longevity Pay under an existing law is not
eligible for the grant of Step Increment Due to Length of Service, is declared UNENFORCEABLE. The
validity, however, of the DBM-DOH Joint Circular as to the qualification of actual exposure to danger for the
PHW’s entitlement to hazard pay, the rates of P50 and P25 subsistence allowance, and the entitlement to
longevity pay on the basis of the PHW’s status in the plantilla of regular positions, is UPHELD.
SO ORDERED. cralawlawlibrary
Sereno, C. J., on official leave.

Carpio,**Velasco, Jr., Leonardo-De Castro, Bersamin,, Villarama, Jr., Perez, Mendoza, and Perlas-Bernabe,
JJ., concur.
Brion, J., see separate opinion.
Del Castillo, J., on official leave.
Reyes, J., on official leave.
Leonen, J., see separate concurring and dissenting opinion.
Jardeleza, J., no part. prior OSG action.
Endnotes:
**
Designated Acting Chief Justice per Special Order No. 2101 dated July 13, 2015.
1
Annex “B” to Petition, rollo, pp. 67-83.
2
Annex “A” to Petition, id. at 58-66.
3
Republic Act No. 7305, Sec. 2.
4
Emphasis ours.
5
Section 35. Rules and Regulations. - The Secretary of Health after consultation with appropriate agencies
of the Government as well as professional and health workers' organizations or unions, shall formulate and
prepare the necessary rules and regulations to implement the provisions of this Act. Rules and regulations
issued pursuant to this Section shall take effect thirty (30) days after publication in a newspaper of general
circulation.
6
Emphasis ours.
7
Section 2, supra note 2.
8
Section 6.5, id.
9
Annex “C” to Petition, rollo, pp. 125-127.
10
Emphasis ours.
Metropolitan Bank and Trust Company, Inc. v. National Wages and Productivity Commission and Regional
11
Tripartite Wages and Productivity Board – Region II, 543 Phil. 318, 328 (2007).
12
Id. at 328-329.
Dela Llana v. The Chairperson, Commission on Audit, G.R. No. 180989, February 7, 2012, 665 SCRA 176,
13
184, Liga ng mga Barangay National v. City Mayor of Manila, 465 Phil. 529 (2004), Southern Hemisphere
Engagement Network, Inc. v. Anti-Terrorism Council, 646 Phil. 452, 470-471 (2010).
Chamber of Real Estate and Builders Associations, Inc. v. Secretary of Agrarian Reform, 635 Phil. 283,
14
304, citing Liga ng mga Barangay National v. City Mayor of Manila, supra, at 543.
15
Id.
Metropolitan Bank and Trust Company, Inc. v. National Wages And Productivity Commission And Regional
16
Tripartite Wages And Productivity Board – Region II, supranote 11, at 329, citing De Guzman, Jr. v.
Mendoza, 493 Phil. 690, 696 (2005); Sismaet v. Sabas, 473 Phil. 230, 239 (2004), Philippine Bank of
Communications v. Torio, 348 Phil. 74, 84 (1998).
Chamber of Real Estate and Builders Association, Inc. v. Secretary of Agrarian Reform, supra note 14, at
17
304-305.
Metropolitan Bank and Trust Company, Inc. v. National Wages and Productivity Commission and Regional
18
Tripartite Wages and Productivity Board-Region II, supra note 11, at 330.
Yusay v. Court of Appeals, G.R. No. 156684, April 6, 2011, 647 SCRA 269, 277, citingRepublic v. Yang Chi
19
Hao, 617 Phil. 422, 425 (2009) and Chua v. Court of Appeals, 338 Phil. 262, 269 (1997).
20
Holy Spirit Homeowners’ Association, Inc. v. Sec. Defensor, 529 Phil. 573, 587 (2006).
21
Emphasis ours.
22
Supra note 4.
23
Section 35. Rules and Regulations. - The Secretary of Health after consultation with appropriate agencies
of the Government as well as professional and health workers' organizations or unions, shall formulate and
issued pursuant to this Section shall take effect thirty (30) days after publication in a newspaper
of general circulation. (Emphasis ours)
National Association of Electricity Consumers for Reforms (NASECORE) v. Energy Regulatory Commission,
24
517 Phil. 23, 61-62 (2006).
Association of Southern Tagalog Electric Cooperatives, Inc. (ASTEC), et al. v. Energy Regulatory
25
Commission, G.R. Nos. 192117 and 192118, September 18, 2012, 681 SCRA 119, 151, citing Commissioner
of Internal Revenue v. Court of Appeals, 329 Phil. 987, 1007 (1996).
26
Id., citing The Veterans Federation of the Philippines v. Reyes, 518 Phil. 668, 704 (2006).
27
Id.
28
G.R. No. 190837, March 5, 2014.
29
Rollo, p. 179.
30
Id. at 47.
Dacudao v. Secretary of Justice, G.R. No. 188056, January 8, 2013, 688 SCRA 109, 123, citing ABAKADA
31
Guro Party List v. Purisima, 584 Phil. 246, 283 (2008).
32
Id.
33
Rollo, p. 179.
Araos, et. al. v. Hon. Regala, 627 Phil. 13, 22 (2010), citing GMA Network, Inc. v. Movie Television Review
34
and Classification Board, 543 Phil. 178, 183 (2007).
35
Section 9.5 of DBM-DOH Joint Circular provides:
9.5 On or after the effectivity of this JC, a PHW previously granted Step Increment Due to Length of Service
shall no longer be granted subsequent Step Increment Due to Length of Service in view of the prohibition in
item (4)(d) of said JR No. 4. Likewise, a PHW hired on or after the effectivity of this JC shall not be granted
Step Increment Due to Length of Service.
36
Re: Entitlement to Hazard Pay of SC Medical and Dental Clinic Personnel, 592 Phil. 389, 397 (2008).
SEPARATE OPINION
BRION, J.:
I write this Separate Opinion to present an alternative approach in resolving the present case. This
alternative approach discusses (and raises questions about) the procedure that this Court observes in
taking jurisdiction over petitions questioning quasi-legislative acts. In my view, the attendant facts
of the present case and the ponencia’s approach aptly illustrate the need to revisit our present approach.
In recent years, we have been relaxing the certiorari requirements of Rule 65 of the Rules of Court1to give
due course to certiorari petitions assailing quasi-legislative acts. Awareness of the impact of this trend is
crucial, since we can only act on the basis of the “judicial power” granted to us by the Constitution. In
blunter terms, our present approach is necessarily rooted in, and must be consistent with, the constitutional
definition of judicial power.
Judicial power, as defined under Section 1, Article VIII of the 1987 Constitution, includes “the duty of the
courts of justice to settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack
or excess of jurisdiction on the part of any branch or instrumentality of the Government.”
Thus, in determining whether the Court should take jurisdiction over a case, it must, necessarily, first
determine whether there is an actual controversy in which the Court can grant the appropriate relief
through its judgment. This may involve private rights that are legally demandable and enforceable,
or public rights, which involve the nullification of a governmental act that had been exercised without, or in
excess of its, jurisdiction.
At present, we have been allowing petitions for certiorari and prohibition to assail a quasi-legislative act
whenever we find a paramount importance in deciding the petitions.
This approach, in my view, has no essential relation to the question of whether an actual controversy exists;
hence, its use as a standard in determining whether to take jurisdiction over a petition isinherently
contrary to the requirements for the exercise of judicial power.
Factual antecedents
The present petition for certiorari and prohibition assails the validity of Joint Circular No. 1 dated November
29, 2012 of the Department of Budget and Management (DBM) and Department of Health (DOH), as well as
Joint Circular dated September 3, 2012 of the DBM and Civil Service Commission (CSC).
The petitioners are officers and members of the Philippine Public Health Association, Inc. (PPHAI). On
January 23, 2013, they sent a letter addressed to the respondents Secretary of Budget and Management
and Secretary of Health, expressing their opposition to the Joint Circulars as they diminish the benefits
granted to them by the Magna Carta of Public Health Workers (Republic Act No. 7305, hereinafter RA
7305).
Thereafter, the petitioners filed a Petition for Certiorari and Prohibition before this Court, imputing grave
abuse of discretion on the respondents for issuing the joint circulars. According to the petitioners, the joint
circulars had been issued with grave abuse of discretion for the following reasons:
(1) the joint circulars impose additional requirements to the grant of

hazard pay, i.e., it requires the PHWs’ duties to expose them to danger,
when RA 7305 does not require such condition;
(2) the joint circulars unduly fix subsistence allowance at Php50 per day for
full-time service and Php25 for part-time service, and these not in
accordance with the prevailing circumstances required by RA
7305;
(3) the joint circulars prematurely took effect on January 1, 2012;
(4) longevity pay had been wrongfully granted only to regular plantilla
positions, and undulywithheld the Step Increment due to Length
of Service from those who have already been granted longevity pay.
[Emphasis supplied.]
The ponencia aptly characterized the respondents’ acts as quasi-legislative in nature; hence, they are
acts not assailable through the writs of certiorari and prohibition under the strict terms of Rule 65 of the
Rules of Court.
From this characterization, the ponencia proceeded to discuss the substantive issues raised in
the petition to “finally resolve the doubt over the Joint Circulars’ validity.”
According to the ponencia, “the pressing issue of whether or not the joint circulars regulating the salaries
and benefits relied upon by public health workers were tainted with grave abuse of discretion rightly
deserves its prompt resolution.”
The ponencia partially granted the petition, and held that the following aspects of the Joint Circulars are
tainted with grave abuse of discretion: (1) the ineligibility of grantees of longevity pay from receiving the
step increment due to length of service is unenforceable as it had not been published in the ONAR; and (2)
the imposition of hazard pay below the minimum prescribed under RA 7305 is invalid.
The traditional approach in assailing quasi-legislative acts
I agree with the ponencia’s conclusion that the petitioners availed of an improper remedy to directly assail
the Joint Circulars before the Court.
A writ of certiorari lies against judicial or quasi-judicial acts, while a writ of prohibition is the proper remedy
to address judicial, quasi-judicial or ministerial acts. Hence, under these terms alone, the present petition is
easily dismissible for having been an improper remedy.
Traditionally, the proper remedy to assail the validity of these joint circulars would have been through an
ordinary action for nullification filed with the proper Regional Trial Court. Any allegation that the respondents
are performing or threatening to perform functions without or in excess of their jurisdiction may
appropriately be prevented or prohibited through a writ of injunction or a temporary restraining order.2 ChanRoblesVirtualawlibrary
Had the petitioners availed of the proper remedy, then immediate recourse to this Court’s original
jurisdiction to issue a writ of certiorari or prohibition would have been avoided. While this Court has original
jurisdiction to issue these extraordinary writs, this jurisdiction is shared with the Regional Trial Court and the
Court of Appeals.
As a matter of policy, direct recourse to the Court is frowned upon and a violation of the policy renders a
petition dismissible under the Doctrine of Hierarchy of Courts.
Despite the observed impropriety of remedies used, the ponencia proceeded to render its decision on the
case, and partially granted it under the following dispositive portion:
WHEREFORE, premises considered, the instant petition is PARTLY GRANTED. The DBM-DOH Joint
Circular, insofar as it lowers the hazard pay at rates below the minimum prescribed by Section 21 of RA No.
7305 and Section 7.1.5 (a) of its Revised IRR, is declared INVALID. The DBM-CSC Joint Circular, insofar as
it provides that an official or employee authorized to be granted Longevity Pay under an existing law is not
eligible for the grant of Step Increment Due to Length of Service, is declaredUNENFORCEABLE. The
validity, however, of the DBM-DOH Joint Circular as to the qualification of actual exposure to danger for
PHW’s entitlement to hazard pay, the rates Php50 and Php25 subsistence allowance, and the entitlement to
longevity pay on the basis of the PHW’s status in the plantilla of regular positions, is UPHELD.
The ponencia’s approach in resolving the petition is not without precedent. Indeed, in the past, we have
granted petitions for certiorari and prohibition that assail quasi-legislative acts despite the use of
inappropriate remedies in questioning the quasi-legislative acts.
In granting the petitions and invalidating the questioned legislative act, we gave consideration to the
“transcendental nature and paramount importance” of deciding the issues they raised. In some
cases, we also invoked “compelling state interest” as reason to justify the early resolution of these
issues,3 and observed as well the need for the Court to make a final and definitive pronouncement on
pivotal issues for everyone’s enlightenment and guidance.4 ChanRoblesVirtualawlibrary
The public importance of resolving issues in a petition should not determine whether the Court
takes jurisdiction over a case
In my view, the public importance of resolving the issues presented in a petition should not determine the
Court’s jurisdiction over a case, as public importance does not affect the subject matter of these petitions.
That a petition relates to a matter of public importance does not make the abuse in the exercise of
discretion any more or less grave.
For instance, we gave due course to the petitions for certiorari in Review Center Association of the
Philippines v. Executive Secretary,5 and in Pharmaceutical and Healthcare Association of the Philippines v.
Secretary of Health,6 both of which assail quasi-legislative acts.
The administrative rules in these petitions carry different public policy reasons behind them, and I cannot
see how these policy goals could have affected the fact that in both cases, the respondent administrative
agency acted outside of its jurisdiction in issuing administrative rules that contradict with, or are not
contemplated by, the laws they seek to implement.
In more concrete terms, the right to have access to quality education, which is the state interest in issuing
the assailed Executive Order No. 566 in Review Center Association of the Philippines v. Executive
Secretary,7 does not have any direct bearing on the fact that its provisions extended beyond the provisions
of the laws it seeks to implement.
The same argument applies to Sections 4(f), 11 and 46 of Administrative Order No. 2006-0012, which had
been invalidated through a certiorari petition in Pharmaceutical and Healthcare Association of the Philippines
v. Secretary of Health.8 That the nation has an interest in promoting the breastfeeding of Filipino infants
does not affect the authority of the Secretary of Health to issue administrative rules that are beyond what
the Milk Code requires.
A law, by its very nature and definition, governs human conduct that is important to society.9 That the
State, through Congress, found that a particular conduct should be regulated already speaks of the
importance of, and need for, this regulation.
Necessarily, any deviation from this regulation carries some degree of importance to the public, because
society, by agreeing to a regulation, has an interest that it be applied to all persons covered by the law,
without exception.
Our Constitution has established how the need for regulation is identified, as well as the process for its
formulation and implementation. The identification function has been given to Congress through the process
of law-making. Implementation, on the other hand, has been given to the Executive. Our task in the
Judiciary comes only in cases of conflict, either in the implementation of these laws or in the exercise of the
powers of the two other branches of government.10 ChanRoblesVirtualawlibrary
This is how our republican, democratic system of government institutionalizes the doctrine of separation of
powers, with each branch of government reigning supreme over its particular designation under the
Constitution.11
ChanRoblesVirtualawlibrary
When we, as the Highest Court of the land, decree that an issue involving the implementation of a law is of
paramount interest, does this declaration not teeter towards the role assigned for Congress, which
possesses the plenary power to determine what needs are to be regulated and how the regulation should
operate?
This problem, I believe, becomes even starker when we look at this phenomenon at the macro-level: when
we, by exception, decide to take jurisdiction in some cases, and apply the general rule in others.
Thereby, we, in effect, determine that public issues are more important or paramount than others.
Taking an active part in determining how public issues are prioritized is not part of the judicial power vested
in the Court. We may do this tangentially, as the outcome of our cases could demonstrate public
importance, but we cannot and should not make this outcome the basis of when we should exercise judicial
power.
A survey of cases involving a petition for certiorari against a quasi-legislative act shows the uneven, and
rather arbitrary, record of how we determine the paramount importance standard.
We have, in the past, relaxed the requirements for certiorari in petitions against the following quasi-
legislative acts: (1) Commission on Audit Circular No. 89-299 lifting the pre-audit of government
transactions of national government agencies;12 (2) Comelec Resolution No. 8678 considering any candidate
holding public appointive office to have ipso facto resigned upon filing his or her Certificate of
Candidacy;13 (3) Comelec Resolution No. 9615 limiting the broadcast and radio advertisements of candidates
and political parties for national election positions to an aggregate total of one hundred twenty (120)
minutes and one hundred eighty (180) minutes, respectively;14 (4) Executive Order No. 566 (EO 566) and
Commission on Higher Education (CHED) Memorandum Order No. 30, series of 2007 (RIRR) directing the
Commission on Higher Education to regulate the establishment and operation of review centers;15 and (5)
Administrative Order (A.O.) No. 2006-0012 implementing the Milk Code.16 ChanRoblesVirtualawlibrary
On the other hand, we applied the strict requirements for a certiorari petition against the following: (1)
Section 2.6 of the Distribution Services and Open Access Rules (DSOAR), which obligates certain customers
to advance the amount needed to cover the expenses of extending lines and installing additional
facilities17 (2) Comelec Resolution No. 7798 prohibiting barangay officials and tanods from staying in polling
places during elections18 (3) Department of Agrarian Reform (DAR) Administrative Order (AO) No. 01-02, as
amended by DAR AO No. 05-07 and DAR Memorandum No. 88 involving the reclassification of agricultural
lands19 (4) Executive Order No. 7 Directing the Rationalization of the Compensation and Position
Classification System in Government Owned and Controlled Corporations and Government Financial
Institutions;20 and (5) the implementing rules and regulations (IRR) of Republic Act No. 9207, otherwise
known as the “National Government Center (NGC) Housing and Land Utilization Act of 2003.”21 ChanRoblesVirtualawlibrary
I believe that all these quasi-legislative acts involve matters that are important to the public. The Court is
not in the position to weigh which of these regulations carried more importance than the others by
exercising jurisdiction over petitions involving some of them and dismissing other petitions outright.
Who are we, for instance, to say that regulating review centers is more important than the conversion of
agricultural lands? Or that the ipso facto resignation of public appointive officials running for office is more
important than the prohibition against barangay officials to stay in polling places during the elections?
To my mind, these issues all affect our nation, and the Court cannot and should not impose any standard,
unless the measure is provided in the Constitution or in our laws, to determine why one petition would be
more important than another, such that the former deserves the relaxation ofcertiorari requirements.
Furthermore, the relaxation of certiorari requirements through the paramount importance exception affects
our approach in reviewing cases brought to us on appeal. Our appellate jurisdiction reviews the decisions
of the lower court for errors of law,22 or errors of law and fact.23
In several cases,24 however, we reversed the decision of the Court of Appeals denying a petition
forcertiorari against a quasi-legislative act based on the terms of the Rules of Court. In these reversals, we
significantly noted the paramount importance of resolving the case on appeal and, on this basis, relaxed the
requirements of the petition for certiorari filed in the lower court.
This kind of approach, to my mind, leads to an absurd situation where we effectively hold that the CA
committed an error of law when it applied the rules as provided in the Rules of Court.
To be sure, when we so act, we send mixed and confusing signals to the lower courts, which cannot be
expected to know when a certiorari petition may or should be allowed despite being the improper remedy.
Additionally, this kind of approach reflects badly on the Court as an institution, as it applies the highly
arbitrary standard of ‘paramount importance’ in place of what is written in the Rules. A suspicious mind may
even attribute malicious motives when the Court invokes a highly subjective standard such as “paramount
importance.”
The public, no less, is left confused by the Court’s uneven approach. Thus, it may not hesitate to file a
petition that violates or skirts the margins of the Rules or its jurisprudence, in the hope that the Court would
consider its presented issue to be of paramount importance and on this basis take cognizance of the
petition.
Assailing quasi-legislative acts through the Court’s expanded jurisdiction
I believe that the better approach in handling the certiorari cases assailing quasi-legislative acts should be to
treat them as petitions invoking the Court’s expanded jurisdiction. Thus, the standard in determining
whether to exercise judicial power in these cases should be the petitioners’ prima facie that showing that the
respondents committed grave abuse of discretion in issuing the quasi-legislative act.
Should the petitioners sufficiently prove, prima facie, a case for grave abuse of discretion, then the petition
should be given due course. If not, then it should be dismissed outright. Through this approach, which
the Court can institutionalize through appropriate rules, the traditional Rule 65 approach can be
maintained, while providing for rules that sets the parameters to invoke the courts’ expanded
jurisdiction to cover situations of grave abuse of discretion in any agency of the government.
Notably, most of the certiorari cases that applied the paramount importance exception eventually granted,
or partially granted, the petition.25 Thus, the Court, in giving due course to the petition must have observed
that it had merit, and this initial determination was sufficient to bypass the requirements for
a certiorari petition.
In other words, it was not the paramount importance of the issues presented that led the Court to decide on
the case; it was - as in the present case - the initially shown possibility that the injuries claimed may be
established and the remedies prayed for may be granted.
To cite a past example, the difference between the petitions assailing the quasi-legislative act placing review
centers under the CHED’s regulation, and the act providing for the conversion of agricultural lands was not
the former’s greater importance so that the rules was relaxed to give it due course. Their difference could be
found in the potency of the issues they presented: in the former, there had been a prima facie showing of
grave abuse of discretion, as shown by the eventual grant of the petition. In the latter, the prime facie grave
abuse of discretion threshold was not met; thus, it was not given due course.
I have additionally observed that in several cases26 dismissing the petition for certiorari against quasi-
legislative acts, we even provided arguments against the substantive issues in these petitions. In these
cases, we held the petition to be procedurally infirm (such that it warranted immediate dismissal), but at the
same time noted that these petitions offer no substantive arguments against the assailed acts, such that the
petition would not be granted even if we were to proceed to give it due course.
In light of these uneven approaches, I believe it to be more practical, and certainly less arbitrary,
if we would only take jurisdiction over a certiorari petition involving a quasi-legislative act
through an initial, cursory determination of whether there had been a prima facie showing of
grave abuse of discretion.27 ChanRoblesVirtualawlibrary
This approach of course should not affect the ordinary remedies that may be availed of to assail quasi-
legislative acts before the lower courts. Certiorari, after all, remains to be an extraordinary writ, to be issued
only when there is no other plain, speedy recourse.
Certiorari, additionally, lies only against acts of grave abuse of discretion – i.e., an act that is not only
legally erroneous, but is often described as “arbitrary, capricious, whimsical, or blatantly in disregard of the
law,” so that government official or agency acting on the matter is divested of jurisdiction.28 ChanRoblesVirtualawlibrary
The respondents committed grave abuse of discretion in insisting that public health workers with
a salary grade of 19 or lower should be given less than 25 percent of their salary as hazard pay.
I agree with the ponencia that the respondents committed grave abuse of discretion in formulating the
hazard pay of public health workers with a salary grade of 19 or lower.
The joint circulars that the respondents formulated determine hazard pay depending on the actual exposure
and level of risk that public health workers experience while at work. While the respondents possess the
discretion to determine how hazard pay is formulated and to categorize it according to risk and exposure,
the formulation should not be contrary to what the Magna Carta for Public Health Workers provides them.
The formulation of hazard pay under the joint circulars provides a hazard pay amounting to 25% of the
PHW’s salary only when they are exposed to high risk hazard for 12 or more days. PHWs exposed during a
lesser period to high or low risks receive lower hazard pay; the same goes for PHWs exposed to low risk for
122 or more days:
Actual Exposure/Level
High Risk Low Risk
of Risk
12 or more days 25% of monthly salary 14% of monthly salary
6 to 11 days 14% of monthly salary 8% of monthly salary
Less than 6 days 8% of monthly salary 5% of monthly salary
This formulation blatantly disregards the text of the Magna Carta, as well as jurisprudence interpreting this
text.
RA 7305 provides that the hazard pay of public health workers with a salary grade of 19 or lower should be
AT LEAST be 25% of their salary, viz:
Section 21. Hazard Allowance. - Public health workers in hospitals, sanitaria, rural health units, main health
centers, health infirmaries, barangay health stations, clinics and other health-related establishments located
in difficult areas, strife-torn or embattled areas, distressed or isolated stations, prisons camps, mental
hospitals, radiation-exposed clinics, laboratories or disease-infested areas or in areas declared under state of
calamity or emergency for the duration thereof which expose them to great danger, contagion, radiation,
volcanic activity/eruption, occupational risks or perils to life as determined by the Secretary of Health or the
Head of the unit with the approval of the Secretary of Health, shall be compensated hazard allowances
equivalent to at least twenty-five percent (25%) of the monthly basic salary of health workers
receiving salary grade 19 and below, and five percent (5%) for health workers with salary grade 20 and
above.
This provision had already been the subject of the Court’s decision in In Re Entitlement To Hazard Pay of SC
Medical and Dental Clinic Personnel,29 where the Court observed that:
In a language too plain to be mistaken, R.A. No. 7305 and its implementing rules mandate that the
allocation and distribution of hazard allowances to public health workers within each of the two salary grade
brackets at the respective rates of 25% and 5% be based on the salary grade to which the covered
employees belong.
While the issue in In Re Entitlement To Hazard Pay of SC Medical and Dental Clinic Personnel involved
hazard allowance for PHWs with a salary of SG 20 and above, the import of the decision is clear: the rates
found in RA 7305 are the minimum rates prescribed for hazard pay, and the government cannot prescribe
any rate lower than these.
That Joint Resolution No. 4 subsequently provided for a uniform benefits package for government employees
does not affect existing Magna Carta benefits, including RA 7305. The Joint Resolution provides:
Nothing in this Joint Resolution shall be interpreted to reduce, diminish or in any way, alter the benefits
provided for in existing laws on Magna Carta benefits for specific officials and employees in government,
regardless of whether said benefits have already been received or have yet to be implemented.
A simple reading of these laws, as well as that of In Re Entitlement To Hazard Pay of SC Medical and Dental
Clinic Personnel clearly shows that PHWs are entitled to the minimum rates for hazard pay provided in RA
7305.
By issuing Joint Circulars that completely disregard this rule, the respondents committed a patent and gross
abuse of its discretion to formulate the amount payable for hazard pay; this disregard amounted to an
evasion of its positive duty to implement RA 7305, particularly the minimum rates it prescribes for hazard
pay.
Thus, the respondents committed grave abuse of discretion in enacting the Joint Circulars. Its provisions
lowering the PHW’s hazard pay below the minimum required in RA 7305 is thus void. Administrative rules
cannot contradict the laws it implements, and in the present case, the contradiction against RA 7305 is an
invalid act on the part of the respondents.
Given the existing grave abuse, it becomes easier and more reasonable to recognize this case as an
exception to the doctrine of hierarchy of courts. This doctrine, of course, is a procedural matter that must
reasonably yield when a greater substantive reason exists.
For these alternative reasons, I concur in the result and vote for the grant of the petition.
Endnotes:
1
Specifically, Rule 65, Section 1 on Certiorari, and Section 2 on Prohibition, viz.:
Section 1. Petition for certiorari. — When any tribunal, board or officer exercising judicial or quasi-judicial
functions has acted without or in excess its or his jurisdiction, or with grave abuse of discretion amounting
to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the
ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging
the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of
such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.
xxxx
Section 2. Petition for prohibition. — When the proceedings of any tribunal, corporation, board, officer or
person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or
his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no
appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved
thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that
judgment be rendered commanding the respondent to desist from further proceedings in the action or
matter specified therein, or otherwise granting such incidental reliefs as law and justice may require.
xxxx
Holy Spirit Homeowners Association v. Defensor, 529 Phil. 573, 588 (2006).
2
Quinto v. Comelec, G.R. No. 189698, December 1, 2009, 606 SCRA 258, 276.
3
GMA Network v. Comelec, G.R. No. 205357, September 02, 2014, 734 SCRA 88, 125 – 126.
4
5
G.R. No. 180046, 602 Phil. 342 (2009).
6
G.R. No. 173034, 561 Phil. 386 (2007).
Supra note 5.
7
Supra note 6.
8
9
The Black’s Law Dictionary provides the following definitions of law:
1. That which is laid down, ordained, or established. A rule or method according to which phenomena or
actions coexist or follow each other. 2. A system of principles and rules of human conduct, being the
aggregate of those commandments and principles which are either prescribed or recognized by the
governing power in an organized jural society as its will in relation to the conduct of the members of such
society, and which it undertakes to maintain and sanction and to use as the criteria of the actions of such
members. "Law" is a solemn expression of legislative will. It orders and permits and forbids. It announces
rewards and punishments. Its provisions generally relate not to solitary or singular cases, but to what
passes in the ordinary course of affairs. Civ. Code La. arts. 1. 2. "Law," without an article, properly implies a
science or system of principles or rules of human conduct, answering to the Latin "jus;" as when it is spoken
of as a subject of study or practice. In this sense, it includes the decisions of courts of justice, as well as
acts of the legislature. The judgment of a competent, court, until reversed or otherwise superseded, is law,
as much as any statute. Indeed, it may happen that a statute may be passed in violation of law, that is, of
the fundamental law or constitution of a state; that it is the prerogative of courts in such cases to declare it
void, or, in other words, to declare it not to be law. Rurrill. 3. A rule of civil conduct prescribed by the
supreme power in a, state. 1 Steph. Comm. 25; Civ. Code Dak.Definition of Law, Black’s Law Dictionary
Website, athttp://thelawdictionary.org/letter/l/page/13/ (July 27, 2015).
10
Belgica, et. al. v. Ochoa, G.R. No. 208566, November 19, 2013, 710 SCRA 1, 106 – 107.
11
Angara v. Electoral Commission, 63 Phil 139, 156 – 157 (1936).
12
Dela Llana v. COA, 681 Phil. 186 (2012).
13
Quinto v. Comelec, 621 Phil. 236 (2009).
14
GMA Network v. Comelec, G.R. No. 205357, September 02, 2014, 734 SCRA 88.
15
Review Center Association of the Philippines v. Ermita, 602 Phil. 342 (2009).
16
Pharmaceutical and Healthcare Association of the Philippines v. Secretary of Health, 561 Phil. 386 (2007).
17
CREBA v. ERC, 638 Phil. 542 (2010).
18
Concepcion v. Comelec, 609 Phil. 201 (2009).
19
CREBA v. Secretary of Agrarian Reform, 635 Phil. 283 (2010).
20
Galicto v. Aquino, G.R. No. 193978, February 28, 2012, 667 SCRA 150.
21
Supra note 2.
22
Rule 45 of the Rules of Court limits the issues in appeal by certiorari to the Supreme Court to questions of
law, viz:
Section 1. Filing of petition with Supreme Court. — A party desiring to appeal bycertiorari from a judgment
or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other
courts whenever authorized by law, may file with the Supreme Court a verified petition for review
on certiorari. The petition shall raise only questions of law which must be distinctly set forth. (1a, 2a)
23
Jurisprudence teaches us that "(a)s a rule, the jurisdiction of this Court in cases brought to it from the
Court of Appeals is limited to the review and revision of errors of law allegedly committed by the appellate
court, as its findings of fact are deemed conclusive. As such this Court is not duty-bound to analyze and
weigh all over again the evidence already considered in the proceedings below. This rule, however, is not
without exceptions." The findings of fact of the Court of Appeals, which are as a general rule deemed
conclusive, may admit of review by this Court:
(1) when the factual findings of the Court of Appeals and the trial court are contradictory;
(2) when the findings are grounded entirely on speculation, surmises, or conjectures;
(3) when the inference made by the Court of Appeals from its findings of fact is manifestly mistaken,
absurd, or impossible;
(4) when there is grave abuse of discretion in the appreciation of facts;
(5) when the appellate court, in making its findings, goes beyond the issues of the case, and such findings
are contrary to the admissions of both appellant and appellee;
(6) when the judgment of the Court of Appeals is premised on a misapprehension of facts;
(7) when the Court of Appeals fails to notice certain relevant facts which, if properly considered, will justify a
different conclusion;
(8) when the findings of fact are themselves conflicting;
(9) when the findings of fact are conclusions without citation of the specific evidence on which they are
based; and
(10) when the findings of fact of the Court of Appeals are premised on the absence of evidence but such
findings are contradicted by the evidence on record. Fuentes v. CA, G.R. No. 109849, February 26, 1997.
24
See, as examples, the following cases: Metropolitan Bank and Trust Company v. National Wages
Productivity Commission, 543 Phil. 318 (2007) and Equi-Asia Placement v. DFA, 533 Phil. 590 (2006).
25
See Quinto v. Comelec, supra note 13; Review Center Association of the Philippines v. Ermita, supra note
15; and Pharmaceutical and Healthcare Association of the Philippines v. Secretary of Health, supra note 16.
CREBA v Secretary of Agrarian Reform, supra note 19 and Holy Spirit Home Owners Association v.
26
Defensor, supra note 21.
27
See J. Brion’s discussion on the Power of Judicial Review in his Concurring Opinion inImbong v. Executive
Secretary, G.R. No.204819, April 8, 2014, 721 SCRA 146, 489 – 491.
28
The term grave abuse of discretion is defined as “a capricious and whimsical exercise of judgment so
patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law, as where the power is exercised in an arbitrary and despotic manner because of passion or
hostility.” Office of the Ombudsman v. Magno, G.R. No. 178923, November 27, 2008, 572 SCRA 272, 286-
287 citing Microsoft Corporation v. Best Deal Computer Center Corporation, 438 Phil. 408, 414
(2002); Suliguin v. Commission on Elections, G.R. No. 166046, March 23 2006, 485 SCRA 219, 233; Natalia
Realty, Inc. v. Court of Appeals, 440 Phil. 1, 19-20 (2002);Philippine Rabbit Bus Lines, Inc. v. Goimco, Sr.,
512 Phil. 729, 733-734 (2005) citingLand Bank of the Philippines v. Court of Appeals, 456 Phil. 755, 786
(2003); Duero v. Court of Appeals, 424 Phil. 12, 20 (2002) citing Cuison v. Court of Appeals, G.R. No.
128540, April 15, 1998, 289 SCRA 159, 171.
29
A.M. No. 03-9-02-SC, 592 Phil. 389 (2008).
CONCURRING and DISSENTING OPINION
LEONEN, J.:
I concur in the result with regard to the declaration that several provisions in the joint circulars are invalid
and unenforceable. However, with much regret, I cannot join the ponencia.
The remedy sought by petitioners should be granted. The joint circulars promulgated by the Department of
Budget and Management were issued with grave abuse of discretion because it contravened the provisions
of Republic Act No. 7305,1 also known as the Magna Carta of Public Health Workers.
Certiorari and Prohibition are available remedies when there is a proper allegation of breach of a
constitutional provision and an actual case or controversy that can narrow the formulation of the relevant
doctrines.
Article VIII, Section 1, paragraph 2 of the 1987 Constitution states that:

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which
are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government. (Emphasis supplied)
In Tañada v. Angara,2 this court’s duty was characterized as follows:

As explained by former Chief Justice Roberto Concepcion, “the judiciary is the final arbiter on the question of
whether or not a branch of government or any of its officials has acted without jurisdiction or in excess of
jurisdiction or so capriciously as to constitute an abuse of discretion amounting to excess of jurisdiction. This
is not only a judicial power but a duty to pass judgment on matters of this nature.”
As this Court has repeatedly and firmly emphasized in many cases, it will not shirk, digress from or abandon
its sacred duty and authority to uphold the Constitution in matters that involve grave abuse of discretion
brought before it in appropriate cases, committed by any officer, agency, instrumentality or department of
the government.
As the petition alleges grave abuse of discretion and as there is no other plain, speedy or adequate remedy
in the ordinary course of law, we have no hesitation at all in holding that this petition should be given due
course and the vital questions raised therein ruled upon under Rule 65 of the Rules of Court.
Indeed, certiorari, prohibition and mandamus are appropriate remedies to raise constitutional issues and to
review and/or prohibit/nullify, when proper, acts of legislative and executive officials. On this, we have no
equivocation.3 (Citations omitted)
In addition, this court recently clarified in Araullo v. Aquino III:4 cralawlawlibrary
With respect to the Court, however, the remedies of certiorari and prohibition are necessarily broader in
scope and reach, and the writ of certiorari or prohibition may be issued to correct errors of jurisdiction
committed not only by a tribunal, corporation, board or officer exercising judicial, quasi-judicial or
ministerial functions but also to set right, undo and restrain any act of grave abuse of discretion amounting
to lack or excess of jurisdiction by any branch or instrumentality of the Government, even if the latter does
not exercise judicial, quasi-judicial or ministerial functions. This application is expressly authorized by the
text of the second paragraph of Section 1, [Article VIII of the 1987 Constitution].5
The Department of Budget and Management promulgated joint circulars in clear and patent breach of
Republic Act No. 7305. The joint circulars appear to be based on Joint Resolution No. 4, Series of 2009,
which amended several laws.6 The implementation of the joint circulars is imminent and affects a critical
sector of government employees. The parties’ positions have thus become sufficiently adversarial and
properly framed within clear factual ambients.
II
Republic Act No. 7305 specifically provides that the Management-Health Workers’ Consultative Council must
be consulted for the computation and grant of allowances to public health workers. Consultation is clearly
statutory. The pertinent provisions of Republic Act No. 7305 provide:
SEC. 22. Subsistence Allowance. — Public health workers who are required to render service within the
premises of hospitals, sanitaria, health infirmaries, main health centers, rural health units and barangay
health stations, or clinics, and other health-related establishments in order to make their services available
at any and all times, shall be entitled to full subsistence allowance of three (3) meals which may be
computedin accordance with prevailing circumstances as determined by the Secretary of Health in
consultation with the Management-Health Workers’ Consultative Councils, as established under Section 33 of
this Act: Provided, That representation and travel allowance shall be given to rural health physicians as
enjoyed by municipal agriculturists, municipal planning and development officers and budget officers.
....
SEC. 33. Consultation with Health Workers’ Organizations. — In the formulation of national policies
governing the social security of public health workers, professional and health workers’ organizations or
union as well as other appropriate government agencies concerned shall be consulted by the Secretary of
Health. For this purpose, Management-Health Workers’ Consultative Councils for national, regional and other
appropriate levels shall be established and operationalized. (Emphasis supplied)
However, it appears that the joint circulars were issued without the Secretary of the Department of Health
consulting with the Management-Health Workers’ Consultative Council. It also appears that the assailed joint
circulars7 were issued pursuant to Joint Circular No. 4, Series of 2009.8 Joint Resolution No. 4 is entitled
“Joint Resolution Authorizing the President of the Philippines to Modify the Compensation and Position
Classification System of Civilian Personnel and the Base Pay Schedule of Military and Uniformed Personnel in
the Government, and for Other Purposes.”9 ChanRoblesVirtualawlibrary
Item 610 of Joint Resolution No. 4 removed the requirement that the Secretary of the Department of Health
should discuss with consultative councils the rates of allowances and the release of Magna Carta benefits.
This was also reflected in Provision 1.1 of Department of Budget and Management-Department of Health
Joint Circular No. 1, Series of 2012,11 which states:
1.0 Background Information
....
1.2 On the other hand, Item (6), “Magna Carta Benefits,” of the Senate and
House of Representatives Joint Resolution (JR) No. 4, s. 2009, approved
on June 17, 2009, “Joint Resolution Authorizing the President of the
Philippines to Modify the Compensation and Position Classification
System of Civilian Personnel and the Base Pay Schedule of Military and
Uniformed Personnel in the Government, and for Other Purposes,”
provides among others, that the Department of Budget and Management
(DBM), in coordination with the agencies concerned, shall determine the
qualifications, conditions, and rates in the grant of said benefits, and to
determine those that may be categorized under the Total Compensation
Framework. It further states that the consultative councils, departments,
and officials previously authorized to issue the implementing rules and
regulations of Magna Carta benefits shall no longer exercise said
functions relative to the grant of said benefits.
1.3 Pursuant to the compensation principles espoused in the said JR No. 4,
the grant of compensation-related Magna Carta benefits to PHWs needs
to be rationalized to ensure equity and uniformity in remuneration.
(Emphasis supplied)
The creation of consultative councils for public health workers was a significant right granted in Republic Act
No. 7305. Section 22 of Republic Act No. 7305 required the Secretary of the Department of Health to consult
with the Management-Health Workers’ Consultative Council to provide for the computation of subsistence
allowances. The concept of this consultative council was clearly articulated in Section 33. The participation of
health workers in the drafting of the guidelines empowered them. It also achieved several purposes, which
included ensuring immediate feedback from health workers, and thus increasing the possibility of improving
the overall efficiency of all health agencies.
Announced as part of the package of rights in Republic Act No. 7305, the Management-Health Workers’
Consultative Council was taken away piecemeal by a broadly entitled joint resolution. The validity of Joint
Resolution No. 4 was suspect because it revised several laws and was passed by Congress in a manner not
provided by the Constitution.12ChanRoblesVirtualawlibrary
Department of Budget and Management-Civil Service Commission Joint Circular No. 1, Series of 2012,13 also
cites Joint Resolution No. 4, Series of 2009, as follows:
1.0 Background
Item (4)(d) of the Senate and House of Representatives Joint Resolution No. 4, s. 2009, “Joint Resolution
Authorizing the President of the Philippines to Modify the Compensation and Position Classification System of
Civilian Personnel and the Base Pay Schedule of Military and Uniformed Personnel in the Government, and
for Other Purposes,” approved by the President of the Philippines on June 17, 2009, provides as follows:
(d) Step Increments – An employee may progress from Step 1 to Step 8 of the salary grade allocation of
his/her position in recognition of meritorious performance based on a Performance Management System
approved by the CSC and/or through length of service, in accordance with the rules and regulations to be
promulgated jointly by the DBM and the CSC.
Employees authorized to receive Longevity Pay under existing laws shall no longer be entitled to Step
Increments Due to Length of Service. The grant of Step Increment based on Merit and Performance shall be
in lieu of the Productivity Incentive Benefit.
Joint resolutions are not sufficient to notify the public that a statute is being passed or amended. As in this
case, the amendment to a significant empowering provision in Republic Act No. 7305 was done through a
joint resolution. The general public will be misled when it attempts to understand the state of the law since
it will also have to comb through joint resolutions in order to ensure that published Republic Acts have not
been amended.
III
Another instance showing grave abuse of discretion is that Department of Budget and Management-
Department of Health Joint Circular No. 1, Series of 2012 provides for rates of hazard pay that are lower
than the minimum provided under Republic Act No. 7305.14 This was recognized in the ponencia when it held
that the rates of hazard pay must be invalidated for contravening Republic Act No. 7305.15 ChanRoblesVirtualawlibrary
IV
Petitioners further argue that the assailed joint circulars are null and void because these were not published
in accordance with the 30-day period as required by Republic Act No. 7305. The ponencia addresses this
issue as follows:
Indeed, publication, as a basic postulate of procedural due process, is required by law in order for
administrative rules and regulations to be effective. There are, however, several exceptions, one of which
are interpretative regulations which “need nothing further than their bare issuance for they give no real
consequence more than what the law itself has already prescribed.” These regulations need not be published
for they add nothing to the law and do not affect substantial rights of any person.
....
In this case, the DBM-DOH Joint Circular in question gives no real consequence more than what the law
itself had already prescribed. There is really no new obligation or duty imposed by the subject circular for it
merely reiterated those embodied in RA No. 7305 and its Revised IRR. The Joint Circular did not modify,
amend nor supplant the Revised IRR, the validity of which is undisputed. Consequently, whether it was duly
published and filed with the UP Law Center – ONAR is necessarily immaterial to its validity because in view
of the pronouncements above, interpretative regulations, such as the DBM-DOH circular herein, need not be
published nor filed with the UP Law Venter – ONAR in order to be effective. Neither is prior hearing or
consultation mandatory.16 (Citations omitted)
The ponencia further discusses that in any case, the Department of Budget and Management-Department of
Health Joint Circular No. 1, Series of 2012, was published in the Philippine Star on December 29, 2012.17 ChanRoblesVirtualawlibrary
Section 35 of Republic Act No. 7305 states:

SEC. 35. Rules and Regulations. — The Secretary of Health after consultation with appropriate agencies of
the Government as well as professional and health workers’ organizations or unions, shall formulate and
issued pursuant to this Section shall take effect thirty (30) days after publication in a newspaper of general
circulation.
Republic Act No. 7305 is explicit that rules and regulations “take effect thirty (30) days after publication.”
While Department of Budget and Management-Department of Health Joint Circular No. 1, Series of 2012,
provided for its own date of effectivity, it cannot amend what is provided in the law it implements. In this
case, the circular took effect after the lapse of only three (3) days.
Moreover, Republic Act No. 7305 is a law while Department of Budget and Management-Department of
Health Joint Circular No. 1, Series of 2012, is an administrative circular. As we ruled in Trade and
Investment Development Corporation of the Philippines v. Civil Service Commission,18 an administrative
circular cannot amend the provisions of a law.
While rules issued by administrative bodies are entitled to great respect, “[t]he conclusive effect of
administrative construction is not absolute. [T]he function of promulgating rules and regulations may be
legitimately exercised only for the purpose of carrying the provisions of the law into effect. x x x
[A]dministrative regulations cannot extend the law [nor] amend a legislative enactment; x x x
administrative regulations must be in harmony with the provisions of the law[,]” and in a conflict between
the basic law and an implementing rule or regulation, the former must prevail.19 (Emphasis supplied, citation
omitted)
I agree with the ponencia that the Department of Budget and Management-Civil Service Commission Joint
Circular No. 1, Series of 2012, is unenforceable because it has not been deposited with the Office of the
National Administrative Register at the University of the Philippines Law Center.20 However, it is my opinion
that Department of Budget and Management-Department of Health Joint Circular No. 1, Series of 2012,
should also be deposited with the Office of the National Administrative Register before it can be validly
enforced.
Book VII, Chapter 2, Section 3 of the Administrative Code21 provides that:

SECTION 3. Filing.—(1) Every agency shall file with the University of the Philippines Law Center three (3)
certified copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are
not filed within three (3) months from that date shall not thereafter be the basis of any sanction against any
party or persons.
(2) The records officer of the agency, or his equivalent functionary, shall carry out the requirements of this
section under pain of disciplinary action.
(3) A permanent register of all rules shall be kept by the issuing agency and shall be open to public
inspection.
Book VII, Chapter 1, Section 2 of the Administrative Code defines “rule” as:
SECTION 2. Definitions.—As used in this Book:

(2) “Rule” means any agency statement of general applicability that implements or interprets a law, fixes
and describes the procedures in, or practice requirements of, an agency, including its regulations. The term
includes memoranda or statements concerning the internal administration or management of an agency not
affecting the rights of, or procedure available to, the public.
The assailed joint circulars can be considered as “rules” that must be deposited with the Office of the
National Administrative Register. These circulars provide guidelines for the implementation of the benefits
provided under Republic Act No. 7305.
The publication of the assailed joint circulars in a newspaper of general circulation does not remove the
requirement of the Administrative Code that the circulars must be deposited with the Office of the National
Administrative Register. The pertinent portion of the Guidelines for Receiving and Publication of Rules and
Regulations Filed with the UP Law Center22 provides:
2. All rules and regulations adopted after the effectivity of the Administrative Code of 1987, which date is on
November 23, 1989, must be filed with the U.P. Law Center by either the adopting agency or the
implementing agency of the Executive Department authorized to issue rules and regulations and said rules
and regulations shall be effective, in addition to other rule-making requirements by law not inconsistent with
the provisions of this Code, fifteen days from the date of their filing with the U.P. Law Center unless a
different date is fixed by law, or specified in the rule in cases of imminent danger to public health, safety,
and welfare, the existence of which must be expressed in a statement accompanying the rule. The agency
shall take appropriate measures to make emergency rules known to persons who may be affected by them.
The agency should be advised to inform the U.P. Law Center of the date of effectivity of each rule and when
publication in a newspaper is required, to furnish the date/dates of the newspapers where published. In such
a case the counting should be reckoned with the last date of publication.23 (Emphasis supplied)
VI
Admittedly, not all administrative issuances are required to be filed with the Office of the National
Administrative Register.24 Nevertheless, it is my opinion that the circulars in this case affect third parties.
The hazard pay and other benefits of public health workers affect third parties because the grant of these
benefits involves the use of public funds.
Parenthetically, all Department of Budget and Management circulars affect the public because the
Department’s circulars involve the use of public funds collected from taxpayers. Hence, all Department of
Budget and Management circulars must be deposited with the Office of the National Administrative
Register.25 Taxpayers have the right to know where public funds were used and for what reasons. There is
no harm in requiring that circulars be deposited with the Office of the National Administrative Register. In
fact, the requirement that rules must be deposited with the Office of the National Administrative Register
can be easily complied with. To opt not to deposit a rule with the Office of the National Administrative
Register is suspect for the public has the right to be informed of government rules and regulations, more so
if the rule involves the use of public funds.
ACCORDINGLY, I concur in the result.

Endnotes:
1
Rep. Act No. 7305 was approved on March 26, 1992.
338 Phil. 546 (1997) [Per J. Panganiban, En Banc].

2
3
Id. at 574–575.
728 Phil. 1 (2014) [Per J. Bersamin, En Banc].

4
Id. at 74.
5
6
Joint Resolution No. 4 amends the following laws: Rep. Act No. 7305 (1992) or the Magna Carta of Public
Health Workers; Rep. Act No. 4670 (1966) or the Magna Carta for Public School Teachers; Rep. Act No.
8439 (1997) or the Magna Carta for Scientists, Engineers, Researchers and Other Science and Technology
Personnel in Government; Rep. Act No. 9433 (2007) or the Magna Carta for Public Social Workers; Rep. Act
No. 8551 (1998) or the Philippine National Police Reform and Reorganization Act of 1998; Exec. Order No.
107 (1999) or Specifying the Salary Grades of the Officers and Enlisted Personnel of the Philippine National
Police pursuant to Section 36 of Republic Act No. 8551, otherwise known as the Philippine National Police
Reform and Reorganization Act of 1998; Rep. Act No. 9166 (2002) or An Act Promoting the Welfare of the
Armed Forces of the Philippines by Increasing the Rate of Base Pay and other Benefits of its Officers and
Enlisted Personnel and for Other Purposes; Rep. Act No. 9286 (2004) or An Act Further Amending
Presidential Decree No. 198, otherwise known as The Provincial Water Utilities Act of 1973, as amended;
Rep. Act No. 7160 (1991) or the Local Government Code of 1991; Rep. Act No. 9173 (2002) or the
Philippine Nursing Act of 2002.
7
The assailed joint circulars are Department of Budget and Management-Civil Service Commission Joint
Circular No. 1, Series of 2012, and Department of Budget and Management-Department of Health Joint
Circular No. 1, Series of 2012.
8
Ponencia, p. 7.
9
Joint Resolution No. 4 was dated July 28, 2008 and was approved by then President Gloria Macapagal-
Arroyo on June 17, 2009.
10
Joint Resolution No. 4 (2008), item 6 provides:
(6) Magna Carta Benefits – Within ninety (90) days from the effectivity of this Joint Resolution, the DBM is
hereby authorized to issue the necessary guidelines, rules and regulations on the grant of Magna Carta
benefits authorized for specific officials and employees in the government to determine those that may be
categorized in the Total Compensation Framework.
Nothing in this Joint Resolution shall be interpreted to reduce, diminish or, in any way, alter the benefits
provided for in existing laws on Magna Carta benefits for specific officials and employees in government,
regardless of whether said benefits have been already received or have yet to be implemented.
The DBM, in coordination with the agencies concerned, shall determine the qualifications, conditions and
rates in the grant of said benefits. Accordingly, the consultative councils, departments and officials
previously authorized to issue the implementing rules and regulations of Magna Carta benefits shall no
longer exercise said function relative to the grant of such benefits. (Emphasis supplied)
Rules and Regulations on the Grant of Compensation-Related Magna Carta Benefits to Public Health
11
Workers (PHWs) (2012).
12
Const., art. VI, secs. 26 and 27 provide:
SECTION 26. (1) Every bill passed by the Congress shall embrace only one subject which shall be expressed
in the title thereof.
(2) No bill passed by either House shall become a law unless it has passed three readings on separate days,
and printed copies thereof in its final form have been distributed to its Members three days before its
passage, except when the President certifies to the necessity of its immediate enactment to meet a public
calamity or emergency. Upon the last reading of a bill, no amendment thereto shall be allowed, and the vote
thereon shall be taken immediately thereafter, and the yeas and nays entered in the Journal. (Emphasis
supplied).
SECTION 27. (1) Every bill passed by the Congress shall, before it becomes a law, be presented to the
President. If he approves the same, he shall sign it; otherwise, he shall veto it and return the same with his
objections to the House where it originated, which shall enter the objections at large in its Journal and
proceed to reconsider it. If, after such reconsideration, two-thirds of all the Members of such House shall
agree to pass the bill, it shall be sent, together with the objections, to the other House by which it shall
likewise be reconsidered, and if approved by two-thirds of all the Members of that House, it shall become a
law. In all such cases, the votes of each House shall be determined by yeas or nays, and the names of the
Members voting for or against shall be entered in its Journal. The President shall communicate his veto of
any bill to the House where it originated within thirty days after the date of receipt thereof; otherwise, it
shall become a law as if he had signed it.
(2) The President shall have the power to veto any particular item or items in an appropriation, revenue, or
tariff bill, but the veto shall not affect the item or items to which he does not object. (Emphasis supplied)
On the other hand, the House Rules of the House of Representatives specifically provides:
Section. 58. Third Reading. . . .
No bill or joint resolution shall become law unless it passes three (3) readings on separate days and
printed copies thereof in its final form are distributed to the Members three (3) days before its passage
except when the President certifies to the necessity of its immediate enactment to meet a public calamity or
emergency. (Emphasis supplied)
With the insertion of “joint resolution,” it seems that Congress intercalated a procedure not sanctioned by
the Constitution.
13
Rules and Regulations on the Grant of Step Increment/s Due to Meritorious Performance and Step
Increment Due to Length of Service (2012).
14
Rollo, pp. 32–33.
15
Ponencia, p. 16.
16
Id. at 11–14.
17
Id. at 14.
18
692 SCRA 384 (2013) [Per J. Brion, En Banc].
19
Id. at 399.
20
Ponencia, p. 15.
21
Exec. Order No. 292 (1987).
22
Guidelines for Receiving and Publication of Rules and Regulations Filed with the UP Law Center
<http://law.upd.edu.ph/index.php?option=com_content&view=category&id=324&Itemid=509> (visited
April 6, 2015).
23
Id.
The Guidelines for Receiving and Publication of Rules and Regulations Filed with the UP Law Center
24
provide:
9. Rules and Regulations which need not be filed with the U.P. Law Center, shall, among others, include but
not be limited to, the following:
a) Those which are interpretative regulations and those merely internal in nature, that is, regulating only the
personnel of the Administrative agency and not the public;
b) Instructions on the case studies made in petitions for adoption;
c) Rules laid down by the head of a government agency on the assignments or workload of his personnel or
the wearing of uniforms;
d) Rules and regulations affecting only a particular or specific sector and circularized to them;
e) Instructions by administrative supervisors concerning the rules and guidelines to be followed by their
subordinates in the performance of their duties;
f) Memoranda or statements concerning the internal administration or management of an agency not

affecting the rights of, or procedure available to, the public;
g) Memoranda or circulars merely disseminating any law, executive order, proclamation, and issuances of
other government agencies.
25
A comparison of the issuances published by the Office of the National Administrative Register
<http://law.upd.edu.ph/index.php?option=com_content&view=category&id=324&Itemid=509> visited April
6, 2015) and the issuances uploaded on the Department of Budget and Management’s website
<http://www.dbm.gov.ph/?page_id=815> (visited April 6, 2015) show that there were years when the
Department of Budget and Management did not file copies of its circulars with the Office of the National
Administrative Register.cralawred
Bureau of Customs v. Devanadera, GR 193253, 8 September 2015
EN BANC
September 8, 2015
G.R. No. 193253
BUREAU OF CUSTOMS, Petitioner,

vs.
THE HONORABLE AGNES VST DEVANADERA, ACTING SECRETARY, DEPARTMENT OF
JUSTICE; HONORABLE JOVENCITO R. ZUNO, PEDRITO L. RANCES, ARMAN A. DE ANDRES,
PAUL CHI TING CO, KENNETH PUNDANERA, MANUEL T. CO, SALLY L. CO,, STANLEY L.
TAN, ROCHELLE E. VICENCIO, LIZA R. MAGAWAY, JANICE L. CO, VIVENCIO ABANO, GREG
YU, EDWIN AGUSTIN, VICTOR D. PIAMONTE, UNIOIL PETROLEUM PHILIPPINES, INC., and
OILINK, INTERNATIONAL, INC., Respondents.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to
reverse and set aside the Court of Appeals (CA) Resolutions dated March 26, 2010 and August 4,
1
2010, and to reinstate the petition for certiorari in CA-G.R. SP No. 113069, or in the alternative, to
2
issue a decision finding probable cause to prosecute the private respondents for violation of
Sections 3601 and 3602, in relation to Sections 2503 and 2530, paragraphs f and l (3), (4) and (5) of
the Tariff and Customs Code of the Philippines (TCCP), as amended.
The antecedents are as follows:
Private respondent UNIOIL Petroleum Philippines, Inc. is engaged in marketing, distribution, and
sale of petroleum, oil and other products, while its co-respondent OILINK International, Inc. is
engaged in manufacturing, importing, exporting, buying, selling, or otherwise dealing in at wholesale
and retails of petroleum, oil, gas and of any and all refinements and byproducts thereof. Except for
respondent Victor D. Piamonte who is a Licensed Customs Broker, the following private respondents
are either officers or directors of UNIOIL or OILINK:
1. Paul Chi Ting Co – Chairman of UNIOIL and OILINK
2. Kenneth Pundanera – President/Director of UNIOIL
3. Manuel T. Co – Officer/Director of UNIOIL
4. Sally L. Co – Officer/Director of UNIOIL
5. Stanley L. Tan – Officer/Director of UNIOIL
6. Rochelle E. Vicencio – Corporate Administrative Supervisor of UNIOIL
7. Liza R. Magaway – President of OILINK
8. Janice L. Co – Director of OILINK
9. Vivencio Abaño – Director of OILINK
10. Greg Yu – Director of OILINK
11. Edwin Agustin – Corporate Secretary of OILINK
On January 30, 2007, Commissioner Napoleon L. Morales of petitioner Bureau of Customs (BOC)
issued Audit Notification Letter (ANL) No. 0701246, informing the President of OILINK that the Post
3
Entry Audit Group (PEAG) of the BOC will be conducting a compliance audit, including the
examination, inspection, verification and/or investigation of all pertinent records of OILINK's import
transactions for the past three (3)-year period counted from the said date.
On March 2, 2007, a pre-audit conference was held between the BOC Audit Team and the4
representatives of OILINK. During the conference, the Audit Team explained to OILINK
5
representatives the purpose of the postentry audit and the manner by which it would be conducted,
and advised it as to the import documents required for such audit.
On March 14, 2007, OILINK submitted to the Audit Team the following documents: Post-Entry Audit
Group General Customs Questionnaire, General Information Sheet for the year 2006, SEC
Registration, Articles of Incorporation, Company By-laws, and Audited Financial Report for the year
2005.
On April 20, 2007, the Audit Team requested OILINK to submit the other documents stated in the
List of Initial Requirements for Submission, namely: 2004 Audited Financial Report, 2004-2006
Quarterly VAT Returns with the accompanying schedule of importations, Organizational
chart/structure, and List of foreign suppliers with details on the products imported and the total
amount, on a yearly basis.
On May 7, 2007, OILINK expressed its willingness to comply with the request for the production of
the said documents, but claimed that it was hampered by the resignation of its employees from the
Accounting and Supply Department. OILINK also averred that it would refer the matter to the
Commissioner of Customs in view of the independent investigation being conducted by the latter.
On June 4, 2007, OILINK sent a letter stating that the documents which the Audit Team previously
requested were available with the Special Committee of the BOC, and that it could not open in the
meantime its Bureau of Internal Revenue (BIR) – registered books of accounts for validation and
review purposes.
In a letter dated July 11, 2007, the Audit Team informed OILINK of the adverse effects of its request
for the postponement of the exit conference and its continuous refusal to furnish it the required
documents. It advised OILINK that such acts constitute as waiver on its part to be informed of the
audit findings and an administrative case would be filed against it, without prejudice to the filing of a
criminal action.
On July 24, 2007, Commissioner Morales approved the filing of an administrative case against
OILINK for failure to comply with the requirements of Customs Administrative Order (CAO) No. 4-
2004. Such case was filed on July 30, 2007.
6
On September 20, 2007, an Order was issued by the Legal Service of the BOC, submitting the case
for resolution in view of OILINK's failure to file its Answer within the prescribed period.
On December 14, 2007, the Legal Service of the BOC rendered a Decision finding that OILINK
violated Section IV.A.2(c) and (e) of CAO 4- 2004 when it refused to furnish the Audit Team copies
7
of the required documents, despite repeated demands. The dispositive portion of the Decision
states:
WHEREFORE, in view of the foregoing, this Office finds herein respondent liable for violating
Sections IV.A.2 (c) and (e) of Customs Administrative Order No. 4-2004, and a DECISION is hereby
rendered:
1. Ordering OILINK INTERNATIONAL CORPORATION to pay the equivalent of twenty

percent (20%) ad valorem on the article/s subject of the Importation for which no records
were kept and maintained as prescribed in Section 2504 of the Customs Code in the amount
of Pesos: Two Billion Seven Hundred Sixty-Four Million Eight Hundred Fifty-Nine
Thousand Three Hundred Four and 80/100 (Php 2,764,859,304.80);
2. Ordering the Bureau of Customs to hold the delivery or release of subsequent imported
articles to answer for the fine, any revised assessment, and/or as a penalty for failure to keep
records.
This is without prejudice to the filing of a criminal case or any appropriate legal action against the
importer in order to protect the interest of the government and deter other importers from committing
the same offense.
SO ORDERED. 8
Pursuant to the Decision dated December 14, 2007, Commissioner Morales, in a letter of even date,
9
directed the President of OILINK to pay the BOC the administrative fine of _2,764,859,304.80 for
violation of CAO No. 4-2004, in relation to Section 2504 of the TCCP. Copy of the said Decision and
letter were served to OILINK through personal service on December 28, 2007. 10
On March 13, 2008, Atty. Noemi B. Alcala, Officer-in-Charge, Collection Service, Revenue and
Monitoring Group, sent a final demand letter for OILINK to settle the administrative fine, otherwise,
the BOC will be compelled to file the necessary legal action and put in force Section 1508 of the
11
TCCP against its succeeding shipments to protect the government's interest. 12
On April 23, 2008, a Hold Order was issued by Horacio P. Suansing, Jr., District Collector, Port of
13
Manila, against all shipments of OILINK for failure to settle its outstanding account with the BOC and
to protect the interest of the government pursuant to Section 1508 of the TCCP.
On May 2, 2008, Rochelle E. Vicencio, Corporate Administrative Supervisor of UNIOIL, citing the
existing Terminalling Agreement dated January 2, 2008 with OILINK for the Storage of UNIOIL's
aromatic process oil and industrial lubricating oils (collectively, "base oils"), requested District
Collector Suansing Jr. to allow it to withdraw base oils from OILINK's temporarily closed Terminal.
On May 6, 2008, Commissioner Morales granted the request of UNIOIL to withdraw its base oils
stored at OILINK's terminal/depot based on the Terminalling Agreement between the two
companies, subject to the following conditions:
1. Only Unioil products shall be withdrawn subject to proper inventory by the BIR and BOC.
2. Appropriate duties and taxes due on the products to be withdrawn are fully paid or settled.
3. The company should allow the operation/withdrawal to be closely monitored and

continuously underguarded by assigned Customs personnel. 14
On May 9, 2008, a Warrant of Seizure and Detention (WSD), docketed as Seizure Identification
(S.I.) No. 2008-082, was issued by District Collector Suansing Jr., directing the BOC officials to seal
and padlock the oil tanks/depots of OILINK located in Bataan.
On May 12, 2008, Kenneth C. Pundanera, Operations Manager of UNIOIL, requested Zaldy E.
Almoradie, District Collector of Mariveles, Bataan, for permission to release UNIOIL-owned products
from OILINK's storage terminal. Pertinent portion of the request letter reads:
Unioil is a licensed importer of various Petroleum Products by virtue of its import license LTAD-0-
021-2002 issued on March 26, 2002 which was revised to include all other petroleum products in
2007 through LTAMII (P) 001-10-07-13639. To pursue its line of business, Unioil has an existing
Terminalling Agreement with Oilink for the storage of various Unioil products at the Oilink terminal
located at Lucanin Pt., Mariveles, Bataan.
In view of the said temporary closure of Oilink's terminal, Unioil is currently unable to fully utilize its
leased tanks as well as make use of the products contained therein. We understand that there is still
an unresolved issue between Oilink and the Bureau of Customs. However, with all due respect, said
issue should not affect Unioil because it is not a party to the same, furthermore there is a legal and
binding terminalling agreement between Oilink and Unioil which should be honored.
Last May 8, 2008, an asphalt importation for Unioil Petroleum Philippines, Inc. arrived in Mariveles,
Bataan. This was issued the corresponding discharging permit by the Bureau of Customs. All duties,
excise taxes and value added taxes for this product have already been settled. However, we are still
unable to withdraw these products in order to serve our customers who are using the product to
supply major government infrastructure projects in the country.
In line with the endorsement coming from the Bureau of Customs Commissioner Napoleon D.
Morales issued last May 6, 2008, Unioil has complied with the conditions stipulated therein which
are:
1. Only Unioil products shall be withdrawn subject to proper inventory by the BIR and BOC.
2. Appropriate duties and taxes due on the products to be withdrawn are fully paid or settled.
3. The company (Unioil) should allow the operation/withdrawal to be closely monitored and
continuously underguarded by assigned Customs personnel.
In this regard, may we respectfully request your good office to please allow Unioil to withdraw from
Oilink's terminal its products which are stored in the following tanks[:]
15
TANK PROD CONTENTS (Liters)

2 diesel 2,171,670.00
6 rexo 1,862,846.00
10 asphalt 4,573.14
13 gasoline 809,345.00
14 gasoline 746,629.00
17 diesel 360,097.00
19 sn 500 203,659.00
20 sn 500 643,236.00
In the same request letter, District Collector Almoradie approved the release of the above petroleum
products through a handwritten note dated May 12, 2008: "All concerned: Pls. allow the release of
the Unioil-owned products from the Oilink Storage Terminal per this request. Thanks." 16
On May 15, 2008, Pundanera wrote a clarificatory letter pursuant to the verbal instruction of District
Collector Almoradie to explain the withdrawal of products from the Terminal of OILINK, to wit:
As far as Unioil is concerned, we affirm to your good office that the products withdrawn/loaded at the
Terminal are entirely Unioil products. Unioil owns these products pursuant to its supply and
terminalling agreements with Oilink. (We shall be submitting to you copies of these documents as
soon as they arrive from our office in Manila.) In addition, due to the issue involving Oilink and the
Bureau of Customs, Unioil was forced to secure its petroleum products from local sources in order to
comply with its valid contractual commitments.
Unioil intended to withdraw these products because it believed in good faith and based on
documents in its possession that it is allowed to do so. Unioil based its intention pursuant to the
Indorsements of the Collector of the Port of Manila as well as the Office of the Commissioner that
allowed the withdrawal of Unioil products subject to compliance with the three (3) conditions
specified in the abovementioned Indorsements.
This being the precedent, we believe in good faith that, since Unioil owns the products, and it is
considered a stranger to the issue between Oilink and the Bureau, then Unioil is allowed to withdraw
the products it owns subject to the compliance with the three (3) stated conditions. Besides, any
withdrawal is covered by an appropriate delivery receipt, which would clearly indicate that Unioil
owns the products being withdrawn. 17
In a complaint-affidavit dated December 15, 2008, Atty. Balmyrson M. Valdez, a member of the
petitioner BOC's Anti-Oil Smuggling Coordinating Committee that investigated the illegal withdrawal
by UNIOIL of oil products consigned to OILINK, valued at _181,988,627.00 with corresponding
duties and taxes in the amount of _35,507,597.00, accused the private respondents of violation of
Sections 3601 and 3602, in relation to Sections 2503 and 2530, paragraphs f and l (3), (4) and
18 19 20 21
(5), of the TCCP.
In a letter dated December 15, 2008, Commissioner Morales referred to the Office of Chief State
22
Prosecutor Jovencito R. Zuño the said complaintaffidavit, together with its annexes, for preliminary
investigation. During the said investigation, BOC's counsel appeared and all of the private
respondents submitted their respective counter-affidavits.
In a Resolution dated May 29, 2009, public respondent Arman A. De Andres, State Prosecutor of
23
the Department of Justice (DOJ), recommended the dismissal of the complaint-affidavit for lack of
probable cause. The Resolution was approved by public respondents Assistant Chief State
Prosecutor Pedrito L. Rances and Chief State Prosecutor Zuño. On automatic review, the Resolution
was affirmed by then Secretary of Justice Raul M. Gonzales. 24
Dissatisfied, the BOC filed a motion for reconsideration which was denied by the public respondent,
the Acting Secretary of Justice Agnes VST Devanadera, in a Resolution dated December 28, 2009.
25
On March 11, 2010, the BOC filed a petition for certiorari with the CA.
In the Resolution dated March 26, 2010, the CA dismissed outright the petition due to procedural
defects:
The instant petition (i) contains no explanation why service thereof was not done personally (Sec.
11, Rule 13, 1997 Rules of Civil Procedure); (ii) shows that it has no proper verification and
certification against forum shopping and (iii) the docket and other lawful fees payment is short by
P1,530.00. 26
In the Resolution dated August 4, 2010, the CA denied the private respondents' motion for
reconsideration of the March 26, 2010 Resolution, as follows:
We made a cursory examination of the petition filed in this case as well as the whole rollo of the
case. It is our finding that, up to the date hereof, the petitioner has not duly submitted to this Court
another set of petition with a certification against forum shopping embodied therein or appended
thereto. Thus, the petition really suffers from a fatal defect until now, and so, the petitioner has to
bear the consequence thereof. 27
The CA stressed that procedural rules are not to be belittled or dismissed simply because their non-
observance may have resulted in prejudice to a party's substantive rights. Like all rules, they are
required to be followed except only when, for the most persuasive of reasons, they may be relaxed
to relieve a litigant of an injustice not commensurate with the degree of thoughtlessness in not
complying with the procedure prescribed. While it is true that litigation is not a game of technicalities,
this does not mean that Rules of Court may be ignored at will and at random to the prejudice of the
orderly presentation and assessment of the issues and their just resolution.
Aggrieved, the BOC filed the instant petition for review on certiorari, raising the following issues:
WHETHER THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT

DENIED PETITIONER'S MOTION FOR RECONSIDERATION SOLELY ON THE GROUND
THAT, ALLEGEDLY, IT DID NOT RECEIVE THE SECOND AND COMPLETE COPY OF
THE PETITION, CONTAINING THE VERIFICATION AND CERTIFICATION AGAINST
FORUM SHOPPING.
WHETHER THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN LAW AND

JURISPRUDENCE WHEN IT AFFIRMED ITS 26 MARCH 2010 RESOLUTION,
DISMISSING THE PETITION ON ACCOUNT OF MERE TECHNICALITIES.
WHETHER THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR

WHEN IT DID NOT LOOK INTO THE MERITS OF THE CASE, WHERE IT WAS CLEARLY
ESTABLISHED THAT THERE IS PROBABLE CAUSE TO INDICT RESPONDENTS FOR
TRIAL FOR VIOLATION OF SECTION 3601 AND 3602 IN RELATION TO SECTION 2530,
PARAGRAPHS (E), AND SECTION 3604 (D), (E), (F), AND (H) OF THE TCCP, AS
AMENDED. 28
Although the question of jurisdiction over the subject matter was not raised at bench by either of the
parties, the Court will first address such question before delving into the procedural and substantive
issues of the instant petition. After all, it is the duty of the courts to consider the question of
jurisdiction before they look into other matters involved in the case, even though such question is not
raised by any of the parties. Courts are bound to take notice of the limits of their authority and, even
29
if such question is neither raised by the pleadings nor suggested by counsel, they may recognize the
want of jurisdiction and act accordingly by staying pleadings, dismissing the action, or otherwise
noticing the defect, at any stage of the proceedings. Besides, issues or errors not raised by the
30
parties may be resolved by the Court where, as in this case, the issue is one of jurisdiction; it is
necessary in arriving at a just decision; and the resolution of the issues raised by the parties depend
upon the determination of the unassigned issue or error, or is necessary to give justice to the
parties.
31
On the issue of whether or not the CA has certiorari jurisdiction over the resolution of the Acting
Secretary of Justice, affirming the dismissal of the complaint-affidavit for violation of provisions of the
TCCP due to lackof probable cause, the Court rules in negative.
The elementary rule is that the CA has jurisdiction to review the resolution of the DOJ through a
petition forcertiorari under Rule 65 of the Rules of Court on the ground that the Secretary of Justice
committed grave abuse of his discretion amounting to excess or lack of jurisdiction. However, with
32
the enactment of Republic Act (R.A.) No. 9282, amending R.A. No. 1125 by expanding the
33 34
jurisdiction of the CTA, enlarging its membership and elevating its rank to the level of a collegiate
court with special jurisdiction, it is no longer clear which between the CA and the CTA has
jurisdiction to review through a petition for certiorari the DOJ resolution in preliminary investigations
involving tax and tariff offenses.
Apropos is City of Manila v. Hon. Grecia-Cuerdo where the Court en banc declared that the CTA
35
has appellate jurisdiction over a special civil action for certiorari assailing an interlocutory order
issued by the RTC in a local tax case, despite the fact that there is no categorical statement to that
effect under R.A. No. 1125, as well as the amendatory R.A. No. 9282. Thus:
x x x Section 5 (1), Article VIII of the 1987 Constitution grants power to the Supreme Court, in the
exercise of its original jurisdiction, to issue writs of certiorari, prohibition and mandamus. With
respect to the Court of Appeals, Section 9 (1) of Batas Pambansa Blg. 129 (BP 129) gives the
appellate court, also in the exercise of its original jurisdiction, the power to issue, among others, a
writ of certiorari, whether or not in aid of its appellate jurisdiction. As to Regional Trial Courts, the
power to issue a writ of certiorari, in the exercise of their original jurisdiction, is provided under
Section 21 of BP 129.
The foregoing notwithstanding, while there is no express grant of such power, with respect to the
CTA, Section 1, Article VIII of the 1987 Constitution provides, nonetheless, that judicial power shall
be vested in one Supreme Court and in such lower courts as may be established by law and that
judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, andto determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government.
On the strength of the above constitutional provisions, it can be fairly interpreted that the power of
the CTA includes that of determining whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the RTC in issuing an interlocutory order in
cases falling within the exclusive appellate jurisdiction of the tax court. It, thus, follows that the CTA,
by constitutional mandate, is vested with jurisdiction to issue writs of certiorari in these cases.
Indeed, in order for any appellate court to effectively exercise its appellate jurisdiction, it must have
the authority to issue, among others, a writ of certiorari. In transferring exclusive jurisdiction over
appealed tax cases to the CTA, it can reasonably be assumed that the law intended to transfer also
such power as is deemed necessary, if not indispensable, in aid of such appellate jurisdiction. There
is no perceivable reason why the transfer should only be considered as partial, not total.
xxxx
Furthermore, Section 6, Rule 135 of the present Rules of Court provides that when by law,
jurisdiction is conferred on a court or judicial officer, all auxiliary writs, processes and other means
necessary to carry it into effect may be employed by such court or officer.
If this Court were to sustain petitioners' contention that jurisdiction over their certiorari petition lies
with the CA, this Court would be confirming the exercise by two judicial bodies, the CA and the CTA,
of jurisdiction over basically the same subject matter – precisely the split-jurisdiction situation which
is anathema to the orderly administration of justice. The Court cannot accept that such was the
legislative motive, especially considering that the law expressly confers on the CTA, the tribunal with
the specialized competence over tax and tariff matters, the role of judicial review over local tax cases
without mention of any other court that may exercise such power. Thus, the Court agrees with the
ruling of the CA that since appellate jurisdiction over private respondents' complaint for tax refund is
vested in the CTA, it follows that a petition for certiorari seeking nullification of an interlocutory order
issued in the said case should, likewise, be filed with the same court. To rule otherwise would lead to
an absurd situation where one court decides an appeal in the main case while another court rules on
an incident in the very same case.
Stated differently, it would be somewhat incongruent with the pronounced judicial abhorrence to split
jurisdiction to conclude that the intention of the law is to divide the authority over a local tax case
filed with the RTC by giving to the CA or this Court jurisdiction to issue a writ of certiorari against
interlocutory orders of the RTC but giving to the CTA the jurisdiction over the appeal from the
decision of the trial court in the same case. It is more in consonance with logic and legal soundness
to conclude that the grant of appellate jurisdiction to the CTA over tax cases filed in and decided by
the RTC carries with it the power to issue a writ of certiorari when necessary in aid of such appellate
jurisdiction. The supervisory power or jurisdiction of the CTA to issue a writ of certiorari in aid of its
appellate jurisdiction should co-exist with, and be a complement to, its appellate jurisdiction to
review, by appeal, the final orders and decisions of the RTC, in order to have complete supervision
over the acts of the latter.
effectively, to make all orders that will preserve the subject of the action, and to give effect to the
final determination of the appeal. It carries with it the power to protect that jurisdiction and to make
the decisions of the court thereunder effective.
The court, in aid of its appellate jurisdiction, has authority to control all auxiliary and incidental
matters necessary to the efficient and proper exercise of that jurisdiction. For this purpose, it may,
when necessary, prohibit or restrain the performance of any act which might interfere with the proper
exercise of its rightful jurisdiction in cases pending before it.
Lastly, it would not be amiss to point out that a court which is endowed with a particular jurisdiction
should have powers which are necessary to enable it to act effectively within such jurisdiction. These
should be regarded as powers which are inherent in its jurisdiction and the court must possess them
in order to enforce its rules of practice and to suppress any abuses of its process and to defeat any
attempted thwarting of such process.
In this regard, Section 1 of RA 9282 states that the CTA shall be of the same level as the CA and
shall possess all the inherent powers of a court of justice.
Indeed, courts possess certain inherent powers which may be said to be implied from a general
grant of jurisdiction, in addition to those expressly conferred on them. These inherent powers are
such powers as are necessary for the ordinary and efficient exercise of jurisdiction; or are essential
to the existence, dignity and functions of the courts, as well as to the due administration of justice; or
are directly appropriate, convenient and suitable to the execution of their granted powers; and
include the power to maintain the court's jurisdiction and render it effective in behalf of the litigants.
Thus, this Court has held that "while a court may be expressly granted the incidental powers
necessary to effectuate its jurisdiction, a grant of jurisdiction, in the absence of prohibitive legislation,
implies the necessary and usual incidental powers essential to effectuate it, and, subject to existing
laws and constitutional provisions, every regularly constituted court has power to do all things that
are reasonably necessary for the administration of justice within the scope of its jurisdiction and for
the enforcement of its judgments and mandates." Hence, demands, matters or questions ancillary or
incidental to, or growing out of, the main action, and coming within the above principles, may be
taken cognizance of by the court and determined, since such jurisdiction is in aid of its authority over
the principal matter, even though the court may thus be called on to consider and decide matters
which, as original causes of action, would not be within its cognizance.
Based on the foregoing disquisitions, it can be reasonably concluded that the authority of the CTA to
take cognizance of petitions for certiorari questioning interlocutory orders issued by the RTC in a
local tax case is included in the powers granted by the Constitution as well as inherent in the
exercise of its appellate jurisdiction.
36
Since the Court ruled in City of Manila v. Hon. Grecia-Cuerdo that the CTA has jurisdiction over a
37
special civil action for certiorari questioning an interlocutory order of the RTC in a local tax
case via express constitutional mandate and for being inherent in the exercise of its appellate
jurisdiction, it can also be reasonably concluded based on the same premise that the CTA has
original jurisdiction over a petition for certiorari assailing the DOJ resolution in a preliminary
investigation involving tax and tariff offenses.
If the Court were to rule that jurisdiction over a petition for certiorari assailing such DOJ resolution
lies with the CA, it would be confirming theexercise by two judicial bodies, the CA and the CTA, of
jurisdiction over basically the same subject matter – precisely the split-jurisdiction situation which is
anathema to the orderly administration of justice. The Court cannot accept that such was the
legislative intent, especially considering that R.A. No. 9282 expressly confers on the CTA, the
tribunal with the specialized competence over tax and tariff matters, the role of judicial review over
local tax cases without mention of any other court that may exercise such power. 38
Concededly, there is no clear statement under R.A. No. 1125, the amendatory R.A. No. 9282, let
alone in the Constitution, that the CTA has original jurisdiction over a petition for certiorari. By virtue
of Section 1,
Article VIII of the 1987 Constitution, vesting judicial power in the Supreme Court and such lower
courts as may be established by law, to determine whether or not there has been a grave abuse of
discretion on the part of any branch or instrumentality of the Government, in relation to Section 5(5),
Article VIII thereof, vesting upon it the power to promulgate rules concerning practice and procedure
in all courts, the Court thus declares that the CA's original jurisdiction over a petition
39
for certiorari assailing the DOJ resolution in a preliminary investigation involving tax and tariff
offenses was necessarily transferred to the CTA pursuant to Section 7 of R.A. No. 9282, and that40
such petition shall be governed by Rule 65 of the Rules of Court, as amended. Accordingly, it is the
CTA, not the CA, which has jurisdiction over the petition for certiorari assailing the DOJ resolution of
dismissal of the BOC's complaint-affidavit against private respondents for violation of the TCCP.
On the procedural issue of whether the CA erred in dismissing the petition for certiorari on the sole
ground of lack of verification and certification against forum shopping, the Court rules in the
affirmative, despite the above discussion that such petition should have been filed with the CTA.
In Traveño, et al. v. Bobongon Banana Growers Multi-Purpose Cooperative, et al., the Court 41
restated the jurisprudence on non-compliancewith the requirements on, or submission of defective,

verification and certification against forum shopping:
1) A distinction must be made between non-compliance with the requirement on or

submission of defective verification, and noncompliance with the requirement on or
submission of defective certification against forum shopping.
2) As to verification, non-compliance therewith or a defect therein does not necessarily

render the pleading fatally defective. The court may order its submission or correction or act
on the pleading if the attending circumstances are such that strict compliance with the Rule
may be dispensed with in order that the ends of justice may be served thereby.
3) Verification is deemed substantially complied with when one who has ample knowledge to
swear to the truth of the allegations in the complaint or petition signs the verification, and
when matters alleged in the petition have been made in good faith or are true and correct.
4) As to certification against forum shopping, non-compliance therewith or a defect therein,

unlike in verification, is generally not curable by its subsequent submission or correction
thereof, unless there is a need to relax the Rule on the ground of "substantial compliance" or
presence of "special circumstances or compelling reasons."
5) The certification against forum shopping must be signed by all the plaintiffs or petitioners
in a case; otherwise, those who did not sign will be dropped as parties to the case. Under
reasonable or justifiable circumstances, however, as when all the plaintiffs or petitioners
share a common interest and invoke a common cause of action or defense, the signature of
only one of them in the certification against forum shopping substantially complies with the
Rule.
6) Finally, the certification against forum shopping must be executed by the party-pleader,
not by his counsel. If, however, for reasonable or justifiable reasons, the party-pleader is
unable to sign, he must execute a Special Power of Attorney designating his counsel of
record to sign on his behalf.42
While it admittedly filed a petition for certiorari without a certification against forum shopping on
March 11, 2010, the BOC claimed to have subsequently complied with such requirement by filing
through registered mail a complete set of such petition, the following day which was also the last day
of the reglementary period. The problem arose when the CA failed to receive such complete set of
the petition for certiorari with the verification and certification against forum shopping. In support of
the motion for reconsideration of the CA's March 26, 2010 resolution which dismissed outright the
petition, the BOC asserted that it filed a complete set of petition by registered mail. It also submitted
an affidavit of the person who did the mailing as required by Section 12, Rule 13 of the Rules of
43
Court, including the registry receipt numbers, but not the receipts themselves which were allegedly
attached to the original copy mailed to the CA. Instead of ordering the BOC to secure a certification
from the postmaster to verify if a complete set of the petition was indeed filed by registered mail, the
CA – after examining the whole case rollo and finding that no other set of petition with a certification
against forum shopping was duly submitted – denied the motion for reconsideration.
Faced with the issue of whether or not there is a need to relax the strict compliance with procedural
rules in order that the ends of justice may be served thereby and whether "special circumstances or
compelling reasons" are present to warrant a liberal interpretation of such rules, the Court rules –
after a careful review of the merits of the case – in the affirmative.
Despite the BOC's failed attempt to comply with the requirement of verification and certification
against forum shopping, the Court cannot simply ignore the CA's perfunctory dismissal of the petition
on such sole procedural ground vis-à-vis the paramount public interest in the subject matter and the
substantial amount involved, i.e., the alleged illegal withdrawal of oil products worth _181,988,627.00
with corresponding duties and taxes worth _35,507,597.00. Due to the presence of such special
circumstances and in the interest of justice, the CA should have at least passed upon the
substantive issue raised in the petition, instead of dismissing it on such procedural ground. Although
it does not condone the failure of BOC to comply with the said basic requirement, the Court is
constrained to exercise the inherent power to suspend its own rules in order to do justice in this
particular case.
Given that the petition for certiorari should have been filed with the CTA, the mistake committed by
the BOC in filing such petition before the CA may be excused. In this regard, Court takes note that
nothing in R.A. No. 1125, as amended by R.A. No. 9282, indicates that a petition for certiorari under
Rule 65 may be filed with the CTA. Despite the enactment of R.A. No. 9282 on March 30, 2004, it
was only about ten (10) years later in the case ofCity of Manila v. Hon. Grecia-Cuerdo that the
44
Court ruled that the authority of the CTA to take cognizance of such petitions is included in the
powers granted by the Constitution, as well as inherent in the exercise of its appellate jurisdiction.
While the rule on perfection of appeals cannot be classified as a difficult question of law, mistake in
45
the construction or application of a doubtful question of law, as in this case, may be considered as a
mistake of fact, excusing the BOC from the consequences of the erroneous filing of its petition with
the CA.
As the CA dismissed the petition for certiorari solely due to a procedural defect without resolving the
issue of whether or not the Acting Secretary of Justice gravely abused her discretion in affirming the
dismissal of the BOC's complaint-affidavit for lack of probable cause, the Court ought to reinstate the
petition and refer it to the CTA for proper disposition. For one, as a highly specialized court
specifically created for the purpose of reviewing tax and customs cases, the CTA is dedicated
46
exclusively to the study and consideration of revenue-related problems, and has necessarily
developed an expertise on the subject. For another, the referral of the petition to the CTA is in line
47
with the policy of hierarchy of courts in order to prevent inordinate demands upon the Court's time
and attention which are better devoted to those matters within its exclusive jurisdiction, and to
prevent further overcrowding of its docket. 48
Be that as it may, the Court stressed in The Diocese of Bacolod v. Commission on Elections that 49
the doctrine of hierarchy of courts is not an iron-clad rule, and that it has full discretionary power to
take cognizance and assume jurisdiction over special civil actions for certiorari filed directly with it for
exceptionally compelling reasons or if warranted by the nature of the issues clearly and specifically
raised in the petition. Recognized exceptions to the said doctrine are as follows: (a) when there are
genuine issues of constitutionality that must be addressed at the most immediate time; (b) when the
issues involved are of transcendental importance; (c) cases of first impression where no
jurisprudence yet exists that will guide the lower courts on the matter; (d) the constitutional issues
raised are better decided by the Court; (e) where exigency in certain situations necessitate urgency
in the resolution of the cases; (f) the filed petition reviews the act of a constitutional organ; (g) when
petitioners rightly claim that they had no other plain, speedy, and adequate remedy in the ordinary
course of law that could free them from the injurious effects of respondents’ acts in violation of their
right to freedom of expression; and (h) the petition includes questions that are dictated by public
welfare and the advancement of public policy, or demanded by the broader interest of justice, or the
orders complained of were found to be patent nullities, or the appeal was considered as clearly an
inappropriate remedy. Since the present case includes questions that are dictated by public welfare
50
and the advancement of public policy, or demanded by the broader interest of justice, as well as to
avoid multiplicity of suits and further delay in its disposition, the Court shall directly resolve the
petition for certiorari, instead of referring it to the CTA.
On the substantive issue of whether the Acting Secretary of Justice gravely abused her discretion in
affirming the dismissal of the BOC's complaint-affidavit for lack of probable cause, the settled policy
of noninterference in the prosecutor’s exercise of discretion requires the courts to leave to the
prosecutor and to the DOJ the determination of what constitutes sufficient evidence to establish
probable cause. As the Court explained inUnilever Philippines, Inc. v. Tan: 51
The determination of probable cause for purposes of filing of information in court is essentially an
executive function that is lodged, at the first instance, with the public prosecutor and, ultimately, to
the Secretary of Justice. The prosecutor and the Secretary of Justice have wide latitude of discretion
in the conduct of preliminary investigation; and their findings with respect to the existence or non-
existence of probable cause are generally not subject to review by the Court.
Consistent with this rule, the settled policy of non-interference in the prosecutor’s exercise of
discretion requires the courts to leave to the prosecutor and to the DOJ the determination of what
constitutes sufficient evidence to establish probable cause. Courts can neither override their
determination nor substitute their own judgment for that of the latter. They cannot likewise order the
prosecution of the accused when the prosecutor has not found aprima facie case.
Nevertheless, this policy of non-interference is not without exception. The Constitution itself allows
(and even directs) court action where executive discretion has been gravely abused. In other words,
the court may intervene in the executive determination of probable cause, review the findings and
conclusions, and ultimately resolve the existence or non-existence of probable cause by examining
the records of the preliminary investigation when necessary for the orderly administration of justice. 52
Probable cause for purposes of filing a criminal information is defined as such facts as are sufficient
to engender a well-founded belief that a crime has been committed and the respondent is probably
guilty thereof, and should be held for trial. As explained in Sy v. Secretary of
53
Justice, citing Villanueva v. Secretary of Justice:

54 55
x x x [Probable cause] is such a state of facts in the mind of the prosecutor as would lead a person
of ordinary caution and prudence to believe or entertain an honest or strong suspicion that a thing is
so. The term does not mean "actual or positive cause"; nor does it import absolute certainty. It is
merely based on opinion and reasonable belief. Thus, a finding of probable cause does not require
an inquiry into whether there is sufficient evidence to procure a conviction. It is enough that it is
believed that the act or omission complained of constitutes the offense charged. Precisely,
there is a trial for the reception of evidence of the prosecution in support of the charge.
56
To find out if there is a reasonable ground to believe that acts or ommissions complained of
constitute the offenses charged, the Court must first examine whether or not the allegations against
private respondents in the BOC's complaint-affidavit constitute the offenses of unlawful importation
under Section 3601 and various fraudulent practices against customs revenue under Section 3602
of the TCCP.
In Jardeleza v. People, the Court discussed the concepts of unlawful importation under Section
57
3601 of the TCCP, and various fraudulent practices against customs revenue under Section 3602
thereof, thus:
Section 3601 of the TCC was designed to supplement the existing provisions of the TCC against the
means leading up to smuggling, which might render it beneficial by a substantive and criminal
statement separately providing for the punishment of smuggling. The law was intended not to merge
into one and the same offense all the many acts which are classified and punished by different
penalties, penal or administrative, but to legislate against the overt act of smuggling itself. This is
manifested by the use of the words "fraudulently" and "contrary to law" in the law.
Smuggling is committed by any person who: (1) fraudulently imports or brings into the Philippines
any article contrary to law; (2) assists in so doing any article contrary to law; or (3) receives,
conceals, buys, sells or in any manner facilitate the transportation, concealment or sale of such
goods after importation, knowing the same to have been imported contrary to law.
The phrase "contrary to law" in Section 3601 qualifies the phrases "imports or brings into the
Philippines" and "assists in so doing," and not the word "article." The law penalizes the importation of
any merchandise in any manner contrary to law.
The word "law" includes regulations having the force and effect of law, meaning substantive or
legislative type rules as opposed to general statements of policy or rules of agency, organization,
procedures or positions. An inherent characteristic of a substantive rule is one affecting individual
rights and obligations; the regulation must have been promulgated pursuant to a congressional grant
of quasi-legislative authority; the regulation must have been promulgated in conformity to with
congressionally-imposed procedural requisites.
xxxx
Section 3602 of the TCC, on the other hand, provides:
Sec. 3602. Various Fraudulent Practices Against Customs Revenue. – Any person who makes or
attempts to make any entry of imported or exported article by means of any false or fraudulent
invoice, declaration, affidavit, letter, paper or by any means of any false statement, written or verbal,
or by any means of any false or fraudulent practice whatsoever, or knowingly effects any entry of
goods, wares or merchandise, at less than the true weight or measures thereof or upon a false
classification as to quality or value, or by the payment of less than the amount legally due, or
knowingly and wilfully files any false or fraudulent entry or claim for the payment of drawback or
refund of duties upon the exportation of merchandise, or makes or files any affidavit, abstract,
record, certificate or other document, with a view to securing the payment to himself or others of any
drawback, allowance or refund of duties on the exportation of merchandise, greater than that legally
due thereon, or who shall be guilty of any wilful act or omission shall, for each offense, be punished
in accordance with the penalties prescribed in the preceding section.
The provision enumerates the various fraudulent practices against customs revenue, such as the
entry of imported or exported articles by means of any false or fraudulent invoice, statement or
practice; the entry of goods at less than the true weight or measure; or the filing of any false or
fraudulent entry for the payment of drawback or refund of duties.
The fraud contemplated by law must be intentional fraud, consisting of deception, willfully and
deliberately dared or resorted to in order to give up some right. The offender must have acted
knowingly and with the specific intent to deceive for the purpose of causing financial loss to another;
even false representations or statements or omissions of material facts come within fraudulent
intent. The fraud envisaged in the law includes the suppression of a material fact which a party is
bound in good faith to disclose. Fraudulent nondisclosure and fraudulent concealment are of the
same genre.
Fraudulent concealment presupposes a duty to disclose the truth and that disclosure was not made
when opportunity to speak and inform was present, and that the party to whom the duty of disclosure
as to a material fact was due was thereby induced to act to his injury. Fraud is not confined to words
1âwphi1
or positive assertions; it may consist as well of deeds, acts or artifice of a nature calculated to
mislead another and thus allow one to obtain an undue advantage. 58
In unlawful importation, also known as outright smuggling, goods and articles of commerce are
brought into the country without the required importation documents, or are disposed of in the local
market without having been cleared by the BOC or other authorized government agencies, to evade
the payment of correct taxes, duties and other charges. Such goods and articles do not undergo the
processing and clearing procedures at the BOC, and are not declared through submission of import
documents, such as the import entry and internal revenue declaration.
In various fraudulent practices against customs revenue, also known as technical smuggling, on the
other hand, the goods and articles are brought into the country through fraudulent, falsified or
erroneous declarations, to substantially reduce, if not totally avoid, the payment of correct taxes,
duties and other charges. Such goods and articles pass through the BOC, but the processing and
clearing procedures are attended by fraudulent acts in order to evade the payment of correct taxes,
duties, and other charges. Often committed by means of misclassification of the nature, quality or
value of goods and articles, undervaluation in terms of their price, quality or weight, and
misdeclaration of their kind, such form of smuggling is made possible through the involvement of the
importers, the brokers and even some customs officials and personnel.
In light of the foregoing discussion, the Court holds that private respondents cannot be charged with
unlawful importation under Section 3601 of the TCCP because there is no allegation in the BOC's
complaint-affidavit to the effect that they committed any of the following acts: (1) fraudulently
imported or brought into the Philippines the subject petroleum products, contrary to law; (2) assisted
in so doing; or (3) received, concealed, bought, sold or in any manner facilitated the transportation,
concealment or sale of such goods after importation, knowing the same to have been imported
contrary to law.
The said acts constituting unlawful importation under Section 3601 of the TCCP can hardly be
gathered from the following allegations in the BOC's complaint-affidavit:
19.1 From May 23, 2007 to February 10, 2008, UNIOIL is not an accredited importer of the BOC;
19.2 From the time UNIOIL was accredited on February 11, 2008 until the time of its request to
withdraw its oil products on 02 May 2008, they did not import Gasoil (diesel) and Mogas Gasoline;
19.3 The Terminalling Agreement allegedly executed between OILINK and UNIOIL was obviously for
the purpose of circumventing the Warrant of Seizure and Detention issued against the shipments of
OILINK aside from the fact that it was only executed on 02 January 2008 after the decision of the
Commissioner finding OILINK liable to pay an administrative fine of Two Billion Seven Hundred
Sixty-Four Million Eight Hundred Fifty-Nine Thousand Three Hundred Four Pesos and 80/100
(Php2,764,859,304.80);
19.4 Only base oil should have been withdrawn by UNIOIL since it is the only product subject of its
request and approved by the Commissioner;
19.5 UNIOIL withdrew Gasoil (Diesel) and Mogas which were not covered by importations;
19.6 Finally, the illegal release/withdrawal of the oil products deprived the government of the
supposed partial payment on the Php2.7 billion liability of OILINK in the approximate amount of
Php181,988,627 representing the customs value of the released/withdrawn oil products and
estimated duties and taxes of Php35,507,597 due thereon or the total amount
ofPhp217,496,224.00. 59
xxxx
21.1 When UNIOIL withdrew Gasoil (Diesel) and Mogas without filing the corresponding Import
Entry, the shipment becomes unlawful per se and thus falls under unlawful importation under
Section 3601 of the Tariff and Customs Code of the Philippines, as amended;
21.2 The fact that UNIOIL and OILINK executed a belated Terminalling Agreement after the
issuance of the Warrant of Seizure and Detention showed the fraudulent intent of the respondents
whereby UNIOIL can still withdraw the oil products stored at OILINK's depot likewise in clear
violation of section 3601 and 3602 of the Tariff and Customs Code of the Philippines, as amended;
21.3 The fact that the UNIOIL make [sic] it appear that they are the owner of Gasoil (Diesel) and
Mogas when in truth and in fact they did not import said products make them liable for [violation of]
Section 3602 of the Tariff and Customs Code of the Philippines, as amended and falsification; 60
Since the foregoing allegations do not constitute the crime of unlawful importation under Section
3601 of the TCCP, the Acting Secretary of Justice did not commit grave abuse of discretion when
she affirmed the State Prosecutor's dismissal the BOC's complaint-affidavit for lack of probable
cause.
Neither could private respondents be charged with various fraudulent practices against customs
revenue under Section 3602 of the TCCP as the above allegations do not fall under any of the
following acts or omissions constituting such crime/s: (1) making or attempting to make any entry of
imported or exported article: (a) by means of any false or fraudulent invoice, declaration, affidavit,
letter, paper or by any means of any false statement, written or verbal; or (b) by any means of any
false or fraudulent practice whatsoever; or (2) knowingly effecting any entry of goods, wares or
merchandise, at less than the true weight or measures thereof or upon a false classification as to
quality or value, or by the payment of less than the amount legally due; or (3) knowingly and wilfully
filing any false or fraudulent entry or claim for the payment of drawback or refund of duties upon the
exportation of merchandise; or (4) making or filing any affidavit, abstract, record, certificate or other
document, with a view to securing the payment to himself or others of any drawback, allowance or
refund of duties on the exportation of merchandise, greater than that legally due thereon.
Related to various fraudulent practices against customs revenue by means of undervaluation,

misclassification and misdeclaration in the import entry is the following provision of R.A. No. 7651 -
An Act to Revitalize and Strengthen the Bureau of Customs, Amending for the Purpose Certain
Sections of the Tariff and Customs Code of the Philippines, as amended: 61
Sec. 2503. Undervaluation, Misclassification and Misdeclaration in Entry. – When the dutiable value
of the imported articles shall be so declared and entered that the duties, based on the declaration of
the importer on the face of the entry, would be less by ten percent (10%) than should be legally
collected, or when the imported articles shall be so described and entered that the duties based on
the importer's description on the face of the entry would be less by ten percent (10%) than should
be legally collected based on the tariff classification, or when the dutiable weight, measurement or
quantity of imported articles is found upon examination to exceed by ten percent (10%) or more than
the entered weight, measurement or quantity, a surcharge shall be collected from the importer in an
amount of not less than the difference between the full duty and the estimated duty based upon the
declaration of the importer, nor more than twice of such difference: Provided, that an
undervaluation, misdeclaration in weight, measurement or quantity of more than thirty
percent (30%) between the value, weight, measurement, or quantity declared in the entry, and
the actual value, weight, quantity, or measurement shall constitute a prima facie evidence of
fraud penalized under Sec. 2530 of this Code:Provided, further, that any misdeclared or
undeclared imported articles/items found upon examination shall ipso facto be forfeited in favor of
the Government to be disposed of pursuant to the provisions of this Code.
When the undervaluation, misdescription, misclassification or misdeclaration in the import
entry is intentional, the importer shall be subject to the penal provision under Sec. 3602 of
this Code. 62
A careful reading of the BOC's complaint-affidavit would show that there is no allegation to the effect
that private respondents committed undervaluation, misdeclaration in weight, measurement or
quantity of more than thirty percent (30%) between the value, weight, measurement, or quantity
declared in the entry, and the actual value, weight, quantity, or measurement which constitute prima
facie evidence of fraud. Nor is there an allegation that they intentionally committed undervaluation,
misdescription, misclassification or misdeclaration in the import entry. Since the allegations in the
BOC's complaint-affidavit fall short of the acts or omissions constituting the various fraudulent acts
against customs revenue under Section 3602 of the TCCP, the Acting Secretary of Justice correctly
ruled that there was no probable cause to believe that they committed such crime/s.
While it is true that the sole office of the writ of certiorari is the correction of errors of jurisdiction,
including the commission of grave abuse of discretion amounting to lack of jurisdiction, and does not
include a correction of the public respondents' evaluation of the evidence and factual findings
thereon, it is sometimes necessary to delve into factual issues in order to resolve the allegations of
grave abuse of discretion as a ground for the special civil action of certiorari. In light of this principle,
63
the Court reviews the following findings of the Acting Secretary of Justice in affirming the State
Prosecutor's dismissal of the BOC's complaint-affidavit for lack of probable cause:
Respondents are being charged for unlawful importation under Section 3601, and fraudulent
practices against customs revenues under Section 3602, of the TCCP, as amended. For these
charges to prosper, complainant must prove, first and foremost, that the subject articles were
imported. On this score alone, complainant has miserably failed.
Indeed, except for complainant's sweeping allegation, no clear and convincing proof was presented
to show that the subject petroleum products (gasoil and mogas) withdrawn by Unioil from the oil
depot/terminal of Oilink were imported. For, only when the articles are imported that the
importer/consignee is required to file an import entry declaration and pay the corresponding customs
duties and taxes. The fact that complainant's record fails to show that an import entry was filed for
the subject articles does not altogether make out a case of unlawful importation under Section 3601,
or fraudulent practices against customs revenue under Section 3602, of the TCCP, without having
first determined whether the subject articles are indeed imported. Thus, in this case, complainant still
bears the burden of proof to show that the subject petroleum products are imported, by means of
documents other than the import entry declaration, such as but not limited to, the transport
documents consisting of the inward foreign manifest, bill of lading, commercial invoice and packing
list, all indicating that the goods were bought from a supplier/seller in a foreign country and imported
or transported to the Philippines. Instead[,] complainant merely surmised that since the subject
products were placed under warrant of seizure and detention[,] they must necessarily be imported.
Regrettably, speculation and surmises do not constitute evidence and should not, therefore, be
taken against the respondents. x x x Taken in this light, we find more weight and credence in
respondent Unioil's claim that the subject petroleum products were not imported by them, but were
locally purchased, more so since it was able to present local sales invoices covering the same.
Even assuming gratia argumenti that the subject petroleum products were imported, it still behooves
the complainant to present clear and convincing proof that the importation was unlawful or that it was
carried out through any fraudulent means, practice or device to prejudice the government. But again,
complainant failed to discharge this burden.
As can be culled from the records, the warrant of seizure and detention docketed as Seizure
Identification No. 2008-082, which covers various gas tanks already stored at Oilink's depot/terminal
located at Lucanin Pt., Mariveles, Bataan, was issued pursuant to Section 2536, in relation to
Section 1508, of the TCCP because of Oilink's failure to pay the administrative fine of
P2,764,859,304.80 that was previously meted against the company for its failure/refusal to submit to
a post entry audit. In fact, the delivery of all shipments consigned to or handled directly or indirectly
by Oilink was put on hold as per order of the Customs Commissioner dated April 23, 2008 pursuant
to Section 1508 of the TCCP, also for the same reason. There was nothing on record which shows,
or from which it could be inferred, that the warrant of seizure and detention or hold order were
imposed pursuant to Section 2530 of the same Code which relates, among others, to unlawfully
imported articles or those imported through any fraudulent practice or device to prejudice the
government, much less due to non-payment of the corresponding customs duties and taxes due on
the shipments/articles covered by the warrant of seizure and detention. Again, what complainant's
evidence clearly shows is that Oilink's failure to pay the administrative fine precipitated the issuance
of the warrant of seizure and detention and hold order. 64
After a careful review of records, the Court affirms the dismissal of the BOC's complaint-affidavit for
lack of probable cause, but partly digresses from the reasoning of the Acting Secretary of Justice in
arriving at such conclusion. While the Acting Secretary of Justice correctly stated that the act of
fraudulent importation of articles must be first proven in order to be charged for violation of Section
3601 of the TCCP, the Court disagrees that proof of such importation is also required for various
fraudulent practices against customs revenue under Section 3602 thereof.
As held in Jardeleza v. People, the crime of unlawful importation under Section 3601 of the TCCP is
65
complete, in the absence of a bona fide intent to make entry and pay duties when the prohibited
article enters Philippine territory. Importation, which consists of bringing an article into the country
from the outside, is complete when the taxable, dutiable commodity is brought within the limits of the
port of entry. Entry through a customs house is not the essence of the act. On the other hand, as
66 67
regards Section 3602 of the TCCP which particularly deals with the making or attempting to make a
fraudulent entry of imported or exported articles, the term "entry" in customs law has a triple
meaning, namely: (1) the documents filed at the customs house; (2) the submission and acceptance
of the documents; and (3) the procedure of passing goods through the customs house. In view
68
thereof, it is only for charges for unlawful importation under Section 3601 that the BOC must first
prove that the subject articles were imported. For violation of Section 3602, in contrast, what must be
proved is the act of making or attempting to make such entry of articles.
The Court likewise disagrees with the finding of the Acting Secretary of Justice that the BOC failed to
prove that the products subject of the WSD were imported. No such proof was necessary because
private respondents themselves presented in support of their counter-affidavits copies of import
entries which can be considered asprima facie evidence that OILINK imported the subject
69
petroleum products. At any rate, the Acting Secretary of Justice aptly gave credence to their twenty
(20) sales invoices covering the dates October 1, 2007 until April 30, 2008 which tend to prove that
70
UNIOIL locally purchased such products from OILINK even before the BOC rendered the Decision
dated December 14, 2007 imposing a _2,764,859,304.80 administrative fine, and holding the
delivery or release of its subsequently imported articles to answer for the fine, any revised
assessment and/or penalty for failure to keep records.
The Court also finds as misplaced the BOC's reliance on the Terminalling Agreement dated January
2, 2008 and the Certification that UNIOIL made no importation of Gasoil (diesel) and Mogas
71
gasoline from January 2007 up to June 2008 in order to prove that it illegally imported the said
products. Such documentary evidence tend to prove only that UNIOIL was engaged in the
importation of petroleum products and that it did not import the said products during the said period.
Such documents, however, do not negate the evidence on record which tend to show that OILINK
was the one that filed the import entries, and that UNIOIL locally purchased from OILINK such
72
products as indicated in the sales invoices. Not being the importer of such products, UNIOIL, its
73
directors and officers, are not required to file their corresponding import entries. Hence, contrary to
the BOC's allegation, UNIOIL's withdrawal of the Gasoil (Diesel) and Mogas gasoline without filing
the corresponding import entries can neither be considered as unlawful importation under Section
3601 of the TCCP nor as a fraudulent practice against customs revenue under Section 3602 thereof.
Moreover, the fact that private respondent Paul Chi Ting Co is both the Chairman of UNIOIL and
OILINK is not enough to justify the application of the doctrine of piercing the corporate veil. In fact,
mere ownership by a single stockholder or by another corporation of a substantial block of shares of
a corporation does not, standing alone, provide sufficient justification for disregarding the separate
corporate personality. In Kukan International Corporation v. Hon. Judge Reyes, et al. the Court
74 75
explained the application of the said doctrine in this wise:
In fine, to justify the piercing of the veil of corporate fiction, it must be shown by clear and convincing
proof that the separate and distinct personality of the corporation was purposefully employed to
evade a legitimate and binding commitment and perpetuate a fraud or like wrongdoings. To be sure,
the Court has, on numerous occasions, applied the principle where a corporation is dissolved and its
assets are transferred to another to avoid a financial liability of the first corporation with the result
that the second corporation should be considered a continuation and successor of the first entity.
In those instances when the Court pierced the veil of corporate fiction of two corporations, there was
a confluence of the following factors:
1. A first corporation is dissolved;
2. The assets of the first corporation is transferred to a second corporation to avoid a

financial liability of the first corporation; and
3. Both corporations are owned and controlled by the same persons such that the second
corporation should be considered as a continuation and successor of the first corporation. 76
Granted that the principle of piercing the veil of corporate entity comes into play only during the trial
of the case for the purpose of determining liability, it is noteworthy that even the BOC itself virtually
77
recognized that OILINK and UNIOIL are separate and distinct entities when it alleged that only the
base oil products should have been withdrawn by UNIOIL, since they were the only products subject
of its request and approved by the Customs Commissioner. As discussed above, however, private
respondents were able to present sales invoices which tend to show that UNIOIL locally purchased
Gasoil (diesel) and Mogas gasoline products from OILINK. Hence, the BOC cannot invoke the
doctrine of piercing the veil of corporate entity in this case.
On a final note, the Court stresses that OILINK, its directors or officers, and Victor D. Piamonte, the
Licensed Customs Broker, may still be held liable for various fraudulent practices against customs
revenue under
Section 3602 of the TCCP, if the final results of the post-entry audit and examination would show
that they committed any of the following acts or omissions: (1) making or attempting to make any
entry of imported or exported article: (a) by means of any false or fraudulent invoice, declaration,
affidavit, letter, paper or by any means of any false statement, written or verbal; or (b) by any means
of any false or fraudulent practice; or (2) intentional undervaluation, misdescription, misclassification
or misdeclaration in the import entries; or (3) undervaluation, misdeclaration in weight, measurement
or quantity of more than thirty percent (30%) between the value, weight, measurement, or quantity
declared in the entries, and the actual value, weight, quantity, or measurement. This is consistent
with Section 2301 (Warrant for Detention of Property-Cash Bond) of the TCCP which states that
78
nothing therein shall be construed as relieving the owner or importer from any criminal liability which
may arise from any violation of law committed in connection with the importation of articles, which in
this case were placed under a WSD for failure of the importer, OILINK, to submit the required post-
entry audit documents under CAO No. 4-2004.
In addition, OILINK and its directors or officers may be held liable under Section 16 of R.A. No.
9135:79
SEC. 16. A new section to be known as Section 3611 is hereby inserted in Part 3, Title VII of the
Tariff and Customs Code of the Philippines, as amended, which shall read as follows:
SEC. 3611. Failure to Pay Correct Duties and Taxes on Imported Goods. - Any person who, after
being subjected to post-entry audit and examination as provided in Section 3515 of Part 2, Title
VII hereof, is found to have incurred deficiencies in duties and taxes paid for imported goods,
shall be penalized according to three (3) degrees of culpability subject to any mitigating,
aggravating or extraordinary factors that are clearly established by the available evidence:
(a) Negligence - When the deficiency results from an offender’s failure, through an act or
acts of omission or commission, to exercise reasonable care and competence to ensure that
a statement made is correct, it shall be determined to be negligent and punishable by a fine
equivalent to not less than one-half (1/2) but not more than two (2) times the revenue loss.
(b) Gross Negligence - When a deficiency results from an act or acts of omission or
commission done with actual knowledge or wanton disregard for the relevant facts and with
indifference to or disregard for the offender’s obligation under the statute, it shall be
determined to be grossly negligent and punishable by a fine equivalent to not less than two
and a half (2 ½) but not more than four (4) times the revenue loss.
(c) Fraud - When the material false statement or act in connection with the transaction was
committed or omitted knowingly, voluntarily and intentionally, as established by clear and
convincing evidence, it shall be determined to be fraudulent and be punishable by a fine
equivalent to not less than five (5) times but not more than eight (8) times the revenue loss
and imprisonment of not less than two (2) years but not more than eight (8) years.
The decision of the Commissioner of Customs, upon proper hearing, to impose penalties as
prescribed in this Section may be appealed in accordance with Section 2402 hereof. 80
With respect to the directors or officers of OILINK, they may further be held liable jointly and
severally for all damages suffered by the government on account of such violation of Sections 3602
and 3611 of the TCCP, upon clear and convincing proof that they willfully and knowingly voted for or
assented to patently unlawful acts of the corporation or was guilty of gross negligence or bad faith in
directing its corporate affairs.
81
WHEREFORE, the petition is PARTLY GRANTED. The Court of Appeals Resolutions dated March
26, 2010 and August 4, 2010, in CA-G.R. SP No. 113069, are REVERSED and SET ASIDE. The
Resolution dated December 28, 2009 of the ·Acting Secretary of Justice Agnes VST Devanedera,
which upheld the State Prosecutor's dismissal of the complaintaffidavit filed by the Bureau of
Customs for lack of probable cause, is AFFIRMED. This is without prejudice to the filing of the
appropriate criminal and administrative charges under Sections 3602 and 3611 of the Tariff and
Customs Code of the Philippines, as amended, against private respondents OILINK, its officers and
directors, and Victor D. Piamonte, if the final results of the post-entry audit and examination would
show that they violated the said provisions.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:

Chief Justice
ANTONIO T. CARPIO PRESBITERO J. VELASCO, JR.

TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRION

LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO

MARTIN S. VILLARAMA, JR. JOSE PORTUGAL PEREZ

JOSE CATRAL MENDOZA BIENVENIDO L. REYES*

ESTELA M. PERLAS-BERNABE MARIVIC M.V.F LEONEN

FRANCIS H. JARDELEZA
Associate Justice
CERTIFICATION
Pursuant to Section 13, article VIII of constitution, I certify that the conclusion in the above Decision
were reached in consultation before the case was assigned to the writer of the opinion of the Court.

Chief Justice
Footnotes
* On leave.
1
Penned by Associate Justice Pampio A. Abarintos, with Associate Justices Isaias P.
Dicdican and Florito S. Macalino, concurring; rollo, p. 273.
2
Penned by Associate Justice Isaias P. Dicdican with Associate Justices Michael P. Elbinias
and Florito S. Macalino, concurring; id. at 306-308.
3
Rollo, p. 130.
4
Composed of Atty. Balmyrson M. Valdez (Team Leader), Ma. Elenita A. Salcedo (Team
Head), Henry D. Angeles and Deo Augustus Y. Yalong.
5
Composed of Liza Magaway and Atty. Raymond Zorilla, OILINK's Executive Vice-President
and Corporate Counsel, respectively.
6
CA rollo, p. 63.
7
SEC. IV. RECORDKEEPING AND COMPLIANCE AUDIT
a. Record keeping
xxxx
2. The following records are required to be kept by importers:
xxxx
c. Shipping, importation, exportation, and transportation documentation including the

following to the extent that they are relevant for the verification of the accuracy of the
transaction value declared on the import entry and necessary for the purpose of
collecting the proper duties and taxes on imports, as the case may be:
1. Import and/or export entry;
2. Invoice and or consignment notes;
3. Import and export licenses/permit;
4. Ocean bill of lading, and/or master air waybill, and/or house air waybill,
and/or consolidator bill of lading;
5. Shipping instructions and/or freight forwarders instructions;
6. Certificates of Origin, and/or Certificates of Eligibility, and/or Certificate of

Inspection and/or Loading;
7. Freight and insurance contracts;
8. Packing Lists;
9. Transhipment permits, and/or boatnotes, and/or special permits to transfer;

10. Quota Allocation and/or Certificates;
11. Customs brokerage agreements, and/or billings, and/or statement of

accounts, and/or receipts,
12. Receipts for arrester charges, cargo handling and storage fees;
13. Short shipped/bad order reports, if applicable;
14. Goods tally records, if applicable;
15. Letter of credits, application for letter of credit banks details;
16. Remittance advice;
17. Credit Card Transactions;
18. Telegraphic money transfers;
19. Offshore monetary transactions; and
20. Evidence of payments by any other means, including information

detailing non-cash compensation transactions.
xxxx
e. The following bank documents, financial statements, and other accounting

information to the extent that they are relevant for the verification of the accuracy of
the transaction value declared on the import entry and necessary for the purpose of
collecting proper duties and taxes on imports;
1. Receipts, cashbooks;
2. Schedules of accounts payables and accounts receivables and
3. Cheque records.
xxxx
8
Rollo, pp. 137-138. (Emphasis added)
9
Id. at 139.
10
CA rollo, p. 9.
11
SEC. 1508. Authority of the Collector of Customs to Hold the Delivery or Release of
Imported Articles. - Whenever any importer, except the government, has an outstanding and
demandable account with the Bureau of Customs, the Collector shall hold the delivery of any
article imported or consigned to such importer unless subsequently authorized by the
Commissioner of Customs, and upon notice as in seizure cases, he may sell such
importation or any portion thereof to cover the outstanding account of such importer;
Provided, however, That at any time prior to the sale, the delinquent importer may settle his
obligations with the Bureau of Customs, in which case the aforesaid articles may be
delivered upon payment of the corresponding duties and taxes and compliance with all other
legal requirements.
12
Rollo, p. 140.
13
Id. at 141.
14
Id. at 145.
15
Id. at 156-157.
16
Id. at 157.
17
Id. at 159.
18
Sec. 3601. Unlawful Importation.– Any person who shall fraudulently import or bring into
the Philippines, or assist in so doing, any article, contrary to law, or shall receive, conceal,
buy, sell, or in any manner facilitate the transportation, concealment, or sale of such article
after importation, knowing the same to have been imported contrary to law, shall be guilty of
smuggling and shall be punished with:
1. A fine of not less than fifty pesos nor more than two hundred pesos and
imprisonment of not less than five days nor more than twenty days, if the appraised
value, to be determined in the manner prescribed under the Tariff and Customs
Code, including duties and taxes, of the article unlawfully imported does not exceed
twenty-five pesos;
2. A fine of not less than eight hundred pesos nor more than five thousand pesos and
imprisonment of not less than six months and one day nor more than four years, if
the appraised value, to be determined in the manner prescribed under the Tariff and
Customs Code, including duties and taxes, of the article unlawfully imported exceeds
twenty-five pesos but does not exceed fifty thousand pesos;
3. A fine of not less than six thousand pesos nor more than eight thousand pesos
and imprisonment of not less than five years and one day nor more than eight years,
if the appraised value, to be determined in the manner prescribed under the Tariff
and Customs Code, including duties and taxes, of the article unlawfully imported is
more than fifty thousand pesos but does not exceed one hundred thousand pesos.
4. A fine of not less than eight thousand pesos nor more than ten thousand pesos
and imprisonment of not less than eight years and one day nor more than twelve
years, if the appraised value, to be determined in the manner prescribed under the
Tariff and Customs Code, including duties and taxes, of the article unlawfully
imported exceeds one hundred fifty thousand pesos.
5. The penalty of prision mayor shall be imposed when the crime of serious physical
injuries shall have been committed and the penalty of reclusion perpetua to death
shall be imposed when the crime of homicide shall have been committed by reason
or on the occasion of the unlawful importation. In applying the above scale of
penalties, if the offender is an alien and the prescribed penalty is not death, he shall
be deported after serving the sentence without further proceeding for deportation. If
the offender is a government official or employee, the penalty shall be the maximum
as hereinabove prescribed and the offender shall suffer an additional penalty of
perpetual disqualification from public office, to vote and to participate in any public
election. When, upon trial for a violation of this section, the defendant is shown to
have had possession of the article in question, possession shall be deemed sufficient
evidence to authorize conviction, unless the defendant shall explain the possession
to the satisfaction of the court: Provided, however, That payment of the tax due after
apprehension shall not constitute a valid defense in any prosecution under this
section. (R.A. No. 4712, June 18, 1966).
19
Sec. 3602. Various Fraudulent Practices Against Customs Revenue. – Any person who
makes or attempts to make any entry of imported or exported article by means of any false
or fraudulent invoice, declaration, affidavit, letter, paper, or by any means of any false
statement, written or verbal, or by any means of any false or fraudulent practice whatsoever,
or knowingly effects any entry of goods, wares or merchandise, at less than true weight or
measures thereof or upon a false classification as to quality or value, or by the payment of
less than the amount legally due, or knowingly and willfully files any false or fraudulent entry
or claim for the payment of drawback or refund of duties upon the exportation of
merchandise, or makes or files any affidavit, abstract, record, certificate or other document,
with a view to securing the payment to himself or others of any drawback, allowance, or
refund of duties on the exportation of merchandise, greater than that legally due thereon, or
who shall be guilty of any willful act or omission, shall, for each offense, be punished in
accordance with the penalties prescribed in the preceding section. (R.A. No. 4712, June 18,
1966)
20
Sec. 2503. Undervaluation, Misclassification and Misdeclaration in Entry. – When the
dutiable value of the imported articles shall be so declared and entered that the duties,
based on the declaration of the importer on the face of the entry, would be less by ten
percent (10%) than should be legally collected, or when the imported articles shall be so
described and entered that the duties based on the importer's description on the face of the
entry would be less by ten percent (10%) than should be legally collected based on the tariff
classification, or when the dutiable weight, measurement or quantity of imported articles is
found upon examination to exceed by ten percent (10%) or more than the entered weight,
measurement or quantity, a surcharge shall be collected from the importer in an amount of
not less than the difference between the full duty and the estimated duty based upon the
declaration of the importer, nor more than twice of such difference:
Provided, That an undervaluation, misdeclaration in weight, measurement or quantity

of more than thirty percent (30%) between the value, weight, measurement, or
quantity declared in the entry, and the actual value, weight, quantity, or measurement
shall constitute a prima facie evidence of fraud penalized under Section 2530 of this
Code: Provided, further, That any misdeclared or undeclared imported articles/items
found upon examination shall ipso facto be forfeited in favor of the Government to be
disposed of pursuant to the provisions of this Code. When the undervaluation,
misdescription, misclassification or misdeclaration in the import entry is intentional,
the importer shall be subject to the penal provision under Section 3602 of this Code.
(R.A. No. 7651, June 04, 1993).
21
Sec. 2530. Property Subject to Forfeiture Under Tariff and Customs Laws. – Any vessel or
aircraft, cargo, articles and other objects shall, under the following conditions, be subject to
forfeiture:
xxxx
f. Any article of prohibited importation or exportation, the importation or exportation of

which is effected or attempted contrary to law, and all other articles which, in the
opinion of the Collector, have been used, are or were intended to be used as
instrument in the importation or exportation of the former.
xxxx
m.. Any article sought to be imported or exported
xxxx
(3) On the strength of a false declaration or affidavit executed by the owner, importer,
exporter or consignee concerning the importation or exportation of such article.
(4) On the strength of a false invoice or other document executed by the owner,
importer, exporter or consignee concerning the importation or exportation of such
article.
(5) Through any other fraudulent practice or device by means of which such articles
was entered through a customhouse to the prejudice of the government.
22
Rollo, pp. 454-458.
23
Id. at 118-127.
24
Id. at113-114.
25
Id. at 96-99.
26
Id. at 273.
27
Id. at 306-307.
28
Id. at 33.
29
20 Am. Jur. 2d, Courts, §92, 1965.
Ace Publications, Inc. v. Commissioner of Customs, 120 Phil. 143, 149 (1964), citing 15
30
C.J. 852.
31
Villaflores v. Ram System Services, Inc., 530 Phil. 749, 763 (2006).
32
Hasegawa v. Giron, G.R. No. 184536, August 14, 2013, 703 SCRA 549, 558.
33
Passed into law on March 30, 2004.
34
An Act Creating the Court of Tax Appeals.
35
City of Manila v. Hon. Grecia-Cuerdo, supra, at 201-206. (Emphasis in the original; citation
36
omitted)
37
Supra note 35.
38
Id.
39
Section 9 (1), BP Blg. 129 – The Court of Appeals shall exercise: (1) Original jurisdiction to
issue writs ofmandamus, prohibition, habeas corpus, and quo warranto and auxiliary writs or
processes, whether or not in aid of its appellate jurisdiction.
40
Sec. 7. Jurisdiction. - The CTA shall exercise:
xxxx
b. Jurisdiction over cases involving criminal offenses as herein provided:
1. Exclusive original jurisdiction over all criminal offenses arising from

violations of the National Internal Revenue Code or Tariff and Customs Code
and other laws administered by the Bureau of Internal Revenue or the Bureau
of Customs: Provided, however, That offenses or felonies mentioned in this
paragraph where the principal amount of taxes and fees, exclusive of charges and
penalties, claimed is less than One million pesos (P1,000,000.00) or where there is
no specified amount claimed shall be tried by the regular Courts and the jurisdiction
of the CTA shall be appellate. Any provision of law or the Rules of Court to the
contrary notwithstanding, the criminal action and the corresponding civil action for the
recovery of civil liability for taxes and penalties shall at all times be simultaneously
instituted with, and jointly determined in the same proceeding by the CTA, the filing
of the criminal action being deemed to necessarily carry with it the filing of the civil
action, and no right to reserve the filling of such civil action separately from the
criminal action will be recognized. (Emphasis added)
41
614 Phil. 222 (2009).
Traveño, et al. v. Bobongon Banana Growers Multi-Purpose Cooperative, et al., supra, at

42
231-232, citingVda. De Formoso, et al. v. Philippine National Bank, et al., 665 Phil. 184, 193-
194 (2011).
43
Sec. 12. Proof of filing - The filing of a pleading or paper shall be proved by its existence in
the record of the case. If it is not in the record, but is claimed to have been filed personally,
the filing shall be proved by the written or stamped acknowledgment of its filing by the clerk
of court on a copy of the same;
if filed by registered mail, by the registry receipt and by the affidavit of the
person who did the mailing, containing a full statement of the date and place of
depositing the mail in the post office in a sealed envelope addressed to the
court, with postage fully prepaid, and with instructions to the postmaster to
return the mail to sender after ten (10) days if not delivered.(Emphasis added)
44
Supra note 35.
45
Santos v. Velarde, 450 Phil. 381 (2003)
46
Chevron Phils., Inc. v. Commissioner of the Bureau of Customs, 583 Phil. 706, 737 (2008).
Western Mindanao Power Corporation v. Commissioner of Internal Revenue, G.R. No.

47
181136, June 13, 2012, 672 SCRA 350.
48
Cabarles v. Hon. Maceda, 545 Phil. 210, 223 (2007).
49
G.R. No. 205728, January 21, 2015. (Citations omitted).
50
Diocese of Bacolod v. Commission on Elections, supra.
51
52
Unilever Philippines, Inc. v. Tan, supra, at 44-45.
53
Alejandro, et al. v. Atty. Jose A. Bernas, et al., 672 Phil. 698, 707 (2011).
54
540 Phil. 111, 117 (2006).
55
512 Phil. 145 (2005).
56
Villanueva v. Secretary of Justice, supra, at 159. (Emphasis added)
57
517 Phil. 179 (2006).
58
Jardeleza v. People, supra, at 201-203.
59
Rollo, pp. 168-169.
60
Id. at 171-172.
61
Approved June 4, 1993.
62
Emphasis added.
63
United Coconut Planters Bank v. Looyuko, 560 Phil. 581 (2007).
64
Rollo, pp. 97-98. (Citation omitted)
65
Supra note 57, at 202.
66
Id.
67
Id., citing Tomplain v. United States, 42 F. 2d 203 (1930).
68
Id. at 203.
69
Rollo, pp. 236-240; CA rollo, pp. 171-175.
70
Id. at 216-235; id. at 150-170.
71
Rollo, p. 161; CA rollo, p. 93.
72
Id. at 236-240; id. at 171-175.
73
Id. at 216-235; id. at 150-170.
74
Kukan International Corp. v. Hon. Judge Reyes, et al., 646 Phil. 210, 239 (2010),
citing Francisco v. Mejia, 415 Phil. 153 (2001).
75
Supra.
76
Id. at 237-238.
77
Id. at 234.
78
SEC. 2301. Warrant for Detention of Property-Cash Bond. - Upon making any, seizure, the
Collector shall issue a warrant for the detention of the property; and if the owner or importer
desires to secure the release of the property for legitimate use, the Collector shall, with the
approval of the Commissioner of Customs, surrender it upon the filing of a cash bond, in an
amount to be fixed by him, conditioned upon the payment of the appraised value of the
article and/or any fine, expenses and costs which may be adjudged in the case: Provided,
That such importation shall not be released under any bond when there is prima facie
evidence of fraud in the importation of the article: Provided, further, That articles the
importation of which is prohibited by law shall not be released under any circumstance
whomsoever, Provided, finally, That nothing in this section shall be construed as relieving the
owner or importer from any criminal liability which may arise from any violation of law
committed in connection with the importation of the article.
79
An Act Amending Certain Provisions of Presidential Decree No. 1464, Otherwise Known as
the Tariff and Customs Code of the Philippines, As Amended, and For Other Purposes.
80
Emphasis added.
81
Corporation Code, Sec. 31. Liability of directors, trustees or officers. - Directors or trustees
who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or
who are guilty of gross negligence or bad faith in directing the affairs of the corporation or
acquire any personal or pecuniary interest in conflict with their duty as such directors or
trustees shall be liable jointly and severally for all damages resulting therefrom suffered by
the corporation, its stockholders or members and other persons. When a director, trustee or
officer attempts to acquire or acquires, in violation of his duty, any interest adverse to the
corporation in respect of any matter which has been reposed in him in confidence, as to
which equity imposes a disability upon him to deal in his own behalf, he shall be liable as a
trustee for the cocporat;on and mu't ac<ount for the profiV; which otherw;,. would have
accrued to the corporation.
Carpio-Morales v. Court of Appeals, GR 217126-27, 10 November 2015
EN BANC
G.R. Nos. 217126-27, November 10, 2015
CONCHITA CARPIO MORALES, IN HER CAPACITY AS THE OMBUDSMAN, Petitioner, v. COURT OF

APPEALS (SIXTH DIVISION) AND JEJOMAR ERWIN S. BINAY, JR., Respondents.
DECISION
PERLAS-BERNABE, J.:
"All government is a trust, every branch of government is a trust, and immemorially acknowledged so to
be[.]"1
The Case
Before the Court is a petition for certiorari and prohibition2 filed on March 25, 2015 by petitioner Conchita
Carpio Morales, in her capacity as the Ombudsman (Ombudsman), through the Office of the Solicitor
General (OSG), assailing: (a) the Resolution3 dated March 16, 2015 of public respondent the Court of
Appeals (CA) in CA-G.R. SP No. 139453, which granted private respondent Jejomar Erwin S. Binay, Jr.'s
(Binay, Jr.) prayer for the issuance of a temporary restraining order (TRO) against the implementation of
the Joint Order4 dated March 10, 20,15 of the Ombudsman in OMB-C-A-15-0058 to 0063 (preventive
suspension order) preventively suspending him and several other public officers and employees of the City
Government of Makati, for six (6) months without pay; and (b) the Resolution5dated March 20, 2015 of the
CA, ordering the Ombudsman to comment on Binay, Jr.'s petition for contempt6 in CA-G.R. SP No.
139504.
Pursuant to the Resolution7 dated April 6, 2015, the CA issued a writ of preliminary injunction8 (WPI) in CA-
G.R. SP No. 139453 which further enjoined the implementation of the preventive suspension order,
prompting the Ombudsman to file a supplemental petition9 on April 13, 2015.
The Facts
On July 22, 2014, a complaint/affidavit10 was filed by Atty. Renato L. Bondal and Nicolas "Ching" Enciso VI
before the Office of the Ombudsman against Binay, Jr. and other public officers and employees of the City
Government of Makati (Binay, Jr., et al), accusing them of Plunder11 and violation of Republic Act No. (RA)
3019,12 otherwise known as "The Anti-Graft and Corrupt Practices Act," in connection with the five (5)
phases of the procurement and construction of the Makati City Hall Parking Building (Makati Parking
Building).13
On September 9, 2014, the Ombudsman constituted a Special Panel of Investigators14 to conduct a fact-
finding investigation, submit an investigation report, and file the necessary complaint, if warranted (1st
Special Panel).15 Pursuant to the Ombudsman's directive, on March 5, 2015, the 1st Special Panel filed a
complaint16 (OMB Complaint) against Binay, Jr., et al, charging them with six (6) administrative cases17 for
Grave Misconduct, Serious Dishonesty, and Conduct Prejudicial to the Best Interest of the Service, and six
(6) criminal cases18 for violation of Section 3 (e) of RA 3019, Malversation of Public Funds, and Falsification
of Public Documents (OMB Cases).19
As to Binay, Jr., the OMB Complaint alleged that he was involved in anomalous activities attending the
following procurement and construction phases of the Makati Parking Building project, committed during his
previous and present terms as City Mayor of Makati:
Binay, Jr.'s First Term (2010 to 2013)20

(a) On September 21, 2010, Binay, Jr. issued the Notice of Award21 for Phase III of the Makati Parking
Building project to Hilmarc's Construction Corporation (Hilmarc's), and consequently, executed the
corresponding contract22 on September 28, 2010,23without the required publication and the lack of
architectural design,24 and approved the release of funds therefor in the following amounts as follows: (1)
P130,518,394.80 onDecember 15, 2010;25 (2) P134,470,659.64 on January 19, 2011;26 (3)
P92,775,202.27 on February 25, 2011;27 (4) P57,148,625.51 on March 28, 2011;28(5) P40,908,750.61
on May 3, 2011;29 and (6) P106,672,761.90 on July 7, 2011;30
(b) On August 11, 2011, Binay, Jr. issued the Notice of Award31 for Phase IV of the Makati Parking Building
project to Hilmarc's, and consequently, executed the corresponding contract32 on August 18, 2011,33 without
the required publication and the lack of architectural design,34 and approved the release of funds therefor in
the following amounts as follows: (1) P182,325,538.97 on October 4, 2O11;35 (2) P173,132,606.91 on
October 28,2011;36 (3) P80,408,735.20 on December 12, 2011;37(4) P62,878,291.81 on February 10,
2012;38 and (5) P59,639,167.90 on October 1, 2012;39
(c) On September 6, 2012, Binay, Jr. issued the Notice of Award40 for Phase V of the Makati Parking Building
project to Hilmarc's, and consequently, executed the corresponding contract41 on September 13,
2012,42 without the required publication and the lack of architectural design,43 and approved the release of
the funds therefor in the amounts of P32,398,220.0544 and P30,582,629.3045 on December 20, 2012; and
Binay, Jr.'s Second Term (2013 to 2016)46
(d) On July 3, 2013 and July 4, 2013, Binay, Jr. approved the release of funds for the remaining balance of
the September 13, 2012 contract with Hilmarc's for Phase V of the Makati Parking Building project in the
amount of P27,443,629.97;47 and
(e) On July 24, 2013, Binay, Jr. approved the release of funds for the remaining balance of the
contract48 with MANA Architecture & Interior Design Co. (MANA) for the design and architectural services
covering the Makati Parking Building project in the amount of P429,011.48.49
On March 6, 2015, the Ombudsman created another Special Panel of Investigators to conduct a preliminary
investigation and administrative adjudication on the OMB Cases (2nd Special Panel).50Thereafter, on March 9,
2015, the 2nd Special Panel issued separate orders51 for each of the OMB Cases, requiring Binay, Jr., et al. to
file their respective counter-affidavits.52
Before Binay, Jr., et al.'s filing of their counter-affidavits, the Ombudsman, upon the recommendation of the
2nd Special Panel, issued on March 10, 2015, the subject preventive suspension order, placing Binay, Jr., et
al. under preventive suspension for not more than six (6) months without pay, during the pendency of the
OMB Cases.53 The Ombudsman ruled that the requisites for the preventive suspension of a public officer are
present,54 finding that: (a) the evidence of Binay, Jr., et al.'s guilt was strong given that (1) the losing
bidders and members of the Bids and Awards Committee of Makati City had attested to the irregularities
attending the Makati Parking Building project; (2) the documents on record negated the publication of bids;
and (3) the disbursement vouchers, checks, and official receipts showed the release of funds; and (b) (1)
Binay, Jr., et al. were administratively charged with Grave Misconduct, Serious Dishonesty, and Conduct
Prejudicial to the Best Interest of the Service; (2) said charges, if proven to be true, warrant removal from
public service under the Revised Rules on Administrative Cases in the Civil Service (RRACCS), and (3) Binay,
Jr., et al.'s respective positions give them access to public records and allow them to influence possible
witnesses; hence, their continued stay in office may prejudice the investigation relative to the OMB Cases
filed against them.55 Consequently, the Ombudsman directed the Department of Interior and Local
Government (DILG), through Secretary Manuel A. Roxas II (Secretary Roxas), to immediately implement
the preventive suspension order against Binay, Jr., et al., upon receipt of the same.56
On March 11, 2015, a copy of the preventive suspension order was sent to the Office of the City Mayor, and
received by Maricon Ausan, a member of Binay, Jr.'s staff.57
The Proceedings Before the CA

On even date,58 Binay, Jr. filed a petition for certiorari59 before the CA, docketed as CA-G.R. SP No.
139453, seeking the nullification of the preventive suspension order, and praying for the issuance of a TRO
and/or WPI to enjoin its implementation.60Primarily, Binay, Jr. argued that he could not be held
administratively liable for any anomalous activity attending any of the five (5) phases of the Makati
Parking Building project since: (a) Phases I and II were undertaken before he was elected Mayor of Makati
in 2010; and (b) Phases III to V transpired during his first term and that his re-election as City Mayor of
Makati for a second term effectively condoned his administrative liability therefor, if any, thus
rendering the administrative cases against him moot and academic.61In any event, Binay, Jr. claimed
that the Ombudsman's preventive suspension order failed to show that the evidence of guilt
presented against him is strong, maintaining that he did not participate in any of the purported
irregularities.62 In support of his prayer for injunctive relief, Binay, Jr. argued that he has a clear and
unmistakable right to hold public office, having won by landslide vote in the 2010 and 2013 elections, and
that, in view of the condonation doctrine, as well as the lack of evidence to sustain the charges against him,
his suspension from office would undeservedly deprive the electorate of the services of the person they have
conscientiously chosen and voted into office.63
On March 16, 2015, at around 8:24 a.m., Secretary Roxas caused the implementation of the preventive
suspension order through the DILG National Capital Region - Regional Director, Renato L. Brion, CESO III
(Director Brion), who posted a copy thereof on the wall of the Makati City Hall after failing to personally
serve the same on Binay, Jr. as the points of entry to the Makati City Hall were closed. At around 9:47 a.m.,
Assistant City Prosecutor of Makati Billy C. Evangelista administered the oath of office on Makati City Vice
Mayor Romulo V. Peña, Jr. (Peña, Jr.) who thereupon assumed office as Acting Mayor.64
At noon of the same day, the CA issued a Resolution65 (dated March 16, 2015), granting Binay, Jr.'s prayer
for a TRO,66 notwithstanding Pena, Jr.'s assumption of duties as Acting Mayor earlier that day.67 Citing the
case of Governor Garcia, Jr. v. CA,68 the CA found that it was more prudent on its part to issue a TRO in
view of the extreme urgency of the matter and seriousness of the issues raised, considering that if it were
established that the acts subject of the administrative cases against Binay, Jr. were all committed during his
prior term, then, applying the condonation doctrine, Binay, Jr.'s re-election meant that he can no longer be
administratively charged.69 The CA then directed the Ombudsman to comment on Binay, Jr.'s petition
for certiorari .70
On March 17, 2015, the Ombudsman manifested71 that the TRO did not state what act was being restrained
and that since the preventive suspension order had already been served and implemented, there was no
longer any act to restrain.72
On the same day, Binay, Jr. filed a petition for contempt,73 docketed as CA-G.R. SP No. 139504, accusing
Secretary Roxas, Director Brion, the officials of the Philippine National Police, and Pena, Jr. of deliberately
refusing to obey the CA, thereby allegedly impeding, obstructing, or degrading the administration of
justice.74 The Ombudsman and Department of Justice Secretary Leila M. De Lima were subsequently
impleaded as additional respondents upon Binay, Jr.'s filing of the amended and supplemental petition for
contempt75 (petition for contempt) on March 19, 2015.76 Among others, Binay, Jr. accused the Ombudsman
and other respondents therein for willfully and maliciously ignoring the TRO issued by the CA against the
preventive suspension order.77
In a Resolution78dated March 20, 2015, the CA ordered the consolidation of CA-G.R. SP No. 139453 and
CA-G.R. SP No. 139504, and, without necessarily giving due course to Binay, Jr.'s petition for
contempt, directed the Ombudsman to file her comment thereto.79 The cases were set for hearing of oral
arguments on March 30 and 31, 2015.80
The Proceedings Before the Court
Prior to the hearing of the oral arguments before the CA, or on March 25, 2015, the Ombudsman filed the
present petition before this Court, assailing the CA's March 16, 2015 Resolution, which granted Binay, Jr.'s
prayer for TRO in CA-G.R. SP No. 139453, and the March 20, 2015 Resolution directing her to file a
comment on Binay, Jr.'s petition for contempt in CA-G.R. SP No. 139504.81 The Ombudsman claims that: (a)
the CA had no jurisdiction to grant Binay, Jr.'s prayer for a TRO, citing Section 14 of RA 6770,82 or "The
Ombudsman Act of 1989," which states that no injunctive writ could be issued to delay the Ombudsman's
investigation unless there is prima facie evidence that the subject matter thereof is outside the latter's
jurisdiction;83 and (b) the CA's directive for the Ombudsman to comment on Binay, Jr.'s petition for
contempt is illegal and improper, considering that the Ombudsman is an impeachable officer, and therefore,
cannot be subjected to contempt proceedings.84
In his comment85 filed on April 6, 2015, Binay, Jr. argues that Section 1, Article VIII of the 1987 Constitution
specifically grants the CA judicial power to review acts of any branch or instrumentality of government,
including the Office of the Ombudsman, in case of grave abuse of discretion amounting to lack or excess of
jurisdiction, which he asserts was committed in this case when said office issued the preventive suspension
order against him.86 Binay, Jr. posits that it was incumbent upon the Ombudsman to1 have been apprised of
the condonation doctrine as this would have weighed heavily in determining whether there was strong
evidence to warrant the issuance of the preventive suspension order.87 In this relation, Binay, Jr. maintains
that the CA correctly enjoined the implementation of the preventive suspension order given his clear and
unmistakable right to public office, and that it is clear that he could not be held administratively liable for
any of the charges against him since his subsequent re-election in 2013 operated as a condonation of any
administrative offenses he may have committed during his previous term.88 As regards the CA's order for
the Ombudsman to comment on his petition for contempt, Binay, Jr. submits that while the Ombudsman is
indeed an impeachable officer and, hence, cannot be removed from office except by way of impeachment,
an action for contempt imposes the penalty of fine and imprisonment, without necessarily resulting in
removal from office. Thus, the fact that the Ombudsman is an impeachable officer should not deprive the CA
of its inherent power to punish contempt.89
Meanwhile, the CA issued a Resolution90 dated April 6, 2015, after the oral arguments before it were
held,91 granting Binay, Jr.'s prayer for a WPI, which further enjoined the implementation of the preventive
suspension order. In so ruling, the CA found that Binay, Jr. has an ostensible right to the final relief prayed
for, namely, the nullification of the preventive suspension order, in view of the condonation doctrine,
citing Aguinaldo v. Santos.92 Particularly, it found that the Ombudsman can hardly impose preventive
suspension against Binay, Jr. given that his re-election in 2013 as City Mayor of Makati condoned any
administrative liability arising from anomalous activities relative to the Makati Parking Building project from
2007 to 2013.93 In this regard, the CA added that, although there were acts which were apparently
committed by Binay, Jr. beyond his first term — namely, the alleged payments on July 3, July 4, and July
24, 2013,94 corresponding to the services of Hillmarc's and MANA - still, Binay, Jr. cannot be held
administratively liable therefor based on the cases of Salalima v. Guingona, Jr.,95 and Mayor Garcia v.
Mojica96 wherein the condonation doctrine was still applied by the Court although the payments were made
after the official's re-election, reasoning that the payments were merely effected pursuant to contracts
executed before said re-election.97 To this, the CA added that there was no concrete evidence of Binay, Jr.'s
participation for the alleged payments made on July 3, 4, and 24, 2013.98
In view of the CA's supervening issuance of a WPI pursuant to its April 6, 2015 Resolution, the Ombudsman
filed a supplemental petition99 before this Court, arguing that the condonation doctrine is irrelevant to the
determination of whether the evidence of guilt is strong for purposes of issuing preventive suspension
orders. The Ombudsman also maintained that a reliance on the condonation doctrine is a matter of defense,
which should have been raised by Binay, Jr. before it during the administrative proceedings, and that, at any
rate, there is no condonation because Binay, Jr. committed acts subject of the OMB Complaint after his re-
election in 2013.100
On April 14 and 21, 2015,101 the Court conducted hearings for the oral arguments of the parties. Thereafter,
they were required to file their respective memoranda.102 In compliance thereto, the Ombudsman filed her
Memorandum103 on May 20, 2015, while Binay, Jr. submitted his Memorandum the following day.104
Pursuant to a Resolution105 dated June 16, 2015, the Court directed the parties to comment on each other's
memoranda, and the OSG to comment on the Ombudsman's Memorandum, all within ten (10) days from
receipt of the notice.
On July 15, 2015, both parties filed their respective comments to each other's memoranda.106Meanwhile, on
July 16, 2015, the OSG filed its Manifestation In Lieu of Comment,107 simply stating that it was mutually
agreed upon that the Office of the Ombudsman would file its Memorandum, consistent with its desire to
state its "institutional position."108 In her Memorandum and Comment to Binay, Jr.'s Memorandum, the
Ombudsman pleaded, among others, that this Court abandon the condonation doctrine.109 In view of the
foregoing, the case was deemed submitted for resolution. chanrobleslaw
The Issues Before the Court
Based on the parties' respective pleadings, and as raised during the oral arguments conducted before this
Court, the main issues to be resolved in seriatim are as follows:
I. Whether or not the present petition, and not motions for reconsideration of the assailed CA
issuances in CA-G.R. SP No. 139453 and CA-G.R. SP No. 139504, is the Ombudsman's plain,
speedy, and adequate remedy; cralawlawlibrary
II. Whether or not the CA has subject matter jurisdiction over the main petition forcertiorari in CA-G.R.
SP No. 139453; cralawlawlibrary
III. Whether or not the CA has subject matter jurisdiction to issue a TRO and/or WPI enjoining the
implementation of a preventive suspension order issued by the Ombudsman; cralawlawlibrary
IV. Whether or not the CA gravely abused its discretion in issuing the TRO and eventually, the WPI in
CA-G.R. SP No. 139453 enjoining the implementation of the preventive suspension order against
Binay, Jr. based on the condonation doctrine; and
V. Whether or not the CA's directive for the Ombudsman to ' comment on Binay, Jr.'s petition for
contempt in CA- G.R. SP No. 139504 is improper and illegal.
The Ruling of the Court
The petition is partly meritorious. chanrobleslaw
I.
A common requirement to both a petition for certiorari and a petition for prohibition taken under Rule 65 of
the 1997 Rules of Civil Procedure is that the petitioner has no other plain, speedy, and adequate remedy in
the ordinary course of law. Sections 1 and 2 thereof provide:
Section 1. Petition for certiorari. - When any tribunal, board or officer exercising judicial or quasi-judicial
functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate
remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the
proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying
the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may
require.
xxxx
Section 2. Petition for prohibition. - When the proceedings of any tribunal, corporation, board, officer or
person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or
his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no
appeal, or any other plain, speedy, and adequate remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the proper court, alleging the facts r with certainty and
praying that judgment be rendered commanding the respondent to desist from further proceedings in the
action or matter specified therein, or otherwise granting such incidental reliefs as law and justice may
require.
x x x x (Emphases supplied)
Hence, as a general rule, a motion for reconsideration must first be filed with the lower court prior to
resorting to the extraordinary remedy of certiorari or prohibition since a motion for reconsideration may still
be considered as a plain, speedy, and adequate remedy in the ordinary course of law. The rationale for the
pre-requisite is to grant an opportunity for the lower court or agency to correct any actual or perceived error
attributed to it by the re-examination of the legal and factual circumstances of the case.110
Jurisprudence states that "[i]t is [the] inadequacy, [and] not the mere absence of all other legal remedies
and the danger of failure of justice without the writ, that must usually determine the propriety
of certiorari [or prohibition]. A remedy is plain, speedy[,] and adequate if it will promptly relieve the
petitioner from the injurious effects of the judgment, order, or resolution of the lower court or agency, x x
x."111
In this light, certain exceptions were crafted to the general rule requiring a prior motion for reconsideration
before the filing of a petition for certiorari, which exceptions also apply to a petition for prohibition.112 These
are: (a) where the order is a patent nullity, as where the court a quo has no jurisdiction; (b) where the
questions raised in the certiorari proceedings have been duly raised and passed upon by the lower court, or
are the same as those raised and passed upon in the lower court; (c) where there is an urgent necessity for
the resolution of the question and any further delay would prejudice the interests of the Government or of
the petitioner or the subject matter of the action is perishable; (d) where, under the circumstances, a
motion for reconsideration would be useless; (e) where petitioner was deprived of due process and there is
extreme urgency for relief; (f) where, in a criminal case, relief from an order of arrest is urgent and the
granting of such relief by the trial court is improbable; (g) where the proceedings in the lower court are a
nullity for lack of due process; (h) where the proceedings were ex parte or in which the petitioner had no
opportunity to object; and (i)where the issue raised is one purely of law or where public interest is
involved.113
In this case, it is ineluctably clear that the above-highlighted exceptions attend since, for the first time, the
question on the authority of the CA - and of this Court, for that matter - to enjoin the implementation of a
preventive suspension order issued by the Office of the Ombudsman is put to the fore. This case tests the
constitutional and statutory limits of the fundamental powers of key government institutions - namely, the
Office of the Ombudsman, the Legislature, and the Judiciary - and hence, involves an issue of
transcendental public importance that demands no less than a careful but expeditious resolution. Also raised
is the equally important issue on the propriety of the continuous application of the condonation doctrine as
invoked by a public officer who desires exculpation from administrative liability. As such, the Ombudsman's
direct resort to certiorari and prohibition before this Court, notwithstanding her failure to move for the prior
reconsideration of the assailed issuances in CA-G.R. SP No. 139453 and CA-G.R. SP No. 139504 before the
CA, is justified.
chanrobleslaw
II.
Albeit raised for the first time by the Ombudsman in her Memorandum,114 it is nonetheless proper to resolve
the issue on the CA's lack of subject matter jurisdiction over the main petition for certiorari in CA-G.R. SP
No. 139453, in view of the well-established rule that a court's jurisdiction over the subject matter may be
raised at any stage of the proceedings. The rationale is that subject matter jurisdiction is conferred by law,
and the lack of it affects the very authority of the court to take cognizance of and to render judgment on the
action.115 Hence, it should be preliminarily determined if the CA indeed had subject matter jurisdiction over
the main CA-G.R. SP No. 139453 petition, as the same determines the validity of all subsequent proceedings
relative thereto. It is noteworthy to point out that Binay, Jr. was given the opportunity by this Court to be
heard on this issue,116 as he, in fact, duly submitted his opposition through his comment to the
Ombudsman's Memorandum.117 That being said, the Court perceives no reasonable objection against ruling
on this issue.
The Ombudsman's argument against the CA's lack of subject matter jurisdiction over the main petition, and
her corollary prayer for its dismissal, is based on her interpretation of Section 14, RA 6770, or the
Ombudsman Act,118 which reads in full:
Section 14. Restrictions. - No writ of injunction shall be issued by any court to delay an investigation being
conducted by the Ombudsman under this Act, unless there is a prima facie evidence that the subject matter
of the investigation is outside the jurisdiction of the Office of the Ombudsman.
No court shall hear any appeal or application for remedy against the decision or findings of the Ombudsman,
except the Supreme Court, on pure question of law.
The subject provision may be dissected into two (2) parts.
The first paragraph of Section 14, RA 6770 is a prohibition against any court (except the Supreme
Court119) from issuing a writ of injunction to delay an investigation being conducted by the Office of the
Ombudsman. Generally speaking, "[injunction is a judicial writ, process or proceeding whereby a party is
ordered to do or refrain from doing a certain act. It may be the main action or merely a provisional remedy
for and as an incident in the main action."120 Considering the textual qualifier "to delay," which connotes a
suspension of an action while the main case remains pending, the "writ of injunction" mentioned in this
paragraph could only refer to injunctions of the provisional kind, consistent with the nature of a provisional
injunctive relief.
The exception to the no injunction policy is when there is prima facie evidence that the subject matter of the
investigation is outside the office's jurisdiction. The Office of the Ombudsman has disciplinary authority over
all elective and appointive officials of the government and its subdivisions, instrumentalities, and agencies,
with the exception only of impeachable officers, Members of Congress, and the Judiciary.121 Nonetheless, the
Ombudsman retains the power to investigate any serious misconduct in office allegedly committed by
officials removable by impeachment, for the purpose of filing a verified complaint for impeachment, if
warranted.122 Note that the Ombudsman has concurrent jurisdiction over certain administrative cases which
are within the jurisdiction of the regular courts or administrative agencies, but has primary jurisdiction to
investigate any act or omission of a public officer or employee who is under the jurisdiction of the
Sandiganbayan.123
On the other hand, the second paragraph of Section 14, RA 6770 provides that no appeal or application
for remedy may be heard against the decision or findings of the Ombudsman, with the exception of the
Supreme Court on pure questions of law. This paragraph, which the Ombudsman particularly relies on in
arguing that the CA had no jurisdiction over the main CA-G.R. SP No. 139453 petition, as it is supposedly
this Court which has the sole jurisdiction to conduct a judicial review of its decisions or findings, is vague for
two (2) reasons: (1) it is unclear what the phrase "application for remedy" or the word "findings" refers to;
and (2) it does not specify what procedural remedy is solely allowable to this Court, save that the same be
taken only against a pure question of law. The task then, is to apply the relevant principles of statutory
construction to resolve the ambiguity.
"The underlying principle of all construction is that the intent of the legislature should be sought in the
words employed to express it, and that when found[,] it should be made to govern, x x x. If the words of
the law seem to be of doubtful import, it may then perhaps become necessary to look beyond them in order
to ascertain what was in the legislative mind at the time the law was enacted; what the circumstances were,
under which the action was taken; what evil, if any, was meant to be redressed; x x x [a]nd where the law
has contemporaneously been put into operation, and in doing so a construction has necessarily been put
upon it, this construction, especially if followed for some considerable period, is entitled to great respect, as
being very probably a true expression of the legislative purpose, and is not lightly to be overruled, although
it is not conclusive."124
As an aid to construction, courts may avail themselves of the actual proceedings of the legislative body in
interpreting a statute of doubtful meaning. In case of doubt as to what a provision of a statute means, the
meaning put to the provision during the legislative deliberations may be adopted,125 albeit not controlling in
the interpretation of the law.126
A. The Senate deliberations cited by the

Ombudsman do not pertain to the second
paragraph of Section 14, RA 6770.
The Ombudsman submits that the legislative intent behind Section 14, RA 6770, particularly on the matter
of judicial review of her office's decisions or findings, is supposedly clear from the following Senate
deliberations:127
Senator [Edgardo J.] Angara, x x x. On page 15, Mr. President, line 14, after the phrase "petition for"
delete the word "review" and in lieu thereof, insert the wordCERTIORARI. So that, review or appeal from the
decision of the Ombudsman would only be taken not on a petition for review, but on certiorari.
The President [Jovito R. Salonga]. What is the practical effect of that? Will it be more difficult to
reverse the decision under review?
Senator Angara. It has two practical effect ways, Mr. President. First is that the findings of facts of the
Ombudsman would be almost conclusive if supported by substantial evidence. Second, we would
not unnecessarily clog the docket of the Supreme Court. So, it in effect will be a very strict appeal
procedure.
xxxx
Senator [Teofisto T.] Guingona, [Jr.]. Does this mean that, for example, if there are exhaustive
remedies available to a respondent, the respondent himself has the right to exhaust the administrative
remedies available to him?
Senator Angara. Yes, Mr. President, that is correct.
Senator Guingona. And he himself may cut the proceeding short by appealing to the Supreme Court
only on certiorari ?
Senator Angara. On question of law, yes.
Senator Guingona. And no other remedy is available to him?
Senator Angara. Going to the Supreme Court, Mr. President?
Senator Guingona. Yes. What I mean to say is, at what stage, for example, if he is a presidential
appointee who is the respondent, if there is f no certiorari available, is the respondent given the right to
exhaust his administrative remedies first before the Ombudsman can take the appropriate action?
Senator Angara. Yes, Mr. President, because we do not intend to change the administrative law principle
that before one can go to court, he must exhaust all administrative remedies xxx available to him before he
goes and seeks judicial review.
xxxx
Senator [Neptali A.] Gonzales. What is the purpose of the Committee in changing the method of
appeal from one of a petition for review to a petition forcertiorari ?
Senator Angara. To make it consistent, Mr. President, with the provision here in the bill to the
effect that the finding of facts of the Ombudsman is conclusive if supported by substantial
evidence.
Senator Gonzales. A statement has been made by the Honorable Presiding Officer to which I concur, that
in an appeal by certiorari , the appeal is more difficult. Because in certiorari it is a matter of
discretion on the part of the court, whether to give due course to the petition or dismiss it
outright. Is that not correct, Mr. President?
Senator Angara. That is absolutely correct, Mr. President
Senator Gonzales. And in a petition for certiorari , the issue is limited to whether or not the
Ombudsman here has acted without jurisdiction and has committed a grave abuse of discretion
amounting to lack of jurisdiction. Is that not the consequence, Mr. President.
Senator Angara. That is correct, Mr. President.
Senator Gonzales. And it is, therefore, in this sense that the intention of the Committee is to make it
harder to have a judicial review, but should be limited only to cases that I have enumerated.
Senator Angara. Yes, Mr. President.
Senator Gonzales. I think, Mr. President, our Supreme Court has made a distinction between a petition for
review and a petition for certiorari ; because before, under the 1935 Constitution appeal from any order,
ruling or decision of the COMELEC shall be by means of review. But under the Constitution it is now
by certiorari and the Supreme Court said that by this change, the court exercising judicial review will not
inquire into the facts, into the evidence, because we will not go deeply by way of review into the evidence
on record but its authority will be limited to a determination of whether the administrative agency acted
without, or in excess of, jurisdiction, or committed a grave abuse of discretion. So, I assume that that is the
purpose of this amendment, Mr. President.
Senator Angara. The distinguished Gentleman has stated it so well.
Senator Gonzales. I just want to put that in the Record. Senator Angara. It is very well stated, Mr.
President.
xxxx
The President. It is evident that there must be some final authority to render decisions. Should it
be the Ombudsman or should it be the Supreme Court?
Senator Angara. As I understand it, under our scheme of government, Mr. President, it is and has to be
the Supreme Court to make the final determination.
The President. Then if that is so, we have to modify Section 17.
Senator Angara. That is why, Mr. President, some of our Colleagues have made a reservation to introduce
an appropriate change during the period of Individual Amendments.
xxxx
The President. All right. Is there any objection to the amendment inserting the wordCERTIORARI instead
of "review"? [Silence] Hearing none, the same is approved.128
Upon an assiduous scrutiny of these deliberations, the Court is, however, unconvinced that the provision
debated on was Section 14, RA 6770, as the Ombudsman invokes. Note that the exchange begins with the
suggestion of Senator Angara to delete the word "review" that comes after the phrase "petition for review"
and, in its stead, insert the word "certiorari" so that the "review or appeal from the decision of the
Ombudsman would not only be taken on a petition for review, but on certiorari" The ensuing exchange
between Senators Gonzales and Angara then dwells on the purpose of changing the method of review from
one of a petition for review to a petition for certiorari - that is, to make "the appeal x x x more difficult."
Ultimately, the amendment to the change in wording, from "petition for review" to "petition for certiorari"
was approved.
Noticeably, these references to a "petition for review" and the proposed "petition for certiorari" are nowhere
to be found in the text of Section 14, RA 6770. In fact, it was earlier mentioned that this provision,
particularly its second paragraph, does not indicate what specific procedural remedy one should take in
assailing a decision or finding of the Ombudsman; it only reveals that the remedy be taken to this Court
based on pure questions of law. More so, it was even commented upon during the oral arguments of this
case129 that there was no debate or clarification made on the current formulation of the second paragraph of
Section 14, RA 6770 per the available excerpts of the Senate deliberations. In any case, at least for the
above-cited deliberations, the Court finds no adequate support to sustain the Ombudsman's entreaty that
the CA had no subject matter jurisdiction over the main CA-G.R. SP No. 139453 petition.
On the contrary, it actually makes greater sense to posit that these deliberations refer to another
Ombudsman Act provision, namely Section 27, RA 6770. This is because the latter textually reflects the
approval of Senator Angara's suggested amendment, i.e., that the Ombudsman's decision or finding may be
assailed in a petition for certiorari to this Court (fourth paragraph), and further, his comment on the
conclusive nature of the factual findings of the Ombudsman, if supported by substantial evidence (third
paragraph):
Section 27. Effectivity and Finality of Decisions.— (1) All provisionary orders of the Office of the Ombudsman
are immediately effective and executory.
A motion for reconsideration of any order, directive or decision of the Office of the Ombudsman must be
filed within five (5) days after receipt of written notice and shall be entertained only on any of the following
grounds: chanRoblesvirtualLawlibrary
(1) New evidence has been discovered which materially affects the order, directive or decision; cralawlawlibrary
(2) Errors of law or irregularities have been committed prejudicial to the interest of the movant. The motion
for reconsideration shall be resolved within three (3) days from filing: Provided, That only one motion for
reconsideration shall be entertained. ChanRoblesVirtualawlibrary
Findings of fact by the Office of the Ombudsman when supported by substantial evidence are conclusive.
Any order, directive or decision imposing the penalty of public censure or reprimand, suspension of not more
than one (1) month's salary shall be final and unappealable.
In all administrative disciplinary cases, orders, directives, or decisions of the Office of the
Ombudsman may be appealed to the Supreme Court by filing apetition for certiorari within ten
(10) days from receipt of the written notice of the order, directive or decision or denial of the
motion for reconsideration in accordance with Rule 45 of the Rules of Court.
The above rules may be amended or modified by the Office of the ' Ombudsman as the interest of justice
may require. (Emphasis and underscoring supplied)
At first blush, it appears that Section 27, RA 6770 is equally ambiguous in stating that a "petition
forcertiorari" should be taken in accordance with Rule 45 of the Rules of Court, as it is well-known that
under the present 1997 Rules of Civil Procedure, petitions for certiorari are governed by Rule 65 of the said
Rules. However, it should be discerned that the Ombudsman Act was passed way back in 1989130 and,
hence, before the advent of the 1997 Rules of Civil Procedure.131 At that time, the governing 1964 Rules of
Court,132 consistent with Section 27, RA 6770, referred to the appeal taken thereunder as a petition
for certiorari , thus possibly explaining the remedy's textual denomination, at least in the provision's final
approved version:
RULE 45
Appeal from Court of Appeals to Supreme Court
SECTION 1. Filing of Petition with Supreme Court. - A party may appeal by certiorari , from a judgment of
the Court of Appeals, by filing with the Supreme Court a petition for certiorari , within fifteen (15) days
from notice of judgment or of the denial of his motion for reconsideration filed in due time, and paying at
the same time, to the clerk of said court the corresponding docketing fee. The petition shall not be acted
upon without proof of service of a copy thereof to the Court of Appeals. (Emphasis supplied)
B. Construing the second paragraph of

Section 14, RA 6770.
The Senate deliberations' lack of discussion on the second paragraph of Section 14, RA 6770
notwithstanding, the other principles of statutory construction can apply to ascertain the meaning of the
provision.
To recount, the second paragraph of Section 14, RA 6770 states that "[n]o court shall hear any appeal
or application for remedy against the decision or findings of the Ombudsman, except the
Supreme Court, on pure question of law." ; cralawlawlibrary
As a general rule, the second paragraph of Section 14, RA 6770 bans the whole range of remedies
against issuances of the Ombudsman, by prohibiting: (a) an appeal against any decision or finding of
the Ombudsman, and (b) "any application of remedy" (subject to the exception below) against the same.
To clarify, the phrase "application for remedy," being a generally worded provision, and being separated
from the term "appeal" by the disjunctive "or",133 refers to any remedy (whether taken mainly or
provisionally), except an appeal, following the maxim generalia verba sunt generaliter intelligenda: general
words are to be understood in a general sense.134 By the same principle, the word "findings," which is also
separated from the word "decision" by the disjunctive "or", would therefore refer to any finding made by the
Ombudsman (whether final or provisional), except a decision.
The subject provision, however, crafts an exception to the foregoing general rule. While the specific
procedural vehicle is not explicit from its text, it is fairly deducible that the second paragraph of Section 14,
RA 6770 excepts, as the only allowable remedy against "the decision or findings of the Ombudsman," a
Rule 45 appeal, for the reason that it is the only remedy taken to the Supreme Court on "pure
questions of law," whether under the 1964 Rules of Court or the 1997 Rules of Civil Procedure:
Rule 45, 1964 Rules of Court
RULE 45
Appeal from Court of Appeals to Supreme Court
xxxx
Section 2. Contents of Petition. — The petition shall contain a concise statement of the matters involved, the
assignment of errors made in the court below, and the reasons relied on for the allowance of the petition,
and it should be accompanied with a true copy of the judgment sought to be reviewed, together with twelve
(12) copies of the record on appeal, if any, and of the petitioner's brief as filed in the Court of Appeals. A
verified statement of the date when notice of judgment and denial of the motion for reconsideration, if any,
were received shall accompany the petition.
Only questions of law may be raised in the petition and must be distinctly set forth. If no record on
appeal has been filed in the Court of Appeals, the clerk of the Supreme Court, upon admission of the
petition, shall demand from the Court of Appeals the elevation of the whole record of the case. (Emphasis
and underscoring supplied)
Rule 45, 1997 Rules of Civil Procedure
RULE 45
Appeal by Certiorari to the Supreme Court
Section 1. Filing of petition with Supreme Court. - A party desiring to appeal by certiorarifrom a judgment,
final order or resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional
Trial Court or other courts, whenever authorized by law, may file with the Supreme Court a verified petition
for review on certiorari. The petition may include an application for a writ of preliminary injunction or other
provisional remedies and shall raise only questions of law, which must be distinctly set forth. The
petitioner may seek the same provisional remedies by verified motion filed in the same action or proceeding
at any time during its pendency. (Emphasis and underscoring supplied)
That the remedy excepted in the second paragraph of Section 14, RA 6770 could be a petition
forcertiorari under Rule 65 of the 1964 Rules of Court or the 1997 Rules of Procedure is a suggestion that
defies traditional norms of procedure. It is basic procedural law that a Rule 65 petition is based on errors of
jurisdiction, and not errors of judgment to which the classifications of (a) questions of fact, (b) questions of
law, or (c) questions of mixed fact and law, relate to. In fact, there is no procedural rule, whether in the old
or new Rules, which grounds a Rule 65 petition on pure questions of law. Indeed, it is also a statutory
construction principle that the lawmaking body cannot be said to have intended the establishment of
conflicting and hostile systems on the same subject. Such a result would render legislation a useless and idle
ceremony, and subject the laws to uncertainty and unintelligibility.135 There should then be no confusion that
the second paragraph of Section 14, RA 6770 refers to a Rule 45 appeal to this Court, and no other. In sum,
the appropriate construction of this Ombudsman Act provision is that all remedies against issuances of the
Office of the Ombudsman are prohibited, except the above-stated Rule 45 remedy to the Court on pure
questions of law.
C. Validity of the second paragraph of

Section 14, RA 6770.
Of course, the second paragraph of Section 14, RA 6770's extremely limited restriction on remedies is
inappropriate since a Rule 45 appeal -which is within the sphere of the rules of procedure promulgated by
this Court - can only be taken against final decisions or orders of lower courts,136 and not against "findings"
of quasi-judicial agencies. As will be later elaborated upon, Congress cannot interfere with matters of
procedure; hence, it cannot alter the scope of a Rule 45 appeal so as to apply to interlocutory "findings"
issued by the Ombudsman. More significantly, by confining the remedy to a Rule 45 appeal, the
provision takes away the remedy of certiorari, grounded on errors of jurisdiction, in denigration of the
judicial power constitutionally vested in courts. In this light, the second paragraph of Section 14, RA 6770
also increased this Court's appellate jurisdiction, without a showing, however, that it gave its consent to the
same. The provision is, in fact, very similar to the fourth paragraph of Section 27, RA 6770 (as above-cited),
which was invalidated in the case of Fabian v. Desiertoni137 (Fabian).138
In Fabian, the Court struck down the fourth paragraph of Section 27, RA 6770 as unconstitutional since it
had the effect of increasing the appellate jurisdiction of the Court without its advice and concurrence in
violation of Section 30, Article VI of the 1987 Constitution.139 Moreover, this provision was found to be
inconsistent with Section 1, Rule 45 of the present 1997 Rules of Procedure which, as above-intimated,
applies only to a review of "judgments or final orders of the Court of Appeals, the Sandiganbayan, the Court
of Tax Appeals, the Regional Trial Court, or other courts authorized by law;" and not of quasi-judicial
agencies, such as the Office of the Ombudsman, the remedy now being a Rule 43 appeal to the Court
of Appeals. In Ruivivar v. Office of the Ombudsman,140 the Court's ratiocinations and ruling in Fabian were
recounted:
The case of Fabian v. Desierto arose from the doubt created in the application of Section 27 of R.A. No.
6770 (The Ombudsman's Act) and Section 7, Rule III of A.O. No. 7 (Rules of Procedure of the Office of the
Ombudsman) on the availability of appeal before the Supreme Court to assail a decision or order of the
Ombudsman in administrative cases.In Fabian, we invalidated Section 27 of R.A. No. 6770 (and
Section 7, Rule III of A.O. No. 7 and the other rules implementing the Act) insofar as it provided
for appeal by certiorari under Rule 45 from the decisions or orders of the Ombudsman in
administrative cases. We held that Section 27 of R.A. No. 6770 had the effect, not only of
increasing the appellate jurisdiction of this Court without its advice and concurrence in violation
of Section 30, Article VI of the Constitution; it was also inconsistent with Section 1, Rule 45 of
the Rules of Court which provides that a petition for review on certiorari shall apply only to a
review of "judgments or final orders of the Court of Appeals, the Sandiganbayan, the Court of Tax
Appeals, the Regional Trial Court, or other courts authorized by law." We pointedly said: chanRoblesvirtualLawlibrary
As a consequence of our ratiocination that Section 27 of Republic Act No. 6770 should be struck down as
unconstitutional, and in line with the regulatory philosophy adopted in appeals from quasi-judicial agencies
in the 1997 Revised Rules of Civil Procedure, appeals from decisions of the Office of the Ombudsman in
administrative disciplinary cases should be taken to the CA under the provisions of Rule 43.141 (Emphasis
supplied)
Since the second paragraph of Section 14, RA 6770 limits the remedy against "decision or findings" of the
Ombudsman to a Rule 45 appeal and thus - similar to the fourth paragraph of Section 27, RA 6770142 -
attempts to effectively increase the Supreme Court's appellate jurisdiction without its advice and
concurrence,143 it is therefore concluded that the former provision is also unconstitutional and perforce,
invalid. Contrary to the Ombudsman's posturing,144Fabian should squarely apply since the above-stated
Ombudsman Act provisions are in part materia in that they "cover the same specific or particular subject
matter,"145 that is, the manner of judicial review over issuances of the Ombudsman.
Note that since the second paragraph of Section 14, RA 6770 is clearly determinative of the existence of the
CA's subject matter jurisdiction over the main CA-G.R. SP No. 139453 petition, including all subsequent
proceedings relative thereto, as the Ombudsman herself has developed, the Court deems it proper to
resolve this issue ex mero motu (on its own motion146). This procedure, as was similarly adopted
in Fabian, finds its bearings in settled case law:
The conventional rule, however, is that a challenge on constitutional grounds must be raised by a party to
the case, neither of whom did so in this case, but that is not an inflexible rule, as we shall explain.
Since the constitution is intended for the observance of the judiciary and other departments of the
government and the judges are sworn to support its provisions, the courts are not at liberty to overlook or
disregard its commands or countenance evasions thereof. When it is clear , that a statute transgresses the
authority vested in a legislative body, it is the duty of the courts to declare that the constitution, and not the
statute, governs in a case before them for judgment.
Thus, while courts will not ordinarily pass upon constitutional questions which are not raised in the
pleadings, the rule has been recognized to admit of certain exceptions. It does not preclude a court from
inquiring into its own jurisdiction or compel it to enter a judgment that it lacks jurisdiction to enter. If a
statute on which a court's jurisdiction in a proceeding depends is unconstitutional, the court has no
jurisdiction in the proceeding, and since it may determine whether or not it has jurisdiction, it necessarily
follows that it may inquire into the constitutionality of the statute.
Constitutional questions, not raised in the regular and orderly procedure in the trial are
ordinarily rejected unless the jurisdiction of the court below or that of the appellate court is
involved in which case it may be raised at any time or on the court's own motion. The Court ex
mero motu may take cognizance of lack of jurisdiction at any point in the case where that fact is developed.
The court has a clearly recognized right to determine its own jurisdiction in any proceeding.147 (Emphasis
supplied)
D. Consequence of invalidity.
In this case, the Rule 65 petition for certiorari in CA-G.R. SP No. 139453 was filed by Binay, Jr. before the
CA in order to nullify the preventive suspension order issued by the Ombudsman, an interlocutory
order,148 hence, unappealable.149
In several cases decided after Fabian, the Court has ruled that Rule 65 petitions for certiorari against
unappelable issuances150 of the Ombudsman should be filed before the CA, and not directly before this
Court:
In Office of the Ombudsman v. Capulong151 (March 12, 2014), wherein a preventive suspension order issued
by the Office of the Ombudsman was - similar to this case - assailed through a Rule 65 petition
for certiorari filed by the public officer before the CA, the Court held that "[t]here being a finding of grave
abuse of discretion on the part of the Ombudsman, it was certainly imperative for the CA to grant incidental
reliefs, as sanctioned by Section 1 of Rule 65."152
In Dagan v. Office of the Ombudsman153 (November 19, 2013), involving a Rule 65 petition
forcertiorari assailing a final and unappealable order of the Office of the Ombudsman in an administrative
case, the Court remarked that "petitioner employed the correct mode of review in this case, i.e., a special
civil action for certiorari before the Court of Appeals."154 In this relation, it stated that while "a special civil
action for Certiorari is within the concurrent original jurisdiction of the Supreme Court and the Court of
Appeals, such petition should be initially filed with the Court of Appeals in observance of the doctrine of
hierarchy of courts." Further, the Court upheld Barata v. Abalos, Jr.155 (June 6, 2001), wherein it was ruled
that the remedy against final and unappealable orders of the Office of the Ombudsman in an administrative
case was a Rule 65 petition to the CA. The same verdict was reached in Ruivivar156 (September 16, 2008).
Thus, with the unconstitutionality of the second paragraph of Section 14, RA 6770, the Court, consistent
with existing jurisprudence, concludes that the CA has subject matter jurisdiction over the main CA-G.R. SP
No. 139453 petition. That being said, the Court now examines the objections of the Ombudsman, this time
against the CA's authority to issue the assailed TRO and WPI against the implementation of the preventive
suspension order, incidental to that main case.
III.
From the inception of these proceedings, the Ombudsman has been adamant that the CA has no jurisdiction
to issue any provisional injunctive writ against her office to enjoin its preventive suspension orders. As
basis, she invokes the first paragraph of Section 14, RA 6770 in conjunction with her office's
independence under the 1987 Constitution. She advances the idea that "[i]n order to further ensure [her
office's] independence, [RA 6770] likewise insulated it from judicial intervention,"157 particularly, "from
injunctive reliefs traditionally obtainable from the courts,"158claiming that said writs may work "just as
effectively as direct harassment or political pressure would."159
A. The concept of Ombudsman independence.
Section 5, Article XI of the 1987 Constitution guarantees the independence of the Office of the Ombudsman:
Section 5. There is hereby created the independent Office of the Ombudsman, composed of the
Ombudsman to be known as Tanodbayan, one overall Deputy and at least one Deputy each for Luzon,
Visayas[,] and Mindanao. A separate Deputy for the military establishment may likewise be appointed.
(Emphasis supplied)
In Gonzales III v. Office of the President160 (Gonzales III), the Court traced the historical underpinnings of
the Office of the Ombudsman:
Prior to the 1973 Constitution, past presidents established several Ombudsman-like agencies to serve as the
people's medium for airing grievances and for direct redress against abuses and misconduct in the
government. Ultimately, however, these agencies failed to fully realize their objective for lack of the political
independence necessary for the effective performance of their function as government critic.
It was under the 1973 Constitution that the Office of the Ombudsman became a constitutionally-mandated
office to give it political independence and adequate powers to enforce its mandate. Pursuant to the ( 1973
Constitution, President Ferdinand Marcos enacted Presidential Decree (PD) No. 1487, as amended by PD No.
1607 and PD No. 1630, creating the Office of the Ombudsman to be known as Tanodbayan. It was tasked
principally to investigate, on complaint or motu proprio, any administrative act of any administrative agency,
including any government-owned or controlled corporation. When the Office of the Tanodbayan was
reorganized in 1979, the powers previously vested in the Special Prosecutor were transferred to the
Tanodbayan himself. He was given the exclusive authority to conduct preliminary investigation of all cases
cognizable by the Sandiganbayan, file the corresponding information, and control the prosecution of these
cases.
With the advent of the 1987 Constitution, a new Office of the Ombudsman was created by constitutional
fiat. Unlike in the 1973 Constitution, its independence was expressly and constitutionally
guaranteed. Its objectives are to enforce the state policy in Section 27, Article II and the standard of
accountability in public service under Section 1, Article XI of the 1987 Constitution. These provisions
read:chanRoblesvirtualLawlibrary
Section 27. The State shall maintain honesty and integrity in the public service and take positive and
effective measures against graft and corruption.
Section 1. Public office is a public trust. Public officers and employees must, at all times, be accountable to
the people, serve them with utmost responsibility, integrity, loyalty, and efficiency; act with patriotism and
justice, and lead modest lives.161 (Emphasis supplied)
More significantly, Gonzales III explained the broad scope of the office's mandate, and in correlation, the
impetus behind its independence:
Under Section 12, Article XI of the 1987 Constitution, the Office of the Ombudsman is envisioned to be the
"protector of the people" against the inept, abusive, and corrupt in the Government, to function essentially
as a complaints and action bureau. This constitutional vision of a Philippine Ombudsman practically intends
to make the Ombudsman an authority to directly check and guard against the ills, abuses and excesses , of
the bureaucracy. Pursuant to Section 13 (8), Article XI of the 1987 Constitution, Congress enacted RA No.
6770 to enable it to further realize the vision of the Constitution. Section 21 of RA No. 6770 provides: chanRoblesvirtualLawlibrary
Section 21. Official Subject to Disciplinary Authority; Exceptions. - The Office of the Ombudsman shall have
disciplinary authority over all elective and appointive officials of the Government and its subdivisions,
instrumentalities, and agencies, including Members of the Cabinet, local government, government-owned or
controlled corporations and their subsidiaries, except over officials who may be removed only by
impeachment or over Members of Congress, and the Judiciary. ChanRoblesVirtualawlibrary
As the Ombudsman is expected to be an "activist watchman," the < Court has upheld its actions, although
not squarely falling under the broad powers granted [to] it by the Constitution and by RA No. 6770, if these
actions are reasonably in line with its official function and consistent with the law and the Constitution.
The Ombudsman's broad investigative and disciplinary powers include all acts of malfeasance, misfeasance,
and nonfeasance of all public officials, including Members of the Cabinet and key Executive officers, during
their tenure. To support these broad powers, the Constitution saw it fit to insulate the Office of the
Ombudsman from the pressures and influence of officialdom and partisan politics and from fear
of external reprisal by making it an "independent" office, x x x.
xxxx
Given the scope of its disciplinary authority, the Office of the Ombudsman is a very powerful government
constitutional agency that is considered "a notch above other grievance-handling investigative bodies." It
has powers, both constitutional and statutory, that are commensurate , with its daunting task of enforcing
accountability of public officers.162 (Emphasis and underscoring supplied)
Gonzales III is the first case which grappled with the meaning of the Ombudsman's independence vis-a-vis
the independence of the other constitutional bodies. Pertinently, the Court observed:
(1) "[T]he independence enjoyed by the Office of the Ombudsman and by the Constitutional Commissions
shares certain characteristics - they do not owe their existence to any act of Congress, but are
created by the Constitution itself; additionally, they all enjoy fiscal autonomy. In general terms, the
framers of the Constitution intended that these 'independent' bodies be insulated from political
pressure to the extent that the absence of 'independence' would result in the impairment of their core
functions"163;
cralawlawlibrary
(2) "[T]he Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence
and flexibility needed in the discharge of their constitutional duties. The imposition of restrictions and
constraints on the manner the independent constitutional offices allocate and utilize the funds
appropriated for their operations is anathema to fiscal autonomy and violative not only [of] the
express mandate of the Constitution, but especially as regards the Supreme Court, of the independence and
separation of powers upon which the entire fabric of our constitutional system is based";164 and
(3) "[T]he constitutional deliberations explain the Constitutional Commissions' need for independence. In
the deliberations of the 1973 Constitution, the delegates amended the 1935 Constitution by providing for a
constitutionally-created Civil Service Commission, instead of one created by law, on the premise that the
effectivity of this body is dependent on its freedom from the tentacles of politics. In a similar
manner, the deliberations of the 1987 Constitution on the Commission on Audit highlighted the
developments in the past Constitutions geared towards insulating the Commission on Audit from
political pressure."165
At bottom, the decisive ruling in Gonzales III, however, was that the independence of the Office of the
Ombudsman, as well as that of the foregoing independent bodies, meant freedom from control or
supervision of the Executive Department:
[T]he independent constitutional commissions have been consistently intended by the framers to
be independent from executive control or supervision or any form of political influence. At least
insofar as these bodies are concerned, jurisprudence is not scarce on how the "independence" granted to
these bodies prevents presidential interference.
In Brillantes, Jr. v. Yorac (G.R. No. 93867, December 18, 1990, 192 SCRA 358), we emphasized that the
Constitutional Commissions, which have been characterized under the Constitution as "independent,"
are not under the control of the President, even if they discharge functions that are executive in nature.
The Court declared as unconstitutional the President's act of temporarily appointing the respondent in that
case as Acting Chairman of the [Commission on Elections] "however well-meaning" it might have been.
In Bautista v. Senator Salonga (254 Phil. 156, 179 [1989]), the Court categorically stated that the tenure of
the commissioners of the independent Commission on Human Rights could not be placed under the
discretionary power of the President.
xxxx
The kind of independence enjoyed by the Office of the Ombudsman certainly cannot be inferior - but is
similar in degree and kind - to the independence similarly guaranteed by the Constitution to the
Constitutional Commissions since all these offices fill the political interstices of a republican democracy that
are crucial to its existence and proper functioning.166 (Emphases and underscoring supplied)
Thus, in Gonzales III, the Court declared Section 8 (2), RA 6770, which provides that "[a] Deputy or the
Special Prosecutor, may be removed from office by the President for any of the grounds provided for the
removal of the Ombudsman, and after due process," partially unconstitutional insofar as it subjected the
Deputy Ombudsman to the disciplinary authority of the President for violating the principle of independence.
Meanwhile, the validity of Section 8 (2), RA 6770 was maintained insofar as the Office of the Special
Prosecutor was concerned since said office was not considered to be constitutionally within the Office of the
Ombudsman and is, hence, not entitled to the independence the latter enjoys under the Constitution.167
As may be deduced from the various discourses in Gonzales III, the concept of Ombudsman's independence
covers three (3) things:
First: creation by the Constitution, which means that the office cannot be abolished, nor its
constitutionally specified functions and privileges, be removed, altered, or modified by law, unless the
Constitution itself allows, or an amendment thereto is made; cralawlawlibrary
Second: fiscal autonomy, which means that the office "may not be obstructed from [its] freedom to use
or dispose of [its] funds for purposes germane to [its] functions;168hence, its budget cannot be strategically
decreased by officials of the political branches of government so as to impair said functions; and
Third: insulation from executive supervision and control, which means that those within the ranks of
the office can only be disciplined by an internal authority.
Evidently, all three aspects of independence intend to protect the Office of the Ombudsman frompolitical
harassment and pressure, so as to free it from the "insidious tentacles of politics."169
That being the case, the concept of Ombudsman independence cannot be invoked as basis to insulate the
Ombudsman from judicial power constitutionally vested unto the courts. Courts are apolitical bodies, which
are ordained to act as impartial tribunals and apply even justice to all. Hence, the Ombudsman's notion that
it can be exempt from an incident of judicial power - that is, a provisional writ of injunction against a
preventive suspension order - clearly strays from the concept's rationale of insulating the office from political
harassment or pressure.
B. The first paragraph of Section 14, RA

6770 in light of the powers of Congress and the
Court under the 1987 Constitution.
The Ombudsman's erroneous abstraction of her office's independence notwithstanding, it remains that the
first paragraph of Section 14, RA 6770 textually prohibits courts from extending provisional injunctive relief
to delay any investigation conducted by her office. Despite the usage of the general phrase "[n]o writ of
injunction shall be issued by any court," the Ombudsman herself concedes that the prohibition does not
cover the Supreme Court.170 As support, she cites the following Senate deliberations:
Senator [Ernesto M.] Maceda. Mr. President, I do not know if an amendment is necessary. I would just
like to inquire for the record whether below the Supreme Court, it is understood that there is no
injunction policy against the Ombudsman by lower courts. Or, is it necessary to have a special
paragraph for that?
Senator Angara. Well, there is no provision here, Mr. President, that will prevent an injunction against the
Ombudsman being issued.
Senator Maceda. In which case, I think that the intention, this being one of the highest
constitutional bodies, is to subject this only to certiorari to the Supreme Court. I think an
injunction from the Supreme Court is, of course, in order but no lower courts should be allowed
to interfere. We had a very bad experience with even, let us say, the Forestry Code where no injunction is
supposed to be issued against the Department of Natural Resources. Injunctions are issued right and
left by RTC judges all over the country.
The President. Why do we not make an express provision to that effect?
Senator Angara. We would welcome that, Mr. President.
The President. No [writs of injunction] from the trial courts other than the Supreme Court.
Senator Maceda. I so move, Mr. President, for that amendment.
The President. Is there any objection? [Silence] Hearing none, the same is approved.171
Further, she acknowledges that by virtue of Sections 1 and 5 (1), Article VIII of the 1987 Constitution, acts
of the Ombudsman, including interlocutory orders, are subject to the Supreme Court's power of judicial
review As a corollary, the Supreme Court may issue ancillary mjunctive writs or provisional remedies in the
exercise of its power of judicial review over matters pertaining to ongoing investigations by the Office of the
Ombudsman. Respecting the CA, however, the Ombudsman begs to differ.172
With these submissions, it is therefore apt to examine the validity of the first paragraph of Section 14, RA
6770 insofar as it prohibits all courts, except this Court, from issuing provisional writs of injunction to enjoin
an Ombudsman investigation. That the constitutionality of this provision is the lis mota of this case has not
been seriously disputed. In fact, the issue anent its constitutionality was properly raised and presented
during the course of these proceedings.173 More importantly, its resolution is clearly necessary to the
complete disposition of this case.174
In the enduring words of Justice Laurel in Angara v. The Electoral Commission (Angara),175 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."176 The constitutional demarcation of the three fundamental
powers of government is more commonly known as the principle of separation of powers. In the landmark
case of Belgica v. Ochoa, Jr. (Belgica),177 the Court held that "there is a violation of the separation of powers
principle when one branch of government unduly encroaches on the domain of another."178 In particular,
"there is a violation of the principle when there is impermissible (a) interference with and/or (b) assumption
of another department's functions."179
Under Section 1, Article VIII of the 1987 Constitution, judicial power is allocated to the Supreme Court
and all such lower courts:
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.
Government.
This Court is the only court established by the Constitution, while all other lower courts may be
established by laws passed by Congress. Thus, through the passage of Batas Pambansa Bilang (BP)
129,180 known as "The Judiciary Reorganization Act of 1980," the Court of Appeals,181 the Regional Trial
Courts,182 and the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts183 were
established. Later, through the passage of RA 1125,184 and Presidential Decree No. (PD) 1486,185 the Court
of Tax Appeals, and the Sandiganbayan were respectively established.
In addition to the authority to establish lower courts, Section 2, Article VIII of the 1987
Constitution empowers Congress to define, prescribe, and apportion the jurisdiction of all
courts, except that it may not deprive the Supreme Court of its jurisdiction over cases
enumerated in Section 5186 of the same Article:
Section 2. The Congress shall have the power to define, prescribe, ' and apportion the jurisdiction of the
various courts but may not deprive the Supreme Court of its jurisdiction over cases enumerated in Section 5
hereof.
xxxx ChanRoblesVirtualawlibrary
Jurisdiction, as hereinabove used, more accurately pertains to jurisdiction over the subject matter of an
action. In The Diocese ofBacolod v. Commission on Elections,187 subject matter jurisdiction was defined as
"the authority 'to hear and determine cases of the general class to which the proceedings in
question belong and is conferred by the sovereign authority which organizes the court and
defines its powers.'"
Among others, Congress defined, prescribed, and apportioned the subject matter jurisdiction of this Court
(subject to the aforementioned constitutional limitations), the Court of Appeals, and the trial courts, through
the passage of BP 129, as amended.
In this case, the basis for the CA's subject matter jurisdiction over Binay, Jr.'s main petition
forcertiorari in CA-G.R. SP No. 139453 is Section 9(1), Chapter I of BP 129, as amended:
Section 9. Jurisdiction. - The Court of Appeals shall exercise:
1. Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo
warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction[.]
Note that the CA's certiorari jurisdiction, as above-stated, is not only original but also concurrentwith the
Regional Trial Courts (under Section 21 (1), Chapter II of BP 129), and the Supreme Court (under Section 5,
Article VIII of the 1987 Philippine Constitution). In view of the concurrence of these courts' jurisdiction over
petitions for certiorari, the doctrine of hierarchy of courts should be followed. In People v.
Cuaresma,188 the doctrine was explained as follows:
[T]his concurrence of jurisdiction is not x x x to be taken as according to parties seeking any of the writs
an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There
is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also
serve as a general determinant of the appropriate forum for petitions for the extraordinary writs. A
becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of
extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and
those against the latter, with the Court of Appeals.189
When a court has subject matter jurisdiction over a particular case, as conferred unto it by law, said
court may then exercise its jurisdiction acquired over that case, which is called judicial power.
Judicial power, as vested in the Supreme Court and all other courts established by law, has been defined
as the "totality of powers a court exercises when it assumes jurisdiction and hears and decides a
case."190 Under Section 1, Article VIII of the 1987 Constitution, it includes "the duty of the courts of
justice to settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government."
In Oposa v. Factoran, Jr.191 the Court explained the expanded scope of judicial power under the 1987
Constitution:
The first part of the authority represents the traditional concept of judicial power, involving the settlement of
conflicting rights as conferred by law. The second part of the authority represents a broadening of f judicial
power to enable the courts of justice to review what was before forbidden territory, to wit, the discretion of
the political departments of the government.
As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to rule
upon even the wisdom of the decisions of the executive and the legislature and to declare their acts invalid
for lack or excess of jurisdiction because they are tainted with grave abuse of discretion. The catch, of
course, is the meaning of "grave abuse of discretion," which is a very elastic phrase that can expand or
contract according to the disposition of the judiciary.192
Judicial power is never exercised in a vacuum. A court's exercise of the jurisdiction it has acquired
over a particular case conforms to the limits and parameters of the rules of procedure duly
promulgated by this Court. In other words, procedure is the framework within which judicial power is
exercised. In Manila Railroad Co. v. Attorney-General,193 the Court elucidated that "[t]he power or authority
of the court over the subject matter existed and was fixed before procedure in a given cause
began. Procedure does not alter or change that power or authority; it simply directs the manner
in which it shall be fully and justly exercised. To be sure, in certain cases, if that power is not
exercised in conformity with the provisions of the procedural law, purely, the court attempting to exercise it
loses the power to exercise it legally. This does not mean that it loses jurisdiction of the subject matter."194
While the power to define, prescribe, and apportion the jurisdiction of the various courts is, by constitutional
design, vested unto Congress, the power to promulgate rules concerning the protection and
enforcement of constitutional rights, pleading, practice, and procedure in all courts belongs
exclusively to this Court. Section 5 (5), Article VIII of the 1987 Constitution reads:
Section 5. The Supreme Court shall have the following powers:
xxxx
(5) Promulgate rules concerning the protection and enforcement of constitutional rights,
pleading, practice, and procedure in all courts, the admission to the practice of law, the Integrated Bar,
and legal assistance to the underprivileged. Such rules shall provide a simplified and inexpensive procedure
for the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish,
increase, or modify substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall
remain effective unless disapproved by the Supreme Court. (Emphases and underscoring supplied)
In Echegaray v. Secretary of Justice195 (Echegaray), the Court traced the evolution of its rule-making
authority, which, under the 1935196 and 1973 Constitutions,197 had been priorly subjected to a power-sharing
scheme with Congress.198 As it now stands, the 1987 Constitution textually altered the old provisions by
deleting the concurrent power of Congress to amend the rules, thus solidifying in one body the
Court's rule-making powers, in line with the Framers' vision of institutionalizing a "[s]tronger and
more independent judiciary."199
The records of the deliberations of the Constitutional Commission would show200 that the Framers debated
on whether or not the Court's rule-making powers should be shared with Congress. There was an initial
suggestion to insert the sentence "The National Assembly may repeal, alter, or supplement the said rules
with the advice and concurrence of the Supreme Court", right after the phrase "Promulgate rules concerning
the protection and enforcement of constitutional rights, pleading, practice, and procedure in all courts, the
admission to the practice of law, the integrated bar, and legal assistance to the underprivileged^" in the
enumeration of powers of the Supreme Court. Later, Commissioner Felicitas S. Aquino proposed to delete
the former sentence and, instead, after the word "[underprivileged," place a comma (,) to be followed by
"the phrase with the concurrence of the National Assembly." Eventually, a compromise formulation was
reached wherein (a) the Committee members agreed to Commissioner Aquino's proposal to delete the
phrase "the National Assembly may repeal, alter, or supplement the said rules with the advice and
concurrence of the Supreme Court" and (b) in turn, Commissioner Aquino agreed to withdraw his proposal
to add "the phrase with the concurrence of the National Assembly." The changes were approved,
thereby leading to the present lack of textual reference to any form of Congressional
participation in Section 5 (5), Article VIII, supra. The prevailing consideration was that "both
bodies, the Supreme Court and the Legislature, have their inherent powers."201
Thus, as it now stands, Congress has no authority to repeal, alter, or supplement rules concerning pleading,
practice, and procedure. As pronounced in Echegaray:
The rule making power of this Court was expanded. This Court for the first time was given the power to
promulgate rules concerning the protection and enforcement of constitutional rights. The Court was also r
granted for the first time the power to disapprove rules of procedure of special courts and quasi-judicial
bodies. But most importantly, the 1987 Constitution took away the power of Congress to repeal,
alter, or supplement rules concerning pleading, practice and procedure. In fine, the power to
promulgate rules of pleading, practice and procedure is no longer shared by this Court with
Congress, more so with the Executive.202 (Emphasis and underscoring supplied)
Under its rule-making authority, the Court has periodically passed various rules of procedure, among others,
the current 1997 Rules of Civil Procedure. Identifying the appropriate procedural remedies needed
for the reasonable exercise of every court's judicial power, the provisional remedies of
temporary restraining orders and writs of preliminary injunction were thus provided.
A temporary restraining order and a writ of preliminary injunction both constitute temporary measures
availed of during the pendency of the action. They are, by nature, ancillary because they are mere incidents
in and are dependent upon the result of the main action. It is well-settled that the sole object of a
temporary restraining order or a writ of preliminary injunction, whether prohibitory or
mandatory, is to preserve the status quo203 until the merits of the case can be heard. They are usually
granted when it is made to appear that there is a substantial controversy between the parties and one of
them is committing an act or threatening the immediate commission of an act that will cause irreparable
injury or destroy the status quo of the controversy before a full hearing can be had on the merits of the
case. In other words, they are preservative remedies for the protection of substantive rights or interests,
and, hence, not a cause of action in itself, but merely adjunct to a main suit.204 In a sense, they are
regulatory processes meant to prevent a case from being mooted by the interim acts of the parties.
Rule 58 of the 1997 Rules of Civil Procedure generally governs the provisional remedies of a TRO and a WPI.
A preliminary injunction is defined under Section 1,205 Rule 58, while Section 3206 of the same Rule
enumerates the grounds for its issuance. Meanwhile, under Section 5207 thereof, a TRO may be issued as a
precursor to the issuance of a writ of preliminary injunction under certain procedural parameters.
The power of a court to issue these provisional injunctive reliefs coincides with its inherent power to issue
all auxiliary writs, processes, and other means necessary to carry its acquired jurisdiction into
effect under Section 6, Rule 135 of the Rules of Court which reads:
Section 6. Means to carry jurisdiction into effect. - When by law jurisdiction is conferred on a court or
judicial officer, all auxiliary writs, f processes and other means necessary to carry it into effect may be
employed by such court or officer; and if the procedure to be followed in the exercise of such jurisdiction is
not specifically pointed out by law208 or by these rules, any suitable process or mode of proceeding may be
adopted which appears comfortable to the spirit of the said law or rules. ChanRoblesVirtualawlibrary
In City of Manila v. Grecia-Cuerdo,209 which is a case involving "[t]he supervisory power or jurisdiction of the
[Court of Tax Appeals] to issue a writ of certiorari in aid of its appellate jurisdiction"210 over "decisions,
orders or resolutions of the RTCs in local tax cases originally decided or resolved by them in the exercise of
their original or appellate jurisdiction,"211 the Court ruled that said power "should coexist with, and be a
complement to, its appellate jurisdiction to review, by appeal, the final orders and decisions of the RTC, in
order to have complete supervision over the acts of the latter:"212
effectively, to make all orders that ; will preserve the subject of the action, and to give effect to
the final determination of the appeal. It carries with it the power to protect that jurisdiction and to make
the decisions of the court thereunder effective. The court, in aid of its appellate jurisdiction, has authority to
control all auxiliary and incidental matters necessary to the efficient and proper exercise of that jurisdiction.
For this purpose, it may, when necessary, prohibit or restrain the performance of any act which might
interfere with the proper exercise of its rightful jurisdiction in cases pending before it.213 (Emphasis supplied)
In this light, the Court expounded on the inherent powers of a court endowed with subject matter
jurisdiction:
[A] court which is endowed with a particular jurisdiction should have powers which are necessary to enable
it to act effectively within such jurisdiction. These should be regarded as powers which are inherent in
its jurisdiction and the court must possess them in order to enforce its rules of practice and to
suppress any abuses of its process and to t defeat any attempted thwarting of such process.
xxxx cralawlawlibrary
Indeed, courts possess certain inherent powers which may be said to be implied from a general grant of
jurisdiction, in addition to those expressly conferred on them. These inherent powers are such powers
as are necessary for the ordinary and efficient exercise of jurisdiction; or are essential to the
existence, dignity and functions of the courts, as well as to the due administration of justice; or
are directly appropriate, convenient and suitable to the execution of their granted powers; and
include the power to maintain the court's jurisdiction and render it effective in behalf of the
litigants.214 (Emphases and underscoring supplied)
Broadly speaking, the inherent powers of the courts resonates the long-entrenched constitutional principle,
articulated way back in the 1936 case of Angara, that "where a general power is conferred or duty enjoined,
every particular power necessary for the exercise of the one or the performance of the other is also
conferred."215
In the United States, the "inherent powers doctrine refers to the principle, by which the courts deal with
diverse matters over which they are thought to have intrinsic authority like procedural [rule-making] and
general judicial housekeeping. To justify the invocation or exercise of inherent powers, a court must show
that the powers are reasonably necessary to achieve the specific purpose for which the exercise
is sought. Inherent powers enable the judiciary to accomplish its constitutionally mandated
functions."216
In Smothers v. Lewis217 (Smothers), a case involving the constitutionality of a statute which prohibited
courts from enjoining the enforcement of a revocation order of an alcohol beverage license pending
appeal,218 the Supreme Court of Kentucky held:
[T]he Court is x x x vested with certain "inherent" powers to do that which is reasonably necessary
for the administration of justice within the scope of their jurisdiction. x x x [W]e said while
considering the rule making power and the judicial power to be one and the same that ". . . the grant of
judicial power [rule making power] to the courts by the constitution carries with it, as a
necessary incident, the right to make that power effective in the administration of justice."
(Emphases supplied)
Significantly, Smothers characterized a court's issuance of provisional injunctive relief as an exercise of the
court's inherent power, and to this end, stated that any attempt on the part of Congress to interfere with the
same was constitutionally impermissible:
It is a result of this foregoing line of thinking that we now adopt the language framework of 28 Am.Jur.2d,
Injunctions, Section 15, and once and for all make clear that a court, once having obtained jurisdiction of a
cause of action, has, as an incidental to its constitutional grant of power, inherent power to do all things
reasonably necessary to the administration of justice in the case before it. In the exercise of this power,
a court, when necessary in order to protect or preserve the subject matter of the litigation, to
protect its jurisdiction and to make its judgment effective, may grant or issue a temporary
injunction in aid of or ancillary to the principal action.
The control over this inherent judicial power, in this particular instance the injunction, is
exclusively within the constitutional realm of the courts. As such, it is not within the purview of
the legislature to grant or deny the power nor is it within the purview of the legislature to shape
or fashion circumstances under which this inherently judicial power may be or may not be
granted or denied.
This Court has historically recognized constitutional limitations upon the power of the legislature to interfere
with or to inhibit the performance of constitutionally granted and inherently provided judicial functions, x x x
xxxx
We reiterate our previously adopted language, ". . . a court, once having obtained jurisdiction of a cause of
action, has, as incidental to its general jurisdiction, inherent power to do all things reasonably necessary f to
the administration of justice in the case before it. . ." This includes the inherent power to issue
injunctions. (Emphases supplied)
Smothers also pointed out that the legislature's authority to provide a right to appeal in the statute does not
necessarily mean that it could control the appellate judicial proceeding:
However, the fact that the legislature statutorily provided for this appeal does not give it the right to
encroach upon the constitutionally granted powers of the judiciary. Once the administrative action has
ended and the right to appeal arises the legislature is void of any right to control a subsequent
appellate judicial proceeding. The judicial rules have come into play and have preempted the
field.219 (Emphasis supplied)
With these considerations in mind, the Court rules that when Congress passed the first paragraph of Section
14, RA 6770 and, in so doing, took away from the courts their power to issue a TRO and/or WPI to enjoin an
investigation conducted by the Ombudsman, it encroached upon this Court's constitutional rule-making
authority. Clearly, these issuances, which are, by nature, provisional reliefs and auxiliary writs created under
the provisions of the Rules of Court, are matters of procedurewhich belong exclusively within the province
of this Court. Rule 58 of the Rules of Court did not create, define, and regulate a right but merely prescribed
the means of implementing an existing right220since it only provided for temporary reliefs to preserve the
applicant's right in esse which is threatened to be violated during the course of a pending litigation. In the
case of Fabian,211 it was stated that:
If the rule takes away a vested right, it is not procedural. If the rule creates a right such as the right to
appeal, it may be classified as a substantive matter; but if it operates as a means of implementing an
existing right then the rule deals merely with procedure. ChanRoblesVirtualawlibrary
Notably, there have been similar attempts on the part of Congress, in the exercise of its legislative power, to
amend the Rules of Court, as in the cases of: (a) In Re: Exemption of The National Power Corporation from
Payment of Filing/ Docket Fees;222 (b) Re: Petition for Recognition of the Exemption of the Government
Service Insurance System (GSIS) from Payment of Legal Fees;223 and (c) Baguio Market Vendors Multi-
Purpose Cooperative (BAMARVEMPCO) v. Cabato-Cortes224 While these cases involved legislative enactments
exempting government owned and controlled corporations and cooperatives from paying filing fees, thus,
effectively modifying Rule 141 of the Rules of Court (Rule on Legal Fees), it was, nonetheless, ruled that the
prerogative to amend, repeal or even establish new rules of procedure 225 solely belongs to the
Court, to the exclusion of the legislative and executive branches of government. On this score, the
Court described its authority to promulgate rules on pleading, practice, and procedure as exclusive and
"[o]ne of the safeguards of [its] institutional independence."226
That Congress has been vested with the authority to define, prescribe, and apportion the jurisdiction of the
various courts under Section 2, Article VIII supra, as well as to create statutory courts under Section 1,
Article VIII supra, does not result in an abnegation of the Court's own power to promulgate rules of
pleading, practice, and procedure under Section 5 (5), Article VIII supra. Albeit operatively interrelated,
these powers are nonetheless institutionally separate and distinct, each to be preserved under its own
sphere of authority. When Congress creates a court and delimits its jurisdiction, the procedure for
which its jurisdiction is exercised is fixed by the Court through the rules it promulgates. The first
paragraph of Section 14, RA 6770 is not a jurisdiction-vesting provision, as the Ombudsman
misconceives,227 because it does not define, prescribe, and apportion the subject matter jurisdiction of courts
to act on certiorari cases; the certiorari jurisdiction of courts, particularly the CA, stands under the relevant
sections of BP 129 which were not shown to have been repealed. Instead, through this provision, Congress
interfered with a provisional remedy that was created by this Court under its duly promulgated
rules of procedure, which utility is both integral and inherent to every court's exercise of judicial
power. Without the Court's consent to the proscription, as may be manifested by an adoption of
the same as part of the rules of procedure through an administrative circular issued therefor,
there thus, stands to be a violation of the separation of powers principle.
In addition, it should be pointed out that the breach of Congress in prohibiting provisional injunctions, such
as in the first paragraph of Section 14, RA 6770, does not only undermine the constitutional allocation of
powers; it also practically dilutes a court's ability to carry out its functions. This is so since a
particular case can easily be mooted by supervening events if no provisional injunctive relief is
extended while the court is hearing the same. Accordingly, the court's acquired jurisdiction, through
which it exercises its judicial power, is rendered nugatory. Indeed, the force of judicial power, especially
under the present Constitution, cannot be enervated due to a court's inability to regulate what occurs during
a proceeding's course. As earlier intimated, when jurisdiction over the subject matter is accorded by law and
has been acquired by a court, its exercise thereof should be undipped. To give true meaning to the judicial
power contemplated by the Framers of our Constitution, the Court's duly promulgated rules of procedure
should therefore remain unabridged, this, even by statute. Truth be told, the policy against provisional
injunctive writs in whatever variant should only subsist under rules of procedure duly promulgated by the
Court given its sole prerogative over the same.
The following exchange between Associate Justice Marvic Mario Victor F. Leonen (Justice Leonen) and the
Acting Solicitor General Florin T. Hilbay (Acting Solicitor General Hilbay) mirrors the foregoing observations:
JUSTICE LEONEN:
Okay. Now, would you know what rule covers injunction in the Rules of Court?
ACTING SOLICITOR GENERAL HILBAY:

Rule 58, Your Honor.
JUSTICE LEONEN:
58, that is under the general rubric if Justice Bersamin will correct me if I will be mistaken under the rubric
of what is called provisional remedies, our resident expert because Justice Peralta is not here so Justice
Bersamin for a while. So provisional remedy you have injunction, x x x.
xxxx
JUSTICE LEONEN:
Okay, Now, we go to the Constitution. Section 5, subparagraph 5 of Article VIII of the Constitution, if you
have a copy of the Constitution, can you please read that provision? Section 5, Article VIII the Judiciary
subparagraph 5, would you kindly read that provision?
ACTING SOLICTOR GENERAL HILBAY.

"Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice and
procedure in all courts..."
JUSTICE LEONEN:
Okay, we can stop with that, promulgate rules concerning pleading, practice and procedure in all courts.
This is the power, the competence, the jurisdiction of what constitutional organ?

The Supreme Court, Your Honor.
JUSTICE LEONEN:
The Supreme Court. This is different from Article VIII Sections 1 and 2 which we've already been discussed
with you by my other colleagues, is that not correct?

Correct, Your Honor.
JUSTICE LEONEN:
Okay, so in Section 2, [apportion] jurisdiction that is the power of Congress, is that not correct?

JUSTICE LEONEN:
On the other hand, the power to promulgate rules is with the Court, is that not correct?
JUSTICE LEONEN:
A TRO and a writ of preliminary injunction, would it be a separate case or is it part of litigation in an
ordinary case?

It is an ancillary remedy, Your Honor.
JUSTICE LEONEN:
In fact, it originated as an equitable remedy, is that not correct?

JUSTICE LEONEN:
In order to preserve the power of a court so that at the end of litigation, it will not be rendered
moot and academic, is that not correct?

JUSTICE LEONEN:
In that view, isn't Section 14, first paragraph, unconstitutional?

No, Your Honor.
xxxx
JUSTICE LEONEN.
Can Congress say that a Court cannot prescribe Motions to Dismiss under Rule 16?

Your Honor, Congress cannot impair the power of the Court to create remedies, x x x.
JUSTICE LEONEN.
What about bill [of] particulars, can Congress say, no Court shall have the power to issue the supplemental
pleading called the bill of t particular [s]? It cannot, because that's part of procedure...

That is true.
JUSTICE LEONEN
...or for that matter, no Court shall act on a Motion to Quash, is that not correct?

Correct.
JUSTICE LEONEN:
So what's different with the writ of injunction?

Writ of injunction, Your Honor, requires the existence of jurisdiction on the part of a court that was created
by Congress. In the absence of jurisdiction... (interrupted)
JUSTICE LEONEN:
No, writ of injunction does not attach to a court. In other words, when they create a special agrarian court it
has all procedures with it but it does not attach particularly to that particular court, is that not correct?
ACTING SOLICTOR GENERAL HILBAY:

When Congress, Your Honor, creates a special court...
JUSTICE LEONEN:
Again, Counsel, what statute provides for a TRO, created the concept of a TRO? It was a Rule. A rule of
procedure and the Rules of Court, is that not correct?

Yes, Your Honor.
JUSTICE LEONEN:
And a TRO and a writ of preliminary injunction does not exist unless it is [an] ancillary to a particular
injunction in a court, is that not correct?

xxxx228 (Emphasis supplied)
In Biraogo v. The Philippine Truth Commission of 2010,229 the Court instructed that "[i]t is through the
Constitution that the fundamental powers of government are established, limited and defined, and by which
these powers are distributed among the several departments. The Constitution is the basic and paramount
law to which all other laws must conform and to which all persons, including the highest officials of the land,
must defer." It would then follow that laws that do not conform to the Constitution shall be stricken down for
being unconstitutional.230
However, despite the ostensible breach of the separation of powers principle, the Court is not oblivious to
the policy considerations behind the first paragraph of Section 14, RA 6770, as well as other statutory
provisions of similar import. Thus, pending deliberation on whether or not to adopt the same, the Court,
under its sole prerogative and authority over all matters of procedure, deems it proper to declare as
ineffective the prohibition against courts other than the Supreme Court from issuing provisional injunctive
writs to enjoin investigations conducted by the Office of the Ombudsman, until it is adopted as part of the
rules of procedure through an administrative circular duly issued therefor.
Hence, with Congress interfering with matters of procedure (through passing the first paragraph of Section
14, RA 6770) without the Court's consent thereto, it remains that the CA had the authority to issue the
questioned injunctive writs enjoining the implementation of the preventive suspension order against Binay,
Jr. At the risk of belaboring the point, these issuances were merely ancillary to the exercise of the
CA's certiorari jurisdiction conferred to it under Section 9 (1), Chapter I of BP 129, as amended, and which it
had already acquired over the main CA-G.R. SP No. 139453 case.
IV.
The foregoing notwithstanding, the issue of whether or not the CA gravely abused its jurisdiction in issuing
the TRO and WPI in CA-G.R. SP No. 139453 against the preventive suspension order is a persisting objection
to the validity of said injunctive writs. For its proper analysis, the Court first provides the context of the
assailed injunctive writs.
A. Subject matter of the CA's iniunctive writs is the preventive suspension order.
By nature, a preventive suspension order is not a penalty but only a preventive measure. InQuimbo
v. Acting Ombudsman Gervacio,231 the Court explained the distinction, stating that its purpose is to
prevent the official to be suspended from using his position and the powers and prerogatives of
his office to influence potential witnesses or tamper with records which may be vital in the
prosecution of the case against him:
Jurisprudential law establishes a clear-cut distinction between suspension as preventive

measure and suspension as penalty. The distinction, by considering the purpose aspect of the suspensions,
is readily cognizable as they have different ends sought to be achieved.
Preventive suspension is merely a preventive measure, a preliminary step in an administrative

investigation. The purpose of the suspension order is to prevent the accused from using his
position and the powers and prerogatives of his office to influence potential witnesses or tamper
with records which may be vital in the prosecution of the case against him. If after such
investigation, the charge is established and the person investigated is found guilty of acts warranting his
suspension or removal, then he is suspended, removed or dismissed. This is the penalty.
That preventive suspension is not a penalty is in fact explicitly provided by Section 24 of Rule XIV of the
Omnibus Rules Implementing Book V of the Administrative Code of 1987 (Executive Order No. 292) and
other Pertinent Civil Service Laws.
Section. 24. Preventive suspension is not a punishment or penalty for misconduct in office but is considered
to be a preventive measure. (Emphasis supplied) ChanRoblesVirtualawlibrary
Not being a penalty, the period within which one is under preventive suspension is not considered part of
the actual penalty of suspension. So Section 25 of the same Rule XIV provides: chanRoblesvirtualLawlibrary
Section 25. The period within which a public officer or employee charged is placed under preventive
suspension shall not be considered part of the actual penalty of suspension imposed upon the
employee found guilty.232 (Emphases supplied) ChanRoblesVirtualawlibrary
The requisites for issuing a preventive suspension order are explicitly stated in Section 24, RA 6770:
Section 24. Preventive Suspension. - The Ombudsman or his Deputy may preventively suspend any officer
or employee under his authority pending an investigation, if in his judgment the evidence of guilt is
strong, and (a) the charge against such officer or employee involves dishonesty, oppression or
grave misconduct or neglect in the performance of duty; (b) the charges would warrant removal
from the service; or (c) the respondent's continued stay in office may prejudice the case filed
against him.
The preventive suspension shall continue until the case is terminated by the Office of the Ombudsman but
not more than six (6) months, without pay, except when the delay in the disposition of the case by the
Office of the Ombudsman is due to the fault, negligence or petition of the respondent, in which case the
period of such delay shall not be counted in computing the period of suspension herein provided. (Emphasis
and underscoring supplied)
In other words, the law sets forth two (2) conditions that must be satisfied to justify the issuance of an
order of preventive suspension pending an investigation, namely:
(1) The evidence of guilt is strong; and
(2) Either of the following circumstances co-exist with the first requirement: chanRoblesvirtualLawlibrary
(a) The charge involves dishonesty, oppression or grave misconduct or neglect in the performance of duty; cralawlawlibrary
(b) The charge would warrant removal from the service; or
(c) The respondent's continued stay in office may prejudice the case filed against him.233 ChanRoblesVirtualawlibrary
B. The basis of the CA's injunctive writs is the condonation doctrine.
Examining the CA's Resolutions in CA-G.R. SP No. 139453 would, however, show that the Ombudsman's
non-compliance with the requisites provided in Section 24, RA 6770 was not the basis for the issuance of the
assailed injunctive writs.
The CA's March 16, 2015 Resolution which directed the issuance of the assailed TRO was based on the case
of Governor Garcia, Jr. v. CA234 (Governor Garcia, Jr.), wherein the Court emphasized that "if it were
established in the CA that the acts subject of the administrative complaint were indeed committed during
petitioner [Garcia's] prior term, then, following settled jurisprudence, he can no longer be administratively
charged."235 Thus, the Court, contemplating the application of the condonation doctrine, among others,
cautioned, in the said case, that "it would have been more prudent for [the appellate court] to have, at the
very least, on account of the extreme urgency of the matter and the seriousness of the issues raised in
the certiorari petition, issued a TRO x x x"236during the pendency of the proceedings.
Similarly, the CA's April 6, 2015 Resolution which directed the issuance of the assailed WPI was based on
the condonation doctrine, citing the case of Aguinaldo v. Santos237 The CA held that Binay, Jr. has an
ostensible right to the final relief prayed for, i.e., the nullification of the preventive suspension order, finding
that the Ombudsman can hardly impose preventive suspension against Binay, Jr. given that his re-election
in 2013 as City Mayor of Makati condoned any administrative liability arising from anomalous activities
relative to the Makati Parking Building project from 2007 to 2013.238 Moreover, the CA observed that
although there were acts which were apparently committed by Binay, Jr. beyond his first term , i.e., the
alleged payments on July 3, 4, and 24, 2013,239 corresponding to the services of Hillmarc's and MANA - still,
Binay, Jr. cannot be held administratively liable therefor based on the cases of Salalima v. Guingona,
Jr.,240 and Mayor Garcia v. Mojica,241 wherein the condonation dobtrine was applied by the Court although
the payments were made after the official's election, reasoning that the payments were merely effected
pursuant to contracts executed before said re-election.242
The Ombudsman contends that it was inappropriate for the CA to have considered the condonation doctrine
since it was a matter of defense which should have been raised and passed upon by her office during the
administrative disciplinary proceedings.243 However, the Court agrees with the CA that it was not precluded
from considering the same given that it was material to the propriety of according provisional injunctive
relief in conformity with the ruling in Governor Garcia, Jr., which was the subsisting jurisprudence at that
time. Thus, since condonation was duly raised by Binay, Jr. in his petition in CA-G.R. SP No. 139453,244 the
CA did not err in passing upon the same. Note that although Binay, Jr. secondarily argued that the evidence
of guilt against him was not strong in his petition in CA-G.R. SP No. 139453,245 it appears that the CA found
that the application of the condonation doctrine was already sufficient to enjoin the implementation of the
preventive suspension order. Again, there is nothing aberrant with this since, as remarked in the same case
of Governor Garcia, Jr., if it was established that the acts subject of the administrative complaint were
indeed committed during Binay, Jr.'s prior term, then, following the condonation doctrine, he can no longer
be administratively charged. In other words, with condonation having been invoked by Binay, Jr. as an
exculpatory affirmative defense at the onset, the CA deemed it unnecessary to determine if the evidence of
guilt against him was strong, at least for the purpose of issuing the subject injunctive writs.
With the preliminary objection resolved and the basis of the assailed writs herein laid down, the Court now
proceeds to determine if the CA gravely abused its discretion in applying the condonation doctrine.
C. The origin of the condonation doctrine.
Generally speaking, condonation has been defined as "[a] victim's express or implied forgiveness of an
offense, [especially] by treating the offender as if there had been no offense."246
The condonation doctrine - which connotes this same sense of complete extinguishment of liability as will be
herein elaborated upon - is not based on statutory law. It is a jurisprudential creation that originated from
the 1959 case of Pascual v. Hon. Provincial Board ofNueva Ecija,247 (Pascual),which was therefore
decided under the 1935 Constitution.
In Pascual, therein petitioner, Arturo Pascual, was elected Mayor of San Jose, Nueva Ecija, sometime in
November 1951, and was later re-elected to the same position in 1955. During his second term, or on
October 6, 1956, the Acting Provincial Governor filed administrative charges before the Provincial Board
of Nueva Ecija against him for grave abuse of authority and usurpation of judicial functions for acting on a
criminal complaint in Criminal Case No. 3556 on December 18 and 20, 1954. In defense, Arturo Pascual
argued that he cannot be made liable for the acts charged against him since they were committed during his
previous term of office, and therefore, invalid grounds for disciplining him during his second term. The
Provincial Board, as well as the Court of First Instance of Nueva Ecija, later decided against Arturo Pascual,
and when the case reached this Court on appeal, it recognized that the controversy posed a novel issue -
that is, whether or not an elective official may be disciplined for a wrongful act committed by him during his
immediately preceding term of office.
As there was no legal precedent on the issue at that time, the Court, in Pascual, resorted to
American authorities and "found that cases on the matter are conflicting due in part, probably, to
differences in statutes and constitutional provisions, and also, in part, to a divergence of views with respect
to the question of whether the subsequent election or appointment condones the prior
misconduct."248Without going into the variables of these conflicting views and cases, it proceeded to
state that:
The weight of authorities x x x seems to incline toward the rule denying the right to remove one
from office because of misconduct during a prior term, to which we fully subscribe.249 (Emphasis and
underscoring supplied)
The conclusion is at once problematic since this Court has now uncovered that there is really no established
weight of authority in the United States (US) favoring the doctrine of condonation, which, in the words of
Pascual, theorizes that an official's re-election denies the right to remove him from office due to a
misconduct during a prior term. In fact, as pointed out during the oral arguments of this case, at least
seventeen (17) states in the US have abandoned the condonation doctrine.250 The Ombudsman aptly cites
several rulings of various US State courts, as well as literature published on the matter, to demonstrate the
fact that the doctrine is not uniformly applied across all state jurisdictions. Indeed, the treatment is
nuanced:
(1) For one, it has been widely recognized that the propriety of removing a public officer from his current
term or office for misconduct which he allegedly committed in a prior term of office is governed by the
language of the statute or constitutional provision applicable to the facts of a particular case (see In Re
Removal of Member of Council Coppola).251 As an example, a Texas statute, on the one hand, expressly
allows removal only for an act committed during a present term: "no officer shall be prosecuted or removed
from office for any act he may have committed prior to his election to office" (see State ex rel. Rowlings v.
Loomis).252 On the other hand, the Supreme Court of Oklahoma allows removal from office for "acts of
commission, omission, or neglect committed, done or omitted during a previous or preceding term of office"
(see State v. Bailey)253 Meanwhile, in some states where the removal statute is silent or unclear, the case's
resolution was contingent upon the interpretation of the phrase "in office." On one end, the Supreme Court
of Ohio strictly construed a removal statute containing the phrase "misfeasance of malfeasance in office"
and thereby declared that, in the absence of clear legislative language making, the word "office" must be
limited to the single term during which the offense charged against the public officer occurred (see State ex
rel. Stokes v. Probate Court of Cuyahoga County)254 Similarly, the Common Pleas Court of Allegheny County,
Pennsylvania decided that the phrase "in office" in its state constitution was a time limitation with regard to
the grounds of removal, so that an officer could not be removed for misbehaviour which occurred; prior to
the taking of the office (see Commonwealth v. Rudman)255 The opposite was construed in the Supreme
Court of Louisiana which took the view that an officer's inability to hold an office resulted from the
commission of certain offenses, and at once rendered him unfit to continue in office, adding the fact that the
officer had been re-elected did not condone or purge the offense (seeState ex rel. Billon v.
Bourgeois).256 Also, in the Supreme Court of New York, Apellate Division, Fourth Department, the court
construed the words "in office" to refer not to a particular term of office but to an entire tenure; it stated
that the whole purpose of the legislature in enacting the statute in question could easily be lost sight of, and
the intent of the law-making body be thwarted, if an unworthy official could not be removed during one term
for misconduct for a previous one (Newman v. Strobel).257
(2) For another, condonation depended on whether or not the public officer was a successor in the same
office for which he has been administratively charged. The "own-successor theory," which is recognized in
numerous States as an exception to condonation doctrine, is premised on the idea that each term of a re-
elected incumbent is not taken as separate and distinct, but rather, regarded as one continuous term of
office. Thus, infractions committed in a previous term are grounds for removal because a re-elected
incumbent has no prior term to speak of258 (see Attorney-General v. Tufts;259State v. Welsh;260Hawkins v.
Common Council of Grand Rapids;261Territory v. Sanches;262and Tibbs v. City of Atlanta).263
(3) Furthermore, some State courts took into consideration the continuing nature of an offense in cases
where the condonation doctrine was invoked. In State ex rel. Douglas v. Megaarden,264 the public officer
charged with malversation of public funds was denied the defense of condonation by the Supreme Court of
Minnesota, observing that "the large sums of money illegally collected during the previous years are still
retained by him." In State ex rel. Beck v. Harvey265 the Supreme Court of Kansas ruled that "there is no
necessity" of applying the condonation doctrine since "the misconduct continued in the present term of
office[;] [thus] there was a duty upon defendant to restore this money on demand of the county
commissioners." Moreover, in State ex rel. Londerholm v. Schroeder,266 the Supreme Court of Kansas held
that "insofar as nondelivery and excessive prices are concerned, x x x there remains a continuing duty on
the part of the defendant to make restitution to the country x x x, this duty extends into the present term,
and neglect to discharge it constitutes misconduct."
Overall, the foregoing data clearly contravenes the preliminary conclusion in Pascual that there is a "weight
of authority" in the US on the condonation doctrine. In fact, without any cogent exegesis to show
that Pascual had accounted for the numerous factors relevant to the debate on condonation, an outright
adoption of the doctrine in this jurisdiction would not have been proper.
At any rate, these US cases are only of persuasive value in the process of this Court's decision-making.
"[They] are not relied upon as precedents, but as guides of interpretation."267 Therefore, the ultimate
analysis is on whether or not the condonation doctrine, as espoused in Pascual, and carried over in
numerous cases after, can be held up against prevailing legal norms. Note that the doctrine ofstare
decisis does not preclude this Court from revisiting existing doctrine. As adjudged in the case ofBelgica,
the stare decisis rule should not operate when there are powerful countervailing considerations against its
application.268 In other words, stare decisis becomes an intractable rule only when circumstances exist to
preclude reversal of standing precedent.269 As the Ombudsman correctly points out, jurisprudence, after all,
is not a rigid, atemporal abstraction; it is an organic creature that develops and devolves along with the
society within which it thrives.270 In the words of a recent US Supreme Court Decision, "[w]hat we can
decide, we can undecide."271
In this case, the Court agrees with the Ombudsman that since the time Pascual was decided, the legal
landscape has radically shifted. Again, Pascual was a 1959 case decided under the 1935 Constitution, which
dated provisions do not reflect the experience of the Filipino People under the 1973 and 1987 Constitutions.
Therefore, the plain difference in setting, including, of course, the sheer impact of the condonation doctrine
on public accountability, calls for Pascual's judicious re-examination.
D. Testing the Condonation Doctrine.
Pascual's ratio decidendi may be dissected into three (3) parts:
First, the penalty of removal may not be extended beyond the term in which the public officer was elected
for each term is separate and distinct:
Offenses committed, or acts done, during previous term are generally held not to furnish cause
for removal and this is especially true where the constitution provides that the penalty in proceedings for
removal shall not extend beyond the removal from office, and disqualification from holding office
for the term for which the officer was elected or appointed. (67 C.J.S. p. 248, citing Rice vs.
State, 161 S.W. 2d. 401; Montgomery vs. Nowell, 40 S.W. 2d. 418; People ex rel. Bagshaw vs.
Thompson, 130 P. 2d. 237; Board of Com'rs of Kingfisher County vs. Shutter, 281 P. 222; State vs.
Blake, 280 P. 388; In re Fudula, 147 A. 67; State vs. Ward, 43 S.W. 2d. 217).
The underlying theory is that each term is separate from other terms x x x.272
Second, an elective official's re-election serves as a condonation of previous misconduct, thereby cutting
the right to remove him therefor; and
[T]hat the reelection to office operates as a condonation of the officer's previous misconduct to the extent of
cutting off the right to remove him therefor. (43 Am. Jur. p. 45, citing Atty. Gen. vs. Hasty, 184 Ala. 121, 63
So. 559, 50 L.R.A. (NS) 553.273(emphasis supplied)
Third, courts may not deprive the electorate, who are assumed to have known the life and character of
candidates, of their right to elect officers:
As held in Conant vs. Grogan (1887) 6 N.Y.S.R. 322, cited in 17 A.I.R. 281, 63 So. 559, 50 LRA (NS) 553 —
The Court should never remove a public officer for acts done prior to his present term of office. To do
otherwise would be to deprive the people of their right to elect their officers. When the people have
elected a man to office, it must be assumed that they did this with knowledge of his life and
character, and that they disregarded or forgave his faults or misconduct, if he had been guilty of
any. It is not for the court, by reason of such faults or misconduct to practically overrule the will of the
people.274 (Emphases supplied)
The notable cases on condonation following Pascual are as follows:
(1) Lizares v. Hechanova275 (May 17, 1966) - wherein the Court first applied the condonation doctrine,
thereby quoting the above-stated passages from Pascual in verbatim.
(2) Insco v. Sanchez, et al.276 (December 18, 1967) - wherein the Court clarified that the condonation
doctrine does not apply to a criminal case. It was explained that a criminal case is different from an
administrative case in that the former involves the People of the Philippines as a community, and is a public
wrong to the State at large; whereas, in the latter, only the populace of the constituency he serves is
affected. In addition, the Court noted that it is only the President who may pardon a criminal offense.
(3) Aguinaldo v. Santos277 (Aguinaldo; August 21, 1992) - a case decided under the 1987
Constitution wherein the condonation doctrine was applied in favor of then Cagayan Governor Rodolfo E.
Aguinaldo although his re-election merely supervened the pendency of, the proceedings.
(4) Salalima v. Guinsona, Jr.278 (Salalima; May 22, 1996) -wherein the Court reinforced the
condonation doctrine by stating that the same is justified by "sound public policy." According to
the Court, condonation prevented the elective official from being "hounded" by administrative cases filed by
his "political enemies" during a new term, for which he has to defend himself "to the detriment of public
service." Also, the Court mentioned that the administrative liability condoned by re-election covered the
execution of the contract and the incidents related therewith.279
(5) Mayor Garcia v. Mojica280 (Mayor Garcia; September 10, 1999) - wherein the benefit of the doctrine
was extended to then Cebu City Mayor Alvin B. Garcia who was administratively charged for his involvement
in an anomalous contract for the supply of asphalt for Cebu City, executed only four (4) days before the
upcoming elections. The Court ruled that notwithstanding the timing of the contract's execution, the
electorate is presumed to have known the petitioner's background and character, including his past
misconduct; hence, his subsequent re-election was deemed a condonation of his prior transgressions. More
importantly, the Court held that the determinative time element in applying the condonation doctrine should
be the time when the contract was perfected;this meant that as long as the contract was entered into
during a prior term, acts which were done to implement the same, even if done during a
succeeding term, do not negate the application of the condonation doctrine in favor of the
elective official.
(6) Salumbides, Jr. v. Office of the Ombudsman281 (Salumbides, Jr.; April 23, 2010) - wherein the Court
explained the doctrinal innovations in the Salalima and Mayor Garcia rulings, to wit:
Salalima v. Guingona, Jr. and Mayor Garcia v. Hon. Mojica reinforced the doctrine. The condonation rule
was applied even if the administrative complaint was not filed before the reelection of the public
official, and even if the alleged misconduct occurred four days before the elections,
respectively. Salalima did not distinguish as to the date of filing of the administrative complaint, as long as
the alleged misconduct was committed during the prior term, the precise timing or period of
which Garcia did not further distinguish, as long as the wrongdoing that gave rise to the public official's
culpability was committed prior to the date of reelection.282 (Emphasis supplied) ChanRoblesVirtualawlibrary
The Court, citing Civil Service Commission v. Sojor,283 also clarified that the condonation doctrine would
not apply to appointive officials since, as to them, there is no sovereign will to disenfranchise.
(7) And finally, the above discussed case of Governor Garcia, Jr. -wherein the Court remarked that it
would have been prudent for the appellate court therein to have issued a temporary restraining order
against the implementation of a preventive suspension order issued by the Ombudsman in view of the
condonation doctrine.
A thorough review of the cases post-1987, among others, Aguinaldo, Salalima, Mayor Garcia, andGovernor
Garcia, Jr. - all cited by the CA to justify its March 16, 2015 and April 6, 2015 Resolutions directing the
issuance of the assailed injunctive writs - would show that the basis for condonation under the prevailing
constitutional and statutory framework was never accounted for. What remains apparent from the text of
these cases is that the basis for condonation, as jurisprudential doctrine, was - and still remains - the
above-cited postulates of Pascual, which was lifted from rulings of US courts where condonation was amply
supported by their own state laws. With respect to its applicability to administrative cases, the core premise
of condonation - that is, an elective official's re-election cuts qff the right to remove him for an
administrative offense committed during a prior term - was adopted hook, line, and sinker in our
jurisprudence largely because the legality of that doctrine was never tested against existing legal norms. As
in the US, the propriety of condonation is - as it should be -dependent on the legal foundation of the
adjudicating jurisdiction. Hence, the Court undertakes an examination of our current laws in order to
determine if there is legal basis for the continued application of the doctrine of condonation.
The foundation of our entire legal system is the Constitution. It is the supreme law of the land;284thus, the
unbending rule is that every statute should be read in light of the Constitution.285 Likewise, the Constitution
is a framework of a workable government; hence, its interpretation must take into account the complexities,
realities, and politics attendant to the operation of the political branches of government.286
As earlier intimated, Pascual was a decision promulgated in 1959. Therefore, it was decided within the
context of the 1935 Constitution which was silent with respect to public accountability, or of the nature of
public office being a public trust. The provision in the 1935 Constitution that comes closest in dealing with
public office is Section 2, Article II which states that "[t]he defense of the State is a prime duty of
government, and in the fulfillment of this duty all citizens may be required by law to render personal military
or civil service."287 Perhaps owing to the 1935 Constitution's silence on public accountability, and considering
the dearth of jurisprudential rulings on the matter, as well as the variance in the policy considerations, there
was no glaring objection confronting the Pascual Court in adopting the condonation doctrine that originated
from select US cases existing at that time.
With the advent of the 1973 Constitution, the approach in dealing with public officers underwent a
significant change. The new charter introduced an entire article on accountability of public officers, found in
Article XIII. Section 1 thereof positively recognized, acknowledged, and declared that "[p]ublic office is a
public trust." Accordingly, "[p]ublic officers and employees shall serve with the highest degree of
responsibility, integrity, loyalty and efficiency, and shall remain accountable to the people."
After the turbulent decades of Martial Law rule, the Filipino People have framed and adopted the 1987
Constitution, which sets forth in the Declaration of Principles and State Policies in Article II that "[t]he
State shall maintain honesty and integrity in the public service and take positive and effective
measures against graft and corruption."288 Learning how unbridled power could corrupt public servants
under the regime of a dictator, the Framers put primacy on the integrity of the public service by declaring it
as a constitutional principle and a State policy. More significantly, the 1987 Constitution strengthened and
solidified what has been first proclaimed in the 1973 Constitution by commanding public officers to be
accountable to the people at all times:
Section 1. Public office is a public trust. Public officers and employees must at all timesbe accountable to
the people, serve them with utmost responsibility, integrity, loyalty, and efficiency and act with
patriotism and justice, and lead modest lives. ChanRoblesVirtualawlibrary
In Belgica, it was explained that:
[t]he aphorism forged under Section 1, Article XI of the 1987 Constitution, which states that "public office is
a public trust," is an overarching reminder that every instrumentality of government should exercise their
official functions only in accordance with the principles of the Constitution which embodies the parameters of
the people's trust. The notion of a public trust connotes accountability x x x.289 (Emphasis supplied) ChanRoblesVirtualawlibrary
The same mandate is found in the Revised Administrative Code under the section of the Civil Service
Commission,290 and also, in the Code of Conduct and Ethical Standards for Public Officials and Employees.291
For local elective officials like Binay, Jr., the grounds to discipline, suspend or remove an elective local
official from office are stated in Section 60 of Republic Act No. 7160,292 otherwise known as the "Local
Government Code of 1991" (LGC), which was approved on October 10 1991, and took effect on January 1,
1992:
Section 60. Grounds for Disciplinary Action. - An elective local official may be disciplined, suspended, or
removed from office on any of the r following grounds: chanRoblesvirtualLawlibrary
(a) Disloyalty to the Republic of the Philippines; cralawlawlibrary
(b) Culpable violation of the Constitution; cralawlawlibrary
(c) Dishonesty, oppression, misconduct in office, gross negligence, or dereliction of duty; cralawlawlibrary
(d) Commission of any offense involving moral turpitude or an offense punishable by at least prision
mayor; cralawlawlibrary
(e) Abuse of authority; cralawlawlibrary
(f) Unauthorized absence for fifteen (15) consecutive working days, except in the case of members of
the sangguniang panlalawigan, sangguniang panlunsod, sanggunian bayan, and sangguniang barangay; cralawlawlibrary
(g) Application for, or acquisition of, foreign citizenship or residence or the status of an immigrant of another
country; and
(h) Such other grounds as may be provided in this Code and other laws.
An elective local official may be removed from office on the grounds enumerated above by order of the
proper court.
Related to this provision is Section 40 (b) of the LGC which states that those removed from office as a
result of an administrative case shall be disqualified from running for any elective local position:
Section 40. Disqualifications. - The following persons are disqualified from running for any elective local
position:
xxxx
(b) Those removed from office as a result of an administrative case;
x x x x (Emphasis supplied) ChanRoblesVirtualawlibrary
In the same sense, Section 52 (a) of the RRACCS provides that the penalty of dismissal from service
carries the accessory penalty of perpetual disqualification from holding public office:
Section 52. - Administrative Disabilities Inherent in Certain Penalties. -
a. The penalty of dismissal shall carry with it cancellation of eligibility, forfeiture of retirement benefits,
perpetual disqualification from holding public office, and bar from taking the civil service
examinations.
In contrast, Section 66 (b) of the LGC states that the penalty of suspension shall not exceed the
unexpired term of the elective local official nor constitute a bar to his candidacy for as long as he meets the
qualifications required for the office. Note, however, that the provision only pertains to the duration of the
penalty and its effect on the official's candidacy. Nothing therein states that the administrative
liability therefor is extinguished by the fact of re-election:
Section 66. Form and Notice of Decision. - x x x.
xxxx
(b) The penalty of suspension shall not exceed the unexpired term of the respondent or a period of six (6)
months for every administrative offense, nor shall said penalty be a bar to the candidacy of the respondent
so suspended as long as he meets the qualifications required for the office.
Reading the 1987 Constitution together with the above-cited legal provisions now leads this Court to the
conclusion that the doctrine of condonation is actually bereft of legal bases.
To begin with, the concept of public office is a public trust and the corollary requirement of
accountability to the people at all times, as mandated under the 1987 Constitution, is plainly
inconsistent with the idea that an elective local official's administrative liability for a misconduct committed
during a prior term can be wiped off by the fact that he was elected to a second term of office, or even
another elective post. Election is not a mode of condoning an administrative offense, and there is
simply no constitutional or statutory basis in our jurisdiction to support the notion that an official elected for
a different term is fully absolved of any administrative liability arising from an offense done during a prior
term. In this jurisdiction, liability arising from administrative offenses may be condoned bv the
President in light of Section 19, Article VII of the 1987 Constitution which was interpreted in Llamas v.
Orbos293 to apply to administrative offenses:
The Constitution does not distinguish between which cases executive clemency may be exercised by the
President, with the sole exclusion of impeachment cases. By the same token, if executive clemency may be
exercised only in criminal cases, it would indeed be unnecessary to provide for the exclusion of
impeachment cases from the coverage of Article VII, Section 19 of the Constitution. Following petitioner's
proposed interpretation, cases of impeachment are automatically excluded inasmuch as the same do not
necessarily involve criminal offenses.
In the same vein, We do not clearly see any valid and convincing , reason why the President cannot grant
executive clemency in administrative cases. It is Our considered view that if the President can grant
reprieves, commutations and pardons, and remit fines and forfeitures in criminal cases, with much more
reason can she grant executive clemency in administrative cases, which are clearly less serious than
criminal offenses.
Also, it cannot be inferred from Section 60 of the LGC that the grounds for discipline enumerated therein
cannot anymore be invoked against an elective local official to hold him administratively liable once he is re-
elected to office. In fact, Section 40 (b) of the LGC precludes condonation since in the first place, an elective
local official who is meted with the penalty of removal could not be re-elected to an elective local position
due to a direct disqualification from running for such post. In similar regard, Section 52 (a) of the RRACCS
imposes a penalty of perpetual disqualification from holding public office as an accessory to the penalty of
dismissal from service.
To compare, some of the cases adopted in Pascual were decided by US State jurisdictions wherein the
doctrine of condonation of administrative liability was supported by either a constitutional or statutory
provision stating, in effect, that an officer cannot be removed by a misconduct committed during a previous
term,294 or that the disqualification to hold the office does not extend beyond the term in which the
official's delinquency occurred.295 In one case,296 the absence of a provision against the re-election of an
officer removed - unlike Section 40 (b) of the LGC-was the justification behind condonation. In another
case,297 it was deemed that condonation through re-election was a policy under their constitution - which
adoption in this jurisdiction runs counter to our present Constitution's requirements on public accountability.
There was even one case where the doctrine of condonation was not adjudicated upon but only invoked by a
party as a ground;298 while in another case, which was not reported in full in the official series, the crux of
the disposition was that the evidence of a prior irregularity in no way pertained to the charge at issue and
therefore, was deemed to be incompetent.299 Hence, owing to either their variance or inapplicability, none of
these cases can be used as basis for the continued adoption of the condonation doctrine under our existing
laws.
At best, Section 66 (b) of the LGC prohibits the enforcement of the penalty of suspension beyond the
unexpired portion of the elective local official's prior term, and likewise allows said official to still run for re-
election This treatment is similar to People ex rel Bagshaw v. Thompson300 andMontgomery v. Novell301 both
cited in Pascual, wherein it was ruled that an officer cannot besuspended for a misconduct committed
during a prior term. However, as previously stated, nothing in Section 66 (b) states that the elective local
official's administrative liability is extinguished by the fact of re-election. Thus, at all events, no legal
provision actually supports the theory that the liability is condoned.
Relatedly it should be clarified that there is no truth in Pascual's postulation that the courts would be
depriving the electorate of their right to elect their officers if condonation were not to be sanctioned. In
political law, election pertains to the process by which a particular constituency chooses an individual to hold
a public office. In this jurisdiction, there is, again, no legal basis to conclude that election automatically
implies condonation. Neither is there any legal basis to say that every democratic and republican state has
an inherent regime of condonation. If condonation of an elective official's administrative liability would
perhaps, be allowed in this jurisdiction, then the same should have been provided by law under our
governing legal mechanisms. May it be at the time of Pascual or at present, by no means has it been shown
that such a law, whether in a constitutional or statutory provision, exists. Therefore, inferring from this
manifest absence, it cannot be said that the electorate's will has been abdicated.
Equally infirm is Pascual's proposition that the electorate, when re-electing a local official, are assumed to
have done so with knowledge of his life and character, and that they disregarded or forgave his faults or
misconduct, if he had been guilty of any. Suffice it to state that no such presumption exists in any
statute or procedural rule.302 Besides, it is contrary to human experience that the electorate would have
full knowledge of a public official's misdeeds. The Ombudsman correctly points out the reality that most
corrupt acts by public officers are shrouded in secrecy, and concealed from the public. Misconduct
committed by an elective official is easily covered up, and is almost always unknown to the
electorate when they cast their votes.303 At a conceptual level, condonation presupposes that the
condoner has actual knowledge of what is to be condoned. Thus, there could be no condonation of an
act that is unknown. As observed in Walsh v. City Council of Trenton304 decided by the New Jersey
Supreme Court:
Many of the cases holding that re-election of a public official prevents his removal for acts done in a
preceding term of office are reasoned out on the theory of condonation. We cannot subscribe to that theory
because condonation, implying as it does forgiveness, connotes knowledge and in the absence of knowledge
there can be no condonation. One cannot forgive something of which one has no knowledge.
That being said, this Court simply finds no legal authority to sustain the condonation doctrine in this
jurisdiction. As can be seen from this discourse, it was a doctrine adopted from one class of US rulings way
back in 1959 and thus, out of touch from - and now rendered obsolete by - the current legal regime. In
consequence, it is high time for this Court to abandon the condonation doctrine that originated from Pascual,
and affirmed in the cases following the same, such as Aguinaldo, Salalima, Mayor Garcia, and Governor
Garcia, Jr. which were all relied upon by the CA.
It should, however, be clarified that this Court's abandonment of the condonation doctrine should
beprospective in application for the reason that judicial decisions applying or interpreting the laws or the
Constitution, until reversed, shall form part of the legal system of the Philippines.305 Unto this Court devolves
the sole authority to interpret what the Constitution means, and all persons are bound to follow its
interpretation. As explained in De Castro v. Judicial Bar Council.306
Judicial decisions assume the same authority as a statute itself and, until authoritatively abandoned,
necessarily become, to the extent that they are applicable, the criteria that must control the actuations, not
only of those called upon to abide by them, but also of those duty-bound to enforce obedience to them.307
Hence, while the future may ultimately uncover a doctrine's error, it should be, as a general rule,
recognized as "good law" prior to its abandonment. Consequently, the people's reliance thereupon should be
respected. The landmark case on this matter is People v. Jabinal,308 wherein it was ruled:
[W]hen a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be
applied prospectively, and should not apply to parties who had relied on the old doctrine and acted on the
faith thereof.
Later, in Spouses Benzonan v. CA,309 it was further elaborated:
[Pursuant to Article 8 of the Civil Code "judicial decisions applying or interpreting the laws or the
Constitution shall form a part of the legal system of the Philippines." But while our decisions form part of the
law of the land, they are also subject to Article 4 of the Civil Code which provides that "laws shall have no
retroactive effect unless the contrary is provided." This is expressed in the familiar legal maxim lex prospicit,
non respicit, the law looks forward not backward. The rationale against retroactivity is easy to perceive. The
retroactive application of a law usually divests rights that have already become vested or impairs the
obligations of contract and hence, is unconstitutional.310
Indeed, the lessons of history teach us that institutions can greatly benefit from hindsight and rectify its
ensuing course. Thus, while it is truly perplexing to think that a doctrine which is barren of legal anchorage
was able to endure in our jurisprudence for a considerable length of time, this Court, under a new
membership, takes up the cudgels and now abandons the condonation doctrine.
E. Consequence of ruling.
As for this section of the Decision, the issue to be resolved is whether or not the CA committed grave
abuse of discretion amounting to lack or excess of jurisdiction in issuing the assailed injunctive
writs.
It is well-settled that an act of a court or tribunal can only be considered as with grave abuse of
discretion when such act is done in a capricious or whimsical exercise of judgment as is equivalent
to lack of jurisdiction. The abuse of discretion must be so patent and gross as to amount to an evasion of
a positive duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of
law, as where the power is exercised in an arbitrary and despotic manner by reason of passion and
hostility.311 It has also been held that "grave abuse of discretion arises when a lower court or
tribunal patently violates the Constitution, the law or existing jurisprudence."312
As earlier established, records disclose that the CA's resolutions directing the issuance of the assailed
injunctive writs were all hinged on cases enunciating the condonation doctrine. To recount, the March 16,
2015 Resolution directing the issuance of the subject TRO was based on the case of Governor Garcia, Jr.,
while the April 6, 2015 Resolution directing the issuance of the subject WPI was based on the cases
of Aguinaldo, Salalima, Mayor Garcia, and again, Governor Garcia, Jr. Thus, by merely following settled
precedents on the condonation doctrine, which at that time, unwittingly remained "good law," it cannot be
concluded that the CA committed a grave abuse of discretion based on its legal attribution above.
Accordingly, the WPI against the Ombudsman's preventive suspension order was correctly issued.
With this, the ensuing course of action should have been for the CA to resolve the main petition
forcertiorari in CA-G.R. SP No. 139453 on the merits. However, considering that the Ombudsman, on
October 9, 2015, had already found Binay, Jr. administratively liable and imposed upon him the penalty of
dismissal, which carries the accessory penalty of perpetual disqualification from holding public office, for the
present administrative charges against him, the said CA petition appears to have been mooted.313 As initially
intimated, the preventive suspension order is only an ancillary issuance that, at its core, serves the purpose
of assisting the Office of the Ombudsman in its investigation. It therefore has no more purpose - and
perforce, dissolves - upon the termination of the office's process of investigation in the instant
administrative case.
F. Exceptions to the mootness principle.
This notwithstanding, this Court deems it apt to clarify that the mootness of the issue regarding the validity
of the preventive suspension order subject of this case does not preclude any of its foregoing
determinations, particularly, its abandonment of the condonation doctrine. As explained in Belgica, '"the
moot and academic principle' is not a magical formula that can automatically dissuade the Court in resolving
a case. The Court will decide cases, otherwise moot, if: first, there is a grave violation of the
Constitution; second, the exceptional character of the situation and the paramount public interest is
involved; third, when the constitutional issue raised requires formulation of controlling principles to guide
the bench, the bar, and the public; and fourth, the case is capable of repetition yet evading review."314 All
of these scenarios obtain in this case:
First, it would be a violation of the Court's own duty to uphold and defend the Constitution if it were not to
abandon the condonation doctrine now that its infirmities have become apparent. As extensively discussed,
the continued application of the condonation doctrine is simply impermissible under the auspices of the
present Constitution which explicitly mandates that public office is a public trust and that public officials shall
be accountable to the people at all times.
Second, the condonation doctrine is a peculiar jurisprudential creation that has persisted as a defense of
elective officials to escape administrative liability. It is the first time that the legal intricacies of this doctrine
have been brought to light; thus, this is a situation of exceptional character which this Court must ultimately
resolve. Further, since the doctrine has served as a perennial obstacle against exacting public accountability
from the multitude of elective local officials throughout the years, it is indubitable that paramount public
interest is involved.
Third, the issue on the validity of the condonation doctrine clearly requires the formulation of controlling
principles to guide the bench, the bar, and the public. The issue does not only involve an in-depth exegesis
of administrative law principles, but also puts to the forefront of legal discourse the potency of the
accountability provisions of the 1987 Constitution. The Court owes it to the bench, the bar, and the public to
explain how this controversial doctrine came about, and now, its reasons for abandoning the same in view of
its relevance on the parameters of public office.
And fourth, the defense of condonation has been consistently invoked by elective local officials against the
administrative charges filed against them. To provide a sample size, the Ombudsman has informed the
Court that "for the period of July 2013 to December 2014 alone, 85 cases from the Luzon Office and 24
cases from the Central Office were dismissed on the ground of condonation. Thus, in just one and a half
years, over a hundred cases of alleged misconduct - involving infractions such as dishonesty, oppression,
gross neglect of duty and grave misconduct - were placed beyond the reach of the Ombudsman's
investigatory and prosecutorial powers."315 Evidently, this fortifies the finding that the case is capable of
repetition and must therefore, not evade review.
In any event, the abandonment of a doctrine is wholly within the prerogative of the Court. As mentioned, it
is its own jurisprudential creation and may therefore, pursuant to its mandate to uphold and defend the
Constitution, revoke it notwithstanding supervening events that render the subject of discussion moot. chanrobleslaw
V.
With all matters pertaining to CA-G.R. SP No. 139453 passed upon, the Court now rules on the final issue on
whether or not the CA's Resolution316 dated March 20, 2015 directing the Ombudsman to comment on Binay,
Jr.'s petition for contempt in CA-G.R. SP No. 139504 is improper and illegal.
The sole premise of the Ombudsman's contention is that, as an impeachable officer, she cannot be the
subject of a charge for indirect contempt317 because this action is criminal in nature and the penalty therefor
would result in her effective removal from office.318 However, a reading of the aforesaid March 20, 2015
Resolution does not show that she has already been subjected to contempt proceedings. This issuance, in?
fact, makes it clear that notwithstanding the directive for the Ombudsman to comment, the CA has not
necessarily given due course to Binay, Jr.'s contempt petition:
Without necessarily giving due course to the Petition for Contempt respondents [Hon. Conchita
Carpio Morales, in her capacity as the Ombudsman, and the Department of Interior and Local Government]
are hereby DIRECTED to file Comment on the Petition/Amended and Supplemental Petition for Contempt
(CA-G.R. SP No. 139504) within an inextendible period of three (3) days from receipt hereof. (Emphasis and
underscoring supplied) ChanRoblesVirtualawlibrary
Thus, even if the Ombudsman accedes to the CA's directive by filing a comment, wherein she may properly
raise her objections to the contempt proceedings by virtue of her being an impeachable officer, the CA, in
the exercise of its sound judicial discretion, may still opt not to give due course to Binay, Jr.'s contempt
petition and accordingly, dismiss the same. Sjmply put, absent any indication that the contempt petition has
been given due course by the CA, it would then be premature for this Court to rule on the issue. The
submission of the Ombudsman on this score is perforce denied.
WHEREFORE, the petition is PARTLY GRANTED. Under the premises of this Decision, the Court resolves
as follows:
(a) the second paragraph of Section 14 of Republic Act No. 6770 is declared UNCONSTITUTIONAL, while
the policy against the issuance of provisional injunctive writs by courts other than the Supreme Court to
enjoin an investigation conducted by the Office of the Ombudsman under the first paragraph of the said
provision is DECLARED ineffective until the Court adopts the same as part of the rules of procedure through
an administrative circular duly issued therefor; cralawlawlibrary
(b) The condonation doctrine is ABANDONED, but the abandonment is PROSPECTIVE in effect; cralawlawlibrary
(c) The Court of Appeals (CA) is DIRECTED to act on respondent Jejomar Erwin S. Binay, Jr.'s (Binay, Jr.)
petition for certiorari in CA-G.R. SP No. 139453 in light of the Office of the Ombudsman's supervening
issuance of its Joint Decision dated October 9, 2015 finding Binay, Jr. administratively liable in the six (6)
administrative complamts, docketed as OMB-C-A-15-0058, OMB-C-A-15-0059, OMB-C-A-15-0060, OMB-C-
A-15-0061, OMB-C-A-15-0062, and OMB-C-A-15-0063; and
(d) After the filing of petitioner Ombudsman Conchita Carpio Morales's comment, the CA is DIRECTEDto
resolve Binay, Jr.'s petition for contempt in CA-G.R. SP No. 139504 with utmost dispatch.
SO ORDERED. chanroblesvirtuallawlibrary
Sereno, C.J. Carpio, Leonardo-De Castro, Del Castillo, Villarama, Jr., Perez, Reyes, and Leonen, JJ., concur.
Velasco, Jr., Peralta, and Jardeleza, JJ., no part.
Brion, J., no part/ on leave.
Mendoza, J., on leave.
Bersamin, J., please see my concurring & dissenting opinion.
Endnotes:
1
"The Works of Jeremy Bentham, published under the superintendence of his executor, John Bowring." Vol.
II, Chapter IV, p. 423, London (1843).
2
With urgent prayer for the issuance of a TRO and/or a WPI. Rollo, Vol. 1, pp. 6-36.
3
Id. at 43-47. Penned by Associate Justice Jose C. Reyes, Jr. with Associate Justices Francisco P. Acosta and
Eduardo B. Peralta, Jr. concurring.
4
Id. at 53-65. Issued by petitioner Ombudsman Conchita Carpio Morales.
5
Id. at 50-51.
6
Dated March 18, 2015. Id. at 362-373.
7
Id. at 613-627.
8
Id. at 629-630. Signed by Division Clerk, of Court Miriam Alfonso Bautista.
9
For certiorari and prohibition with prayer for the issuance of a TRO and/or WPI. Id. at 606-611
10
See rollo, Vol. II, pp. 749-757.
11
RA 7080, entitled "AN ACT DEFINING AND PENALIZING THE CRIME OF PLUNDER" (approved on Julv 12,
1991).
12
Approved on August 17, 1960.
13
Rollo, Vol. II, pp. 647.
14
Id.
15
Through Ombudsman Office Order No. 546, which was later on amended through Officer Order No. 546-A
dated November 18, 2014. Id. at 758-759.
16
Dated March 3, 2015. Rollo, Vol. I, pp. 66-100.
17
Docketed as OMB-C-A-15-0058, OMB-C-A-15-0059, OMB-C-A-15-0060, OMB-C-A-15-0061, OMB-C-A-15-
0062, and OMB-C-A-15-0063. See id. at 53-58.
18
Docketed as OMB-C-C-15-0059, OMB-C-C-15-0060, OMB-C-C-15-0061, OMB-C-C-15-0062, OMB-C-C-15-
0063, and OMB-C-C-15-0064. See id. at 66. See also rollo, Vol. II, p. 674.
19
As for Binay, Jr., only four (4) administrative cases and four (4) criminal cases were filed against him,
particularly: (a) for administrative cases (1) OMB-C-A-15-0058, (2)OMB-C-A-15-0061, (3) OMB-C- A-15-
0062, and (4) OMB-C-A-15-0063; and (b) for criminal cases (1) OMB-C-C-15-0059, for violation of Section
3 (e) of RA 3019 and Malversation of Public Funds involving the design, architectural, and engineering
services of MANA Architecture & Interior Design Co. covering the Makati Parking Building project, (2) OMB-
C-C-15-0062, for violation of Section 3 (e) of RA 3019 and two (2) counts of Falsification of Public
Documents under Article 171 of the Revised Penal Code in connection with Phase III of the Makati Parking
Building project involving Hilmarc's, (3) OMB-C-C-15-0063, for violation of Section 3 (e) of RA 3019 and two
(2) counts of Falsification of Public Documents in connection with Phase IV of the Makati Parking Building
project involving Hilmarc's, and (4) OMB- C-C-1 5-0064, for violation of Section 3 (e) of RA 3019 and two
(2) counts of Falsification of Public Documents in connection with Phase V of the Makati Parking Building
project involving Hilmarc's. (Rollo, Vol. I, p. 12; rollo, Vol. II, p. 647.)
20
Specific period covered by his first term is from Noon of June 30, 2010 to Noon of June 30, 2013.
21
Rollo, Vol. I, p. 247.
22
Id. at 248-250.
23
The original contract amount was P599,395,613.34. Due to a change order, this was later increased to
P599,994,021.05. See Disbursement Voucher; id. at 284.
24
Id. at 86-87.
25
See Disbursement Voucher for 26% completion of Phase III; id. at 270.
26
See Disbursement Voucher for 52.49% completion of Phase III; id. at 273.
27
28
29
30
31
Id. at 312.
32
Id. at 290-292.
33
The original contract amount was f 649,275,681.73. This was later increased to f 649,934,440.96. See
Disbursement Voucher; id. at 320.
34
Id. at 88.
35
See Disbursement Voucher for 33.53% completion of Phase IV; id. at 315.
36
37
38
39
See Disbursement Voucher for 100% completion of Phase IV; id. at 320.
40
Id. at 334.
41
Id. at 323-325.
42
The original contract amount was P141,649,366.00. Due to a change order, this was later increased to
P143,806,161.00. See Disbursement Voucher; id. at 349
43
Id. at 91.
44
See Disbursement Voucher for 27.31% completion of Phase V; id. at 340. See also id. at 337-339.
45
See Disbursement Voucher for 52.76% completion of Phase V; id. at 344. See also id. at 341-343.
46
Specific period covered by his second term is from Noon of June 30, 2013 to Noon of June 30, 2016.
47
See Disbursement Voucher for 100% completion of Phase V; rollo, p. 349. See also id. at 346-349.
48
For the contract amount of PI 1,974,900.00. Dated November 28,2007. Id. at 108-113.
49
See Disbursement Voucher for 100% completion of the MANA contract; id. at 126.
50
Through Ombudsman Office Order No. 178, which was later on amended through Office Order No. 180
dated March 9, 2015. See rollo, Vol. II, pp. 647-648.
52
Rollo, Vol. II, p. 648.
51
Not attached to the rollos.
53
See rollo, Vol. I, pp. 62 and 480.
54
Id. at 61.
55
Id.
56
See id. at 63 and 480. See also Ombudsman's Indorsement letter dated March 11, 2015; id. at 351.
57
See Personal Delivery Receipt; id. at 350. See also id. at 12.
58
See Binay, Jr.'s Comment/Opposition dated April 6, 2005; id. at 481. See also Binay, Jr.'s Memorandum
dated May 21, 2015; rollo, Vol. 11, p. 806. The Ombudsman, however, claims that the said petition was
filed on March 12, 2015; see rollo, Vol II p 648
59
Rollo, Vol. I, pp. 403-427.
60
See id. at 425-426.
61
Id. at 404.
62
Id. at 404-405.
63
Id. at 424-425.
64
See id. at 12-13. See also Director Brion's Memorandum dated March 16, 2015; id. at 352-353.
65
Id. at 43-47.
66
Id. at 47.
67
Id. at 13.
68
604 Phil. 677 (2009).
69
70
Which directive the Ombudsman complied with on March 30, 2015 (rollo, Vol. II, p. 650). See also rollo,
Vol. I, p. 47.
71
See Manifestation dated March 17, 2015; rollo, Vol. I, pp. 357-360.
72
Id. at 358.
73
Not attached to the rollos.
74
Rollo, Vol. I, p. 14; rollo, Vol. II, p. 649.
75
Dated March 18, 2015. Rollo, Vol. I, pp. 362-373.
76
Id.
77
See id. at 370.
78
Id. at 50-51.
79
Which the Ombudsman complied with on March 26, 2015 (rollo, Vol. II, p. 650). See also rollo, Vol I, p.
50.
80
The CA heard oral arguments with respect to Binay, Jr.'s application for a WP1 on March 30, 2015. On the
other hand, the CA heard oral arguments with respect to Binay, Jr.'s petition for contempt on March 31,
2015 (see rollo, Vol. II, p. 650). See also rollo, Vol. I, p. 51
81
82
Entitled "AN ACT PROVIDING FOR THE FUNCTIONAL AND STRUCTURAL ORGANIZATION OF THE OFFICE
OF THE OMBUDSMAN, AND FOR OTHER PURPOSES," approved on November 17 1989.
85
See rollo, Vol. I, pp. 17-21.
84
See id. at 21-24.
85
See Comment/Opposition dated April 6, 2015; id. at 477-522.
86
See id. at 478-479.
87
See id. at 492-493.
88
See id. at 497-505.
89
Id. at 511.
90
Id. at 613-627.
91
Id. at 615.
92
G.R. No. 94115, August 21, 1992, 212 SCRA 768.
93
94
All of which pertains to the payment of Phase V. See id. at 346-349. See also id. at 623.
95
326 Phil. 847(1996).
96
372 Phil. 892(1999).
97
98
See id. at 623.
99
Id. at 606-611.
100
Id. at 609.
101
See Court Resolutions dated April 7, 2015 (id. at 524-525) and April 14, 2015 (id. at 634-638).
102
See April 21, 2015; id. at 639-640
103
Rollo, Vol. 11, pp. 646-745.
104
Dated May 21,2015. Id. at 803-865.
105
Id. at 951-952.
106
See Ombudsman's Comment to Binay, Jr.'s Memorandum dated July 3, 2015; id. at 1109-1161. See also
Binay, Jr.'s Comment (to Petitioners' Memorandum) dated July 3, 2015; id. at 2203-2240.
107
Id. at 959-960.
108
Id. at 959. See also Manifestation dated May 14, 2015; id. at 641.
See discussions on the condonation doctrine in the Ombudsman's Memorandum,rollo, Vol. II, pp. 708-733
109
and in the Ombudsman's Comment to Binay, Jr.'s Memorandum, rollo, Vol. II pp 1144-1149,1153-1155, and
1158-1159.
110
See Republic v. Bayao, G.R. No. 179492, June 5, 2013, 697 SCRA 313, 322-323.
See Bordomeo v. CA, G.R. No. 161596, February 20, 2013, 691 SCRA 269, 286, citing Heirs of Spouses
111
Reterta v. Spouses Mores, 671 Phil. 346, 359 (2011).
See AFP Mutual Benefit Association, Inc. v. Solid Homes, Inc., 658 Phil. 68, 19 (2011); citing Diamond
112
Builders Conglomeration v. Country Bankers Insurance Corporation, 564 Phil 756 769-770 (2007).
Republic v. Bayao, supra note 110, at 323, citing Siok Ping Tang v. Subic Bay Distribution Inc., 653 Phil.
113
124, 136-137(2010).
114
See Ombudsman's Memorandum dated May 14, 2015; rollo, Vol. II, pp. 661-669.
115
Francel Realty Corporation v. Sycip, 506 Phil. 407,415 (2005).
116
See Court Resolution dated June 16, 2015; rollo, Vol. II, pp. 951-952.
117
Id. at 2203-2240.
118
See id. at 662-666 and 98.
As the Ombudsman herself concedes; see Main Petition, rollo, Vol. 1, pp. 17-18; See also Ombudsman's
119
Memorandum, rollo, Vol. II, pp. 661-666.
120
Bacolod City Water District v. Labayen, 487 Phil. 335, 346 (2004).
121
Section 21, RA 6770 states: chanRoblesvirtualLawlibrary
Section 21. Official Subject to Disciplinary Authority; Exceptions. — The Office of the Ombudsman shall have
disciplinary authority over all elective and appointive officials of Jthe Government and its subdivisions,
instrumentalities and agencies, including Members of the Cabinet, local government, government-owned or
controlled corporations and their subsidiaries, except over officials who may be removed only by
impeachment or over Members of Congress, and the Judiciary.
122
Section 22, RA 6770 states: chanRoblesvirtualLawlibrary
Section 22. Investigatory Power. — The Office of the Ombudsman shall have the power to investigate any
serious misconduct in office allegedly committed by officials removable by impeachment, for the purpose of
filing a verified complaint for impeachment, if warranted.
In all cases of conspiracy between an officer or employee of the government and a private person, the
Ombudsman and his Deputies shall have jurisdiction to include such private person in the investigation and
proceed against such private person as the evidence may warrant. The officer or employee and the private
person shall be tried jointly and shall be subject to the same penalties and liabilities.
123
See Alejandro v. Office of the Ombudsman Fact-Finding and Intelligence Bureau, G.R. No. 173121, April
3, 2013, 695 SCRA 35, 44-46. t
124
Molina v. Rafferty, 38 Phil. 167, 169 (1918).
See National Police Commission v. De Guzman, Jr., G.R. No. 106724, February 9, 1994, 229 SCRA, 801-
125
807.
126
See Espino v. Cleofe, 152 Phil. 80, 87 (1973).
Records of the Senate, Vol. II, No. 6, August 2, 1998, pp. 174-187. As cited also in Ombudsman's
127
Memorandum, rollo, Vol. II, p. 662.
128
Records of the Senate, Vol. II, No. 10, August 9, 1988, pp. 282-286 (full names of the senators in
brackets supplied). See also Ombudsman's Memorandum, rollo, Vol. II, pp. 662-665, emphases and
underscoring in the original.
129
See Associate Justice Francis H. Jardeleza's interpellation; TSN of the Oral Arguments April 14 2015, p. 7.
130
Approved on November 17, 1989.
131
Effective July 1, 1997.
132
Effective January 1, 1964.
133
"The word 'or' x x x is a disjunctive term signifying disassociation and independence of one thing from the
other things enumerated; it should, as a rule, be construed in the sense in which it ordinarily implies, as a
disjunctive word." (Dayao v. Commission on Elections, G.R. Nos. 193643 and 193704 January 29, 2013, 689
SCRA 412,428-429.)
134
Black's Law Dictionary, 8th Ed., p. 1720.
135
Bagatsing v. Ramirez, 165 Phil. 909, 914-915 (1976).
136
Section 1, Rule 45 of the 1997 Rules of Procedure states that a "party desiring to appeal
by certiorari from a judgment, final order or resolution of the Court of Appeals, the Sandiganbayan,
the Court of Tax Appeals, the Regional Trial Court or other courts, whenever authorized by law, may
file with the Supreme Court a verified petition for review on certiorari." (Emphasis and underscoring
supplied)
This is consistent with Item (e), Section 5 (2), Article VIII of the 1987 Constitution which reads:
xxxx
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari , as the law or the Rules of Court may
provide, final judgments and orders of lower courts in:
(e) All cases in which only an error or question of law is involved.
137
356 Phil. 787(1998).
138
Note that "[o]ur ruling in the case of Fabian vs. Desierto invalidated Section 27 of Republic Act "No. 6770
and Section 7, Rule 111 of Administrative Order No. 07 and any other provision of law implementing the
aforesaid Act only insofar as they provide for appeals in administrative disciplinary cases from the Office of
the Ombudsman to the Supreme Court. The only provision affected by the Fabian ruling is the designation of
the Court of Appeals as the proper forum and of Rule 43 of the Rules of Court as the proper mode of appeal.
All other matters included In said section 27, including the finality or non-finality of decisions, are not
affected and still stand." (Lapid v. CA, 390 Phil. 236, 248 [2000]).
139
Section 30. No law shall be passed increasing the appellate jurisdiction of the Supreme Court as provided
in this Constitution without its advice and concurrence.
140
587 Phil. 100(2008).
141
Id. at 111-112.
142
For ease of reference, the provision is re-stated:
"In all administrative disciplinary cases, orders, directives, or decisions of the Office of the Ombudsman may
be appealed to the Supreme Court by filing a petition for certiorariwithin ten (10) days from receipt of the
written notice of the order, directive or decision or denial of the motion for reconsideration in accordance
with Rule 45 of the Rules of Court."
143
There should be no statement on the Court's lack of advice and concurrence with respect to the second
paragraph of Section 14, RA 6770 since the deliberations are, in fact, silent on the said provision.
144
See Ombudsman's Memorandum, rollo, Vol. II, pp. 666-667. Note that nowhere does the fourth
paragraph of Section 27 delimit the phrase "orders, directives or decisions" to those rendered by the
Ombudsman at the conclusion of the administrative proceedings, as the Ombudsman submits.
145
See Philippine Economic Zone Authority v. Green Asia Construction and Development Corporation, 675
Phil. 846, 857(2011).
146
See Black's Law Dictionary, 8th Ed., p. 615.
147
Fabian supra note 137, at 800-801.
148
A preventive suspension is a mere preventive measure, and not a penalty (seeQuimbo v. Gervacio, 503
Phil. 886, 891 [2005]); and hence, interlocutory in nature since it "does not terminate or finally dismiss or
finally dispose of the case, but leaves something to be done by [the adjudicating body] before the case is
finally decided on the merits." (Metropolitan Bank & Trust Company v. CA, 408 Phil. 686, 694 [2001]; see
also Banares II v. Balising, 384 Phil. 567, 577 [2000]).
149
Gomales v. CA, 409 Phil. 684, 689 (2001).
150
Includes interlocutory orders, such as preventive suspension orders, as well as final and unappealable
decisions or orders under Section 27, RA 6770 which states that "[a]ny order, directive or decision imposing
the penalty of public censure or reprimand, suspension of not more than one (1) month's salary shall be
final and unappealable."
151
G.R. No. 201643, March 12, 2014, 719 SCRA 209.
152
Id. at 219.
153
G.R. No. 184083, November 19, 2013, 709 SCRA 681.
154
Id. at 693.
155
411 Phil. 204(2001).
156
Supra note 140.
157
Rollo, Vol. 1, p. 18.
158
Id.
159
Id.
160
G.R. Nos. 196231 and 196232, January 28, 2014, 714 SCRA 611.
161
Id. at 639-641.
162
Id. at 641-642.
163
Id. at 643 (emphases supplied).
Id. at 644, citing Bengzon v. Drilon, G.R. No. 103524, April 15, 1992, 208 SCRA 133, 150 (emphasis
164
supplied).
165
Id. at 644-645 (emphases supplied).
166
Id. at 646-648.
167
See id. at 648-657.
See Re: COA Opinion on the Computation of the Appraised Value of the Properties Purchased by the
168
Retired Chief/Associate Justices of the Supreme Court, A.M. No. 11-7-10-SC July 31 2012 678 SCRA 1, 13.
169
See Gonzales III, supra note 160, at 650, citing the Record of the Constitutional Commission Vol 2 July
26, 1986, p. 294.
170
Records of the Senate, August 24, 1988, p. 619. See also rollo, Vol. II, pp. 670-671 (emphases and
171
underscoring in the original).
172
See discussions in Ombudsman's Memorandum, rollo, Vol. 11, pp. 670-678 and Binay, Jr.'s
173
Memorandum, rollo, Vol. II, pp. 825-833. See also TSN of the Oral Arguments, April 14, 2015, pp. 5-9.
174
See People v. Vera, 65 Phil. 56, 82 (1937), citing McGirr v. Hamilton and Abreu, 30 Phil, 563, 568
(1915); 6 R. C. L., pp. 76, 77; 12 C. J., pp. 780-782, 783.
175
63 Phil. 139(1936).
176
Id. at 157.
177
G.R.Nos. 208566, 208493, and 209251, November 19, 2013, 710 SCRA 1.
178
Id. at 108.
179
Id.
Entitled "AN ACT REORGANIZING THE JUDICIARY, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER
180
PURPOSES" (approved on August 14, 1981).
181
See Section 3, Chapter 1, BP 129.
182
See Section 13, Chapter II, BP 129.
183
See Section 25, Chapter III, BP 129.
Entitled "An ACT Creating THE COURT OF TAX APPEALS" (approved on June 16, 1954), which was later
184
amended by RA 9282 (approved on March 30, 2004) and RA 9503 (approved on June 12, 2008).
185
Entitled "CREATING A SPECIAL COURT TO BE KNOWN AS 'SANDIGANBAYAN' AND FOR OTHER
PURPOSES" (approved on June 11, 1978), which was later amended by PD 1606 (approved on December
10, 1978), RA 7975 (approved on March 30, 1995), and RA 8249 (approved on February 5, 1997).
186
Section 5, Article VIII of the 1987 Constitution provides:
(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and
over petitions for certiorari , prohibition, mandamus, quo warranto, and habeas corpus.
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari , as the law or the Rules of Court may
provide, final judgments and orders of lower courts in:
(a) All cases in which the constitutionality or validity of any treaty, international or executive agreement,
law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.
(b) All cases involving the legality of any tax, impost, assessment, or toll, or any penalty imposed in relation
thereto.
(c) All cases in which the jurisdiction of any lower court is in issue.
(d) All criminal cases in which the penalty imposed is reclusion perpetua or higher.
(e) All cases in which only an error or question of law is involved.
xxxx
187
See G.R. No. 205728, January 21, 2015, citing Reyes v. Diaz 73 Phil 484, 486 (1941)
188
254 Phil. 418 (1989).
189
Id. at 427.
190
Bernas, Joaquin G., S.J., The 1987 Constitution of the Republic of the Philippines: A Commentary, 2009
Ed., p. 959, as cited also in the Ombudsman's Memorandum, rollo,Vol. II, p. 661.
191
G.R. No. 101083, July 30, 1993, 224 SCRA 792.
192
Id. at 810, citing Cruz, Isagani A., Philippine Political Law, 1991 Ed., pp. 226-227.
193
20 Phil. 523(1911).
194
Id. at 530-531.
195
See 361 Phil. 73, 86-91 (1999).
196
Article VIII, Section 13 of the 1935 Constitution provides: chanRoblesvirtualLawlibrary
Section 13. The Supreme Court shall have the power to promulgate rules concerning pleading, practice and
procedure in all courts, and the admission to the practice of law. Said rules shall be uniform for all courts of
the same grade and shall not diminish, increase, or modify substantive rights. The existing laws on pleading,
practice and procedure are hereby repealed as statutes, and are declared Rules of Courts, subject to the
power of the Supreme Court to alter and modify the same. The National Assembly shall have the power
to repeal, alter or supplement the rules concerning pleading, practice and procedure, and the w7
admission to the practice of law in the Philippines. (Emphasis supplied)
197
Article X, Section 5 (5) of the 1973 Constitution provides:
Section 5. The Supreme Court shall have the following powers.
xxxx
(5) Promulgate rules concerning pleading, practice, and procedure in all courts, the admission to
the practice of law, and the integration of the Bar, which, however, may be repealed, altered, or
supplemented by the Batassing Pambansa. Such rules shall provide a simplified and inexpensive
procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall
not diminish, increase, or modify substantive rights. (Emphasis supplied)
198
See Re: Petition for Recognition of the Exemption of the Government Service Insurance System (GSIS)
from Payment of Legal Fees, 626 Phil. 93, 106-109 (2010).
Baguio Market Vendors Multi-Purpose Cooperative (BAMARVEMPCO) v. Cabato-Cortes, 627 Phil.

199
543,549(2010).
200
See discussions as in the Records of the Constitutional Commission, July 14, 1986, pp. 491-492.
201
Id. at 492.
202
203
"Status quo is the last actual, peaceable and uncontested situation which precedes a controversy."
(See Dolmar Real Estate Dev't. Corp. v. CA, 570 Phil. 434, 439 [2008] andPreysler, Jr. v. CA, 527 Phil. 129,
136 [2006].)
See The Incorporators of Mindanao Institute, Inc. v. The United Church of Christ in the Philippines, G.R.
204
No. 171765, March 21, 2012, 668 SCRA 637, 647.
205
Section 1, Rule 58 of the 1997 Rules of Civil Procedure provides: chanRoblesvirtualLawlibrary
Section 1. Preliminary injunction defined; classes. - A preliminary injunction is an order granted at any stage
of an action or proceeding prior to the judgment or final order, requiring a party or a court, agency or a
person to refrain from a particular act or acts. It may cilso require the performance of a particular act or
acts, in which case it shall be known as a preliminary mandatory injunction. ChanRoblesVirtualawlibrary
206
Section 3, Rule 58 of the 1997 Rules of Civil Procedure provides: chanRoblesvirtualLawlibrary
Section. 3. Grounds for issuance of preliminary injunction. — A preliminary injunction may be granted when
it is established:
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in
restraining the commission or continuance of the act or acts complained of, or in requiring the performance
of an act or acts, either for a limited period or perpetually;
cralawlawlibrary
(b) That the commission, continuance or non-performance of the act or acts complained of during the
litigation would probably work injustice to the applicant; or
(c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or
suffering to be done, some act or acts probably in violation of jthe rights of the applicant respecting the
subject of the action or proceeding, and tending to render the judgment ineffectual.
207
Section 5, Rule 58 of the 1997 Rules of Civil Procedure provides:
Section 5. Preliminary injunction not granted without notice; exception. — No preliminary injunction shall be
granted without hearing and prior notice to the party or person sought to be enjoined. If it shall appear from
facts shown by affidavits or by the verified application that great or irreparable injury would result to the
applicant before the matter can be heard on notice, the court to which the application for preliminary
injunction was made, may issue ex parte a temporary restraining order to be effective only for a period of
twenty (20) days from service on the party or person sought to be enjoined, except as herein provided, x x
x.
However, subject to the provisions of the preceding sections, if the matter is of extreme urgency and the
applicant will suffer grave injustice and irreparable injury, the executive judge of a multiple-sala court or the
presiding judge of a single-sala court may issue ex parte a temporary restraining order effective for only
seventy-two (72) hours from issuance but shall immediately comply with the provisions of the next
preceding section as to service of summons and the documents to be served therewith, x x x.
x x x x (Emphases supplied)
208
Rules of procedure of special courts and quasi-judicial bodies may be specifically pointed out by law and
thus, remain effective unless the Supreme Court disapproves the same pursuant to Section 5 (5), Article
VIII of the 1987 Constitution:
Section 5. The Supreme Court shall have the following powers: cralawlawlibrary
(5) xxx. Rules of procedure of special courts and quasi-judicial bodies shall remain
effective unless disapproved by the Supreme Court. (Emphasis and underscoring supplied)
209
210
Id. at 204.
211
Id. at 197.
212
Id. at 204.
213
Id. at 204-205.
214
Id. at 205.
215
Supra note 175, at 177, citing Cooley, Constitutional Limitations, 8th Ed., Vol. I, pp. 138-139.
216
(last visited July 27, 2015). See also Black's Law Dictionary, 8th Ed., p. 798.
217
672 S.W.2d 62 (1984).
218
The particular statute [KRS 243.580(2) and (3)] reads: chanRoblesvirtualLawlibrary
(2) If a license is revoked or suspended by an order of the board, the licensee shall at once suspend all
operations authorized under his license, except as provided by KRS 243.540, though he files an appeal in
the Franklin Circuit Court from the order of revocation of suspension.
(3) No court may enjoin the operation of an order of revocation or suspension pending an
appeal. If upon appeal to the Franklin Circuit Court an order of suspension or revocation is upheld, or if an
order refusing to suspend or revoke a license is reversed, and an appeal is taken to the Court of Appeals, no
court may enjoin the operation of the judgment of the Franklin Circuit Court pending the appeal.
(See Smothers, id.; emphasis supplied.)
219
See id.
220
"Substantive law is that part of the law which creates, defines and regulates rights, or which regulates
the right and duties which give rise to a cause of action; that part of the law which courts are established to
administer; as opposed to adjective or remedial law, which prescribes the method of enforcing rights or
obtain redress for their invasions." (Primicias v. Ocampo, 93 Phil. 446, 452 [1953], citing Bustos v. Lucero,
[46 Off. Gaz., January Supp., pp. 445, 448], further citing 36 C. J. 27; 52 C. J. S. 1026); See
also Fabian, supra note 137.
221
Fabian, id. at 809.
222
629 Phil. 1 (2010).
223
Supra note 198.
224
Supra note 199.
225
Neypes v. CA, 506 Phil. 613, 626 (2005).
226
BAMARVEMPCO v. Cabato-Cortes, supra note 199, at 550.
227
See Ombudsman's Memorandum, rollo, Vol. II, pp. 668-669.
228
TSN of the Oral Arguments, April 14, 2015, pp. 64-68.
229
651 Phil. 374, 427(2010).
230
See 2 335 Phil. 82, 114 (1997).
231
503 Phil. 886 (2005).
232
Id. at 891-892.
233
The Ombudsman v. Valeroso, 548, Phil. 688, 695 (2007).
234
Supra note 68. See also rollo, Vol. I, p. 45.
235
236
Governor Garcia, Jr. supra note 68, at 690.
237
Supra note 92.
238
Rollo, Vol. I, p. 619
239
All of which Pertains to the payment of Phase V. See id. at 346-349. See also id. at 623.
240
Supra note 95.
241
Supra note 96.
242
242 Id. at 619-620.
243
See Ombudsman's Memorandum, rollo, Vol. II, p. 703-704.
244
243
See id. at 415-422.
246
Black's Law Dictionary, 8th Ed., p. 315.
247
106 Phil. 466 (1959).
248
Id. at 471.
249
Id.
250
See Chief Justice Maria Lourdes P. A. Sereno's (Chief Justice Sereno) Interpellation, TSN of the Oral
Arguments, April 21, 2015, p. 191.
155 Ohio St. 329; 98 N.E.2d 807 (1951); cited in Goger, Thomas, J.D., Removal of public officers for
251
misconduct during previous term, 42 A.L.R.3d 691 (1972), published by Thomson Reuters (2015), p.
252
Tex Civ App 29 SW 415 (1895), cited in Goger, Thomas, J.D., Removal of public officers for misconduct
during previous term, 42 A.L.R.3d 691 (1972), published by Thomson Reuters (2015), p. 16, and in Silos,
Miguel U., A Re-examination of the Doctrine of Condonation of Public Officers, 84 Phil. L.J. 22, 33 (2009).
1956 OK 338; 305 P.2d 548 (1956); cited in Goger, Thomas, J.D., Removal of public officers for
253
misconduct during previous term, 42 A.L.R3d 691 (1972), published by Thomson Reuters (2015), p. 15.
22 Ohio St. 2d 120; 258 N.E.2d 594 (1970); cited in Goger, Thomas, J.D., Removal of public officers for
254
misconduct during previous term, 42 A.L.R.3d 691 (1972), published by Thomson Reuters (2015), pp. 11
and 22.
255
1946 Pa. Dist. & Cnty.; 56 Pa. D. & C. 393 (1946); cited in Goger, Thomas, J.D.,Removal of public
officers for misconduct during previous term, 42 A.L.R3d 691 (1972), published by Thomson Reuters
(2015), pp. 11.
45 La Ann 1350, 14 So 28 (1893); cited in Goger, Thomas, J.D., Removal of public officers for
256
misconduct during previous term, 42 A.L.R.3d 691 (1972), published by Thomson Reuters (2015), pp. 26.
236 App Div 371, 259 NYS 402 (1932); cited in Goger, Thomas, J.D., Removal of public officers for
257
misconduct during previous term, 42 A.L.R.3d 691 (1972), published by Thomson Reuters (2015), pp. 27.
258
See Ombudsman's Memorandum p. 70, rollo, Vol. II, p. 715, citing Silos, Miguel U.,A Re-examination of
the Doctrine of Condonation of Public Officers, 84, Phil. LJ 22, 69 (2009).
259
239 Mass. 458; 132 N.E. 322(1921)
260
109 Iowa 19; 79 N.W. 369(1899).
261
192 Mich. 276; 158 N.W. 953 (1916).
262
14 N.M. 493; 1908-NMSC-022 (1908).
263
125 Ga. 18; 53 S.E. 811 (1906)
85 Minn. 41; 88 N.W. 412 (1901), cited in Silos, Miguel U., A Re-examination of the Doctrine of
264
Condonation of Public Officers, 84, Phil. LJ 22, 69 (2009).
148 Kan. 166; 80 P.2d 1095 (1938); cited in Silos, Miguel U., A Re-examination of the Doctrine of
265
Condonation of Public Officers, 84, Phil. LJ 22, 70 (2009).
266
199 Kan. 403; 430 P.2d 304 (1967), applying State ex rel. Beck v. Harvey, id.
Southern Cross Cement Corporation v. Cement Manufacturers Association of the Philippines, 503 Phil.
267
485 (2005).
268
Supra note 177.
269
See Ombudsman Memorandum, rollo, Vol. II, p. 718, citing Cardozo, Benjamin N., The Nature of the
Judicial Process 149 (1921), cited in Christopher P. Banks, Reversal of Precedent and Judicial Policy- Making:
How Judicial Conceptions of Stare Decisis in the U.S. Supreme Court Influence Social Change, 32 Akron L.
Rev. 233(1999).
270
Id. at 722-723.
271
Kimble v. Marvel Entertainment, L.L.C., 135 S. Ct. 2401; 192 L. Ed.; 192 L. Ed. 2d 463 (2015).
272
Pascual, supra note 247, at 471.
273
Id. at 471-472.
274
Id. at 472.
275
123 Phil. 916(1966).
276
129 Phil. 553 (1967). See also Luciano v. The Provincial Governor, 138 Phil. 546 (1967) and Oliveros v.
Villaluz, 156 Phil. 137 (1974).
277
Supra note 92.
278
Supra note 95.
279
Id. at 921.
280
Supra note 96.
281
633 Phil. 325(2010).
282
Id. at 335
283
577 Phil. 52, 72 (2008).
284
Chavez v. Judicial and Bar Council, G.R. No. 202242, July 17, 2012, 676 SCRA 579, 607.
285
Teehankee v. Rovira, 75 Phil. 634, 646 (1945), citing 11 Am. Jur., Constitutional Law, Section 96.
Philippine Constitution Association v. Enriquez, G.R. Nos. 113105, 113174, 113766 and 113888 August
286
19, 1994, 235 SCRA 506, 523.
287
See Silos, Miguel U., A Re-examination of the Doctrine of Condonation of Public Officers, 84, Phil. LJ 22,
69 (2009), pp. 26-27.
288
Section 27, Article II.
289
Belgica, supra note 177, at 131, citing Bernas, Joaquin G., S.J., The 1987 Constitution of the Republic of
the Philippines: A Commentary, 2003 Ed., p. 1108.
290
Section 1. Declaration of Policy. - The State shall insure and promote the Constitutional mandate that
appointments in the Civil Service shall be made only according to merit and fitness; that the Civil Service
Commission, as the central personnel agency of the Government shall establish a career service, adopt
measures to promote morale, efficiency, integrity, responsiveness, and courtesy in the civil service,
strengthen the merit and rewards system, integrate all human resources development programs for all
levels and ranks, and institutionalize a management climate conducive to public accountability; that public
office is a public trust and public officers and employees must at all times be accountable to the
people; and that personnel functions shall be decentralized, delegating the corresponding authority to the
departments, offices and agencies where such functions can be effectively performed. (Section 1, Book V,
Title I, subtitle A of the Administrative Code of 1987; emphasis supplied).
Section 2. Declaration of Policies. - It is the policy of the State to promote a high standard of ethics in
291
public service. Public officials and employees shall at all times be accountable to the people and
shall discharge their duties with utmost responsibility, integrity, competence, and loyalty, act
with patriotism and justice, lead modest lives, and uphold public interest over personal interest.
(Emphasis supplied) See Section 2, RA 6713 (approved on February 20, 1989).
Entitled "AN ACT PROVIDING FOR A LOCAL GOVERNMENT CODE OF 1991" (approved on October 10
292
1991).
293
279 Phil. 920, 937(1991)
294
In Fudula's Petition (297 Pa. 364; 147 A. 67 [1929]), the Supreme Court of Pennsylvania cited (a) 29
Cyc. 1410 which states: "Where removal may be made for cause only, the cause must have occurred
during the present term of the officer. Misconduct prior to the present term even during a
preceding term will not justify a removal": and (b) "x x x Penal Code [Cal.], paragraph 772, providing
for the removal of officers for violation of duty, which states "a sheriff cannot be removedfrom office,
while serving his second term, for offenses committed during his first term." (Emphases supplied)
ln Board of Commissioners of Kingfisher County v. Shutler (139 Okla. 52; 281 P. 222 [1929]), the
Supreme Court of Oklahoma held that "[u]nder section 2405, C. O. S. 1921, the only judgment a court
can render on an officer being convicted of malfeasance or misfeasance in office is removal from office
and an officer cannot be removed from office under said section for acts committed by him while
holding the same office in a previous term." (Emphases supplied)
295
In State v. Blake (138 Okla. 241; 280 P. 833 [1929]), the Supreme Court of Oklahoma cited State ex
rel. Hill, County Attorney, v. Henschel, 175 P. 393, wherein it was said: "Under the Ouster Law (section
7603 of the General Statutes of 1915-Code Civ. Proc. 686a-), a public officer who is guilty of willful
misconduct in office forfeits his right to hold the office for the term of his election or appointment; but the
disqualification to hold the office does not extend beyond the term in which his official
delinquency occurred." (Emphases supplied)
296
In Rice v. State (204 Ark. 236; 161 S.W.2d 401 [1942]), the Supreme Court of Arkansas cited
(a) Jacobs v. Parham, 175 Ark. 86,298 S.W. 483, which quoted a headnote, that "Under Crawford Moses'
Dig., [(i.e., a digest of statutes in the jurisdiction of Arkansas)] 10335, 10336, a public officer is not
subject to removal from officebecause of acts done prior to his present term of office in view of Const.,
art. 7, 27,containing no provision against re-election of officer removed for any of the reasons
named therein." (Emphases supplied)
297
In State ex rel. Brlckell v. Hasty (184 Ala. 121; 63 So. 559 [1913]), the Supreme Court of Alabama
held: "x x x If an officer is impeached and removed, there is nothing to prevent his being elected to the
identical office from which he was removed for a subsequent term, and, this being true, a re
election to the office would operate as a condonation under the Constitution of the officer's conduct
during the previous term, to the extent of cutting off the right to remove him from subsequent term for said
conduct during the previous term. It seems to be the policy of our Constitution to make each term
independent of the other, and to disassociate the conduct under one term from the qualification or right to
fill another term, at least, so far as the same may apply to impeachment proceedings, and as distinguished
from the right to indict and convict an offending official." (Eijnphasis supplied)
298
In State Ex Rel. V. Ward (163 Tenn. 265; 43 S.W.2d. 217 [1931]), decided by the Supreme Court of
Tennessee, Knoxville, it appears to be erroneously relied upon inPascual, since the proposition "[tjhat the
Acts alleged in paragraph 4 of the petition involved contracts made by defendant prior to his present term
for which he cannot now be removed from office" was not a court ruling but an argument raised by the
defendant in his demurrer.
299
In Conant v. Grosan (6 N.Y.S.R. 322 [1887]), which was cited in Newman v. Strobel(236 A.D. 371; 259
N.Y.S. 402 [1932]; decided by the Supreme Court of New York, Appellate Division) reads: "Our attention is
called to Conant v. Grogan (6 N.Y. St. Repr. 322; 43 Hun, 637) and Matter of King (25 N.Y. St. Repr.
792; 53 Hun, 631), both of which decisions are of the late General Term, and neither of which is
reported in full in the official series. While there are expressions in each opinion which at first blush
might seem to uphold respondent's theory, an examination of the cases discloses the fact that
the charge against each official related to acts performed during his then term of office, and
evidence of some prior irregularity was offered which in no way pertained to the charge in issue.
It was properly held that such evidence was incompetent. The respondent was not called upon to
answer such charge, but an entirely separate and different one." (Emphases supplied)
300
In People ex rel. Basshaw v. Thompson (55 Cal. App. 2d 147; 130 P.2d.237 [1942]), the Court of
Appeal of California, First Appellate District cited Thurston v. Clark, (107 Cal. 285, 40 P. 435), wherein it
was ruled: "The Constitution does not authorizethe governor to suspend an incumbent of the office of
county commissioner for an act of malfeasance or misfeasance in office committed by him prior to the date
of the beginning of his current term of office as such county commissioner." (Emphasis supplied)
301
Montgomery v. Nowell, (183 Ark. 1116; 40 S.W.2d 418 [1931]; decided by the Supreme Court of
Arkansas), the headnote reads as follows: "Crawford & Moses' Dig., 10, 335, providing for suspension of an
officer on presentment or indictment for certain causes including malfeasance, in office does not provide for
suspension of an officer on being indicted for official misconduct during a prior term of office." (Emphasis
supplied)
302
See Chief Justice Maria Lourdes P. A. Sereno's interpellation, TSN of the Oral Arguments, April 14, 2015,
p. 43.
See Ombudsman's Memorandum, rollo, Vol. 11, p. 716, citing Silos, Miguel U., A Re-examination of the
303
Doctrine of Condonation of Public Officers, 84, Phil. LJ 22, 69 (2009), p. 67.
304
117 N.J.L. 64; 186 A. 818(1936).
305
See Article 8 of the Civil Code.
306
632 Phil. 657(2010).
307
Id. at 686.
308
154 Phil. 565 (1974).
309
G.R. Nos. 97973 and 97998, January 27, 1992, 205 SCRA 515.
310
Id. at 527.
311
Yu v. Reyes-Carpio, 667 Phil. 474, 481-482 (2011).
Tagolino v. House of Representatives Electoral Tribunal, G.R. No. 202202, March 19 2013 693 SCRA 574,
312
599-600.
313
See Press Release dated October 9, 2015 of the Office of the Ombdusman, (visited November 9, 2015).
314
315
See Ombudsman's Memorandum, rollo, Vol II p 85.
316
Rollo, Vol. I, pp. 50-51.
317
See Amended and Supplemental Petition for Contempt dated March 18, 2015 wherein private respondent
Binay, Jr. charged, inter alia, the Ombudsman for acts constituting indirect contempt under Section 3 (b),
(c), and (d) of Rule 71 of the Rules of Court; id. at 362-375.
318
See rollo, Vol. II, pp. 734-743.
319
CONCURRING AND DISSENTING OPINION
BERSAMIN, J.:
I am writing this separate opinion to memorialize my concurrence with the declaration of the ineffectiveness
of the first paragraph of Section 14 of Republic Act No. 6770, and of the unconstitutionality of the second
paragraph thereof. The main opinion has been written well by our esteemed colleague, Associate Justice
Estela M. Perlas-Bernabe, who has exhibited her scholarly bent once again. But let me assure my colleagues
in the Majority that if I submit this concurrence, I do not mean to diminish in any way or degree the
forcefulness and correctness of the justification for the declaration. I simply want to underscore that Section
14 of Republic Act No. 6770 should be struck down for authorizing the undue interference with the
prerogatives of the courts of law to adopt whatever means were allowed by law and procedure to exercise
their jurisdiction in the cases properly cognizable by them.
My dissent focuses on the main opinion's re-examination of the doctrine of condonation. This controversy
does not call for the revisit of the doctrine, and does not warrant its eventual abandonment. For the Court to
persist in the re-examination, as it does now, and to announce its abandonment of the doctrine despite the
lack of the premise of justiciability is to indulge in conjecture or in unwarranted anticipation of future
controversies. We should refrain from the re-examination.
The Ombudsman's supplemental petition raised condonation for the first time but only to support her
insistence that the CA could not validly rely on the doctrine of condonation to justify its issuance of the
injunction. She maintained then that condonation was a matter of defense to be properly raised only in the
appropriate administrative proceeding, viz:
6. It must be further emphasized that the condonation doctrine is irrelevant in the Ombudsman's
determination of whether the evidence of guilt is strong in issuing preventive suspension orders. Said
doctrine does not go into the heart of subject-matter jurisdiction. Neither can it oust the Ombudsman of her
jurisdiction which she has already acquired. Private respondent's claim of condonation doctrine is equally a
matter of defense which, like any other defense, could be raised in the proper pleading, could be rebutted,
and could be waived.
As a defense, condonation should be passed upon after a decision on the administrative proceedings, not
this early in the proceeding.
7. The condonation doctrine, however, cannot abate the issuance of a preventive suspension order, precisely
because an order of preventive suspension does not render a respondent administratively liable. A
respondent may be preventively suspended, yet may be exonerated in the end.
8. At all events, there is no condonation because private respondent committed the acts subject of the
complaint after his re-election in 2013, as was argued by petition in public respondent Court of Appeals.
9. As mentioned earlier, there is no condonation. The assailed act (i.e. payment), by private respondent's
own admission during the proceedings before public respondent Court of Appeals, took place during the
period of June and July 2013, which was after his re-election in May 2013.1
The Ombudsman again discussed the doctrine of condonation at some length in her Memorandum as the
fourth and last argument presented on the issue of the propriety of the temporary restraining order and the
writ of preliminary injunction.2 She reiterated, however, that the doctrine was only a matter of defense that
was relevant only in imposing an administrative penalty on the respondent public elective official, to wit:
165. Thus, in deciding that the evidence of respondent Binay's guilt is strong, petitioner did not take into
consideration the so-called "condonation doctrine" the way respondent Court of Appeals did in its Third
Resolution. The condonation doctrine is applicable and relevant only to the imposition of an administrative
penalty, not to the issuance of a preventive suspension, the latter being merely a preliminary step in an
administrative investigation.
166. Since a preventive suspension does not hold a public officer liable, it will not be affected by any
"condonation" that the electorate may extend to the public officer. Verily, for purposes of aiding an
investigation, a public officer may be preventively suspended even as, ultimately, he or she will be
exonerated from administrative liability due to the condonation doctrine. CONDONATION IS A MATTER OF
DEFENSE - to be positively alleged and to be weighed according to the evidence - during the administrative
proceedings, and not at the very preliminary stage thereof.3
I agree with the Ombudsman. The question of grave abuse of discretion on the part of the CA could be
settled not by re-examining and overturning the doctrine of condonation but by reference to Section 24 of
the Republic Act No. 6770. It would be plain error for us to determine whether the Court of Appeals (CA)
gravely abused its discretion or not on the basis of the doctrine of condonation.
The general investigatory power of the Ombudsman is decreed by Section 13 (1), Article XI of the 1987
Constitution,4 while her statutory mandate to act on administrative complaints is founded on Section 19 of
Republic Act No. 6770, viz.:
Section 19. Administrative complaints. — The Ombudsman shall act on all complaints relating, but not
limited, to acts or omissions which:
1. Are contrary to law or regulation; cralawlawlibrary
2. Are unreasonable, unfair, oppressive or discriminatory; cralawlawlibrary
3. Are inconsistent with the general course of an agency's functions, though in accordance with law; cralawlawlibrary
4. Proceed from a mistake of law or an arbitrary ascertainment of facts; cralawlawlibrary
5. Are in the exercise of discretionary powers but for an improper purpose; or
6. Are otherwise irregular, immoral or devoid of justification. ChanRoblesVirtualawlibrary
In line with the power to investigate administrative cases, the Ombudsman is vested with the authority to
preventively suspend respondent public officials and employees pursuant to Section 24 of Republic Act No.
6770, which provides:
Section 24. Preventive Suspension. — The Ombudsman or his Deputy may preventively suspend any officer
or employee under his authority pending an investigation, if in his judgment the evidence of guilt is strong,
and (a) the charge against such officer or employee involves dishonesty, oppression or grave misconduct or
neglect in the performance of duty; (b) the charges would warrant removal from the service; or (c) the
respondent's continued stay in office may prejudice the case filed against him.
The preventive suspension shall continue until the case is terminated by the Office of the Ombudsman but
not more than six (6) months, without pay, except when the delay in the disposition of the case by the
Office of the Ombudsman is due to the fault, negligence or petition of the respondent, in which case the
period of such delay shall not be counted in computing the period of suspension herein provided.
It is important to note, however, that the Ombudsman has no authority to issue the preventive suspension
order in connection with criminal investigations of government officials or employees because such authority
rests in the courts in which the criminal cases are filed.5
Under Section 24, supra, two requisites must concur to render the preventive suspension order valid. The
first requisite is unique because it can be satisfied in only one way, which is that the evidence of guilt is
strong in the judgment of the Ombudsman or the Deputy Ombudsman. But the second requisite may be
satisfied in three different ways, namely: (1) that the offense charged involves dishonesty, oppression or
grave misconduct or neglect in the performance of duty; or (2) the charge would warrant removal from the
service; or (3) the respondent's continued stay in office may prejudice the case filed against him or her.6
Respondent Jejomar Erwin S. Binay, Jr., along with other officers and employees of the City of Makati, were
administratively charged in the Office of the Ombudsman with grave misconduct, serious dishonesty, and
conduct prejudicial to the best interest of the service.7 In her joint order dated March 10, 2015, the
Ombudsman stated that the requisites for the issuance of the preventive suspension order against Binay, Jr.
and his corespondents were satisfied, specifically:
The first requisite is present in these cases, as shown by the supporting evidence attached as Annexes to
the Complaint. These Annexes include, among other things, sworn statements of allegedlosing bidders and
of some members of the Makati City BAC attesting to the irregularities in the subject procurement;
documents negating the purported publication of bids; and disbursement vouchers, checks, and official
receipts showing disbursement of public funds by the city government.
As regard the second requisite, all the circumstances enumerated therein are likewise present. The
Complaint charges respondents with Grave Misconduct, Serious Dishonesty and Conduct Prejudicial to the
Best Interest of the Service. If proven true, they constitute grounds for removal from public service under
the Revised Rules on Administrative Cases in the Civil Service. Moreover, since the respondents' respective
positions give them access to public records and influence on possible witnesses, respondents' continued
stay in office may prejudice the cases filed against them. Thus, their preventive suspension without pay for
a period of six (6) months is in order.
When he assailed the preventive suspension order by petition for certiorari in the CA, Binay, Jr. alleged that
the preventive suspension order was illegal and issued with grave abuse of discretion because: (1) it
contravened well-settled jurisprudence applying the doctrine of condonation; and (2) evidence of his guilt
was not strong. He prayed that a temporary restraining order or writ of preliminary injunction be issued to
enjoin the implementation of the preventive suspension order.
The CA heeded Binay, Jr.'s prayer for injunctive reliefs chiefly on the basis of the doctrine of condonation. In
the resolution promulgated on March 16, 2015, the CA, citing the pronouncement inGarcia, Jr. v. Court of
Appeals,8 granted Binay, Jr.'s application for the temporary restraining order, holding as follows:
In Garcia v. Court of Appeals (GR No. 185132, April 24, 2009), the Supreme Court held that suspension
from office of an elective official, whether as a preventive measure or as a penalty will undeservedly deprive
the electorate of the services of the person they have conscientiously chosen and voted into office.
The Supreme Court in said case likewise found serious and urgent the question, among other matters, of
whether the alleged acts were committed in the previous term of office of petitioner therein. This is because
if it were established that the acts subject of the administrative complaint were indeed committed during
petitioner's prior term, then following settled jurisprudence, he can no longer be administratively charged. It
further declared imperative on the part of the appellate court, as soon as it was apprised of the said
considerable grounds, to issue an injunctive writ so as not to render moot, nugatory and ineffectual the
resolution of the issues in the certiorari petition. (Garcia, supra)
The Supreme Court also declared that it would have been more prudent on the part of the CA, on account of
the extreme urgency of the matter and the seriousness of the issues raised in the certioraripetition, to issue
a TRO while it awaits the respective comments of the respondents and while it judiciously contemplates on
whether or not to issue a writ of preliminary injunction. It pointed out that the basic purpose of a restraining
order is to preserve the status quo until the hearing of the application for preliminary injunction. That, it is a
preservative remedy for the protection of substantive rights and interests. (Garcia, supra)
In view of the seriousness of the issues raised in the Petition for Certiorari and the possible repercussions on
the electorate who will unquestionably be affected by suspension of their elective official, the Court
resolves to grant petitioner's prayer for a Temporary Restraining Order for a period of sixty (60)
days from notice hereof, conditioned upon the posting by petitioner of a bond in the amount of FIVE
HUNDRED THOUSAND PESOS (P500,000.00)9
In ultimately granting the writ of preliminary injunction through its April 6, 2015 resolution, the CA, relying
on the doctrine of condonation adopted in Garcia, Jr.; Joson III v. Court of Appeals;10Aguinaldo v.
Santos;11 and Salalima v. Guingona, Jr.,12 explained:
Garcia was simply an echo of teachings in Joson v. Cowl of Appeals (G.R. No. 160652, February 13, 2006)
where the High Court declared that suspension from office of an elective official would deprive the electorate
of the services of the person they have voted into office.
Along this line, the concept of condonation, as advocated by petitioner and opposed by public respondent
Ombudsman, will assume resonance.
Premised on Aguinaldo, Salalima and Garcia, petitioner asserted that the public respondent Ombudsman can
hardly impose preventive suspension of petitioner, given his election in 2010 and re-election in 2013 as
Makati City Mayor, relative to his perceived illegal participation in anomalous activities for the Makati City
Hall Building II project from 2007 to 2013.
xxxx
To reiterate, there was no disagreement that petitioner was elected in 2010 and re-elected as City Mayor of
Makati in 2013. The acts constitutive of the charges in the Complaint pertained to events from November 8,
2007, when City Ordinance No. 2007-A-015 appropriated P1,240,000,000.00 as supplemental budget for
2007. From this budget, P400,000,000.00 was allocated for the parking building. It was allegedly during this
time that a Negotiated Contract for the architectural and engineering services were negotiated and
approved. Disbursements allegedly favored Hilmarc and MANA amidst irregularities in the bidding process
during the term of petitioner as City Mayor of Makati.
Yet, to subscribe to public respondent Ombudsman's submission that condonation can only be appreciated
by the investigating body after it is ventilated as an exculpation by petitioner and considered solely by public
respondent, following the exercise of its investigatory power, will ignore the Court's constitutional power and
duty to evaluate the factual and legal foundations for, nay, impediments to, a preventive suspension in an
administrative case.13
In my view, however, the CA erroneously banked on the pronouncements in Garcia, Jr., Joson III,
Aguinaldo, and Salalima to espouse the doctrine of condonation as the basis to issue the injunctive writs
under its resolutions promulgated on March 16, 2015 and April 6, 2015. In both Aguinaldo andSalalima, the
Court applied the doctrine of condonation to avoid the imposition of administrative liability upon re-elected
public officials. Specifically, the Court held in Aguinaldo that:
Petitioner's re-election to the position of Governor of Cagayan has rendered the administrative case pending
before Us moot and academic. It appears that after the canvassing of votes, petitioner garnered the most
number of votes among the candidates for governoer of Cagayan province, xxx
xxxx
Clearly then, the rule is that a public official cannot be removed for administrative misconduct committed
during a prior term, since his reelection to office operates as a condonation of the officer's previous
misconduct to the extent of cutting off the right to remove him therefor. The foregoing rule, however, finds
no application to criminal cases pending against petitioner for acts he may have committed during the failed
coup.14
while in Salalima, the Court maintained that:
xxx [A]ny administrative liability which petitioner Salalima might have incurred in the execution of the
retainer contract in O.P. Case No. 5469 and the incidents related therewith and in the execution on 6 March
1992 of a contract for additional repair and rehabilitation works for the Tabaco Public Market in O.P. Case
No. 5450 are deemed extinguished by his reelection in the 11 May 1992 synchronozed elections. So are the
liabilities, if any, of petitioner members of the Sangguniang Panlalawigan ng Albay,who signed Resolution
No. 129 authorizing petitioner Salalima to enter into the retainer contract in question and who were
reelected in the 1992 elections. This is, however, without prejudice to the institution of appropriate civil and
criminal cases as may be warranted by the attendant circumstances, xxx15
It is clear to me that, based on the language and the factual milieu of Aguinaldo and Salalima, which both
cited Pascual v. Provincial Board of Nueva Ecija,16 and of other akin rulings,17 condonation shall apply only in
case of the re-election of a public officer who is sought to be permanently removed from office as a result of
his misconduct, not while such public officer is undergoing investigation. Condonation necessarily implies
that the condoned act has already been found to have been committed by the public officer. Hence,
condonation applies to the penalty or punishment imposedafter the conduct of an administrative
investigation. Under the circumstances, the pronouncements inAguinaldo, Salalima and the others could not
be applicable to the preventive suspension order issued to Binay, Jr. pending his administrative investigation
because preventive suspension pending the conduct of an investigation was not yet a penalty in itself, but a
mere measure of precaution to enable the disciplining authority to investigate the charges by precluding the
respondent from influencing the witnesses against him.18
It is worth emphasis that preventive suspension is distinct from the penalty of suspension. The former is
imposed on a public official during the investigation while the latter, as a penalty, is served after
thefinal disposition of the case.19 The former is not a punishment or penalty for misconduct in office, but a
merely preventive measure, or a preliminary step in the administrative investigation.20
As I see it, the CA misconstrued the milieu in Garcia, Jr. and Joson III as an application of the doctrine of
condonation. The Court notably stated in Garcia, Jr. and Joson III that "suspension from office of an elective
official would deprive the electorate of the services of the person they voted into office" in the context of
determining the propriety of the issuance of the preventive suspension order. In other words, the statement
only served to remind the Ombudsman to issue the preventive suspension orders with utmost caution in
view of the gravity of the effects of suspending an incumbent elective local official. Hence, Garcia,
Jr. and Joson III did not apply the doctrine of condonation.
I further underscore that the CA was then only resolving Binay, Jr.'s application for injunctive reliefs against
the preventive suspension order issued by the Ombudsman. At that point, the CA's application of the
doctrine of condonation was irrelevant and unnecessary.
A preliminary injunction is an order granted at any stage of an action prior to the judgment or final order
requiring a party or a court, agency or a person to refrain from a particular act or acts.21 The requirements
for the issuance of a writ of preliminary injunction or temporary restraining ordern are clearly set forth in
Section 3, Rule 58 of the Rules of Court.22 The sole objective of the writ of preliminary injunction is to
preserve the status quo until the merits of the case can be heard fully. The writ of preliminary injunction is
generally based solely on initial and incomplete evidence;23 hence, it should not determine the merits of a
case, or decide controverted facts, for, being a preventive remedy, it only seeks to prevent threatened
wrong, further injury, and irreparable harm or injustice until the rights of the parties can be settled.24 As
held in Saulog v. Court of Appeals25 it is sufficient that:
x x x for the court to act, there must be an existing basis of facts affording a present right which is directly
threatened by an act sought to be enjoined. And while a clear showing of the right claimed is necessary, its
existence need not be conclusively established. In fact, the evidence to be submitted to justify preliminary
injunction at the hearing thereon need not be conclusive or complete but need only be a sampling intended
merely to give the court an idea of the justification for the preliminary injunction pending the decision of the
case on the merits. This should really be so since our concern here involves only the proprietary of the
preliminary injunction and not the merits of the case still pending with the trial court.
Thus, to be entitled to the writ of preliminary injunction, the private respondent needs only to show that it
has the ostensible right to the final relief prayed for in its complaint x x x. (bold emphasis supplied.)
By relying on the doctrine of condonation, therefore, the CA went beyond the parameters for determining
whether or not to issue the injunctive writ. To recall, Binay, Jr. had filed his petition forcertiorari in the CA
primarily to assail the validity of the preventive suspension order. What was raised for the CA to determine
was whether or not the Ombudsman satisfactorily complied with the requisites imposed by Section 24 of
Republic Act No. 6770 to establish that Binay, Jr. and his co-respondents had the ostensible right to the final
relief prayed for in their petition, which was the nullification or lifting of the preventive suspension order. In
this regard, the CA plainly exceeded its jurisdiction.
In the meanwhile, the Ombudsman found Binay, Jr. administratively liable, and dismissed him from the
service. By such dismissal, the questions raised against the CA's issuance of the writ of preliminary
injunction against the Ombudsman were rendered moot and academic. I join the Majority in saying that the
preventive suspension order, being an ancillary issuance, was dissolved upon the Ombudsman's resolution
of the administrative charges on the merits. Thus, to dwell on the preventive suspension of Binay, Jr. and
his co-respondents any further would be superfluous, for, as the Court said in Philippine Savings Bank v.
Senate Impeachment Court:26
It is a rule of universal application that courts of justice constituted to pass upon substantial rights will not
consider questions in which no actual interests are involved; they decline jurisdiction of moot cases. And
where the issue has become moot and academic, there is no justiciable controversy, so that a declaration
thereon would be of no practical use or value. There is no actual substantial relief to which petitioners
would be entitled and which would be negated by the dismissal of the petition.
In short, the Court should excuse itself from exercising jurisdiction because the main case, the
administrative proceeding against the respondents, has already been decided by the Ombudsman on the
merits.
IN VIEW OF THE FOREGOING, I VOTE to PARTIALLY GRANT the petition for certiorari and prohibition,
and, accordingly, SET ASIDE the Resolution promulgated on April 6, 2015 by the Court of Appeals.
I further VOTE to DISSOLVE the writ of preliminary injunction issued on April 8, 2015 in C.A.-G.R. SP No.
139453; and to AFFIRM the Resolution promulgated on March 20, 2015 in C.A.-G.R. SP No. 139504.
Endnotes:
1
Supplemental Petition for Certiorari , p. 4.
2
Memorandum, pp. 646-734.
3
Id. at 703-704.
4
Sec. 13. The Office of the Ombudsman shall have the following powers, functions, and duties:
(1) Investigate on its own, or on complaint by any person, any act or omission of any public official,
employee, office or agency, when such act or omission appears to be illegal, unjust, improper, or inefficient;
xxx
5
See Luciano v. Provincial Governor, No. L-30306, June 20, 1969, 28 SCRA 517.
Office of the Ombudsman v. Evangelista, G.R. No. 177211, March 13, 2009, 581 SCRA 350.
6
7
Docketed as OMB-C-A-15-0058, OMB-C-A-15-0059, OMB-C-A-15-0060 OMB-C-A-15-0061 OMB-C-A-15-
0062, OMB-C-A-15-0063.
8
G.R. No. 185132, April 24, 2009.
9
CA Resolution dated March 16, 2015, pp. 4-5.
10
11
G.R. No. 94115, August 21, 1992, 212 SCRA 768.
12
G.R. No. 117589-92, May 22, 1996, 257 SCRA 55.
13
CA Resolution dated April 6, 2015, pp. 6-10.
14
Aguinaldo v. Santos, G.R. No. 94] 15, August 21, 1992, 212 SCRA 768
15
Salalima v, Guingona, Jr., G.R. No. 117589-92, May 22, 1996, 257 SCRA 55, 1 16.
16
106 Phil. 467 (October 31, 1959).
Lizares v. Hechanova, No. L-22059, May 17, 1966, 17 SCRA 58; Office of the Ombudsman v. Torres, G.R.
17
No. 168309, January 29, 2008, 543 SCRA 46; Garcia v. Mojica, G.R. No. 139043, September 10, 1999, 314
SCRA 207.
18
Board of Trustees of the Government Service Insurance Svstem v. Velasco, G R No 170463 February 2,
2011, 641 SCRA 372, 387.
19
Villaseñor v. Sandiganbayan, G.R. No. 180700, March 4, 2008, 547 SCRA 658, 667.
20
Section 24 of Rule XIV of the Omnibus Rules Implementing, Book V of the Administrative Code of 1987
(Executive Order No. 292)
21
Section 1, Rule 58 of the Rules of Court.
23
Section 3. Grounds for issuance of preliminary injunction. - A preliminary injunction may be granted when
it is established:
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in
restraining the commission or continuance of the act or acts complained of, or in requiring the performance
of an act or acts, either for a limited period or perpetually;
cralawlawlibrary
(b) That the commission, continuance or non-performance of the act or acts complained of during the
litigation would probably work injustice to the applicant; or
(c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or
suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the
subject of the action or proceeding, and tending to render the judgment ineffectual.
23
Unilever Philippines, (PRC), Inc. v. Court of Appeals, G.R. No. 119280, August 10, 2006.
24
Bank of the Philippine Islands v. Hontanosas, Jr., G.R. No. 157 163, June 25, 2014.
25
G.R. No. 119769, September 18, 1996, 262 SCRA 51.
26
Gonzales v. GKH land Inc., GR 202664, 10 November 2015
EN BANC
G.R. No. 202664, November 20, 2015
MANUEL LUIS C. GONZALES AND FRANCIS MARTIN D. GONZALES, Petitioners, v. GJH LAND, INC.
(FORMERLY KNOWN AS S.J. LAND, INC.), CHANG HWAN JANG A.K.A. STEVE JANG, SANG RAK
KIM, MARIECHU N. YAP, AND ATTY. ROBERTO P. MALLARI II, Respondent.
DECISION
PERLAS-BERNABE, J.:
This is a direct recourse to the Court, via a petition for review on certiorari,1 from the Orders dated April 17,
20122 and July 9, 20123 of the Regional Trial Court (RTC) of Muntinlupa City, Branch 276 (Branch 276)
dismissing Civil Case No. 11-077 for lack of jurisdiction.
The Facts
On August 4, 2011, petitioners Manuel Luis C. Gonzales4 and Francis Martin D. Gonzales (petitioners) filed a
Complaint5 for "Injunction with prayer for Issuance of Status Quo Order, Three (3) and Twenty (20)-Day
Temporary Restraining Orders, and Writ of Preliminary Injunction with Damages" against respondents GJH
Land, Inc. (formerly known as S.J. Land, Inc.), Chang Hwan Jang, Sang Rak Kim, Mariechu N. Yap, and
Atty. Roberto P. Mallari II6 (respondents) before the RTC of Muntinlupa City seeking to enjoin the sale of S.J.
Land, Inc.'s shares which they purportedly bought from S.J. Global, Inc. on February 1, 2010. Essentially,
petitioners alleged that the subscriptions for the said shares were already paid by them in full in the books
of S.J. Land, Inc.,7 but were nonetheless offered for sale on July 29, 2011 to the corporation's
stockholders,8 hence, their plea for injunction.
The case was docketed as Civil Case No. 11-077 and raffled to Branch 276, which is not a Special
Commercial Court. On August 9, 2011, said branch issued a temporary restraining order,9 and later, in an
Order10 dated August 24, 2011, granted the application for a writ of preliminary injunction.
After filing their respective answers11 to the complaint, respondents filed a motion to dismiss12 on the ground
of lack of jurisdiction over the subject matter, pointing out that the case involves an intra-corporate dispute
and should, thus, be heard by the designated Special Commercial Court of Muntinlupa City.13
The RTC Ruling
In an Order14 dated April 17, 2012, Branch 276 granted the motion to dismiss filed by respondents. It found
that the case involves an intra-corporate dispute that is within the original and exclusive jurisdiction of the
RTCs designated as Special Commercial Courts. It pointed out that the RTC of Muntinlupa City, Branch 256
(Branch 256) was specifically designated by the Court as the Special Commercial Court, hence, Branch 276
had no jurisdiction over the case and cannot lawfully exercise jurisdiction on the matter, including the
issuance of a Writ of Preliminary Injunction.15 Accordingly, it dismissed the case.
Dissatisfied, petitioners filed a motion for reconsideration,16 arguing that they filed the case with the Office
of the Clerk of Court of the RTC of Muntinlupa City which assigned the same to Branch 276 byraffle.17 As the
raffle was beyond their control, they should not be made to suffer the consequences of the wrong
assignment of the case, especially after paying the filing fees in the amount of P235,825.00 that would be
for naught if the dismissal is upheld.18 They further maintained that the RTC has jurisdiction over intra-
corporate disputes under Republic Act No. (RA) 8799,19 but since the Court selected specific branches to
hear and decide such suits, the case must, at most, be transferred or raffled off to the proper branch.20
In an Order21 dated July 9, 2012, Branch 276 denied the motion for reconsideration, holding that it has no
authority or power to order the transfer of the case to the proper Special Commercial Court, citing Calleja v.
Panday22 (Calleja); hence, the present petition.
The Issue Before the Court
The essential issue for the Court's resolution is whether or not Branch 276 of the RTC of Muntinlupa City
erred in dismissing the case for lack of jurisdiction over the subject matter.
The Court's Ruling
The petition is meritorious.
At the outset, the Court finds Branch 276 to have correctly categorized Civil Case No. 11-077 as a
commercial case, more particularly, an intra-corporate dispute,23 considering that it relates to petitioners'
averred rights over the shares of stock offered for sale to other stockholders, having paid the same in full.
Applying the relationship test and the nature of the controversy test, the suit between the parties is clearly
rooted in the existence of an intra-corporate relationship and pertains to the enforcement of their correlative
rights and obligations under the Corporation Code and the internal and intra-corporate regulatory rules of
the corporation,24 hence, intra-corporate, which should be heard by the designated Special Commercial
Court as provided under A.M. No. 03-03-03-SC25 dated June 17, 2003 in relation to Item 5.2, Section 5 of
RA 8799.
The present controversy lies, however, in the procedure to be followed when a commercial case - such
as the instant intra-corporate dispute -has been properly filed in the official station of the
designated Special Commercial Court but is, however, later wrongly assigned by raffle to a
regular branch of that station.
As a basic premise, let it be emphasized that a court's acquisition of jurisdiction over a particular case's
subject matter is different from incidents pertaining to the exercise of its jurisdiction. Jurisdiction over the
subject matter of a case is conferred by law, whereas a court's exercise of jurisdiction, unless provided
by the law itself, is governed by the Rules of Court or by the orders issued from time to time by the
Court.26 In Lozada v. Bracewell,27 it was recently held that the matter of whether the RTC resolves an
issue in the exercise of its general jurisdiction or of its limited jurisdiction as a special court
is only a matter of procedure and has nothing to do with the question of jurisdiction.
Pertinent to this case is RA 8799 which took effect on August 8, 2000. By virtue of said law, jurisdiction over
cases enumerated in Section 528 of Presidential Decree No. 902-A29 was transferred from the Securities and
Exchange Commission (SEC) to the RTCs, being courts of general jurisdiction. Item 5.2, Section 5 of
RA 8799 provides: chanRoblesvirtualLawlibrary
SEC. 5. Powers and Functionsof the Commission. - x x x
xxxx
5.2 The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential
Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate
Regional Trial Court: Provided, that the Supreme Court in the exercise of its authority may
designate the Regional Trial Court branches that shall exercise jurisdiction over the cases. The
Commission shall retain jurisdiction over pending cases involving intra-corporate disputes submitted for final
resolution which should be resolved within one (1) year from the enactment of this Code. The Commission
shall retain jurisdiction over pending suspension of payments/rehabilitation cases filed as of 30 June 2000
until finally disposed. (Emphasis supplied) cralawlawlibrary
The legal attribution of Regional Trial Courts as courts of general jurisdiction stems from Section 19
(6), Chapter II of Batas Pambansa Bilang (BP) 129,30 known as "The Judiciary Reorganization Act of
1980": chanRoblesvirtualLawlibrary
Section 19. Jurisdiction in civil cases.- Regional Trial Courts shall exercise exclusive original jurisdiction: chanRoblesvirtualLawlibrary
xxxx
(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising
jurisdiction or any court, tribunal, person or body exercising judicial or quasi-judicial functions; x x x x
cralawlawlibrary
As enunciated in Durisol Philippines, Inc. v. CA:31 chanroblesvirtuallawlibrary
The regional trial court, formerly the court of first instance, is a court of general jurisdiction. All cases, the
jurisdiction over which is not specifically provided for by law to be within the jurisdiction of any other court,
fall under the jurisdiction of the regional trial court.32
cralawlawlibrary
To clarify, the word "or" in Item 5.2, Section 5 of RA 8799 was intentionally used by the legislature to
particularize the fact that the phrase "the Courts of general jurisdiction" is equivalent to the phrase "the
appropriate Regional Trial Court." In other words, the jurisdiction of the SEC over the cases enumerated
under Section 5 of PD 902-A was transferred to the courts of general jurisdiction, that is to say (or,
otherwise known as), the proper Regional Trial Courts. This interpretation is supported bySan Miguel Corp.
v. Municipal Council,33 wherein the Court held that: chanRoblesvirtualLawlibrary
[T]he word "or" may be used as the equivalent of "that is to say" and gives that which precedes it the same
significance as that which follows it. It is not always disjunctive and is sometimes interpretative or
expository of the preceding word.34 cralawlawlibrary
Further, as may be gleaned from the following excerpt of the Congressional deliberations: chanRoblesvirtualLawlibrary
Senator [Raul S.] Roco: x x x.
xxxx
x x x. The first major departure is as regards the Securities and Exchange Commission. The Securities and
Exchange Commission has been authorized under this proposal to reorganize itself. As an administrative
agency, we strengthened it and at the same time we take away the quasi-judicial functions. The quasi-
judicial functions are now given back to the courts of general jurisdiction - the Regional Trial
Court, except for two categories of cases.
In the case of corporate disputes, only those that are now submitted for final determination of the SEC will
remain with the SEC. So, all those cases, both memos of the plaintiff and the defendant, that have been
submitted for resolution will continue. At the same time, cases involving rehabilitation, bankruptcy,
suspension of payments and receiverships that were filed before June 30, 2000 will continue with the SEC.
in other words, we are avoiding the possibility, upon approval of this bill, of people filing cases with the SEC,
in manner of speaking, to select their court.35
x x x x (Emphasis supplied) cralawlawlibrary
Therefore, one must be disabused of the notion that the transfer of jurisdiction was made only in favor of
particular RTC branches, and not the RTCs in general.
Consistent with the foregoing, history depicts that when the transfer of SEC cases to the RTCs was first
implemented, they were transmitted to the Executive Judges of the RTCs for raffle between or among its
different branches, unless a specific branch has been designated as a Special Commercial Court, in
which instance, the cases were transmitted to said branch.36 It was only on November 21, 2000 that
the Court designated certain RTC branches to try and decide said SEC cases37 without, however, providing
for the transfer of the cases already distributed to or filed with the regular branches thereof. Thus, on
January 23, 2001, the Court issued SC Administrative Circular No. 08-200138 directing the transfer of said
cases to the designated courts (commercial SEC courts). Later, or on June 17, 2003, the Court issued A.M.
No. 03-03-03-SC consolidating the commercial SEC courts and the intellectual property courts39 in one RTC
branch in a particular locality, i.e., the Special Commercial Court, to streamline the court structure
and to promote expediency.40 Accordingly, the RTC branch so designated was mandated to try and decide
SEC cases, as well as those involving violations of intellectual property rights, which were, thereupon,
required to be filed in the Office of the Clerk of Court in the official station of the designated Special
Commercial Courts, to wit: chanRoblesvirtualLawlibrary
1. The Regional Courts previously designated as SEC Courts through the: (a) Resolutions of this Court dated
21 November 2000, 4 July 2001, 12 November 2002, and 9 July 2002 all issued in A.M. No. 00-11-03-SC;
(b) Resolution dated 27 August 2001 in A.M. No. 01-5-298-RTC; and (c) Resolution dated 8 July 2002 in
A.M. No. 01-12-656-RTC are hereby DESIGNATED and shall be CALLED as Special Commercial Courts to try
and decide cases involving violations of Intellectual Property Rights which fall within their jurisdiction
and those cases formerly cognizable by the Securities and Exchange Commission: chanRoblesvirtualLawlibrary
xxxx
4. The Special Commercial Courts shall have jurisdiction over cases arising within their respective territorial
jurisdiction with respect to the National Capital Judicial Region and within the respective provinces with
respect to the First to Twelfth Judicial Regions. Thus,cases shall be filed in the Office of the Clerk of Court in
the official station of the designated Special Commercial Court;41
x x x x (Underscoring supplied) cralawlawlibrary
It is important to mention that the Court's designation of Special Commercial Courts was made in line with
its constitutional authority to supervise the administration of all courts as provided under Section 6, Article
VIII of the 1987 Constitution: chanRoblesvirtualLawlibrary
Section 6. The Supreme Court shall have administrative supervision over all courts and the personnel
thereof. cralawlawlibrary
The objective behind the designation of such specialized courts is to promote expediency and efficiency
in the exercise of the RTCs' jurisdiction over the cases enumerated under Section 5 of PD 902-A. Such
designation has nothing to do with the statutory conferment of jurisdiction to all RTCs under RA 8799 since
in the first place, the Court cannot enlarge, diminish, or dictate when jurisdiction shall be removed, given
that the power to define, prescribe, and apportion jurisdiction is, as a general rule, a matter of
legislative prerogative.42 Section 2, Article VIII of the 1987 Constitution provides: chanRoblesvirtualLawlibrary
Section 2. The Congress shall have the power to define, prescribe, and apportion the jurisdiction of the
various courts but may not deprive the Supreme Court of its jurisdiction over cases enumerated in Section 5
hereof.
xxxx
cralawlawlibrary
Here, petitioners filed a commercial case, i.e., an intra-corporate dispute, with the Office of the Clerk of
Court in the RTC of Muntinlupa City, which is the official station of the designated Special Commercial Court,
in accordance with A.M. No. 03-03-03-SC. It is, therefore, from the time of such filing that the RTC of
Muntinlupa City acquired jurisdiction over the subject matter or the nature of the
action.43 Unfortunately, the commercial case was wrongly raffled to a regular branch, e.g., Branch
276, instead of being assigned44to the sole Special Commercial Court in the RTC of Muntinlupa
City, which is Branch 256. This error may have been caused by a reliance on the complaint's caption, i.e.,
"Civil Case for Injunction with prayer for Status Quo Order, TRO and Damages,"45 which, however,
contradicts and more importantly, cannot prevail over its actual allegations that clearly make out an intra-
corporate dispute: chanRoblesvirtualLawlibrary
16. To the surprise of MLCG and FMDG, however, in two identical letters both dated 13 May 2011, under the
letterhead of GJH Land, Inc., Yap, now acting as its President, Jang and Kim demanded payment of
supposed unpaid subscriptions of MLCG and FMDG amounting to P10,899,854.30 and P2,625,249.41,
respectively.
16.1 Copies of the letters dated 13 May 2011 are attached hereto and made integral parts hereof as
Annexes "J" and "K", repectively.
17. On 29 July 2011, MLCG and FMDG received an Offer Letter addressed to stockholders of GJH Land, Inc.
from Yap informing all stockholders that GJH Land, Inc. is now offering for sale the unpaid shares of stock of
MLCG and FMDG. The same letter states that the offers to purchase these shares will be opened on 10
August 2011 with payments to be arranged by deposit to the depository bank of GJH Land, Inc.
17.1 A copy of the undated Offer Letter is attached hereto and made and made an integral part hereof as
Annex "L".
18. The letter of GJH Land, Inc. through Yap, is totally without legal and factual basis because as evidenced
by the Deeds of Assignment signed and certified by Yap herself, all the S.J. Land, Inc. shares acquired by
MLCG and FMDG have been fully paid in the books of S.J. Land, Inc.
19. With the impending sale of the alleged unpaid subscriptions on 10 August 2011,there is now a clear
danger that MLCG and FMDG would be deprived of these shares without legal and factual basis.
20. Furthermore, if they are deprived of these shares through the scheduled sale, both MLCG and FMDG
would suffer grave and irreparable damage incapable of pecuniary estimation.
21. For this reason, plaintiffs now come to the Honorable Court for injunctive relief so that after trial on the
merits, a permanent injunction should be issued against the defendants preventing them from selling the
shares of the plaintiffs, there being no basis for such sale.46
cralawlawlibrary
According to jurisprudence, "it is not the caption but the allegations in the complaint or other initiatory
pleading which give meaning to the pleading and on the basis of which such pleading may be legally
characterized."47 However, so as to avert any future confusion, the Court requires henceforth, that all
initiatory pleadings state the action's nature both in its caption and the body, which parameters are defined
in the dispositive portion of this Decision.
Going back to the case at bar, the Court nonetheless deems that the erroneous raffling to a regular branch
instead of to a Special Commercial Court is only a matter of procedure - that is, an incident related to the
exercise of jurisdiction - and, thus, should not negate the jurisdiction which the RTC of Muntinlupa City had
already acquired. In such a scenario, the proper course of action was not for the commercial case to be
dismissed; instead, Branch 276 should have first referred the case to the Executive Judge for re-
docketing as a commercial case; thereafter, the Executive Judge should then assign said case to
the only designated Special Commercial Court in the station, i.e.,Branch 256.
Note that the procedure would be different where the RTC acquiring jurisdiction over the case hasmultiple
special commercial court branches; in such a scenario, the Executive Judge, after re-docketing the same
as a commercial case, should proceed to order its re-raffling among the said special branches.
Meanwhile, if the RTC acquiring jurisdiction has no branch designated as a Special Commercial Court,
then it should refer the case to the nearest RTC with a designated Special Commercial Court branch within
the judicial region.48 Upon referral, the RTC to which the case was referred to should re-docket the case as a
commercial case, and then: (a) if the said RTC has only one branch designated as a Special Commercial
Court, assign the case to the sole special branch; or (b) if the said RTC has multiple branches designated as
Special Commercial Courts, raffle off the case among those special branches.
In all the above-mentioned scenarios, any difference regarding the applicable docket fees should be duly
accounted for. On the other hand, all docket fees already paid shall be duly credited, and any excess,
refunded.
At this juncture, the Court finds it fitting to clarify that the RTC mistakenly relied on the Calleja case to
support its ruling. In Calleja, an intra-corporate dispute49 among officers of a private corporation with
principal address at Goa, Camarines Sur, was filed with the RTC of San Jose, Camarines Sur, Branch 58
instead of the RTC of Naga City, which is the official station of the designated Special Commercial Court for
Camarines Sur. Consequently, the Court set aside the RTC of San Jose, Camarines Sur's order to transfer
the case to the RTC of Naga City and dismissed the complaint considering that it was filed before a court
which, having no internal branch designated as a Special Commercial Court, had no jurisdiction over those
kinds of actions, i.e., intra-corporate disputes. Calleja involved two different RTCs, i.e., the RTC of San
Jose, Camarines Sur and the RTC of Naga City, whereas theinstant case only involves one RTC, i.e., the
RTC of Muntinlupa City, albeit involving two different branches of the same court, i.e., Branches 256 and
276. Hence, owing to the variance in the facts attending, it was then improper for the RTC to rely on the
Calleja ruling.
Besides, the Court observes that the fine line that distinguishes subject matter jurisdiction and exercise of
jurisdiction had been clearly blurred in Calleja. Harkening back to the statute that had conferred subject
matter jurisdiction, two things are apparently clear: (a) that the SEC's subject matter jurisdiction over
intra-corporate cases under Section 5 of Presidential Decree No. 902-A was transferred to the Courts of
general jurisdiction, i.e., the appropriate Regional Trial Courts; and (b) the designated branches of the
Regional Trial Court, as per the rules promulgated by the Supreme Court, shall exercise jurisdiction over
such cases. Item 5.2, Section 5 of RA 8799 provides: chanRoblesvirtualLawlibrary
SEC. 5. Powers and Functions of the Commission. - x x x
xxxx
5.2 The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential
Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate
Regional Trial Court: Provided, that the Supreme Court in the exercise of its authority may
designate the Regional Trial Court branches that shall exercise jurisdiction over the cases, x x x. cralawlawlibrary
In contrast, the appropriate jurisprudential reference to this case would be Tan v. Bausch & Lomb,
Inc.,50 which involves a criminal complaint for violation of intellectual property rights filed before the RTC of
Cebu City but was raffled to a regular branch thereof (Branch 21), and not to a Special Commercial Court.
As it turned out, the regular branch subsequently denied the private complainant's motion to transfer the
case to the designated special court of the same RTC, on the ground of lack of jurisdiction. The CA reversed
the regular branch and, consequently, ordered the transfer of the case to the designated special court at
that time (Branch 9). The Court, affirming the CA, declared that the RTC had acquired jurisdiction over the
subject matter. In view, however, of the designation of another court as the Special Commercial Court in the
interim (Branch 11 of the same Cebu City RTC), the Court accordingly ordered the transfer of the case and
the transmittal of the records to said Special Commercial Court instead.51Similarly, the transfer of the
present intra-corporate dispute from Branch 276 to Branch 256 of the same RTC of Muntinlupa
City, subject to the parameters above-discussed is proper and will further the purposes stated in
A.M. No. 03-03-03-SC of attaining a speedy and efficient administration of justice.
For further guidance, the Court finds it apt to point out that the same principles apply to the inverse
situation of ordinary civil cases filed before the proper RTCs but wrongly raffled to its branches
designated as Special Commercial Courts. In such a scenario, the ordinary civil case should then be
referred to the Executive Judge for re-docketing as an ordinary civil case; thereafter, the
Executive Judge should then order the raffling of the case to all branches of the same RTC,
subject to limitations under existing internal rules, and the payment of the correct docket fees in
case of any difference. Unlike the limited assignment/raffling of a commercial case only to branches
designated as Special Commercial Courts in the scenarios stated above, the re-raffling of an ordinary civil
case in this instance to all courts is permissible due to the fact that a particular branch which has been
designated as a Special Commercial Court does not shed the RTC's general jurisdiction over ordinary civil
cases under the imprimatur of statutory law, i.e., Batas Pambansa Bilang (BP) 129.52 To restate, the
designation of Special Commercial Courts was merely intended as a procedural tool to expedite the
resolution of commercial cases in line with the court's exercise of jurisdiction. This designation was not
made by statute but only by an internal Supreme Court rule under its authority to promulgate rules
governing matters of procedure and its constitutional mandate to supervise the administration of all courts
and the personnel thereof.53Certainly, an internal rule promulgated by the Court cannot go beyond the
commanding statute. But as a more fundamental reason, the designation of Special Commercial Courts is, to
stress, merely an incident related to the court's exercise of jurisdiction, which, as first discussed, is distinct
from the concept of jurisdiction over the subject matter. The RTC's general jurisdiction over ordinary civil
cases is therefore not abdicated by an internal rule streamlining court procedure.
In fine, Branch 276's dismissal of Civil Case No. 11-077 is set aside and the transfer of said case to Branch
256, the designated Special Commercial Court of the same RTC of Muntinlupa City, under the parameters
above-explained, is hereby ordered.
WHEREFORE, the petition is GRANTED. The Orders dated April 17, 2012 and July 9, 2012 of the Regional
Trial Court (RTC) of Muntinlupa City, Branch 276 in Civil Case No. 11-077 are herebyREVERSED and SET
ASIDE. Civil Case No. 11-077 is REFERRED to the Executive Judge of the RTC of Muntinlupa City for re-
docketing as a commercial case. Thereafter, the Executive Judge shallASSIGN said case to Branch 256, the
sole designated Special Commercial Court in the RTC of Muntinlupa City, which is ORDERED to resolve the
case with reasonable dispatch. In this regard, the Clerk of Court of said RTC shall DETERMINE the
appropriate amount of docket fees and, in so doing,ORDER the payment of any difference or, on the other
hand, refund any excess.
Furthermore, the Court hereby RESOLVES that henceforth, the following guidelines shall be observed:
1. If a commercial case filed before the proper RTC is wrongly raffled to its regular branch, the proper
courses of action are as follows:
1.1 If the RTC has only one branch designated as a Special Commercial Court, then the case shall be
referred to the Executive Judge for re-docketing as a commercial case, and thereafter, assigned to the sole
special branch;
1.2 If the RTC has multiple branches designated as Special Commercial Courts, then the case shall be
referred to the Executive Judge for re-docketing as a commercial case, and thereafter, raffled off among
those special branches; and
1.3 If the RTC has no internal branch designated as a Special Commercial Court, then the case shall be
referred to the nearest RTC with a designated Special Commercial Court branch within the judicial region.
Upon referral, the RTC to which the case was referred to should re- docket the case as a commercial case,
and then: (a) if the said RTC has only one branch designated as a Special Commercial Court, assign the case
to the sole special branch; or (b) if the said RTC has multiple branches designated as Special Commercial
Courts, raffle off the case among those special branches.
2. If an ordinary civil case filed before the proper RTC is wrongly raffled to its branch designated as a
Special Commercial Court, then the case shall be referred to the Executive Judge for re-docketing as an
ordinary civil case. Thereafter, it shall be raffled off to all courts of the same RTC (including its designated
special branches which, by statute, are equally capable of exercising general jurisdiction same as regular
branches), as provided for under existing rules.
3. All transfer/raffle of cases is subject to the payment of the appropriate docket fees in case of any
difference. On the other hand, all docket fees already paid shall be duly credited, and any excess, refunded.
4. Finally, to avert any future confusion, the Court requires that all initiatory pleadings state the action's
nature both in its caption and body. Otherwise, the initiatory pleading may, upon motion or by order of the
court motu proprio, be dismissed without prejudice to its re-filing after due rectification. This last procedural
rule is prospective in application.
5. All existing rules inconsistent with the foregoing are deemed superseded. cralawlawlibrary
SO ORDERED.
Sereno, C.J. Carpio, Velasco, Jr., Peralta, Bersamin, Del Castillo, Villarama, Jr., Reyes, and Jardeleza, JJ.,
concur.
Leonardo-De Castro, J., I concur in the result. I subscribe to the ruling in the Calleja case that the misfiling
of a commercial case with a court not duly designated Special Commercial Court is an error of jurisdiction.
However the Supreme Court has constitutional and legal basis [RA 8799] to promulgated the guidelines here
for future cases.
Brion, and Mendoza, JJ., on leave.
Perez, J., I submitted a dissenting opinion.
Leonen, J., see concurring opinion.
Endnotes:
1
Rollo, pp. 10-28.
2
Id. at 34-38. Penned by Presiding Judge Antonietta Pablo-Medina.
3
Id. at 39-41.
4
"Francis Martin C. Gonzales" in some parts of the records.
5
Dated August 2, 2011. Rollo, pp. 42-53.
6
"Atty. Roberto P. Mallari" in some parts of the records.
Rollo, p. 44.
7
8
Id. at 47.
9
Id. at 90-91.
10
Id. at 92-97.
11
Id. at 14.
12
Dated February 7, 2011. (Id. at 98-114.)
13
Id. at 107-110.
14
Id. at 34-38.
15
Id. at 37.
16
Dated May 8, 2012. Id. at 152-160.
17
Id. at 152-154.
18
Id. at 154-155.
19
Otherwise known as "The Securities Regulation Code."
20
Rollo, p. 155.
21
Id. at 39-41.
22
518 Phil. 801 (2006).
23
Rollo, p. 37.
24
See Medical Plaza Makati Condominium Corporation v. Cullen, G.R. No. 181416, November 11, 2013, 709
SCRA 110, 120-121; citations omitted.
25
Entitled "RE: CONSOLIDATION OF INTELLECTUAL PROPERTY COURTS WITH COMMERCIAL COURTS" (July
1, 2003). Prior to A.M. No. 03-03-03-SC, however, the Court had already issued several resolutions in A.M.
No. 00-11-03-SC (Entitled "RESOLUTION DESIGNATING CERTAIN BRANCHES OF REGIONAL TRIAL COURTS
TO TRY AND DECIDE CASES FORMERLY COGNIZABLE BY THE SECURITIES AND EXCHANGE COMMISSION"
[November 21, 2000]), A.M. No. 01-5-298-RTC (August 27, 2001), and A.M. No. 01- 12-656-RTC (July 8,
2002) to implement the provisions of Item 5.2, Section 5 of RA 8799.
26
See Herrera, Oscar M., Remedial Law, Vol. I, 2007 Ed., p. 73.
27
G.R. No. 179155, April 2, 2014, 720 SCRA 371, 381.
28
SEC. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange
Commission over corporations, partnerships and other forms of associations registered with it as expressly
granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide
cases involving.
a. Devices or schemes employed by or any acts, of the board of directors, business
associates, its officers or partners, amounting to fraud and misrepresentation which
may be detrimental to the interest of the public and/or of the stockholder,
partners, members of associations or organizations registered with the
Commission.
b. Controversies arising out of intra-corporate or partnership relations, between and

among' stockholders, members, or associates; between any or all of them and the
corporation, partnership or association of which they are stockholders, members or
associates, respectively; and between such corporation, partnership or association
and the state insofar as it concerns their individual franchise or right to exist as
such entity;
c. Controversies in the election or appointments of directors, trustees, officers or

managers of such corporations, partnerships or associations.
29
Entitled "REORGANIZATION OF THE SECURITIES AND EXCHANGE COMMISSION WITH ADDITIONAL
POWERS AND PLACING THE SAID AGENCY UNDER THE ADMINISTRATIVE SUPERVISION OF THE OFFICE OF
THE PRESIDENT" (March 11, 1976).
30
Entitled "AN ACT REORGANIZING THE JUDICIARY, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER
PURPOSES" (approved on August 14, 1981).
31
427 Phil. 604 (2002).
32
Id. at 612.
33
152 Phil. 30(1973).
34
Id. at 38.
35
See Transcript of Session Proceedings in Securities Act of 1998, SB. NO. 1220/CR. No 6 RA 8799 dated
July 17, 2000, p. 222.
36
See Resolution dated August 22, 2000 in A.M. No. 00-8-10-SC, entitled "In RB: Transfer OF CASES from
the Securities and exchange Commission to the Regular Courts Pursuant to R. A. No. 8799."
37
See Resolution dated November 21, 2000 in A.M. No. 00-11-03-SC, entitled "RESOLUTION DESIGNATING
CERTAIN BRANCHES OF REGIONAL TRIAL COURTS TO TRY AND DECIDE CASES FORMERLY COGNIZABLE
BYTHF SECURITIES AND EXCHANGE COMMISSION."
38
Entitled "Transfer to Designated Regional Trial Courts of SEC Cases Enumerated in Section 5, P. D. No.
902-A from the Regular Regional Trial Courts" (March 1,2001). Designated to try violations of intellectual
property rights under RA 8293, otherwise known as the "Intellectual Property Code of the Philippines" and
under SC A.O. No. 113-95 (Entitled "RE: Designation of Special Courts for Intellectual Property Rights"
[October 2, 1995]), as amended by SC A.O. No. 104-96 (Entitled "Re: Designation of Special Courts for
Kidnapping, Robbery, Carnapping, Dangerous Drugs Cases and Other Heinous Crimes; Intellectual Property
Rights Violations and Jurisdiction in Libel Cases" [October 21, 1996]) and A.M. No. 02-1-11-SC (Entitled
"Re: Designation of an Intellectual Property Judge for Manila" [February 19,2002]).
Tan v. Bausch & Lomb, Inc., 514 Phil. 307, 316 (2005). See also final whereas clause of A.M. No. 03-03-
40
03-SC.
41
See OCA Circular No. 82-2003, entitled "SUBJECT: CONSOLIDATION OF INTELLECTUAL PROPERTY Courts
with Commercial Courts" (June 30, 2003).
42
See Tinitigan v. Tinitigan, Sr.,188 Phil. 597, 611 (1980).
43
See Herrera, Oscar M., Remedial Law, Vol. I, 2007 Ed., p. 112-113. See also Tinitigan v. Tinitigan, Sr., id.
44
Item 6 of A.M. No. 03-03-03-SC provides:
6. In order to ensure a just and equitable distribution of cases, the designated Special Commercial Court
shall continue to participate in the raffles of other cases.Provided, however, that the Executive Judge
concerned shall adopt a procedure whereby every IP and SEC case assigned to a Special Commercial
Court should be considered a case raffled to it and duly credited to such court. (Emphasis supplied)
45
See rollo, p. 42.
46
Id. at 47-48.
47
Republic of the Phils, v. Nolasco, 496 Phil. 853, 867 (2005).
48
See Item No. 3 of A.M. No. 03-03-03-SC, as amended, dated June 15, 2015.
49
A case for quo warranto against members of the board of directors and officers of St John Hospital,
Incorporated, docketed as Civil Case No. T-1007.
50
Supra note 40.
51
See id. at 314-316.
52
Section 19 of BP 129, entitled "AN ACT REORGANIZING THE JUDICIARY, APPROPRIATING FUNDS
THEREFOR, AND FOR OTHER PURPOSES," as amended by RA 7691, entitled "AN ACT EXPANDING THE
JURISDICTION OF THE METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS, AND MUNICIPAL
CIRCUIT TRIAL COURTS, AMENDING FOR THE PURPOSE BATAS PAMBANSA BLG. 129, OTHERWISE KNOWN
AS THE JUDICIARY REORGANIZATION ACT OF 1980,'" reads: chanRoblesvirtualLawlibrary
Section 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original jurisdiction: chanRoblesvirtualLawlibrary
(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;
(2) In all civil actions which involve the title to, or possession of, real property, or any interest
therein, where the assessed value of the property involved exceeds Twenty thousand pesos
(P20,000.00) or for civil actions in Metro Manila, where such the value exceeds Fifty thousand
pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or
buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts, Municipal
Trial Courts, and Municipal Circuit Trial Courts;
(3) In all actions in admiralty and maritime jurisdiction where he demand or claim exceeds One hundred
thousand pesos (P100,000.00) or , in Metro Manila, where such demand or claim exceeds Two hundred
thousand pesos (P200.000.00): chanRoblesvirtualLawlibrary
(4) In all matters of probate, both testate and intestate, where the gross value of the estate exceeds One
hundred thousand pesos (P100,000.00) or, in probate matters in Metro Manila, where such gross value
exceeds Two hundred thousand pesos (P200,000.00);
(5) In all actions involving the contract of marriage and marital relations;
jurisdiction or any court, tribunal, person or body exercising judicial or quasi- judicial functions;
(7) In all civil actions and special proceedings falling within the exclusive original jurisdiction of a Juvenile
and Domestic Relations Court and of the Court of Agrarian Relations as now provided by law; and
(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney's fees,
litigation expenses, and costs or the value of the property in controversy exceeds One hundred thousand
pesos (P100,000.00) or. in such other cases in Metro Manila, where the demand, exclusive of the
abovementioned items exceeds Two hundred thousand pesos (P200,000.00).
53
Section 5 (5), Article VIII of the 1987 Philippine Constitution reads:
Section 5. The Supreme Court shall have the following powers: chanRoblesvirtualLawlibrary
xxxx
(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice,
and procedure in all courts, the admission to the practice of law, the integrated bar, and legal assistance to
the under-privileged. Such rules shall provide a simplified and inexpensive procedure for the speedy
disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or
modify substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall remain
effective unless disapproved by the Supreme Court.
xxxx
cralawlawlibrary
DISSENTING OPINION
PEREZ, J.:
I am constrained to register my dissent to the ponencia that the Securities and Exchange Commission's
(SEC's) jurisdiction over cases enumerated in Section 5 of Presidential Decree (P.D.) No. 902-A was
transferred to all Regional Trial Courts, unaffected by the proviso in the same Section that the Supreme
Court may designate the Regional Trial Court branches that shall exercise the transferred jurisdiction. I base
my dissent on the plain wording of Section 5.2 of Republic Act. No. 8799 or "The Securities Regulation
Code."
Briefly, the undisputed facts.
Petitioners Manuel Luis C. Gonzales and Francis Martin D. Gonzales filed a Complaint against respondents
GJH Land, Inc. (formerly known as S.J. Land, Inc.), Chang Hwan Jang, Sang Rak Kim, Mariechu N. Yap, and
Atty. Roberto P. Mallari II before the Regional Trial Court (RTC) of Muntinlupa City seeking to enjoin the sale
of S.J. Land, Inc.'s shares which petitioners purportedly already bought from, and fully paid to, S.J. Global,
Inc. on 1 February 2010. Petitioners, the Gonzales', designated their Complaint as a Civil Case for
Injunction with prayer for Status Quo Order, TRO and Damages.1
Essentially, the allegations in the Complaint state that petitioners subscribed to a total of 295,116 shares
fully paid in the books of S.J. Land Inc., acquiring 40% and 10% of the outstanding capital stock thereof.
The bone of contention in the Complaint is the status of the shares, i.e., whether fully paid or unpaid by
petitioners and the consequent issue of ownership and its incidences.
Upon filing of the Complaint with the Office of the Clerk of Court of the RTC of Muntinlupa City, it was raffled
to Branch 276, which is not a Special Commercial Court. On 9 and 24 August 2011, the RTC, Branch
276, in two separate Orders, issued a temporary restraining order and a writ of preliminary injunction.
After filing their respective answers to the complaint, respondents filed a motion to dismiss on the ground
of lack of jurisdiction over the subject matter, pointing out that the case involves an intra-corporate
dispute and should, thus, be heard by the designated Special Commercial Court of Muntinlupa City.
In an Order dated 17 April 2011, Branch 276 granted the motion to dismiss, ruling that the case involves an
intra-corporate dispute falling within the original and exclusive jurisdiction of the RTCs designated as Special
Commercial Courts, Branch 256 in this instance. Since Branch 276 was not specifically designated by the
Supreme Court as a commercial court, it had no jurisdiction over the intra-corporate dispute, and
accordingly, the case should be dismissed.
On motion for reconsideration, petitioners argued that: (1) they had no control over raffle of cases; (2) the
RTCs have jurisdiction over intra-corporate disputes pursuant to Republic Act (R.A.) No. 8799, with only the
Supreme Court designating specific branches as special commercial courts, thus, at most, the case should
be transferred or raffled to the proper branch; and (3) in all, as a matter of justice and equity, they cannot
be prejudiced by the incorrect raffling of their case since they complied with the rules for the filing of cases.
Branch 276 stood pat on its ruling that it was without jurisdiction to hear, decide and act on the case, not
designated as a special commercial court pursuant to A.M. No. 00-11-03-SC/l 1-21-00. Ratiocinating further
that without any kind of authority to act thereon, Branch 276 can only dismiss the case and cannot order
the transfer of the case to the proper RTC following our ruling in Calleja v. Panday.2 The reversal of the
rulings is the object of this Petition before us.
In granting the petition, the ponencia starts with the basic premise that jurisdiction over the subject matter
is conferred by law, distinct from the exercise of jurisdiction which, unless provided by the law itself, is
governed by the Rules of Court or by the orders issued from time to time by the Court. The ponencia points
to R.A. No. 8799, specifically Section 5.2, as the law conferring (transferring) original and exclusive
jurisdiction to the appropriate RTCs (from the Securities and Exchange Commission) over cases enumerated
in Section 5 of Presidential Decree (P.D.) No. 902-A (SEC Cases). Theponencia clarifies, however, that the
Supreme Court's designation of specific Special Commercial Courts, made subject of various Supreme Court
Administrative Matters,3was not a conferment of jurisdiction, but a "procedural tool to promote
expediency and efficiency in the exercise of the RTCs jurisdiction over such cases." In this instance,
pursuant to our Rules directing the manner by which jurisdiction shall be exercised, commercial cases were
required to be filed in the Office of the Clerk of Court in the official station of the designated Special
Commercial Courts.
The ponencia emphasizes that, petitioners having "correctly filed an intra-corporate case with the Office of
the Clerk of Court in the RTC of Muntinlupa City, which is the official station of the designated Special
Commercial Court, in accordance with [the Rules]," the RTC, "from the time of such filing[,] acquired
jurisdiction over the subject matter or the nature of the action."
Specifically, the ponencia holds: chanRoblesvirtualLawlibrary
Unfortunately, the case was raffled to Branch 276 instead of being assigned to the single Special
Commercial Court in the RTC of Muntinlupa City, which is Branch 256. As the Court sees it, this erroneous
raffling to a regular branch instead of to a Special Commercial Court is only a matter of procedure - that is,
an incident related to the RTC's exercise of jurisdiction - and, thus, should not negate the jurisdiction which
the RTC of Muntinlupa City had already acquired. As such, Branch 276 should have merely ordered the
transfer of the case to Branch 256, and not its dismissal, x x x cralawlawlibrary
In sum, the ponencia, discussing and citing the cases of Calleja, on which the court a quo based the herein
assailed Order, Tan v. Bausch & Lomb, Inc.,4 and Home Guaranty Corporation v. R-II Builders, Inc.,5 draws
a distinction between subject matter jurisdiction conferred by law, in this instance falling with the RTCs, and
the exercise of jurisdiction, in accordance with the designation of appropriate RTCs by the Supreme Court.
Thus, according to the ponencia, the RTC of Muntinlupa City regardless of the Supreme Court designated
branch, acquired jurisdiction over Civil Case No. 11-077 upon the filing of the complaint in the official station
of the designated Special Commercial Courts. Thus, too, Branch 276, an RTC, albeit not designated as a
Special Commercial Court, should simply order the transfer of the case to Branch 256, the designated
Special Commercial Court, contemplating merely a procedural matter, incidental to the RTC's exercise of
jurisdiction. In all, as per the ponencia, the general investiture of jurisdiction to all RTCs is absolute, and
once acquired, any of the RTCs may, in the exercise of vested jurisdiction, order the transfer of cases to the
specific branch designated by the Supreme Court as a Special Commercial Court.
With all due respect, the ponencia proceeds from the wrong premise that the law vested jurisdiction over
transferred SEC cases on all the Regional Trial Courts and that the designation by the Supreme Court of
Special Commercial Courts concern only an "exercise of jurisdiction."
Section 5, Item 5.2 of R.A. No. 8799 reads: chanRoblesvirtualLawlibrary
SEC. 5. Powers and Functions of the Commission. — x x x
xxxx
5.2 The Commission's jurisdiction over all cases enumerated under Section 56 of Presidential Decree No.
902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial
Court:Provided, that the Supreme Court in the exercise of its authority may designate the Regional Trial
Court branches that shall exercise jurisdiction over the cases. The Commission shall retain jurisdiction over
pending cases involving intra-corporate disputes submitted for final resolution which should be resolved
within one (1) year from the enactment of this Code. The Commission shall retain jurisdiction over pending
suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed. cralawlawlibrary
Thus, I am constrained to differ based on the statements in, and exact wording of, the law
It is first axiom in legal hermeneutics that a statutory provision is read as a whole and not in disjointed
parts. The rule is as respected as it is ancient. Its sum and substance has not been diluted no matter how
frequent the free paraphrases have been. The textbook says: chanRoblesvirtualLawlibrary
Subject always to the cardinal rule of statutory construction, the courts should give every reasonable
interpretation to a statute which will give effect and meaning to every part or word thereof.
A statute should be construed that no word, clause, sentence, provision or part shall be rendered
surplusage, or superfluous, meaningless, void, insignificant or nugatory, if that can be reasonably avoided.
The rule has its basis in the presumption that the legislature could not have intended to use words in vain or
to leave part of its enactment devoid of sense or meaning. It cannot be presumed that the legislature
introduced into a statute, words, clauses, provisions which would annul or mutually destroy each other.
Rather, it is to be presumed that it is the purpose of the legislature that the entire statute and every part
thereof should be significant and effective.
The maxim "ut res tnagis quam per eat" requires not merely that a statute should be given effect as a whole
but that effect should be given to each of its express provisions.
Under this rule, that construction is favored which will render every word operative rather than one which
makes some words idle and nugatory.
However, the court may not, in order to give effect to particular words, virtually destroy the meaning of the
entire context, e.g., give them a significance which would be clearly repugnant to the statute looked upon as
a whole and destructive of its obvious intent.7
cralawlawlibrary
Included in the Philippine applications of the tenet are the cases of: (1) Land Bank of the Philippines v. AMS
Farming Corporation;8Mactan-Cebu International Airport Authority v. Urgello;9 and Smart Communications,
Inc. v. The City of Danao,10 as cited in Philippine International Trading Corporation v. Commission on
Audit11 where the Court's ruling was: chanRoblesvirtualLawlibrary
It is a rule in statutory construction that every part of the statute must be interpreted with reference to the
context, i.e., that every part of the statute must be considered together with the other parts, and kept
subservient to the general intent of the whole enactment. Because the law must not be read in truncated
parts, its provisions must be read in relation to the whole law. The statute's clauses and phrases must not,
consequently, be taken as detached and isolated expressions, but the whole and every part thereof must be
considered in fixing the meaning of any of its parts in order to produce a harmonious whole. Consistent with
the fundamentals of statutory construction, all the words in the statute must be taken into consideration in
order to ascertain its meaning. cralawlawlibrary
I must here repeat the application of the rule. Thus must the following conclusions be reached.
Section 5, Item 5.2 of R.A. No. 8799 did not transfer the cases enumerated under Section 5 of P.D. No. 902-
A to all the RTCs. If that was the legislative intention, then the provision should have simply stated that
such cases are "hereby transferred to the Regional Trial Courts." The complete investiture is, however, on
"the courts of general jurisdiction or the appropriate Regional Trial Court: Provided, that the Supreme Court,
in the exercise of its authority may designate the Regional Trial Court branches that shall exercise
jurisdiction over the cases." If the law is a general conferment of jurisdiction on all RTC, then the phrase "or
the appropriate Regional Trial Court" is an inutile surplusage and the proviso that "the Supreme Court in the
exercise of its authority may designate the Regional Trial Court branches that shall exercise jurisdiction over
the cases" is a purposeless appendage and wasted words. A general grant to all RTCs renders irrelevant the
"Supreme Court's exercise of authority" on the matter. Such a general grant renders meaningless the
designation by the Supreme Court of the RTC branchesthat shall exercise jurisdiction over the cases.
Each word in the law was purposely written; and all such words make up the phrased idea. This is a basic
presumption: To repeat -
[T]he legislature could not have intended to use words in vain or to leave part of its enactment devoid of
sense or meaning. It cannot be presumed that the legislature introduced into a statute, words, clauses,
provisions which would annul or mutually destroy each other. Rather, it is to be presumed that it is the
purpose of the legislature that the entire statute and every part thereof should be significant and
effective.12 cralawlawlibrary
Section 5, Item 5.2 of R.A. No. 8799 should therefore be read to mean that SEC's jurisdiction over all cases
under Section 5 of P.D. No. 902-A is transferred to the specific RTC branch designated by the Supreme
Court in the exercise of its authority.
This is the reading of the Supreme Court as expressed with precision in A.M. No. 00-11-03-SC dated 21
November 2000 which is aptly titled "Resolution Designating Certain Branches of Regional Trial Courts To
Try and Decide Cases Formerly Cognizable by the Securities and Exchange Commission" "arising within their
respective territorial jurisdictions with respect to the National Capital Region and within the respective
provinces in the First to the Twelfth Judicial Regions." This En Banc Resolution opened with a purpose clause
reading "to implement the provisions of Sec. 5.2 of Republic Act No. 8799 (The Securities Regulation
Code). This is an unequivocal statement that the Court interprets the provision to mean that only the RTC
Branches that it shall designate to hear and decide Special Commercial Court cases can exercise jurisdiction
over such cases. The issued guideline reinforces the exclusivity of the designation: chanRoblesvirtualLawlibrary
1. In multiple sala courts where one (1) or more branches of the RTC are herein designated as special
courts, there will be no unloading of cases already pending in the branches designated. They shall continue
to try and decide the said cases in addition to the SEC cases. In the meantime, in view of the temporary
imbalance of caseload as a result of the transfer of SEC cases, the Executive Judge concerned shall exclude
them in the raffle of newly filed cases in their station until their workload equals to that of the other
branches, in which event they shall be included in the raffle of other civil and criminal cases.
xxxx
5. In provinces (for the First to the Twelth Judicial Regions) where there are no designated special courts,
the Executive Judge of the station where new SEC cases will be filed shall consult the Supreme Court thru
the Office of the Court Administrator.cralawlawlibrary
There have been subsequent designations of RTC Branches as SEC courts, namely: RTC Branch 142, Makati
City through A.M. No. 00-11-03-SC; RTC Branch 34, Calamba, Laguna through amendment A.M. No. 00-11-
03-SC; RTC Branch 40, in Daet, Camarines Norte; RTC Branch 2, Tuguegarao, Cagayan; RTC Branch 74,
Malabon; RTC Branch 36, Masbate again through an amendment of A.M. No. 00-11-03-SC; and RTC Branch
23 of Naga City through A.M. No. 01-5-298-RTC.
There has been, as just enumerated, as many iterations by the court itself of its reading of Section 5, Item
5.2 of P. D. 8799 i.e., that the law transferred the SEC jurisdiction over the cases listed in Sec. 5 of P.D. No.
902-A to the particular branches of the RTCs designated by the Supreme Court as such. Unavoidable,
therefore, is the conclusion that all other Branches of the RTCs without the Supreme Court designation are
without jurisdiction over SEC cases. And, following unreversed rulings13 the other Branches of the RTC
before whom a SEC case is filed must dismiss such case for want of jurisdiction. Furthermore, absent such
jurisdiction, the non-SEC RTC cannot direct the case to the "proper" court.14
The unavoidable, because statutorily mandated, allocation to RTC branches of the authority to decide SEC
cases had, just as unavoidably, resulted in caseload imbalance in affected areas. Parenthetically, there was
a resulting caseload imbalance since R.A. No. 8799 did not create Commercial Courts. The law merely
unloaded SEC cases to the branches designated by the Supreme Court as Commercial Courts. The
consequent caseload problem urged the exercise by the Court, as administrator, to effect an equitable
distribution of cases among the RTC branches in areas where RTC branches have been given jurisdiction
over the additional case types. Thus did the Court issue the Resolutions on the exclusion of the SEC
designated courts from the raffle of cases.
Such arrangement continued until the weight of the unloaded jurisdiction eased such that the Court in 1 July
2003 issued A.M. No. 03-03-03-SC. It states: chanRoblesvirtualLawlibrary
1. The Regional Trial Courts previously designated as SEC Courts through the: (a) Resolutions
of this Court dated 21 November 2000, 4 July 2001, 12 November 2002, and 9 July 2002,
all issued in A.M. No. 00-11-03-SC, (b) Resolution dated 27 August 2001 in A.M. No. 01-5-
298-RTC; and (c) Resolution dated 8 July 2002 in A.M. No. 01-12-656-RTC are hereby
DESIGNATED and shall be CALLED as Special Commercial Courts to try and decide cases
involving violations of Intellectual Property Rights which fall within their jurisdiction and
those cases formerly cognizable by the Securities and Exchange Commission;
2. The designation of Intellectual Property Courts under Administrative Order No. 113-95
dated 2 October 1995, as amended by Administrative Order No. 104-96 dated 21 October
1996 and Resolution dated 19 February 2002 in A.M. No. 02-1-11- SC, is hereby revoked.
However, the Regional Trial Court, Branch 24, Manila is hereby designated as an additional
Special Commercial Court in the City of Manila;
3. Upon the effectivity of this Resolution, all IP cases shall be transferred to the designated
Special Commercial Courts except those which have undergone the pre-trial state in civil
cases or those where any of the accused has been arraigned in criminal cases which shall
be retained by the court previously assigned to try them;
4. The Special Commercial Courts shall have jurisdiction over cases arising within their
respective territorial jurisdiction with respect to the National Capital Judicial Region and
within the respective provinces with respect to the First to Twelfth Judicial Regions. Thus,
cases shall be filed in the Office of the Clerk of Court in the official station of the designated
Special Commercial Court;
5. In the event of inhibition of the judge of a designated Special Commercial Court, the
following guidelines shall be observed: (a) where there is only one (1) Special Commercial
Court, the case shall be raffled among the other judges in the station; (b) where there are
two (2) Special Commercial Courts in the station, the Executive Judge shall immediately
assign the case to the other Special Commercial Court; and (c) in case of inhibition of both
judges of the Special Commercial Court, the Executive Judge shall raffle the case among
the judges in the station; and
6. In order to ensure a just and equitable distribution of cases, the designated Special
Commercial Courts shall continue to participate in the raffles of other cases. Provided,
however, that the Executive Judge concerned shall adopt a procedure whereby every IP and
SEC case assigned to a Special Commercial Court should be considered a case raffled to it
and duly credited to such court.
cralawlawlibrary
What must be noted is the fact that the chosen RTC branch, now called Commercial Court, became such, as
distinguished from the other RTC branches because of a special bestowal of jurisdiction by the Court in
implementation of the statutorily granted authority. Without such grant mandated by the law, the
undesignated RTC branch is without SEC case jurisdiction.
Upon the other hand, the RTC branch, or the Commercial Court, maintain jurisdiction over the cases
enumerated in Section 19, of Batas Pambansa Blg. 129.15
But the exercise of such jurisdiction is subject to the regulation of the Court in the exercise of its
constitutional power of administrative supervision over all lower courts:
SEC. 5. The Supreme Court shall have the following powers: chanRoblesvirtualLawlibrary
xxxx
and procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal assistance to
the underprivileged. Such rules shall provide simplified and inexpensive procedure for the speedy disposition
of cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or modify
substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall remain effective
unless disapproved by the Supreme Court.
xxxx
Section 6. The Supreme Court shall have administrative supervision over all courts and the personnel
thereof. cralawlawlibrary
This is evident from A.M. No. 00-11-03-SC and A.M. No. 03-03-03-SC.
Palpably, RTC caseloads and the need to equalize the caseloads among all branches determine the need for
the Court to issue regulations regarding the Commercial Courts' exercise of jurisdiction over noncommercial
cases.
In all, the RTC Commercial Court has exclusive jurisdiction over commercial cases and can still exercise
jurisdiction over regular cases if, as determined by the Supreme Court, the caseloads necessitate such
exercise.
While there may be arguments in favor of a simpler arrangement whereby all the RTCs in all the Judicial
Districts are made Commercial Courts, such arguments cannot be submitted for resolution by the Court. The
settlement is in the legislature.
Further on the issue, the proviso that "the Supreme Court in the exercise of its authority may designate the
Regional Trial Court branches that shall exercise jurisdiction over these cases" is a definition of the
conferred jurisdiction. The designation of specific Regional Trial Court branches that will exercise
jurisdiction over cases enumerated under Section 5 of P.D. No. 902-A is pursuant to statute and not solely
the consequence of the Court's rule-making power and administrative supervisory power of the Court over
lower courts under Article VIII, Sections 5 (paragraph 5) and 6, respectively. In fact, A.M. No. 03-03-03-SC
on which the ponencia relies heavily for its position that the designation of specific RTC branches as a simple
procedural rule incidental to the exercise of jurisdiction, primarily traces its authority for designation of
Special Commercial Courts to Section 5.2 of R.A. No. 8799, gleaned from the 1st recital clause, to wit:
WHEREAS, to implement the provisions of Section 5.2 of Republic Act No. 8799 (The Securities
and Regulation Code), and in the interest of a speedy and efficient administration of justice, the Supreme
Court en banc, in the (a) Resolutions dated 21 November 2000 (Annex 1), 4 July 2001 (Annex 1-a), 12
November 2002 (Annex 1-b), and 9 July 2002 (Annex 1-c), all issued in A.M. No. 00-11-03-SC; (b)
Resolution dated 27 August 2001 in A.M. No. 01-5-298-RTC (Annex 2); and (c) Resolution dated 8 July 2002
in A.M. No. 01-12-656-RTC (Annex 3), resolved to designate certain branches of the Regional Trial Courts to
try and decide cases formerly recognizable by the Securities and Exchange Commission;
Plainly, the designation of Special Commercial Courts, as implemented by the Supreme Court through its
various rules, pertains to the statutorily conferred jurisdiction and not merely an incident related to the
court's exercise of jurisdiction.
The ponencia fails to address an equally important precept on subject matter jurisdiction, i.e., jurisdiction is
determined by the averments and allegations of the complaint which in this instance is inarguably a
commercial case concerning subscription of shares in a corporation.
From the onset, petitioners, by the filing of their Complaint, supplied the occasion for the
exercise of jurisdiction vested by law in a particular court. In short, petitioners invoked the
jurisdiction of the RTC (not as a court of general jurisdiction), and with the allegations in their Complaint,
specifically invoked the RTC designated as a Special Commercial Court under Section 5.2 of RA 8799,
implemented under A.M. No. 03-03-03-SC. Petitioners cannot just simply file their Complaint before
the RTC without any specificity, given the allegations contained therein and the reliefs they
prayed for.
I cannot give credence to petitioners' stance that they cannot be faulted for the incorrect raffling of their
Complaint to a regular court, having filed the same before the Office of the Clerk of Court in the RTC of
Muntinlupa City. Petitioners obviously argue that their only responsibility as plaintiffs in this case is to file
the case with the RTC despiteSection 5.2 of R.A. No. 8799 confining exclusive and original
jurisdiction over cases enumerated under Section 5 of P.D. No. 902-A to the appropriate RTC.
I invite attention to the statement in the ponencia that "petitioners correctly filed an intra-corporate case
with the Office of the Clerk of Court in the RTC of Muntinlupa City, which is the official station of the
designated Special Commercial Court, in accordance with A.M. No. 03-03-03-SC." The ponencia then
concludes that the RTC had validly acquired jurisdiction over the subject matter or the nature of the action
from the time of such filing.
Quite notably, petitioners did not intend to file an intra-corporate case: they labeled their Complaint though
incorrectly as a Civil Case for Injunction with prayer for StatusQuo Order, TRO and Damages. At that time
they filed their Complaint in 2011, petitioners were with the aid of counsel, a full service law firm and R.A.
No. 8799 and the implementing rules of the Supreme Court for the designation of Special Commercial
Courts, have long been effective. Subject matter jurisdiction over their Complaint, the nature determined by
the allegations therein, has been settled and delineated to be with not just any RTC, but the appropriate
RTC specially designated by the Supreme Court as a Special Commercial Court pursuant to law.
Petitioners, as plaintiffs, by the filing of their Complaint, are charged with responsibilityto properly and
correctly invoke the jurisdiction of the RTC whether in the exercise of its general jurisdiction or
as a Special Commercial Court. Palpably, petitioners' incorrect labeling of their Complaint precipitated the
incorrect raffling thereof to a regular court, Branch 276, which, by specific provision of law, is without
subject matter jurisdiction to act thereon given that it had not been designated as a Special Commercial
Court.
Second, with the incorrect labeling of their Complaint and the wrong invocation of the RTC's regular
jurisdiction, the designated Special Commercial Court did not acquire jurisdiction over the Complaint by the
mere filing thereof with the multi sala RTC. Since petitioners had filed what they labeled as a Civil Case,
they knowingly filed it pursuant to the general jurisdiction of the RTC under Sec. 19 of B.P. Big. 129.
The mere filing of the Complaint before the Office of the Clerk of Court in the RTC of Muntinlupa City, in the
official station of the designated Special Commercial Court as what occurred herein, is not equivalent to the
correct and proper filing of the Complaint before the appropriate Regional Trial Court specially designated by
the Supreme Court to hear and decide cases enumerated under Section 5 of P.D. No. 902-A. Branch 276 of
the RTC, to which the Complaint was consequently raffled, in the exercise of its general jurisdiction, cannot
order the transfer of the Complaint to Branch 256, the designated Special Commercial Court. Branch 276
cannot do so on the basis of authority over the case which it did not have. Neither does it have authority
over a co-equal court.
Note that in this case, petitioners, given the labeling of their Complaint as a Civil Case, should suffer the
consequences of its own act. The Office of the Clerk of Court, cannot be faulted for raffling it to the RTC of
general jurisdiction as petitioners themselves invoked such general jurisdiction.
In Calleja v. Panday,16 we likewise took note of the fact that therein plaintiffs petition for quo warranto was
filed as late as 2005, by that time A.M. No. 00-11-03-SC has been in effect for four years, and A.M. No. 03-
03-03-SC effective for almost two years, where there appears no cogent reason why plaintiffs were not
aware of the appropriate court where their petition should be filed.
Such can also be said in this case, albeit there is only one designated Special Commercial Court. With more
reason should it be noted in this case since petitioners herein has even incorrectly labeled their Complaint as
a Civil Case. They cannot claim that it should not be prejudiced by the incorrect raffling of their Complaint,
laying fault solely on the Office of the Clerk of Court.
Indeed, We should, as warranted, require from counsels disciplined knowledge of procedure. Courts should
not themselves correct the procedural mistakes of pleaders. I cannot overemphasize, and ultimately revert
to the fact, that subject matter jurisdiction was conferred by law (Section 5.2 of R.A. No. 8799) to the
appropriate RTC as determined thru the designation by the Supreme Court.
Consistent with the observable conformity with, nay affirmance by the existing administrative issuances
relative to the foregoing opinion, the following directives are reiterated for continuing validity and, therefore,
compliance.
1. A.M. No. 00-11 -03-SC, August 27, 2001
2. A.M. No. 03-03-03-SC, July 1, 2003, and
3. All related issuances
Thus, I vote to DENY the petition. The Orders dated 17 April 2012 and 9 July 2012 of the Regional Trial
Court of Muntinlupa City, Branch 276 in Civil Case No. 11-077 areAFFIRMED. The Complaint docketed as
Civil Case No. 11-077 is DISMISSED for lack of jurisdiction without prejudice to its re-filing in the proper
court.
Endnotes:
Rollo, p. 42; Complaint.

1
2
518 Phil. 801(2006).
3
A.M. No. 00-8-10-SC; AM No. 00-11-03-SC; Administrative Circular No. 08-2001; A.M. No. 03-03-03-SC;
OCA Circular No. 82-2003.
4
514 Phil. 307(2005)
5
660 Phil. 517 (2011), later deleted as citation in the revised ponencias.
6
SEC. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission
over corporations, partnerships and other forms of associations registered with it as expressly granted under
existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases
involving:
(a) Devices or schemes employed by or any acts, of the board of directors, business associates, its officers
or partnership, amounting to fraud and misrepresentation which may be detrimental to the interest of the
public and/or of the stockholder, partners, members of associations or organizations registered with the
Commission;
(b) Controversies arising out of intra-corporate or partnership relations, between and among
stockholders, members, or associates; between any or all of them and the corporation, partnership or
association of which they are stockholders, members or associates, respectively; and between such
corporation, partnership or association and the state insofar as it concerns their individual franchise or right
to exist as such entity; and
(c) Controversies in the election or appointments of directors, trustees, officers or managers of such
corporations, partnerships or associations.
7
Martin, Statutory Construction, 6th Ed., p. 141 citing Martin v. Shippard, 102 S. Co. 2nd, p.
1036; Adamowski v. Bard,A.C., Pa. 193 F. 2d., p. 578; Black on Interpretation of Laws, 322-323; Denvis v.
Roses, 52 P. 333; Shimonek v. Tillanan, 1 P. 2d., 154; and Van Dyke v. Cordova Copper Co., 15Ld2d. 1273.
8
G.R. No. 174971, 15 October 2008, 569 SCRA 154, 183.
9
G.R. No. 162288, 4 April 2007, 520 SCRA 515, 535.
10
G.R. No. 155491, 16 September 2008, 565 SCRA 237, 247-248.
11
635 Phil. 447, 454 (2010).
12
Martin, Statutory Construction 1984 Ed. p. 141 citing Black on Interpretation of Laws, 322-323.
Calleja v. Panday, supra note 2; Home Guaranty Corporation, supra note 5; and Fabia v. Court of
13
Appeals, 11 September 2002, 388 SCRA 574.
14
Home Guaranty Corporation v. R-II Builders, supra note 5.
15
Section 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original jurisdiction:
(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;
(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein,
where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or for civil
actions in Metro Manila, where such the value exceeds Fifty thousand pesos (50,000.00) except actions for
forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred
upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts;
(3) In all actions in admiralty and maritime jurisdiction where he demand or claim exceeds One hundred
thousand pesos (PI00,000.00) or , in Metro Manila, where such demand or claim exceeds Two hundred
thousand pesos (200,000.00);
(4) In all matters of probate, both testate and intestate, where the gross value of the estate exceeds One
hundred thousand pesos (P100,000.00) or, in probate matters in Metro Manila, where such gross value
exceeds Two hundred thousand pesos (200,000.00);
(5) In all actions involving the contract of marriage and marital relations;
jurisdiction or any court, tribunal, person or body exercising judicial or quasi-judicial functions;
(7) In all civil actions and special proceedings falling within the exclusive original jurisdiction of a Juvenile
and Domestic Relations Court and of the Courts of Agrarian Relations as now provided by law; and
(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney's fees,
litigation expenses, and costs or the value of the property in controversy exceeds One hundred thousand
pesos (100,000.00) or, in such other abovementioned items exceeds Two hundred thousand pesos
(200,000.00). (as amended by R.A. No. 7691*)
16
Supra note 2.
CONCURRING OPINION
LEONEN, J.:
I concur with the ponencia's conclusion that the designation of certain Regional Trial Court branches as
Special Commercial Courts does not work to confer jurisdiction over the branches designated as such. It was
an error for the Muntinlupa City Regional Trial Court, Branch 276, to dismiss the Complaint filed by
petitioners. As the ponencia underscores, Branch 276 should have instead transferred the case to the
Muntinlupa City Regional Trial Court, Branch 256, the branch duly designated to perform the Muntinlupa City
Regional Trial Court's functions as a Special Commercial Court. The present Petition must, thus, be granted.
Jurisdiction over what the ponencia collectively refers to as SEC Cases was vested by Republic Act No. 8799,
otherwise known as the Securities Regulation Code, in Regional Trial Courts and is not limited to the
Regional Trial Court branches designated by this court as Special Commercial Courts. It is only the
legislature that has the power "to define, prescribe, and apportion the jurisdiction of various courtsf.]"1 As
Congress does not share this power with this court, in relation with these issues, this court's competence is
limited to "administrative supervision over all courts[,]"2as well as the "[p]romulgat[ion of] rules
concerning . . . pleading, practice, and procedure in all courts[.]"3 It was purely in the exercise of these
powers, and not for the purpose of vesting jurisdiction where previously there was none, that this court
designated certain Regional Trial Court branches as Special Commercial Courts.
The text of Section 5.24 of the Securities Regulation Code, the statutory provision that transferred
jurisdiction over SEC Cases from the Securities and Exchange Commission to the Regional Trial Courts,
bears this out. It refers to Regional Trial Courts in general and in their capacity as courts of general
jurisdiction. It delimits the capacity of this court to designate Regional Trial Court branches as Special
Commercial Courts to only be "in the exercise of its authority[,]"5i.e., administrative supervision and
promulgation of procedural rules. It specifies that the effect of this court's designation is to enable the
branches so specified to "exercise jurisdiction"6 and not to vest jurisdiction.
I
Jurisdiction over all cases enumerated under Section 57 of Presidential Decree No. 902-A, which were
previously under the jurisdiction of the Securities and Exchange Commission, was vested in Regional Trial
Courts by Section 5.2 of the Securities Regulation Code. Section 5.2 reads:
SEC. 5. Powers and Functions of the Commission. - . . .
5.2. The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential Decree No.
902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court:
Provided, That the Supreme Court in the exercise of its authority may designate the Regional Trial Court
branches that shall exercise jurisdiction over these cases. The Commission shall retain jurisdiction over
suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed. cralawlawlibrary
This statutory provision was adopted pursuant to the legislature's power under Article VIII, Section 28 of the
1987 Constitution "to define, prescribe, and apportion the jurisdiction of various courts[.]" In contrast, the
designation of Special Commercial Courts, through this court's November 21, 2000 Resolution in A.M. No.
00-11-03-SC, was pursuant to this court's power under Article VIII, Section 69 of the 1987 Constitution to
exercise "administrative supervision over all courts." A.M. No. 00-11-03-SC did not work to confer
jurisdiction independently of Section 5.2 of the Securities Regulation Code. A.M. No. 00-11-03-SC itself
declares that it was adopted merely "[t]o implement the provisions of Sec. 5.2 of Republic Act No. 8799[.]"10
Congress' power "to define, prescribe, and apportion the jurisdiction of various courts" is constitutionally
established. While it may be true that the allocation of competencies among courts may be incidental and
necessary to the power to adjudicate cases, the sovereign, through the Constitution, deemed it fit for the
legislature to exercise this power to balance and temper judicial power. We cannot, in the guise of judicial
interpretation, disregard a clear command of the Constitution.
The power vested solely and exclusively in Congress has clear limitations: First, Congress cannot diminish
the jurisdiction of this court, which jurisdiction is spelled out in Article VIII, Section 511 of the 1987
Constitution; and second, Congress cannot increase the "appellate jurisdiction of [this court] without its
advice and concurrence."12
The exclusivity and non-delegability of Congress' power "to define, prescribe, and apportion the jurisdiction
of various courts" is long settled.
In University of Santo Tomas v. Board of Tax Appeals,13 this court was confronted with an issuance by the
President of the Philippines, i.e., Executive Order No. 401-A, that was purportedly enacted pursuant to an
enabling statute, Republic Act No. 422.14 Executive Order No. 401-A created the Board of Tax Appeals and
defined its jurisdiction, as follows: chanRoblesvirtualLawlibrary
SEC. 8. The Board of Tax Appeals shall have exclusive jurisdiction to hear and decide administratively as
hereinafter provided —
(1) All appeals from decisions of the Collector of Internal Revenue in cases involving disputed assessments,
refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other
matters arising under the National Internal Revenue Code or other law or part of law administered by the
Bureau of Internal Revenue[.]15
cralawlawlibrary
This court declared Executive Order No. 401-A null and void to the extent where it interfered with the
jurisdiction of Courts of First Instance, but sustained its validity in all other respects.16 This court
emphasized that, in the first place, Republic Act No. 422's purpose was limited only to "effect[ing] a
reorganization of the different bureaus, offices, agencies and instrumentalities of the executive branch of the
government."17 Republic Act No. 422 did not go so far as to enable the President to create a body or to
promulgate an issuance which, "in effect deprives the courts of first instance of their jurisdiction in actions
for recovery of taxes which is granted to them by section 30618 of the National Internal Revenue Code."19
For that matter, even though Republic Act No. 422 actually enabled the President to do so, this statutory
grant (i.e., delegation) of power would have been invalid. This court categorically stated that under the
Constitution, "Congress alone has 'the power to define, prescribe, and apportion the jurisdiction of the
various courtsf,]'"20 and that this is a power that cannot be delegated by Congress.21 Pursuant to this power,
jurisdiction vested in Courts of First Instance was conferred on them by statute, i.e., an act of the
legislature, and the President, the existence of a supposed enabling statute notwithstanding, cannot himself
define their jurisdiction:
But Executive Order No. 401-A does not merely create the Board of Tax Appeals, which, as an
instrumentality of the Department of Finance, may properly come within the purview of Republic Act No.
422, but goes as far as depriving the courts of first instance of their jurisdiction to act on internal revenue
cases a matter which is foreign to it and which comes within the exclusive province of Congress. This the
Chief Executive cannot do, nor can that power be delegated by Congress, for under our Constitution,
Congress alone has "the power to define, prescribe, and apportion the jurisdiction of the various
courts. "22(Emphasis supplied, citation omitted) cralawlawlibrary
The same conclusions were reached by this court inCorominas, Jr., and Corominas & Co. v. Labor Standard
Commission, et al.23 Here, this court found the Government Survey and Reorganization Commission to have
exceeded its authority when, through its Reorganization Plan No. 20-A,24 it vested jurisdiction over money
claims arising from labor standards violations in the regional offices of the (then) Department of
Labor.25 Reorganization Plan No. 20-A ran counter to Republic Act No. 602, the then Minimum Wage Law,
Sections 15(d),26 15(e),27 and 16(a)28 of which vested jurisdiction over money claims cases in a "competent
court."
In Corominas, this court noted that Republic Act No. 997,29the statute creating the Government Survey and
Reorganization Commission, did not enable the Commission to create a body exercising judicial power and
intruding into the jurisdiction of courts.30 So, too, this court emphasized that Congress could not have done
so "as the Legislature may not and cannot delegate its power to legislate or create courts of justice to any
other agency of the Government."31
Bereft of the power "to define, prescribe, and apportion the jurisdiction of various courts[,]" this court's
competence is limited to "administrative supervision over all courts[,]"32 as well as the "[p]romulgat[ion]
[of] rules concerning . . . pleading, practice, and procedure in all courts[.]"33
II
Section 5.2 of the Securities Regulation Code's investiture of jurisdiction over erstwhile SEC Cases in
Regional Trial Courts is clear: "The Commission's jurisdiction over all cases enumerated under section 5 of
Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate
Regional Trial Court[.]"
Concededly, the use of the disjunctive conjunction "or" leads to some degree of confusion. Customarily, the
use of "or" denotes that the items mentioned are alternative to each other. Thus, Section 5.2 appears to
mean that "Courts of general jurisdiction" are distinct from Regional Trial Courts and that one can stand in
place of the other. However, it is settled that, in our judicial system, it is the Regional Trial Courts which
themselves stand as courts of general jurisdiction. They are one and the same. As this court stated
in Durisol Philippines, Inc. v. Court of Appeals:34 chanroblesvirtuallawlibrary
The regional trial court, formerly the court of first instance, is a court of general jurisdiction. All cases, the
jurisdiction over which is not specifically provided for by law to be within the jurisdiction of any other court,
fall under the jurisdiction of the regional trial court.35 cralawlawlibrary
The consideration of Regional Trial Courts as courts of general jurisdiction proceeds from Section 19(6) of
Batas Pambansa Big. 129, otherwise known as the Judiciary Reorganization Act of 1980: chanRoblesvirtualLawlibrary
SEC. 19. Jurisdiction in civil cases.—Regional Trial Courts shall exercise exclusive original jurisdiction: chanRoblesvirtualLawlibrary
....
6. In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising judicial
or quasi-judicial functions[.]cralawlawlibrary
The identity of Regional Trial Courts as courts of general jurisdiction is no bar to designating certain Regional
Trial Court branches to focus on certain types of cases. To the contrary, it is this identity which permits it.
Designating branches to focus on certain types of cases, in order to facilitate the efficient dispensation of
justice, is well within their nature as courts competent to take cognizance of cases not falling under the
exclusive jurisdiction of any other court, tribunal, person, or body. Designating branches as such balances
two considerations: on the one hand, their nature as courts, which because they have general jurisdiction,
can exercise jurisdiction over the specific matter to which they were assigned; and, on the other, their duty
to speedily administer justice.
Accordingly, this designation does not work to confer jurisdiction over these branches when previously there
was none. It merely exhorts them to proceed with dispatch and deftness. This is evident from Section 23 of
the Judiciary Reorganization Act of 1980: chanRoblesvirtualLawlibrary
SEC. 23. Special jurisdiction to try special cases. — The Supreme Court may designate certain branches of
the Regional Trial Courts to handle exclusively criminal cases, juvenile and domestic relations cases,
agrarian cases, urban land reform cases which do not fall under the jurisdiction of quasi-judicial bodies and
agencies, and/or such other special cases as the Supreme Court may determine in the interest of a speedy
and efficient administration of justice. (Emphasis supplied) cralawlawlibrary
Section 23 is not a blanket license for this court to create new courts of limited jurisdiction. It is an enabling
mechanism, empowering this court to fulfill its function as the authority having "administrative supervision
over all courts[.]"36
When the legislature (at that time, it was the interim Batasang Pambansa) adopted the Judiciary
Reorganization Act of 1980, it created all Regional Trial Courts as courts of general jurisdiction, equally
competent to exercise the jurisdiction vested in them by the same statute. So, too, when the Securities
Regulation Code transferred jurisdiction over SEC Cases, it did so to all of our courts which were recognized
as courts of general jurisdiction, that is, to Regional Trial Courts.
Section 5.2's investiture of jurisdiction over Regional Trial Courts notwithstanding, it also contains a proviso
enabling this court to "in the exercise of its authority . . . designate the Regional Trial Court branches that
shall exercise jurisdiction over [the] cases."
Section 5.2's qualification that this court's power to designate is necessarily only "in the exercise of its
authority" is illuminating. It is to say that, in going about its task of designating, this court cannot act in
excess of its constitutional authority. This affirms the Constitution's segregation of the competencies of
Congress from those of this court. It affirms the exclusivity of Congress' power "to define, prescribe, and
apportion the jurisdiction of various courts[.]" This affirms the reality that, bereft of this power, this court's
competence is limited to "administrative supervision over all courts[,]"37 as well as the "[p]romulgat[ion]
[of] rules concerning . . . pleading, practice, and procedure in all courts[.]"38
Accordingly, it was exclusively in the performance of these competencies that this court adopted its
November 21, 2000 Resolution in A.M. No. 00-11-03-SC and specified the Regional Trial
Court branches which are to perform functions as Special Commercial Courts.
Equally illuminating is Section 5.2's specification that this court's competence is in designating which
branches shall "exercise jurisdiction[.]" As deftly emphasized by the ponencia, conferment of jurisdiction
over the subject matter of a case is a matter of substantive law.39 In contrast, incidents pertaining to the
exercise of jurisdiction are a matter of procedure.40
A.M. No. 00-11-03-SC did not create a new class of courts. Its purpose is operational efficiency. In its own
words, it was adopted to serve "the interest of a speedy and efficient administration of justice[.]"41 It is,
thus, but a procedural and administrative mechanism aimed (to echo the words of the ponencia) "to
promote expediency and efficiency in the exercise of the [Regional Trial Courts'] jurisdiction[.]"42
Also in its own words, A.M. No. 00-11-03-SC was adopted only "[t]o implement the provisions of Sec. 5.2 of
Republic Act No. 8799 [or the Securities Regulation Code]."43 Thus, in adopting A.M. No. 00-11-03-SC, this
court was fully cognizant of how Section 5.2 limited its authority to designate only "in the exercise of its
authority[.]" Indeed, this court could not have intended to overstep the constitutional limits of its authority.
III
A.M. No. 00-11-03-SC is not the only administrative issuance of this court specifying Regional Trial Court
branches which are to focus on certain types of cases, not because this court created or transformed them
into special types of courts in lieu of their being courts of general jurisdiction, but solely in the interest of
expediency and efficiency.
In this court's August 1, 2000 Resolution in A.M. No. 00-8-01-SC,44 this court designated certain Regional
Trial Court branches as "Special Courts for drugs cases, which shall hear and decide all criminal cases in
their respective jurisdictions involving violations of the Dangerous Drugs Act [of] 1972 (R.A. No. 6425) as
amended, regardless of the quantity of the drugs involved."45
This court's Resolution in A.M. No. 00-8-01-SC made no pretenses that it was creating new courts of limited
jurisdiction or transforming Regional Trial Courts into courts of limited jurisdiction. Instead, it repeatedly
referred to its operational and administrative purpose: efficiency. Its preambular clauses emphasized that
the designation of Special Courts was being made because "public policy and public interest demand that
[drug] cases ... be expeditiously resolved[,]"46 and in view of "the consensus of many that the designation of
certain branches of the Regional Trial Courts as Special Courts to try and decide drug cases . . . may
immediately address the problem of delay in the resolution of drugs cases."47 Moreover, its dispositive
portion provides that it was being adopted "pursuant to Section 23 of [the Judiciary Reorganization Act of
1980], [and] in the interest of speedy and efficient administration of justice[.]"48
Consistent with these operational and administrative aims, this court's October 11, 2005 Resolution in A.M.
No. 05-9-03-SC,49 which addressed the question of whether "special courts for dr[u]g cases [may] be
included in the raffle of civil and criminal cases other than drug related cases[,]"50stated: chanRoblesvirtualLawlibrary
The rationale behind the exclusion of dr[u]g courts from the raffle of cases other than drug cases is to
expeditiously resolve criminal cases involving violations of [R.A. No.] 9165 (previously, of [R.A. No.] 6435).
Otherwise, these courts may be sidelined from hearing drug cases by the assignment of non-drug cases to
them and the purpose of their designation as special courts would be negated. The faithful observance of the
stringent time frame imposed on drug courts for deciding dr[u]g related cases and terminating proceedings
calls for the continued implementation of the policy enunciated in A.M. No. 00-8-01-SC.51 cralawlawlibrary
To reiterate, at no point did this court declare the Regional Trial Court branches identified in these
administrative issuances as being transformed or converted into something other than Regional Trial Courts.
They retain their status as such and, along with it, the Judiciary Reorganization Act of 1980's
characterization of them as courts of general jurisdiction. However, this court, in the interest of facilitating
operational efficiency and promoting the timely dispensation of justice, has opted to make these Regional
Trial Court branches focus on a certain class of the many types of cases falling under their jurisdiction.
Having mentioned this court's Resolutions, which designated Regional Trial Court branches as so-called
Drugs Courts, it is crucial to draw the distinction between, on the one hand, this court's designation of
certain Regional Trial Court branches as such Drugs Courts, or (as is the subject of this case) Commercial
Courts, and, on the other, this court's designation of certain Regional Trial Court branches as so-called
Family Courts.
Similarly through a Resolution in an Administrative Matter, this . court's February 1, 2000 Resolution in A.M.
No. 99-11-07-SC52 designated certain Regional Trial Court branches as Family Courts. As with Drugs Courts,
this court declared this designation of Family Courts to be "in the interest of the expeditious, effective and
efficient administration of justice[.]"53 This court further specified that this designation was in order "[t]o
implement the provisions of Section 17 of Republic Act No. 8369, otherwise known as the 'Family Courts Act
of 1997[.]'"54
This court's February 1, 2000 Resolution in A.M. No. 99-11-07-SC is, thus, an offshoot of the Family Courts
Act of 1997. Section 3 of this statute did not add to, clarify, or make specific mention of the types of cases
cognizable by Regional Trial Courts. Rather, it created independent Family Courts that are distinct from
Regional Trial Courts. Section 5 spelled out the exclusive original jurisdiction of Family Courts, that is,
subject matter jurisdiction that, henceforth, was no longer within the jurisdiction of Regional Trial Courts.
Parenthetically, it is well to emphasize that the Family Courts Act of 1997 is a legislative enactment.
Accordingly, it was well within its bounds to create courts and define their jurisdiction.
Sections 3 and 5 of the Family Courts Act of 1997 provide: chanRoblesvirtualLawlibrary
SEC. 3. Establishment of Family Courts. - There shall be established a Family Court in every province and
city in the country. In case where the city is the capital of the province, the Family Court shall be established
in the municipality which has the highest population.
SEC. 5. Jurisdiction of Family Courts. - The Family Courts shall have exclusive original jurisdiction to hear
and decide the following cases: chanRoblesvirtualLawlibrary
a) Criminal cases where one or more of the accused is below eighteen (18) years of age but not less than
nine (9) years of age or where one or more of the victims is a minor at the time of the commission of the
offense: Provided, That if the minor is found guilty, the court shall promulgate sentence and ascertain any
civil liability which the accused may have incurred.
The sentence, however, shall be suspended without need of application pursuant to Presidential Decree No.
603, otherwise known as the "Child and Youth Welfare Code";
b) Petitions for guardianship, custody of children, habeas corpus in relation to the latter;
c) Petitions for adoption of children and the revocation thereof;
d) Complaints for annulment of marriage, declaration of nullity of marriage and those relating to marital
status and property relations of husband and wife or those living together under different status and
agreements, and petitions for dissolution of conjugal partnership of gains;
e) Petitions for support and/or acknowledgment;
f) Summary judicial proceedings brought under the provisions of Executive Order No. 209, otherwise known
as the "Family Code of the Philippines";
g) Petitions for declaration of status of children as abandoned, dependent or neglected children, petitions for
voluntary or involuntary commitment of children; the suspension, termination, or restoration of parental
authority and other cases cognizable under Presidential Decree No. 603, Executive Order No. 56, (Series of
1986), and other related laws;
h) Petitions for the constitution of the family home;
i) Cases against minors cognizable under the Dangerous Drugs Act, as amended;
j) Violations of Republic Act No. 7610, otherwise known as the "Special Protection of Children Against Child
Abuse, Exploitation and Discrimination Act," as amended by Republic Act No. 7658; and
k) Cases of domestic violence against: chanRoblesvirtualLawlibrary
1) Women - which are acts of gender based violence that results, or are likely to result in physical, sexual or
psychological harm or suffering to women; and other forms of physical abuse such as battering or threats
and coercion which violate a woman's personhood, integrity and freedom of movement; and
2) Children - which include the commission of all forms of abuse, neglect, cruelty, exploitation, violence, and
discrimination and all other conditions prejudicial to their development.
If an act constitutes a criminal offense, the accused or batterer shall be subject to criminal proceedings and
the corresponding penalties.
If any question involving any of the above matters should arise as an incident in any case pending in the
regular courts, said incident shall be determined in that court. cralawlawlibrary
This court's designation of Family Courts through its February 1, 2000 Resolution in A.M. No. 99-11-07-SC
was pursuant to a transitory provision: Section 17 of the Family Courts Act of 1997. Section 17 required this
court to, in the meantime, designate Regional Trial Court branches to act as Family Courts. This designation
was of a temporary nature, effective only in the intervening period pending the establishment of Family
Courts: chanRoblesvirtualLawlibrary
SEC. 17. Transitory Provisions. - Pending the establishment of such Family Courts, the Supreme Court shall
designate from among the branches of the Regional Trial Court at least one Family Court in each of the cities
of Manila, Quezon, Pasay, Caloocan, Makati, Pasig, Mandaluyong, Muntinlupa, Laoag, Baguio, Santiago,
Dagupan, Olongapo, Cabanatuan, San Jose, Angeles, Cavite, Batangas, Lucena, Naga, Iriga, Legazpi, Roxas,
Iloilo, Bacolod, Dumaguete, Tacloban, Cebu, Mandaue, Tagbilaran, Surigao, Butuan, Cagayan de Oro,
Davao, General Santos, Oroquieta, Ozamis, Dipolog, Zamboanga, Pagadian, Iligan, and in such other places
as the Supreme Court may deem necessary.
Additional cases other than those provided in Sec. 5 may be assigned to the Family Courts when their
dockets permit: Provided, That such additional cases shall not be heard on the same day family cases are
heard.
In areas where there are no Family Courts, the cases referred to in Section 5 of this Act shall be adjudicated
by the Regional Trial Court.
cralawlawlibrary
This court's designation of Family Courts, insofar as there was a need to tentatively provide for specialized
courts, proceeded from the same mandate which animated its designation of Drugs Courts, as well as
Special Commercial Courts. It was pursuant to the power of this court to administratively supervise lower
courts.
The status quo engendered by A.M. No. 99-11-07-SC persists to the present day, more than 15 years after
its adoption and almost 18 years after the adoption of the Family Courts Act of 1997. However, the
delineation of the exclusive original jurisdiction of Family Courts as against the subject matter jurisdiction of
Regional Trial Courts remains. It is just that, from the time of its enactment, the Family Courts Act of 1997
has not been fully implemented. This state of affairs is a fact acknowledged by this court, as, on August 13,
2014, this court issued Memorandum Order No. 20-14 establishing a Committee on Family Courts and
Juvenile Concerns, the mandate of which includes the drafting of a plan for effecting the organization of
Family Courts.
I have no doubt that this Committee, under the present and able leadership of Justice Teresita J. Leonardo-
de Castro, will do all it can to provide a workable and comprehensive plan that will convince Congress to
create and fund the statutorily mandated Family Courts. However, this temporary state of affairs can only be
remedied by an act of Congress. Hopefully, in due time, Congress can proceed to complete what is
mandated by the Family Courts Act of 1997.
ACCORDINGLY, I vote to GRANT the Petition for Review on Certiorari. The Orders dated April 17, 2012
and July 9, 2012 of the Muntinlupa City Regional Trial Court, Branch 276, in Civil Case No. 11-077 must
be REVERSED and SET ASIDE.Instead of being dismissed, Civil Case No. 11-077, must beREFFERRED to
the Executive Judge of the Muntinlupa City Regional Trial Court, in order that it may be ASSIGNED to the
Muntinlupa City Regional Trial Court, Branch 256, the branch duly designated to perform the Muntinlupa City
Regional Trial Court's functions as a Special Commercial Court.
Endnotes:
1
Const., art. VIII, sec. 2.
2
Const., art. VIII, sec. 6.
CONST., art. VIII, sec. 5(5).

3
4
Securities Code, sec. 5.2 provides: chanRoblesvirtualLawlibrary
SEC. 5. Powers and Functions of the Commission.- . . .
5.2. The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential Decree No.
902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court:
Provided, That the Supreme Court in the exercise of its authority may designate the Regional Trial Court
branches that shall exercise jurisdiction over these cases. The Commission shall retain jurisdiction over
suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.
5
SECURITIES CODE, sec. 5.2.
6
SECURITIES CODE, sec. 5.2.
7
Pres. Decree No. 902-A (1976), sec. 5 provides: chanRoblesvirtualLawlibrary
SEC. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission
over corporations, partnerships and other forms of associations registered with it as expressly granted under
existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving.
a. Devices or schemes employed by or any acts, of the board of

directors, business associates, its officers or partners, amounting
to fraud and misrepresentation which may be detrimental to the
interest of the public and/or of the stockholder, partners,
members of associations or organizations registered with the
Commission;
b. Controversies arising out of intra-corporate or partnership
relations, between and among stockholders, members, or
associates; between any or all of them and the corporation,
partnership or association of which they are stockholders,
members or associates, respectively; and between such
corporation, partnership or association and the state insofar as it
concerns their individual franchise or right to exist as such entity;
and
c. Controversies in the election or appointments of directors,

trustees, officers or managers of such corporations, partnerships
or associations.
8
Const., art. VIII, sec. 2 provides: chanRoblesvirtualLawlibrary
SECTION 2. The Congress shall have the power to define, prescribe, and apportion the jurisdiction of various
courts but may not deprive the Supreme Court of its jurisdiction over cases enumerated in Section 5 hereof.
No law shall be passed reorganizing the Judiciary when it undermines the security of tenure of its Members.
9
CONST., art. VIII, sec. 6 provides: chanRoblesvirtualLawlibrary
SECTION 6. The Supreme Court shall have administrative supervision over all courts and the personnel
thereof.
10
A.M. No. 00-11-03-SC (2000), first par. provides: chanRoblesvirtualLawlibrary
To implement the provisions of Sec. 5.2 of Republic Act No. 8799 (The Securities Regulation Code), and in
the interest of a speedy and efficient administration of justice and subject to the guidelines hereinafter set
forth, the following branches of the Regional Trial Courts (RTC) are hereby designated to try and decide
Securities and Exchange Commission (SEC) cases enumerated in Sec. 5 of P.D. No. 902-A (Reorganization
of the Securities and Exchange Commission), arising within their respective territorial jurisdictions with
respect to the National Capital Judicial Region, and within the respective provinces in the First to the Twelfth
Judicial Regions[.]
11
CONST., art. VIII, sec. 5 provides: chanRoblesvirtualLawlibrary
SECTION 5. The Supreme Court shall have the following powers: chanRoblesvirtualLawlibrary
(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and
over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may
provide, final judgments and orders of lower courts in: chanRoblesvirtualLawlibrary
(a) All cases in which the constitutionality or validity of any treaty, international or executive agreement,
law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. (b) All
cases involving the legality of any tax, impost, assessment, or toll, or any penalty imposed in relation
thereto. (c) All cases in which the jurisdiction of any lower court is in issue. (d) All criminal cases in which
the penalty imposed is reclusion perpetua or higher. (e) All cases in which only an error or question of law is
involved. (3) Assign temporarily judges of lower courts to other stations as public interest may require. Such
temporary assignment shall not exceed six months without the consent of the judge concerned.
(4) Order a change of venue or place of trial to avoid a miscarriage of justice.
and procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal assistance to
the underprivileged. Such rules shall provide a simplified and inexpensive procedure for the speedy
disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or
modify substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall remain
effective unless disapproved by the Supreme Court.
(6) Appoint all officials and employees of the Judiciary in accordance with the Civil Service Law.
12
CONST., art. VI, sec. 30 provides: chanRoblesvirtualLawlibrary
SECTION 30. No law shall be passed increasing the appellate jurisdiction of the Supreme Court as provided
in this Constitution without its advice and concurrence.
13
93 Phil. 376 (1953) [Per J. Bautista Angelo, En Banc].
14
Id. at 379; Rep. Act No. 422 (1950), otherwise known as An Act Authorizing the President of the
Philippines to Reorganize within One Year the Different Executive Departments, Bureaus, Offices, Agencies
and Other Instrumentalities of the Government, including the Corporations Owned or Controlled by it. Sec. 2
provides: SEC. 2. For the purpose of carrying out the policy set forth in section one of this Act, the President
of the Philippines is hereby authorized to effect by executive order from time to time, for a period not
exceeding one year from the date of the approval of this Act, and within the limits of the total current
appropriation, such reforms and changes in the different executive departments, bureaus, offices, agencies
and other instrumentalities of the government including the corporations owned or controlled by the
government as he may deem necessary, with the power to diminish, add to or abolish those existing and
create new ones; consolidate related undertakings; transfer functions, appropriations, equipment, property,
records, and personnel from one department, bureau, office, agency or instrumentality to another; to
eliminate duplicated services or authorize new ones not provided for; classify, combine, split or abolish
positions; standardize salaries and do whatever is necessary and desirable to effect economy and promote
efficiency in the government service.
University of Santo Tomas v. Board of Tax Appeals, 93 Phil. 376, 379 (1953) [Per J. Bautista Angelo, En
15
Bane].
16
Id. at 382.
17
Id.
18
Id. at 380. University of Santo Tomas v. Board of Tax Appeals cites Sec. 306: SEC. 306. Recovery of tax
erroneously or illegally collected. — No suit or proceeding shall be maintained in any court for the recovery
of any national internal-revenue tax hereafter alleged to have been erroneously or illegally assessed or
collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have
been excessive or in any manner wrongfully collected, until a claim for refund or credit has been duly filed
with the Collector of Internal Revenue; but such suit or proceeding may be maintained, whether or not such
tax, penalty, or sum has been paid under protest or duress. In any case, no such suit or proceeding shall be
begun after the expiration of two years from the date of payment of the tax or penalty.
19
Id. at 381.
20
Id. at 382.
21
Id.
22
Id.
23
112 Phil. 551 (1961) [Per J. Labrador, En Bane].
24
Id. at 557. Corominas, Jr., and Corominas & Co. v. Labor Standard Commission, et al. cites
Reorganization Plan No. 20-A, sec. 25: 25. Each Regional Office shall have original and exclusive jurisdiction
over all cases affecting all money claims arising from violations of labor standards on working conditions,
including but not restrictive to: unpaid wages, underpayment, overtime, separation pay, and maternity
leave of employees/laborers; and unpaid wages, overtime, separation pay, vacation pay, and payment for
medical services of domestic help.
25
Id. at 562.
26
Rep. Act No. 602 (1951), sec. 15(d) provides: chanRoblesvirtualLawlibrary
SEC. 15. Penalties and recovery of wage due under this Act.-
d. The Secretary may bring an action in any competent court to recover the wages owing to an employee
under this Act, with legal interest. Any sum thus recovered by the Secretary on behalf of an employee
pursuant to this subsection shall be held in a special deposit account and shall be paid, on order of the
Secretary, directly to the employee or employees affected. Any such sums not paid to an employee because
he cannot be located within a period of three years shall be covered into the Treasury as miscellaneous
receipts.
27
Rep. Act No. 602(1951), sec. 15(e) provides: chanRoblesvirtualLawlibrary
SEC. 15. Penalties and recovery of wage due under this Act-
e. Any employer who underpays an employee in violation of this Act shall be liable to the employee affected
in the amount of the unpaid wages with legal interest. Action to recover such liability may be maintained in
any competent court by anyone or more employees on behalf of himself or themselves. The court in such
action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's
fee which shall not exceed ten per cent of the amount awarded to the plaintiffs, unless the amount awarded
is less than one hundred pesos, in which event the fee may be ten pesos, but not in excess of that amount.
Payment of the amount found due to the plaintiffs shall be made directly to the plaintiffs, in the presence of
a representative of the Secretary of the Court. In the event payment is witnessed by the court of its
representative, the Secretary shall be notified within ten days of payment that the payment has been made.
28
Rep. Act No. 602(1951), sec. 16 provides: SEC. 16. Jurisdiction of the courts.-
a. The Court of First Instance shall have jurisdiction to restrain violations of this act; action by the Secretary
or by the employees affected to recover underpayment may be brought in any competent Court, which shall
render its decision on such cases within fifteen days from the time the case has been submitted for decision;
in appropriate instances, appeal from the decisions of these courts on any action under this Act shall be in
accordance with applicable law.
29
An Act Creating the Government Survey and Reorganization Commission and Appropriating Funds
Therefor.
30
Corominas, Jr., and Corominas & Co. v. Labor Standard Commission, et al., 112 Phil. 551, 561 (1961)
[Per J. Labrador, En Banc].
31
Id.
32
CONST., art. VIII, sec. 6.
33
CONST., art. VIII, sec. 5(5).
34
427 Phil. 604 (2002) [Per J. Ynares-Santiago, First Division].
35
Id. at 612.
36
CONST., art. VIII, sec. 6.
37
Const, art. VIII, sec. 6.
38
Const, art. VIII, sec. 5(5). j9 Ponencia, p. 4.
See Lozada v. Bracewell, G.R. No. 179155, April 2, 2014, 720 SCRA 371, 381 [Per J. Perlas-Bernabe,
40
Second Division].
41
A.M. No. 00-11-03-SC (2000).
42
Ponencia, p. 8.
43
A.M. No. 00-11-03-SC (2000).
44
Resolution Designating Certain Branches of the Regional Trial Courts as Special Courts for Drugs Cases
Regardless of the Quantity of the Drugs Involved.
45
A.M. No. 00-8-01-SC (2000).
46
A.M. No. 00-8-01-SC (2000).
47
A.M. No. 00-8-01 -SC (2000).
48
A.M. No. 00-8-01-SC (2000).
49
Re: Request for Clarification on Whether Drug Court[s] should be Included in the Regular Raffle.
50
A.M. No. 05-9-03-SC (2005).
51
A.M. No. 05-9-03-SC (2005).
52
Designation of Certain Branches of the Regional Trial Courts as Family Courts.
53
A.M. No. 99-11-07-SC (2000).
54
A.M. No. 99-11-07-SC (2000).
People v. Valdez, GR 216007-09, 8 December 2015
EN BANC
G.R. Nos. 216007-09, December 08, 2015
PEOPLE OF THE PHILIPPINES, Petitioner, v. LUZVIMINDA S. VALDEZ AND THE SANDIGANBAYAN

(FIFTH DIVISION), Respondent.
DECISION
PERALTA, J.:
This special civil action for certiorari under Rule 65 of the Rules of Court (Rules) seeks to nullify and set
aside the October 10, 2014 Resolution1 of public respondent Sandiganbayan Fifth Division, the dispositive
portion of which states:
WHEREFORE, the (i) Motion to Set Aside No Bail Recommendation and to Fix the Amount of Bail and the
(ii) Urgent Supplemental Motion to the Motion to Set Aside No Bail Recommendation and to Fix the Amount
of Bail with Additional Prayer to Recall/List Warrant of Arrest filed by accused Luzviminda S. Valdez,
are GRANTED.
Let the Order of Arrest issued in Criminal Case Nos. SB-14-CRM-0321, 0322 and 0324 adopting the "no bail"
recommendation of the Office of the Ombudsman be RECALLED. Instead, let an Order of arrest in said
cases be issued anew, this time, fixing the bail for each offense charged in the amount of Two Hundred
Thousand Pesos (P200,000.00).
SO ORDERED.2 ChanRoblesVirtualawlibrary
The case stemmed from the Joint Affidavit3 executed by Sheila S. Velmonte-Portal and Mylene T. Romero,
both State Auditors of the Commission on Audit Region VI in Pavia, Iloilo, who conducted a post-audit of the
disbursement vouchers (D.V.) of the Bacolod City Government. Among the subjects thereof were the
reimbursements of expenses of private respondent Luzviminda S. Valdez (Valdez), a former mayor of
Bacolod City, particularly:
1. D.V. No. 6 dated January 8, 2004 amounting to P80,000.00;
2. D.V. No. 220 dated March 24, 2004 amounting to P68,000.00;
3. D.V. No. 278 dated April 13, 2004 amounting to P19,350.00; and
4. D.V. No. 325 dated April 30, 2004 amounting to P111,800.00 for Cash Slip No. 193402.4
Based on the verification conducted in the establishments that issued the official receipts, it was alleged that
the cash slips were altered/falsified to enable Valdez to claim/receive reimbursement from the Government
the total amount of P279,150.00 instead of only P4,843.25; thus, an aggregate overclaim of P274,306.75.
The Public Assistance and Corruption Prevention Office (PACPO), Office of the Ombudsman - Visayas
received the joint affidavit, which was thereafter resolved adverse to Valdez.
Consequently, Valdez was charged with eight cases four of which (SB-14-CRM-0317 to 0320) were for
Violation of Section 3 (e) of Republic Act No. 3019, while the remaining half (SB-14-CRM-0321 to 0324)
were for the complex crime of Malversation of Public Funds thru Falsification of Official/Public Documents
under Articles 2175 and 171,6 in relation to Article 487 of the Revised Penal Code (RPC). All the cases were
raffled before public respondent.
Since the Ombudsman recommended "no bail" in SB-14-CRM-0321, 0322, and 0324, Valdez, who is still at-
large, caused the filing of a Motion to Set Aside No Bail Recommendation and to Fix the Amount of Bail.8 She
argued that the three cases are bailable as a matter of right because no aggravating or modifying
circumstance was alleged; the maximum of the indeterminate sentence shall be taken from the medium
period that ranged from 18 years, 8 months and 1 day to 20 years; and applying Article 48 of the RPC, the
imposable penalty is 20 years, which is the maximum of the medium period.
Petitioner countered in its Comment/Opposition9 that the Indeterminate Sentence Law (ISL) is inapplicable
as the attending circumstances are immaterial because the charge constituting the complex crime have the
corresponding penalty of reclusion perpetua. Since the offense is punishable by reclusion perpetua, bail is
discretionary. Instead of a motion to fix bail, a summary hearing to determine if the evidence of guilt is
strong is, therefore, necessary conformably with Section 13, Article III of the 1987 Constitution and Section
4, Rule 114 of the Rules.
Due to the issuance and release of a warrant of arrest, Valdez subsequently filed an Urgent Supplemental
Motion to the Motion to Set Aside No Bail Recommendation and to Fix the Amount of Bail with Additional
Prayer to Recall/Lift Warrant of Arrest.10 Petitioner filed a Comment/Opposition thereto.11 Later, the parties
filed their respective Memorandum of Authorities.12
As aforesaid, on October 10, 2014, public respondent granted the motions of Valdez. It recalled the arrest
order issued in Criminal Case Nos. SB-14-CRM-0321, 0322 and 0324. In lieu thereof, a new arrest order was
issued, fixing the bail for each offense charged in said cases in the amount of Two Hundred Thousand Pesos
(P200,000.00). Without filing a motion for reconsideration, petitioner elevated the matter before Us to
resolve the lone issue of whether an accused indicted for the complex crime of Malversation of Public Funds
thru Falsification of Official/Public Documents involving an amount that exceeds P22,000.00 is entitled to
bail as a matter of right.
The Court shall first tackle Valdez's procedural objection. She avers that the petition must be dismissed
outright on the ground that it was filed without first filing a motion for reconsideration before public
respondent, and that, even if there are exceptions to the general rule, this case does not fall under any of
them.
We disagree.
The general rule is that a motion for reconsideration is a condition sine qua non before a petition
forcertiorari may lie, its purpose being to grant an opportunity for the court a quo to correct any error
attributed to it by a re-examination of the legal and factual circumstances of the case.
However, the rule is not absolute and jurisprudence has laid down the following exceptions when the filing of
a petition for certiorari is proper notwithstanding the failure to file a motion for reconsideration:
(a) where the order is a patent nullity, as where the court a quo has no jurisdiction;
(b) where the questions raised in the certiorari proceedings have been duly raised and passed upon by the
lower court, or are the same as those raised and passed upon in the lower court;
(c) where there is an urgent necessity for the resolution of the question and any further delay would
prejudice the interests of the Government or of the petitioner or the subject matter of the petition is
perishable;
(d) where, under the circumstances, a motion for reconsideration would be useless;
(e) where petitioner was deprived of due process and there is extreme urgency for relief;
(f) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the
trial court is improbable;
(g) where the proceedings in the lower court are a nullity for lack of due process;
(h) where the proceeding was ex parte or in which the petitioner had no opportunity to object; and,
(i) where the issue raised is one purely of law or public interest is involved.13ChanRoblesVirtualawlibrary
The issue being raised here is one purely of law and all the argument, pros and cons were already raised in
and passed upon by public respondent; thus, filing a motion for reconsideration would be an exercise in
futility. Likewise, as petitioner claims, the resolution of the question raised in this case is of urgent necessity
considering its implications on similar cases filed and pending before the Sandiganbayan. As it appears,
there have been conflicting views on the matter such that the different divisions of the anti-graft court issue
varying resolutions. Undeniably, the issue is of extreme importance affecting public interest. It involves not
just the right of the State to prosecute criminal offenders but, more importantly, the constitutional right of
the accused to bail.
Now, on the main issue: chanRoblesvirtualLawlibrary
The controversy is, in fact, not one of first impression. Mañalac, Jr. v. People14 already resolved that an
accused charged with Malversation of Public Funds thru Falsification of Official/Public Documents where the
amount involved exceeds P22,000.00 is not entitled to bail as a matter of right because it has an actual
imposable penalty of reclusion perpetua.
In Mañalac, Jr., the defendants argued that they should be allowed to post bail since reclusion perpetua is
not the prescribed penalty for the offense but merely describes the penalty actually imposed on account of
the fraud involved. It was also posited that Article 48 of the RPC applies "only after the accused has been
convicted in a full-blown trial such that the court is mandated to impose the penalty of the most serious
crime," and that the reason for the imposition of the penalty of the most serious offense is "only for the
purpose of determining the correct penalty upon the application of the Indeterminate Sentence Law." This
Court, through the Third Division, however, denied the petition and resolved in the affirmative the issue of
whether the constitutional right to bail of an accused is restricted in cases whose imposable penalty ranges
from reclusion temporal maximum toreclusion perpetua. Citing People v. Pantaleon, Jr., et al.,15 in relation
to Section 13, Article III of the Constitution and Section 7, Rule 114 of the Rules, it was held that Mañalac,
Jr. is not entitled to bail as a matter of right since he is charged with a crime whose penalty is reclusion
perpetua.
To recall, the amounts involved in Pantaleon, Jr. were manifestly in excess of P22,000.00. We opined that
the Sandiganbayan correctly imposed the penalty of reclusion perpetua and that the ISL is inapplicable since
it is an indivisible penalty. The Court's pronouncement is consistent with the earlier cases of People v.
Conwi, Jr.,16People v. Enfermo,17 and People v. Pajaro, et al.18 as well as with the fairly recent case of Zafra
v. People.19
The rulings in Pantaleon, Jr. and analogous cases are in keeping with the provisions of the RPC. Specifically,
Article 48 of which states that in complex crimes, "the penalty for the most serious crime shall be imposed,
the same to be applied in its maximum period." Thus, in Malversation of Public Funds thru Falsification of
Official/Public Documents, the prescribed penalties for malversation and falsification should be taken into
account. Under the RPC, the penalty for malversation of public funds or property if the amount involved
exceeds P22,000.00 shall be reclusion temporal in its maximum period to reclusion perpetua, aside from
perpetual special disqualification and a fine equal to the amount of the funds malversed or equal to the total
value of the property embezzled.20 On the other hand, the penalty ofprision mayor and a fine not to exceed
P5,000.00 shall be imposed for falsification committed by a public officer.21 Considering that malversation is
the more serious offense, theimposable penalty for Malversation of Public Funds thru Falsification of
Official/Public Documents if the amount involved exceeds P22,000.00 is reclusion perpetua, it being the
maximum period of theprescribed penalty of reclusion temporal in its maximum period to reclusion
perpetua.
For purposes of bail application, however, the ruling in Mañalac, Jr. should be revisited on the ground that
Pantaleon, Jr. (as well as Conwi, Jr., Enfermo, Pajaro, et al., and Zafra) was disposed in the context of a
judgment of conviction rendered by the lower court and affirmed on appeal by this Court. As will be shown
below, the appropriate rule is to grant bail as a matter of right to an accused who is charged with a complex
crime of Malversation of Public Funds thru Falsification of Official/Public Documents involving an amount that
exceeds P22,000.00.
Section 13, Article III of the 1987 Constitution states:

SECTION 13. All persons, except those charged with offenses punishable by reclusion perpetua when
evidence of guilt is strong, shall, before conviction, be bailable by sufficient sureties, or be released on
recognizance as may be provided by law. The right to bail shall not be impaired even when the privilege of
the writ of habeas corpus is suspended. Excessive bail shall not be required.22 ChanRoblesVirtualawlibrary
Pursuant thereto, Sections 4 and 7, Rule 114 of the Revised Rules of Criminal Procedure provide:
SEC. 4. Bail, a matter of right; exception. - All persons in custody shall be admitted to bail as a matter
of right, with sufficient sureties, or released on recognizance as prescribed by law or this Rule (a) before or
after conviction by the Metropolitan Trial Court, Municipal Trial Court, Municipal Trial Court in Cities, or
Municipal Circuit Trial Court, and (b) before conviction by the Regional Trial Court of an offense
notpunishable by death, reclusion perpetua, or life imprisonment. (4a)
SEC. 7. Capital offense of an offense punishable by reclusion perpetua or life imprisonment, not
bailable. - No person charged with a capital offense, or an offensepunishable by reclusion perpetua or life
imprisonment, shall be admitted to bail when evidence of guilt is strong, regardless of the stage of the
criminal prosecution. (7a)23ChanRoblesVirtualawlibrary
The pivotal question is: How should We construe the term "punishable" under the provisions above-quoted?
In Our mind, the term "punishable" should refer to prescribed, not imposable, penalty. People v.
Temporada,24 which was even cited by petitioner, perceptibly distinguished these two concepts:
The RPC provides for an initial penalty as a general prescription for the felonies defined therein which
consists of a range of period of time. This is what is referred to as the "prescribed penalty." For instance,
under Article 249 of the RPC, the prescribed penalty for homicide is reclusion temporal which ranges from 12
years and 1 day to 20 years of imprisonment. Further, the Code provides for attending or modifying
circumstances which when present in the commission of a felony affects the computation of the penalty to
be imposed on a convict. This penalty, as thus modified, is referred to as the "imposable penalty." In the
case of homicide which is committed with one ordinary aggravating circumstance and no mitigating
circumstances, the imposable penalty under the RPC shall be the prescribed penalty in its maximum period.
From this imposable penalty, the court chooses a single fixed penalty (also called a straight penalty) which
is the "penalty actually imposed" on a convict, i.e., the prison term he has to serve.25 ChanRoblesVirtualawlibrary
Petitioner contends that the imposable penalty is the one provided by the RPC before conviction to
determine whether the charge is bailable or not, while the penalty actually imposed pertains to the prison
sentence upon conviction.26 Hence, it is maintained that the penalty imposable for the offense charged
against private respondent is reclusion perpetua, which makes Criminal Case Nos. SB-14-CRM-0321, 0322
and 0324 non-bailable.
The argument is erroneous.
Following Temporada, for the complex crime of Malversation of Public Funds thru Falsification of
Official/Public Documents involving an amount that exceeds P22,000.00, the "prescribed penalty"
isreclusion temporal in its maximum period to reclusion perpetua. After trial, should the commission of such
crime be proven by the prosecution beyond reasonable doubt, the "imposable penalty" isreclusion
perpetua in view of the RPC mandate that the prescribed penalty of reclusion temporalmaximum to reclusion
perpetua shall be applied in its maximum.27 The falsification, which is the means used to commit the crime
of malversation, is in the nature of a generic aggravating circumstance that effectively directs the imposition
of the prescribed penalty in its maximum period.28The phrases "shall be applied" and "shall impose," found
in Articles 63 and 64, respectively, of the RPC, are of similar import as the phrase "shall be imposed" found
in Article 48. Both Articles 63 and 64 refer to the penalty to be imposed after considering the aggravating or
mitigating circumstance/s. Finally, the "penalty actually imposed" is still reclusion perpetua, considering
that the ISL finds no application as the penalty is indivisible.29
The October 10, 2014 Resolution of public respondent is spot on had it not confused imposablepenalty
with prescribed penalty. Nonetheless, reading through the text of the assailed Resolution reveals that the
anti-graft court actually meant prescribed penalty whenever it referred toimposable penalty. Therefore, in
essence, the ruling is correct. Respondent court held:
If the complex crime of Malversation thru Falsification be imposed in its maximum period, there is no doubt
that, in case of conviction, the penalty to be imposed isreclusion perpetua. The cases, however, are still at
their inception. Criminal proceedings are yet to ensue. This is not the proper time, therefore, to call for the
application of the penalty contemplated under Article 48 by imposing the same in its maximum period.
For purposes of determining whether a person can be admitted to bail as a matter of right, it is
the imposable penalty prescribed by law for the crime charged which should be considered and, not the
penalty to be actually imposed. Illustrative cases such asCatiis v. Court of Appeals, et al. and People v. Hu
Ruey Chun evidently confirm this to be so.
xxxx
In both cases, therefore, it is the penalty imposable for the offense charged that was considered for
purposes of bail.
A circumspect reading of substantive law validates this view. Section 13, Article III of the Constitution
provides that: x x x x
On the other hand, Section 4, Rule 114 of the Revised Rules of Court, as amended, provides: chanRoblesvirtualLawlibrary
xxxx
Notably, the word used is ["punishable,"] which practically bears the same meaning as "imposable." It is
only logical that the reference has a direct correlation with the time frame "before conviction" since trial is
yet to begin; hence, it can only be the penalty imposable of the offense charged that can be considered for
purposes of bail.
In these cases, the offenses charged are the complex crimes of Malversation of Public Funds thru
Falsification of Official/Public Documents. In determining the penalty imposable, it is the penalty for the
most serious crime which is considered. Between Malversation and Falsification, it is Malversation which
provides the graver penalty. As thus provided under Article 217 of the Revised Penal Code, "[i]f the amount
exceeds the latter, the penalty shall be reclusion temporal in its maximum period to reclusion perpetua."
The penalty, however, cannot be immediately applied in its maximum period, orreclusion perpetua, since
this will already consider the application of the penalty in the event of a conviction.
A clear perusal of Article 48 of the Revised Penal Code states: chanRoblesvirtualLawlibrary
xxxx
The word used is "imposed," not imposable. Thus, the reference can only point to the time when a judgment
of conviction is impending. If and when "the penalty for the most serious crime shall be imposed, the same
to be applied in its maximum period," is thus applied in the proper application of the penalty to be imposed
on the accused. Certainly, this cannot be considered for purposes of bail.30 ChanRoblesVirtualawlibrary
Indeed, the trial is yet to proceed and the prosecution must still prove the guilt of the accused beyond
reasonable doubt. It is not amiss to point that in charging a complex crime, the information should allege
each element of the complex offense with the same precision as if the two (2) constituent offenses were the
subject of separate prosecutions.31 Where a complex crime is charged and the evidence fails to support the
charge as to one of the component offenses, the defendant can be convicted of the offense proven.32
At this point, there is no certainty that Valdez would be found guilty of Malversation of Public Funds thru
Falsification of Official/Public Documents involving an amount that exceeds P22,000.00. Falsification, like an
aggravating circumstance, must be alleged and proved during the trial. For purposes of bail proceedings, it
would be premature to rule that the supposed crime committed is a complex crime since it is only when the
trial has terminated that falsification could be appreciated as a means of committing malversation. Further,
it is possible that only the elements of one of the constituent offenses, i.e., either malversation or
falsification, or worse, none of them, would be proven after full-blown trial.
It would be the height of absurdity to deny Valdez the right to bail and grant her the same only after trial if
it turns out that there is no complex crime committed. Likewise, it is unjust for Us to give a stamp of
approval in depriving the accused person's constitutional right to bail for allegedly committing a complex
crime that is not even considered as inherently grievous, odious and hateful. To note, Article 48 of the RPC
on complex crimes does not change the nature of the constituent offenses; it only requires the imposition of
the maximum period of the penalty prescribed by law. When committed through falsification of official/public
documents, the RPC does not intend to classify malversation as a capital offense. Otherwise, the complex
crime of Malversation of Public Funds thru Falsification of Official/Public Documents involving an amount that
exceeds P22,000.00 should have been expressly included in Republic Act No. 7659.33 If truly a non-bailable
offense, the law should have already considered it as a special complex crime like robbery with rape,
robbery with homicide, rape with homicide, and kidnapping with murder or homicide, which have prescribed
penalty ofreclusion perpetua.
Just to stress, the inequity of denying bail as a matter of right to an accused charged with Malversation of
Public Funds thru Falsification of Official/Public Documents involving an amount that exceeds P22,000.00 is
palpable when compared with an accused indicted for plunder, which is a heinous crime punishable under
R.A. No. 7080,34 as amended by R.A. No. 765935 and R.A. No. 9346.36 Observe that bail is not a matter of
right in plunder committed through malversation of public funds, but the aggregate amount or total value of
ill-gotten wealth amassed, accumulated or acquired must be at least Fifty Million Pesos (P50,000,000.00). In
contrast, an accused who is alleged to have committed malversation of public funds thru falsification of
official/public documents, which is not a capital offense, is no longer entitled to bail as a matter of right if
the amount exceeds P22,000.00, or as low as P22,000.01. Such distinction is glaringly unfair and could not
have been contemplated by the law.
The foregoing interpretation is more favorable to Valdez as an accused following the rule of lenity:
Intimately related to the in dubio pro reo principle is the rule of lenity. The rule applies when the court is
faced with two possible interpretations of a penal statute, one that is prejudicial to the accused and another
that is favorable to him. The rule calls for the adoption of an interpretation which is more lenient to the
accused.37ChanRoblesVirtualawlibrary
The time-honored principle is that penal statutes are construed strictly against the State and liberally in
favor of the accused.38 When there is doubt on the interpretation of criminal laws, all must be resolved in
favor of the accused.39 Since penal laws should not be applied mechanically, the Court must determine
whether their application is consistent with the purpose and reason of the law.40
For having ruled that an accused charged with the complex crime of Malversation of Public Funds thru
Falsification of Official/Public Documents that involves an amount in excess of P22,000.00 is entitled to bail
as a matter of right, a summary hearing on bail application is, therefore, unnecessary. Consistent
with Miranda v. Tuliao,41 an affirmative relief may be obtained from the court despite the accused being still
at-large. Except in petition for bail, custody of the law is not required for the adjudication of reliefs sought
by the defendant (such as a motion to set aside no bail recommendation and to fix the amount of bail in this
case) where the mere application therefor constitutes a waiver of the defense of lack of jurisdiction over the
person of the accused.42
WHEREFORE, premises considered, the petition is DENIED for lack of merit. Private respondent
Luzviminda S. Valdez is entitled to bail, as a matter of right, in Criminal Case Nos. SB-14-CRM-0321, 0322
and 0324. Public respondent Sandiganbayan Fifth Division should be guided by the latest Bailbond Guide. In
any case, the amount should correspond to the medium penalty multiplied by Ten Thousand Pesos
(P10,000.00) for every year of imprisonment.
SO ORDERED.
Sereno, C. J., I join the Dissent of J. Villarama.

Carpio,Velasco, Jr., Leonardo-De Castro, Bersamin, Del Castillo, Perez, Mendoza, Reyes, andJardeleza, JJ.,
concur.
Brion, J., on official leave.
Villarama, Jr., J., pls. see Dissenting Opinion.
Perlas-Bernabe, J., I join the Dissent of J. Villarama.
Leonen, J., see separate Dissenting opinion.
Endnotes:
1
Penned by Associate Justice Ma. Theresa Dolores C. Gomez-Estoesta, with Associate Justices Roland B.
Jurado and Alexander G. Gesmundo, concurring; rollo, pp. 30-40.
Id. at 40.
2
Id. at 41-43.
3
Id. at 41.
4
5
Art. 217. Malversation of Public Funds or Property; Presumption of Malversation. - Any public officer who,
by reason of the duties of his office, is accountable for public funds or property, shall appropriate the same
or shall take or misappropriate or shall consent, through abandonment or negligence, shall permit any other
person to take such public funds, or property, wholly or partially, or shall otherwise be guilty of the
misappropriation or malversation of such funds or property, shall suffer: chanRoblesvirtualLawlibrary
1. The penalty of prision correccional in its medium and maximum periods, if the amount involved in the
misappropriation or malversation does not exceed two hundred pesos.
2. The penalty of prision mayor in its minimum and medium periods, if the amount involved is more than
two hundred pesos but does not exceed six thousand pesos.
3. The penalty of prision mayor in its maximum period to reclusion temporal in its minimum period, if the
amount involved is more than six thousand pesos but is less than twelve thousand pesos.
4. The penalty of reclusion temporal, in its medium and maximum periods, if the amount involved is more
than twelve thousand pesos but is less than twenty-two thousand pesos. If the amount exceeds the latter,
the penalty shall be reclusion temporal in its maximum period to reclusion perpetua.
In all cases, persons guilty of malversation shall also suffer the penalty of perpetual special disqualification
and a fine equal to the amount of the funds malversed or equal to the total value of the property embezzled.
The failure of a public officer to have duly forthcoming any public funds or property with which he is
chargeable, upon demand by any duly authorized officer, shall be prima facie evidence that he has put such
missing funds or property to personal use. (As amended by RA 1060)
6
Art. 171. Falsification by Public Officer, Employee or Notary or Ecclesiastic Minister. —The penalty of prision
mayor and a fine not to exceed 5,000 pesos shall be imposed upon any public officer, employee, or notary
who, taking advantage of his official position, shall falsify a document by committing any of the following
acts:
1. Counterfeiting or imitating any handwriting, signature or rubric;
2. Causing it to appear that persons have participated in any act or proceeding when
they did not in fact so participate;
3. Attributing to persons who have participated in any act or proceeding statements

other than those in fact made by them;
4. Making untruthful statements in a narration of facts;
5. Altering true dates;

6. Making any alteration or intercalation in a genuine document which changes its
meaning;
7. Issuing in an authenticated form a document purporting to be a copy of an original

document when no such original exists, or including in such a copy a statement
contrary to, or different from, that of the genuine original; or
8. Intercalating any instrument or note relative to the issuance thereof in a protocol,

registry, or official book.
The same penalty shall be imposed upon any ecclesiastical minister who shall commit any of the offenses
enumerated in the preceding paragraphs of this article, with respect to any record or document of such
character that its falsification may affect the civil status of persons.
7
Art. 48. Penalty for complex crimes. - When a single act constitutes two or more grave or less grave
felonies, or when an offense is a necessary means for committing the other, the penalty for the most serious
crime shall be imposed, the same to be applied in its maximum period.
8
Rollo, pp. 44-51.
Id. at 52-56.
9
10
Id. at 57-59.
11
Id. at 60-63.
12
Id. at 64-74.
13
Republic v. Lazo, G.R. No. 195594, September 29, 2014, 737 SCRA 1, 18-19.
14
G.R. Nos. 206194-206207, July 3, 2013, Third Division Resolution.
15
600 Phil. 186 (2009).
16
223 Phil. 23 (1985).
17
513 Phil. 1 (2005).
18
577 Phil. 441 (2008).
19
G.R. No. 176317, July 23, 2014, 730 SCRA 438.
20
REVISED PENAL CODE, Art. 217.
21
REVISED PENAL CODE, Art. 171.
22
Emphasis supplied.
23
Emphasis supplied.
24
594 Phil. 680, 717-718 (2008).
25
Id.
26
Rollo, p.19.
27
The duration of reclusion temporal in its maximum period to reclusion perpetua is 17 years, 4 months and
1 day to reclusion perpetua: The minimum period is 17 years, 4 months and 1 day to 18 years and 8
months; the medium period is 18 years, 8 months and 1 day to 20 years; and the maximum period
is reclusion perpetua. (See Zafra v. People, supra note 19, at 456).
28
See REVISED PENAL CODE, Art. 64 (3).
29
The ISL is not applicable since the proper imposable penalty to be imposed upon the accused is
already reclusion perpetua. (See Zafra v. People, supra note 19, at 458).
30
Rollo, pp. 34-37.
31
See People v. Bulalayao, G.R. No. 103497, February 23, 1994, 230 SCRA 232, 240.
32
People v. Bulalayao, supra.
33
AN ACT TO IMPOSE THE DEATH PENALTY ON CERTAIN HEINOUS CRIMES, AMENDING FOR THAT PURPOSE
THE REVISED PENAL CODE, AS AMENDED, OTHER SPECIAL PENAL LAWS, AND FOR OTHER PURPOSES,
dated December 13, 1993.
34
AN ACT DEFINING AND PENALIZING THE CRIME OF PLUNDER, dated July 12, 1991.
35
ACT TO IMPOSE THE DEATH PENALTY ON CERTAIN HEINOUS CRIMES, AMENDING FOR THAT PURPOSE
THE REVISED PENAL CODE, AS AMENDED, OTHER SPECIAL PENAL LAWS, AND FOR OTHER PURPOSES,
dated December 13, 1993.
36
AN ACT PROHIBITING THE IMPOSITION OF DEATH PENALTY IN THE PHILIPPINES, dated June 24, 2006.
37
Intestate Estate of Manolita Gonzales Vda. de Carungcong v. People et al., 626 Phil. 177 200 (2010).
Tan v. Philippine Commercial International Bank, 575 Phil. 485, 497 (2008); People v. Temporada,
38
supra note 24, at 735; Maj. Gen. Garcia (Ret.) v. The Executive Secretary, et al., 692 Phil. 114, 142 (2012);
andRenato M. David v. Editha A. Agbay, G.R. No. 199113, March 18, 2015.
39
Villareal v. People, 680 Phil. 527, 600 (2012).
40
Tan v. Philippine Commercial International Bank, supra note 38, at 497.
41
520 Phil. 907 (2006).
42
See Renato M. David v. Editha A. Agbay, G.R. No. 199113, March 18, 2015, citing Miranda v. Tuliao, 520
Phil. 907, 919 (2006). cralawlawlibrary
DISSENTING OPINION
VILLARAMA, JR., J.:
Before us is a petition for certiorari under Rule 65 filed by the People of the Philippines, represented by the
Office of the Special Prosecutor, Office of the Ombudsman (OMB), assailing the Resolution1 dated October
10, 2014 of the Sandiganbayan's Fifth Division in Criminal Case Nos. SB-14-CRM-0321, SB-14-CRM-0322
and SB-14-CRM-0324 entitled "People of the Philippines, plaintiff, versus Luzviminda S. Valdez, accused."
Respondent Luzviminda S. Valdez (Valdez) is a former Mayor of Bacolod City. During a post-audit of
disbursement vouchers of the City Government of Bacolod, the Commission on Audit found that the Cash
Slips used for the reimbursement of expenses of Valdez under Disbursement Voucher Nos. 6, 220, 278 and
325 totalling P279,150.00 were falsified and that the actual amount due to her was only P4,843.25.2
Subsequently, Valdez was indicted for three (3) counts of Malversation of Public Funds thru Falsification of
Public Documents under Article 217, in relation to Article 171, paragraph 6, of the Revised Penal Code, as
amended. An Order of Arrest was issued by the Sandiganbayan. However, Valdez remains at large and yet
caused the filing of a Motion to Set Aside No Bail Recommendation and To Fix the Amount of Bail,3 arguing
that since there are no aggravating or mitigating circumstances alleged in the Informations, the maximum
of the indeterminate sentence shall be taken from the medium period, or from 18 years, 8 months and 1
day to 20 years, an imposable penalty which is bailable. She further emphasized that it is oppressive
especially for the woman accused, to be jailed at this stage while she is presumed innocent.
In its Comment/Opposition,4 the Office of the Special Prosecutor argued that theIndeterminate Sentence
Law cannot be invoked by Valdez because reclusion perpetua is an indivisible penalty. It further asserted
that since bail is discretionary in this case, the court cannot dispense with the requirement of a hearing.
Valdez also filed an Urgent Supplemental Motion5 with the additional prayer for the recall/lifting of the
warrants of arrest pending resolution of her motion to set aside the "No Bail" recommendation of the OMB
and to fix the amount of bail.
On October 10, 2014, the Sandiganbayan issued the assailed Resolution granting Valdez's motion, as
follows:
WHEREFORE, the (i) Motion to Set Aside No Bail Recommendation and to Fix the Amount of Bail and the (ii)
Urgent Supplemental Motion to the Motion to Set Aside No Bail Recommendation and to Fix the Amount of
Bail with Additional Prayer to Recall/Li[f]t Warrant of Arrest filed by accused Luzvimi[n]da S. Valdez,
are GRANTED.
Let the Order of Arrest issued in Criminal Case Nos. SB-14-CRM-0321, 0322 and 0324 adopting the "no bail"
recommendation of the Office of the Ombudsman be RECALLED. Instead, let an Order of arrest in said
cases be issued anew, this time, fixing the bail for each offense charged in the amount of Two Hundred
Thousand Pesos (P200,000.00).
In ruling that Valdez is entitled to bail, the Sandiganbayan explained that in determining whether a person
can be admitted to bail as a matter of right, it is the imposable penaltyprescribed by law for the crime
charged which should be considered and not the penalty to be actually imposed. Thus, it held that the
penalty imposable for malversation cannot be immediately applied in its maximum period (reclusion
perpetua) when the case is still at its inception since this will already consider the application of the penalty
in the event of conviction.
Hence, this petition raising the sole issue of whether malversation thru falsification of public documents is a
bailable offense.
First, we address the procedural flaw pointed out by Valdez as to the failure of the Office of the Special
Prosecutor to comply with the requirement of a motion for reconsideration prior to the filing of the present
petition.
The well-established rule is that a motion for reconsideration is an indispensable condition before an
aggrieved party can resort to the special civil action for certiorari under Rule 65 of the 1997 Rules of Civil
Procedure, as amended.7 However, the rule is not absolute and admits of exceptions entrenched in our
jurisprudence:
The general rule is that a motion for reconsideration is a condition sine qua non before a petition
for certiorari may lie, its purpose being to grant an opportunity for the court a quo to correct any error
attributed to it by re-examination of the legal and factual circumstances of the case. There are, however,
recognized exceptions permitting a resort to the special civil action for certiorari without first filing a motion
for reconsideration. In the case of Domdom v. Sandiganbayan, it was written:
The rule is, however, circumscribed by well-defined exceptions, such as where the order is a patent nullity
because the court a quo had no jurisdiction; where the questions raised in the certiorari proceeding
have been duly raised and passed upon by the lower court, or are the same as those raised and
passed upon in the lower court; where there is an urgent necessity for the resolution of the question,
and any further delay would prejudice the interests of the Government or of the petitioner, or the subject
matter of the action is perishable; where, under the circumstances, a motion for reconsideration would be
useless; where the petitioner was deprived of due process and there is extreme urgency of relief; where, in
a criminal case, relief from an order of arrest is urgent and the grant of such relief by the trial court is
improbable; where the proceedings in the lower court are a nullity for lack of due process; where the
proceedings were ex parte or in which the petitioner had no opportunity to object; and where the issue
raised is one purely of law or where public interest is involved. x x x8 (Emphasis supplied; emphasis in the
original omitted)
Here, we recognize the presence of two exceptions, as underscored above. Records confirm that the
Sandiganbayan has categorically ruled that Valdez is entitled to bail as a matter of right and forthwith
recalled the order of arrest it had issued. Also, the petition undeniably raised a lone question of law:
whether an accused charged with malversation thru falsification of public documents may apply for bail.
Petitioner is thus allowed by the Rules to file the present certiorari petition even if it had not first moved for
reconsideration of the assailed resolution.
The Sandiganbayan set aside the "No Bail" recommendation under the informations filed by the OMB based
on its own interpretation of Article 48 that the "maximum period" of the most serious crime, which
is reclusion perpetua for the more serious charge of Malversation, cannot be considered for purpose of bail
because the law speaks of "penalty imposable" and not penalty actually imposed. Acknowledging a contrary
position to the 2000 Bail Bond Guide issued by the Department of Justice where no bail is indicated for the
complex crime of Malversation thru Falsification of Public Documents when the amount malversed is
P22,000.00 or higher as alleged in the informations, the Sandiganbayan opined that this interpretation is
more favorable to the accused.
We disagree.
Section 13, paragraph 4, Article III of the 1987 Constitution provides that all persons, except those charged
with offenses punishable by reclusion perpetua when evidence of guilt is strong, shall, before conviction, be
bailable by sufficient sureties, or be released from recognizance as may be provided by law. Likewise, Rule
114, Section 7 of theRevised Rules of Criminal Procedure, as amended, provides that no person charged
with a capital offense or an offense punishable by reclusion perpetua or life imprisonment when evidence of
guilt is strong shall be admitted to bail regardless of the stage of the prosecution.
We find no legal basis for making a distinction between imposable or prescribed penalty and penalty actually
imposed and concluding that the maximum period mentioned in Article 48 cannot be considered for bail
purposes before conviction. The term "punishable" in the Constitution and the Rules clearly refers only to
the prescribed penalty. Ubi lex non distinguit nee nos distinguire debemus. When the law does not
distinguish, we must not distinguish.9 Further, it is a cardinal rule in statutory construction that when the
law is clear and free from any doubt or ambiguity, there is no room for construction or interpretation. There
is only room for application.10
The question of actual imposable penalty of malversation thru falsification of public documents has been
settled by this Court in People v. Pantaleon, Jr.,11 where we ruled:
Article 217, paragraph 4 of the Revised Penal Code imposes the penalty ofreclusion temporal in its
maximum period to reclusion perpetua when the amount malversed is greater than P22,000.00. This Article
also imposes the penalty of perpetual special disqualification and a fine equal to the amount of the funds
malversed or equal to the total value of the property embezzled. Falsification by a public officer or employee
under Article 171, on the other hand, is punished by prision mayor and a fine not to exceed P5,000.00.
Since appellant committed a complex crime, the penalty for the most serious crime shall be imposed in its
maximum period, pursuant to Article 48 of the Revised Penal Code. This provision states:
ART. 48. Penalty for complex crimes. - When a single act constitutes two or more grave or less grave
felonies, or when an offense is a necessary means for committing the other, the penalty for the most serious
crime shall be imposed, the same to be applied in its maximum period.
The Sandiganbayan, therefore, correctly imposed on the appellants the penalties of reclusion
perpetua and perpetual special disqualificationfor each count of malversation of public funds through
falsification of public documents, and the payment of fines of P166,242.72, P154,634.27, and P90,464.21,
respectively, representing the amounts malversed. The Indeterminate Sentence Law finds no
application since reclusion perpetua is an indivisible penalty to which the Indeterminate
Sentence Law does not apply.12 (Additional Emphasis supplied)
In the light of all the foregoing, we hold that Valdez is not entitled to bail as a matter of right since she is
charged with a crime whose penalty is reclusion perpetua. The DOJ's 2000 Bail Bond Guide likewise sets no
bail for the said offense where the amount involved exceeds P22,000.00. While not controlling, in view of
the constitutional prohibition against excessive bail, the said guidelines should have been considered by the
Sandiganbayan.13
The Sandiganbayan thus gravely erred in setting aside the "No Bail" recommendation of the Special
Prosecutor and fixing the amount of bail as prayed for by Valdez. It is settled that the grant of bail to an
accused charged with an offense that carries with it the penalty of reclusion perpetua is discretionary on the
part of the trial court, i.e., accused is still entitled to bail but no longer as a matter of right.14 Indeed, the
determination of whether or not the evidence of guilt is strong is a matter of judicial discretion. This
discretion, by the nature of things, may rightly be exercised only after the evidence is submitted to the court
at the hearing.15 The Prosecution must be given a chance to show strength of its evidence; otherwise, a
violation of due process occurs.16As the rule now stands, a hearing upon notice is mandatory before the
grant of bail, whether bail is a matter of right or discretion.17
I therefore VOTE: chanRoblesvirtualLawlibrary
1. To GRANT the petition; and
2. To ANNUL and SET ASIDE the Resolution dated October 10, 2014 of the Sandiganbayan's Fifth Division
in Criminal Case Nos. SB-14- CRM-0321, SB-14-CRM-0322 and SB-14-CRM-0324.
Endnotes:
1
Rollo, pp. 30-40. Penned by Associate Justice Ma. Theresa Dolores C. Gomez-Estoesta with Associate
Justices Roland B. Jurado and Alexander G. Gesmundo concurring.
2
Id. at 41-43.
3
Id. at 44-51.
4
Id. at 52-56.
5
Id. at 57-59.
6
Id. at 40.
7
Republic of the Philippines v. Pantranco North Express, Inc., 682 Phil. 186, 193 (2012), citing Ag v. Mejia,
555 Phil. 348, 353 (2007).
8
Pineda v. Court of Appeals (Former Ninth Division), G.R. No. 181643, November 17, 2010, 635 SCRA 274,
281-282, cited in Medado v. Heirs of the Late Antonio Consing, 681 Phil. 536, 548-549 (2012).
Amores v. House of Representatives Electoral Tribunal, 636 Phil. 600, 609 (2010).
9
10
Id. at 608, citing Twin Ace Holdings Corporation v. Rufina and Company, 523 Phil. 766, 777 (2006).
600 Phil. 186 (2009). See also Mañalac, Jr. People of the Philippines, G.R. Nos. 206194-206207, July 3,
11
2013 (Unsigned Resolution).
12
Id. at 228.
13
See A.M. No. 12-11-2-SC promulgated on March 18, 2014.
14
Andres v. Beltran, 415 Phil. 598, 603 (2001).
15
Ocampo v. Bernabe, 77 Phil. 55, 58 (1946).
16
Gacal v. Infante, 674 Phil. 324, 340 (2011).
17
Id. at 338. cralawlawlibrary
DISSENTING OPINION
LEONEN, J.:
I concur with the opinion of Justice Martin S. Villarama, Jr. and, in addition to the points raised, add a few
more of my own.
Respondent Luzviminda S. Valdez was charged with four (4) counts of Malversation of Public Funds through
Falsification of Public Documents.1Malversation of Public Funds is punished under Article 2172 of the Revised
Penal Code while Falsification of Public Documents is punished under Article 1713 of the Revised Penal Code.
The penalty for falsification under the law is prision mayor and a fine not to exceed P5,000. Since the
amount allegedly malversed exceeds P22,000.00,4 the appropriate penalty under the law for malversation
is reclusion temporal in its maximum period to reclusion perpetua.
Malversation of Public Funds through Falsification of Public Documents, however, is considered-an ordinary
complex crime under Article 48 of the Revised Penal Code.5 Article 48 states:
ARTICLE 48. Penalty for Complex Crimes. — When a single act constitutes two or more crimes, or when an
offense is a necessary means for committing the other, the penalty for the most serious crime shall be
imposed, the same to be applied in its maximum period.
Justice Villarama is of the opinion that the crime is bailable as a matter of discretion, considering that Article
48 raises the imposable penalty to that of the most serious crime in its maximum period.6 The ponencia,
however, disagrees and argues that Article 48 states the penalty to be actually imposed, or the penalty after
a trial on the merits is conducted.7In the ponente's view, the crime should be bailable as a matter of right.8
Respondent was charged with Malversation of Public Funds throughFalsification of Public Documents, not
Malversation of Public Funds andFalsification of Public Documents. While it is true that "the information
should charge each element of the complex offense with the same precision as if the two (2) constituent
offenses were the subject of separate prosecutions[,]"9 the singularity of the criminal intent must be taken
into account in order to determine its penalty. Respondent was charged with a single complex crime, not
two separate crimes. The crime carries only one imposable penalty.
The determination of an accused's liability in a complex crime is not new. In Intestate Estate of Manolita
Gonzales Vda. De Carungcong v. People, et al.,10 this court has stated that the complex crime of Estafa
through Falsification of Public Documents is treated as one crime subject to a single criminal liability:
In considering whether the accused is liable for the complex crime of estafa through falsification of public
documents, it would be wrong to consider the component crimes separately from each other. While there
may be two component crimes (estafa and falsification of documents), both felonies are animated by and
result from one and the same criminal intent for which there is only one criminal liability. That is the
concept of a complex crime. In other words, while there are two crimes, they are treated only as one,
subject to a single criminal liability.
As opposed to a simple crime where only one juridical right or interest is violated (e.g., homicide which
violates the right to life, theft which violates the right to property), a complex crime constitutes a violation
of diverse juridical rights or interests by means of diverse acts, each of which is a simple crime in itself.
Since only a single criminal intent underlies the diverse acts, however, the component crimes are considered
as elements of a single crime, the complex crime. This is the correct interpretation of a complex crime as
treated under Article 48 of the Revised Penal Code.
In the case of a complex crime, therefore, there, is a formal (or ideal) plurality of crimes where the same
criminal intent results in two or more component crimes constituting a complex crime for which there is only
one criminal liability. (The complex crime of estafa through falsification of public document-falls under this
category.) This is different from a material (or real) plurality of crimes where different criminal intents result
in two or more crimes, for each of which the accused incurs criminal liability. The latter category is covered
neither by the concept of complex crimes nor by Article 48.
Under Article 48 of the Revised Penal Code, the formal plurality of crimes (concursus
delictuorum or concurso de delitos) gives rise to a single criminal liability and requires the imposition of a
single penalty:
Although [a] complex crime quantitatively consists of two or more crimes, it is only one crime in law on
which a single penalty is imposed and the two or more crimes constituting the same are more conveniently
termed as component crimes.
xxx xxx xxx
In [a] complex crime, although two or more crimes are actually committed, they constitute only one crime
in the eyes of the law as well as in the conscience of the offender. The offender has only one criminal intent.
Even in the case where an offense is a necessary means for committing the other, the evil intent of the
offender is only one.
For this reason, while a conviction for estafa through falsification of public document requires that the
elements of both estafa and falsification exist, it does not mean that the criminal liability for estafa may be
determined and considered independently of that for falsification. The two crimes of estafa and
falsification of public documents are not separate crimes but component crimes of the single
complex crime of estafa and falsification of public documents.
Therefore, it would be incorrect to claim that, to be criminally liable for the complex crime of estafa through
falsification of public document, the liability for estafa should be considered separately from the liability for
falsification of public document. Such approach would disregard the nature of a complex crime and
contradict the letter and spirit of Article 48 of the Revised Penal Code. It would wrongly disregard the
distinction between formal plurality and material plurality, as it improperly treats the plurality of crimes in
the complex crime of estafa through falsification of public document as a mere material plurality where the
felonies are considered as separate crimes to be punished individually.11 (Emphasis in the original)
Thus, while a complex crime constitutes two or more offenses whose elements must be pleaded and proved,
it is considered by law as a single crime committed through a single criminal intent and punishable by a
single penalty. In determining whether a complex crime is bailable as a matter of right or of discretion, what
is considered is not the penalties of the two or more separate offenses that compose the complex crime, but
the single penalty imposed by law for the complex crime.
II
Our esteemed colleague Justice Diosdado M. Peralta now proposes that it is time to digress from settled
canonical interpretations of the classification of the availability of bail for public officers charged with
Malversation through Falsification. He now proposes that we change the long-standing interpretation of
Article III, Section 1312 of the Constitution in relation to Article 48 of the Revised Penal Code. I regret that I
could not bring myself to agree with the proposed approach.
III
The ponencia starts with creating a distinction between the concept of "prescribed" and "imposable" penalty.
In the ponente's view, "prescribed" penalty is the penalty provided by law for the crime charged. The
"imposable" penalty is the penalty that will be declared after trial.13Prescribed penalty refers to the crime as
charged, the statute that punishes the offense, and the penalty in the statute. Imposable penaltyconsiders
in addition the totality of the evidence presented.
Prescribed penalty, not imposable penalty, is what is considered for bail.
To this extent, I agree with both Justice Villarama and the ponencia.
This is precisely what the Constitution provides. When the prescribed penalty is reclusion perpetua, bail is
granted only after a showing that evidence of guilt is not strong.
Thus in Article III, Section 13 of the Constitution:

the writ of habeas corpus is suspended. Excessive bail shall not be required.
The purpose of bail is to ensure the accused's presence at trial.14 The underlying theory of denying bail irt
capital offenses is not only to prevent the risk of flight by the accused, but also to protect the community
from potential danger due to the heinousness of the crime charged and to avoid delays in the service of
punishment.15 Regardless of these presumptions, determination of bail by the sovereign has already been
fixed by the text of the Constitution. It is conclusive on courts. It cannot be reconsidered. The test of the
Constitution reduces judicial discretion to a single variable: whether the evidence of guilt is strong.
IV
The ponencia posits that the penalty for the complex crime of Malversation through Falsification is reclusion
temporal in its maximum period toreclusion perpetua. It then concludes that because it starts with reclusion
temporal, necessarily, bail automatically is a matter of right.16
This would have been accurate except that Article 48 is as much a part of the Revised Penal Code as any
other provision. The better interpretative approach is to allow all provisions to work together. Parsing pieces
of legislation while backgrounding relevant provisions invites too much judicial discretion at the cost of
undermining the results of legitimate constitutional processes in our political departments.
Article 48 provides:
ARTICLE 48. Penalty for Complex Crimes. — When a single act constitutes two or more crimes, or when an
offense is a necessary means for committing the other, the penalty for the most serious crime shall be
imposed, the same to be applied in its maximum period.
There is no doubt as to the prescribed penalty. It is "the penalty for the most serious crime" and "the same
to be applied in its maximum period."
What may understandably cause the apparent ambiguity is the phrase "shall be imposed" in this provision.
The ponencia interprets this to mean that the penalty mentioned in Article 48 is post hoc, i.e., after
trial.17 Justice Villarama reads this as ex ante, i.e., it is the penalty for the crime as charged.18
The trial court, in determining whether a complex crime is bailable-as a matter of right or a matter of
discretion, examines the penalty to be imposed in the complex crime charged. The court does not have the
luxury of deciding which among the two component crimes the accused would be most guilty of. It considers
the complex crime as two separate component crimes punishable by a single penalty. Respondent was
charged with one complex crime of Malversation of Public Funds through Falsification of Public Documents. It
is illogical to'determine bail on the basis only of the single simple crime of Malversation or on the single
simple crime of Falsification.
Article 48 is not only the penal provision that provides the penalty that "shall be imposed." Several offenses
containing this phrase are listed in the Revised Penal Code, among them being: Violation of Domicile,
Inciting to Sedition, Falsification, Perjury, Grave Scandal, Indirect Bribery, Infanticide, and Estafa:
ARTICLE 128. Violation of Domicile. — The penalty of prision correccional in its minimum period shall be
imposed upon any public officer or employee who, not being authorized by judicial order, shall enter any
dwelling against the will of the owner thereof, search papers or other effects found therein without the
previous consent of such owner, or, having surreptitiously entered said dwelling, and being required to leave
the premises, shall refuse to do so.
....
ARTICLE 142. Inciting to Sedition. — The penalty of prision correccional in its maximum period and a fine
not exceeding 2,000 pesos shall be imposed upon any person who, without taking any direct part in the
crime of sedition, should incite others to the accomplishment of any of the acts which constitute sedition, by
means of speeches, proclamations, writings, emblems, cartoons, banners, or other representations tending
to the same end.
....
ARTICLE 171. Falsification by Public Officer, Employee or Notary or Ecclesiastic Minister. — The penalty of
prision mayor and a fine not to exceed 5,000 pesos shall be imposed upon any public officer, employee, or
notary who, taking advantage of his official position, shall falsify a document by committing any of the
following acts:chanRoblesvirtualLawlibrary
....
ARTICLE 183. False Testimony in Other Cases and Perjury in Solemn Affirmation. — The penalty of arresto
mayor in its maximum period to prision correccional in its minimum period shall be imposed upon any
person who, knowingly making untruthful statements and not being included in the provisions of the next
preceding articles, shall testify under oath, or make an affidavit, upon any material matter before a
competent person authorized to administer an oath in cases in which the law so requires.
Any person who, in case of a solemn affirmation made in lieu of an oath, shall commit any of the falsehoods
mentioned in this and the three preceding articles of this section, shall suffer the respective penalties
provided therein.
....
ARTICLE 200. Grave Scandal. — The penalties of arresto mayor and public censure shall be imposed upon
any person who shall offend against decency or good customs by any highly scandalous conduct not
expressly falling within any other article of this Code.
....
ARTICLE 211. Indirect Bribery. — The penalties of arresto mayor, suspension in its minimum and medium
periods, and public censure shall be imposed upon any public officer who shall accept gifts offered to him by
reason of his office.
....
ARTICLE 255. Infanticide. — The penalty provided for parricide in Article 246 and for murder in Article 248
shall be imposed upon any person who shall kill any child less than three days of age.
....
ARTICLE 315. Swindling (Estafa). — Any person who shall defraud another by any of the means mentioned
hereinbelow shall be punished by:
1st. The penalty of prision correccional in its maximum period to prision mayor in its minimum period, if the
amount of the fraud is over 12,000 pesos but doe's not exceed 22,000 pesos, and if such amount exceeds
the latter sum, the penalty provided in this paragraph shall be imposed in its maximum period, adding one
year for each additional 10,000 pesos; but the total penalty which may be imposed shall not exceed twenty
years. In such cases, and in connection with the accessory penalties which may be imposed and for the
purpose of the other provisions of this Code, the penalty shall be termed prision mayor or rcclusion
temporal, as the case may be.
Even if these offenses state the penalty that "shall be imposed," there is no confusion as to what the
prescribed penalties of these offenses are: the prescribed penalty is what is stated in the law.
Bail under the Constitution considers the offense charged in the information, not the offense of which the
accused will eventually be convicted. "Punishable" within the context of the Constitution means the penalty
prescribed by law for the offense charged. When an accused is charged with a complex crime, the penalty is
what is stated in the Revised Penal Code or in special penal laws in relation to Article 48 of the Revised Penal
Code. A complex crime is a single offense comprised of two or more offenses but with a single penalty.
While the prosecution must prove all the elements charged, it must only prove a single criminal intent. The
splitting of the penalties according to its separate component crimes undermines the singularity of the
criminal intent, which makes it a complex crime.
Finally, we must remember that there are two (2) aspects in criminal trial. First, there is the determination
by the judge as to whether all the elements of the offense as well as the accused's alleged participation can
be inferred or proven beyond reasonable doubt by the admissible evidence presented. This is the objective
part of trial. Thereafter, and second, the judge determines the proper penalty from a range provided by law.
This sentencing part involves a higher degree of discretion. The first part looks at the acts. The second looks
at the. offender and his or her circumstances.
The only allowable range for Malversation through Falsification as charged in the Information is reclusion
perpetua.
There is nothing inequitable in considering Malversation through Falsification of Public Documents of public
funds exceeding P22,000.00 as an offense bailable only as a matter of discretion.
Malversation of Public Funds, by itself, may be bailable as a matter of right since the prescribed penalty
under the law is reclusion temporal in its maximum period to reclusion perpetua. However, the law raises
the prescribed penalty to that of the more serious crime in its maximum period if it is committed through
Falsification. The conversion of the offense to a complex crime serves to underscore the gravity of the
offense.
Like Plunder under Republic Act No. 708019 and Graft and Corruption under Republic Act No. 3019,20 it is
generally committed by public officers.21 "Public office is a public trust."22 Public officers are sworn to
perform their duties with the highest fidelity. Malversation through Falsification, therefore, is a crime at par
with Plunder and Graft and Corruption since it involves a public officer's betrayal of public trust. As an
offense considered a violation of a constitutionally enshrined policy, it should be imposable with the highest
penalty provided by law.
ACCORDINGLY, I join the opinion of Justice Martin S. Villarama, Jr. and vote to GRANT the Petition.
Endnotes:
1
Ponencia, p. 2.
2
REV. PEN. CODE, art. 217, as amended by Rep. Act No. 1060 (1954), sec. 1, provides: chanRoblesvirtualLawlibrary
ARTICLE 217. Malversation of Public Funds or Property — Presumption of Malversation. — Any public officer
who, by reason of the duties of his office, is accountable for public funds or property, shall appropriate the
same, or shall take or misappropriate or shall consent, or through abandonment or negligence, shall permit
any other person to take such public funds or property, wholly or partially, or shall otherwise be guilty of the
misappropriation or malversation of such funds or property, shall suffer: chanRoblesvirtualLawlibrary
....
4. The penalty of reclusion temporal in its medium and maximum periods, if the amount involved is more
than 12,000 pesos but is less than 22,000 pesos. If the amount exceeds the latter, the penalty shall be
reclusion temporal in its maximum period to reclusion perpetua.
3
Rev. Pen. Code, art. 171 provides: chanRoblesvirtualLawlibrary
ARTICLE 171. Falsification by Public Officer, Employee or Notary or Ecclesiastic Minister. — The penalty of
prision mayor and a fine not to exceed 5,000 pesos shall be imposed upon any public officer, employee, or
notary who. taking advantage of his official position, shall falsify a document by committing any of the
following acts: chanRoblesvirtualLawlibrary
....
4
Ponencia, p. 2. The amount allegedly malversed was P274,306.75.
5
See People v. Pantaleon, Jr., et al., 600 Phil. 186 (2009) [Per J. Brion, Second Division].
6
J. Villarama, Jr., Dissenting Opinion on this case, p. 5.
7
Ponencia, pp. 8-11.
8
Id. at 10-11.
People v. Bulalayao, G.R. No. 103497, February 23, 1994, 230 SCRA 232, 240 [Per J. Padilla, Second
9
Division]. This case was also cited in the ponencia (Ponencia, p. 10).
10
626 Phil. 177 (2010) [Per J. Corona, Third Division].
11
Id. at 206-208, citing FLORENZ REGALADO, CRIMINAL LAW CONSPECTUS 172, 176 (3rded., 2007), III
RAMON AQUINO AND CAROLINA GRIÑO AQUINO, THE REVISED PENAL CODE 662 (1997), and LUIS B.
REYES, REVISED PENAL CODE, Book I, 650 (15th ed. rev., 2001).
12
CONST., art. III, sec. 13 provides: chanRoblesvirtualLawlibrary
the writ of habeas corpus is suspended. Excessive bail shall not be required.
13
Ponencia, pp. 8-11.
See Basco v. Judge Rapatalo, 336 Phil. 214, 219 (1997) [Per J. Romero, Second Division],citing ROLANDO
14
V. DEL CARMEN, CRIMINAL PROCEDURE, LAW AND PRACTICE 31 (3rd ed., 1995).
15
See Leviste v. Court of Appeals, et al., 629 Phil. 587, 594 (2010) [Per J. Corona, Third Division].
16
See ponencia, pp. 8-10.
17
Poneneia, p. 10.
18
J. Villarama, Jr., Dissenting Opinion on this case, p. 5.
19
An Act Defining and Penalizing the Crime of Plunder, July 12, 1991.
20
Anti-Graft and Corrupt Practices Act, August 17, I960.
21
See People v. Pajaro, et al., 577 Phil. 441, 453-454 (2008) [Per J. Ynares-Santiago, Third Division].
Malversation may be committed by private individuals if the private individual conspires with a public officer
to commit the crime.
22
CONST., art. XI, sec. 1.
Pilipinas Total Gas v. Commissioner of Internal revenue, GR 207122, 8 December 2015
EN BANC
G.R. No. 207112, December 08, 2015
PILIPINAS TOTAL GAS, INC., Petitioner, v. COMMISSIONER OF INTERNAL REVENUE,Respondent.
DECISION
MENDOZA, J.:
Before the Court is a petition for review on certiorari1 under Rule 45 of the Rules of Court assailing the
October 11, 2012 Decision2 and the May 8, 2013 Resolution3 of the Court of Tax Appeals (CTA) En Banc, in
CTA EB Case No. 776, which affirmed the January 13, 2011 Decision4 of the CTA Third Division (CTA
Division) in CTA Case No. 7863.
The Facts
Petitioner Pilipinas Total Gas, Inc. (Total Gas) is engaged in the business of selling, transporting and
distributing industrial gas. It is also engaged in the sale of gas equipment and other related businesses. For
this purpose, Total Gas registered itself with the Bureau of Internal Revenue (BIR) as a Value Added Tax
(VAT) taxpayer.
On April 20, 2007 and July 20, 2007, Total Gas filed its Original Quarterly VAT Returns for the First and
Second quarters of 2007, respectively with the BIR.
On May 20, 2008, it filed its Amended Quarterly VAT Returns for the first two quarters of 2007 reflecting its
sales subject to VAT, zero-rated sales, and domestic purchases of non-capital goods and services.
For the First and Second quarters of 2007, Total Gas claimed it incurred unutilized input VAT credits from its
domestic purchases of noncapital goods and services in the total amount of P8,124,400.35. Of this total
accumulated input VAT, Total Gas claimed that it had P7,898,433.98 excess unutilized input VAT.
On May 15, 2008, Total Gas filed an administrative claim for refund of unutilized input VAT for the first two
quarters of taxable year 2007, inclusive of supporting documents.
On August 28, 2008, Total Gas submitted additional supporting documents to the BIR.
On January 23, 2009, Total Gas elevated the matter to the CTA in view of the inaction of the Commissioner
of Internal Revenue (CIR).
During the hearing, Total Gas presented, as witnesses, Rosalia T. Yu and Richard Go, who identified
documentary evidence marked as Exhibits "A" to "ZZ-1," all of which were admitted. Respondent CIR, on
the other hand, did not adduce any evidence and had the case submitted for decision.
Ruling of the CTA Division
In its January 13, 2011 Decision,5 the CTA Division dismissed the petition for being prematurely filed. It
explained that Total Gas failed to complete the necessary documents to substantiate a claim for refund of
unutilized input VAT on purchases of goods and services enumerated under Revenue Memorandum Order
(RMO) No. 53-98. Of note were the lack of Summary List of Local Purchases and the certifications from the
Office of the Board of Investment (BOD), the Bureau of Customs (BOC), and the Philippine Economic Zone
Authority (PEZA) that the taxpayer had not filed any similar claim for refund covering the same period.6
Believing that Total Gas failed to complete the necessary documents to substantiate its claim for refund, the
CTA Division was of the view that the 120-day period allowed to the CIR to decide its claim under Section
112 (C) of the National Internal Revenue Code of 1997 (NIRC), had not even started to run. With this, the
CTA Division opined that the petition for review was prematurely filed because Total Gas failed to exhauist
the appropriate administrative remedies. The CTA Division stressed that tax refunds partake of the nature of
an exemption, putting into operation the rule of strict interpretation, with the taxpayer being charged with
the burden of proving that he had satisfied all the statutory and administrative requirements.7
Total Gas sought for reconsideration8 from the CTA Division, but its motion was denied for lack of merit in a
Resolution, dated April 19, 2011.9 In the same resolution, it reiterated that "that the complete supporting
documents should be submitted to the BIR before the 120-day period for the Commissioner to decide the
claim for refund shall commence to run. It is only upon the lapse of the 120-day period that the taxpayer
can appeal the inaction [to the CTA.]"10 It noted that RMO No. 53-98, which provides a checklist of
documents for the BIR to consider in granting claims for refund, also serves as a guideline for the courts to
determine if the taxpayer had submitted complete supporting documents.11 It also stated that Total Gas
could not invoke Revenue Memorandum Circular (RMC) No. 29-09 because it was issued after the
administrative claim was filed and could not be applied retroactively.12 Thus, the CTA Division disposed:
WHEREFORE, premises considered, the present Petition for Review is hereby DENIED DUE COURSE, and,
accordingly DISMISSED for having been prematurely filed.
Ruling of the CTA En Banc
In its assailed decision, the CTA En Banc likewise denied the petition for review of Total Gas for lack of
merit. It condensed its arguments into two core issues, to wit: (1) whether Total Gas seasonably filed its
judicial claim for refund; and (2) whether it was unable to substantiate its administrative claim for refund by
failing to submit the required documents that would allow respondent to act on it.14
As to the first issue, the CTA En Banc ruled that the CTA Division had no jurisdiction over the case because
Total Gas failed to seasonably file its petition. Counting from the date it filed its administrative claim on May
15, 2008, the CTA En Banc explained that the CIR had 120 days to act on the claim (until September 12,
2008), and Total Gas had 30 days from then, or until October 12, 2008, to question the inaction before the
CTA. Considering that Total Gas only filed its petition on January 23, 2009, the CTAEn Banc concluded that
the petition for review was belatedly filed. For the tax court, the 120-day period could not commence on the
day Total Gas filed its last supporting document on August 28, 2008, because to allow such would give the
taxpayer unlimited discretion to indefinitely extend the 120-day period by simply filing the required
documents piecemeal.15
As to the second issue, the CTA En Banc affirmed the CTA Division that Total Gas failed to submit the
complete supporting documents to warrant the grant of its application for refund. Quoting the pertinent
portion of the decision of its division, the CTA En Banc likewise concurred in its finding that the judicial claim
of Total Gas was prematurely filed because the 120-day period for the CIR to decide the claim had yet to
commence to run due to the lack of essential documents.16
Total Gas filed a motion for reconsideration,17 but it was denied in the assailed resolution of the CTAEn
Banc.18
Hence, the present petition.

ISSUES
(a) whether the judicial claim for refund was belatedly filed on 23 January 2009, or way beyond
the 30-day period to appeal as provided in Section 112(c) of the Tax Code, as amended; and
(b) whether the submission of incomplete documents at the adminstrative level (BIR) renders
the judicial claim premature and dismissible for lack of jurisdiction. 19 ChanRoblesVirtualawlibrary
In its petition, Total Gas argues that its judicial claim was filed within the prescriptive period for claiming
excess unutilized input VAT refund as provided under Section 112 of the NIRC and expounded in the Court's
ruling in CIR v. Aichi Forging Company of Asia20 (Aichi) and in compliance with Section 112 of the NIRC. In
addition to citing Section 112 (C) of the Tax Code, Total Gas points out that in one of its previous claims for
refund of excess unutilized input VAT, the CTA En Banc in CTAEn Banc Case No. 674,21 faulted the BIR in not
considering that the reckoning period for the 120-period should be counted from the date of submission of
complete documents.22 It then adds that the previous ruling of the CTA En Banc was in accordance with law
because Section 112 (C) of the Tax Code is clear in providing that the 120-day period should be counted
from the date of its submission of the complete documents or from August 28, 2008 and not from the date it
filed its administrative claim on May 15, 2008.23 Total Gas argues that, since its claim was filed within the
period of exception provided in CIR v. San Roque Power Corporation24 (San Roque), it did not have to
strictly comply with 120+30 day period before it could seek judicial relief.25cralawred
Moreover, Total Gas questions the logic of the CTA En Banc which stated that the petition was filed both
belatedly and prematurely. Total Gas points out that on the one hand, the CTA En Banc ruled that it filed the
judicial claim belatedly as it was way beyond the 120+30 day period. Yet, it also affirmed the findings of its
division that its petition for review was prematurely filed since the 120-day period did not even commence
to run for lack of complete supporting documents.26
For Total Gas, the CTA En Banc violated the doctrine of stare decisis because the tax tribunal had, on
numerous occassions, held that the submission of incomplete supporting documents should not make the
judicial appeal premature and dismissible for lack of jurisdiction. In these decisions, the CTA En Banc had
previously held that non-compliance with RMO No. 53-98 should not be fatal since the requirements listed
therein refer to requirements for refund or tax credit in the administrative level for purposes of establishing
the authenticity of a taxpayer's claim; and that in the judicial level, it is the Rules of Court that govern and,
thus, whether or not the evidence submitted by the party to the court is sufficient lies within the sound
discretion of the court. Total Gas emphasizes that RMO No. 53-98 does not state that non-submission of
supporting documents will nullify the judicial claim. It posits that once a judicial claim is filed, what should
be examined are the evidence formally offered in the judicial proceedings.27
Even assuming that the supporting documents submitted to the BIR were incomplete, Total Gas argues that
there was no legal basis to hold that the CIR could not decide or act on the claim for refund without the
complete supporting documents. It argues that under RMC No. 29-09, the BIR is tasked with the duty to
notify the taxpayer of the incompleteness of its supporting documents and, if the taxpayer fails to complete
the supporting supporting documents despite such notice, the same shall be denied. The same regulation
provides that for purposes of computing the 120-day period, it should be considered tolled when the
taxpayer is notified. Total Gas, however, insists that it was never notified and, therefore, was justified in
seeking judicial relief.28
Although Total Gas admits that RMC No. 29-09 was not yet issued at the time it filed its administrative
claim, the BIR still erred for not notifying them of their lack of supporting documents. According to Total
Gas, the power to notify a taxpayer of lacking documents and to deny its claim if the latter would not
comply is inherent in the CIR's power to decide refund cases pursuant to Section 4 of the NIRC. It adds
"[s]ound policy also dictates that it should be the taxpayer who should determine whether he has already
submitted all documents pertinent to his claim. To rule otherwise would result into a never-ending
conflict/issue as to the completeness of documents which, in turn, would delay the taxpayer's claim, and
would put to naught the protection afforded by Section 112 (C) of the Tax Code."29
In her Comment,30 the CIR echoed the ruling of the CTA En Banc, that Total Gas filed its petition out of time.
She countered that the 120-day period could not be counted from the time Total Gas submitted its
additional documents on August 28, 2008 because such an interpretation of Section 112(D) would
indefinitely extend the prescriptive period as provided in favor of the taxpayer.
In its Reply,31 Total Gas insisted that Section 112(C) stated that the 120-day period should be reckoned
from the date of submission of complete documents, and not from the date of the filing of the administrative
claim.
Ruling of the Court
The petition has merit.
Judicial claim timely filed

Section 112 (C) of the NIRC provides: chanRoblesvirtualLawlibrary
SEC. 112. Refunds or Tax Credits of Input Tax. -
xxxx
(C) Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the
Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one
hundred twenty (120) days from the date of submission of complete documents in support of the
Commissioner to act on the application within the period prescribed above, the taxpayer affected may,
within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one
hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals.
xxxx
[Emphasis and Underscoring Supplied]

From the above, it is apparent that the CIR has 120 days from the date of submission of complete
documents to decide a claim for tax credit or refund of creditable input taxes. The taxpayer may, within 30
days from receipt of the denial of the claim or after the expiration of the 120-day period, which is considered
a "denial due to inaction," appeal the decision or unacted claim to the CTA.
To be clear, Section 112(C) categorically provides that the 120-day period is counted "from the date of
submission of complete documents in support of the application." Contrary to this mandate, the CTA En
Banc counted the running of the period from the date the application for refund was filed or May 15, 2008,
and, thus, ruled that the judicial claim was belatedly filed.
This should be corrected.
Indeed, the 120-day period granted to the CIR to decide the administrative claim under the Section 112 is
primarily intended to benefit the taxpayer, to ensure that his claim is decided judiciously and expeditiously.
After all, the sooner the taxpayer successfully processes his refund, the sooner can such resources be
further reinvested to the business translating to greater efficiencies and productivities that would ultimately
uplift the general welfare. To allow the CIR to determine the completeness of the documents submitted and,
thus, dictate the running of the 120-day period, would undermine these objectives, as it would provide the
CIR the unbridled power to indefinitely delay the administrative claim, which would ultimately prevent the
filing of a judicial claim with the CTA.
A hypothetical situation illustrates the hazards of granting the CIR the authority to decide when complete
documents have been submitted - A taxpayer files its administrative claim for VAT refund/credit with
supporting documents. After 121 days, the CIR informs the taxpayer that it must submit additional
documents. Considering that the CIR had determined that complete documents have not yet been
submitted, the 120-day period to decide the administrative claim has not yet begun to run. In the
meantime, more than 120 days have already passed since the application with the supporting documents
was filed to the detriment of the taxpayer, who has no opportunity to file a judicial claim until the lapse of
the 120+30 day period in Section 112(C). With no limitation to the period for the CIR to determine when
complete documents have been submitted, the taxpayer may be left in a limbo and at the mercy of the CIR,
with no adequate remedy available to hasten the processing of its administrative claim.
Thus, the question must be asked: In an administrative claim for tax credit or refund of creditable input
VAT, from what point does the law allow the CIR to determine when it should decide an application for
refund? Or stated differently: Under present law, when should the submission of documents be deemed
"completed" for purposes of determining the running of the 120-day period?
Ideally, upon filing his administrative claim, a taxpayer should complete the necessary documents to
support his claim for tax credit or refund or for excess utilized VAT. After all, should the taxpayer decide to
submit additional documents and effectively extend the 120-period, it grants the CIR more time to decide
the claim. Moreover, it would be prejudicial to the interest of a taxpayer to prolong the period of processing
of his application before he may reap the benefits of his claim. Therefore, ideally, the CIR has a period of
120 days from the date an administrative claim is filed within which to decide if a claim for tax credit or
refund of excess unutilized VAT has merit.
Thus, when the VAT was first introduced through Executive Order No. 273,32 the pertinent rule was that:
(e) Period within which refund of input taxes may be made by the Commissioner. The Commissioner shall
refund input taxes within 60 days from the date the application for refund was filed with him or his
duly authorized representative. No refund or input taxes shall be allowed unless the VAT-registered person
files an application for refund within the period prescribed in paragraphs (a), (b) and (c), as the case
maybe.
[Emphasis supplied]
Here, the CIR was not only given 60 days within which to decide an administrative claim for refund of input
taxes, but the beginning of the period was reckoned "from the date the application for refund was filed."
When Republic Act (R.A.) No. 771633 was, however, enacted on May 5, 1994, the law was amendedto read:
(d) Period within which refund or tax credit of input taxes shall be made. - In proper cases, The
Commissioner shall grant a refund or issue the tax credit for creditable input taxes within sixty (60)
days from the date of submission of complete documents in support of the application filed in
accordance with sub-paragraphs (a) and (b) hereof. In case of full or partial denial of the claim for tax
refund or tax credit, or the failure on the part of the Commissioner to act on the application within the
period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision
denying the claim or after the expiration of the sixty-day period, appeal the decision or the unacted claim
with the Court of Tax Appeals.
[Emphasis supplied]
Again, while the CIR was given only 60 days within which to act upon an administrative claim for refund or
tax credit, the period came to be reckoned "from the date of submission of complete documents in
support of the application." With this amendment, the date when a taxpayer made its submission of
complete documents became relevant. In order to ensure that such date was at least determinable, RMO
No. 4-94 provides:
REVENUE MEMORANDUM ORDER NO. 40-94
SUBJECT : Prescribing the Modified Procedures on the Processing of Claims for Value-Added Tax
Credit/Refund
III. Procedures
REGIONAL OFFICE
A. Revenue District Office
In General: chanRoblesvirtualLawlibrary
1. Ascertain the completeness of the supporting documents prior to the receipt of the application for VAT
credit/refund from the taxpayer.
2. Receive application for VAT Credit/Refund (BIR Form No. 2552) in three (3) copies in the following
manner:
a. stamp the word "RECEIVED" on the appropriate space provided in all copies of application;
b. indicate the claim number;
c. indicate the date of receipt; and
d. initial by receiving officer.

The application shall be received only if the required attachments prescribed in RAMO 1-91 have been fully
complied with x x x.
Then, when the NIRC34 was enacted on January 1, 1998, the rule was once more amended to read:
(D) Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the
hundred twenty (120) days from the date of submission of compete documents in support of the
[Emphasis supplied]
This time, the period granted to the CIR to act upon an admmistrative claim for refund was extended to 120
days. The reckoning point however, remained "from the date of submission of complete documents."
Aware that not all taxpayers were able to file the complete documents to allow the CIR to properly evaluate
an administrative claim for tax credit or refund of creditable input taxes, the CIR issued RMC No. 49-2003,
which provided:
Q-18: For pending claims with incomplete documents, what is the period within which to submit the
supporting documents required by the investigating/processing office? When should the
investigating/processing office officially receive claims for tax credit/refund and what is the period required
to process such claims?
A-18: For pending claims which have not been acted upon by the investigating/processing office due to
incomplete documentation, the taxpayer-claimants are given thirty (30) days within which to
submit the documentary requirements unless given further extension by the head of the
processing unit, but such extension should not exceed thirty (30) days.
For claims to be filed by claimants with the respective investigating/processing office of the administrative
agency, the same shall be officially received only upon submission of complete documents.
For current and future claims for tax credit/refund, the same shall be processed within one hundred twenty
(120) days from receipt of the complete documents. If, in the course of the investigation and processing of
the claim, additional documents are required for the proper determination of the legitimate amount of claim,
the taxpayer-claimants shall submit such documents within thirty (30) days from request of the
investigating/processing office, which shall be construed as within the one hundred twenty
(120) day period.
[Emphases Supplied]
Consequently, upon filing of his application for tax credit or refund for excess creditable input taxes, the
taxpayer-claimant is given thirty (30) days within which to complete the required documents, unless given
further extension by the head of the processing unit. If, in the course of the investigation and processing of
the claim, additional documents are required for the proper determination of the legitimate amount of claim,
the taxpayer-claimants shall submit such documents within thirty (30) days from request of the
investigating/processing office. Notice, by way of a request from the tax collection authority to produce the
complete documents in these cases, became essential. It is only upon the submission of these documents
that the 120-day period would begin to run.
Then, when R.A. No. 933735 was passed on July 1, 2005, the same provision under the NIRC was retained.
With the amendment to Section 112, particularly the deletion of what was once Section 112(B) of the NIRC,
Section 112 (D) was amended and renamed 112(C). Thus:
(C) Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the
hundred twenty (120) days from the date of submission of complete documents in support of the
application filed in accordance with Subsection (A) hereof.
With the amendments only with respect to its place under Section 112, the Court finds that RMC No. 49-
2003 should still be observed. Thus, taking the foregoing changes to the law altogether, it becomes
apparent that, for purposes of determining when the supporting documents have been completed — it is
the taxpayer who ultimately determines when complete documents have been submitted for the purpose of
commencing and continuing the running of the 120-day period. After all, he may have already completed
the necessary documents the moment he filed his administrative claim, in which case, the 120-day period is
reckoned from the date of filing.
The taxpayer may have also filed the complete documents on the 30th day from filing of his application,
pursuant to RMC No. 49-2003. He may very well have filed his supporting documents on the first day he
was notified by the BIR of the lack of the necessary documents. In such cases, the 120-day period is
computed from the date the taxpayer is able to submit the complete documents in support of his
application.
Then, except in those instances where the BIR would require additional documents in order to fully
appreciate a claim for tax credit or refund, in terms what additional document must be presented in support
of a claim for tax credit or refund - it is the taxpayer who has that right and the burden of providing any and
all documents that would support his claim for tax credit or refund. After all, in a claim for tax credit or
refund, it is the taxpayer who has the burden to prove his cause of action. As such, he enjoys relative
freedom to submit such evidence to prove his claim.
The foregoing conclusion is but a logical consequence of the due process guarantee under the Constitution.
Corollary to the guarantee that one be afforded the opportunity to be heard, it goes without saying that the
applicant should be allowed reasonable freedom as to when and how to present his claim within the
allowable period.
Thereafter, whether these documents are actually complete as required by law - is for the CIR
and the courts to determine. Besides, as between a taxpayer-applicant, who seeks the refund of his
creditable input tax and the CIR, it cannot be denied that the former has greater interest in ensuring that
the complete set of documentary evidence is provided for proper evaluation of the State.
Lest it be misunderstood, the benefit given to the taxpayer to determine when it should complete its
submission of documents is not unbridled. Under RMC No. 49-2003, if in the course of the investigation and
processing of the claim, additional documents are required for the proper determination of the legitimacy of
the claim, the taxpayer-claimants shall submit such documents within thirty (30) days from request of the
investigating/processing office. Again, notice, by way of a request from the tax collection authority
to produce the complete documents in these cases, is essential.
Moreover, under Section 112(A) of the NIRC,36 as amended by RA 9337, a taxpayer has two (2) years, after
the close of the taxable quarter when the sales were made, to apply for the issuance of a tax credit
certificate or refund of creditable input tax due or paid attributable to such sales. Thus, before the
adminstrative claim is barred by prescription, the taxpayer must be able to submit his complete documents
in support of the application filed. This is because, it is upon the complete submission of his documents in
support of his application that it can be said that the application was, "officially received" as provided under
RMC No. 49-2003.
To summarize, for the just disposition of the subject controversy, the rule is that from the date an
administrative claim for excess unutilized VAT is filed, a taxpayer has thirty (30) days within which to submit
the documentary requirements sufficient to support his claim, unless given further extension by the CIR.
Then, upon filing by the taxpayer of his complete documents to support his application, or expiration of the
period given, the CIR has 120 days within which to decide the claim for tax credit or refund. Should the
taxpayer, on the date of his filing, manifest that he no longer wishes to submit any other addition
documents to complete his administrative claim, the 120 day period allowed to the CIR begins to run from
the date of filing.
In all cases, whatever documents a taxpayer intends to file to support his claim must be completed within
the two-year period under Section 112(A) of the NIRC. The 30-day period from denial of the claim or from
the expiration of the 120-day period within which to appeal the denial or inaction of the CIR to the CTA must
also be respected.
It bears mentioning at this point that the foregoing summation of the rules should only be made applicable
to those claims for tax credit or refund filed prior to June 11, 2014, such as the claim at bench. As it now
stands, RMC 54-2014 dated June 11, 2014 mandates that:
The application for VAT refund/tax credit must be accompanied by complete supporting documents as
enumerated in Annex "A" hereof. In addition, the taxpayer shall attach a statement under oath attesting
to the completeness of the submitted documents (Annex B). The affidavit shall further state that the said
documents are the only documents which the taxpayer will present to support the claim. If the taxpayer is a
juridical person, there should be a sworn statement that the officer signing the affidavit (i.e., at the very
least, the Chief Financial Officer) has been authorized by the Board of Directors of the company.
Upon submission of the administrative claim and its supporting documents, the claim shall be processed and
no other documents shall be accepted/required from the taxpayer in the course of its evaluation. A decision
shall be rendered by the Commissioner based only on the documents submitted by the taxpayer. The
application for tax refund/tax credit shall be denied where the taxpayer/claimant failed to submit the
complete supporting documents. For this purpose, the concerned processing/investigating office shall
prepare and issue the corresponding Denial Letter to the taxpayer/claimant.
Thus, under the current rule, the reckoning of the 120-day period has been withdrawn from the taxpayer by
RMC 54-2014, since it requires him at the time he files his claim to complete his supporting documents and
attest that he will no longer submit any other document to prove his claim. Further, the taxpayer is barred
from submitting additional documents after he has filed his administrative claim.
On this score, the Court finds that the foregoing issuance cannot be applied rectroactively to the case
at bar since it imposes new obligations upon taxpayers in order to perfect their administrative claim, that is,
[1] compliance with the mandate to submit the "supporting documents" enumerated under RMC 54-2014
under its "Annex A"; and [2] the filing of "a statement under oath attesting to the completeness of the
submitted documents," referred to in RMC 54-2014 as "Annex B." This should not prejudice taxpayers who
have every right to pursue their claims in the manner provided by existing regulations at the time it was
filed.
As provided under Section 246 of the Tax Code:

SEC. 246. Non-Retroactivity of Rulings. - Any revocation, modification or reversal of any of the rules and
regulations promulgated in accordance with the preceding Sectionsor any of the rulings or circulars
promulgated by the Commissioner shall not be given retroactive application if the revocation,
modification or reversal will be prejudicial to the taxpayers, except in the following cases: chanRoblesvirtualLawlibrary
(a) Where the taxpayer deliberately misstates or omits material facts from his return or any document
required of him by the Bureau of Internal Revenue;
(b) Where the facts subsequently gathered by the Bureau of Internal Revenue are materially different from
the facts on which the ruling is based; or
(c) Where the taxpayer acted in bad faith.
[Emphasis and Italics Supplied]

Applying the foregoing precepts to the case at bench, it is observed that the CIR made no effort to question
the inadequacy of the documents submitted by Total Gas. It neither gave notice to Total Gas that its
documents were inadequate, nor ruled to deny its claim for failure to adequately substantiate its claim.
Thus, for purposes of counting the 120-day period, it should be reckoned from August 28, 2008, the date
when Total Gas made its "submission of complete documents to support its application" for refund of excess
unutilized input VAT. Consequently, counting from this later date, the BIR had 120 days to decide the claim
or until December 26, 2008. With absolutely no action or notice on the part of the BIR for 120 days, Total
Gas had 30 days or until January 25, 2009 to file its judicial claim.
Total Gas, thus, timely filed its judicial claim on January 23, 2009.
Anent RMO No. 53-98, the CTA Division found that the said order provided a checklist of documents for the
BIR to consider in granting claims for refund, and served as a guide for the courts in determining whether
the taxpayer had submitted complete supporting documents.
This should also be corrected.
To quote RMO No. 53-98:

REVENUE MEMORANDUM ORDER NO. 53-98
SUBJECT: Checklist of Documents to be Submitted by a Taxpayer upon Audit of his Tax Liabilities as well as
of the Mandatory Reporting Requirements to be Prepared by a Revenue Officer, all of which Comprise a
Complete Tax Docket.
TO: All Internal Revenue Officers, Employees and Others Concerned
I. BACKGROUND
It has been observed that for the same kind of tax audit case, Revenue Officers differ in their request for
requirements from taxpayers as well as in the attachments to the dockets resulting to tremendous
complaints from taxpayers and confusion among tax auditors and reviewers.
For equity and uniformity, this Bureau comes up with a prescribed list of requirements from taxpayers, per
kind of tax, as well as of the internally prepared reporting requirements, all of which comprise a complete
tax docket.
II. OBJECTIVE
This order is issued to:chanRoblesvirtualLawlibrary
a. Identify the documents to be required from a taxpayer during audit, according to particular kind of tax;
and
b. Identify the different audit reporting requirements to be prepared, submitted and attached to a tax audit
docket.
III. LIST OF REQUIREMENTS PER TAX TYPE
Income Tax/ Withholding Tax

- Annex A (3 pages)
Value Added Tax

- Annex B (2 pages)
- Annex B-1 (5 pages)
xxxx
As can be gleaned from the above, RMO No. 53-98 is addressed to internal revenue officers and employees,
for purposes of equity and uniformity, to guide them as to what documents they may require taxpayers to
present upon audit of their tax liabilities. Nothing stated in the issuance would show that it was intended
to be a benchmark in determining whether the documents submitted by a taxpayer are actually complete to
support a claim for tax credit or refund of excess unutilized excess VAT. As expounded in Commissioner of
Internal Revenue v. Team Sual Corporation (formerely Mir ant Sual Corporation):37
The CIR's reliance on RMO 53-98 is misplaced. There is nothing in Section 112 of the NIRC. RR 3-88 or RMO
K3-Q8 itself that requires submission of the complete documents enumerated in RMO 53-98 for a grant of a
refund or credit of input VAT. The subject of RMO 53-98 states that it is a "Checklist of Documents to be
Submitted by a Taxpayer upon Audit of his Tax Liabilities x x x." In this case, TSC was applying for a grant
of refund or credit of its input tax. There was no allegation of an audit being conducted by the CIR. Even
assuming that RMO 53-98 applies, it specifically states that some documents are required to be submitted
by the taxpayer "if applicable."
Moreover, if TSC indeed failed to submit the complete documents in support of its application, the CIR could
have informed TSC of its failure, consistent with Revenue Memorandum Circular No. (RMC) 42-03. However,
the CIR did not inform TSC of the document it failed to submit, even up to the present petition. The CIR
likewise raised the issue of TSC's alleged failure to submit the complete documents only in its motion for
reconsideration of the CTA Special First Division's 4 March 2010 Decision. Accordingly, we affirm the CTA
EB's finding that TSC filed its administrative claim on 21 December 2005, and submitted the complete
documents in support of its application for refund or credit of its input tax at the same time.
[Emphasis included. Underlining Ours.]

As explained earlier and underlined in Team Sual above, taxpayers cannot simply be faulted for failing to
submit the complete documents enumerated in RMO No. 53-98, absent notice from a revenue officer or
employee that other documents are required. Granting that the BIR found that the documents submitted by
Total Gas were inadequate, it should have notified the latter of the inadequacy by sending it a request to
produce the necessary documents in order to make a just and expeditious resolution of the claim.
Indeed, a taxpayer's failure with the requirements listed under RMO No. 53-98 is not fatal to its claim for tax
credit or refund of excess unutilized excess VAT. This holds especially true when the application for tax
credit or refund of excess unutilized excess VAT has arrived at the judicial level. After all, in the judicial level
or when the case is elevated to the Court, the Rules of Court governs. Simply put, the question of whether
the evidence submitted by a party is sufficient to warrant the granting of its prayer lies within the sound
discretion and judgment of the Court.
At this point, it is worth emphasizing that the reckoning of the 120-day period from August 28, 2008 cannot
be doubted. First, a review of the records of the case undubitably show that Total Gas filed its supporting
documents on August 28, 2008, together with a transmittal letter bearing the same date. These documents
were then stamped and signed as received by the appropriate officer of the BIR.Second, contrary to RMO
No. 40-94, which mandates officials of the BIR to indicate the date of receipt of documents received by their
office in every claim for refund or credit of VAT, the receiving officer failed to indicate the precise date and
time when he received these documents. Clearly, the error is attributable to the BIR officials and should not
prejudice Total Gas.
Third, it is observed that whether before the CTA or this Court, the BIR had never questioned the date it
received the supporting documents filed by Total Gas, or the propriety of the filing thereof. In contrast to
the contiuous efforts of Total Gas to complete the necessary documents needed to support its application, all
that was insisted by the CIR was that the reckoning period should be counted from the date Total Gas filed
its application for refund of excess unutilized input VAT. There being no question as to whether these
documents were actually received on August 28, 2008, this Court shall not, by way of conjecture, cast doubt
on the truthfullness on such submission. Finally, in consonance with the presumption that a person acts in
accordance with the ordinary course of business, it is presumed that such documents were received on the
date stated therein.
Verily, should there be any doubt on whether Total Gas filed its supporting documents on August 28, 2008,
it is incumbent upon the CIR to allege and prove such assertion. As the saying goes, contra preferentum.
If only to settle any doubt, this Court is by no means setting a precedent by leaving it to the mercy of the
taxpayer to determine when the 120- day reckoning period should begin to run by providing absolute
discretion as to when he must comply with the mandate submitting complete documents in support of his
claim. In addition to the limitations thoroughly discussed above, the peculiar circumstance applicable herein,
as to relieve Total Gas from the application of the rule, is the obvious failure of the BIR to comply with
the specific directive, under RMO 40-94, to stamp the date it received the supporting
documents which Total Gas had submitted to the BIR for its consideration in the processing of its claim.
The utter failure of the tax administrative agency to comply with this simple mandate to stamp the date it
receive the documents submitted by Total Gas - should not in any manner prejudice the taxpayer by casting
doubt as to when it was able to submit its complete documents for purposes of determing the 120-day
period.
While it is still true a taxpayer must prove not only his entitlement to a refund but also his compliance with
the procedural due process38 - it also true that when the law or rule mandates that a party or authority must
comply with a specific obligation to perform an act for the benefit of another, the non-compliance therof by
the former should not operate to prejudice the latter, lest it render the nugatory the objective of the rule.
Such is the situation in case at bar.
Judicial claim not prematurely filed
The CTA En Banc curiously ruled in the assailed decision that the judicial claim of Total Gas was not only
belatedly filed, but prematurely filed as well, for failure of Total Gas to prove that it had submitted the
complete supporting documents to warrant the grant of the tax refund and to reckon the commencement of
the 120-day period. It asserted that Total Gas had failed to submit all the required documents to the CIR
and, thus, the 120-day period for the CIR to decide the claim had not yet begun to run, resulting in the
premature filing of the judicial claim. It wrote that the taxpayer must first submit the complete supporting
documents before the 120-day period could commence, and that the CIR could not decide the claim for
refund without the complete supporting documents.
The Court disagrees.
The alleged failure of Total Gas to submit the complete documents at the administrative level did not render
its petition for review with the CTA dismissible for lack of jurisdiction. First, the 120-day period had
commenced to run and the 120+30 day period was, in fact, complied with. As already discussed, it is the
taxpayer who determines when complete documents have been submitted for the purpose of the running of
the 120-day period. It must again be pointed out that this in no way precludes the CIR from requiring
additional documents necessary to decide the claim, or even denying the claim if the taxpayer fails to
submit the additional documents requested.
Second, the CIR sent no written notice informing Total Gas that the documents were incomplete or required
it to submit additional documents. As stated above, such notice by way of a written request is required by
the CIR to be sent to Total Gas. Neither was there any decision made denying the administrative claim of
Total Gas on the ground that it had failed to submit all the required documents. It was precisely the inaction
of the BIR which prompted Total Gas to file the judicial claim. Thus, by failing to inform Total Gas of the
need to submit any additional document, the BIR cannot now argue that the judicial claim should be
dismissed because it failed to submit complete documents.
Finally, it should be mentioned that the appeal made by Total Gas to the CTA cannot be said to be
premature on the ground that it did not observe the otherwise mandatory and juridictional 120+30 day
period. When Total Gas filed its appeal with the CTA on January 23, 2009, it simply relied on BIR Ruling No.
DA-489-03, which, at that time, was not yet struck down by the Court's ruling in Aichi. As explained
in San Roque, this Court recognized a period in time wherein the 120-day period need not be strictly
observed. Thus:
To repeat, a claim for tax refund or credit, like a claim for tax exemption, is construed strictly against the
taxpayer. One of the conditions for a judicial claim of refund or credit under the VAT System is compliance
with the 120+30 day mandatory and jurisdictional periods. Thus, strict compliance with the 120+30 day
periods is necessary for such a claim to prosper, whether before, during, or after the effectivity of the Atlas
doctrine,except for the period from the issuance of BIR Ruling No. DA-489-03 on 10 December
2003 to 6 October 2010 when the Aichi doctrine was adopted, which again reinstated the 120+30
day periods as mandatory and jurisdictional.
xxxx
Clearly, BIR Ruling No. DA-489-03 is a general interpretative rule. Thus, all taxpayers can rely on BIR
Ruling No. DA-489-03 from the time of its issuance on 10 December 2003 up to its reversal by
this Court in Aichi on 6 October 2010, where this Court held that the 120+30 day periods are
mandatory and jurisdictional.
At this stage, a review of the nature of a judicial claim before the CTA is in order. In Atlas Consolidated
Mining and Development Corporation v. CIR, it was ruled -
x x x First, a judicial claim for refund or tax credit in the CTA is by no means an original action but rather
an appeal by way of petition for review of a previous, unsuccessful administrative claim. Therefore, as in
every appeal or petition for review, a petitioner has to convince the appellate court that the quasi-judicial
agency a quo did not have any reason to deny its claims. In this case, it was necessary for petitioner to
show the CTA not only that it was entitled under substantive law to the grant of its claims but also that it
satisfied all the documentary and evidentiary requirements for an administrative claim for refund or tax
credit. Second, cases filed in the CTA are litigated de novo. Thus, a petitioner should prove every minute
aspect of its case by presenting, formally offering and submitting its evidence to the CTA. Since it is crucial
for a petitioner in a judicial claim for refund or tax credit to show that its administrative claim should have
been granted in the first place, part of the evidence to be submitted to the CTA must necessarily include
whatever is required for the successful prosecution of an administrative claim.39
[Underscoring Supplied]
A distinction must, thus, be made between administrative cases appealed due to inaction and those
dismissed at the administrative level due to the failure of the taxpayer to submit supporting documents. If
an administrative claim was dismissed by the CIR due to the taxpayer's failure to submit complete
documents despite notice/request, then the judicial claim before the CTA would be dismissible, not for lack
of jurisdiction, but for the taxpayer's failure to substantiate the claim at the administrative level. When a
judicial claim for refund or tax credit in the CTA is an appeal of an unsuccessful administrative claim, the
taxpayer has to convince the CTA that the CIR had no reason to deny its claim. It, thus, becomes imperative
for the taxpayer to show the CTA that not only is he entitled under substantive law to his claim for refund or
tax credit, but also that he satisfied all the documentary and evidentiary requirements for an administrative
claim. It is, thus, crucial for a taxpayer in a judicial claim for refund or tax credit to show that its
administrative claim should have been granted in the first place. Consequently, a taxpayer cannot cure its
failure to submit a document requested by the BIR at the administrative level by filing the said document
before the CTA.
In the present case, however, Total Gas filed its judicial claim due to the inaction of the BIR. Considering
that the administrative claim was never acted upon; there was no decision for the CTA to review on
appeal per se. Consequently, the CTA may give credence to all evidence presented by Total Gas, including
those that may not have been submitted to the CIR as the case is being essentially decided in the first
instance. The Total Gas must prove every minute aspect of its case by presenting and formally offering its
evidence to the CTA, which must necessarily include whatever is required for the successful prosecution of
an administrative claim.40
The Court cannot, however, make a ruling on the issue of whether Total Gas is entitled to a refund or tax
credit certificate in the amount of P7,898,433.98. Considering that the judicial claim was denied due course
and dismissed by the CTA Division on the ground of premature and/or belated filing, no ruling on the issue
of Total Gas entitlement to the refund was made. The Court is not a trier of facts, especially when such facts
have not been ruled upon by the lower courts. The case shall, thus, be remanded to the CTA Division for
trial de novo.
WHEREFORE, the petition is PARTIALLY GRANTED. The October 11, 2012 Decision and the May 8, 2013
Resolution of the Court of Tax Appeals En Banc, in CTA EB No. 776 are REVERSED and SET ASIDE.
The case is REMANDED to the CTA Third Division for trial de novo.
Sereno, C.J., Carpio, Velasco, Jr., Leonardo-De Castro, Peralta, Bersamin, Del Castillo, Villarama, Jr., Perez,
Reyes, and Perlas-Bernabe, JJ., concur.
Brion, J., on leave.
Leonen, J., see separate concurring opinion.
Jardeleza, J., no part.
Endnotes:
Rollo, pp. 11-394.

1
2
Id. at 39-60; penned by Associate Justice Esperanza R. Fabon-Victorino, with Associate Justice Ernesto D.
Acosta, Associate Justice Juanito C. Castaneda, Jr., Associate Justice Caesar A. Casanova, Associate Justice
Olga Palanca-Enriquez, and Associate Justice Cielito N. Mindaro-Grulla, concurring; Associate Justice Lovell
R. Bautista, dissenting; and Associate Justice Erlinda P. Uy and Associate Justice Amelia R. Cotangco-
Manalastas, on leave.
3
Id. at 62-65.
4
Id. at 93-108.
5
Id.
6
Id. at 102-105
7
Id. at 106-107.
8
Id. at 114-126.
9
Id. at 128-133.
10
Id. at 130.
11
Id.
12
Id.
13
Id. at 107.
14
Id. at 52.
15
Id. at 56-57.
16
Id. at 57-58.
17
Id. at 157-169.
18
Id. at 62-65.
19
Id. at 18.
20
646 Phil. 710 (2010).
21
Affirmed by the Third Division of this Court in G.R. No. 201920 via Resolutions dated October 14, 2013
and February 10, 2014; see rollo, G.R. No. 201920, p. 302 and p. 320.
22
Id. at 20-21.
23
Id. at 21.
24
25
Rollo, pp. 21-22.
26
Id. at 23.
27
Id. at 23-25.
28
Id. at 25-26.
29
Id. at 28.
30
Id. at 426-433.
31
Id. at 436-440.
32
Titled "Adopting A Value-Added Tax, Amending For This Purpose Certain Provisions of the National Internal
Revenue Code, and For Other Purposes."
33
Titled "An Act Restructing the Value Added Tax (Vat) System, Widening its Tax Base and Enhancing its
Administration, and for these Purposes Amending and Repealing the Relevant Provisions of the National
Internal Revenue Code, as amended, and For Other Purposes."
34
Otherwise known as R.A. No. 8424.
35
Titled "An Act Amending Sections 27, 28, 34, 106, 107, 108, 109, 110, 111, 112, 113, 114, 116, 117,
119, 121, 148, 151, 236, 237 And 288 of the National Internal Revenue Code of 1997, as Amended, and For
Other Purposes."
36
(A) Zero-Rated or Effectively Zero-Rated Sales. - Any VAT-registered person, whose sales are zero-rated
or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales
were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid
attributable to such sales, except transitional input tax, to the extent that such input tax has not been
applied against output tax: Provided, however, That in the case of zero-rated sales under Section 106(A)(2)
(a)(1), (2) and (b) and Section 108 (B)(1) and (2), the acceptable foreign currency exchange proceeds
thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng
Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated
sale and also in taxable or exempt sale of goods of properties or services, and the amount of creditable
input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be
allocated proportionately on the basis of the volume of sales: Provided, finally, That for a person making
sales that are zero-rated under Section 108 (B)(6), the input taxes shall be allocated ratably between his
zero-rated and non- zero-rated sales.
37
G.R. No. 205055, July 18, 2014, 730 SCRA 242.
38
CIR v. Aichi Forging Company of Asia, supra note 17, at 714.
39
Atlas Consolidated Mining and Development Corporation v. CIR, 547 Phil. 332, 339 (2007).
40
Id.cralawlawlibrary
CONCURRING OPINION
LEONEN, J.:
I concur with the ponencia in the result. I agree that it is the taxpayer's burden to determine whether
complete documents have been submitted for purposes of computing the 120-day period1 for the
Commissioner to decide administrative claims.
Between the taxpayer and the Commissioner, it is the former that has the greater incentive to (a) have its
case decided expeditiously by the Bureau of Internal Revenue, and (b) in cases where it prefers to have the
Court of Tax Appeals rule on its case, have the administrative period lapse.
Besides, the sooner the taxpayer is able to get a refund, the sooner its resources can be further reinvested
into our economy, thus translating to greater efficiencies, productivities, and an increase in overall welfare.
Furthermore, in view of the nature of a judicial action explained in Commissioner of Internal Revenue v.
Aichi Forging Company of Asia, Inc.2 and deftly emphasized again in this case, it is the taxpayer that has the
greater incentive to present as complete a set of evidence as possible to have the Commissioner rule and,
should the ruling be adverse, as basis for an appeal.
On the other hand, it is not to the government's interest to allow the Bureau of Internal Revenue to
determine whether the documents are complete. Otherwise, we would sanction bias on its part with the
corresponding opportunities for illicit rent-seeking that deters honest investors and prudent
entrepreneurship. Should the documents, in the opinion of the Commissioner, be incomplete, then the
Commissioner should simply proceed to decide on the administrative claim. The sooner it is resolved, the
better its effect on our economy. After all, it is truly the taxpayer that has the burden of proving its basis for
a claim for tax exemptions3 and VAT refunds.4
Any attempt on the part of the taxpayer to amend or add to the documents it initially submitted after an
administrative finding by the Commissioner would, therefore, be unacceptable. This way, the prerogative of
the taxpayer and the interest of the state, in not making the regulatory period of 120 days in Section
112(D) flexible, could be met. Therefore, I do not agree that the effect of Revenue Memorandum Circular
No. 54-2014 and its validity should be decided in this case to arrive at the required result.
The ambient facts in Hedcor v. Commissioner of Internal Revenue5 are different from this case. In Hedcor,
before the filing of a Petition for Review before the Court of Tax Appeals, there was a letter of authority to
the officials of the Bureau of Internal Revenue to inspect the documents of the taxpayer. In this case, there
was none. It was the taxpayer, on its own initiative, that sought to complete its submissions.
Parenthetically, the belated issuance of a letter of authority for administrative claims for VAT refunds
inHedcor seems to me, at best, strange. At worse, it is irregular.
Endnotes:
1
Tax Code, sec. 112(D) provides, in part, that [i]n proper cases, the Commissioner shall grant a refund or
issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date
of submission of complete documents in support of the application filed in accordance with Subsection (A)
hereof[.]
2
646 Phil. 710 (2010) [Per J. Del Castillo, First Division].
3
See, for example, Smart Communications, Inc. v. City of Davao, 587 Phil. 20, 31 (2008) [Per J. Nachura,
Third Division]; Digital Telecom v. City Government of Batangas, 594 Phil. 269, 299 (2008) [Per J.
Carpio, En Banc].
4
See, for example, Republic v. GST Philippines, Inc., G.R. No. 190872, October 17, 2013, 707 SCRA 695,
712 [Per J. Perlas-Bernabe, En Banc]; Microsoft Phils., Inc. v. Commissioner of Internal Revenue, 662 Phil.
762, 767 (2011) [Per J. Carpio, Second Division]; Bonifacio Water Corporation v. Commissioner of Internal
Revenue, G.R. No. 175142, July 22, 2013, 701 SCRA 574, 584 [Per J. Peralta, Third Division], citing
Western Mindanao Power v. Commissioner of Internal Revenue, 687 Phil. 328 (2012) [Per J. Sereno (now
Chief Justice), Second Division]. See also Commissioner of Internal Revenue v. San Roque, G.R. No.
187485, February 12, 2013, 690 SCRA 336, 383 [Per J. Carpio, En Banc].
5
G.R. No. 207575, July 15, 2015 <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/
2015/july2015/207575.pdf> [Per C.J. Sereno, First Division].
Barroso v. Omelio, GR 194767, 14 October 2015
THIRD DIVISION
G.R. No. 194767, October 14, 2015
EDGAR T. BARROSO, Petitioner, v. HON. JUDGE GEORGE E. OMELIO, PRESIDING JUDGE, REGIONAL
TRIAL COURT, BRANCH 14, DAVAO CITY AND TRAVELLERS INSURANCE & SURETY CORPORATION,
ANTONIO V. BATAO, REGIONAL MANAGER, Respondents.
DECISION
PERALTA, J.:
This deals with the Petition for Certiorari under Rule 65 of the Rules of Court praying that the Order1dated
July 29, 2009, and the Order2 dated September 15, 2010, both of the Regional Trial Court of Davao City,
Branch 14 (RTC-Br. 14), be reversed and set aside.
The antecedent facts are as follow.
Sometime in 2007, herein petitioner filed with the Regional Trial Court of Davao City, Branch 16 (RTC-Br.
16) a Complaint for sum of money, damages and attorney's fees against Dennis Li. The complaint included a
prayer for the issuance of a writ of attachment, and after Dennis Li filed his Answer, RTC-Br. 16 granted
herein petitioner's application for a Writ of Attachment and approved the corresponding attachment bond.
On the other hand, Dennis Li filed a counter-attachment bond purportedly issued by herein respondent
Travellers Insurance & Surety Corporation (Travellers).
On January 7, 2008, petitioner filed a Motion for Approval of Compromise Agreement. Thereafter, RTC-Br.
16 issued a Judgment on Compromise Agreement dated January 22, 2008. However, Dennis Li failed to pay
the sums of money as provided for under said Judgment on Compromise Agreement. Herein petitioner then
filed a Motion for Execution and RTC-Br. 16 issued a Writ of Execution solely against Dennis Li. When said
Writ of Execution against Dennis Li was returned by the Sheriff unsatisfied, petitioner then filed a Motion for
Execution of Judgment upon the Counterbond. Acting on said Motion, RTC-Br. 16 issued an Order3 dated
April 2, 2009, pertinent portions of which read as follows: cralawlawlibrary
Since the Writ was returned "UNSATISFIED", plaintiff filed a Motion for Execution of Judgment upon the
Counter-Bond, a copy of which was sent to the Head Office of Travellers Insurance Surety Corporation. In
accordance with the Rules, a summary hearing to determine the liability under the counterbond was set.
Notice of said hearing was likewise sent to the Head Office of the surety corporation at the address
appearing on the face of the counterbond issued. For reasons unknown, the notice was simply returned.
The case law cited by movant x x x justifies the issuance of an Alias Writ of Execution against the Defendant
Dennis Li but this time including the Travellers Insurance Surety Corporation based on its counterbond. x x
x.4
chanrobleslaw
An Alias Writ of Execution dated April 28, 2009 was then issued against both Dennis Li and respondent
Travellers based on the counterbond it issued in favor of the former, and pursuant to said writ, Sheriff
Anggot served a Demand Letter on Travellers. In a letter dated July 1, 2009 addressed to Sheriff Anggot,
Travellers asked for a period of seven (7) days within which to validate the counterbond and, thereafter, for
its representative to discuss the matter with complainant, herein petitioner.
However, on July 10, 2009, instead of appearing before RTC-Br. 16, Travellers filed a separate case for
Declaration of Nullity, Prohibition, Injunction with Prayer for Writ of Preliminary Injunction & Temporary
Restraining Order (TRO), and Damages, which was raffled to RTC-Br. 14. Said petition prayed for the
following reliefs: (a) the issuance of a TRO enjoining Sheriff Anggot and herein petitioner from implementing
and enforcing the Writ of Execution dated April 28, 2009, and after hearing, the issuance of a writ of
preliminary injunction; (b) judgment be rendered declaring the counterbond and its supporting documents
to be null and void; ordering Sheriff Anggot and herein petitioner to desist from further implementing the
Writ of Execution dated April 28, 2009; and (c) ordering Sheriff Anggot and herein petitioner to pay
Travellers actual and moral damages, attorney's fees and costs of suit.
After hearing on the application for a writ of preliminary injunction, herein respondent judge issued the
assailed Order dated July 29, 2009 directing the issuance of the writ of preliminary injunction. RTC-Br. 14, in
its Order dated July 29, 2009, ratiocinated, thus: cralawlawlibrary
Be it noted that under letter (b) of paragraph six (6) of respondents' [herein petitioner among them] answer
with counterclaim they alleged that: "x x x The evidence the counter-attachment bond is fake has yet to be
proven by the petitioner [Travellers] in the proper forum. Till then, said judicial officers enjoy the
presumption of regularity in the performance of their judicial duties . . ."
Precisely, herein petitioner [comes] before this Court, which is the "proper forum" referred to by the
respondents in their answer, to prove that the counter-attachment bond which herein respondents are about
to implement, is fake. And the only remedy for the petitioner to hold in abeyance the enforcement of the
subject writ of execution lest the decision of this Court on the merit more so if favorable to the petitioner will
become moot and academic or phyrric victory, is the writ of preliminary injunction.
Anent the respondents' defense that "this Court has no jurisdiction to interfere with the judgment of RTC,
Branch 16 in Davao City" x x x, suffice it to state that this Court is not interfering with the Order or
judgment of RTC-Br. 16 which is a coordinate Court. On the contrary[,] this Court is merely exercising its
complementary jurisdiction with that of the jurisdiction of RTC 16 - a coordinate court, the latter - to
hypothetical ly state, was hoodwinked into believing as to the regularity and due production of the subject
counter-attachment bond now subject to be executed and enforced against herein petitioner. While this
Court is aware of this doctrine of non-interference by a Court against the Order or judgment of another
coordinate court, this doctrine, however, is not without exception. The maxim is: For every rule, there is an
exception; for in every room, there is always a door. This case is an exception, x x x5chanrobleslaw
On July 30, 2009, the Writ of Preliminary Injunction was issued, commanding Sheriff Anggot to refrain from
implementing the Writ of Execution dated April 28, 2009. Petitioner's motion for reconsideration of the
afore-quoted Order was denied in the Order dated September 15, 2010.
Hence, the instant petition was filed with this Court, alleging that respondent judge committed grave abuse
of discretion amounting to lack or in excess of jurisdiction and gross ignorance of the law by (1) acting on
respondent Travellers' petition despite the lack of jurisdiction of RTC-Br. 14; (2) issuing the writ of
preliminary injunction without requiring Travellers to put up an injunction bond; and (3) assuming
jurisdiction over the action for prohibition and injunction against the executive sheriff of a coequal court.
Herein petitioner, while acknowledging that the Court of Appeals (CA) had concurrent jurisdiction over this
petition, justified his immediate resort to this Court by pointing out that respondent judge's conduct shows
his gross ignorance of the law, and any other remedy under the ordinary course of law would not be speedy
and adequate.
Private respondents, on the other hand, counter that its petition before RTC-Br. 14 involved the issue of the
validity of a contract, hence, the court presided by respondent judge had jurisdiction to take cognizance of
the same. Private respondent then reiterated its arguments regarding the dubious authenticity and
genuineness of the counterbond purportedly issued by Travellers and filed by Dennis Li before RTC-Br. 16.
It must first be emphasized that trifling with the rule on hierarchy of courts is looked upon with disfavor by
the Court. Said rule is an important component of the orderly administration of justice and not imposed
merely for whimsical and arbitrary reasons. This doctrine was exhaustively explained inThe Diocese of
Bacolod, represented by the Most Rev. Bishop Vicente M. Navarra and the Bishop Himself in His Personal
Capacity v. Commission on Elections and the Election Officer of Bacolod City, Atty. Mavil V. Majarucon6 in
this wise:
cralawlawlibrary
x x x we explained the necessity of the application of the hierarchy of courts:

The Court must enjoin the observance of the policy on the hierarchy of courts, and now affirms that the
policy is not to be ignored without serious consequences. The strictness of the policy is designed to
shield the Court from having to deal with causes that are also well within the competence of the
lower courts, and thus leave time for the Court to deal with the more fundamental and more
essential tasks that the Constitution has assigned to it. The Court may act on petitions for the
extraordinary writs of certiorari, prohibition and mandamus only when absolutely necessary or when serious
and important reasons exist to justify an exception to the policy.
xxxx
The doctrine that requires respect for the hierarchy of courts was created by this court to ensure
that every level of the judiciary performs its designated roles in an effective and efficient
manner.
Trial courts do not only determine the facts from the evaluation of the evidence presented before them.
They are likewise competent to determine issues of law which may include the validity of an ordinance,
statute, or even an executive issuance in relation to the Constitution. To effectively perform these functions,
they are territorially organized into regions and then into branches. Their writs generally reach within those
territorial boundaries. Necessarily, they mostly perform the all-important task of inferring the facts from the
evidence as these are physically presented before them. In many instances, the facts occur within their
territorial jurisdiction, which properly present the "actual case" that makes ripe a determination of the
constitutionality of such action. The consequences, of course, would be national in scope. There are,
however, some cases where resort to courts at their level would not be practical considering their decisions
could still be appealed before the higher courts, such as the Court of Appeals.
The Court of Appeals is primarily designed as an appellate court that reviews the determination of facts and
law made by the trial courts. It is collegiate in nature. This nature ensures more standpoints in the review of
the actions of the trial court. But the Court of Appeals also has original jurisdiction over most special civil
actions. Unlike the trial courts, its writs can have a nationwide scope. It is competent to determine facts
and, ideally, should act on constitutional issues that may not necessarily be novel unless there are factual
questions to determine.
This court, on the other hand, leads the judiciary by breaking new ground or further reiterating - in the light
of new circumstances or in the light of some confusion of bench or bar - existing precedents. Rather than a
court of first instance or as a repetition of the actions of the Court of Appeals, this court promulgates these
doctrinal devices in order that it truly performs that role.7 chanrobleslaw
However, in the same case, it was acknowledged that for exceptionally compelling reasons, the Court may
exercise its discretion to act on special civil actions for certiorari filed directly with it. Examples of cases that
present compelling reasons are: (1) those involving genuine issues of constitutionality that must be
addressed at the most immediate time; (2) those where the issues are of transcendental importance, and
the threat to fundamental constitutional rights are so great as to outweigh the necessity for prudence; (3)
cases of first impression, where no jurisprudence yet exists that will guide the lower courts on such issues;
(4) where the constitutional issues raised are better decided after a thorough deliberation by a collegiate
body and with the concurrence of the majority of those who participated in its discussion; (5) where time is
of the essence; (6) where the act being questioned was that of a constitutional body; (7) where there is no
other plain, speedy, and adequate remedy in the ordinary course of law that could free petitioner from the
injurious effects of respondents' acts in violation of their constitutional rights; and (8) the issues involve
public welfare, the advancement of public policy, the broader interest of justice, or where the orders
complained of are patent nullities, or where appeal can be considered as clearly an inappropriate remedy.8
Verily, the issues in this case could have been competently resolved by the CA, thus, the Court was initially
inclined to reject taking cognizance of this case. However, we cannot close our eyes to the unbecoming
conduct exhibited by respondent judge in obstinately issuing an injunction against the orders of a co-equal
court despite this Court's consistent reiteration of the time-honored principle that "no court has the power to
interfere by injunction with the judgments or decrees of a court of concurrent or coordinate jurisdiction. The
various trial courts of a province or city, having the same or equal authority, should not, cannot,
and are not permitted to interfere with their respective cases, much less with their orders or
judgments."9 The issue raised in this case, therefore, falls under one of the exceptions to the rule on
hierarchy of courts, i.e., where the order complained of is a patent nullity.
Atty. Cabili v. Judge Balindong10 is closely analogous to the present case. In Cabili, the RTC of Iligan City
issued a writ of execution, but the judgment debtor, instead of complying with said writ, filed a separate
petition for prohibition and mandamus with application for issuance of temporary restraining order (TRO)
and/or preliminary injunction with the RTC of Marawi City. After the hearing, the Presiding Judge of the RTC
of Marawi City issued the TRO restraining the sheriff from enforcing the writ of execution issued by the RTC
of Iligan City.
In the aforementioned case, the Court struck down such action of the RTC of Marawi City, ruling thus: cralawlawlibrary
The doctrine of judicial stability or non-interference in the regular orders or judgments of a co-equal court is
an elementary principle in the administration of justice: no court can interfere by injunction with the
judgments or orders of another court of concurrent jurisdiction having the power to grant the relief
sought by the injunction. The rationale for the rule is founded on the concept of jurisdiction: a court that
acquires jurisdiction over the case and renders judgment therein has jurisdiction over Its judgment, to the
exclusion of all other coordinate courts, for its execution and over all its incidents, and to control,
in furtherance of justice, the conduct of ministerial officers acting in connection with this
judgment.
Thus, we have repeatedly held that a case where an execution order has been issued is considered as still
pending, so that all the proceedings on the execution are still proceedings in the suit. A court which issued
a writ of execution has the inherent power, for the advancement of justice, to correct errors of its ministerial
officers and to control its own processes. To hold otherwise would be to divide the jurisdiction of the
appropriate forum in the resolution of incidents arising in execution proceedings-Splitting of jurisdiction is
obnoxious to the orderly administration of justice.
xxxx
To be sure, the law and the rules are not unaware that an issuing court may violate the law in issuing a writ
of execution and have recognized that there should be a remedy against this violation. The remedy,
however, is not the resort to another co-equal body but to a higher court with authority to nullify the action
of the issuing court. This is precisely the judicial power that the 1987 Constitution, under Article VIII,
Section 1, paragraph 2, speaks of and which this Court has operationalized through a petition
forcertiorari, under Rule 65 of the Rules of Court.
xxxx
It is not a viable legal position to claim that a TRO against a writ of execution is issued against an erring
sheriff, not against the issuing Judge. A TRO enjoining the enforceability of a writ addresses the writ itself,
not merely the executing sheriff x x x As already mentioned above, the appropriate action is to assail the
implementation of the writ before the issuing court in whose behalf the sheriff acts, and, upon failure, to
seek redress through a higher judicial body, xxx.11 chanrobleslaw
Applying the foregoing ruling, it is quite clear that, in this case, the issuance of the subject writ of
preliminary injunction was improper and, thus, correctible by certiorari. Herein respondent judge does not
have jurisdiction to hinder the enforcement of an order of a co-equal court. He must be aware that said co-
equal court had the exclusive jurisdiction or authority to correct its own issuances if ever there was, indeed,
a mistake. There is no question, therefore, that subject writ of preliminary injunction is null and void.
Further, had Judge Omelio not been dismissed from the service in 2013 for gross ignorance of the law and
violation of judicial conduct, he could have been subjected to an investigation again for gross ignorance due
to his unprecedented acts in the case at bar.
WHEREFORE, the instant petition is GRANTED and the Orders dated July 29, 2009 and September 15,
2010, both issued by the Regional Trial Court of Davao City, Branch 14, are hereby SET ASIDEand
declared NULL and VOID.
SO ORDERED
Velasco, Jr., (Chairperson), Villarama, Jr., Mendoza,* and Jardeleza, JJ., concur.
Endnotes:
*
Designated Acting Member in lieu of Associate Justice Bienvenido L. Reyes, per Special Order No. 2084
(Revised) dated June 29, 2015.
1
Penned by Judge George E. Omelio; rollo, pp. 25-26.
2
Id. at 28.
3
Id. at 60-61.
4
Id. at 60.
5
Id. at 25-26.
6
G.R. No. 205728, January 21, 2015.
The Diocese of Bacolod, represented by the Most Rev. Bishop Vicente N. Navarra and the Bishop Himself in
7
His Capacity v. Commission on Elections and the Election Officer of Bacolod City, Atty. Mavil V. Majarucon,
G.R. No. 205728, January 21, 2015. (Emphasis supplied)
8
Id.
9
Heirs of the Late Spouses Lauro Yadao and Pugsong Mat-an v. Heirs of the Late Spouses Mauro and Elisa
Anchales, G.R. No. 174582, October 11, 2012, 684 SCRA 106, 115-116. (Emphasis supplied) 672 Phil.
398(2011).
Atty. Cabili v. Judge Balindong, supra, at 406-411. (Emphasis in the original; citations omitted:
11
underscoring supplied)
Querubin v. COMELEC, GR 218787, 8 December 2015
EN BANC
G.R. No. 218787, December 08, 2015
LEO Y. QUERUBIN, MARIA CORAZON M. AKOL, AND AUGUSTO C.

LAGMAN, Petitioners, v. COMMISSION ON ELECTIONS EN BANC, REPRESENTED BY CHAIRPERSON
J. ANDRES D. BAUTISTA, AND JOINT VENTURE OF SMARTMATIC-TIM CORPORATION, TOTAL
INFORMATION MANAGEMENT CORPORATION, SMARTMATIC INTERNATIONAL HOLDING B.V. AND
JARLTECH INTERNATIONAL CORPORATION, REPRESENTED BY PARTNER WITH BIGGEST EQUITY
SHARE, SMARTMATIC-TIM CORPORATION, ITS GENERAL MANAGER ALASTAIR JOSEPH JAMES
WELLS, SMARTMATIC CHAIRMAN LORD MALLOCH-BROWN, SMARTMATIC-ASIA PACIFIC
PRESIDENT CESAR FLORES, AND ANY OR ALL PERSONS ACTING FOR AND ON BEHALF OF THE
JOINT VENTURE, Respondent.
DECISION
VELASCO JR., J.:
Nature of the Case
Before the Court is a petition for certiorari or prohibition under Rule 64 of the Rules of Court, with prayer for
injunctive relief, assailing the validity and seeking to restrain the implementation of the Commission of
Elections (COMELEC) en banc's June 29, 2015 Decision1 for allegedly being repugnant to the provisions
of Batas Pambansa Blg. 68 (BP 68), otherwise known as the Corporation Code of the Philippines, and
Republic Act No. 9184 (RA 9184) or the Government Procurement Reform Act.
The Facts
On October 27, 2014, the COMELEC en banc, through its Resolution No. 14-0715, released the bidding
documents for the "Two-Stage Competitive Bidding for the Lease of Election Management System (EMS) and
Precinct-Based Optical Mark Reader (OMR) or Optical Scan (OP-SCAN) System."2 Specified in the published
Invitation to Bid3 are the details for the lease with option to purchase, through competitive public bidding, of
twenty-three thousand (23,000) new units of precinct-based OMRs or OP-SCAN Systems, with a total
Approved Budget for Contract of P2,503,518,000,4 to be used in the 2016 National and Local Elections.5 The
COMELEC Bids and Awards Committee (BAC) set the deadline for the submission by interested parties of
their eligibility requirements and initial technical proposal on December 4, 2014.6
The joint venture of Smartmatic-TIM Corporation (SMTC), Smartmatic International Holding B.V., and
Jarltech International Corporation (collectively referred to as "Smartmatic JV") responded to the call and
submitted bid for the project on the scheduled date. Indra Sistemas, S.A. (Indra) and MIRU Systems Co.
Ltd. likewise signified their interest in the project, but only Indra, aside from Smartmatic JV, submitted its
bid.7
During the opening of the bids, Smartmatic JV, in a sworn certification, informed the BAC tha't one of its
partner corporations, SMTC, has a pending application with the Securities and Exchange Commission (SEC)
to amend its Articles of Incorporation (AOI), attaching therein all pending documents.8 The amendments
adopted as early as November 12, 2014 were approved by the SEC on December 10, 2014.9 On even date,
Smartmatic JV and Indra participated in the end-to-end testing of their initial technical proposals for the
procurement project before the BAC.
Upon evaluation of the submittals, the BAC, through its Resolution No. 1 dated December 15, 2014,
declared Smartmatic JV and Indra eligible to participate in the second stage of the bidding process.10 The
BAC then issued a Notice requiring them to submit their Final Revised Technical Tenders and Price proposals
on February 25, 2015, to which the eligible participants complied. Finding that the joint venture satisfied the
requirements in the published Invitation to Bid, Smartmatic JV, on March 26, 2015, was declared to have
tendered a complete and responsive Overall Summary of the Financial Proposal.11 Meanwhile, Indra was
disqualified for submitting a non-responsive bid.12
Subsequently, for purposes of post-qualification evaluation, the BAC required Smartmatic JV to submit
additional documents and a prototype sample of its OMR.13 The prototype was subjected to testing to gauge
its compliance with the requirements outlined in the project's Terms of Reference (TOR).14
After the conduct of post-qualification, the BAC, through Resolution No. 9 dated May 5, 2015, disqualified
Smartmatic JV on two grounds, viz:15
1. Failure to submit valid AOI; and
2. The demo unit failed to meet the technical requirement that the system shall be capable of writing
all data/files, audit log, statistics and ballot images simultaneously in at least two (2) data storages.
The ruling prompted Smartmatic JV to move for reconsideration.16 In denying the motion, the BAC, through
Resolution No. 1017 dated May 15, 2015, declared that Smartmatic JV complied with the requirements of
Sec. 23.1(b) of the Revised Implementing Rules and Regulations of RA 9184 (GPRA IRR), including the
submission of a valid AOI, but was nevertheless disqualified as it still failed to comply with the technical
requirements of the project.18
Aggrieved, Smartmatic JV filed a Protest,19 seeking permission to conduct another technical demonstration
of its SAES 1800 plus OMR (OMR+), the OMR Smartmatic JV presented during the public bidding before the
COMELEC en banc.20Accordingly, on June 19, 2015, Smartmatic JV was allowed to prove compliance with the
technical specifications for the second time, but this time before the electoral tribunal's Technical Evaluation
Committee (TEC).21 This was followed, on June 23, 2015, by another technical demonstration before the
Commission en banc at the Advanced Science and Technology Institute (ASTI) at the University of the
Philippines, Diliman, Quezon City.22
Ruling of the COMELEC en banc
Though initially finding that the OMR+'s ability to simultaneously write data in two storage devices could not
conclusively be established,23 the TEC, upon the use of a Digital Storage Oscilloscope (DSO) during the
second demonstration,24determined that the OMR+ complied with the requirements specified in the
TOR.25 Adopting the findings of the TEC as embodied in its Final Report, the COMELEC en banc, on June 29,
2015, promulgated the assailed Decision granting Smartmatic JV's protest. The dispositive portion of the
Decision reads:26
WHEREFORE, the instant Protest is hereby GRANTED. Accordingly, the Commission hereby declares the
Joint Venture of Smartmatic-TIM Corporation, Total Information Management Corporation, Smartmatic
International Holding B.V., and Jarltech International Corporation, as the bidder with the lowest calculated
responsive bid in connection with the public bidding for the lease with option to purchase of 23,000 new
units of precinct-based Optical Mark Reader or Optical Scan System for use in the May 9, 2016 national and
local elections. Corollarily, the scheduled opening of financial proposal and eligibility documents for the
Second Round of Bidding is hereby CANCELLED, with specific instruction for the Bids and Awards
Committee to RETURN to the prospective bidders their respective payments made for the purchase of
Bidding Documents pertaining to the Second Round of Bidding.
Let the Bids and Awards Committee implement this Decision.
SO ORDERED.
The seven-man commission was unanimous in holding that Smartmatic JV's OMR+ sufficiently satisfied the
technical requirements itemized in the TOR, reproducing in the assailed Decision, verbatim and with
approbation, the entirety of the TEC's Final Report, thusly:27
This is to report on the result of the public test conducted on 23 June of the claim of Smartmatic TIM (SMTT)
that their proposed SAES 1800 (PCOS+) has the capability to write ballot images, audit logs, and elections
results on two separate storage (devices) simultaneously.
Technical discussion, demonstrations, and design reviews were conducted over two day period before the
actual demonstration to the Comelec En Banc. These reviews were conducted between SMTT engineers and
a team of embedded electronics design engineers from the Advanced Science and Technology Institute of
the Department of Science and Technology.
Though these reviews are important to validate the behavior and functionality of the PCOS+, the best way
to validate the claim of SMTT is to use a specialized test instrument connected to the actual electrical inputs
of both storage cards.
To visualize the electrical signals being sent to the memory cards, an Agilent DSO7054A Digital Storage
Oscilloscope (DSO) from ASTI connected to the same data input line on two SD card adapters with a micro
SD card inside. This was done to simulate an actual SC card and to make the DSO probe connections
accessible and secure without modifying anything in the PCOS+ hardware or software. x x x
During normal operation such as on Election day, when the PCOS+ is accepting ballots from voters, the
PCOS+ is designated to write data on both SD cards after the ballots has been determined to be valid and
the voter choices have been shown to the voter for verification.
The data being written on the storage devices consist mainly of the scanned ballots image of the front and
back of the ballot at 200 dots per inch in both the horizontal and vertical dimension with each dot encoded
into a 4 bit value corresponding to 16 shades of gray. The other data saved on the storage device consists of
the vote interpretation and updates to the audit log. Each time that data is. written on the two storage
device, the date is encrypted and a verification step is done to check that identical data is written on both
devices. The entire write process lasts a few seconds for each ballot.
xxxx
The DSO display the time dimension on the horizontal axis and the electrical voltage in the vertical axis, the
display is generated left to right over time (earlier events are on the left). The yellow line on top shows the
electrical signal on the Data 2 pin of the main storage card and the green line shows the electrical signal on
the Data 2 pin of the backup storage card. The orange dashed horizontal and vertical lines are used for
measuring the differences in time and voltage.
The vertical dashed line on the left marks the start of the data being written on the main and backup
storage card and the vertical dashed line on the right marks the ends of the writing operation for one ballot.
The time difference in this case is about 2.616 seconds as shown near the bottom left corner of the display.
The yellow and green vertical lines in between the two vertical dashed lines represent the digital ones and
zeros being written on both storage cards. The yellow and green traces are not exactly identical because the
main car also contains the operating system of the PCOS+ and additional data operations are being
performed on it. Because the time scale is the same on both probes, we conclude that the PCOS+ is writing
on both cards simultaneously during this time interval.
Notwithstanding Smartmatic JV's compliance with the technical requirements in the TOR, Commissioner Luie
Tito F. Guia (Guia) would nonetheless dissent in part, questioning the sufficiency of the documents
submitted by the Smartmatic JV.28 Taking their cue from Commissioner Guia's dissent, petitioners now assail
the June 29, 2015 Decision of the COMELEC through the instant recourse.
The Issues
Petitioners framed the issues in the extant case in the following wise:29
A. Procedural Issues
I. WHETHER OR NOT THE PETITION IS THE PROPER REMEDIAL VEHICLE TO ASSAIL THE SUBJECT
DECISION OF THE COMELEC EN BANC;
II. WHETHER OR NOT THE SUPREME COURT HAS THE RIGHT AND DUTY TO ENTERTAIN THIS
PETITION;
III. WHETHER OR NOT A JUSTICIABLE CASE OR CONTROVERSY EXISTS;

IV. WHETHER OR NOT THE CASE OR CONTROVERSY IS RIPE FOR JUDICIAL ADJUDICATION;
V. WHETHER OR NOT UNDER THE CIRCUMSTANCES, THE RULE ON "HIERARCHY OF COURTS" MAY BE
DISPENSED WITH;
VI. WHETHER OR NOT THE PETITIONERS POSSESS LOCUS STANDI;
B. Substantive Issues
VII. WHETHER OR NOT THE COMELEC EN BANC ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN GRANTING THE PROTEST AS WELL AS IN
DECLARING THE JOINT VENTURE OF SMARTMATIC-TIM CORPORATION, TOTAL INFORMATION
MANAGEMENT CORPORATION, SMARTMATIC INTERNATIONAL HOLDING B.V. AND JARLTECH
INTERNATIONAL CORPORATION AS THE BIDDER WITH THE LOWEST CALCULATED RESPONSIVE
BID IN CONNECTION WITH THE PUBLIC BIDDING FOR THE LEASE WITH OPTION TO PURCHASE OF
23,000 NEW UNITS OF PRECINCT-BASED OPTICAL MARK READER OR OPTICAL SCAN SYSTEM FOR
USE IN THE MAY 9, 2016 NATIONAL AND LOCAL ELECTIONS
VIII. WHETHER OR NOT A WRIT OF PRELIMINARY INJUNCTION OR TEMPORARY RESTRAINING ORDER

SHOULD ISSUE
In challenging the June 29, 2015 Decision, petitioners; filing as taxpayers, alleged that the COMELEC en
banc acted with grave abuse of discretion amounting to lack or excess of jurisdiction in declaring Smartmatic
JV as the bidder with the lowest calculated responsive bid.30 According to petitioners, Smartmatic JV cannot
be declared eligible, even more so as the bidder with the lowest calculated responsive bid, because one of
its proponents, SMTC, holding 46.5% of the shares of Smartmatic JV, no longer has a valid corporate
purpose as required under Sec. 14 of BP 68, which pertinently reads:
Section 14. Contents of the articles of incorporation. - All corporations organized under this code shall file
with the Securities and Exchange Commission articles of incorporation in any of the official languages duly
signed and acknowledged by all of the incorporators, containing substantially the following matters, except
as otherwise prescribed by this Code or by special law:chanRoblesvirtualLawlibrary
xxxx
2. The specific purpose or purposes for which the corporation is being incorporated. Where a
corporation has more than one stated purpose, the articles of incorporation shall state which is the primary
purpose and which is/are the secondary purpose or purposes: Provided, That a nonstock corporation may
not include a purpose which would change or contradict its nature as such x x x.
As proof, petitioners cite the primary purpose of SMTC as stated in the company's AOI, which was submitted
to the COMELEC on December 4, 2014 as part of the joint venture's eligibility documents. To quote SMTC's
primary purpose therein:31
To do, perform and comply with all the obligations and responsibilities of, and accord legal personality to,
the joint venture of Total Information Management Corporation ("TIM") and Smartmatic International
Corporation ("Smartmatic") arising under the Request for Proposal and the Notice of Award issued by the
Commission on Elections ("COMELEC") for the automation of the 2010 national and local elections
("Project"), including the leasing, selling, importing and/or assembling of automated voting machines,
computer software and other computer services and/or otherwise deal in all kinds of services to be used,
offered or provided to the COMELEC for the preparations and the conduct of the Project including
project management services. (emphasis added)
In concurrence with Commissioner Guia's opinion, petitioners argue that the foregoing paragraph readily
evinces that SMTC was created solely for the automation of the 2010 National and Local Elections, not for
any other election.32Having already served its purpose, SMTC no longer has authority to engage in business,
so petitioners claim. To allow SMTC then to have a hand in the succeeding elections would be tolerating its
performance of an ultra vires act.
Petitioners hasten to add that without a valid purpose, the company could not have submitted a valid AOI, a
procurement eligibility requirement under Sec. 23.1 (b) of the IRR of RA 9184. For them, the SEC's
subsequent approval, on December 10, 2014, of the amendments to SMTC's AOI cannot cure the partner
corporation's ineligibility because eligibility is determined at the time of the opening of the bids, which, in
this case, was conducted on December 4, 2014.33
Finally, petitioners contend that SMTC misrepresented itself by leading the BAC to believe that it may cany
out the project despite its limited corporate purpose, and by claiming that it is a Philippine corporation when
it is, allegedly, 100% foreign-owned.34 They add that misrepresentation is a ground for the procuring agency
to consider a bidder ineligible and disqualify it from obtaining an award or contract.35
In its Comment,36 public respondent COMELEC, through the Office of the Solicitor General (OSG), refuted
the arguments of petitioners on the main postulation that the sole issue raised before the COMELEC en
banc was limited to the technical aspect of the project.37 According to the OSG, the sufficiency of the
documents submitted was already decided by the BAC on May 15, 2015 when it partially granted
Smartmatic JV's motion for reconsideration through BAC Resolution No. 10. Anent the procedural issues, the
OSG, in its bid to have the case dismissed outright, questioned petitioners' locus standi and failure to
observe the hierarchy of courts.38
Meanwhile, private respondents, in their Comment/Opposition,39 countered that the BAC has thoroughly
explained and laid down the factual and legal basis behind its finding on Smartmatic JV's legal capacity to
participate as bidder in the project procurement; that the issue on SMTC's AOI has been rendered moot by
the SEC's subsequent approval on December 10, 2014 of the AOFs amendment broadening the companyjs
primary purpose;40 that SMTC's primary purpose, as amended, now reads:41
To sell, supply, lease, import, export, develop, assemble, repair and deal with automated voting machines,
canvassing equipment, computer software, computer equipment and all other goods and supplies, and/or to
provide, render and deal in all kinds of services, including project management services for the conduct of
elections, whether regular or special, in the Philippine(s) and to provide Information and Communication
Technology (ICT) goods and services to private and government entities in the Philippines.
that the alleged defect in SMTC's AOI is of no moment since neither the law nor the bidding documents
require a bidder to submit its AOI;42 that even assuming for the sake of argument that SMTC's primary
purpose precludes it from further contracting for the automation of the Philippine elections beyond 2010, its
secondary purposes43 and Sec. 42 of BP 6844 authorize the company to do so;45 and that the COMELEC, in
fact, has already dealt with SMTC numerous times after the 2010 elections.46
Private respondents would likewise debunk petitioners' allegation that SMTC misrepresented its nationality.
They argue that based on its General Information Sheet (GIS), SMTC is a Filipino corporation, not a foreign
one as petitioners alleged. Moreover, what is only required under RA 9184 is that the nationality of the joint
venture be Filipino, and not necessarily that of its individual proponents.47 In any event, so private
respondents claim, the COMELEC, under the law, is not prohibited from acquiring election equipment from
foreign sources, rendering SMTC and even Smartmatic JV's nationality immaterial.48
Lastly, private respondents pray for the petition's outright dismissal, following petitioner Akol and Lagman's
alleged failure to comply with the rules on verifications, on the submission of certifications against forum-
shopping, and on the efficient use of paper.49
The Court's Ruling
The petition lacks merit.
Rule 64 is not applicable in assailing the COMELEC en banc's Decision granting Smartmatic JV's
protest
In arguing for the propriety of the remedial vehicle chosen, petitioners claim that under Rule 64, Sec. 2 of
the Rules of Court, "[a] judgment or final order or resolution of the Commission on Elections x x x
may be brought by the aggrieved party to the Supreme Court on certiorari under Rule 65."50 They
postulate that the June 29, 2015 Decision of the COMELEC en banc declaring Smartmatic JV as the eligible
bidder with the lowest calculated responsive bid is a "judgment" within the contemplation of the rule, and is,
therefore, a proper subject of a Rule 64 petition.
The argument fails to persuade.
a. Rule 64 does not cover rulings of the COMELEC in the exercise of its administrative powers
The rule cited by petitioners is an application of the constitutional mandate requiring that, unless otherwise
provided by law, the rulings of the constitutional commissions shall be subject to review only by the
Supreme Court on certiorari. A reproduction of Article IX-A, Section 7 of the 1987 Constitution is in order:
Section 7. Each Commission shall decide by a majority vote of all its Members, any case or matter brought
before it within sixty days from the date of its submission for decision or resolution. A case or matter is
deemed submitted for decision or resolution upon the filing of the last pleading, brief, or memorandum
required by the rules of the Commission or by the Commission itself. Unless otherwise provided by this
Constitution or by law, any decision, order, or ruling of each Commission may be brought to the
Supreme Court on certiorari by the aggrieved party within thirty days from receipt of a copy thereof.
(emphasis added)
Though the provision appears unambiguous and unequivocal, the Court has consistently held that the
phrase "decision, order, or ruling" of constitutional commissions, the COMELEC included, that may be
brought directly to the Supreme Court on certiorari is not all-encompassing, and that it only relates to those
rendered in the commissions' exercise ofadjudicatory or quasi-judicial powers.51 In the case of the
COMELEC, this would limit the provision's coverage to the decisions, orders, or rulings issued pursuant to its
authority to be the sole judge of generally all controversies and contests relating to the elections, returns,
and qualifications of elective offices.52
Consequently, Rule 64, which complemented the procedural requirement under Article IX-A, Section 7,
should likewise be read in the same sense—that of excluding from its coverage decisions, rulings, and orders
rendered by the COMELEC in the exercise of its administrative functions. In such instances, a Rule 65
petition for certiorari is the proper remedy. As held in Macabago v. COMELEC:53
[A] judgment or final order or resolution of the COMELEC may be brought by the aggrieved party to this
Court on certiorari under Rule 65, as amended, except as therein provided. We ruled in Elpidio M. Salva, et
al. vs. Hon. Roberto L. Makalintal, et al. (340 SCRA 506 (2000) that Rule 64 of the Rules applies only to
judgments or final orders of the COMELEC in the exercise of its quasi-judicial functions. The rule does not
apply to interlocutory orders of the COMELEC in the exercise of its quasi-judicial functions or to its
administrative orders. In this case, the assailed order of the COMELEC declaring private respondents petition
to be one for annulment of the elections or for a declaration of a failure of elections in the municipality and
ordering the production of the original copies of the VRRs for the technical examination is administrative in
nature. Rule 64, a procedural device for the review of final orders, resolutions or decision of the COMELEC,
does not foreclose recourse to this Court under Rule 65 from administrative orders of said Commission
issued in the exercise of its administrative function.
As applied herein, recall that the instant petition revolves around the issue on whether or not Smartmatic JV
is eligible to participate in the bidding process for the COMELEC's procurement of 23,000 units of optical
mark readers. The case does not stem from an election controversy involving the election, qualification, or
the returns of an elective office. Rather, it pertains to the propriety of ihe polling commission's conduct of
the procurement process, and its initial finding that Smartmatic JV is eligible to participate therein. It springs
from the COMELEC's compliance with the Constitutional directive to enforce and administer all laws and
regulations relative to the conduct of an election.54 Specifically, it arose from the electoral commission's
exercise of Sec. 12 of RA 8436, otherwise known as the Automated Elections Law, as amended by RA
9369,55 which authorized the COMELEC "to procure, in accordance with existing laws, by purchase,
lease, rent or other forms of acquisition, supplies, equipment, materials, software, facilities, and
other services, from local or foreign sources free from taxes and import duties, subject to
accounting and auditing rules and regulation."
The subject matter of Smartmatic JV's protest, therefore, does not qualify as one necessitating the
COMELEC's exercise of its adjudicatory or quasi-judicial powers that could properly be the subject of a Rule
64 petition, but is, in fact, administrative in nature. Petitioners should then have sought redress via a
petition for the issuance of the extraordinary writ of certiorari under Rule 65 to assail the COMELEC en
banc's June 29, 2015 Decision granting the protest. As a caveat, however, the writ will only lie upon
showing that the COMELEC acted capriciously or whimsically, with grave abuse of discretion amounting to
lack or excess of jurisdiction in issuing the Decision, such as where the power is exercised in an arbitrary or
despotic manner by reason of passion or personal hostility. The abuse of discretion must be so patent and
gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to
act at all in contemplation of law.56 Mere abuse of discretion will not suffice.
It goes without saying that petitioners' action, having been lodged through an improper petition, is
susceptible to outright dismissal. As the Court held in Pates v. COMELEC,57 a Rule 64 petition cannot simply
be equated to Rule 65 even if it expressly refers to the latter rule.58 The clear distinction between the
instant, petition and Pates, however, is that in Pates, therein petitioner failed to present an exceptional
circumstance or any compelling reason that would have warranted the liberal application of the Rules of
Court. In stark contrast, herein petitioners, as will later on be discussed, were able to establish a meritorious
case for the relaxation of the rules, relieving them from the rigid application of procedural requirements. We
therefore treat the instant recourse as one filed not merely in relation to, but under Rule 65.
This brings us now to the question on where the petition ought to have been filed.
b. Jurisdiction of the RTC over rulings of the head of the procuring entity relating to procurement protests
Guilty of reiteration, the COMELEC en banc was not resolving an election controversy when it resolved the
protest, but was merely performing its function to procure the necessary election paraphernalia for the
conduct of the 2016 National and Local Elections. This power finds statutory basis in Sec. 12 of RA
8436,59 as amended, which reads:
SEC. 12. Procurement of Equipment and Materials. - To achieve the purpose of this Act, the Commission is
authorized to procure, in accordance with existing laws, by purchase, lease, rent or other forms
of acquisition, supplies, equipment, materials, software, facilities, and other service, from local
or foreign sources free from taxes and import duties, subject to accounting and auditing rules and
regulation. With respect to the May 10, 2010 election and succeeding electoral exercises, the system
procured must have demonstrated capability and been successfully used in a prior electoral exercise here or
board. Participation in the 2007 pilot exercise shall not be conclusive of the system's fitness.
In determining the amount of any bid from a technology, software or equipment supplier, the cost to the
government of its deployment and implementation shall be added to the bid price as integral thereto. The
value of any alternative use to which such technology, software or equipment can be put for public use shall
not be deducted from the original face value of the said bid. (emphasis added)
In Pabillo v. COMELEC,60 the Court held that the "existing laws" adverted to in the provision is none other
than RA 9184. The law is designed to govern all cases of procurement of the national government, its
departments, bureaus, offices and agencies, including state universities and colleges, government-owned
and/or-controlled corporations, government financial institutions and local government units.61 It mandates
that as a general rule, all government procurement must undergo competitive bidding62 and for purposes of
conducting the bidding process, the procuring entity convenes a BAC.
The BAC is tasked to oversee the entire procuring process, from advertisement of the project to its eventual
award.63 It is the first to rule on objections or complaints relating to the conduct of the bidding process,
subject to review by the head of the procuring entity via protest. As outlined in RA 9184, the protest
mechanism in procurement processes is as follows:
ARTICLE XVII
PROTEST MECHANISM
Section 55. Protests on Decisions of the BAC. - Decisions of the BAC in all stages of procurement may
beprotested to the head of the procuring entity and shall be in writing. Decisions of the BAC may be
protested by filing, a verified position paper and paying a non-refundable protest fee. The amount of the
protest fee and the periods during which the protests may be filed and resolved shall be specified in the IRR.
Section 56. Resolution of Protests. - The protest shall be resolved strictly on the basis of records of the,
BAC. Up to a certain amount to be specified in the IRR, the decisions of the Head of the Procuring Entity
shall be final.
Section 57. Non-interruption of the Bidding Process. - In no case shall any protest taken from any decision
treated in this Article stay or delay the bidding process. Protests must first be resolved before any award is
made.
Section 58. Resort to Regular Courts; Certiorari. - Court action may be resorted to only after the protests
contemplated in this Article shall have been completed. Cases that are filed in violation of the process
specified in this Article shall be dismissed for lack of jurisdiction. The regional trial court shall
have jurisdiction over final decision of the head of the procuring entity. Court actions shall be
governed by Rule 65 of the 1997 Rules of Civil Procedure.
This provision is without prejudice to any law conferring on the Supreme court the sole jurisdiction to issue
temporary restraining orders and injunctions relating to Infrastructure Projects of Government. (emphasis
added)
Thus, under Sec. 58, the proper remedy to question the ruling of the head of the procuring entity is through
a Rule 65 petition for certiorari with the Regional Trial Court (RTC). The term "procuring entity" is defined
under the RA 9184 as "any branch, department, office, agency, or instrumentality of the
government, including state universities and colleges, government-owned and/or -controlled
corporations, government financial institutions, and local government units procuring Goods,
Consulting Services and Infrastructure Projects."64 This statutory definition makes no distinction as to
whether or not the procuring entity is a constitutional commission under Article IX of the Constitution. It is
broad enough to include the COMELEC within the contemplation of the term. Hence, under the law,
grievances relating to the COMELEC rulings in protests over the conduct of its project procurement should
then be addressed to the RTC.
The mandatory recourse to the RTC in the appeal process applicable to COMELEC procurement project is not
a novel development introduced by RA 9184. Even prior to the advent of the government procurement law,
the requirement already finds jurisprudential support in Filipinas Engineering and Machine Shop v.
Ferrer,65 wherein the Court expounded this way:
[I]t has been consistently held that it is the Supreme Court, not the Court of First Instance, which has
exclusive jurisdiction to review on certiorari final decisions, orders or rulings of the COMELEC relative to the
conduct of elections and enforcement of election laws.
We are however, far from convince[d] that an order of the COMELEC awarding a contract to a private party,
as a result of its choice among various proposals submitted in response to its invitation to bid comes within
the purview of a "final order" which is exclusively and directly appealable to this court on certiorari. What is
contemplated by the term "final orders, rulings and decisions" of the COMELEC reviewable by certiorari by
the Supreme Court as provided by law are those rendered in actions or proceedings before the COMELEC
and taken cognizance of by the said body in the exercise of its adjudicatory or quasi-judicial powers.
xxxx
[T]he order of the Commission granting the award to a bidder is not an order rendered in a legal
contrpversy before it wherein the parties filed their respective pleadings and presented evidence after which
the questioned order was issued; and that this order of the commission was issued pursuant to its authority
to enter into contracts in relation to election purposes. In short, the COMELEC resolution awarding the
contract in favor of Acme was not issued pursuant to its quasi-judicial functions but merely as an
incident of its inherent administrative functions over the conduct of elections, and hence, the
said resolution may not be deemed as a "final order" reviewable by certiorari by the Supreme
Court. Being non-judicial in character, no contempt may be imposed by the COMELEC from said order, and
no direct and exclusive appeal by certiorari to this Tribunal lie from such order. Any question arising from
said order may be well taken in an ordinary civil action before the trial courts. (emphasis added)
Additionally, even if the Court treats the protest proceeding as part of the procuring agency's adjudicatory
function, the Court notes that Sec. 58 of RA 9184 would nevertheless apply, and the RTC would still have
jurisdiction, pursuant to the proviso "unless otherwise provided by law" as appearing in Article IX-A, Section
7 of the Constitution. In this case, the pertinent law provides that insofar as rulings of the COMELEC in
procurement protests are concerned, said rulings can be challenged through a Rule 65 certiorari with the
RTC.
c. The protest mechanism under RA 9184 can only be availed of by a losing bidder
Nevertheless, the application of Sec. 58 of RA 9184 has to be qualified. It cannot, in all instances, be the
proper remedy to question the rulings of the heads of procuring entities in procurement protests. As in the
prior case of Roque v. COMELEC,66 which similarly dealt with COMELEC procurement of OMRs the Court held
that only a losing bidder would be aggrieved by, and ergo would have the personality to challenge, the head
of the procuring entity's ruling in the protest. This is bolstered by the GPRA IRR, which fleshed out the
provisions of RA 9184 thusly:
RULE XVII - PROTEST MECHANISM
Section 55. Protests on Decisions of the BAC
55.1. Decisions of the BAC at any stage of the procurement process may be questioned by filing a request
for reconsideration within the three (3) calendar days upon receipt of written notice or upon verbal
notification. The BAC shall decide on the request for reconsideration within seven (7) calendar days from
receipt thereof.
If a failed bidder signifies his intent to file a request for reconsideration, the BAC shall keep the bid
envelopes of the said failed bidder unopened and/or duly sealed until such time that the request for
reconsideration has been resolved.
55.2. In the event that the request for reconsideration is denied, decisions of the BAC may be protested in
writing to the Head of the Procuring Entity: Provided, however, That a prior request for reconsideration
should have been filed by the party concerned in accordance with the preceding Section, and the same has
been resolved.
55.3. The protest must be filed within seven (7) calendar days from receipt by the party
concerned of the resolution of the BAC denying its request for reconsideration. A protest may be made
by filing a verified position paper with the Head of the Procuring Entity concerned, accompanied by the
payment of a non-refundable protest fee. The non-refundable protest fee shall be in an amount equivalent
to no less than one percent (1%) of the ABC.
55.4. The verified position paper shall contain the following information: chanRoblesvirtualLawlibrary
a) The name of bidder;
b) The office address of the bidder;
c) The name of project/contract;
d) The implementing office/agency or procuring entity;
e) A brief statement of facts;
f) The issue to be resolved; and
g) Such other matters and information pertinent and relevant to the proper resolution of the protest.
The position paper is verified by an affidavit that the affiant has read and understood the contents thereof
and that the allegations therein are true and correct of his personal knowledge or based on authentic
records. An unverified position paper shall be considered unsigned, produces no legal effect, and results to
the outright dismissal of the protest.
xxxx
Section 58. Resort to Regular Courts; Certiorari
58.1. Court action may be resorted to only after the protests contemplated in this Rule shall have
been completed, i.e., resolved by the Head of the Procuring Entity with finality. The regional trial court
shall have jurisdiction over final decisions of the Head of the Procuring Entity. Court actions shall be
governed by Rule 65 of the 1997 Rules of Civil Procedure. (emphasis added)
Evidently, the remedy of certiorari filed before the RTC under Sec. 58 of RA 9184 is intended as a
continuation of the motion for reconsideration filed before the BAC, and of the subsequent protest filed with
the head of the procuring entity. This is confirmed by the condition sine qua non completion of the process
under Rule XVII, Secs. 55-57 of the GPRA IRR before recourse to the trial courts become available.
It is obvious under Sec. 55.1 of Rule XVII that only a failed bidder can turn the cogs of the protest
mechanism by first moving for reconsideration of the assailed BAC ruling. The party concerned, the bidder
adversely affected by the resolution of the motion, shall then have seven (7) days to file a protest with the
head of the procuring entity. The prerequisite that a protestant should likewise be a bidder is emphasized by
Sec. 55.4 which requires that the "name of the bidder" and the "office address of the bidder" be
indicated in its position paper. Accordingly, only the bidder against whom the head of the procuring
entity ruled, if it would challenge the ruling any further, is required to resort to filing a petition
for certiorari before the trial courts under Sec. 58. Ego, there is neither rhyme nor reason for
petitioners herein, who are non-participants in the procurement project, to comply with the rules on protest
under RA 9184, part and parcel of which is the exclusivity of the jurisdiction of the RTC under Sec. 58
thereof. Stated in the alternative, there is no legislative enactment requiring petitioners to seek recourse
first with the RTC to question the COMELEC en banc's June 29, 2015 Decision. Thus, if circumstances so
warrant, direct resort to the Court will be allowed.
d. Hierarchy of courts and the exceptions to the doctrine

The expanded concept of judicial power under Article VIII, Section 1 of the Constitution67 includes the duty
of the judiciary not only "to settle actual controversies involving rights which are legally demandable and
enforceable" but also, as an instrument of checks and balances, "to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government."68 Under Rule 65 of the Rules of Court, the special civil actions for
certiorari and prohibition are the available remedies for determining and correcting such grave abuses of
discretion.
The power is wielded not by the Court alone, but concurrently with the Court of Appeals and the Regional
Trial Courts, as provided by law. With respect to the Court of Appeals, Section 9 (1) of Batas Pambansa Blg.
129 (BP 129) gives the appellate court original jurisdiction to issue, among others, a writ of certiorari,
whether or not in aid of its appellate jurisdiction. For the RTCs, the power to issue a writ of certiorari, in the
exercise of their original jurisdiction, is provided under Section 21 of BP 129.69 Additionally, the Court has
already held that the CTA, by constitutional mandate, is likewise vested with jurisdiction to issue writs of
certiorari.70 So too has the Sandiganbayan been vested with certiorari powers in aid of its appellate
jurisdiction.71
Notwithstanding the non-exclusivity of the original jurisdiction over applications for the issuance of writs of
certiorari, however, the doctrine of hierarchy of courts dictates that recourse must first be made to the
lower-ranked court exercising concurrent jurisdiction with a higher court.72 The rationale behind the principle
is explained in Bañez, Jr. v. Conception73 in the following wise:
The Court must enjoin the observance of the policy on the hierarchy of courts, and now affirms that the
policy is not to be ignored without serious consequences. The strictness of the policy is designed to shield
the Court from having to deal with causes that are also well within the competence of the lower courts, and
thus leave time to the Court to deal with the more fundamental and more essential tasks that the
Constitution has assigned to it. The Court may act on petitions for the extraordinary writs of certiorari,
prohibition and mandamus only when absolutely necessary or when serious and important reasons exist to
justify an exception to the policy.
Petitioners do not have the absolute and unrestrained freedom of choice of the court to which an application
for certiorari will be directed.74 Indeed, referral to the Supreme Court as the court of last resort will simply
be empty rhetoric if party-litigants are able to flout judicial hierarchy at will. The Court reserves the direct
invocation of its jurisdiction only when there are special and important reasons clearly and especially set out
in the petition that would justify the same.75
In the leading case of The Diocese of Bacolod v. Comelec,76 the Court enumerated the specific instances
when direct resort to this Court is allowed, to wit:
(a) When there are genuine issues of constitutionality that must be addressed at the most immediate time;
(b)When the issues involved are of transcendental importance;
(c) Cases of first impression;
(d) When the constitutional issues raised are best decided by this Court;
(e) When the time element presented in this case cannot be ignored;
(f) When the petition reviews the act of a constitutional organ;
(g) When there is no other plain, speedy, and adequate remedy in the ordinary course of law;
(h) When public welfare and the advancement of public policy so dictates, or when demanded by the
broader interest of justice;
(i) When the orders complained of are patent nullities; and
(j) When appeal is considered as clearly an inappropriate remedy.

The Court finds the second and fifth, and sixth grounds applicable in the case at bar. Much has already been
said of the "compelling significance and the transcending public importance" of the primordial issue
underpinning petitions that assail election automation contracts: the success and the far-reaching grim
implications of the failure—of the nationwide automation project.77 So it is that the Court, in the growing
number of cases concerning government procurement of election paraphernalia and services, has
consistently exhibited leniency and dispensed of procedural requirements for petitioners to successfully
lodge certiorari petitions.78 Technicalities should not stand in the way of resolving the substantive issues
petitioners raised herein. On this same ground of transcendental importance, the Court may opt to treat the
instant petition as one for certiorari under, not merely in relation to, Rule 65.
As regards the fifth ground, the time element, it is sufficient to state that with the 2016 polls visible in the
horizon, the post-haste resolution of this case becomes all the more imperative. It would be the height of
absurdity to require petitioners to undergo scrutiny through the lens of the RTC first, considering that the
acquisition of 23,000 OMRs would, at the minimum, affect the clustering of precincts. Without the finalized
list of clustered precincts, the polling place for the registered voters could not yet be ascertained. Needless
to state, this would impede the preparations for the conduct of the polls and its unmitigated effects could
very well lead to mass disenfranchisement of voters.
Lastly, the sixth ground is indubitably applicable. The rulings of the COMELEC, as a constitutional body, can
immediately be reviewed by the Court on proper petition. As quoted in The Diocese of Bacolod v.
COMELEC,79 citing Albano v. Arranz,80 "it is easy to realize the chaos that would ensue if the Court of
First Instance of each and every province were [to] arrogate itself the power to disregard,
suspend, or contradict any order of the Commission on Elections: that constitutional body would
be speedily reduced to impotence."
In sum, there exist ample compelling reasons to justify the direct resort to the Court as a departure from
the doctrine of hierarchy of courts not in relation to but under Rule 65 of the Rules of Court on certiorari and
prohibition, and to brush aside the procedural issues in this case to focus on the substantive issues
surrounding the procurement of the 23,000 additional OMRs for the 2016 elections.
The submission of an AOI is not an eligibility criterion
It bears stressing on the outset that no issue has been brought forth questioning the technical capability of
Smartmatic JV's 0MR+. Instead, the pivotal point to be resolved herein is whether or not the COMELEC
acted with grave abuse of discretion in declaring Smartmatic JV eligible in spite of the alleged nullity of, or
defect in, SMTC's AOI.
Petitioner would first insist that the submission of an AOI is an eligibility requirement that Smartmatic JV
cannot be deemed to have complied with. In addressing this assertion, a discussion of the qualification
process is apropos.
a. The submission of an AOI was not a pre-qualification requirement
It is a basic tenet that except only in cases in which alternative methods of procurement are allowed, all
government procurement shall be done by competitive bidding. This is initiated by the BAC, which publishes
an Invitation to Bid for contracts under competitive bidding in order to ensure the widest possible
dissemination thereof.81
Answering the invitation, interested participants submit their bids using the forms specified in the bidding
documents in two (2) separate sealed bid envelopes submitted simultaneously. The first contains the
technical component of the bid, including the eligibility requirements under Section 23.1 of GPRA IRR, while
the second contains the financial component of the bid.82
The BAC then sets out to determine the eligibility of the prospective bidders based on their compliance with
the eligibility requirements set forth in the Invitation to Bid and their submission of the legal, technical and
financial documents required under RA 9184 and the GPRA IRR.83 The first screening is done via the pre-
qualification stage as governed by Sec. 30.1 of RA 9184's IRR, which pertinently reads:
Section 30. Preliminary Examination of Bids
30.1. The BAC shall open the first bid envelopes of prospective bidders in public to determine each bidder's
compliance with the documents required to be submitted for eligibility and for the technical requirements, as
prescribed in this IRR. For this purpose, the BAC shall check the submitted documents of each bidder
against a checklist of required documents to ascertain if they are all present, using
a nondiscretionary "pass/fail" criterion, as stated in the Instructions to Bidders. If a bidder submits the
required document, it shall be rated "passed" for that particular requirement. In this regard, bids that fail to
include any requirement or are incomplete or patently insufficient shall be considered as "failed". Otherwise,
the BAC shall rate the said first bid envelope as "passed." (emphasis added)
For the procurement of highly technical goods wherein the two-stage bidding process is employed, such as
the subject of procurement in this case, the same procedure for pre-qualification outlined above is followed
in the first stage, except that the technical specifications are only in the form of performance criteria, and
that the technical proposals will not yet include price tenders.84
Based on the rule, the BAC's function in determining the eligibility of a bidder during pre-qualification is
ministerial in the sense that it only needs to countercheck the completeness and sufficiency of the
documents submitted by a bidder against a checklist of requirements. It cannot, therefore, declare a bidder
ineligible for failure to submit a document which, in the first place, is not even required in the bid
documents.
Citing Sec. 23.1 (b) of the GPRA IRR, petitioners contend that an AOI is one of such mandatory
documentary requirements and that the failure of a bidder to furnish the BAG a valid one would
automatically render the bidder ineligible.
We are not convinced.
Sec. 23 of the adverted GPRA IRR reads:

Section 23. Eligibility Requirements for the Procurement of Goods and Infrastructure Projects
23.1. For purposes of determining the eligibility of bidders using the criteria stated in Section 23.5 of this
IRR, only the following documents shall be required by the BAC, using the forms prescribed in the Bidding
Documents: chanRoblesvirtualLawlibrary
a) Class "A" Documents
Legal Documents
i) Registration certificate from SEC, Department of Trade and Industry (DTI) for sole
proprietorship, or CDA for cooperatives, or any proof of such registration as stated in the Bidding
Documents.
ii) Mayor's permit issued by the city or municipality where the principal place of business of the prospective
bidder is located.
iii) Tax clearance per Executive Order 398, Series of 2005, as finally reviewed and approved by the BIR.
Technical Documents
iv) Statement of the prospective bidder of all its ongoing government and private contracts, including
contracts awarded but not yet started, if any, whether similar or not similar in nature and complexity to the
contract to be bid; and Statement identifying the bidder's single largest completed contract similar to the
contract to be bid, except under conditions provided for in Section 23.5.1.3 of this IRR, within the relevant
period as provided in the Bidding Documents in the case of goods. All of the above statements shall include
all information required in the PBDs prescribed by the GPPB.
v) In the case of procurement of infrastructure projects, a valid Philippine Contractors Accreditation Board
(PCAB) license and registration for the type and cost of the contract to be bid.
Financial Documents
vi) The prospective bidder's audited financial statements, showing, among others, the prospective bidder's
total and current assets and liabilities, stamped "received" by the BIR or its duly accredited and authorized
institutions, for the preceding calendar year which should not be earlier than two (2) years from the date of
bid submission.
vii) The prospective bidder's computation for its Net Financial Contracting Capacity (NFCC).
b) Class "B" Document
Valid joint venture agreement (JVA), in case the joint venture is already in existence. In the
absence of a JVA, duly notarized statements from all the potential joint venture partners stating
that they will enter into and abide by the provisions of the JVA in the instance that the bid is
successful shall be included in the bid. Failure to enter into, a joint venture in the event of a contract
award shall be ground for the forfeiture of the bid security. Each partner of the joint venture shall
submit the legal eligibility documents. The submission of technical and financial eligibility documents by
any of the joint venture partners constitutes compliance. (emphasis added)
Clearly, the quoted provisions, as couched, do not require the submission of an AOI in order for a bidder to
be declared eligible. The requirement that bears the most resemblance is the submission by each partner to
the venture of a registration certificate issued by the Securities and Exchange Commission, but compliance
therewith was never disputed by the petitioners. Moreover, it was never alleged that Smartmatic JV was
remiss in submitting a copy of its joint venture agreement pursuant to Sec. 23.1(b), which petitioners
specifically invoked.
It may be that the procuring entity has the option to additionally require the submission of the bidders'
respective AOIs in order to substantiate the latter's claim of due registration with the government entities
concerned. However, a perusal of the bidding documents would readily reveal that the procuring entity, the
COMELEC in this case, did not impose such a requirement. As can be gleaned in the Instruction to
Bidders,85 only the following documents were required for purposes of determining a bidder's eligibility:
12. Documents Comprising the Bid: Eligibility and Technical Components
12.1. Unless otherwise indicated in the BDS, the first envelope shall contain the following eligibility and
technical documents: chanRoblesvirtualLawlibrary
(a) Eligibility Documents -
Class "A" Documents:
(i) Registration certificate from the Securities and Exchange Commission

(SEC), Department of Trade and Industry (DTI) for sole proprietorships,
and Cooperative Development Authority (CDA) for cooperatives, or any
proof of such registration as stated in the BDS;
(ii) Mayor's permit issued by the city or municipality where the principal
place of business of the prospective bidder is located;
(iii) Statement of all its ongoing and completed government and private
contracts within the period stated in the BDS, including contracts
awarded but not yet started, if any. The statement shall include, for
each contract, the following:
(111.1) name of the contract;
(111.2) date of the contract;
(111.3) kinds of Goods;

(111.4) amount of contract and value of outstanding contracts;
(111.5) date of delivery; and
(111.6) end user's acceptance or official receipt(s) issued for the

contract, if completed.
(iv) Audited financial statements, stamped "received" by the Bureau of

Internal Revenue (BIR) or its duly accredited and authorized
institutions, for the preceding calendar year, which should not be earlier
than two (2) years from the bid submission;
(v) NFCC computation or CLC in accordance with ITB Clause 5.5; and
(vi) Tax clearance per Executive Order 398, Series of 2005, as finally
reviewed and approved by the BIR. (Updated pursuant to GPPB
Resolution No. 21-2013 dated July 30, 2013)
Class "B" Document:
(vii) If applicable, the JVA in case the joint venture is already in existence,
or duly notarized statements from all the potential joint venture
partners stating that they will enter into and abide by the provisions of
the JVA in the instance that the bid is successful;
(viii) Social Security Clearance (SSS);
(ix) Department of Labor and Employment Clearance (DOLE);
(x) Court Clearance (Regional Trial Court) (emphasis omitted)

The non-requirement of an AOI is further made evident by the Bid Data Sheet (BDS)86 which provides a
"complete list"87 of eligibility proposal documents to be submitted during the first stage of the bidding
process. As outlined in the BDS:88
TAB CLASS "A" DOCUMENTS

I. LEGAL DOCUMENTS:
(In case of a Joint Venture, each member of the JV shall submit the required
Documents mentioned in Tabs "A", "B", "C" and "I").
A. Registration Certificate Form
Securities and Exchange Commission from the Securities and Exchange
Commission (SEC) for Corporation or Partnership; or its equivalent
documents in case of foreign bidder.
Department of Trade and Industry (DTI) for sole proprietorship; or its
equivalent documents in case of foreign bidder.
Cooperative Development Authority, for Cooperatives or its equivalent
documents in case of foreign bidder.
B. Mayor's Permit issued by the city or municipality where the principal
place of business of the prospective bidder is located or its equivalent
document in case of a foreign corporation.
C. Tax Clearance per Executive Order 398, Series of 2005, as finally
reviewed and approved by the BIR.
II. TECHNICAL DOCUMENTS
D. Statement of all ongoing and completed government and private
contracts, within the last six (6) years from the date of submission and
receipt of bids, including contracts awarded but not yet started, if any,
using the prescribed form. Please refer to Section VIII. Bidding Forms.
Statement of at least one similar completed largest contract within six
(6) years from the date of the opening bids equivalent to at least 50%
E.
of the ABC, using the prescribed form. Please refer to Section VIII.
Bidding Forms.
Bid security in the form, amount and validity in accordance with ITB
F.
Clause 18.
III. FINANCIAL DOCUMENTS
G. Audited financial statements, stamped received by the Bureau of
Internal Revenue (BIR) or its duly accredited and authorized
institutions, for the preceding calendar year, which should not be
earlier than two (2) years from bid submission; or equivalent
documents in case of foreign bidder, provided that the same is in
accordance with International Financial Reporting Standards.
H. NFCC Computation in accordance with ITB clause 5.
TAB CLASS "B" ELIGIBILITY REQUIREMENTS
I. Valid Joint Venture Agreement (JVA), in case the Joint
Venture is already in existence at the time of the submission and
opening of bids, OR duly notarized statements from all potential joint
venture partners stating that they will enter into and abide by the
provisions of the JVA if the bid is successful;
IV. OTHER DOCUMENTS
J. Conformity with the Schedule of Requirements and Initial Technical
Proposal (approved TOR), as enumerated and specified in Sections VI
and VII of the Bidding Documents, using the prescribed form.
K. Certification from the Election Authority or Election Management Body
that the system has demonstrated capability and has been successfully
used in a prior electoral exercise here or abroad.
L. Omnibus Sworn Statement using the prescribed form in Section VIII.
Even the furnished Schedule of Requirements89 does not mandate the submission of an AOI:90
CORPORATION/
REQUIREMENTS JOINT VENTURE
SP/PARTNERSHIP
PASSED FAILED PASSED FAILED
xxx
ELIGIBILITY DOCUMENTS
1. LEGAL DOCUMENTS
I. Class "A" Documents
a. Original/Certified true copy of
Registration Certificate from the
Securities and Exchange Commission
(SEC), Department of Trade and
Industry (DTI) for sole
proprietorship, or Cooperative
Development Authority (CDA) for
Cooperatives or any proof of such
registration as stated in the BDS; (In
case of a JV, this requirement must
be complied with by all the JV
partners)
b. Original/Certified true copy of
valid and current Mayor's/Business
Permit/License issued by the city or
municipality where the principal place
of business of the prospective bidder
is located; (In case of a JV, this
requirement must be complied with
by all the JV partners)
c. Original/Certified true copy of valid
Tax Clearance per Executive Order
398, Series of 2005 (In case of a JV,
this requirement must be complied
with by ail the JV partners)
2. TECHNICAL DOCUMENTS
d. Sworn Statement of all its on-
going and completed government
and private contracts within the last
six (6) years prior to the deadline for
the submission and opening of bids,
including contracts awarded but not
yet started, if any. The statement
shall include, for each of the
contract, the following: x x x
e. Sworn Statement of the bidder's
single largest contract completed
within six (6) YEARS prior to the
deadline for the submission and
opening of bids, with a value of FIFTY
(50%) per cent of the ABC.
f. The bid security (Payable to
COMELEC) shall be ' in the following
amount: x x x
3. FINANCIAL DOCUMENTS
g. Audited Financial Statements
(AFS), stamped "received" by the
Bureau of Internal Revenue (BIR) or
its duly accredited and authorized
institutions, for the preceding
calendar year x x x
h. NFCC computation which shall be
based only on the current assets and
current liabilities submitted to the
BIR, through Electronic Filing and
Payment System (EFPS)
4. OTHERS
i. Conformity with Section VI:
Schedule of Requirements of the
Bidding Documents
j. Conformity with Section VII.
Technical Specifications of the
Bidding Documents. If proposal is the
same with the initial technical
requirements, just put "COMPLY"
k. Certification from the Election
Authority or Election management
Body that the system' has
demonstrated capability and has
been successfully used in a prior
electoral exercise here or abroad.
l. OMNIBUS AFFIDAVIT in accordance
with Section 25.2(a)(iv) of the IRR of
RA 9184 and using the form
prescribed in Section VIII of the
Philippine bidding Documents. Shall
include: x x x
Verily, based on Sec. 23.1 (b) of the GPRA IRR, the Instruction to Bidders, the BDS, and the Checklist of
Requirements, the non-submission of an AOI is not fatal to a bidder's eligibility to contract the project at
hand. Thus, it cannot be considered as a ground for declaring private respondents ineligible to participate in
the bidding process. To hold otherwise would mean allowing the BAC to consider documents beyond the
checklist of requirements, in contravention of their non-discretionary duty under Sec. 30(l) of the GPRA IRR.
b. Neither is the API a post-qualification requirement
After the preliminary examination stage, the BAC opens, examines, evaluates and ranks all bids and
prepares the Abstract of Bids which contains, among others, the names of the bidders and their
corresponding calculated bid prices arranged from lowest to highest. The objective of the bid evaluation is to
identify the bid with the lowest calculated price or the Lowest Calculated Bid. The Lowest Calculated Bid shall
then be subject to post-qualification to determine its responsiveness to the eligibility and bid requirements.91
During post-qualification, the procuring entity verifies, validates, and ascertains all statements made and
documents submitted by the bidder with the lowest calculated or highest rated bid using a non-discretionary
criteria as stated in the bidding documents.92 If, after post-qualification, the Lowest Calculated Bid is
determined to be post-qualified, it shall be considered the Lowest Calculated Responsive Bid and the
contract shall be awarded to the bidder.93
To recall, the BAC, on December 15, 2014, declared that only Smartmatic JV and Indra were eligible to
participate in the second stage of the bidding process. Of the two, only Smartmatic JV submitted a complete
and responsive Overall Summary of the Financial Proposal and was thus subjected to post-qualification
evaluation. Initially, the BAC post-disqualified Smartmatic JV for allegedly failing to submit a valid AOL It is
this preliminary finding that petitioners want reinstated.
We disagree.
Even on post-qualification, the submission of an AOI was not included as an added requirement. The
Instruction to Bidders pertinently provides:94
29. Post-Qualification
29.1. The Procuring Entity shall determine to its satisfaction whether the Bidder that is evaluated as having
submitted the Lowest Calculated Bid (LCB) complies with and is responsive to all the requirements and
conditions specified in ITB Clauses 5, 12 and 13.
xxxx
29.3. The determination shall be based upon an examination of the documentary evidence of the
Bidder's qualifications submitted pursuant to ITB Clauses 12 and 13, as well as other information
as the Procuring Entity deems necessary and appropriate, using a non-discretionary "pass/fail"
criterion. (emphasis added)
Clauses 12 and 13 of the Instruction to Bidders pertain to the eligibility documents, technical documents,
and the financial component of a participant's bid.95 Meanwhile, the Clause 5 adverted to is an enumeration
of persons or entities who may participate in the bidding.96 Nowhere in these clauses does it appear that an
AOI is a mandatory requirement even for post-qualification. Even the BAC's March 27, 2015 Notice
addressed to Smartmatic JV supports this finding:97
x x x [F]or purposes of post-qualification proceedings, please submit copies of the following documents to
the Bid and Awards Committee (BAC), through the BAC Secretariat, as stated in Clause 29.2 (a) of Section
III, Bid Data Sheet of the Bidding Documents, within three (3) calendar days from receipt of this Notice: chanRoblesvirtualLawlibrary
a) Latest Income and Business Tax Returns. x x x
b) Certificate of PhilGEPS Registration.

c) ISO 9001:2008 Certification of the Optical Mark/reader or Optical Scan
manufacturer for OMR.
In addition, the following certifications must be submitted: chanRoblesvirtualLawlibrary
a) That all system requirements for customization as stated in the Terms of

Reference and RA 9369 shall be fully complied with, subject to the
application of applicable penalties for non-compliance; and
b) That it shall not demand for additional payment from COMELEC to

procure additional OMR system requirements during Project
Implementation for items that it may have overlooked in its Bid Proposal.
The bidder is also required to submit the machines, including the software and hardware, back-up power
supply and other equipment and peripherals necessary for the conduct of the testing during post-
qualification, including the prototype sample of the ballot box based on what is required in the Terms of
Reference (TOR) for the OMR on April 6, 2015 as per instruction from the Technical Working Group (TWG).
From the foregoing, the inescapable result is that mere failure to file an AOI cannot automatically result in
the bidder concerned being declared ineligible, contrary to petitioners' claim.
Smartmatic JV may validly undertake the project sought to be procured
a. SMTC still has the authority to conduct business even after the conduct of the 2010 national and local
elections
A thorough reading of petitioners' contention, however, would show that it is not only assailing Smartmatic
JV's ineligibility based on the alleged incompleteness of its documentary requirements i.e. for non-
submission of a valid AOI, but also because they considered the subject of the procurement beyond the
ambit of SMTCs corporate purpose. Petitioners postulate that SMTC's authority to conduct business ceased
upon fulfillment of its primary purpose stated in its AOI-that of automating the 2010 National and Local
Elections, and this allegedly rendered SMTC's subsequent involvement in the subject procurement project
an ultra vires act.
Petitioners' myopic interpretation of SMTC's purpose is incorrect.
While it is true that SMTC's AOI made specific mention of the automation of the 2010 National and Local
Elections as its primary purpose, it is erroneous to interpret this as meaning that the corporation's authority
to transact business will cease thereafter. Indeed, the contractual relation between SMTC and the COMELEC
has been the subject of prior controversies that haVe reached the Court, and We have on these occasions
held that even beyond the 2010 election schedule, the parties remain to have subsisting rights and
obligations relative to the products and services supplied by SMTC to the COMELEC for the conduct of the
2010 polls.
For instance, the Court, in the landmark case of Capalla v. COMELEC (Capalla),98 upheld the validity of the
March 30, 2012 Deed of Sale by and between SMTC and COMELEC when the latter exercised the option to
purchase (OTP) clause embodied in their 2009 Automated Election System Contract (AES Contract). Even
though the original deadline for the option was only until December 31, 2010, We ruled that the parties to
the AES Contract, pursuant to Art. 19 thereof,99can still validly extend the same by mutual agreement. The
Court ratiocinated that Art. 19 of the AES Contract may still be invoked even after December 31, 2010, for
the agreement subsisted in view of the COMELEC's failure to return SMTC's performance security, a
condition for the contract's termination. As provided under Art. 2 of the AES Contract:100
Article 2
EFFECTIVITY
2.1. This Contract shall take effect upon the fulfillment of all of the following conditions: chanRoblesvirtualLawlibrary
(a) Submission by the PROVIDER of the Performance Security;
(b) Signing of this Contract in seven (7) copies by the parties; and
(c) Receipt by the PROVIDER of the Notice to Proceed.
2.2. The Term of this Contract begins from the date of effectivity until the release of the Performance
Security,vithout prejudice to the surviving provisions of this Contract, including the warranty
provision as prescribed in Article 8.3 and the period of the option to purchase. (Emphasis supplied)
Based on Our ruling in Capalla, the cessation of SMTC's business cannot be assumed just because the May
10, 2010 polls have already concluded. For clearly, SMTC's purpose—the "automation of the 2010 national
and local elections"—is not limited to the conduct of the election proper, but extends further to the
fulfillment of SMTC's contractual obligations that spring forth from the AES Contract during the lifetime of
the agreement (i.e. until the release of the performance security), and even thereafter insofar as the
surviving provisions of the contract are concerned. In other words, regardless of whether or not SMTC's
performance security has already been released, establishing even just one surviving provision of the AES
Contract would be sufficient to prove that SMTC has not yet completed its purpose under its AOI, toppling
petitioners' argument like a house of cards.
Unfortunately for petitioners, one such surviving provision has already been duly noted by the Court in the
recent case of Pabillo v. COMELEC (Pabillo).101 In Pabillo, the Court cited Art. 8.8 of the AES Contract, which
significantly reads:
8.8 If COMELEC opts to purchase the PCOS and Consolidation and Canvassing System (CCS), the following
warranty provisions indicated in the RFP shall form part of the purchase contract: chanRoblesvirtualLawlibrary
1) For PCOS, SMARTMATIC shall warrant the availability of parts, labor and technical support and
maintenance to COMELEC for ten (10) years, if purchased (Item 18, Part V of the RFP), beginning
May 10, 2010. Any purchase of parts, labor and technical support and maintenance not covered under
Article 4.3 above shall be subject to the prevailing market prices at the time and at such terms and
conditions as may be agreed upon. (emphasis added)
Pertinently, We have interpreted the foregoing contractual provision in Pabillo in the following wise:102
Smartmatic-TIM warrants that its parts, labor and technical support and maintenance will be
available to the COMELEC, if it so decides to purchase such parts, labor and technical support and
maintenance services, within the warranty period stated, i.e., ten (10) years for the PCOS,
reckoned from May 10, 2010, or until May 10, 2020. Article 8.8 skews from the ordinary concept of
warranty since it is a mere warranty on availability, which entails a subsequent purchase contract, founded
upon a new consideration, the costs of which (unlike in the first warranty) are still to be paid. With Article
8.8 in place, the COMELEC is assured that it would always have access to a capable parts/service
provider in Smartmatic-TIM, during the 10-year warranty period therefor, on account of the peculiar
nature of the purchased goods. (emphasis added)
Indubitably, the vinculum juris between COMELEC and SMTC remains solid and unsevered despite the 2010
elections' inevitable conclusion. Several contractual provisions contained in the 2009 AES Contract, as
observed in a review of our jurisprudence, continue to subsist and remain enforceable up to this
date. Pabillo, in effect, at least guaranteed that SMTC's purpose under its AOI will not be fulfilled until May
10, 2020. Therefore, petitioners' theory—that SMTC no longer has a valid purpose—is flawed. Otherwise,
there would be no way of enforcing the subsisting provisions of the contract and of holding SMTC to its
warranties after the conduct of the. May 10, 2010 elections.
Having resolved the continuity of SMTC's business, We now proceed to determine whether its participation in
the bidding process is an authorized or an ultra vires act.
b. The issue is mooted by the subsequent approval of the amendment to SMTC's AOI
Commissioner Guia, in his dissent, opines that a bidder should be authorized to participate in the bidding as
early as the time the pre-qualification was conducted, which in this case was held on December 4, 2014.
Thus, the December 10, 2014 approval of SMTC's amended AOI, to Commissioner Guia's mind, cannot cure
the alleged vice attending SMTC's submission of its bid, as a partner in Smartmatic JV, for a project that it
was, at that time, unauthorized to undertake.
The argument fails to persuade.
As earlier discussed, the function of the BAC, in making an initial assessment as to the eligibility of the
bidders during pre-qualification, is ministerial and nondiscretionary. It merely counterchecks the documents
submitted by the bidder against the checklist of requirements included in the bid documents disseminated
by the procuring agency. It cannot consider documents not listed in the checklist for purposes of
ascertaining a bidder's eligibility during pre-qualification.
The only time the procuring agency can go beyond the checklist is during post-qualification wherein it is
allowed to check to its satisfaction the veracity of the information submitted to it by the bidder. To recall,
Sec. 29.3 of the Invitation to Bid provides that on post-qualification, the procuring entity may utilize any
"other information as [it] may deem necessary and appropriate" in order to test the accuracy of the
information provided in the bidder's eligibility documents and bid proposal. In the end, notwithstanding the
dispensability of the AOI insofar as compliance with documentary requirements is concerned, the procuring
entity may nevertheless consider the same in ultimately determining a bidder's eligibility.
Stated in the alternative, the procuring entity, for purposes of post-qualification, cannot be faulted for, as it
is not precluded from, considering information volunteered by the bidder with the highest bid. Bearing in
mind the non-discretionary function of the BAC during pre-qualification, it is then understandable that it is
only on post-qualification, when it is allowed to consider other documents, during which an extensive inquiry
will be made to detect any defect in the bidder's capacity to contract. Hence, even though the submission of
an AOI was not required for either pre or post-qualification purposes, the COMELEC and BAC, on post-
qualification, may still consider the same in determining whether or not the project is in line with the
bidder's corporate purpose, and, ultimately, in ascertaining the bidder's eligibility.
In the case at bar, We take note that during the opening of the bids on December 4, 2014, Smartmatic JV
already informed the BAC that SMTC was already in the process of amending its AOI. The contents of the
AOI, at that time, were immaterial since the AOI is not an eligibility requirement that can be considered by
the BAC on pre-qualification. By post-qualification, however, the time the BAC can validly consider
extraneous documents, SMTC's AOI has already been duly amended, and the amendments approved by the
SEC on December 10, 2014, for its updated primary purpose to read:103
To sell, supply, lease, import, export, develop, assemble, repair and deal with automated voting machines,
canvassing equipment, computer software, computer equipment and all other goods and supplies, and/or to
provide, render and deal in all kinds of services, including project management services for the conduct of
elections, whether regular or special, in the Philippine(s) and to provide Information and Communication
Technology (ICT) goods and services to private and government entities in the Philippines.
Hence, any doubt on SMTC's authorization to continue its business has already been dispelled by December
10, 2014. It matters not that the amendments to the AOI took effect only on that day104 for as long as it
preceded post-qualification.
c. SMTC's participation in the bidding is not an ultra vires act but one that is incidental to its corporate
purpose
In any event, there is merit in private respondents' argument that SMTC's participation in the bidding is not
beyond its declared corporate purpose; that, in the first place, there was no impediment in SMTC's AOI that
could have prevented Smartmatic JV from participating in the project.
To elucidate, an ultra vires act is defined under BP 68 in the following wise:

Section 45. Ultra vires acts of corporations. - No corporation under this Code shall possess or exercise any
corporate powers except those conferred by this Code or by its articles of incorporation and except such as
are necessary or incidental to the exercise of the powers so conferred. (emphasis added)
The language of the Code appears to confine the term ultra vires to an act outside or beyond express,
implied and incidental corporate powers. Nevertheless, the concept can also include those acts that may
ostensibly be within such powers but are, by general or special laws, either proscribed or declared
illegal.105Ultra vires acts or acts which are clearly beyond the scope of one's authority are null and void and
cannot be given any effect.106
In determining whether or not a coiporation may perform an act, one considers the logical and necessary
relation between the act assailed and the corporate purpose expressed by the law or in the charter, for if the
act were one which is lawful in itself or not otherwise prohibited and done for the purpose of serving
corporate ends or reasonably contributes to the promotion of those ends in a substantial and not merely in a
remote and fanciful sense, it may be fairly considered within corporate powers.107The test to be applied is
whether the act in question is in direct and immediate furtherance of the corporation's business,
fairly incident to the express powers and reasonably necessary to their exercise. If so, the corporation has
the power to do it; otherwise, not.108
In the case at bar, notwithstanding the specific mention of the 2010 National and Local Elections in SMTC's
primary purpose, it is not, as earlier discussed, precluded from entering into contracts over succeeding ones.
Here, SMTC cannot be deemed to be overstepping its limits by participating in the bidding for the 23,000
new optical mark readers for the 2016 polls since upgrading the machines that the company supplied the
COMELEC for the automation of the 2010 elections and offering them for subsequent elections is but a
logical consequence of SMTC's course of business, and should, therefore, be considered included in, if not
incidental to, its corporate purpose. A restricted interpretation of its purpose would mean limiting SMTC's
activity to that of waiting for the expiration of its warranties in 2020. How then can the company be
expected to subsist and sustain itself until then if it cannot engage in any other project, even in those
similar to what the company already performed?
In the final analysis, We see no defect in the AOI that needed to be cured before SMTC could have
participated in the bidding as a partner in Smartmatic JV, the automation of the 2016 National and Local
Elections being a logical inclusion of SMTC's corporate purpose.
Smartmatic JV cannot be declared ineligible for SMTC's nationality
In a desperate last ditch effort to have Smartmatic JV declared ineligible to participate in the procurement
project, petitioners question the nationality of SMTC. They direct the Court's attention to the 2013 Annual
Report and Consolidated Financial Statements109 of Smartmatic Limited to prove that SMTC is 100% foreign
owned. They then contend that SMTC is the biggest shareholder in the bidding joint venture at 46.5% share,
making the joint venture less than 60% Filipino-owned and, hence, ineligible.
The argument is specious.
Clause 5 of the Instruction to Bidders provides that the following may participate in the bidding process:110
5.1. Unless otherwise provided in the BDS, the following persons shall be eligible to participate in the
bidding:chanRoblesvirtualLawlibrary
xxxx
(e) Unless otherwise provided in the BDS, persons/entities forming themselves into a JV, i.e., group of two
(2) or more persons/entities that intend to be jointly and severally responsible or liable for a peculiar
contract: Provided, however, that Filipino ownership or interest of the joint venture concerned
shall be at least sixty percent (60%).
While petitioners are correct in asserting that Smartmatic JV ought to be at least 60% Filipino-owned to
qualify, they did not adduce sufficient evidence to prove that the joint venture did not meet the
requirement. Petitioners, having alleged non-compliance, have the correlative burden of proving that
Smartmatic JV did not meet the requirement, but aside from their bare allegation that SMTC is 100%
foreign-owned, they did not offer any relevant evidence to substantiate their claim. Even the 2013 financial
statements submitted to Court fail to impress for they pertain to the financial standing of Smartmatic
Limited,111 which is a distinct and separate entity from SMTC. It goes without saying that Smarmatic
Limited's nationality is irrelevant herein for it is not even a party to this case, and even to the joint venture.
Aside from the sheer weakness of petitioners' claim, SMTC satisfactorily refuted the challenge to its
nationality and established that it is, indeed, a Filipino corporation as defined under our laws. As provided in
Republic Act No. 7042 (RA 7042), otherwise known as the Foreign Investments Act, a Philippine corporation
is defined in the following wise:
Section 3. Definitions. - As used in this Act: chanRoblesvirtualLawlibrary
a) The term "Philippine national" shall mean a citizen of the Philippines or a domestic partnership or
association wholly owned by citizens of the Philippines; or a corporation organized under the laws of
the Philippines of which at least sixty percent (60%) of the capital stock outstanding and entitled
to vote is owned and held by citizens of the Philippines; or a trustee of funds for pension or other
employee retirement or separation benefits, where the trustee is a Philippine national and at least sixty
(60%) of the fund will accrue to the benefit of the Philippine nationals: Provided, That where a corporation
and its non-Filipino stockholders own stocks in a Securities and Exchange Commission (SEC) registered
enterprise, at least sixty percent (60%) of the capital stocks outstanding and entitled to vote of both
corporations must be owned and held by citizens of the Philippines and at least sixty percent (60%) of the
members of the Board of Directors of both corporations must be citizens of the Philippines, in order that the
corporations shall be considered a Philippine national.
In Narra Nickel Mining and Development, Corp. v. Redmont Consolidated Mines, Corp.,112 the Court held that
the "control test" is the prevailing mode of determining whether or not a corporation is Filipino. Under the
"control test," shares belonging to corporations or partnerships at least 60% of the capital of which is owned
by Filipino citizens shall be considered as of Philippine nationality.113 It is only when based on the attendant
facts and circumstances of the case, there is, in the mind of the Court, doubt in the 60-40 Filipino-equity
ownership in the corporation, that it may apply the "grandfather rule."114
Perusing SMTC's GIS115 proves useful in applying the control test. Upon examination, SMTC's GIS reveals
that it has an authorized capital stock of P226,000,000.00, compromised of 226,000,000 common
stocks116 at P1.00 par value, of which 100% is subscribed and paid.117 The GIS further provides information
on the stcok holders as follows:118
NAME SHARES SUBSCRIBED

NATIONALIT
Y AND % OF AMOUNT PAID
CURRENT TYPE NUMBER AMOUNT OWNERSH
RESIDENTIA IP
L ADDRESS
1920 60%
Commo 135,599,9 135,599,997. 677,999,997.
Business
n 97 00 00
Inc.
Filipino "A"
King's Court
2, 2129 Don
Chino
Roces Ave.,
Makati, 135,599,9 135,599,997.
TOTAL
Metro 97 00
Manila
Smartmatic
Commo 90,399,99 90,399,998.0 451,999,998.
Internationa
n 8 0 00
l, Corp.
Barbadian "B"
4 Stafford 40%
House,
Garisson
St.,
Michael, 90,399,99 90,399,998.0
TOTAL
Barbados 8 0
Juan C. Commo
1 1.00 1.00
Villa, Jr. n
Filipino
No. 74,
Jalan 0%
Setiabakti,
Damansara
Heights,
TOTAL 1 1.00
Kuala
Lumpur
Jacinto R. Commo
1 1.00 1.00
Perez, Jr. n
Filipino "A"
1211
Consuelo
St.,
Singalong,
Manila TOTAL 1 1.00
Alastair Commo 1 1.00 0% 1.00
Joseph n
James Wells
British "B"
1405
Spanish
Bay,
Bonifacio
Ridge,
1st Avenue,
Bonifacio TOTAL 1 1.00
Global City,
Taguig
Marian Ivy
Commo
F. Reyes- 1 1.00 1.00
n
Fajardo
Filipino "A"
71-B 0%
Tindalo St.,
MonteVista,
Subdivision,
Total 1 1.00
Marikina
Salvador P. Commo
1 1.00 1.00
Aque n
Filipino "A"
2250 P. 0%
Burgos,
Pasay City
Total 1 1.00
Applying the control test, 60% of SMTC's 226,000,000 shares, that is 135,600,000 shares, must be Filipino-
owned. From the above-table, it is clear that SMTC reached this threshold amount to qualify as a Filipino-
owned corporation. To demonstrate, the following are SMTC's Filipino investors:
NAME OF
SHAREHOLDER TYPE OF SHARE NUMBER OF SHARES
1920 Business Inc. Common "A" 135,599,997
Juan C. Villa, Jr. Common "B" 1
Jacinto R. Perez, Jr. Common "A" 1
Marian Ivy F. Reyes-
Common "A" 1
Fajardo
Salvador P. Aque Common "A" 1
TOTAL 135,600,001
Indeed, the application of the control test would yield the result that SMTC is a Filipino corporation. There is
then no truth to petitioners' claim that SMTC is 100% foreign-owned. Consequently, it becomes unnecessary
to confirm this finding through the grandfather rule119 since the test is only employed when the 60% Filipino
ownership in the corporation is in doubt.120 In this case, not even the slightest doubt is cast since the
petition is severely wanting in facts and circumstances that raise legitimate challenges to SMTC's 60-40
Filipino ownership. The petition rested solely on petitioners' vague assertions and baseless claims. On the
other hand, SMTC countered by furnishing the Court a copy of its GIS providing its shareholders' stock
ownership details, and by submitting a copy of its AOI, which reserved all of SMTC's 135,600,000 class A
common shares to Filipinos121 in a bid to guarantee that when all of its shares are outstanding, foreign
ownership will not exceed 40%.
Anent the nationality of the other joint venture partners, the Court defers to the findings of the COMELEC
and the BAC, and finds sufficient their declaration that Smartmatic JV is, indeed, eligible to participate in the
bidding process, and is in fact the bidder with the lowest calculated responsive bid.122 If petitioners would
insist otherwise by reason of Smartmatic JV's nationality, it becomes incumbent upon them to prove that the
aggregate Filipino equity of the joint venture partners—SMTC, Total Information Management Corporation,
Smartmatic International Holding B.V., and Jarltech International Corporation—does not comply with the
60% Filipino equity requirement, following the oft-cited doctrine that he who alleges must
prove.123 Regrettably, one fatal flaw in petitioners' posture is that they challenged the nationality of SMTC
alone, which, after utilizing the control test, turned out to be a Philippine corporation as defined under RA
7042. There was no iota of evidence presented or, at the very least, even a claim advanced that the
remaining partners are foreign-owned. There are, in fact, no other submissions whence - this Court can
inquire as to the nationalities of the other joint venture partners. Hence, there is no other alternative for this
Court other than to adopt the findings of the COMELEC and the BAC upholding Smartmatic JV's eligibility to
participate in the bidding process, subsumed in which is the joint venture and its individual partners'
compliance with the nationality requirement.
WHEREFORE, in view of the foregoing, the petition is hereby DISMISSED for lack of merit. The June 29,
2015 Decision of the COMELEC en banc is hereby AFFIRMED.
SO ORDERED.
Sereno, C.J., Carpio, Leonardo-De Castro, Peralta, Bersamin, Del Castillo, Villarama, Jr., Perez, Mendoza,
Reyes, andJardeleza, JJ., concur.
Brion, J., on official leave.
Perlas-Bernabe, J., I join the separate opinion of J. Leonen.
Leonen, J., see separate concurring and dissenting opinion.
Endnotes:
1
Rollo, pp. 61-72. Rendered by Chairman J. Andres D. Bautista and Commissioners Christian Robert S. Lim,
Al A. Parreno, Luie Tito F. Guia, Arthur D. Lim, Ma. Rowena Amelia V. Guanzon and Sheriff M. Abas.
2
Id. at 213-329. The bid documents are divided into eight (8) sections, namely: the Invitation to Bid,
Instruction to Bidders, Bid Data Sheet, General Conditions of Contract, Special Conditions of Contract,
Schedule of Requirements, Technical Specifications, and Bidding Forms.
3
Id. at 216-218.
4
Id. at 216.
COMPONENT QUANTITY UNIT COST TOTAL

1 - Voting Php
23,000 units Php 90,000.00
Machines 2,070,000,000.00
2 - Ballots 16,500,000 pieces Php 20.00 Php 330,000,000.00
3 - Ballot Boxes 20,406 units Php 3,000.00 Php 61,218,000.00
4 - Technical 4,550 Technicians Php 42,300,000.00
Support (Polling Centers)
150 Technicians
(National Technical
Support Group)
APPROVED BUDGET FOR THE Php
CONTRACT (ABC) 2,503,518,000.00
5
Id. at 61-62.
6
Id. at 217-218.
7
Id. at 621.
8
Id. at 623; see also BAC Resolution No. 10, Memorandum of Divida Blaz-Perez, id. at 433.
9
Id. at 546.
10
Id. at 623, 437.
11
Id. at 624.
12
Id. at 624, 441-442.
13
Id. at 624, 447-448.
14
Id. at 900-901.
15
Id. at 62, 449-451.
16
Id. at 452-468.
17
Id. at 424-429.
18
Id. at 428.
19
Id. at 469-506.
20
Id. at 62-63.
21
Id. at 63.
22
Id. at 64.
23
Id. at 63.
24
Id. at 23. The DOS was used to visualize the electrical signals sent to the memory cards without modifying
the OMR+ hardware and software. During the June 23, 2015 demonstration, the DSO displayed waveforms
of time dimension and electrical voltage, which were then analyzed by the electronics design engineers of
the ASTI.
25
Id. at 23-26.
26
Id. at 26.
27
Id. at 69-71.
28
Id. at 74-76.
29
Id. at 32-34.
30
Id. at 34.
31
Id. at 75,532.
32
Id. at 48.
33
Id. at 46.
34
Id. at 46.
35
Id. at 49.
36
Id. at 587-618.
37
Id. at 593-596.
38
Id. at 596-604.
39
Id. at 619-663.
40
Id. at 647.
41
Id. at 549.
42
Id. at 637-639.
43
Id. at 533-534. Its secondary purposes read: a. to acquire by purchase, lease, contract, concession or
otherwise, within the limits allowed by law, any and all real and/or personal properties of every kind and
description whatsoever, whether tangible or intangible, which the Corporation may deem necessary or
appropriate in connection with the conduct of any business in which the Corporation may lawfully engage,
and, within the limits allowed by law, to own, hold, operate, improve, develop, manage, grant, lease, sell,
assign, convey, transfer, exchange, or otherwise dispose of the whole or any part thereof;
xxxx
h. To carry out any of the above-mentioned purposes as principal, agent, factor, licensee, concessionaire,
contractor, or otherwise, either alone or on conjunction with any other person, firm, association,
corporation, or entity, whether public or private;
i. To enter into contracts and arrangements of every kind and description for any lawful purpose with any
person, firm, association, corporation, municipality, body politic, country, territory, province, state, or
government, and to obtain from any government or authority such rights, privileges, contracts and
concessionaires which the Corporation may deem desirable.
44
Section 42. Power to invest corporate funds in another corporation or business or for any other purpose. -
Subject to the provisions of this Code, a private corporation may invest its funds in any other corporation or
business or for any purpose other than the primary purpose for which it was organized when approved by a
majority of the board of directors or trustees and ratified by the stockholders representing at least two-
thirds (2/3) of the outstanding capital stock, or by at least two thirds (2/3) of the members in the case of
non-stock corporations, at a stockholder's or member's meeting duly called for the purpose. Written notice
of the proposed investment and the time and place of the meeting shall be addressed to each stockholder or
member at his place of residence as shown on the books of the corporation and deposited to the addressee
in the post office with postage prepaid, or served personally: Provided, That any dissenting stockholder shall
have appraisal right as provided in this Code: Provided, however, That where the investment by the
corporation is reasonably necessary to accomplish its primary purpose as stated in the articles of
incorporation, the approval of the stockholders or members shall not be necessary.
45
Rollo, pp. 640-646.
46
Id. at 646-647. Contract dated January 14, 2013 for the supply of 82,000 CF Cards Main, Contract dated
January 28, 2013 for the supply of 82,000 CF Cards WORM, Contract dated January 18, 2013 for the
Electronic Transmission of Election Results of the May 13, 2013 elections, Contract dated May 14, 2013 for
the supply of 15,000 MTD Modems, and Contract dated March 22, 2013 for the National Support Center.
47
Id. at 647-648.
48
Id. at 648-652.
49
Id. at 652-657.
50
Id. at 34.
51
Garces v. Court of Appeals, G.R. No. 114795, July 17, 1996, 259 SCRA 99, 107.
52
Bedol v. Comelec, G.R. No. 179830, December 3, 2009, 606 SCRA 554.
53
54
CONSTITUTION, Art. IX-C, Sec. 2(1).
55
An Act Amending Republic Act No. 8436, Entitled "An Act Authorizing the Commission on Elections to Use
an Automated Election System in the May 11, 1998 National or Local Elections and in Subsequent National
and Local Electoral Exercises, To Encourage Transparency, Credibility, Fairness and Accuracy of Elections,
Amending for the Purpose Batas Pampansa Blg. 881, As Amended, Republic Act No. 7166 and Other Related
Elections Laws, Providing Funds Therefor and for Other Purposes."
56
Duco v. Comelec, G.R. No. 183366, August 19, 2009, 596 SCRA 572.
57
G.R. No. 184915, June 30, 2009, 591 SCRA 481.
58
Pates v. Comelec, id. They exist as separate rules for substantive reasons as discussed below.
Procedurally, the most patent difference between the two - i.e., the exception that Section 2, Rule 64 refers
to - is Section 3 which provides for a special period for the filing of petitions for certiorari from decisions or
rulings of the COMELEC en banc. The period is 30 days from notice of the decision or ruling (instead of the
60 days that Rule 65 provides), with the intervening period used for the filing of any motion for
reconsideration deductible from the originally-granted 30 days (instead of the fresh period of 60 days that
Rule 65 provides).
59
Formerly Section 8 of RA 8436, the provision was renumbered to Section 12 by RA 9369.
60
G.R. Nos. 216098 & 216562, April 21, 2015.
61
RA 9184, Sec. 3.
62
Id., Sec. 10.
63
Id., Sec. 12.
64
Id., Sec. 5(o).
65
No. L-31455, February 28, 1985, 135 SCRA 25.
66
67
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.
Government.
68
See also Araullo v. Aquino III, G.R. Nos. 209287 etc., July 1, 2014.
69
City of Manila v. Grecia-Cuerdo, G.R. No. 175723, February 4, 2014.
70
Id.
71
PD 1606, Sec. 4(c), as amended by RA 8249, Sec. 4.
72
Bonifacio v. Gimenez, G.R. No. 184800, May 5, 2010.
73
G.R. No. 159508, August 29, 2012, 679 SCRA 237.
74
Macapagal v. People, G.R. No. 193217, February 26, 2014.
75
Id.
76
G.R. No. 205728, January 21, 2015.
Roque v. COMELEC, supra note 66; citing Marabur v. Comelec, G.R. No. 169513, February 26, 2007, 516
77
SCRA 696.
Id.; Pabillo v. COMELEC, G.R. Nos. 216098 & 216562, April 21, 2015; Capalla v. COMELEC, G.R. No.
78
201112, June 13, 2012.
79
G.R. No. 205728, January 21, 2015.
80
No. L-19260, January 31,1962,4 SCRA 386.
81
Commission on Audit v. Linkworth International, G.R. No. 182559, March 13, 2009, 518 SCRA 501.
82
Sec. 25.1, RA 9184 IRR.
83
Commission on Audit v. Linkworth International, supra note 81.
84
Revised Implementing Rules and Regulations, RA 9184, Sec. 30.3. — For the procurement of goods
where, due to the nature of the requirements of the project, the required technical
specifications/requirements of the contract cannot be precisely defined in advance of bidding, or where the
problem of technically unequal bids is likely to occur, a two (2)-stage bidding procedure may be employed.
In these cases, the procuring entity concerned shall prepare the Bidding Documents, including the technical
specification in the form of performance criteria only. Under this procedure, prospective bidders shall be
requested at the first stage to submit their respective eligibility requirements if needed, and initial technical
proposals only (no price tenders). The concerned BAC shall then evaluate the technical merits of the
proposals received from eligible bidders vis-a-vis the required performance standards. A meeting/discussion
shall then be held by the BAC with those eligible bidders whose technical tenders meet the minimum
required standards stipulated in the Bidding Documents for purposes of drawing up the final revised
technical specifications/requirements of the contract. Once the final revised technical specifications are
completed and duly approved by the concerned BAC, copies of the same shall be issued to all the bidders
identified in the first stage who shall then be required to submit their revised technical tenders, including
their price proposals in two (2) separate sealed envelopes in accordance with this IRR, at a specified
deadline, after which time no more bids shall be received. The concerned BAC shall then proceed in
accordance with the procedure prescribed in this IRR.
85
Rollo, pp. 231-233.
86
Id. at 254-264.
87
Id. at 258.
88
Id. at 258-259.
89
Id. at 325-329.
90
Id. at 326-328.
91
92
Sec. 34.3, Revised Implementing Rules and Regulations, R.A. No. 9184.
93
94
Rollo, pp. 247-248.
95
Id. at 231-234.
96
Id. at 225-226.
97
Id. at 447-448.
98
G.R. Nos. 201112 etc., October 23, 2012.
99
"This contract and its Annexes may be amended by mutual agreement of the parties. All such
amendments shall be in writing and signed by the duly authorized representatives of both parties." As cited
in Capalla v. COMELEC, id.
100
Id.
101
Supra note 60.
102
Id.
103
Rollo, p. 549.
Section 16. Amendment of Articles of Incorporation. - x x x The amendments shall take effect upon their
104
approval by the Securities and Exchange Commission or from the date of filing with the said Commission if
not acted upon within six (6) months from the date of filing for a cause not attributable to the corporation.
Concurring opinion of Justice Vitug

105
<http://www.lawphil.net/judjuris/juri2000/feb2000/gr_137686_2000.html>.
Gancayco v. City Government of Quezon City, G.R. Nos. 177807 & 177933, October 11, 2011, 658 SCRA
106
853.
107
<http://sc.judiciary.gov.ph/jurisprudence/2000/feb2000/ 137686_Concur.htm>.
108
Concurring opinion of Justice Vitug in
<http://www.lawphil.net/judjuris/juri2000/feb2000/gr_137686_2000.html>; see
also<http://www.lawphil.net/judjuris/juril962/mayl962/grj-l 5092_1962.html>.
109
Rollo, pp. 79-128.
110
Id. at 225-226.
111
Smartmatic International's United Kingdom office.
112
G.R. No. 195580, April 21, 2014.
113
Id.; citing DOJ Opinion No. 20 s. 2005.
114
Id.
115
Rollo, pp. 567-573.
116
Common stocks are voting shares.
117
Rollo, p. 568.
118
Id. at 570.
119
Under the Strict Rule or Grandfather Rule Proper, the combined totals in the Investing Corporation and
the Investee Corporation must be traced (i.e., "grandfathered") to determine the total percentage of Filipino
ownership; see Narra Nickel Mining and Development, Corp. v. Redmont Consolidated Mines, Corp., supra
note 112.
120
Id. The Grandfather Rule applies only when the 60-40 Filipino-foreign equity ownership is in doubt (i.e.,
in cases where the joint venture corporation with Filipino and foreign stockholders with less than 60%
Filipino stockholdings [or 59%] invests in otherjoint venture corporation which is either 60-40% Filipino-
alien or the 59% less Filipino). Stated differently, where the 60-40 Filipino-foreign equity ownership is not in
doubt, the Grandfather Rule will not apply.
121
Rollo, p. 554. Seventh Article in SMTC's Articles of Incorporation.
122
Id. at 26.
123
Lim v. Equitable PCI Bank, G.R. No. 183918, January 15, 2014. cralawlawlibrary
CONCURRING and DISSENTING OPINION
LEONEN, J.:
I concur in the result. The original and exclusive jurisdiction over matters pertaining to the
administrative actions of the head of a procuring agency is by law vested in the Regional Trial
Court. Hence, the Petition should have been dismissed. There is no need to go into the merits of
the controversy.
I, therefore, disagree with the ponencia's further statement that valid Articles of Incorporation is
not an eligibility requirement in bidding for government projects. The Commission on Elections'
(COMELEC) issuance requires this document. A corporation must be disqualified from bidding if it
lacks valid Articles of Incorporation on the day it submitted the bid documents. A corporation's
Articles of Incorporation determines the limits and extent of its corporate powers. Acts done
outside its stated purposes are ultra vires.
Petitioners Leo Y. Querubin, Maria Corazon M. Akol, and Augusto C. Lagman come to this court
through a Petition1 for certiorari or prohibition under Rule 64 in relation to Rule 65 of the 1997
Rules of Civil Procedure,2 with prayer for the issuance of a temporary restraining order or writ of
preliminary injunction. This Petition assails the COMELEC En Banc's Decision 3 dated June 29,
2015.
The COMELEC En Banc granted the Protest of the joint venture of Smartmatic-TIM Corporation
(SMTC), Total Information Management Corporation, Smartmatic International Holding B.V., and
Jarltech International Corporation (collectively, Smartmatic Joint Venture) relative to the Two-
Stage Competitive Bidding for the Lease of Election Management System and Precinct-Based
Optical Mark Reader or Optical Scan System (OMR Project). 4 The COMELEC En Banc also declared
Smartmatic Joint Venture as the "bidder with the lowest calculated responsive bid[.]" 5
II
On October 27, 2014, the bidding documents for the OMR Project were released by the COMELEC
Bids and Awards Committee (BAC).6 Under the OMR Project, the COMELEC would lease with
option to purchase 23,000 new units7 of precinct-based Optical Mark Reader or Optical Scan
System for the May 9, 2016 elections.8
The bidding documents contained the following: an Invitation to Bid setting forth the Approved
Budget for Contract amounting to P2.5 billion,9 and an instruction for interested bidders "to
submit eligibility and technical components, which includes an original or certified true copy of
its registration certificate from the Securities and Exchange Commission[.]" 10
The deadline for submitting the Initial Technical Proposals and Eligibility Requirements was set
on December 4, 2014.11
Smartmatic Joint Venture, ftidra Sistemas, S.A. (Indra), and MIRU Systems Co. Ltd. bought
Bidding Documents from the COMELEC.12
SMTC, the biggest shareholder with 46.5%13 shares in the Smartmatic Joint Venture, has in its
Articles of Incorporation the following as its primary corporate purpose:
To do, perform and comply with all the obligations and responsibilities of, and accord legal
personality to, the joint venture of Total Information Management Corporation ("TIM") and
Smartmatic International Corporation ("Smartmatic") arising under the Request for Proposal and
the Notice of Award issued by the Commission on Elections ("COMELEC"; for the automation of
the 2010 national and local elections ("Project"), including the leasing, selling, importing, and/or
assembling of automated voting machines, computer software and other computer services
and/or otherwise deal in all kinds of services to be used, offered or provided to the COMELEC for
the preparations and the conduct of the Project, including project management
services.14 (Emphasis supplied)
On November 12, 2014, SMTC adopted amendments to its Articles of Incorporation. 15 Among
others, it changed its primary corporate purpose from operating solely for the automation of the
2010 elections16 to doing the following acts:
To sell, supply, lease, import, export, develop, assemble, repair and deal with the automated
voting machines, canvassing equipment, computer software, computer equipment and all other
goods and supplies, and/or to provide, render and deal in all kinds of services, including project
management services, for the conduct of elections, whether regular or special, in the
Philippine[s] and to provide Information and Communication Technology (ICT) goods and
services to private and government entities in the Philippines. 17
The proposed amendments were pending with the Securities and Exchange Commission for
approval.18
On December 4, 2014, the COMELEC received and opened the bids for prospective OMR Project
suppliers.19 Only Smartmatic Joint Venture and Indra participated in the opening of
bids.20Meanwhile, the proposed amendments to SMTC's Articles of Incorporation had yet to be
acted upon by the Securities and Exchange Commission. Thus, when Smartmatic Joint Venture
submitted the required documents, SMTC, its biggest shareholder partner, still contained the
automation of the 2010 elections as the latter's primary corporate purpose. Smartmatic Joint
Venture informed the BAC, through a sworn Certification, of the Securities and Exchange
Commission's pending action on the amendments to the Articles of Incorporation. 21
On December 10, 2014, six days after the deadline for submission of the bidding documents, the
Securities and Exchange Commission approved SMTC's amended Articles of
Incorporation.22Smartmatic Joint Venture and Indra had their initial technical proposals tested
on the same day.23
On December 15, 2014, in its Resolution No. 1, the BAC declared Smartmatic Joint Venture and
Indra eligible to proceed to the second stage of bidding.24 The BAC required Smartmatic Joint
Venture and Indra to present their Final Revised Technical Tenders and Price Proposals. 25 cralawred
On February 25, 2015, the date set for opening the second envelope, Smartmatic Joint Venture
and Indra submitted nonresponsive bids.26 Smartmatic Joint Venture failed to submit a complete
financial proposal, while Indra submitted one in excess of the approved budget for the
contract.27 They were both disqualified, and the BAC declared a failure of bidding. 28
A Motion for Reconsideration was filed by Smartmatic Joint Venture. 29 Upon the BAC's denial of
the Motion, Smartmatic Joint Venture filed a (First) Protest before the COMELEC En Banc. 30
Ruling on the Protest, the COMELEC En Banc suspended on March 26, 2015 the "opening of the
Financial Bids and Eligibility Documents for the on-going Second Round of Bidding for the [OMR
Project.]"31
The BAC then proceeded to the post-qualification evaluation to determine whether Smartmatic
Joint Venture followed the specifications in the Bidding Documents. 32 The BAC sought for
additional documents as well as a model unit of Smartmatic Joint Venture's SAES 1800 plus
Optical Mark Reader (OMR+).33 It tested34 the sample 0MR+ to determine Smartmatic Joint
Venture's compliance with the OMR Project's Terms of Reference.
In its Resolution No. 9 dated May 5, 2015, the BAC post-disqualified the Smartmatic Joint
Venture on the following grounds: (1) nonsubmission of the Articles of Incorporation; and (2)
failure of the demo unit to comply with the technical requirements (i.e., that the system should
have at least two storage devices, and it be capable of simultaneously writing to these devices
"all data/files, audit log, statistics and ballot images"). 35
On May 9, 2015, Smartmatic Joint Venture filed a Motion for Reconsideration before the BAC. 36It
sought to conduct a redemonstration of the OMR+ system's compliance with the OMR Project's
Terms of Reference.37
On May 12, 2015, Smartmatic Joint Venture conducted the redemonstration before the BAC, BAC-
Special Technical Working Group, Information Technology Department, COMELEC En Banc, "and
other stakeholders[.]"38
Through its Resolution No. 10 dated May 15, 2015, the BAC partially granted the Motion for
Reconsideration:39
Regarding the required legal documents, the BAC declared that the Articles of Incorporation of
the Smartmatic Joint Venture partners complied with Section 23.1(b) of the Revised
Implementing Rules and Regulations of Republic Act No. 9184, otherwise known as the
Government Procurement Reform Act.40
In his dissent, however, Commissioner Luie Tito F. Guia (Commissioner Guia) observes that the
COMELEC "failed to elaborate on [the] reasons"41 for suddenly reversing itself and finding that
Smartmatic-TIM Corporation has "legal capacity ... to participate in the subject procurement] " 42
Regarding the required technical documents, the BAC ruled that Smartmatic Joint Venture
"remain[ed] post-disqualified"43 due to the OMR+ system's failure to meet technical
specifications in the Terms of Reference.44
On May 25, 2015, Smartmatic Joint Venture filed a (Second) Protest before the COMELEC En
Banc, "seeking the conduct of another technical demonstration [.] " 45
On June 16, 2015, in response to the query as to whether BAC requires the "submission of
Articles of Incorporation and By-laws of each bidder[,]"46 the BAC confirmed the need for each
joint venture partner's Articles of Incorporation,47 but not the latter's by-laws. This is found in its
Bid Bulletin No. 5,48 to wit:
The [Special Bids and Awards Committee] 1 requires the submission of copies of SEC
Registration and Articles of Incorporation only of each bidder, including partner to the joint
venture, and sub-contractor if already identified by the bidder before the submission and opening
of bids.49 (Emphasis supplied)
On June 19, 2015, the Technical Evaluation Committee began the technical demonstration of the
OMR+ in the Department of Science and Technology, University of the Philippines Diliman
Campus.50 Engr. Peter Antonio B. Banzon, Chairman of the Technical Evaluation Committee,
reported that the "actual simultaneous writing of data" 51 was inconclusive, and that there was a
need "to use a specialized test instrument such as a Digital Storage Oscilloscope (DSO) that can
access and compare the timing waveforms of electric signals on the inputs of the storage card
itself[.]"52 He suggested further testing of the system.53
On June 23, 2015, Smartmatic Joint Venture conducted another technical demonstration before
the COMELEC En Banc.54 The Technical Evaluation Committee submitted its Final Report dated
June 24, 2015, finding that Smartmatic Joint Venture complied with the technical requirements. 55
On June 29, 2015, the COMELEC En Banc granted the Protest of Smartmatic Joint Venture. The
dispositive portion reads as follows:
WHEREFORE, the instant Protest is hereby GRANTED. Accordingly, the Commission hereby
declares the Joint Venture of Smartmatic-TIM Corporation, Total Information Management
Corporation, Smartmatic International Holding B.V., and Jarltech International Corporation, as
the bidder with the lowest calculated responsive bid in connection with the public bidding for the
lease with option to purchase of [sic] 23,000 units of precinct-based Optical Mark Reader or
Optical Scan System for use in the May 9, 2016 national and local elections. Corollarily, the
scheduled opening of financial proposal and eligibility documents for the Second Round of
Bidding is hereby CANCELLED, with specific instruction for the Bids and Awards Committee
toRETURN to the prospective bidders their respective payments made for the purchase of Bidding
Documents pertaining to the Second Round of Bidding.56 (Emphasis in the original)
In his Separate Opinion, COMELEC Chairman J. Andres D. Bautista wrote that "it is still in the
best interest of the government that [the COMELEC] proceed with the opening of the bids for the
procurement of 23,000 units of precinct-based Optical Mark Reader or Optical Scan System on 30
June 2015."57 His statement comes on the heels of the COMELEC's Decision awarding the bid to
Smartmatic Joint Venture.
Commissioner Guia agrees that the COMELEC must review the basis of the award, as having more
bidders "would surely be more advantageous to the government."58 Assailing SMTC's Articles of
Incorporation, he states that the COMELEC should "resolve the AOI issue
conclusively[.]"59 Commissioner Guia adds that the joint venture partner "should be established
at the time of the submission of the document, that is[,] on [December 4,] 2014." 60
Aggrieved by the COMELEC En Banc Decision, petitioners filed this Petition for certiorari or
prohibition with injunctive relief before this court.
This case concerns both procedural and substantive issues. For the procedural issues, it explores
whether petitioners have legal standing and whether this court has jurisdiction to hear the case.
For the substantive issues, this case inquires as to whether a valid Articles of Incorporation is a
requirement for eligibility to bid.
III
"Suing as taxpayers and registered voters,"61 petitioners pray that this court annul the Decision
of the COMELEC En Banc and issue a writ of preliminary injunction or temporary restraining order
against public respondents.62 Petitioners allegedly "suffered mortal wounds"63 that only this
court can vindicate.64 They claim that the case also involves the "imperious necessity" 65 of
preventing COMELEC's "illega[l] spending [of] public money"66 while this Petition is being
considered.67
Petitioners argue that this case is a proper subject of this court's jurisdiction. 68 They state that,
pursuant to Rule 64, Section 2 in relation to Rule 65 of the Rules of Court, this court can review
on certiorari the Decision of the COMELEC En Banc.69 They also invoke the "transcendental
importance"70 of this case.
On the other hand, public respondent, as represented by the Office of the Solicitor General,
alleges that petitioners, not being bidders themselves, lack a "material interest" 71 to pursue this
case.72 Public respondent further claims that "[p]etitioners do not have a right in esse [or]
urgent necessity for the grant of injunctive relief."73
The concept of real party in interest for private suits under Rule 3, Section 2 74 of the Rules of
Court is different from locus standi for public suits under the Constitution.
Locus standi pertains to government actions wherein a person, being a taxpayer or a voter, may
suffer injury. In a number of cases,75 this court has applied a liberal stance on taxpayer suits
where it was shown that the case involves public funds. This is true in this case.
On the matter of jurisdiction, I disagree with the ponencia's statement that "the transcending
public importance"76 of the case allows for a procedural shortcut to this court.
Transcendental interest is the exception, not the rule.77 The transcendental doctrine should not
justify a "blatant disregard of procedural rules, [especially if] petitioner[s] had other available
remedies[.]"78
Section 7 of Article IX-A (Constitutional Commission) of the Constitution states:

SECTION 7 ... Unless otherwise provided by this Constitution or by law, any decision, order, or
ruling of each Commission may be brought to the Supreme Court on certiorari by the aggrieved
party within thirty days from receipt of a copy thereof. (Emphasis supplied)
We interpreted this to refer to certiorari under Rule 65, and not appeal under Rule 45. 79 Rule 65
in relation to Rule 64 of the Rules of Court provides for resort to this court from the ruling of the
COMELEC En Banc only when there is no other "plain, speedy, and adequate remedy in the
ordinary course of law"80 to assail the COMELEC's exercise of a quasi-judicial function.
Quasi-judicial power is an administrative agency's power to "adjudicate the rights of persons

before it."81 It involves hearing and determining questions of fact and application of the
standards laid down by the law to enforce this same law. 82 The COMELEC Decision dated June 29,
2015 adjudicated the rights of Smartmatic Joint Venture. It was promulgated in pursuit of the
COMELEC's role of procuring election-related supplies and enforcing election-related laws. Batas
Pambansa Blg. 881 provides the following:
SECTION 52. Powers and functions of the Commission on Elections. - In addition to the powers
and functions conferred upon it by the Constitution, the Commission shall have exclusive charge
of the enforcement and administration of all laws relative to the conduct of elections for the
purpose of ensuring free, orderly and honest elections . . . and shall: chanRoblesvirtualLawlibrary
(h) Procure any supplies, equipment, materials or services needed for the holding of the election
by public bidding . . .
(i) Prescribe the use or adoption of the latest technological and electronic devices, taking into
account the situation prevailing in the area and the funds available for the purpose[.] (Emphasis
supplied)
Meanwhile, the Implementing Rules and Regulations (Part A) of Republic Act No. 9184 states
that "[decisions of the BAC with respect to the conduct of bidding may be protested in writing to
the head of the procuring entity[.]"83
Thus, COMELEC, being the head of the entity for procuring election supplies by public bidding,
has quasi-adjudicative powers. To enforce election-related laws, it adjudicates protests relative
to the procurement process by applying both the law and the facts of the case.
The ponencia emphasizes that Macabago v. Commission on Elections84 clarifies Rule 64.85 He
states that Rule 64 applies only to the judgments of the COMELEC in the exercise of its power to
resolve controversies "involving the election, qualification, or the returns of an elective
office[,]"86 and not "in the exercise of its administrative functions." 87
Even assuming that the correct remedy is Rule 65 and not Rule 64 in relation to Rule 65, resort to
this court cannot be had if there is another plain, speedy, and adequate remedy.
Petitioners' remedy lies with the Regional Trial Court. Section 58 of Republic Act No. 9184
provides that the Regional Trial Court has "jurisdiction over final decisions of the head of the
procuring entity[,]" which is COMELEC in this case.
SEC. 58. Report to Regular Courts; Certiorari. - Court action may be resorted to only after the
protests contemplated in this Article shall have been completed. Cases that are filed in violation
of the process specified in this Article shall be dismissed for lack of jurisdiction. The regional trial
court shall have jurisdiction over final decisions of the head of the procuring entity. Court actions
shall be governed by Rule 65 of the 1997 Rules of Civil Procedure.
Jurisprudence further solidifies this rule. In Dimson (Manila), Inc., et al. v. Local Water Utilities
Administration,88 this court held that the Regional Trial Court is the proper venue for Rule 65
petitions pertaining to issues on the procurement and bidding process. 89 Likewise, this court said
in First United Constructors Corporation v. Poro Point Management Corporation (PPMC), et
al.90 that, notwithstanding the Regional Trial Court's concurrent certiorari jurisdiction with that of
this court, this court should still refuse to permit an unrestricted freedom to directly seek this
court's intervention when there are other remedies available. 91
In government procurement cases, the decisions of the COMELEC En Banc must be appealed
before the Regional Trial Court, which has the power to issue an injunctive writ while the cases
are pending before it. As this court held in Bañez, Jr. v. Judge Concepcion, et al.:92
The strictness of the policy is designed to shield the [Supreme] Court from having to deal with
causes that are also well within the competence of the lower courts, and thus leave time to the
[Supreme] Court to deal with the more fundamental and more essential tasks that the
Constitution has assigned to it.93
IV
Petitioners claim that the COMELEC En Banc Decision dated June 29, 2015 "is repugnant to the
letter and spirit"94 of Republic Act No. 9184 and Batas Pambansa Blg. 68 (Corporation Code). 95For
petitioners, the COMELEC committed grave abuse of discretion in promulgating its ruling. 96
Petitioners echo Commissioner Guia's dissent. First, SMTC's primary corporate purpose is only for
the 2010 national and local elections.97 This is the limit of its authority to contract with
others.98 Second, the COMELEC did not address "satisfactorily" 99 why it accepted the submission
of a document (invalid Articles of Incorporation) in which one of the joint venture partners is
ineligible.100 Petitioners also claim that SMTC committed a material misrepresentation in
declaring that it "complies with the equity requirement under Philippine law[.]" 101 They assert
that SMTC is 100% foreign-owned, based on an annual report. 102
Meanwhile, the ponencia agrees with public respondent's arguments that the COMELEC En Banc
did not commit grave abuse of discretion for the following reasons: the submission of the Articles
of Incorporation is not a criterion for eligibility; 103 the issue has become moot because the
Securities and Exchange Commission already approved the amendments; 104 and SMTC's
secondary purpose and the Corporation Code allow it to participate in the bidding. 105
It appears that in granting private respondent's protest, the COMELEC acted in reckless disregard
of its own bidding rules and procedure.
For the OMR Project, the COMELEC required the submission of the Articles of Incorporation. This
is shown in BAC Bid Bulletin No. 5, which respondents and the ponencia fail to mention. BAC Bid
Bulletin No. 5 mandates all bidders in the OMR Project, including every joint venture partner, to
submit their Articles of Incorporation, to wit:106
#
Query
Answer
54
Statement: A. Securities [and] Exchange Commission, for Corporation or Partnership; or its
equivalent documents in case of foreign bidder.
The [Special Bids and Awards Committee] 1 requires the submission of copies of SEC
Registration and Articles of Incorporation only of each bidder, including partner to the joint
venture, and sub-contractor if already identified by the bidder before the submission and opening
of bids.
Question: Will BAC still require the submission of Articles of Incorporation and By-laws of each
bidder? Section 12A of the [Invitation to Bid] only mentions the SEC registration or any proof of
registration. (Emphasis supplied)
Even though, Clause 12.1 of Section II (Instructions to Bidders) of the Bidding Documents
mentions only SEC Registration, such requirement is not exclusive and absolute as the same
clause gives the BAC a leeway to modify or add the requirement through the Bid Data Sheet
(BDS). The clause "unless otherwise stated in the BDS" expressly gives the BAC such
authority.107 (Emphasis supplied)
When SMTC failed to submit its Articles of Incorporation, the COMELEC should have disqualified
Smartmatic Joint Venture.
The COMELEC has the power to review a bidder's lack of eligibility at any stage of the
procurement process. Section 23.7 (Eligibility Requirements for the Procurement of Goods and
Infrastructure Projects) of the Revised Implementing Rules and Regulations of Republic Act No.
9184 and Section 30108 of the bidding documents provide for this. Section 23.7 of the
Implementing Rules and Regulations states:
Section 23. Eligibility Requirements for the Procurement of Goods and Infrastructure Projects
....
23.7.
Notwithstanding the eligibility of a prospective bidder, the procuring entity concerned reserves
the right to review the qualifications of the bidder at any stageof the procurement process . . .
Should such review uncover any misrepresentation made in the eligibility requirements,
statements or documents, or any changes in the situation of the prospective bidder which will
affect the capability of the bidder to undertake the project so that it fails the eligibility criteria,
the procuring entity shall consider the said prospective bidder as ineligible and shall disqualify it
from obtaining an award or contract . . . (Emphasis supplied)
Moreover, this court cannot be estopped by the findings of the BAC or the COMELEC En Banc.
When Smartmatic Joint Venture submitted noncompliant legal requirements, there was no basis
for the COMELEC to have allowed it to proceed to the next stage of bidding.
SMTC's transgression is already fait accompli, and amending its Articles of Incorporation (by
changing its corporate purpose) cannot cure the defect. The Articles of Incorporation is part of
the requirements for the issuance of a Certificate of Registration. 109 Thus, for the submitted
Certificate of Registration to have been considered valid, the Articles of Incorporation forming
part of it should likewise have been valid.
The purpose clause in the Articles of Incorporation "confers, as well as limits, the powers which
a corporation may exercise."110 That way, corporate officers shall know the limits of their actions,
shareholders shall be informed of the corporation's type, of business, and third parties shall
know whether the corporation they are transacting with is actually authorized to act or has legal
personality to conduct business.
This court cannot grant corporate personality where there previously was none. Acts done
beyond the express, implied, and incidental powers of the corporation, as provided for in the law
or its Articles of Incorporation, are ultra vires.
According to Section 45 of the Corporation Code, "[n]o corporation under this Code shall possess
or exercise any corporate powers except those conferred by this Code or by its articles of
incorporation and except such as are necessary or incidental to the exercise of the powers so
conferred." It is clear from the provision that the necessary or incidental powers must relate to
the express powers conferred by law or the Articles of Incorporation.
"[E]xpress powers cannot be enlarged by implication."111 If a corporate charter's recital of

specific powers is followed by a general language, this general language "is construed and
confined within the limitations of the specific power named." 112 SMTC has a specific power: The
Articles of Incorporation expressly "accord[s] legal personality to [SMTC] for the automation of
the 2010 national and local elections[,]"113 The ensuing general language (as stated in the
secondary purpose) which supposedly allows SMTC to "enter into contracts ... of every kind and
description and for any lawful purpose"114 cannot be enlarged to contemplate the OMR Project for
the 2016 national and local elections.
Further, while it is true that Section 42 of the Corporation Code allows corporations to invest its
funds in another corporation or business, and that SMTC's secondary purpose also provides for
this, one must make a distinction between investment of funds (such as in banks, stocks, or
money market placements) and active pursuit of business (i.e., bidding for the lease with option
to purchase 23,000 new units of the OMR+ system for the 2016 elections).
The corporate charter of SMTC is time-bound, limited, restricted, and specific. Thus, insofar as
the 2016 elections are concerned, SMTC was disqualified on the date it submitted the eligibility
documents.
By participating in the bidding for the OMR Project, SMTC committed an ultra vires act.
The ponencia further asserts that the COMELEC and SMTC maintained their contractual relations
after the 2010 election schedule. He states that for this reason, Smartmatic Joint Venture may
validly undertake the OMR Project.115
I disagree.
The COMELEC cannot be made to accommodate an ineligible bidder. While there may be legal ties
between the COMELEC and SMTC for some of the post-2010 transactions related to the
refurbishment of the precinct count optical scan (PCOS) voting machines, this bond of law ends
for the OMR Project.
The ponencia cites two cases to show how "the vinculum juris between COMELEC and SMTC
remains solid and unsevered despite the 2010 elections[.]" 116
In Archbishop Capalla, et al. v. Commission on Elections,117 this court upheld the COMELEC's
purchase of the PCOS machines in 2012, which it leased from SMTC for the 2010 elections. 118This
was pursuant to the lease with an option-to-purchase clause in the amended Contract for the
Provision of an Automated Election System for the May 10, 2010 Synchronized National and Local
Elections (2009 Automated Election System Contract). 119
In Pabillo, et al. v. Commission on Elections,120 the 2009 Automated Election System Contract
states that SMTC would make available parts, labor, and technical support and maintenance of
the PCOS machines to the COMELEC for the next 10 years (10-year warranty), if the latter
decides to exercise its option to purchase the PCOS machines. 121
In contrast, the Terms of Reference of the OMR Project do not speak of the leased and purchased
2010 PCOS machines, but of an OMR+ with new and different specifications, for use specifically
in the 2016 elections. The 2009 Automated Election System Contract cannot be unduly stretched
to contemplate the OMR Project.
SMTC's authority to bid for the 2016 elections was determined on December 4, 2015, the date of
submission of its legal documents. Section 25 of Republic Act No. 9184 provides that bid
documents "submitted after the deadline shall not be accepted." Neither may the bid documents
be modified after the deadline for submission of bids.122
The party that sleeps on its rights necessarily suffers the consequences of its own inaction.
SMTC, the company that won the bidding for the automation of the 2010 elections, sought to
amend its primary corporate purpose only two weeks after the Invitation to Bid for the 2016
elections had been released.123 Being slow to act, SMTC has no one to blame but itself for
submitting its amended Articles of Incorporation six days after deadline. A seasoned business
enterprise such as SMTC is expected to exercise prudence in conducting its corporate affairs.
A corporation cannot amend its Articles of Incorporation without the state's consent. Thus, the
effects of the amendment do not retroact to December 4, 2014.
During post-qualification, the BAC validated and ascertained whether the documents Smartmatic
Joint Venture submitted on December 4, 2014 complied with the required bidding documents. On
May 5, 2015, the BAC answered negatively, thus, disqualifying Smartmatic Joint Venture. Ten
days after, however, the BAC reversed itself without adequate explanations. Pursuant to the
Implementing Rules and Regulations of Republic Act No. 9184, the COMELEC En Banc should
have exercised its all-encompassing right to review the qualifications of the partners in the
Smartmatic Joint Venture, notwithstanding any previous declaration of eligibility.
SMTC has the biggest equity share in the Smartmatic Joint Venture. SMTC's ineligibility militates
against the qualifications of the Smartmatic Joint Venture. The acts of a joint venture partner
bind the joint venture itself.
V
Petitioners failed to present any evidence relating to the nationality of the owners of the
corporations. The only proof they showed was the financial report 124 of Smartmatic Limited,
which is not a party to this case. Only SMTC and Smartmatic International Holding B.V. are
partners in the Smartmatic Joint Venture. Respondents, on the other hand, presented SMTC's
General Information Sheet,125 showing that Smartmatic Joint Venture is Filipino-owned, not
foreign-owned. In any case, the law allows the COMELEC to procure from foreign sources. Thus:
SECTION 12. Procurement of Equipment and Materials. — To achieve the purpose of this Act, the
Commission is authorized to procure, in accordance with existing laws, by purchase, lease, rent
or other forms of acquisition, supplies, equipment, materials, software, facilities, and other
services, from local or foreign sources free from taxes and import duties, subject to accounting
and auditing rules and regulations. With respect to the May 10, 2010 elections and succeeding
electoral exercises, the system procured must have demonstrated capability and been
successfully used in a prior electoral exercise here or abroad. 126 (Emphasis supplied)
ACCORDINGLY, for the reasons stated, I vote to DISMISS this Petition.
Endnotes:
1
Rollo, pp. 3-54.
2
Id. at 34.
3
Id. at 61-72. The COMELEC En Banc was composed of Commissioners J. Andres D. Bautista
(Chair), Christian Robert S. Lim, Al A. Parreno, Luie Tito F. Guia, Arthur D. Lim, Ma. Rowena
Amelia V. Guanzon, and Sheriff M. Abas. Commissioner J. Andres D. Bautista penned a brief
Concurring and Dissenting Opinion (Id. at 73). Commissioner Luie Tito F. Guia penned a Separate
Opinion (Id. at 74-76). Commissioner Arthur D. Lim participated via telephone and submitted a
separate Concurring Opinion (Id. at 77-78). Commissioners Al A. Parreno and Sheriff M. Abas
joined Commissioner Arthur D. Lim's separate Concurring Opinion. Commissioner Ma. Rowena
Amelia V. Guanzon abstained.
4
Id. at 32, Commissioner Arthur D. Lim's Memorandum, and 71, COMELEC En Banc Decision.
5
Id. at 71, COMELEC En Banc Decision.
6
Ponencia, p. 2.
7
Rollo, p. 61, COMELEC En Banc Decision.
8
Id. at 588, COMELEC's Comment.
9
Id. at 167, Smartmatic Joint Venture's Comment/Opposition. The amount is exactly
P2,503,518,000.00.
10
Id. at 168, citing Bidding Documents, sec. II, Bid Data Sheet, p. 4.
11
Id.
12
Id.
13
Id. at 76, Commissioner Luie Tito F. Guia's Memorandum.
14
Id. at 6, Petition.
15
Id. at 546, Certificate of Filing of [Smartmatic-TIM Corporation's] Amended Articles of
Incorporation.
16
Id. at 75, Commissioner Luie Tito F. Guia's Memorandum, which states that "[t]here is no
indication that the project was for the automation of any other elections."
17
Id. at 549, Amended Articles of Incorporation of Smartmatic-TIM Corporation.
18
Incorporation. The Securities and Exchange Commission approved the proposed amendments
only on December 10, 2014.
19
20
Id. at 621, Smartmatic Joint Venture's Comment/Opposition.
21
Id. at 629.
22
Incorporation.
The deadline for submitting the bidding documents was on December 4, 2015.
23
Id. at 170, Smartmatic Joint Venture's Comment/Opposition.
24
Id.
25
Id. at 171.
26
27
Id. at 894, COMELEC Bids and Awards Committee Resolution No. 4.
28
29
Id.
30
Id.
31
Id. at 589-590.
32
Id. at 590.
33
Id. at 447-448, COMELEC Bids and Awards Committee Notice dated March 27, 2015 and 605,
COMELEC's Comment.
34
Id. at 624-625, Smartmatic Joint Venture's Comment/Opposition.
35
36
37
38
Id. COMELEC En Banc Decision contains a typographical error, stating the date as May 12, 2016
instead of May 12, 2015.
39
Id.
40
Id.
41
42
Id., citing COMELEC Bids and Awards Committee Resolution No. 10.
43
44
Id.
45
Id. at 62-63.
46
COMELEC Bids and Awards Committee Bid Bulletin No. 5, Lease with Option to Purchase of
Election Management System (EMS) and Precinct-based Optical Mark Reader (OMR) or Optical
Scan (OP-SCAN) System for the 2016 National and Local Elections, Reference No. BAC 01-2014-
AES-OMR, June 16, 2015, Query No. 54. (visited December 7, 2015).
47
COMELEC Bids and Awards Committee Bid Bulletin No. 5, Answer to Query No. 54.
<http://www.comelec.gov.ph/?r=AboutCOMELEC/BidsandAwards/ProcurementProjects/
BAC012014 AESOMRSecondBidding/BAC012014AESOMRSecondBiddingBidBul5> (visited
December 7, 2015).
48
COMELEC Bids and Awards Committee Bid Bulletin No. 5.
49
COMELEC Bids and Awards Committee Bid Bulletin No. 5, Answer to Query No. 54.
Rollo, p. 63, COMELEC En Banc Decision.

50
51
Id.
52
Id.
53
Id. at 63-64.
54
Id. at 64.
55
Id. at 64, 68-71.
56
Id. at 71.
57
Id. at 73, Commissioner J. Andres D. Bautista's Memorandum,Emphasis supplied.
58
59
Id. at 75.
60
Id. at 76.
61
Id. at 51, Petition.
62
Id. at 52.
63
Id. at 51
64
Id.
65
Id.
66
Id.
67
Id.
68
Id. at 34.
69
Id.
70
Id. at 40.
71
72
Id.
73
Id. at 614.
74
RULES OF COURT, Rule 3, sec. 2 provides: chanRoblesvirtualLawlibrary
SECTION 2. Parties in Interest. — A real party in interest is the party who stands to be benefited
or injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless
otherwise authorized by law or these Rules, every action must be prosecuted or defended in the
name of the real party in interest.
Spouses Constantino, Jr. v. Hon. Cuisia, 509 Phil. 486, 504-505 (2005) [Per J. Tinga, En
75
Banc], Francisco, Jr. v. The House of Representatives, 460 Phil. 830, 896-897 (2003) [Per J.
Carpio Morales, En Banc], Agan, Jr. v. Philippine International Air Terminals Co., Inc., 450 Phil.
744, 803-804 (2003) [PerJ. Puno, En Banc].
76
Ponencia, p. 20,
Rollo, p. 599, COMELEC's Comment.

77
Galicto v. H.E. President Aquino III, et al., 683 Phil. 141, 169 (2012) [Per J. Brion, En
78
Banc], citing
Concepcion, Jr. v. Commission on Elections, 609 Phil. 201, 217 (2009) [Per J. Brion, En Banc].
Ambil, Jr. v. Commission on Elections, 398 Phil. 257, 275 (2000) [Per J. Pardo, En Banc].
79
80
RULES OF COURT, Rule 65, sec. 1 provides: chanRoblesvirtualLawlibrary
SECTION 1. Petition for Certiorari. — When any tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby
may file a verified petition in the proper court, alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer,
and granting such incidental reliefs as law and justice may require.
81
DOLE Philippines, Inc. v. Esteva, 538 Phil. 817, 860 (2006) [Per J. Chico-Nazario, First
Division].
82
Id.
83
Rep. Act No. 9184, Implementing Rules and Regulations Part A, sec. 55.1 provides: chanRoblesvirtualLawlibrary
Section 55. Protests on Decisions of the BAC
55.1.
Decisions of the BAC with respect to the conduct of bidding may be protested in writing to the
head of the procuring entity: Provided, however, That a prior motion for reconsideration should
have been filed by the party concerned within the reglementary periods specified in this IRR-A,
and the same has been resolved. The protest must be filed within seven (7) calendar days from
receipt by the party concerned of the resolution of the BAC denying its motion for
reconsideration. A protest may be made by filing a verified position paper with the head of the
procuring entity concerned, accompanied by the payment of a non-refundable protest fee. The
non-refundable protest fee shall be in an amount equivalent to no less than one percent (1%) of
the ABC.
84
440 Phil. 683 (2002) [Per J, Callejo, Sr., En Banc].
85
Ponencia, pp. 11-12.
86
Id. at 12.
87
Id. at 11.
88
645 Phil. 309 (2010) [Per J. Peralta, Second Division].
89
Id. at 319.
90
596 Phil. 334 (2009) [Per J. Nachura, Third Division].
91
Id. at 342.
92
693 Phil. 399 (2012) [Per J. Bersamin, First Division].
93
Id. at 412.
Rollo, p. 44, Petition.

94
95
Id.
96
Id.
97
Id. at 48, Petition, and 75, Commissioner Luie Tito F. Guia's Memorandum.
98
Id. at 45.
99
Id. at 48, Petition, and 76, Commissioner Luie Tito F. Guia's Memorandum.
100
Id.
101
Id. at 46, citing Annual Report and Consolidated financial statements Registration number
102
07477910 dated 31 December 2013 of Smartmatic Limited.
103
104
Id. at 33-34.
105
Id. at 35-36.
106
COMELEC Bids and Awards Committee Bid Bulletin No. 5, Lease with Option to Purchase of
Election Management System (EMS) and Precinct-based Optical Mark Reader (OMR) or Optical
Scan (OP-SCAN) System for the 2016 National and Local Elections, Reference No. BAC 01-2014-
AES-OMR, June 16, 2015
<http://www.comelec.gov.ph/?r=AboutCOMELEC/BidsandAwards/ProcurementProjects/
BAC012014 AESOMRSecondBidding/BAC012014AESOMRSecondBiddingBidBul5> (visited
December 7, 2015).
107
Id.
Rollo, p. 249, COMELEC Bids and Award Committee's Philippine Bidding Documents for the
108
Two-Stage Competitive Bidding for the Lease of Election Management System (EMS) and
Precinct-Based Optical Mark Reader (OMR) or Optical Scan (OP-SCAN) System, sees. 30.1 and
30.2(b), which provide: chanRoblesvirtualLawlibrary
[Section] 30. Reservation Clause
30.1.
Notwithstanding the eligibility or post-qualification of a Bidder, the Procuring Entity concerned
reserves the right to review its qualifications at any stage of the procurement process . . . Should
such review uncover any misrepresentation made in the eligibility and bidding requirements,
statements or documents, or any changes in the situation of the Bidder which will affect its
capability to undertake the project so that it fails the preset eligibility or bid evaluation criteria,
the Procuring Entity shall consider the said Bidder as ineligible and shall disqualify it from
submitting a bid or from obtaining an award or contract.
30.2.
Based on the following grounds, the Procuring Entity reserves the right to reject any and all bids,
declare a failure of bidding at any time prior to the contract award, or not to award the contract,
without thereby incurring any liability, and make no assurance that a contract shall be entered
into as a result of the bidding:
...
(b)
If the Procuring Entity's BAC is found to have failed in following the prescribed bidding
procedures[.]
See Registration of Corporations and Partnerships with the SEC

109
<http://www.sec.gov.pl-i/cmanual/CITIZENS%20MANUAL%20NO.%202.pdf> (visited
December 7, 2015).
110
SEC OGC Opinion No. 07-14, July 18, 2007
<http://www.sec.gov.ph/investorinfo/opinions/ogc/cy%202007/07-14.pdf> (visited December
7, 2015).
111
SEC OGC Opinion No. 07-14.
112
Id.
113
Rollo, p. 6, Petition.
114
Id. at 534, Articles of Incorporation of Smartmatic-TIM Corporation.
115
116
Id. at 33.
117
687 Phil. 617 (2012) [Per J. Peralta, En Banc].
118
Id. at 663-664.
119
Id. at 665.
G.R. No. 216098, April 21, 2015

120
<http://sc.judiciary.gov.ph/pdf/wcb/viewer.html?file=/jurisprudence/2015/
april2015/216098.pdf> [Per J. Perlas-Bernabe, En Banc].
121
Id. at 31.
Rollo, p. 242, COMELEC Bids and Award Committee's Philippine Bidding Documents for the
122
Two-Stage Competitive Bidding for the Lease of Election Management System (EMS) and
Precinct-Based Optical Mark Reader (OMR) or Optical Scan (OP-SCAN) System.
Sixteen days from October 27, 2014, when COMELEC released the eligibility requirements, to
123
November 12, 2014, when SMTC adopted the amendments for approval of the Securities and
Exchange Commission.
124
Rollo, pp. 79-133.
125
Id. at 1023.
126
Rep. Act No. 8436 (1997), sec. 8, as amended by Rep. Act No. 9369, sec. 10.
Jardeleza v. Sereno, 733 SCRA 279

EN BANC
G.R. No. 213181 August 19, 2014
FRANCIS H. JARDELEZA Petitioner,

vs.
CHIEF JUSTICE MARIA LOURDES P. A. SERENO, THE JUDICIAL AND BAR COUNCIL AND
EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., Respondents.
DECISION
MENDOZA, J.:
Once again, the Couii is faced with a controversy involving the acts of an independent body, which is
considered as a constitutional innovation the Judicial and Bar Council (JBC). It is not the first time
that the Court is called upon to settle legal questions surrounding the JBC's exercise of its
constitutional mandate. In De Castro v. JBC, the Court laid to rest issues such as the duty of the JBC
1
to recommend prospective nominees for the position of Chief Justice vis-à-vis the appointing power
of the President, the period within which the same may be exercised, and the ban on midnight
appointments as set forth in the Constitution. In Chavez v. JBC, the Court provided an extensive
2
discourse on constitutional intent as to the JBC’s composition and membership.
This time, however, the selection and nomination process actually undertaken by the JBC is being
challenged for being constitutionally infirm. The heart of the debate lies not only on the very
soundness and validity of the application of JBC rules but also the extent of its discretionary power.
More significantly, this case of first impression impugns the end-result of its acts - the shortlistfrom
which the President appoints a deserving addition to the Highest Tribunal of the land.
To add yet another feature of noveltyto this case, a member of the Court, no less than the Chief
Justice herself, was being impleaded as party respondent.
The Facts
The present case finds its genesis from the compulsory retirement of Associate Justice Roberto
Abad (Associate Justice Abad) last May 22, 2014. Before his retirement, on March 6, 2014, in
accordance with its rules, the JBC announced the opening for application or recommendation for the
3
said vacated position.
On March 14, 2014, the JBC received a letter from Dean Danilo Concepcion of the University of the
Philippines nominating petitioner Francis H. Jardeleza (Jardeleza), incumbent Solicitor General of
the Republic, for the said position. Upon acceptance of the nomination, Jardeleza was included in
the names of candidates, as well as in the schedule of public interviews. On May 29, 2014,
Jardeleza was interviewed by the JBC.
It appears from the averments in the petition that on June 16 and 17, 2014, Jardeleza received
telephone callsfrom former Court of Appeals Associate Justice and incumbent JBC member, Aurora
Santiago Lagman (Justice Lagman), who informed him that during the meetings held on June 5 and
16, 2014, Chief Justice and JBC ex-officioChairperson, Maria Lourdes P.A. Sereno (Chief Justice
Sereno),manifested that she would be invoking Section 2, Rule 10 of JBC-009 against him.
4
Jardeleza was then directed to "make himself available" before the JBC on June 30, 2014, during
which he would be informed of the objections to his integrity.
Consequently, Jardeleza filed a letter-petition (letter-petition) praying that the Court, in the exercise
5
of itsconstitutional power of supervision over the JBC, issue an order: 1) directing the JBC to give
him at least five (5) working days written notice of any hearing of the JBC to which he would be
summoned; and the said notice to contain the sworn specifications of the charges against him by his
oppositors, the sworn statements of supporting witnesses, if any, and copies of documents in
support of the charges; and notice and sworn statements shall be made part of the public record of
the JBC; 2) allowing him to cross-examine his oppositors and supporting witnesses, if any, and the
cross-examination to be conducted in public, under the same conditions that attend the
publicinterviews held for all applicants; 3) directing the JBC to reset the hearing scheduled on June
30, 2014 to another date; and 4) directing the JBC to disallow Chief Justice Sereno from
participating in the voting on June 30,2014 or at any adjournment thereof where such vote would be
taken for the nominees for the position vacated by Associate Justice Abad.
During the June 30, 2014 meeting of the JBC, sansJardeleza, incumbent Associate Justice Antonio
T. Carpio (Associate Justice Carpio) appeared as a resource person to shed light on a classified
legal memorandum (legal memorandum) that would clarify the objection to Jardeleza’s integrity as
posed by Chief Justice Sereno. According to the JBC, Chief Justice Sereno questioned Jardeleza’s
ability to discharge the duties of his office as shown in a confidential legal memorandum over his
handling of an international arbitration case for the government.
Later, Jardeleza was directed to one of the Court’s ante-rooms where Department of Justice
Secretary Leila M. De Lima (Secretary De Lima) informed him that Associate Justice Carpio
appeared before the JBC and disclosed confidential information which, to Chief Justice Sereno,
characterized his integrity as dubious. After the briefing, Jardeleza was summoned by the JBC at
around 2:00o’clock in the afternoon.
Jardeleza alleged that he was asked by Chief Justice Sereno if he wanted to defend himself against
the integrity issues raised against him. He answered that he would defend himself provided that due
process would be observed. Jardeleza specifically demanded that Chief Justice Sereno execute a
sworn statement specifying her objectionsand that he be afforded the right to cross-examine her in a
public hearing. He requested that the same directive should also be imposed on Associate Justice
Carpio. As claimed by the JBC, Representative Niel G. Tupas Jr. also manifested that he wanted to
hear for himself Jardeleza’s explanation on the matter. Jardeleza, however, refused as he would not
be lulled intowaiving his rights. Jardeleza then put into record a written statement expressing his
6
views on the situation and requested the JBC to defer its meeting considering that the Court en banc
would meet the next day to act on his pending letter-petition. At this juncture, Jardeleza was
excused.
Later in the afternoon of the sameday, and apparently denying Jardeleza’s request for deferment of
the proceedings, the JBC continued its deliberations and proceeded to vote for the nominees to be
included in the shortlist. Thereafter, the JBC releasedthe subject shortlist of four (4) nominees which
included: Apolinario D. Bruselas, Jr. with six (6) votes, Jose C. Reyes, Jr. with six (6) votes, Maria
Gracia M. Pulido Tan with five (5) votes, and Reynaldo B. Daway with four (4) votes. 7
As mentioned in the petition, a newspaper article was later published in the online portal of the
Philippine Daily Inquirer, stating that the Court’s Spokesman, Atty. Theodore Te, revealed that there
were actually five (5) nominees who made it to the JBC shortlist, but one (1) nominee could not be
included because of the invocation of Rule 10, Section 2 of the JBC rules.
In its July 8, 2014 Resolution, the Court noted Jardeleza’s letterpetition in view of the transmittal of
the JBC list of nominees to the Office of the President, "without prejudice to any remedy available in
law and the rules that petitioner may still wish to pursue." The said resolution was accompanied by
8
an extensive Dissenting Opinion penned by Associate Justice Arturo D. Brion, expressing his
9
respectful disagreement as to the position taken by the majority.
The Petition
Perceptibly based on the aforementioned resolution’s declaration as to his availment of a remedy in

law, Jardeleza filed the present petition for certiorari and mandamus under Rule 65 of the Rules of
Court with prayer for the issuance of a Temporary Restraining Order (TRO), seeking to compel the
JBC to include him in the list ofnominees for Supreme Court Associate Justice viceAssociate Justice
Abad, on the grounds that the JBC and Chief Justice Sereno acted in grave abuse of discretion
amounting to lack or excess of jurisdiction in excluding him, despite having garnered a sufficient
number of votes to qualify for the position.
Notably, Jardeleza’s petition decries that despite the obvious urgency of his earlier letter-petition and
its concomitant filing on June 25, 2014, the same was raffled only on July 1, 2014 or a day after the
controversial JBC meeting. By the time that his letter-petition was scheduled for deliberation by the
Court en bancon July 8, 2014, the disputedshortlist had already been transmitted to the Office of the
President. He attributedthis belated action on his letter-petition to Chief Justice Sereno, whose
action on such matters, especially those impressed withurgency, was discretionary.
An in-depth perusal of Jardeleza’s petition would reveal that his resort to judicial intervention hinges
on the alleged illegality of his exclusion from the shortlist due to: 1) the deprivation of his
constitutional right to due process; and 2) the JBC’s erroneous application, if not direct violation, of
its own rules. Suffice it to say, Jardelezadirectly ascribes the supposed violation of his constitutional
rights tothe acts of Chief Justice Sereno in raising objections against his integrity and the manner by
which the JBC addressed this challenge to his application, resulting in his arbitrary exclusion from
the list of nominees.
Jardeleza’s Position
For a better understanding of the above postulates proffered in the petition, the Court hereunder
succinctlysummarizes Jardeleza’s arguments, as follows:
A. Chief Justice Sereno and the JBC violated Jardeleza’s right to due process in the events leading
up to and during the vote on the shortlist last June 30, 2014. When accusations against his integrity
were made twice, ex parte, by Chief Justice Sereno, without informing him of the nature and cause
thereof and without affording him an opportunity to be heard, Jardeleza was deprived of his right to
due process. In turn, the JBC violated his right to due process when he was simply ordered to make
himself available on the June 30, 2014 meeting and was told that the objections to his integrity would
be made known to him on the same day. Apart from mere verbal notice (by way of a telephone call)
of the invocation of Section 2, Rule 10 of JBC-009 against his application and not on the accusations
against him per se, he was deprived of an opportunity to mount a proper defense against it. Not only
did the JBC fail to ventilate questions on his integrity during his public interview, he was also
divested of his rights as an applicant under Sections 3 and 4, Rule 4, JBC-009, to wit:
Section 3. Testimony of parties. – The Council may receive written opposition to an applicant on the
ground of his moral fitness and, at its discretion, the Council may receive the testimony of the
oppositor at a hearing conducted for the purpose, with due notice to the applicant who shall be
allowed to cross-examine the oppositor and to offer countervailing evidence.
Section 4. Anonymous Complaints. – Anonymous complaints against an applicant shall not be given
due course, unless there appears on its face a probable cause sufficient to engender belief that the
allegations may be true. In the latter case, the Council may direct a discreet investigation or require
the applicant to comment thereon in writing or during the interview.
His lack of knowledge as to the identity of his accusers (except for yet again, the verbalinformation
conveyed to him that Associate Justice Carpio testified against him) and as to the nature of the very
accusations against him caused him to suffer from the arbitrary action by the JBC and Chief Justice
Sereno. The latter gravely abused her discretion when she acted as prosecutor, witness and
judge,thereby violating the very essence of fair play and the Constitution itself. In his words: "the sui
generis nature of JBC proceedings does not authorize the Chief Justice to assume these roles, nor
does it dispense with the need to honor petitioner’s right to due process." 10
B. The JBC committed grave abuse of discretion in excluding Jardeleza from the shortlist of
nominees, in violation of its own rules. The "unanimity requirement" provided under Section 2,
Rule10 of JBC-009 does not find application when a member of the JBC raises an objection to an
applicant’s integrity. Here, the lone objector constituted a part of the membership of the body set to
vote. The lone objector could be completely capable oftaking hostage the entire voting process by
the mere expediency of raising an objection. Chief Justice Sereno’s interpretation of the rule would
allow a situation where all thata member has to do to veto other votes, including majority votes,
would be to object to the qualification of a candidate, without need for factual basis.
C. Having secured the sufficient number of votes, it was ministerial on the part of the JBC to include
Jardeleza in the subject shortlist.Section 1, Rule 10 of JBC-009 provides that a nomination for
appointment to a judicial position requires the affirmative vote of at least a majority of all members of
the JBC. The JBC cannot disregard its own rules. Considering that Jardeleza was able to secure
four (4) out of six (6) votes, the only conclusion is that a majority of the members of the JBC found
him to be qualified for the position of Associate Justice.
D. The unlawful exclusion ofthe petitioner from the subject shortlist impairs the President’s
constitutional power to appoint.Jardeleza’s exclusion from the shortlist has unlawfully narrowed the
President’s choices. Simply put, the President would be constrained to choose from among four (4)
nominees, when five (5) applicants rightfully qualified for the position. This limits the President to
appoint a member of the Court from a list generated through a process tainted with patent
constitutional violations and disregard for rules of justice and fair play. Until these constitutional
infirmities are remedied, the petitioner has the right to prevent the appointment of an Associate
Justice viceAssociate Justice Abad.
Comment of the JBC
On August 11, 2014, the JBC filed its comment contending that Jardeleza’s petition lacked
proceduraland substantive bases that would warrant favorable action by the Court. For the JBC,
certiorariis only available against a tribunal, a board or an officer exercising judicial or quasijudicial
functions. The JBC, in its exercise of its mandate to recommend appointees to the Judiciary, does
11
not exercise any of these functions. In a pending case, Jardeleza himself, as one of the lawyers for
12
the government, argued in this wise: Certioraricannot issue against the JBC in the implementation of
its policies.
In the same vein, the remedy of mandamusis incorrect. Mandamus does not lie to compel a
discretionary act. For it to prosper, a petition for mandamus must, among other things, show that the
petitioner has a clear legal right to the act demanded. In Jardeleza’s case, there is no legal right to
be included in the list of nominees for judicial vacancies. Possession of the constitutional and
statutory qualifications for appointment to the Judiciary may not be used to legally demand that one’s
name be included in the list of candidates for a judicial vacancy. One’s inclusion in the shortlist is
strictly within the discretion of the JBC.
Anent the substantive issues, the JBC mainly denied that Jardeleza was deprived of due process.
The JBC reiterated that Justice Lagman, on behalf of the JBC en banc, called Jardeleza and
informed him that Chief Justice Sereno would be invoking Section 2, Rule 10 of JBC-009 due to a
question on his integrity based on the way he handled a very important case for the government.
Jardeleza and Justice Lagman spoke briefly about the case and his general explanation on how he
handled the same. Secretary De Lima likewise informed him about the content of the impending
objection against his application. On these occasions, Jardeleza agreed to explain himself. Come
the June 30, 2014 meeting, however, Jardeleza refused to shed light on the allegations against
him,as he chose to deliver a statement, which, in essence, requested that his accuser and her
witnesses file sworn statements so that he would know of the allegations against him, that he be
allowed to cross-examine the witnesses;and that the procedure be done on record and in public.
In other words, Jardeleza was given ample opportunity to be heard and to enlighten each member of
the JBC on the issues raised against him prior to the voting process. His request for a sworn
statement and opportunity to cross-examine is not supported by a demandable right. The JBC is not
a fact-finding body. Neitheris it a court nor a quasi-judicial agency. The members are notconcerned
with the determination of his guilt or innocence of the accusations against him. Besides, Sections 3
and 4, Rule 10,JBC-009 are merely directory as shown by the use of the word "may." Even the
conduct of a hearing to determine the veracity of an opposition is discretionary on the JBC.
Ordinarily, if there are other ways of ascertaining the truth or falsity of an allegation or opposition, the
JBC would not call a hearing in order to avoid undue delay of the selection process. Each member of
the JBC relies on his or her own appreciation of the circumstances and qualifications of applicants.
The JBC then proceeded to defend adherence to its standing rules. As a general rule, an applicant is
included in the shortlist when he or she obtains an affirmative vote of at least a majority of all the
members of the JBC. When Section 2, Rule 10 of JBC-009,however, is invoked because an
applicant’s integrity is challenged, a unanimous vote is required. Thus, when Chief Justice Sereno
invoked the saidprovision, Jardeleza needed the affirmative vote of all the JBC members tobe
included in the shortlist. In the process, Chief Justice Sereno’s vote against Jardeleza was not
counted. Even then, he needed the votes of the five(5) remaining members. He only got four (4)
affirmative votes. As a result,he was not included in the shortlist. Applicant Reynaldo B. Daway, who
gotfour (4) affirmative votes, was included in the shortlist because his integrity was not challenged.
As to him, the "majority rule" was considered applicable.
Lastly, the JBC rued that Jardeleza sued the respondents in his capacity as Solicitor General.
Despiteclaiming a prefatory appearance in propria persona, all pleadings filed with the Court were
signed in his official capacity. In effect, he sued the respondents to pursue a purely private interest
while retaining the office of the Solicitor General. By suing the very parties he was tasked by law to
defend, Jardeleza knowingly placed himself in a situation where his personal interests collided
against his public duties, in clear violation of the Code of Professional Responsibility and Code of
Professional Ethics. Moreover, the respondents are all public officials being sued in their official
capacity. By retaining his title as Solicitor General, and suing in the said capacity, Jardeleza filed a
suit against his own clients, being the legal defender of the government and its officers. This runs
contrary to the fiduciary relationship sharedby a lawyer and his client.
In opposition to Jardeleza’s prayer for the issuance of a TRO, the JBC called to mind the
constitutional period within which a vacancy in the Court must be filled. As things now stand, the
President has until August 20, 2014 to exercise his appointment power which cannot be restrained
by a TRO or an injunctive suit.
Comment of the Executive Secretary
In his Comment, Executive Secretary Paquito N. Ochoa Jr. (Executive Secretary)raised the possible
unconstitutionality of Section 2, Rule 10 of JBC-009, particularly the imposition ofa higher voting
threshold in cases where the integrity of an applicant is challenged. It is his position that the subject
JBC rule impairs the body’s collegial character, which essentially operates on the basis of majority
rule. The application of Section 2, Rule 10 of JBC-009 gives rise to a situation where all that a
member needs to do, in order to disqualify an applicant who may well have already obtained a
majority vote, is to object to his integrity. In effect, a member who invokes the said provision is given
a veto powerthat undermines the equal and full participation of the other members in the nomination
process. A lone objector may then override the will ofthe majority, rendering illusory, the collegial
nature of the JBC and the very purpose for which it was created— to shield the appointment process
from political maneuvering. Further, Section 2, Rule 10 of JBC-009 may beviolative of due process
for it does not allow an applicant any meaningful opportunity to refute the challenges to his integrity.
While other provisions of the JBC rules provide mechanisms enabling an applicant to comment on
an opposition filed against him, the subject rule does not afford the same opportunity. In this case,
Jardeleza’s allegations as to the events which transpired on June 30, 2014 obviously show that he
was neither informed ofthe accusations against him nor given the chance to muster a defense
thereto.
The Executive Secretary then offered a supposition: granting that the subject provision is held to be
constitutional, the "unanimity rule" would only be operative when the objector is not a member of the
JBC. It is only in this scenario where the voting ofthe body would not be rendered inconsequential. In
the event that a JBC member raised the objection, what should have been applied is the general rule
of a majority vote, where any JBC member retains their respective reservations to an application
with a negative vote. Corollary thereto, the unconstitutionality of the said rule would necessitate the
inclusion of Jardeleza in the shortlist submitted to the President.
Other pleadings
On August 12, 2014, Jardeleza was given the chance to refute the allegations of the JBC in its
Comment. He submitted his Reply thereto on August 15, 2014. A few hours thereafter, orbarely ten
minutes prior to the closing of business, the Court received the Supplemental Comment-Reply of the
JBC, this time with the attached minutes of the proceedings that led to the filing of the petition,and a
detailed "Statementof the Chief Justice on the Integrity Objection." Obviously, Jardeleza’s Reply
13
consisted only of his arguments against the JBC’s original Comment, as it was filed prior to the filing
of the Supplemental Comment-Reply.
At the late stage of the case, two motions to admit comments-inintervention/oppositions-in-

intervention were filed. One was by Atty. Purificacion S. Bartolome-Bernabe, purportedly the
President of the Integrated Bar of the Philippines-Bulacan Chapter. This pleading echoed the
position of the JBC.14
The other one was filed by Atty. Reynaldo A. Cortes, purportedly a former President of the IBP
Baguio-Benguet Chapter and former Governor of the IBP-Northern Luzon. It was coupled with a
complaint for disbarment against Jardeleza primarily for violations of the Code of Professional
Responsibility for representing conflicting interests.
15
Both motions for intervention weredenied considering that time was of the essence and their motions
were merely reiterative of the positions of the JBC and were perceived to be dilatory. The complaint
for disbarment, however, was re-docketed as a separate administrative case.
The Issues
Amidst a myriad of issues submitted by the parties, most of which are interrelated such that the
resolution of one issue would necessarily affect the conclusion as to the others, the Court opts to
narrow down the questions to the very source of the discord - the correct application of Section 2,
Rule 10 JBC-009 and its effects, if any, on the substantive rights of applicants.
The Court is not unmindful of the fact that a facial scrutiny of the petition does not directly raise the
unconstitutionality of the subject JBC rule. Instead, it bewails the unconstitutional effects of its
application. It is only from the comment of the Executive Secretary where the possible
unconstitutionality of the rulewas brought to the fore. Despite this milieu, a practical approach
dictatesthat the Court must confront the source of the bleeding from which the gaping wound
presented to the Court suffers.
The issues for resolution are:
I.
WHETHER OR NOT THE COURT CAN ASSUME JURISDICTION AND GIVE DUECOURSE TO
THE SUBJECT PETITION FOR CERTIORARI AND MANDAMUS (WITH APPLICATION FOR A
TEMPORARY RESTRAINING ORDER).
II
WHETHER OR NOT THE ISSUES RAISED AGAINST JARDELEZA BEFIT "QUESTIONS OR

CHALLENGES ON INTEGRITY" AS CONTEMPLATED UNDER SECTION 2, RULE 10 OF JBC-
009.
II.
WHETHER OR NOT THE RIGHT TO DUE PROCESS IS AVAILABLE IN THE COURSE OF JBC
PROCEEDINGS IN CASES WHERE AN OBJECTION OR OPPOSITION TO AN APPLICATION IS
RAISED.
III.
WHETHER OR NOT PETITIONER JARDELEZA MAY BE INCLUDED IN THE SHORTLIST OF

NOMINEES SUBMITTED TO THE PRESIDENT.
The Court’s Ruling
I – Procedural Issue: The Court has constitutional bases to assume jurisdiction over the case
A - The Court’s Power of Supervision over the JBC
Section 8, Article VIII of the 1987 Constitution provides for the creation of the JBC. The Court was
given supervisory authority over it. Section 8 reads:
Section 8.
A Judicial and Bar Council is hereby created under the supervision of the Supreme Courtcomposed
of the Chief Justice as ex officio Chairman, the Secretary of Justice, and a representative of the
Congress as ex officio Members, a representative of the Integrated Bar, a professor of law, a retired
Member of the Supreme Court, and a representative of the private sector. [Emphasis supplied]
As a meaningful guidepost, jurisprudence provides the definition and scope of supervision. It is the
power of oversight, or the authority to see that subordinate officers perform their duties.It ensures
that the laws and the rules governing the conduct of a government entity are observed and complied
with. Supervising officials see to it that rules are followed, but they themselves do not lay down such
rules, nor do they have the discretion to modify or replace them. If the rules are not observed, they
may order the work done or redone, but only to conform to such rules. They may not prescribe their
own manner of execution of the act. They have no discretion on this matter except to see to it that
the rules are followed. 16
Based on this, the supervisory authority of the Court over the JBC covers the overseeing of
compliance with its rules. In this case, Jardeleza’s principal allegations in his petition merit the
exercise of this supervisory authority.
B- Availability of the Remedy of Mandamus
The Court agrees with the JBC that a writ of mandamus is not available. "Mandamuslies to compel
the performance, when refused, of a ministerial duty, but not to compel the performance of a
discretionary duty. Mandamuswill not issue to control or review the exercise of discretion of a public
officer where the law imposes upon said public officer the right and duty to exercise his judgment in
reference to any matter in which he is required to act. It is his judgment that is to be exercised and
not that of the court. There is no question that the JBC’s duty to nominate is discretionary and it
17
may not becompelled to do something.
C- Availability of the Remedy of Certiorari
Respondent JBC opposed the petition for certiorarion the ground that it does not exercise judicial or
quasi-judicial functions. Under Section 1 of Rule 65, a writ of certiorariis directed against a tribunal
exercising judicial or quasi-judicial function. "Judicial functions are exercised by a body or officer
clothed with authority to determine what the law is and what the legal rights of the parties are with
respect to the matter in controversy. Quasijudicial function is a term that applies to the action or
discretion of public administrative officers or bodies given the authority to investigate facts or
ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for their
official action using discretion of a judicial nature." It asserts that in the performance of its function
18
of recommending appointees for the judiciary, the JBC does not exercise judicial or quasijudicial
functions. Hence, the resort tosuch remedy to question its actions is improper.
In this case, Jardeleza cries that although he earned a qualifying number of votes in the JBC, it was
negated by the invocation of the "unanimity rule" on integrity in violation of his right to due process
guaranteed not only by the Constitution but by the Council’s own rules. For said reason, the Court is
of the position that it can exercise the expanded judicial power of review vestedupon it by the 1987
Constitution. Thus:
Article VIII.
Section 1. The judicial power is vested in one Supreme Court and in such lower courts as may be
established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights
instrumentality of the Government.
It has been judicially settled that a petition for certiorari is a proper remedy to question the act of any
branch or instrumentality of the government on the ground of grave abuse of discretion amounting to
lack or excess of jurisdiction by any branch orinstrumentality of the government, even if the latter
does not exercise judicial, quasi-judicial or ministerial functions.
19
In a case like this, where constitutional bearings are too blatant to ignore, the Court does not find
passivity as an alternative. The impassemust be overcome.
II – Substantial Issues
Examining the Unanimity Rule of the JBC in cases where an applicant’s integrity is challenged
The purpose of the JBC’s existence is indubitably rooted in the categorical constitutional declaration
that"[a] member of the judiciary must be a person of proven competence, integrity, probity, and
independence." To ensure the fulfillment of these standards in every member of the Judiciary, the
JBC has been tasked toscreen aspiring judges and justices, among others, making certain that the
nominees submitted to the President are all qualified and suitably best for appointment. In this way,
the appointing process itself is shieldedfrom the possibility of extending judicial appointment to the
undeserving and mediocre and, more importantly, to the ineligible or disqualified.
In the performance of this sacred duty, the JBC itself admits, as stated in the "whereas clauses" of
JBC-009, that qualifications such as "competence, integrity, probity and independence are not easily
determinable as they are developed and nurtured through the years." Additionally, "it is not possible
or advisable to lay down iron-clad rules to determine the fitness of those who aspire to become a
Justice, Judge, Ombudsman or Deputy Ombudsman." Given this realistic situation, there is a need
"to promote stability and uniformity in JBC’s guiding precepts and principles." A set of uniform criteria
had to be established in the ascertainment of "whether one meets the minimum constitutional
qualifications and possesses qualities of mind and heart expected of him" and his office. Likewise for
the sake oftransparency of its proceedings, the JBC had put these criteria in writing, now in the form
of JBC-009. True enough, guidelines have been set inthe determination of competence," "probity20
and independence," "soundness of physical and mental condition, and "integrity."

21 22 23
As disclosed by the guidelines and lists of recognized evidence of qualification laid down in JBC-
009, "integrity" is closely related to, or if not, approximately equated to an applicant’s good reputation
for honesty, incorruptibility, irreproachableconduct, and fidelity to sound moral and ethical standards.
That is why proof of an applicant’s reputation may be shown in certifications or testimonials from
reputable government officials and non-governmental organizations and clearances from the courts,
National Bureau of Investigation, and the police, among others. In fact, the JBC may even conduct a
discreet background check and receive feedback from the public on the integrity, reputation and
character of the applicant, the merits of which shall be verifiedand checked. As a qualification, the
term is taken to refer to a virtue, such that, "integrity is the quality of person’s character."
24
The foregoing premise then begets the question: Does Rule 2, Section 10 of JBC-009, in imposing
the "unanimity rule," contemplate a doubt on the moral character of an applicant? Section 2, Rule 10
of JBC-009 provides:
SEC. 2. Votes required when integrity of a qualified applicant is challenged. - In every case where
the integrity of an applicant who is not otherwise disqualified for nomination is raised or challenged,
the affirmative vote of all the Members of the Council must be obtained for the favorable
consideration of his nomination.
A simple reading of the above provision undoubtedly elicits the rule that a higher voting requirement
is absolute in cases where the integrity of an applicant is questioned. Simply put, when an integrity
question arises, the voting requirement for his or her inclusion as a nominee to a judicial post
becomes "unanimous" instead of the "majority vote" required in the preceding section. Considering
25
that JBC-009 employs the term "integrity" as an essential qualification for appointment, and its
doubtful existence in a person merits a higher hurdle to surpass, that is, the unanimous vote of all
the members of the JBC, the Court is of the safe conclusion that "integrity" as used in the rules must
be interpreted uniformly. Hence, Section 2, Rule 10 of JBC-009 envisions only a situation where an
applicant’s moral fitness is challenged. It follows then that the "unanimity rule" only comes into
operation when the moral character of a person is put in issue. It finds no application where the
question is essentially unrelated to an applicant’s moral uprightness.
Examining the "questions of integrity" made against Jardeleza
The Court will now examine the propriety of applying Section 2, Rule 10 of JBC-009 to Jardeleza’s
case.
The minutes of the JBC meetings, attached to the Supplemental Comment-Reply, reveal that during
the June 30, 2014 meeting, not only the question on his actuations in the handling of a case was
called for explanation by the Chief Justice, but two other grounds as well tending to show his lack of
integrity: a supposed extra-marital affair in the past and alleged acts of insider trading.
26
Against this factual backdrop, the Court notes that the initial or original invocation of Section 2, Rule
10 of JBC-009 was grounded on Jardeleza’s "inability to discharge the duties of his office" as shown
in a legal memorandum related to Jardeleza’s manner of representing the government in a legal
dispute. The records bear that the "unanimity rule" was initially invoked by Chief Justice Sereno
during the JBC meeting held on June 5, 2014, where she expressed her position that Jardeleza did
not possess the integrity required tobe a member of the Court. In the same meeting, the Chief
27
Justice shared withthe other JBC members the details of Jardeleza’s chosen manner of framing the
government’s position in a case and how this could have been detrimental to the national interest.
In the JBC’s original comment, the details of the Chief Justice’s claim against Jardeleza’s integrity
were couched in general terms. The particulars thereof were only supplied to the Court in the JBC’s
Supplemental Comment-Reply. Apparently, the JBC acceded to Jardeleza’s demand to make the
accusations against him public. At the outset, the JBC declined to raise the fine points of the integrity
question in its original Comment due to its significant bearing on the country’s foreign relations and
national security. At any rate, the Court restrains itself from delving into the details thereof in this
disposition. The confidential nature of the document cited therein, which requires the observance of
utmost prudence, preclude a discussion that may possibly affect the country’s position in a pending
dispute.
Be that as it may, the Court has to resolve the standing questions: Does the original invocation of
Section 2, Rule 10 of JBC-009 involve a question on Jardeleza’s integrity? Doeshis adoption of a
specific legal strategy in the handling of a case bring forth a relevant and logical challenge against
his moral character? Does the "unanimity rule" apply in cases where the main point of contention is
the professional judgment sans charges or implications of immoral or corrupt behavior?
The Court answers these questions in the negative.
While Chief Justice Sereno claims that the invocation of Section 2, Rule 10 of JBC-009 was not
borne out ofa mere variance of legal opinion but by an "act of disloyalty" committed by Jardeleza in
the handling of a case, the fact remains that the basis for her invocation of the rule was the
"disagreement" in legal strategy as expressed by a group of international lawyers. The approach
taken by Jardeleza in that case was opposed to that preferred by the legal team. For said reason,
criticism was hurled against his "integrity." The invocation of the "unanimity rule" on integrity traces
its roots to the exercise ofhis discretion as a lawyer and nothing else. No connection was established
linking his choice of a legal strategy to a treacherous intent to trounce upon the country’s interests or
to betray the Constitution.
Verily, disagreement in legal opinion is but a normal, if not an essential form of, interaction among
members of the legal community. A lawyer has complete discretion on whatlegal strategy to employ
in a case entrusted to him provided that he lives up tohis duty to serve his client with competence
28
and diligence, and that he exert his best efforts to protect the interests of his client within the bounds
of the law. Consonantly, a lawyer is not an insurer of victory for clients he represents. An infallible
grasp of legal principles and technique by a lawyer is a utopian ideal. Stripped of a clear showing of
gross neglect, iniquity, or immoral purpose, a strategy of a legal mind remains a legal tactic
acceptable to some and deplorable to others. It has no direct bearing on his moral choices.
As shown in the minutes, the other JBC members expressed their reservations on whether the
ground invoked by Chief Justice Sereno could be classified as a "question of integrity" under Section
2, Rule 10 of JBC-009. These reservations were evidently sourced from the factthat there was no
29
clear indication that the tactic was a "brainchild" of Jardeleza, as it might have been a collective idea
by the legal team which initially sought a different manner of presenting the country’s arguments,
and there was no showing either of a corrupt purpose on his part. Even Chief Justice Sereno was
30
not certain that Jardeleza’s acts were urged by politicking or lured by extraneous
promises. Besides, the President, who has the final say on the conduct of the country’s advocacy in
31
the case, has given no signs that Jardeleza’s action constituted disloyalty or a betrayal of the
country’s trust and interest. While this point does notentail that only the President may challenge
Jardeleza’s doubtful integrity, itis commonsensical to assume that he is in the best position to
suspect a treacherous agenda. The records are bereft of any information that indicatesthis
suspicion. In fact, the Comment of the Executive Secretary expressly prayed for Jardeleza’s
inclusion in the disputed shortlist.
The Court notes the zeal shown by the Chief Justice regarding international cases, given her
participation in the PIATCO case and the Belgian Dredging case. Her efforts inthe determination of
Jardeleza’s professional background, while commendable, have not produced a patent
demonstration of a connection betweenthe act complained of and his integrity as a person.
Nonetheless, the Court cannot consider her invocation of Section 2, Rule 10 of JBC-009 as
conformably within the contemplation of the rule. To fall under Section 2, Rule 10 of JBC-009, there
must be a showing that the act complained of is, at the least, linked to the moral character of the
person and not to his judgment as a professional. What this disposition perceives, therefore, is the
inapplicability of Section 2, Rule 10 of JBC-009 to the original ground of its invocation.
As previously mentioned, Chief Justice Sereno raised the issues of Jardeleza’s alleged extra-marital
affair and acts of insider-trading for the first time onlyduring the June 30, 2014 meeting of the JBC.
As can be gleaned from the minutes of the June 30, 2014 meeting, the inclusion of these issues had
its origin from newspaper reports that the Chief Justice might raise issues of "immorality" against
Jardeleza. The Chief Justice then deduced that the "immorality" issue referred to by the media
32
might have been the incidents that could have transpired when Jardeleza was still the General
Counsel of San Miguel Corporation. She stated that inasmuch as the JBC had the duty to "take
every possible step to verify the qualification of the applicants," it might as well be clarified.
33
Do these issues fall within the purview of "questions on integrity" under Section 2, Rule 10 of JBC-
009? The Court nods in assent. These are valid issues.
This acquiescence is consistent with the Court’s discussion supra. Unlike the first ground which
centered onJardeleza’s stance on the tactical approach in pursuing the case for the government, the
claims of an illicit relationship and acts of insider trading bear a candid relation to his moral
character. Jurisprudence is replete with cases where a lawyer’s deliberate participation in extra-
34
marital affairs was considered as a disgraceful stain on one’s ethical and moral principles. The
bottom line is that a lawyer who engages in extra-marital affairs is deemed to have failed to adhere
to the exacting standards of morality and decency which every member of the Judiciary is expected
to observe. In fact, even relationships which have never gone physical or intimate could still be
subject to charges of immorality, when a lawyer, who is married, admits to having a relationship
which was more than professional, more than acquaintanceship, more than friendly. As the Court
35
has held: Immorality has not been confined to sexual matters, but includes conduct inconsistentwith
rectitude, or indicative of corruption, indecency, depravity and dissoluteness; or is willful, flagrant, or
shameless conduct showing moral indifference to opinions of respectable members of the
communityand an inconsiderate attitude toward good order and public welfare. Moral character is
36
not a subjective term but one that corresponds to objective reality. To have a good moral character,
37
a person must have the personal characteristic ofbeing good. It is not enough that he or she has a
good reputation, that is, the opinion generally entertained about a person or the estimate in which he
or she is held by the public in the place where she is known. Hence, lawyers are at all times subject
38
to the watchful public eye and community approbation. 39
The element of "willingness" to linger in indelicate relationships imputes a weakness in one’s values,
self-control and on the whole, sense of honor, not only because it is a bold disregard of the sanctity
of marriage and of the law, but because it erodes the public’s confidence in the Judiciary. This is no
longer a matter of an honest lapse in judgment but a dissolute exhibition of disrespect toward
sacredvows taken before God and the law.
On the other hand, insider trading is an offense that assaults the integrity of our vital securities
market. Manipulative devices and deceptive practices, including insider trading, throw a monkey
40
wrench right into the heart of the securities industry. Whensomeone trades inthe market with unfair
advantage in the form of highly valuable secret inside information, all other participants are
defrauded. All of the mechanisms become worthless. Given enough of stock marketscandals
coupled with the related loss of faith in the market, such abuses could presage a severe drain of
capital. And investors would eventuallyfeel more secure with their money invested elsewhere. In its 41
barest essence, insider trading involves the trading of securities based on knowledge of material
information not disclosed to the public at the time. Clearly, an allegation of insider trading involves
the propensity of a person toengage in fraudulent activities that may speak of his moral character.
These two issues can be properly categorized as "questions on integrity" under Section 2, Rule 10 of
JBC-009. They fall within the ambit of "questions on integrity." Hence, the "unanimity rule" may come
into operation as the subject provision is worded.
The Availability of Due Process in the
Proceedings of the JBC

In advocacy of his position, Jardeleza argues that: 1] he should have been informed of the
accusations against him in writing; 2] he was not furnished the basis of the accusations, that is, "a
very confidential legal memorandum that clarifies the integrityobjection"; 3] instead of heeding his
request for an opportunity to defend himself, the JBC considered his refusal to explain, during the
June 30, 2014 meeting, as a waiver of his right to answer the unspecified allegations; 4] the voting of
the JBC was railroaded; and 5] the alleged "discretionary" nature of Sections 3 and 4 of JBC-009 is
negated by the subsequent effectivity of JBC-010, Section 1(2) of which provides for a 10-day period
from the publication of the list of candidates within which any complaint or opposition against a
candidate may be filed with the JBC Secretary; 6] Section 2 of JBC-010 requires complaints and
oppositions to be in writing and under oath, copies of which shall be furnished the candidate in order
for him to file his comment within five (5) days from receipt thereof; and 7] Sections 3 to 6 of JBC-
010 prescribe a logical, reasonable and sequential series of steps in securing a candidate’s right to
due process.
The JBC counters these by insisting that it is not obliged to afford Jardeleza the right to a hearing in
the fulfillment of its duty to recommend. The JBC, as a body, is not required by law to hold hearings
on the qualifications of the nominees. The process by which an objection is made based on Section
2, Rule 10 of JBC-009 is not judicial, quasi-judicial, or fact-finding, for it does not aim to determine
guilt or innocence akin to a criminal or administrative offense but toascertain the fitness of an
applicant vis-à-vis the requirements for the position. Being sui generis, the proceedings of the JBC
do not confer the rights insisted upon by Jardeleza. He may not exact the application of rules of
procedure which are, at the most, discretionary or optional. Finally, Jardeleza refused to shed light
on the objections against him. During the June 30, 2014 meeting, he did not address the issues, but
instead chose totread on his view that the Chief Justice had unjustifiably become his accuser,
prosecutor and judge.
The crux of the issue is on the availability of the right to due process in JBC proceedings. After a
tedious review of the parties’ respective arguments, the Court concludes that the right to due
process is available and thereby demandable asa matter of right.
The Court does not brush aside the unique and special nature of JBC proceedings. Indeed, they are
distinct from criminal proceedings where the finding of guilt or innocence of the accused is sine qua
non. The JBC’s constitutional duty to recommend qualified nominees to the President cannot be
compared to the duty of the courts of law to determine the commission of an offense and ascribe the
same to an accused, consistent with established rules on evidence. Even the quantum ofevidence
required in criminal cases is far from the discretion accorded to the JBC.
The Court, however, could not accept, lock, stock and barrel, the argument that an applicant’s
access tothe rights afforded under the due process clause is discretionary on the part of the JBC.
While the facets of criminal and administrative due process are not strictly applicable to JBC
42 43
proceedings, their peculiarity is insufficient to justify the conclusion that due process is not
demandable.
In JBC proceedings, an aspiring judge or justice justifies his qualifications for the office when he
presents proof of his scholastic records, work experience and laudable citations. His goal is to
establish that he is qualified for the office applied for. The JBC then takes every possible step to
verify an applicant's trackrecord for the purpose ofdetermining whether or not he is qualified for
nomination. It ascertains the factors which entitle an applicant to become a part of the roster from
which the President appoints.
The fact that a proceeding is sui generisand is impressed with discretion, however, does not
automatically denigrate an applicant’s entitlement to due process. It is well-established in
jurisprudence that disciplinary proceedings against lawyers are sui generisin that they are neither
purely civil nor purely criminal; they involve investigations by the Court into the conduct of one of its
officers, not the trial of an action or a suit. Hence, in the exercise of its disciplinary powers, the
44
Court merely calls upon a member of the Bar to accountfor his actuations as an officer of the Court
with the end in view of preserving the purity of the legal profession and the proper and honest
administration of justice by purging the profession of members who, by their misconduct, have
proved themselves no longer worthy to be entrusted with the duties and responsibilities pertaining to
the office of an attorney. In such posture, there can be no occasion to speak of a complainant or a
prosecutor. On the whole, disciplinary proceedings are actually aimed to verifyand finally determine,
45
if a lawyer charged is still qualifiedto benefit from the rights and privileges that membership in the
legal profession evoke.
Notwithstanding being "a class of itsown," the right to be heard and to explain one’s self is availing.
The Court subscribes to the view that in cases where an objection to an applicant’s qualifications is
raised, the observance of due process neither negates nor renders illusory the fulfillment of the duty
of JBC torecommend. This holding is not an encroachment on its discretion in the nomination
process. Actually, its adherence to the precepts of due process supports and enriches the exercise
of its discretion. When an applicant, who vehemently denies the truth of the objections, is afforded
the chance to protest, the JBC is presented with a clearer understanding of the situation it faces,
thereby guarding the body from making an unsound and capriciousassessment of information
brought before it. The JBC is not expected to strictly apply the rules of evidence in its assessment of
an objection against an applicant. Just the same, to hear the side of the person challenged complies
with the dictates of fairness for the only test that an exercise of discretion must surmount is that of
soundness.
A more pragmatic take on the matter of due process in JBC proceedings also compels the Court to
examine its current rules. The pleadings of the parties mentioned two: 1] JBC-009 and 2] JBC-010.
The former provides the following provisions pertinent to this case:
SECTION 1. Evidence of integrity. - The Council shall take every possible step to verify the
applicant's record of and reputation for honesty, integrity, incorruptibility, irreproachable conduct, and
fidelity to sound moral and ethical standards. For this purpose, the applicant shall submit to the
Council certifications or testimonials thereof from reputable government officials and non-
governmental organizations, and clearances from the courts, National Bureau of Investigation,
police, and from such other agencies as the Council may require.
SECTION 2. Background check. - The Council mayorder a discreet background check on the
integrity, reputation and character of the applicant, and receive feedback thereon from the public,
which it shall check or verify to validate the merits thereof.
SECTION 3. Testimony of parties.- The Council may receive written opposition to an applicant on
groundof his moral fitness and, at its discretion, the Council mayreceive the testimony of the
oppositor at a hearing conducted for the purpose, with due notice to the applicant who shall be
allowed to cross-examine the oppositor and to offer countervailing evidence.
SECTION 4. Anonymous complaints. - Anonymous complaints against an applicant shall not

begiven due course, unless there appears on its face a probable cause sufficient to engender belief
that the allegations may be true. In the latter case, the Council may either direct a discreet
investigation or require the applicant to comment thereon in writing or during the interview.
[Emphases Supplied]
While the "unanimity rule" invoked against him is found in JBC-009, Jardeleza urges the Court to
hold that the subsequent rule, JBC-010, squarely applies to his case. Entitled asa "Rule to Further
46
Promote Public Awareness of and Accessibility to the Proceedings of the Judicial and Bar Council,"
JBC-010 recognizes the needfor transparency and public awareness of JBC proceedings. In
pursuance thereof, JBC-010 was crafted in this wise:
SECTION 1. The Judicial and Bar Council shall deliberate to determine who of the candidates meet
prima facie the qualifications for the positionunder consideration. For this purpose, it shall prepare a
long list of candidates who prima facieappear to have all the qualifications.
The Secretary of the Council shall then cause to be published in two (2) newspapers of general
circulation a notice of the long list of candidates in alphabetical order.
The notice shall inform the public that any complaint or opposition against a candidate may be filed
with the Secretary within ten (10) days thereof.
SECTION 2.The complaint or opposition shall be in writing, under oath and in ten (10) legible copies,
together with its supporting annexes. It shall strictly relate to the qualifications of the candidate or
lack thereof, as provided for in the Constitution, statutes, and the Rules of the Judicial and Bar
Council, as well as resolutions or regulations promulgated by it.
The Secretary of the Council shallfurnish the candidate a copy of the complaint or opposition against
him. The candidate shall have five (5) days from receipt thereof within which to file his comment to
the complaint or opposition, if he so desires.
SECTION 3.The Judicial and Bar Council shall fix a date when it shall meet in executive session to
consider the qualification of the long list of candidates and the complaint or opposition against them,
if any. The Council may, on its own, conduct a discreet investigation of the background of the
candidates.
On the basis of its evaluationof the qualification of the candidates, the Council shall prepare the
shorter list of candidates whom it desires to interview for its further consideration.
SECTION 4.The Secretary of the Council shall again cause to be published the dates of the
interview of candidates in the shorter list in two (2) newspapers of general circulation. It shall
likewise be posted in the websites of the Supreme Court and the Judicial and Bar Council.
The candidates, as well as their oppositors, shall be separately notified of the dateand place of the
interview.
SECTION 5.The interviews shall be conducted in public. During the interview, only the members
ofthe Council can ask questions to the candidate. Among other things, the candidate can be made to
explain the complaint or opposition against him.
SECTION 6. After the interviews, the Judicial and Bar Council shall again meet in executive session
for the final deliberation on the short list of candidates which shall be sent to the Office of the
President as a basis for the exercise of the Presidential power of appointment. [Emphases supplied]
Anent the interpretation of these existing rules, the JBC contends that Sections 3 and 4, Rule 10 of
JBC-009 are merely directory in nature as can be gleaned from the use of the word "may." Thus, the
conduct of a hearing under Rule 4 of JBC-009 is permissive and/or discretionary on the part of the
JBC. Even the conduct of a hearing to determine the veracity of an opposition is discretionary for
there are ways, besides a hearing, to ascertain the truth or falsity of allegations. Succinctly, this
argument suggests that the JBC has the discretion to hold or not to hold a hearing when an
objection to an applicant’s integrity is raised and that it may resort to other means to accomplish its
objective. Nevertheless, JBC adds, "what is mandatory, however, is that if the JBC, in its discretion,
receives a testimony of an oppositor in a hearing, due notice shall be given to the applicant and that
shall be allowed to cross-examine the oppositor." Again, the Court neither intends to strip the JBC
47
of its discretion to recommend nominees nor proposes thatthe JBC conduct a full-blown trial when
objections to an application are submitted. Still, it is unsound to say that, all together, the observance
of due process is a part of JBC’s discretion when an opposition to an application is made of record.
While it may so rely on "other means" such as character clearances, testimonials, and discreet
investigation to aid it in forming a judgment of an applicant’s qualifications, the Court cannot accept a
situation where JBC is given a full rein on the application of a fundamental right whenever a person’s
integrity is put to question. In such cases, an attack on the person of the applicant necessitates his
right to explain himself.
The JBC’s own rules convince the Court to arrive at this conclusion. The subsequent issuance of
JBC-010 unmistakably projects the JBC’s deference to the grave import of the right of the applicant
to be informed and corollary thereto, the right to be heard. The provisions of JBC-010, per se,
provide that: any complaint or opposition against a candidate may be filed with the Secretary within
ten (10) days thereof; the complaint or opposition shall be in writing, under oath and in ten (10)
legible copies; the Secretary of the Council shall furnish the candidate a copy of the complaint or
opposition against him; the candidate shall have five (5) days from receipt thereof within which to file
his comment to the complaint or opposition, if he so desires; and the candidate can be made to
explain the complaint or opposition against him.
The Court may not close its eyes to the existence of JBC-010 which, under the rules of statutory
construction,bears great weight in that: 1] it covers "any" complaint or opposition; 2] it employs the
mandatory term, "shall"; and 3] most importantly, it speaks of the very essence of due process.
While JBC-010 does not articulate a procedure that entails a trialtype hearing, it affords an applicant,
who faces "any complaint or opposition," the right to answer the accusations against him. This
constitutes the minimum requirements of due process.
Application to Jardeleza’s Case
Nearing the ultimate conclusion of this case, the Court is behooved to rule on whether Jardeleza
was deprived of his right to due process in the events leading up to, and during, the vote on the
shortlist last June 30, 2014.
The JBC gives great weight and substance to the fact that it gave Jardeleza the opportunity to
answer the allegations against him. It underscores the fact that Jardeleza was asked to attend the
June 30, 2014 meeting so that he could shed light on the issues thrown at him. During the said
meeting, Chief Justice Sereno informed him that in connection with his candidacy for the position of
Associate Justice of the Supreme Court, the Council would like to propound questions on the
following issues raised against him: 1] his actuations in handling an international arbitration case not
compatible with public interest; 2] reports on his extra-marital affair in SMC; and 3] alleged insider
48
trading which led to the "show cause" order from the Philippine Stock Exchange. 49
As Jardeleza himself admitted, he declined to answer or to explain his side, as he would not want to
be "lulled into waiving his rights." Instead, he manifested that his statement be put on record and
informed the Council of the then pendency of his letter-petition with the Court en banc. When Chief
Justice Sereno informed Jardeleza that the Council would want to hear from him on the three (3)
issues against him,Jardeleza reasoned out that this was precisely the issue. He found it irregular
that he was not being given the opportunity to be heard per the JBC rules.He asserted that a
candidate must be given the opportunity to respond to the charges against him. He urged the Chief
Justice to step down from her pedestal and translate the objections in writing. Towards the end of
the meeting, the Chief Justice said that both Jardeleza’s written and oral statements would be made
part of the record. After Jardeleza was excused from the conference, Justice Lagman suggested that
the voting be deferred, but the Chief Justice ruled that the Council had already completed the
process required for the voting to proceed.
After careful calibration of the case, the Court has reached the determination that the application of
the "unanimity rule" on integrity resulted in Jardeleza’s deprivation of his right to due process.
As threshed out beforehand, due process, as a constitutional precept, does not always and in all
situations require a trial-type proceeding. Due process is satisfied when a person is notified of the
charge against him and given an opportunity to explain or defend himself. Even as Jardeleza was
50
verbally informed of the invocation of Section 2, Rule 10 of JBC-009 against him and was later
asked to explain himself during the meeting, these circumstances still cannot expunge an immense
perplexity that lingers in the mind of the Court. What is to become of the procedure laid down in
JBC-010 if the same would be treated with indifference and disregard? To repeat, as its wording
provides, any complaint or opposition against a candidate may be filed with the Secretary withinten
(10) days from the publication of the notice and a list of candidates. Surely, this notice is all the more
conspicuous to JBC members. Granting ex argumenti, that the 10-day period is only applicable to
51
the public, excluding the JBC members themselves, this does not discount the fact that the
invocation of the first ground in the June 5, 2014 meeting would have raised procedural issues. To
be fair, several members of the Council expressed their concern and desire to hear out Jardeleza
but the application of JBC-010 did not form part of the agenda then. It was only during the next
meeting on June 16, 2014, that the Council agreed to invite Jardeleza, by telephone, to a meeting
that would be held on the same day when a resource person would shed light on the matter.
Assuming again that the classified nature of the ground impelled the Council to resort to oral notice
instead of furnishing Jardeleza a written opposition, why did the JBC not take into account its
authority to summon Jardeleza in confidence at an earlier time? Is not the Council empowered to
"take every possible step to verify the qualification of the applicants?" It would not be amiss to state,
at this point, that the confidential legal memorandum used in the invocation ofthe "unanimity rule"
was actually addressed to Jardeleza, in his capacity as Solicitor General. Safe to assume is his
knowledge of the privileged nature thereof and the consequences of its indiscriminate release to the
public. Had he been privately informed of the allegations against him based on the document and
had he been ordered to respond thereto in the same manner, Jardeleza’s right to be informed and to
explain himself would have been satisfied.
What precisely set off the protest of lack of due process was the circumstance of requiring Jardeleza
to appear before the Council and to instantaneously provide those who are willing to listen an
intelligent defense. Was he given the opportunity to do so? The answer is yes, in the context of his
physical presence during the meeting. Was he given a reasonable chance to muster a defense? No,
because he was merely asked to appear in a meeting where he would be, right then and there,
subjected to an inquiry. It would all be too well to remember that the allegations of his extra-marital
affair and acts of insider trading sprung up only during the June 30, 2014 meeting. While the said
issues became the object of the JBC discussion on June 16, 2014, Jardeleza was not given the idea
that he should prepare to affirm or deny his past behavior. These circumstances preclude the very
idea of due process in which the right to explain oneself is given, not to ensnare by surprise, but
toprovide the person a reasonable opportunity and sufficient time to intelligently muster his
response. Otherwise, the occasion becomes anidle and futile exercise.
Needless to state, Jardeleza’s grievance is not an imagined slight but a real rebuff of his right to be
informed of the charges against him and his right to answer the same with vigorouscontention and
active participation in the proceedings which would ultimately decide his aspiration to become a
magistrate of this Court.
Consequences
To write finisto this controversy and in view of the realistic and practical fruition of the Court’s
findings, the Court now declares its position on whether or not Jardeleza may be included in the
shortlist, just in time when the period to appoint a member of the Court is about to end.
The conclusion of the Court is hinged on the following pivotal points:
1. There was a misapplication of the "unanimity rule" under Section 2, Rule 10 of JBC-009 as
to Jardeleza’s legal strategy in handling a case for the government.
2. While Jardeleza’s alleged extra-marital affair and acts of insider trading fall within the
contemplation of a "question on integrity" and would have warranted the application of the
"unanimity rule," he was notafforded due process in its application.
3. The JBC, as the sole body empowered to evaluate applications for judicial posts,
exercises full discretion on its power to recommend nomineesto the President. The sui
generischaracter of JBC proceedings, however, is not a blanket authority to disregard the
due process under JBC-010.
4. Jardeleza was deprived of his right to due process when, contrary to the JBC rules, he
was neither formally informed of the questions on his integrity nor was provided a reasonable
opportunity to prepare his defense.
With the foregoing, the Court is compelled to rule that Jardeleza should have been included in the
shortlist submitted to the President for the vacated position of Associate Justice Abad. This
consequence arose not from the unconstitutionality of Section 2, Rule 10 of JBC-009, per se, but
from the violation by the JBC of its own rules of procedure and the basic tenets of due process. By
no means does the Court intend to strike down the "unanimity rule" as it reflects the JBC’s policy
and, therefore, wisdom in its selection of nominees. Even so, the Court refuses to turn a blind eye on
the palpable defects in its implementation and the ensuing treatment that Jardeleza received before
the Council. True, Jardeleza has no vested right to a nomination, but this does not prescind from the
fact that the JBC failed to observe the minimum requirements of due process.
In criminal and administrative cases, the violation of a party’s right to due process raises a serious
jurisdictional issue which cannot be glossed over or disregarded at will. Where the denial of the
fundamental right of due process is apparent, a decision rendered in disregard of that right is void for
lack of jurisdiction. This rule may well be applied to the current situation for an opposing view
52
submits to an undue relaxation of the Bill of Rights. To this, the Court shall not concede. Asthe
branch of government tasked to guarantee that the protection of due process is available to an
individual in proper cases, the Court finds the subject shortlist as tainted with a vice that it is
assigned to guard against. Indeed, the invocation of Section 2, Rule 10 of JBC-009 must be deemed
to have never come into operation in light of its erroneous application on the original ground against
Jardeleza’s integrity. At the risk of being repetitive, the Court upholds the JBC’s discretion in the
selection of nominees, but its application of the "unanimity rule" must be applied in conjunction with
Section 2, Rule 10 of JBC-010 being invoked by Jardeleza. Having been able to secure four (4) out
of six (6) votes, the only conclusion left to propound is that a majority of the members of the JBC,
nonetheless, found Jardeleza to be qualified for the position of Associate Justice and this grants him
a rightful spot in the shortlist submitted to the President. Need to Revisit JBC’s
Internal Rules
In the Court’s study of the petition,the comments and the applicable rules of the JBC, the Court is of
the view that the rules leave much to be desired and should be reviewed and revised. It appears that
the provision on the "unanimity rule" is vagueand unfair and, therefore, can be misused or abused
resulting in the deprivation of an applicant’s right to due process.
Primarily, the invocation of the "unanimity rule" on integrity is effectively a veto power over the
collective will of a majority. This should be clarified. Any assertion by a member aftervoting seems to
be unfair because it effectively gives him or her a veto power over the collective votes of the other
members in view of the unanimous requirement. While an oppositor-member can recuse himself
orherself, still the probability of annulling the majority vote ofthe Council is quite high.
Second, integrity as a ground has not been defined. While the initial impression is that it refers to the
moral fiber of a candidate, it can be, as it has been, used to mean other things. Infact, the minutes of
the JBC meetings n this case reflect the lack of consensus among the members as to its precise
definition. Not having been defined or described, it is vague, nebulous and confusing. It must be
distinctly specified and delineated.
Third, it should explicitly provide who can invoke it as a ground against a candidate. Should it be
invoked only by an outsider as construed by the respondent Executive Secretary or also by a
member?
Fourth, while the JBC vetting proceedings is "sui generis" and need not be formal or trial type, they
must meet the minimum requirements of due process. As always, an applicant should be given a
reasonable opportunity and time to be heard on the charges against him or her, if there are any.
At any rate, it is up to the JBC to fine-tune the rules considering the peculiar nature of its function. It
need not be stressed that the rules to be adopted should be fair, reasonable, unambiguous and
consistent with the minimum requirements of due process.
One final note.
The Court disclaims that Jardeleza's inclusion in the shortlist is an endorsement of his appointment
as a member of the Court. In deference to the Constitution and his wisdom in the exercise of his
1âwphi1
appointing power, the President remains the ultimate judge of a candidate's worthiness.
WHEREFORE, the petition is GRANTED. Accordingly, it is hereby declared that Solicitor General
Francis I-I. Jardeleza is deemed INCLUDED in the shortlist submitted to the President for
consideration as an Associate Justice of the Supreme Court vice Associate Justice Roberto A. Abad.
The Court further DIRECTS that the Judicial and Bar Council REVIEW, and ADOPT, rules relevant
to the observance of due process in its proceedings, particularly JBC-009 and JBC-010, subject to
the approval of the Court.
This Decision is immediately EXECUTORY. Immediately notify the Office of the President of this
Decision.
SO ORDERED.
JOSE CATRAL MENDOZA

Associate Justice
WE CONCUR:
(No part)
MARIA LOURDES P. A. SERENO*
Chief Justice
I join the Dissent of J. Leonen.

(No part)
PRESBITERO J. VELASCO, JR.
ANTONIO T. CARPIO*
Associate Justice
Associate Justice
Acting Chairperson
Please see my separate Opinion

concurring with the Ponencia of Justice
Pls. See: Separate Concurring Opinion
Mendoza And the separate opinion of
ARTURO D. BRION
Justice Brion
Associate Justice
Associate Justice
See separate opinion In corporating I also join the separate opinion of J, De

explanation of vote Castro & J. Brion
DIOSDADO M. PERALTA LUCAS P. BERSAMIN
(On official leave)

MARTIN S. VILLARAMA, JR.**
Associate Justice
Associate Justice
JOSE PORTUGAL PEREZ BIENVENIDO L. REYES

I join the dissent of J. Leonen I dissent. See separate opinion

ESTELA M. PERLAS-BERNABE MARVIC MARIO VICTOR F. LEONEN
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I hereby certify that the conclusions in the
above Decision had been reached in consultation before the case was assigned to the writer of the
ooinion of the Court.

Acting Chairperson
Footnotes
* No part.
** On official leave.
1
G.R. No. 191002, April 20, 2010, 676 SCRA 579.
2
G.R. No. 202242, July 17, 2012, 618 SCRA 639.
3
JBC-009, Rules of the Judicial and Bar Council, promulgated on September 23, 2002.
4
Section 2. Votes required when integrity of a qualified applicant is challenged. – In every
case when the integrity of an applicant who is not otherwise disqualified for nomination is
raised or challenged, the affirmative vote of all the members ofthe Council must be obtained
for the favourable consideration of his nomination.
5
Docketed as A.M. No. 14-07-01-SC-JBC, Re: Jardeleza For the Position of Associate
Justice Vacated By Justice Roberto A. Abad, rollo, pp. 79-88.
6
Id. at 33-36.
7
Id.at 37-38.
8
Id. at 95.
9
Id. at 97-106.
10
Id. at 12.
11
Section 1, Rule 65, Rules of Court.
12
Villanueva v. Judicial and Bar Council, docketed as G.R. No. 211833 (still pending).
13
Rollo,pp. 170-217.
14
Id. at 128-169.
15
Id. at 220-233.
16
Drilon v. Lim, G.R. No. 112497, August 4, 1994, 235 SCRA 135, 142.
17
Paloma v. Mora, 507 Phil. 697 (2005).
Chamber of Real Estate And Builders’ Associations, Inc. (CREBA) v. Energy Regulatory
18
Commission (ERC) And Manila Electric Company (MERALCO),G.R. No. 174697, July 8,
2010, 624 SCRA 556.
19
Araullo v. Aquino, G.R. No. 209287, July 1, 2014.
20
Rule 3 SEC 1. Guidelines in determining competence. - In determining the competence of
the applicant or recommendee for appointment, the Council shall consider his educational
preparation, experience, performance and other accomplishments including the completion
of the prejudicature program of the Philippine Judicial Academy; provided, however, that in
places where the number of applicants or recommendees is insufficient and the prolonged
vacancy in the court concerned will prejudice the administration of justice, strict compliance
with the requirement of completion of the prejudicature program shall be deemed directory."
(Effective Dec. 1, 2003)SEC. 2. Educational preparation. - The Council shall evaluate the
applicant's (a) scholastic record up to completion of the degree in law and other
baccalaureate and post-graduate degrees obtained; (b) bar examination performance; (c)
civil service eligibilities and grades in other government examinations; (d) academic awards,
scholarships or grants received/obtained; and (e) membership in local or international honor
societies or professional organizations. SEC. 3. Experience. - The experience of the
applicant inthe following shall be considered:
(a) Government service, which includes that in the Judiciary (Court of Appeals,
Sandiganbayan, and courts of the first and second levels); the Executive Department
(Office of the President proper and the agencies attached thereto and the Cabinet);
the Legislative Department (elective or appointive positions); Constitutional
Commissions or Offices; Local Government Units (elective and appointive positions);
and quasi-judicial bodies.
(b) Private Practice, which may either begeneral practice, especially in courts of
justice, as proven by, among other documents, certifications from Members of the
Judiciary and the IBP and the affidavits of reputable persons; or specialized practice,
as proven by, among other documents, certifications from the IBP and appropriate
government agencies or professional organizations, as well as teaching or
administrative experience in the academe; and
(c) Others, such as service in international organizations or with foreign governments

or other agencies.
SEC. 4. Performance. - (a) The applicant who is in government service shall submit
his performance ratings, which shall include a verified statement as to such
performance for the past three years.
(b) For incumbent Members of the Judiciary who seek a promotional or lateral
appointment, performance may be based on landmark decisions penned; court
records as to status of docket; reports of the Office of the Court Administrator;
verified feedback from the IBP; and a verified statement as to his performance for the
past three years, which shall include his caseload, his average monthly output in all
actions and proceedings, the number of cases deemed submitted and the date they
were deemed submitted, and the number of his decisions during the immediately
preceding two-year period appealedto a higher court and the percentage of
affirmance thereof.
SEC. 5. Other accomplishments. - The Council shall likewise consider other

accomplishments of the applicant, such as authorship of law books, treatises, articles
and other legal writings, whether published or not; and leadership in professional,
civic or other organizations.
21
Rule 5 SECTION 1. Evidence of probity and independence.- Any evidence relevantto the
candidate's probity and independence such as, but not limited to, decisions he has rendered
if he is an incumbent member of the judiciary or reflective of the soundness of his judgment,
courage, rectitude, cold neutrality and strength of character shall be considered.
SEC. 2. Testimonials of probity and independence. - The Council may likewise

consider validated testimonies of the applicant's probity and independence from
reputable officials and impartial organizations.
22
Rule 6 SECTION 1. Good health. - Good physical health and sound mental/psychological
and emotional condition of the applicant play a critical role in his capacity and capability to
perform the delicate task of administering justice. The applicant or the recommending party
shall submit together with his application or the recommendation a sworn medical certificate
or the results of an executive medical examination issued or conducted, as the case may be,
within two months prior to the filing of the application or recommendation. At its discretion,
the Council may require the applicant to submit himself to another medical and physical
examination if it still has some doubts on the findings contained in the medical certificate or
the results of the executive medical examination.
SEC. 2. Psychological/psychiatric tests. - The applicant shall submit to

psychological/psychiatric tests to be conducted by the Supreme Court MedicalClinic
or by a psychologist and/or psychiatrist duly accredited by the Council.
23
Rule 4 SECTION 1. Evidence of integrity. - The Council shall take every possible step to
verify the applicant's record of and reputation for honesty, integrity, incorruptibility,
irreproachable conduct, and fidelity to sound moral and ethical standards. For this purpose,
the applicant shall submit to the Council certifications or testimonials thereof from reputable
government officials and non-governmental organizations, and clearances from the courts,
National Bureau of Investigation, police, and from such other agencies as the Council may
require.
SEC. 2. Background check. - The Council may order a discreet background check on
the integrity, reputation and character of the applicant, and receive feedback thereon
from the public, which it shall check or verify to validate the merits thereof.
SEC. 3. Testimony of parties.- The Council may receive written opposition to an

applicant on ground of his moral fitness and, at its discretion, the Council may
receive the testimony of the oppositor at a hearing conducted for the purpose, with
due notice to the applicant who shall be allowed to cross-examine the oppositor and
to offer countervailing evidence.
SEC. 4. Anonymous complaints. - Anonymous complaints against an applicant shall

not be given due course, unless there appears on its face a probable cause sufficient
to engender belief that the allegations may be true. In the latter case, the Council
may either direct a discreet investigation or require the applicant to comment thereon
in writing or during the interview.
SEC. 5. Disqualification. - The following are disqualified from being nominated for
appointment to any judicial post or as Ombudsman or Deputy Ombudsman:
1. Those with pending criminal or regular administrative cases;

2. Those with pending criminal cases in foreign courts or tribunals; and
3. Those who have been convicted in any criminal case; or in an

administrative case, where the penalty imposed is at least a fine of more
than P10,000, unless he has been granted judicial clemency.
SEC. 6. Other instances of disqualification.- Incumbent judges, officials orpersonnel

of the Judiciary who are facing administrative complaints under informal preliminary
investigation (IPI) by the Office of the Court Administrator may likewise be
disqualified frombeing nominated if, in the determination of the Council, the charges
are serious or grave as to affect the fitness of the applicant for nomination.
For purposes of this Section and of the preceding Section 5 insofar as pending
regular administrative cases are concerned, the Secretary of the Council shall, from
time to time, furnish the Office of the Court Administrator the name of an applicant
upon receipt of the application/recommendation and completion of the required
papers; and within ten days from receiptthereof the Court Administrator shall report in
writing to the Council whether or not the applicant is facing a regular administrative
case or an IPI case and the status thereof. In regard to the IPI case, the Court
Administrator shall attach to his report copies of the complaint and the comment of
the respondent.
Stanford Encyclopedia of Philosophy; http://plato.stanford.edu/entries/integrity/last

24
accessed August 18, 2014
25
Section 1. Votes required for inclusion as nominee. - No applicant shall be considered for
nomination for appointment to a judicial position unless he shall obtain the affirmative vote of
at least a majority of all the Members of the Council.
26
Minutes, June 30, 2014; rollo, pp. 207-216, 211.
27
Minutes, June 5, 2014; id. at 197-201.
28
Mattus v. Villaseca, A.C. No. 7922, October 1, 2013, 706 SCRA 477.
29
Minutes, June 5, 2014; rollo,p. 199
30
Minutes, June 5, 2014; id. at 199.
31
Minutes, June 16, 2014; id. at 203.
32
Minutes, June 30, 2014.
33
Rollo, p. 209.
34
Guevarra v. Atty. Eala, 555 Phil. 713 (2007); and Samaniego v. Atty. Ferrer,578 Phil. 1
(2008).
35
Geroy v. Hon. Calderon, 593 Phil. 585, 597 (2008).
Judge Florencia D. Sealana-Abbu v. Doreza Laurenciana-Huraño and Pauleen Subido,
36
558 Phil. 24 (2007).
37
Tolentino v. Atty. Norberto Mendoza, A.C. No. 5151. October 19, 2004, 440 SCRA 519.
38
Garrido v. Atty. Garrido,A.C. No. 6593,: http://sc.judiciary.gov.ph/jurisprudence/2010/
february2010/6593.htm; last visited August 15, 2014.
Maria Victoria Ventura v. Atty. Danilo Samson,A.C. No. 9608, November 27, 2012, 686
39
SCRA 430.
Justice Tinga, Concurring Opinion, Securities and Exchange Commission v. Interport

40
Resources Corporation,G.R. No. 135808, October 6, 2008, 588 Phil. 651 (2008).
Securities and Exchange Commission v. Interport Resources Corporation,G.R. No.

41
135808, October 6, 2008, citing Colin Chapman, How the Stock Market Works (1988 ed.),
pp. 151-152.
42
Article 3 of the 1987 Constitution guarantees the rights of the accused, including the right to
be presumed innocent until proven guilty, the right to enjoy due process under the law, and
the right to a speedy, public trial. Those accused must be informed of the charges against
them and must be given access to competent, independent counsel, and the opportunity to
post bail, except in instances where there is strong evidence that the crime could result in the
maximum punishment of life imprisonment. Habeas corpus protection is extended to all
except in cases of invasion or rebellion. During a trial,the accused are entitled to be present
at every proceeding, to compel witnesses, to testify and cross-examine them and to testify or
be exempt as a witness. Finally, all are guaranteed freedom from double jeopardy and, if
convicted, the right to appeal.
43
The right to a hearing which includes the right of the party interested or affected to present
his own case and submit evidence in support thereof.
(2) Not only must the party be given an opportunity to present his case and to
adduce evidence tending to establish the rights which he asserts but the tribunal
must consider the evidence presented.
(3) While the duty to deliberate does not impose the obligation to decide right, it does
imply a necessity which cannot be disregarded, namely, that of having something to
support its decision. A decision with absolutely nothing to support it is a nullity, a
place when directly attached.
(4) Not only must there be some evidence to support a finding or conclusion but the
evidence must be "substantial." Substantial evidence is more than a mere scintilla It
means such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion.
(5) The decision must be rendered on the evidence presented at the hearing, or at
least contained in the record and disclosed to the parties affected.
(6) The Court of Industrial Relations or any of its judges, therefore, 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 in arriving at a decision.
(7) The Court of Industrial Relations should, in all controversial questions, render its
decision in such a manner that the parties to the proceeding can know the various
issues involved, and the reasons for the decisions rendered. The performance of this
duty is inseparable from the authority conferred upon it. (Ang Tibay v. CIR, 69 Phil.
635 (1940).
44
Fe A. Ylaya v. Atty. Glenn Carlos Gacott,A.C. No. 6475, January 30, 2013, 689 SCRA 453,
citing Pena v. Aparicio, 522 Phil. 512 (2007).
45
Id.
46
Which took effect on October 1, 2002.
47
JBC Original Comment; rollo, pp. 59.
48
Paraphrased from the JBC meetings in order to uphold confidentiality.
49
Minutes, June 30, 2014 meeting; rollo, p. 211.
50
Ledesma v. Court of Appeals, 565 Phil. 731 (2007).
The official list of candidates was published in The Philippine Star on April 26, 2014. The
51
10-day period ended on May 6, 2014.
PO2 Ruel C. Montoya v. Police Director Reynaldo P. Varilla and Atty. Rufino Jeffrey l.
52
Manere, 595 Phil. 507 (2008), citing State Prosecutors v. Muro, Adm. Matter No. RTJ-92-
876, 19 September 1994, 236 SCRA 505, 522-523.
Villanueva v. Judicial and Bar Council, 755 SCRA 182
EN BANC
G.R. No. 211833 April 7, 2015
FERDINAND R. VILLANUEVA, Presiding Judge, MCTC, Compostela-New Bataan, Compostela

Valley Province, Petitioner,
vs.
JUDICIAL AND BAR COUNCIL, Respondent.
DECISION
REYES, J.:
Presiding Judge Ferdinand R. Villanueva (petitioner) directly came to this Court via a Petition for
Prohibition, Mandamus, and Certiorari, and Declaratory Relief under Rules 65 and 63 of the Rules
1
of Court, respectively, with prayer for the issuance of a temporary restraining order and/or writ of
preliminary injunction, to assail the policy of the Judicial and Bar Council (JBC), requiring five years
of service as judges of first-level courts before they can qualify as applicant to second-level courts,
on the ground that it is unconstitutional, and was issued with grave abuse of discretion.
The Facts
The petitioner was appointed on September 18, 2012 as the Presiding Judge of the Municipal Circuit
Trial Court, Compostela-New Bataan, Poblacion, Compostela Valley Province, Region XI, which is a
first-level court. On September 27,2013, he applied for the vacant position of Presiding Judge in the
following Regional Trial Courts (RTCs): Branch 31, Tagum City; Branch 13, Davao City; and Branch
6, Prosperidad, Agusan Del Sur.
In a letter dated December 18, 2013, JBC’s Office of Recruitment, Selection and Nomination,
2
informed the petitioner that he was not included in the list of candidates for the said stations. On the
same date, the petitioner sent a letter, through electronic mail, seeking reconsideration of his non-
inclusion in the list of considered applicants and protesting the inclusion of applicants who did not
pass the prejudicature examination.
The petitioner was informed by the JBC Executive Officer, through a Letter dated February 3, 2014,
3
that his protest and reconsideration was duly noted by the JBC en banc. However, its decision not to
include his name in the list of applicants was upheld due to the JBC’s long-standing policy of
opening the chance for promotion to second-level courts to, among others, incumbent judges who
have served in their current position for at least five years, and since the petitioner has been a judge
only for more than a year, he was excluded from the list. This caused the petitioner to take recourse
to this Court.
In his petition, he argued that: (1) the Constitution already prescribed the qualifications of an RTC
judge, and the JBC could add no more; (2) the JBC’s five-year requirement violates the equal
protection and due process clauses of the Constitution; and (3) the JBC’s five-year requirement
violates the constitutional provision on Social Justice and Human Rights for Equal Opportunity of
Employment. The petitioner also asserted that the requirement of the Prejudicature Program
mandated by Section 10 of Republic Act (R.A.) No. 8557 should not be merely directory and should
4 5
be fully implemented. He further alleged that he has all the qualifications for the position prescribed
by the Constitution and by Congress, since he has already complied with the requirement of 10
years of practice of law.
In compliance with the Court’s Resolution dated April 22, 2014, the JBC and the Office of the
6 7
Solicitor General (OSG) separately submitted their Comments. Summing up the arguments of the
8
JBC and the OSG, they essentially stated that the petition is procedurally infirm and that the assailed
policy does not violate the equal protection and due process clauses. They posited that: (1) the writ
of certiorari and prohibition cannot issue to prevent the JBC from performing its principal function
under the Constitution to recommend appointees to the Judiciary because the JBC is not a tribunal
exercising judicial or quasi-judicial function; (2) the remedy of mandamus and declaratory relief will
not lie because the petitioner has no clear legal right that needs to be protected; (3) the equal
protection clause is not violated because the classification of lower court judges who have served at
least five years and those who have servedless than five years is valid as it is performance and
experience based; and (4) there is no violation of due process as the policy is merely internal in
nature.
The Issue
The crux of this petition is whether or not the policy of JBC requiring five years of service as judges
of first-level courts before they can qualify as applicant to second-level courts is constitutional.
Ruling of the Court
Procedural Issues:
Before resolving the substantive issues, the Court considers it necessary to first determine whether
or not the action for certiorari, prohibition and mandamus, and declaratory relief commenced by the
petitioner was proper.
One. The remedies of certiorari and prohibition are tenable. "The present Rules of Court uses two
special civil actions for determining and correcting grave abuse of discretion amounting to lack or
excess of jurisdiction. These are the special civil actions for certiorari and prohibition, and both are
governed by Rule 65." As discussed in the case of Maria Carolina P. Araullo, etc., et al. v. Benigno
9
Simeon C. Aquino III, etc., et al., this Court explained that:

10
With respect to the Court, however, the remedies of certiorari and prohibition are necessarily
broader in scope and reach, and the writ of certiorari or prohibition may be issued to correct errors of
jurisdiction committed not only by a tribunal, corporation, board or officer exercising judicial, quasi-
judicial or ministerial functions but also to set right, undo and restrain any act of grave abuse of
discretion amounting to lack or excess of jurisdiction by any branch or instrumentality of the
Government, even if the latter does not exercise judicial, quasi-judicial or ministerial functions. This
application is expressly authorized by the text of the second paragraph of Section 1, supra.
Thus, petitions for certiorari and prohibition are appropriate remedies to raise constitutional issues
and to review and/or prohibit or nullify the acts of legislative and executive officials. (Citation
11
omitted)
In this case, it is clear that the JBC does not fall within the scope of a tribunal, board, or officer
exercising judicial or quasi-judicial functions. In the process of selecting and screening applicants,
the JBC neither acted in any judicial or quasi-judicial capacity nor assumed unto itself any
performance of judicial or quasi-judicial prerogative. However, since the formulation of guidelines
and criteria, including the policy that the petitioner now assails, is necessary and incidental to the
exercise of the JBC’s constitutional mandate, a determination must be made on whether the JBC
has acted with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing and
enforcing the said policy.
Besides, the Court can appropriately take cognizance of this case by virtue of the Court’s power of
supervision over the JBC. Jurisprudence provides that the power of supervision is the power of
oversight, or the authority to see that subordinate officers perform their duties. It ensures that the
laws and the rules governing the conduct of a government entity are observed and complied with.
Supervising officials see to it that rules are followed, but they themselves do not lay down such rules,
nor do they have the discretion to modify or replace them. If the rules are not observed, they may
order the work done or redone, but only to conform to such rules. They may not prescribe their own
manner of execution of the act. They have no discretion on this matter except to see to it that the
rules are followed.12
Following this definition, the supervisory authority of the Court over the JBC is to see to it that the
JBC complies with its own rules and procedures. Thus, when the policies of the JBC are being
attacked, then the Court, through its supervisory authority over the JBC, has the duty to inquire
about the matter and ensure that the JBC complies with its own rules.
Two. The remedy of mandamus cannot be availed of by the petitioner in assailing JBC’s policy. The
petitioner insisted that mandamus is proper because his right was violated when he was not included
in the list of candidates for the RTC court she applied for. He said that his non-inclusion in the list of
candidates for these stations has caused him direct injury.
It is essential to the issuance of a writ of mandamus that the applicant should have a clear legal right
to the thing demanded and it must be the imperative duty of the respondent to perform the act
required. The petitioner bears the burden to show that there is such a clear legal right to the
13
performance of the act, and a corresponding compelling duty on the part of the respondent to
perform the act. The remedy of mandamus, as an extraordinary writ, lies only to compel an officer to
perform a ministerial duty, not a discretionary one. Clearly, the use of discretion and the
14
performance of a ministerial act are mutually exclusive.
The writ of mandamus does not issue to control or review the exercise of discretion or to compel a
course of conduct, which, it quickly seems to us, was what the petitioner would have the JBC do in
his favor. The function of the JBC to select and recommend nominees for vacant judicial positions is
discretionary, not ministerial. More so, the petitioner cannot claim any legal right to be included in the
list of nominees for judicial vacancies. Possession of the constitutional and statutory qualifications
for appointment to the judiciary may not be used to legally demand that one’s name be included in
the list of candidates for a judicial vacancy. One’s inclusion in the list of the candidates depends on
the discretion of the JBC, thus:
The fact that an individual possesses the constitutional and statutory qualifications for appointment
to the Judiciary does not create an entitlement or expectation that his or her name be included in the
list of candidates for a judicial vacancy. By submitting an application or accepting a
recommendation, one submits to the authority of the JBC to subject the former to the search,
screening, and selection process, and to use its discretion in deciding whether or not one should be
included in the list. Indeed, assuming that if one has the legal right to be included in the list of
candidates simply because he or she possesses the constitutional and statutory qualifications, then
the application process would then be reduced to a mere mechanical function of the JBC; and the
search, screening, and selection process would not only be unnecessary, but also improper.
However, this is clearly not the constitutional intent. One’s inclusion in the list of candidates is
subject to the discretion of the JBC over the selection of nominees for a particular judicial post. Such
candidate’s inclusion is not, therefore, a legally demandable right, but simply a privilege the
conferment of which is subject to the JBC’s sound discretion.
Moreover, petitioner is essentially seeking a promotional appointment, that is, a promotion from a
first-level court to a second level court. There is no law, however, that grants him the right to a
promotion to second-level courts. (Emphasis in the original)
15
Clearly, to be included as an applicant to second-level judge is not properly compellable by

mandamus inasmuch as it involves the exercise of sound discretion by the JBC.
Three. The petition for declaratory relief is improper. "An action for declaratory relief should be filed
by a person interested under a deed, a will, a contract or other written instrument, and whose rights
are affected by a statute, an executive order, a regulation or an ordinance. The relief sought under
this remedy includes the interpretation and determination of the validity of the written instrument and
the judicial declaration of the parties’ rights or duties thereunder." "[T]he purpose of the action is to
16
secure an authoritative statement of the rights and obligations of the parties under a statute, deed,
contract, etc., for their guidance in its enforcement or compliance and not to settle issues arising
from its alleged breach." 17
In this case, the petition for declaratory relief did not involve an unsound policy. Rather, the petition
specifically sought a judicial declaration that the petitioner has the right to be included in the list of
applicants although he failed to meet JBC’s five-year requirement policy. Again, the Court reiterates
that no person possesses a legal right under the Constitution to be included in the list of nominees
for vacant judicial positions. The opportunity of appointment to judicial office is a mere privilege, and
not a judicially enforceable right that may be properly claimed by any person. The inclusion in the list
of candidates, which is one of the incidents of such appointment, is not a right either. Thus, the
petitioner cannot claim any right that could have been affected by the assailed policy.
Furthermore, the instant petition must necessarily fail because this Court does not have original
jurisdiction over a petition for declaratory relief even if only questions of law are involved. The
18
special civil action of declaratory relief falls under the exclusive jurisdiction of the appropriate RTC
pursuant to Section 19 of Batas Pambansa Blg. 129, as amended by R.A. No. 7691.
19 20
Therefore, by virtue of the Court’s supervisory duty over the JBC and in the exercise of its expanded
judicial power, the Court assumes jurisdiction over the present petition. But in any event, even if the
Court will set aside procedural infirmities, the instant petition should still be dismissed.
Substantive Issues
As an offspring of the 1987 Constitution, the JBC is mandated to recommend appointees to the
judiciary and only those nominated by the JBC in a list officially transmitted to the President may be
appointed by the latter as justice or judge in the judiciary. Thus, the JBC is burdened with a great
responsibility that is imbued with public interest as it determines the men and women who will sit on
the judicial bench. While the 1987 Constitution has provided the qualifications of members of the
judiciary, this does not preclude the JBC from having its own set of rules and procedures and
providing policies to effectively ensure its mandate.
The functions of searching, screening, and selecting are necessary and incidental to the JBC’s
principal function of choosing and recommending nominees for vacancies in the judiciary for
appointment by the President. However, the Constitution did not lay down in precise terms the
process that the JBC shall follow in determining applicants’ qualifications. In carrying out its main
function, the JBC has the authority to set the standards/criteria in choosing its nominees for every
vacancy in the judiciary, subject only to the minimum qualifications required by the Constitution and
law for every position. The search for these long held qualities necessarily requires a degree of
flexibility in order to determine who is most fit among the applicants. Thus, the JBC has sufficient but
not unbridled license to act in performing its duties.
JBC’s ultimate goal is to recommend nominees and not simply to fill up judicial vacancies in order to
promote an effective and efficient administration of justice. Given this pragmatic situation, the JBC
had to establish a set of uniform criteria in order to ascertain whether an applicant meets the
minimum constitutional qualifications and possesses the qualities expected of him and his office.
Thus, the adoption of the five-year requirement policy applied by JBC to the petitioner’s case is
necessary and incidental to the function conferred by the Constitution to the JBC.
Equal Protection
There is no question that JBC employs standards to have a rational basis to screen applicants who
cannot be all accommodated and appointed to a vacancy in the judiciary, to determine who is best
qualified among the applicants, and not to discriminate against any particular individual or class.
The equal protection clause of the Constitution does not require the universal application of the laws
to all persons or things without distinction; what it requires is simply equality among equals as
determined according to a valid classification. Hence, the Court has affirmed that if a law neither
burdens a fundamental right nor targets a suspect class, the classification stands as long as it bears
a rational relationship to some legitimate government end. 21
"The equal protection clause, therefore, does not preclude classification of individuals who may be
accorded different treatment under the law as long as the classification is reasonable and not
arbitrary." "The mere fact that the legislative classification may result in actual inequality is not
22
violative of the right to equal protection, for every classification of persons or things for regulation by
law produces inequality in some degree, but the law is not thereby rendered invalid." 23
That is the situation here. In issuing the assailed policy, the JBC merely exercised its discretion in
accordance with the constitutional requirement and its rules that a member of the Judiciary must be
of proven competence, integrity, probity and independence. "To ensure the fulfillment of these
24
standards in every member of the Judiciary, the JBC has been tasked to screen aspiring judges and
justices, among others, making certain that the nominees submitted to the President are all qualified
and suitably best for appointment. In this way, the appointing process itself is shielded from the
possibility of extending judicial appointment to the undeserving and mediocre and, more importantly,
to the ineligible or disqualified." Consideration of experience by JBC as one factor in choosing
25
recommended appointees does not constitute a violation of the equal protection clause. The JBC
does not discriminate when it employs number of years of service to screen and differentiate
applicants from the competition. The number of years of service provides a relevant basis to
determine proven competence which may be measured by experience, among other factors. The
difference in treatment between lower court judges who have served at least five years and those
who have served less than five years, on the other hand, was rationalized by JBC as follows:
Formulating policies which streamline the selection process falls squarely under the purview of the
JBC. No other constitutional body is bestowed with the mandate and competency to set criteria for
applicants that refer to the more general categories of probity, integrity and independence.
The assailed criterion or consideration for promotion to a second-level court, which is five years
experience as judge of a first-level court, is a direct adherence to the qualities prescribed by the
Constitution. Placing a premium on many years of judicial experience, the JBC is merely applying
one of the stringent constitutional standards requiring that a member of the judiciary be of "proven
competence." In determining competence, the JBC considers, among other qualifications,
experience and performance.
Based on the JBC’s collective judgment, those who have been judges of first-level courts for five(5)
years are better qualified for promotion to second-level courts. It deems length of experience as a
judge as indicative of conversance with the law and court procedure. Five years is considered as a
sufficient span of time for one to acquire professional skills for the next level court, declog the
dockets, put in place improved procedures and an efficient case management system, adjust to the
work environment, and gain extensive experience in the judicial process. A five-year stint in the
Judiciary can also provide evidence of the integrity, probity, and independence of judges seeking
promotion. To merit JBC’s nomination for their promotion, they must have had a "record of, and
reputation for, honesty, integrity, incorruptibility, irreproachable conduct, and fidelity to sound moral
and ethical standards." Likewise, their decisions must be reflective of the soundness of their
judgment, courage, rectitude, cold neutrality and strength of character.
Hence, for the purpose of determining whether judges are worthy of promotion to the next level
court, it would be premature or difficult to assess their merit if they have had less than one year of
service on the bench. (Citations omitted and emphasis in the original)
26
At any rate, five years of service as a lower court judge is not the only factor that determines the
selection of candidates for RTC judge to be appointed by the President. Persons with this
qualification are neither automatically selected nor do they automatically become nominees. The
applicants are chosen based on an array of factors and are evaluated based on their individual
merits. Thus, it cannot be said that the questioned policy was arbitrary, capricious, or made without
any basis.
Clearly, the classification created by the challenged policy satisfies the rational basis test. The
foregoing shows that substantial distinctions do exist between lower court judges with five year
experience and those with less than five years of experience, like the petitioner, and the
classification enshrined in the assailed policy is reasonable and relevant to its legitimate purpose.
The Court, thus, rules that the questioned policy does not infringe on the equal protection clause as
it is based on reasonable classification intended to gauge the proven competence of the applicants.
Therefore, the said policy is valid and constitutional
Due Process
The petitioner averred that the assailed policy violates procedural due process for lack of publication
and non-submission to the University of the Philippines Law Center Office of the National
Administrative Register (ONAR). The petitioner said that the assailed policy will affect all applying
judges, thus, the said policy should have been published.
Contrary to the petitioner’s contention, the assailed JBC policy need not be filed in the ONAR
because the publication requirement in the ONAR is confined to issuances of administrative
agencies under the Executive branch of the government. Since the JBC is a body under the
27
supervision of the Supreme Court, it is not covered by the publication requirements of the
28
Administrative Code.
Nevertheless, the assailed JBC policy requiring five years of service as judges of first-level courts
before they can qualify as applicants to second-level courts should have been published. As a
general rule, publication is indispensable in order that all statutes, including administrative rules that
are intended to enforce or implement existing laws, attain binding force and effect. There are,
however, several exceptions to the requirement of publication, such as interpretative regulations and
those merely internal in nature, which regulate only the personnel of the administrative agency and
not the public. Neither is publication required of the so-called letters of instructions issued by
administrative superiors concerning the rules or guidelines to be followed by their subordinates in the
performance of their duties. 29
Here, the assailed JBC policy does not fall within the administrative rules and regulations exempted
from the publication requirement. The assailed policy involves a qualification standard by which the
JBC shall determine proven competence of an applicant. It is not an internal regulation, because if it
were, it would regulate and affect only the members of the JBC and their staff. Notably, the selection
process involves a call to lawyers who meet the qualifications in the Constitution and are willing to
serve in the Judiciary to apply to these vacant positions. Thus, it is but a natural consequence
thereof that potential applicants be informed of the requirements to the judicial positions, so that they
would be able to prepare for and comply with them.
The Court also noted the fact that in JBC-009, otherwise known as the Rules of the Judicial and Bar
Council, the JBC had put its criteria in writing and listed the guidelines in determining competence,
independence, integrity and probity. Section 1, Paragraph 1 of Rule 9 expressly provides that
applicants for the Court of Appeals and the Sandiganbayan, should, as a general rule, have at least
five years of experience as an RTC judge, thus:
RULE 9 – SPECIAL GUIDELINES FOR NOMINATION TO A VACANCY IN THE COURT OF

APPEALS AND SANDIGANBAYAN
Section 1. Additional criteria for nomination to the Court of Appeals and the Sandiganbayan.–In
addition to the foregoing guidelines the Council should consider the following in evaluating the merits
of applicants for a vacancy in the Court of Appeals and Sandiganbayan:
1. As a general rule, he must have at least five years of experience as a judge of Regional Trial
Court, except when he has in his favor outstanding credentials, as evidenced by, inter alia,
impressive scholastic or educational record and performance in the Bar examinations, excellent
reputation for honesty, integrity, probity and independence of mind; at least very satisfactory
performance rating for three (3) years preceding the filing of his application for nomination; and
excellent potentials for appellate judgeship.
x x x x (Emphasis ours)
The express declaration of these guidelines in JBC-009, which have been duly published on the
website of the JBC and in a newspaper of general circulation suggests that the JBC is aware that
these are not mere internal rules, but are rules implementing the Constitution that should be
published. Thus, if the JBC were so-minded to add special guidelines for determining competence of
applicants for RTC judges, then it could and should have amended its rules and published the same.
This, the JBC did not do as JBC-009 and its amendatory rule do not have special guidelines for
applicants to the RTC.
Moreover, jurisprudence has held that rules implementing a statute should be published. Thus, by
analogy, publication is also required for the five-year requirement because it seeks to implement a
constitutional provision requiring proven competence from members of the judiciary. Nonetheless,
the JBC’s failure to publish the assailed policy has not prejudiced the petitioner’s private interest. At
the risk of being repetitive, the petitioner has no legal right to be included in the list of nominees for
judicial vacancies since the possession of the constitutional and statutory qualifications for
appointment to the Judiciary may not be used to legally demand that one’s name be included in the
list of candidates for a judicial vacancy. One’s inclusion in the shortlist is strictly within the discretion
of the JBC. 30
As to the issue that the JBC failed or refused to implement the completion of the prejudicature
program as a requirement for appointment or promotion in the judiciary under R.A. No. 8557, this
ground of the petition, being unsubstantiated, was unfounded. Clearly, it cannot be said that JBC
unlawfully neglects the performance of a duty enjoined by law.
Finally, the petitioner argued but failed to establish that the assailed policy violates the constitutional
provision under social justice and human rights for equal opportunity of employment. The OSG
explained:
[T]he questioned policy does not violate equality of employment opportunities. The constitutional
provision does not call for appointment to the Judiciary of all who might, for any number of reasons,
wish to apply. As with all professions, it is regulated by the State. The office of a judge is no ordinary
office. It is imbued with public interest and is central in the administration of justice x x x. Applicants
who meet the constitutional and legal qualifications must vie and withstand the competition and
rigorous screening and selection process. They must submit themselves to the selection criteria,
processes and discretion of respondent JBC, which has the constitutional mandate of screening and
selecting candidates whose names will be in the list to be submitted to the President. So long as a
fair opportunity is available for all applicants who are evaluated on the basis of their individual merits
and abilities, the questioned policy cannot be struck down as unconstitutional. (Citations omitted)
31
From the foregoing, it is apparent that the petitioner has not established a clear legal right to justify
the issuance of a preliminary injunction. The petitioner has merely filed an application with the JBC
for the position of RTC judge, and he has no clear legal right to be nominated for that office nor to be
selected and included in the list to be submitted to the President which is subject to the discretion of
the JBC. The JBC has the power to determine who shall be recommended to the judicial post. To be
included in the list of applicants is a privilege as one can only be chosen under existing criteria
imposed by the JBC itself. As such, prospective applicants, including the petitioner, cannot claim any
demandable right to take part in it if they fail to meet these criteria. Hence, in the absence of a clear
legal right, the issuance of an injunctive writ is not justified.
As the constitutional body granted with the power of searching for, screening, and selecting
applicants relative to recommending appointees to the Judiciary, the JBC has the authority to
determine how best to perform such constitutional mandate. Pursuant to this authority, the JBC
issues various policies setting forth the guidelines to be observed in the evaluation of applicants, and
formulates rules and guidelines in order to ensure that the rules are updated to respond to existing
circumstances. Its discretion is freed from legislative, executive or judicial intervention to ensure that
the JBC is shielded from any outside pressure and improper influence. Limiting qualified applicants
in this case to those judges with five years of experience was an exercise of discretion by the JBC.
The potential applicants, however, should have been informed of the requirements to the judicial
positions, so that they could properly prepare for and comply with them. Hence, unless there are
good and compelling reasons to do so, the Court will refrain from interfering with the exercise of
JBC’s powers, and will respect the initiative and independence inherent in the latter.
WHEREFORE, premises considered, the petition is DISMISSED. The Court, however, DIRECTS
that the Judicial and Bar Council comply with the publication requirement of (1) the assailed policy
requiring five years of experience as judges of first-level courts before they can qualify as applicant
to the Regional Trial Court, and (2) other special guidelines that the Judicial and Bar Council is or
will be implementing.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice
WE CONCUR:
(No Part)
MARIA LOURDES P.A. SERENO*
Chief Justice
I concur and also join the

See: Concurring Opinion
Concurring opinion of Justice Brion:
ARTURO D. BRION
Associate Justice
Associate Justice
I join the opinion of J. Brion

LUCAS P. BERSAMIN
DIOSDADO M. PERALTA
Associate Justice
Associate Justice
(On official Leave)

MARTIN S. VILLARAMA, JR.**
Associate Justice
Associate Justice
JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA

(On Leave) See Separate Concurring Opinion

ESTELA M. PERLAS-BERNABE*** MARVIC M.V.F. LEONEN<
(No Part)
FRANCIS H. JARDELEZA*
Associate Justice
CERTIFICATION
of the Court.
ANTONIO T. CARPIO
Associate Justice
Footnotes
* No part.
** On Official Leave.
*** On Leave.
1
Rollo, pp. 3-19.
2
Id. at 70.
3
Id. at 6.
4
Section 10. As soon as PHILJA shall have been fully organized with the composition of its
Corps of Professorial Lecturers and other personnel, only participants who have completed
the programs prescribed by the Academy and have satisfactorily complied with all the
requirements incident thereto may be appointed or promoted to any position or vacancy in
the Judiciary.
5
AN ACT ESTABLISHING THE PHILIPPINE JUDICIAL ACADEMY, DEFINING ITS
POWERS AND FUNCTIONS, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER
PURPOSES
6
Rollo, p. 28.
7
Id. at 40-60.
8
Id. at 68-95.
9
Maria Carolina P. Araullo, etc., et al. v. Benigno Simeon C. Aquino III, etc., et al., G.R. No.
209287, July 1, 2014.
10
G.R. No. 209287, July 1, 2014.
11
Id.
Francis H. Jardeleza v. Chief Justice Maria Lourdes P. A. Sereno, the Judicial and Bar
12
Council and Executive Secretary Paquito N. Ochoa, Jr., G.R. No. 213181, August 19, 2014.
Star Special Watchman and Detective Agency, Inc., Celso A. Fernandez and Manuel V.
13
Fernandez v. Puerto Princesa City, Mayor Edward Hagedorn and City Council of Puerto
Princesa City, G.R. No. 181792, April 21, 2014.
Special People, Inc. Foundation v. Canda, G.R. No. 160932, January 14, 2013, 688 SCRA
14
403, 424.
15
Rollo, pp. 57-58.
16
Malana, et al. v. Tappa, et al.,616 Phil. 177, 186 (2009).
17
Hon. Quisumbing, et al. v. Gov. Garcia, et al., 593 Phil. 655, 674 (2008).
See Bankers Association of the Philippines v. Commission on Elections, G.R. No. 206794,
18
November 27, 2013, 710 SCRA 608, 618.
Section 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise exclusive
19
original jurisdiction:
(1) In all civil actions in which the subject of the litigation is incapable of pecuniary
estimation;
xxxx
(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or
body exercising jurisdiction of any court, tribunal, person or body exercising judicial
or quasi-judicial functions;
xxxx
AN ACT EXPANDING THE JURISDICTION OF THE METROPOLITAN TRIAL COURTS,

20
MUNICIPAL TRIAL COURTS, AND MUNICIPAL CIRCUIT TRIAL COURTS, AMENDING

FOR
THE PURPOSE BATAS PAMBANSA, BLG. 129, OTHERWISE KNOWN AS THE

"JUDICIARY REORGANIZATION ACT OF 1980". Approved on March 25, 1994.
21
Supra note 10.
22
National Power Corporation v. Pinatubo Commercial, 630 Phil. 599, 609 (2010).
23
Garcia v. Drilon, G.R. No. 179267, June 25, 2013, 699 SCRA 352, 419.
24
CONSTITUTION, Article VIII, Section 7(3) states:
3. A Member of the Judiciary must be a person of proven competence, integrity,

probity, and independence.
25
Supra note 12.
26
Rollo, pp. 48-49.
27
Administrative Code, Book VII (Administrative Procedure) provides: Section 1. Scope. –
This Book shall be applicable to all agencies as defined in the next succeeding section,
except the Congress, the Judiciary, the Constitutional Commissions, military establishments
in all matters relating exclusively to Armed Forces personnel, the Board of Pardons and
Parole, and state universities and colleges.
28
1987 CONSTITUTION, Article VIII, Judicial Department states:
Section 8. – A Judicial and Bar Council is hereby created under the supervision of
the Supreme Court x x x.
29
Tañada v. Hon. Tuvera, 230 Phil. 528, 535 (1986).
30
Supra note 12.
31
Rollo, pp. 86-87.
Gonzales v. Serra, 752 SCRA 434
Maritime Industry Authority v. COA 745 SCRA 300
EN BANC
G.R. No. 185812, January 13, 2015
MARITIME INDUSTRY AUTHORITY, Petitioner, v. COMMISSION ON AUDIT, Respondents.
DECISION
LEONEN, J.:
This case involves the validity of the grant of allowance and incentives to the officers and employees of
petitioner Maritime Industry Authority. We revisit the interpretation and application of Section 12 of the
Compensation and Position Classification Act of 1989.1 chanroblesvirtuallawlibrary
The Resident Auditor issued notices of disallowance on the allowances and incentives received by the officers
and employees of Maritime Industry Authority.2 The Legal and Adjudication Office of the Commission on
Audit upheld the notices of disallowance issued.3 The Commission on Audit affirmed the notices of
disallowance.4 Thus, this petition for certiorari was filed by Maritime Industry Authority.
Maritime Industry Authority is an attached agency of the Department of Transportation and Communication
and created under Presidential Decree No. 474.5 chanroblesvirtuallawlibrary
On July 1, 1989, Republic Act No. 6758, otherwise known as “An Act Prescribing a Revised Compensation
and Position Classification System in the Government and For Other Purposes” took effect. The law
standardizes the salary rates of government officials and employees.
Section 12 of Republic Act No. 6758 provides: chanRoblesvirtualLawlibrary
Section 12. Consolidation of Allowances and Compensation. - All allowances, except for
representation and transportation allowances; clothing and laundry allowances; subsistence allowance of
marine officers and crew on board government vessels and hospital personnel; hazard pay; allowances of
foreign service personnel stationed abroad; and such other additional compensation not otherwise specified
herein as may be determined by the DBM, shall be deemed included in the standardized salary rates herein
prescribed. Such other additional compensation, whether in cash or in kind, being received by incumbents
only as of July 1, 1989 not integrated into the standardized salary rates shall continue to be authorized.
Existing additional compensation of any national government official or employee paid from local funds of a
local government unit shall be absorbed into the basic salary of said official or employee and shall be paid by
the National Government.
On September 30, 1989, the Department of Budget and Management issued National Compensation Circular
Nos. 566 and 597 implementing Republic Act No. 6758.
Maritime Industry Authority discontinued the grant of several allowances and incentives to its officials and
employees allegedly due to the issuance of National Compensation Circular Nos. 56 and 59.8 chanroblesvirtuallawlibrary
In the memorandum dated February 10, 2000, the Administrator of Maritime Industry Authority
recommended to then President Joseph Ejercito Estrada the approval and/or restoration of financial
incentives, benefits, or allowances to the officers and employees of Maritime Industry Authority.9 chanroblesvirtuallawlibrary
The allowances and incentives received by the employees and officers of Maritime Industry Authority as of
the date of the memorandum and needing approval of the President are the following:10 chanroblesvirtuallawlibrary
(1) Per diems and commutable allowance received by the members of the Board of Maritime Industry
Authority;11
(2) Rice subsidy allowance;12 and
(3) Medical allowance.13
The allowances and incentives sought to be restored are the following:14 chanroblesvirtuallawlibrary
(1) Reimbursable representation allowance for members of the Board of Maritime Industry Authority;15
(2) Performance incentives allowance;16
(3) Economic/efficiency/financial assistance/benefit;17
(4) Hearing allowance;18 and
(5) Birthday month/off month/employment date anniversary allowances.19
The request to restore these benefits or allowances was premised on “inflation-caused difficulties resulting
to [sic] the exodus of technically/specially trained personnel into the private sector or abroad who shall carry
on the delicate and unique functions of the agency and in consideration of the additional functions of the
agency.”20 The request to restore was also made to “further enhance/provide/promote employees’
welfare/productivity and deter graft and corruption activities.”21 chanroblesvirtuallawlibrary
The memorandum was then allegedly stamped with “approved” on October 16, 2000 with the signature of
the President of the Philippines below the stamp.22 Relying on the alleged approval of the President of the
Philippines, Maritime Industry Authority granted the allowances and incentives to its officers and employees
starting January 2001.23 chanroblesvirtuallawlibrary
The Resident Auditor24 of Maritime Industry Authority then issued the following notices of disallowance with
a total amount of ?5,565,445.02 for the allowances or benefits received by the officers or employees from
January to May 2001:25 chanroblesvirtuallawlibrary
Notice of Date Amount Allowance/Benefit

Disallowance Disallowed Disallowed
No.
2002-002- April 9, 2002 P586,500.00 Rice and Medical Allowance
101(01)26 Allowances of Board Members
and Secretary
2002-005- April 9, 2002 P30,800.00 Rice and Medical Allowance
101(01)27 Representation Allowance of
Board Members and Secretary
2002-006- August 7, P1,635,376.08 Rice and Medical Allowance
101(01)28 2002 Performance Incentive
Allowance for February
Birthday and Employment
Anniversary Bonus
Representation Allowance of
Board Members and Secretary
Allowance
Anniversary Bonus
Allowance
Anniversary Bonus
Anniversary Allowance
The Resident Auditor disallowed the grant of the allowances on the ground that it constituted double
compensation to public officers and employees proscribed by Article IX(b) of the 1987 Constitution, in
relation to Section 229 of the Government Accounting and Auditing Manual or GAAM Volume 1.31Further, the
President’s approval of the memorandum was not the law contemplated by the Constitution as an exception
to the prohibition on double compensation.32 chanroblesvirtuallawlibrary
On October 25, 2002, Maritime Industry Authority filed a request for reconsideration on the notices of
disallowance before the Commission on Audit Director of the Legal and Adjudication Office.33 chanroblesvirtuallawlibrary
The request for reconsideration was denied in the decision dated June 23, 2003.34 It was ruled that the
incentives/allowances, except for medical allowance and per diems of the members of the Board, were
integrated in the basic salary pursuant to the Salary Standardization Law and National Compensation
Circular No. 59.35 On the other hand, the grant of medical allowance and per diems to the members of the
Board is proscribed by Article VII, Section 13 of the 1987 Constitution on double compensation.36 chanroblesvirtuallawlibrary
Maritime Industry Authority filed a petition for review before the Commission on Audit.37 chanroblesvirtuallawlibrary
In the decision38 dated March 3, 2005, the Commission on Audit denied the petition for review except as to
the per diem and monthly commutable allowance of the members of the Board of Maritime Industry
Authority at the rate of ?500.00 for each member per month.39 chanroblesvirtuallawlibrary
The Commission on Audit held that the disallowed allowances are integrated in the standardized salary rates
under Section 12 of Republic Act No. 6758.40 chanroblesvirtuallawlibrary
Further, the alleged approval of the President for the restoration or grant of benefits falls short of a law, as
required by the Constitution for the grant of additional allowance or incentive.41 Even assuming that the
approval of the President is sufficient to grant additional allowance to officers and employees of Maritime
Industry Authority, the authenticity of the memorandum bearing the alleged approval of the President
presented by Maritime Industry Authority was not established.42 Only a photocopy of the memorandum was
presented. A copy of the memorandum was also not on file in the Malacañang Records Office.43 chanroblesvirtuallawlibrary
Maritime Industry Authority’s motion for reconsideration was denied in COA Resolution No. 2008-117 dated
December 9, 2008.44 chanroblesvirtuallawlibrary
Thus, this petition for certiorari was filed by Maritime Industry Authority assailing the Commission on Audit's
decision and resolution affirming the notices of disallowance.
In compliance with the orders45 of this court, the Commission on Audit filed a comment on the petition for
certiorari on June 22, 2009.46 Maritime Industry Authority filed a reply to the comment on August 24,
2009.47chanroblesvirtuallawlibrary
The sole issue in this case is whether the allowance or incentives granted to the officers and employees of
Maritime Industry Authority have legal basis.
We deny the petition.
Commission on Audit did not

commit grave abuse of discretion
The aggrieved party can assail the decision of the Commission on Audit through a petition for certiorari
under Rule 64 before this court. A petition under Rule 64 may prosper only after a finding that the
administrative agency committed grave abuse of discretion amounting to lack or excess of jurisdiction. Not
all errors of the Commission on Audit is reviewable by this court. Thus,
A Rule 65 petition is a unique and special rule because it commands limited review of the question raised. As
an extraordinary remedy, its purpose is simply to keep the public respondent within the bounds of its
jurisdiction or to relieve the petitioner from the public respondent’s arbitrary acts. In this review, the Court
is confined solely to questions of jurisdiction whenever a tribunal, board or officer exercising judicial or
quasi-judicial function acts without jurisdiction or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction. . . .
The limitation of the Court’s power of review over COA rulings merely complements its nature as
an independent constitutional body that is tasked to safeguard the proper use of the government and,
ultimately, the people’s property by vesting it with power to (i) determine whether the government entities
comply with the law and the rules in disbursing public funds; and (ii) disallow legal disbursements of these
funds.48 (Emphasis in the original)
Reviewing the rationale for this standard of judicial review: chanRoblesvirtualLawlibrary
[t]his court has consistently held that findings of administrative agencies are generally respected, unless
found to have been tainted with unfairness that amounted to grave abuse of discretion: chanRoblesvirtualLawlibrary
It is the general policy of the Court to sustain the decisions of administrative authorities, especially one
which is constitutionally-created not only on the basis of the doctrine of separation of powers but also for
their presumed expertise in the laws that they are entrusted to enforce. Findings of administrative agencies
are accorded not only respect but also finality when the decision and order are not tainted with unfairness or
arbitrariness that would amount to grave abuse of discretion. It is only when the COA has acted without or
in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, that
this Court entertains a petition questioning its rulings. There is grave abuse of discretion when there is an
evasion of a positive duty or a virtual refusal to perform a duty enjoined by law or to act in contemplation of
law as when the judgment rendered is not based on law and evidence but on caprice, whim and despotism.49
We find that no grave abuse of discretion amounting to lack or excess of jurisdiction may be attributed to
the Commission on Audit in this case.
II
Position of the parties
Petitioner Maritime Industry Authority argues that the allowances and incentives granted to its officers and
employees are not integrated in the standardized salary.50 It relies on the last clause of the first sentence of
Section 12 of Republic Act No. 6758:51 chanroblesvirtuallawlibrary
representation and transportation allowances; clothing and laundry allowances; subsistence allowance of
marine officers and crew on board government vessels and hospital personnel; hazard pay; allowances of
foreign service personnel stationed abroad; and such other additional compensation not otherwise specified
herein as may be determined by the DBM, shall be deemed included in the standardized salary rates herein
prescribed. Such other additional compensation, whether in cash or in kind, being received by incumbents
only as of July 1, 1989 not integrated into the standardized salary rates shall continue to be authorized.
the National Government. (Emphasis supplied)
Petitioner Maritime Industry Authority understands the clause as requiring a subsequent issuance by the
Department of Budget and Management so that other allowances or benefits not specifically enumerated in
the provision will be excluded. It insists that a circular must be issued by the Department of Budget and
Management for a specific allowance to be deemed integrated in the standardized salary pursuant to Section
12 of Republic Act No. 6758.
Since the National Compensation Circular No. 59, the circular issued by the Department of Budget and
Management implementing Section 12, was not published, there can be no allowance deemed integrated in
the standardized salary rates.52 It relies on Philippine Ports Authority hired after July 1, 1989 v. Commission
on Audit53 where this court held the following: chanRoblesvirtualLawlibrary
However, because of its lack of publication in either the Official Gazette or in a newspaper of general
circulation, DBM-CCC No. 10 was declared ineffective on August 12, 1998, in De Jesus v. COA, which we
quote:chanRoblesvirtualLawlibrary
In the present case under scrutiny, it is decisively clear that D[B]M-CCC No. 10, which completely disallows
payment of allowances and other additional compensation to government officials and employees, starting
November 1, 1989, is not a mere interpretative or internal regulation. It is something more than that. And
why not, when it tends to deprive government workers of their allowances and additional compensation
sorely needed to keep body and soul together. At the very least, before the said circular under attack may
be permitted to substantially reduce their income, the government officials and employees concerned should
be apprised and alerted by the publication of the subject circular in the Official Gazette or in a newspaper of
general circulation in the Philippines – to the end that they be given amplest opportunity to voice out
whatever opposition they may have, and to ventilate their stance on the subject matter. This approach is
more in keeping with democratic precepts and rudiments of fairness and transparency. cralawred
In other words, during the period that DBM-CCC No. 10 was in legal limbo, the COLA and the amelioration
allowance were not effectively integrated into the standardized salaries.
Hence, it would be incorrect to contend that because those allowances were not effectively integrated under
the first sentence, then they were “non-integrated benefits” falling under the second sentence of Section 12
of RA 6758. Their characterization must be deemed to have also been in legal limbo, pending the effectivity
of DBM-CCC No. 10. Consequently, contrary to the ruling of the COA, the second sentence does not apply to
the present case. By the same token, the policy embodied in the provision — the non-diminution of benefits
in favour of incumbents as of July 1, 1989 — is also inapplicable.
The parties fail to cite any law barring the continuation of the grant of the COLA and the amelioration
allowance during the period when DBM-CCC No. 10 was in legal limbo.54
On the other hand, respondent Commission on Audit interprets Section 12 of Republic Act No. 6758
differently. It considers all allowances as deemed included in the standardized salary except those
specifically enumerated in Section 12 of Republic Act No. 6758.55 The issuance of a circular by the
Department of Budget and Management is necessary only for the grant of allowance other than those
enumerated under Section 12 of Republic Act No. 6758 in addition to the standardized salary.56Respondent
Commission on Audit relies on PPA Employees Hired After 01 July 1989 v. COA57 and NAPOCOR Employees
Consolidated Union v. National Power Corporation.58 chanroblesvirtuallawlibrary
In PPA Employees Hired After 01 July 1989 v. COA, et al., 59 this court held that the Department of Budget
and Management’s issuance is only for the purpose of identifying additional non-integrated benefits, over
and above the standardized salary rates.
Then in NAPOCOR Employees Consolidated Union v. National Power Corporation,60 this court stated: chanRoblesvirtualLawlibrary
Section 12 of Rep. Act No. 6758 lays down the general rule that all allowances of state workers are to be
included in their standardized salary rates. Exempted from integration to the standardized salary rates, as
specified in the aforequoted provision of Section 12 of Rep. Act No. 6758, are only the following
allowances: chanRoblesvirtualLawlibrary
(1) representation and transportation allowances (RATA);

(2) clothing and laundry allowances;
(3) subsistence allowances of marine officers and crew on board
government vessels;
(4) subsistence allowance of hospital personnel;
(5) hazard pay;
(6) allowance of foreign service personnel stationed abroad; and
(7) such other additional compensation not otherwise specified herein as
may be determined by the DBM.
Otherwise stated, the foregoing are the only allowances which government employees can continue to
receive in addition to their standardized salary rates. The employee welfare allowance of NPC personnel is
clearly not among the allowances listed above which State workers can continue to receive under Rep. Act
No. 6758 over and above their standardized salary rates. We must emphasize that Rep. Act No. 6758 does
not require that DBM should first define those allowances that are to be integrated with the standardized
salary rates of government employees before NPC could integrate the employee welfare allowance into its
employees’ salaries. Thus, despite our ruling in De Jesus which thwarted the attempt of DBM in DBM-CCC
No. 10 to complete the list of allowances exempted from integration, NPC is allowed under Rep. Act No.
6758 to integrate employee welfare allowance into the employees’ standardized salary rates.61
Respondent Commission on Audit argues that the alleged lack of publication of National Compensation
Circular No. 59 does not affect the integration of allowances into the standardized salary.62 Section 12 of
Republic Act No. 6758 is in itself executory in that allowances and benefits are deemed integrated in the
standardized salary except those specifically exempted.
Further, the nature of the allowances and incentives in this case is not similar to that of the enumerated
exceptions in Section 12 of Republic Act No. 6758.63 As held in Bureau of Fisheries and Aquatic Resources
Employees Union v. Commission on Audit,64 the “benefits excluded from the standardized salary rates are
the ‘allowances’ or those which are usually granted to officials and employees of the government to defray
or reimburse the expenses incurred in the performance of their official functions.”65 chanroblesvirtuallawlibrary
Finally, respondent Commission on Audit points out that there is no law that authorizes the grant of the
allowances and incentives in addition to the salaries of the officers and employees of petitioner Maritime
Industry Authority.66
Respondent Commission on Audit points out that the alleged approval of the President was contained in a
mere photocopy of the memorandum dated February 10, 2000. It purportedly bears the approval and
signature of the President for the grant of the allowances and incentives.67 The original was not presented
during the proceedings.
III
The concept of integration of allowances
The consolidation of allowances in the standardized salary in Section 12 of Republic Act No. 6758 is a new
rule in the Philippine position classification and compensation system. The previous laws68 on standardization
of compensation of government officials and employees do not have this provision.
Presidential Decree No. 985,69 as amended by Presidential Decree No. 1597,70 the law prior to Republic Act
No. 6758, repealed all laws, decrees, executive orders, and other issuances or parts thereof that authorize
the grant of allowances of certain positions and employees.71 Under Presidential Decree No. 985, allowances,
honoraria, and other fringe benefits may only be granted to government employees upon approval of the
President with the recommendation of the Commissioner of the Budget Commission.72 chanroblesvirtuallawlibrary
Being a new rule, Section 12 of Republic Act No. 6758 raised several questions among government
employees. Petitions were filed before this court involving the Commission on Audit’s disallowance of the
grant of allowances and incentives to government employees. This court already settled the issues and
matters raised by petitioner Maritime Industry Authority.
The clear policy of Section 12 is “to standardize salary rates among government personnel and do away with
multiple allowances and other incentive packages and the resulting differences in compensation among
them.”73 Thus, the general rule is that all allowances are deemed included in the standardized
salary.74 However, there are allowances that may be given in addition to the standardized salary. These non-
integrated allowances are specifically identified in Section 12, to wit:
1. representation and transportation allowances;

2. clothing and laundry allowances;
3. subsistence allowance of marine officers and crew on board government vessels;
4. subsistence allowance of hospital personnel;
5. hazard pay; and
6. allowances of foreign service personnel stationed abroad.75
In addition to the non-integrated allowances specified in Section 12, the Department of Budget and
Management is delegated the authority to identify other allowances that may be given to government
employees in addition to the standardized salary.76 chanroblesvirtuallawlibrary
Action by the Department of Budget and Management is not required to implement Section 12 integrating
allowances into the standardized salary.77 Rather, an issuance by the Department of Budget and
Management is required only if additional non-integrated allowances will be identified. Without this issuance
from the Department of Budget and Management, the enumerated non-integrated allowances in Section 12
remain exclusive.78chanroblesvirtuallawlibrary
This court has repeatedly clarified the last clause of the first sentence of Section 12: “and such other
additional compensation not otherwise specified herein as may be determined by the DBM.”
In Abellanosa v. Commission on Audit,79 this court held that: chanRoblesvirtualLawlibrary
R.A. 6758 further reinforced this policy by expressly decreeing that all allowances not specifically mentioned
therein, or as may be determined by the DBM, shall be deemed included in the standardized salary rates
prescribed.80
In Napocor Employees Consolidation Union v. The National Power Corporation,81 this court held that Section
12 of Republic Act No. 6758 is self-executing. It is not required that allowances must be listed for these to
be considered integrated in the standardized salary. This court said: chanRoblesvirtualLawlibrary
Otherwise stated, the foregoing are the only allowances which government employees can continue to
receive in addition to their standardized salary rates. The employee welfare allowance of NPC personnel is
clearly not among the allowances listed above which State workers can continue to receive under Rep. Act
No. 6758 over and above their standardized salary rates. We must emphasize that Rep. Act No. 6758
does not require that DBM should first define those allowances that are to be integrated in the
standardized salary rates of government employees before NPC could integrate the employee
welfare allowance into its employees' salaries. Thus, despite our ruling in De Jesus which thwarted the
attempt of DBM-CCC No. 10 to complete the list of allowances exempted from integration, NPC is allowed
under Rep. Act No. 6758 to integrate the employee welfare allowance into the employees' standardized
salary rates.82 (Emphasis supplied)
In Benguet State University v. Commission on Audit,83 this court held that the rice subsidy and health care
allowance “were not among the allowances listed in Section 12 which State workers can continue to receive
under R.A. No. 6758 over and above their standardized salary rates.”84 chanroblesvirtuallawlibrary
We cannot subscribe to petitioner Maritime Industry Authority’s contention that due to the non-publication of
the Department of Budget and Management’s National Compensation Circular No. 59, it is considered invalid
that results in the non-integration of allowances in the standardized salary.
The Department of Budget and Management’s National Compensation Circular No. 59 issued on September
30, 1989 enumerates the allowances/additional compensation of government employees that are deemed
integrated into the basic salary. It does not identify an allowance that should not be deemed as integrated in
the basic salary of government employees.
As held in Philippine International Trading Corporation v. Commission on Audit,85 the non-publication of the
Department of Budget and Management’s issuance enumerating allowances that are deemed integrated in
the standardized salary will not affect the execution of Section 12 of Republic Act No. 6758. Thus: chanRoblesvirtualLawlibrary
There is no merit in the claim of PITC that R.A. No. 6758, particularly Section 12 thereof is void because
DBM-Corporate Compensation Circular No. 10, its implementing rules, was nullified in the case of De Jesus
v. Commission on Audit, for lack of publication. The basis of COA in disallowing the grant of SFI was Section
12 of R.A. No. 6758 and not DBM-CCC No. 10. Moreover, the nullity of DBM-CCC No. 10 will not affect the
validity of R.A. No. 6758. It is a cardinal rule in statutory construction that statutory provisions control the
rules and regulations which may be issued pursuant thereto. Such rules and regulations must be consistent
with and must not defeat the purpose of the statute. The validity of R.A. No. 6758 should not be made to
depend on the validity of its implementing rules.86
In Gutierrez v. Department of Budget and Management,87 this court held that: chanRoblesvirtualLawlibrary
“all allowances” were deemed integrated into the standardized salary rates except the following: chanRoblesvirtualLawlibrary
(1) representation and transportation allowances;

(2) clothing and laundry allowances;
(3) subsistence allowances of marine officers and crew on board government vessels;
(4) subsistence allowances of hospital personnel;
(5) hazard pay;
(6) allowances of foreign service personnel stationed abroad; and
(7) such other additional compensation not otherwise specified in Section 12 as may be determined by the
DBM. cralawred
But, while the provision enumerated certain exclusions, it also authorized the DBM to identify such other
additional compensation that may be granted over and above the standardized salary rates. In Philippine
Ports Authority Employees Hired After July 1, 1989 v. Commission on Audit, the Court has ruled that while
Section 12 could be considered self-executing in regard to items (1) to (6), it was not so in regard to item
(7). The DBM still needed to amplify item (7) since one cannot simply assume what other allowances were
excluded from the standardized salary rates. It was only upon the issuance and effectivity of the
corresponding implementing rules and regulations that item (7) could be deemed legally completed.
....
In this case, the DBM promulgated NCC 59 [and CCC 10]. But, instead of identifying some of the additional
exclusions that Section 12 of R.A. 6758 permits it to make, the DBM made a list of what allowances and
benefits are deemed integrated into the standardized salary rates. More specifically, NCC 59 identified the
following allowances/additional compensation that are deemed integrated: chanRoblesvirtualLawlibrary
....
The drawing up of the above list is consistent with Section 12 above. R.A. 6758 did not prohibit the DBM
from identifying for the purpose of implementation what fell into the class of “all allowances.” With respect
to what employees’ benefits fell outside the term apart from those that the law specified, the DBM, said this
Court in a case, needed to promulgate rules and regulations identifying those excluded benefits. This leads
to the inevitable conclusion that until and unless the DBM issues such rules and regulations, the enumerated
exclusions in items (1) to (6) remain exclusive. Thus so, not being an enumerated exclusion, COLA is
deemed already incorporated in the standardized salary rates of government employees under the general
rule of integration.88
Petitioner Maritime Industry Authority’s reliance on Philippine Ports Authority Employees Hired After July 1,
1989 v. Commission on Audit is misplaced. As this court clarified in Napocor Employees Consolidated Union
v. National Power Corporation,89 the ruling in Philippine Ports Authority Employees Hired After July 1, 1989
was limited to distinguishing the benefits that may be received by government employees who were hired
before and after the effectivity of Republic Act No. 6758. Thus:chanRoblesvirtualLawlibrary
[t]he Court has, to be sure, taken stock of its recent ruling in Philippine Ports Authority (PPA) Employees
Hired After July 1, 1989 vs. Commission on Audit. Sadly, however, our pronouncement therein is not on all
fours applicable owing to the differing factual milieu. There, the Commission on Audit allowed the payment
of back cost of living allowance (COLA) and amelioration allowance previously withheld from PPA employees
pursuant to the heretofore ineffective DBM – CCC No. 10, but limited the back payment only to incumbents
as of July 1, 1989 who were already then receiving both allowances. COA considered the COLA and
amelioration allowance of PPA employees as “not integrated”within the purview of the second sentence of
Section 12 of Rep. Act No. 6758, which, according to COA confines the payment of “not integrated” benefits
only to July 1, 1989 incumbents already enjoying the allowances.
In setting aside COA’s ruling, we held in PPA Employees that there was no basis to use the elements of
incumbency and prior receipt as standards to discriminate against the petitioners therein. For, DBM-CCC No.
10, upon which the incumbency and prior receipt requirements are contextually predicated, was in legal
limbo from July 1, 1989 (effective date of the unpublished DBM-CCC No. 10) to March 16, 1999 (date of
effectivity of the heretofore unpublished DBM circular). And being in legal limbo, the benefits otherwise
covered by the circular, if properly published, were likewise in legal limbo as they cannot be classified either
as effectively integrated or not integrated benefits.90
Similar to what was stated in Napocor Employees Consolidated Union, the “element of discrimination
between incumbents as of July 1, 1989 and those joining the force thereafter is not obtaining in this case.”
The second sentence of the first paragraph of Section 12, Republic Act No. 6758 is not in issue.
V
Additional allowances that

may be identified and granted
to government employees
Other than those specifically enumerated in Section 12, non-integrated allowances, incentives, or benefits,
may still be identified and granted to government employees. This is categorically allowed in Republic Act
No. 6758. This is also in line with the President’s power of control over executive departments, bureaus, and
offices.
These allowances, however, cannot be granted indiscriminately. Otherwise, the purpose and mandate of
Republic Act No. 6758 will be defeated.
Republic Act No. 6758 was enacted to promote “the policy of the State to provide equal pay for substantially
equal work and to base differences in pay upon substantive differences in duties and responsibilities, and
qualification requirements of the positions.”91 The law lists down the factors that should guide the
Department of Budget and Management in preparing the index of occupational services, to wit: chanRoblesvirtualLawlibrary
1. the education and excellence required to perform the duties and responsibilities of the position;
2. the nature and complexity of the work to be performed;
3. the kind of supervision received;
4. mental and/or physical strain required in the completion of the work;
5. nature and extent of internal and external relationships;
6. kind of supervision exercised;
7. decision-making responsibility;
8. responsibility for accuracy of records and reports;
9. accountability for funds, properties, and equipment; and
10. hardship, hazard, and personal risk involved in the job.92
The factors to determine the salary grades corresponding to each position of a government employee do not
take into consideration the peculiar characteristics of each government office where performance of the
same work may entail different necessary expenses for the employee. For instance, some employees in the
Bureau of Customs may require expenses pertaining to security to properly execute their duties as
compared to employees in the Department of Trade and Industry. Republic Act No. 6758 recognizes this
when it allowed certain allowances in addition to the standardized salary due to the nature of the office.
Section 12 of the law excludes from the standardized salary allowances to be given to marine officers and
crew on board government vessels and hospital personnel, and foreign service personnel stationed
abroad.93chanroblesvirtuallawlibrary
Thus, it must be shown that additional non-integrated allowances are given to government employees of
certain offices due to the unique nature of the office and of the work performed by the employee.
Further, the non-integrated allowances that may be granted in addition to those specifically enumerated in
Section 12 of Republic Act No. 6758 should be in the nature similar to those enumerated in the provision,
that is, they are amounts needed by the employee in the performance of his or her duties.94 chanroblesvirtuallawlibrary
[T]he benefits excluded from the standardized salary rates are the “allowances” or those which are usually
granted to officials and employees of the government to defray or reimburse the expenses incurred in the
performance of their official functions.
....
In Philippine Ports Authority v. Commission on Audit, we explained that if these allowances were
consolidated with the standardized salary rates, then government officials or employees would be compelled
to spend their personal funds in attending to their duties.95
In National Tobacco Administration v. Commission on Audit,96 this court held that educational assistance is
not an allowance that may be granted in addition to the standardized salary.
Analyzing No. 7, which is the last clause of the first sentence of Section 12, in relation to the other benefits
therein enumerated, it can be gleaned unerringly that it is a “catch-all proviso.” Further reflection on the
nature of subject fringe benefits indicates that all of them have one thing in common - they belong to one
category of privilege calledallowances which are usually granted to officials and employees of the
government to defray or reimburse the expenses incurred in the performance of their official
functions.In Philippine Ports Authority vs. Commission on Audit, this Court rationalized that “if these
allowances are consolidated with the standardized rate, then the government official or employee will be
compelled to spend his personal funds in attending to his duties.”
The conclusion - that the enumerated fringe benefits are in the nature of allowance - finds support in sub-
paragraphs 5.4 and 5.5 of CCC No. 10.
Sub-paragraph 5.4 enumerates the allowance/fringe benefits which are not integrated into the basic salary
and which may be continued after June 30, 1989 subject to the condition that the grant of such benefit is
covered by statutory authority, to wit:chanRoblesvirtualLawlibrary
(1) RATA;
(2) Uniform and Clothing allowances;
(3) Hazard pay;
(4) Honoraria/additional compensation for employees on detail with special projects or inter-agency
undertakings;
(5) Honoraria for services rendered by researchers, experts and specialists who are of acknowledged
authorities in their fields of specialization;
(6) Honoraria for lectures and resource persons or speakers;
(7) Overtime pay in accordance to Memorandum Order No. 228;
(8) Clothing/laundry allowances and subsistence allowance of marine officers and crew on board
GOCCs/GFIs owned vessels and used in their operations, and of hospital personnel who attend directly to
patients and who by nature of their duties are required to wear uniforms;
(9) Quarters Allowance of officials and employees who are presently entitled to the same;
(10) Overseas, Living Quarters and other allowances presently authorized for personnel stationed abroad;
(11) Night differential of personnel on night duty;
(12) Per Diems of members of the governing Boards of GOCCs/GFIs at the rate as prescribed in their
respective Charters;
(13) Flying pay of personnel undertaking aerial flights;
(14) Per Diems/Allowances of Chairman and Members or Staff of collegial bodies and Committees; and
(15) Per Diems/Allowances of officials and employees on official foreign and local travel outside of their
official station.
In addition, sub-paragraph 5.5 of the same Implementing Rules provides for the other allowances/fringe
benefits not likewise integrated into the basic salary and allowed to be continued only for incumbents as of
June 30, 1989 subject to the condition that the grant of the same is with appropriate authorization either
from the DBM, Office of the President or legislative issuances, as follows:chanRoblesvirtualLawlibrary
(1) Rice Subsidy;

(2) Sugar Subsidy;
(3) Death Benefits other than those granted by the GSIS;
(4) Medical/Dental/Optical Allowances/Benefits;
(5) Children’s Allowances;
(6) Special Duty Pay/Allowance;
(7) Meal Subsidy;
(8) Longevity Pay; and
(9) Teller’s Allowance.
On the other hand, the challenged financial incentive is awarded by the government in order to encourage
the beneficiaries to pursue further studies and to help them underwrite the expenses for the education of
their children and dependents. In other words, subject benefit is in the nature of financial assistance and not
of an allowance. For the former, reimbursement is not necessary while for the latter, reimbursement is
required. Not only that, the former is basically an incentive wage which is defined as “abonus or other
payment made to employees in addition to guaranteed hourly wages” while the latter cannot be reckoned
with as a bonus or additional income, strictly speaking.
It is indeed decisively clear that the benefits mentioned in the first sentence of Section 12 and sub-
paragraphs 5.4 and 5.5 of CCC No. 10 are entirely different from the benefit in dispute, denominated as
Educational Assistance. The distinction elucidated upon is material in arriving at the correct interpretation of
the two seemingly contradictory provisions of Section 12.
Cardinal is the rule in statutory construction “that the particular words, clauses and phrases should not be
studied as detached and isolated expressions, but the whole andevery part of the statute must be
considered in fixing the meaning of any of its parts and in order to produce a harmonious whole. A statute
must so construed as to harmonize and give effect to all its provisions whenever possible.” And the rule -
that statute must be construed as a whole - requires that apparently conflicting provisions should be
reconciled and harmonized, if at all possible. It is likewise a basic precept in statutory construction that
the intent of the legislature is the controlling factor in the interpretation of the subject statute. With these
rules and the foregoing distinction elaborated upon, it is evident that the two seemingly irreconcilable
propositions are susceptible to perfect harmony. Accordingly, the Court concludes that under the
aforesaid “catch-all proviso,” the legislative intent is just to include the fringe benefits which are in the
nature ofallowances and since the benefit under controversy is not in the same category, it is safe to hold
that subject educational assistance is not one of the fringe benefits within the contemplation of the first
sentence of Section 12 but rather, of the second sentence of Section 12, in relation to Section 17 of R.A. No.
6758, considering that (1) the recipients were incumbents when R.A. No. 6758 took effect on July 1,
1989, (2) were, in fact, receiving the same, at the time, and (3) such additional compensation is distinct and
separate from the specific allowances above-listed, as the former is not integrated into the standardized
salary rate. Simply stated, the challenged benefit is covered by the second sentence of Section 12 of R.A.
No. 6758, the application of sub-paragraphs 5.4 and 5.5 of CCC No. 10 being only confined to the first
sentence of Section 12, particularly the last clause thereof which amplifies the “catch-all
proviso.”97 (Citations omitted)
In Bureau of Fisheries and Aquatic Resources Employees Union v. Commission on Audit,98 this court affirmed
the disallowance of the grant of the food basket allowance in the amount of P10,000.00 to employees of the
Bureau of Fisheries and Aquatic Resources. This court held: chanRoblesvirtualLawlibrary
In the instant case, the Food Basket Allowance is definitely not in the nature of an allowance to reimburse
expenses incurred by officials and employees of the government in the performance of their official
functions. It is not payment in consideration of the fulfilment of official duty. It is a form of financial
assistance to all officials and employees of BFAR. Petitioner itself stated that the Food Basket Allowance has
the purpose of alleviating the economic condition of BFAR employees.99
VI
Who identifies and grants
Respondent Commission on Audit argues that the alleged approval by the President is not a law that would
allow the grant of allowances and benefits to the employees of petitioner Maritime Industry Authority.
Section 12 of Republic Act No. 6758 does not require the enactment of a law to exclude benefits or
allowances from the standardized salary. What is required is a determination by the Department of Budget
and Management of the non-integrated benefits or allowances. In Abakada Guro Party List v. Purisima:100 chanroblesvirtuallawlibrary
Congress has two options when enacting legislation to define national policy within the broad horizons of its
legislative competence. It can itself formulate the details or it can assign to the executive branch the
responsibility for making necessary marginal decisions in conformity with those standards. In the latter case,
the law must be complete in all its essential terms and conditions when it leaves the hands of the
legislature. Thus, what is left for the executive branch or the concerned administrative agency when it
formulates rules and regulations implementing the law is to fill up details (supplementary rule-making) or
ascertain facts necessary to bring the law into actual operation (contingent rule-making).101 (Citations
omitted)
The law delegated to the executive branch the filling in of other allowances and benefits that should be
excluded from the standardized salary. It specifically identifies the Department of Budget and Management
to carry out the task. However, this does not exclude the President from identifying the excluded allowances
or benefits himself, the Secretary of the Department of Budget and Management being an alter ego of the
President. Of course, the performance of this task must still be in accordance with the parameters laid down
in Republic Act No. 6758.102 As this court held in Chavez v. Romulo:103 chanroblesvirtuallawlibrary
at the apex of the entire executive officialdom is the President. Section 17, Article VII of the Constitution
specifies his power as Chief Executive, thus: “The President shall have control of all the executive
departments, bureaus and offices. He shall ensure that the laws be faithfully executed.” As Chief
Executive, President Arroyo holds the steering wheel that controls the course of her government. She lays
down policies in the execution of her plans and programs. Whatever policy she chooses, she has her
subordinates to implement them. In short, she has the power of control. Whenever a specific function is
entrusted by law or regulation to her subordinate, she may act directly or merely direct the
performance of a duty. Thus, when President Arroyo directed respondent Ebdane to suspend the issuance
of PTCFOR, she was just directing a subordinate to perform an assigned duty. Such act is well within the
prerogative of her office.104 (Emphasis in the original)
VII
Constitutional and Fiscal

Autonomy Group
We must, however, differentiate the guidelines for the grant of allowances and benefits to officials and
employees of members of the Constitutional and Fiscal Autonomy Group. The judiciary, Civil Service
Commission, Commission on Audit, Commission on Elections, and the Office of the Ombudsman are granted
fiscal autonomy by the Constitution.105 The fiscal autonomy enjoyed by the Constitutional and Fiscal
Autonomy Group is an aspect of the members’ independence guaranteed by the Constitution.106Their
independence is a necessary component for their existence and survival in our form of government.
In Bengzon v. Drilon,107 this court said: chanRoblesvirtualLawlibrary
As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil Service
Commission, the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman
contemplates a guarantee of full flexibility to allocate and utilize their resources with the wisdom and
dispatch that their needs require. It recognizes the power and authority to levy, assess and collect fees, fix
rates of compensation not exceeding the highest rates authorized by law for compensation and pay loans of
the government and allocate and disburse such sums as may be provided by law or prescribed by them in
the course of the discharge of their functions.108
As this court held in Re: COA Opinion on the Computation of the Appraised Value of the Properties
Purchased by the Retired Chief/Associate Justices of the Supreme Court,109 “real fiscal autonomy covers the
grant to the Judiciary of the authority to use and dispose of its funds and properties at will, free from any
outside control or interference.”110 This includes the judgment to use its funds to provide additional
allowances and benefits to its officials and employees deemed to be necessary and relevant in the
performance of their functions in the office. Due to the nature of the functions of the Constitutional and
Fiscal Autonomy Group and the constitutional grant of fiscal autonomy, an issuance by the Department of
Budget and Management or any other agency of the government is not necessary to exclude an allowance
or benefit from the standardized salary.
The entity entrusted by Republic Act No. 6758 to determine the benefits and allowances that are not
deemed integrated is the Department of Budget and Management. It studies the necessity and
reasonableness of the grant of the allowance and, more importantly, its practicability, that is, whether the
government has enough budget to grant the allowance. This is in line with our form of government where
the “sound management and effective utilization of financial resources of government are basically executive
functions.”111 On the other hand, the budget of the Constitutional and Fiscal Autonomy Group is
constitutionally mandated to be released regularly. How these constitutional bodies manage and utilize their
budget is within their prerogative and authority to determine. The officials of the Constitutional and Fiscal
Autonomy Group can determine whether the budget allocated and released by the government to them can
deliver the allowances and benefits its employees will receive. The executive cannot interfere with how funds
will be used or disbursed without violating the separation of powers.
Allowing the President or his or her alter ego to dictate the allowances or benefits that may be received by
the officers and employees of the Constitutional and Fiscal Autonomy Group will undermine their
independence. This arrangement is repugnant to their autonomy enshrined by the Constitution. As said
in Velasco v. Commission on Audit,112 the grant or regulation of the grant of productivity incentive allowance
or similar benefits are in the exercise of the President’s power of control over these entities. Not being under
the President’s power of control, the Constitutional and Fiscal Autonomy Group should be able to determine
the allowances or benefits that suit the functions of the office.
Nonetheless, expenditures of government funds by the Constitutional and Fiscal Autonomy Group are still
audited by the Commission on Audit on a post-audit basis.113 chanroblesvirtuallawlibrary
VIII
No proof of grant of allowance

by the President or the Department
of Budget and Management
Petitioner Maritime Industry Authority relies on the alleged approval by then President Estrada of its
memorandum dated February 10, 2000. Respondent Commission on Audit counters that the original
memorandum was not presented by petitioner Maritime Industry Authority. Further, the alleged approval is
not a law authorizing the grant of additional compensation or benefits to government employees.
Article VI, Section 29 of the 1987 Constitution provides, “[n]o money shall be paid out of the Treasury
except in pursuance of an appropriation made by law.”
Further, before public funds may be disbursed for salaries and benefits to government officers and
employees, it must be shown that these are commensurate to the services rendered and necessary or
relevant to the functions of the office. “Additional allowances and benefits must be shown to be necessary or
relevant to the fulfillment of the official duties and functions of the government officers and
employees.”114 chanroblesvirtuallawlibrary
In Yap v. Commission on Audit,115 this court laid down two general requisites before a benefit may be
granted to government officials or employees. First is that the allowances and benefits were authorized by
law and second, that there was a direct and substantial relationship between the performance of public
functions and the grant of the disputed allowances. Thus: chanRoblesvirtualLawlibrary
[t]o reiterate, the public purpose requirement for the disbursement of public funds is a valid limitation on
the types of allowances and benefits that may be granted to public officers. It was incumbent upon
petitioner to show that his allowances and benefits were authorized by law and that there was a direct and
substantial relationship between the performance of his public functions and the grant of the disputed
allowances to him.116
The burden of proving the validity or legality of the grant of allowance or benefits is with the government
agency or entity granting the allowance or benefit, or the employee claiming the same. After the Resident
Auditor issues a notice of disallowance, the aggrieved party may appeal the disallowance to the Director
within six (6) months from receipt of the decision.117 At this point, the government agency or employee has
the chance to prove the validity of the grant of allowance or benefit. If the appeal is denied, a petition for
review may be filed before the Commission on Audit Commission Proper.118 Finally, the aggrieved party may
file a petition for certiorari before this court to assail the decision of the Commission on Audit Commission
Proper.119
Our laws and procedure have provided the aggrieved party several chances to prove the validity of the grant
of the allowance or benefit.
To prove the validity of the allowances granted, petitioner Maritime Industry Authority presented a
photocopy of the memorandum with an “approved” stamped on the memorandum. Below the stamp is the
signature of then President Estrada.
We cannot rule on the validity of the alleged approval by the then President Estrada of the grant of
additional allowances and benefits. Petitioner Maritime Industry Authority failed to prove its existence. The
alleged approval of the President was contained in a mere photocopy of the memorandum dated February
10, 2000. The original was not presented during the proceedings. A copy of the document is not in the
Malacañang Records Office.
IX
The grant of allowances and

benefits amounts to double
compensationproscribed by
Article IX(B), Section 8 of
the 1987 Constitution
Article IX(B), Section 8 of the 1987 Constitution provides: chanRoblesvirtualLawlibrary
Section 8. No elective or appointive public officer or employee shall receive additional, double, or indirect
compensation, unless specifically authorized by law, nor accept without the consent of the Congress, any
present, emolument, office, or title of any kind from any foreign government.
Pensions or gratuities shall not be considered as additional, double, or indirect compensation.
Petitioner Maritime Industry Authority argues that the rule against double compensation does not apply
because National Compensation Circular No. 59 is ineffectual due to its non-publication.120 chanroblesvirtuallawlibrary
Respondent Commission on Audit counters that the disallowed allowances is tantamount to additional
compensation proscribed by Article IX(B), Section 8 of the 1987 Constitution.121 This is because these
allowances are not authorized by law.
Republic Act No. 6758 deems all allowances and benefits received by government officials and employees as
incorporated in the standardized salary, unless excluded by law or an issuance by the Department of Budget
and Management. The integration of the benefits and allowances is by legal fiction.122 chanroblesvirtuallawlibrary
The disallowed benefits and allowances of petitioner Maritime Industry Authority’s officials and employees
were not excluded by law or an issuance by the Department of Budget and Management. Thus, these were
deemed already given to the officials and employees when they received their basic salaries. Their receipt of
the disallowed benefits and allowances was tantamount to double compensation.
Petitioner Maritime Industry

Authority was not denied due
process in the disallowance of
the allowances and benefits
Petitioner Maritime Industry Authority argues that it was denied administrative due process.123Respondent
Commission on Audit affirmed the notices of disallowance on the basis of provisions of law that are different
from the bases cited in the notices of disallowance.124 chanroblesvirtuallawlibrary
Respondent Commission on Audit does not deny that other grounds were relied upon to affirm the
disallowance of the allowances given to the officers and employees of petitioner Maritime Industry Authority.
However, it argues that this is pursuant to its mandate under Article IX(D), Section 2 of the 1987
Constitution125 and is a necessary incident of its appellate jurisdiction as provided in Rule II, Section 4 of the
1997 COA Revised Rules of Procedure.126 chanroblesvirtuallawlibrary
This court already settled that: chanRoblesvirtualLawlibrary
[the Commission on Audit] is not required to limit its review only to the grounds relied upon by a
government agency's auditor with respect to disallowing certain disbursements of public funds. In
consonance with its general audit power, respondent Commission on Audit is not merely legally permitted,
but is also duty-bound to make its own assessment of the merits of the disallowed disbursement and not
simply restrict itself to reviewing the validity of the ground relied upon by the auditor of the government
agency concerned. To hold otherwise would render COA's vital constitutional power unduly limited and
thereby useless and ineffective.127
The disallowance of the grant of benefits and allowances by respondent Commission on Audit is proper. We
proceed to determine whether officers and employees of petitioner Maritime Industry Authority are liable
and/or should refund the disallowed allowances.
XII
Refund of the amounts received

and liability of approving officers
Presidential Decree No. 1445 provides for a general liability for unlawful expenditures: chanRoblesvirtualLawlibrary
Section 103. General liability for unlawful expenditures. Expenditures of government funds or uses of
government property in violation of law or regulations shall be a personal liability of the official or employee
found to be directly responsible therefor.128
Section 19 of the Manual of Certificate of Settlement and Balances, Commission on Audit Circular No. 94-
001 provides: chanRoblesvirtualLawlibrary
19.1. The liability of public officers and other persons for audit disallowances shall be determined on the
basis of: (a) the nature of the disallowance; (b) the duties, responsibilities or obligations of the
officers/persons concerned; (c) the extent of their participation or involvement in the disallowed transaction;
and (d) the amount of losses or damages suffered by the government thereby. The following are illustrative
examples: chanRoblesvirtualLawlibrary
....
19.1.3. Public officers who approve or authorize transactions involving the expenditure of government funds
and uses of government properties shall be liable for all losses arising out of their negligence or failure to
exercise the diligence of a good father of a family.
Generally, the public officer’s good faith does not excuse his or her personal liability over the unauthorized
disbursement. This court said: chanRoblesvirtualLawlibrary
Section 103 of P.D. 1445 declares that expenditures of government funds or uses of government property in
violation of law or regulations shall be a personal liability of the official or employee found to be directly
responsible therefor. The public official’s personal liability arises only if the expenditure of government funds
was made in violation of law. In this case, petitioner’s act of entering into a contract on behalf of the local
government unit without the requisite authority therefor was in violation of the Local Government Code.
While petitioner may have relied on the opinion of the City Legal Officer, such reliance only serves to
buttress his good faith. It does not, however, exculpate him from his personal liability under P.D. 1445.129
However, with regard to the disallowance of salaries, emoluments, benefits, and allowances of government
employees, prevailing jurisprudence130 provides that recipients or payees need not refund these disallowed
amounts when they received these in good faith.131 Government officials and employees who received
benefits or allowances, which were disallowed, may keep the amounts received if there is no finding of bad
faith and the disbursement was made in good faith.132 chanroblesvirtuallawlibrary
On the other hand, officers who participated in the approval of the disallowed allowances or benefits are
required to refund only the amounts received when they are found to be in bad faith or grossly negligent
amounting to bad faith.133 chanroblesvirtuallawlibrary
In Philippine Economic Zone Authority v. Commission on Audit,134 this court defined good faith relative to the
requirement of refund of disallowed benefits or allowances.
In common usage, the term “good faith” is ordinarily used to describe that state of mind denoting “honesty
of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry; an
honest intention to abstain from taking any unconscientious advantage of another, even through
technicalities of law, together with absence of all information, notice, or benefit or belief of facts which
render transaction unconscientious.”135
The assailed notices of disallowance enumerate the following persons as liable for the disallowed
disbursements: chanRoblesvirtualLawlibrary
Elenita Delgado – Approving Officer136

Oscar Sevilla- Approving Officer 137
Yolanda Quiñones – Chief Accountant138
Agrifina Lacson – Certifying Officer139
Erlinda Baltazar - Cashier140
Myrna Colag – Alternative Approving Officer141
Miriam Dimayuga – Alternate Approving Officer142
The recipients of the disallowed allowances under the assailed notices of disallowance are the following: chanRoblesvirtualLawlibrary
Payee Position Amount Allowance/Benefit

Disallowed Disallowed
Notice of Disallowance No. 2002-002-101(01)143
Erlinda Baltazar Cashier 550,000.00 Rice and Medical
Oscar Sevilla Administrator 5,000.00 Allowance and
Allowances of
Pedro Mendoza Director 5,700.00 Board Members
Marietto Enecio Director 5,700.00 and Secretary (net
Juan Peña Director 5,700.00 of allowable
allowance of
Gloria Bañas [not indicated 3,000.00
P500.00/mo
in rollo]
pursuant to Sec. 7
G. Mendoza Director 5,700.00 of P.D. 474) for
Ruben Ciron Director 5,700.00 January 2001.
Oscar Sevilla Administrator 5,000.00 Rice and Medical
Pedro Mendoza Director 5,700.00 Allowance,
Representation
Marietto Enecio Director 5,700.00 Allowance of
Alfonso Cusi Director 5,700.00 Board Members
Ruben Ciron Director 5,700.00 and Secretary (net
of allowable
Gloria Bañas [not indicated 3,000.00
allowance of
in rollo]
P500.00/mo
pursuant to Sec. 7
of P.D. 474) for
February 2001.
Allowance
Chona [illegible] [not indicated 1,591.50 Performance
in rollo] Incentive
[illegible] [not indicated 2,508.25 Allowance for Feb.
in rollo] 2001
Erlinda Baltazar Cashier 139,000.00 Birthday and
Employment
Anniversary Bonus
for February 2001
Erlinda Baltazar Cashier 835,376.33 Performance
Incentive
Allowance for
March 2001
Jovino G. Tamayo [not indicated 5,000.00 Employment
in rollo] Anniversary Bonus
Oscar M. Sevilla Administrator 5,000.00 Representation
Jose T. Tale Director 5,700.00 Allowance of
Board Members
Pedro V. Mendoza Director 5,700.00 and Secretary (net
Marietto A. Enecio Director 5,700.00 of allowable
Ruben Ciron Director 5,700.00 allowance of
P500.00/mo
Alfonso Cusi Director 5,700.00
pursuant to Sec. 7
Gloria Bañas [not indicated 3,000.00 of P.D. 474) for
in rollo] March 2001.
Allowance for April
2001
Renita Bautista [not indicated 30,800.00 Rice/Med for
in rollo] March 2001
Chona Verceles [not indicated 2,200.00 Rice/Med for
in rollo] March 2001
Alfonso Rulloda [not indicated 4,698.00 Performance
in rollo] Incentive
Allowance for Feb.
2001
Renita Bautista [not indicated 15,400.00 Rice[/][M]ed for
in rollo] April 2001
Incentive
Allowance for April
2001
Employment
Anniversary Bonus
for April 2001
Allowance for May
2001
Renita Bautista [not indicated 30,669.50 Performance
in rollo] Incentive
Allowance for April
2001
Liberato [illegible] [not indicated 2,200.00 Rice/Med for April
in rollo] 2001
Emperatriz Aquino [not indicated 1,098.75 Performance
in rollo] Incentive
Allowance for Feb.
2001
Alfonso Rulloda [not indicated 4,698.00 Performance
in rollo] Incentive
Allowance for
March 2001
Chona Verceles [not indicated 1,591.50 Performance
in rollo] Incentive
Allowance for
March 2001
Emperatriz Aquino [not indicated 2,232.75 Performance
in rollo] Incentive
Allowance for
March 2001
Jesus Manongdo [not indicated 2,200.00 Rice[/][M]ed for
in rollo] May 2001
Employment
Anniversary
Bonus
for May 2001
Roberto [illegible] [not indicated 3,000.00 Anniversary
in rollo] Allowance
Renita Bautista [not indicated 11,600.00 Rice/Med for May
in rollo] 2001
Incentive
Allowance for
May 2001
Feliciano Tira, Jr. [not indicated 4,400.00 Rice/Med For April
in rollo] and May 2001
The records do not show the reason why Erlinda Baltazar, petitioner Maritime Industry Authority’s cashier,
received high amounts for the allowances as shown in the notices of disallowance.
The amount given to Erlinda Baltazar is exorbitant especially when contrasted with the other officers and
employees of petitioner Maritime Industry Authority receiving the same allowance. The disparity in the
amounts given to Erlinda Baltazar compared to the other officers and employees is too substantial to
consider her and the approving officers to be in good faith when Erlinda Baltazar received the amounts.
Thus, Erlinda Baltazar and the approving officers are solidarily liable to refund all amounts received by
Erlinda Baltazar based on what was disallowed by respondent Commission on Audit. This solidary liability is
in accordance with Book VI, Chapter V, Section 43 of the Administrative Code, which provides: chanRoblesvirtualLawlibrary
Liability for Illegal Expenditures. – Every expenditure or obligation authorized or incurred in violation of the
provisions of this Code or of the general and special provisions contained in the annual General or other
Appropriations Act shall be void. Every payment made in violation of said provisions shall be illegal and
every official or employee authorizing or making such payment, or taking part therein, and every person
receiving such payment shall be jointly and severally liable to the Government for the full amount so paid or
received.
The amount Erlinda Baltazar received as allowance for one month should have alerted her and the approving
officers on the validity and legality of the grant of the allowance. Good faith dictates that the approving
officers deny the grant and Erlinda Baltazar refrain from receiving the amount that is clearly and on its face
invalid. Erlinda Baltazar and the approving officers’ positions dictate that they are familiar and
knowledgeable of the usual amounts allowed for allowances and benefits.
As to the directors, officers, and other employees of petitioner Maritime Industry Authority who received the
disallowed benefits, they are presumed to have acted in good faith when they allowed and/or received
them.148chanroblesvirtuallawlibrary
Respondent Commission on Audit failed to show bad faith on the part of the approving officers in disbursing
the disallowed benefits and allowances. Further, the officers of petitioner Maritime Industry Authority relied
on the alleged approval of the President of the Philippines in granting the benefits and allowances.
Respondent Commission on Audit said that there were “exchanges of communications between the auditor
and Atty. Oscar M. Sevilla, [Maritime Industry Authority]’s Administrator, pointing out to the latter, in letter
of April 4, 2001, that continuous grant of the allowances in question would not only contradict the provisions
of Administrative Order no. 5 issued by the Office of the President and Budget Circular No. 2001-1 but would
likewise negate the objective of generating savings.”
However, the checks for the disallowed benefits and allowances were issued prior to April 4, 2001. It does
not appear that petitioner Maritime Industry Authority’s directors and officers were informed prior to the
disbursement of the amounts disallowed that these allowances and benefits were in violation of existing law,
and rules and regulations.
WHEREFORE, the decision of respondent Commission on Audit dated March 3, 2005 and resolution dated
December 9, 2008 are AFFIRMED with MODIFICATION. The approving officers and Erlinda Baltazar are
solidarily liable to refund the disallowed amounts received by Erlinda Baltazar. The other payees need not
refund the amounts received.
SO ORDERED.
Sereno, C.J., Carpio, Velasco, Jr., Leonardo-De Castro, Peralta, Bersamin, Del Castillo, Villarama, Jr., Perez,
Mendoza, Reyes, Perlas-Bernabe, Leonen, and Jardeleza, JJ.
Brion,* J., left his vote, see his concurring opinion.
Endnotes:
*
On leave.
1
Rep. Act No. 6758 (1989).
2
Rollo, p. 14.
3
Id. at 37. The decision was dated June 23, 2003 and was signed by Director Khem N. Inok.
4
Id. at 28. The decision dated March 3, 2005 was signed by Commissioners Guillermo N. Carague
(Chairman), Emmanuel M. Dalman, and Reynaldo A. Villar.
5
Pres. Decree No. 474 (1974), Providing for the Reorganization of Maritime Functions in the Philippines,
Creating the Maritime Industry Authority, and for Other Purposes.
6
National Compensation Circular No. 56 (1989), Rules and Regulations on the Standardization of
Compensation and Position Classification Plan in the Government.
7
National Compensation Circular No. 59 (1989), List of Allowances/Additional Compensation of Government
Officials and Employees Which Shall Be Deemed Integrated Into the Basic Salary.
Rollo, p. 14.
8
9
Id. at 45.
10
Id. at 46.
11
Id. The amount granted for the per diems is P100.00 per meeting but not to exceed P500.00 per month,
the commutable allowance is P500.00 per month.
12
Id. at 45. The amount granted for rice subsidy allowance is P1,200.00.
13
Id. The amount granted for medical allowance is P1,000.00 per month.
14
Id.
15
Id. at 46. The amount requested for reimbursible representation allowance is P5,000.00 for the Chairman,
P4,000.00 for the Members, and P3,000.00 for the Board Secretary.
16
Id. at 47. The amount requested for performance incentives allowance is 25% of the basic salary.
17
Id. The amount requested for economic/efficiency/financial assistance benefit is P30,000.00.
18
Id. at 48. The amount requested for hearing allowance is P1,000.00.
19
Id. The amount requested for birthday month/off month/employment date anniversary allowances is
P5,000.00.
20
Id. at 45.
21
Id.
22
Id.
23
Id. at 14.
24
The Resident Auditor who issued the notices of disallowance is Ms. Loida T. Andres, State Auditor III, Unit
Head.
25
Rollo, p. 14.
26
Id. at 149–150.
27
Id. at 151–152.
28
Id. at 153–154.
29
Id. at 155–156.
30
Id. at 157–158.
31
Section 229 of the GAAM Volume I provides that “Officials and employees who are duly appointed by
competent authority to any position in another government office or agency, in a concurrent capacity, may,
in the discretion of the President, be allowed to receive additional compensation in the form of allowances or
honoraria at such rates he shall fix and subject to such conditions as he may prescribe. Such additional
compensation shall be paid from the appropriations of the office or agency benefitting from the concurrent
service (Sec. 59, Bk VI, 1987 Adm. Code).
However, under Sec. 13, Art. VII of the 1987 Constitution, the President, Vice-President, the members of
the cabinet and their deputies and assistants, shall not, unless otherwise provided in the constitution, hold
any other office or employment during their tenure.
Pensions or gratuities shall not be considered as additional, double or indirect compensation (Sec. 8, Art.
IX(b), 1987 Const.).
The contemplation of the Constitutional provisions which authorizes additional or double compensation is
construed to mean statutes passed by the national legislative body (this includes decrees issued by the
President under the martial law regime); it does not include ordinances or resolutions passed by local
legislative bodies or governing boards, as the case may be. (COA Dec. 77-110, June 21, 1977).”
32
Rollo, pp. 96 and 149–158.
33
Id. at 51–70.
34
Id. at 29–39. The decision was signed by Director Khem N. Inok.
35
Id. at 32 and 97.
36
Id. at 36–37.
37
Id. at 25.
38
Id. at 25–28. The decision was signed by Commissioners Guillermo N. Carague (Chaiman), Emmanuel M.
Dalman, and Reynaldo A. Villar.
39
Id. at 28.
40
Id. at 27.
41
Id.
42
Id. at 27–28.
43
Id. at 31 and 95.
44
Id. at 40–43.
45
Id. at 78 and 180.
46
Id. at 93–179.
47
Id. at 184–194.
48
J. Brion, concurring and dissenting opinion in Technical Education and Skills Development Authority v.
Commission on Audit, G.R. No. 204869, March 11, 2014, [Per J. Carpio, En Banc].
49
City of General Santos v. Commission on Audit, G.R. No. 199439, April 22, 2014 [Per J. Leonen, En Banc].
50
Rollo, p. 15.
51
Id. at 16.
52
Id. at 18 and 188.
53
506 Phil. 382 (2005) [Per Acting C.J. Panganiban, En Banc].
54
Id. at 388–389.
55
Rollo, p. 105.
56
Id. at 108.
57
58
519 Phil. 372 (2006) [Per J. Garcia, En Banc].
59
60
61
Id. at 383–384.
62
Rollo, p. 110.
63
Id. at 111.
64
584 Phil. 132 (2008) [Per C.J. Puno, En Banc].
65
Rollo, pp. 110–111.
66
Id. at 111.
67
Id.
68
Act No. 102 (1901), An Act Regulating the Salaries of Officers and Employees in the Philippine Civil
Service; Commonwealth Act No. 402 (1938), An Act to Provide for the Classification of Civilian Positions and
Standardization of Salaries in the Government; Pres. Decree No. 985 (1976), The Budgetary Reform Decree
on Compensation and Position Classification of 1976; Pres. Decree No. 1597 (1978), Further Rationalizing
the System of Compensation and Position Classification in the National Government.
69
Pres. Decree No. 985 (1976), The Budgetary Reform Decree on Compensation and Position Classification
of 1976.
70
Pres. Decree No. 1597 (1978), Further Rationalizing the System of Compensation and Position
Classification in the National Government.
71
Pres. Decree No. 1597 (1978), sec. 3. Repeal of special salary laws and regulations. All laws, decrees,
executive orders and other issuances or parts thereof are hereby repealed that exempt agencies from the
coverage of the National Compensation and Position Classification System as established by P.D. 985 and
P.D. 1285, or which authorize and fix position classification, salaries, pay rates/ranges or allowances for
specified positions to groups of officials and employees or to agencies that are inconsistent with the position
classification or rates in the National Compensation and Position Classification Plan are hereby repealed.
72
Pres. Decree No. 1597 (1978), sec. 5. Allowances, honoraria and other fringe benefits. [These] which may
be granted to government employees, whether payable by their offices or by other agencies of government
shall be subject to the approval of the President upon recommendation of the Commissioner of the Budget.
For this purpose, the Budget Commission shall continuously review and shall prepare . . . policies and levels
of allowances and other fringe benefits applicable to government personnel, including honoraria or other
forms of compensation for participation in projects which are authorized to pay additional compensation.
73
Ambros v. Commission on Audit, 501 Phil. 255 (2005) [Per J. Callejo, Sr., En Banc].
74
Rep. Act No. 6758 (1989), sec. 12.
75
Rep. Act No. 6758 (1989), sec. 12.
76
Rep. Act No. 6758 (1989), sec. 12.
NAPOCOR Employees Consolidated Union v. National Power Corporation, 519 Phil. 372 (2006) [Per J.
77
Garcia, En Banc].
78
Gutierrez v. Department of Budget and Management, 630 Phil. 1 (2010) [Per J. Abad, En Banc].
79
G.R. No. 185806, July 24, 2012, [Per J. Sereno, En Banc].
80
Id.
81
82
Id. at 384.
83
551 Phil. 878 (2007) [Per J. Nachura, En Banc].
84
Id. at 888.
85
461 Phil. 737 (2003) [Per J. Ynares-Santiago, En Banc].
86
Id. at 749–750.
87
630 Phil. 1 (2010) [Per J. Abad, En Banc].
88
Id. at 14–16.
89
90
Id. at 388–389.
91
Rep. Act No. 6758 (1989), sec. 2.
92
Rep. Act No. 6758 (1989), sec. 9.
93
Rep. Act No. 6758 (1989), sec. 12.
Bureau of Fisheries and Aquatic Resources Employees Union v. Commission on Audit, 584 Phil. 132 (2008)
94
[Per C.J. Puno, En Banc].
95
Id. at 139–140.
96
370 Phil. 793 (1999) [Per J. Purisima, En Banc].
97
Id. at 805–809.
98
584 Phil. 132 (2008) [Per C.J. Puno, En Banc].
99
Id. at 140.
100
584 Phil. 246 (2008) [Per J. Corona, En Banc].
101
Id. at 282–283.
102
See Equi-Asia Placement, Inc. v. Department of Foreign Affairs, 533 Phil. 590 (2006) [Per J. Chico-
Nazario, First Division] where this court held that “[a]ll that is required for the valid exercise of this power of
subordinate legislation is that the regulation must be germane to the objects and purposes of the law; and
that the regulation be not in contradiction to, but in conformity with, the standards prescribed by the law.”
103
G.R. No. 157036, June 9, 2004, 431 SCRA 534 [Per J. Sandoval-Gutierrez, En Banc].
104
Id. at 555.
105
See Const. (1987), art. VIII, sec. 3; Const. (1987), art. IX(A), sec. 5; Const. (1987), art. XI, sec. 14.
See Re: COA Opinion on the Computation of the Appraised Value of the Properties Purchased by the
106
Retired Chief/Associate Justices of the Supreme Court, A.M. No. 11-7-10-SC, July 31, 2012, 678 SCRA 1
[Per Curiam, En Banc].
107
G.R. No. 103524, April 15, 1992, 208 SCRA 133 [Per J. Gutierrez, En Banc].
108
Id. at 150.
109
A.M. No. 11-7-10-SC, July 31, 2012, 678 SCRA 1 [Per Curiam, En Banc].
110
Id. at 16.
111
Blaquera v. Commission on Audit, 356 Phil. 678, 763 (1998) [Per J. Purisima, En Banc].
112
G.R. No. 189774, September 18, 2012, 681 SCRA 102 [Per J. Perlas-Bernabe, En Banc].
113
Const. (1987), art. IX(D), sec. 2.
Veloso v. Commission on Audit, G.R. No. 193677, September 6, 2011, 656 SCRA 767, 780 [Per J. Peralta,
114
En Banc].
115
633 Phil. 174 (2010) [Per J. Leonardo-De Castro, En Banc].
116
Id. at 192.
117
REVISED RULES OF THE COMMISSION ON AUDIT (2009), Rule V, secs. 1 and 4.
118
REVISED RULES OF THE COMMISSION ON AUDIT (2009), Rule VII, sec. 1.
119
RULES OF COURT, Rule 64.
120
Rollo, p. 19.
121
Id. at 116.
122
See Gutierrez v. Department Budget and Management, 630 Phil. 1 (2010) [Per J. Abad, En Banc].
123
Rollo, p. 22.
124
Id.
125
CONST. (1987), art. IX(D), sec. 2 provides: chanRoblesvirtualLawlibrary
Section 2. (1) The Commission on Audit shall have the power, authority, and duty to examine, audit, and
settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and
property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies,
or instrumentalities, including government-owned or controlled corporations with original charters, and on a
post-audit basis: (a) constitutional bodies, commissions and offices that have been granted fiscal autonomy
under this Constitution; (b) autonomous state colleges and universities; (c) other government-owned or
controlled corporations and their subsidiaries; and (d) such non-governmental entities receiving subsidy or
equity, directly or indirectly, from or through the Government, which are required by law or the granting
institution to submit to such audit as a condition of subsidy or equity. However, where the internal control
system of the audited agencies is inadequate, the Commission may adopt such measures, including
temporary or special pre-audit, as are necessary and appropriate to correct the deficiencies. It shall keep
the general accounts of the Government and, for such period as may be provided by law, preserve the
vouchers and other supporting papers pertaining thereto.
(2) The Commission shall have exclusive authority, subject to the limitations in this Article, to define the
scope of its audit and examination, establish the techniques and methods required therefor, and promulgate
accounting and auditing rules and regulations, including those for the prevention and disallowance of
irregular, unnecessary, excessive, extravagant, or unconscionable expenditures or uses of government funds
and properties.
126
Rollo, pp. 119–120. COA REVISED RULES OF PROCEDURE (1997), Rule II, sec. 4 provides: chanRoblesvirtualLawlibrary
Section 4. Appellate Jurisdiction. – The Commission Proper shall have appellate jurisdiction to review,
reverse, modify, alter or affirm the reports, resolutions, orders, decisions and other dispositions of the
Auditors or Directors concerned.
127
Yap v. Commission on Audit, 633 Phil. 174 (2010) [Per J. Leonardo-De Castro, En Banc].
128
A similar provision is also found in Exec. Order No. 292 (1987), book V, chap. 9, sec. 52.
129
Vicencio v. Villar, G.R. No. 182069, July 3, 2012, 675 SCRA 468, 480 [Per J. Sereno, En Banc].
130
See Mendoza v. Commission on Audit, G.R. No. 195395, September 10, 2013, 705 SCRA 306 [Per J.
Leonen, En Banc]; Magno v. Commission on Audit, 558 Phil. 76 (2007) [Per J. Chico-Nazario, En
Banc]; Singson v. Commission on Audit, G.R. No. 159355, August 9, 2010, 627 SCRA 36 [Per J. Peralta, En
Banc]; Lumayna v. Commission on Audit, 616 Phil. 928 (2009) [Per J. del Castillo, En Banc]; Barbo v.
Commission on Audit,589 Phil. 289 (2008) [Per J. Leonardo-De Castro, En Banc]; Kapisanan ng mga
Manggagawa sa Government Service Insurance System v. Commission on Audit, et al.,480 Phil. 861 (2004)
[Per J. Tinga, En Banc]; Veloso v. Commission on Audit, G.R. No. 193677, September 6, 2011, 656 SCRA
767 [Per J. Peralta, En Banc]; Abanilla v. Commission on Audit, 505 Phil. 202 (2005) [Per J. Sandoval-
Gutierrez, En Banc]; Home Development Mutual Fund v. Commission on Audit, 483 Phil. 666 (2004) [Per J.
Carpio, En Banc]; Public Estates Authority v. Commission on Audit, 541 Phil. 412 (2007) [Per J. Sandoval-
Gutierrez, En Banc]; Bases Conversion and Development Authority v. Commission on Audit, 599 Phil. 455
(2009) [Per J. Carpio, En Banc]; Benguet State University v. Commission on Audit, 551 Phil. 878 (2007)
[Per J. Nachura, En Banc]; Agra v. Commission on Audit, 661 Phil. 563 (2011) [Per J. Leonardo-De Castro,
En Banc];Blaquera v. Commission on Audit, 356 Phil. 678 (1998) [Per J. Purisima, En Banc].
Manila International Airport Authority v. Commission on Audit, G.R. No. 194710, February 14, 2012, 665
131
SCRA 653 [Per J. Reyes, En Banc]; Benguet State University v. Commission on Audit, 551 Phil. 878 (2007)
[Per J. Nachura, En Banc].
J. Brion, concurring and dissenting opinion in Technical Education and Skills Development Authority v.
132
Commission on Audit, G.R. No. 204869, March 11, 2014, [Per J. Carpio, En Banc].
Technical Education and Skills Development Authority v. Commission on Audit, G.R. No. 204869, March
133
11, 2014, [Per J. Carpio, En Banc]; See Velasco v. Commission on Audit, G.R. No. 189774, September 18,
2012, 681 SCRA 102 [Per J. Perlas-Bernabe, En Banc].
134
G.R. No. 189767, July 3, 2012, 675 SCRA 513 [Per J. Villarama, Jr., En Banc].
135
Id. at 524.
136
Rollo, pp. 149 and 151.
137
Id. at 153, 155, and 157.
138
Id. at 149, 151, 153, 155, and 157.
139
Id. at 149, 151, 153, and 155.
140
Id. at 149, 151, 153, 155, 157.
141
Id. at 157.
142
Id.
143
Id. at 149.
144
Id. at 151.
145
Id. at 153.
146
Id. at 155.
147
Id. at 157.
Velasco v. Commission on Audit, G.R. No. 189774, September 18, 2012, 681 SCRA 102 [Per J. Perlas-
148
Bernabe, En Banc].
CONCURRING OPINION
BRION, J.:
I write this Concurring Opinion to reflect my former Concurring and Dissenting Opinion to the
circulatedoriginal draft ponencia of Justice Marvic M.V.F. Leonen and to express my concurrence with
therevised ponencia’s position.
The original draft ponencia held that only Erlinda Baltazar, the cashier, shall reimburse the Government as a
result of the disallowance. With respect to the approving officers and other recipients, theponencia stated
that they were presumed to have acted in good faith since they faithfully relied on the memorandum dated
February 10, 2000.
I dissented from the original draft ponencia on the ground that the non-receipt of the approving officers of
the disallowed amounts does not automatically exempt them from solidary liability in disallowance cases. As
I explained in my dissent in TESDA v. COA,1 the approving officer’s receipt of a portion of the disallowed
amount is not an element of liability under Section 43, Chapter V, Book VI of the Administrative Code2 in
relation with Section 52, Chapter IX, Title I-B, Book V of the Administrative Code3 and Section 103 of
Presidential Decree No. 14454. These provisions do not require that the approving officer must first receive
the illegal disbursement as a necessary prerequisite for his personal and solidary liability.
Thereafter, Justice Leonen circulated the present revised ponencia whose disposition follow the lines of my
dissent in TESDA v. COA.5 chanroblesvirtuallawlibrary
Based on these developments, I submit this Concurring Opinion to the present and revised ponencia.
THE CASE
To briefly summarize the case, Republic Act No. 6758 (RA 6758), which took effect on July 1, 1989,
standardized the salaries of government employees. Section 12 of RA 6758 provides: chanRoblesvirtualLawlibrary
representation and transportation allowances; clothing and laundry allowances; subsistence
allowance of marine officers and crew on board government vessels and hospital personnel;
hazard pay; allowances of foreign service personnel stationed abroad; and such other additional
compensation not otherwise specified herein as may be determined by the DBM, shall be deemed
included in the standardized salary rates herein prescribed. Such other additional compensation,
whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated into the
standardized salary rates shall continue to be authorized.
the National Government. (Underlines and emphasis ours)
On September 30, 1989, the Department of Budget and Management (DBM) issued National Compensation
Circulars Nos. 56 and 59, enumerating additional allowances that are deemed integrated into the basic
salary.
Due to these developments, Marina discontinued the grant of several allowances to its employees. In a
memorandum dated February 10, 2000, Marina recommended to President Estrada the restoration of
allowances of its employees. The President approved and signed the memorandum on October 16, 2000.
Relying on this approval, Marina restored the grant of allowances and incentives to its employees beginning
January 2001.
The COA disallowed the granted allowances and incentives, except per diems and monthly commutable
allowances of Marina board members. In particular, the COA held the following persons liable for the
disallowance: chanRoblesvirtualLawlibrary
1. Elenita Delgado – Approving Officer

2. Yolanda Quinones – Chief Accountant
3. Agrifina Lacson – Certifying Officer
4. Erlinda Baltazar – Cashier
5. Myrna Colag – Alternate Approving Officer
6. Miriam Dimayuga – Alternate Approving Officer
The COA held that allowances are already integrated as part of the salaries of government employees under
RA 6758. The COA did not give probative value to the memorandum to President Estrada dated February
10, 2000 for Marina’s failure to present its original copy. The COA noted that the Malacanang Records Office
did not have a copy of this memorandum. Furthermore, the COA ruled that the President’s approval of the
memorandum was insufficient, since a law was required for the grant of additional allowances and
incentives.
THE ISSUES
(1) Whether the grant of allowances to Marina employees has legal basis; and
(2) Whether the approving officers and the recipients should solidarily refund the disallowance.
THE PONENCIA’S RULING
The ponencia explained that RA 6758 provides a new system in the position classification and compensation
of government employees. Under this new system, all allowances are deemed part of the standardized
salary. However, there are allowances that may be given on top of the standardized salary – (1) the non-
integrated allowances specifically enumerated under Section 12 of RA 6758; and (2) additional
compensation as may be determined by the DBM.
Consequently, if the allowance does not fall under these two exceptions, it is deemed part of the
standardized salary. In Napocor Employees Consolidation Union v. The National Power Corporation,6the
Court held that Section 12 of RA 6758 is self-executing and the allowance need not be specifically
enumerated to be integrated in the standardized salary.
The ponencia upheld the disallowance on the ground that the subject allowances were neither non-
integrated allowances nor additional compensation allowed by the DBM. Furthermore, the President’s alleged
approval of the memorandum would not suffice since it was not a law. The ponencia further ruled that the
receipt of additional allowances and incentives contravene Section 12 of RA 6758 and the constitutional
prohibition against double compensation.
The ponencia held that the approving officers and Erlinda Baltazar are solidarily liable to refund
the disallowed amounts received by Erlinda Baltazar. The ponencia observed that only Erlinda Baltazar
received hundreds of thousands of pesos in allowances while other recipients only received a few thousand
pesos.7 The exorbitant amount that she received should have alerted her and the approving officers to the
dubious legality of the allowances. These officers should be knowledgeable of the amounts allowed for
allowances and benefits.
The ponencia exempted the directors, officers, and other employees of Marina from liability. It does not
appear from the records of the case that these employees were informed prior to the illegal disbursements
that the allowances and benefits were in violation of existing rules and regulations.
THE CONCURRENCE
I concur with the ponencia. While only Erlinda was the recipient of the disallowances among the persons
the COA held liable, the circumstances surrounding the release of her allowances, appears to me to
be questionable.
From January to May 2001, Erlinda successively received unconscionable allowances from Marina. How this
escaped the attention of the approving officers is puzzling and leaves many unanswered questions. The
given facts, in fact, raise doubts on whether or not these officers had colluded with Erlinda. There appears
indicia of bad faith, if not gross negligence, on the part of these officers among them, the following:
1. Marina failed to present the original of the memorandum dated February 10, 2000.
2. The Malacanang Records Office does not have a copy of this memorandum.
3. No guideline appears on record as to the amount and the qualifications for the receipt of the
allowances. (In the Supreme Court, prior to the release of allowances, the Office of the Chief
Justice issues a guideline on the amount and qualifications for the receipt of allowances).
4. Erlinda received P550,000.00, P565,400.00, P561,000.00, P552,200.00 as monthly rice and medical
allowance; P139,000.00, P186,000.00, P124,000.00 as birthday and employment anniversary
bonus for February 2001; and P835,376.33, P893,910.14, and P877,270.30 as performance
incentive allowance. This is in contrast to a few thousand of pesos received by other employees of
Marina.
Consistent with my dissent in TESDA v. COA,8 I take the position that the officers found by COA to be
solidarily liable should be so held for the full amount of the disallowance. Section 43, Chapter V, Book VI of
the Administrative Code expressly provides that every official or employee authorizing an illegal payment
and every person receiving the illegal payment shall be jointly and severally liable to the Government for the
full amount so paid or received. The non-receipt of the approving officers of the disallowance should not
exempt them from solidary liability. Otherwise, the approving officers can easily evade liability by merely
ordering or colluding with others so that their receipt of the portion of the illegal disbursement would not be
documented.
Finally, the facts of the case prima facie show signs of irregularities in the handling of public funds –
particularly in the release of exorbitant amounts of allowances despite the clear intent of the law to
standardize salaries, as well as the failure to produce the memorandum issued by former President Estrada.
In this light, and to foster public accountability in government, I highly recommend that we forward a copy
of the records of this case to the Ombudsman, that it may investigate the public officers involved for
possible criminal and/or administrative liabilities.
Endnotes:
1
G.R. No. 204869, March 11, 2014.
2
Section 43. Liability for Illegal Expenditures. - Every expenditure or obligation authorized or incurred in
violation of the provisions of this Code or of the general and special provisions contained in the annual
General or other Appropriations Act shall be void. Every payment made in violation of said provisions shall
be illegal and every official or employee authorizing or making such payment, or taking part therein, and
every person receiving such payment shall be jointly and severally liable to the Government for the full
amount so paid or received.
Any official or employee of the Government knowingly incurring any obligation, or authorizing any
expenditure in violation of the provisions herein, or taking part therein, shall be dismissed from the service,
after due notice and hearing by the duly authorized appointing official. If the appointing official is other than
the President and should he fail to remove such official or employee, the President may exercise the power
of removal.
3
Section 52. General Liability for Unlawful Expenditures. - Expenditures of government funds or uses of
found to be directly responsible therefor.
4
Section 103. General liability for unlawful expenditures. Expenditures of government funds or uses of
found to be directly responsible therefor.
Supra note 1.
5
6
G.R. No. 157492, March 10, 2006, 484 SCRA 409.
7
See pages 23-25 of the Decision.
Supra note 1.
8
cralawred
Araullo vs. Aquino, 749 SCRA 284
EN BANC
G.R. No. 209287 February 3, 2015
MARIA CAROLINA P. ARAULLO, CHAIRPERSON, BAGONG ALYANSANG MAKABAYAN;

JUDY M. TAGUIWALO, PROFESSOR, UNIVERSITY OF THE PHILIPPINES DILIMAN, CO-
CHAIRPERSON, PAGBABAGO; HENRI KAHN, CONCERNED CITIZENS MOVEMENT; REP. LUZ
ILAGAN, GABRIELA WOMEN'S PARTY REPRESENTATIVE; REP. TERRY L. RIDON,
KABATAAN PARTYLIST REPRESENTATIVE; REP. CARLOS ISAGANI ZARATE, BAYAN MUNA
PARTY-LIST REPRESENTATIVE; RENATO M. REYES, JR., SECRETARY GENERAL OF
BAYAN; MANUEL K. DAYRIT, CHAIRMAN, ANG KAPATIRAN PARTY; VENCER MARI E.
CRISOSTOMO, CHAIRPERSON, ANAKBAYAN; VICTOR VILLANUEVA, CONVENOR, YOUTH
ACT NOW, Petitioners,
vs.
BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES;
PAQUITO N. OCHOA, JR., EXECUTIVE SECRETARY; AND FLORENCIO B. ABAD,
SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.
x-----------------------x
G.R. No. 209135

AUGUSTO L. SYJUCO JR., Ph.D., Petitioner,
vs.
FLORENCIO B. ABAD, IN HIS CAPACITY AS THE SECRETARY OF DEPARTMENT OF
BUDGET AND MANAGEMENT; AND HON. FRANKLIN MAGTUNAO DRILON, IN HIS CAPACITY
AS THE SENATE PRESIDENT OF THE PHILIPPINES, Respondents.
x-----------------------x
G.R. No. 209136
MANUELITO R. LUNA, Petitioner,

vs.
SECRETARY FLORENCIO ABAD, IN HIS OFFICIAL CAPACITY AS HEAD OF THE
DEPARTMENT OF BUDGET AND MANAGEMENT; AND EXECUTIVE SECRETARY PAQUITO
OCHOA, IN HIS OFFICIAL CAPACITY AS ALTER EGO OF THE PRESIDENT, Respondents.
x-----------------------x
G.R. No. 209155
ATTY. JOSE MALVAR VILLEGAS, JR. Petitioner

vs.
THE HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; AND THE
SECRETARY OF BUDGET AND MANAGEMENT FLORENCIO B. ABAD, Respondents.
x-----------------------x
G.R. No. 209164
PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), REPRESENTED BY DEAN

FROILAN M. BACUNGAN, BENJAMIN E. DIOKNO AND LEONOR M. BRIONES, Petitioners,
vs.
DEPARTMENT OF BUDGET AND MANAGEMENT AND/OR HON. FLORENCIO B.
ABAD, Respondents.
x-----------------------x
G.R. No. 209260
INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioner,

vs.
SECRETARY FLORENCIO B. ABAD OF THE DEPARTMENT OF BUDGET AND MANAGEMENT
(DBM),Respondent.
x-----------------------x
G.R. No. 209442
GRECO ANTONIOUS BEDA B. BELGICA; BISHOP REUBEN M. ABANTE AND REV. JOSE L.
GONZALEZ,Petitioners,
vs.
PRESIDENT BENIGNO SIMEON C. AQUINO III, THE SENATE OF THE PHILIPPINES,
REPRESENTED BY SENATE PRESIDENT FRANKLIN M. DRILON; THE HOUSE OF
REPRESENTATIVES, REPRESENTED BY SPEAKER FELICIANO BELMONTE, JR.; THE
EXECUTIVE OFFICE, REPRESENTED BY EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.;
THE DEPARTMENT OF BUDGET AND MANAGEMENT, REPRESENTED BY SECRETARY
FLORENCIO ABAD; THE DEPARTMENT OF FINANCE, REPRESENTED BY SECRETARY
CESAR V. PURISIMA; AND THE BUREAU OF TREASURY, REPRESENTED BY ROSALIA V. DE
LEON, Respondents.
x-----------------------x
G.R. No. 209517
CONFEDERATION FOR UNITY, RECOGNITION AND ADVANCEMENT OF GOVERNMENT

EMPLOYEES (COURAGE), REPRESENTED BY ITS 1ST VICE PRESIDENT, SANTIAGO
DASMARINAS, JR.; ROSALINDA NARTATES, FOR HERSELF AND AS NATIONAL PRESIDENT
OF THE CONSOLIDATED UNION OF EMPLOYEES NATIONAL HOUSING AUTHORITY (CUE-
NHA); MANUEL BACLAGON, FOR HIMSELF AND AS PRESIDENT OF THE SOCIAL WELFARE
EMPLOYEES ASSOCIATION OF THE PHILIPPINES, DEPARTMENT OF SOCIAL WELFARE
AND DEVELOPMENT CENTRAL OFFICE (SWEAP-DSWD CO); ANTONIA PASCUAL, FOR
HERSELF AND AS NATIONAL PRESIDENT OF THE DEPARTMENT OF AGRARIAN REFORM
EMPLOYEES ASSOCIATION (DAREA); ALBERT MAGALANG, FOR HIMSELF AND AS
PRESIDENT OF THE ENVIRONMENT AND MANAGEMENT BUREAU EMPLOYEES UNION
(EMBEU); AND MARCIAL ARABA, FOR HIMSELF AND AS PRESIDENT OF THE KAPISANAN
PARA SA KAGALINGAN NG MGA KAW ANI NG MMDA (KKK-MMDA), Petitioners,
vs.
BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES;
PAQUITO OCHOA, JR., EXECUTIVE SECRETARY; AND HON. FLORENCIO B. ABAD,
SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.
x-----------------------x
G.R. No. 209569
VOLUNTEERS AGAINST CRIME AND CORRUPTION (V ACC), REPRESENTED BY DANTE L.

JIMENEZ,Petitioner,
vs.
PAQUITO N. OCHOA, EXECUTIVE SECRETARY, AND FLORENCIO B. ABAD, SECRETARY OF
THE DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.
RESOLUTION
BERSAMIN, J.:
The Constitution must ever remain supreme. All must bow to the mandate of this law. Expediency
must not be allowed to sap its strength nor greed for power debase its rectitude.
1
Before the Court are the Motion for Reconsideration filed by the respondents, and the Motion for
2
Partial Reconsideration filed by the petitioners in G.R. No. 209442.

3
In their Motion for Reconsideration, the respondents assail the decision4 promulgated on July 1
2014 upon the following procedural and substantive errors, viz:
PROCEDURAL
WITHOUT AN ACTUAL CASE OR CONTROVERSY, ALLEGATIONS OF GRAVE ABUSE OF

DISCRETION ON THE PART OF ANY INSTRUMENTALITY OF THE GOVERNMENT CANNOT
CONFER ON THIS HONORABLE COURT THE POWER TO DETERMINE THE
CONSTITUTIONALITY OF THE DAP AND NBC NO. 541
II
PETITIONERS’ ACTIONS DO NOT PRESENT AN ACTUAL CASE OR CONTROVERSY AND

THEREFORE THIS HONORABLE COURT DID NOT ACQUIRE JURISDICTION
III
PETITIONERS HAVE NEITHER BEEN INJURED NOR THREATENED WITH INJURY AS A

RESULT OF THE OPERATION OF THE DAP AND THEREFORE SHOULD HAVE BEEN HELD TO
HAVE NO STANDING TO BRING THESE SUITS FOR CERTIORARI AND PROHIBITION
IV
NOR CAN PETITIONERS’ STANDING BE SUSTAINED ON THE GROUND THAT THEY ARE
BRINGING THESE SUITS AS CITIZENS AND AS TAXPAYERS
THE DECISION OF THIS HONORABLE COURT IS NOT BASED ON A CONSIDERATION OF THE

ACTUAL APPLICATIONS OF THE DAP IN 116 CASES BUT SOLELY ON AN ABSTRACT
CONSIDERATION OF NBC NO. 541 5
SUBSTANTIVE
THE EXECUTIVE DEPARTMENT PROPERLY INTERPRETED "SAVINGS" UNDER THE

RELEVANT PROVISIONS OF THE GAA
II
ALL DAP APPLICATIONS HAVE APPROPRIATION COVER
III
THE PRESIDENT HAS AUTHORITY TO TRANSFER SAVINGS TO OTHER DEPARTMENTS

PURSUANT TO HIS CONSTITUTIONAL POWERS
IV
THE 2011, 2012 AND 2013 GAAS ONLY REQUIRE THAT REVENUE COLLECTIONS FROM
EACH SOURCE OF REVENUE ENUMERATED IN THE BUDGET PROPOSAL MUST EXCEED
THE CORRESPONDING REVENUE TARGET
THE OPERATIVE FACT DOCTRINE WAS WRONGLY APPLIED 6
The respondents maintain that the issues in these consolidated cases were mischaracterized and
unnecessarily constitutionalized; that the Court’s interpretation of savings can be overturned by
legislation considering that savings is defined in the General Appropriations Act (GAA), hence
making savings a statutory issue; that the withdrawn unobligated allotments and unreleased
7
appropriations constitute savings and may be used for augmentation; and that the Court should
8
apply legally recognized norms and principles, most especially the presumption of good faith, in
resolving their motion.9
On their part, the petitioners in G.R. No. 209442 pray for the partial reconsideration of the decision
on the ground that the Court thereby:
FAILED TO DECLARE AS UNCONSTITUTIONAL AND ILLEGAL ALL MONEYS UNDER THE

DISBURSEMENT ACCELERATION PROGRAM (DAP) USED FOR ALLEGED AUGMENTATION
OF APPROPRIATION ITEMS THAT DID NOT HAVE ACTUAL DEFICIENCIES 10
They submit that augmentation of items beyond the maximum amounts recommended by the
President for the programs, activities and projects (PAPs) contained in the budget submitted to
Congress should be declared unconstitutional.
Ruling of the Court
We deny the motion for reconsideration of the petitioners in G.R. No. 209442, and partially grant the
motion for reconsideration of the respondents.
The procedural challenges raised by the respondents, being a mere rehash of their earlier
arguments herein, are dismissed for being already passed upon in the assailed decision.
As to the substantive challenges, the Court discerns that the grounds are also reiterations of the
arguments that were already thoroughly discussed and passed upon in the assailed decision.
However, certain declarations in our July 1, 2014 Decision are modified in order to clarify certain
matters and dispel further uncertainty.
1.
The Court’s power of judicial review
The respondents argue that the Executive has not violated the GAA because savings as a conceptis
an ordinary species of interpretation that calls for legislative, instead of judicial, determination.
11
This argument cannot stand.

The consolidated petitions distinctly raised the question of the constitutionality of the acts and
practices under the DAP, particularly their non-conformity with Section 25(5), Article VI of the
Constitution and the principles of separation of power and equal protection. Hence, the matter is still
entirely within the Court’s competence, and its determination does not pertain to Congress to the
exclusion of the Court. Indeed, the interpretation of the GAA and its definition of savings is a
foremost judicial function. This is because the power of judicial review vested in the Court is
exclusive. As clarified in Endencia and Jugo v. David: 12
Under our system of constitutional government, the Legislative department is assigned the power to
make and enact laws. The Executive department is charged with the execution of carrying out of the
provisions of said laws. But the interpretation and application of said laws belong exclusively to the
Judicial department. And this authority to interpret and apply the laws extends to the Constitution.
Before the courts can determine whether a law is constitutional or not, it will have to interpret and
ascertain the meaning not only of said law, but also of the pertinent portion of the Constitution in
order to decide whether there is a conflict between the two, because if there is, then the law will
have to give way and has to be declared invalid and unconstitutional.
xxxx
We have already said that the Legislature under our form of government is assigned the task and
the power to make and enact laws, but not to interpret them. This is more true with regard to the
interpretation of the basic law, the Constitution, which is not within the sphere of the Legislative
department. If the Legislature may declare what a law means, or what a specific portion of the
Constitution means, especially after the courts have in actual case ascertain its meaning by
interpretation and applied it in a decision, this would surely cause confusion and instability in judicial
processes and court decisions. Under such a system, a final court determination of a case based on
a judicial interpretation of the law of the Constitution may be undermined or even annulled by a
subsequent and different interpretation of the law or of the Constitution by the Legislative
department. That would be neither wise nor desirable, besides being clearly violative of the
fundamental, principles of our constitutional system of government, particularly those governing the
separation of powers. 13
The respondents cannot also ignore the glaring fact that the petitions primarily and significantly
alleged grave abuse of discretion on the part of the Executive in the implementation of the DAP. The
resolution of the petitions thus demanded the exercise by the Court of its aforedescribed power of
judicial review as mandated by the Constitution.
2.
Strict construction on the accumulation and utilization of savings
The decision of the Court has underscored that the exercise of the power to augment shall be strictly
construed by virtue of its being an exception to the general rule that the funding of PAPs shall be
limited to the amount fixed by Congress for the purpose. Necessarily, savings, their utilization and
14
their management will also be strictly construed against expanding the scope of the power to
augment. Such a strict interpretation is essential in order to keep the Executive and other budget
15
implementors within the limits of their prerogatives during budget execution, and to prevent them
from unduly transgressing Congress’ power of the purse. Hence, regardless of the perceived
16
beneficial purposes of the DAP, and regardless of whether the DAP is viewed as an effective tool of
stimulating the national economy, the acts and practices under the DAP and the relevant provisions
of NBC No. 541 cited in the Decision should remain illegal and unconstitutional as long as the funds
used to finance the projects mentioned therein are sourced from savings that deviated from the
relevant provisions of the GAA, as well as the limitation on the power to augment under Section
25(5), Article VI of the Constitution. In a society governed by laws, even the best intentions must
come within the parameters defined and set by the Constitution and the law. Laudable purposes
must be carried out through legal methods. 17
Respondents contend, however, that withdrawn unobligated allotments and unreleased

appropriations under the DAP are savings that may be used for augmentation, and that the
withdrawal of unobligated allotments were made pursuant to Section 38 Chapter 5, Book VI of the
Administrative Code; that Section 38 and Section 39, Chapter 5, Book VI of the Administrative Code
18
are consistent with Section 25(5), Article VI of the Constitution, which, taken together, constitute "a
framework for which economic managers of the nation may pull various levers in the form of
authorization from Congress to efficiently steer the economy towards the specific and general
purposes of the GAA;" and that the President’s augmentation of deficient items is in accordance
19
with the standing authority issued by Congress through Section 39.
Section 25(5), Article VI of the Constitution states:
Section 25. x x x x x x x
5) No law shall be passed authorizing any transfer of appropriations; however, the President, the
President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the
Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to
augment any item in the general appropriations law for their respective offices from savings in other
items of their respective appropriations.
xxxx
Section 38 and Section 39, Chapter 5, Book VI of the Administrative Code provide:
Section 38. Suspension of Expenditure of Appropriations. - Except as otherwise provided in the

General Appropriations Act and whenever in his judgment the public interest so requires, the
President, upon notice to the head of office concerned, is authorized to suspend or otherwise stop
further expenditure of funds allotted for any agency, or any other expenditure authorized in the
General Appropriations Act, except for personal services appropriations used for permanent officials
and employees.
Section 39. Authority to Use Savings in Appropriations to Cover Deficits.—Except as otherwise

provided in the General Appropriations Act, any savings in the regular appropriations authorized in
the General Appropriations Act for programs and projects of any department, office or agency, may,
with the approval of the President, be used to cover a deficit in any other item of the regular
appropriations: Provided, that the creation of new positions or increase of salaries shall not be
allowed to be funded from budgetary savings except when specifically authorized by law: Provided,
further, that whenever authorized positions are transferred from one program or project to another
within the same department, office or agency, the corresponding amounts appropriated for personal
services are also deemed transferred, without, however increasing the total outlay for personal
services of the department, office or agency concerned. (Bold underscoring supplied for emphasis)
In the Decision, we said that:
Unobligated allotments, on the other hand, were encompassed by the first part of the definition of
"savings" in the GAA, that is, as "portions or balances of any programmed appropriation in this Act
free from any obligation or encumbrance." But the first part of the definition was further qualified by
the three enumerated instances of when savings would be realized. As such, unobligated allotments
could not be indiscriminately declared as savings without first determining whether any of the three
instances existed. This signified that the DBM’s withdrawal of unobligated allotments had
disregarded the definition of savings under the GAAs.
xxxx
The respondents rely on Section 38, Chapter 5, Book VI of the Administrative Code of 1987 to justify
the withdrawal of unobligated allotments. But the provision authorized only the suspension or
stoppage of further expenditures, not the withdrawal of unobligated allotments, to wit:
xxxx
Moreover, the DBM did not suspend or stop further expenditures in accordance with Section 38,
supra, but instead transferred the funds to other PAPs. 20
We now clarify.
Section 38 refers to the authority of the President "to suspend or otherwise stop further expenditure
of funds allotted for any agency, or any other expenditure authorized in the General Appropriations
Act." When the President suspends or stops expenditure of funds, savings are not automatically
generated until it has been established that such funds or appropriations are free from any obligation
or encumbrance, and that the work, activity or purpose for which the appropriation is authorized has
been completed, discontinued or abandoned.
It is necessary to reiterate that under Section 5.7 of NBC No. 541, the withdrawn unobligated
allotments may be:
5.7.1 Reissued for the original programs and projects of the agencies/OUs concerned, from which
the allotments were withdrawn;
5.7.2 Realigned to cover additional funding for other existing programs and projects of the
agency/OU; or
5.7.3 Used to augment existing programs and projects of any agency and to fund priority programs
and projects not considered in the 2012 budget but expected to be started or implemented during
the current year.
Although the withdrawal of unobligated allotments may have effectively resulted in the suspension or
stoppage of expenditures through the issuance of negative Special Allotment Release Orders
(SARO), the reissuance of withdrawn allotments to the original programs and projects is a clear
indication that the program or project from which the allotments were withdrawn has not been
discontinued or abandoned. Consequently, as we have pointed out in the Decision, "the purpose for
which the withdrawn funds had been appropriated was not yet fulfilled, or did not yet cease to exist,
rendering the declaration of the funds as savings impossible." In this regard, the withdrawal and
21
transfer of unobligated allotments remain unconstitutional. But then, whether the withdrawn
allotments have actually been reissued to their original programs or projects is a factual matter
determinable by the proper tribunal.
Also, withdrawals of unobligated allotments pursuant to NBC No. 541 which shortened the
availability of appropriations for MOOE and capital outlays, and those which were transferred to
PAPs that were not determined to be deficient, are still constitutionally infirm and invalid.
At this point, it is likewise important to underscore that the reversion to the General Fund of
unexpended balances of appropriations – savings included – pursuant to Section 28 Chapter IV,
Book VI of the Administrative Code does not apply to the Constitutional Fiscal Autonomy Group
22
(CFAG), which include the Judiciary, Civil Service Commission, Commission on Audit, Commission
on Elections, Commission on Human Rights, and the Office of the Ombudsman. The reason for this
is that the fiscal autonomy enjoyed by the CFAG –
x x x contemplates a guarantee of full flexibility to allocate and utilize their resources with the wisdom
and dispatch that their needs require. It recognizes the power and authority to levy, assess and
collect fees, fix rates of compensation not exceeding the highest rates authorized by law for
compensation and pay plans of the government and allocate and disburse such sums as may be
provided by law or prescribed by them in the course of the discharge of their functions.
Fiscal autonomy means freedom from outside control. If the Supreme Court says it needs 100
typewriters but DBM rules we need only 10 typewriters and sends its recommendations to Congress
without even informing us, the autonomy given by the Constitution becomes an empty and illusory
platitude.
The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence
and flexibility needed in the discharge of their constitutional duties. The imposition of restrictions and
constraints on the manner the independent constitutional offices allocate and utilize the funds
appropriated for their operations is anathema to fiscal autonomy and violative not only of the express
mandate of the Constitution but especially as regards the Supreme Court, of the independence and
separation of powers upon which the entire fabric of our constitutional system is based. x x x 23
On the other hand, Section 39 is evidently in conflict with the plain text of Section 25(5), Article VI of
the Constitution because it allows the President to approve the use of any savings in the regular
appropriations authorized in the GAA for programs and projects of any department, office or agency
to cover a deficit in any other item of the regular appropriations. As such, Section 39 violates the
mandate of Section 25(5) because the latter expressly limits the authority of the President to
augment an item in the GAA to only those in his own Department out of the savings in other items of
his own Department’s appropriations. Accordingly, Section 39 cannot serve as a valid authority to
justify cross-border transfers under the DAP. Augmentations under the DAP which are made by the
Executive within its department shall, however, remain valid so long as the requisites under Section
25(5) are complied with.
In this connection, the respondents must always be reminded that the Constitution is the basic law to
which all laws must conform. No act that conflicts with the Constitution can be valid. In Mutuc v.
24
Commission on Elections, therefore, we have emphasized the importance of recognizing and

25
bowing to the supremacy of the Constitution:
x x x The concept of the Constitution as the fundamental law, setting forth the criterion for the validity
of any public act whether proceeding from the highest official or the lowest functionary, is a postulate
of our system of government. That is to manifest fealty to the rule of law, with priority accorded to
that which occupies the topmost rung in the legal hierarchy. The three departments of government in
the discharge of the functions with which it is [sic] entrusted have no choice but to yield obedience to
its commands. Whatever limits it imposes must be observed. Congress in the enactment of statutes
must ever be on guard lest the restrictions on its authority, whether substantive or formal, be
transcended. The Presidency in the execution of the laws cannot ignore or disregard what it ordains.
In its task of applying the law to the facts as found in deciding cases, the judiciary is called upon to
maintain inviolate what is decreed by the fundamental law. Even its power of judicial review to pass
upon the validity of the acts of the coordinate branches in the course of adjudication is a logical
corollary of this basic principle that the Constitution is paramount. It overrides any governmental
measure that fails to live up to its mandates. Thereby there is a recognition of its being the supreme
law.
Also, in Biraogo v. Philippine Truth Commission of 2010, we have reminded that: – The role of the
26
Constitution cannot be overlooked. It is through the Constitution that the fundamental powers of
government are established, limited and defined, and by which these powers are distributed among
the several departments. The Constitution is the basic and paramount law to which all other laws
must conform and to which all persons, including the highest officials of the land, must defer.
Constitutional doctrines must remain steadfast no matter what may be the tides of time. It cannot be
simply made to sway and accommodate the call of situations and much more tailor itself to the
whims and caprices of government and the people who run it. 27
3.
The power to augment cannot be used to fund non-existent provisions in the GAA
The respondents posit that the Court has erroneously invalidated all the DAP-funded projects by
overlooking the difference between an item and an allotment class, and by concluding that they do
not have appropriation cover; and that such error may induce Congress and the Executive (through
the DBM) to ensure that all items should have at least P1 funding in order to allow augmentation by
the President.28
At the outset, we allay the respondents’ apprehension regarding the validity of the DAP funded
projects. It is to be emphatically indicated that the Decision did not declare the en masse invalidation
of the 116 DAP-funded projects. To be sure, the Court recognized the encouraging effects of the
DAP on the country’s economy, and acknowledged its laudable purposes, most especially those
29
directed towards infrastructure development and efficient delivery of basic social services. It bears
30
repeating that the DAP is a policy instrument that the Executive, by its own prerogative, may utilize
to spur economic growth and development.
Nonetheless, the Decision did find doubtful those projects that appeared to have no appropriation
cover under the relevant GAAs on the basis that: (1) the DAP funded projects that originally did not
contain any appropriation for some of the expense categories (personnel, MOOE and capital outlay);
and (2) the appropriation code and the particulars appearing in the SARO did not correspond with
the program specified in the GAA. The respondents assert, however, that there is no constitutional
requirement for Congress to create allotment classes within an item. What is required is for
Congress to create items to comply with the line-item veto of the President. 31
After a careful reexamination of existing laws and jurisprudence, we find merit in the respondents’
argument.
Indeed, Section 25(5) of the 1987 Constitution mentions of the term item that may be the object of
augmentation by the President, the Senate President, the Speaker of the House, the Chief Justice,
and the heads of the Constitutional Commissions. In Belgica v. Ochoa, we said that an item that is
32
the distinct and several part of the appropriation bill, in line with the item-veto power of the President,
must contain "specific appropriations of money" and not be only general provisions, thus:
For the President to exercise his item-veto power, it necessarily follows that there exists a proper
"item" which may be the object of the veto. An item, as defined in the field of appropriations, pertains
to "the particulars, the details, the distinct and severable parts of the appropriation or of the bill." In
the case of Bengzon v. Secretary of Justice of the Philippine Islands, the US Supreme Court
characterized an item of appropriation as follows:
An item of an appropriation bill obviously means an item which, in itself, is a specific appropriation of
money, not some general provision of law which happens to be put into an appropriation bill.
(Emphases supplied)
On this premise, it may be concluded that an appropriation bill, to ensure that the President may be
able to exercise his power of item veto, must contain "specific appropriations of money" and notonly
"general provisions" which provide for parameters of appropriation.
Further, it is significant to point out that an item of appropriation must be an item characterized by
singular correspondence – meaning an allocation of a specified singular amount for a specified
singular purpose, otherwise known as a "line-item." This treatment not only allows the item to be
consistent with its definition as a "specific appropriation of money" but also ensures that the
President may discernibly veto the same. Based on the foregoing formulation, the existing Calamity
Fund, Contingent Fund and the Intelligence Fund, being appropriations which state a specified
amount for a specific purpose, would then be considered as "line-item" appropriations which are
rightfully subject to item veto. Likewise, it must be observed that an appropriation may be validly
apportioned into component percentages or values; however, it is crucial that each percentage or
value must be allocated for its own corresponding purpose for such component to be considered as
a proper line-item. Moreover, as Justice Carpio correctly pointed out, a valid appropriation may even
have several related purposes that are by accounting and budgeting practice considered as one
purpose, e.g., MOOE (maintenance and other operating expenses), in which case the related
purposes shall be deemed sufficiently specific for the exercise of the President‘s item veto power.
Finally, special purpose funds and discretionary funds would equally square with the constitutional
mechanism of item-veto for as long as they follow the rule on singular correspondence as herein
discussed. x x x (Emphasis supplied) 33
Accordingly, the item referred to by Section 25(5) of the Constitution is the last and indivisible
purpose of a program in the appropriation law, which is distinct from the expense category or
allotment class. There is no specificity, indeed, either in the Constitution or in the relevant GAAs that
the object of augmentation should be the expense category or allotment class. In the same vein, the
President cannot exercise his veto power over an expense category; he may only veto the item to
which that expense category belongs to.
Further, in Nazareth v. Villar, we clarified that there must be an existing item, project or activity,
34
purpose or object of expenditure with an appropriation to which savings may be transferred for the
purpose of augmentation. Accordingly, so long as there is an item in the GAA for which Congress
had set aside a specified amount of public fund, savings may be transferred thereto for
augmentation purposes. This interpretation is consistent not only with the Constitution and the
GAAs, but also with the degree of flexibility allowed to the Executive during budget execution in
responding to unforeseeable contingencies.
Nonetheless, this modified interpretation does not take away the cave at that only DAP projects
found in the appropriate GAAs may be the subject of augmentation by legally accumulated savings.
Whether or not the 116 DAP-funded projects had appropriation cover and were validly augmented
require factual determination that is not within the scope of the present consolidated petitions under
Rule 65.
4.
Cross-border transfers are constitutionally impermissible
The respondents assail the pronouncement of unconstitutionality of cross-border transfers made by

the President. They submit that Section 25(5), Article VI of the Constitution prohibits only the transfer
of appropriation, not savings. They relate that cross-border transfers have been the practice in the
past, being consistent with the President’s role as the Chief Executive. 35
In view of the clarity of the text of Section 25(5), however, the Court stands by its pronouncement,
and will not brook any strained interpretations.
5.
Unprogrammed funds may only be released upon proof that the total revenues exceeded the target
Based on the 2011, 2012 and 2013 GAAs, the respondents contend that each source of revenue in
the budget proposal must exceed the respective target to authorize release of unprogrammed funds.
Accordingly, the Court’s ruling thereon nullified the intention of the authors of the unprogrammed
fund, and renders useless the special provisions in the relevant GAAs. 36
The respondents’ contentions are without merit.
To recall, the respondents justified the use of unprogrammed funds by submitting certifications from
the Bureau of Treasury and the Department of Finance (DOF) regarding the dividends derived from
the shares of stock held by the Government in government-owned and controlled corporations. In 37
the decision, the Court has held that the requirement under the relevant GAAs should be construed
in light of the purpose for which the unprogrammed funds were denominated as "standby
appropriations." Hence, revenue targets should be considered as a whole, not individually;
otherwise, we would be dealing with artificial revenue surpluses. We have even cautioned that the
release of unprogrammed funds based on the respondents’ position could be unsound fiscal
management for disregarding the budget plan and fostering budget deficits, contrary to the
Government’s surplus budget policy. 38
While we maintain the position that aggregate revenue collection must first exceed aggregate
revenue target as a pre-requisite to the use of unprogrammed funds, we clarify the respondents’
notion that the release of unprogrammed funds may only occur at the end of the fiscal year.
There must be consistent monitoring as a component of the budget accountability phase of every
agency’s performance in terms of the agency’s budget utilization as provided in Book VI, Chapter 6,
Section 51 and Section 52 of the Administrative Code of 1987,which state:
SECTION 51. Evaluation of Agency Performance.—The President, through the Secretary shall
evaluate on a continuing basis the quantitative and qualitative measures of agency performance as
reflected in the units of work measurement and other indicators of agency performance, including
the standard and actual costs per unit of work.
SECTION 52. Budget Monitoring and Information System.—The Secretary of Budget shall determine
accounting and other items of information, financial or otherwise, needed to monitor budget
performance and to assess effectiveness of agencies’ operations and shall prescribe the forms,
schedule of submission, and other components of reporting systems, including the maintenance of
subsidiary and other records which will enable agencies to accomplish and submit said information
requirements: Provided, that the Commission on Audit shall, in coordination with the Secretary of
Budget, issue rules and regulations that may be applicable when the reporting requirements affect
accounting functions of agencies: Provided, further, that the applicable rules and regulations shall be
issued by the Commission on Audit within a period of thirty (30) days after the Department of Budget
and Management prescribes the reporting requirements.
Pursuant to the foregoing, the Department of Budget and Management (DBM) and the Commission
on Audit (COA) require agencies under various joint circulars to submit budget and financial
accountability reports (BFAR) on a regular basis, one of which is the Quarterly Report of Income or
39
Quarterly Report of Revenue and Other Receipts. On the other hand, as Justice Carpio points out
40
in his Separate Opinion, the Development Budget Coordination Committee (DBCC) sets quarterly
revenue targets for aspecific fiscal year. Since information on both actual revenue collections and
41
targets are made available every quarter, or at such time as the DBM may prescribe, actual revenue
surplus may be determined accordingly and eleases from the unprogrammed fund may take place
even prior to the end of the fiscal year.
42
In fact, the eleventh special provision for unprogrammed funds in the 2011 GAA requires the DBM to
submit quarterly reports stating the details of the use and releases from the unprogrammed funds,
viz:
11. Reportorial Requirement. The DBM shall submit to the House Committee on Appropriations and
the Senate Committee on Finance separate quarterly reports stating the releases from the
Unprogrammed Fund, the amounts released and purposes thereof, and the recipient departments,
bureaus, agencies or offices, GOCCs and GFIs, including the authority under which the funds are
released under Special Provision No. 1 of the Unprogrammed Fund.
Similar provisions are contained in the 2012 and 2013 GAAs. 43
However, the Court’s construction of the provision on unprogrammed funds is a statutory, not a
constitutional, interpretation of an ambiguous phrase. Thus, the construction should be given
prospective effect.44
6.
The presumption of good faith stands despite the obiter pronouncement
The remaining concern involves the application of the operative fact doctrine.
The respondents decry the misapplication of the operative fact doctrine, stating:
110. The doctrine of operative fact has nothing to do with the potential liability of persons who acted
pursuant to a then-constitutional statute, order, or practice. They are presumed to have acted in
good faith and the court cannot load the dice, so to speak, by disabling possible defenses in
potential suits against so-called "authors, proponents and implementors." The mere nullification are
still deemed valid on the theory that judicial nullification is a contingent or unforeseen event.
111. The cases before us are about the statutory and constitutional interpretations of so-called acts
and practices under a government program, DAP. These are not civil, administrative, or criminal
actions against the public officials responsible for DAP, and any statement about bad faith may be
unfairly and maliciously exploited for political ends. At the same time, any negation of the
presumption of good faith, which is the unfortunate implication of paragraphs 3 and 4 of page 90 of
the Decision, violates the constitutional presumption of innocence, and is inconsistent with the
Honorable Court’s recognition that "the implementation of the DAP yielded undeniably positive
results that enhanced the economic welfare of the country."
112. The policy behind the operative fact doctrine is consistent with the idea that regardless of the
nullification of certain acts and practices under the DAP and/or NBC No. 541, it does not operate to
impute bad faith to authors, proponents and implementors who continue to enjoy the presumption of
innocence and regularity in the performance of official functions and duties. Good faith is presumed,
whereas bad faith requires the existence of facts. To hold otherwise would send a chilling effect to all
public officers whether of minimal or significant discretion, the result of which would be a dangerous
paralysis of bureaucratic activity. (Emphasis supplied)
45
In the speech he delivered on July 14, 2014, President Aquino III also expressed the view that in
applying the doctrine of operative fact, the Court has already presumed the absence of good faith on
the part of the authors, proponents and implementors of the DAP, so that they would have to prove
good faith during trial.
46
Hence, in their Motion for Reconsideration, the respondents now urge that the Court should extend
the presumption of good faith in favor of the President and his officials who co-authored, proposed or
implemented the DAP. 47
The paragraphs 3 and 4 of page 90 of the Decision alluded to by the respondents read:
Nonetheless, as Justice Brion has pointed out during the deliberations, the doctrine of operative fact
does not always apply, and is not always the consequence of every declaration of constitutional
invalidity. It can be invoked only in situations where the nullification of the effects of what used to be
a valid law would result in inequity and injustice; but where no such result would ensue, the general
rule that an unconstitutional law is totally ineffective should apply.
In that context, as Justice Brion has clarified, the doctrine of operative fact can apply only to the
PAPs that can no longer be undone, and whose beneficiaries relied in good faith on the validity of
the DAP, but cannot apply to the authors, proponents and implementors of the DAP, unless there
are concrete findings of good faith in their favor by the proper tribunals determining their criminal,
civil, administrative and other liabilities. (Bold underscoring is supplied)
48
The quoted text of paragraphs 3 and 4 shows that the Court has neither thrown out the presumption
of good faith nor imputed bad faith to the authors, proponents and implementors of the DAP. The
contrary is true, because the Court has still presumed their good faith by pointing out that "the
doctrine of operative fact xxx cannot apply to the authors, proponents and implementors of the DAP,
unless there are concrete findings of good faith in their favor by the proper tribunals determining their
criminal, civil, administrative and other liabilities." Note that the proper tribunals can make "concrete
findings of good faith in their favor" only after a full hearing of all the parties in any given case, and
such a hearing can begin to proceed only after according all the presumptions, particularly that of
good faith, by initially requiring the complainants, plaintiffs or accusers to first establish their
complaints or charges before the respondent authors, proponents and implementors of the DAP.
It is equally important to stress that the ascertainment of good faith, or the lack of it, and the
determination of whether or not due diligence and prudence were exercised, are questions of fact.49
The want of good faith is thus better determined by tribunals other than this Court, which is not a trier
of facts.
50
For sure, the Court cannot jettison the presumption of good faith in this or in any other case. The1âwphi1
presumption is a matter of law. It has had a long history. Indeed, good faith has long been
established as a legal principle even in the heydays of the Roman Empire. In Soriano v.
51
Marcelo, citing Collantes v. Marcelo, the Court emphasizes the necessity of the presumption of
52 53
good faith, thus:
Well-settled is the rule that good faith is always presumed and the Chapter on Human Relations of
the Civil Code directs every person, inter alia, to observe good faith which springs from the fountain
of good conscience. Specifically, a public officer is presumed to have acted in good faith in the
performance of his duties. Mistakes committed by a public officer are not actionable absent any clear
showing that they were motivated by malice or gross negligence amounting to bad faith. "Bad faith"
does not simply connote bad moral judgment or negligence. There must be some dishonest purpose
or some moral obliquity and conscious doing of a wrong, a breach of a sworn duty through some
motive or intent or ill will. It partakes of the nature of fraud. It contemplates a state of mind
affirmatively operating with furtive design or some motive of self-interest or ill will for ulterior
purposes.
The law also requires that the public officer’s action caused undue injury to any party, including the
government, or gave any private party unwarranted benefits, advantage or preference in the
discharge of his functions. x x x
The Court has further explained in Philippine Agila Satellite, Inc. v. Trinidad-Lichauco: 54
We do not doubt the existence of the presumptions of "good faith" or "regular performance of official
duty", yet these presumptions are disputable and may be contradicted and overcome by other
evidence. Many civil actions are oriented towards overcoming any number of these presumptions,
and a cause of action can certainly be geared towards such effect. The very purpose of trial is to
allow a party to present evidence to overcome the disputable presumptions involved. Otherwise, if
trial is deemed irrelevant or unnecessary, owing to the perceived indisputability of the presumptions,
the judicial exercise would be relegated to a mere ascertainment of what presumptions apply in a
given case, nothing more. Consequently, the entire Rules of Court is rendered as excess verbiage,
save perhaps for the provisions laying down the legal presumptions.
Relevantly, the authors, proponents and implementors of the DAP, being public officers, further
enjoy the presumption of regularity in the performance of their functions. This presumption is
necessary because they are clothed with some part of the sovereignty of the State, and because
they act in the interest of the public as required by law.55 However, the presumption may be
disputed. 56
At any rate, the Court has agreed during its deliberations to extend to the proponents and
implementors of the DAP the benefit of the doctrine of operative fact. This is because they had
nothing to do at all with the adoption of the invalid acts and practices.
7.
The PAPs under the DAP remain effective under the operative fact doctrine
As a general rule, the nullification of an unconstitutional law or act carries with it the illegality of its
effects. However, in cases where nullification of the effects will result in inequity and injustice, the
operative fact doctrine may apply. In so ruling, the Court has essentially recognized the impact on
57
the beneficiaries and the country as a whole if its ruling would pave the way for the nullification of
the P144.378 Billions worth of infrastructure projects, social and economic services funded through
58
the DAP. Bearing in mind the disastrous impact of nullifying these projects by virtue alone of the
invalidation of certain acts and practices under the DAP, the Court has upheld the efficacy of such
DAP-funded projects by applying the operative fact doctrine. For this reason, we cannot sustain the
Motion for Partial Reconsideration of the petitioners in G.R. No. 209442.
IN VIEW OF THE FOREGOING, and SUBJECT TO THE FOREGOING CLARIFICATIONS, the

Court PARTIALLY GRANTS the Motion for Reconsideration filed by the respondents, and DENIES
the Motion for Partial Reconsideration filed by the petitioners in G.R. No. 209442 for lack of merit.
ACCORDINGLY, the dispositive portion of the Decision promulgated on July 1, 2014 is hereby
MODIFIED as follows:
WHEREFORE, the Court PARTIALLY GRANTS the petitions for certiorari and prohibition; and
DECLARES the following acts and practices under the Disbursement Acceleration Program,
National Budget Circular No. 541 and related executive issuances UNCONSTITUTIONAL for being
in violation of Section 25(5), Article VI of the 1987 Constitution and the doctrine of separation of
powers, namely:
(a) The withdrawal of unobligated allotments from the implementing agencies, and the
declaration of the withdrawn unobligated allotments and unreleased appropriations as
savings prior to the end of the fiscal year without complying with the statutory definition of
savings contained in the General Appropriations Acts; and
(b) The cross-border transfers of the savings of the Executive to augment the appropriations
of other offices outside the Executive.
The Court further DECLARES VOID the use of unprogrammed funds despite the absence of a
certification by the National Treasurer that the revenue collections exceeded the revenue targets for
non-compliance with the conditions provided in the relevant General Appropriations Acts.
SO ORDERED.
LUACAS P. BERSAMIN
Associate Justice
WE CONCUR:

Chief Justice
I join the concurring & dissenting opinion

See separate opinion
of J. Del Castillo
ANTONIO T. CARPIO
Associate Justice
Associate Justice
No part (Out due to close relation with

J Brion left his vote; see his Separate
one of the counsels of a party
Opinion (Qualified concurrence)ARTURO
TERESITA J. LEONARDO-DE
D. BRION**
CASTRO*
Associate Justice
Associate Justice
See concurring and dissenting opinion
DIOSDADO M. PERALTA
Associate Justice
Associate Justice

JOSE CATRAL MENDOZA BIENVENIDO L. REYES

See concurring opinion

MARVIC M.V.F. LEONEN
Associate Justice
Associate Justice
FRANCIS H. JARDELEZA***
Associate Justice
CERTIFICATION
I certify that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the court.

Chief Justice
Footnotes
* No part
** On leave
*** No part
1
Biraogo v. Philippine Truth Commission of 2010, G.R. No. 192935 and 193036, December
7, 2010, 637 SCRA 78, 177.
2
Rollo (G.R. No. 209287), pp. 1431-1482.
3
Id. at 1496-1520.
4
Id. at 1135-1241.
5
Id. at 1434-1435.
6
Id
7
Id. at 1435-1438.
8
Id. 1444-1449.
9
Id. at 1432.
10
Id. at 1496.
11
Id. at 1435.
12
Nos. L-6355-56, 93 Phil. 696 (1953).
13
Id. at 700-702 (bold underscoring is supplied for emphasis).
14
Rollo (G.R. No. 209287), pp. 1203-1204.
15
Id. at 1208.
16
Id.
Brillantes, Jr. v. Commission on Elections, G.R. No. 163193, June 15, 2004, 432 SCRA
17
269, 307.
18
19
Id. at 1449.
20
Decision, pp. 60-67.
21
Id. at 62.
22
Id. at 67.
23
Bengzon v. Drilon, G.R. No. 103524, April 15, 1992, 208 SCRA 133.
Social Justice Society (SJS) v. Dangerous Drugs Board, G.R. Nos. 157870, 158633 and
24
161658, November 3, 2008, 570 SCRA 410, 422-423.
25
No. L-32717, November 26, 1970, 36 SCRA 228, 234-235.
26
G.R. No. 192935 and 193036, December 7, 2010, 637 SCRA 78.
27
Id. at 137-138.
28
Supra note 7, at 1450-1451.
29
Decision, p. 36.
30
Id at 90.
31
Respondents’ Motion for Reconsideration, p. 21.
32
33
Id. at 126-127.
34
35
36
Id. at 1459-1465.
37
Rollo (G.R. No. 209155), pp. 327, 337-339.
38
Supra note 14, at 1231-1232.
http://budgetngbayan.com/budget-101/budget-accountability/#BAR (Visited on January 28,

39
2015).
See also the DBM and COA’s Joint Circular No. 2013-1, March 15, 2013 and Joint Circular
40
No. 2014-1, July 2, 2014.
41
J. Carpio, Separate Opinion, p. 11.
42
In this regard, the ninth and tenth special provisions for unprogrammed funds in the 2011
GAA also provide the following: 9. Use of Income. In case of deficiency in the appropriations
for the following business-type activities, departments, bureaus, offices and agencies
enumerated hereunder and other agencies as may be determined by the Permanent
Committee are hereby authorized to use their respective income collected during the year.
Said income shall be deposited with the National Treasury, chargeable against Purpose 4 -
General Fund Adjustments, to be used exclusively for the purposes indicated herein or such
other purposes authorized by the Permanent Committee, as may be required until the end of
the year, subject to the submission of a Special Budget pursuant to Section 35, Chapter 5,
Book VI of E. O. No. 292, s. 1987: x x x x Implementation of this section shall be subject to
guidelines to be issued by the DBM. 10. Use of Excess Income. Agencies collecting fees and
charges as shown in the FY 2011 Budget of Expenditures and Sources of Financing (BESF)
may be allowed to use their income realized and deposited with the National Treasury, in
excess of the collection targets presented in the BESF, chargeable against Purpose 4 -
General Fund Adjustments, to augment their respective current appropriations, subject to the
submission of a Special Budget pursuant to Section 35, Chapter 5, Book VI of E.O. No. 292:
PROVIDED, That said income shall not be used to augment Personal Services
appropriations including payment of discretionary and representation expenses.
Implementation of this section shall be subject to guidelines jointly issued by the DBM and
DOFThe 2012 and 2013 GAAs also contain similar provisions.
43
2012 GAA provides: 8. Reportorial Requirement. The DBM shall submit, either in printed
form or by way of electronic document, to the House Committee on Appropriations and the
Senate Committee on Finance separate quarterly reports stating the releases from the
Unprogrammed Fund, the amounts released and the purposes thereof, and the recipient
departments, bureaus, agencies or offices, including GOCCs and GFIs, as well as the
authority under which the funds are released under Special Provision No. 1 of the
Unprogrammed Fund. 2013 GAA reads: 8. Reportorial Requirement. The DBM shall submit,
either in printed form or by way of electronic document, to the House Committee on
Appropriations and the Senate Committee on Finance separate quarterly reports stating the
releases from the Unprogrammed Fund, the amounts released and the purposes thereof,
and the recipient departments, bureaus, and offices, including GOCCs and GFIs, as well as
the authority under which the funds are released under Special Provision No. 1 of the
Unprogrammed Fund.
Commission of Internal Revenue v. San Roque Power Corporation, G.R. Nos. 187485,
44
196113 and 197156, 690 SCRA 336.
45
http://www.gov.ph/2014/07/14/english-national-address-of-president-aquino-on-the-
46
supreme-courts-decision-on-dap/ Last visited on November 13, 2014.
47
48
Philippine National Bank v. Heirs of Estanislao Militar, G.R. No. 164801 and 165165, June
49
30, 2006, 494 SCRA 308, 319.
50
Id.
51
See Good Faith in European Contract Law, R. Zimmermann, S. Whittaker, eds.,
Cambridge University Press, 2000, p. 16;
http://catdir.loc.gov/catdir/samples/cam032/99037679.pdf (Visited on November 24, 2014).
52
G.R. No. 160772, July 13, 2009, 592 SCRA 394.
53
G.R. Nos. 167006-07, 14 August 2007, 530 SCRA 142.
54
G.R. No. 142362, May 3, 2006, 489 SCRA 22.
55
Words And Phrases, Vol. 35, p. 356, citing Bender v. Cushing, 14 Ohio Dec. 65, 70.
56
Section 3(l), Rule 131, Rules of Court.
57
Id.
http://www.gov.ph/2014/07/24/dap-presentation-of-secretary-abad-to-the-senate-of-the-
58
philippines/(November 27, 2014)
Secretary of the Department of Public Works and Highways v. SPS. Tecson, GR 179334, 21 April 2015
THIRD DIVISION
G.R. No. 179334 July 1, 2013
SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS and DISTRICT

ENGINEER CELESTINO R. CONTRERAS, Petitioners,
vs.
SPOUSES HERACLEO and RAMONA TECSON, Respondents.
DECISION
PERALTA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Court of
Appeals (CA) Decision1 dated July 31, 2007 in CA-G.R. CV No. 77997. The assailed decision
affirmed with modification the Regional Trial Court (RTC)2 Decision3 dated March 22, 2002 in Civil
Case No. 208-M-95.
The case stemmed from the following factual and procedural antecedents:
Respondent spouses Heracleo and Ramona Tecson (respondents) are co-owners of a parcel of land
with an area of 7,268 square meters located in San Pablo, Malolos, Bulacan and covered by
Transfer Certificate of Title (TCT) No. T-430064 of the Register of Deeds of Bulacan. Said parcel of
land was among the properties taken by the government sometime in 1940 without the owners’
consent and without the necessary expropriation proceedings and used for the construction of the
MacArthur Highway.5
In a letter6 dated December 15, 1994, respondents demanded the payment of the fair market value
of the subject parcel of land. Petitioner Celestino R. Contreras (petitioner Contreras), then District
Engineer of the First Bulacan Engineering District of petitioner Department of Public Works and
Highways (DPWH), offered to pay the subject land at the rate of P0.70 per square meter per
Resolution of the Provincial Appraisal Committee (PAC) of Bulacan.7 Unsatisfied with the offer,
respondents demanded for the return of their property or the payment of compensation at the current
fair market value.8
As their demand remained unheeded, respondents filed a Complaint9 for recovery of possession with
damages against petitioners, praying that they be restored to the possession of the subject parcel of
land and that they be paid attorney’s fees.10 Respondents claimed that the subject parcel of land was
assessed at P2,543,800.00.11
Instead of filing their Answer, petitioners moved for the dismissal of the complaint on the following
grounds: (1) that the suit is against the State which may not be sued without its consent; (2) that the
case has already prescribed; (3) that respondents have no cause of action for failure to exhaust
administrative remedies; and (4) if respondents are entitled to compensation, they should be paid
only the value of the property in 1940 or 1941.12
On June 28, 1995, the RTC issued an Order13 granting respondents’ motion to dismiss based on the
doctrine of state immunity from suit. As respondents’ claim includes the recovery of damages, there
is no doubt that the suit is against the State for which prior waiver of immunity is required. When
elevated to the CA,14 the appellate court did not agree with the RTC and found instead that the
doctrine of state immunity from suit is not applicable, because the recovery of compensation is the
only relief available to the landowner. To deny such relief would undeniably cause injustice to the
landowner. Besides, petitioner Contreras, in fact, had earlier offered the payment of compensation
although at a lower rate.Thus, the CA reversed and set aside the dismissal of the complaint and,
consequently, remanded the case to the trial court for the purpose of determining the just
compensation to which respondents are entitled to recover from the government. 15 With the finality of
the aforesaid decision, trial proceeded in the RTC.
The Branch Clerk of Court was initially appointed as the Commissioner and designated as the
Chairman of the Committee that would determine just compensation,16 but the case was later
referred to the PAC for the submission of a recommendation report on the value of the subject
property.17 In PAC Resolution No. 99-007,18the PAC recommended the amount of P1,500.00 per
square meter as the just compensation for the subject property.
On March 22, 2002, the RTC rendered a Decision,19 the dispositive portion of which reads:
WHEREFORE, premises considered, the Department of Public Works and Highways or its duly
assigned agencies are hereby directed to pay said Complainants/Appellants the amount of One
Thousand Five Hundred Pesos (P1,500.00) per square meter for the lot subject matter of this case
in accordance with the Resolution of the Provincial Appraisal Committee dated December 19, 2001.
SO ORDERED.20
On appeal, the CA affirmed the above decision with the modification that the just compensation
stated above should earn interest of six percent (6%) per annum computed from the filing of the
action on March 17, 1995 until full payment.21
In its appeal before the CA, petitioners raised the issues of prescription and laches, which the CA
brushed aside on two grounds: first, that the issue had already been raised by petitioners when the
case was elevated before the CA in CA-G.R. CV No. 51454. Although it was not squarely ruled upon
by the appellate court as it did not find any reason to delve further on such issues, petitioners did not
assail said decision barring them now from raising exactly the same issues; and second, the issues
proper for resolution had been laid down in the pre-trial order which did not include the issues of
prescription and laches. Thus, the same can no longer be further considered. As to the propriety of
the property’s valuation as determined by the PAC and adopted by the RTC, while recognizing the
rule that the just compensation should be the reasonable value at the time of taking which is 1940,
the CA found it necessary to deviate from the general rule. It opined that it would be obviously unjust
and inequitable if respondents would be compensated based on the value of the property in 1940
which is P0.70 per sq m, but the compensation would be paid only today. Thus, the appellate court
found it just to award compensation based on the value of the property at the time of payment. It,
therefore, adopted the RTC’s determination of just compensation of P1,500.00 per sq m as
recommended by the PAC. The CA further ordered the payment of interest at the rate of six percent
(6%) per annum reckoned from the time of taking, which is the filing of the complaint on March 17,
1995.
Aggrieved, petitioners come before the Court assailing the CA decision based on the following
grounds:
I.
THE COURT OF APPEALS GRAVELY ERRED IN GRANTING JUST COMPENSATION TO

RESPONDENTS CONSIDERING THE HIGHLY DUBIOUS AND QUESTIONABLE
CIRCUMSTANCES OF THEIR ALLEGED OWNERSHIP OF THE SUBJECT PROPERTY.
II.
THE COURT OF APPEALS GRAVELY ERRED IN AWARDING JUST COMPENSATION TO

RESPONDENTS BECAUSE THEIR COMPLAINT FOR RECOVERY OF POSSESSION AND
DAMAGES IS ALREADY BARRED BY PRESCRIPTION AND LACHES.
III.
THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE TRIAL COURT’S DECISION
ORDERING THE PAYMENT OF JUST COMPENSATION BASED ON THE CURRENT MARKET
VALUE OF THE ALLEGED PROPERTY OF RESPONDENTS.22
Petitioners insist that the action is barred by prescription having been filed fifty-four (54) years after
the accrual of the action in 1940. They explain that the court can motu proprio dismiss the complaint
if it shows on its face that the action had already prescribed. Petitioners likewise aver that
respondents slept on their rights for more than fifty years; hence, they are guilty of laches. Lastly,
petitioners claim that the just compensation should be based on the value of the property at the time
of taking in 1940 and not at the time of payment.23
The instant case stemmed from an action for recovery of possession with damages filed by
respondents against petitioners. It, however, revolves around the taking of the subject lot by
petitioners for the construction of the MacArthur Highway. There is taking when the expropriator
enters private property not only for a momentary period but for a permanent duration, or for the
purpose of devoting the property to public use in such a manner as to oust the owner and deprive
him of all beneficial enjoyment thereof.24
It is undisputed that the subject property was taken by petitioners without the benefit of expropriation
proceedings for the construction of the MacArthur Highway. After the lapse of more than fifty years,
the property owners sought recovery of the possession of their property. Is the action barred by
prescription or laches? If not, are the property owners entitled to recover possession or just
compensation?
As aptly noted by the CA, the issues of prescription and laches are not proper issues for resolution
as they were not included in the pre-trial order. We quote with approval the CA’s ratiocination in this
wise:
Procedurally, too, prescription and laches are no longer proper issues in this appeal. In the pre-trial
order issued on May 17, 2001, the RTC summarized the issues raised by the defendants, to wit: (a)
whether or not the plaintiffs were entitled to just compensation; (b) whether or not the valuation
would be based on the corresponding value at the time of the taking or at the time of the filing of the
action; and (c) whether or not the plaintiffs were entitled to damages. Nowhere did the pre-trial order
indicate that prescription and laches were to be considered in the adjudication of the RTC. 25
To be sure, the pre-trial order explicitly defines and limits the issues to be tried and controls the
subsequent course of the action unless modified before trial to prevent manifest injustice. 26
Even if we squarely deal with the issues of laches and prescription, the same must still fail. Laches is
principally a doctrine of equity which is applied to avoid recognizing a right when to do so would
result in a clearly inequitable situation or in an injustice.27 This doctrine finds no application in this
case, since there is nothing inequitable in giving due course to respondents’ claim. Both equity and
the law direct that a property owner should be compensated if his property is taken for public
use.28 Neither shall prescription bar respondents’ claim following the long-standing rule "that where
private property is taken by the Government for public use without first acquiring title thereto either
through expropriation or negotiated sale, the owner’s action to recover the land or the value thereof
does not prescribe."29
When a property is taken by the government for public use, jurisprudence clearly provides for the
remedies available to a landowner. The owner may recover his property if its return is feasible or, if it
is not, the aggrieved owner may demand payment of just compensation for the land taken. 30 For
failure of respondents to question the lack of expropriation proceedings for a long period of time,
they are deemed to have waived and are estopped from assailing the power of the government to
expropriate or the public use for which the power was exercised. What is left to respondents is the
right of compensation.31 The trial and appellate courts found that respondents are entitled to
compensation. The only issue left for determination is the propriety of the amount awarded to
respondents.
Just compensation is "the fair value of the property as between one who receives, and one who
desires to sell, x x x fixed at the time of the actual taking by the government." This rule holds true
when the property is taken before the filing of an expropriation suit, and even if it is the property
owner who brings the action for compensation.32
The issue in this case is not novel.
In Forfom Development Corporation [Forfom] v. Philippine National Railways [PNR], 33 PNR entered
the property of Forfom in January 1973 for public use, that is, for railroad tracks, facilities and
appurtenances for use of the Carmona Commuter Service without initiating expropriation
proceedings.34 In 1990, Forfom filed a complaint for recovery of possession of real property and/or
damages against PNR. In Eusebio v. Luis,35 respondent’s parcel of land was taken in 1980 by the
City of Pasig and used as a municipal road now known as A. Sandoval Avenue in Pasig City without
the appropriate expropriation proceedings. In 1994, respondent demanded payment of the value of
the property, but they could not agree on its valuation prompting respondent to file a complaint for
reconveyance and/or damages against the city government and the mayor. In Manila International
Airport Authority v. Rodriguez,36 in the early 1970s, petitioner implemented expansion programs for
its runway necessitating the acquisition and occupation of some of the properties surrounding its
premises. As to respondent’s property, no expropriation proceedings were initiated. In 1997,
1âwphi1
respondent demanded the payment of the value of the property, but the demand remained
unheeded prompting him to institute a case for accion reivindicatoria with damages against
petitioner. In Republic v. Sarabia,37 sometime in 1956, the Air Transportation Office (ATO) took
possession and control of a portion of a lot situated in Aklan, registered in the name of respondent,
without initiating expropriation proceedings. Several structures were erected thereon including the
control tower, the Kalibo crash fire rescue station, the Kalibo airport terminal and the headquarters of
the PNP Aviation Security Group. In 1995, several stores and restaurants were constructed on the
remaining portion of the lot. In 1997, respondent filed a complaint for recovery of possession with
damages against the storeowners where ATO intervened claiming that the storeowners were its
lessees.
The Court in the above-mentioned cases was confronted with common factual circumstances where
the government took control and possession of the subject properties for public use without initiating
expropriation proceedings and without payment of just compensation, while the landowners failed for
a long period of time to question such government act and later instituted actions for recovery of
possession with damages. The Court thus determined the landowners’ right to the payment of just
compensation and, more importantly, the amount of just compensation. The Court has uniformly
ruled that just compensation is the value of the property at the time of taking that is controlling for
purposes of compensation. In Forfom, the payment of just compensation was reckoned from the
time of taking in 1973; in Eusebio, the Court fixed the just compensation by determining the value of
the property at the time of taking in 1980; in MIAA, the value of the lot at the time of taking in 1972
served as basis for the award of compensation to the owner; and in Republic, the Court was
convinced that the taking occurred in 1956 and was thus the basis in fixing just compensation. As in
said cases, just compensation due respondents in this case should, therefore, be fixed not as of the
time of payment but at the time of taking, that is, in 1940.
The reason for the rule has been clearly explained in Republic v. Lara, et al., 38 and repeatedly held
by the Court in recent cases, thus:
x x x "The value of the property should be fixed as of the date when it was taken and not the date of
the filing of the proceedings." For where property is taken ahead of the filing of the condemnation
proceedings, the value thereof may be enhanced by the public purpose for which it is taken; the
entry by the plaintiff upon the property may have depreciated its value thereby; or, there may have
been a natural increase in the value of the property from the time it is taken to the time the complaint
is filed, due to general economic conditions. The owner of private property should be compensated
only for what he actually loses; it is not intended that his compensation shall extend beyond his loss
or injury. And what he loses is only the actual value of his property at the time it is taken x x x. 39
Both the RTC and the CA recognized that the fair market value of the subject property in 1940
was P0.70/sq m.40Hence, it should, therefore, be used in determining the amount due respondents
instead of the higher value which is P1,500.00. While disparity in the above amounts is obvious and
may appear inequitable to respondents as they would be receiving such outdated valuation after a
very long period, it is equally true that they too are remiss in guarding against the cruel effects of
belated claim. The concept of just compensation does not imply fairness to the property owner
alone. Compensation must be just not only to the property owner, but also to the public which
ultimately bears the cost of expropriation.41
Clearly, petitioners had been occupying the subject property for more than fifty years without the
benefit of expropriation proceedings. In taking respondents’ property without the benefit of
expropriation proceedings and without payment of just compensation, petitioners clearly acted in
utter disregard of respondents’ proprietary rights which cannot be countenanced by the Court. 42 For
said illegal taking, respondents are entitled to adequate compensation in the form of actual or
compensatory damages which in this case should be the legal interest of six percent (6%) per
annum on the value of the land at the time of taking in 1940 until full payment. 43 This is based on the
principle that interest runs as a matter of law and follows from the right of the landowner to be placed
in as good position as money can accomplish, as of the date of taking.44
WHEREFORE, premises considered, the pet1t10n is PARTIALLY GRANTED. The Court of Appeals
Decision dated July 31, 2007 in CAG.R. CV No. 77997 is MODIFIED, in that the valuation of the
subject property owned by respondents shall be F0.70 instead of P1,500.00 per square meter, with
interest at six percent ( 6o/o) per annum from the date of taking in 1940 instead of March 17, 1995,
until full payment.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
(Dissenting and Concurring Opinion)

Associate Justice
Chairperson
ROBERTO A. ABAD JOSE CATRAL MENDOZA

See separate opinion

MARVIC MARIO VICTOR F. LEONEN
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court’s Division.

Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Acting Chairperson's
Attestation, I certify that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court's Division.

Chief Justice
Footnotes
1
Penned by Associate Justice Lucas P. Bersamin (now a member of this Court), with
Associate Justices Portia Aliño-Hormachuelos and Estela M. Perlas-Bernabe (now a
member of this Court), concurring; rollo, pp. 124-137.
2
Branch 80, Malolos, Bulacan.
3
Penned by .Judge Caesar A. Casanova; rollo, pp. 165-167.
4
Records, p. 5.
5
Rollo, p. 125.
6
Records, p. 6.
7
Id. at 7.
8
Rollo, p. 125.
9
Records, pp. 1-4.
10
Id. at 3.
11
Id. at 2.
12
Id. at 17-19.
13
Id. at 29-30.
14
The case was docketed as CA-G.R. CV No. 51454.
15
Embodied in a Decision dated February 11, 1999, penned by Associate Justice Artemon D.
Luna, with Associate Justices Delilah Vidallon-Magtolis and Rodrigo V. Cosico, concurring;
records, pp. 56-62.
16
Records, p. 104.
17
Id. at 116.
18
Id. at 122.
19
Id. at 150-152.
20
Id. at 152.
21
Supra note 1.
22
Rollo, p. 108.
23
Id. at 24-32.
24
Manila International Airport Authority v. Rodriguez, 518 Phil. 750, 757 (2006).
25
Rollo, p. 133.
26
Rules of Court, Rule 18, Sec. 7.
27
Republic v. Court of Appeals, G.R. No. 147245, March 31, 2005, 454 SCRA 516, 527.
28
Id.
Eusebio v. Luis, G.R. No. 162474, October 13, 2009, 603 SCRA 576, 583; Republic v.
29
Court of Appeals, supra note 27, at 528.

30
Republic v. Court of Appeals, supra note 27, at 532.
Eusebio v. Luis, supra note 29, at 584; Forfom Development Corporation v. Philippine
31
National Railways, G.R. No. 124795, December 10, 2008, 573 SCRA 350, 366-367.
32
Republic v. Court of Appeals, supra note 27, at 534. (Emphasis supplied.)
33
Supra note 31.
34
Forfom Development Corporation v. Philippine National Railways, supra note 31, at 366.
35
Supra note 29.
36
Supra note 24.
37
G.R. No. 157847, August 25, 2005, 468 SCRA 142.
38
96 Phil. 170 (1954).
39
Republic v. Lara, et al., supra, at 177-178.
40
Rollo, p. 44.
41
Republic v. Court of Appeals, supra note 27, at 536.
42
Eusebio v. Luis, supra note 29, at 587.
43
Id. at 587-588; Forfom Development Corporation v. Philippine National Railways, supra
note 31, at 373; Manila International Airport Authority v. Rodriguez, supra note 24, at 761.
(Citations omitted).
Manila International Airport Authority v. Rodriguez, supra note 24, at 761. (Citation
44
omitted).
SM Land Inc v. BCDA, GR 203655, 7 September 2015
SPECIAL THIRD DIVISION
G.R. No. 203655, September 07, 2015

SM LAND, INC., Petitioner, v. BASES CONVERSION AND DEVELOPMENT AUTHORITY AND ARNEL
PACIANO D. CASANOVA, ESQ., IN HIS OFFICIAL CAPACITY AS PRESIDENT AND CEO OF
BCDA,Respondents.
RESOLUTION
VELASCO JR., J.:
Once again, respondent-movants Bases Conversion Development Authority (BCDA) and Arnel Paciano D.
Casanova, Esq. (Casanova) urge this Court to reconsider its August 13, 2014 Decision1 in the case at bar. In
their Motion for Leave to file Second Motion for Reconsideration and to Admit the Attached Second Motion
for Reconsideration (With Motion for the Court en banc to Take Cognizance of this Case and/to Set the Case
for Oral Argument Before the Court en banc),2 respondent-movants remain adamant in claiming that the
assailed rulings of the Court would cause unwarranted and irremediable injury to the government,
specifically to its major beneficiaries, the Department of National Defense (DND) and the Armed Forces of
the Philippines (AFP).3
The motion fails to persuade.
The instant recourse partakes the nature of a second motion for reconsideration, a prohibited
pleading under Section 2, Rule 56,4 in relation to Sec. 2, Rule 52 of the Rules of Court. The rule
categorically states: "no second motion for reconsideration of a judgment or final resolution by the same
party shall be entertained." The rationale behind the rule is explained in Manila Electric Company v.
Barlis, thusly:
The propriety or acceptability of such a second motion for reconsideration is not contingent upon the
averment of "new" grounds to assail the judgment, i.e.. grounds other than those theretofore presented and
rejected. Otherwise, attainment of finality of a judgment might be staved off indefinitely, depending on the
party's ingeniousness or cleverness in conceiving and formulating "additional flaws" or "newly discovered
errors'" therein, or thinking up some injury or prejudice to the rights of the movant for reconsideration.
"Piece-meal1" impugnation of a judgment by successive motions for reconsideration is anathema, being
precluded by the salutary axiom that a party seeking the setting aside of a judgment, act or proceeding
must set out in his motion all the grounds therefor, and those not so included are deemed waived and cease
to be available for subsequent motions.
For all litigation must come to an end at some point, in accordance with established rules of procedure and
jurisprudence. As a matter of practice and policy, courts must dispose of every case as promptly as possible;
and in fulfillment of their role in the administration of justice, they should brook no delay in the termination
of cases by stratagems or maneuverings of parties or their lawyers...5
Indeed, all cases are to eventually reach a binding conclusion and must not remain indefinitely afloat in
limbo. Otherwise, the exercise of judicial power would be for naught if court decisions can effectively be
thwarted at every turn by dilatory tactics that prevent the said rulings from attaining finality. Hence, the
Court has taken a conservative stance when entertaining second motions for reconsideration, allowing only
those grounded on extraordinarily persuasive reasons and, even then, only upon express leave first
obtained.6 As proscribed under Sec. 3, Rule 15 of the Internal Rules of the Supreme Court:
SEC. 3. Second motion for reconsideration. - The Court shall not entertain a second motion for
reconsideration, and any exception to this rule can only be granted in the higher interest of
justice by the Court en banc upon a vote of at least two-thirds of its actual membership. There is
reconsideration "in the higher interest of justice" when the assailed decision is not only legally erroneous,
but is likewise patently unjust and potentially capable of causing unwarranted and irremediable injury or
damage to the parties. A second motion for reconsideration can only be entertained before the ruling sought
to be considered becomes final by operation of law or by the Court's declaration.
In the Division, a vote of three Members shall be required to elevate a second motion for
reconsideration to the Court En Banc.7
(emphasis added) ChanRoblesVirtualawlibrary
Succinctly put, the concurrence of the following elements are required for a second motion for
reconsideration to be entertained: chanRoblesvirtualLawlibrary
1. The motion should satisfactorily explain why granting the same would be in the higher interest of
justice;
cralawlawlibrary
2. The motion must be made before the ruling sought to be reconsidered attains finality; cralawlawlibrary
3. If the ruling sought to be reconsidered was rendered by the Court through one of its Divisions, at
least three (3) members of the said Division should vote to elevate the case to the Court En Banc;
and
4. The favorable vote of at least two-thirds of the Court En Banc's actual membership must be
mustered for the second motion for reconsideration to be granted.
Unfortunately for respondent-movants, the foregoing requirements do not obtain in the case at bench. To
begin with, there are no extraordinarily persuasive reasons "in the higher interest of justice" on which the
instant second motion for reconsideration is anchored on. The enumerated grounds for the second motion
for reconsideration say as much:
GROUNDS8
THE AGREEMENT BETWEEN SMLI AND BCDA WAS NEVER PERFECTED TO COMPEL BCDA TO COMPLETE THE
COMPETITIVE CHALLENGE AS THERE WAS NO MEETING OF THE MINDS.
II
THE GOVERNMENT RESERVATION TO CANCEL THE COMPETITIVE CHALLENGE IS A POLICY DECISION AND
REMAINS ELECTIVE IN THE ENTIRE PROCEEDINGS AND BINDING TO ALL PRIVATE SECTOR ENTITIES
INCLUDING SMLI.
III
THE DECISION TO TERMINATE THE COMPETITIVE CHALLENGE IS A POLICY AND ECONOMIC DECISION.
MANDAMUS WILL THEREFORE NOT LIE.
IV
ESTOPPEL CANNOT OPERATE TO PREJUDICE THE GOVERNMENT.
THE PERCEIVED GOVERNMENT LOSSES IS NOT IMAGINED BUT REAL.
Based on the records, the second motion for reconsideration is a mere rehash, if not a reiteration, of
respondent-movants' previous arguments and submissions, which have amply been addressed by the Court
in its August 13, 2014 Decision, and effectively affirmed at length in its March 18, 2015 Resolution.9
To recapitulate, there exists between SMLI and BCDA a perfected agreement, embodied in the Certification
of Successful Negotiations, upon which certain rights and obligations spring forth, including the
commencement of activities for the solicitation for comparative proposals.10 As evinced in the Certification of
Successful Negotiation:
NOW, THEREFORE, for and in consideration of the foregoing, BCDA and SMLI have, after successful
negotiations pursuant to Stage II of Annex C x x x. reached an agreement on the purpose, terms and
conditions on the JV development of the subject property, which shall become the terms for the Competitive
Challenge pursuant to Annex C of the Guidelines, x x x.11
xxxx
BCDA and SMLI have agreed to subject SMLI's Original Proposal to Competitive
Challenge pursuant to Annex C - Detailed Guidelines for Competitive Challenge Procedure for Public-Private
Joint Ventures of the NEDA .TV guidelines, which competitive challenge process shall be immediately
implemented following the Terms of Reference (TOR) Volumes 1 and 2.12 (emphasis added)
Under the agreement and the National Economic Development Authority Joint Venture Guidelines (NEDA JV
Guidelines), the BCDA is duty-bound to proceed with and complete the competitive challenge after the
detailed negotiations proved successful. Thus, the Court found that BCDA gravely abused its discretion for
having acted arbitrarily and contrary to its contractual commitment to SMLI, to the damage and prejudice of
the latter, when it cancelled the competitive challenge prior to its completion.13
Respondent-movants' reliance on the Terms of Reference (TOR) provision on Qualifications and Waivers14 to
cancel the Swiss Challenge is misplaced for the provision, as couched, focuses only on the eligibility
requirements for Private Sector Entities (PSEs) who wish to challenge SMLI's proposal, and not to the Swiss
Challenge in its entirety.15 To rule otherwise - that the TOR allows the BCDA to cancel the competitive
challenge at any time - would contravene the NEDA JV Guidelines, which has the force and effect of law.16
Respondent-movants cannot also find solace in the dictum that the State is never be barred by estoppel by
the perceived mistakes or errors of its officials or agents.17 As jurisprudence elucidates, the doctrine is
subject to exceptions, viz:
Estoppels against the public are little favored. They should not be invoked except in a rare and unusual
circumstances, and may not be invoked where they would operate to defeat the effective operation of a
policy adopted to protect the public. They must be applied with circumspection and should be applied only in
those special cases where the interests of justice clearly require it. Nevertheless, the government must not
be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble part or do a
shabby thing; and subject to limitations x x x, the doctrine of equitable estoppel may be invoked against
public authorities as well as against private individuals.18
Here, despite BCDA's repeated assurances that it would respect SMLFs rights as an original proponent, and
after putting the latter to considerable trouble and expense, BCDA went back on its word and instead
ultimately cancelled its agreement with SMLI.19 BCDA's capriciousness became all the more evident in its
conflicting statements as regards whether or not SMLI's proposal would be advantageous to the
government.20 The alleged dubiousness of the proceeding that led to the perfection of the agreement cannot
also be invoked as a ground to cancel the contract for to rule that irregularities marred the actions of BCDA's
former board and officers, as respondent-movant would have us to believe, would be tantamount to
prematurely exposing them, who are non-parties to this case, to potential administrative liability without
due process of law.21
Respondent-movants would then asseverate that to proceed with the competitive challenge starting at the
floor price of P38,500.00 per square meter is patently unjust and grossly disadvantageous to the
government since the property in issue is allegedly appraised at P78,000.00 per square meter.22However,
this alleged adverse economic impact on the government, in finding for SMLI, remains speculative. To
clarify, Our ruling did not award the project in petitioner's favor but merely ordered that SMLI's proposal be
subjected to a competitive challenge. And lest it be misunderstood, the perceived low floor price for the
project, based on SMLI's proposal, remains just that - a floor price. Without first subjecting SMLI's proposal
to a competitive challenge, no bid can yet be obtained from private sector entities and, corollarily, no
determination can be made at present as to whether or not the final bid price for the project is indeed below
the property's fair market value.23
Overall, the foregoing goes to show that the BCDA failed to establish a justifiable reason for its refusal to
proceed with the competitive challenge.24 We are left to believe that the cancellation of the competitive
challenge, in violation not only of the agreement between the parties but also of the NEDA JV Guidelines,
was only due to BCDA's whims and caprices, and is correctible by the extraordinary writ of certiorari .
With the foregoing disquisitions, respondent-movants' second motion for reconsideration, as its first, is
totally bereft of merit. There exists no argument "in the higher interest of justice" that would convincingly
compel this Court to even admit the prohibited pleading. It also then goes without saying that this Division
does not find cogent reason to elevate the matter to the Court en banc.
Furthermore, it is well to note that the Court's ruling in this case has already attained finality and an Entry
of Judgment25 has correspondingly been issued. The Court, therefore, no longer has jurisdiction to modify
the Decision granting SMLI's petition for its finality and executoriness consequently rendered it immutable
and unalterable.26 As elucidated in Mocorro, Jr. v. Ramirez:
This quality of immutability precludes the modification of a final judgment, even if the modification is meant
to correct erroneous conclusions of fact and law. And this postulate holds true whether the modification is
made by the court that rendered it or by the highest court in the land. The orderly administration of justice
requires that, at the risk of occasional errors, the judgments/resolutions of a court must reach a point of
finality set by the law. The noble purpose is to write finis to dispute once and for all. This is a fundamental
principle in our justice system, without which there would be no end to litigations. Utmost respect and
adherence to this principle must always be maintained by those who exercise the power of adjudication. Any
act, which violates such principle, must immediately be struck down. Indeed, the principle of conclusiveness
of prior adjudications is not confined in its operation to the judgments of what are ordinarily known as
courts, but extends to all bodies upon which judicial powers had been conferred.27
The only exceptions to the rule on the immutability of final judgments are (1) the correction of clerical
errors, (2) the so-called nunc pro tunc entries which cause no prejudice to any party, and (3) void
judgments.28 Respondent-movants, therefore, question the validity of the Court's Third Division's rulings and
postulate that a deliberation of the case by the Court en banc is warranted under Sec. 4(2), Article VIII, of
the 1987 Constitution, which reads:
SECTION 4. x x x x
(2) All cases involving the constitutionality of a treaty, international or executive agreement, or law, which
shall be heard by the Supreme Court en banc, and all other cases which under the Rules of Court
are required to be heard en banc, including those involving the constitutionality, application,
or operation of presidentialdecrees, proclamations, orders, instructions, ordinances, and other
regulations, shall be decided with the concurrence of a majority of the Members who actually took part in
the deliberations on the issues in the case and voted thereon, (emphasis added)
In support of their contention, respondent-movants cite the 1953 case of Ykalina v. Oricio, which held that a
presidential order may either be in a written memorandum or merely verbal.29 They then argue that the
issuance of Supplemental Notice No. 5, effectively cancelling the Swiss Challenge of petitioner's duly
accepted suo moto proposal, was pursuant to a verbal presidential order or instruction. And pursuant to the
constitutional provision, the challenge against this presidential directive, so respondent-movants insist, is
within the jurisdiction of Court en banc, not with its divisions.30
We disagree.
Respondent-movants' interpretation of the antiquated 1953 doctrine in Ykalina is highly distorted. In the
said case, the Court, finding for respondent Ananias Oricio (Oricio), sustained his appointment in spite of
having been merely verbally made. As held:
While the appointment of an officer is usually evidenced by a Commission, as a general rule it is not
essential to the validity of an appointment that a commission issue, and an appointment may be made
by an oral announcement of his determination by the appointing power.31 (emphasis added, citation
omitted)
Based on the Court's reasoning, the presidential order that "may either be in a written memorandum or
merely verbal " adverted to in Ykalina should therefore be understood as limited specifically to those
pertaining to appointments. Current jurisprudence, however, no longer recognizes the validity of oral
appointments and, in fact, requires the transmission and receipt of the necessary appointment papers for
their completion.32
To further distinguish Ykalina with the extant case, it was observed in the former that Oricio's verbal
appointment was established in evidence by a communication duly signed by the then Acting Executive
Secretary "by order of the President."33 Applied in modern day scenarios, the limited application of the
Ykalina doctrine should only govern those that were similarly verbally given by the president but were,
nevertheless, attested to by the Executive Secretary. This is in hew with Section 27 (10) of Book III, Title
III, Chapter 9-B of Executive Order No. 292 (EO 292),34 otherwise known as the Administrative Code of
1987, which empowers the Executive Secretary to attest executive orders and other presidential issuances
"by authority of the President." These "executive orders and presidential issuances," in turn, relate to the
enumeration under Book III, Title I, Chapter 2 of EO 292.35
Here, it is well to recall that the President did not issue any said executive order or presidential issuance in
intimating to the BCDA that he wishes for the competitive challenge to be cancelled. There was no document
offered that was signed by either the Chief Executive or the Executive Secretary, for the President, to that
effect. The situation, therefore, does not involve a presidential order or instruction within the contemplation
of Sec. 4(2), Article VIII of the Constitution, and, consequently, does not fall within the jurisdiction of the
Court en banc. Given the glaring differences in context, the doctrine in Ykalina cannot find application
herein, and cannot operate to divest the Court's division of its jurisdiction over the instant case.
Anent the joint motion for intervention36 filed by the DND and AFP, both agencies claimed therein that they
are the statutory beneficiaries of the proceeds from the conversion, development, and disposal of the camps
transferred to BCDA, which include the subject property. These expected proceeds that would redound to
their benefit are to be applied in funding the AFP Modernization Program as per Republic Act No. (RA)
7227,37 as amended by RA 10349.38 As such, so the applicants claim, they have legal and financial interests
and stakes in the outcome of the subject matter, and should, therefore, be allowed to intervene.
The argument does not hold merit.
Intervention is not a matter of absolute right but may be permitted by the Court when the applicant shows
facts which satisfy the requirements of the statute authorizing intervention."39 Under the Rules of
Court,40 what qualifies a person to intervene is his possession of a legal interest in the case - be it in the
subject matter of litigation itself, in the success of the parties, or in the resultant distribution of property
in custodia legis. The Court has further expounded on this concept of legal interest and set the parameters
for granting intervention as follows:41
xxx As regards the legal interest as qualifying factor, this Court has ruled that such interest must be of a
direct and immediate character so that the intervenor will either gain or lose by the direct legal operation of
the judgment. The interest must be actual and material, a concern which is more than mere curiosity,
or academic or sentimental desire; it must not be indirect and contingent, indirect and remote,
conjectural, consequential or collateral. However, notwithstanding the presence of a legal interest,
permission to intervene is subject to the sound discretion of the court, the exercise of which is limited by
considering "whether or not the intervention will unduly delay or prejudice the adjudication of the rights of
the original parties and whether or not the intervenor's rights may be fully protected in a separate
proceeding, (emphasis added) ChanRoblesVirtualawlibrary
In the case at bar, the DND and AFP moved for intervention on the ground that they are the beneficiaries of
the proceeds from the project to be undertaken by the BCDA. Obviously, this "right to the proceeds" is far
from actual as it veritably rests on the success of the bidding process, such that there will be no proceeds
that will accrue to their benefit to speak of if the project does not push through. All the applicants have
then, at best, is an inchoate right to the proceeds of the development of the property in litigation. Said
inchoate right, contradistinguished with vested rights that have become fixed and established, are still
expectant and contingent and, thus, open to doubt or controversy.42 Consequently, the said right does not
constitute sufficient legal interest that would qualify the DND and AFP, in this case, to intervene. And in any
event, regardless of the presence or absence of sufficient legal interest, the Comment in Intervention43 filed
does not contain any new issue that has not yet been resolved by the Court in its Decision and Resolution.
Hence, there is no cogent reason to grant the motion for intervention and to admit DND and AFP's comment.
As a final note, the Rule of Law allows the citizenry to reasonably assume that future conduct will be in
observance of government regulations, and to conceivably expect that any deviation therefrom will not be
countenanced.44 The Judiciary, therefore, undertakes to strengthen the Rule of Law by embedding a sense of
predictability in the jurisprudence it builds.
To allow the government to trample on the very rules it itself issued and to renege on its contractual and
legal obligations by invoking the all too familiar mantra of public interest, at any time it pleases, will only
result in uncertainty in the application of laws, a trait inimical to the Rule of Law. The Court, therefore, steps
in to send a strong signal that the government will be honorable in its dealings and that it can be trusted in
the partnerships it forges with the private sector. In holding respondent-movants accountable for the
representations they made during the long drawn-out negotiation process and during the times the
competitive challenge repeatedly encountered roadblocks in the form of constant delays and
postponements, the Court endeavors to concretize into a norm the government's strict adherence to its
statutory enactments, and its fulfilment in good faith of the commitments it made and of the covenants it
entered into. By granting SMLI's petition, We ruled that this is the conduct the public should reasonably
expect of the government. This is what strengthening the Rule of Law exacts.
Nevertheless, We underscore Our finding that "the government is not without protection for it is not
precluded from availing of safeguards and remedies it is entitled to after soliciting comparative
proposals, as provided under the TOR and the NEDA JV Guidelines".45 Indeed, there are sufficient
safeguards installed in the guidelines to ensure that the government will not be in the losing end of the
agreement; enough, in fact, to avoid the dreaded "unwarranted, irreparable injury" that it will allegedly
sustain. If only respondent-movants devoted sufficient time in perusing and reviewing the NEDA JV
guidelines, they would have identified the remedies BCDA, and ultimately the Philippine government, is
entitled to that would have dispelled any apprehension towards conducting the competitive challenge, and
any fear of the government ending up with a low price for the lot.
WHEREFORE, in view of the foregoing, the instant Motion for Leave to file Second Motion for
Reconsideration and to Admit the Attached Second Motion for Reconsideration (With Motion for the Court en
banc to Take Cognizance of this Case and/to Set the Case for Oral Argument Before the Court en banc), filed
by the respondent-movants Bases Conversion Development Authority and Arnel Paciano D. Casanova, is
hereby DENIED for lack of merit. Likewise, the Motion for Leave to File Comment-in-Intervention and to
Admit Attached Comment-in-Intervention, jointly filed by the Department of National Defense and the
Armed Forces of the Philippines, is hereby DENIED.
No further pleadings, motions, letters, or other communications shall be entertained in this case.
Peralta, and Mendoza, JJ., concur.

Villarama, Jr., J., I join J. Leonen in his dissenting opinion.
Leonen, J., I dissent, see separate opinion.
Endnotes:
1
Rollo, pp. 980-1003; Said Decision granted petitioner SM Land, Inc.'s petition forcertiorari qnd directed
respondent BCDA and its president to. among other things, subject petitioner's duly accepted unsolicited
proposal for the development of the Bonifacio South Property to a competitive challenge.
2
Id. at 1446-1496.
3
Id. at 1453-1459.
4
RULES OF COURT, Rule 56, Sec. 2. Rules applicable. — The procedure in original cases
for certiorari, prohibition, mandamus, quo warranto, and habeas corpus shall be in accordance with the
applicable provisions of the Constitution, laws, and Rules 46. 48, 49. 51, 52 and this Rule xxx.
Manila Electric Company v. Barlis, G.R. No. I 14211, June 29, 2004, 431 SCRA 11, 28.
5
6
Id.
7
The Internal Rules of the Supreme Court, A.M. No. 10-4-20-SC. promulgated on May 4, 2010.
Rollo, p. 1517-1518.
8
Rollo, pp. 1414-1425.

9
cralawlawlibrary
10
Id. at 1414-1417.
11
Id. at 65.
12
Id. at 71.
13
Id. at 997-1000.
15
Id. at 992-997.
14
Rollo, pp. 86-87.
VIII. QUALIFICATIONS AND WAIVERS
1. BCDA reserves the right to reject any or all Eligibility Documents, to waive any defect or informality
thereon or minor deviations, which do not affect the substance and validity of the proposal.
2. BCDA reserves the right to review other relevant information affecting the PSE or its Eligibility Documents
before its declaration as eligible to participate further in the selection process, and be allowed to submit a
Final Proposal. Should such review uncover any misrepresentations made in the eligibility documents, or any
change in the situation of the PSE, which affects its eligibility, BCDA may disqualify the PSE from obtaining
any award/contract.
3. BCDA further reserves the right to call off this disposition prior to acceptance of the proposal(s) and call
for a new disposition process under amended rules, and without any liability whatsoever to any or all the
PSEs. except the obligation to return the Proposal Security
16
Id. at 1417-1419.
17
Id. at 1422-1423:
18
Republic v. Court of Appeals, G.R. No. 116111, January 21, 1999, 301 SCRA 366, 377.
19
Rollo, p. 1422.
20
Id.
21
Rollo, p 1423.
22
Id. at 1458-1459.
23
Id. at 1424-1425.
24
Id. at 1000.
25
Id. at 1439-1440.
26
Dacanay v. Yraslorza, Sr., G.R. No. 150664. September 3, 2009, 598 SCRA 20, 25.
27
G.R. No. 178366, July 28, 2008, 560 SCRA 362, 372-373.
28
Mocorro, Jr. v. Ramirez, id.
29
No. L-6951, October 30, 1953, 93 Phil 1076, 1079.
30
Rollo, pp. 1448-1452.
31
Rollo, p. 1080.
Atty. Cheloy Velicaria-Garafil vs. Office of the President, G.R. Nos. 203372, 206290, 209138, and 212030,
32
June 16, 2015: "The following elements should always concur in the making of a valid (which should be
understood as both complete and effective) appointment: (1) authority to appoint and evidence of the
exercise of the authority; (2) transmittal of the appointment paper and evidence of the transmittal: (3) a
vacant position at the time of appointment: and (4) receipt of the appointment paper and acceptance of the
appointment by the appointee who possesses all the qualifications and none of the disqualifications."
33
Rollo, p. 1079.
OFFICE OF THE PRESIDENT OF THE PHILIPPINES

Manila, July 25, 1953
Sir:
Pursuant to the provisions of section 21 (b) of Republic Act No. 180, you are hereby appointed Vice-Mayor of
the municipality of Valladolid, Negros Occidental, vice Antipas Junio.
By virtue hereof, you may qualify and enter upon the performance of the duties of the office, furnishing the
Commissioner of Civil Service with a copy of your oath.
Very respectfully,
By order of the President:
(Sgd.) MARCIANO ROQUE
Acting Executive Secretary
Mr. ANANIAS ORICIO

Through the Honorable
The Provincial Governor
Bacolod, Negros Occidental.
34
Section 27. Functions of the Executive Secretary. - The Executive Secretary shall, subject to the control
and supervision of the President, cany out the functions assigned by law to the Executive Office and shall
perform such other duties as may be delegated to him. He shall:
(10) Exercise primary authority to sign papers "By authority of the President", attest executive
orders and other presidential issuances unless attestation is specifically delegated to other officials by
him or by the President; cralawlawlibrary
SECTION 2. Executive Orders.—Acts of the President providing for rules of a general or permanent
35
character in implementation or execution of constitutional or statutory powers shall be promulgated in

executive orders.
SECTION 3. Administrative Orders.—Acts of the President which relate to particular aspects of

governmental operations in pursuance of his duties as administrative head shall be promulgated in
administrative orders.
SECTION 4. Proclamations.—Acts of the President fixing a date or declaring a status or condition of public
moment or interest, upon the existence of which the operation of a specific law or regulation is made to
depend, shall be promulgated in proclamations which shall have the force of an executive order.
SECTION 5. Memorandum Orders.—Acts of the President on matters of administrative detail or of

subordinate or temporary interest which only concern a particular officer or office of the Government shall
be embodied in memorandum orders.
SECTION 6. Memorandum Circulars.—Acts of the President on matters relating to internal administration,

which the President desires to bring to the attention of all or some of the departments, agencies, bureaus or
offices of the Government, for information or compliance, shall be embodied in memorandum circulars.
SECTION 7. General or Special Orders.—Acts and commands of the President in his capacity as
Commander-in-Chief of the Armed Forces of the Philippines shall be issued as general or special orders.
36
Rollo, pp. 764-783.
37
BASILS CONVERSION DEVELOPMENT ACT OF 1992.
38
AN ACT AMENDING REPUBLIC ACT NO. 7898. ESTABLISHING THE REVISED AFP MODERNIZATION
PROGRAM AND FOR OTHER PURPOSES.
39
Ongco v. Dalisay G.R. No. 190810, July 18, 2012, 677 SCRA 232, 236.
40
RULES OF COURT, Rule 19, Sec. 1. Who may intervene. - A person who has a legal interest in the matter
in litigation, or in the success of either of the parries, or an interest against both, or is so situated as to be
adversely affected by a distribution or other disposition of property in the custody of the court or of an
officer thereof may, with leave of court, be allowed to intervene in the action.
41
Ongco vs. Dalisay, supra note 39, at 239.
42
Heirs of Gabriel Zari vs. Santos, Nos. L-212123 and L-212124, March 28, 1969, 275 SCR A 651: see
also Denguel Consolidated Mining Co. v. Pineda. No. L-7231, March 28. 1956, 98 Phil 711, 722, quoting
from Pearsall vs. Great Northern R. Co., 161 U.S. 646: Rights are vested when the right to enjoyment,
present or prospective, has become the property of some particular person or persons as a present
interest. The right must be absolute, complete and unconditional, independent of a contingency,
and a mere expectancy of future benefit, or a contingent interest in property founded on
anticipated continuance of existing laws, does not constitute a vested right. So, inchoate rights
which have not been acted on are not vested, (emphasis added)
43
Rollo, pp. 71-780.
44
Dissenting Opinion of Chief Justice Maria Lourdes P. A. Sereno, League of Cities of the Philippines (LCP)
vs. Commission on Elections. G.R. Nos. 176951. 177499, and 178056, June 28, 2011, 652 SCRA 798, 822.
45
Rollo, p. 1425.
DISSENTING OPINION
LEONEN, J.:
Bases Conversion and Development Authority's Second Motion for Reconsideration1 cannot be summarily
denied on the ground that judgment had already been entered and had already become final and executory
on March 18, 2015.
Bases Conversion and Development Authority's first Motion for Reconsideration was denied on March 18,
2015.2 Based on the Entry of Judgment3 prepared on April 14, 2015, the August 13, 2014 Decision4 in this
case was declared final and executory on the same date—March 18, 2015.
Bases Conversion and Development Authority (BCDA) received the March 18, 2015 Resolution only on April
20, 2015.5 The immediate Entry of Judgment deprived BCDA of its 15-day period from notice to file its
Second Motion for Reconsideration.6 It deprived SM Land, Inc. the opportunity to show the higher interest
involved in this case.
The Entry of Judgment is procedurally infirm and should be vacated.
Our decision in this case impacts not only properties entrusted to BCDA but also properties of the whole
government whenever it deals with private entities. It also impacts the status of our national defense and
security.
This case involves BCDA's issuance of Supplemental Notice No. 57 on August 6, 2012. It terminated the
"Competitive Challenge for the Selection of BCDA's Private Sector Partner" for the privatization of BCDA's
33.1-hectare property in Fort Bonifacio.8
SM Land, Inc., having been declared the Original Proponent, wants to annul Supplemental Notice No. 5 for
allegedly violating its rights.9 SM Land, Inc. claims that it has the right to a completed competitive
challenge, with its latest offer of P38,500.00 per square meter of the Fort Bonifacio property.10
BCDA, however, claims that SM Land, Inc.'s offer is below the market value. Acceptance of SM Land, Inc.'s
offer may reduce the benefits received by statutory beneficiaries of the proceeds of the disposition of BCDA-
administered properties.11
Our internal rules mandate this court En Banc to act on matters that may have an effect on businesses or
community welfare, or on matters that merit this court En Banc's attention.12
Further, the Motion for Leave to File Second Motion for Reconsideration and to Admit the Attached Second
Motion for Reconsideration contained a "Motion for the Court en banc to Take Cognizance of this Case and/or
to Set the Case for Oral Argument Before the Court en banc."13 Based on their captions, both the Motion for
Leave to File Second Motion for Reconsideration14 and the Second Motion for Reconsideration15 were
addressed to this court En Banc and not to the Third Division.
For these reasons, Bases Conversion and Development Authority's Second Motion for Reconsideration should
be referred to this court En Banc. The En Banc should be allowed to determine for itself whether a case
involves matters that are of sufficient importance to require the participation of a full court.
In the alternative, at the very least, SM Land, Inc. should be ordered to file its Comment.
The competitive challenge process can be terminated upon finding that it is inconsistent with national
policies and public interest.
In this case, the declaration of SM Land, Inc. as the Original Proponent was filled with governance,
commercial, and financial issues.
Particularly, the Joint Venture Selection Committee's and the outgoing BCDA Board's decisions and actions
showed that the disposition must be assessed further in terms of consistency with the country's best
interests.
BCDA points to the Minutes of BCDA's April 28, 2010 Board Meeting16 showing that before SM Land, Inc. was
declared as the Original Proponent, there had been a concern within the BCDA Board regarding the choice of
disposition process:
5.1. Vice Chairman Abaya expressed concern that BCDA might be

3 questioned later on why it opted to go via Annex 'C and not the Annex
'A' mode of disposition. In order to justify BCDA going via Annex 'C
mode, it should be made clear to the interested proponents that there
are already offers higher than the JUSMAG property[.]17(Citation
omitted)
The first developer that submitted a proposal for the development of BCDA's property was Robinsons Land
Corporation and not SM Land, Inc. Robinsons Land Corporation had submitted as early as October 8,
200918 its initial proposal of P14,000.00 per square meter for the development of the property.19 This was at
least two (2) months before SM Land, Inc. submitted its initial proposal of P16,350.00 per square meter on
December 11, 2009.20
On April 29, 2010, BCDA rejected both proposals for failing to conform to "BCDA's policies on the disposition
of its properties[.]"21 The competitive challenge was not terminated.22
Instead, the Joint Venture Selection Committee actively solicited proposals from Robinsons Land Corporation
and SM Land, Inc.23
In BCDA's May 4, 2010 Minutes of the Board Meeting,24 the BCDA Board of Directors was informed that
Robinsons Land Corporation and SM Land, Inc. were allowed to submit another proposal to determine which
among them submitted first.25 This was despite the two-month gap between Robinsons Land Corporation's
and SM Land, Inc.'s submissions.26 Thus:
5.2. The JV-SC informed both entities that the rejection of their proposals
4 does not preclude them from submitting another proposal. To be able
to let BCDA fairly and equitably name the original proponent under the
JV Guidelines, the JV-SC would like to adopt a process wherein both
PSEs shall submit a much improved proposal simultaneously. This
would determine which between the two entities shall be subjected for
evaluation as the original proponent. This would also resolve the issue
of which entity submits first. The determination of the original
proponent shall be based on the content of their respective proposals,
compared against BCDA's pre-approved minimum parameters for the
disposition of the subject property.
5.2. The JV-SC informed the proponents that they may submit their
5 respective proposals, if any, on 04 May 2010, 9:00 am at the BCDA
Corporate Center.27
According to BCDA, this gave Robinsons Land Corporation and SM Land, Inc. "an unfair advantage over all
other developers as it effectively limited the selection process to the two invitees."28
On the same day, May 4, 2010, at 9:00 a.m., SM Land, Inc. submitted its revised proposal. Robinsons Land
Corporation suddenly backed out from submitting its new proposal.29
BCDA perceives: (1) the failure to terminate the competitive challenge proceeding when none of the
participants were found to have met the parameters for disposition;30 (2) the decision to solicit improved
offers even after rejection of proposals;31 (3) Robinsons Land Corporation's sudden decision not to
participate in the competitive challenge;32 and (4) the "need to determine 'which entity submit(ted) first,'
despite the glaring variance in the actual date that BCDA received the proposals of [Robinsons Land
Corporation] and [SM Land, Inc.]"33 as an indication of an advantage given to SM Land, Inc.34
BCDA also implies that the apparent urgency in evaluating and coming up with a recommendation on SM
Land Inc.'s unsolicited proposal was an irregularity:
On 4 May 2010, merely six days before the Presidential Elections, SMLI submitted its 3 May 2010 Unsolicited
Proposal to BCDA. This Unsolicited Proposal was opened at 9:00 a.m. during the BCDA Business
Development Board Committee Meeting in the presence of SMLI representatives. The 3 May 2010
Unsolicited Proposal was thereafter forwarded to BCDA's Reception Desk where it was stamped as having
been received at 9:25 a.m. and then endorsed for inclusion in the Agenda of the BCDA Board Meeting set at
12:00 noon of the same day.
In a span of about three hours, the JV-SC received, opened, evaluated and recommended the
acceptance of SMLI's Unsolicited Proposal for the privatization and development of the 33.1
hectare subject Property for Php32,501/sq. m. in Net Present Value (NPV) using a 10% discount
rate; and the pursuit of detailed negotiations on the terms and conditions of the Joint Venture
under Annex "C" of the NEDA JV Guidelines. This circumstance was not lost to some BCDA Directors. As
reflected in the Minutes of the Board Meeting:
5.2.23.Director Sangil said that the Board was only given a few hours to
evaluate the revised proposal by SLI, considering that copies of the
same were given only shortly before the Board Meeting started. As
such, the Board may not be able to come up with a wise decision on
the matter.35 (Emphasis and underscoring in the original, citations
omitted)
BCDA also points to an apparent disregard of Ayala Land, Inc.'s P36,880.00 per square meter offer made
before the issuance of a Certification of Successful Negotiation.36
This had not escaped the notice of Ayala Land, Inc. In its June 11, 2010 letter:37
We refer to our meeting yesterday, June 10, and reiterate our concern over the decision of the Bases
Conversion Development Authority (BCDA) to accept an offer to purchase the subject parcel of land at a
price below our offer of PHP36,880.00 per square meter and even as you confirmed that our offer is superior
to previous offers you have received.
We now formally request that you reconsider your decision and conduct a public bidding for the property
consistent with the precedent set by BCDA for the South Bonifacio lots with its disposition of the JUSMAG
site in February on account of its receipt of a number of offers from various proponents including ourselves.
We believe that BCDA should pursue the best price for the property to uphold public interest and avoid the
loss of public funds and revenues. The sudden change in BCDA's disposition mode as our government
transitions to a new administration might also be questionable.38ChanRoblesVirtualawlibrary
Ayala Land, Inc.'s offer was not acted upon. Instead, the Joint Venture Selection Committee asked SM Land,
Inc. to improve Ayala Land, Inc.'s offer.39 SM Land, Inc. increased its offer to P36,900.00.40 SM Land, Inc.'s
proposal was later improved to P38,500.00.41
Further, BCDA's July 20, 201042 and July 28, 201043 Board Meetings before the issuance of a Certification of
Successful Negotiation indicate concerns by some of the BCDA Directors over the disposition's alignment
with the President's policies. Some of BCDA's Board Members knew that BCDA's actions must be aligned
with the President's policies.
During the July 20, 2010 Board Meeting:
4.4.31. Director Valencia recalled that in the disposition of the JUSMAG property, the Board could not decide
on whether or not to declare ALI as the original proponent. However, subsequent proposals came along
which compelled BCDA to dispose of the property through public bidding over a period of two years. Given
this example, he suggested that the Board could perhaps defer its decision on the matter until such time
that the new administration appoints new BCDA Board Members. He also expressed his concern about the
ALI letter which alleges that the BCDA's mode of disposition might be questionable[.]
xxx
4.4.40 Director Valencia said that the ALI offer for the subject property was reduced to its present value,
same with the SMLI offer. Regardless of the underlying assumptions for the offers, the value of the property
is the same and the peso represented today is the same as that being represented by other proponents.
Given this fact, it is prudent for BCDA to wait until new BCDA Directors are appointed by the new
administration to avoid the suspicion that BCDA is rushing the disposition of the subject property.
4.4.52 Director Seno suggested the possibility of elevating the matter to the Office of the President (OP) as
far as the Board's decision is concerned, explaining the process involved and the actions of the Board every
step of the way. The professionalism of the BCDA Board will be questioned if it does not exercise prudence
on the matter.44(Underscoring in the original, citation omitted)
On July 28, 2010:
5.10.9. For the record, Director Sangil asked whether BCDA considered President Aquino's State of the
Nation (SONA) speech vis-a-vis the discussions in BCDA and read on a portion of the SONA, to wit:
'May nagmungkahi sa atin, ito ang proposisyon, uupahan po nila ang Headquarters ng Navy sa Roxas
Boulevard at Navy Station sa Fort Bonifacio. Sagot po nila ang paglipat ng Navy Headquarters sa Camp
Agninaldo. Agaran bibigyan tayo ng isang milyon dolyar, at dagdag pa sa lahat na iyan, magsusumi [te] pa
sila sa atin ng kita mida sa mga negosyong itatayo nila sa uupahan nilang lupa. Mar ami napong nag alok at
nagmungkahi sa atin, mula local hanggang dayuhang negosyante, na nagpuno ng iba't ibang
pangangailangan.'
5.10.10. Vice Chairman Abaya said that subsequent interviews of the Philippine Navy spokesperson
identified Lot 1, which is on the other side of the Fort Bonifacio. Director Sangil, on the other hand,
expressed concern that the President put emphasis on the term uupahan or lease instead of a joint venture.
xxx
5.10.14. Director Sangil wanted to place on record that BCDA has considered the policy statement of the
President after his SONA. He opined that when BCDA comes up with certain policies, the policy of the
President should be considered as part of the framework of a development plan for the agency.
xxx
5.10.20. xxx Director Sangil deems whatever concession, agreements, directions that may be done in the
past of BCDA may be superseded by a policy statement of the President.45 (Emphasis in the original, citation
omitted)
Upon recommendation of the Joint Venture Selection Committee, the BCDA Board of Directors declared SM
Land, Inc. as the Original Proponent.46 One Board Member refused to participate and insisted that a decision
be made under the new administration and with the new Board that would be appointed by the elected
President.47
The above circumstances of disposition affect perception on the conduct of present and future government
transactions.
As shown by Ayala Land, Inc.'s letter, investors are aware of the government disposition process. Other
private entities may be interested in participating in government disposition processes. However, a
perception that one participant is favored reduces the government's credibility whenever it transacts with
private entities.
Perception that a government property disposition procedure is rigged or favoring a particular interest will
discourage investors to participate not only in this specific disposition process but also in future disposition
processes or transactions involving government.
II
The President, as Chief Executive, must ensure the faithful execution of laws.48 He took an oath to
"consecrate [himself] to the service of the Nation."49 As such, part of his job is to maintain or improve the
credibility of government transactions. Government transactions must be consistent with public interest.
The President also controls and supervises executive departments, bureaus, and offices including BCDA.50 He
is expected to correct errors by and irregularities in the processes of departments, bureaus, and offices
under his control whenever they come to his knowledge.
Thus, after the President had been elected in 2010 under a platform of good governance, his new
administration saw the need to conduct a due diligence on existing government projects. Among the
projects reviewed were the disposition of the Food Terminal, Inc. Complex, the Subic-Clark-Tarlac
Expressway concession, and the disposition of the 33.1-hectare property in Fort Bonifacio.51 The disposition
process of the Fort Bonifacio property was deferred for a policy review.
In the letter52 dated September 14, 2010, Undersecretary Christian M. Castillo of the Office of the Chief
Presidential Legal Counsel requested documents relating to the privatization and development of the 33.1-
hectare property in Fort Bonifacio.
In the letter53 dated September 27, 2010, Assistant Director Clemencia A. Cabugayan of the Presidential
Management Staff Politico-Security Policy Office requested a copy of the Bonifacio South Master
Development Plan.
BCDA justified the disposition process.54 In its November 8, 2010 and November 30, 2010 Memoranda
submitted to the President, BCDA recommended to proceed with the privatization of the Fort Bonifacio
property through competitive challenge.55
In the letter56 dated April 20, 2011, Director May Jean A. Name of the Economic Policy Office of the
Presidential Management Staff referred to the President's directive to meet regarding the Department of
Justice's opinion that it was still possible for government not to proceed with the disposition of the property
and the pending policy decision on the property's disposition. Director May Jean A. Name asked for BCDA's
comments on the Department of Justice's opinion.57
BCDA later found that SM Land, Inc.'s proposal would not yield the best value for government. SM Land,
Inc.'s proposal of P38,500.00 was below the market value of the property. BCDA claims that the property
was already appraised at P78,000.00 to P500,000.00 by Cuervo Appraisers, the Bureau of Internal Revenue,
and the Government Service Insurance System. Compelling government to dispose the property at
P38,500.00 would entail a loss of about P13 billion.58
BCDA recommended that the competitive challenge process be terminated and to proceed with public
bidding.59
As a result of the President's policy review and BCDA's re-evaluation of its recommendations, Supplemental
Notice No. 5 was issued, terminating the competitive challenge.
This court's Decision of August 13, 2014 and Resolutions of March 18, 2015 and September 7, 2015
disregarded that the termination of the competitive challenge was a policy decision by the President. This
court, through the Third Division, overruled that, in violation of the principle of separation of powers.
Under the Constitution, government powers are divided into three branches, such that none of these
branches may interfere with or exercise powers vested in the other branches. The executive power is vested
in the President.60 The exercise of executive power may entail policy decisions, with which the judiciary may
not interfere. Policy decisions entail evaluation of actions in relation to government policies.
Judicial review should be exercised with great "deliberation, care, and caution"61 such that we do not "unduly
transgress into the province of the other departments."62 The judiciary's power is to interpret the law and/or
determine the consistency of the other government branches' acts with the Constitution or if those acts are
attended by grave abuse of discretion amounting to lack or excess of jurisdiction. This court only "sits to
ensure that political departments exercise their discretions within the boundaries set by the [Constitution
and our laws."63 It has no power to question policy decisions by the executive or the legislative branches
unless there is a clear showing of constitutional violation or grave abuse of discretion. Whether canceling a
disposition process is in accordance with the policies is a matter where this court should exercise deference.
What I have said of judicial review in Araullo v. Aquino64 vis-a-vis statutory interpretation also applies to
other government acts such as in this case:
Judicial review should take a more deferential temperament when the interpretation of a statutory provision
involves political choices. At the very least, these questions should be deferred until parties in the proper
case using the appropriate remedy are able to lay down the ambient facts that can show that one
interpretation adopted by government respondents clearly and categorically runs afoul of any law or
constitutional provision. In my separate opinion in Umali v. Commission on Elections, I noted: chanRoblesvirtualLawlibrary
Our power to strike down an act of co-equal constitutional organs is not unlimited. When we nullify a
governmental act, we are required "to determine whether there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. "
No less than three constitutional organs have interpreted the law and the relevant provision of the
Constitution. I am of the view that our power to strike down that interpretation should not be on the basis of
the interpretation we prefer. Rather, Governor Umali should bear the burden of proving that the
interpretation of the law and the Constitution in the actual controversy it presents is not unreasonable and
not attended by any proven clear and convincing democratic deficit. We should wield the awesome power of
judicial review awash with respectful deference that the other constitutional organs are equally conscious of
the mandate of our people through our Constitution.
When judicial review is being applied to check on the powers of other constitutional departments or organs,
it should require deference as a constitutional duty. This proceeds from the idea that the Constitution, as a
fundamental legal document, contains norms that should also be interpreted by other public officers as they
discharge their functions within the framework of their constitutional powers.65 (Emphasis supplied, citation
omitted)
The policy involved in this case relates to the enhancement of benefits derived from properties administered
by BCDA.66 BCDA-administered properties should be disposed to the end that the use of military camps
would be maximized.67 Revenues obtained from disposition of BCDA-administered properties are, based on
Section 868 of Republic Act No. 7227, intended for the modernization of the Armed Forces of the Philippines.
They are also intended for housing loan programs and other projects that will impact public security and
community welfare.69
Maximizing benefits derived from BCDA-administered properties hardly means allowing a floor price that is
below market value. Indeed, the floor price may not necessarily be the final price, but competitive challenge
does not guarantee that the property will be bidded out at a price that is equivalent to the property's market
value. Government has processes that allow it to set a minimum contract price.70 These processes ensure
that the disposition of BCDA-administered properties is consistent with the policy to maximize benefits and
revenues derived from them.
The importance of maximizing revenues is emphasized by the Department of National Defense and Armed
Forces of the Philippines' attempt to intervene in this case.
On February 21, 2013, the Department of National Defense and Armed Forces of the Philippines filed their
Motion for Leave to File Comment-in-Intervention71 and their Comment-in-Intervention.72 They explained the
import of the decision in this case on their purpose as guardians of national peace and security, which we
cannot ignore. Thus:
The DND is mandated to maximize its effectiveness for guarding against external and internal threats to
national peace and security and provide support for social and economic development. The DND is the
primary government agency which supervises the Armed Forces of the Philippines (AFP). It functions, among
others, as the lead line agency and authority in formulating the national defense-security policies, plans and
programs on defense and security; the monitor and evaluator of the implementation of policies, plans and
programs on defense and security; an innovator of new strategies on defense and security issues, including
and pursuant to the national defense plan; and the implementor of the country's national defense and
security commitments based on defense and security treaties, cooperation agreements, international
covenants, protocols and other similar arrangements.
The AFP is composed of a citizen armed force that shall undergo military training and respond to the call to
military service, organized and maintained in a manner that shall render it capable of rapid expansion from
a peacetime organization to a wartime or emergency organization, a Standing Force composed of regular
officers and enlisted personnel; reservists called to active duty; draftees; trainees and government-
sponsored Filipino cadets enrolled in local or foreign military schools and a Citizen Armed Force that shall be
composed of all reservists, and officers and enlisted men on inactive status that are all tasked with the duty
to uphold sovereignty, support the Constitution, and defend the territory of the Republic of the Philippines
against all enemies, foreign and domestic; promote and advance the national aims, goals, interests and
polices; plan, organize, maintain, develop and deploy its regular and citizen reserve forces for national
security; and perform such other functions as may be provided by law or assigned by higher authorities.
The succeeding years saw the decline in the state of the AFP while the threats to national security in the
region increased, leaving the AFP seriously wanting in its capacity to defend the Philippines from external
and internal threats.
The government saw the need to address this problem and enacted the AFP Modernization Act on 23
February 1995. The Act has given the Armed Forces of the Philippines a fresh mandate for the development
of its capabilities as it prepares for the 21st Century.
The AFP Modernization Program entails the development and employment of certain capabilities that can
address assessed threats. The objectives of the program include the development and transformation of the
AFP into a multi-mission oriented force capable of effectively addressing internal and external security
threats.
The AFP Modernization Program is dependent on funds appropriated for that purpose under the National
Budget and from revenues generated from the development or disposition of military reservations. . . .
The AFP Modernization Program necessitates a procurement program that includes multi-year contracts
which are supported by multi-year obligational authorities from the Department of Budget and Management
(DBM). This will require planned expenses anchored on a budget guaranteed by annual revenue streams
such as those provided by leases or joint-venture agreements over military camps provided under RA 7227.
Under the Revised AFP Modernization Act, the AFP must set priorities and schedules and map out the
average cost of each modernization project. The law directs the AFP, together with the senior leaders of the
defense and military establishments, to deliberately plan and determine the major defense equipment
needed by the services of the AFP to enable them to perform their mandate.
The painstaking process of planning the much needed upgrade and improvement of the AFP's defense
equipment is mainly dependent on budget availability. For the next five (5) years alone, the AFP will need at
least Phpl5 billion per annum to upgrade its capabilities and provide the country with a minimum credible
defense posture.
The Bases Conversion and Development Authority (BCDA) remits Php2 billion every year, on the average, to
the Bureau of Treasury (BTr) for the AFP modernization fund. The remittance is raised from the proceeds
and from the recurring revenues from the disposition, leases and joint ventures executed by BCDA pursuant
to RA 7227. The remittances provide a sustained income of approximately thirteen percent (13%) of the
estimated Phpl5 billion annual budgetary requirement of the AFP Modernization Program.
The AFP Modernization Program relies on the disposition of the y
Metro Manila Camps for its Modernization Fund. . . .
...
. . . The AFP stands to receive at least fifty percent (50%) from the proceeds from bidding for the Joint
Partnership in the development of a 33.1-hectare prime property in Fort Bonifacio. . . .
According to information supplied by BCDA, DND and AFP shall receive fifty percent (50%) of the cash
payment that the private sector partner is expected to pay. . . [T]he cash payment will amount to, at the
minimum, Php7 billion of which intervenors expect to receive or at least Php3.5 billion for this year alone, if
the bidding pushes through. This is on top of the Php2 billion that is expected to be remitted by respondent
BCDA for the AFP Modernization Fund.
...
The intervention of DND and AFP becomes especially significant in the instant case since this Honorable
Court has recently issued and granted petitioner SM Land, Inc.'s (SMLI) prayer for Temporary Restraining
Order (TRO) enjoining BCDA from proceeding with the bidding of the Bonifacio South Pointe property. The
issuance of a TRO directly and materially affects the interest of the DND and AFP, they being the elected
statutory beneficiary of the proceeds to be derived from the disposition.73 (Citations omitted)
The issuance of Supplemental Notice No. 5 was also in consideration of our policy in favor of public bidding.
Executive Order No. 42374 provides that public bidding is the preferred mode of awarding government
contracts:
Section 1. Policy Requiring Public Bidding. It is the policy of this Administration that all Government
contracts of Government Agencies shall be awarded through open and competitive public bidding, save in
exceptional cases provided by law and applicable rules and regulations. . .
Executive Order No. 62 provides that public bidding is the general rule in privatization of BCDA-administered
properties:
SECTION 4. PRIVATIZATION. The BCDA hereby adopts the following policy guidelines in pursuing
privatization, commercialization or divestment projects: chanRoblesvirtualLawlibrary
4.1. Privatization shall be the basic thrust of the conversion and development of the baselands. Privatization
modes shall include, among others, leasing, joint ventures, management contract, build-operate-transfer
(BOT) and its variants;cralawlawlibrary
4.3. As a general rule, the privatization process should be conducted through public bidding. However, in the
exigency of public service and national interest, and consonant with existing laws, rules and regulations on
negotiated contracts, simplified bidding through sealed canvass of at least three (3) pre-qualified investors,
or direct negotiation, may be resorted to. The process of selecting the prospective lessees and private
investors shall be transparent, where procedures and selection process adapted are made public through
newspaper advertisements and similar other means[.]
Public bidding does away with preferential treatments given to any one private entity. It provides interested
private entities with equal opportunity to participate in government disposition processes. It fosters
competition and allows government to obtain the best value for the properties it chooses to dispose. Being
the general rule, public bidding should be the first resort among all disposition processes. Other modes of
disposition may not be used without showing that they will be more advantageous to the government.
The President conducted a policy review. There were irregularities found in the disposition process that may
be inconsistent with government policies and may affect government's credibility. While the President holds
an enormous power affecting the whole nation and its citizens, he is not in a position to resort to inaction
when faced with irregularities in disposition procedures, financial and commercial issues, and possible
government losses. The President's decision to suspend or stop government acts that are marred by
irregularities is not grave abuse of discretion. It is in keeping with the oath he took when he assumed
office.75 This is one of the cases requiring this court's deference.
Not only was the policy decision of the executive disregarded in this court's August 13, 2014 Decision and
March 18, 2015 and September 7, 2015 Resolutions; public interest concerns, such as business and
community welfare, governance, financial, and public security issues were also either denied or insufficiently
addressed by this court. In this court's September 7, 2015 Resolution, the Department of National Defense's
and Armed Forces of the Philippines' rights to and interest in the proceeds of the disposition— which would
eventually redound to the public's benefit—were dismissed as merely "inchoate"76 and insufficient, rendering
them unqualified to participate in the matter.77
Moreover, despite this case's impact on government's credibility, public security, businesses and public
welfare, despite the irregularities that hounded the whole disposition process, and despite signals that this
case may merit the attention of a full court, this court decided to keep the issues within the purview of a
five-member Division.
Our internal rules mandate this court En Banc to act on matters that may have an impact on businesses or
community welfare, or on matters that merit this court En Banc's attention.78 Cases involving these matters
should be referred to this court En Banc. They should not be confined to the consciousness of a five-member
Division. This court En Banc should be given an opportunity to determine for itself whether a case is of
sufficient importance to merit the full court's consideration.
III
SM Land, Inc. has no right to a completed competitive challenge procedure. BCDA's acceptance of SM Land,
Inc.'s unsolicited proposal, the Certification of Successful Negotiation,79 the Terms of Reference,80 and the
joint venture guidelines did not limit the selection process to a competitive challenge. Neither was there any
provision in these documents showing that SM Land, Inc. was given the right to a completed competitive
challenge.
BCDA's May 12, 2010 letter81 to SM Land, Inc. categorically stated that the acceptance "shall mean only that
authorization is given to proceed with detailed negotiations on the terms and conditions of the JV activity
and shall not bind BCDA to enter into a JV agreement, nor to the terms of your unsolicited proposal."82
A review of the terms of the Certification of Successful Negotiation and of the Terms of Reference shows
that there was no commitment to enter into a joint venture agreement or to subject any proposal to a
completed competitive challenge.
The issuance of a Certification of Successful Negotiation comprises only a part of the whole disposition
process. The terms of the Certificate were crafted under the premise that the disposition process has not
changed. Its effectivity should be read in light of the whole disposition process. The Certification of
Successful Negotiation cannot be interpreted as a consummated agreement that is separate from BCDA's
intent to proceed with the disposition of the property.
The terms and conditions under the Certification are preparatory terms and conditions for a future joint
venture activity. Meanwhile, the Terms of Reference merely describe the procedural aspects of a competitive
challenge. Their application is still contingent upon a decision to proceed with the property's disposition and
the property's disposition process. In other words, the Certification of Successful Negotiation and the Terms
of Reference give no right to any participant unless BCDA decides to proceed with the disposition process.83
Further, the Terms of Reference contain a qualification, thus:
VIII. QUALIFICATIONS AND WAIVERS

3. BCDA further reserves the right to call off this disposition prior to acceptance of the proposal(s) and call
for a new disposition process under amended rules, and without any liability whatsoever to any or all the
PSEs, except the obligation to return the Proposal Security.84(Emphasis supplied) ChanRoblesVirtualawlibrary
The existence of this reservation indicates that BCDA may reconsider or terminate the disposition process
unilaterally.
In this court's March 18, 2015 Resolution, this reservation was dismissed as inapplicable to the original
proponent and applicable only to private sector entities other than the original proponent and the process of
finding comparative proposals.85
The Terms of Reference "describe the procedures that shall be followed in connection with the disposition of
the . . . 33.1-hectare [property of BCDA.]"86 The clause "call off this disposition"87 refers to the whole
disposition process. As I explained in my August 13, 2014 Dissenting Opinion in this case:
For clarity, however, the term "disposition" cannot be interpreted as anything other than the entire
competitive challenge process. The terms of reference define "privatization" as "the disposition of the
Property through joint venture." In the context of SMLI and BCDA's dealings, the object of disposition is
always the 33.1-hectare property of BCDA in Fort Bonifacio, and the disposition of that property is
privatization. Privatization is an entire process that starts from selection and ends with the actual transfer of
ownership of property.88 (Citations omitted)
Accordingly, this will affect not only comparative proponents, but also the original proponent.
The extent of protection given to original proponents is limited to its right to match subsequent proposals
from other private sector entities.89 The rights of an original proponent, therefore, take effect only if other
private sector entities submit their proposals. Private sector entities other than the original proponent may
submit their proposals if BCDA decides to proceed with the disposition or disposition process.90 In effect, a
choice to stop the process of finding comparative proposals in accordance with the qualifications and waivers
also stops the whole competitive challenge process. There can be no valid competitive challenge if no private
entity other than the original proponent is allowed to submit a comparative proposal. A contrary view would
be uncompetitive and, therefore, would go against our policies relating to government procurement and
joint venture agreements.91
IV
The ponencia denies that there is a high interest of justice involved in this case since proceeding with the
competitive challenge does not necessarily entail the award of the project.92 Further, the ponencia
emphasizes the existence of safeguards that will "ensure that the government will not be in the losing end of
the agreement[.]"93
Indeed, the Detailed Guidelines for Competitive Challenge Procedure for Public-Private Joint
Ventures94 provide that the awarding of a joint venture contract to a private sector entity is still subject to
approval by the Head of the concerned government entity.95 The Detailed Guidelines for Competitive
Challenge Procedure for Public-Private Joint Ventures provides:
Stage Three - Once the negotiations have been successfully completed, the JV activity shall be subjected to
a competitive challenge, as follows: chanRoblesvirtualLawlibrary
...
5. Within seven (7) calendar days from the date of completion of the Competitive Challenge, the JV-SC shall
submit the recommendation of award to the Head of the Government Entity. Succeeding activities shall be in
accordance with Sections VIII. (Award and Approval of Contract) and X (Final Approval) of Annex
A hereof.96 (Emphasis supplied)
Annex "A" or the Detailed Guidelines and Procedures for Competitive Selection for Public-Private Joint
Ventures provides:97
VIII. Award and Approval of Contract

....
2. Decision to Award. Within seven (7) calendar days from the submission by JV-SC of the recommendation
to award, the Head of the Government Entity shall approve or reject the same. The approval shall be
manifested by signing and issuing the "Notice of Award" to the winning private sector participant within
seven (7) calendar days from approval thereof.
All participating private sector participants shall be informed of the award in writing. Such decision shall be
made available to the public upon request.98 (Underscoring in the original)
These provisions in the Guidelines only indicate that there is no consummated contract yet between the
parties prior to the approval of the Head of government entity. The government entity concerned may still
approve or disapprove the proposal of the successful proponent regardless of the completion of the
competitive challenge procedure. In other words, the above provisions provide government with a
procedural exit through the Head of the government entity's rejection of the proposal even after the
issuance of a Certification of Successful Negotiation. There is no reason why this cannot be done before an
original proponent's proposal is subjected to a completed competitive challenge. Insisting on the completion
of the competitive challenge procedure will only be a costly exercise of futility if the government entity has,
in the middle of the process, already decided to terminate the procedure. It will only unduly delay the
disposition process and the receipt of intended benefits by the beneficiaries.
In view of these, SM Land, Inc.'s Second Motion for Reconsideration should be elevated to this court En
Banc. Had this case been elevated to this court En Banc, the Second Motion for Reconsideration could have
been granted.
Endnotes:
1
Rollo, pp. 1464-1496.
2
Id. at 1425, Resolution; SM Land, Inc. v. Bases Conversion and Development Authority,G.R. No. 203655,
March 18, 2015 12 [Per J. Velasco, Jr., Special Third Division].
Rollo, pp. 1439-1440.

3
4
SM Land, Inc. v. Bases Conversion and Development Authority, G.R. No. 203655, August 13, 2014, 733
SCRA 68 [Per J. Velasco, Jr., Third Division].
5
Rollo, p. 1447, BCDA's Motion for Leave to File Second Motion for Reconsideration and to Admit the
Attached Second Motion for Reconsideration, and p. 1464, BCDA's Second Motion for Reconsideration.
6
RULES OF COURT, Rule 51, sec. 10 and Rule 52, sec. 1; S.Cr. INT. RULES, Rule 16, sees. 1 and 3.
Rollo, p. 63.
7
8
Id.
9
10
Id. at 3-59.
11
Id. at 1023-1078, BCDA's Motion to Resolve with Motion for Reconsideration.
12
S.Ct. INT. RULES, Rule 2, sec. 3(k) and 3(m).
(k) Division cases where the subject matter has a huge financial impact on businesses or affects the welfare
of a community; cralawlawlibrary
....
(m) cases that the Court en banc deems of sufficient importance to merit its attention[.]
Rollo, p. 1446, BCDA's Motion for Leave to File Second Motion for Reconsideration and to Admit the
13
Attached Second Motion for Reconsideration.

14
Id. at 1446.
15
Id. at 1464.
16
Rollo, pp. 1094-1123.
Id. at 1040, BCDA's Motion to Resolve with Motion for Reconsideration, and p. 1481, BCDA's Second
17
Motion for Reconsideration.
18
Id. at 1480, BCDA's Second Motion for Reconsideration.
19
Id. at 1091-1093, Robinsons Land Corporation Technical and Financial Proposal.
20
Id. at 1048, BCDA's Motion to Resolve with Motion for Reconsideration.
21
Id. at 1124-1125, BCDA's letters to Robinsons Land Corporation and to SM Land Incorporation,
respectively.
22
23
Id. at 1041.
24
Id. at 1126-1141.
25
Id. at 1136.
26
Id. at 1048, BCDA's Motion to Resolve with Motion for Reconsideration.
27
Id. at 1136, BCDA Board Meeting dated May 4, 2010.
28
29
Id. at 1482.
30
Id.
31
Id.
32
Id. at 1482.
33
Id. at 1483.
34
Id.
35
Id. at 1042, BCDA's Motion to Resolve with Motion for Reconsideration
30
37
Id. at 1145.
38
Id.
39
40
Id.
41
Id. at 1492.
42
Id. at 1146-1170.
43
Id. at 1171-1206.
44
Id. at 1045—1046, BCDA's Motion to Resolve with Motion for Reconsideration, and 1484, BCDA's Second
45
Motion for Reconsideration.
46
Id. at 1046, BCDA's Motion to Resolve with Motion for Reconsideration, and 1488, BCDA's Second Motion
for Reconsideration.
47
48
Const, art. VII, sec. 17.
49
Const., art. VII, sec. 5.
50
Const., art. VII, sec. 17.
51
Rollo, p. 1479, BCDA's Second Motion for Reconsideration.
52
Id. at 574.
53
Id. at 1081.
54
55
Id. at 1479-1480.
56
Id. at 1082.
58
59
Id. at 635, BCDA's Memorandum for H.E. The President dated February 13, 2012.
60
Const, art. VII, sec. 1.
61
J. Leonen, Concurring Opinion in Araullo v. Aquino III, G.R. No. 209287, July 1, 2014, 728 SCRA 403 [Per
J. Bersamin, En Banc].
62
Id.
63
J. Leonen, Concurring Opinion in Araullo v. Aquino III, G.R. No. 209287, February 3, 2015, 3 [Per J.
Bersamin, En Banc].
64
G.R. No. 209287, February 3, 2015, [Per J. Bersamin, En Banc].
65
J. Leonen, Concurring Opinion in Araullo v. Aquino III, G.R. No. 209287, February 3, 2015, 21 [Per J.
Bersamin, En Banc].
66
Rep. Act No. No. 7227 (1992), sec. 2 provides:
Sec. 2. Declaration of Policies. - It is hereby declared the policy of the Government to accelerate the sound
and balanced conversion into alternative productive uses of the Clark and Subic military reservations and
their extensions (John Hay Station, Wallace Air Station, O'Donnell Transmitter Station, San Miguel Naval
Communications Station and Capas Relay Station), to raise funds by the sale of portions of Metro Manila
military camps, and to apply said funds as provided herein for the development and conversion to
productive civilian use of the lands covered under the 1947 Military Bases Agreement between the
Philippines and the United States of America, as amended. It is likewise the declared policy of the
Government to enhance the benefits to be derived from said properties in order to promote the economic
and social development of Central Luzon in particular and the country in general.
67
Exec. Order No. 62 (1993), sec. 1.4 provides:
SECTION 1. Policy Framework - The BCDA shall be guided by the following policy framework in its
conversion program:
1.4 The BCDA shall plan and implement fund generating projects which will maximize the use of the military
camps in Metro Manila that shall be sold pursuant to Section 8 of the Act with the funds generated
therefrom to be strictly utilized as provided for in the Act; and
68
Rep. Act No. No. 7227 (1992), sec. 8 provides: Sec. 8 ...
. . . The proceeds from any sale, after deducting all expenses related to the sale, of portions of Metro Manila
military camps as authorized under this Act, shall be used for the following purposes with their
corresponding percent shares of proceeds:
1. Thirty-two and five-tenths percent (32.5%) - To finance the transfer of the AFP military camps and the
construction of new camps, the self-reliance and modernization program of the AFP, the concessional and
long-term housing loan assistance and livelihood assistance to AFP officers and enlisted men and their
families, and the rehabilitation and expansion of the AFP's medical facilities[.]
69
Rep. Act No. No. 7227 (1992), sec. 8.
70
J. Leonen, Dissenting Opinion in SM Land, Inc. v. Bases Conversion and Development Authority, G.R. No.
203655, August 13, 2014, 733 SCRA 68, 123-124 [Per J. Velasco, Jr., Third Division].
71
Rollo, pp. 764-770.
72
Id. at 771-782.
73
Id. at 772-777.
74
Exec. Order No. 423 was executed on April 30, 2005.
75
CONST., art. VII, sec. 5 provides:
SECTION 5. Before they enter on the execution of their office, the President, the Vice-President, or the
Acting President shall take the following oath or affirmation:
"I do solemnly swear (or affirm) that I will faithfully and conscientiously fulfill my duties as President (or
Vice-President or Acting President) of the Philippines, preserve and defend its Constitution, execute its laws,
do justice to every man, and consecrate myself to the service of the Nation. So help me God." (In case of
affirmation, last sentence will be omitted.)
76
Ponencia, p. 10.
77
Id.
78
S.CT. INT. RULES, Rule 2, sec. 3(k) and 3(m).
(k) Division cases where the subject matter has a huge financial impact on businesses or affects the welfare
of a community; cralawlawlibrary
(m) cases that the Court en banc deems of sufficient importance to merit its attention[.]
79
Rollo, pp. 64-72
80
Id. at 74-88.
81
Id. at 351-352.
82
Id. at 351.
83
Id. at 64-71, Certification of Successful Negotiations.
84
Id. at 86-87.
85
Id. at 1419-1422, Resolution; SM Land, Inc. v. Bases Conversion and Development Authority, G.R. No.
203655, March 18, 2015 6-9 [Per J. Velasco, Jr., Special Third Division].
86
Rollo, p. 74.
87
Id. at 87, Terms of Reference VIII.3.
88
J. Leonen, Dissenting Opinion in SM Land, Inc. v. Bases Conversion and Development Authority, G.R. No.
203655, August 13, 2014, 733 SCRA 68, 131 [Per J. Velasco, Jr., Third Division].
Rollo, pp. 74-75, Terms of Reference, and p. 374, NEDA Joint Venture Guidelines, Annex C, III, Stage
89
Three, 4.
90
Id. at 374, NEDA Joint Venture Guidelines, Annex C, III, Stage Three, 4; Cf. Exec. Order No. 62 (1993).
91
See Exec. Order No. 423 (2005), sec. 8 provides:
Section 8. Joint Venture Agreements. The NEDA, in consultation with the GPPB, shall issue guidelines
regarding joint venture agreements with private entities with the objective of promoting transparency,
competitiveness, and accountability in government transactions, and, where applicable, complying with the
requirements of an open and competitive public bidding.
See also Rep. Act No. 9184 (2002), sec. 3 provides:
SEC. 3. Governing Principles on Government Procurement. - All procurement of the national government, its
departments, bureaus, offices and agencies, including state universities and colleges, government-owned
and/or -controlled corporations, government financial institutions and local government units, shall, in all
cases, be governed by these principles:
(b) Competitiveness by extending equal opportunity to enable private contracting parties who are eligible
and qualified to participate in public bidding.
92
Ponencia, p. 6.
93
Id. at 11.
94
Id. at 373-375.
95
Id. at 373.
96
Id. at 374-375.
97
Id. at 360-370.
98
Id. at 368.
Garcia v. Drilon, 699 SCRA 352
EN BANC
G.R. No. 179267 June 25, 2013
JESUS C. GARCIA, Petitioner,

vs.
THE HONORABLE RAY ALAN T. DRILON, Presiding Judge, Regional Trial Court-Branch 41,
Bacolod City, and ROSALIE JAYPE-GARCIA, for herself and in behalf of minor children,
namely: JO-ANN, JOSEPH EDUARD, JESSE ANTHONE, all surnamed GARCIA, Respondents.
DECISION
PERLAS-BERNABE, J.:
Hailed as the bastion of Christianity in Asia, the Philippines boasts of 86.8 million Filipinos- or 93
percent of a total population of 93.3 million – adhering to the teachings of Jesus Christ. 1 Yet, the
admonition for husbands to love their wives as their own bodies just as Christ loved the church and
gave himself up for her2 failed to prevent, or even to curb, the pervasiveness of violence against
Filipino women. The National Commission on the Role of Filipino Women (NCRFW) reported that,
for the years 2000-2003, "female violence comprised more than 90o/o of all forms of abuse and
violence and more than 90% of these reported cases were committed by the women's intimate
partners such as their husbands and live-in partners."3
Thus, on March 8, 2004, after nine (9) years of spirited advocacy by women's groups, Congress
enacted Republic Act (R.A.) No. 9262, entitled "An Act Defining Violence Against Women and Their
Children, Providing for Protective Measures for Victims, Prescribing Penalties Therefor, and for
Other Purposes." It took effect on March 27, 2004.4
R.A. 9262 is a landmark legislation that defines and criminalizes acts of violence against women and
their children (VAWC) perpetrated by women's intimate partners, i.e, husband; former husband; or
any person who has or had a sexual or dating relationship, or with whom the woman has a common
child.5 The law provides for protection orders from the barangay and the courts to prevent the
commission of further acts of VAWC; and outlines the duties and responsibilities of barangay
officials, law enforcers, prosecutors and court personnel, social workers, health care providers, and
other local government officials in responding to complaints of VAWC or requests for assistance.
A husband is now before the Court assailing the constitutionality of R.A. 9262 as being violative of
the equal protection and due process clauses, and an undue delegation of judicial power to
barangay officials.
The Factual Antecedents
On March 23, 2006, Rosalie Jaype-Garcia (private respondent) filed, for herself and in behalf of her
minor children, a verified petition6 (Civil Case No. 06-797) before the Regional Trial Court (RTC) of
Bacolod City for the issuance of a Temporary Protection Order (TPO) against her husband, Jesus C.
Garcia (petitioner), pursuant to R.A. 9262. She claimed to be a victim of physical abuse; emotional,
psychological, and economic violence as a result of marital infidelity on the part of petitioner, with
threats of deprivation of custody of her children and of financial support. 7
Private respondent's claims
Private respondent married petitioner in 2002 when she was 34 years old and the former was eleven
years her senior. They have three (3) children, namely: Jo-Ann J. Garcia, 17 years old, who is the
natural child of petitioner but whom private respondent adopted; Jessie Anthone J. Garcia, 6 years
old; and Joseph Eduard J. Garcia, 3 years old.8
Private respondent described herself as a dutiful and faithful wife, whose life revolved around her
husband. On the other hand, petitioner, who is of Filipino-Chinese descent, is dominant, controlling,
and demands absolute obedience from his wife and children. He forbade private respondent to pray,
and deliberately isolated her from her friends. When she took up law, and even when she was
already working part time at a law office, petitioner trivialized her ambitions and prevailed upon her
to just stay at home. He was often jealous of the fact that his attractive wife still catches the eye of
some men, at one point threatening that he would have any man eyeing her killed. 9
Things turned for the worse when petitioner took up an affair with a bank manager of Robinson's
Bank, Bacolod City, who is the godmother of one of their sons. Petitioner admitted to the affair when
private respondent confronted him about it in 2004. He even boasted to the household help about
his sexual relations with said bank manager. Petitioner told private respondent, though, that he was
just using the woman because of their accounts with the bank.10
Petitioner's infidelity spawned a series of fights that left private respondent physically and
emotionally wounded. In one of their quarrels, petitioner grabbed private respondent on both arms
and shook her with such force that caused bruises and hematoma. At another time, petitioner hit
private respondent forcefully on the lips that caused some bleeding. Petitioner sometimes turned his
ire on their daughter, Jo-Ann, who had seen the text messages he sent to his paramour and whom
he blamed for squealing on him. He beat Jo-Ann on the chest and slapped her many times. When
private respondent decided to leave petitioner, Jo-Ann begged her mother to stay for fear that if the
latter leaves, petitioner would beat her up. Even the small boys are aware of private respondent's
sufferings. Their 6-year-old son said that when he grows up, he would beat up his father because of
his cruelty to private respondent.11
All the emotional and psychological turmoil drove private respondent to the brink of despair. On
December 17, 2005, while at home, she attempted suicide by cutting her wrist. She was found by
her son bleeding on the floor. Petitioner simply fled the house instead of taking her to the hospital.
Private respondent was hospitalized for about seven (7) days in which time petitioner never bothered
to visit, nor apologized or showed pity on her. Since then, private respondent has been undergoing
therapy almost every week and is taking anti-depressant medications.12
When private respondent informed the management of Robinson's Bank that she intends to file
charges against the bank manager, petitioner got angry with her for jeopardizing the manager's job.
He then packed his things and told private respondent that he was leaving her for good. He even
told private respondent's mother, who lives with them in the family home, that private respondent
should just accept his extramarital affair since he is not cohabiting with his paramour and has not
sired a child with her.13
Private respondent is determined to separate from petitioner but she is afraid that he would take her
children from her and deprive her of financial support. Petitioner had previously warned her that if
she goes on a legal battle with him, she would not get a single centavo. 14
Petitioner controls the family businesses involving mostly the construction of deep wells. He is the
President of three corporations – 326 Realty Holdings, Inc., Negros Rotadrill Corporation, and J-Bros
Trading Corporation – of which he and private respondent are both stockholders. In contrast to the
absolute control of petitioner over said corporations, private respondent merely draws a monthly
salary of P20,000.00 from one corporation only, the Negros Rotadrill Corporation. Household
expenses amounting to not less than P200,000.00 a month are paid for by private respondent
through the use of credit cards, which, in turn, are paid by the same corporation together with the
bills for utilities.15
On the other hand, petitioner receives a monthly salary of P60,000.00 from Negros Rotadrill
Corporation, and enjoys unlimited cash advances and other benefits in hundreds of thousands of
pesos from the corporations.16After private respondent confronted him about the affair, petitioner
forbade her to hold office at JBTC Building, Mandalagan, where all the businesses of the
corporations are conducted, thereby depriving her of access to full information about said
businesses. Until the filing of the petition a quo, petitioner has not given private respondent an
accounting of the businesses the value of which she had helped raise to millions of pesos. 17
Action of the RTC of Bacolod City
Finding reasonable ground to believe that an imminent danger of violence against the private
respondent and her children exists or is about to recur, the RTC issued a TPO 18 on March 24, 2006
effective for thirty (30) days, which is quoted hereunder:
Respondent (petitioner herein), Jesus Chua Garcia, is hereby:
a) Ordered to remove all his personal belongings from the conjugal dwelling or family home
within 24 hours from receipt of the Temporary Restraining Order and if he refuses, ordering
that he be removed by police officers from the conjugal dwelling; this order is enforceable
notwithstanding that the house is under the name of 236 Realty Holdings Inc. (Republic Act
No. 9262 states "regardless of ownership"), this is to allow the Petitioner (private respondent
herein) to enter the conjugal dwelling without any danger from the Respondent.
After the Respondent leaves or is removed from the conjugal dwelling, or anytime the
Petitioner decides to return to the conjugal dwelling to remove things, the Petitioner shall be
assisted by police officers when re-entering the family home.
The Chief of Police shall also give the Petitioner police assistance on Sunday, 26 March
2006 because of the danger that the Respondent will attempt to take her children from her
when he arrives from Manila and finds out about this suit.
b) To stay away from the petitioner and her children, mother and all her household help and
driver from a distance of 1,000 meters, and shall not enter the gate of the subdivision where
the Petitioner may be temporarily residing.
c) Not to harass, annoy, telephone, contact or otherwise communicate with the Petitioner,
directly or indirectly, or through other persons, or contact directly or indirectly her children,
mother and household help, nor send gifts, cards, flowers, letters and the like. Visitation
rights to the children may be subject of a modified TPO in the future.
d) To surrender all his firearms including a .9MM caliber firearm and a Walther PPK and
ordering the Philippine National Police Firearms and Explosives Unit and the Provincial
Director of the PNP to cancel all the Respondent's firearm licenses. He should also be
ordered to surrender any unlicensed firearms in his possession or control.
e) To pay full financial support for the Petitioner and the children, including rental of a house
for them, and educational and medical expenses.
f) Not to dissipate the conjugal business.
g) To render an accounting of all advances, benefits, bonuses and other cash he received
from all the corporations from 1 January 2006 up to 31 March 2006, which himself and as
President of the corporations and his Comptroller, must submit to the Court not later than 2
April 2006. Thereafter, an accounting of all these funds shall be reported to the court by the
Comptroller, copy furnished to the Petitioner, every 15 days of the month, under pain of
Indirect Contempt of Court.
h) To ensure compliance especially with the order granting support pendente lite, and
considering the financial resources of the Respondent and his threat that if the Petitioner
sues she will not get a single centavo, the Respondent is ordered to put up a BOND TO
KEEP THE PEACE in the amount of FIVE MILLION PESOS, in two sufficient sureties.
On April 24, 2006, upon motion19 of private respondent, the trial court issued an amended
TPO,20 effective for thirty (30) days, which included the following additional provisions:
i) The petitioners (private respondents herein) are given the continued use of the Nissan
Patrol and the Starex Van which they are using in Negros Occidental.
j) The petitioners are given the continued use and occupation of the house in Parañaque, the
continued use of the Starex van in Metro Manila, whenever they go to Manila.
k) Respondent is ordered to immediately post a bond to keep the peace, in two sufficient
sureties.
l) To give monthly support to the petitioner provisionally fixed in the sum of One Hundred
Fifty Thousand Pesos (Php 150,000.00) per month plus rental expenses of Fifty Thousand
Pesos (Php 50,000.00) per month until the matter of support could be finally resolved.
Two days later, or on April 26, 2006, petitioner filed an Opposition to the Urgent Ex-Parte Motion for
Renewal of the TPO21 seeking the denial of the renewal of the TPO on the grounds that it did not (1)
comply with the three-day notice rule, and (2) contain a notice of hearing. He further asked that the
TPO be modified by (1) removing one vehicle used by private respondent and returning the same to
its rightful owner, the J-Bros Trading Corporation, and (2) cancelling or reducing the amount of the
bond from P5,000,000.00 to a more manageable level at P100,000.00.
Subsequently, on May 23, 2006, petitioner moved22 for the modification of the TPO to allow him
visitation rights to his children.
On May 24, 2006, the TPO was renewed and extended yet again, but subject only to the following
modifications prayed for by private respondent:
a) That respondent (petitioner herein) return the clothes and other personal belongings of
Rosalie and her children to Judge Jesus Ramos, co-counsel for Petitioner, within 24 hours
from receipt of the Temporary Protection Order by his counsel, otherwise be declared in
Indirect Contempt of Court;
b) Respondent shall make an accounting or list of furniture and equipment in the conjugal
house in Pitimini St., Capitolville Subdivision, Bacolod City within 24 hours from receipt of the
Temporary Protection Order by his counsel;
c) Ordering the Chief of the Women's Desk of the Bacolod City Police Headquarters to
remove Respondent from the conjugal dwelling within eight (8) hours from receipt of the
Temporary Protection Order by his counsel, and that he cannot return until 48 hours after the
petitioners have left, so that the petitioner Rosalie and her representatives can remove
things from the conjugal home and make an inventory of the household furniture, equipment
and other things in the conjugal home, which shall be submitted to the Court.
d) Deliver full financial support of Php200,000.00 and Php50,000.00 for rental and
Php25,000.00 for clothes of the three petitioners (sic) children within 24 hours from receipt of
the Temporary Protection Order by his counsel, otherwise be declared in indirect contempt of
Court;
e) That respondent surrender his two firearms and all unlicensed firearms to the Clerk of
Court within 24 hours from receipt of the Temporary Protection Order by his counsel;
f) That respondent shall pay petitioner educational expenses of the children upon
presentation of proof of payment of such expenses.23
Claiming that petitioner continued to deprive them of financial support; failed to faithfully comply with
the TPO; and committed new acts of harassment against her and their children, private respondent
filed another application24for the issuance of a TPO ex parte. She alleged inter
alia that petitioner contrived a replevin suit against himself by J-Bros Trading, Inc., of which the latter
was purportedly no longer president, with the end in view of recovering the Nissan Patrol and Starex
Van used by private respondent and the children. A writ of replevin was served upon private
respondent by a group of six or seven policemen with long firearms that scared the two small boys,
Jessie Anthone and Joseph Eduard.25
While Joseph Eduard, then three years old, was driven to school, two men allegedly attempted to
kidnap him, which incident traumatized the boy resulting in his refusal to go back to school. On
another occasion, petitioner allegedly grabbed their daughter, Jo-Ann, by the arm and threatened
her.26 The incident was reported to the police, and Jo-Ann subsequently filed a criminal complaint
against her father for violation of R.A. 7610, also known as the "Special Protection of Children
Against Child Abuse, Exploitation and Discrimination Act."
Aside from the replevin suit, petitioner's lawyers initiated the filing by the housemaids working at the
conjugal home of a complaint for kidnapping and illegal detention against private respondent. This
came about after private respondent, armed with a TPO, went to said home to get her and her
children's belongings. Finding some of her things inside a housemaid's (Sheryl Jamola) bag in the
maids' room, private respondent filed a case for qualified theft against Jamola. 27
On August 23, 2006, the RTC issued a TPO,28 effective for thirty (30) days, which reads as follows:
Respondent (petitioner herein), Jesus Chua Garcia, is hereby:
1) Prohibited from threatening to commit or committing, personally or through another, acts

of violence against the offended party;
2) Prohibited from harassing, annoying, telephoning, contacting or otherwise communicating

in any form with the offended party, either directly or indirectly;
3) Required to stay away, personally or through his friends, relatives, employees or agents,
from all the Petitioners Rosalie J. Garcia and her children, Rosalie J. Garcia's three brothers,
her mother Primitiva Jaype, cook Novelita Caranzo, driver Romeo Hontiveros,
laundrywoman Mercedita Bornales, security guard Darwin Gayona and the petitioner's other
household helpers from a distance of 1,000 meters, and shall not enter the gate of the
subdivision where the Petitioners are temporarily residing, as well as from the schools of the
three children; Furthermore, that respondent shall not contact the schools of the children
directly or indirectly in any manner including, ostensibly to pay for their tuition or other fees
directly, otherwise he will have access to the children through the schools and the TPO will
be rendered nugatory;
4) Directed to surrender all his firearms including .9MM caliber firearm and a Walther PPK to
the Court;
5) Directed to deliver in full financial support of Php200,000.00 a month and Php50,000.00

for rental for the period from August 6 to September 6, 2006; and support in arrears from
March 2006 to August 2006 the total amount of Php1,312,000.00;
6) Directed to deliver educational expenses for 2006-2007 the amount of Php75,000.00 and
Php25,000.00;
7) Directed to allow the continued use of a Nissan Patrol with Plate No. FEW 508 and a
Starex van with Plate No. FFD 991 and should the respondent fail to deliver said vehicles,
respondent is ordered to provide the petitioner another vehicle which is the one taken by J
Bros Tading;
8) Ordered not to dissipate, encumber, alienate, sell, lease or otherwise dispose of the
conjugal assets, or those real properties in the name of Jesus Chua Garcia only and those in
which the conjugal partnership of gains of the Petitioner Rosalie J. Garcia and respondent
have an interest in, especially the conjugal home located in No. 14, Pitimini St., Capitolville
Subdivision, Bacolod City, and other properties which are conjugal assets or those in which
the conjugal partnership of gains of Petitioner Rosalie J. Garcia and the respondent have an
interest in and listed in Annexes "I," "I-1," and "I-2," including properties covered by TCT
Nos. T-186325 and T-168814;
9) Ordered that the Register of Deeds of Bacolod City and E.B. Magalona shall be served a
copy of this TEMPORARY PROTECTION ORDER and are ordered not to allow the transfer,
sale, encumbrance or disposition of these above-cited properties to any person, entity or
corporation without the personal presence of petitioner Rosalie J. Garcia, who shall affix her
signature in the presence of the Register of Deeds, due to the fear of petitioner Rosalie that
her signature will be forged in order to effect the encumbrance or sale of these properties to
defraud her or the conjugal partnership of gains.
In its Order29 dated September 26, 2006, the trial court extended the aforequoted TPO for another
ten (10) days, and gave petitioner a period of five (5) days within which to show cause why the TPO
should not be renewed, extended, or modified. Upon petitioner's manifestation, 30 however, that he
has not received a copy of private respondent's motion to modify/renew the TPO, the trial court
directed in its Order31 dated October 6, 2006 that petitioner be furnished a copy of said motion.
Nonetheless, an Order32 dated a day earlier, October 5, had already been issued renewing the TPO
dated August 23, 2006. The pertinent portion is quoted hereunder:
xxxx
x x x it appearing further that the hearing could not yet be finally terminated, the Temporary
Protection Order issued on August 23, 2006 is hereby renewed and extended for thirty (30) days and
continuously extended and renewed for thirty (30) days, after each expiration, until further orders,
and subject to such modifications as may be ordered by the court.
After having received a copy of the foregoing Order, petitioner no longer submitted the required
comment to private respondent's motion for renewal of the TPO arguing that it would only be an
"exercise in futility."33
Proceedings before the CA
During the pendency of Civil Case No. 06-797, petitioner filed before the Court of Appeals (CA) a
petition34 for prohibition (CA-G.R. CEB-SP. No. 01698), with prayer for injunction and temporary
restraining order, challenging (1) the constitutionality of R.A. 9262 for being violative of the due
process and the equal protection clauses, and (2) the validity of the modified TPO issued in the civil
case for being "an unwanted product of an invalid law."
On May 26, 2006, the appellate court issued a 60-day Temporary Restraining Order 36 (TRO) against
the enforcement of the TPO, the amended TPOs and other orders pursuant thereto.
Subsequently, however, on January 24, 2007, the appellate court dismissed 36 the petition for failure
of petitioner to raise the constitutional issue in his pleadings before the trial court in the civil case,
which is clothed with jurisdiction to resolve the same. Secondly, the challenge to the validity
of R.A. 9262 through a petition for prohibition seeking to annul the protection orders issued by the
trial court constituted a collateral attack on said law.
His motion for reconsideration of the foregoing Decision having been denied in the
Resolution37 dated August 14, 2007, petitioner is now before us alleging that –
The Issues
I.
THE COURT OF APPEALS ERRED IN DISMISSING THE PETITION ON THE THEORY THAT THE
ISSUE OF CONSTITUTIONALITY WAS NOT RAISED AT THE EARLIEST OPPORTUNITY AND
THAT, THE PETITION CONSTITUTES A COLLATERAL ATTACK ON THE VALIDITY OF THE
LAW.
II.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN FAILING TO CONCLUDE THAT

R.A. 9262 IS DISCRIMINATORY, UNJUST, AND VIOLATIVE OF THE EQUAL PROTECTION
CLAUSE.
III.
THE COURT OF APPEALS COMMITTED GRAVE MISTAKE IN NOT FINDING THAT R.A. 9262
RUNS COUNTER TO THE DUE PROCESS CLAUSE OF THE CONSTITUTION.
IV.
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE LAW DOES VIOLENCE TO THE
POLICY OF THE STATE TO PROTECT THE FAMILY AS A BASIC SOCIAL INSTITUTION.
V.
THE COURT OF APPEALS SERIOUSLY ERRED IN NOT DECLARING R.A. No. 9262 AS INVALID
AND UNCONSTITUTIONAL BECAUSE IT ALLOWS AN UNDUE DELEGATION OF JUDICIAL
POWER TO THE BARANGAY OFFICIALS.38
The Ruling of the Court
Before delving into the arguments propounded by petitioner against the constitutionality of R.A.
9262, we shall first tackle the propriety of the dismissal by the appellate court of the petition for
prohibition (CA-G.R. CEB-SP. No. 01698) filed by petitioner.
As a general rule, the question of constitutionality must be raised at the earliest opportunity so that if
not raised in the pleadings, ordinarily it may not be raised in the trial, and if not raised in the trial
court, it will not be considered on appeal.39 Courts will not anticipate a question of constitutional law
in advance of the necessity of deciding it.40
In defending his failure to attack the constitutionality of R.A. 9262 before the RTC of Bacolod City,
petitioner argues that the Family Court has limited authority and jurisdiction that is "inadequate to
tackle the complex issue of constitutionality."41
We disagree.
Family Courts have authority and jurisdiction to consider the constitutionality of a statute.
At the outset, it must be stressed that Family Courts are special courts, of the same level as
Regional Trial Courts. Under R.A. 8369, otherwise known as the "Family Courts Act of 1997," family
courts have exclusive original jurisdiction to hear and decide cases of domestic violence against
women and children.42 In accordance with said law, the Supreme Court designated from among the
branches of the Regional Trial Courts at least one Family Court in each of several key cities
identified.43 To achieve harmony with the first mentioned law, Section 7 of R.A. 9262 now provides
that Regional Trial Courts designated as Family Courts shall have original and exclusive jurisdiction
over cases of VAWC defined under the latter law, viz:
SEC. 7. Venue. – The Regional Trial Court designated as a Family Court shall have original and
exclusive jurisdiction over cases of violence against women and their children under this law. In the
absence of such court in the place where the offense was committed, the case shall be filed in the
Regional Trial Court where the crime or any of its elements was committed at the option of the
complainant. (Emphasis supplied)
Inspite of its designation as a family court, the RTC of Bacolod City remains possessed of authority
as a court of general original jurisdiction to pass upon all kinds of cases whether civil, criminal,
special proceedings, land registration, guardianship, naturalization, admiralty or insolvency. 44 It is
settled that RTCs have jurisdiction to resolve the constitutionality of a statute, 45 "this authority being
embraced in the general definition of the judicial power to determine what are the valid and binding
laws by the criterion of their conformity to the fundamental law." 46 The Constitution vests the power of
judicial review or the power to declare the constitutionality or validity of a law, treaty, international or
executive agreement, presidential decree, order, instruction, ordinance, or regulation not only in this
Court, but in all RTCs.47 We said in J.M. Tuason and Co., Inc. v. CA48 that, "plainly the Constitution
contemplates that the inferior courts should have jurisdiction in cases involving constitutionality of
any treaty or law, for it speaks of appellate review of final judgments of inferior courts in cases where
such constitutionality happens to be in issue." Section 5, Article VIII of the 1987 Constitution reads in
part as follows:
SEC. 5. The Supreme Court shall have the following powers:
xxx
2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court
may provide, final judgments and orders of lower courts in:
a. All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in
question.
xxxx
Thus, contrary to the posturing of petitioner, the issue of constitutionality of R.A. 9262 could have
been raised at the earliest opportunity in his Opposition to the petition for protection order before the
RTC of Bacolod City, which had jurisdiction to determine the same, subject to the review of this
Court.
Section 20 of A.M. No. 04-10-11-SC, the Rule on Violence Against Women and Their Children, lays
down a new kind of procedure requiring the respondent to file an opposition to the petition and not
an answer.49 Thus:
SEC. 20. Opposition to petition. – (a) The respondent may file an opposition to the petition which he
himself shall verify. It must be accompanied by the affidavits of witnesses and shall show cause why
a temporary or permanent protection order should not be issued.
(b) Respondent shall not include in the opposition any counterclaim, cross-claim or third-party
complaint, but any cause of action which could be the subject thereof may be litigated in a separate
civil action. (Emphasis supplied)
We cannot subscribe to the theory espoused by petitioner that, since a counterclaim, cross-claim
and third-party complaint are to be excluded from the opposition, the issue of constitutionality cannot
likewise be raised therein. A counterclaim is defined as any claim for money or other relief which a
defending party may have against an opposing party.50 A cross-claim, on the other hand, is any claim
by one party against a co-party arising out of the transaction or occurrence that is the subject matter
either of the original action or of a counterclaim therein.51Finally, a third-party complaint is a claim
that a defending party may, with leave of court, file against a person not a party to the action for
contribution, indemnity, subrogation or any other relief, in respect of his opponent's claim. 52 As
pointed out by Justice Teresita J. Leonardo-De Castro, the unconstitutionality of a statute is not a
cause of action that could be the subject of a counterclaim, cross-claim or a third-party complaint.
Therefore, it is not prohibited from being raised in the opposition in view of the familiar maxim
expressio unius est exclusio alterius.
Moreover, it cannot be denied that this issue affects the resolution of the case a quo because the
right of private respondent to a protection order is founded solely on the very statute the validity of
which is being attacked53 by petitioner who has sustained, or will sustain, direct injury as a result of
its enforcement. The alleged unconstitutionality of R.A. 9262 is, for all intents and purposes, a valid
cause for the non-issuance of a protection order.
That the proceedings in Civil Case No. 06-797 are summary in nature should not have deterred
petitioner from raising the same in his Opposition. The question relative to the constitutionality of a
statute is one of law which does not need to be supported by evidence.54 Be that as it may, Section
25 of A.M. No. 04-10-11-SC nonetheless allows the conduct of a hearing to determine legal issues,
among others, viz:
SEC. 25. Order for further hearing. - In case the court determines the need for further hearing, it may
issue an order containing the following:
(a) Facts undisputed and admitted;
(b) Factual and legal issues to be resolved;
(c) Evidence, including objects and documents that have been marked and will be
presented;
(d) Names of witnesses who will be ordered to present their direct testimonies in the form of
affidavits; and
(e) Schedule of the presentation of evidence by both parties which shall be done in one day,
to the extent possible, within the 30-day period of the effectivity of the temporary protection
order issued. (Emphasis supplied)
To obviate potential dangers that may arise concomitant to the conduct of a hearing when
necessary, Section 26 (b) of A.M. No. 04-10-11-SC provides that if a temporary protection order
issued is due to expire, the trial court may extend or renew the said order for a period of thirty (30)
days each time until final judgment is rendered. It may likewise modify the extended or renewed
temporary protection order as may be necessary to meet the needs of the parties. With the private
respondent given ample protection, petitioner could proceed to litigate the constitutional issues,
without necessarily running afoul of the very purpose for the adoption of the rules on summary
procedure.
In view of all the foregoing, the appellate court correctly dismissed the petition for prohibition with
prayer for injunction and temporary restraining order (CA-G.R. CEB - SP. No. 01698). Petitioner may
have proceeded upon an honest belief that if he finds succor in a superior court, he could be granted
an injunctive relief. However, Section 22(j) of A.M. No. 04-10-11-SC expressly disallows the filing of
a petition for certiorari, mandamus or prohibition against any interlocutory order issued by the trial
court. Hence, the 60-day TRO issued by the appellate court in this case against the enforcement of
the TPO, the amended TPOs and other orders pursuant thereto was improper, and it effectively
hindered the case from taking its normal course in an expeditious and summary manner.
As the rules stand, a review of the case by appeal or certiorari before judgment is prohibited.
Moreover, if the appeal of a judgment granting permanent protection shall not stay its
enforcement,55 with more reason that a TPO, which is valid only for thirty (30) days at a time, 56 should
not be enjoined.
The mere fact that a statute is alleged to be unconstitutional or invalid, does not of itself entitle a
litigant to have the same enjoined.57 In Younger v. Harris, Jr.,58 the Supreme Court of the United
States declared, thus:
Federal injunctions against state criminal statutes, either in their entirety or with respect to their
separate and distinct prohibitions, are not to be granted as a matter of course, even if such statutes
are unconstitutional. No citizen or member of the community is immune from prosecution, in good
faith, for his alleged criminal acts. The imminence of such a prosecution even though alleged to be
unauthorized and, hence, unlawful is not alone ground for relief in equity which exerts its
extraordinary powers only to prevent irreparable injury to the plaintiff who seeks its aid. (Citations
omitted)
The sole objective of injunctions is to preserve the status quo until the trial court hears fully the
merits of the case. It bears stressing, however, that protection orders are granted ex parte so as to
protect women and their children from acts of violence. To issue an injunction against such orders
will defeat the very purpose of the law against VAWC.
Notwithstanding all these procedural flaws, we shall not shirk from our obligation to determine novel
issues, or issues of first impression, with far-reaching implications. We have, time and again,
discharged our solemn duty as final arbiter of constitutional issues, and with more reason now, in
view of private respondent's plea in her Comment59 to the instant Petition that we should put the
challenge to the constitutionality of R.A. 9262 to rest. And so we shall.
Intent of Congress in enacting R.A. 9262.
Petitioner claims that since R.A. 9262 is intended to prevent and criminalize spousal and child
abuse, which could very well be committed by either the husband or the wife, gender alone is not
enough basis to deprive the husband/father of the remedies under the law. 60
A perusal of the deliberations of Congress on Senate Bill No. 2723,61 which became R.A. 9262,
reveals that while the sponsor, Senator Luisa Pimentel-Ejercito (better known as Senator Loi
Estrada), had originally proposed what she called a "synthesized measure"62 – an amalgamation of
two measures, namely, the "Anti-Domestic Violence Act" and the "Anti-Abuse of Women in Intimate
Relationships Act"63 – providing protection to "all family members, leaving no one in isolation" but at
the same time giving special attention to women as the "usual victims" of violence and
abuse,64 nonetheless, it was eventually agreed that men be denied protection under the same
measure. We quote pertinent portions of the deliberations:
Wednesday, December 10, 2003
Senator Pangilinan. I just wanted to place this on record, Mr. President. Some women's groups have
expressed concerns and relayed these concerns to me that if we are to include domestic violence
apart from against women as well as other members of the household, including children or the
husband, they fear that this would weaken the efforts to address domestic violence of which the
main victims or the bulk of the victims really are the wives, the spouses or the female partners in a
relationship. We would like to place that on record. How does the good Senator respond to this kind
of observation?
Senator Estrada. Yes, Mr. President, there is this group of women who call themselves "WIIR"
Women in Intimate Relationship. They do not want to include men in this domestic violence. But
plenty of men are also being abused by women. I am playing safe so I placed here members of the
family, prescribing penalties therefor and providing protective measures for victims. This includes the
men, children, live-in, common-law wives, and those related with the family. 65
xxx
Wednesday, January 14, 2004
xxxx
The President Pro Tempore. x x x
Also, may the Chair remind the group that there was the discussion whether to limit this to women
and not to families which was the issue of the AWIR group. The understanding that I have is that we
would be having a broader scope rather than just women, if I remember correctly, Madam sponsor.
Senator Estrada. Yes, Mr. President.
As a matter of fact, that was brought up by Senator Pangilinan during the interpellation period.
I think Senator Sotto has something to say to that.
Senator Legarda. Mr. President, the reason I am in support of the measure. Do not get me wrong.
However, I believe that there is a need to protect women's rights especially in the domestic
environment.
As I said earlier, there are nameless, countless, voiceless women who have not had the opportunity
to file a case against their spouses, their live-in partners after years, if not decade, of battery and
abuse. If we broaden the scope to include even the men, assuming they can at all be abused by the
women or their spouses, then it would not equalize the already difficult situation for women, Mr.
President.
I think that the sponsor, based on our earlier conversations, concurs with this position. I am sure that
the men in this Chamber who love their women in their lives so dearly will agree with this
representation. Whether we like it or not, it is an unequal world. Whether we like it or not, no matter
how empowered the women are, we are not given equal opportunities especially in the domestic
environment where the macho Filipino man would always feel that he is stronger, more superior to
the Filipino woman.
xxxx
The President Pro Tempore. What does the sponsor say?
Senator Estrada. Mr. President, before accepting this, the committee came up with this bill because
the family members have been included in this proposed measure since the other members of the
family other than women are also possible victims of violence. While women are most likely the
intended victims, one reason incidentally why the measure focuses on women, the fact remains that
in some relatively few cases, men also stand to be victimized and that children are almost always
the helpless victims of violence. I am worried that there may not be enough protection extended to
other family members particularly children who are excluded. Although Republic Act No. 7610, for
instance, more or less, addresses the special needs of abused children. The same law is
inadequate. Protection orders for one are not available in said law.
I am aware that some groups are apprehensive about granting the same protection to men, fearing
that they may use this law to justify their abusive behavior against women. However, we should also
recognize that there are established procedures and standards in our courts which give credence to
evidentiary support and cannot just arbitrarily and whimsically entertain baseless complaints.
Mr. President, this measure is intended to harmonize family relations and to protect the family as the
basic social institution. Though I recognize the unequal power relations between men and women in
our society, I believe we have an obligation to uphold inherent rights and dignity of both husband
and wife and their immediate family members, particularly children.
While I prefer to focus mainly on women, I was compelled to include other family members as a
critical input arrived at after a series of consultations/meetings with various NGOs, experts, sports
groups and other affected sectors, Mr. President.
Senator Sotto. Mr. President.
The President Pro Tempore. Yes, with the permission of the other senators.
Senator Sotto. Yes, with the permission of the two ladies on the Floor.
The President Pro Tempore. Yes, Sen. Vicente C. Sotto III is recognized.
Senator Sotto. I presume that the effect of the proposed amendment of Senator Legarda would be
removing the "men and children" in this particular bill and focus specifically on women alone. That
will be the net effect of that proposed amendment. Hearing the rationale mentioned by the
distinguished sponsor, Sen. Luisa "Loi" Ejercito Estrada, I am not sure now whether she is inclined
to accept the proposed amendment of Senator Legarda.
I am willing to wait whether she is accepting this or not because if she is going to accept this, I will
propose an amendment to the amendment rather than object to the amendment, Mr. President.
xxxx
Senator Estrada. The amendment is accepted, Mr. President.
The President Pro Tempore. Is there any objection?
xxxx
Senator Sotto. x x x May I propose an amendment to the amendment.
The President Pro Tempore. Before we act on the amendment?
Senator Sotto. Yes, Mr. President.
The President Pro Tempore. Yes, please proceed.
Senator Sotto. Mr. President, I am inclined to believe the rationale used by the distinguished
proponent of the amendment. As a matter of fact, I tend to agree. Kung may maaabuso, mas
malamang iyong babae kaysa sa lalake. At saka iyong mga lalake, puwede na talagang magulpi
iyan. Okey lang iyan. But I cannot agree that we remove the children from this particular measure.
So, if I may propose an amendment –
The President Pro Tempore. To the amendment.
Senator Sotto. – more than the women, the children are very much abused. As a matter of fact, it is
not limited to minors. The abuse is not limited to seven, six, 5-year-old children. I have seen 14, 15-
year-old children being abused by their fathers, even by their mothers. And it breaks my heart to find
out about these things.
Because of the inadequate existing law on abuse of children, this particular measure will update that.
It will enhance and hopefully prevent the abuse of children and not only women.
SOTTO-LEGARDA AMENDMENTS
Therefore, may I propose an amendment that, yes, we remove the aspect of the men in the bill but
not the children.
Senator Legarda. I agree, Mr. President, with the Minority Leader.
The President Pro Tempore. Effectively then, it will be women AND CHILDREN.
Senator Sotto. Yes, Mr. President.
Senator Estrada. It is accepted, Mr. President.
The President Pro Tempore. Is there any objection? [Silence] There being none, the amendment, as
amended, is approved.66
It is settled that courts are not concerned with the wisdom, justice, policy, or expediency of a
statute.67 Hence, we dare not venture into the real motivations and wisdom of the members of
Congress in limiting the protection against violence and abuse under R.A. 9262 to women and
children only. No proper challenge on said grounds may be entertained in this proceeding. Congress
has made its choice and it is not our prerogative to supplant this judgment. The choice may be
perceived as erroneous but even then, the remedy against it is to seek its amendment or repeal by
the legislative. By the principle of separation of powers, it is the legislative that determines the
necessity, adequacy, wisdom and expediency of any law.68 We only step in when there is a violation
of the Constitution. However, none was sufficiently shown in this case.
R.A. 9262 does not violate the guaranty of equal protection of the laws.
Equal protection simply requires that all persons or things similarly situated should be treated alike,
both as to rights conferred and responsibilities imposed. The oft-repeated disquisition in the early
case of Victoriano v. Elizalde Rope Workers' Union69 is instructive:
The guaranty of equal protection of the laws is not a guaranty of equality in the application of the
laws upon all citizens of the state. It is not, therefore, a requirement, in order to avoid the
constitutional prohibition against inequality, that every man, woman and child should be affected
alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on
persons merely as such, but on persons according to the circumstances surrounding them. It
guarantees equality, not identity of rights. The Constitution does not require that things which are
different in fact be treated in law as though they were the same. The equal protection clause does
not forbid discrimination as to things that are different. It does not prohibit legislation which is limited
either in the object to which it is directed or by the territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows classification. Classification in law,
as in the other departments of knowledge or practice, is the grouping of things in speculation or
practice because they agree with one another in certain particulars. A law is not invalid because of
simple inequality. The very idea of classification is that of inequality, so that it goes without saying
that the mere fact of inequality in no manner determines the matter of constitutionality. All that is
required of a valid classification is that it be reasonable, which means that the classification should
be based on substantial distinctions which make for real differences; that it must be germane to the
purpose of the law; that it must not be limited to existing conditions only; and that it must apply
equally to each member of the class. This Court has held that the standard is satisfied if the
classification or distinction is based on a reasonable foundation or rational basis and is not palpably
arbitrary. (Emphasis supplied)
Measured against the foregoing jurisprudential yardstick, we find that R.A. 9262 is based on a valid
classification as shall hereinafter be discussed and, as such, did not violate the equal protection
clause by favoring women over men as victims of violence and abuse to whom the State extends its
protection.
I. R.A. 9262 rests on substantial distinctions.
The unequal power relationship between women and men; the fact that women are more likely than
men to be victims of violence; and the widespread gender bias and prejudice against women all
make for real differences justifying the classification under the law. As Justice McIntyre succinctly
states, "the accommodation of differences ... is the essence of true equality." 70
A. Unequal power relationship between men and women
According to the Philippine Commission on Women (the National Machinery for Gender Equality and
Women's Empowerment), violence against women (VAW) is deemed to be closely linked with the
unequal power relationship between women and men otherwise known as "gender-based violence".
Societal norms and traditions dictate people to think men are the leaders, pursuers, providers, and
take on dominant roles in society while women are nurturers, men's companions and supporters,
and take on subordinate roles in society. This perception leads to men gaining more power over
women. With power comes the need to control to retain that power. And VAW is a form of men's
expression of controlling women to retain power.71
The United Nations, which has long recognized VAW as a human rights issue, passed its Resolution
48/104 on the Declaration on Elimination of Violence Against Women on December 20, 1993 stating
that "violence against women is a manifestation of historically unequal power relations between men
and women, which have led to domination over and discrimination against women by men and to the
prevention of the full advancement of women, and that violence against women is one of the crucial
social mechanisms by which women are forced into subordinate positions, compared with men." 72
Then Chief Justice Reynato S. Puno traced the historical and social context of gender-based
violence and developments in advocacies to eradicate VAW, in his remarks delivered during the
Joint Launching of R.A. 9262 and its Implementing Rules last October 27, 2004, the pertinent
portions of which are quoted hereunder:
History reveals that most societies sanctioned the use of violence against women. The patriarch of a
family was accorded the right to use force on members of the family under his control. I quote the
early studies:
Traditions subordinating women have a long history rooted in patriarchy – the institutional rule of
men. Women were seen in virtually all societies to be naturally inferior both physically and
intellectually. In ancient Western societies, women whether slave, concubine or wife, were under the
authority of men. In law, they were treated as property.
The Roman concept of patria potestas allowed the husband to beat, or even kill, his wife if she
endangered his property right over her. Judaism, Christianity and other religions oriented towards
the patriarchal family strengthened the male dominated structure of society.
English feudal law reinforced the tradition of male control over women. Even the eminent Blackstone
has been quoted in his commentaries as saying husband and wife were one and that one was the
husband. However, in the late 1500s and through the entire 1600s, English common law began to
limit the right of husbands to chastise their wives. Thus, common law developed the rule of thumb,
which allowed husbands to beat their wives with a rod or stick no thicker than their thumb.
In the later part of the 19th century, legal recognition of these rights to chastise wives or inflict
corporeal punishment ceased. Even then, the preservation of the family was given more importance
than preventing violence to women.
The metamorphosis of the law on violence in the United States followed that of the English common
law. In 1871, the Supreme Court of Alabama became the first appellate court to strike down the
common law right of a husband to beat his wife:
The privilege, ancient though it may be, to beat one's wife with a stick, to pull her hair, choke her,
spit in her face or kick her about the floor, or to inflict upon her like indignities, is not now
acknowledged by our law... In person, the wife is entitled to the same protection of the law that the
husband can invoke for himself.
As time marched on, the women's advocacy movement became more organized. The temperance
leagues initiated it. These leagues had a simple focus. They considered the evils of alcoholism as
the root cause of wife abuse. Hence, they demonstrated and picketed saloons, bars and their
husbands' other watering holes. Soon, however, their crusade was joined by suffragette movements,
expanding the liberation movement's agenda. They fought for women's right to vote, to own
property, and more. Since then, the feminist movement was on the roll.
The feminist movement exposed the private invisibility of the domestic violence to the public gaze.
They succeeded in transforming the issue into an important public concern. No less than the United
States Supreme Court, in 1992 case Planned Parenthood v. Casey, noted:
In an average 12-month period in this country, approximately two million women are the victims of
severe assaults by their male partners. In a 1985 survey, women reported that nearly one of every
eight husbands had assaulted their wives during the past year. The [American Medical Association]
views these figures as "marked underestimates," because the nature of these incidents discourages
women from reporting them, and because surveys typically exclude the very poor, those who do not
speak English well, and women who are homeless or in institutions or hospitals when the survey is
conducted. According to the AMA, "researchers on family violence agree that the true incidence of
partner violence is probably double the above estimates; or four million severely assaulted women
per year."
Studies on prevalence suggest that from one-fifth to one-third of all women will be physically
assaulted by a partner or ex-partner during their lifetime... Thus on an average day in the United
States, nearly 11,000 women are severely assaulted by their male partners. Many of these incidents
involve sexual assault... In families where wife beating takes place, moreover, child abuse is often
present as well.
Other studies fill in the rest of this troubling picture. Physical violence is only the most visible form of
abuse. Psychological abuse, particularly forced social and economic isolation of women, is also
common.
Many victims of domestic violence remain with their abusers, perhaps because they perceive no
superior alternative...Many abused women who find temporary refuge in shelters return to their
husbands, in large part because they have no other source of income... Returning to one's abuser
can be dangerous. Recent Federal Bureau of Investigation statistics disclose that 8.8 percent of all
homicide victims in the United States are killed by their spouses...Thirty percent of female homicide
victims are killed by their male partners.
Finally in 1994, the United States Congress enacted the Violence Against Women Act.
In the International front, the women's struggle for equality was no less successful. The United
States Charter and the Universal Declaration of Human Rights affirmed the equality of all human
beings. In 1979, the UN General Assembly adopted the landmark Convention on the Elimination of
all Forms of Discrimination Against Women (CEDAW). In 1993, the UN General Assembly also
adopted the Declaration on the Elimination of Violence Against Women. World conferences on the
role and rights of women have been regularly held in Mexico City, Copenhagen, Nairobi and Beijing.
The UN itself established a Commission on the Status of Women.
The Philippines has been in cadence with the half – and full – steps of all these women's
movements. No less than Section 14, Article II of our 1987 Constitution mandates the State to
recognize the role of women in nation building and to ensure the fundamental equality before the law
of women and men. Our Senate has ratified the CEDAW as well as the Convention on the Rights of
the Child and its two protocols. To cap it all, Congress, on March 8, 2004, enacted Rep. Act No.
9262, entitled "An Act Defining Violence Against Women and Their Children, Providing for Protective
Measures for Victims, Prescribing Penalties therefor and for other Purposes." (Citations omitted)
B. Women are the "usual" and "most likely"
victims of violence.
At the time of the presentation of Senate Bill No. 2723, official statistics on violence against women
and children show that –
x x x physical injuries had the highest number of cases at 5,058 in 2002 representing 55.63% of total
cases reported (9,903). And for the first semester of 2003, there were 2,381 reported cases out of
4,354 cases which represent 54.31%. xxx (T)he total number of women in especially difficult
circumstances served by the Department of Social Welfare and Development (DSWD) for the year
2002, there are 1,417 physically abused/maltreated cases out of the total of 5,608 cases. xxx
(T)here are 1,091 DSWD cases out of a total number of 3,471 cases for the first semester of 2003.
Female violence comprised more than 90% of all forms of abuse and violence and more than 90% of
these reported cases were committed by the women's intimate partners such as their husbands and
live-in partners.73
Recently, the Philippine Commission on Women presented comparative statistics on violence
against women across an eight-year period from 2004 to August of 2011 with violations under R.A.
9262 ranking first among the different VAW categories since its implementation in 2004, 74 thus:
Table 1. Annual Comparative Statistics on Violence Against Women, 2004 - 2011*
Reported 200 200 200 200 200 200

2010 2011
Cases 4 5 6 7 8 9
Rape 997 927 659 837 811 770 1,042 832
Incestuous
38 46 26 22 28 27 19 23
Rape
Attempted
194 148 185 147 204 167 268 201
Rape
Acts of
Lasciviousne 580 536 382 358 445 485 745 625
ss
Physical 3,55 2,33 1,89 1,50 1,30 1,49

2,018 1,588
Injuries 3 5 2 5 7 8
Sexual
53 37 38 46 18 54 83 63
Harassment
1,26 2,38 3,59 5,28

RA 9262 218 924 9,974 9,021
9 7 9 5
Threats 319 223 199 182 220 208 374 213
Seduction 62 19 29 30 19 19 25 15
Concubinag
121 102 93 109 109 99 158 128
e
RA 9208 17 11 16 24 34 152 190 62
Abduction 16 34 23 28 18 25 22
/Kidnapping
29
Unjust
90 50 59 59 83 703 183 155
Vexation
6,27 5,37 4,88 5,72 6,90 9,48 15,10 12,94

Total
1 4 1 9 5 5 4 8
*2011 report covers only from January to August
Source: Philippine National Police – Women and Children Protection Center (WCPC)
On the other hand, no reliable estimates may be obtained on domestic abuse and violence against
men in the Philippines because incidents thereof are relatively low and, perhaps, because many
men will not even attempt to report the situation. In the United Kingdom, 32% of women who had
ever experienced domestic violence did so four or five (or more) times, compared with 11% of the
smaller number of men who had ever experienced domestic violence; and women constituted 89%
of all those who had experienced 4 or more incidents of domestic violence. 75 Statistics in Canada
show that spousal violence by a woman against a man is less likely to cause injury than the other
way around (18 percent versus 44 percent). Men, who experience violence from their spouses are
much less likely to live in fear of violence at the hands of their spouses, and much less likely to
experience sexual assault. In fact, many cases of physical violence by a woman against a spouse
are in self-defense or the result of many years of physical or emotional abuse. 76
While there are, indeed, relatively few cases of violence and abuse perpetrated against men in the
Philippines, the same cannot render R.A. 9262 invalid.
In a 1960 case involving the violation of a city ordinance requiring drivers of animal-drawn vehicles
to pick up, gather and deposit in receptacles the manure emitted or discharged by their vehicle-
drawing animals in any public highways, streets, plazas, parks or alleys, said ordinance was
challenged as violative of the guaranty of equal protection of laws as its application is limited to
owners and drivers of vehicle-drawing animals and not to those animals, although not utilized, but
similarly pass through the same streets.
The ordinance was upheld as a valid classification for the reason that, while there may be non-
vehicle-drawing animals that also traverse the city roads, "but their number must be negligible and
their appearance therein merely occasional, compared to the rig-drawing ones, as not to constitute a
menace to the health of the community."77 The mere fact that the legislative classification may result
in actual inequality is not violative of the right to equal protection, for every classification of persons
or things for regulation by law produces inequality in some degree, but the law is not thereby
rendered invalid.78
C. Gender bias and prejudices
From the initial report to the police through prosecution, trial, and sentencing, crimes against women
are often treated differently and less seriously than other crimes. This was argued by then United
States Senator Joseph R. Biden, Jr., now Vice President, chief sponsor of the Violence Against
Women Act (VAWA), in defending the civil rights remedy as a valid exercise of the U.S. Congress'
authority under the Commerce and Equal Protection Clauses. He stressed that the widespread
gender bias in the U.S. has institutionalized historic prejudices against victims of rape or domestic
violence, subjecting them to "double victimization" – first at the hands of the offender and then of the
legal system.79
Our own Senator Loi Estrada lamented in her Sponsorship Speech for Senate Bill No. 2723 that
"(w)henever violence occurs in the family, the police treat it as a private matter and advise the
parties to settle the conflict themselves. Once the complainant brings the case to the prosecutor, the
latter is hesitant to file the complaint for fear that it might later be withdrawn. This lack of response or
reluctance to be involved by the police and prosecution reinforces the escalating, recurring and often
serious nature of domestic violence."80
Sadly, our own courts, as well, have exhibited prejudices and biases against our women.
In a recent case resolved on March 9, 2011, we fined RTC Judge Venancio J. Amila for Conduct
Unbecoming of a Judge. He used derogatory and irreverent language in reference to the
complainant in a petition for TPO and PPO under R.A. 9262, calling her as "only a live-in partner"
and presenting her as an "opportunist" and a "mistress" in an "illegitimate relationship." Judge Amila
even called her a "prostitute," and accused her of being motivated by "insatiable greed" and of
absconding with the contested property.81 Such remarks betrayed Judge Amila's prejudices and lack
of gender sensitivity.
The enactment of R.A. 9262 aims to address the discrimination brought about by biases and
prejudices against women. As emphasized by the CEDAW Committee on the Elimination of
Discrimination against Women, addressing or correcting discrimination through specific measures
focused on women does not discriminate against men.82 Petitioner's contention,83 therefore, that R.A.
9262 is discriminatory and that it is an "anti-male," "husband-bashing," and "hate-men" law deserves
scant consideration. As a State Party to the CEDAW, the Philippines bound itself to take all
appropriate measures "to modify the social and cultural patterns of conduct of men and women, with
a view to achieving the elimination of prejudices and customary and all other practices which are
based on the idea of the inferiority or the superiority of either of the sexes or on stereotyped roles for
men and women."84 Justice Puno correctly pointed out that "(t)he paradigm shift changing the
character of domestic violence from a private affair to a public offense will require the development
of a distinct mindset on the part of the police, the prosecution and the judges." 85
II. The classification is germane to the purpose of the law.
The distinction between men and women is germane to the purpose of R.A. 9262, which is to
address violence committed against women and children, spelled out in its Declaration of Policy, as
follows:
SEC. 2. Declaration of Policy. – It is hereby declared that the State values the dignity of women and
children and guarantees full respect for human rights. The State also recognizes the need to protect
the family and its members particularly women and children, from violence and threats to their
personal safety and security.
Towards this end, the State shall exert efforts to address violence committed against women and
children in keeping with the fundamental freedoms guaranteed under the Constitution and the
provisions of the Universal Declaration of Human Rights, the Convention on the Elimination of All
Forms of Discrimination Against Women, Convention on the Rights of the Child and other
international human rights instruments of which the Philippines is a party.
In 1979, the U.N. General Assembly adopted the CEDAW, which the Philippines ratified on August
5, 1981. Subsequently, the Optional Protocol to the CEDAW was also ratified by the Philippines on
October 6, 2003.86 This Convention mandates that State parties shall accord to women equality with
men before the law87 and shall take all appropriate measures to eliminate discrimination against
women in all matters relating to marriage and family relations on the basis of equality of men and
women.88 The Philippines likewise ratified the Convention on the Rights of the Child and its two
protocols.89 It is, thus, bound by said Conventions and their respective protocols.
III. The classification is not limited to existing
conditions only, and apply equally to all members
Moreover, the application of R.A. 9262 is not limited to the existing conditions when it was
promulgated, but to future conditions as well, for as long as the safety and security of women and
their children are threatened by violence and abuse.
R.A. 9262 applies equally to all women and children who suffer violence and abuse. Section 3
thereof defines VAWC as:
x x x any act or a series of acts committed by any person against a woman who is his wife, former
wife, or against a woman with whom the person has or had a sexual or dating relationship, or with
whom he has a common child, or against her child whether legitimate or illegitimate, within or without
the family abode, which result in or is likely to result in physical, sexual, psychological harm or
suffering, or economic abuse including threats of such acts, battery, assault, coercion, harassment
or arbitrary deprivation of liberty. It includes, but is not limited to, the following acts:
A. "Physical Violence" refers to acts that include bodily or physical harm;
B. "Sexual violence" refers to an act which is sexual in nature, committed against a woman or her
child. It includes, but is not limited to:
a) rape, sexual harassment, acts of lasciviousness, treating a woman or her child as

a sex object, making demeaning and sexually suggestive remarks, physically
attacking the sexual parts of the victim's body, forcing her/him to watch obscene
publications and indecent shows or forcing the woman or her child to do indecent
acts and/or make films thereof, forcing the wife and mistress/lover to live in the
conjugal home or sleep together in the same room with the abuser;
b) acts causing or attempting to cause the victim to engage in any sexual activity by
force, threat of force, physical or other harm or threat of physical or other harm or
coercion;
c) Prostituting the woman or child.
C. "Psychological violence" refers to acts or omissions causing or likely to cause mental or emotional
suffering of the victim such as but not limited to intimidation, harassment, stalking, damage to
property, public ridicule or humiliation, repeated verbal abuse and marital infidelity. It includes
causing or allowing the victim to witness the physical, sexual or psychological abuse of a member of
the family to which the victim belongs, or to witness pornography in any form or to witness abusive
injury to pets or to unlawful or unwanted deprivation of the right to custody and/or visitation of
common children.
D. "Economic abuse" refers to acts that make or attempt to make a woman financially dependent
which includes, but is not limited to the following:
1. withdrawal of financial support or preventing the victim from engaging in any

legitimate profession, occupation, business or activity, except in cases wherein the
other spouse/partner objects on valid, serious and moral grounds as defined in
Article 73 of the Family Code;
2. deprivation or threat of deprivation of financial resources and the right to the use
and enjoyment of the conjugal, community or property owned in common;
3. destroying household property;
4. controlling the victims' own money or properties or solely controlling the conjugal
money or properties.
It should be stressed that the acts enumerated in the aforequoted provision are attributable to
research that has exposed the dimensions and dynamics of battery. The acts described here are
also found in the U.N. Declaration on the Elimination of Violence Against Women. 90 Hence, the
argument advanced by petitioner that the definition of what constitutes abuse removes the difference
between violent action and simple marital tiffs is tenuous.
There is nothing in the definition of VAWC that is vague and ambiguous that will confuse petitioner in
his defense. The acts enumerated above are easily understood and provide adequate contrast
between the innocent and the prohibited acts. They are worded with sufficient definiteness that
persons of ordinary intelligence can understand what conduct is prohibited, and need not guess at
its meaning nor differ in its application.91 Yet, petitioner insists92 that phrases like "depriving or
threatening to deprive the woman or her child of a legal right," "solely controlling the conjugal or
common money or properties," "marital infidelity," and "causing mental or emotional anguish" are so
vague that they make every quarrel a case of spousal abuse. However, we have stressed that the
"vagueness" doctrine merely requires a reasonable degree of certainty for the statute to be upheld –
not absolute precision or mathematical exactitude, as petitioner seems to suggest. Flexibility, rather
than meticulous specificity, is permissible as long as the metes and bounds of the statute are clearly
delineated. An act will not be held invalid merely because it might have been more explicit in its
wordings or detailed in its provisions.93
There is likewise no merit to the contention that R.A. 9262 singles out the husband or father as the
culprit. As defined above, VAWC may likewise be committed "against a woman with whom the
person has or had a sexual or dating relationship." Clearly, the use of the gender-neutral word
"person" who has or had a sexual or dating relationship with the woman encompasses even lesbian
relationships. Moreover, while the law provides that the offender be related or connected to the
victim by marriage, former marriage, or a sexual or dating relationship, it does not preclude the
application of the principle of conspiracy under the Revised Penal Code (RPC). Thus, in the case of
Go-Tan v. Spouses Tan,94 the parents-in-law of Sharica Mari L. Go-Tan, the victim, were held to be
proper respondents in the case filed by the latter upon the allegation that they and their son (Go-
Tan's husband) had community of design and purpose in tormenting her by giving her insufficient
financial support; harassing and pressuring her to be ejected from the family home; and in
repeatedly abusing her verbally, emotionally, mentally and physically.
R.A. 9262 is not violative of the

due process clause of the Constitution.
Petitioner bewails the disregard of R.A. 9262, specifically in the issuance of POs, of all protections
afforded by the due process clause of the Constitution. Says he: "On the basis of unsubstantiated
allegations, and practically no opportunity to respond, the husband is stripped of family, property,
guns, money, children, job, future employment and reputation, all in a matter of seconds, without an
inkling of what happened."95
A protection order is an order issued to prevent further acts of violence against women and their
children, their family or household members, and to grant other necessary reliefs. Its purpose is to
safeguard the offended parties from further harm, minimize any disruption in their daily life and
facilitate the opportunity and ability to regain control of their life. 96
"The scope of reliefs in protection orders is broadened to ensure that the victim or offended party is
afforded all the remedies necessary to curtail access by a perpetrator to the victim. This serves to
safeguard the victim from greater risk of violence; to accord the victim and any designated family or
household member safety in the family residence, and to prevent the perpetrator from committing
acts that jeopardize the employment and support of the victim. It also enables the court to award
temporary custody of minor children to protect the children from violence, to prevent their abduction
by the perpetrator and to ensure their financial support."97
The rules require that petitions for protection order be in writing, signed and verified by the
petitioner98 thereby undertaking full responsibility, criminal or civil, for every allegation therein. Since
"time is of the essence in cases of VAWC if further violence is to be prevented," 99 the court is
authorized to issue ex parte a TPO after raffle but before notice and hearing when the life, limb or
property of the victim is in jeopardy and there is reasonable ground to believe that the order is
necessary to protect the victim from the immediate and imminent danger of VAWC or to prevent
such violence, which is about to recur.100
There need not be any fear that the judge may have no rational basis to issue an ex parte order. The
victim is required not only to verify the allegations in the petition, but also to attach her witnesses'
affidavits to the petition.101
The grant of a TPO ex parte cannot, therefore, be challenged as violative of the right to due process.
Just like a writ of preliminary attachment which is issued without notice and hearing because the
time in which the hearing will take could be enough to enable the defendant to abscond or dispose of
his property,102 in the same way, the victim of VAWC may already have suffered harrowing
experiences in the hands of her tormentor, and possibly even death, if notice and hearing were
required before such acts could be prevented. It is a constitutional commonplace that the ordinary
requirements of procedural due process must yield to the necessities of protecting vital public
interests,103 among which is protection of women and children from violence and threats to their
personal safety and security.
It should be pointed out that when the TPO is issued ex parte, the court shall likewise order that
notice be immediately given to the respondent directing him to file an opposition within five (5) days
from service. Moreover, the court shall order that notice, copies of the petition and TPO be served
immediately on the respondent by the court sheriffs. The TPOs are initially effective for thirty (30)
days from service on the respondent.104
Where no TPO is issued ex parte, the court will nonetheless order the immediate issuance and
service of the notice upon the respondent requiring him to file an opposition to the petition within five
(5) days from service. The date of the preliminary conference and hearing on the merits shall
likewise be indicated on the notice.105
The opposition to the petition which the respondent himself shall verify, must be accompanied by the
affidavits of witnesses and shall show cause why a temporary or permanent protection order should
not be issued.106
It is clear from the foregoing rules that the respondent of a petition for protection order should be
apprised of the charges imputed to him and afforded an opportunity to present his side. Thus, the
fear of petitioner of being "stripped of family, property, guns, money, children, job, future employment
and reputation, all in a matter of seconds, without an inkling of what happened" is a mere product of
an overactive imagination. The essence of due process is to be found in the reasonable opportunity
to be heard and submit any evidence one may have in support of one's defense. "To be heard" does
not only mean verbal arguments in court; one may be heard also through pleadings. Where
opportunity to be heard, either through oral arguments or pleadings, is accorded, there is no denial
of procedural due process.107
It should be recalled that petitioner filed on April 26, 2006 an Opposition to the Urgent Ex-Parte
Motion for Renewal of the TPO that was granted only two days earlier on April 24, 2006. Likewise,
on May 23, 2006, petitioner filed a motion for the modification of the TPO to allow him visitation
rights to his children. Still, the trial court in its Order dated September 26, 2006, gave him five days
(5) within which to show cause why the TPO should not be renewed or extended. Yet, he chose not
to file the required comment arguing that it would just be an "exercise in futility," conveniently
forgetting that the renewal of the questioned TPO was only for a limited period (30 days) each time,
and that he could prevent the continued renewal of said order if he can show sufficient cause
therefor. Having failed to do so, petitioner may not now be heard to complain that he was denied due
process of law.
Petitioner next laments that the removal and exclusion of the respondent in the VAWC case from the
residence of the victim, regardless of ownership of the residence, is virtually a "blank check" issued
to the wife to claim any property as her conjugal home.108
The wording of the pertinent rule, however, does not by any stretch of the imagination suggest that
this is so. It states:
SEC. 11. Reliefs available to the offended party. -- The protection order shall include any, some or
all of the following reliefs:
xxxx
(c) Removing and excluding the respondent from the residence of the offended party, regardless of
ownership of the residence, either temporarily for the purpose of protecting the offended party, or
permanently where no property rights are violated. If the respondent must remove personal effects
from the residence, the court shall direct a law enforcement agent to accompany the respondent to
the residence, remain there until the respondent has gathered his things and escort him from the
residence;
xxxx
Indubitably, petitioner may be removed and excluded from private respondent's residence,
regardless of ownership, only temporarily for the purpose of protecting the latter. Such removal and
exclusion may be permanent only where no property rights are violated. How then can the private
respondent just claim any property and appropriate it for herself, as petitioner seems to suggest?
The non-referral of a VAWC case
to a mediator is justified.
Petitioner argues that "by criminalizing run-of-the-mill arguments, instead of encouraging mediation
and counseling, the law has done violence to the avowed policy of the State to "protect and
strengthen the family as a basic autonomous social institution."109
Under Section 23(c) of A.M. No. 04-10-11-SC, the court shall not refer the case or any issue thereof
to a mediator. The reason behind this provision is well-explained by the Commentary on Section 311
of the Model Code on Domestic and Family Violence as follows:110
This section prohibits a court from ordering or referring parties to mediation in a proceeding for an
order for protection. Mediation is a process by which parties in equivalent bargaining positions
voluntarily reach consensual agreement about the issue at hand. Violence, however, is not a subject
for compromise. A process which involves parties mediating the issue of violence implies that the
victim is somehow at fault. In addition, mediation of issues in a proceeding for an order of protection
is problematic because the petitioner is frequently unable to participate equally with the person
against whom the protection order has been sought. (Emphasis supplied)
There is no undue delegation of

judicial power to barangay officials.
Petitioner contends that protection orders involve the exercise of judicial power which, under the
Constitution, is placed upon the "Supreme Court and such other lower courts as may be established
by law" and, thus, protests the delegation of power to barangay officials to issue protection
orders.111 The pertinent provision reads, as follows:
SEC. 14. Barangay Protection Orders (BPOs); Who May Issue and How. – Barangay Protection
Orders (BPOs) refer to the protection order issued by the Punong Barangay ordering the perpetrator
to desist from committing acts under Section 5 (a) and (b) of this Act. A Punong Barangay who
1âwphi1
receives applications for a BPO shall issue the protection order to the applicant on the date of filing
after ex parte determination of the basis of the application. If the Punong Barangay is unavailable to
act on the application for a BPO, the application shall be acted upon by any available Barangay
Kagawad. If the BPO is issued by a Barangay Kagawad, the order must be accompanied by an
attestation by the Barangay Kagawad that the Punong Barangay was unavailable at the time of the
issuance of the BPO. BPOs shall be effective for fifteen (15) days. Immediately after the issuance of
an ex parte BPO, the Punong Barangay or Barangay Kagawad shall personally serve a copy of the
same on the respondent, or direct any barangay official to effect its personal service.
The parties may be accompanied by a non-lawyer advocate in any proceeding before the Punong
Barangay.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights
instrumentality of the Government.112 On the other hand, executive power "is generally defined as the
power to enforce and administer the laws. It is the power of carrying the laws into practical operation
and enforcing their due observance."113
As clearly delimited by the aforequoted provision, the BPO issued by the Punong Barangay or, in his
unavailability, by any available Barangay Kagawad, merely orders the perpetrator to desist from (a)
causing physical harm to the woman or her child; and (2) threatening to cause the woman or her
child physical harm. Such function of the Punong Barangay is, thus, purely executive in nature, in
pursuance of his duty under the Local Government Code to "enforce all laws and ordinances," and
to "maintain public order in the barangay."114
We have held that "(t)he mere fact that an officer is required by law to inquire into the existence of
certain facts and to apply the law thereto in order to determine what his official conduct shall be and
the fact that these acts may affect private rights do not constitute an exercise of judicial powers." 115
In the same manner as the public prosecutor ascertains through a preliminary inquiry or proceeding
"whether there is reasonable ground to believe that an offense has been committed and the accused
is probably guilty thereof," the Punong Barangay must determine reasonable ground to believe that
an imminent danger of violence against the woman and her children exists or is about to recur that
would necessitate the issuance of a BPO. The preliminary investigation conducted by the prosecutor
is, concededly, an executive, not a judicial, function. The same holds true with the issuance of a
BPO.
We need not even belabor the issue raised by petitioner that since barangay officials and other law
enforcement agencies are required to extend assistance to victims of violence and abuse, it would
be very unlikely that they would remain objective and impartial, and that the chances of acquittal are
nil. As already stated, assistance by barangay officials and other law enforcement agencies is
consistent with their duty to enforce the law and to maintain peace and order.
Conclusion
Before a statute or its provisions duly challenged are voided, an unequivocal breach of, or a clear
conflict with the Constitution, not merely a doubtful or argumentative one, must be demonstrated in
such a manner as to leave no doubt in the mind of the Court. In other words, the grounds for nullity
must be beyond reasonable doubt.116 In the instant case, however, no concrete evidence and
convincing arguments were presented by petitioner to warrant a declaration of the unconstitutionality
of R.A. 9262, which is an act of Congress and signed into law by the highest officer of the co-equal
executive department. As we said in Estrada v. Sandiganbayan, 117 courts must assume that the
legislature is ever conscious of the borders and edges of its plenary powers, and passed laws with
full knowledge of the facts and for the purpose of promoting what is right and advancing the welfare
of the majority.
We reiterate here Justice Puno's observation that "the history of the women's movement against
domestic violence shows that one of its most difficult struggles was the fight against the violence of
law itself. If we keep that in mind, law will not again be a hindrance to the struggle of women for
equality but will be its fulfillment."118Accordingly, the constitutionality of R.A. 9262 is, as it should be,
sustained.
WHEREFORE, the instant petition for review on certiorari is hereby DENIED for lack of merit.
SO ORDERED.
Associate Justice
WE CONCUR:
Chief Justice

See separate concurring opinion: See: Concurring Opinion

TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRION
On official leave
LUCAS P. BERSAMIN
DIOSDADO M. PERALTA*
Associate Justice
Associate Justice
See Separate Concurring Opinion

ROBERTO A. ABAD
Associate Justice
Associate Justice

JOSE CATRAL MENDOZA BIENVENIDO L. REYES

See separate concurring opinion

MARVIC MARIO VICTOR F. LEONEN
Associate Justice
CERTIFICATION
I certify that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court.

Chief Justice
Footnotes
*
On official leave.
1
"Philippines still top Christian country in Asia, 5th in world," Philippine Daily Inquirer,
December 21, 2011.
2
Ephesians 5:25-28.
3
RATIONALE OF THE PROPOSED RULE ON VIOLENCE AGAINST WOMEN AND THEIR
CHILDREN, citing statistics furnished by the National Commission on the Role of Filipino
Women.
4
Id.
5
Section 3(a), R.A. 9262.
6
Rollo, pp. 63-83.
7
Id. at 66-67.
8
Id. at 64.
9
Id. at 67-68.
10
Id. at 68-70.
11
Id. at 70-71.
12
Id. at 72.
13
Id. at 73.
14
Id. at 74.
15
Id. at 65-66.
16
Id. at 66.
17
Id. at 70.
18
Id. at 84-87.
Urgent Ex-Parte Motion for Renewal of Temporary Protection Order (TPO) or Issuance of
19
Modified TPO. Id. at 90-93.
20
Id. at 94-97.
21
Id. at 98-103.
22
Id. at 138-140.
23
Order dated May 24, 2006. Id. at 148-149.
24
Id. at 154-166.
25
Id. at 156.
26
Id. at 157.
27
Id. at 158-159.
28
Id. at 167-174.
29
Id. at 182.
30
Id. at 183-184.
31
Id. at 185.
32
Id. at 186-187.
33
See Manifestation dated October 10, 2006. Id. at 188-189.
34
Id. at 104-137.
35
Id. at 151-152.
Decision dated January 24, 2007. Penned by Associate Justice Priscilla Baltazar-Padilla,
36
with Associate Justices Arsenio J. Magpale and Romeo F. Barza, concurring. Id. at 47-57.
37
Id. at 60-61.
38
Petition, id. at 22.
ABS-CBN Broadcasting Corporation v. Philippine Multi-Media System, Inc., G.R. Nos.

39
175769-70, January 19, 2009, 576 SCRA 262, 289.
40
Philippine National Bank v. Palma, 503 Phil. 917, 932 (2005).
41
Petition, rollo, p. 24.
42
SEC. 5. Jurisdiction of Family Courts. - The Family Courts shall have exclusive original
jurisdiction to hear and decide the following cases:
xxxx
k) Cases of domestic violence against:
1) Women - which are acts of gender based violence that results, or are likely to
result in physical, sexual or psychological harm or suffering to women; and other
forms of physical abuse such as battering or threats and coercion which violate a
woman's personhood, integrity and freedom movement; and
2) Children - which include the commission of all forms of abuse, neglect, cruelty,
exploitation, violence, and discrimination and all other conditions prejudicial to their
development.
43
Sec. 17, R.A. 8369.
44
Manalo v. Mariano, 161 Phil. 108, 120 (1976).
Planters Products, Inc. v. Fertiphil Corporation, G.R. No. 166006, March 14, 2008, 548
45
SCRA 485, 504.
46
Drilon v. Lim, G.R. No. 112497, August 4, 1994, 235 SCRA 135, 140.
Planters Products, Inc. v. Fertiphil Corporation, supra note 45, at 505, citing Mirasol v. CA,
47
403 Phil. 760 (2001).
48
G.R. Nos. L-18128 & L-18672, December 26, 1961, 3 SCRA 696, 703-704.
RATIONALE OF THE PROPOSED RULES ON VIOLENCE AGAINST WOMEN AND

49
THEIR CHILDREN.
Korea Exchange Bank v. Hon. Rogelio C. Gonzales, 496 Phil. 127, 143-144 (2005);
50
Spouses Sapugay v. CA, 262 Phil. 506, 513 (1990).
51
Sec. 8, Rule 6, 1997 Rules of Civil Procedure.
52
Sec. 11, Rule 6, 1997 Rules of Civil Procedure.
See People of the Philippine Islands and Hongkong & Shanghai Banking Corporation v.
53
Vera, 65 Phil 199 (1937); Philippine Coconut Producers Federation, Inc. (COCOFED) v.
Republic, G.R. Nos. 177857-58, January 24, 2012, 663 SCRA 514, 594.
Recreation and Amusement Association of the Philippines v. City of Manila, 100 Phil 950,
54
956 (1957).
55
Secs. 22 and 31, A.M. No. 04-10-11-SC.
56
Sec. 26 (b), A.M. No. 04-10-11-SC.
57
Sto. Domingo v. De Los Angeles, 185 Phil. 94, 102 (1980).
27 L.Ed.2d 669 (1971), cited in The Executive Secretary v. Court of Appeals, 473 Phil. 27,
58
56-57 (2004).
59
Rollo, pp. 214-240, 237.
60
Petition, id. at 26-27.
An Act Defining Violence Against Women and Members of the Family, Prescribing
61
Penalties Therefor, Providing for Protective Measures for Victims and for Other Purposes.
62
Congressional Records, Vol. III, No. 45, December 10, 2003, p. 27.
63
Id. at 25.
64
Id. at 27.
65
Id. at 43-44.
66
Congressional Records, Vol. III, No. 51, January 14, 2004, pp. 141-147.
Lawyers Against Monopoly and Poverty (LAMP) v. The Secretary of Budget and
67
Management, G.R. No. 164987, April 24, 2012, 670 SCRA 373, 391.
Garcia v. Commission on Elections, G.R. No. 111511, October 5, 1993, 227 SCRA 100,
68
113-114.
69
158 Phil. 60, 86-87 (1974).
70
Andrews v. Law Society of British Columbia, [1989] 1 S.C.R. 143, p. 169.
Philippine Commission on Women, National Machinery for Gender Equality and Women's
71
Empowerment, "Violence Against Women (VAW)," <http://www.pcw.gov.ph> (visited

November 16, 2012).
<http://www.lawphil.net/international/treaties/dec_dec_1993.html> (visited November 16,

72
2012).
As reported by Senator Loi Estrada in her Sponsorship Speech, Congressional Records,

73
Vol. III, No. 45, December 10, 2003, p. 22.
Philippine Commission on Women, "Statistics on Violence Against Filipino Women,"

74
<http://pcw.gov.ph/statistics/201210/statistics-violence-against-filipino-women> (visited
October 12, 2012).
75
Women's Aid, "Who are the victims of domestic violence?," citing Walby and Allen, 2004,
<www.womensaid.org.uk/domestic-violence-articles.asp?
section=00010001002200410001&itemid= 1273 (visited November 16, 2012).
76
Toronto District School Board, Facts and Statistics <www.tdsb.on.ca/site/viewitem.asp?
siteid=15& menuid=23082&pageid=20007> (visited November 16, 2012).
77
People v. Solon, 110 Phil. 39, 41 (1960).
78
Victoriano v. Elizalde Rope Workers' Union, supra note 69, 90.
Biden, Jr., Joseph R., "The Civil Rights Remedy of the Violence Against Women Act: A
79
Defense," 37 Harvard Journal on Legislation 1 (Winter, 2000).
80
Congressional Records, Vol. III, No. 45, December 10, 2003, pp. 22-23.
81
Benancillo v. Amila, A.M. No. RTJ-08-2149, March 9, 2011, 645 SCRA 1, 8.
82
"General recommendation No. 25, on article 4, paragraph 1, of the Convention on the
Elimination of All Forms of Discrimination against Women, on temporary special measures"
<www.un.org/womenwatch/.../recommendation> (visited January 4, 2013).
83
84
Article 5(a), CEDAW.
85
"The Rule on Violence Against Women and Their Children," Remarks delivered during the
Joint Launching of R.A. 9262 and its Implementing Rules last October 27, 2004 at the
Session Hall of the Supreme Court.
86
Supra note 49.
87
Article 15.
88
Article 16.
89
Supra note 49.
90
Supra note 49.
91
Estrada v. Sandiganbayan, 421 Phil 290, 351-352 (2001).
92
93
Estrada v. Sandiganbayan , supra note 91, at 352-353.
94
95
96
Sec. 4 (o), A.M. No. 04-10-11-SC.
97
Supra note 49.
98
Sec. 7, A.M. No. 04-10-11-SC.
99
Supra note 49.
100
Id.
101
Supra note 85.
102
Cuartero v. CA, G.R. No. 102448, August 5, 1992, 212 SCRA 260, 265.
Laguna Lake Development Authority v. Court of Appeals, G.R. No. 110120, March 16,
103
1994, 231 SCRA 292, 307, citing Pollution Adjudication Board v. Court of Appeals, G.R. No.
93891, March 11, 1991, 195 SCRA 112.
104
Sec. 15, A.M. No. 04-10-11-SC.
105
Sec. 16, A.M. No. 04-10-11-SC.
106
Sec. 20, A.M. No. 04-10-11-SC.
107
Esperida v. Jurado, Jr., G.R. No. 172538, April 25, 2012, 671 SCRA 66, 74.
108
Petition, rollo, pp. 30-31.
109
Id. at 36.
110
Supra note 49.
111
Petition, rollo, pp. 130-131.
112
Sec. 1, Article VIII, 1987 Constitution.
113
Laurel v. Desierto, 430 Phil. 658 (2002).
People v. Tomaquin, 478 Phil. 885, 899 (2004), citing Section 389, Chapter 3, Title One,
114
Book III, Local Government Code of 1991, as amended.
115
Lovina and Montilla v. Moreno and Yonzon, 118 Phil 1401, 1406 (1963).
Hacienda Luisita, Incorporated v. Presidential Agrarian Reform Council, G.R. No. 171101,
116
July 5, 2011, 653 SCRA 154, 258.
117
Supra note 91.
118
Supra note 85.

Consti - Chapter 12 Part 1

Uploaded by

Copyright:

Available Formats

You might also like

Consti - Chapter 12 Part 1

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Consti - Chapter 12 Part 1

Uploaded by

Copyright:

Available Formats

JUDICIARY (Chapter 12)

Daabay v. Coca-Cola Bottlers Phils., Inc., 704 SCRA 350

G.R. No. 199890 August 19, 2013

JEROME M. DAABAY, PETITIONER,

Other claims are hereby ordered dismissed for failure to substantiate.

We deny the petition.

MARIA LOURDES P. A. SERENO

TERESITA J. LEONARDO-DE CASTRO LUCAS P. BERSAMIN

MARIA LOURDES P. A. SERENO

G.R. No. 184266 November 11, 2013

APPLIED FOOD INGREDIENTS COMPANY, INC., Petitioner,

WHETHER OR NOT THE PETITIONER IS ENTITLED TO THE ISSUANCE OF A TAX CREDIT

THE COURT’S RULING

The Petition has no merit.

In Panasonic Communications Imaging Corporation of the Philippines v. Commissioner of Internal

conditions for the grant of the tax refund or credit.

SEC. 112. Refunds or Tax Credits of Input Tax. –

SEC. 7. Jurisdiction. — The CTA shall exercise:

(a) Exclusive appellate jurisdiction to review by appeal, as herein provided:

(1) Decisions of the Commissioner of Internal Revenue in cases involving disputed

This Court further ruled:

WHEREFORE, premises considered, the instant Petition is DENIED.

MARIA LOURDES P. A. SERENO

TERESITA J. LEONARDO-DE CASTRO

LUCAS P. BERSAMIN MARTIN S. VILLARAMA, JR.

MARIA LOURDES P. A. SERENO

184823, 6 October 2010, 632 SCRA 422.

Rizal Commercial Banking Corporation v. Commissioner of Internal Revenue, G.R. No.

168498, 24 April 2007, 522 SCRA 144, 150.

G.R. No. 196278 June 17, 2015

CE CASECNAN WATER and ENERGY COMPANY, INC., Petitioner,

DEL CASTILLO, J.:

denying petitioner’s Motion for Reconsideration. 4

Ruling of the Regional Trial Court

Order dated January 30, 2009.

Ruling of the Court of Appeals

There is no merit in the Petition.

It is the CTA which has the power to rule

Nuez, held that:

The RTC injunction case is a local tax >case.

Moreover, in National Power Corporation v. Municipal Government of Navotas, as well as in City of

MARIANO C. DEL CASTILLO

ARTURO D. BRION JOSE CATRAL MENDOZA

MARIA LOURDES P.A. SERENO

Nippon Express (Philippines) Corporation v. Commissioner of Internal Revenue, G.R. No.

185666, February 4, 2015.

G.R. No. 209830 June 17, 2015

MITSUBISHI MOTORS PHILIPPINES CORPORATION, Petitioner,

amount ofP46,844,385.00 filed by respondent against petitioner Mitsubishi Motors Philippines

docketed as Civil Case No. 02-103763 (collection case).

and trial on the merits continued before the RTC. 14

After respondent’s presentation of evidence, petitioner filed a Demurrer to Plaintiff’s Evidence on

The RTC Ruling

accordingly, dismissed respondent’s collection case on the ground of insufficiency of evidence. It 20

2012. Dissatisfied, it appealed to the CA.

2013, hence, this petition.

The Issue Before the Court

The Court's Ruling

The petition is meritorious.